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Resolution - 2009-R0142 - CPAO Agreement And Terminal Building Lease - Delta Air Lines Inc. - 04/09/2009
Resolution No. 2009—RO142 April 9, 2009 Item No. 5.24 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 Certified Passenger Airline Operating Agreement and Terminal Building Lease, by and between the City of Lubbock and Delta Air Lines, Inc., and related documents. Said Agreement is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. Passed by the City Council this 9th ATTEST: Rebe ca Garza, City Secretary APPROVED AS TO CONTENT: s, Assistant City Manager n and Public Works APPROVEA AS TO FORM: Chad Weaver, Assistant City Attorney day of April , 2009. TOM MARTIN, MAYOR vw/ccdocs/Chad/RResolutions/RES.Agreement-Delta Air Lines, Inc. March 18, 2009 Resolution No. 2009-RO142 CERTIFICATED PASSENGER AIRLINE OPERATING AGREEMENT AND TERMINAL BUILDING LEASE FOR LUBBOCK PRESTON SMITH INTERNATIONAL AIRPORT BY AND BETWEEN CITY OF LUBBOCK LUBBOCK, TEXAS AND DELTA AIR LINES, INC. TABLE OF CONTENTS Article Title Page 1. DEFINITIONS.........................................................................................................2 2. TERM......................................................................................................................9 2.01 Term.............................................................................................................9 2.02 Holding Over...............................................................................................9 3. RIGHTS AND PRIVILEGES OF AIRLINE........................................................10 3.01 AIRLINE Rights and Privileges................................................................10 3.02 Exclusions and Reservations......................................................................13 4. PREMISES............................................................................................................15 4.01 Terminal Building Space...........................................................................15 4.02 Gates and Aircraft Parking Positions.........................................................15 4.03 Employee Parking Facilities......................................................................17 4.04 Construction and Airport Expansion and Inconvenience ..........................17 4.05 Surrender of Airline's Premises.................................................................17 5. RENTALS, FEES AND CHARGES.....................................................................19 5.01 General.......................................................................................................19 5.02 Landing Fees..............................................................................................19 5.03 Terminal Rentals........................................................................................19 5.04 Title 49 CFR, Part 1542 Charges...............................................................19 5.05 Other Fees and Charges.............................................................................20 5.06 Information to be Supplied by AIRLINE..................................................21 5.07 Payments....................................................................................................22 5.08 Security of Performance............................................................................23 5.09 No Further Charges....................................................................................25 6. OPERATION AND MAINTENANCE OF AIRPORT.........................................26 6.01 General......................................................................... ....26 6.02 Terminal Building......................................................................................26 6.03 CITY's Right to Inspect and Make Repairs...............................................27 6.04 Alterations and Improvements...................................................................27 6.05 Debts, Liens, Mortgages............................................................................28 7. DAMAGE OR DESTRUCTION OF AIRLINE'S PREMISES ............................29 �a 7.01 Damage or Destruction..............................................................................29 8. INSURANCE AND INDEMNIFICATION..........................................................31 8.01 Indemnification..........................................................................................31 8.02 Insurance....................................................................................................31 9. TRANSFTER OF AIRLINE'S PREMISES BY ASSIGNMENT OR SUBLETTING......................................................................36 9.01 General.......................................................................................................36 9.02 CITY Approval of Assignments................................................................36 9.03 CITY Approval of Subleases.....................................................................36 9.04 Reasons for Disapproval Not Comprehensive...........................................36 9.05 Method of Obtaining Approval..................................................................37 9.06 Administrative Charge...............................................................................37 9.07 AIRLINE to Remain Liable.......................................................................37 9.08 CITY Determination of Type of Agreement.............................................37 10. RELINQUISHMENT OF AIRLINE'S PREMISES .................... .....38 10.01 Notice of Intent to Relinquish Airline's Premises.....................................38 10.02 Non -Waiver of Responsibility...................................................................38 10.03 Reduction of Rent, Fees and Charges........................................................38 11. CANCELLATION BY CITY................................................................................39 11.01 Events of Default.......................................................................................39 11.02 Continuing Responsibilities of AIRLINE..................................................40 11.03 CITY's Remedies.......................................................................................41 11.04 Remedies Under Federal Bankruptcy Laws..............................................42 12. CANCELLATION BY AIRLINE.........................................................................43 12.01 Events of Default.......................................................................................43 12.02 AIRLINE's Remedy..................................................................................43 13. GOVERNMENT INCLUSION.............................................................................44 13.01 Government Agreements...........................................................................44 13.02 Federal Government's Emergency Clause..................................................44 13.03 Nondiscrimination......................................................................................44 13.04 Security......................................................................................... ..45 13.05 Environmental............................................................................................45 14. GENERAL PROVISIONS ............................................. ..50 14.01 Nonwaiver..................................................................................................50 14,02 Passenger Facility Charge..........................................................................50 14,03 Rights Non-Exclusive................................................................................50 14.04 Quiet Enjoyment........................................................................................50 14.05 Performance...............................................................................................50 14.06 Aviation Rights..........................................................................................51 14.07 Rules and Regulations and Operational Directives...................................51 14.08 No Individual Liability..............................................................................51 14.09 Relationship of Parties...............................................................................51 14.10 Capacity to Execute...................................................................................52 14.11 Savings.......................................................................................................52 14.12 Successors and Assigns Bound..................................................................52 14.13 Incorporation of Exhibits...........................................................................52 14.14 Titles..........................................................................................................52 14.15 Severability ............................................. 14.16 Amendments..............................................................................................52 14.17 Other Agreements......................................................................................52 14.18 Approvals...................................................................................................52 14.19 Notice.........................................................................................................53 14.20 Agent for Service.......................................................................................53 14.21 Governing Law and Legal Forum..............................................................54 14.22 Force Majeure............................................................................................54 14.23 Most Favored Nation.................................................................................54 14.24 Entire Agreement.......................................................................................54 LIST OF EXHIBITS Exhibit Title Page A Leased Terminal Space B AIRLINE Rates and Charges C Sample Activity Report D Landing Weight Report -iv- Resolution No, 2009-80142 CERTIFICATED PASSENGER AIRLINE OPERATING AGREEMENT AND TERMINAL BUILDING LEASE THIS LEASE AGREEMENT, made this 9th day of April , 2009, by and between the City of Lubbock, Texas, a municipal corporation organized and existing under the Iaws of the state of Texas, (hereinafter referred to as "CITY"), and Delta Air Lines, Inc., a corporation incorporated under the laws of the State of Delaware, with its principal office at 1130 Delta Blvd., Dept. 877, Atlanta, Georgia 30354 (as hereinafter defined and referred to as "AIRLINE"). WITNESSETH WHEREAS, CITY owns and operates Lubbock Preston Smith International Airport, located in Lubbock, Lubbock County, Texas, (hereinafter referred to as "Airport"); and WHEREAS, AIRLINE is engaged in the business of air transportation of persons, property, cargo, small packages, and mail, and is certificated by the Federal Aviation Administration to provide such services through Lubbock Preston Smith International Airport; and WHEREAS, AIRLINE desires to lease certain premises, use certain facilities, and acquire certain rights and privileges from CITY in connection with its use of the Airport, and CITY is willing to lease and grant the same to AIRLINE upon the terms and conditions hereinafter stated; and WHEREAS, CITY and AIRLINE each certify that their corporation has the power and authority to enter into this Agreement; NOW THEREFORE, for and in consideration of the mutual covenants hereof, CITY hereby leases to AIRLINE and AIRLINE hereby hires and takes from CITY certain preferential premises (hereinafter called "Preferential Use Space"), and certain non -preferential premises (hereinafter called "Joint Use Space"), along with facilities, rights and privileges in connection with and on the Airport, as hereinafter described, upon the terms and conditions that follow: ARTICLE 1: DEFINITIONS 1.01 Affiliated Airline Qualifying Flight shall mean flights that have been approved by CITY in writing pursuant to this definition and (1) are flights at the Airport that are operated pursuant to a code -share or capacity purchase agreement with a Signatory Airline, on which all seats sold into and out of the Airport are operated exclusively under the same airline code designator as under the exclusive control of Signatory Airline, or (2) are flights by an airline that is wholly owned by Signatory Airline or Signatory Airline's parent company. On or after the Effective Date, at least sixty (60) days prior to the start of new Affiliate Airline Qualifying Flights, Signatory Airline shall provide CITY with a thirty (30) day written notice prior to the Signatory Airline designating new Affiliate Airline Qualifying Flights, which designation is subject to CITY approval solely based on requirements that the proposed airline providing such Affiliate Airline Qualifying flights: (1) meets the criteria established above, (2) and that the airline providing such Qualifying Flights has an executed Non -Signatory Airline Agreement with City, for which there is and (3) does not have an outstanding notice of default from CITY. The airline providing Affiliate Airline Qualifying Flights and executing the Non -Signatory Airline Agreement shall (a) pay to CITY the Signatory Airline Landing Fee Rate, and the Miscellaneous Fees, of this Agreement. 1.02 Agreement shall mean this Certificated Passenger Airline Operating Agreement and Terminal Building Lease between CITY and AIRLINE, as the same may be amended, modified or altered from time to time pursuant to the terms hereof. 1.03 Air Transportation Business shall mean that business operated by AIRLINE at the Airport for the commercial transportation by air of persons, property, mail, parcels and/or cargo and all associated reasonable activities. 1.04 Air Transportation Company shall mean a legal entity engaged in the business of scheduled or non-scheduled commercial transportation by air of persons, property, mail, parcels and/or cargo. 1.05 Airfield shall mean the Landing Area, Taxiing Area, and the Ramp Area. 1.06 AIRLINE shall mean the Air Transportation Company executing this Agreement. 1.07 Airline Premises shall mean those areas in the Terminal leased to AIRLINE as Preferential Use Premises or Joint Use Premises, as defined herein, and shown in Exhibit A, attached hereto. --2-- 1.08 Airport shall mean Lubbock Preston Smith International Airport in Lubbock, Lubbock County, Texas, owned and operated by CITY, including all real property easements or any other interest therein as well as all improvements and appurtenances thereto, structures, buildings, fixtures, and all tangible personal property or interest in any of the foregoing, now or hereafter owned leased or operated by CITY. 1.09 Airport Affairs Committee (AAC) shall mean collectively the authorized representatives of each Signatory Airline that shall meet from time to time with representatives of CITY to receive information and provide input from/to the Signatory Airlines with regard to selected operation and development matters of the Airport. 1.10 Assigned Aircraft Parking Positions shall mean aircraft parking positions at the Airport that have been assigned by the Director of Aviation. 1.11 Assigned Gates shall mean gates within the Terminal Building that have been assigned by the Director of Aviation to each Signatory Airline. 1.12 Bonds shall mean any bonds or other financing instrument or obligation of the CITY, issued for the purposes of improving the Airport, in which the Department of Aviation is responsible for payment of the annual interest and principal associated with such bonds. 1.13 Budget Year shall mean the CITY's Fiscal Year which is the twelve-month period commencing on October I and extending to September 30 of the following year. 1.14 Cargo Aircraft Aprons shall mean those areas of the Airport that are designated for the parking of cargo aircraft and support vehicles, and the loading and unloading of cargo aircraft, as shown in Exhibit A, attached hereto. 1.15 CITY's Department of Aviation shall mean the Airport Department of the City of Lubbock. 1.16 Debt Service shall mean with respect to any series of Bonds, as of any particular date of computation and for any particular period or year, of the aggregate amount required to be deposited during such period or year for interest and principal associated with such Bonds. 1.17 Deplaned Passenger shall mean any passenger disembarking an aircraft at the Terminal, including any such passenger that shall subsequently board another aircraft of the same or a different Air Transportation Company or the same aircraft, previously operating under a different flight number. --3-- 1.18 Director of Aviation shall mean the CITY's Director of Aviation or such other person designated by CITY to exercise functions with respect to the rights and obligations of CITY under this Agreement. 1.19 Enplaned Passenger shall mean any passenger boarding an aircraft at the Terminal except for non -revenue passengers, including any such passenger that previously disembarked from another aircraft of the same or a different Air Transportation Company or from the same aircraft, previously operating under a different flight number. 1.20 Environmental Laws shall mean all applicable federal, state, and local laws, ordinances, regulations, guidelines, and orders relating to health, safety, and protection of persons, the public, and/or the environment. 1.21 FAA shall mean the Federal Aviation Administration, or its authorized successor(s). 1.22 Fiscal Year shall mean the annual accounting period of CITY for its general accounting purposes which, at the time of entering into this Agreement, is the period of twelve consecutive months, ending with the last day of September of any year. 1.23 Gates shall mean those specific areas within the Terminal Building where passengers enplane and deplane aircraft.. 1.24 Ground Handling, Services shall mean services provided to an aircraft that prepares the aircraft for flight, such as the guiding and parking of aircraft, catering, loading and unloading of baggage, fuel arrangements, passengers, etc. and also activities such as ticketing and check-in. 1.25 Hazardous Material shall mean: (i) any oil petroleum products, flammable substances, explosives, radioactive materials, hazardous wastes or substances, toxic wastes or substances or any other wastes, materials or pollutants which pose a hazard to the Airport premises or to the safety and/or health of persons on or about the Airport and /or cause Airline Premises to be in violation of any federal, state, or local laws governing or regulating hazardous materials; (ii) asbestos in any form, urea formaldehyde foam insulation, transformers or other equipment which contain dielectric fluid containing regulated levels of polychlorinated biphenyls, or radon gas; (iii) any chemical, material or substance defined as or included in the definition of "hazardous substances", "hazardous waste", "hazardous material", "extremely hazardous waste", "restricted hazardous waste", "toxic substance" or similar words under any applicable local, state, or federal laws, or any regulations promulgated --4-- pursuant thereto, including, but not limited to: the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), as amended, 42 U.S.C. §§9601, et. seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S. U.S.C. §§1801, et seq.; the Federal Water Pollution Control Act (CWA), as amended, 33 U.S.0 §§I251 et seq.; The Resource Conservation and Recovery Act (RCRA), as amended, 42 U.S.C. §§6901, et seq,; the Toxic Substances Control Act (TSCA), as amended, 15 U.S.C. §§32601,et seq.; (iv) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by government CITY, and which may or could pose a hazard to the health and safety of occupants of the Airport, and or to any person entering upon the Airport or adjacent property; and/or (v) any other chemical, material or substance which may or could pose a hazard to the environment or a person. 1.26 Holdroom shall mean the seating area of the concourse at each gate. 1.27 Joint Use Formula shall mean that formula which prorates 20 percent (20%) of the cost of a service or space equally among all Scheduled Air Carriers, and eighty percent (80%) based on the ratio of each Scheduled Air Carrier's Enplaned Passengers using the service or space at the Airport during the month, to the total of all Enplaned Passengers using the service or space at the Airport during the month. Not withstanding the foregoing, CITY shall, adjust the computation to reflect enplanements of an additional Scheduled Air Carver at the Airport or after the deletion of a Scheduled Air Carrier at the Airport. AIRLINE and Affiliated Airlines shall be considered the same Scheduled Air Carrier for purposes of this Joint Use Formula. 1.28 Joint Use Space shall mean that space in the Terminal Building used jointly by AIRLINE and other airlines using the space, such as baggage claim areas. 1.29 Landing Area shall mean those portions of the Airport provided for the landing, taking off and taxiing of aircraft, including without limitation, approach and turning zones, aviation or other casements, runways, taxiways, runway and taxiway lights, and other appurtenances in connection therewith. 1.30 Landing Fee shall mean a fee expressed in tenths of a cent per thousand pounds of the Maximum Gross Landed Weight of each type of AIRLINE's aircraft and shall be multiplied by the total of all Maximum Gross Landed Weight for all Revenue Landings of each type of aircraft landed at the Airport by AIRLINE. 1.31 Lubbock Preston Smith International Airport Advisory Board shall mean that entity composed of seven members appointed by the City Council. The Board is responsible for recommending to City Council in areas of planning, development, construction, enlargement, improvements, maintenance, equipment, operation and policing of Airport facilities controlled by the CITY. --5-- 1.32 Maximum Gross Landed Weight shall mean the maximum gross certificated landing weight in one thousand pound units for which each aircraft operated at the Airport by AIRLINE as certificated by the FAA or its successor. 1.33 Non -Airline Revenues shall mean those rentals, fees and charges received by CITY from Airport lessees, permittees, concessionaires, users, and patrons other than Air Transportation Companies, but does not include PFCs. 1.34 Non -Revenue Landing shall mean any aircraft landing by AIRLINE at the Airport for a flight for which AIRLINE receives no revenue, and shall include irregular and occasional ferry or emergency, which shall include any flight, that after having taken off from the Airport and without malting a landing at any other airport, returns to land at the Airport because of meteorological conditions, mechanical or operating causes, or any other reason of emergency or precaution. 1.35 Nonsignatory Airline shall mean any Air Transportation Company providing service at the Airport and has not signed this Agreement or a similar agreement and is operating under the terms of a separate agreement. 1.36 Operation and Maintenance Expenses shall mean Operation and Maintenance Expenses paid or accrued, of operation, maintenance, and ordinary current repairs of said Airport and shall include, without limiting the generality of the foregoing, insurance premiums, administrative expenses of the CITY relating solely to the Airport, including engineering, architectural, legal, airport consultants, accounting fees and expenses and such other reasonable current expenses as shall be in accordance with sound accounting practice. Operation and Maintenance Expenses shall not include any allowance for depreciation or renewals or replacements or obsolescence of capital assets of the Airport, or any operation and maintenance expenses of Special Purpose Facilities buildings where the lessees thereof are obligated to pay such operation and maintenance expenses. 1.37 Passenger Facility Charge (PFC) shall mean the fees authorized by 49 USC Appx. 1513 (e) and regulated by 14 CFR Part 158 as such statute and regulations currently exist or as they may be amended during the Term of this Agreement. 1.38 Preferential Use Premises shall mean those portions of the Terminal and Terminal Aircraft Aprons assigned to AIRLINE, as shown in Exhibit A, attached hereto, to which AIRLINE shall have priority over other users. E! 1.39 Public Space shall mean all utility rooms, duct ways, janitorial rooms and closets, stairways, hallways, elevators, escalators, entrance -ways, public or common use lobbies and areas, public toilet areas and other areas used for the operation, maintenance or security of the Terminal, even if used solely by CITY. 1.40 Ramp Area shall mean the aircraft parking and maneuvering areas adjacent to the Terminal, and shall include within its boundaries all Terminal Aircraft Aprons. 1.41 Revenue Landing shall mean any aircraft landing by AIRLINE at the Airport for which AIRLINE receives revenue, including training flights and diversions by AIRLINE. 1.42 Revenues shall mean income accrued by CITY in accordance with generally accepted accounting practices, including investment earnings, from or in connection with the ownership or operation of the Airport or any part thereof, or the leasing or use thereof, but do not include PFCs. 1.43 Rules and Regulations shall mean reasonable and nondiscriminatory rules and regulations as may be established by the City of Lubbock for the Lubbock Preston Smith International Airport, and as may be amended from time to time. 1.44 Scheduled Air Carrier shall mean any Air Transportation Company performing or desiring to perform, pursuant to published schedules, seasonal or non -seasonal commercial air transportation services over specified routes to and from the Airport and holding the necessary authority from the appropriate federal or state agencies to provide such transportation. 1.45 Scheduled Landings shall mean all Revenue Landings at the Airport published by AIRLINE in either the Official Airline Guide or on AIRLINE's Web site. 1.46 Signatory Airline shall mean an Air Transportation Company that has executed an agreement with the CITY substantially similar to this Agreement, and that leases at least one holdroom in the Terminal Building and other space in the Terminal Building deemed sufficient by the Director of Aviation to support its operation. 1.47 Term shall mean the period of time during which AIRLINE's activities at the Airport shall be governed by this Agreement. Said Term shall begin on the Effective Date, and, except as otherwise set forth herein, terminate on the date set forth in Article 2. --7-- 1.48 Terminal Aircraft Aprons shall mean those areas of the Airport that are designated for the parking of passenger aircraft and support vehicles, and the loading and unloading of passenger aircraft. 1.49 Terminal Building or Terminal shall mean the passenger terminal building and appending structures, law enforcement and security activitics, paging systems, multi-user flight information display systems, and the terminal roadway system including entrance/exit/recirculating roadways, terminal curb front, and taxi/bus staging areas, but excluding roadways exclusively serving the public parking areas. 1.50 TSA shall mean the Office of Homeland Security and Transportation Security Administration, or their authorized successor(s). Words and phrases used in this Agreement but not defined herein shall have their usual and customary meaning. ARTICLE 2: TERM 2.01. Term. The Term of this Agreement shall begin on APRIL 1, 2009 (hereinafter the "Effective Date"), and ending SEPTEMBER 30 2011 (hereafter the "Term"), and the rentals, fees and charges established in this Agreement shall apply to said Term regardless of the Executed Date of this Agreement. 2.02. Holding Over. Holding over by AIRLINE after the expiration of the Agreement without the consent of CITY shall not operate to extend or renew this Agreement. Any such holding over shall be construed as a tenancy from month-to-month, provided, however, that AIRLINE shall enjoy signatory rentals, rates and charges up to one year after expiration of this Agreement or for such longer period as may be agreed in writing by the CITY and AIRLINE. Thereafter, upon thirty (30) days advance written notice by the CITY, AIRLINE will pay non -signatory rentals, rates and charges until a new agreement is executed. owl 3 ARTICLE 3: RIGHTS .AND PRIVILEGES OF AIRLINE 3,01 AIRLINE Rights and Privileges. In addition to all rights granted elsewhere in this Agreement, AIRLINE shall have the right to use, in common with others so authorized by CITY, areas, other than areas leased preferentially to others, facilities, equipment, and improvements at the Airport for the operation of AIRLINE's Air Transportation Business and all activities reasonably necessary to such operations, including but not limited to: A. The landing, taking off, flying over, taxiing, towing, and conditioning of AIRLINE's aircraft and, in areas designated by CITY, the extended parking, servicing, deicing, loading or unloading, storage, or maintenance of AIRLINE's aircraft and support equipment subject to Sections 3.01E, 3.01F, and 3.02C, and to the availability of space, and subject to such reasonable charges and regulations as CITY may establish; provided, however, AIRLINE shall not permit the use of the Airfield by any aircraft operated or controlled by AIRLINE which exceeds the design strength or capability of the Airfield as described in the then -current FAA -approved Airport Layout Plan (ALP) or other engineering evaluations performed subsequent to the then -current ALP, including the then -current Airport Certification Manual. B. The sale of air transportation tickets and services, the processing of passengers and their baggage for air travel, the sale, handling, and providing of mail, freight, and express services, and reasonable and customary airline activities. C. The training of personnel in the employ of or to be employed by AIRLINE and the testing of aircraft and other equipment being utilized at the Airport in the operation of AIRLINE's Air Transportation Business; provided, however, said training and testing shall be directly related, but incidental to the use of the Airport in the operation by AIRLINE of its Air Transportation Business and shall not unreasonably hamper or interfere with the use of the Airport and its facilities by others entitled to the use of same. CITY reserves the right to restrict or prohibit such training and testing operations which it deems to interfere with the use of the Airport, including excessive noise as reasonably determined by CITY. D. The purchase at the Airport of fuels, lubricants, and any other supplies and services, from any person or company, subject to CITY's right to require that each provider of services and/or supplies to AIRLINE secures a permit from CITY to conduct such activity at the Airport, pays required fees, and abides by all reasonable rules and regulations established by CITY. No discriminatory limitations or restrictions shall be imposed by CITY that interfcres with such purchases; provided, however, nothing --10-- herein shall be construed to permit AIRLINE to store aviation fuels at the Airport. The granting of the right to store aviation fuels shall be subject to the execution of a separate agreement between AIRLINE or Airline Fuel Facility Corporation and CITY. E. The servicing by AIRLINE or its suppliers of aircraft and other equipment being utilized at the Airport by AIRLINE on the Terminal Aircraft Aprons or such other locations as may be designated by the Director of Aviation. F. The loading and unloading of persons, property, cargo, parcels and mail by motor vehicles or other means of conveyance reasonably approved by CITY Terminal Aircraft Aprons or such other locations as may be designated by the Director of Aviation; provided AIRLINE shall not use Terminal Aircraft Aprons immediately adjacent to the passenger Terminal to load or unload all -cargo aircraft unless otherwise authorized in writing by CITY. G. The provision, either alone or in conjunction with other Air Transportation Companies or through a nominee, of skycap service for the convenience of the public, at no cost to CITY. H. The installation and maintenance, at AIRLINE's sole cost and expense, of identifying signs in AIRLrNE's Preferential Use Premises. Installation shall be subject to the prior written approval of the Director of Aviation. The general type and design of such signs shall be in compliance with CITY's rules and regulations regarding tenant signage. All identifying signage previously approved by the Director and installed as of the Effective Date is deemed to be approved. I. The installation, maintenance, and operation, at no cost to CITY, of such radio communication, company telephone system, computer, meteorological and aerial navigation equipment, and facilities on AIRLINE's Preferential Use Premises as may be necessary or convenient for the operation of its Air Transportation Business; provided, however, that except for equipment and facilities already in place, such installations shall be subject to the prior written approval of the Director of Aviation. Prior to any written approval, AIRLINE shall provide the Director of Aviation with all necessary supporting documentation related to such installations. J. Such rights of way as may reasonably be required by AIRLINE for communications, computer equipment, teletype, telephone, interphone, conveyor systems and power, and other transmission lines in AIRLINE's Preferential Use Premises, subject to the availability of space and/or ground areas as determined by the Director of Aviation. AIRLINE shall provide CITY with an engineer's or architect's drawing depicting the routing of such cabling for approval by CITY prior to engaging in any such work, CITY reserves the right to require the execution of a separate agreement between CITY and AIRLINE for the lease and use of such space and/or ground area outside Terminal areas or to provide such service directly to AIRLINE. K The installation of personal property, including furniture, furnishings, computers, supplies, machinery, equipment, computers, and supplies in AIRLINE's Preferential Use Premises as AIRLINE may deem necessary, useful or prudent for the operation of its Air Transportation Business. Title to such personal property shall remain with AIRLINE, subject to the provisions of this Agreement. L. The construction of modifications, finishes, and improvements in AIRLINE's Preferential Use Premises as AIRLINE may deem necessary or prudent for the operation of its Air Transportation Business. M. AIRLINE shall have the right to ingress to and egress from the Airport and Airline Premises for AIRLINE's officers, employees, agents, and invitees, including passengers, suppliers of materials, furnishers of services, aircraft, equipment, vehicles, machinery and other property. Such right shall be subject to CFR Part 1542, applicable laws, and the CITY's right in accordance with its applicable law to establish reasonable and nondiscriminatory Rules and Regulations and Operating Directives governing (i) the general public, including AIRLINE's passengers, and, (ii) access to non-public areas at the Airport by AIRLINE's employees, suppliers of materials, and furnishers of services; provided, however, any such Rules and Regulations and Operating Directives of CITY shall not unreasonably interfere with the operation of AIRLINE's Air Transportation Business. CITY may at any time temporarily or permanently close, re-route, or consent to or request the closing or re-routing of any roadway or access to the Airport, so long as a means of ingress and egress reasonably equivalent is concurrently made available to AIRLINE. AIRLINE hereby releases and discharges CITY from any and at] claims, demands, or causes of action which AIRLINE may now or at any time hereafter have arising or alleged to arise out of such a closing or re-routing. N. Subject to any restrictions in CITY's agreement with its food and beverage concessionaire, nothing in this paragraph shall prohibit AIRLINE from (i) providing food and beverages, at AIRLINE's sole cost and expense, and (ii) providing under a separate agreement with CITY for its own flight kitchen located at the Airport for catering services to its passengers and crews for consumption aboard aircraft. AIRLINE shall not install vending machines of any type in its Airline Premises without obtaining written approval of the Director of Aviation, however, all vending machines previously approved by the Director and installed as of the Effective Date are hereby deemed to be approved. --12-- O. The rights and privileges granted to AIRLINE pursuant to this Article 3 may be exercised on behalf of AIRLINE by other Signatory Airlines or contractors authorized by CITY to provide such services at the Airport, subject to the prior written approval of CITY and further subject to all laws, rules, regulations, fees and charges as may be applicable to the activities undertaken. P. AIRLINE may exercise on behalf of any other Air Transportation Company having an operating agreement or permit with CITY any of the rights granted AIRLINE herein, so long as AIRLINE is concurrently exercising those same rights in the operation of AIRLINE's own Air Transportation Business at the Airport, subject to other provisions of this Agreement with respect to CITY Rules and Regulations and Operating Directives for the Airport. 3.02 Exclusions and Reservations. A. Nothing in this Article 3 shall be construed as authorizing AIRLINE to conduct any business separate and apart from the conduct of its Air Transportation Business. B. AIRLINE shall not knowingly interfere or permit interference with the use, operation, or maintenance of the Airport, including but not limited to, the effectiveness or accessibility of the drainage, sewerage, water, communications, fire protection, utility, electrical, or other systems installed or located from time to time at the Airport; and AIRLINE shall not engage in any activity prohibited by CITY's Noise Abatement Procedures as implemented, amended, or supplemented from time to time. C. As soon as possible after release from proper authorities, AIRLINE shall remove any of its disabled aircraft from the Airfield or Terminal Aircraft Aprons, shall place any such disabled aircraft only in such storage areas as may be reasonably designated by the Director of Aviation, and shall store such disabled aircraft only upon such terms and conditions as may be reasonably established by the Director of Aviation. In the event AIRLINE shall fail to remove any of its disabled aircraft as expeditiously as possible, CITY may, but shall not be obligated to, cause the removal of such disabled aircraft. AIRLINE shall pay to CITY, upon receipt of invoice, the costs incurred for such removal plus fifteen percent (15%). Nonpayment of such invoice shall be deemed an event of default of this Agreement. D. AIRLINE shall not do or permit to be done anything, either by act or failure to act, that shall cause the cancellation or violation of the provisions, or any part thereof, of any policy of insurance for the Airport, or that shall cause a hazardous condition so as to increase the risks normally attendant upon operations permitted by this Agreement. If AIRLINE shall do or permit to be done any act not --13-- permitted under this Agreement, or fail to do any act required under this Agreement, regardless of whether such act shall constitute a breach of this Agreement, which act or failure, in and of itself, causes an increase in CITY's insurance premiums, AIRLINE shall immediately remedy such actions and/or pay the increase in premiums, upon notice from CITY to do so. E. AIRLINE shall not maintain or operate in the Terminal or elsewhere at the Airport a cafeteria, restaurant, bar, or cocktail lounge for the purpose of selling food and beverages to the public or to AIRLINE's employees and passengers, except as may be permitted under Section 3.©1N, above. F. CITY may, at its sole option, install or cause to be installed advertising and revenue generating devices, including vending machines, in Joint Use Premises provided, however, that such installations shall not unreasonably interfere with AIRLINE's operations authorized hereunder or substantially diminish the square footage contained in Airline Premises. CITY may also, at its sole option, install pay telephones in any part of the Terminal. CITY shall be entitled to reasonable access upon Airline Premises to install or service such telephones and devices. G. The rights and privileges granted AIRLINE pursuant to this Article 3 shall be subject to any and all reasonable and nondiscriminatory Rules and Regulations and Operating Directives established by CITY, as may be amended from time to time. H. AIRLINE shall not use any Airline Premises as office space unless not more than a de minimus amount of the functions to be performed at such office is not directly related to the AIRLINE'S day-to- day operations at the Airport. 1. Any and all rights and privileges not specifically granted to AIRLINE for its use of and operations at the Airport pursuant to this Agreement are hereby reserved for and to CITY. J. AIRLINE shall not conduct political activities on Airline Premises except as allowed by CITY in free speech designated areas within the Airport. SEE ARTICLE 4: PREMISES 4.01.. Terminal Building Space. For the Term of this Agreement, AIRLINE shall Iease or use the areas in the Terminal Building as shown in Exhibit "A". A general description of the types of space leased to AIRLINE and the basis of the use of such space are summarized below. Preferential Use Space Main Level Apron Level Upper Level TOTAL American Eagle 1,279 sq. ft. 2,416 sq. ft. 185 sq. ft.� 3,880 sq. ft. Contintenal Express 1,224 sq. ft. 2,815 sq. ft. 0 4,039 sq. ft. Southwest Airlines 2,134 sq. ft. 6,769 sq. ft. 0 8,903 sq. ft. Delta Air Lines 1,621 sq. ft. 2,999 sq. ft. 0 4,620 sq. ft. Joint Use Space Baggage Claim Area 1 Baggage Claim Area 2 TOTAL Passenger Holdrooms 5 passenger boarding gates 6 passenger boarding gates Main Level 8,040 sq. ft. 8,000 sq. ft. 16,040 sq. ft. 13,819 sq. ft. 16,577 sq. ft. (with Delta) Apron Level 8,064 sq. ft. 7,708 sq. ft. 15,772 sq. ft. TOTAL 16,104 sq. ft. 15,708 sq. ft. 31,812 sq. ft. In the event that additional space is needed within the passenger holdroom area to accommodate new airlines or the expansion of service of existing airlines, an adjustment will be made to the square footage. 4.02. Gates and Aircraft Parking Positions. A. Assigned Gates. Gates shall be assigned to Signatory Airlines in accordance with reasonable and non-discriminatory Department of Aviation policy. Only Signatory Airlines are eligible for gate assignments. Gate assignments for each Signatory Airline are identified in Exhibit "A". AIRLINE will have the sole right to the use of Assigned Gates for scheduled and unscheduled flights. Use of an Assigned Gate shall include use of any existing podium, loading bridge and/or associated gate facilities. AIRLINE may install additional gate facilities at its own cost, subject to the approval of the Department of Aviation which shall not be unreasonably withheld, conditioned or delayed. Seating in the gate area shall be available to all users of the Terminal Building regardless of AIRLINE association. B. Shared Gates. Gates may be assigned to more than one airline subject to the mutual agreement of all parties. Procedures for the shared use of a gate shall be outlined in a letter of agreement. Such letter of agreement shall be approved by representatives of all participating Airlines --15-- and the Director of Aviation, and shall be attached and deemed a supplement to Exhibit "A" of this Agreement. C. Unassigned Gates. Unassigned gates are available for use by Signatory and Non -Signatory Airlines. Use of Unassigned Gates shall be coordinated in advance with the Department of Aviation. Approval for such use shall not be unreasonably withheld, conditioned or delayed. Use of unassigned gates shall be subject to the fees and charges specified in Article 5. D. Temporary Reassignment of Gates. The Department of Aviation may re -assign gates on a temporary basis to accommodate emergency or extraordinary situations. Such temporary reassignment shall be coordinated with AIRLINE as far in advance as practicable, and shall be accomplished in a manner that has the least possible impact on AIRLINE's operation. E. Permanent Reassignment of Gates. The Department of Aviation reserves the reasonable right to permanently reassign gates. Prior to making a decision regarding an involuntary gate reassignment, the Director of Aviation shall consult with the affected AIRLINE or AIRLINEs. In the event that AIRLINE does not concur with the reassignment, the decision may be appealed to the Lubbock Preston Smith International Airport Board at its first available regular meeting following notification of the reassignment by the Director of Aviation. The decision of the Lubbock Preston Smith International Airport Board will be final and binding on all parties. In the event of an involuntary gate reassignment, the Department of Aviation or instigating AIRLINE, shall be responsible for all costs associated with the relocation of the affected AIRLINE or AIRLINES to include but not be limited to cost for relocating and reinstallation of podium, backwall, signage, telecommunication and technology, and associated operations area. F. Termination of Gate Assignments. Subject to interruption in service resulting from events stipulated in Section 14.22, in the event that AIRLINE discontinues use of a gate or gates for scheduled airline service for more than 30 consecutive days, the Department of Aviation reserves the right to terminate such assignment(s) and reassign the gatc(s) at its discretion. G. Aircraft Parking. AIRLINE shall be entitled to park aircraft at its Assigned Gates or its Shared Gates without prior coordination with the Department of Aviation. AIRLINE shall be entitled to park aircraft at Unassigned Gates on a first come/first served basis, subject to the advance coordination requirements outlined in Section 4.02(C) of this Agreement. Aircraft parking at all other locations on the Airport shall be approved by the Department of Aviation on a case-by-case basis. 4.03. Employee Parking Facilities. AIRLINE shall, subject to reasonable and non-discriminatory charges as defined in Section 5.05(B), have the right to use the automobile parking facilities for its employees. Such facilities are located in an area designated by the Director of Aviation. 4.04. Construction and Airport Expansion and Inconvenience. Subject to the requirements of Section 4.02(E), CITY shall have the right, at such times as may be reasonable under the circumstances, to close, relocate, reconstruct, change, alter, or modify Airline's Premises and/or the means of access to Airline's Premises pursuant to this Agreement or otherwise, either temporarily or permanently for purposes of maintaining or constructing improvements, modifications, or expansions to the Terminal Building, including construction of Capital Improvements provided, however, that CITY shall provide: (1) reasonable notice of the construction activities to AIRLINE and (2) adequate means of ingress and egress for Airline's Premises or, in lieu thereof, alternate premises with adequate means of ingress and egress, and reimbursements as provided in Section 4.02(E). 4,05. Surrender of Airline's Premises. A. Surrender of Airline's Premises. AIRLINE covenants and agrees that on expiration of the Term of this Agreement, or earlier termination as hereinafter provided, it will peaceably surrender possession of Airline's Premises leased hereunder in the condition in which they existed at the commencement of this lease, normal wear and tear excepted. B. Removal of Trade Fixtures, Equipment and Personal Property. AIRLINE shall have the right, on expiration or early termination of this Agreement and within thirty (30) consecutive calendar days thereafter, to remove or dispose of all trade fixtures and equipment and other personal property placed or installed by it at its expense, in, on, or about the Airport. AIRLINE shall not be entitled to remove permanent or non -trade fixtures without the advance written consent of CITY which consent shall not be unreasonably withheld, conditioned or delayed. C. Removal Damages. In the event AIRLINE removes its trade fixtures and equipment and other personal property described in Section 4.05(B), and/or is allowed to remove its non -trade fixtures and removes such fixtures, AIRLINE shall repair any damage caused by such removal, reasonable wear and tear excepted. Removal and repair shall be at AIRLINE's expense. D, Ownership of Trade Fixtures, Equipment and Personal Property Not Removed. In the event AIRLINE fails to remove its property within thirty (30) consecutive calendar days of the effective date of termination of this Agreement, or such other period of time agreed to in writing by the parties, --17-- CITY shall have the option of (1) removing and disposing of AIRLINE property at AIRLINE's expense; or (2) taking title to AIRLINE property. MVV IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. ACORD 25 (2001/08) Page 2 of 2 4/9/2009 .ARTICLE 5: RENTALS, FEES AND CHARGES 5.01, General. AIRLINE shall pay CITY rentals for use of Airline Premises, and fees and charges for the other rights, licenses, and privileges granted hereunder during the Term of this Agreement. The rentals, fees, and charges payable by all Signatory Airlines for the Airfield and, with respect to the Terminal, the rentals, fees, and charges payable by Signatory Airlines leasing space in the Terminal, shall be as set forth in Exhibit B. 5.02 Landing Fees. AIRLINE shall pay monthly to CITY fees for Revenue Landings for the preceding month. AIRLINE's Landing Fees shall be determined as the product of the Landing Fee rate for the period, as presented in Exhibit B, attached hereto, and AIRLINE's total maximum certificated gross landing weight for the month. AIRLINE's landed weight for the month shall be determined as the sum of the products obtained by multiplying the Maximum Certificated Gross Landing Weight of each type of AIRLINE's aircraft by the number of Revenue Landings of each said aircraft during such month. 5.03 Terminal Rentals. A. For the Term of this Agreement, AIRLINE's Terminal rentals shall be determined as the sum of AIRLINE's rentals for Preferential Use and Joint Use Premises. AIRLINE's rental payment for Preferential Use Premises shall be determined as the sum of the products obtained by multiplying the rental rate for the period, as presented in Exhibit B, by the amount of the corresponding type of space leased by AIRLINE as Preferential Use Premises as set forth in Exhibit A. B. Total Terminal rentals for Joint Use Premises shall be calculated as the product of the Terminal rental rates for the period calculated in accordance with Exhibit B, and the amount of each category of Joint Use Premises. AIRLINE's share of the total Terminal rentals due each month for Joint Use Premises shall be determined in accordance with the Joint Use Formula. C. For inclusion in the Joint Use Formula, AIRLINE shall include in its monthly report of Enplaned Passengers and Deplaned Passengers the total number of Enplaned Passengers and Deplaned Passengers handled or otherwise accommodated by AIRLINE for its Affiliated Airline Companies and other Air Transportation Companies handled by AIRLINE and not having an agreement with CITY that provides for the direct payment to CITY of appropriate charges for the use of Joint Use Premises. 5.04 Title 49 CFR, Part 1542 Charges. Throughout the Term of the Agreement for as long as law enforcement officers are required by federal law or regulations to be provided by CITY for the protection of the Airport or passenger screening process, as required by CFR Part 1542, CITY reserves the right to implement a EL'S separate Part 1542 charge payable by AIRLINE. The total cost to CITY of providing law enforcement officers for Airport and the passenger screening process in the Terminal shall be prorated monthly among all Air Transportation Companies on the basis of the number of each Air Transportation Company's Enplaned Passengers bears to the total number of Enplaned Passengers for all Air Transportation Companies for such monthly period. AIRLINE's share of the Part 1542 charges shall be calculated using the Joint Use Formula. 5.05 Other Fees and Charges. A. CITY expressly reserves the right to assess and collect the following: (1) Reasonable and non-discriminatory fees for services subject to the requirements of Section 3.01P provided by AIRLINE to Air Transportation Companies that are not Signatory Airlines or to AIRLINE by Air Transportation Companies that are not Signatory Airlines subject to requirements of Section 3.010 of this Agreement, if such services or concessions would otherwise be available from a concessionaire or licensee of CITY. (2) Pro rata shares of any charges for the provision of any services or facilities which CITY is required or mandated to provide by any governmental entity (other than CITY acting within its proprietary capacity) having jurisdiction over the Airport. (3) A fuel flowage fee for fuel delivered to AIRLINE's aircraft. Prior to charging the AIRLINE a fuel flowage fee, the Director of Aviation shall consult with AIRLINE or AIRLINES. In the event that AIRLINE does not concur with the fee, the decision may be appealed to the Lubbock Preston Smith International Airport Board at its first available regular meeting following notification of the fee assessment. The decision of the Lubbock Preston Smith International Airport Board will be final and binding on all parties. (4) An aircraft parking charge for aircraft remotely parked for extended periods of time on the Ramp Area and away from the Terminal Aircraft Aprons. (5) An extraordinary adjustment to the appropriate landing fee or terminal rental rate will occur as necessary when Airport Revenues are not sufficient to pay O&M Expenses that result from emergency repairs or expenses as a result of catastrophic events or circumstances that are "extraordinary" in nature and mutually agreed upon between AIRLINES and CITY, such as events not enumerated in the Airport's annual budget for that fiscal year or covered by insurance, and are not through the failure of the Airport to manage and control its O&M Expenses. (6) A financial adjustment in the landing fee if there is an actual reduction in landed weight over a twelve month period calculated such that for every percent reduction in the actual landed weight to an annual maximum of ten percent, the landing fee will be increased by an equal percentage. Baseline landed weight is defined as shown in Exhibit D. (7) Additional charges for extraordinary usage of electricity or other utilities, facilities, or services provided at the Airport that are greater than the basic utilities, facilities, or services provided that are included in the normal rental rates and landing fees. B. CITY reserves the right to charge AIRLINE or its employees a reasonable and non- discriminatory fee for the employee parking area(s) provided at the Airport and for issuance of Airport identification badges required by CFR Part 1542 of Federal Aviation Regulations. C. AIRLINE shall pay all applicable sales, use, intangible and ad valorem taxes of any kind, against Airline Premises, the real property and any improvements thereto or leasehold estate created herein., or which result from AIRLINE's occupancy or use of Airline Premises whether levied against AIRLINE or CITY. AIRLINE shall also pay any other taxes or assessments against Airline Premises or leasehold estate created herein. CITY agrees to immediately forward to AIRLINE any notices of such taxes and assessments due upon receipt of same. 5.06 Information to be Supplied by AIRLINE. A. Not later than ten (10) days after the end of each month, AIRLINE shall file with CITY separate written reports on forms provided by CITY and included as samples in Exhibit C, attached hereto, for activity conducted by AIRLINE during said month, and for activity handled by AIRLINE for each Air Transportation Company not having an agreement with CITY providing for its own submission of activity data to CITY. Such activity reporting shall include, but not be limited to (1) AIRLINE's total number of aircraft arrivals for the month by type of aircraft, the Maximum Certificated Gross Landing Weight of each aircraft, the total landed weight for the month; (2) total numbers of departures for the month; (3) total number of enplaned and deplaned passengers, including connecting passengers; (4) the amount of enplaned and deplaned cargo (mail, freight, and express — in pounds) for such month. -_21-- B. CITY shall have the right to rely on said activity reports in determining rentals and charges due hereunder. AIRLINE shall have full responsibility for the accuracy of said reports. Payment deficiencies due to incomplete or inaccurate activity reports shall be subject to charges as set forth in Section 5.07E and F. C. AIRLINE shall at all times maintain and keep records reflecting the activity statistics of AIRLINE's activities at the Airport to be reported pursuant to Article 5. Such records shall be retained by AIRLINE for a period of three (3) years subsequent to the activities reported therein, or such other retention period as set forth in FAR Part 249, and upon prior written notice to AIRLINE shall be made available at Lubbock, Texas for audit and/or examination by CITY or its duly authorized representative during all normal business hours. AIRLINE shall produce such books and records at Lubbock, Texas within thirty (30) calendar days of CITY's notice to do so or pay all reasonable expenses, including but not limited to transportation, food, and lodging, necessary for an auditor selected by CITY to audit said books and records. D. The cost of audit, with the exception of the aforementioned expenses, shall be borne by CITY; provided, however, the total out-of-pocket cost of said audit shall be borne by AIRLINE if either or both of the following conditions exist: (1) The audit reveals an underpayment of more than ten percent (10%) in aggregate of rentals, fees, and charges due on an annual basis hereunder, as determined by said audit; (2) AIRLINE has failed to maintain true and complete records in accordance with Section 5.060. E. Whenever AIRLINE or airlines handled by AIRLINE add or delete service or adjust the times of flight arrivals or departures, AIRLINE shall promptly provide CITY with a new gate operations schedule depicting the times each of its Terminal Aircraft Aprons will be occupied as soon as said schedule is available. 5.07 Payments. A. Payments of one -twelfth (1/12) of the total annual rentals for AIRLINE's Preferential Use Premises shall be due in advance, without demand or invoice, on the first day of each month. Said rentals and charges shall be deemed delinquent if payment is not received by the tenth (10) day of the month. B. Payment of AIRLINE's Landing Fees shall be due twenty-five (25) days from CITY's issuance of invoice. C. Payment for Joint Use Premises shall be due twenty-five (25) days from CITY's issuance of invoice. D. Payment for all other fees and charges due hereunder, shall be due twenty-five (25) days from CITY's issuance of invoice. E. CITY shall provide notice of any and all payment delinquencies, including payments of any deficiencies which may be due as a result of CITY's estimates of activity pursuant to Section F below, or due to an audit performed pursuant to Section 5.06C, herein; provided, however, interest at a rate of five percent (5%) annually shall accrue against any and all delinquent payment(s) from the due date until the date payments are received by CITY. This provision shall not preclude CITY from canceling this Agreement for default in the payment of rentals, fees, or charges, or from exercising any other rights contained herein or provided by law. F. In the event AIRLINE fails to submit its monthly activity reports as required in Section 5.06A, CITY shall estimate the rentals, fees, and charges based upon increasing the previous month's activity reported by AIRLINE by one hundred and fifty percent (150%). G. In the event AIRLINE's obligations with respect to Airline Premises or rights, licenses, or privileges granted hereunder shall commence or terminate on any date other than the first or last day of the month, AIRLINE's rentals, fees, and charges shall be prorated on the basis of the number of days such premises, facilities, rights, licenses, services, or privileges were enjoyed during that month. H. All payments due and payable hereunder shall be paid in lawful money of the United States of America, without set off, by check made payable to Lubbock Preston Smith International Airport and delivered to: Director of Aviation Lubbock Preston Smith International Airport 5401 N. Martin Luther King Blvd. Unit 389 Lubbock, TX 79403 5.08 Security for Performance. A. Unless AIRLINE or an Affiliate Airline has provided regularly scheduled flights to and from the Airport during the twelve (12) months prior to the effective date of this Agreement without the occurrence of any act or omission that would have been an event enumerated in Section 11.01 of this Agreement, if this Agreement had been in effect during that period, and any such act or omission remains uncured, AIRLINE shall provide CITY on the Effective Date of this Agreement with a contract bond, irrevocable letter of credit or other similar security acceptable to CITY ("Contract Security") in an amount equal to the estimate of three (3) months' rentals, fees and charges payable by AIRLINE (excluding PFCs) pursuant to this Article 5, to guarantee the faithful performance by AIRLINE of its obligations under this Agreement and the payment of all rentals, fees and charges due hereunder. AIRLINE shall be obligated to maintain such Contract Security in effect until the expiration of twelve (12) consecutive months during which period AIRLINE commits no event enumerated in Section 11.01 of this Agreement. Such Contract Security shall be in a form and with a company reasonably acceptable to CITY and licensed to do business in the State of TEXAS. In the event that any such Contract Security shall be for a period less than the full period required by this Section 5.08A or if Contract Security shall be canceled, AIRLINE shall provide a renewal or replacement Contract Security for the remaining required period at least sixty (60) days prior to the date of such expiration or cancellation. B. In the event CITY is required to draw down or collect against AIRLINE's Contract Security for any reason, AIRLINE shall, within ten (10) business days after CITY's written demand, take such action as may be necessary to replenish the existing Contract Security to its original amount (three months' estimated rentals, fees, and charges) or to provide additional or supplemental Contract Security from another source so that the aggregate of all Contract Security is equal to three months' estimated rentals, fees, and charges payable by AIRLINE pursuant to this Article 5. C. In addition to the foregoing, upon the occurrence of any AIRLINE act or omission that is an event enumerated in Section 11.01, or upon AIRLINE's election to assume this Agreement under Federal Bankruptcy Rules and Regulations and Federal Judgeship Act of 1984 or any successor statute, as such may be amended, supplemented, or replaced, CITY, by written notice to AIRLINE given at any time within ninety (90) days of the date such event becomes known to CITY, may impose or reimpose the requirements of Section 5.08A on AIRLINE. In such event, AIRLINE shall provide CITY with the required Contract Security within ten (10) days from its receipt of such written notice and shall thereafter maintain such Contract Security in effect until the expiration of a period of twelve (12) consecutive 11tZM months during which AIRLINE commits no additional event enumerated in Section 11.0 1 or the termination of bankruptcy proceedings, whichever is later. D. If AIRLINE shall fail to obtain and/or keep in force such Contract Security required hereunder, such failure shall be grounds for immediate cancellation of this Agreement pursuant to Section 11.01. CITY'S rights under this Section 5.08 shall be in addition to all other rights and remedies provided to CITY under this Agreement. E. AIRLINE and CITY agree that this Agreement constitutes an `executory contract' for the purposes of Section 365 of the United States Bankruptcy Code (Title I 1 USC) subject to assumption or rejection, and subject to the terms and conditions of assumption or rejection, as provided in said Section 365. Furthermore, AIRLINE and CITY agree that any Contract Security provided by AIRLINE are not `property of the estate' for purposes of Section 541 of the United States Bankruptcy Code (Title 11 USC), it being understood that any Contract Security is property of the third party providing it (subject to CITY's ability to draw against the Contract Security) and that all PFCs collected by AIRLINE with respect to Enplaned Passengers at the Airport, are property of CITY. 5.09 No Further Charges. Except as provided in this Agreement, or as may be permitted by any governmental entity (other than CITY, acting within its proprietary capacity) having jurisdiction over the Airport, no further rentals, fees, or charges shall be charged against or collected from AIRLINE, its passengers, its shippers and receivers of freight, its suppliers of material, its contractors or furnisher of services, by CITY, acting in its capacity as Airport proprietor, for the premises, facilities, rights, licenses, and privileges granted to AIRLINE herein. ARTICLE 6: OPERATION AND MAINTENANCE OF AIRPORT 6.01. General. CITY agrees that it will, with reasonable diligence, prudently develop, improve, and at all times maintain and operate with adequate, efficient and qualified personnel and keep the Airport in good repair including, without limitation, the Terminal Building, Loading Bridges, Terminal Apron and Airfield, and all appurtenances, facilities, and services now or hereafter connected therewith as the same relate to AIRLINE's air transportation system; will keep the Airport and its aerial approaches free from obstruction and interference for the safe and proper use thereof by AIRLINE; and will develop, maintain, and operate the Airport in all respects in a manner at least equal to the standards or rating established by the FAA and any other governmental agency having jurisdiction thereof, except for conditions beyond the control of CITY. 6.02, Terminal Building. A. CITY shall operate and maintain and keep in good condition and repair the Terminal Building, loading bridges and all additions, improvements, facilities, and other equipment now or hereafter provided by CITY at or in connection with the Terminal Building and loading bridges, except any improvements, facilities, and equipment constructed or installed by AIRLINE. CITY agrees in the event that an assigned loading bridge becomes inoperable during the Term of this Agreement, and CITY is unable to repair it within a reasonable amount of time, CITY will replace such loading bridge at its own cost, or reassign the loading bridge in accordance with Section 4.02E. B. CITY shall at all times maintain the public area of the Terminal Building in a neat, orderly, sanitary, and presentable condition, and shall keep such area adequately supplied, equipped (including directional signs), furnished, and decorated. C. CITY shall supply or cause to be supplied appropriate and adequate equipment and maintenance for air conditioning, electrical power, ventilation, heat, water, and sewerage facilities for Terminal Building public use areas, AIRLINE's Preferential Use Space and Joint Use Space; adequate illumination in Joint Use Space; and janitorial service in Terminal Building public use areas and Joint Use Space. D. AIRLINE shall at all times keep its Preferential Use Space and Joint Use Space neat, orderly, sanitary, and presentable. AIRLINE shall pay for all extraordinary electric power and shall be responsible for relamping their Preferential Use Space. AIRLINE shall furnish its own janitorial service for such Preferential Use Space and shall cause to be removed at AIRLINE's own expense from such Preferential Use Space all waste, garbage, and rubbish, and agrees not to deposit the same on any part of the Airport, except where designated by CITY in connection with collection for removal. AIRLINE shall, at its own expense, transport all refuse from temporary storage to designated depositories at locations on the Airport as established by CITY. E. AIRLINE shall maintain the Terminal Apron contiguous to its assigned gates and such other apron areas used by AIRLINE from time to time in a neat, clean, and orderly condition, free from litter, debris, refuse, petroleum products, or grease that may result from activities of its passengers, employees, agents, suppliers or contractors, and remove all oil and grease spillage, as is reasonably possible, that is attributable to AIRLINE's aircraft or equipment from its aircraft parking positions. F. AIRLINE shall perform, at its sole expense, ordinary preventive maintenance and ordinary upkeep and repair of all facilities, personal property, trade fixtures, and equipment located in its Preferential Use Space, excluding structural and roof repairs and including, but not limited to, fixtures, interior doors and windows, baggage conveyors and belts, floor coverings, and ticket counters. 6.03. CITY's Right to Inspect and Make Repairs. CITY, by its authorized officers, employees, agents, contractors, subcontractors, and other representatives, shall have the right (at such times as may be reasonable under the circumstances and with as little interruption of AIRLINE's operations as is reasonably practicable) to enter upon the AIRLINE's Preferential Use Space, accompanied by an authorized AIRLINE representative, if practicable, for the following purposes: A. CITY shall have the right, but not the obligation, to inspect such space to determine whether AIRLINE has complied and is in compliance with the terms and conditions of this Agreement. Such inspections shall not constitute an inspection for safety, fire protection or security purposes. E. Upon thirty (30) consecutive calendar days notice, to perform such maintenance, cleaning, or repair as CITY reasonably deems necessary, if AIRLINE fails to perform its obligations under this Article 6. CITY shall be entitled to recover the reasonable cost of such maintenance, cleaning, or repair from AIRLINE, plus a fifteen percent (15%) administrative charge from AIRLINE on the next rent date. 6.44. Alterations and Improvements. A. Alterations and Improvements. AIRLINE shall make no alterations, additions, improvements to, or installations on Airline's Premises under this Agreement without the prior written approval of Director of Aviation; provided that such approval shall not be unreasonably withheld, conditioned or delayed. Plans and specifications for such work shall be filed with and subject to the approval of the Director of Aviation and all work shall be done in accordance with local ordinances and state law. Subject to Sections 4.05(B) and (C), all alterations and improvements to Airline's Premises inclusive of outbound baggage system and ticket counter shall become part of the realty and title shall vest with CITY upon completion of the installation or construction of such alterations and/or improvements. Removal of trade fixtures shall be allowed only pursuant to Sections 4.05(B) and (C). B. Payment for Alterations and Improvements. AIRLINE shall be solely responsible for payment for all Leasehold Improvements made by AIRLINE. 6.05. Debts, Liens, Mortgages. AIRLINE shall pay promptly when due, all bills, debts and obligations incurred by AIRLINE in connection with its operations or activities on the Airport, and shall not permit the same to become delinquent. AIRLINE shall not permit any mechanics' or materialmen's or any other lien to be attached to or be foreclosed upon Airline's Premises or improvements thereto. AIRLINE shall suffer no lien, mortgage, judgement or execution to be filed and remain undischarged against Airline's Premises or improvements thereon. --28-- ARTICLE 7: DAMAGE OR DESTRUCTION OF AIRLINE'S PREMISES 7.01. Damage or Destruction. If by reason of any cause including but not limited to any obligation CITY may have, other than the negligence or willful misconduct of AIRLINE, the Airline's Premises or adjacent facilities directly and substantially affecting the use of Airline's Premises are damaged to such an extent that they arc untenantable in whole or in substantial part, then: A. If the repairs or rebuilding necessary to restore Airline's Premises to its condition prior to the occurrence of the damage can, in the reasonable judgement of CITY, be completed within ninety (90) consecutive calendar days from the date on which the damage occurred, CITY shall so notify AIRLINE, in writing, and shall proceed promptly with such repairs and rebuilding, and in such event, the rental fees for Airline's Premises, for which provision is made in Article 5 hereof, shall be abated on a prorated basis for the period from the date of the occurrence of such damage to the date upon which such repairs and rebuilding are completed. The prorata abatement of rental fees shall be based only on the reduction of usable square feet in Airline's Premises due to such damage to Airline's Premises. The rental fee per square foot established in this Agreement shall remain the same. B. If such repairs or rebuilding cannot, in the reasonable judgement of CITY be completed within said ninety (90) consecutive calendar days, CITY, at its option, to be evidenced by notice in writing to AIRLINE within thirty (30) days of the date of the occurrence, may either: (1) proceed promptly with said repairs or rebuilding, in which event abatement of the rental fees shall be allowed, as described in this Article, or (2) terminate the letting of Airline's Premises, in which event the said rental fees therefore for which provision is made in Article 5 hereof shall be eliminated from and after the date of the occurrence of the damage. CITY shall not be deemed in default under this Agreement in the event it elects to terminate the letting of the damaged or destroyed Airline's Premises. The 90 - day repair or rebuilding time shall include the time required for design of repairs or rebuilding, bidding and award of a construction contract pursuant to CITY procedures, and construction of the repairs or rebuilding. C. In the event repair or rebuilding is required pursuant to subsection A, above, or the CITY elects to repair or rebuild pursuant to subsection B, above, CITY shall use its best efforts to provide AIRLINE with alternative space, if necessary, during any repairs, rebuilding, or reconstruction of the Terminal Building. CITY shall advise AIRLINE as soon as may be practicable regarding CITY's intention with respect to any necessary repairs or restorations. In the event CITY provides such alternative space to AIRLINE, AIRLINE's rental fees shall not increase as a result of increased square footage unless AIRLINES requests additional space. In the event CITY provides alternative space to AIRLINE, abatement of rental fees shall consist only of cost directly associated with moving AIRLINE to the temporary space and back to restored space, if applicable, and if applicable, the reduction of rental fees based on a reduction of square feet in any temporary space, in which event, the smaller square footage would be charged at the same rate per square foot required pursuant to this Agreement for the space AIRLINE occupied prior to moving under the terms of this subsection. --31i-- ARTICLE 8: INSURANCE AND INDEMNIFICATI©N 8.01 Indemnification. Except where, and to the extent, it is caused by the negligence of the agents, employees, contractors, officers or board of the CITY, AIRLINE agrees to protect, defend, reimburse, indemnify and hold CITY, its agents, employees, board members and elected officers and each of them, free and harmless at all times from and against any and all claims, liability, expenses, losses, costs, fines and damages (including actually incurred reasonable attorney's fees) and causes of action of every kind and character, whether or not meritorious, against CITY by reason of any damage to property (or the environment, including any contamination of Airport property such as the soil or storm water by fuel, gas, chemicals or other substances deemed by the EPA to be environmental contaminants at the time this Agreement is executed or as may be redefined by the appropriate regulatory agencies in the future), or bodily injury (including death) incurred or sustained by any party hereto, any agent or employee of any party hereto, and any third or other party whomsoever, or any governmental agency, arising out of or incident to or in connection with AIRLINE's negligent performance under this Agreement, AIRLINE's use or occupancy of the Airline Premises, AIRLINE's compliance with Title 49 CFR, Part 1541 requirements, AIRLINE's negligent acts, omissions or operations hereunder or the performance, non-performance or purported performance of AIRLINE or any breach of the terms of this Agreement by AIRLINE. Provided, however, that upon the filing by anyone of a claim with the CITY for damages arising out of incidents for which AIRLINE herein agrees to indemnify and hold the CITY harmless, the CITY shall promptly notify AIRLINE of such claim and, in the event that AIRLINE does not settle or compromise such claim, then AIRLINE shall undertake the legal defense of such claim both on behalf of AIRLINE and on behalf of the CITY. It is specifically agreed, however, that the CITY, at its option and at its own expense, may participate in the legal defense of such claim. Any final judgment rendered against the CITY for any cause for which AIRLINE is liable hereunder shall be conclusive against AIRLINE as to liability and amount upon the expiration of the time for appeal there from. This clause shall survive the termination of this Agreement as to claims arising during the Term thereof. Compliance with the insurance requirements of this Article 8 shall not relieve AIRLINE of its liability or obligation to indemnify CITY as set forth in this Article 8. 8.02 Insurance. A. During the Term of this Agreement, AIRLINE shall provide, pay for and maintain with companies, reasonably satisfactory to CITY, the types of insurance described herein. All insurance shall be issued by responsible insurance companies eligible to do business in the State of Texas. B. All liability policies of AIRLINE and its contractors shall provide that CITY is an Additional Insured to the extent of AIRLINE's contractual obligations hereunder. The insurance coverage and --31-- limits required shall be evidenced by properly executed certificates of insurance. These certificates shall be signed by the authorized representative of the insurance company shown on the certificate. In addition, certified, true, and exact copies of all insurance policies shall be made available to CITY, on a timely basis, if requested by CITY. The required policies of insurance shall be construed in accordance with the laws of the State of Texas. C. If at any time CITY requests a written statement from the insurance company as to any impairments to the aggregate limit, AIRLINE shall promptly authorize and have delivered such statement to CITY. After written notice to AIRLINE, AIRLINE authorizes CITY and its insurance consultant to confirm with AIRLINE's insurance agents, brokers and insurance companies all information furnished CITY, as to its compliance with its insurance requirements. D. All required liability insurance coverages of AIRLINE shall be primary to any insurance or self- insurance program of CITY. E. The acceptance of delivery to CITY of any certificate of insurance evidencing the insurance coverages and limits required in this Agreement does not constitute approval or acceptance by CITY that the insurance requirements in this Agreement have been met. F. No operations shall commence at the Airport unless and until the required certificates of insurance are in effect and approved by CITY. G. The insurance coverages and limits required of AIRLINE under this Agreement are designed to meet the minimum requirements of CITY. They are not designed as a recommended insurance program for AIRLINE. AIRLINE is responsible for insuring its real and personal property located at the Airport. AIRLINE, alone, shall be responsible for the sufficiency of its own insurance program. Should AIRLINE have any question concerning its exposures to loss under this Agreement, or the possible insurance coverages needed therefore, it should seek professional advice. H. AIRLINE and CITY understand and agree that the minimum limits of the insurance herein required may from time to time become inadequate, and AIRLINE agrees that it will increase such minimum limits upon receipt of written notice defining the basis of the increase. AIRLINE shall furnish CITY, within sixty (60) days of the effective date thereof, a certificate of insurance evidencing such insurance is in force. I. AIRLINE's insurance companies or its authorized representative shall give CITY fifteen (15) days prior written notice by registered or certificated mail of any cancellation (including non-payment of premiums), intent not to renew, or material reduction in any policy's coverage, except in the application of the Aggregate Limits Provisions. In the event of a reduction to the Aggregate Limit, it is agreed that immediate steps will be taken to have it reinstated. J. If at any time CITY requests a written statement from the insurance companies as to any impairments to the Aggregate Limit. Prompt authorization and delivery of all requested information will be given to CITY. Renewal Certificates of Insurance must be provided to CITY as soon as practical but in every instance prior to expiration of current coverages. K. Should at any time AIRLINE not, in the opinion of CITY's insurance consultant, provide or maintain the insurance coverages required in this Agreement, CITY may terminate or suspend this Agreement. L. The wording of all policies, forms and endorsements must be reasonably acceptable to the CITY. (1) Workers Compensation and Employer's Liability Insurance shall be maintained in force by AIRLINE during the Term of this Agreement for all employees engaged in the operations under this Agreement. AIRLNE shall elect to obtain workers' compensation coverage pursuant to Section 406.002 of the Texas Labor Code. Further, AIRLINE shall maintain said coverage throughout the term of this contract and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure that the AIRLINE maintains said coverage. Any termination of workers' compensation insurance coverage by AIRLINE or any cancellation or non -renewal of workers' compensation insurance coverage for the AIRLINE shall be a material breach of this contract. The policy must be endorsed to include a waiver of subrogation in favor of the City of Lubbock. The limits of coverage for employer's liability insurance shall not be less than: Employer's Liability $1,000,000 Limit Each Accident $1,000,000 Limit Disease Aggregate $1,000,000 Limit Disease Each Employee (2) Airport Liability Insurance shall be maintained by AIRLINE for the life of this Agreement. Coverage shall include, but not be limited to, Premises and Operations, Personal Injury, Contractual for this Agreement, Independent Contractors, Broad Form Property Damage, Products and completed Operations Coverage and shall not exclude the (XCU) Explosion, Collapse and Underground Property Damage Liability Coverage. Coverage shall be applicable to the operation of all mobile and ground equipment at the Airport. The Completed Operations Coverage shall be maintained for a period of not less than three (3) years following final operations of AIRLINE under this Agreement. The limits of coverage shall not be less than:. Airlines Operating Aircraft with fifty (50) or more seats: Bodily & Personal Injury $100,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate Airlines Operating Aircraft with less than fifty (50) seats: Bodily & Personal Injury $50,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate (3) Aircraft Liability Insurance shall be maintained by AIRLINE during the Term of this Agreement for all owned, non -owned, leased or hired aircraft, including passenger coverage. The limits of coverage shall not be less than: Bodily & Personal Injury $100,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate (4) Business Automobile Liability Insurance shall be maintained by AIRLINE during the Term of this Agreement as to the ownership, maintenance, and use of all owned, non -owned, leased or hired vehicles. The limits of coverage shall not be less than: Bodily & Personal Injury $5,000,000 Combined Single Limit & Property Damage Liability Each Occurrence & Aggregate (5) Umbrella Liability Insurance or Excess Liability„ Insurance may be used to reach the limits of liability required for the Airport Liability Policy, Aircraft Liability and the Business Automobile Policy. The limits of coverage shall not be less than: Umbrella or Excess Liability Policy $100,000,000 Combined Single Limit Each Occurrence & Aggregate -Specific for this Agreement $200,000,000 Combined Single Limit Each Occurrence & Aggregate -Not Specific for this Agreement Primary Liability Limits for the underlying Airport General Liability Coverage: Bodily & Personal injury & Property Damage Liability $10,000,000 Combined Single Limit Each Occurrence & Aggregate ARTICLE 9: TRANSFER OF AIRLINE'S PREMISES BY ASSIGNMENT OR SUBLETTING 9.01. General. AIRLINE, except to assign or sublet to Affiliate Airline, shall not assign, transfer, convey, sell, mortgage, pledge or encumber (hereinafter collectively referred to as "assignment") or sublet Airline's Premises without the advance written approval of CITY, which approval shall not be unreasonably withheld, conditioned or delayed. If AIRLINE fails to obtain advance written approval of any such assignment or sublease, CITY, in addition to the rights and remedies set forth in Article 11, shall have the right to refuse to recognize such agreement, and the assignee or sublessee shall acquire no interest in this Agreement or any rights to use Airline's Premises. 9.02. CITY Approval of Assignments. Notwithstanding the foregoing, this Section shall not be interpreted to preclude the assignment, in whole or in part, of this Agreement and AIRLINE's rights and obligations hereunder to a parent, subsidiary, merged company or any purchaser of all or substantially all of AIRLINE's assets if such parent, subsidiary, merged company or any purchaser of all or substantially all of AIRLINE's assets continues, after such assignment, to conduct an air transportation business at the Airport at which AIRLINE is a Signatory Airline and assumes all rights and obligations consistent with the provisions of this Agreement. Written notice of such assumption shall be provided by the parent, subsidiary, merged company or any purchaser of all or substantially all of AIRLINE's assets thirty (30) consecutive calendar days after the effective date of such assignment. 9.03. CITY Approval of Subleases. It shall not be unreasonable for CITY to disapprove or condition a sublease of Airline's Premises under any or all of the following circumstances, among others: A. If the sublessee is an air transportation company other than an Affiliated Airline who is not, and is not willing to become, a Signatory Airline. B. If a Signatory Airline is, in the determination of CITY, in need of Airline's Premises proposed to be subleased; provided, however, that such Signatory Airline is willing to take such Airline's Premises on substantially the same terms and conditions as proposed in the sublease and is willing to provide AIRLINE with a reasonable security deposit not to exceed one month's rentals, fees and charges. 9.04. Reasons for Disapproval Not Comprehensive. The circumstances under which CITY may determine to disapprove or condition assignments and subleases set forth in this Article 9 are not intended to be a comprehensive list of all those which CITY may impose under Article 9. 9.05. Method of Obtaining Approval. AIRLINE, when requesting an approval of an assignment or sublease under Section 9.01, shall include with its request a copy of the proposed agreement, if prepared, or a detailed summary of the material terms and conditions to be contained in such agreement. Any proposed agreement or detailed summary thereof shall provide the following information: (1) Airline's Premises to be assigned or sublet; (2) the terms; (3) if a sublease, the rentals and fees to be charged; and (4) all material terms and conditions of the assignment or sublease CITY may reasonably require. If approved, AIRLINE shall submit a fully executed copy of such agreement to CITY within thirty (30) consecutive calendar days prior to the commencement of the assignment or sublease. 9.06. Administrative Charge. In the event AIRLINE is authorized by CITY to sublease any portion of Airline's Premises, AIRLINE may charge such sublessee, in addition to a reasonable charge for any services and AIRLINE -owned property provided by AIRLINE or actual costs other than rental costs incurred by AIRLINE, reasonable rentals not to exceed one hundred fifteen percent (115%) of AIRLINE's rental for such portion of Airline's Premises. 9.07. AIRLINE to Remain Liable. AIRLINE shall remain fully and primarily liable during the Term of this Agreement for the payment of all of the rental due and payable to CITY for the Airline's Premises that are subject to a sublease under Article 9, and fully responsible for the performance of all the other obligations hereunder, unless otherwise agreed to by CITY. 9.08. CITY Determination of Type of Agreement. CITY shall have the right to examine the terms of any agreement or arrangement submitted to it for approval pursuant to this Article 9 and determine whether such agreement or arrangement is most appropriately characterized as an assignment or sublease, regardless of AIRLINE's characterization of such agreement or arrangement. ARTICLE 10: RELINQUISHMENT OF AIRLINE'S PREMISES 10.01. Notice of Intent to Relinquish Airline's Premises. In the event AIRLINE desires to relinquish any of Airline's Premises, AIRLINE shall provide written notice to CITY thirty (30) consecutive calendar days in advance of such relinquishment and shall identify in such notice all areas it wishes to relinquish. CITY shall make its best efforts to lease such areas to another airline, to the extent the proposed relinquished Airline's Premises are suitable for another airline, and subject to the limitations of Article 9. 10.02. Non -Waiver of Responsibility_. AIRLINE shall continue to be solely responsible pursuant to this Agreement for the payment of all rentals, fees and charges related to Airline's Premises until another airline commences payment for the relinquished part of Airline's Premises as provided in Section 10.03. 10.03. Reduction of Rent, Fees and Charges. AIRLINE's rentals, fees and charges related to that portion of Airline's Premises taken by another airline, pursuant to such airline's agreement with CITY, shall be reduced in the amount of the rentals, fees and charges paid by such other airline. This reduction shall begin only when the new airline that contracts with CITY for its use of Airline's Premises begins payment for Airline's Premises. --38-- ARTICLE 11: CANCELLATION BY CITY 11.01 Events of Default. The events described below shall be deemed events of default by AIRLINE hereunder: A. Upon the occurrence of any one of the following; events of default, CITY may give thirty (30) days written notice as provided in Section 11.03. (1) The conduct of any business or performance of any acts at the Airport not specifically authorized herein or by other agreements between CITY and AIRLINE, and said business or acts do not cease within thirty (30) days of receipt of CITY's written notice to cease said business or acts. (2) The failure to cure a default in the performance of any of the terms, covenants, and conditions required herein (except Contract Security requirements, insurance requirements, and payment of rentals, fees, and charges, all as provided for in Section 11.01(B) within thirty (30) days of receipt of written notice by CITY to do so; or if by reason of the nature of such default, the same cannot be remedied within thirty (30) days following receipt by AIRLINE of written demand from CITY to do so, AIRLINE fails to commence the remedying of such default within said thirty (30) days following such written notice, or having so commenced, shall fail thereafter to continue with diligence the curing thereof. AIRLINE shall have the burden of proof to demonstrate (i) that the default cannot be cured within thirty (30) days, and (ii) that it is proceeding with diligence to cure said default, and that such default will be cured within a reasonable period of time. (3) The failure by AIRLINE to remit PFCs. B. Upon the occurrence of any one of the following events of default, CITY may immediately issue written notice of default. (1) The failure by AIRLINE to pay any part of the rentals, fees, and charges due hereunder and the continued failure to pay said amounts in full within thirty (30) days of CITY's written notice of payments past due. Provided, however, if a dispute arises between CITY and AIRLINE with respect to any obligation or alleged obligation of AIRLINE to make payments to CITY, payments under protest by AIRLINE of the amount due shall not waive any of AIRLINE's rights to contest the validity or amount of such payment. In the event any court or other body having jurisdiction determines all or any part of the protested payment shall not be due, then CITY shall promptly reimburse AIRLINE any amount determined as not due plus interest on such amount at one and one-half percent (I-1/2%) per month. (2) The failure by AIRLINE to provide and keep in force Contract Security in accordance with Section 5.08. (3) The failure by AIRLINE to provide and keep in force insurance coverage in accordance with Article 8. (4) The appointment of a trustee, custodian, or receiver of all or a substantial portion of AIRLINE's assets. (5) The divestiture of AIRLINE's estate herein by operation of law, by dissolution, or by liquidation, (not including a merger or sale of assets). (6) The insolvency of AIRLINE; or if AIRLINE shall take the benefit of any present or future insolvency statute, shall make a general assignment for the benefit of creditors, or shall seek a reorganization or the readjustment of its indebtedness under any law or statute of the United States or of any state thereof including the filing by AIRLINE of a voluntary petition of bankruptcy or the institution of proceedings against AIRLINE the adjudication of AIRLINE as a bankrupt pursuant thereto. (7) The abandonment by AIRLINE of the Airline Premises, or its conduct of business at the Airport; and, in this connection, suspension of operations for a period of sixty (60) days will be considered abandonment in the absence of a labor dispute or other governmental action in which AIRLINE is directly involved. 11.42 Continuing Responsibilities of AIRLINE. Notwithstanding the occurrence of any event of default, AIRLINE shall remain liable to CITY for all rentals, fees, and charges payable hereunder and for all preceding breaches of any covenant of this Agreement. Furthermore, unless CITY elects to cancel this Agreement, AIRLINE shall remain liable for and promptly pay all rentals, fees, and charges accruing hereunder until termination of this Agreement as set forth in Article 5 or until this Agreement is canceled by AIRLINE pursuant to Article 12. 11.03 CITY's Remedies. Upon the occurrence of any event enumerated in Sections 11.01A, or 11.01 B, including applicable notice and cure periods, the following remedies shall be available to CITY: A. CITY may exercise any remedy provided by law or in equity, including but not limited to the remedies hereinafter specified. B. CITY may cancel this Agreement, effective upon the date specified in the notice of cancellation. For events enumerated in Section 11.01A, such date shall be not less than thirty (30) days from said notice. Upon such date, AIRLINE shall be deemed to have no further rights hereunder and CITY shall have the right to take immediate possession of AIRLINE's Airline Premises. C. CITY may reenter the Airline Premises and may remove all AIRLINE persons and property from same upon the date of reentry specified in CITY's written notice of reentry to AIRLINE. For events enumerated in Section 11.01 A, reentry shall be not less than fifteen (15) days from the date of notice of reentry. Upon any removal of AIRLINE property by CITY hereunder, AIRLINE property may be stored at a public warehouse or elsewhere at AIRLINE's sole cost and expense, D. CITY may relet Airline Premises and any improvements thereon or any part thereof at such rentals, fees, and charges and upon such other terms and conditions as CITY, in its sole discretion, may deem advisable, with the right to make alterations, repairs of improvements on said Airline Premises. In reletting the Airline Premises, CITY shall be obligated to make a good faith effort to obtain terms comparable than those contained herein and otherwise seek to mitigate any damages it may suffer as a result of AIRLINE's event of default. E. In the event that CITY relets Airline Premises, rentals, fees, and charges received by CITY from such reletting shall be applied: (i) to the payment of any indebtedness other than rentals, fees, and charges due hereunder from AIRLINE to CITY; (ii) to the payment of any cost of such reletting; and (iii) to the payment of rentals, fees, and charges due and unpaid hereunder. The residue, if any, shall be held by CITY and applied in payment of future rentals, fees, and charges as the same may become due and payable hereunder. If that portion of such rentals, fees, and charges received from such reletting and applied to the payment of rentals, fees, and charges hereunder is less than the rentals, fees, and charges as would have been payable during applicable periods by AIRLINE hereunder, then AIRLINE shall pay such deficiency to CITY. AIRLINE shall also pay to CITY, as soon as ascertained, any reasonable costs and expenses incurred by CITY in such reletting not covered by the rentals, fees, and charges received from such reletting. --41-- F. No reentry or reletting of Airline Premises by CITY shall be construed as an election on CITY'S part to cancel this Agreement unless a written notice of cancellation is given to AIRLINE. G. AIRLINE shall pay to CITY all other costs, incurred by CITY in the exercise of any remedy in this Article 11, including, but not limited to, reasonable attorney fees, disbursements, court costs, and expert fees. 11.04 Remedies Under Federal Bankruptcy Laws. Notwithstanding the foregoing, upon the filing by or against AIRLINE of any proceeding under Federal bankruptcy laws, if AIRLINE has defaulted in the performance of any provision of this Agreement within the six (6) months preceding such filing, CITY shall have the right to cancel this Agreement, in addition to other remedies provided under provisions of the Federal Bankruptcy Rules and Regulations and Federal Judgeship Act of 1984, as such may be subsequently amended, supplemented, or replaced. Such cancellation shall be by written notice to AIRLINE within sixty (60) days from the date of AIRLINE's initial filing in bankruptcy court. ARTICLE 12: CANCELLATION BY AIRLINE 12.01 Events of Default. The events described below shall be deemed events of default by CITY hereunder: A. CITY fails to keep, perform, or observe any material term, covenant, or condition herein contained, to be kept, performed, or observed by CITY and such failure continues for thirty (30) days after receipt of written notice from AIRLINE; or, if by its nature such default cannot be cured within such thirty (30) day period, CITY shall not commence to cure or remove such default within said thirty (30) days and to cure or remove the same as promptly as reasonably practicable; provided, however, CITY's performance under this Section. B. Airport is closed to flights in general or to the flights of AIRLINE, for reasons other than those circumstances within AIRLINE's control, and Airport fails to be reopened to such flights within sixty (60) consecutive days from such closure. C. The Airport is permanently closed as an air carrier airport by act of any federal, state, or local government agency having competent jurisdiction; or AIRLINE is unable to use Airport for a period of at least forty-five (45) consecutive days due to any law or any order, rule or regulation of any governmental CITY having jurisdiction over the operations of the Airport; or any court of competent jurisdiction issues an injunction preventing CITY or AIRLINE from using Airport for airport purposes, for reasons other than those circumstances within AIRLINE's control, and such injunction remains in force for a period of at least forty-five (45) consecutive days. D. The United States Government or any authorized agency of the same (by executive order or otherwise) assumes the operation, control, or use of the Airport in such a manner as to substantially restrict AIRLINE from conducting its operations, if such restriction be continued for a period of sixty (60) consecutive days or more. 12.02 AIRLINE's Remedy. So long as AIRLINE is not in default as set forth in Section 11.01 of this Agreement, including but not limited to payments due to CITY hereunder, AIRLINE may cancel this Agreement upon the occurrence of an event of default, as set forth in Section 12.01. In such event, AIRLINE shall serve thirty (30) day advance written notice of cancellation to CITY. All rentals, fees, and charges payable by AIRLINE shall cease as of the date of such cancellation and AIRLINE shall surrender the Airline Premises in accordance with Section 4.05 hereof. ARTICLE 13: GOVERNMENT INCLUSION 13.01 Government Agreements. This Agreement shall be subordinate to the provisions of any existing or future agreements between CITY and the United States Government or other governmental CITY, relative to the operation or maintenance of the Airport, the execution of which has been or will be required as a condition precedent to the granting of Federal or other governmental funds for the development of the Airport, to the extent that the provisions of any such existing or future agreements are generally required by the United States or other governmental CITY of other civil airports receiving such funds. CITY agrees to provide AIRLINE written advance notice of any provisions that would adversely modify the material terms of this Agreement. 13.02 Federal Government's Emergency Clause. All provisions of this Agreement shall be subordinate to the rights of the United States of America to operate the Airport or any part thereof during time of war or national emergency. Such rights shall supersede any provisions of this Agreement inconsistent with the operations of the Airport by the United States of America. 13.03 Nondiscrimination. A. AIRLINE for itself, its personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby agree as a covenant running with the land that (i) no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of Airline Premises, (ii) in the construction of any improvements on, over, or under Airline Premises and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination, and (iii) AIRLINE shall use the Airline Premises in compliance with all other requirements imposed by or pursuant to 14 CFR 152 and Title Vl of the Civil Rights Act of 1964 and 49 CFR, Subtitle A, Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and as said Title and Regulations may be amended. B. In conducting or engaging in any aeronautical activity for furnishing services to the public at the Airport, AIRLINE shall furnish said services on a fair, equal, and not unjustly discriminatory basis to all users thereof, and shall charge fair, reasonable, and not unjustly discriminatory prices for each unit or service as required pursuant to 14 CFR 152. AIRLINE may make reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. C. AIRLINE acknowledges that the provisions of 49 CFR, Part 23, Disadvantaged Business Enterprises (DBE), as said regulations may be amended, and such other similar regulations may be enacted, may be applicable to the activities of AIRLINE under the terms of this Agreement, unless exempted by said regulations, and AIRLINE hereby agrees to comply with the regulatory agencies, in reference thereto. These requirements may include, but not be limited to, compliance with DBE participation goals, the keeping of certain records of good faith compliance efforts, which would be subject to review by the various agencies, the submission of various reports and, if so directed, the contracting of specified percentages of goods and services contracts to DBEs. D. In the event of breach of any of the above nondiscrimination covenants which is not cured CITY shall have the right to cancel this Agreement after such action as the United States. Government may direct to enforce this covenant has been followed and completed, including exercise or expiration of appeal rights. 13.04 Securi . AIRLINE shall not bring or operate any vehicle or motorized equipment into or within any air operations area, unless having first complied with all insurance provisions and requirements specified in this Agreement, as well as the Airport Driver Training Program and the Airport's Security Program. When operating within any air operations area, AIRLINE shall cause its vehicles and equipment to move directly to and from the entrance gate or Airline Premises and the aircraft, and shall not enter or move about any other non -movement area. AIRLINE, its officers, employees, agents, and those under its control, shall comply with security measures required of AIRLINE or CITY by the FAA, TSA, U. S. Department of Transportation, or contained in any Airport master security plan approved by the FAA or TSA to include an Airport Tenant Security Program as outlined in CFR Part 1542 respective to AIRLINE's non-public Preferential Use Premises. If AIRLINE, its officers, employees, agents, or those under its control shall fail or refuse to comply with said measures and such non-compliance results in a monetary penalty being assessed against CITY, then AIRLINE shall be responsible and shall reimburse CITY in the full amount of any such monetary penalty or other damages, including attorney fees and other costs to defend CITY against such claims. 13.05 Environmental. A. General Conditions. (1) Notwithstanding any other provisions in this AGREEMENT, and in addition to any and all other requirements of this AGREEMENT or any other covenants, representations or warranties of AIRLINE, AIRLINE hereby expressly covenants, warrants and represents to CITY, in connection with AIRLINE's operations at the Airport the following: (2) AIRLINE is knowledgeable of all applicable federal, state, and local environmental laws, ordinances, rules, regulations and orders, which apply to AIRLINE's operations at the Airport and acknowledges that such environmental laws, ordinances, rules, regulations and orders change from time -to -time, and AIRLINE agrees to keep informed of any such future changes. (3) AIRLINE shall not cause or permit any Hazardous Material hereinafter placed, stored, generated, used, released or disposed of in, on, under about or transported from any Airport premises by AIRLINE, its agents, employees, contractors or other person, unless it has complied with the following: (a) with respect to Hazardous Materials other than oil, petroleum products, and/or flammable substances reasonably necessary in connection with AIRLINE's aeronautical activities, the prior written consent of CITY shall be required, which shall not be withheld unreasonably. CITY may impose, however, as a condition of such consent, such requirements as CITY in its sole discretion may deem reasonable or desirable, including without limiting the generality of the foregoing, requirements as to the manner in which, the time at which, and the contractor by whom such work shall be done, and (b) AIRLINE must comply with all environmental laws and regulations, and with prudent business practices, with respect to such Hazardous Materials and (c) the presence of Hazardous Materials must be reasonably necessary for the operation of AIRLINE's Air Transportation Business. (4) AIRLINE shall comply, and shall at all times ensure that all Airport premises occupied by it are kept in compliance with all applicable federal, state, and local laws, ordinances, regulations, guideline and orders relating to health safety and protection of persons, the public, and/or the environment, (collectively "Environmental Laws"). AIRLINE shall furnish upon the reasonable request of CITY, all report(s), assessments or other documents satisfactory to CITY showing that no Airport premises occupied by it are being used nor have been used by AIRLINE for any activities involving, directly or indirectly, the use, generation, treatment, storage or disposal of any Hazardous Materials. (5) Except for above -ground deicing fluid storage tanks, AIRLINE shall not install or allow to be installed any above or underground storage tanks on any Airport premises. For above -ground deicing fluid storage tanks and required containment, AIRLINE must obtain CITY's written approval and obtain all necessary federal, state, and local licenses. (6) Except as provided herein, AIRLINE shall warrant that it shall keep Airline Premises occupied by it free of all environmental, health or safety hazards and/or nuisances of any kind whatsoever. Prior to AIRLINE's occupancy of any Airline Premises, AIRLINE and CITY, or CITY's designated agent shall review the condition of premises to be occupied by AIRLINE, and shall make written notation of any pre-existing conditions discovered; subsequently, AIRLINE shall not be responsible to CITY with respect to such pre-existing conditions or if not noted previously, AIRLINE can reasonably demonstrate condition was pre-existing. (7) AIRLINE shall notify CITY immediately upon discovery of any Hazardous Material on, in, under or emanating from Airport premises occupied by it, any release or threat of release of a Hazardous Material, illness caused by exposure thereto, as well as any actual, threatened or potential environmental, health or safety liability, including but not limited to claims lawsuits, notices of violation, complaints and investigations. If contamination of said premises or other property by Hazardous Materials occurs as a result of AIRLINE's actions and/or operations, AIRLINE shall immediately, and at its own expense, take all actions necessary to remediate, abate, and/or rectify any such conditions at or upon the Airport. If CITY is required to remediate and/or abate any such conditions on or upon such premises, it may do so upon reasonable notice (under the circumstances) to AIRLINE, and AIRLINE shall pay all costs incurred by CITY with copies of any reports, analyses, notices, claims, complaints, demands, investigations, requests for information, and/or other documents, correspondence or other written materials relating to the environmental condition on or of the Airport premises at issue and/or Hazardous Materials on, in, under, or emanating from those premises upon receipt, completion or delivery of such materials. (8) Except as may otherwise be provided herein, AIRLINE will not make or allow to be made any change in usage, additions, or improvements in, on or to any Airport premises which will result in the presence or release of Hazardous Materials on any Airport premises. (9) If AIRLINE breaches the obligations stated in this section, or if the presence of Hazardous Materials on Airport premises occupied by AIRLINE results in a release of Hazardous Materials on, from or to said premises or contamination of the premises or other property (including groundwater), or if contamination of said premises or other property by Hazardous Materials otherwise occurs as a result of AIRLINE's negligent actions and/or operations, then, in addition to any other indemnification agreements(s) contained in this Agreement, AIRLINE shall indemnify, and hold CITY harmless from any and all resulting claims, judgments, damages, penalties, fines, costs, liabilities or losses, from any and all resulting claims, judgments, damages, penalties, fines, costs, liabilities or losses, (including, without limitation, diminution in value of the premises, damages for the loss or restriction on use of rentable or usable space or of any amenity of the premises, natural resource damages, damages arising from any adverse impact on marketing of space, damage to other property, or the environment, and sums paid in settlement of claims, allomey's fees, consultant and expert fees) except to the extent caused by the negligence or willful misconduct of CITY. Without limiting the foregoing, if the presence of any Hazardous Material on such premises caused or permitted by AIRLINE results in any contamination of the premises, other property, or the environment, AIRLINE shall promptly notify CITY. (10) AIRLINE agrees to cooperate with any investigation, audit or inquiry by CITY or any governmental agency, regarding possible violation of any environmental law or regulation upon the Airport. (11) AIRLINE agrees that all remedies of CITY as provided herein with regard to violation of any federal, state or local environmental laws, ordinances, rules, regulations or orders shall be deemed cumulative in nature and shall survive termination of this Agreement. (12) AIRLINE agrees that any notice of violation, notice of non-compliance, or other enforcement action shall be provided to CITY within twenty-four (24) hours of receipt by AIRLINE or AIRLINE's agent. Any violation or notice of violation or non-compliance with federal, state, or local environmental law or ordinance shall be deemed a default under this Agreement. Such default may be cured within ten (10) days of receipt of notice of default from CITY, or such longer period as may be required to effect a cure provided AIRLINE commences a cure within said ten (10) days and thereafter diligently prosecutes the cure to completion. Any such default that is not cured shall be grounds for termination of this Agreement. (13) In entering this Agreement, CITY expressly relies on the covenants, representations, and warranties of AIRLINE as stated herein. B. Stormwater. (1) Notwithstanding any other provisions or terms of this Agreement, AIRLINE acknowledges that certain properties within the Airport, or on CITY owned land, are subject to stormwater rules and regulations. AIRLINE agrees to observe and abide by such stormwater rules and regulations as may be applicable to CITY's property and uses thereof. (2) AIRLINE acknowledges that any stormwater discharge permit issued to the CITY may name AIRLINE as a co-permitee. CITY and AIRLINE both acknowledge that close cooperation is necessary to insure compliance with any stormwater discharge permit terms and conditions, as well as to insure safety and to minimize cost of compliance. AIRLINE acknowledges further that it may be necessary to undertake such actions to minimize the exposure of stormwater to "significant materials" generated, stored, handled or otherwise used by AIRLINE, as such term may be defined by applicable stormwater rules and regulations, by implementing and maintaining "best management practices" as that term may be defined in applicable stormwater rules and regulations. (3) CITY will provide AIRLINE with written notice of any stormwater discharge permit requirements applicable to AIRLINE and with which AIRLINE will be obligated to comply from time -to -time, including, but not limited to: certification of non-stormwater discharges; collection of stormwater samples; preparation of stormwater pollution prevention or similar plans; implementation of best management practices; and maintenance of necessary records. Such written notice shall include applicable deadlines. AIRLINE agrees that within ten (10) days of receipt of such written notice, it shall notify CITY in writing if it disputes any of the stormwater permit requirements it is being directed to undertake. If AIRLINE does not provide such timely notice, AIRLINE will be deemed to assent to undertake such stormwater permit requirements. In that event, AIRLINE agrees to undertake, at its sole expense, unless otherwise agreed to in writing between CITY and AIRLINE, those stormwater permit requirements for which it has received written notice from CITY, and AIRLINE agrees that it will hold harmless and indemnify CITY for any violations or non-compliance with any such permit requirements. C. Solid and Hazardous Waste. (1) If AIRLINE is deemed to be a generator of hazardous waste, as defined by federal, state or local law, AIRLINE shall obtain a generator identification number from the EPA and the appropriate generator permit and shall comply with all federal, state and local laws, and any rules and regulations promulgated thereunder, including but not limited to, insuring that the transportation, storage, handling and disposal of such hazardous wastes are conducted in frill compliance with applicable law. (2) AIRLINE agrees to provide CITY, upon request, copies of all hazardous waste permit application documentation, permits, monitoring reports, transportation, responses, storage and disposal plans, manifests and material safety data sheets, within ten (10) days of any such requests by CITY. ARTICLE 14: GENERAL PROVISIONS 14.01 Nonwaiver. No waiver of default by either party of any of the terms, covenants, or conditions of this Agreement to be performed, kept, and observed by the other party shall be construed to be or act as a waiver of any subsequent default of any of the terms, covenants, and conditions to be performed, kept, and observed by the other parry and shall not be deemed a waiver of any right on the part of the other party to cancel this Agreement as provided herein. 14.02 Passenger Facility Cham. CITY reserves the right to assess and collect PFCs subject to the terms and conditions set forth in the Aviation Safety and Capacity Expansion Act of 1990, Section 9110 (the "PFC Act") and implementing regulations as may be supplemented or amended from time to time. AIRLINE shall collect and pay all PFCs for which it is responsible under the provisions of 14 CFR Part 150. Failure by AIRLINE to remit PFCs within the time frame required by 14 CFR Part 158 shall be grounds for cancellation of this Agreement. 14.03 Rights Non -Exclusive. Notwithstanding anything herein contained that may be or appear to the contrary, the rights, privileges, and licenses granted under this Agreement, are "non-exclusive" and CITY reserves the right to grant similar privileges to others, provided that in doing so, CITY does not interfere nor alter, or purport to alter, AIRLINE's rights and privileges hereunder. 14.04 Quiet Enjoyment. A. CITY agrees that, so long as AIRLINE's payment of rentals, fees, and charges is timely and AIRLINE keeps all covenants and agreements contained herein, AIRLINE shall peaceably have and enjoy its Airline Premises and all rights, privileges, and licenses of the Airport, its appurtenances and facilities granted herein, subject to the terms and conditions herein contained. B. Consistent with the nature of AIRLINE's business, AIRLINE agrees that occupancy of its Airline Premises will be lawful and quiet and that it will not knowingly use or permit the use of Airline Premises in any way that would violate the terms of this Agreement, create a nuisance, or disturb other tenants or the general public. AIRLINE shall be responsible for the activity of its officers, employees, agents, and others under its control with respect to this provision. 14.05 Performance. The parties expressly agree that time is of the essence in this Agreement. Failure by a party to complete performance within the time specified, or within a reasonable time if no time is specified herein, shall relieve the other party, without liability, of any obligation to accept such performance. --51-- 14.06 Aviation Rights. CITY reserves unto itself, its successors, and assigns for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Airport, including Airline Premises, for navigation or flight in the said airspace for landing on, taking off from, or operating at the Airport. 14.07 Rules and Regulations and Operational Directives. A. AIRLINE, its officers, employees, agents, and others under its control shall observe and obey all laws, regulations, and orders of the federal, state, county governments and CITY (acting in its governmental capacity) which may be applicable to AIRLINE'S operations at the Airport. B. CITY, acting in its governmental capacity, may from time to time adopt, amend, or revise the Airport's Rules and Regulations and Operating Directives governing the conduct of operations at the Airport, for reasons of safety, health, preservation of the property, or for the maintenance of the good and orderly appearance of the Airport. AIRLINE, its officers, employees, agents, and others under its control shall faithfully comply with and observe such reasonable and non-discriminatory Rules and Regulations and Operating Directives, except as they may conflict with the terms and provisions of this Agreement, or the regulations of another governmental entity having appropriate jurisdiction. CITY shall notify AIRLINE in advance of any amendments or supplements to such Rules and Regulations and Operating Directives that would materially alter the terms of this Agreement adversely. C. AIRLINE shall be strictly liable and responsible for obtaining, maintaining current, and fully complying with, any and all permits, licenses, and other governmental authorizations, however designated, as may be required at any time throughout the entire Term of this Agreement by any federal, state, or local governmental entity or any court of law having jurisdiction over AIRLINE or AIRLINE's operations and activities. 14.08 No Individual Liability. No member, officer, agent, director, or employee of CITY or AIRLINE shall be charged personally or held contractually liable by or to the other party under the terms or provisions of this Agreement or because of any breach thereof or because of its or their execution or attempted execution. 14.09 Relationship of Parties. Nothing contained herein shall be deemed or construed by the parties hereto, or by any third party, as creating the relationship of principal and agent, partners, joint venturers, or any other similar such relationship between the parties hereto. It is understood and agreed that neither the method of computation of rentals, fees, and charges, nor any other provisions contained herein, nor any acts of the parties hereto, creates a relationship other than the relationship of landlord and tenant. 14.10 Capacity to Execute. The individuals executing this Agreement personally warrant that they have full authority to execute this Agreement on behalf of the entity for whom they are acting herein. 14.11 Savings. The parties hereto acknowledge that they have thoroughly read this Agreement, including any exhibits or attachments hereto and have sought and received whatever competent advice and counsel was necessary for them to form a full and complete understanding of all rights and obligations herein. The parties further acknowledge that this Agreement is the result of extensive negotiations between the parties and shall not be construed against CITY by reason of the preparation of this Agreement by CITY. 14.12 Successors and Assigns Bound. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. 14.13 Incorporation of Exhibits. All exhibits and attachments referred to in this Agreement are intended to be and are hereby specifically made a part of this Agreement. 14.14 Titles. Section titles are inserted only as a matter of convenience and for reference, and in no way define, limit, or describe the scope or extent of any provision of this Agreement. 14.15 Severability. In the event that any covenant, condition, or provision of this Agreement is held to be invalid by any court of competent jurisdiction, the invalidity of such covenant, condition, or provision shall not materially prejudice either CITY or AIRLINE in their respective rights and obligations contained in the valid covenants, conditions, or provisions of this Agreement. 14.16 Amendments. No amendment, modification or alteration of the terms of this Agreement shall be binding unless the same be in writing, dated subsequent to the date hereof, and duly executed by the parties hereto with the same formality as required for this Agreement. 14.17 Other Agreements. Other than as set forth herein, nothing contained in this Agreement shall be deemed or construed to nullify, restrict, or modify in any manner the provisions of any other lease or contract between CITY and AIRLINE authorizing the use of the Airport, its facilities, and appurtenances. 14.18 Approvals. A. Unless otherwise stated, whenever this Agreement calls for approval by CITY, such approval shall be evidenced by the written approval of the director of Aviation. B. Any approval required by either party to this Agreement shall not be unreasonably withheld, conditioned or delayed. 14.19 Notice. A. All notices, requests, consents, and approvals served or given under this Agreement shall be served or given in writing with proof of delivery. If intended for CITY, notices shall be delivered to: Director of Aviation Lubbock Preston Smith International Airport 5401 N. Martin Luther King Blvd. Unit 389 Lubbock, TX 79403 Telephone: (806) 775-3126 Fax: (806) 775-3133 or to such other address as may be designated by CITY by written notice to AIRLINE. B. Notices to AIRLINE shall be delivered to: Regional Director Delta Air Lines, Inc. 1130 Delta Blvd., Dept. 877 Atlanta, GA 30354 Telephone: (404) 714-8160 Fax: (404) 773-1878 or to such other address as may be designated by AIRLINE by written notice to CITY. If notice, consent or approval is given in any other manner or at any other place, it shall also be given at the place and in the manner specified above. 14.20 Agent for Service. It is expressly understood and agreed that if AIRLINE is not a resident of the State of Texas, or is an association or partnership without a member or partner resident of said state, AIRLINE shall appoint an agent for the purpose of service of process in any court action between it and CITY arising out of or based upon this Agreement. AIRLINE shall immediately, within ten (10) days of execution of this Agreement, notify CITY, in writing, of the name and address of said agent, if applicable. Such service shall be made as provided by the laws of the State of Texas for service upon a non-resident engaging in business in the AYE State. It is further expressly agreed, covenanted, and stipulated that, if for any reason, such service of process is not possible, as an alternative method of service of process, AIRLINE may be personally served out of the State of Texas by the registered mailing of such service at the address set forth in Section 14.19. 14.21 Governing Law and Legal Forum, This Agreement is to be read and construed in accordance with the laws of the State of Texas. All litigation concerning this Agreement by either party shall be instituted in Lubbock, Texas. The provisions of this section shall survive the termination of this Agreement. 14.22 Force Majeure. Except as herein provided, neither CITY nor AIRLINE shall be deemed to be in default hereunder if either party is prevented from performing any of the obligations, other than the payment of rentals, fees, and charges hereunder, by reason of strikes, boycotts, labor disputes, embargoes, shortages of energy or materials, acts of God, acts of the public enemy, weather conditions, riots, rebellion, or sabotage, or any other circumstances for which it is not responsible or which are not within its control. 14.23 Most Favored Nation. CITY covenants and agrees not to enter into any basic airline use and lease agreement with any Air Transportation company which (i) makes substantially similar use of the Airport, (ii) operates substantially similar aircraft, and (iii) utilizes substantially similar facilities to that of AIRLINE, which contains more favorable terms than this Agreement, or to grant to any such Air Transportation Company rights or privileges with respect to the Airport which are not afforded to AIRLINE hereunder unless substantially the same terms, rights, privileges, and facilities are concurrently made available to AIRLINE. 14.24 Entire Agzeement. It is understood and agreed that this instrument contains the entire agreement between the parties hereto. It is further understood and agreed by AIRLINE that CITY and CrI Y"s agents have made no representations or promises with respect to this Agreement or the making or entry into this Agreement, except as in this Agreement expressly set forth, and that no claim or liability or cause for termination shall be asserted by AIRLINE against CITY for, and CITY shall not be liable by reason of, the breach of any representations or promises not expressly stated in this Agreement. IN WITNESS WHEREOF, the Parties hereto have caused these presents to be executed on the day and year first above written. DELTA. AIR f B: ATTEST: B l Secretary CITY OF LUBBOCK, TEXAS 'By: TOM MARTIN, MAYOR ATTEST: Reb ca Garza, City Secretary ROVED AS TO ONTENT: 6 It es W. Loomis, Transportation and Public Works Assistant City Manager APP AS T FORM: Chad Weaver, Assistant City Attorney Resolution No. 2009—R0142 EXHIBIT B Landing fee rates and Terminal rental rates will be as set forth in this Exhibit B during the Term of the Agreement. Any revisions to these amounts will be as permitted in Article 5. October 1, 2006 — September 30, 2007 October 1, 2007 — September 30, 2008 October 1, 2008 — September 30, 2009 October 1, 2009 — September 30, 2010 October 1, 2010 — September 30, 2011 Landing Fee Rate Terminal Rental Rate $1.00 $20.74 $1.03 $21.36 $1.12 $22.52 $1.16 $23.19 $1.19 $23.89 EXHIBIT C STATISTICAL REPORT TO: City of Lubbock — Lubbock Preston Smith International Airport FROM: SUBJECT: Statistical Report for the Month of ACTUAL LANDINGS TYPE OF AIRCRAFT — LANDING WEIGHTS DE-ICE FLUID gallons WFtE landings landings = landings = landings = landings = landings = landings = landings = landings = landings = DEPLANEMENTS lbs. lbs. lbs. 1 lbs. X / lbs. X I lbs. X _ I lbs. X _ / lbs. X / lbs. X DIVERSIONS / lbs. X 1 lbs. X / lbs. X / lbs. X ENPLANEMENTS PASSENGERS MAIL = lbs. FREIGHT = lbs. EXPRESS-- lbs. DE-ICE FLUID gallons WFtE landings landings = landings = landings = landings = landings = landings = landings = landings = landings = DEPLANEMENTS lbs. lbs. lbs. Exhibit D: Landing Weights Month FY 05106 American Eagle FY 04105 FY 03104 FY 05106 Continental FY 04105 FY 03104 October 13,059,277 7,449,115 7,784,196 5,964,795 5,020,417 4,795,200 November 13,009,593 8,169,935 10,240,379 5,757,160 4,469,186 4,536,000 December 13,442,449 8,883,283 9,887,764 6,040,987 5,369,108 5,529,600 January 11,970,273 8,920,281 9,842,792 5,817,296 5,038,851 4,881,600 February 9,650,902 8,039,000 8,289,766 5,408,125 4,755,343 4,556,049 March 10,984,223 10,017,963 9,772,827 6,224,852 6,391,608 5,025,631 April 12,201,353 11,765,181 8,462,533 5,840,009 5,791,513 4,826,553 May 12,715,628 12,454,281 8,220,421 5,904,821 5,997,865 4,890,288 June 13,157,076 13,470,473 7,518,855 6,006,897 6,075,906 4,692,734 July 13,183,124 13,867,836 7,982,370 6,247,681 5,823,478 4,902,393 August - 14,158,863 7,569,573 - 6,212,150 4,855,215 September - 12,618,355 7,261,524 - 4,979,775 4,556,489 Total 123,373,898 129,814,566 102,833,000 59,212,623 65,925,200 58,047,752 Southwest Month FY 05106 FY 04105 FY 03104 October 44,150,000 46,511,000 45,889,000 November 41,534,000 40,516,000 43,005,000 December 42,098,000 43,076,000 44,352,000 January 42,014,000 41,600,000 43,841,000 February 38,090,000 38,392,000 41,121,000 March 42,634,000 43,500,000 45,479,000 April 42,100,000 41,754,000 44,067,000 May 43,714,000 43,166,000 44,353,000 June 42,340,000 42,040,000 43,589,000 July 42,410,000 41,886,000 44,033,000 August - 42,766,000 45,170,000 September - 41,710,000 44,123,000 Total 421,084,000 506,917,000 529,022,000 Total Month FY 05106 FY 04105 FY 03104 October 63,174,072 58,980,532 58,468,396 November 60,300,753 53,155,121 57,781,379 December 61,581,436 57,328,391 59,769,364 January 59,801,569 55,559,132 58,565,392 February 53,149,027 51,186,343 53,966,815 March 59,843,075 59,909,571 60,277,458 April 60,141,362 59,310,694 57.356,086 May 62,334,449 61,618,146 57,463,709 June 61,503,973 61,586,379 55,800,589 July 61,840,805 61,577,314 56,917,763 August 63,015,842 63,137,013 57,594,788 September 60,154,174 59,308,130 55,941,013 Total 726,840,537 702,656,766 689,902,752 * Projected 3 Year Average 706,466,685 Baseline; 706,500,000 wolfls IFIV *44 (2ATF I OA7E I K aAtT 9 QATF3 QATE 4 r 1, GAM 2 GAn I LUBBOCK FRES' ON' IN'I'FRNA'1'1()N:%[. AIRPORT APRON LEVEJ, JoIN'I'I'SI-BA(;(iA(-il—'('I..,\I.%IARI..,k PREFE'RIINTIAL LFASl- PRIA11SIS A.MFRICAN F-AGLL m x x C (IN I INENTAL E-XPRLSS SoL7-1 -tjNklLS'j- > DELTA i - PW7 * - . . .. .. GAM 2 GAn I LUBBOCK FRES' ON' IN'I'FRNA'1'1()N:%[. AIRPORT APRON LEVEJ, JoIN'I'I'SI-BA(;(iA(-il—'('I..,\I.%IARI..,k PREFE'RIINTIAL LFASl- PRIA11SIS A.MFRICAN F-AGLL m x x C (IN I INENTAL E-XPRLSS SoL7-1 -tjNklLS'j- > DELTA GATE 4 DELTA AIR LINES my its fi; f' R ) N I VF 1 rr EL- r� -- ClJ� M N ,tier six ussm low r GATE 7 GATE E acre � WE 4 QATE ,W— L_ GATE 2 LUBBOCK PRESTON SMITH INTERNATIONAL AIRPORT MAIN LEVEL JOINT USE BAGGAGE CLAIM AREA JOINTUSE LEASED HOLDROOMS PREFERENTLAL LEAS F PREM ISIS AM RICAN EAGLE CONTINENTAL EXPRESS SOL1Tl IWES'I DELTA OATS 1 as Resolution No. 2009-RO142 9 � I I I I f I � I r I I 1 � DELTA AIR LINES A,, MAIN 1111F.