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HomeMy WebLinkAboutResolution - 1586 - Lease Agreement - American Airlines - 3,882 Sq Ft Operations Space, LIA - 02/23/1984RESOLUTION 1586 - 2/23/84 MG: js Rrsni :1TTnN 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 Airline Lease Agreement by and between the City of Lubbock and American Airlines, attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 23rd ATTEST E elyn Gaf a, ,,City et y -Treasurer APPROVED AS TO CONTENT: d : LZ� 60Z&�� Marvin Coffee, D' ctor of Aviation APPROVED AS TO FORM: Mi h le isar, Ass' nt City A torney BY of February , 1984. ALAN Y, M . RESOLUTION 1586 - 2/23/84 AIRLINE LEASE AGREEMENT BY AND BETWEEN THE CITY OF LUBBOCK, TEXAS AND AMERICAN AIRLINES, INC. TABLE OF CONTENTS ARTICLE I - LEASED PREMISES AND USES 1.01 - Description of Exclusive Leased Premises 1.02 - Description of Non-exclusive Use Premises 1.03 - Description of Privileges, Uses and Rights 1.04 - Rights and Privileges Specifically Excluded 1.05 - Right of Ingress and Egress ARTICLE II - TITLE TO LESSEE 2.01 - Installed Improvements and Property ARTICLE III - OBLIGATIONS OF CITY 3.01 - Right to Lease Property 3.02 - Maintenance and Operation of Airport 3.03 - Maintenance and Services in Lessee's Exclusive Space 3.04 - Governmental Facilities 3.05 - Restaurants 3.06 - Ticket Counter 3.07 - Outbound Baggage System ARTICLE IV - OBLIGATIONS OF LESSEE 4.01 - Maintenance Leased Premises 4.02 - Porter Service 4.03 - Alterations, Additions or Replacements 4.04 - Removal and Demolition 4.05 - Trash and Garbage 4.06 - Taxes and Licenses 4.07 - Rules and Regulations ARTICLE V - TERM 5.01 - Term ARTICLE VI - RENTALS AND FEES 6.01 - Rental for Exclusive Terminal Building Space 6.02 - Landing Fee 6.03 - Rental for Common Use Area 6.04 -Rental for Public Address System 6.05 - Aircraft Storage 6.06 - Time of Payment 6.07 - Default for Failure to Pay Rentals, Fees and Charges ARTICLE VII - READJUSTMENT OF RENTALS, FEES, AND OTHER CHARGES 7.01 - Basis for Readjusting Charges 7.02 - Costs Excluded ARTICLE VIII - RIGHTS AND PRIVILEGES RESERVED BY CITY 8.01 - Right to Charge Use Fees to Others 8.02 - Right to Improve and Protect the Airport ARTICLE IX - INDEMNIFICATION, INSURANCE AND BONDS 9.01 - Indemnification, Etc. 9.02 - Insurance Page 1 1 2 2 7 7 8 8 8 8 8 10 10 11 11 11 11 11 12 12 13 13 13 13 14 14 14 14 15 15 17 17 18 18 19 19 21 21 21 21 22 22 23 TABLE OF CONTENTS (Cont.) Page ARTICLE X - DAMAGE OR DESTRUCTION OF LEASED PREMISES 24 10.01 - Partial Damage 24 10.02 - Extensive Damage 24 10.03 - Complete Destruction 25 10.04 -Right to Recover Damages 26 10.05 - Limit of City's Obligations Defined 26 ARTICLE XI - TERMINATION OF LEASE, CANCELLATION, ASSIGNMENT AND TRANSFER 26 11.01 - Termination 26 11.02 - Cancellation by Lessee 26 11.03 - Cancellation by City 28 11.04 - Notice of Termination 29 11.05 - Assignment and Subletting 29 ARTICLE XII - PROPERTY RIGHTS UPON TERMINATION 30 12.01 - Lessee's Right of Removal 30 12.02 - City's Rights at Termination 30 ARTICLE XIII - GENERAL PROVISIONS 30 13.01 - Other Ordinances 30 13.02 - Arbitration 30 13.03 - Nondiscrimination 31 13.04 - Rules and Regulations 32 13.05 - Interpretation of Lease 32 13.06 - Conformity of Lease 32 13.07 - Invalid Provisions 32 13.08 - Sponsor's Assurances 33 13.09 - Consent Not to be Unreasonably Withheld 33 13.10 - Redelivery of Premises 33 13.11 - Holding Over 33 13.12 - Federal Aviation Administration 33 13.13 - Inspection 33 13.14 - Nonexclusive 34 13.15 - Lease Made in Texas 34 13.16 - Successors 34 13.17 - Headings 34 13.18 - Time of Essence 34 13.19 - Notices 34 u CERTIFICATED PASSENGER AIRLINE LEASE Lubbock International Airport Lubbock, Texas THIS LEASE AGREEMENT, made this day of 1983, by and between the City of Lubbock (hereinafter referred to as "City"), and American Airlines, Inc., a corporation incorporated under the laws of the State of Delaware with its principal office at Dallas -Fort Worth Airport, Texas (hereinafter referred to as "Lessee"). WITNESSETH WHEREAS, City owns and operates Lubbock International Airport, located in Lubbock County, State of Texas (hereinafter referred to as "Airport"), and WHEREAS, Lessee is engaged in the business of air transpor- tation with respect to persons, property and cargo and is certi- ficated by the Civil Aeronautics Board to furnish said service through Lubbock International Airport, and WHEREAS, City is currently operating a terminal building at said Airport and said building includes space for airline ticketing and operations facilities, and WHEREAS, Lessee desires to lease certain premises and faci- lities in the terminal building and to obtain certain rights in connection with and on the Airport, NOW THEREFORE, for and in consideration of the mutual cove- nants hereof, City hereby leases to Lessee and Lessee hereby hires and takes from City certain exclusive premises (hereinafter called "Leased Premises"), and certain non-exclusive use facilities, rights and privileges in connection with and on the Airport, as hereinafter described, upon the terms and conditions as follows: ARTICLE I LEASED PREMISES AND USES Section 1.01 Description of Exclusive Leased Premises. The exclusive Leased Premises shall be comprised of 3,882 square feet, more or less, in the terminal building which are allocated, more or less, as follows: Storage Space 49 square feet Total exclusive 3852 square feet Leased Space The location of the Leased 'remises is designated in red on Exhibit A attached hereto and by this reference made a part hereof. Section 1.02 - Description of Non-exclusive Use Premises. In addition to the exclusive Leased Premises hereinabove defined, Lessee is hereby granted the Non-exclusive use, in common with others authorized so to do, of such space and facilities as may be designated by City in and adjacent to the terminal building, which space and facilities, without limiting the generality hereof, shall consist of: (A) Ground area for the taxiing of aircraft. (B) Space for a reasonable amount of Lessee's apron equip- ment. (C) Loading gates. (D) Adequate and reasonably convenient vehicular parking space for the use by Lessee and its employees. Such space shall be at locations designated by City in common with other airport employees and the use thereof shall be provided at same charge per month as estab- lished for other airport employees. Section 1.03 - Description of Privileges, Uses and Rights. Lessee shall be entitled, in common with others authorized so to do, to the general use of all public airport facilities and improvements which now are or may hereafter be connected with or appurtenant to the Airport, except as hereinafter provided. For the purpose of this Lease, "public airport facilities" shall include, but not be limited to, approach areas, runways, taxi- ways, aprons, aircraft parking areas, roadways, sidewalks, navi- 90M Ticket Counter Space 460 square feet Office and Reservation 532 square feet Space Baggage and Cargo Space 2251 square feet Communications and 590 square feet Operations Space Storage Space 49 square feet Total exclusive 3852 square feet Leased Space The location of the Leased 'remises is designated in red on Exhibit A attached hereto and by this reference made a part hereof. Section 1.02 - Description of Non-exclusive Use Premises. In addition to the exclusive Leased Premises hereinabove defined, Lessee is hereby granted the Non-exclusive use, in common with others authorized so to do, of such space and facilities as may be designated by City in and adjacent to the terminal building, which space and facilities, without limiting the generality hereof, shall consist of: (A) Ground area for the taxiing of aircraft. (B) Space for a reasonable amount of Lessee's apron equip- ment. (C) Loading gates. (D) Adequate and reasonably convenient vehicular parking space for the use by Lessee and its employees. Such space shall be at locations designated by City in common with other airport employees and the use thereof shall be provided at same charge per month as estab- lished for other airport employees. Section 1.03 - Description of Privileges, Uses and Rights. Lessee shall be entitled, in common with others authorized so to do, to the general use of all public airport facilities and improvements which now are or may hereafter be connected with or appurtenant to the Airport, except as hereinafter provided. For the purpose of this Lease, "public airport facilities" shall include, but not be limited to, approach areas, runways, taxi- ways, aprons, aircraft parking areas, roadways, sidewalks, navi- 90M gational and avigational aids, lighting facilities, terminal facilities, or other public facilities appurtenant to the Airport. Lessee's use of said public airport facilities shall be for the sole purpose of operating a transportation system by aircraft for the carriage of persons, property, cargo, express and mail (hereinafter referred to as "Air Transportation"), which use, without limiting the generality hereof, shall include: (A) The handling, ticketing, billing and manifesting of passengers, baggage, cargo, express and mail in Air Transportation by Lessee or on behalf of any other Certificated Passenger Air Transportation Company having a valid Lease with City. (B) The repairing, maintaining, conditioning, servicing, testing, parking or storage of aircraft or other equip- ment operated by Lessee, or of any other Certificated Passenger Air Transportation Company. Such right and the rights referred to in Subparagraphs (C) and (D) below shall not be construed.as authorizing the conduct of a separate business by_Lessee, but shall permit Lessee to exercise such rights only in connection with its conduct of Air Transportation. (C) The training on the Airport of personnel in the employ of or to be employed by Lessee or any other Certifi- cated Passenger Air Transportation Company. (D) The sale, lease, transfer, disposal or exchange of Lessee's aircraft engines, accessories, and other equipment or supplies. Said right shall include the sale, lease, transfer or disposal of any article or goods used by or bought for use by Lessee in connection with its conduct of Air Transportation; provided how- ever, that Lessee shall not: (1) Sell food or beverages, except for consumption by passengers on the aircraft and as provided in Sub- paragraph (1) of this Section 1.03 and with the further exception that food and beverages may be -3- provided by Lessee to its passengers in its exclu- sive leased VIP or Clubrooms. (2) Sell gasoline, fuel, propellants, greases or other lubricants except when said products are of a particular grade desired by others and are not otherwise available (except to other Certificated Passenger Air Transportation Companies) at the Airport. (E) The servicing by Lessee's employees or others under control of Lessee of aircraft and other equipment operated by Lessee on the apron, by truck or otherwise, with gasoline, oil, greases, lubricants and any other fuel or propellant or other supplies required by Lessee. All of which shall include, without limiting the genera- lity hereof, the right of Lessee to install and main- tain on the Airport subject to terms and conditions mutually agreeable to the parties hereto adequate storage facilities for such gasoline, oil, greases, lubricants and other fuel or propellant or supplies, together with the necessary pipes, pumps, motors, filters and other appurtenances incidental to the use thereof, and the installation and maintenance of pipes in connection with such facilities as well as a pipe- line or lines between Lessee's source of supply and said storage facilities. Lessee shall submit to City for its written approval complete written plans and specifications for such storage facilities prior to installation. Lessee's exercise of its rights here- under shall be subject to the execution by the parties hereto of a separate;Lease on such terms, conditions and consideration, as may be mutually agreed upon. In connection with the execution of any such Lease, City now agrees and hereby becomes obligated to make avail- able for Lessee's use adequate and convenient rights- of-way on the Airport for said pipelines; provided, -4- however, that Lessee shall be responsible for the cost of all excavation, resurfacing, construction, installa- tion, maintenance and operation thereof and further provided that Lessee shall restore the surface of the Airport. In the event Lessee discontinues the use of said storage facilities or pipelines, Lessee agrees to remove said storage facilities or pipelines and restore the surface of the Airport affected by such removal to their original condition to the satisfaction of City. (F) The landing, taking off, flying, taxiing, towing, parking, loading and unloading of Lessee's aircraft or other equipment operated by Lessee, used in the opera- tion of scheduled, shuttle, courtesy, test, training, inspection, emergency, special charter, sight-seeing and other flights. All of which shall incidentally include, without limiting the generality hereof, the right to load and unload Lessee's aircraft, or the aircraft of any other Certificated Passenger Air Trans- portation Company having,a valid Lease with City, adjacent to a convenient entrance to the terminal building at loading gates located on the loading apron at points to be designated by City; provided, however, that flights carrying cargo or freight only shall load and unload at convenient and accessible points to be designated by City. (G) The loading and unloading of property, cargo, express and mail at said Airport by such motor vehicles or other means of conveyance as Lessee may desire or require in the operation of its Air Transportation system, with the right to designate the particular carrier or carriers who shall regularly transport Lessee's property, cargo, express and mail to and from the Airport. (H) The right to install, maintain and operate, for its own use, either by Lessee alone, or by Lessee in conjunc- -5- tion with others who are Lessees at the Airport, or through a nominee, a message system or other communi- cation systems between suitable locations. The instal- lation, maintenance and operation of a message/communi- cation system shall be without cost to City, and sub- ject to reasonable rental payments by Lessee to the City for any space used, as well as the prior written approval of City as to location, plans and specifica- tions. (I) The right to provide food and beverages for consumption aloft by passengers and crews of Lessee or by passengers and crews of any other certificated passenger airline .or for consumption by said passengers and crews grounded at the Airport because of weather or mechanical condi- tions. Such food and beverages may be served in Lessee's exclusive space when such food and beverages were originally scheduled to be served to such passengers and crews aloft. Except to the extent hereinabove specifically provided, nothing in this Subparagraph (T) shall be deemed to give Lessee the right on the Airport to maintain or operate a cafeteria, restaurant, vending machines, bar or cocktail lounge for the purpose of selling or in any manner otherwise providing for the sale of food or beverages to the public. (J) The right to place or replace existing signs identi- fying Lessee's business on and in the terminal build- ing. Said signs shall be substantially similar to existing signs as to size, type and location. A change in existing signs as to number, general type, size, design and location shall be subject to the written approval of City prior to installation. Such installa- tion and operation shall be without cost to City. (K) The right to install, maintain and operate by Lessee alone, by Lessee in conjunction with any other Certi- ficated Passenger Air Transportation Companies who are Lessees at the Airport, or through a nominee, such IM radio communications, meteorological and aerial navi- gation equipment and facilities in or on premises leased exclusively to Lessee, without cost to the City and subject to the written approval of City as to location, method and type of installation prior to installation. (L) The right, except as herein otherwise specifically provided, to purchase or otherwise obtain personal property of any nature (including, but not limited to, gasoline, fuel, propellants, lubricating oil, grease, food, beverages and other materials, equipment and supplies) deemed by Lessee necessary or incidental to its operations, its exercise of the rights herein granted and its discharge of the obligations herein imposed. Said purchases may be made through any person, partnership, firm, association or corporation Lessee may choose. (M) The rights and privileges granted the Lessee under Sub- paragraphs (E) , (G) , (H) , and (K) , of this Section 1.03 may be exercised by Lessee for and on behalf of any other Certificated Passenger Air Transportation Company of, by or through a nominee of Lessee. Said nominee shall be subject to the prior written approval of City. It is specifically provided, however, that any such nominee shall have no greater rights than Lessee here- under. ere-under. Section 1.04 - Rights and Privileges Specifically Excluded. Except as specifically provided for in Section 1.03, nothing herein shall be deemed to give Lessee any right or permission to sell at the Airport any goods or services to the public, other than related Air Transportation services. This prohibition includes, without limiting the generality of the foregoing, insurance sales except when not otherwise available at the Airport. Section 1.05 - Right of Ingress and Egress. City hereby grants the right of ingress to and egress from but not the use -7- of, except as provided in this Lease, the Leased Premises and facilities referred to in Sections 1.O1 and 1.02 for Lessee, its employees, agents, passengers, guests, patrons, its suppliers of materials or furnishers of service, its aircraft, equipment, vehicles, machinery and other property. Said rights shall be subject to such ordinances, rules and regulations not modifying or in conflict with this Lease as may now or hereafter have application at the Airport and shall be without charge, except as herein otherwise provided. ARTICLE 'II TITLE TO LESSEE Section 2.01 - Installed Improvements and Property. All improvements, equipment and other property bought, installed, erected or placed by Lessee in, on or about the Airport and the Leased Premises shall be deemed to be personalty and remain the property of Lessee, except as may constitute fixtures attached to the building or premises, which if removed would damage or.impair the use of such building or premises. ARTICLE III OBLIGATIONS OF CITY Section 3.01 — Right to Lease Property. City represents that it has the full right to lease that portion of the Airport referred to herein, together with all the premises, facilities, rights, licenses, services and privileges herein granted, and has full power and authority to enter into this Lease in respect thereof. City further represents that all things have happened and been done to make its granting of this Lease effective and City warrants to Lessee peaceful possession and quiet enjoyment of the Leased Premises, appurtenances, facilities, rights, license and privileges during the term hereof, upon performance of Lessee's covenants herein. Section 3.02 - Maintenance and Operation of Airport. Except as otherwise specifically provided herein, City shall, during the term of this Lease, operate, maintain and keep in good repair the terminal building, terminal apron and all public airport faci- lities and services now or hereafter connected with the Airport, which City has agreed to furnish and supply hereunder. City shall not, however, be required to perform maintenance and make repairs occasioned by the negligence of or by the misuse or abuse of any equipment or Leased premises by Lessee or its employees, agents, servants, patrons and invitees, in which case City may perform such maintenance or make such repairs as necessary and charge the cost of same to Lessee, provided Lessee has failed to perform such maintenance or make such repairs within a reasonable time after a request in writing from City so to do. City shall keep the Airport free from obstructions, in- cluding the clearing and removal of grass, stones, snow and ice, or other foreign matter as reasonably necessary and with reason- able promptness from the runways, taxiways and loading areas in order to insure the safe, convenient and proper use of the Air- port by Lessee. City shall maintain and operate the.Airport in all respects in a manner at least equal to the standards or rating issued by the Federal Aviation Administration fox -airports substantially similar in size and character and in accordance with all rules and regulations of the Federal Aviation Adminis- tration and any other governmental agency having jurisdiction thereof. Nothing herein contained shall be deemed to require City to enlarge the Airport or to make extensions or additions to the landing areas, runways, taxiways or other appurtenances of the Airport. It is further understood and agreed that City may abandon certain facilities which are no longer reasonably justi- fied for proper and adequate operation of the Airport. The obligations assumed by City under this Article III shall not obligate City, except as provided in Article X hereof, to repair or rebuild any of said facilities at said Airport in the event of damage by the elements, fire, explosion, or other causes beyond the control of City. City shall keep.the public and passenger space in the terminal building adequately supplied, a equipped, furnished and decorated and shall operate or cause to be operated adequate directional signs in said spaces and in all other public spaces on the Airport. Said signs shall include, but not be limited to, signs indicating the location of all public restaurants, zest rooms, newsstands, telegraph offices, baggage counters and all other facilities for passenger or public use in the terminal building or elsewhere on the Airport. City shall provide and supply adequate heat, conditioned air, light and water for the public and passenger space in the terminal building. City shall also provide and supply adequate lighting for vehicular parking spaces and aircraft loading ramp and adequate field lighting including, without limiting the generality hereof, landing lights and beacons. City shall also provide janitors and other cleaners neces- sary to keep the public and passenger space, including that exclusive leased area in front of the ticket counters, and the landing area of the Airport clean, neat, orderly,.sanitary and presentable at all times. Section 3.03 - Maintenance and Services in Lessee's Exclusive Space. City shall be responsible for and shall perform exterior building maintenance and structural maintenance throughout the terminal building and, at no additional charge, provide the following services -to Lessee in the Leased Premises: (A) Building heat and air conditioning (during the period of the year when such service is provided in the public areas of the terminal building). (B) Exterior window washing at periodic intervals, as required to provide a clean attractive appearance. (C) Maintenance of mechanical and electrical systems in- stalled by City, excluding relamping behind and above ticket counter and office areas. Section 3.04 - Governmental Facilities. It is expressly agreed that if funds for the provision, maintenance and operation of the Control Tower, Instrument Landing System, and/or other air -10- navigation aids of other facilities required or permitted by the United States Government and needed by Lessee or Lessee's opera- tion at the Airport and which are now or may hereafter be fur- nished by the United States Government are discontinued by the United States Government, City shall not be required to furnish said facilities. Section 3.05 Restaurants. City agrees to provide space in the terminal building for a restaurant or coffee shop for the purpose of selling food and beverages to the general public. City agrees to require the operator of said restaurant or coffee shop to furnish employees of Lessee and air passengers food and beverages of good quality and reasonable rates. Section 3.06 - Ticket Counter. The ticket counter shell located on the exclusive Leased Premises is and shall remain the property of the City. The Lessee may submit to the City plans and specifications for improvements or alterations to the ticket counter shell and upon receiving prior written approval of such plans and specifications from the Director of Aviation of the City, Lessee may at its sole cost and expense make such improve- ments or alterations to the ticket counter shell. All such construction, improvement, installation or alteration shall be considered as a fixture attached to the premises and will be and remain the property of the City free and clear of any encumbrance. Section 3.07 - Outbound Baggage System. The Lessee is hereby granted the right to use the outbound baggage conveyor system located on the exclusive Leased Premises, and the Lessee shall maintain said system in good condition and shall pay all costs of repair or maintenance for said system; provided however that said outbound baggage conveyor system is and shall remain the property of the City. ARTICLE IV OBLIGATIONS OF LESSEE Section 4.01 —Maintenance of Leased Premises. Except for exterior building and structural maintenance by City, as provided in Section 3.03, Lessee shall be obligated, without cost to City, -11- to maintain its exclusive Leased Premises and every part thereof including, but not limited to, the counter shell and the outbound baggage system in good order, repair and safe condition. Lessee shall, at its own expense, provide janitorial ser- vices in the Leased Premises. Said services may provided by Lessee alone, by Lessee in conjunction with other Certificated Passenger Air Transportation Companies who may hereafter be lessees at the Airport. Lessee shall relamp light fixtures as necessary, and shall repaint the interior of the Leased Premises as necessary but not less than once every three years. All such maintenance, repairs, and replacements shall be of quality equal to the original con- dition in materials and workmanship. All paint colors or schemes shall harmonize with the decor of the passenger terminal area subject to the prior approval of Director of Aviation. Section 4.02 - Porter Service. Lessee may, at its option, provide porter service for the convenience of its passengers in and adjacent to the baggage claim area of the terminal building. Said service may be provided by Lessee alone, by Lessee in con- junction with other Certificated Passenger Air Transportation Companies who may hereafter be Lessees at the Airport, or a nominee of Lessee who shall be approved by the Director of Avia- tion. Section 4.03 - Alterations, Additions or Replacements. During the term of this Lease, Lessee shall make no alterations, additions, or replacements in the Leased Premises without the prior written approval of City. Lessee shall likewise obtain prior approval from City before installing, at its own expense, any additional equipment which requires new electrical or plumbing connections or changes in those already installed on the Leased Premises. Any equipment installed by Lessee that is directly connected to the plumbing or electrical systems of the terminal building shall be deemed fixtures and shall become the property of the City upon instal- lation. -12- MAP IN FILE SEE RESOLUTION i AV EXHIBIT "C" CURRENT SCHEDULE OF PRO RATA RENTALS The following schedule of pro rata rentals shall be used by City to compute the monthly pro rata amount to be paid by Lessee on the COMMON BOARDING LOUNGE AREA and the BAGGAGE CLAIM AREA until such time as Lessee in conjunction with other Certificated Passenger Air Transportation Companies that now or may hereafter have leases at the Lubbock International Airport provide City in writing a schedule of the pro rata rentals due by each Lessee, as required by Article VI, Sections 6.O3A and 6.O3B of the Certifi- cated Passenger Airline Lease Agreement between the City of Lubbock and American Airlines, Inc. The rental for the COMMON BOARDING LOUNGE AREA and the. rental for the BAGGAGE CLAIM AREA shall be apportioned among said Certificated Passenger Air Transportation Companies on a 20/80 ratio. The monthly pro rata rental amounts payable by Lessee shall be computed as follows: A. Twenty percent (20%) of one -twelfth (1/12) of the annual rental amount multiplied by a percentage figure derived by dividing the actual number of departures of Lessee's air- craft from the Airport during the preceding month by the total actual number of departures of aircraft of all Certi- ficated Passenger Air Transportation Companies that are Lessees at Airport during the preceding month, (20% of ANNUAL RENTAL AMOUNT X LESSEE'S ACTUAL DEPARTURES) C12 ALL LESSEES' ACTUAL DEPARTURES) plus rental computed under "B" hereof = monthly rental amount payable by Lessee. B. Eighty percent (80%) of one -twelfth (1/12) of the annual rental amount multiplied by.a percentage figure derived by dividing the actual number of passenger enplanements on Lessee's aircraft by the total actual number of passenger enplanements on aircraft of all Certificated Passenger Air Transportation Companies that are Lessees at Airport during the preceding month, equals monthly rental amount payable by Lessee. (80% of ANNUAL RENTAL AMOUNT X LESSEE'S ACTUAL PASSENGER ENPLANEMENTS) C12 ALL EE PASSENGER ENPLANEMENTS plus rental computed under "A" hereof = monthly rental amount payable. IN WITNESS WHEREOF, the Parties have hereunto set their hands this olz4( day of � 19 ATTEST: CITY OF LU OC TE By Eve yn G g Se -Treasurer, ,City of Lubbock City of Lubbock Date Date FEB 2 3 1984 APPROVED AS TO FORM: As tans City ttorney ATTEST: Date -35- APPROVED AS TO TERMS AND CONDITIONS a n o e i rector o Aviation, Cit of Lubbock LESSEE: AMERICAN AIRLINES, INC. By 'RICA ARD B. ;�?� r�^�•a Name Vice President -Properties & Facilities Date tie Section 13.14 - Nonexclusive. It is hereby agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right prohibited by Section 308 of the Federal Aviation Act of 1958, as amended, 49 U.S.C.S. §1349 (1981), and City reserves the right to grant to others the pri- vilege and right of conducting any one or all of the aeronautical activities listed herein, or any other activity of an aeronau- tical nature. Section 13.15 -' Lease.Made in Texas. This Lease has been made in and shall be construed in accordance with the laws of the State of Texas. Section 13.16 - Successors. This Lease shall bind and inure to the benefit of any successor of City and any successor, as- signee or sublessee of Lessee. Section 13.17 - Headings. The article and section headings contained herein are for convenience in reference and are not intended to define or.limit the scope of any provision of this Lease. Section 13.18 - Time of Essence. Time is of the essence of this Lease. Section 13.19 - Notices. Notices to City provided for herein shall be sufficient if sent by certified mail, postage prepaid, addressed to: Lubbock International Airport, Route #3, Box 389, Lubbock, Texas 79401 and notices to Lessee, if sent by certified mail, postage prepaid, addressed to: American Airlines, Inc., Post Office Box 61616, Dallas -Fort Worth .Airport, Texas 75261 Attention: Vice President Properties and Facilities or to such other addresses as the parties may designate to each other in writing from time to time. -34- provided that the invalidity of such covenant, condition, or provision does not materially prejudice either City or Lessee in its respective rights and obligations contained in the valid covenants, conditions or provisions of this Lease. Section 13.08 - Sponsor's Assurances. This Lease shall be subject to the terms of the City's Sponsor's Assurances Agreement as amended. City represents that none of the provisions of this Lease violates any of�the provisions of said Sponsor's Assurances, as amended. Section 13.09 - Consent Not to be Unreasonably Withheld. Whenever consent is required hereunder by either Cit or Lessee, such consent is nota be unreasonablywithheld or to be delayed for an unreasonable period of time. Section 13.10 - kedelivery of Premises. Lessee shall, upon termination of this Lease, quit and deliver up the Leased Premises to City peaceably, quietly and in as good order and �ondition as the same now or may hereafter be improved by Lessee or City, i i reasonable use and wear thereof excepted. Section 13.11 - Holding Over. In the event Lessee remains in possession of the, eased Premises after the expiration of this i Lease without any written renewal thereof, such holdng over shall not be deemed as a renewal or extension of thi Lease, but shall create only a t�nancy from day to day which may be termi- nated at any time by City. I Section 13.12 - Federal Aviation Administration. Whenever the term "Federal Avi�tion Administration" is used i this Lease it shall mean the Federal Aviation Administration crated by the Federal Government under the Federal Aviation Act of 1958, or to such other Federal Government authority as may be the successor i thereto or be vested with the same or similar authority. Section 13.13 - Inspection. City through its authorized agent shall have the right at all reasonable times to enter upon the Leased Premises to inspect said 'remises, to obse e the performance by Lessee of its obligations hereunder, a�d to do any act which City may be obligated or have the right to do under this Lease. -33- shall include, but not be limited to, employment, upgrading, demotion, or transfer, recruitment, layoff, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Section 13.04 - Rules and Regulations. City shall have the right to and shall adopt from time to time and enforce reasonable rules and regulations, which Lessee agrees to observe and obey, with respect to the use of the Airport, public terminal building and appurtenances; provided that such rules and regulations shall not be inconsistent with safety and with rules, regulations, and orders of the Federal Aviation Administration with respect to aircraft operations at the Airport, and with the procedures pre- scribed or approved from time to time by the Federal Aviation Administration with respect to the operation of Lessee's aircraft at the Airport. Section 13.05 - Interpretation of Lease. Nothing in this Lease shall be construed or interpreted. in any manner whatsoever as limiting, relinquishing, or waiving of any rights or ownership enjoyed by City in the Airport property,:or in any manner waiving or limiting its control over the operation, maintenance, etc., of Airport property or in derogation of such governmental rights as City possesses, except as is specifically provided for herein. Section 13.06 - Conformity of Lease. In the event that City shall enter into a Lease, contract or agreement for use of the Airport with any other Certificated Passenger Air Transportation Company having aircraft of substantially similar size as that operated by Lessee and said Lease, contract or agreement contains more favorable terms, rights, or privileges than this Lease, then the same shall be concurrently and automatically made available to Lessee, at its option. Section 13.07 - Invalid Provisions. In the event any cove- nant, condition or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of any such covenant, condition or provision shall in no way affect any other covenant, condition or provision herein contained; -32- of rentals, arising between said parties with respect to the interpretation of any term, condition or covenant herein con.- tained or with respect to any matter of compliance or noncom- pliance with the terms hereof. City and Lessee shall each select one arbitrator and the two so chosen shall then select a compe- tent and disinterested third arbitrator; and the arbitrators together shall then consider the question(s) or the dispute(s) submitted to them in writing by the parties hereto. The decision in writing of any two shall determine the particular question or dispute under consideration. The parties hereto shall bear equally the expense of said arbitration. Section 13.03 - Nondiscrimination. The Lessee, its agents and employees will not discriminate against any person or class of persons by reason of age, sex, race, color, creed or national origin in providing any services or in the use of any of its facilities provided for the public, in any manner prohibited by Part 15 of the Federal Aviation Regulations. The Lessee will conduct its activities in accordance with requirementsof Section 504 of the Rehabilitation Act of 1973 and will assure that no qualified handicapped person shall, solely by reason of his or her handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under activity of the Lessee. The Lessee further agrees to comply with such enforcement procedures as the United States might demand that the City take in order to comply with the Sponsor's Assur- ances. ssur-ances. Lessee agrees to not discriminate against any employee or applicant for employment because of race, creed, color, age, sex or national origin. The Lessee shall not discriminate, solely on the basis of such persons' handicap, against any qualified handi- capped person who is either an employee or an applicant for employment with the Lessee. The Lessee agrees to take affirma- tive action to insure that applicants are employed and that employees are tested during employment without regard to their race, creed, color, age, sex or national origin. Such action -31- that Lessee may assign this Lease to any corporation with which Lessee may merge or consolidate or which may succeed to the Air Transportation business of Lessee. ARTICLE XII PROPERTY RIGHTS UPON TERMINATION Section 12.01 - Lessee's Right of Removal. Upon expiration of this Lease Lessee shall have the right for a period of sixty (60) days after the date of expiration, to remove any or all of its property from the Airport; provided, however, that Lessee shall not be in default in its payments to City hereunder and provided that Lessee shall restore said premises to their ori- ginal condition as of the beginning of occupancy, ordinary wear and tear, damage by the elements, fire, explosion or other causes beyond control of Lessee excepted. Section 12.02 - City's Rights at Termination. Title to any and all property not removed by Lessee prior to the expiration of the aforesaid sixty-day period shall vest in City; provided, however, that City reserves the right to require. Lessee to remove such improvements and property, the cost of which shall be borne by Lessee in the event City removes same on failure of Lessee to perform its obligation hereunder. City also reserves the right to charge reasonable rental for the sixty-day period of continued occupancy by Lessee; provided, however, that no charge shall be made to Lessee if Lessee shall remove its property from the Leased Premises within the first thirty (30) days of said sixty-day period. ARTICLE XIII GENERAL PROVISIONS Section 13.01 - Other Ordinances. This Lease supersedes City Ordinance Number 2375 of the 6th day of December, 1957, and amendments thereto, pertaining to the rental rates and landing fees at the Airport. Section 13.02 - Arbitration. In any event and notwith- standing any provisions made in this Lease, the parties agree to submit to arbitration any question or dispute, except nonpayment -30- substantial part or parts thereof, in such manner as substantially to restrict Lessee, for a period of at least ninety (90) days, from operating thereon for the carrying of passengers, cargo, property.and the United States airmail. (G) In addition to the foregoing, all rights, privileges or interests acquired hereunder by Lessee may, at the option of City and following written notice of thirty (30) days, be suspended or finally terminated if such suspension or termination is found by City, acting in good faith, to be necessary to secure federal financial aid for the development of the Airport or to secure federal financial aid for the development or promotion of aeronautical operation thereon. Upon termination of this Lease upon the occurrence of the aforesaid events, City may take immediate possession of the Leased Premises and remove Lessee's effects, forcibly, if neces- sary, without being deemed guilty of trespass and without pre- judice to any remedy which might otherwise be used for arrears of rent or for breach of covenant. It is agreed that failure to declare this Lease terminated upon the default of Lessee for any of the reasons set forth above or in Section 6.07 hereof shall not operate to bar or destroy the right of City to declare this Lease null and void by reason of any subsequent violation of the terms of this Lease. Section 11.04 - Notice of Termination. City may exercise its right of termination under Section 11.03 hereof by giving Lessee sixty (60) days advance written notice at any time after the lapse of any applicable periods of time and this Lease shall terminate at the end of such sixty day period. Rental due shall be payable only to the date of such termination. Section 11.05 - Assignment and Subletting. Lessee shall not sell, assign, or'transfer this Lease or any part thereof and shall not sublease all or any portion of the Leased Premises without the prior written consent of City; provided, however, -29- under shall be payable only to the date of said termination except such portion of the rental attributable to the exclusive Leased Premises when such premises shall have been completely destroyed by fire, explosion, the elements, the public enemy or other casualty so that such Leased Premises remain untenantable for more than thirty (30) days in which event the rental shall be payable as provided in Article X, Section 10.03 hereof. Lessee's performance of all or any part of this Lease for or during any period(s) after a default by City of any of the terms, covenants, and conditions herein contained to be kept by City shall not be deemed a waiver of any right on the part of Lessee to cancel this Lease for any subsequent failure by City so to perform, keep or observe any of the terms, covenants, or condi- tions hereof. Section 11.03 - Cancellation by City. This Lease shall be subject to cancellation by City upon the happening of any one of the following events: (A) The taking by a court of competent jurisdiction of Lessee and its assets pursuant to proceedings brought under the provisions of any federal reorganization act. (B) The appointment of a receiver of Lessee's assets. (C) The divestiture of Lessee's estate herein by other operation of law. (D) The abandonment by Lessee of its conduct of air trans- portation at the Airport for a period of ninety (90) days. (E) The default by Lessee in the performance of any cove- nant or agreement herein required to be performed by Lessee (Except rental payments for which provision is made in Section 6.07) and the failure of Lessee to remedy such default for a period of sixty (60) days after receipt of written notice by City to 'remedy same. (F) The lawful assumption by the United States Government or any authorized agency thereof of the operation control or use of the Airport and facilities, or any -28- (C) Issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Airport or any part thereof for Airport purposes, and the remaining in force of such injunction for a period of at least ninety (90) days. (D) The inability of Lessee to use for a period in excess of ninety (90) days the Airport, other than the Leased Premises, or any of the licenses, services or privileges granted to Lessee hereunder, because of fire, explo- sion, earthquake,.or other casualty or acts of God or the public enemy, provided that same is not caused by negligence or willful acts or failure to act on part of Lessee. (E) The suspension, or substantial modification, for a period of ninety (90) days or the revocation of the operating authority of the Lessee to serve the Lubbock area through the Airport.by final order of the Civil Aeronautics Board or other governmental agency, Federal or State, having jurisidction over Lessee. (F) Any failure or refusal by the Federal Aviation Adminis- tration preventing Lessee from operating into, from or through said Airport such aircraft as Lessee may rea- sonably desire to operate. (G) The default by City in the performance of any covenant or agreement herein required to be performed by City and the failure of City to remedy such default for a period of ninety (90) days after receipt from Lessee of written notice to remedy the same; provided, however, that no notice of cancellation, as above provided, shall be of any force or effect if City shall have remedied the default prior to the receipt of the Les- see's notice of cancellation. Lessee may exercise such right of termination by giving City sixty (60) days advance written notice at any time after the lapse of the applicable periods of time and this Lease shall terminate at the end of such sixty day period. Rental due here- -27- Section 10.04 - Right to 'Recover Damages. Nothing in this Lease shall be construed as a waiver of the right of either City or Lessee to recover damages from the other arising out of the fault or negligence of the other. Section 10.05 Limit of City's Obligations Defined. It is understood that, in the application of the foregoing Sections 10.01, 10.02 and 10.03, City's obligations shall be limited to repair or reconstruction of the terminal building to the same extent and of equal quality as obtained at the commencement of the operations hereunder. Redecoration and replacement of furni- ture, equipment and supplies shall be the responsibility of Lessee and any such redecoration and refurnishing/re-equipping shall be of equivalent quality to that originally installed hereunder within Lessee's exclusive area. ARTICLE XI TERMINATION OF LEASE CANCELLATION, ASSIGNMENT AND TRANSFER Section 11.01 - Termination. This Lease shall terminate at the end of the full term hereof, and Lessee shall have no further right or interest in the Leased Premises, except as provided in Article XII. Section 11.02 - Cancellation by Lessee. This Lease shall be subject to cancellation by Lessee after the happening of one or more of the following events: (A) The permanent abandonment of the Airport as an airline terminal or the permanent removal of scheduled airline service from the Airport. (B) The lawful assumption by the United States Government, or any authorized agency thereof, of the operation, control or use of the Airport, or any substantial part or parts thereof, in such a manner as substantially to restrict Lessee for a period of at least ninety (90) days from operating thereon for the carrying of pas- sengers, cargo, express, property, and United States mail. -26- repaired with due diligence by City at its own cost and expense, and the rent payable herein with respect to Lessee's exclusive space shall be paid proportionately to the time of such damage and thereafter cease until such time as the premises are fully restored, provided, however, that if the damage is caused by an act or omission of Lessee, its sublessees, agents or employees, Lessee shall be responsible for repairing said premises and shall pay the costs therefor. During any such period where Lessee repairs said premises under the terms of this paragraph, the usual rental shall be payable. The abatement of rental for the Leased Premises, as aforesaid, shall not be construed as a waiver of other fees due and payable under the terms of Article VI. Section 10.03 - Complete Destruction. In the event the Leased Premises are completely destroyed by fire, explosion, the elements, the public enemy or other casualty, or so damaged that they will remain untenantable for more .than thirty (30) days, City shall be under no obligation to repair and reconstruct said premises, and rent payable hereunder shall be paid proportion- ately to the time of such damage or destruction and shall thence- forth cease until such time as the premises are fully restored. If within one hundred fifty (150) days after the time of such damage or destruction said premises shall not have been repaired or reconstructed, or other reasonable facilities provided in lieu thereof, Lessee may cancel this Lease in its entirety or such part of this Lease as relates to the exclusive Leased Premises by giving City written notice of such cancellation. Notwithstanding the foregoing, if the Leased Premises and adjoining premises are completely destroyed as a result of an act or omission by Lessee, City may, in its discretion, require Lessee to repair and reconstruct the Leased -Premises and adjoining premises and pay the costs therefor. During any such period where Lessee repairs said premises under the terms of this Para- graph, the usual rental shall be payable. -25- loss payable endorsements in favor of the parties as their respective interests may appear hereunder. City agrees that any payments received from such insuring companies by reason of loss under such policy or poli- cies shall be applied toward repair and reconstruction of said Leasehold improvements. (B) Public Liability and Property Damage Insurance — Promptly after the execution of this Lease, Lessee shall provide comprehensive general liability insurance in protection of City, its officers, agents, and employees. Lessee shall provide public liability insurance for personal injuries or death growing out of any one accident or event in a minimum sum of Three Hundred Thousand Dollars ($300,000.00) for one person and Two Million Dollars ($2,000,000.00) for any one accident, and in addition, shall provide property damage liability insurance in a minimum sum of Two Hundred Fifty Thousand Dollars ($250,000.00) for property damage growing out of any one accident or event. Insurance coverages required of Lessee shall be subject to adjustment from time to time to comply with any changes in minimum requirements determined necessary by City. ARTICLE X DAMAGE OR DESTRUCTION OF LEASED PREMISES Section 10.01 - Partial Damage. If the Leased Premises are partially damaged by fire, explosion, the elements, the public enemy, or other casualty, but not rendered untenantabie, the same will be repaired with due diligence by City at its own cost and expense; provided, however, that if the damage is caused by an act or omission of Lessee, its sublessees, agents, or employees, Lessee shall be responsible for repairing said premises and shall pay the cost therefor. Section 10.02 - Extensive Damage. If the damage shall be so extensive as to render the Leased Premises untenantable, but capable of being repaired in thirty (30) days, the same shall be -24- ,negligence of the City, its agents and employees, or rising out of or as a result of the condition of any of the publicly used premises in or about said Airport. City shall give to Lessee prompt and reasonable notice of any claims or actions against it and failure to so notify Lessee shall relieve Lessee of its obligations to indemnify the City therefor. Lessee shall have ,the rights to investigate, compromise and defend anysuchclaims or actions to the extent of its own interest. Section 9.02 - Insurance. Lessee shall procure and keep in effect at all times during the term of the Lease, the forms of insurance set forth in this Section 9.02. All policies or certi- ficates shall contain a provision that written notice of cancel- lation or of any material change in said policy by the Insurer shall be delivered to City thirty (30) days in advance of the effective date thereof. All policies shall contain an agreement on the part of the respective insurers, waiving the right of such insurers to subrogation. Lessee shall maintain all insurance hereunder with insurance underwriters authorized to do business in the State of Texas satisfactory to City. All policies shall name City, its officers, servants, agents, and employees as additional insureds. Annually, during the entire term of this Lease, Lessee shall furnish City with certificates from the insurance carrier showing all insurance required hereunder to be in full force and effect or shall de- posit with City certified copies of said policies. (A) Fire Insurance - Lessee shall insure for fire and extended coverage risks all Lessee's improvements on the Leased Premises. Such insurance shall be in an amount equal to the full insurable replacement value of such improvements, subject to Lessee's right to maintain reasonable deductibles; provided that Lessee shall assume all losses within the deductible amount and shall pay to City any loss incurred by City that would have been payable had no such deductibles been maintained by Lessee. All fire insurance policies shall contain -23- obstruction, together with the right to prevent Lessee from erecting or permitting to be erected any building or other structure on the Airport which, in the opinion of City, would limit the usefulness of the Airport or constitute a hazard to aircraft. (C) The right during the time of war or national emergency to lease the Airport or any part thereof to the United States Government for military use. In the event any such Lease is executed, the privileges of this instru- ment insofar as they are inconsistent with the privi- leges of the Lease to the government shall be suspended. ARTICLE IX INDEMNIFICATION, INSURANCE AND BONDS Section 9.01 - Indemnification, Etc.. The parties agree that Lessee is and shall always be deemed to be an independent contractor and operator and not an agent or employee of City with respect to its acts or omissions hereunder. The Lessee agrees that it will indemnify and save the City harmless from all claims growing out of any demands of contractors, subcontractors, laborers, workers, mechanics, materialmen and furnishers of equipment or parts thereof, and all suppliers, which claims may be incurred by the activities of Lessee at the Airport or by reason of any improvements, alterations, construc- tion or installation on the exclusive Leased Premises. Lessee shall indemnify fully and save harmless City, its officers, agents and employees from any and all claims and actions and any and all expenses incidental to the investigation and defense thereof, based upon or arising out of damages or injuries to third persons or their property, caused by the fault or negli- gence of Lessee, its agents.or_employees in the use or occupancy of_the:prpmises and privileges hereunder. Provided, however, that the City shall indemnify fully and save harmless Lessee, its officers, agents, and employees from any and all claims and actions and any and all expenses incidental to the investigation in defense thereof based upon or rising out of damages or in- juries to third persons or their property caused by the fault or -22- Section 7.02 Costs Excluded. Costs of facilities and improvements paid for by Federal or State gifts or grants-in-aid, and depreciation, amortization and interest charges thereon, shall not be included in the cost factors herein. A DTT I+T L+ t7TTT RIGHTS AND PRIVILEGES RESERVED BY CITY Section 8.01 - Right to Charge Use Fees to Others. Nothing in this Lease shall be deemed to restrict in any manner City's right to charge any person, partnership, firm, association or corporation fees and rentals for the use of City's property or any improvements thereon where such use of said property or improvements is of a regular or permanent nature, as distin- guished from a temporary or transitory nature, or where such use is of such a nature as to constitute the performance of a com- mercial business at the Airport. In addition, City shall have the right to charge persons, partnerships, firms, associations or corporations a fee no less than that set forth.in mutual assis- tance ground services agreement approved by CAB, and as revised from time to time. This fee shall be applicable to, but not limited to, fees for ramp use, jetway use, gate use, training flights and aircraft storage, and landing fees which shall never be less than 125% of the landing fee charged Lessee as set out in Section 6.02 hereof. Section 8.02 - Right to Improve and Protect the Airport. In addition to any other rights herein retained by it, City speci- fically reserves the following privileges: (A) The right to further develop or improve the landing area and other portions of the Airport as it deems necessary, regardless of the desires or views of Lessee and without interference or hindrance therefrom. If feasible, such improvements shall be made in a manner which will cause Lessee as little inconvenience as possible. (B) The right to take any action it considers necessary to protect the aerial approaches of the Airport against -21- (3) Extraordinary expenditures for maintenance and renewals and replacements. Such expenditures shall be equalized over a reasonable period of succeeding years. (C) Buildings and facilities, the charges for the use of which are made the basis for the adjustment pursuant to this Article VII shall be the following: (1) Passenger terminal building means the building proper, including vehicular parking space and roadways in connection therewith. There shall be included all concessions operated in or in con- junction with the passenger terminal building, such as, but not limited to, restaurant, cocktail lounge, baggage, newsstands, ground transportation of passengers, automobile parking, and all other building and area concessions and operations in the passenger terminal area. (2) Aircraft storage shall mean the areas, other than hangars, designated by.City for storage of aircraft. (3) Any other buildings, appurtenances, facilities or services, requested by Lessee or City and not covered by separate agreement. (D) In the event a governmental order or requirement re- sults in increased costs, Lessee shall be advised and shall have an opportunity to oppose same, if it desires. (E) The depreciation of the City's investment and/or the annual debt service requirements on all bonds issued and outstanding at the time of the adjustment. (F) In allocating costs and revenues to the various faci- lities as hereinabove defined, City will observe sound accounting principles and shall include interest charges which are no greater than the maximum of those paid by the City on bond issues or other loans for Airport purposes. -20- ARTICLE VIZ READJUSTMENT OF RENTALS, FEES, AND OTHER CHARGES Section 7.01.- Basis for Readjusting Charges. On April 1, 1985, and every three (3) calendar years thereafter, charges for the use of any one or all of the premises and facilities leased hereunder for the succeeding three-year period shall be subject to renegotiation upon written notice by either party hereto ninety (90) days prior to the beginning of the next three-year period. Either party giving notice shall, at the time, furnish the other party with a reasonably detailed statement supporting the proposed adjustment. The following factors, among others, shall be considered in determining adjustment of rental, fees and other charges: (A) The actual costs during the preceding three-year rental period of providing the buildings or facility, charges for the use of which are made the basis of the adjust- ment, and the actual revenue derived therefrom during said period. For this purpose, any and all revenue, including concession revenue applicable to said build- ings and facility, shall be included. (B) City's estimated costs for the succeeding three-year period of providing the buildings or facility, charges for the use of which are made the basis of the adjust- ment. Such estimate shall take into account: (1) The actual costs as shown by City's books. (2) The necessary increased costs resulting from: (a) Technical advances requiring additional expenditures by City. (b) Expenditures incurred by City pursuant to orders or requirements of governmental autho- rity. (c) Additional expenditures of City required for the prudent operation of the buildings or facility, charges for the use of which are made the subject of the adjustment. -19- Section 6.06 - Time of Payment. Lessee agrees to pay City the rentals and fees due hereunder at such place as City may from time to time designate. The rental for the exclusive Leased Premises shall be payable in advance. All other rentals and fees shall be payable in monthly installments covering the preceding calendar month of operation. In the event that the commencement or termination of this Lease falls on any date other then the first or last day of a calendar month, the applicable rentals, fees and charges (except landing fees and rentals fees or charges that are pro rated on the basis of passenger enplanements, aircraft departures and/or other such use measurements) for that month shall be paid on a pro rata basis according to the number of days during which said particular premises, facilities, rights, licenses, services and privileges were enjoyed. City shall, after the end of each calendar month, transmit to Lessee a statement of the rentals, fees and charges incurred by Lessee during said month as hereinabove provided. Payment shall be made by Lessee within thirty (30) days after receipt of such statement. Section 6.07 — Default for Failure to Pay Rentals, Fees and Charges. It is expressly agreed that time of payment of the rentals and fees hereinabove provided is of the essence in this entire Lease. Therefore, if Lessee fails to pay any rentals, charges and fees due hereunder within thirty (30) days after City transmits a statement therefor to Lessee, City may, at its option, upon fifteen (15) days written notice to Lessee (unless in such fifteen -day period Lessee shall have corrected such failure to pay) immediately or at any time thereafter enter into and upon the Leased Premises, or any part thereof in the name of the whole, and repossess said premises. In said event, City may expel Lessee and those claiming by, through or under it and remove its effects forcibly, if necessary, without being deemed guilty of trespass and without prejudice to any remedy which otherwise might be used for arrears of rent or preceding breach of covenant. Upon such re-entry this Lease shall terminate. -18- leases at the Airport, shall provide City in writing a schedule of the pro rata rental .due by each Lessee hereunder, and Lessee agrees to pay its stated pro rata amount monthly. The pro rata schedule so furnished to City shall remain in effect until such time as City is provided a revised schedule of the pro rata rental amounts executed by all said Lessees, which revised sche- dule shall remain in effect until similarly modified. The sche- dule attached hereto as Exhibit "C" shall be used by City to compute the monthly pro rata amount to be paid by Lessee on the Common boarding lounge area until such time as Lessee in conjunc- tion with other Certificated Passenger Air Transportation Companies that now or may hereafter have leases at the Airport provide to City such written pro rata schedule or such revised pro rata schedule, as the case may be. The aforesaid rental rate of $2.62 covers the Maintenance and Operation and is subject to adjustment every three years to reflect actual cost, however, in no event shall it exceed the CPI changes for the same three year period. Section 6.04 - Rental for Public:Address System. Lessee shall pay a rental rate of $5.00 per month per microphone connec- tion located in the exclusive leased area or common lease area. The rental rate per month will be adjusted when required to reflect the charges imposed on the City to provide this service. The microphones located in the common leased area will be provided for use in conjunction with other Certificated Passenger Air Transportation Companies which now or may hereafter have valid Leases at the Airport.These companies shall provide City in writing a schedule of the pro rata rental due by each Lessee hereunder and Lessee agrees to pay its stated pro rata amount monthly. The pro rata schedule so furnished to City shall remain in effect until such time as City is provided a revised schedule of the pro rata rental amounts executed by all said Lessees which revised schedule shall remain in effect until similarly modified. Section 6.05 - Aircraft Storage. City shall have the right to designate apron parking areas for the storage of Lessee's aircraft. -17- month., the actual number of passenger enplanements on Lessee's aircraft and the actual number of departures of Lessee's aircraft from the Airport for the preceding month. Furthermore, the Lessee, in conjunction with other Certi- ficated Passenger Air Transportation Companies which now or may hereafter have valid leases at the Airport, shall provide City in writing a schedule of the pro rata rental due by each Lessee hereunder and Lessee agrees to pay its stated pro rata amount monthly. The pro rata schedule so furnished to City shall remain in effect until such time as City is provided a revised schedule of the pro rata rental amounts executed by all said Lessees which revised schedule shall remain in effect until similarly modified. The schedule attached hereto as Exhibit "C" and incorporated herein by this reference shall be used by City to compute the monthly pro rata amount to be paid by Lessee on the Common Bag Claim Area until such time as Lessee in conjunction with other Certificated Passenger Air Transportation Companies that now or may hereafter have leases at the Airport provide to City such written pro rata schedule or such revised pro rata schedule, as the case may be. The aforesaid rental rate of $8.25 is broken down as follows: $5.63 fixed fee to cover debt service and $2.62 for Maintenance and Operation. The $2.62 Maintenance and Operation portion is subject to adjustment every three years to reflect actual cost, however, in no event should it exceed the CPI changes for the same three year period. B. Common Boarding Lounge Area The common boarding lounge area comprises a total of approximately 26,789 sq. ft. as shown on Exhibit B attached hereto and by this reference made a part hereof shall be charged jointly to all Certificated Passenger Air Transportation Com- panies ompanies which now or may hereafter have valid leases at the Air- port at the rate of $2.62 per sq. ft. per year or $70,187.18 per year. Lessee, in conjunction with other Certificated Passenger Air Transportation Companies which now or may hereafter have valid -16- Section 6.02 - Landing Fee. The fee for the use of the landing area and facilities necessary therefor as granted here- under, except those for which rentals are specifically provided elsewhere',herein, shall be as follows: 32.5¢ effective October 1, 1981 35¢ effective October 1, 1983 40¢ effective October 1, 1986 45¢ effective October 1, 1989 50¢ effective October 1, 1992 per 1,000 pounds of the approved maximum gross landing weight of each actual flight operated. Lessee shall file with the City, acting by and through its Director of Aviation, not later than the fifth day of each month. Lessee's actual landings at the Airport for the preceding month, I which shall include the number and type of aircraft making such landings.'i The term "approved maximum gross landing weight" for any aircraft, as used herein, shall be the maximum landing weight approved by the Federal Aviation Administration for landing such aircraft at the Airport. Lessee shall provide the City such "approved,maximum gross landing.weights" for each type of air- craft it operates at the Airport. Five ',hundred (500) pounds or any larger part of one thousand (1,000) pounds shall be counted as if a whole one thousand (1,000) pounds and any smaller part shall be disregarded. Section 6.03 - Rental for Common Use Area. A. Common Bag Claim Area The bag claim area comprises a total of approximately 8,316 sq. ft., as shown on Exhibit B attached hereto and by the reference made a part hereof, and the air carriers have jointly agreed to accept responsibility for payment of rent on the bag claim area; therefore, such rental shall be charged jointly to all Certificated Passenger Air Transportation Companies which now or may hereafter have valid leases at the Airport at the rate of $8.25 per sq. ft. per year or $68,607.00 per year. The Lessee shall file with the City, acting by and through its Director of Aviation, not later than the fifth day of each -15- Provided that such rules and regulations of the City shall not be inconsistent with the terms of this agreement. ARTICLE V TERM Section 5.01 - Term. The term of this Lease shall be for a period of twelve (12) years and ten (10) months commencing on the 1st day of June, 1983, subject, however, to earlier termination as hereinafter provided under Article XI and to renegotiation of the Maintenance and Operation portion of the rentals and fees hereinafter provided; the first such renegotiation shall continence upon written demand by either party at least ninety (90) days prior to April 1, 1985. Subsequent renegotiations shall commence upon written demand by either party at least ninety (90) days prior to April 1, 1988; April 1, 1991; or April 1, 1994; such dates being the time of expiration of anniversary years of this Lease. In the event that no written demand for renegotiation is made by either party at least ninety (90) days prior to the expiration of such anniversary years,.the rentals and fees then current shall apply for the .succeeding.three year period. ARTICLE VI RENTALS AND FEES Section 6.01 - Rental for Exclusive Terminal Building Space. Rental for the Leased Premises in the terminal building as des- cribed in Section 1.01, shall be as follows: Exclusive Area: '3882 Sq. Ft. of exclusive leased space at the rate of $8.25 per sq. ft. per year or $32,026.50 per year. The aforesaid rental rate of $8.25 is broken down:as follows: $5.63 fixed fee to cover debt service and $2.62 for Maintenance and Operation.. The $2.62 Maintenance and Operation portion is subject to adjustment on April 1, 1985, and every three years thereafter to reflect actual cost; however, in no event shall it exceed the change for the same three year period in the Consumer Price Index published by the Bureau of Labor Statistics of the United States Government, hereinafter called "CPI". -14- Section 4.04 Removal and Demolition. Lessee shall not remove or demolish, in whole or in part, any improvements that already exist on the Leased Premises without the prior written -consent of City which may, at its discretion, condition such consent upon the obligation of Lessee to replace the same im- provements specified in such consent upon termination of this Lease. City shall not withhold consent unreasonably and shall not impose unreasonable condition in its consent. Section 4.05 - Trash and Garbage— Lessee shall provide at its expense a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage and other refuse caused as a result of its opera- tions on the Airport. Lessee shall provide and use suitable covered metal receptacles for all garbage, trash and other refuse on or in connection with Lessee's areas. Piling of boxes, car- tons, barrels or other similar items in an unsafe manner in or about Lessee's premises shall not be permitted. Section 4.06 - Taxes and Licenses. -Lessee shall pay all taxes of whatever character that may be lawfully levied or charged upon Lessee's leasehold improvements or operations hereunder and upon Lessee's rights to use the Le sed Premises,• provided, however, that Lessee reserves the right to contest any such taxes. Lessee shall obtain and pay for all licenses or permits necessary or required by law for the construction of any additional improve- ments, the installation of equipment and furnishings, and any other licenses necessary for the conduct of its Air Transporta- tion services. City shall assist Lessee where necessary in obtaining said permits. Section 4.07 - Rules and Regulations. In conducting its operations hereunder, Lessee shall comply with all applicable laws of the United States of America and the State of Texas; the rules and regulations promulgated by their authority with refer- ence to aviation and air navigation; and all reasonable and applicable rules, regulations and ordinances of City now in force or hereafter prescribed or promulgated by authority or by law. -13-