HomeMy WebLinkAboutResolution No. 2008-27CITY OF I{ENAI
Suggested by: Administration
12ESOLU'1°ION 1V®. 2008-2'7
A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING
THE FORM FOR THE AIRLINE OPERATING AGREEMENT AND TERMINAL AREA
LEASE AND AUTHORIZING THE CITY ENTER INTO SUCH AGREEMENTS WITH ERA
AVIATION AND GRANT AVIATION.
WHEREAS, the City of Kenai is the owner and operator of the Kenai Municipal Airport;
and,
WHEREAS, the City of Kenai has undergone a supplemental planning assessment in
order to update the airport operations including: planning, finances, accounting,
management, leasing; and,
WHEREAS, one of the recommendations of the supplemental planning assessment was
to update the City's airline operating agreement and terminal lease; and,
WHEREAS, the administration working with an airport consultant has developed a new
airline operating agreement and terminal area lease; and,
WHEREAS, the new airline operating agreement and terminal area lease will modernize
airport airline terminal leasing procedures and policies and increase airport operating
revenue; and,
WHEREAS, the administration has consulted with the two regularly scheduled
passenger airlines currently operating at the Kenai Municipal Airport regarding the
agreement; and,
WHEREAS, non-signatory airlines operating out of the passenger building will pay an
additional 30% for landing fees than signatory airlines; and,
WHEREAS, it is in the best interest of the City of Kenai to authorized the City Manager
to enter into such agreements with ERA Aviation and Grant Aviation on behalf of the
City.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, that: i) the Kenai City Council approves the Airline Operating Agreement and
Terminal Area Lease form as shown in Exhibit 1; and 2) the Kenai City Manager is
authorized to enter into such agreements with ERA Aviation and Cxrant Aviation.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this twentieth day of
May, 2008.
~~.~~
PAT PORTER, MAYOR
ATTEST: y-~
Carol L. Freas, City Clerk ~~~~~
$~
__ -_- ,
tye c~~ a f
KENiI~ SKA
"V'lla~e wit~i a Past, Gc~ wit~t a Facture"
210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Am.~„m<~„
Telephone: 907-283-7535 /FAX: 907-283-3014 ,'I~~I
i99z
MEMO:
TO: City Council
~,~~ FROM: Rick Koch
l~°
DATE: May 13, 2008
SUBJECT: Resolution 2008-27, Airline Operating Agreement and
Terminal Lease
The purpose of this correspondence is to recommend Cotimcil approval of the above
referenced resolution.
The airlines have been operating at the Kenai Municipal Airport Terminal on a month-to-
monthbasis under the terms of the expired agreement since May/June of 2006.
The effect of the new operating agreement and terminal. lease will establish the following:
1. Term of lease. The new lease term will be 'f ve years.
2. Landing Fees. Landnig fees will increase from $ 0.50 per 1,000 ibs to $ 1.00
per 1,000 lbs, resulting in an increase in revenue to the airport of
approximately $ 71,000 per year.
3. Terminal. Rent. The formula for calculating terminal rent for exclusive use
space and shared space has been changed. The net effect is to increase
revenues to the airport by approximately $ 52,000 per year.
4. Escalation. The agreement provides for an escalator of 10% per year over the
term of the agreement. The escalation provision will provide approximately
$ 120,000 total additional revenues during years two through five of the Lease.
Te terms of the agreement are very fair to the airlines. Comparable market rates and fees
remain higher than the rates and fees included in the new agreements. I have discussed
the agreement with both ERA Aviation and Grant Aviation. Both have told me, that while
no company is pleased with increased expenses, the terms are fair and reasonable. I
expect to receive executed copies of the agreements from both Era Aviation and Grant
Aviation in the next 10-14 days.
These increased revenues to the Kenai Municipal Airport are an integral component of
the adnvnish-ation's efforts Yo make the airport self-sustanling.
Thank you for your attention in this matter.
Resolution tUo. 200-27
Exhibit °°,4°'
CITY OF KENAI' ALASKA
KEl\ Al V L\ iCil Al_e Al~P®1~T
Airline Operating Agreement
and Terminal Area Lease
Apri13Q, 2008
CITY OF KENAI, ALASKA
KENAI MUNICIPAL AIRPORT
AIRLINE OPERATING AGREEMENT
AND TERMINAL AREA LEASE
Table of Contents
Pale
ARTICLE 1 DEFINITIONS ....................................................................................................... 2
Section 1.IDetinitions ........................................:.......................................................................2
Section 1.2Cross-References ..............:......................................................................................5
Section 1.3Construction of Certain Words ................................................................................5
ARTICLE 2 TERM ......................................................................................................................6
Section 2.1Term6
Section 2.2Holding Over ...........................................................................................................6
ARTICLE 3 RIGHTS AND PRIVILEGES ................................................................................ 7
Section 3.lUse of the Airport ....................................................................................................7
Section 3.2Specific Rights of Airline at the Airport ..................................................................7
Section 3.3Limitations on Use by Airline ................................................................................10
AR'I1CLE 4 LEASF,D PREMISES ...........................................................................................12
Sectior. 4.1Terminal P.rea Leased Space ........................_,_,.,,,.,.,.......,,,.....,...........................12
Section 4.2Surrender of the Premises ......................................................................................12
Section 4.3Accommodation of New and/or F,xisting AirlInes .................................................13
Section 4.4Remodeling and New Construction .......................................................................14
Section 4.SAccess ....................................................................................................................14
CITY OF KENAI, ALASKA
KENAI MUNICIPAL AIRPORT
AIRLINE OPERATING AGREEMENT
AND TERMINAL AREA LEASE
Table of Contents (Cont'd.)
Pale
Airline Operating Agreement LESSOR
and Terminal Area Lease LESSEE
Page ii of v
ARTICLE 5 RENTALS, FF,ES AND CHARGES ..................................................... ...............16
Section S.1Consideration and Rate-Setting Basis ..................................................... ...............16
Section 5.2Landing Fee Charges .............................................................................. ...............16
Section 5.3Rentals for Exclusive Use Space and Joint Use Space ........................... ...............16
Section 5.4RentaIs For Terminal Apron Aircraft Parking and GSE Space ............... ...............17
Section S.SOther Charges ................................................................................:........ ............,..17
Section 5.6Partial Month Charges ............................................................................ ...............17
Section 5.7Late Payments ......................................................................................... ...............18
Section 5.80verpayments ......................................................................................... ...............18
Section 5.91nformation to be Supplied by Airline .................................................... ...............18
Section. 5.10 Non-Signatory Rates ...................................................................... ...............18
ARTICLE 6 MAINTENANCE, REPAIR, ALTERATIONS AND IMPROVEMENTS .........] 9
Section 6.IAirline's Responsibilities .......................................................................................19
Section 6.2City's Responsibilities ...........................................................................................20
Section 6.3City's Right to Inspect and Make Repairs .............................................................21
Section 6.4Alterations and Improvements ...............................................................................22
ARTICLE 7 DAMAGE OR DESTRUCTION OF PREMISES
Section 7.IMinor Damage ......................................................
Section 7.2Substantial Damage ..............................................
Section 7.3Tota1 Damage ........................................................
Section 7.4Scope of Restoration of Premises .........................
Section 7.SDamage from Airline Negligence or Willful Act .
ARTICLE 8 INDEMNIFICATION, INSURANCE AND SECURITY
Section 8.lIndemnification .................................................................
Section 8.2 Airline Insurance ......................................................
Section 8.3Security for Payment of Airline Rates and Charges .........
Airline Operating Agreement
and Terminal Area Lease
Page iii of v
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LESSOR
LESSEE
CITY OF KENAI, ALASKA
KENAI MUNICIPAL AIRPORT
AIRLINE OPERATING AGREEMENT
AND TERMINAL AREA LEASE
Table of Contents (Cont'd.)
Paae
ARTICLE 9 RLLES AND REGULATIONS, COMPLIANCE WITH LAWS,
NON-DISCRIMINATION AND AFFIRMATIVE ACTION ...............................29
Section 9.IRules and Regulations ............................................................................................29
Section 9.2Compliance with Laws ..........................................................................................29
Section 9.3Non-Discrimination and Affirmative Action .........................................................30
ARTICLE 10 DEFAULT AND TERMINATION .......................................................:.... ..........33
Section 10.1 Events of Default ................................................................................ ..........33
Section 10.2 Events Permitting Termination of Agreement by Airline ................... ..........35
Section 10.3 Events Permitting Termination of Agreement by City ....................... ..........36
Section 10.4 Possession by City .............................................................................. ..........37
ARTICLE I 1 ASSIGNMENT, SUBLETTING, MERGER AND BANKRUPTCY ........ ..........38
Section 11.1 Assignment and Subletting ................................................................. ..........38
Section 11.2 Non-Waiver of Responsibility ............................................................ ..........38
Section. 1 1.3 Relinquishment of Space .................................................................... ..........38
Section. 11.4 Ground Handling Agreements ............................................................ ..........38
Section 11.5 Bankruptcy .......................................................................................... ..........39
Section 11.6 Consent ............................................................................................... ..........40
ARTICLB 12 GBNERAL PROVISIONS ..........................................................
Section 12.1 Successors and Assigns Bound ...........................................
Section 12.2 Governing Law ...................................................................
Section 1.2.3 Severability .........................................................................
Section. 12.4 Quiet Enjoyment .................................................................
Section ]2.5 Taxes ...................................................................................
Section 12.6 Liens ....................................................................................
Section 12.7 Obtaining Federal and State Funds .....................................
Section 12.8 Subordination to Agreements with the U.S. Govermnent..
Section 12.9 Subordination to Bond Ordinances .....................................
Section 12.10 Incorporation of Exhibits ....................................................
Section 12.11 Entire Agreement ................................................................
Airline Operating Agreement
and Terminal Area Lease
LESSOR _
LESSEE
Page iv of v
CITY OF KF.NAI, ALASKA
KENAI MUNICIPAL AIRPORT
AIRLINE OPERATING AGREEMENT
AND TERMINAL AREA LEASE
Table of Contents (Cont'd.)
ARTICLE 12 GE
Section 12.12
Section 12.13
Section 12.14
Section 12.15
Section 12.16
Section 1.2.17
Section 12.18
Section 12.19
Section 12.20
Section 12.21
Section 12.22
Section 12.23
Section 12.24
Section 12.25
Section 12.26
Section 12.27
Secrion 12.28
Section 12.29
Section 12.30
Section 12.31
NERAL PROVISIONS (Cont'd.)
Non-Waiver of Rights ................................
Force Majeure ............................................
Headings ....................................................
Nonexclusive Rights ..................................
Inspection of Books and Records ..............
Generally Accepted Accounting Principles
Consent Not to be Unreasonably Withheld
Authority of Manager ................................
Amendments ..............................................
Attorney Fees .............................................
Vending Machines .....................................
Public Address System ..............................
Employees of Airline .................................
Remova] of Disabled Aircraft ....................
Licenses, Fees and Permits ........................
National Emergency ...................................
Time is of the Essence ...............................
Employee Parking ......................................
Notices .......................................................
No More Favorable "Perms .........................
Paee
AR'PICLE 13 PROVISIONS OF CITY'S DEED ................
EXHIBITS
A AIRLINE PREMISES - F,XCLUSIVE USE SPACE
B AIRLINE PREMISES -JOINT USE SPACE
C AIRLINE RATE SCHEDULE
D AIRLINE AND AFFILIATE INSURANCE REQUIREMENTS
Airline Operating Agreement
and Terminal Area Lease
....44
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LESSOR
LeSSEE
Page v of v
CITY OF KENAI, ALASKA
KENAI MUNICIPAL AIRPORT
AIRLINE OPERATING AGREEMENT A1V'D
TERiVILNAL AREA LEASE
This Airline Operating Agreement and Terminal Area Lease (the "Agreement") made and
entered into this day of , 2008, by and between the City of Kenai,
Alaska (the "City"), ahome-rule municipal corporation of the State of Alaska and
of
"Airline".
a corporation organized and existing under the laws of the State
and authorized to do business in the State of Alaska, hereinafter called
WITNESSETH:
WHEREAS, City is owner and operator of Kenai Municipal Airport (the "Airport")
located in Kenai, Alaska, and has the right to lease portions of the Airport and to grant operating
privileges thereon subject to the terms and conditions hereinafter set forth; and
WHEREAS, Airline is a corporation primarily engaged in the business of providing Air
Transportation of persons, property, cargo and mail; and
WHEREAS, Airline desires to lease certain premises within the Terminal Building, use
certain faci]ities at the Airport and acquire certain rights and privileges from City in connection
with its use of the Airport, and City is willing to ]ease and grant same to Airline under terms and
conditions hereinafter stated; and
WHEREAS, City and Airline have the power and authority to enter into this agreement;
NOW, THEREFORE, 'For and in consideration of the premises and the mutual covenants
and considerations herein contained, City and Airline agree as follows:
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page 1 of 57
ARTICLE, I
DF,FINITIONS
Section 11 Definitions
The terms and phrases defined in this Article 1 for all purposes of this Airline Operating
Agreement and Terminal Building Lease shall have the following meanings:
1.1.1 "Air Transportation" shall mean the carriage of persons, property, cargo and/or
mail by aircraft.
1.1.2 "Airline Premises° shall mean Airline's leased Exclusive LTSe Space and Joint Use
Space in the terminal building and its leased terminal apron space.
1.1.3 "Airline's Authorized Representative" shall mean such person designated by
Airline in writing to the Manager prior to the commencement of the term hereof and
from time-to-time during the term hereof setting forth the name, title and authority of
such person.
l .1.4 "Airport" shall mean the Kenai Municipal Airport in Kenai, Alaska (a facility of the
City of Kenai) as it may hereafter be modified, changed or developed from time-to-
time.
1.1.5 "Airport Purpose" shall mean any action or undertaking by City directly relating to
the development and preservation of the Airport for air commerce in accordance with
all applicable laws (federal, state and local, statutory, regulatory and decisional) and
this Airline Operating Agreement and Terminal Area Lease.
1.1.6 "Airport Revenues° shall mean any income and revenue lawfully derived directly or
indirectly by the City from the operation and use of, or otherwise relating to, the
Airport. The term does not include any grants, appropriations, loans, gifts, taxes or
bond proceeds from federal, state or local governments.
1.1.7 "Manager'! shall mean the Airport Manager, designated as such by City. The word
a]so means the Acting Airport Manager, if any, of City whenever the Airport
Manager is unable to act in such capacity, or the successor of the Airport Manager in
functions, if any.
Airline Operating Agreement
and Terminal Area Lease
LL-'SSOR
LESSEE
Page 2 of 51
1.1.8 "Exclusive Use Space" shall mean, at any time, the space ]eased in the passenger
terminal building by City to Airline on an exclusive use basis as more fully set forth
on Exhibit A, as the same may be amended from time-to-time.
l .1.9 °FAA" shall mean the Federal Aviation Administration of the U.S. Government or
any federal agency succeeding to all or part of its jurisdiction.
1.1.10 "Fiscal Year" shall mean the twelve (12) months commencing on July I st and ending
on June 305Y of any year or such other twelve (12) month period as may be designated
by City.
l.l.l I "Joint tise Space" shall mean, at any time, the premises leased or used jointly in the
passenger terminal building by Airline and any other Signatory Airlines, as more
particularly set forth on Exhibit B, as the same may be amended from time-to-time.
l .1.12 "Maximum Certificated Gross Take-Off Weight" shall mean the maximum take-
off weight certificated by the FAA, in one thousand (1,000) pound units, of each
aircraft landed by Airline at the Airport.
1.1.13 "Non-Signatory Airline" shall mean any airline providing scheduled or unscheduled
service to the Airport out of the terminal passenger building which is not a Signatory
Airline.
1.1.14 "Public Area(s)" shall mean at any time those passenger terminal building areas not
teased on an exclusive or joint use basis, or otherwise, to any person, company or
corporation.
1.1 .l S "Requesting Airline" shall mean a scheduled airline desiring to provide new or
increased commercial Air Transportation service at the Airport, or to provide a
change of aircraft for existing service for which the scheduled airline does not have
appropriate facilities at the Airport.
1.1.16 "Rules and Regulations" shall mean those lawful, reasonable and non-
discriminatory rules, regulations and resolutions promulgated by City (including
Airport Minimum Standards for Aeronautical Activities) or operating directives
issued by the Manager for the orderly use of the Airport by both the Signatory
Airlines and other tenants and users of the Airport as same may be amended,
modified or supplemented from time-to-time, but which are not inconsistent with the
express terms of this Agreement.
Airline Operating Agreement
acrd Terminal Area Lease
LESSOR
LESSEE
Page 3 of 5]
111'7 "Signatory Airline(s)" shall mean those prhnarily commercial passenger service
airlines which provide Air Transportation pursuant to published schedules over
specified routes to and from the Airport and which hold the necessary authority from
the FAA to provide such Yransportation and that have executed substantially similar
agreements to this Agreement with die City, including term, covering the lease, use
and occupancy of facilities at the Airport. A Signatory Airline or an Affiliate of such
airline must lease Exclusive Use Space at the passenger terminal building, subject to
The availability of space solely determined at the discretion of the City. Except as
otherwise provided herein, no Signatory Airline shall have any right pursuant to this
Agreement to object to the City's entry into the Agreement with any other airline.
Signatory Airlines shall also include airlines that do not use terminal building
facilities which provide Air Transportation to and from the Airport on an
unscheduled, on-call basis and which hold the necessary authority from the FAA to
provide such transportation and that have executed substantially similar agreements to
this Agreement with the City, including term, covering the use of airfield facilities but
not the use and lease of space in the terminal building.
1.1.18 "Affiliate(s) or Affiliated Airline(s)" shall mean any Air Transportation company
that is specifically designated as such by Airline during the Term of this Agreement
and is approved by the prior written consent of City which shall not be unreasonably
withheld. Airline shall give the City thirty (30) days prior written notice of any
change in airlines that Airline chooses to use as an Affiliate operating at the Airport.
During such period of time that an airline is an Affiliate in accordance with the terms
hereof, such Affiliate shall (1) be charged at the same Airport rental rates as Airline
without payment of any premiums and (2) participate in any reconciliation process
related to Airport rent provided Airline (a) remains a signatory to this Agreement and
(b) agrees and shall be obligated to serve as a financial guarantor for all rent, activity
fees and any other charges incurred by all Affiliates of Airline at the Airport.
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page 4 of 51
Section 1.2 Cross-References
All references to articles, sections and exhibits in this Agreement pertain to material in this
Agreement, unless specifically noted otherwise.
Section 1.3 Construction of Certain Words
Words used in this Agreement may be construed as follows:
1.3.1 Number -Words used in the singular include the plural and words used in the plural
include the singular.
l .3.2 Tense -Words used in the present tense include the future.
Airline Operating Agreement
and "Germinal Area Lease
LESSOR
LESSEE
Page 5 of Sl
ARTICLE 2
TERM
Section 2.1 Term
The term of this Agreement (the "Term") shall begin on June 1, 2008 ("Commencement Date")
and shall terminate in sixty (60) consecutive months thereafter (except as it may be terminated or
extended in accordance with this Agreement), and the rentals, fees and charges shall be effective
on Commencement Date, but only in the event that the Airline Premises are then tendered to
Airline ready for use and occupancy in accordance with the terms and provisions of this
Agreement.
Section 2.2 Holding Over
If Airline remains in possession of the Airline Premises after the expiration of this Agreement
without any written renewal thereof, such holding over shall not be deemed as a renewal or
extension of this Agreement, but shall create only a tenancy from month to month that may be
terminated at any time by City upon thirty (30) days prior written notice. Such holding over
shall otherwise be upon the same terms and conditions as set forth in this Agreement, and
amendments hereto executed prior to its expiration. City acknowledges and agrees that the
foregoing sets forth Airline's entire obligation and liability for any holding over.
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page 6 of 51
ARTICLE 3
RIGHTS AND PRIVILEGES
Section 3.1 Use of the Airport
Airline, its employees, passengers, guests, patrons and invitees shall have the right to the use (in
common with other duly authorized users) of the Airport and its appurtenances, together with all
facilities, improvements, equipment and services that have been or may hereafter be provided for
common use at, or in connection with, the Airport, subject to the Rules and Regulations of City
and other applicable laws.
Section 3.2 Specific Rights of Airline at the Airport
Airline shall have the right, in addition to all rights elsewhere granted in this Agreement, but
subject to the Rules and Regulations of City to use the Airport for the following purposes:
3.2.1 The operation of an Air Transportation business by aircraft for the carriage of
persons, property, cargo and mail, including all activities reasonably necessary to
such operation;
3.2.2 The landing, taking off, flying over, taxiing, pushing, towing, loading, unloading,
repairing, maintaining, conditioning, servicing, parking, storing, and testing of
aircraft or other equipment of, or operated by, Airline, or other certificated Air
Transportation companies with which City has an agreement, including the right to
provide or handle all or part of the operations or services of such other companies, all
of which are subject to City's Rules and Regulations;
3.23 The sale of tickets, documentation of shipments, handling of reservations and the
loading and unloading of persons, property, cargo and mail at the Airport by such
motor vehicles or other means of conveyance as Airline may desire to use in the
operation of its Air Transportation business, or that of other certificated Air
Transportation companies with which City has an agreement. Any ground
transportation commercial carrier including Airline (except for such ground
transportation as Airline may provide or arrange solely for the benefit of its
employees) regularly transporting persons or their baggage to and from the Airport
shall first secure and thereafter hold a valid lease, license or other agreement with
City for the right to carry persons or their baggage to and from the Airport and shall
pay City such reasonable and non-discriminatory rentals, fees and percentages of the
fares of such ground transportation commercial carrier for such right as City may set
by agreements, resolutions or Rules and Regulations;
Airline Operating Agreement
and Terminal Area Lease
LESSOR _
LESSBE
Page 7 of 51
3.2.4 The ground training at the Airport of persons and testing of equipment, such training
and testing to be limited to that incidental to Airline's Air Transportation business at
the Airport; provided that nothing in this paragraph shall preclude Airline and City
from entering into separate agreements for training at the Airport;
3.2.5 The purchase of Airline's requirements of personal property or services, including
fuel, lubricants, food, beverage and other passenger supplies, and any other materials
and supplies used by Airline from any person or company of Airline's choice, and the
making of agreements with any person or company of Airline's choice for services to
be performed by Airline that are incidental to the operation of Airline's Air
Transportation business. Nothing herein shall restrict City from levying a reasonable
and non-discriminatory concession fee on any person or company providing property
or services to Airline that are not incidental to Airline's Air Transportation business;
3.2.6 The sale, disposal and exchange of Airline's aircraft, engines, accessories, other
equipment and materials or supplies, provided that such right shall not be construed
as authorizing the conduct of a separate regular business by Airline, but as permitting
Airline to perforn only such functions as are incidental to the operation of its Air
Transportation business.
3.2.6.1 Except for items brought upon the property for regular Airline business
purposes, Airline shall not cause or permit any hazardous substance to be
brought upon, kept or used in or about the property. While on the
property, hazardous substances allowed by this paragraph shall be stored
in a safe manner and in compliance with all environmental laws.
Notwithstanding any provision to the contrary in this agreement, under no
circumstances shall hazardous substances be disposed of or released on the
property. The term "hazardous substance" shall mean any hazardous or
toxic substances, materials or wastes, pollutants or contaminants, as
defined or regulated currently or in the future by any environmental law
(as defined below) or by common law decision, including without
limitation: (a) chlorinated solvents, (b) petroleum products or byproducts,
(c) asbestos, (d) polychlorinated biphenyl and (e) urea-formaldehyde. The
term "environmental law" means any federal, state or local law, statute,
ordinance, regulation, rule or order pertaining to health, industrial hygiene,
environmental conditions or hazardous substances.
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page 8 of 51
3.2.6.2 Upon Airline written request, City shall provide to Airline all relevant
data, assessments, studies, permits and certificates available to City, and
shall otherwise cooperate with Airline, as Airline may reasonably require
to effectuate its own compliance with applicable environmental
requirements;
3.2.6.3 Airline will deliver to the City copies of any documents received from, or
sent by Airline to, the United States Environmental Protection Agency
and/or any state, borough or municipal environmental or health agency
concerning Airline's Operations on the Airline Premises.
3.2.7 The servicing by Airline, or by its suppliers of materials, or its furnishers of services,
of aircraft and other equipment operated by Airline or by other Air Transportation
companies with which Airline has an applicable agreement to provide handling or
servicing, line maintenance or other materials or supplies, at assigned aircraft parking
positions or other locations designated by the Manager;
3.2.8 The installation and operation of identifying signs, posters and graphics on Airline
Premises, subject to the prior written approval of the Manager. Such signs shall be
substantially uniform in size, types and location with those of other airlines, and
subject to Manager's approval, Rules and Regulations, and in compliance with all
applicable laws and resolutions;
3.2.9 The installation, maintenance, and operation of radio, meteorological and aerial
navigation equipment and facilities at suitable locations on the Airport as may be
necessary or convenient in the opinion of Airline for its operations; provided that
3.2.9.7 the location of such equipment and facilities shall be subject to the prior
written approval of the Manager;
3.2.9.2 the use and location of such equipment and facilities shall not conflict with
other similar equipment and facilities on the Ah-port and
3.2.9.3 the location of such equipment and facilities on the Airport shall be
subject to payment of such reasonable and non-discriminatory fee or rental
charge established by City for such location on the Airport by Airline.
Airline Operating Agreement
and'Tenninal Area Lease
LESSOR __
LESSEE
Page 9 of 51
3.2.10 The installation, maintenance and operation of computer data lines, telephone
cormnunicafions equipment and associated conduits and telephone communications
switchgear and support computers at suitable locations on the Airport, as may be
necessary or convenient in the opinion of Airline for its operations; provided that
3.2.10.1 the location of such equipment shall be subject to the prior written
approval of the Manager, if such locafion is not included in Airline's
Exclusive Use Space;
3.2.10.2 the use and location of such equipment shall not conflict with other similar
equipment on the Airport; and
3.2.10.3 the location of such equipment (other than conduit and cable) on the
Airport shall be subject to payment of such reasonable and non-
discriminatory fee or rental charge established by City for such use of
space on the Airport by Airline unless such space is already leased to
Airline.
3.2.11 The sale, disposal, storage, distribution, provision or maintenance of aircraft, engines,
accessories, fuel, oil, Lubricants and other equipment, services or supplies to other
airline users of the Airport, performed or provided by Airline or by a consortimn of
which Airline is or becomes a part, to the extent that such servicing of other airlines
constitutes a regular business activity of Airline.
Section 3.3 Limitations on Use by Airline
In connection with the exercise of its rights under this Agreement, Airline shall not:
3.3.1 Do, or permit to be done, anything within its control at or about the Airport that may
interfere with the effectiveness or accessibility of the drainage and sewage system,
water system, electrical system, heating system, natural gas system, air conditioning
system, fire protection system, sprinkler system, alarm system or fire hydrants and
hoses, if any, installed or located on or within the premises of the Airport;
3.3.2 Do, or permit to be done, upon the Airport any act or thing within its control that will
invalidate or conflict with any fire or other casualty insurance policies (copies of
which, together with premium schedules, shal(be furnished to Airline in writing on
request) covering the Airport or any part thereof;
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and Terminal Area Lease
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3.3.3 Dispose of, or permit any other person within its control (including service
contractors) to dispose of, any waste material taken from, or products used (whether
liquid or solid) with respect to, its aircraft into the sanitary or storm sewers at the
Airport unless such waste material or products are first properly treated by equipment
installed with the approvat of the Manager for that purpose;
3.3.4 Keep or store within the enclosed portion of the Airline Premises, during any twenty-
four (24) hour period, flammable liquids in excess of Airline's working requirements
during said twenty-four (24) hour period, except in storage facilities specially
constructed for such purposes in accordance with standards established by the
National Board of Fire Underwriters, and approved in writing by the Manager from
the standpoint of safety;
3.3.5 Do, or pernitto be done, upon the Airport any act or thing within its control that will
be in conflict with Fedora] Aviation Regulations Part 139 or jeopardize the Airport's
operating certificate;
3.3.6 Do, or permit to be done, any act or thing within its control in conflict with the
Airport's security plan;
3.3.'7 Do, or permitto be done, any actor thing within its control in conflict with the
Airport's Rules and Regulations;
3.3.8 Do or permit to be done any aot, or (et any condition exist, which is in conflict with
current or future Environmental Protection Agency, State of Alaska and other
government entities' rules, regulations or directives; and
3.3.9 Do, or permit to be done, in the area of the passenger terminal building, heavy
maintenance (i.e., engine changes, control surface replacements, overhauls) within
Airline's control unless consented to by City, and providing that suitable, reasonably
accessible space is available for such purpose.
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and Terminal Area Lease
LESSOR
LESSEE
Page I I of 51
ARTICLE 4
LEASED PREMISES
Section 4.1 Terminal Area Leased Space
4.1.1 Airline hereby leases its assigned Exclusive Use Space in the passenger terminal
building being more particularly delineated on Exhibit A, as the same may be
amended from time-to-time.
4. L2 Airline hereby leases the Joint Use Space it uses with other airlines in the passenger
terminal building being more particularly delineated on Exhibit 13, as the same may
be amended from time-to-time.
4.13 Airline hereby leases the terminal apron space for the parking of aircraft and the
storage of ground service equipment (ESE), as indicated on Exhibit C -Airline Rate
Schedule, as the same may be amended from time-to-Time.
4.1.4 Airline shall use its Exclusive Use Space for office purposes and the sale of Air
Transportation, handling, ticketing, billing and manifesting of passengers, baggage,
cargo, property and mail in the conduct of its Air Transportation business. If Airline
desires to use its Exclusive Use Space on behalf of any other Air Transportation
company authorized by the Manager to use the Airport, Airline must first obtain
written approval of Manager, other than for Affi Bates of the Airline.
4.1.5 Airline shall use the Joint Use Space for purposes designated for such space by the
Manager, which shall include:
4.1.5.1 Baggage claim area (delivery and display of inbound passenger baggage
and passenger waiting areas for delivery of their baggage);
4.1.5.2 Tug cart circulation and baggage breakdown, loading and unloading;
4.1.53 Passenger holdrooms (checking-in, passenger waiting areas for arrival of
aircraft, boarding of passengers and deplaning of passengers); and
4.1.5.4 City owned loading bridges for enplaning and deplaning aircraft.
Section 4.2 Surrender of the Premises
4.2.1 City shall not be required to give notice to quit possession o'Pthe Airline Premises
hereunder upon expiration of the term of this Agreement. City acknowledges that the
following conditions shall also be excluded from Airline's duty to surrender the
leased premises, and that Airline shall not be liable for, or required to correct or make
good any damage caused by (a) any willful or negligent act or omission of City, its
Airline Operating Agreement
and "I'ermina] Area Lease
LESSOR _
LESSEE
Page l2 of S I
employees or agents, or, in the case of any jointly or commonly used portion of the
Airline Premises, any damage due to any willful or negligent act or omission of any
other tenant, its employees or agents; (b) any latent defect in any Airport
improvement not constructed by or on behalf of Airline, and (c) any other damage or
loss that Airline is not responsible to repair ander the terms of this Agreement.
Airline covenants and agrees that, on expiration of the term of this Agreement, or on
earlier termination as hereinafter provided, it will peaceably surrender possession of
the premises leased hereunder in good condition, reasonable wear and tear, acts of
God and fire casualties excepted, and City shall have the right to take possession of
said premises. Airline shall have t11e right on termination, and within thirty (30) days
thereafter, to remove al] trade fixtures, equipment and other persona) property
installed or placed by it at its expense, in, on or about the Airport, except that
4.2.1.1 Airline shall not remove fixtures, equipment and other personal property
for which City is to reimburse Airline pursuant to Section 4.3; and
4.2.2 Airline shall not abandon any of its property on the premises without the prior written
consent of the Manager. Any and all property not removed by Airline within the
thirty (30) day period, except as otherwise mutually agreed upon by the parties
hereto, shall thereupon, at the option of City, become a part of the land on which it is
located, and title thereto shall vest with City. All City property damaged by, or as the
result of, the removal of Airline's property shall be restored by Airline, at its own
expense, to the condition existing prior to such damage or according to such other
arrangement to which City and Airline may agree.
Section 4.3 Accommodation of New and/or Existing Airlines
The parties hereto agree that every reasonable effort will be made to accommodate any other
new entrant or inewnbent airline, such carrier to be referred to hereinafter as °Requesting
Airline". The parties agree that City will make every effort to accommodate such Requesting
Airline through direct lease of premises between City and Requesting Airline. In the event that
no premises which will accommodate the Requesting Airline are available for lease from City,
the parties hereto recognize that it may become necessary tp share the use of the premises
demised herein with other Signatory Airlines so as to reasonably accommodate new and/or
additional Air Transportation service at the Airport. Airline agrees to cooperate with City by
giving appropriate consideration to any request by City to accommodate such Requesting Airline
in its leased premises. If Airline accommodates such Requesting Airline, Airline may charge the
Requesting Airline a reasonable and non-discriminatory fee for secondary use of Airline's space,
and Requesting Airline shall be required to indemnify the incumbent airline to the same extent
that the incumbent airline is required to indemnify the City for the use and occupancy of the
premises under this Agreement.
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and Terminal Area Lease
LESSOR
LESSEE
Page 13 of 51
Section 4.4 Remodeling and New Construction
City reserves the right to provide Exclusive Use Space to a Requesfing Airline by remodeling
existing space or constructing new space after consultation with all Signatory Airlines.,
4.4. I "Remodeling" will be treated as a tenant improvement and the sole cost will be borne
by the Requesting Airline as well as all remodeling and relocation costs, if any,
incurred by any incumbent Signatory Airline that has accommodated the Requesting
Airline.
4.4.2 "New construction" which increases the space available for ]ease and use by airlines
will be treated as a common cost element of the passenger terminal building, and
costs involving additions or building modifications (including financing costs, if
appropriate) will be borne by the Airport, except that, ~6nish costs related to the new
space will be borne by the Requesting Airline including any finish costs that the "new
construction" necessitates for any incumbent Signatory Airline.
Section 4.5 Access
4.5.1 Subject to the provisions hereof, the Kules and Regulations, and such restrictions as
Airline may impose with respect to its Exclusive Use Space, City hereby grants to
Airline, its agents, suppliers, employees, contractors, passengers, guests and invitees,
the right and privilege of access, ingress and egress to the Airline Premises and to
Public Areas and public facilities of the AirporC, together with all improvements,
facilities and equipment now or hereafter located thereon. The Public Areas shall be
in the possession and control of City and shall at alt times remain public property to
be used only as public Airport facilities, except as may be otherwise provided herein.
4.5.2 The ingress and egress provided for in Section 4.5.1 above shall not be used, enjoyed
or extended to any person engaging in any activity or performing any act or
furnishing any service for or on behalf of Airline that is not incidental to Airline's Air
Transportation business and that Airline is not authorized to engage in or perform
under the provisions hereof unless expressly authorized by the Manager.
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and Terminal Area Lease
LESSOR.
LESSEE
Page 14 of 51
4.53 City shall have the right at any time to close, relocate, reconstruct, change, alter or
modify any such means of access, ingress and egress provided for Airline's use
pursuant to this Agreement or otherwise, either temporarily or permanently, provided
that reasonable notice to Airline and a reasonably convenient and adequate means of
access, ingress and egress shall exist or be provided in Lieu thereof. City shall use its
best efforts to limit such closing to the duration appropriate to the circumstances.
City shall consult with Airline prior to any such closing which would adversely affect
Airline's operations unless such closing is necessitated by circumstances which pose
an immediate threat to the health or safety of persons using the Airport. City shall
suffer no liability including but not limited to consequential damages, by reason
thereof, and such action shall in no way alter or affect any of Airline's obligations
under this Agreement.
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and Terminal Area Lease
LESSOR
LESSEE
Page 15 of 51
ARTICLE 5
RENTALS, FEES AND CHARGES
Section 51 Consideration and Rate-Setting Basis
5.1.1 In consideration of the rights and privileges granted under this Agreement, Airline
agrees to pay City, without deduction or setoff, during the term of this Agreement,
certain fees and rentals as set forth herein.
5.1.2 Airline landing fees and passenger terminal building rentals prescribed in this
Agreement are based on the Airport's actual cost of operations with recognition of the
City's necessity to provide substantial rate subsidies to the airlines to reflect its
current circumstances and level of aviation activity and the economic infeasibility of
charging full-cost recovery based rates. As such, the rates established and imposed
by the City comply with the FAA Policy Regarding Airport Rates and Charges. The
Airline hereby acknowledges the City's basis for establishing rates and its compliance
with the FAA Policy.
Section 5.2 Landing Fee Charges
5.2.1 Airline shall pay City within thirty (30) days following the end of each month,
without demand or invoicing, landing fee charges for aircraft landings for the
preceding month at the rate and in the amount then currently approved by the City as
provided in Exhibit C -Airline Rate Schedule. For each year of the Agreement, the
landing fee rate is based on the previous year landing fee increased by ten percent
(10%).
5.2.2 Airline shall provide to Airport a copy of its monthly take-off weight report,
including the number of landings by aircraft types and Maximum Certificated Gross
Take-Off Weight. This monthly take-off weight report shall be provided within ten
(10) days following the end of each month for landings for the preceding month.
Section 5.3 Rentals for Exclusive Use Space and Joint Use Space
53.1 Airline shall pay to City in advance, on the first day of each month, without demand
or invoicing, rentals for Airline's Exclusive lise Space and Joint Use Space at the rate
and in the amount then currently approved by the City as provided in Exhibit C -
Airline Rate Schedule. For each year of the Agreement, the terminal rental rate is
based on the previous year terminal rental rate increased by ten percent (10%).
53.2 Airline shall provide to Airport a copy of its monthly passenger enplanement report,
including all revenue and non-revenue passenger enplanements. This monthly report
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and Terminal Area Lease I,F.SSEE
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shall be provided within ten (10) days following the end of each month for
enplanements for the preceding month.
Section 5.4 Rentals tor'Y'erminai Apron Aircraft Parking and GSE Space
Airline shall pay to City in advance, on the first day of each month, without demand or
invoicing, rentals for Airline's use of the terminal apron space for the parking of aircraft and the
storage of ground service equipment (GSE) at the rate and in the amount then currently approved
by the City as provided in Exhibit C -Airline Rate Schedule. For each year of the Agreement,
the terminal apron rental rate is based on the previous year terminal apron rental rate increased
by ten percent (] 0%).
Section 5.5 Other Charges
Other Charges may include charges for special items or activities including, but not limited to,
telephone fees, public address system, electrical usage, automobile parking fees, mailbox rentals,
flight training fees and loading bridge maintenance. The City may assess reasonable, non-
discriminatory and cost-recovery based charges for these special items or activities. All new
charges will be reviewed with Airline prior to implementation. Other Charges payable by
Airline, shall be paid by Airline to City no later than fifteen (15) days following receipt by
Airline of the billing therefor.
Section 5.6 Partial Month Charges
In the event the beginning or termination date with respect to any of the particular leased
premises, facilities, rights, licenses, services or privileges as herein provided falls on any day
other than the first day of a calendar month, the applicable rentals, fees and charges for that
month shall be paid for said mouth on a prorated basis according to the number of days during
which said particular leased premises, facilities, rights, licenses, services or privileges were
enjoyed during that month.
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and Terminal Area Lease
LESSOR
LESSEE
Page 7 7 of 51
Section 5.7 Late Payments
In the event Airline fails to make payment when due under this agreement, Airline shat] be
obligated to pay a late charge in the amount of eight percent (8%} of the past due amount.
Payment of the Late charge shaft not constitute a waiver by the City of its other remedies under
this Agreement on account of Airline's failure to pay sums hereunder. Airline shall also pay
interest on all past due amounts at the rate of eight percent (8%) per annum from the due date,
until paid.
Section 5.8 Overpayments
It is the obligation of Airline to pay all rentals, fees and other charges, free of any "set-offs" or
claims, in the amounts and at the times specified in this agreement. In the event Airline desires
to contest the validity or amount of any rental, fee or other charge, Airline shall first pay the
same to City, and may then seek a refund in any appropriate forum. Any overpayment of a
particular rental, fee or other charge shall first be applied to any past due sums before it is
refunded to Airline.
Section 5.9 Information to be Supplied by Airline
5.9.1 In the event Airline fails to submit the reports required by Sections 5.2.2 and 5.3.2 for
the then current month by the fifteenth (15th) day of the succeeding month, City shall
base its current rentals, fees and charges upon the most recent data transmitted by
Airline to City, with such charges to be adjusted as necessary on the next succeeding
payment date. If statistical data to be submitted by Airline continues to be
unavailable in the next succeeding month, City shall develop estimates as to Airline`s
monthly activity for use in the determination of Airline's rentals, fees and charges.
5.9.2 The acceptance by City of any Airline payment shall not preclude City from verifying
the accuracy of Airline's reports on which Airline's rentals, fees and charges are
based, and shall not be construed as a waiver of a late payment penalty due on full or
partial underpayment, if any.
Section 5.10 Non-Signatory Rates
City shall establish and maintain Non-Signatory Airline landing fee charges and passenger
terminal building rental rates that are thirty percent (30%) higher than Signatory Airline rates.
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and Terminal Area Lease
LESSOR
LESSEE
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ARTICLE 6
MAINTENANCE, REPAIR, ALTERATIONS ANI3 IMPROVEMENTS
Section 6.1 Airline's Responsibilities
Airline shall have the following maintenance and repair obligations:
6.1.1 Airline agrees that, upon Airline's occupancy of its Exclusive IJse Space, such space
is in good, tenantable condition unless otherwise noted in writing to the Manager.
6.1.2 Airline, except as hereinafter provided, shall not call on City for any of the following
janitorial services or nonstructural repairs to its Exclusive Use Space and Airline
shall, at its sole expense and in a manner acceptable to City:
6.1.2.1 Maintain its Exclusive Use Space in reasonably good, tenantable
condition;
6.1.2.2 Maintain the aircraft ramp area in a neat, clean and orderly condition, free
from litter, debris, rcfiise, petroleum products or grease that may result
from activities of its passengers, employees, agents or suppliers; and
remove from its aircraft parking positions, all oil, fuel and grease spillage
amibutable to Air]ine's aircraft and equipment.
6.1.2.3 Perform, at its sole expense, ordinary preventive maintenance and
ordinary upkeep and nonstructural repair of all Exclusive Use Space and
all Airline owned fixtures, personal property and equipment.
6.1.2.4 Immediately repair any damage in any other space at the Airport
occasioned by the fault or negligence of Airline, its servants, agents,
employees and licensees.
6.1.3 Except as may be caused by the negligence of City beyond the City's reasonable
control, Airline expressly agrees that City shall not be liable to Airline, its employees,
passengers, visitors or contractors for bodily injury or for any loss or damage to real
or personal property occasioned by flood, fire, earthquake, lightning, windstorm, hail,
explosion, riot, strike, civil commotion, smoke, vandalism, malicious mischief or acts
of civil authority.
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and Terminal Area Lease
LESSOR
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61.4 If Airline fails to perform its obligations under this Article 6 after the notice period
expires as provided in Section 101.1, City may do so and recover its entire cost plus
a fifteen percent (1 S%) administrative charge from Airline as an Other Charge
referred to in Section 5.5 on the next renta] due date.
6.1.5 Airline will take all reasonable precautions to prevent, and take all necessary action to
suppress destructive or uncontrolled fires and comply with a(l laws, regulations and
rules promu]gated and enforced by the City for fire protection within the area wherein
the leased premises are located.
Section 6.2 City's Responsibilities
6.21 City, during the term of this Agreement, shall retain FAA Airport Certification and
keep in good repair, or arrange for the safe, orderly, economical operation,
maintenance and reasonably good repair of, all areas and facilities of the Airport
except as specifically otherwise assigned by this Agreement, including, but not
limited to, the Public Areas and the Joint Use Space of the passenger terminal
building, City owned loading bridges, vehicular parking areas, runways, landing
lights, floodlights, beacons and other field lighting, taxiways, aprons, roadways and
all appurtenances, facilities and services now or hereafter connected with the
foregoing. City also shall keep the Airport reasonably free from obstructions,
including, without limitation, vegetation, stones and other foreign matter, as
reasonably necessary, from the landing area, ramp area, taxi area, roadways, vehicular
parking areas and aircraft parking areas for the safe, convenient and proper use of the
Airport by Airline.
6.2.2 City shall operate and maintain the Airport in a reasonably prudent manner and in
accordance with the rules, regulations and orders of any federal or state agency
having jurisdiction with respect thereto.
6.23 City shall maintain the exterior portions of the walls, ceiling and roof of the Exclusive
Use Space and all central mechanical distribution systems in good repair and
condition
6.2.4 The undertakings by City under this Section 6.2 do not relieve Airline of its duties to
maintain its Exclusive Use Space and aircraft ramp areas as specified in Section 61
and to use Joint Use Space with due care.
Airline Operating Agreement LESSOR
and "Ceaninal Area Lease LESSEE
Page 20 of 51.
6.2.5 City shall operate the Airport and lease space to concessionaires, other tenants and
other commercial operators in a manner so as to produce, subject to the provisions of
this Agreement, revenues of a nature and amount which would be produced by a
reasonably prudent airport operator and to maximize such revenues to the extent
reasonably practicable.
6.2.6 City shall use its best efforts to keep the Airport open and in operation for landings
and take-offs of aircraft of any type designed to use facilities similar to those at the
Airport. In such regard, City shall employ or cause to be employed construction,
reconstruction and repair techniques (including supervision and construction
management) which wilt minimize Airport operational delays or disruptions
reasonably expected to result from such construction, reconstruction or repair,
including but not ]invited to coordination with affected Airline's representatives or its
designee.
Section 6.3 City's Right to Inspect and Make Repairs
63.1 City, by its authorized officers, employees, agents, contractors, subcontractors and
other representatives, shall have the right (at such time and upon reasonable notice to
Airline as may be reasonable under the circumstances and with as little interruption of
Airline's operations as is reasonably practicable) to enter Airline's Exclusive Use
Space and Joint iJse Space for the following purposes:
6.3.1.1 To inspect such space to determine whether Airline has complied and is
complying with the terms and conditions of this Agreement;
63.12 To accomplish repairs or replacements by City pursuant to Section 6.2, or
in any case, where Airline is obligated to make repairs or replacements
and has failed to do so, after notice as provided herein, make such repairs
or replacements on Airline's behalf; and
63.13 In the exercise of City's police powers.
63.2 No such entry by or on behalf of City upon any Exclusive Use Space leased to Airline
shall cause or constitute a termination of the letting thereof or be deemed to constitute
an interference with the possession thereof by Airline. City shall suffer no liability by
reason thereof, and such action shall in no way alter or affect any of Airline's
obligations under this agreement; provided that, and so long as each entry by City, is
conducted to minimize inconvenience, disruption or interference with Airline's
operations and activities.
Airline Operating Agreement
and Terminal Area Lease
1,ESSOx
LESSEE
Page 21 of 51
Section 6.4 Alterations and Improvements
Airline shall make no alterations, additions, improvements to, or installations on the space
leased under this Agreement without the prior written approval of the Manager. If City intends
to require the removal of any alteration, improvement or addition upon termination of this
Agreement, City shall so indicate to Airline at the time City consents to the installation. If not
indicated at the time City consents to the installation, City shalt be precluded from requiring its
removal at time of termination of this Agreement.
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and Terminal Area Lease
LESSOR
LESSEE
Page 22 of 51
ARTICLE 7
DAMAGE OR DESTRUCTION OF PREMISES
Section 7.1 Minor Damage
If any part of Airline Premises, or adjacent facilities directly and substantially affecting the use
of Airline Premises, shall be partially damaged by fire or other casualty, but said circumstances
do not render Airline Premises untenantable or unusable for the purpose intended as reasonably
determined by the City, the same shall be repaired to usable condition with due diligence by the
City as provided in Section 7.4.
Section 7.2 Substantial Damage
If any part of Airline Premises, or adjacent facilities directly and substantially affecting the use
of Airline Premises, shall be so extensively damaged by fire, or other casualty, as to render any
portion of said Airline Premises untenantable but capable of being repaired, as reasonably
determined by the City, the same shall be repaired to usable condition with due diligence by the
City as provided in Section 7.4. In such case, the rentals payable hereunder with respect to
affected Airline Premises shall be paid up to the time of such damage and shall thereafter be
abated ratably in the proportion that the part of the area rendered untenantable or unusable for the
purpose intended bears to tote] Airline Premises of the same category and area. Such abatement
in rent will continue until such time as such affected Airline Premises shall be restored
adequately for Airline`s use. The City shall use its best efforts toprovide alternate facilities to
continue Airline's operation while repair, reconstruction or replacement is being completed, at a
rental rate not to exceed that provided in this Agreement for comparable space.
Section 7.3 Total Damage
7.3.1 If any part of Airline Premises, or adjacent facilities directly and substantially
affecting the use of Airline Premises, shall be damaged by fire or other casualty, and
is so extensively damaged as to render any portion of said Airline Premises incapable
of being repaired, as reasonably determined by the City, the City shall notify Airline
within a period of sixty (60) days after the date of such damage of its decision
whether to reconstruct or replace said space. However, the City shall be under no
obligation to replace or reconstruct such premises. The rentals payable hereunder
with respect to affected Airline Premises shall be paid up to the time of such damage
and thereafter shall cease until such time as reasonable and comparable replacement
or reconstructed space shall be available for use by Airline.
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and Terminal Area Lease
LESSOR
LESSEE
Page 23 of 51
7.3.2 In the event the City elects to reconstruct or replace affected Airline Premises, the
City shall use its best efforts to provide alternate facilities to continue Airline's
operation while repair, reconstruction or replacement is being completed, at a rental
rate not to exceed that provided in this Agreement for comparable space. However, if
such damaged space shall not have been replaced or reconstructed, or the City is not
diligently pursuing such replacement or reconstruction, within three (3) months after
the date of such damage or destruction, Airline shall have the right, upon giving the
City thirty (30) days advance written notice, to delete the affected Airline Premises
from this Agreement, but this Agreement shall remain in effect with respect to the
remainder of said Airline Premises, unless such damaged or destroyed premises
prevent Airline from operating at Airport.
7.33 In the event the City elects not to reconstruct or replace affected Airline Premises, the
City shall meet and consult with Airline on ways to permanently provide Airline with
adequate replacement space for affected Airline Premises. Airline shall have the
right, upon giving the City thirty (30) days advance written notice, to delete the
affected Airline Premises from this Agreement, but this Agreement shall remain in
full force and effect with respect to the remainder of said Airline Premises, unless the
loss of such premises prevents Airline from operating at Airport.
Section 7.4 Scope of Restoration of Premises
'7.4.I The City's obligations to repair, reconstruct or replace affected premises under the
provisions of this Article 7 shall in any event be limited to using due diligence and
best efforts to restore affected Airline Premises to substantially the same condition
that existed prior to any such damage and shall further be limited to the extent of
insurance proceeds available to the City for such repair, reconstruction or
replacement Airline agrees that if the City elects to repair, reconstruct or replace
affected premises as provided in this Article 7, then Airline shall proceed with
reasonable diligence and at its sole cost and expense to repair, reconstruct or replace
its signs, fixtures, firrnishings, equipment and other items provided or installed by
Airline in or about Airline Premises in a manner and in a condition at least equal to
that which existed prior to said damage or destruction. However, in the event City
chooses not to replace space in kind, Airline may delete said premises from its
obligation.
7.4.2 In lieu of the City's repair, reconstruction or replacement of the affected premises, as
provided in Section 7.4.7, if Airline requests to perform said function with respect to
damage under Sections 71 and 7.2, the City may in its sole discretion, allow the
Airline to perform such work. Airline shall not be performing such work as an agent
or contractor of the City. The City shall reimburse Airline for the cost of such work
performed by Airline that was otherwise the obligation of the City if prior to
performing such work, the City and Airline agree that such work is the obligation of
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the City to perform.
Section 7.5 Damage from Airline Negligence or Willful Act
Notwithstanding the provisions of this Article 7, in the event that due to the negligence or willful
act of Airline, its agents, servants or employees, or those under its control, Airline Premises shall
be damaged or destroyed by fire, casualty or otherwise, there shall be no abatement of rent
during the restoration or replacement of said Airline Premises and Airline shat( have no option to
delete the affected Airline Premises from this Agreement under the provisions of this Article 7.
To the extent that the costs of repairs shall exceed the amount of any insurance proceeds payable
to the City by reason of such damage or destruction, Airline shall pay the amount of such
additional costs to the City.
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page ZS of 51
ARTICLE 8
INDEMNIFICATION, INSURANCF, AND SECURITY
Section 8.1 Indemniffcation
8.1.1 Airline shall indemnify, defend and hold harmless the City, its Council members,
directors, officers, agents and employees, individually or collectively, from and
against any and all claims, actions, damages, loss and liability, together with all
reasonable expenses incidental to the investigation and defense thereof claimed by
anyone by reason of injury or damage to persons or property sustained in whole or in
part as a result of an act, omission or negligence of Airline, its officers, agents or
employees, subtenants, contractors, subcontractors or by anyone acting pursuant to
the express or implied authority or permission of Airline arising out of, or incident to,
this Agreement. The provisions of this Section 8.1.1 and of Section 8.1.2 shall
exclude claims or actions arising out of the negligence or willful act of the City, its
Council members, officers, agents or employees. The City shall give to Airline
prompt and reasonable notice of any claims or actions, and Airline shall have the
right to investigate and compromise said claims or actions. The provisions of this
Section 8.1.1 shall survive the expiration or earlier termination of this Agreement.
8.1.2 Airline shall indemnify, defend and hold harmless, the City, its Council members,
directors, officers, agents and employees, individually or collectively from and
against any and all claims, actions, damages, 'tines, loss and liability, together with all
reasonable expenses incidental to the investigation and defense thereof, in any way
arising from or based upon the violation of any federal, state or municipal laws,
statutes, ordinances or regulations, by Airline, its officers or agents, employees,
subtenants, contractors, subcontractors or by anyone acting pursuant to the express or
implied authority or permission of Airline arising out of, or incident to, this
Agreement. Airline shall be responsible for the investigation expenses pursuant to
this Section 8.7.2 only in the event that Airline is shown to be responsible for
violation of a federal, state or municipal law, statute, ordinance or regulation. The
provisions of this Section 8.1.2 shall survive the expiration or earlier termination of
this Agreement.
8.1.3 City shall, within the limits of state law and the Kenai Municipal Code and Charter,
indemnify, defend and hold harmless Airline, its directors, managers, officers, agents
and employees, individually or collectively, from and against any and all claims,
actions, damages, loss and liability, together with all reasonable expenses incidental
to the investigation and defense thereof by anyone by reason of injury or damage to
persons or property sustained in whole or in part as a result of an act, omission or
negligence of City, its Council members, its officers, agents or employees arising out
of, or incident to, this Agreement. The provisions of this Section 8.1.3 shall exclude
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claims or actions arising out of the negligence or willful act of Airline, its directors,
managers, officers, agents or employees. Airline shall give to City prompt and
reasonable notice of any claims or actions, and City shall have the right to investigate
and compromise said claims or actions. Theprovisions of this Section 8.1.3 sha(1
survive the expiration or earlier termination of this Agreement.
Section 8.2 Airline Insurance
8.2.1 Airline shall maintain, and shall require all of its Affiliates to individually maintain,
liability insurance for the protection of Airline, its Affiliates and the City, its Council
members, directors, officers, agents and employees, insuring against damages
because of personal injury, bodily injury, death, property damage,, including loss of
use thereof, and arising out of any operations of Airline and its Affiliates in
connection with this Agreement. Coverage shall provide limits per occurrence to a
combined single limit in amounts not less than those set forth in Exhibit D. Such
insurance shall name the City, its Council members, directors, officers, agents and
employees as additional insureds, but only as respects the operations of the named
insured Airline and its Affiliates, as their interests may appear, with the stipulation
that this insurance, as to the interest of the City only, shall not be invalidated by any
act or neglect or breach of contract by Airline or its Affiliates, so long as the City has
not caused, contributed to or laiowingly condoned the said act, neglect or breach of
contract. The coverage provided by this policy(ies) shall be primary coverage and
any other insurance carried by the City is excess. All insurance shall be written by
companies rated "A--" or better by A.M. Best.
8.2.2 Airline shall comply, and shall require all of its Affiliates to comply, with AS 23.30
which requires Airline and its Affiliates to provide workers' compensation insurance
coverag: that safisfies ° laska stake ]aw for all su sect workers. Emplcyer's Liabil ~y
Insurance is also required. The specifically required coverage types and amounts are
provided in Exhibit D.
8.2.3 Airline shall furnish, and shall require all of its Affiliates to furnish, the City, no later
than thirty (30) days following the execution of this Agreement, a certificate(s) of
insurance as evidence that the then required amounts and types of such insurance are
in force. The City reserves the right to require a certified copy of such certificates
upon request. Airline shall name, and sha71 require all of its Affiliates to name, the
City as an additional insured on such insurance policy or policies. Said policies shall
be in a form, content and for a term generally used by scheduled commercial
passenger air carriers similar to Airline and its Affiliates in their routine operations
and shall provide for thirty (30) days' written notice to the City prior to the
cancellation of, or any material change in, such policies.
8.2.4 City and Airline agree, and Airline shall require all of its Affiliates to agree, to have
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all property, fire and extended coverage, all risk and material damage insurance
carried with respect to the Airport or any portion thereof with a clause which waives
all rights of subrogation which the insurer of one party might have against the other
party.
8.2.5 City, Airline, Airline's Affiliates and all parties claiming rights under them, mutually
release and discharge each other from all claims and liabilities arising from or caused
by any casualty or hazard eovercd or required hereunder to be covered in whole or in
part by insurance carried with respect to the Airport or any portion thereof, without
regard to whether such loss or damage was occasioned by the negligence of the other,
its agents or employees.
Section 8.3 Security for Payment oPAirline Rates and Charges
Airline shall, upon the execution of this Agreement, file and maintain with the City a good and
Buff dent corporate surety bond or bonds or such other security as the City may find acceptable
in accordance with the requirements of the laws of the State of Alaska, the form and terms of
which bond or other security shall be subject to the approval of the City, in a sum equal to three
(3) months of Airline's estimated rent for its use of the Airiine Premises, Landing Fees and Other
Charges (depending on circumstances this sum may increase or decrease), conditioned upon the
full performance by Airline of all the terms and conditions of this Agreement and the payment by
Airline of the rentals and of all other amounts herein provided for the full term hereof.
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ARTICLE 9
RULES AND REGULATIONS, COMPLIANCE WITH LAWS,
NON-DISCRIMINATION AND AFFIRMATIVE ACTION
Section 9.1 Rules and Regulations
9.1.1 Airline shall observeand obey all City ordinances, resolutions and Rules and
Regulations governing conduct on and operations at the Airport and use of its
facilities. City a~~ees that all Rules and Regulations so promulgated shalt not be
inconsistent with the express terms of this Agreement or any legally authorized rule
or regulation of the FAA, or any other federal or state agency, which is binding in law
on Airline, as the same now ace or may from time-to-time be amended or
supplemented. Except as so expressly limited, City's authority to promulgate or
amend Rules and Regulations shall not be affected by this Agreement. City shall give
Airline reasonable notice of amendment to Rules and Regulations:
9.1.2 Airline shall not violate, nor permit its agents, contractors or employees acting on
Airline's behalf to violate any such Rules and Regulations that are now in effector as
may from time-to-time during the term hereof be promulgated by City. Copies of the
Rules and Regulations, as adopted, shall be forwarded to Airline's local manager.
Section 9.2 Compliance with Laws
9.2.1 Airline shall not use its Exclusive Use Space, Joint Use Space or any part thereof or
permit the same to be used by any of its employees, ofFcers, agents, subtenants,
invites or hoensees fer any illegal purposes and shall, at al? times during the term of
this Agreement, comply with all applicable resolutions, laws and rules and
regulations of the City of Kenai, State of Alaska or of the U.S. Government, and of
any commission thereof that may have jurisdiction to pass laws or ordinances or to
make and enforce rules or regulations with respect to the uses hereunder or to the
Exclusive Use Space and Joint Use Space.
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9.2.2 At all times during the term of this Agreement; Airline shall, in connection with
Airline's activities and operations at the Airport:
9.2.2.1 Comply with and conform to all existing and future statutes, resolutions
and ordinances, and the rules and regulations promulgated thereunder, of
all federal, state and other govermnental bodies of competent jurisdiction
that apply to or affect, either directly or indirectly, Airline or Airline's
operations and activities under this Agreement.
9.2.2.2 Make, at Airline's own expense, all nonstructural improvements, repairs,
and alterations to its Exclusive Use Space, equipment and personal
property that are required to comply with or conform to any of such laws,
ordinances, and rules and regulations referred to in Section 9.2.2.1, to
which this Agreement is expressly subject.
9.2.2.3 Reimburse City for Airline's pro rata share in accordance with the Joint
Use Formula of all nonstructural improvements, repairs and alterations to
Airline's Joint Use Space that are required to comply with or conform to
any of such laws, ordinances, and rules and regulations referred to in
Section 9.2.2.1, to which this Agreement is expressly subject.
9.2.2.4 Be and remain an independent contractor with respect to all installations,
construction and services performed by or at the request of Airline,
hereunder.
Section 9.3 Non-Discrimination and Affirmative Action
Airline, as part of the consideration hereof and as a covenant running wir_h the Agreement,
hereby covenants and agrees that:
93.1 In the event facilities are constructed, maintained or otherwise operated for a purpose
for which a Federal Department of Transportation and Transportation Security
Administration program or activity is intended or for another purpose involving the
provision of similar services or benefts, Airline shall maintain and operate such
facilities and services in compliance with all other requirements imposed pursuant to
Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A,
Office of the Secretary, Part 21,Non-Discrimination in Federally Assisted Progrvns
of the Department of Transportation, Bffectuation of Title VI of the Civil Rights Act
of 1964, and as such regulations may be amended.
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9.3.2 No person on the grounds of race, creed, color, national origin, sex, age or physical
handicap shall be excluded from participation in, denied the benefits of, or be
otherwise subjected to discrimination in the use of said facilities.
9.3.3 No person on the grounds of race, creed, color, national origin, sex, age or physical
handicap shall be excluded from participation in, denied the benefits of, or otherwise
be subjected to discrimination in the construction of any improvements on, over, or
under the Airline Premises and the furnishing of services thereon.
9.3.4 Airline shall use the Airline Premises in compliance with all other requirements
imposed by or pursuant to Title 49, Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part 21,Non-Discrimination in
Federally Assisted Programs of the Department of Transportation, Effectuation of
Title VI of the Civil Rights Act of 1964, and as such regulations may be amended.
9.3.5 Airline agrees that it shall insert the provisions of Sections 9.3.1, 9.3.2, 9.3.3 and
9.3.4, inclusive, in any lease or other agreement by which it grants a right or privilege
to any person, firm or corporation to render accommodations and/or services to the
public on the premises herein leased.
9.3.6 In the event of breach of any of the non-discrimination covenants set forth in this
Section 9.3, City shall have the right to terminate this Agreement and to reenter and
repossess the premises and the facilities thereon, and hold the same as if this
Agreement had never been made or issued. This provision shall not become effective
until the procedures of Title 49, Code of Federal Regulations, Part 21, are followed
and completed, including the expiration of appeal rights.
9.3.7 Airline will undertake an affirmative action program as required by FAA Regulations,
Title l4, Code of Federal Regtlations, Part ] 52, Subpart E, entitled 'Non-
Discrimination in Airport Aid Program," or otherwise approved by the FAA, to
ensure that no person shall, on the grounds of race, creed, color, national origin, sex,
age or physical handicap, be excluded from participation in any employment
activities covered in such Subpart E. No person shall be excluded by Airline on such
grounds from participating in or receiving the services or benefits of any program or
activity covered by such Subpart E. Airline will require that its covered
suborganizations provide assurances to Airline that they similarly will undertake
affirmative action programs and that they will require assurances from their
suborganizations, as required by Title I4, Code of Federal Regulations, Part I52,
Subpart E, to the same effect.
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9.3.8 Airline covenants and agrees that no person shall be excluded from participation in,
denied the benefits of, or otherwise discriminated. against in the performance of this
Agreement on the grounds of race, color, national origin, or sex, as provided in Part
23, of Title 49, of the Code of Federal Regulations entitled "Participation by
Disadvantaged Business Enterprises in Deparhment of Transportation Programs."
9.3.9 In the event of a breach by Airline of any of the assurances or covenants in Sections
9.3.7 and 9.3.8, City shall have the right to terminate this Agreement, and to reenter
and repossess any leased facilities hereunder, and to hold the same as if this
Agreement had never been made or issued, but not without the express prior
concurrence or direction of the U.S. Deparhnent of Transportation or the FAA
following suitable review, if any, of such breach and affording Airline a reasonable
opportunity to rectify the same, if appropriate.
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ARTICLE 10
llEFAULT AND TERMINATION
Section 10.1 Events of Default
10.1.1 If Airline:
10.1.1.1 Pails to pay rentals, fees or charges or make any other payment past due
hereunder within fifteen (15) days after receipt of written notice of
nonpayment;
70.1.1.2 Fails, subject to force majeure events specified in Section 12.13 of this
Agreement, to commence immediately to keep and perform any of its
covenants and agreements within thirty (30) days after receipt of written
notice of default and to diligently pursue the completion of such cure of
such non-monetary default;
10.1.1.3 Fails to continue to complete any of its covenants and agreements after
performance is commenced; or
10.1.1.4 Is the subject of any petition, proceedings or action by, for, or against
Airtinc under any insolvency, bankruptcy or reorganization act of law;
10.1.2 'T'hen, at the election of City:
10.1.2.1 City may accelerate all rent payments due hereunder which shall then
become immediately due and payable.
10.1.2.2 City may terminate this Agreement, in which event Airline immediately
shall surrender the Exclusive Use Space and Joint Use Space (Airline
Premises} to City, and if Airline fails so to do, City may, without prejudice
to airy other remedy which it may have for possession, or arrearag~es in
rent, enter upon and take possession of the Airline Premises and expel or
remove Airline and any other person who may be occupying the Airline
Premises or any part thereof, without being liable for prosecution or any
claim of damages therefor, and Airline agrees to pay to City on demand
the amount of all loss and damage which City may suffer by reason of
such termination, whether through inability to relet the Airline Premises
on satisfactory terms or otherwise.
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10.1.23 City may enter upon and take possession of the Airline Premises and expel
or remove Airline and any other person who may be occupying the Airline
Premises or any part thereof, without being liable for prosecution or any
claim for damages therefor, and relet the premises for such terms ending
before, on or after the expiration date of the Agreement Term, at such
rentals and upon such other conditions (including concessions and prior
occupancy periods) as City in its sole discretion may determine, and
receive the rent therefor; and Airline agrees to pay to City on demand any
deficiency that may arise by reason of such reletting. City shall use
reasonable efforts to mitigate its damages by reletting the Airline
Premises. In the event City is successful in reletting the Airlines Premises
at a rental in excess of that agreed to be paid by Airline pursuant to the
terms of this Agreement, City and Airline each mutually agree that Airline
shall not be entitled, under any circumstances, to such excess rental, and
Airline does hereby specifically waive any claim to such excess rental.
10.1.2.4 City may enter upon the Airline Premises, without being liable for
prosecution of any claim for damages therefor, and do whatever Airline is
obligated to do under the terms of this Agreement; and Airline agrees to
reimburse City on demand for any expenses which City may incur in thus
effecting compliance with Airline's obligations under this Agreement, and
Airline further agrees that City shall not be liable for any damages
resulting to the Airline from such action, whether caused by the
negligence of City or otherwise.
10.].2.5 Whether or not City retakes possession or relets the Airline Premises, City
shall have the right to recover unpaid rent and all damages caused by
Airline's default, including attorney fees. Damages shall include, without
limitation: All rentals lost, all legal expenses and other related costs
incurred by City following Airline's default, all costs incurred by City in
restoring the Airline Premises to good order and condition, or in
remodeling, renovating or otherwise preparing the Airline Premises for
reletting, all costs (including without limitation any brokerage
commissions and the value of City's time) incurred by City, plus interest
thereon from the date of expenditure until fully repaid at the rate of eight
percent (8%) per annum.
10.1.2.6 Pursuit of any of the foregoing remedies shall not preclude pursuit of any
of the other remedies herein provided or any other remedies provided by
law, such remedies being cumulative and non-exclusive, nor shall pursuit
of any remedy herein provided constitute a forfeiture or waiver of any rent
due to City hereunder or of any damages accruing to City by reason of the
violation of any of the terms, provisions and covenants herein contained.
No act or thing done by City or its agents during the Agreement Term
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hereby granted shall be deemed a termination of this Agreement or an
acceptance of the surrender of the Airline Premises, and no agreement to
terminate this Agreement or accept a surrender of the Airline Premises
shall be valid unless in writing signed by City. No waiver by City of any
violation or breach of any of the terms, provisions and covenants herein
contained shall be deemed or construed to constitute a waiver of any other
violation or breach of any of the terms, provisions and covenants herein
contained. City's acceptance of the payment of rental or other payments
hereunder after the occurrence of an event of default shall not be construed
as a waiver of such default, unless City so notifies Airline in writing.
Forbearance by City to enforce one or more of the remedies herein
provided upon an event of default shall not be deemed or construed Co
constitute a waiver of such default or of City's right to enforce any such
remedies with respect to such default or any subsequent default. If, on
account of any breach or default by Airline in Airline's obligations under
the terms and conditions of this Agreement, it shall become necessary or
appropriate for City to employ or consult with an attorney concerning or to
enforce or defend auy of City's rights or remedies hereunder, Airline
agrees to pay any reasonable attorneys' fees so incurred.
10.1.3 City shall have all additional rights and remedies as may be provided to landlords by
Alaska state law.
Section 10.2 Events Permitting Termination of Agreement by Airline
10.2.1 Airline may terminate this Agreement and all of its future obligations hereunder at
any time that Airline is not in default in its payments or other obligations to City
hereunder, by giving the Manager thirty (301 days advance written notice if:
10.2.1.] City is in default of any material provision of this Agreement; or
10.2.1.2 Airline becomes subject to any order, rule or regulation of any Federal or
State agency or to a court order which prevents or substantially prevents
Airline's use of the Airport for more than ninety (90) days following
written notice by Airline to the iVianager.
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10.2.2 With respect to 10.2.1.1, Airline termination shall not be effective unless and until at
least thirty (30) days have elapsed after written notice to City specifying the date
upon which such termination shall take effect and the reason for such termination.
City may cure the cause of such termination within said (30) day period, or such
longer time as the parties may agree thereto. If City so cures, Airline's right to
terminate ceases for that particular instance or situation, and the Agreement shall
continue in full force and effect.
10.2.3 Airline may terminate this agreement if Airline terminates its Air Transportation
business at the Airport, at any time that Airline is not in default in its payments or
other obligations to City hereunder, by giving the Manager sixty (60) days advance
written notice. Airline termination shall not be effective unless and until at least sixty
(60) days have elapsed after written notice to City specifying the date upon which
such termination shall take effect.
Section 10.3 Events Permitting Termination of Agreement by City
City, at its option, may declare this Agreement terminated on the happening of any one or more
of the following events, and may exercise all rights of entry and reentry of Airline's Exclusive
Use Space:
10.3.1 If Airline has failed to cure a default in the Agreement after notice required in Section
I0.1 hereinabove;
10.3.2 If any act occurs that deprives Airline permanently of the rights, power and privileges
necessary for the proper conduct and operation of its Air Transportation business;
10.3.3 In the event Airline fails to provide scheduled Air Transportation service for a period
of thirty (30) days (except for events of Porce Majeure) or to pay rentals and fees
when due, City may cancel this Agreement on fifteen (15) days written notice.
However, if Airline cures the breach within this fifteen (15) day period, the
Agreement shall continue in full force and effect;
10.3.4 If Airline abandons and fails to use its Exclusive Use Space for a period of thirty (30)
days at any one time, except when such abandonment and cessation are due to fire,
earthquake, strike, governmental action, weather conditions which prevent aircraft
operations, mechanical failure of aircraft which prohibits operations under PAA
regulations, default of City or other cause beyond Airline's control;
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] 03.5 If Airline fails to operate at least five (5) weeldy scheduled passenger service
departures from the Airport, for a period of thirty (30) days or more (except by reason
of an event of Force Majeure).
Section 10.4 Possession by City
10.4.1 Iu any of the aforesaid events of Section 103, City may take possession of the Airline
Premises upon thirty (30) days notice and remove Airline's effects, without being
deemed to have trespassed. On said default, all rights of Airline shall be forfeited,
provided City shall have and reserve all of its available remedies at taw as a result of
said breach of this Agreement.
10.4.2 Failure of City to declare this Agreement terminated on default of Airline for any of
the reasons set forth herein shall not operate to bar, destroy or waive the right of City
to cancel this Agreement by reason of any subsequent violation of the terms hereof.
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ARTICLE 11
ASSIGNMENT, SUBLETTING, MERGER AND BANKRUPTCY
Section 11.1 Assignment and Subletting
Airline shall not assign this Agreement, or any part hereof in any manner whatsoever or sublet
the Airline Premises or any part thereof or any of the privileges recited herein without the prior
written consent of the Manager. However, Airline shall have the right to assign all or airy part of
its rights and interests under this Agreement to an Affiliate of the Airline or any successor to its
business through merger, consolidation, voluntary sale or transfer of substantially all of its assets,
and the consent of City thereto shall not be required; provided, however, due written notice of
any such assignment shall be given to the Manager.
Section 11.2 Non-Waiver of Responsibility
No assignment, transfer, conveyance, sublease or granting a nonexclusive license by Airline
shall relieve Airline of its responsibility for payment of rent and performance of all other
obligations provided in this Agreement, without specific written consent of the Manager to such
relief.
Section 11.3 Relinquishment of Space
If Airline desires to relinquish any of its Exclusive Use Space or any rights to Joint Use Space,
Airline may notify the Manager of the space available, and the Manager shall use a best effort to
reassign the space to another Airline. No reassignment by the Manager, nor any assignment,
transfer, conveyance or sublease by Airline shall relieve Airline of its primary responsibility for
payment of rent and performance of all other obligations provided in this Agreement, without
specific written consent by the Manager to such relief.
Section 11.4 Ground Handling Agreements
In the event Airline agrees to ground handle any portion of the operations of another Air
Transportation provider, other than an Affiliate of the Airline, Airline shall provide the Manager
advance written notice of such proposed activities, including a description of the type and extent
of services to be provided.
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Section 11.5 Bankruptcy
Notwithstanding Section I ] . I, in the event that a petition for relief under Tit]e 11 of the United
States Code or under any similar or successor federal, state or local statute is filed by or against
the Airline (a "Filing"):
1 T .5.1 The Airline shall give the City immediate verbal notice of the Filing followed by
written notice within ten (10) days of the filing;
11.5.2 Within sixty (60) days of the date of the Filing, the Airline will confine the
outstanding amount of any obligations hereunder due the City as of the date of Filing;
l 1.53 The Airline will fully and timely perform all obligations arising hereunder
commencing as of the date of the Filing and thereafter for the purposes of this
provision and of Section 365(d)(3) of Title l I of the United States Code, the parties
agree that, in the event that the Airline shall be the subject of a Filing commenced on
a day (the "Filing Date") when the rent due for the then-current month is outstanding
and unpaid, the obligation for rent during that month in which the Filing shall have
occurred shall be considered to accrue and be due pro rata on a daily basis during that
month and the Airline will pay the City the pro rata rent for the period from the Filing
Date through the end of that month within thirty (30) days of written demand
therefore by the City.
11.5.4 If the Airline determines that it wishes to assume the Agreement, the Airline will cure
all defaults, provide the City with adequate assurances of future performance and
comp]y with any and all other statutory or legal requirements prior to the effective
date of such assumption;
1 l .5.5 If the Airline determines that it wishes to assume the Agreement and assign the
Agreement to athird-party, the Airline shall seek the consent of the City, which
consent shall not be unreasonably withheld, and shall provide to the City all pertinent
information with respect to the proposed assignee, cure all defaults, provide the City
with adequate assurances of future performance through the proposed assignee and
comply with any and all other statutory or legal requirements;
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11.5.6 If the Airline wishes to reject the unexpired term of the Agreement, if any, the Airline
will not seek to have the effective date of such rejection determined to be a date
earlier than that date on which (i) the Airline shall have returned control and
possession of the Airline Premises to the City in the condition and on the terms set
forth herein and relevant to the redelivery of possession to the City, and (ii) the
Airline shall have obtained court approval and authorization for such rejection; and
the Airline shall fully and timely pay all rent and other charges through the date of
such rejection; and
11.5.7 The Airline shall be deemed to have expressly consented to the modification of the
stays of proceedings in any Filing in the event of any post-Filing default by the
Airline under the terms of this Agreement for the purpose of allowing the City to
exercise any default rights or remedies arising from such default.
Section ll.6 Consent
Consent by the Manager to any type of transfer provided for by this Article 11 shall not in any
way be construed to relieve Airline from obtaining further consent for any subsequent transfer or
assignment of any nature whatsoever.
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ARTICLE 12
GENERAL PROVISIONS
Section 12.1 Successors and Assigns Bound
This Agreement shall be binding on and inure to the benefit of the successors and assigns of the
parties hereto.
Section 12.2 Governing Law
This Agreement and all disputes arising hereunder shall be govenied by the laws of the State of
Alaska:
Section 12.3 Severability
if any covenant, condition or provision herein contained is held to be invalid by any court of
competent jurisdiction, the invalidity of any such covenant, condition or provision shall in no
way affect any other covenant, condition or provision herein contained, provided that the
invalidity°of any such covenant, condition or provision does not materially prejudice either party
hereto in its respective rights and obligations contained in the valid covenants, conditions or
provisions in this Agreement.
Section 12.4 Quiet Enjoyment
Airline shall, upon payment of the rentals and fees herein required, and subject to performance
and compliance by Airline aF the covenants, conditions and agreements on the part of Airline to
be performed and complied with hereunder, peaceably have and enjoy the rights, uses and
privileges of the Airport, its appurtenances and facilities as granted hereby and by the Rules and
Regulations.
Section ,12.5 Taxes
12.5.1 Airline shall pay, but such payment shall not be considered part of Airport Revenues,
all taxes (including any possessory interest tax), assessments and charges of a like
nature, if any, which at any time during the term of this Agreement may be levied or
become a lien by virtue of any levy, assessment or charge by the Federal government,
the State of Alaska, the City of Kenai, the Kenai Peninsula Borough, any municipal
corporation, any local government entity, any govermnent successor in authority to
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the foregoing, or any other tax or assessment levying bodies, in whole or in part, upon
or in respect to any of the space leased under this Agreement (including Airline's pro
rata share for any taxes, assessments or charges imposed upon Joint Use Space) or
such facilities of the Airport as are made available for use by Airline hereunder, or
upon or in respect to any personal property belonging to Airline situated on the space
leased under this Agreement. Payment of such taxes, assessments and charges, when
and if levied or assessed, shall be made by Airline directly to the taxing or assessing
authority charged with collection thereof.
12.5.2 Airline may, at its own expense, contest the amount or validity of any tax or
assessment, or the inclusion of the space ]eased under this Agreement as taxable or
assessable property, directly against the taxing or assessing authority. Airline shall
indemnify City from all taxes, penalties, costs, expenses and attorneys fees incurred
by City resulting directly or indirectly from all such tax contests except where Airline
prevails in contesting a tax assessed by the City.
12.5.3 On any termination of this Agreement, all lawful taxes then levied or a lien upon any
such property or taxable interest therein shall be paid in full by Airline forthwith, or
as soon as a statement thereof has been issued by the tax collector if termination
occurs during the interval between attachment of the lien and issuance of a statement.
Section 12.6 Liens
12.6.1 Airline shall cause to be removed promptly any and all liens of any nature arising out
of or because of any construction performed by Airline or any of its contractors or
subcontractors upon Exclusive or Joint Use Space or arising out of or because of the
performance of any work or labor by or for it or them at said premises.
12.6.2 Notwithstanding the foregoing provision of this Section 12.6, Airline may withhold
payment of any claim in connection with agood-faith dispute over the obligation to
pay. In the event a lien is filed as a result of Airline's nonpayment, Airline shall,
within 70 days after the filing, secure the removal of the lien or deposit with City cash
or sufficient corporate surety bond or other security satisfactory to City in an amount
equaling 150% of the total lien amount or $20,000, whichever is greater. Within one
year after providing City with security for the lien, Airline shall, upon City's written
request, secure the removal of the lien. Should Airline fail to remove the lien within
the one year period, Airline acknowledges and agrees that City in its sole unfettered
discretion may secure the removal of the lien and apply the security provided by
Airline to the costs of discharging the lien, including City's administrative costs and
attorney fees. In the event City has accepted a cash deposit as satisfactory security
under this Section 12.6, City shall distribute to Airline any portion of the deposit
remaining after full payment of all such costs relating to the discharge of the lien has
been made. In the event a mechanic's lien is asserted or filed against the leased
Airline Operating Agreement LESSOR
and Terminal Area Lease LESSEE
Page 42 of 51
premises for improvements made by Airline, Airline shall hold City harmless from
such claim, including the cost of defense.
Section 12.7 Obtaining Federal and State Funds
City shall use its best efforts to obtain appropriate grants from State or Federal agencies or other
sources, when consistent with prudent management of the Airport.
Section 12.8 Subordination to Agreements with the U.S. Government
This Agreement is subject and subordinate to the provisions of any agreements heretofore or
hereafter made between City and the United States, relative to the operation or maintenance of
the Airport, or to the expenditure of federal funds for the improvement or development of the
Airport, including the expenditure of federal funds for the development of the Airport in
accordance with the provisions of the Federal Aviation Act of 1958, the Federal Aid to Airport
Act, the Airport and Airway Development Act of 1970 and the Airport and Airway Improvement
Act of l 982, as such acts have been amended or replaced from time-to-time. In the event that the
FAA requires, as a condition precedent to the granting of funds for the improvement of the
Airport, modifications or changes to this Agreement, Airline agrees to consent to such
amendments, modifications, revisions, supplements or deletions of any of the terms, conditions
or requirements of this Agreement as may be required to enable City to obtain such grant of
funds.
Section 12.9 Subordination to Bond Ordinances
This Agreement and all rights of Airline hereunder are especially subordinated and subject to the
lien and provisions of any pledge, assignment or security interest made or granted by City to
secure any obligations authorized by ]aw to be issued for the development, operation or
improvement of the AirporC. City and Airline agree that holders of such obligations, and any
bond trustee acting on behalf of such holders, shall possess, enjoy and may exercise all rights of
City hereunder to the extent such possession, enjoyment and exercise are necessary to ensure
compliance by Airline and City with the terms and provisions of any covenant contained in an
ordinance, resolution or other instrument relating to such obligations. Airline shall not take any
action or suffer to take any action that would adversely affect the tax-exempt status of any
obligation issued by City in connection with the Airport.
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page 43 of 51
Section 12.10 Incorporation of Exhibits
All exhibits referred to in this Agreement are intended to be and hereby are specifically made a
part of this Agreement.
Section 12.11 Entire Agreement
This Agreement, together with all exhibits attached hereto, constitutes the entire agreement
between the parties hereto, and all other representations or statements heretofore made, verbal or
written, are merged herein, and this Agreement may be amended only in writing, and executed
by duly authorized representatives of the parties hereto.
Section 12.12 Non-Waiver of Rights
No waiver of default by either party of any of the terms, covenants and conditions hereof to be
performed, kept and observed by the other party shall be construed, or shall operate, as a waiver
of any subsequent default of any of the teens, covenants or conditions herein contained, to be
performed, kept and observed by the other parry.
Section 12.13 Force Majeure
12.13.1 In the event of either party being rendered unable wholly, or in part, by force majeure
to carry out its obligations under this Agreement, other than its obligations to make
payments of money due hereunder then on such party's giving notice and full
particulars of such force majeure in writing to the other party as soon as possible after
the occurrence of the cause relied on, then the obligation of the party giving such
notice, so far as it is affected by such force majeure, shall be suspended during the
continuance of any inability so caused, but for no longer period, and such cause shall,
as far as possible, be remedied with all reasonable dispatch. In the event either party
hereto has with its employees what is commonly known as a labor dispute, each party
does hereby reserve unto itself the right to handle said dispute in its own fashion and
as it shall, in its uncontrolled discretion, deem best and without interference from the
other party.
12.13.2 The term "force majeure" as employed herein shall mean acts of God, strikes,
lockouts or other industrial disturbances, acts of the public enemies, wars, blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms,
floods, washouts, arrests and restraints of rulers and people, civil disturbances,
explosions, inability with reasonable diligence to obtain materials and any other
causes not within the control of the party claiming a suspension, which by the
exercise of due diligence such party shall not have been able to avoid or overcome.
Airline Operating A~reemem LESSOR
and Terminal Area Lease LESSEE
Page 44 of 51
Section 12.14 Headings
The headings of the several articles and sections of this Agreement are inserted only as a matter
of convenience and for reference and do not define or limit the scope or intent of any provisions
of this Agreement and shall not be construed to affect in any manner the terms and provisions
hereof or the interpretation or construction thereof.
Section 12.15 Nonexclusive Rights
It is understood and agreed that nothing herein contained shall be construed to grant to Airline
any exclusive right or privilege within the meaning of Section 308 of the Federal Aviation Act
for the conduct of any activity on the Airport, except that, subject to the terms and provisions
hereof, Airline shall have the right to exclusive possession of the Exclusive Use Space leased to
Airline under the provisions of this Agreement.
Section 12.16 Inspection of Books and Records
Each party hereto, at its expense and on reasonable notice, shall have the right from time-to-time
to inspect the books, records and other data of the other party relating to the provisions and
requirements hereof, provided such inspection is made during regular business hours. Each party
shall retain all such records for a period of at least three (3) years, or as required by the FAA,
Transportation Security Administration or other federal agency having jurisdiction over the
Airlines. On at least thirty (30) days prior written notice, Airline agrees to make any records
required hereunder available to City at Airline's offices at the Airport.
Section 12.17 Generally Accepted Accounting Principles
Whenever any report or disclosure referred to in this Agreement consists, either in whole or in
part, of financial information, such report or disclosure shall be prepared in accordance with
generally accepted accounting principles, except as specifically provided to the contrary in this
Agreement.
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page 45 of 51
Section 12.18 Consent Not to be lTnreasonably Withheld
Whenever consent, permission or prior written approval is required by either City or Airline,
such consent, permission or prior written approval is not to be unreasonably withheld or delayed.
Section 12.19 Authority of Manager
All rights and obligations of City under this Agreement may be exercised by the Manager or the
Manager's designee, unless specifically provided otherwise or required by law.
Section 12.20 Amendments
This Agreement may be amended in whole or in part without further consideration upon mutual
written consent of City and Airline.
Section 12.21 Attorney Fees
In the event any action or proceeding is brought to collect sums due or to become due hereunder
or any portion thereof or to take possession of the Airline Premises or to enforce compliance
with this Agreement for failure to observe or perform any of the covenants, terms or conditions
of this Agreement, the losing party agrees to pay to the prevailing party such fees, including
attorney fees, and costs as the Court may judge reasonable in such action or proceeding, and in
any appeal therefrom.
Section 12.22 Vending Machines
Airline shall ensure that no amusement, vending or self-ticketing machines, public pay
telephones or other machines operated by coins, tokens or credit cards are installed or maintained
in or at Airline's Exclusive Use Space or Joint Use Space except with Che prior written
permission of the Manager.
Section 12.23 Public Address System
Airline agrees that the use of City's public address system will be professional and non-
promotional. Airline shall not install, cause to be installed or use any other public address
system in the passenger terminal building without the prior written approval of the Manager.
Section 12.24 Employees of Airline
Airline shall require all of its employees, subcontractors or independent contractors hired by
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSEE
Page 46 of 51
Airline working in view of the public and about the passenger terminal building area to wear
clean and neat ariire and to display appropriate identification.
Section 12.25 Removal of Disabled Aircraft
Airline shall promptly remove any of its disabled aircraft from any part of the Airport (including,
without limitation, runways, taxiways, aprons and gate positions) and place any such disabled
aircraft in such storage areas as may be designated by the Manager. Airline may store such
disabled aircraft only for such length of time and on such terms and conditions as may be
established by City. If Airline fails to remove any of its disabled aircraft promptly, the Manager
may, after informing Airline of his/her intent to do so, but shall not be obligated to, cause the
removal of such disabled aircraft; provided, however, the obligation to remove or store such
disabled aircraft shall not be inconsistent with federal laws and regulations. Airline agrees to
reimburse City for all costs of such removal, and Airline further hereby releases City from any
and all claims for damage, except as the result of negligent or willful misa>nduct, to the disabled
aircraft or otherwise arising from or in any way connected with such removal by City.
Section 12.26 Licenses, Fees and Permits
Airline shall obtain and pay for all licenses, fees, permits or other authorization or charges as
required under federal, state or loca] laws and regulations insofar as they are necessary to comply
with the requirements of this Agreement and the privileges extended hereunder.
Section 12.27 National Emergency
This Agreement and al] the provisions hereof shall be sub;ect to whatever right the U.S.
Government now has, or in the future may have or acquire, affecting the control, operation,
regulation and taking over of said Airport or the exclusive or nonexclusive use of the Airport by
the United States during the time of war or national emergency.
Section 12.2 Time is of the Essence
Time is of the essence in this Agreement.
Airline Operating Agreement
and Terminal Area Lease
LESSOR
LESSF.,E
Page 47 of 57
Section 12.29 Employee Parking
The City shall provide and Airline shall have the right to the use of vehicle parking facilities, for
its employees employed at the Airport. Such facilities shall be located in an area designated by
the City. City reserves the right to charge Airline and/or its employees reasonable fees, not to
exceed actual net costs, for use of such facilities and to regulate such use.
Section 12.30 Notices
12.30.1 Notices to City provided for herein shall be sufficient if sent by first class mail and
certified mail, return receipt requested,, postage prepaid, addressed to: City of Kenai,
Kenai Municipal Airport, 210 Fidalgo Avenue, Kenai, Alaska 99611-7794. Notices
to City shall also be considered sufficient if sent by tested or otherwise authenticated
facsimile at (907) 283-3737 or by recognized overnight courier service, and notices to
Airline, if sent by first class mail and certified mail, return receipt requested, postage
prepaid, addressed to __ , or to such other addresses as the
parties may designate to each other in writing from time to time. Notices to Airline
shall also be considered sufficient if sent by tested or otherwise authenticated
facsimile at or by a recognized overnight courier
service.
12.30.2 All notices, requests, demands or other commwlications which are required or may be
given pursuant to the terms of this Agreement shall be in writing and shall be deemed
to have been received (i) on the date of delivery if personally delivered by hand, (ii)
upon the third day after such notice is (a) deposited in the United States mail, if
mailed by registered or certified mail, postage prepaid, return receipt requested, or (b)
sent by a nationally recognized overnight express courier, or (iii) by facsimile upon
written confirmation (other than the automatic confirmation that is received from the
recipient's facsimile machine) of receipt by the recipient of such notice.
Section 12.31 No More Favorable Terms
City shall not enter into any lease, contract or any other agreement with any other Air
Transportation company containing more favorable terms than this Agreement, or to grant any
tenant engaged in Air Transportation, rights or privileges with respect to the Airport that are not
accorded Airline hereunder, unless the same rights, terms and privileges are concurrently made
available to Airline.
Airline Operating Agreement
and Terminal Area Lease
LF,SSOR
LESSEE
Page 48 of 51
ARTICLE 13
PROVISIONS OF CITY'S D>;EIS
This Agreement shall be binding on and inure to the benefit of the successors and assigns of the
Parties hereto. Airline expressly understands that all provisions of this Agreement are subject to
the provisions of the deed under which City holds title to the Airport property and that tenancy
established herein is subject to the terms and conditions set forth in that deed of December 1,
1963, wherein the City of Kenai obtained title to the premises from the Administration of
General Services pursuant to authority of the provisions of the Federal Property and
Administration Services Act of 1949 and the Surplus Property Act of 1944 (58 Stat. 765) as
amended and regulations and orders promulgated thereunder and the Airline further agrees to
abide by the covenants of such deed and the restrictions set forth therein which are imposed
pursuant to authority of Article 4, Section 3, Clause 2 of the Constit<rtion of the United States of
America, the Federal Property and Administrative Services Act of 1949 (Public Law 152-81st
Congress), the Surplus Property Act of 1944 as amended thereby, and the applicable rules,
regulations and orders, and that the use of the premises by Airline shall be in accordance with
such covenants and conditions the same as though all of such covenants and conditions contained
in such deed were set forth in full herein.
Airline Operating Agreement LESSOR
and Termioat Area Lease LESSEE
Page 49 of 51
IN WITNF,SS WHEREOF, the parties hereto have hereunto set their hands, the day and year
stated in the individual acknowledgments below.
LESSOR:
CITY OF KENAI
By:
Rick K. Koch -City Manager
LESSEE:
By:
Name -Title
(If Lessee is a Corporation)
ATTEST:
Name and'I'itle
STATE OF ALASKA )
)ss
THIRD JUDICIAL DISTRICT )
AVIATION, INC.
THIS IS TO CERTIFY that on this day of 2008, NAME, TITLE of
AVIATION, INC., being personally ltnown to me or having produced
satisfactory evidence of identification, appeared before me and aclmowledged the voluntary and
authorized execution of the foregoing instrument on behalf of said Corporation.
Notary Public for Alaska
My Commission expires:
Airline Operaring Agreement LESSOR
and Terminal Area Lease LESSEE
Page 50 of 51
STATE OP ALASKA
)ss
THIRD JUDICIAL DISTRIC'T' )
TriIS IS TO CERTIFY thai on this day of 2G08, RICK K. KOCFI, City
Manager of the City of Kenai, Alaska, being personally known to me or having produced
satisfactory evidence of identification, appeared before me and acknowledged the voluntary and
authorized execution of the foregoing instrument on behalf of said City.
Notary Public for Alaska
My Commission expires:
Approved by Kenai City Council
Approved as to ]ease form by City Attorney
Approved by Finance Director
Approved by City Manager
Return to: City Attorney
210 Fidalgo Ave.
Kenai, AK 99611
Airline Operating Agreement LCSSOR
and Terminal Area Lease LESSEE
Page 51 of 57
EXHIBIT A
AIRLINE PIBEMISES - EXCLIISI~E I751G SPACE
INSERT TERMINAL BUILDING DRAWING WITH EXCLUSIVE USE SPACE SHADED
ONE EXHIBIT A FOR EACH AIRLINE AGREEMENT
Terminal Drawing Not to Scale
Grant Aviation
Exclusive Use Space including the ticket courters, ticket lobby queuing area, office space and
operations space indicated above: 544 square feet
Terminal apron aircraft parking and GSE Space: 5,000 square feat
ERA Aviation
Exclusive Use Space including the ticket counters, ticket lobby queuing area, office space and
operations space indicated above: 1,152 square feet
Terminal apron aircraft parking and GSE Space: 15,000 square feet
Airline Operating Agreement LESSOR _
and Terminal Area Lease LESSEE
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E7LIIIBIT S
AIRLINE YI2E1VII3ES - 3(DINT' USE SPACE
INSERT TERMINAL BUILDING DRAWING WITH JUINT USE SPACE SHADED
SAME EXHIBIT B PUR ALL AIRLINE AGREEMP.,NTS
Terminal Drawing Not io Scaie _
Joint Use Space used in common by all Signatory
Passenger Haldroom
Departure Hallway
Arrival Hallway
Baggage Makeup Area
Baggage Claim Area
Baggage Breakdown Area
Total Joint Use Space
Square
Peet
1,008
528
288
2,440
1,200
96d
6 3$4
Airline flpetating Agreement LESSOR
and Terminal Area Lease t,ESSEE
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EXHIBIT C
AIRLINE RATE SCHEI3ULE
KENAI MUNICIPAL AIRPORT
City of Kenai, Alaska
ENA_Exh.t23 30-Apr-O8
Calculation of 2408 Terminal Rent, Apron Space Rent and Landing Fees (1)
Ef2A Aviation 2008 Terminal Rent
Actua! Adjusted
Area Square Utilization Square Base Rental Enplanement
Description Feet Adjustment Feet_ Rats sfpy) Percentage
Exclusive use space 1,152 - 1,152 $19.80 -
Joint use space:
Baggage make-up area 2,400 65.34%
Baggage breakdown area 960 65.34%
Baggage claim area 1,200 65.34%
Passenger hofdroom, arrival and
departure Hallways 1,824 65.34%
Rental
4mount
$22,810
1,568 $12.00 79% $14,$66
627 $12.00 79% $5,946
784 $19.80 79% $12,265
1,19? $19.80 79% $18.642
Total Terminal Rent
Square
Feet
Terminal Apron Aircraft
- Parking & G5E Space Renk 15,000
Landing Fees 11
2008 Terminal Apron SF
Renta! Rate
{PsfpY)
___ $0.30
2008 Landing Fe~
Landing
Fee
_ Rate
est(2} $1.p0
NOTES:
{1) Rents and fees are scheduled to increase by 10% for each year of the agreement.
{2) Alreraft take-off weights are estimated. Actual landing fees are to be based on actual weight.
Space
Rent
Landing
Airline Operating Agreement LESSOR _
and Terminal Area Lease Page 1 of 2 LESSEE
EXHIBIT C
AIRLINE RATE SGHEDULE
KENAI MUNICIPAL AIRP(yRT
City of Kenai, Alaska
ENA Exh.F23 30-Apr-08
Calculation of 2008 Terminal Rent, Apron Space Rent and Landing Fees (1)
Actual Adjusted
Area
- 6escription _____ Square
Feet Utilization
Adjustmenf Square
Feet Base Rental
Rate{psfpy) Enplanement
Percentage Rental
Amount
Exclusive use space 544 - 544 $19.80 - $10,771
Joint use space:
Baggage make-up area 2-,400 65.34% 1,568 $12.00 21% $3,952
baggage breakdown area 960 65.34% 627 $12.00 21% $1,581
6aggageclaimarea 1,200 85.34% 784 $19.80 21% $12,285
Passenger hotdroom, arrival and
departure hallways 1,824 &5.34_%__ ____1_,192 $19.80 21% $4,956
Total Terminal Rent `fi33 5~a
2008 Terminal Apron Space Rent
Actual ---
Apron
Square Rental Rate Space
Feet _ (psfpy) Rent
Terminal Apron Aircraft _ _____
Parking & GSE Space Rent 5,000 $0.30 $1,5i
2008 Landing Fees
___
~ Take-Off Landing
' Weight Fee Landing
__ (1,OOOs)
_ _ Rate Fees
_
landing Fees __._ _. 27,424 est (2) $1.00 ~ $27,4:
NOTES:
(1) Rents and fees are scheduled to increase by 10% for each year of the agreement.
(2) Aircraft Yake-off weights are estimated. Actual landing fees are to be based on actual weight.
Airlina Operating Agreement LGSSOR _
'. and Terminal Araa Lease Page 2 of 2 LESSEE
EXI£iBIT D
AIRLINE AND AFFILIATE INSURANCE REQiJIIiEMENTS
A. Airline Liability Insurance and Comprehensive Ueneral Liability Insurance
Insurance limits of liability for Airline and each of its individual Affiliates shall be determined
by the capacity in passenger seats of the largest aircraft in Airline's and its Affiliate's fleet as
follows:
Nat less than one hundred fifty million dollars ($15Q000,000} per occurrence for
airlines operating aircraft of one hundred (I00) seats or more;
2. Not less than one hundred million dollars ($100,000,000} per occurrence for airlines
operating aircraft of between sixty (60) and ninety-nine (99} seats;
3. Nat less than fifty million dollars ($50,000,000) per occurrence for airlines operating
aircraft of between twenty (20} and fifty-nine (S9) seats;
4. Not less than twenty million dollars ($20,000,600) per occurrence for airlines operatng
aircraft of nineteen (l9) or fewer seats;
5. Not less than five million dollars ($5,000,000} per occurrence for airlines operating
aircraft of nine (9) or fewer seats;
6. Passenger personal injury not less than twenty-five miIIion dollars ($25,006,000) par
occurrence and in the annual aggregate with respect to non-passenger personal injury.
B. Hangar Keepers Liability Insurance (If Applicable)
hangar keepers liability ursurance in an amount aaequate to cover any non-owned property in
the care, custody and control of Airline or any of its individual Affiliates on the Airport, but in
any event ar an amount not less than five million dollars {$5,000,000).
C. Automobile Liability Insurance
Automobile liability insurance in an amount adequate to cover automobile insurance while on
Airport premises hl an amount not less than one million dollars {$1,00Q000} per Berson per
occurrence.
D. Workers' Compensation and Employexs' Liability Insurance
Statutory coverage and liability limits are required.
Airline Operating Agreement LESSOR
and Terminal Area Lease LESSEE