HomeMy WebLinkAbout04627 - EXPRESSJET AIRLINES AIRPORT USE LEASE ' Expressjet Airlines
Airport Use &- Lease Agr
AGREEMENT #4627
CM signed 3-10-03 per R18205
STANDARD FORM 93-001A
AIRPORT USE AND LEASE AGREEMENT
PALM SPRINGS REGIONAL AIRPORT
Dated July 1, 1994
Between
CITY OF PALM SPRINGS
PALM SPRINGS, CALIFORNIA
and
EXPRESS7ET AIRLINES, INC
[Airline]
r
TABLE OF CONTENTS
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Aircraft Loading Bridge(s) or AC Loading Bridge(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02 Aircraft Operator 2
Section 1.03 Aircraft Parking Position(s) or AC Parking Position(s) . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section1.04 Airline Funded Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.05 Airline Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section1.06 Airport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.07 Airport Improvement Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.08 Airport Layout Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.09 Airport Terminal Development Program or Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10 Airside Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.11 Airside Cost-Revenue Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.12 Capital Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.13 Capital Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.14 Certificated Maximum Landing Weight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.15 Concession Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section1.16 Concourses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.17 Concourse Gate Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.18 Cost-Revenue Centers or CRCs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.19 Date of Beneficial Occupancy or DBO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.20 Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . I . 4
Section 1.21 Director of Aviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section1.22 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.23 Enplaned or Enplaning Passengers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section1.24 Exclusive Use Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.25 Exclusive Use Space Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.26 Existing Joint Use Baggage Claim/Common Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.27 Existing Joint Use Walkway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.28 Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.29 FAA or Federal Aviation Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section1.30 Fee Landing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.31 First Level Concourse Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section1.32 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section1.33 Independent Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.34 Indirect Cost Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1.35 Joint Use Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section1.36 Landing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section1.37 Landing Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section1.38 Landside Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.39 Landside Cost-Revenue Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.40 Main Terminal Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.41 Maintenance and Operations Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.42 Maintenance and Operations Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section1.43 Non-Airline Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.44 Passenger Departure Lounge(s) on the First Level Concourse . . . . . . . . . . . . . . . . . . . 9
Section 1.45 Preferential Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.46 Preferential Use Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section1.47 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section1.48 Reserve Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.49 Second Level Concourse Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.50 Signatory Airline(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.51 Special Capital Projects Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.52 Terminal Area or Terminal Building Complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Airport Use and Lease Agreement i Dated 07/01/94
Section 1.53 Terminal Cost-Revenue Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.54 Total Landed Weight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLEII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . . . . . 10
Section 2.01 Term of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . 10
Section 3,01 Rights of Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLEIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.01 Period From Effective Date to DBO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.02 Period From DBO Until Expiration Date of This Agreement . . . . . . . . . . . . . . . . . . . . . 14
ARTICLEV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.01 General Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.02 Period From Effective Date to DBO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.03 Period From DBO Until Expiration Date of This Agreement . . . . . . . . . . . . . . . . . . . . 15
Section 5.04 Landing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.05 Supplemental Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.06 Special Capital Projects Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.07 Employee Ground Vehicle Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 5.08 Insufficiency of Airport Revenues, Adjustment of Airline Rates and Charges . . . . . . . 18
Section 5.09 Annual Adjustment to Actual Airline Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.10 Costs Excluded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.11 Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . 19
Section 5.12 Non-Signatory Airlines Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLEVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.01 Maintenance and Operations Expenses,Reserve Fund Deposit Requirements and Non-
Use Agreement Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.02 Disposition of Airport Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.03 Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.04 Maintenance and Operations Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 6.05 Landside Development Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLEVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.01 Preliminary Projection of Airline Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.02 Payment of Airline Rates and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 7.03 Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 7.04 Provision Against Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLEVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.01 General Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.02 Accounting Principals &Audit Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.03 Cost or Expense Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.04 City to Exercise Prudence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.05 Additional Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.06 Airline Approval . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.07 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.08 Bonded Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . 26
Section 8.09 Outside Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . 26
ARTICLEIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.01 Approval of Airport Terminal Development Program . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.02 Sources of Funds . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . 27
Section 9.03 Airline Cooperation . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . . . . 27
Section 10.01 Maintenance and Operation of the Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . 27
Section 10.02 Maintenance and Operation of Airport by City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Airport Use and Lease Agreement ii Dated 07/01/94
Section 10.03 Accommodations of Other Incoming Aircraft Operators . . . . . . . . . . . . . . . . . . . . . . . 28
Section 10.04 Gate Positions and Loading Ramps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 10.05 Aircraft Parking Position(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section10.06 Public Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section10.07 Signs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.08 Alteration, Repair, Maintenance, Remodeling, Expansion, Removal and/or
Improvement of the Facilities of Terminal Building Complex or Its Appurtenances . . . . 30
Section 10.09 Airport Security- Federal Aviation Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section10.10 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 10.11 Trash, Garbage, Aircraft Sewage and Other Refuse . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 10.12 Vehicles and Automotive Equipment on Airside Area and Aircraft Parking Positions 32
Section10.13 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLEXI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section11.01 No Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLEXII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 12.01 Indemnification of Airport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 12.02 Airline Public Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 12.03 Workers Compensation Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 12.04 City Public Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 12.05 Fire and Extended Coverage Insurance - Terminal Building Complex . . . . . . . . . . . . 35
Section 12.06 Airline Insurance on Automobiles and Other Ground Vehicles . . . . . . . . . . . . . . . . . . 36
Section 12.07 General Provision Applicable to Airline's Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLEXIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 13.01 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLEXIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 14,01 Inspection by City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLEXV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 15.01 Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLEXVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 16.01 Assignment and Sublease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLEXVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 17.01 Surrender of Possession - Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLEXVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section18.01 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLEXIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.01 Default by Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.02 Remedies Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.03 Cancellation by City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 19.04 Cancellation by Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLEXX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 20.01 Damage or Destruction of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLEXXI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 21.01 Prohibited Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 21.02 Oil, Fuel and Other Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 21.03 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLEXXII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 22.01 Improvements by Airline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 22.02 Conditions Covering Improvements and Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Airport Use and Lease Agreement iii Dated 07/01/94
Section 22.03 Ownership of Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XXIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 23.01 Non-Discrimination and FAA Required Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 23.02 Federal Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XXIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 24.01 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLEXXV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.01 Non-Waiver of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.02 Invalidity of Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.03 Approval by the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.04 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.05 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.06 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.07 Non-Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 25.08 Attorneys' Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 25.09 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 25.10 Termination of Prior Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 25.11 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 25.12 Agreement Not to Grant More Favorable Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 25.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 25.14 Invalidity of Covenants, Conditions or Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 25.15 Jurisdiction and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 25.16 No Oral Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Airport Use and Lease Agreement iv Dated 07/01/94
EXHIBITS
EXHIBIT A Airside, Terminal and Landside Areas
EXHIBIT B Existing Exclusive Use Space, Existing Joint Use Baggage Claim/Common Area, and
Existing Joint Use Walkway
EXHIBIT C Exclusive Use Space
EXHIBIT D First Level Concourse Building
EXHIBIT E Second Level Concourse Building
EXHIBIT F Airport Terminal Development Program
EXHIBIT G Maintenance, Services and Utilities Responsibilities
EXHIBIT H Gate Allocation Formulas
EXHIBIT I Preferential Use of Concourse Gate Positions
Airport Use and Lease Agreement _v Dated 07/01/94
AIRPORT USE AND LEASE AGREEMENT
THIS AIRPORT USE AND LEASE AGREEMENT("Agreement') made and entered into as ofthe&Yday of
200, by and between the CITY OF PALM SPRINGS, a municipal corporation organized and
existing under the laws of the State of California ("City'), and ExPRESSJET .AIRLINES, IN G a corporation
organized and existing under the laws of the State of DELAWARE ("Airline').
WITNESSETH:
WHEREAS, the City owns and operates the Palm Springs Regional Airport ("Airport'), located in the
City of Palm Springs, County of Riverside, State of California; and
WHEREAS, City operates the Airport as a governmental function for the primary purpose of providing
to the public the service of air transportation; and
WHEREAS, Airline is engaged in the business of commercial air transportation of persons, property,
cargo and mail ("Air Transportation') and desires to enter into a use and lease agreement covering certain
premises, facilities, rights, licenses, services and privileges at the Airport; and
WHEREAS, City and Airline mutually desire to enter into an Agreement, in order to provide Air
Transportation services for the community and its visitors, and
WHEREAS, City has the right to permit the use of its property at the Airport and to grant the use of the
Airport to Airline for the operation of Airline's Air Transportation service; and
WHEREAS, City intends to issue bonds, notes, certificates of participation or other obligations in an
amount not to exceed Twenty Five Million Dollars($25,000,000)in orderto develop new and improved terminal
facilities at Airport,
NOW, THEREFORE, for and in consideration of the Premises and the mutual covenants hereinafter
contained to be observed and performed,the parties hereto covenant, agree and bind themselves as follows:
ARTICLE I
DEFINITIONS
The following words,terms and phrases, whenever used in this Agreement, shall have the meanings
respectively ascribed to them in this Article.
Airport Use and Lease Agreement 1 Dated 07/01/94
Section 1 01 Aircraft Loading Bridge(s)orAC Loading Bridge(s)shall mean the covered airline
equipment affixed to the Terminal to permit passengers access from the Passenger Departure Lounges in the
Terminal Building Complex to parked aircraft.
Section 1.02 Aircraft Operator shall mean the operator of an aircraft,whetherthe aircraft is owned,
leased or chartered,that is used for private, military, pleasure or governmental operations, or for airline or non-
airline operations, or for scheduled or non-scheduled operations. "Aircraft Operator" does not mean the pilot
of an aircraft unless such pilot is also the owner or lessee thereof or a person to whom such aircraft is chartered.
Section 1.03 Aircraft Parking Position(s) or AC Parking Position(s) shall mean the positions
on the Airport's Terminal Apron Area where aircraft are required to park in order to enplane and deplane
passengers.
Section 1.04 Airline Funded Cost shall mean for each Capital Project described in the Airport
Terminal Development Program,the estimated amount set forth opposite such Capital Project in the Program.
Section 1.05 Airline Rates and Charges shall mean for any Fiscal Year,all rates,fees and charges
payable by all Signatory Airlines for such Fiscal Year as specified herein.
Section 1.06 Airport shall mean the Palm Springs Regional Airport owned and operated by the City
of Palm Springs,the location of which is 3400 East Tahquitz Canyon Way, Palm Springs, California, Riverside
County.
Section 1.07 Airport Improvement Program shall mean the Federal Grant in Aid program for
airports, as it now exists or as it may be modified in the future.
Section 1.08 Airport Layout Plan shall mean the Airport Layout Plan dated January 20, 1993, as
it may be amended from time to time, required by the Federal Aviation Administration to be submitted by the
City for review and approval showing the layout of the Airport and the current and projected uses ofthe facilities
located at the Airport.
Section 1.09 Airport Terminal Development Program or Programs shall mean the expansion
and improvement of the Existing Terminal Building Complex including the development of a new Second Level
Concourse Building, improvements to the existing Terminal Building (i.e. re-roofing, equipment screening and
FIDS) and consolidation of central plant functions.
Section 1.10 Airside Area shall mean the land identified as Airside Area on Exhibit A, and except
as otherwise provided herein, all facilities, equipment and improvements now or hereafter located thereon,
including but not limited to the following:
Airport Use and Lease Agreement 2 Dated 07/01/94
(a) Airfield Area
(1) Runways- runways at the Airport for the landing and taking-off of aircraft;
(2) Taxiways-taxiways and taxilanes at the Airport for the ground movement of aircraft to,
from and between the runways,Aircraft Parking Areas,and other portions of the Airport;
(3) Aircraft Parking Positions;
(4) Facilities Incidental to the Runways and Taxiways - facilities for the purpose of
controlling and assisting arrivals, departures and operations, of aircraft using the
Airport, such as airfield security roads, control towers, navigational aids, and support
facilities operated and maintained by the FAA, signals, beacons,wind indicators,flood
lights,landing lights,boundary lights,construction lights,fencing,open or undeveloped
spaces or areas inside Airport fence not in Terminal or Landside Areas, radio and
electronic aids or other aids to operations, navigation or ground control of aircraft
whether or not of a type herein mentioned and even though located away from the rest
of the Airside Area;
(b) Air Freight Buildings, Maintenance and Hangar Facilities, and Fixed Base Operations (FBOs);
and
(c) Aircraft Rescue and Firefighting (ARFF) Services, facilities and equipment(80% of the costs).
Section 1.11 Airside Cost-Revenue Center for cost accounting purposes shall mean the revenues
and expenses associated with the Airside Area.
Section 1.12 Capital Expenditure shall mean an expenditure for the acquisition, construction or
equipping of a Capital Project,togetherwith related design,architectural and engineering fees,consulting fees,
laboratory and testing fees, financing costs, and other associated costs.
Section 1.13 Capital Project shall mean a capital improvement at the Airport, including but not
limited to, the Airport Terminal Development Program, or the acquisition of land beyond the then-current
boundaries of the Airport for use as a part of the Airport.
Section 1.14 Certificated Maximum Landing Weight shall mean the current maximum allowable
gross landing weight, expressed in 1,000 pound units, of aircraft operated by Airline and certificated by the
Federal Aviation Administration for operation at the Airport.
Section 1.15 Concession Revenues shall mean for any Fiscal Year, rentals, charges and fees of
any kind or nature payable to City during such Fiscal Year from tenants, licensees, permittees, or other
Airport Use and Lease Agreement 3 Dated 07/01/94
operators at the Airport,for the right to use premises at the Airport to sell or lease merchandise, services (other
than Air Transportation)or other intangibles,including,but not limited to,restaurants,cocktail lounges,car rental
agencies, news stands, gift shops, specialty shops, advertising displays, insurance sales facilities, public
telephones, facilities for the furnishing of ground transportation services, hotels, and parking areas.
Section 1.16 Concourses shall mean the First Level and Second Level Terminal Buildings, and
areas adjacent thereto,serving the Signatory Airlines and otherAircraft Operators forthe loading and unloading
ofpassengers,including Passenger Departure Lounges;Aircraft Loading Bridges,where applicable;concession
areas; public areas, including security screening; and other tenant and City space thereon.
Section 1.17 Concourse Gate Position shall mean an aircraft loading facility unit in the
Concourses, which may include a Passenger Departure Lounge, and where applicable, an Aircraft Loading
Bridge. As of DBO, eleven Aircraft Loading Bridges may be provided at Gates 1 through 11.
Section 1.18 Cost-Revenue Centers or CRCs shall mean those areas of the Airport grouped
together for the purposes of accounting for Revenues, Maintenance and Operations Expenses, Capital
Expenditures,Reserve Fund deposit requirements,Debt Service,and forcalculating Airline Rates and Charges.
The CRCs named in this Agreement, taken together, comprise the entire Airport, and are the Terminal Area,
Airside Area and Landside Area.
Section 1.19 Date of Beneficial Occupancy or DBO shall mean the date established by the City
by written notice to Airline on which the Premises in the two level Concourse Complex will be substantially
completed and usable by Airline as a result of the Airport Terminal Development Program, without hazard or
undue inconvenience based upon a certification by City's architect/engineer, a copy of which shall accompany
such notice. City agrees to give Airline access to the leased Premises at least 60 days priorto the anticipated
day of DBO to allow Airline to install its equipment and other fixtures. Such installations shall be coordinated
with City's architect/engineer.
Section 1.20 Debt Service shall mean for any Fiscal Year, principal payments, interest payments,
fund deposit requirements and amounts payable as a result of debt service coverage requirements on
obligations of the Airport payable for such Fiscal Year, including but not limited to bonds, notes and certificates
of participation.
Section 1.21 Director of Aviation shall mean the person designated by City to exercise functions
with respect to the rights and obligations of City under this Agreement. The term also includes any person
expressly designated to exercise functions with respect to the rights and obligations of the Director of Aviation
Airport Use and Lease Agreement 4 Dated 07/01/94
under this Agreement, or such other person, division, department, bureau, or agency as may from time to time
exercise functions equivalent or similar to those exercised by the Director of Aviation, as appointed by the City.
Section 1.22 Effective Date shall mean July 1, 1994.
Section 1.23 Enplaned or Enplaning Passengers shall mean the revenue, originating and
connecting passengers actually boarding the aircraft operated by the Airline or user of the facility in question
at the Airport during the period of the cost apportionment.
Section 1.24 Exclusive Use Space shall mean the exclusive use space as shown on Exhibit C,
which City has granted Airline the right to use exclusively from the Effective Date of this Agreement.
Section 1.25 Exclusive Use Space Rate shall have the meaning assigned in Section 5.02(a).
Section 1.26 Existing Joint Use Baqqaqe Claim/Common Area shall mean the area as shown
on Exhibit B,which City has granted Airline the right to use jointly with other Aircraft Operators forthe purpose
of unloading and delivering to its passengers the baggage of such passengers from the Effective Date of this
Agreement.
Section 1.27 Existing Joint Use Walkway shall mean the walkway area adjacent to existing Gates
1 through 12B,as shown on Exhibit B,for which City has granted Airline the right to use jointly with otherAircraft
Operators for the purpose of loading and unloading its passengers from the Effective Date of this Agreement
to DBO.
Section 1.28 Expiration Date shall mean June 30, 2004.
Section 1.29 FAA or Federal Aviation Administration shall mean the Federal Aviation
Administration created underthe Federal Aviation Act of 1958 or such successor agency as may from time to
time have similar jurisdiction over Airline or its business, and Airport.
Section 1.30 Fee Landing shall mean any landing at the Airport of an aircraft, except general
aviation; military; an aircraft engaged in flight training and testing, subject to Section 3.01(D); and an aircraft
which takes off from the Airport and, without making a stop at any other airport, returns to and lands at the
Airport because of meteorological conditions, mechanical or operating causes, or any similar emergency or
precautionary reason.
Section 1.31 First Level Concourse Building shall mean the area of the Terminal Building
Complex,shown on Exhibit D,which includes a Passenger Departure Lounge, public areas(including a portion
of security screening), concession areas, and other tenant and City space thereon, if applicable.
Airport Use and Lease Agreement 5 Dated 07/01/94
Section 1.32 Fiscal Year shall mean the 12-month period beginning on the 1st day of July of any
year or any 12-month period the City may designate.
Section 1.33 Independent Accountant shall mean a certified public accountant selected by City,
licensed to practice in the State of California, and who (a) in the case of an individual, shall not be a director,
commissioner, officer or employee of either City or any Signatory Airline, (b)shall be satisfactory to the Trustee,
if any, and (c) may be the independent accountant that regularly audits the books of City or the Airport.
Section 1.34 Indirect Cost Pool shall mean a subsidiary account of the Cost-Revenue Centers for
recording Maintenance and Operations Expenses which cannot be identified to a specific CRC, and for
recording required deposits to the Maintenance and Operations Reserve Fund and Special Capital Improvement
Fund, The Indirect Cost Pool includes, but is not limited to the following:
(a) Airport Administration and Operations Expenses;
(b) Central Plant Functions;
(c) Maintenance and Operations Reserve Fund Deposit Requirement;
(d) Special Capital Improvement Fund Deposit Requirement;
(e) Security Access Control System (SACS);
(f) Airport Security and Security Badging Costs;
(g) Insurance Expenses; and
(h) Motor Vehicle Replacement (MVR) Fee.
The total expenses in the Indirect Cost Pool shall be allocated to the Airside&Terminal CRCs. Said allocation
shall be at the discretion of the Director of Aviation following consultation with the Airlines.
Section 1.35 Joint Use Formula shall mean the formula used to prorate a specified charge such
that 10% of the charge to be prorated shall be apportioned equally among the users, including regularly
scheduled airlines subletting space from another airline, and 45%of such charge shall be apportioned among
such users in the same proportion that the number of each such user's Enplaning Passengers at the Airport
during the Fiscal Year under consideration bears to the total number of Enplaning Passengers of all such users
at the Airport during the same Fiscal Year, and the remaining 45% of such charge shall be apportioned among
such users in the same proportion that the number of each such user's Fee Landings at the Airport during the
Fiscal Year under consideration bears to the total numberof Fee Landings of all such users at the Airport during
the same Fiscal Year. For purposes of this calculation, each Signatory Airline's total Enplaning Passengers and
Fee Landings shall include, in addition to the Enplaning Passengers and Fee Landings served by such
Airport Use and Lease Agreement 6 Dated 07/01/94
Signatory Airline,the number of Enplaning Passengers and Fee Landings handled by said Signatory Airline for
other Aircraft Operators that do not have an agreement with City that provides for the direct payment to City of
appropriate charges for use of Joint Use and Preferential Use Space. Joint Use Formula shall be used to
calculate Airline Rates and Charges for the Joint Use Baggage Claim/Common Area, Joint Use Walkway,
temporary joint use passenger holdrooms and the commuter holdroom. As of DBO, the charges for the
holdrooms shall be apportioned separately based on Airline gate locations with First Level Concourse and
Second Level Concourse charges being subject to further negotiation 1 year prior to estimated DBO.
Section 1.36 Landing Fee shall have the meaning assigned to such term in Section 5.04 of this Agreement.
Section 1.37 Landing Fee Rate shall have the meaning assigned to such term in Section 5.04 of this
Agreement.
Section 1.38 Landside Area shall mean the area identified as Landside Area on Exhibit A, and except as
otherwise provided herein, all facilities, equipment and improvements now or hereafter located thereon.
Section 1.39 Landside Cost-Revenue Center for cost accounting purposes shall mean the revenues and
expenses associated with the Landside Area facilities, equipment and improvements now or hereafter located
thereon and 60% of which shall be allocated to the Terminal CRC and 40% of which shall be allocated to the
Airside CRC.
Section 1.40 Main Terminal Building shall mean that portion of the Terminal Building Complex serving
Aircraft Operators and others as shown on Exhibit B, including but not limited to airline ticket counters, airline
office and operations space,outbound baggage belts, baggage claim area, public space,airport operations and
administration space, law enforcement office, concession space, and other tenant and City space thereon.
Section 1.41 Maintenance and Operations Expenses shall mean the costs incurred by the City in
operating, maintaining, repairing, and administering the Airport during such Fiscal Year, either directly or
indirectly by allocation to the Airport by City, including, but not limited to:
(a)the following costs and expenses incurred by City for employees of City employed at the Airport, or doing
work involving the Airport: direct salaries and wages(including overtime pay),together with payments or costs
incurred for associated payroll expenses, cash payments to pension funds, retirement funds or unemployment
compensation funds, life,health,accident and unemployment insurance premiums, deposits for self-insurance,
vacations and holiday pay, and other fringe benefits;
(b)cost of repairs, materials, supplies, machinery and equipment and other similar expenses which, under
generally accepted accounting principles, are not capitalized;
Airport Use and Lease Agreement 7 Dated 07/01/94
(c) costs of maintenance, landscaping, decorating, repairs, renewals, and alterations not
reimbursed by insurance, and which, under generally accepted accounting principles, are not
capitalized;
(d) costs of water, electricity, natural gas, telephone service and all other utilities and services
whether furnished by City or purchased by City and furnished by independent contractors at or
for the Airport;
(e) costs of rentals of equipment or other personal property;
(f) costs of rentals of real property;
(g) costs of premiums for insurance, including property damage, public liability, burglary, bonds of
employees,workers'compensation,disability,automobile,and all other insurance covering the
Airport or its operations;
(h) terminal fees and charges, concession fees, Landing Fees, miscellaneous Airport fees and
indemnification payments unpaid by any Aircraft Operator or otherAirport tenant when due and
reasonably deemed by City to be uncollectible after collection efforts have been undertaken by
City;
(i) costs incurred in collecting and attempting to collect any sums due City in connection with the
operation of the Airport;
(j) costs of advertising at or for the Airport, including public relations brochures and events;
(k) costs of Law Enforcement and Aircraft Rescue and Firefighting (ARFF) services;
(1) except to the extent capitalized, compensation paid or credited to persons or firms appointed
or engaged, from time to time, by City to render advice and perform architectural, engineering,
construction management,financial,legal,accounting,consulting,testing orother professional
services in connection with the operation, expansion, alteration, reconstruction, betterment or
other improvement of the Airport or any of its structure or facilities;
(m) except to the extent capitalized, trustees' fees, paying agents' fees, and all other fees and
expenses incurred in order to comply with the provisions of any ordinance or resolution
authorizing obligations issued pursuant to Section 9.02.
(n) the costs of maintaining and operating the public address system, flight information display
system, baggage information display system and the security access control system; and
Airport Use and Lease Agreement 8 Dated 07/01/94
(o) all other direct and indirect expenses which arise out of City's operation of the Airport, and
which, under generally accepted accounting principles, are properly chargeable as expenses
to the Airport, including any taxes payable by City which may be lawfully imposed upon the
Airport.
Section 1.42 Maintenance and Operations Reserve Fund shall mean the Maintenance and
Operations Reserve Fund created under Section 6.04.
Section 1.43 Non-Airline Revenues shall mean for any Fiscal Year all revenues,except Signatory
Airline Revenues which include Exclusive Use Space, Joint Use space and Preferential Use Space fees and
charges, and Landing Fees.
Section 1.44 Passenger Departure Lounge(s) on the First Level Concourse shall mean the
area assigned to Aircraft Operators on a joint use basis for the assembly and processing of passengers.
Section 1.45 Preferential Use shall mean an Aircraft Operator's right to use space prior to use by
others on a nonexclusive basis.
Section 1.46 Preferential Use Space shall mean the space, including AC Parking Position(s) and
Passenger Departure Lounge(s) and equipment, including Aircraft Loading Bridge(s), which City has granted
to Airline a right to use on a nonexclusive but Preferential Use basis.
Section 1.47 Premises shall mean the Exclusive Use Space,the Preferential Use Space, and the
Joint Use Space.
Section 1.48 Reserve Funds shall mean the Maintenance and Operations Reserve Fund, Special
Capital Improvement Fund and Landside Development Fund.
Section 1.49 Second Level Concourse Building shall mean the area of the Terminal Building
Complex, shown on Exhibit I,which includes Passenger Departure Lounges, Public Areas(including a portion
of security screening), concession areas, and other tenant and City space thereon, if applicable.
Section 1.50 Signatory Airline(s)shall mean Airline and other Aircraft Operators serving the Airport
that have entered into agreements with the City that are substantially similar to this Agreement. and have so
selected this category in Article II of this Agreement.
Section 1.51 Special Capital Projects Fund shall mean the Special Capital Projects Fund created
under Section 5.06.
Section 1.52 Terminal Area or Terminal Building Complex shall mean the Main Terminal
Building, First Level Concourse Building and Second Level Concourse Building.
Airport Use and Lease Agreement 9 Dated 07/01/94
Section 1.53 Terminal Cost-Revenue Center for cost accounting purposes shall mean the
revenues and expenses associated with the Terminal Area or Terminal Building Complex facilities, equipment
and improvements now or hereafter located thereon, including but not limited to the following:
(a) Airline Space - including Ticket Counters, Administration and Operations Space, Outbound
Baggage, Passenger Departure Lounges, and Baggage Claim Space;
(b) Concessions - including Food and Beverage, News & Gifts, Auto Rental, and Specialty
Concessions;
(c) Security Screening;
(d) Central Lobby and Public Areas;
(e) Public Address System;
(f) Other Airport Tenant Space; and
(g) Aircraft Rescue Fire Fighting (ARFF) services, facilities and equipment (20%).
Section 1.54 Total Landed Weight shall mean the sum of the Certificated Maximum Landing
Weights for all Fee Landings over a stated period of time.
ARTICLE II
TERM
Section 2.01 Term of Agreement
The term of this Agreement shall commence on the Effective Date, , 2002, and expire
on June 30, 2004, the Expiration Date. In accordance with Section 19.04, said Airline may cancel this
Agreement by providing three hundred sixty four(364) days written notice to City.
ARTICLE III
GRANT OF RIGHTS
Section 3.01 Rights of Airline
Airline shall have the following rights with respect to the Airport:
(A) Right to Use Airport. The City hereby grants to Airline, its employees, passengers, guests,
patrons, and invitees, the right to the use of (in common with other duly authorized users) the Terminal,
Landside and Airside Areas togetherwith all facilities, improvements, equipment, and services that have been
or may be provided for common use of such facilities and areas.
Airport Use and Lease Agreement 10 Dated 07/01/94
(B) Right to Operate Aircraft. Airline shall have the right to land, take off, fly over, taxi, push and
tow, any aircraft of its choice, properly licensed by the FAA and all other governmental authorities with
jurisdiction, in appropriate areas of the Airport(subject to the design limitations of such areas)and to park, load
and unload such aircraft at the Aircraft Parking Position(s)assigned to Airline. Airline shall not schedule aircraft
landings and take offs between the hours of 2200 and 0700 for jet aircraft.
(C) Right to Provide Services. Within designated areas, Airline shall have the right to sell Air
Transportation tickets and services;to process passengers and their baggage for airtravel;to sell, handle, and
provide mail, freight, express and cargo services; and to perform other similar activities reasonably related to
the operation of Airline's Air Transportation service.
Subject to the provisions of Section 3.01(0) hereof, Airline shall have the right to perform ground
handling services for other airlines engaged in Air Transportation.
(D) Right to Provide Training. Airline shall have the right to provide training at the Airport of
personnel in the employ of orto be employed by Airline and the testing of aircraft and other equipment owned
and operated by Airline, provided that such training and testing shall be incidental to the use of the Airport in
the operation by Airline of its Air Transportation service. Such training and testing shall not unreasonably
hamper or interfere with the use of the Airport by other users entitled to the use thereof; and shall be conducted
in areas of the Airport which have been leased to Airline or authorized by the Director of Aviation.
(E) Right to Sell Its Aircraft. Equipment and Supplies. Airline shall have the right to sell, dispose
of or exchange Airline's aircraft, engines, accessories and other equipment or supplies bought for its own use
or as part of ground handling services provided to other airlines and not for resale. This right shall not imply
that Airline has the right to conduct a separate business related to such sales.
(F) Right to Purchase from Person or Company of its Choice. Airline shall have the right to
purchase at the Airport or elsewhere from any person or company of its choice, its requirements of aviation fuel,
ground vehicle fuel, lubricating oil, greases, food, beverage, and other passenger supplies, and all other
materials and supplies and services,so long as that person or company is properly permitted to provide service
at the Airport.
(G) Right to Service Aircraft and Other Equipment. Airline shall have the right to have its aircraft
and other equipment serviced by suppliers of its choice. Such suppliers may provide materials and services,
including, but not limited to, aviation fuel, ground vehicle fuel, lubricating oil, greases, parts and all other
materials and supplies and services required by Airline in the conduct of its Air Transportation service. Such
Airport Use and Lease Agreement 11 Dated 07/01/94
right shall include, but not be limited to, the right to erect, install and maintain at designated locations at the
Airport(as authorized by the Director of Aviation for that purpose by separate agreement between Airline and
City) storage facilities for aviation fuel, lubricating oil, greases and other materials and supplies, together with
the necessary pipes, pumps, motors, filters and other appurtenances incidental to the use thereof, so long as
said supplier is properly permitted to provide service at the Airport.
(H) Right to Handle Persons Property and Mail. Airline shall have the right to load and unload
persons, property and mail by such motor vehicles or other means of conveyance at areas designated by City
as Airline may reasonably require in the operation of its Air Transportation service so long as operator is
properly permitted to operate at the Airport. Airline may designate the particular ground carrier,or carriers,that
may transport Airline's employees, property and mail to, from and on the Airport, provided that the particular
carrier or carriers so designated by Airline hereunder shall be required to comply with all applicable and
reasonable rules, regulations and laws. Contractual arrangements by Airline hereunder with any carrier of
passengers and their baggage for ground transport to and from the Airport shall subject to the payment to City
by said passenger carriers of a fee to be fixed and determined by City. Such fees shall not apply to
arrangements for late or other baggage delivery, crew hauls/shuttles, or surface transportation provided for a
diverted or canceled flight.
(1) Right to Install Signs. Airline shall have the right to install signs identifying Airline's Exclusive
Use and Preferential Use Space and the function or operation conducted therein. The number, size, type,
design and location shall be harmonious and in keeping with the pattern and decor of the Terminal Area and
shall be subject to Section 10.07 and the prior written approval of the Director of Aviation.
(J) Right to Install and Operate Communications Equipment. Airline shall have the right to install,
maintain and operate on or about the Airport such telecommunications (including radio antennae),
meteorological and aerial navigation equipment and other facilities as may be reasonably necessary or
convenient for the proper performance and operation by Airline of its Air Transportation service, subject to the
prior written approval of the Director of Aviation. Such equipment and facilities shall be located in areas leased
to Airline for its exclusive use, or on such other portions of the Airport as may be authorized for that purpose
by the City. Airline shall be provided with reasonably adequate rights of way for the installation of
communications controls,teletype,telephone,interphone, pneumatic tubes and power lines in and between the
Terminal Building Complex and other points at the Airport; provided, however,the manner of such installations
and the location of such rights of way shall be subject to approval by the City.
Airport Use and Lease Agreement 12 Dated 07/01/94
(K) Ingress and Egress. The City hereby grants to the Airline, its agents,employees, passengers,
guests, invitees, contractors and suppliers of material and service the right to reasonable access, ingress and
egress to the Premises and the public areas and facilities of the Airport. Such right shall be exercised in
accordance with Airport rules and regulations and shall at all times be exercisable without charge to the Airline,
its agents, employees, guests, passengers, invitee, contractors and suppliers of materials and services;
provided, however, that this provision shall not be construed to prevent the City from imposing the additional
rentals, fees, taxes, and charges referred to in Section 11.01 of this Agreement.
(L) Porter Services. Airline shall participate in nonexclusive porter services in conjunction with all
scheduled airlines serving the Airport to assist its passengers with their baggage, and provide assistance to
handicapped passengers subject to the rules and regulations of City.
(M) Right to Provide Curbside Baggage Check-In Service. Airline shall have the right to provide
curbside baggage check-in service, the location and operation of which shall be subject to the prior written
approval of City and the rules and regulations of City.
(N) Right to Provide Services on Behalf of Other Aircraft Operators. The rights and privileges
granted Airline under this Article I, with respect to the performance of ground services and activities in
connection with its Air Transportation services at the Airport, may be exercised by Airline for and on behalf of
any other Aircraft Operators or companies authorized by City to use the Airport. This provision shall not be
construed by the parties hereto to impede, hinder or negate the legislative intent of the Airline Deregulation Act
of 1978.
(0) No Other Business Authorized. Nothing contained in this Section 3.01 shall be construed to
authorize Airline to conduct a business of any kind at the Airport except its Air Transportation service, and
nothing herein contained shall be construed as authorizing Airline in its conduct of its Air Transportation service
to interfere unreasonably with other persons ortenants leasing or lawfully using Airport facilities. Nothing in this
Section shall be construed as in any way limiting the general powers of City to fully exercise its statutory
functions.
(P) Rules and Regulations. All activities of Airline pursuant to this section 3.01 shall be performed
in compliance with all applicable Federal, State and local laws, ordinances, and regulations.
Airport Use and Lease Agreement 13 Dated 07/01/94
ARTICLE IV
AIRLINE'S PREMISES
Section 4.01 Period From Effective Date to DBO
Commencing on the Effective Date of this Agreement and continuing until DBO, City grants Airline the
rightto use certain premises located in the Terminal Building Complex at the Airport, consisting of the following:
(A) Existing Exclusive Use Space. A portion of the Terminal Building Complex known as Existing
Exclusive Use Space, consisting of ticket counter space, office and operations space, and outbound baggage
space, and baggage service desks.The square footage of floor area as shown and delineated on Exhibit C shall
apply to this agreement.
(B) Joint Use Baggage Claim/Common Area. A portion of the joint use space in the Terminal
Building Complex known as Existing Joint Use Baggage Claim/Common Area containing 24,651 square feet
of floor area for nonexclusive use in common with other Aircraft Operators as shown on Exhibit B.
(C) Existing Joint Use Walkway. A portion of the joint use space in the Terminal Building Complex
known as Existing Joint Use Walkway containing 20,823 square feet of floor area for nonexclusive use in
common with other Aircraft Operators as shown on Exhibit B.
Section 4.02 Period From DBO Until Expiration Date of This Agreement
Commencing on DBO until the Expiration Date, City grants Airline the right to use certain premises
located in the Terminal Building Complex at the Airport, consisting of the areas outlined is Section 4.01 above
and the following:
(A) Preferential Use Space on the Second Level Concourse. A portion of the Terminal Building
Complex,as shown on Exhibit E,including Aircraft Parking Position(s)and Passenger Departure Lounge(s)and
equipment, including Aircraft Loading Bridge(s),which City grants to Airline on a nonexclusive but Preferential
Use basis.
(B) Joint Use Space on the First Level Concourse. A portion of the Terminal Building Complex,as
shown on Exhibit D, including Aircraft Parking Position(s) and a Passenger Departure Lounge and equipment,
which City grants to Airline a right to use in common with other Aircraft Operators.
Airport Use and Lease Agreement 14 Dated 07/01/94
ARTICLE V
CALCULATION OF AIRLINE RATES AND CHARGES
Section 5.01 General Commitment
Forthe purpose of fairly allocating the net cost of operating and maintaining the Airport among all of the
Signatory Airlines, various areas of the Airport have been grouped together for the purpose of accounting for
revenues,Maintenance and Operations Expenses,Reserve Fund deposit requirements and Debt Service. Each
such area is a Cost-Revenue Center as defined in Section 1.18. Signatory Airlines shall pay rates and charges
as outlined in this Article.
Section 5.02 Period From Effective Date to DBO
Commencing on the Effective Date of this Agreement and continuing until DBO, Airline's Terminal
Rates and Charges shall consist of the following:
(A) Exclusive Use Space Fees. Airline shall pay its share of Maintenance and Operations
Expenses, Reserve Fund deposit requirements and Debt Service allocable to the Terminal CRC, less Non-
Airline Revenues allocable to the Terminal CRC. Airline's share shall be the total number of square feet of
Airline's Existing Exclusive Use Space multiplied bythe Exclusive Use Space Rate which shall be specified in
the City Comprehensive Fee Schedule.
(B) Joint Use Baggage Claim/Common Area. Airline shall pay its prorata share of Maintenance and
Operations Expenses, Reserve Fund deposit requirements and Debt Service allocable to Joint Use Baggage
Claim/Common Area in the Terminal CRC,less Non-Use Agreement Revenues allocable to the Terminal CRC.
Airline's prorata share shall be computed according to the Joint Use Formula as defined in Section 1.35.
(C) Joint Use Walkway. Airline shall pay its prorata share of Maintenance and Operations
Expenses, Reserve Fund deposit requirements and Debt Service allocable tojoint use walkway in the Terminal
CRC, less Non-Use Agreement Revenues allocable to the Terminal CRC. Airline's prorata share shall be
computed according to the Joint Use Formula as defined in Section 1.35.
Section 5.03 Period From DBO Until Expiration Date of This Agreement
Commencing as of DBO and continuing until the Expiration Date of this Agreement, Airline's Terminal
Rates and Charges shall consist of the following:
(A) Exclusive Use Space Fees. Airline shall pay its share of Maintenance and Operations
Expenses, Reserve Fund deposit requirements and Debt Service allocable to the Terminal CRC, less Non-
Airport Use and Lease Agreement 15 Dated 07/01/94
revenues derived from the Terminal CRC. Airline's share shall be the total number of square feet of Airline's
Exclusive Use Space multiplied by the Exclusive Use Space Rate.
(B) Joint Use Baggage Claim/Common Area Airline shall pay its prorata share of Maintenance
and Operations Expenses, Reserve Fund deposit requirements and Debt Service allocable to Joint Use
Baggage Claim/Common Area in the Terminal CRC, less Non-Use Agreement Revenues allocable to the
Terminal CRC. Airline's prorata share shall be computed according to the Joint Use Formula as defined in
Section 1.35.
(C) Preferential Use Space on the Second Level Concourse Airline shall pay its prorata share of
Maintenance and Operations Expenses, Reserve Fund deposit requirements and Debt Service allocable to
preferential use space on the second level concourse in the Terminal CRC,less Non-Use Agreement Revenues
allocable to the Terminal CRC, allocated in accordance with Section 1.18 to Preferential Use Space on the
Second Level Concourse. Airline's prorata share shall be computed according to the Joint Use Formula as
defined in Section 1.35.
(D) Joint Use Space on the First Level Concourse Airline shall pay its prorata share of
Maintenance and Operations Expenses,Reserve Fund deposit requirements and Debt Service allocable tojoint
use space on the first level concourse in the Terminal CRC, less Non-Use Agreement Revenues allocable to
the Terminal CRC.Airline's prorata share shall be computed according to the Joint Use Formula as defined in
Section 1.35.
Section 5.04 Landing Fees
At such times and in such manner as provided in Article VII, Airline shall pay a Landing Fee to City for
each Fee Landing of an aircraft operated by Airline. The Landing Fee shall be an amount equal to the product
of(i)the number of thousands of pounds of the Approved Maximum Landing Weight of the aircraft involved in
the Fee Landing, multiplied by (ii) the Landing Fee Rate.
The Landing Fee Rate for any Fiscal Year shall be determined (to the nearest 1/10th of one cent per
each one thousand pounds) by dividing the cost of the Airside CRC for such Fiscal Year, by the total Approved
Maximum Landing Weight in thousand-pound units of all aircraft of all Signatory Airlines Fee Landings during
the previous Fiscal Year,adjusted based on preliminary projections of the upcoming year's activity, as provided
for in the Preliminary Projection of Airline Rates and Charges. The cost of the Airside CRC for any Fiscal Year
shall be Maintenance and Operations Expenses, Reserve Fund deposit requirements and Debt Service
Airport Use and Lease Agreement 16 Dated 07/01/94
allocable to the Airside CRC, less Non-Use Agreement Revenues allocable to the Airside CRC, allocated in
accordance with Section 1.18 to the Airside CRC.
Section 5.05 Supplemental Space
Airline may elect to lease additional Supplemental Space at the Airport in the categories of office trailer
space,upstairs office space and open acreage. Rates shall be as established in the City's Comprehensive Fee
Schedule. Specific space requested by the airline shall be as shown of Exhibit H.
The above referenced Supplemental Space may change from time to time with changes occuring via
letters of mutual agreement between Airline Property Manager and the Director of Aviation.
Section 5.06 Special Capital Projects Fund
(A) The Fund. The City shall establish a separate airport budget activity,to be designated"Special
Capital Projects Fund"to be utilized for any Capital Project or a portion of the cost thereof(including equipment
purchases).Annual contributions to such Fund shall be made from a landing fee surcharge to all Airlines in the
total amount not-to-exeed$260,000 forthe firstyear.The$260,000 shall be increased by$10,000 annually until
it reaches $300.000 annually, the level at which it shall remain for the term of the agreement. No further
contributions will be made when the Fund balance is $750,000, except as provided in Section 5.09.
(B) Expenditures from the Fund Single or multiple expenditures not exceeding the aggregate of
$250,000 in any Fiscal Year from the Fund may be made without the necessity for consent by, or approval of,
the Signatory Airlines. Expenditures of more than$250,000 in any Fiscal Year will require approval as defined
in Section 8.06 herein except when said expenditure is made as a required matching fund to a Federal Grant.
To further clarify, in any one fiscal year the Airport may utilize any amount in the fund for grant matching plus
utilize up to $250,000 for other projects and not be required to seek Airline approval under Section 8.06. The
Special Capital Project Fund may not be listed as Airport revenue eligible for payment of debt service on any
new (a refunding of the 1992 bond issue shall not be construed as new) bond issue issued after July 1, 1993.
(C) The Surcharge. The landing fee surcharge, billed on a per-passenger allocation, shall be
calculated each July 1 by dividing the amount of surcharge due for the coming year by the total number of
enplaned passengers for the previous twelve months. This equation shall determine the per-enplaned
passenger surcharge for the following twelve months. Said surcharge shall be collected monthly, from all
Airlines serving the Airport until the annual maximum amount is reached or until the fund balance equals
$750,000.
Section 5.07 Employee Ground Vehicle Parking
Airport Use and Lease Agreement 17 Dated 07/01/94
Y '
The City shall make available to Airline's employees assigned to duty at the Airport reasonably
adequate automobile parking facilities. The City may, at its discretion,charge employees of Airline and others
a reasonable vehicular parking fee based on City's actual costs of providing, operating, and maintaining such
facilities.
Section 5.08 Insufficiency of Airport Revenues Adiustment of Airline Rates and Charges
(A) Right to Adqus . Notwithstanding any other provision hereof, if,at anytime while this Agreement
shall remain in effect, City determines that Airport revenues being derived from the Terminal, Landside and
Airside CRCs are, or likely will be, insufficient to pay when due all costs and expenses of annual debt service
requirements on all bonds, maintenance of rate covenant on all bonds, maintenance, repairs or replacements
City may, upon thirty(30) days'notice to Airline, increase Airline Rates and Charges provided for herein to such
amount as is sufficient to assure that actual revenues shall be sufficient to pay all such costs and expenses.
City agrees that prior to such action, upon twenty (20) days' notice to Airline, City will hold a meeting with
Signatory Airlines to discuss such charges.
(B) 1992 Bond Issue Coverage. The depreciation of the City's investment in the Airport (excluding
federal gifts and grants in aid),and/or an amount necessary to produce for collection by the City Net Revenues,
as defined in that First Amended and Restated Installment Sale Agreement by and between the City of Palm
Springs (the "City') and the City of Palm Springs Financing Authority dated as of August 1, 1992 relating to
$16,265,000 City of Palm Springs Financing Authority(the"Authority') (Palm Springs Regional Airport)Airport
Revenue Bonds, Series 1992 (the "Installment sales Agreement") and that Master Trust Indenture by and
between the Authority and First Interstate Bank of California dated as of August 1, 1992 relating to$16,265,000
City of Palm Springs Financing Authority(Palm Springs Regional Airport)Airport Revenue Bonds, 1992 Series
(the "Master Indenture"), in each fiscal year which, together with other available funds, as defined in the
Installment Sale Agreement, are at least equal to 1.25 times Maximum Annual Debt Service, all is provided in
Section 6.17 of the Installment Sale Agreement, or any amendment or supplement to said issuing Parity Debt,
as defined in the Master Indenture or otherwise. Further,and without limitation,the fees established herein may
be readjusted by the City either annually, or, in the City's discretion, upon thirty (30) days notice to the Airline,
on a residual cost basis as described in the Report of the Airport Consultant delivered to the City dated February
15, 1991 and in such amount as to satisfy the covenants contained in Section 6.17 of the Installment Sale
Agreement, or any other rate installment sale agreement adopted for the purposes of issuing Parity Debt or
otherwise. In making the adjustment described herein,consideration shall be given to all bonds and other forms
Airport Use and Lease Agreement 18 Dated 07/01/94
of indebtedness issued and outstanding at the time of the adjustment by the City, the Authority and any other
issuerwhich issues bonds or otherforms of debt on behalf of the Airport provided, however,as to any one item,
consideration is to be given to either debt service or depreciation but not both. In allocating costs and revenues
to the various facilities as herein above defined,the City will apply and observe generally accepted accounting
principals.
Section 5.09 Annual Adiustment to Actual Airline Rates and Charges
Within one hundred twenty (120) days after the close of each FiscalYear the City will recompute the
rates applicable to the fees and charges payable by Airline for its use of the Premises and the Landing Fee Rate
forthe preceding Fiscal Year, based upon actual space utilization,activity, costs and expenses, and revenues.
If the recalculation results in a variance from the rates charged the Airline forthat Fiscal Year,City will calculate
an additional charge or credit against Airline's fees and charges. Such charge or credit shall be payable in
equal monthly installments overtwelve(12) months. Airline agrees to pay any such additional charge as billed
in accordance with the foregoing.
Section 5.10 Costs Excluded
The portion of capital costs of the Airport, its facilities and improvements paid for from the Special
Capital Projects Fund, or by Federal Grants-in-Aid or by contributions from other Cities, and depreciation,
amortization and interest charged thereon, if any, shall not be included in the cost factors herein.
Section 5.11 Other Charges
In the event City is required to furnish special law enforcement services under FAR, Part 107 and Part
108; fire and crash protection under FAR, Part 139; and a security access system under FAR, Part 107.14; or
is required to make additional expenditures by any Federal,State orother governmental order,rule or regulation
during the term of this Agreement, the cost and expense thereof shall be allocated to the appropriate cost
center.
City may from time to time,on reasonable notice,determine and impose compensatory service charges
for non-routine apron and ramp cleaning and scrubbing, apron housekeeping and other special services
requested by Airline or made necessary by non-compliance of Airline with City's rules and regulations.
Section 5.12 Non-Signatory Airlines Rates and Charges
It is acknowledged that the methodology forcalculating rates and charges forSignatory Airlines involves
risk to the Signatory Airlines in that rates and charges imposed on Signatory Airlines could in certain instances
require the absorption of deficits due to shortfalls in non-airline revenues. In recognition of this risk the
Airport Use and Lease Agreement 19 Dated 07/01/94
methodology for calculating rates and charges for the Signatory Airlines provides for the possibility of reduction
of rates and charges by the crediting of surplus non-airline revenues. In view of the fact that Non-Signatory
Airlines will not assume the risk of deficits it is agreed that they should not receive the benefits of any surplus.
It is agreed that in view of the fact that non-signatories will avoid the risks outlined above, that the City shall
charge the non-signatories as follows:
(A) Landing Fees: 125% of the Landing Fee paid by the Signatory Airlines.
(B) Terminal Use: A fee per enplaning passenger based on dividing the total number of Signatory
Airline enplanements for the previous fiscal year, into the total dollars paid by the Signatory Airlines for Joint
Use Baggage Claim/Common Areas, Walkway and public address maintenance times a factor of 125%.
(C) Special Capital Projects Fund Surcharge: Per Section 5.06(A).
(D) Such other charges for special facilities or activities as deemed appropriate by the City.
ARTICLE VI
IDENTIFICATION AND ALLOCATION OF REVENUES AND EXPENSES
Section 6.01 Maintenance and Operations Expenses Reserve Fund Deposit Requirements and
Non-Use Agreement Revenues
City shall maintain accurate records allocating Maintenance and Operations Expenses, Reserve Fund
deposit requirements and Non-Use Agreement Revenues for each Fiscal Year among the CRCs.
Section 6.02 Disposition of Airport Revenues
All revenues received or otherwise realized by City, or remaining in reserves at the end of the term of
this Agreement, arising from its operation of the Airport shall remain the property of City, and shall not be
expended for any purpose otherthan the acquiring,establishing,developing,extending, maintaining,operating
and managing the Airport.
Section 6.03 Debt Service
City shall maintain accurate records allocating Debt Service for each Fiscal Year among the CRCs. The
allocation of Debt Service shall be based on actual expenditures made out of the proceeds of bonds, notes,
certificates of participation and/or other Airport obligations giving rise to such Debt Service for each Capital
Project.
Section 6.04 Maintenance and Operations Reserve Fund
Airport Use and Lease Agreement 20 Dated 07/01/94
The Maintenance and Operations Reserve Fund was established prior to the Effective Date of this
Agreement and shall be used only to make loans to the Maintenance and Operations Fund whenever and to
the extent moneys in the Maintenance and Operations Fund are insufficientto pay Maintenance and Operations
Expenses,
The Maintenance and Operations Reserve Fund deposit requirement for 1993 fiscal year and the 1994
fiscal year shall be $250,000 and then only$100,000 for each year thereafter until it reaches 20% of the total
Maintenance and Operations Expenses. Each year thereafter it shall be the amount necessary to increase the
amount on deposit therein (including amounts receivable from the Maintenance and Operations Fund) to an
amount equal to 20% of the Maintenance and Operations Expenses amount provided in the Preliminary
Projection of Airline Rates and Charges, as adjusted from time to time for Maintenance and Operations
Expenses for such Fiscal Year.
The Maintenance and Operations Reserve Fund payment requirements calculated in any Fiscal Year
shall be charged to the Indirect Cost Pool and allocated to the CRCs as prescribed in Section 1.34.
Section 6.05 Landside Development Reserve Fund
(A) The Fund. There is herein created a Landside Reserve Fund which shall be used for other than
terminal and airfield improvements and may be utilized for advertising. The Landside Reserve Fund deposit
shall be $200,000 per year. Contributions to such fund shall be obtained by adding $200,000 annually as an
expense in the Terminal Cast Revenue Center; provided that no further contributions will be made when the
fund balance is $600,000.
(B) Expenditures from the Fund. Single or multiple expenditures may be made without the necessity
for consent by, or approval of, the Signatory Airlines.
(C) Limitation on the Fund. The fund may be utilized for grant matches on Airport Improvement
Program eligible landside programs. Construction development expenditures from the fund, on other than
landside grant projects, are appropriate so long as these improvements lead to the prudent development of
facilities that are financially self sustaining. The fund may also be utilized for Airport advertising.
ARTICLE VII
PAYMENT OF AIRLINE FEES AND CHARGES
Section 7.01 Preliminary Proiection of Airline Rates and Charges
Airport Use and Lease Agreement 21 Dated 07/01/94
Not later than sixty (60) days prior to the end of each Fiscal Year, City shall furnish Airline with a
projection forthe next ensuing Fiscal Year of Airline Rates and Charges. The projection("Preliminary Projection
of Airline Rates and Charges")shall incorporate such information,and shall present,forthe Airport in its entirety
and for each CRC as defined in Section 1.18, the latest available data on current operations of the Airport, a
pro forma projection for the entire Fiscal Year, and an estimate of each of the following items for the next
ensuing Fiscal Year:
(a) Maintenance and Operations Expenses;
(b) Non-Use Agreement Revenues;
(c) Debt Service;
(d) Capital Projects;
(e) Maintenance and Operations Reserve Fund deposit requirements and Fund payments;
(f) Special Capital Projects Fund deposit requirements and Fund payments;
(g) Any changes in the number of square feet of any Signatory Airline's Exclusive Use Space;
(h) Allocation of Non-Use Agreement Revenues, Maintenance and Operations Expenses, Capital
Expenditures, Debt Service and Reserve Fund requirements to CRCs; and the net cost of the
Terminal CRC allocated to Existing or Future Exclusive Use,whichever is applicable,Joint Use
Baggage Claim/Common Area.
Existing Joint Use Walkway, if applicable, Preferential Use Space in the Second Level Concourse Building,
and Joint Use Space in the First Level Concourse Building; and
(i) Summary Schedule of Total Airline Rates and Charges for each Signatory Airline.
Section 7.02 Payment of Airline Rates and Charges
(A) Information to be Provided by Airline Airline shall furnish to the City on or before the tenth
(10th)day of each month on forms to be supplied by City and signed by an authorized representative of Airline,
for the preceding month reporting (1) the number of Enplaned Passengers and deplaned passengers; (2)
Airline's total numberof Fee Landings bytype of aircraft and Certificated Maximum Landing Weight of each type
of aircraft; (3)the weight of air freight, air-express, and air mail, loaded and unloaded by Airline at the Airport;
(4)the 30-day projected published flight schedule for arriving and departing flights at the Airport; (5)the number
of Enplaned Passengers and deplaned passengers and number Fee Landings, by type of aircraft, for which
Airline provided handling services of any kind for otherAircraft Operators, and the names and addresses of the
Aircraft Operators so that the City may submit to such operators appropriate invoices for Landing Fees and
Airport Use and Lease Agreement 22 Dated 07/01/94
other charges; (6) the number of training and test flights, the time of day during which these flights occurred,
and the Landing Weight of each type of aircraft; and (7)the number of seats per each type of aircraft utilized.
(B) Terminal Rates and Charges Not laterthan the tenth (10th) day of each month of each Fiscal
Year, City shall furnish Airline with an invoice setting forth the amount of Airline's Terminal Rates and Charges
for the next ensuing month. Not later than the first (1st) day of such next ensuing month, Airline shall pay City
an amount equal to Airline's total Terminal Rates and Charges for such month.
(C) Landing Fees. Upon furnishing City with the information described in Section 7.02(A),City shall
forthwith furnish Airline with an invoice setting forth the amount of Landing Fees payable by Airline for such
preceding month, calculated by multiplying the total Approved Maximum Landing Weight for Airline's Fee
Landings atthe Airport during such preceding month bythe Landing Fee Rate forsuch preceding month. Within
thirty (30) days after the date of such invoice, Airline shall pay to City the amount of Landing Fees set forth
herein.
Section 7.03 Late Charges
All fees and charges not timely received by City and within fifteen (15) days after receipt by Airline of
a written notice of delinquency will bear a late charge equal to five percent (5%)of the payment due and owing.
If such rentals,fees and other charges are not received with thirty(30) days, interest shall accrue on the unpaid
balance plus the unpaid late charge at the rate of eighteen percent (18%) per annum or the highest rate which
may be legally charged, whichever is lower, from the due date until paid in full.
Section 7.04 Provision Against Set-Offs
It is the obligation of Airline to pay all fees and charges,free of any set-offs or claims,in the amount and
at the times specified in this Agreement. In the event that Airline desires to contest the validity or amount of
any such fees and charges, Airline shall first pay the same to City and may then seek a refund in any
appropriate forum.
ARTICLE VIII
PRINCIPLES RELATING TO RATES AND CHARGES
With respect to the Airline Rates and Charges imposed by this Agreement, it is agreed that the following
principles shall be observed.
Section 8.01 General Concepts
Airport Use and Lease Agreement 23 Dated 07/01/94
The administration and control of all concessions (including vending machines and pay telephones) in
the Terminal Building Complex and elsewhere on the Airport is exclusively reserved to the City.
Airline shall not install or operate pay telephones, vending machines or amusement machines and
devices of any kind in the Terminal Building Complex or elsewhere on the Airport however, subject to City's
approval, Airline may have such machines and devices installed if such shall be for the use of Airline's
employees only and shall be located in Airline leased areas not accessible to the general public.
Section 8.02 Accounting Principles and Audit Report
Generally accepted accounting principles, consistently applied, recognizing the special requirements
of airports, will be used by the City for keeping the books, accounts and records of the Airport and in the
computation of all rates and charges.
Within nine (9) months, and upon request, afterthe close of each Fiscal Year, City shall furnish Airline
with a copy of an annual audit report,prepared in accordance with generally accepted accounting principles and
certified by an Independent Accountant, covering the operation of the Airport for such preceding Fiscal Year.
Section 8.03 Cost or Expense Allocation
All costs or expenses directly attributable to each Cost Revenue Center shall be charged to the
appropriate Cost Revenue Center.
All overhead or other indirect costs or expenses shall be allocated to each Cost Revenue Center on the
basis of work orders, value of asset, space footage or other appropriate method determined by the City, but in
the event that a cost or expense cannot be so allocated the cost shall be charged to the Indirect Cost Pool and
allocated as follows: 50% of such cost or expense shall be allocated in the ratio of all direct costs or expenses
allocated to each CRC,and the remaining 50%of such cost or expense shall be allocated in the ratio of revenue
received from each CRC.
Section 8.04 City to Exercise Prudence
The City agrees to exercise prudence in the operation, maintenance, improvement, expansion,
management and financing of the Airport.
Section 8.05 Additional Capital Expenditures
It is understood that from time to time the City will make additional expenditures for capital
improvements and capital asset purchases at the Airport, or in relation to the Airport such as:
Airport Use and Lease Agreement 24 Dated 07/01/94
a) Projects that are mandated by the Federal Aviation Administration or are necessary in order to
comply with laws, rules and regulations of Federal Aviation Administration or any other
government agency.
b) Projects relating to the Airside Areas that are indicated in the Airport Layout Plan, as it may be
amended from time to time,that have been reviewed and conditionally approved by the Federal
Aviation Administration, and that will be undertaken by the City when federal grants are
available to fund a substantial portion of the expenditure and it is prudent to undertake the
Project.
c) Projects that would enhance the safety and security of the Airport.
d) Projectsto repaircasualty damage to Airport property,preventative pavement maintenance and
the repair, replacement or unscheduled maintenance of equipment used in the operation of the
Airport.
e) Purchase of land that may be required for any of the foregoing projects when prudent to do so
when the majority of the cost is funded by the Federal Aviation Administration.
f) Special projects,including but not limited to international arrivals facilities the cost of which shall
be entirely borne by the beneficial user of the improvement or asset for which the expenditure
was made.
g) Projects to be funded with the Special Capital Projects Fund pursuant to Section 5.05.
h) Projects to be funded from the Landside Development Reserve Fund pursuant to Section 6.05.
i) Projects to be funded from any special contribution received from any Coachella Valley city.
j) Other projects, not described above that may be prudent, in the operation and maintenance of
the Airport or in the preparation for the prudent expansion of the Airport and/or any of the
Airport's facilities.
k) Such other projects and expenses as the Signatory Airlines may authorize for their own
purposes.
The amortization of costs plus interest and other expenses associated therewith not covered by funding
previously contributed by the Signatory Airlines, grants and participating funds from the United States of
America and the State of California, County or any special contribution from other cities or any agency thereof,
including all payments, deposits and other requirements relating to the issuance of bonds, notes, certificates
of participation and payments to banks and other lenders shall constitute an expense when such projects are
Airport Use and Lease Agreement 25 Dated 07/01/94
on or at the Airport and shall be chargeable to the appropriate Airport CRC; provided that prior to making any
expenditure for projects in c), i),j) and k) above,the City has received Airline approval, per Section 8,06. It is
agreed that City may proceed with projects described in a), b), d), e), f), g) and h) above without Airline
Approval.
Section 8.06 Airline Approval
The Airline approval of Capital Projects outlined in Section 8.05 c), i),j) and k) shall be obtained by the
City submitting a proposal in writing therefor to all Signatory Airlines which proposal shall include an estimate
of the budget for and a description of such Capital Project and the Maintenance and Operation Expenses
resulting therefrom; and the construction schedules for such Capital Project, if applicable. Airline may within
ten (10) days request a meeting with the City's representatives to discuss the project and parties agree to
schedule said meeting within twenty (20) days after said request. Airline agrees to furnish City in writing, its
approval or disapproval ofthe project within thirty(30)days aftersaid meeting orthirty(30)days afterthe initial
notice from City, if a meeting was not requested; it being agreed that the Airline's failure to timely furnish its
approval or disapproval will be deemed to be Airline's approval of the project. Approval shall be based on
Signatory Airlines representing 50% of the Signatory Airlines and 50% of the Enplaned Passengers at the
Airport.
Section 8.07 Grants
Consistent with good business practices, the City agrees to prudently seek the maximum amount of
grants and participating funds for the Airport from the United States of America and the State of California, and
any agency thereof, and advise the Airlines of such application by direct notice or by incorporating anticipated
amounts in proposed budgets.
Section 8.08 Bonded Indebtedness
City shall issue no additional bonded indebtedness for airport improvements, except for a refunding of
the 1992 Bond Issue or except for the Airport Terminal Development Program outlined in Article IX, for the first
five years of this Agreement without first receiving Airline approval via the process outlined in Section 8.06.
Section 8.09 Outside Storage
Airline takes notice of the fact that City has entered into various fixed based operators agreements with
third parties to provide aviation-related services to the public which include among other things the rental of
aircraft outside storage areas. In the event Airline requires outside storage (i.e. storage otherthan on terminal
Airport Use and Lease Agreement 26 Dated 07/01/94
aircraft aprons) of its aircraft, such storage shall be subject to user charges adopted from time to time by such
fixed based operators.
ARTICLE IX
AIRPORT TERMINAL DEVELOPMENT PROGRAM
Section 9.01 Approval of Airport Terminal Development Program
City and Airline each hereby approve the Airport Terminal Development Program("Program')attached
hereto as Exhibit F, subject to attainment of an Enplaned Passenger level of 500,000, except that irregardless
of Enplaned Passenger levels, the project may be undertaken so that construction begins prior to October 1,
2001.
Section 9.02 Sources of Funds
City shall have the right to issue bonds, notes, certificates of participation or other Airport obligations
sufficient to fund the cost of the Program, reimburse or refinance (a)the actual cost of designing, constructing
and equipping the Capital Projects described in the Program, (b) all related costs of issuance and associated
financing costs, including but not limited to, costs of capitalized interest, insurance, debt service coverage
requirements,credit facility fees,legal fees,consulting fees,and required deposits into any debt service reserve
fund or other fund established in an ordinance or resolution authorizing the issuance of obligations,and(c)the
remaining principle amount outstanding and accrued interest of prior years'Airport obligations.
Section 9.03 Airline Cooperation
Airline shall use its best efforts to take such action as may be reasonably requested of it by City,
consistent with this Agreement and any other agreements in effect at such time between City and Airline, to
enable City to implement the Program in a timely and cost-effective manner. Airline shall take no action which
unreasonably impedes or hinders City from such implementation.
ARTICLE X
MAINTENANCE, OPERATION, USE
AND CONDITION OF PREMISES
Section 10.01 Maintenance and Operation of the Premises
The responsibility for maintaining, operating and repairing the Premises, including the cost of utilities
and energy consumption and the insurance referred to in Article XII hereof, shall be divided between the City
Airport Use and Lease Agreement 27 Dated 07/01/94
and Airline in accordance with Exhibit G, and the cost of such maintenance operations and repairs shall be paid
by Airline directly for those items and facilities designated on said Exhibit as being its responsibility and
indirectly through Airline Rates and Charges for those items and facilities designated on said Exhibit as being
the City's responsibility. City and Airline agree to undertake their respective maintenance and operating
responsibilities assigned to each by Exhibit L in such a manner so as to maintain the Premises in a good,
sanitary,safe and presentable order and condition. In fulfilling said respective responsibilities, City and Airline
may act on its own behalf using its own personnel or may contract with a third party so long as the Premises
are maintained and operated in such order and condition, provided that such personnel are properly permitted
to operate at the Airport.
Section 10.02 Maintenance and Operation of Airport by City
Subject to the other provisions of this Article X, including Section 10.01 thereof, City agrees that it will,
with reasonable diligence, prudently operate, develop, improve and keep in good repair, the Airport and all
appurtenances, facilities, and services now or hereafter connected therewith; and maintain the Airport in all
respects in a manner at least equal to an acceptable standard or rating established by the Federal Aviation
Administration.
Section 10.03 Accommodations of Other Incoming Aircraft Operators
Airline agrees to make every reasonable effort to offerto any incoming Aircraft Operatorthe opportunity
to share use of its Exclusive Use Space as described in Section 4.01 and Section 4.02. In determining whether
the use of another incoming Aircraft Operator is reasonable and possible,Airline will have the right to consider
the compatibility of the proposed operations of those with whom Airline has subleases or handling
arrangements,Airline's existing and future flight schedules,the need for labor harmony,the adverse competitive
impacts resulting from the presence of the other Aircraft Operator on Airline's Existing or Future Exclusive Use
Space, and the availability of other such space at the Airport. Should Airline refuse another incoming Aircraft
Operatorthe opportunity to use said Airline's Existing or Future Exclusive Use Space, City may review Airline's
space usage, and should it reasonably determine, considering all the factors noted herein including Airline's
reasons for such refusal,that Airline unreasonably refused usage by such otherAircraft Operator,it may require
Airline to permit the Aircraft Operator to use Airline's Existing or Future Exclusive Use Space, subject to the
incoming Aircraft Operator executing an agreement with Airline acceptable to the City.
Section 10.04 Gate Positions and Loadinq Ramps
Airport Use and Lease Agreement 28 Dated 07/01/94
(A) Assignment of Gate Positions and Loading Ramps All assignment of gate positions and aircraft
loading ramps shall be made in strict accordance with reasonable rules,regulations and directives adopted and
promulgated by the Director of Aviation consistent with the Airline Deregulation Act of 1978. The Director of
Aviation, in making preferential but non-exclusive assignments of gate positions to Airline users, shall take into
account the needs and requirements of Airline for use of gate positions. As of the date of this Agreement, the
gate allocation formula provided by the Director of Aviation is shown in Exhibit I attached. A guarantee of one
preferential gate position for the term of the lease, so long as the Signatory Airline operates at least 6 months
of the year, shall accrue to all Signatory Airlines executing this agreement prior to January 1, 1994. Each
Signatory Airline executing this agreement after January 1, 1994 may be guaranteed gates based on the
Director's determination of availability, consistent with the Airline Deregulation Act of 1978. If an Airline is
reassigned to a different gate, at the request of anotherAirline orthe Airport,for its own reasons,the requesting
Airline or the Airport, as applicable, shall pay for the reasonable costs of relocation.
Section 10.05 Aircraft Parkinq Position(s)
Airline shall perform all services pertinent to the operations in keeping the loading ramps adjacent to
its Aircraft Parking Position(s) in a neat, clean and sanitary condition free of litter,trash, debris and other waste
and refuse matter, all in keeping and consistent with first-class passenger terminal facilities of other major
airports throughout the United States.
Section 10.06 Public Areas
Subject to the rights hereby reserved by City to license, permit, authorize, regulate and locate
concessionaires and other tenants therein, including, without limiting the generality thereof, booths, counters,
offices, lockers,wall space and vending machines,Airline, its passengers, patrons, business invitees, agents,
servants, officers, employees and the public shall have the free right of use of all of the public unrented areas,
as they may exist from time to time in the Terminal Building Complex.
City undertakes to so regulate, maintain and operate said public areas to best serve the interest of the
public, building tenants, patrons and visitors at the Airport and to permit, in said public areas, only such
functions and concessions that will not interfere with the public access to Airline's exclusive or nonexclusive
use areas and as are compatible to the purpose of providing a first-class Air Transportation facility.
Section 10.07 Signs
(A) Signs Installed by Airline. Airline shall maintain all signs installed by it in the Premises in a neat
and attractive condition and appearance. Airline shall allow other secondary users and itinerant operators of
Airport Use and Lease Agreement 29 Dated 07/01/94
Airline's Preferential Space to install identifying signs when secondary users and itinerant operators utilize
Airline's Preferential Space for an aircraft arrival or departure for the purpose of loading and unloading
passengers.
(B) Signs Installed by City City shall install all signs necessary or required for the direction of
pedestrian and vehicular traffic on the sidewalks, ways and roads within the Terminal Building Complex,
including such signs as it determines are necessary on the roadways leading from the public streets to said
Terminal Building Complex. All directional signs in the Terminal Building Complex including any additions
thereto shall be installed by City. No signs or advertisements pertaining to Airline's Air Transportation business
shall be installed or maintained outside of or within the Premises on the Airport until Airline shall have submitted
to the Director of Aviation for his approval, in writing, such drawings, sketches, design dimension and type and
character of such signs and advertisements proposed to be placed therein or thereon and any payment,
conditions, restrictions or limitations in respect to the use thereof stated by the Director of Aviation in his written
approval therefor shall become conditions hereof as if set forth herein at length.
Section 10.08 Alteration, Repair Maintenance Remodeling Expansion Removal and/or
Improvement of the Facilities of Terminal Building Complex or Its Appurtenances
It is understood and agreed by and between the parties hereto that the City may alter, repair, maintain,
remodel, expand, remove or improve any of the facilities of the Terminal Building Complex or any of its
appurtenances, including space leased to Airline pursuant to this Agreement or other agreements related to
such facilities at any time during the term hereof subject to the provisions of this Agreement.
If however, it becomes necessary for the City to reassign or relocate Airline space, City shall give
Airline reasonable advance notice of such action and shall make available alternative space that is reasonably
comparable for Airline's operations at the same rates and charges which Airline would have paid for the space
being surrendered. Airline shall surrender its space promptly to City, provided that Airline shall be reimbursed
for the reasonable cost of any such reassignment, reallocation or relocation and the cost of Airline's
unamortized investment, if any. All of such costs, as well as City's cost of providing the alternative space
aforementioned, shall be included in the cost of the particular Capital Project requiring such reassignment,
reallocation or relocation.
Section 10.09 Airport Security - Federal Aviation Regulations
(A) Security Screening Facilities It is recognized that Airline and other Aircraft Operators which
are engaged in the transportation of persons and property by air are required by the Federal Aviation
Airport Use and Lease Agreement 30 Dated 07/01/94
Regulations ("FAR") to provide, at their expense, certain security measures for the screening of persons,
baggage and other property entering aircraft boarding areas of the Terminal Building Complex.
Airline agrees to provide (along with other Aircraft Operators) such security screening facilities and
equipment in the Passenger Screening Area, including X-ray machines, other devices, and guard services, as
are required by the FAR, as amended. City shall have no obligations whatsoever relating to the provision or
the administration of such security screening facilities and equipment; the collection of use charges therefor;
or the payment of the costs of such facilities to vendors or service companies.
Airline agrees to comply with the requirements of FAR 107.3b and to execute any Agreements that may
be required by the FAA in relation thereto.
(B) Airport Access Control System Airline agrees to pay its prorata share of the costs associated
with the Airport access control system as is or may be required to be implemented by FAR, Part 107.14. The
pro rated costs of implementing,operating and maintaining the access control system will be recovered through
Airline Rates and Charges, and allocated to the appropriate CRCs in accordance with Article VI.
Section 10.10 Utilities
Airline may use all the electrical power outlets of City located in or about the Premises including this
Aircraft Parking Positions and ramp area or adjacent thereto and the cost thereof shall be charged to the
Terminal Cost Recovery Center and Airfield Cost Recovery Center based on the area of useage.
However, wherever meters are installed in the Premises for measuring the quantity of public utility
services used by Airline, all charges for water, gas, heat, light, power, telephone or other utility services used
by Airline in connection with its occupancy of the Premises, including deposits,connection fees or charges and
meter rental required by the supplier of any such utility service, and the costs of all equipment or improvements
necessary for connecting the Premises to such utility services facilities shall be paid by Airline. Charges shall
be paid by the Airline within twenty (20) days of receipt of City's invoice. Airline expressly waives any and all
claims against City for compensation for any and all loss or damage sustained by reason of any defect,
deficiency or impairment of any water supply system,drainage or sewer system,gas supply system,telephone,
system,electrical supply system, or electrical apparatus orwires serving the Premises. All costs forwater,gas,
heat or electricity used in connection with the heating or air conditioning furnished to the Premises by City as
part of the basic charge for said Premises shall be paid by City. Notwithstanding, should Airline use electrical
power in excess of what is reasonably required for its normal operations, City reserves the right to require
Airport Use and Lease Agreement 31 Dated 07/01/94
Airline, at its expenses,to promptly install meters as provided above and pay for all electrical power consumed
thereafter.
Section 10.11 Trash Garbage Aircraft Sewage and Other Refuse
City shall provide a complete and proper arrangement forth adequate,sanitary handling and disposal,
away from the Airport,of all trash,garbage,aircraft sewage and other refuse caused as a result of the operation
of its Air Transportation business and charges therefor shall be allocated to the appropriate Cost Recovery
Center. Piling of boxes, cartons, barrels or other similar items in an unsightly or unsafe manner on or about the
Premises by Airline is forbidden.
Section 10.12 Vehicles and Automotive Equipment on Airside Area and Aircraft Parking Positions
City reserves the right to regulate, by adoption of rules or other means, subject to Section 3.01(K)
hereof, the use of vehicles and automotive equipment upon, over and across the Airside Area. In the event of
an emergency not specifically provided for in said rules and regulations,the Director of Aviation ora designated
representative on duty at the time of such emergency shall have the power to take charge of the direction of
such vehicle and automotive traffic in the area affected and regulate the same until the cause of such
emergency has been removed. The existence of an emergency, other than an aircraft emergency, shall be
determined by the Director of Aviation or a designated representative.
Section 10.13 Security Deposit
Airline,on execution of this Agreement, shall deposit with City an aggregate sum in cash,letterof credit
or bond, which letter of credit or bond shall be in a form and content satisfactory to the City, equal to two (2)
month's Airline's Terminal Rates and Charges and Landing Fees specified in Article V hereof, as a security
deposit to guarantee the faithful performance by Airline of its obligations underthis Agreement and the payment
of all fees and charges due hereunder. Airline shall be obligated to maintain such security deposit in effect until
the Expiration Date of this Agreement. In each Fiscal Year,Airline will be required to adjust the amount of such
security deposit to reflect Airline's current Fiscal Year's terminal fees and charges and Landing Fees as
projected bythe Preliminary Projection of Airline Rates and Charges and Mid-Year Adjustment of Airline Rates
and Charges for such Fiscal Year. If Airline has not been in default of any of the provisions of this Agreement
as prescribed in Section 19.01, or earlier Agreements for a continuous eighteen (18) month period City will
waive the requirement for security deposit and return the security deposit to Airline, if such a deposit has been
made.
Airport Use and Lease Agreement 32 Dated 07/01/94
Security deposits provided bythird parties,including bonding companies and financial institutions,shall
be properly licensed to do such business in the State of California and subject to the approval of City. In the
event that any such security deposit shall be for a period of less than the full period required by this Agreement,
or if such security deposit may be cancelled,Airline shall provide a renewal or replacement security deposit for
the period following the expiration or cancellation of such security deposit previously provided at least sixty(60)
days prior to the date on which such previous security deposit expires or at least sixty (60) days prior to the
effective date of such cancellation.
If Airline shall commit an Event of Default under Section 19.01 of this Agreement, City shall have the
right to use the security deposit, or any portion thereof,to cure the default orto compensate City for all damage
sustained by City resulting from Airline's default. Airline shall immediately on demand pay to City a sum equal
to the portion of the security deposit expended or applied by City, as provided in this Section,so as to maintain
the security deposit in the sum initially deposited with City or renew said bond.
ARTICLE XI
NO OTHER CHARGES
Section 11.01 No Other Charges
The City agrees that no fees or charges other than those expressly set forth in this Agreement, shall
be charged or collected by it from Airline or Airline's passengers or employees for the use of any of the
premises, facilities, rights, licenses and privileges granted by this Agreement, however, notwithstanding the
foregoing, City shall not be prevented from:
(a) entering into use agreements or leases with others for space and facilities at the Airport or from
requiring and issuing permits for the use of such space and facilities, or
(b) levying uniform catering fees on in-flight food and beverage caterers which service aircraft
operating at the Airport and charge such caterers rentals for any facilities which they lease on the Airport for
their exclusive use or for their joint use with others, or
(c) assessing and collecting a head tax, passenger boarding tax, passenger facility charge, use
fee, or similar charge upon passengers using the Airport, or any of its facilities or services as, if, and when such
tax, fee or similar charge becomes lawful by the repeal or modification of the Federal Anti-Head Tax Act (49
USCA Section 1513), or otherwise, or
Airport Use and Lease Agreement 33 Dated 07/01/94
(d) entering into agreements with Airline for additional facilities which provide for a separate and
additional charge to Airline, or
(e) imposing a charge for public vehicular parking at the Airport or employee vehicular parking
referred to in Section 5.07 of this Agreement, or
(f) imposing ground transportation fees, or
(g) imposing a fuel flowage fee on fixed base operators and other similar service contractors using
space and facilities at the Airport who may be engaged by Airline or other aircraft operators to provide and
dispense fuel to their aircraft, or
(h) imposing a fee for the issuance of security badges, access cards, and other access media at
the Airport.
ARTICLE XII
INDEMNITY AND INSURANCE
Section 12.01 Indemnification of Airport
Airline agrees to indemnify the City, its officers, agents and employees against, and will hold and save
them and each of them harmless from, any and all actions, suits, claims, damages to persons or property,
losses, costs, penalties, obligations, errors, omissions or liabilities, of or in connection with the negligent
performance of the work, operations or activities of Airline, its agents, employees, subcontractors, or invitees,
provided for herein, or arising from the use of the Premises or the Airport by Airline or its employees and
customers, or arising from the failure of Airline to keep its exclusive Premises in good condition and repair, as
herein provided, or arising from the negligent acts or omissions of Airline hereunder, or arising from Airline's
negligent performance of or failure to perform any term, provision covenant or condition of this Agreement,
whether or not there is concurrent passive or active negligence on the part of the City, its officers, agents or
employees but excluding such claims or liabilities arising from the sole negligence or willful misconduct of the
City, its officers, agents or employees, who are directly responsible to the City, and in connection therewith:
(a) Airline will defend any action or actions filed in connection with any of said claims or liabilities
and will pay all costs and expenses, including legal costs and attorneys' fees incurred in
connection therewith;
(b) Airline will promptly pay any judgment rendered against the City, its officers, agents or
employees for any such claims or liabilities arising out of or in connection with the negligent
Airport Use and Lease Agreement 34 Dated 07/01/94
performance of or failure to perform such work,operations or activities of airline hereunder;and
Airline agrees to save and hold the City, its officers, agents, and employees harmless
therefrom;
(c) In the event the City, its officers, agents or employees is made a party to any action or
proceeding filed or prosecuted against Airline for such damages or other claims arising out of
or in connection with the negligent performance of or failure to perform the work, operation or
activities of Airline hereunder, Airline agrees to pay to the City, its officers, agents or
employees, any and all costs and expenses incurred by the City, its officers, agents or
employees in such action or proceeding, including but not limited to, legal costs and attorneys'
fees.
Section 12.02 Airline Public Liability Insurance
Airline agrees to carry and keep in force public liability insurance with an insurance company of
recognized responsibility, or provide self insurance, covering personal injury, death and property damage to
protect the City, its commissioners, directors, agents, officers, and employees, from liability covered by the
indemnification provisions of this Article. Without limiting its liability as aforesaid, Airline agrees to carry and
keep in force such insurance,written on a per occurance basis, with limits of liability for death, personal injury
and property damage in a combined single limit not less than Fifty Million Dollars($50,000,000). An Airline shall
have the right to self-insure the items specified in this Section 12.02, Section 12.03 and Section 12.05 so long
as Airline maintains a net worth satisfactory to the City's Risk Manager.
Section 12.03 Workers Compensation Insurance
Airline shall, at the Airline's sole cost and expense, maintain a policy of worker's compensation
insurance in an amount as will fully comply with the laws of the State of California and which shall indemnify,
insure and provide legal defense for both the Airline and the City against any loss,claim or damage arising from
any injuries or occupational diseases occurring to any worker employed by or any persons retained by the
Airline in the course of conducting Airline's business in the Airport.
Section 12.04 City Public Liability Insurance
The City shall maintain in force during the term of this Agreement public liability insurance protecting
the City from claims of bodily injury and property damage liability arising out of the ownership, maintenance,
use and occupancy of the premises for amounts to be determined by the City.
Section 12.05 Fire and Extended Coverage Insurance - Terminal Buildinq Complex
Airport Use and Lease Agreement 35 Dated 07/01/94
The City agrees to maintain in force during the term of this Agreement fire and extended coverage
insurance on the Terminal Building Complex and any additions, alterations, or modifications thereto and on all
contents owned bythe City usual and incidental to the Terminal Building Complex for an amount of notlessthan
ninety (90) percent of the full replacement value thereof(hereinafter referred to as "City Insurance").
Airline shall purchase similar insurance on its contents,improvements,betterments and otherincidental
personal property (hereinafter referred to as "Airline Insurance'), or shall self insure.
The City and Airline hereby mutually release and discharge each other from all claims or liabilities
arising from or caused by fire or other casualty covered by the aforementioned insurance on the Terminal
Building Complex or contents and personal property in, at or on the Terminal Building Complex. All such
policies shall include a waiver of subrogation with respect to the provisions of this Agreement to the extent
insurance proceeds are actually received.
Section 12.06 Airline Insurance on Automobiles and Other Ground Vehicles
Airline shall maintain at is sole expense and cause to be kept in force at all times during the term of
this Agreement, liability insurance in the form of primary and excess,or layered amounts of insurance covering
the operation of Airline's owned or non-owned automobiles and other ground vehicles at the Airport,written on
a per occurance basis in a combined single limit of not less than Twenty Five Million Dollars ($25,000,000) for
bodily injury and property damage liability per any one occurrence.
Section 12.07 General Provision Applicable to Airline's Insurance
All of the policies of insurance required to be procured by Airline pursuant to this Article XII shall (i) in
a form and content common to the industry and reasonably satisfactory to the City and written by insurers
satisfactory to the City;be(ii)primary insurance;and shall(iii)name the City,its officers,employees and agents
as additional insureds to the extent of their indemnified interest. All of said policies of insurance shall provide
that said insurance may not be amended or cancelled without providing 30 days prior written notice by
registered mail to the City. Prior to the Effective Date or such earlier date as Airline takes possession of the
Premises for any purpose; and at least 30 days prior to the expiration of any insurance policy, Airline shall
provide City with certificates of insurance or appropriate insurance binders evidencing the above insurance
coverages written by insurance companies acceptable to the City, licensed to do business in the state where
the Premises are located. In the event the Risk Manager of City("Risk Manager")determines that(i)the Airline's
activities in the Premises creates an increased or decreased risk of loss to the City, (ii) greater insurance
coverage is required due to the passage of time, or(iii) changes in the industry require different coverages be
Airport Use and Lease Agreement 36 Dated 07/01/94
obtained, Airline agrees that the minimum limits of any insurance policy and the types of insurance policies
required to be obtained by Airline may be changed accordingly upon receipt of written notice from the Risk
Manager; provided that Airline shall have the right to appeal a determination of increased coverage by the Risk
Manager to the City Council of City within ten (10) days of receipt of notice from the Risk Manager. City and
Airline hereby waive any rights each may have against the other on account of any loss or damage occasioned
by property damage to the Premises, its contents, or airline's trade fixtures, equipment, personal property or
inventory arising from any risk generally covered by insurance against the perils of fire, extended coverage,
vandalism, malicious mischief,theft, sprinkler damage, and earthquake sprinkler leakage. Each of the parties,
on behalf of their respective insurance companies insuring such property of eitherAirport orAirline against such
loss, waive any right of subrogation and contribution that it may have against the other. The foregoing waivers
of subrogation shall be operative only so long as available in California and provided further that no policy in
invalidated thereby.
ARTICLE XIII
QUIET ENJOYMENT
Section 13.01 Quiet Enjoyment
The City agrees that on payment of the rents, fees and other charges provided for herein and the
performance of the covenants and agreements on the part of Airline to be performed hereunder, Airline shall
peaceably have and enjoy the Premises, appurtenances, facilities, rights, licenses and privileges granted
herein.
ARTICLE XIV
INSPECTION BY CITY
Section 14.01 Inspection by City
The City may enterupon the premises includingthe Premisesthatare leased exclusively,preferentially,
orjointly to Airline and others, during normal business hours and at such times as may be reasonable under
the circumstances forany purpose necessary, incidental to orconnected with the performance of its obligations
hereunderorin the exercise of its governmental functions relating to the public health,safety,good conduct and
the proper management of the Airport.
Airport Use and Lease Agreement 37 Dated 07/01/94
ARTICLE XV
RULES AND REGULATIONS
Section 15.01 Rules and Regulations
The City may adopt and enforce reasonable rules and regulations,which Airline agrees to observe and
obey, with respect to the use of the Airport and its appurtenances, facilities, improvements, equipment and
services;provided that such rules and regulations shall be consistent with safety and with rules,regulations and
orders of the Federal Aviation Administration with respect to all operations of the Airport and, provided further,
that such rules and regulations shall not be inconsistent with the provisions of this Agreement or other
agreements between the City and Airline relating to the use of the Airport or inconsistent with the procedures
prescribed or approved from time to time by the Federal Aviation Administration with respect to the operation
of aircraft operated by Airline at the Airport.
In addition to the foregoing,Airline shall observe,obey,complywith and not otherwise hinder or obstruct
any and all applicable rules, regulations, laws, ordinances, statutes or orders of any governmental authority,
Federal,State or local, lawfully exercising authority overthe Airport or Airline's conduct of its Air Transportation
business hereunder.
In the event City shall be subject to any fine or penalty by reason of Airline's violation of any
governmental rules, regulations or standards as now or hereafter may be promulgated or enacted, the cost of
such fine or penalty shall be borne by Airline. Furthermore,Airline agrees to indemnify, defend, and save City
harmless from any and all fines or penalties charged against City by reason of Airline's violation of any
governmental rules, regulations or standards.
City shall not be liable to Airline for any diminution or deprivation of possession, or of its rights
hereunder, on account of the exercise of any such right or authority as in this Section provided, nor shall Airline
be entitled to terminate the whole or any portion of the leasehold estate herein created, by reason of the
exercise of such right or authority, unless the exercise thereof shall so interfere with Airline's use and
occupancy of the leasehold estate herein created as to constitute a termination in whole or in part of this
Agreement by operation of law in accordance with the laws of the State of California.
ARTICLE XVI
ASSIGNMENT AND SUBLEASE
Section 16.01 Assignment and Sublease
Airport Use and Lease Agreement 38 Dated 07/01/94
Airline shall not assign or transfer this Agreement, the Premises or any part thereof, without the prior
written consent of the City,whrcp consent shall not be unreasonably withheld. For purposes of this Agreement
an assignment shall be deerriea to include the transfer to any person or group of persons acting in concert, of
more than fifty percent "/o of the present ownership and/or control of Airline, taking all transfers into account
on a cumulative basis. Notwithstanding the foregoing, Airline may assign this Agre .nent to any successor-in-
interest of Airline with or into which Airline may merge or consolidate or to any entity which may acquire
substantially all of the assets of Airline without the consent of the City; provided that said assignee complies
with all of the other terms of this Section. Airline shall not sublease all or any part of the Premises without the
prior written approval of the City, which approval shall not be unreasonably withheld.
City may withhold its consent to an assignment or sublease to a proposed assignee or sublessee, and
Airline agrees that City shall not be unreasonable for doing so, if all of the following criteria are not met: (a) the
proposed assignee's or sublessee's general financial condition, including liquidity and net worth, verified by
audited financial statements prepared by a certified public accountant in conformity with generally accepted
accounting principles, is equal to or greater than that of Airline; (b)the proposed assignee has a demonstrated
business capability equal to or greater than that of Airline in operating an Airline Transportation business; and
(c) the proposed assignee is morally and financially responsible. Prior to the effectiveness of any assignment
or subletting, regardless ofwhetherthe consent of the City is required,the assignee or sublessee shall assume
all of the obligations of Airline hereunder, in writing in a form satisfactory to the City. Said assignment or
sublease shall be subject to all of the terms and conditions of this Agreement.
City shall be under no obligation to consider a request for City's consent to an assignment until Airline
shall have submitted in writing to City a request forCity's consent to such assignment or subletting together with
audited financial statements of Airline and the proposed assignee or sublessee, a history of the proposed
assignee's or sublessee's business experience and such other information as required by City to verify that the
criteria for assignment and subletting as set forth herein are met.
The consent by City to one assignment or subletting by another person or entity shall not be deemed
to be a consent to any subsequent assignment or subletting. Any assignment or subletting requiring the
consent of City made without obtaining such consent shall constitute a material breach of this Agreement, and
shall, at the option of the City, terminate this Agreement
ARTICLE XVII
Airport Use and Lease Agreement 39 Dated 07/01/94
SURRENDER OF POSSESSION
HOLDING OVER
Section 17.01 Surrender of Possession - Holding Over
Airline agrees to yield and deliver to the City the possession of the Premises including the Premises
leased exclusively or preferentially to Airline orjointlyto Airline and others, atthe termination ofthisAgreement
by expiration or otherwise. Such Premises shall be delivered in clean and good condition in accordance with
Airline's express obligations hereunder, except for reasonable wear and tear, fire and other casualty. Airline
shall have the right at anytime during the term of this Agreement, orany renewal orextension hereof,to remove
or sell its trade fixtures and equipment situated on the Premises that were installed, or placed by it, at its
expense in, on oraboutthe Premises pursuantto the provisions ofthis Agreement subject howeverto anyvalid
lien that the City may have thereon for unpaid fees or other charges. Any such removal shall be at Airline's
expense and accomplished in a good workmanlike manner. Any damage occassioned by such removal shall
be repaired at Airline's expense so that the Premises may be surrendered in a good, clean and sanitary
condition.
Any holding over by Airline after the cancellation or termination of this Agreement shall not operate to
extend or renew such Agreement for any further term whatsoever. Acceptance by City of payment of rents,
fees or charges after cancellation or termination shall be deemed to be payment on account and shall not
operate to waive or modify any provision of this paragraph.
ARTICLE XVIII
TAXES
Section 18.01 Taxes
All taxes imposed on this Agreement as extended or modified (including any renewals thereof and
property interests created thereby)and on any otheragreements now in effect between City and Airline orwhich
may hereinafter be entered into between the Airline and City (including any renewals thereof and property
interests created thereby) shall be charged to and paid by Airline.
Without limiting the generality of the foregoing, Airline shall pay all rental and/or sales taxes, if any,
assessed or levied on account of amounts payable by Airline to City hereunder.
Airline acknowledges that this Agreement may create a possessory interest subject to property taxation,
and that Airline shall be subject to payment of any real property taxes or excise taxes levied on such interest
Airport Use and Lease Agreement 40 Dated 07/01/94
and/or upon the fee estate of the City. Real property taxes shall include any form of real estate taxes or
assessments,general, special, ordinary or extraordinary and any license fee, rental tax, improvement bond or
bonds,levy,penalty,ortax composed by any authority having the power to tax as against any legal or equitable
interest of City on the Airport or on the underlying realty, as against City's right to receive rent or other income
therefrom or as against City's business of leasing the Airport whether now or hereafter enacted.
Airline shall also pay all personal property taxes and assessments levied upon Airline's personal
property located on the Premises.
If the Airline shall fail to pay said taxes, charges, or assessments within thirty (30) days before they
become delinquent, City may, at its option, pay such taxes, charges or assessments without pre-empting the
Airlines right to protest. Such amount paid by City, plus interest at the rate of ten percent (10%) per annum,
shall be considered as an additional charge payable hereunder and shall be due and payable at the next due
date for Airline Rates and Charges.
ARTICLE XIX
DEFAULT AND CANCELLATION
Section 19.01 Default by Airline
The occurrence of any one or more of the following events shall constitute a default and breach of this
Agreement by Airline: (a) the failure to pay any rental or other payment required hereunder to or on behalf of
Airport more than three (3) days after receipt of written notice from City to Airline that Airline has failed to pay
rent when due; (b) the failure to perform any of Airline's agreements or obligations hereunder(exclusive of a
default in the payment of money)where such default shall continue for a period of thirty(30) days after written
notice thereof from City to Airline which notice shall be deemed to be the statutory notice so long as such notice
complies with statutory requirements; (c) the vacation or abandonment of the Premises by Airline; (d) the
making by Airline of a general assignment for the benefit of creditors; (e) the filing by Airline of a voluntary
petition in bankruptcy or the adjudication of Airline as a bankrupt; (f) the appointment of a receiver to take
possession of all or substantially all the assets of Airline located at the Premises or of Airline's leasehold interest
in the Premises; (g) the filing by any creditor of Airline of an involuntary petition in bankruptcy which is not
dismissed within sixty (60) days. Any repetitive failure by airline to perform its agreements and obligations
hereunder, though intermittently cured, shall be deemed an incurable default. Two (2) breaches of the same
covenant within a sixty (60) day period, a notice having been given pursuant to (a) or (b) above for the first
Airport Use and Lease Agreement 41 Dated 07/01/94
breach, or three (3) of the same or different breaches during any 5 year period of this Agreement for which
notices pursuant to (a) or(b) above were given for the first two (2) breaches shall conclusively be deemed to
be an incurable repetitive failure by Airline to perform its obligations hereunder.
Section 19.02 Remedies Upon Default
In the event of any such default or breach by Airline, City may at any time thereafter, without further
notice or demand, rectify or cure such default, and any sums expended by City for such purposes shall be paid
by Airline to City upon demand and as additional rental hereunder. In the event of any such default or breach
by Airline, City shall have the right(i)to continue the lease in full force and effect and enforce all of its rights and
remedies under this Agreement, including the right to recover the rental as it becomes due under this
Agreement,or(ii)City shall havethe right at anytime thereafterto elect to terminate the Agreement and Airline's
right to possession thereunder. Upon such termination, City shall have the right to recover from Airline:
(a) The worth at the time of award of the unpaid Airline Rates and Charges which had been earned
at the time of termination;
(b) The worth at the time of award of the amount by which the unpaid Airline Rates and Charges
which would have been earned after termination until the time of award exceeds the amount of
such Airline Rates and Charges that the Airline proves could have been reasonably avoided;
(c) Any other amount necessary to compensate the City for all the detriment proximately caused
by Airline's failure to perform its obligations under the Agreement or which in the ordinary
course of things would be likely to result therefrom.
The "worth at the time of award"of the amounts referred to in subparagraphs (i) and (ii) above shall be
computed by allowing interest at three percent(3%)overthe prime rate then being charged by Bank ofAmerica,
N.A. but in no event greaterthan the maximum rate permitted by law. The "worth at the time of award"of the
amount referred to in subparagraph (iii) above shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent(1%), but in no event
greater than ten percent (10%).
Such efforts as City may make to mitigate the damages caused by Airline's breach of this Agreement
shall not constitute a waiver of City's right to recover damages against Airline hereunder, nor shall anything
herein contained affect City's right to indemnification against Airline for any liability arising prior to the
termination of this Agreement for personal injuries or property damage, and Airline hereby agrees to indemnify
and hold City harmless from any such injuries and damages, including all attorney's fees and costs incurred
Airport Use and Lease Agreement 42 Dated 07/01/94
by Airport in defending any action brought against City for any recovery thereof,and in enforcing the terms and
provisions of this indemnification against Airline.
Notwithstanding any of the foregoing, the breach of this Agreement by Airline, or an abandonment of
the Premises by Airline, shall not constitute a termination of this Agreement, or of Airline's right of possession
hereunder, unless and until City elects to do so, and until such time City shall have the right to enforce all of its
rights and remedies under this Agreement, including the right to recover Airline Rates and Charges, and all
other payments to be made by Airline hereunder, as they become due. Failure of City to terminate this
Agreement shall not prevent City from later terminating this Agreement or constitute a waiver of City's right to
do so.
Section 19.03 Cancellation by City
(A) Preferential Use of Concourse Gate Positions If, at any time, one or more of Airline's
Preferential Use Concourse Gate Positions is underutilized as hereinafter set forth, City may cancel Airline's
Preferential Use of such underutilized Concourse Gate Position by giving Airline at least thirty (30) days prior
written notice. The one gate position guarantee set forth in Section 10.04 shall remain in effect during the term
of this Agreement.
Any Concourse Gate Position shall be deemed to be underutilized if during the preceding twelve (12)
months a secondary user of Airline's Concourse Gate Position has a greater number of Fee Landings utilizing
such Preferential Use Concourse Gate Position, for the purpose of loading and unloading passengers, than
Airline.
If during the thirty (30) days notice period Airline institutes additional flights, aircraft arrivals and
departures for the purpose of loading and unloading passengers, which would exceed the number flights in
place by the secondary user, then Airline may retain Preferential Use of its Concourse Gate Position.
(B) Cessation of Use. If Airline ceases to operate for more than sixty (60) consecutive days
during the months of November through May ("peak season"), then City may cancel this Agreement and
terminate all of its obligations hereunder by giving Airline at least thirty (30) days prior written notice.
Airline is considered to have ceased operations during peak season when Airline has no aircraft
scheduled for arrival or departure at Airline's Concourse Gate Position(s), for the purpose of loading and
unloading passengers, for a period of more than sixty (60) consecutive days, unless said cessation of
operations is due to a force majeure or a labor strike.
Section 19.04 Cancellation by Airline
Airport Use and Lease Agreement 43 Dated 07/01/94
In addition to the rights of cancellation granted heretofore in this Agreement,Airline shall have the right
to cancel this Agreement in its entirety and all rights ensuing therefrom upon the occurrence of any of the
following:
(a) The Airline provides three hundred sixty four (364) days written notice to City.
(b) The withdrawal, suspension or termination by the Civil Aeronautics Board or its successor
Federal Agency, and/or the State of California Public Utilities Commission, or its successor State Agency, of
the permit or authorization required by the law permitting or authorizing Airline to operate to and from the Airport;
provided, however, that none of the foregoing is due to any fault of Airline;
(c) The issuance of any order, rule or regulation by the Federal Aviation Administration, the
California Public Utilities Commission, or its or their successor Federal or State Agency of any other
governmental agency having jurisdiction, or the issuance and execution of any judicial process by any court
of competent jurisdiction materially restricting for a period of at least sixty (60) days the use of the Airport for
scheduled Air Transportation; provided, however, that none of the foregoing is due to any fault of Airline;
(d) The material restriction of City's operation of the Airport by action of the Federal Government,
or any department or agency thereof, under its wartime or emergency powers, and the continuance thereof for
a period of not less than sixty (60) days; provided, however, that without prejudice to the rights of Airline to
cancel as above provided, the parties hereto may mutually agree to a just abatement of fees and charges
accordingly as their respective rights are affected; and
(e) The material restriction of Airline's use of the Premises and facilities herein and the continuance
thereof for a period of not less than sixty(60)days by reason of any future agreement between the City and the
United States.
ARTICLE XX
DAMAGE OR DESTRUCTION
Section 20.01 Damage or Destruction of Premises
A. Partially Insured Casualty. If the Premises or the Airport shall be partially damaged by fire or
other casualty required to be insured by City pursuantto Section 12.05,then upon City's receipt of the insurance
proceeds, City shall, except as otherwise provided in this section, promptly repair and restore the same
(exclusive of Airline's leasehold improvements, alterations or additions, trade fixtures, signs or other personal
Airport Use and Lease Agreement 44 Dated 07/01/94
property)substantially to the condition thereof immediately prior to said damage or destruction,limited,however,
to the extent of the insurance proceeds actually received by City therefor.
B. Substantial and Uninsured Casualty. If(a)both the Premises and the buildings constituting the
Airport shall be damaged to the extent of fifty percent (50%) or more of the cost of replacement thereof or(b)
the Premises or the buildings constituting the Airport shall be destroyed or damaged as a result of a risk not
required to be insured by City pursuant to 12.05 hereof, or(c)the Premises shall be damaged to the extent of
twenty-five percent (25%) or more of the cost of replacement thereof during the last two (2) years of the term
of this Agreement, or (d) the buildings constituting the Airport shall be damaged to the extent of fifty percent
(50%) or more of the cost of replacement thereof,whether or not the Premises shall be damaged, then in any
such events, City may elect either to repair the damages as aforesaid, or to cancel this Agreement by written
notice of cancellation given to Airline within ninety(90) days after the date of such occurrence, and thereupon
this Agreement shall cease and terminate twenty(20)days following Airline's receipt of such notice; and Airline
shall vacate and surrender the Premises to City in accordance with the terms of this Agreement. In determining
the cost of replacement of the Premises or any building or improvement,the cost of foundations and footings
shall not be included, except to the extent of the cost of repair thereto required by such damage or destruction.
C. Reconstruction. In the event of any reconstruction of the Premises or the Airport under this
Section, said reconstruction shall be performed by City's contractor. Airline, at its sole cost and expense,shall
be responsible for the replacement of its signs, stock in trade, trade fixtures, furniture, furnishings and
equipment. Airline shall commence such installation of fixtures, equipment and merchandise promptly upon
delivery to Airline of possession of the Premises and shall diligently prosecute such installation to completion.
D. Termination. Upon any termination of this Agreement under any of the provisions of this
Section, the parties shall be released thereby without further obligation to the other party coincident with the
surrender of possession of the Premises to City, except for items which have theretofore accrued and be then
unpaid and for Airline's removal of fixtures, signs and other personal property under Section 17.01.
E. Abatement of Airline Rates and Charges. In the event of repair, reconstruction and restoration
to the Premises by City as to be paid under Sections 5.02 and 5.03 hereof shall be abated proportionately with
the degree to which Airline's use of the Premises is impaired commencing from the date of destruction and
continuing during the period of City's repair, reconstruction or restoration of the Premises. Airline shall continue
the operation reasonably practicable from the standpoint of prudent business management, and the obligation
of Airline to pay Landing Fees and other Airline rates and Charges shall remain in full force and effect. Airline
Airport Use and Lease Agreement 45 Dated 07/01/94
shall not be entitled to any compensation for damages from City for loss of the use of the whole or any part of
the Premises,the building of which the Premises are a part, orAirline's personal property or any inconvenience
or annoyance occasioned by such damage, repair, reconstruction or restoration.
F. Waiver. Airline hereby waives any statutory rights of termination which may arise by reason of
any partial or total destruction of the Premises which City is obligated to restore or may restore under any of
the provisions of this Agreement.
ARTICLE XXI
PROHIBITED USES
Section 21.01 Prohibited Uses
Airline shall not do or permit anything to be done in, on, or at the Airport which will in any way conflict
with any law, or ordinance of any governmental agency, or with the City's rules and regulations provided for in
Article XV herein, or create a nuisance or in any way obstruct or interfere with the rights of other users of the
Airport, or damage any property or persons thereon, or endanger the health and safety of persons using the
Airport.
Section 21.02 Oil, Fuel and Other Materials
Airline agrees to prevent the entry of oil,fuel or other prohibited materials that are under its control into
the drainage system of Airport or into the drainage system of any of its surrounding communities, unless such
materials are first properly treated by equipment installed with the approval of City forthat purpose, and Airline
complies with recommendations made by the Environmental Protection Agency. "Drainage system(s)" shall
include among otherthings,the sewer system and ground water. Airline will bear all costs related to prohibited
entry of such oil, fuel or other materials into said drainage systems.
Section 21.03 Compliance with Laws
Airline shall,at its sole cost and expense, comply with all of the requirements of all municipal, state and
federal authorities now in force or which may hereafter be in force pertaining to the use of the Premises, and
shall faithfully observe in said use all municipal ordinances, including, but not limited to, the General Plan and
zoning ordinances, state and federal statutes or other governmental regulations now in force or which shall
hereinafter be in force, except that in complying with the law, Airline shall not be held responsible for any
structural changes to the terminal building. Airline's violation of law shall constitute an incurable default under
this Agreement. The judgment of any court of competent jurisdiction, orthe admission of Airline in any action
Airport Use and Lease Agreement 46 Dated 07/01/94
or proceeding against Airline,whether City be a party thereto or not,that Airline has violated any such order or
statute in said use, shall be conclusive of that fact as between the City and Airline.
Airline shall not engage in any activity on or about the Premises that violates any Environmental Law,
and shall promptly, at Airline's sole cost and expense,take all investigatory and/or remedial action required or
ordered by any governmental agency or Environmental Law for clean-up and removal of any contamination
involving any Hazardous Material created or caused directly or indirectly by Airline. The term "Environmental
Law"shall mean any federal, state or local law, statute, ordinance or regulation pertaining to health, industrial
hygiene or the environmental conditions on, under or about the Premises, including, without limitation, (i) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C.
Sections 9601 et seq.; (ii)the Resource Conservation and Recovery Act of 1976 ("RCRA'�42 U.S.C. Sections
6901 et seq.; (iii) California Health and Safety Code Sections 25100 et seq.; (iv)the Safe Drinking Water and
Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq.; (v) California
Health and Safety Code Section 25359.7;(vi)California Health and Safety Code Section 25915;(vii)the Federal
Water Pollution Control Act,33 U.S.C.Sections 1317 et seq.; (viii)California Water Code Section 1300 et seq.;
(ix) California Civil Code Section 3479 et seq., as such laws are amended and the regulations and
administrative codes applicable thereto. The term "Hazardous Material" includes, without limitation, any
material or substance which is (i) defined or listed as a "hazardous waste", "extremely hazardous waste",
"restrictive hazardous waste"or"hazardous substance"orconsidered awaste,condition of pollution ornuisance
under the Environmental Laws; (ii) petroleum or a petroleum product of fraction thereof; (iii) asbestos; and/or
(iv) substances known by the State of California to cause cancer and/or reproductive toxicity. It is the intent of
the parties hereto to construe the terms "Hazardous Materials" and "Environmental Laws" in their broadest
sense. Airline shall provide all notices required pursuant to the Safe Drinking Water and Toxic Enforcement
Act of 1986,California Health and Safety Code Section 25249 et seq. Airline shall provide promptwritten notice
to City of all notices of violation of the Environmental Laws received by Airline.
ARTICLE XXII
IMPROVEMENTS
Section 22.01 Improvements by Airline
Airline may, at it expense and subject to the provisions of Section 22.02 hereof, design, construct and
install in Airline's Exclusive Use Space any additional interior partitions, walls other than structural building
Airport Use and Lease Agreement 47 Dated 07/01/94
walls, electrical wiring, conduits, ducts, fixtures and equipment, wall and floor coverings including all special
flooring, painting and decor, counters, cabinet work and equipment as may be required by Airline and which is
not provided by City. Airline shall have the right to install at its expense and subject to the provisions of Section
22.02 hereof, in the conduit and ducts provided by City in the basic building structure, the wiring and other
equipment necessary forAirline's internal communications system and the further right to attach and maintain,
at it expense, on the vertical sides of the terminal building, a communications antenna.
Section 22.02 Conditions Covering Improvements and Alterations
(A) Consent Required from City. No improvements, alterations or additions including repainting,
redecorating and recarpeting shall be made in or about Airline's Existing or Future Exclusive Use Space by
Airline without first obtaining written consent of the Director of Aviation. All such improvements, structure,
alterations, additions and work shall be in full accordance with all written conditions prescribed by the Director
of Aviation. Prior to the construction of any improvements mentioned in Section 22.01 above, Airline shall
submit to the Director of Aviation for his review and approval, the plans of such improvements, including the
color of all paint and carpet. Such plans shall conform to the general architectural scheme and overall plans
adopted by the City for the Terminal Building Complex.
(B) Working Drawings Upon approval bythe Directorof Aviation of Airline's plans,Airline shall
cause the construction called for by said plans to be commenced and completed with reasonable dispatch.
Upon completion of any improvement, Airline shall furnish to City, at no charge, a complete set of working
drawings of the improvement as constructed.
(C) Conformance. All improvement constructed by Airline in the Airline's Existing or Future
Exclusive Use Space including the plans and specification therefor, shall conform in all respects to the
applicable statutes, ordinances, building code, rules and regulations of the City of Palm Springs and such other
governmental authority as may have jurisdiction. City's approval given, as provided for in this Section 22.02,
shall not constitute a representation orwarranty as to such conformitywhich shall remain Airline's responsibility.
Airline, at its own cost and expense, shall procure all permits necessary for such construction.
(D) Airline's Cost and Expense All renovation or construction by Airline pursuant to this Section
22.02 shall be at Airline's sole cost and expense. Airline shall keep its Existing or Future Exclusive Use Space
and the improvements constructed thereon free and clear of all liens and shall pay all costs for labor and
material arising out of such construction and shall hold City harmless from any liability in respect thereto. Airline
Airport Use and Lease Agreement 48 Dated 07/01/94
shall have the right to contest any and all liens filed against its Existing or Future Exclusive Use Space. Airline
further agrees that City shall have the right to post notices of non-responsibility as provided by Sections 3094
and 3129 of the Civil Code of the State of California.
(E) No Structural Alteration. Airline shall make no structural alterations to the roof,walls, or floors
of any of City's permanent structures in which Airline's Existing or Future Exclusive Use Space is located
without first obtaining City's written consent. Nothing contained this Section 22.02 shall prevent Airline from
making non-structural alterations to any improvements pursuant to this Section 22.02.
Section 22.03 Ownership of Improvements
Any and all improvements, alterations, or additions erected or installed by Airline upon the Airline's
existing or future Exclusive Use Space shall become a part of the land on which they are erected and title
thereto shall thereupon vest in City upon the expiration or sooner termination of this Agreement. However,
machines, baggage conveyor equipment,trade fixtures and similar installations of the type commonly installed
in and removed from other airport terminal facilities by tenants,which are installed in or on the Premises, shall
not be deemed to be a part of the realty even though they are attached to the floors, walls or roof of the
buildings or to outside pavements so long as they can be removed without structural damage to the buildings
or pavements; provided, however, that if the removal of any such installation damages any part or parts of the
buildings, pavements, or Premises, Airline shall repair such damage and restore said damaged part or parts
of said building, pavements, or Premises to the condition in which they existed prior to the installation of said
improvements.
ARTICLE XXIII
FEDERAL GRANTS AND NON-DISCRIMINATION
Section 23.01 Non-Discrimination and FAA Required Clauses
Airline, for itself, heirs, personal representatives, successors in interest, and assigns, as a part of the
consideration hereof, does hereby covenant and agree as a covenant running with the Premises that, in the
event facilities are constructed maintained, or otherwise operated on the said Premises described in this
Agreement for a purpose forwhich a Department of Transportation (DOT)program or activity is extended orfor
another purpose involving the provision of similar services or benefits, Airline shall maintain and operate such
facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal
Regulations, DOT, Subtitle A, Office of the Secretary, Part 21. Nondiscrimination in Federally- Assisted
Airport Use and Lease Agreement 49 Dated 07/01/94
Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964,and as said
Regulations may be amended.
Airline, for itself, personal representatives, successors in interest, and assigns, as a part of the
consideration hereof, does hereby covenant and agree as a covenant running with the Premises that: (1) no
person on the grounds of race, color, or national origin shall be excluded from participation in, denied the
benefits of, or be otherwise subjected to discrimination in the use of said facilities; (2) in the construction of any
improvements on, over, or under such Premises and the furnishing or services thereon, no person on the
grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or
otherwise be subjected to discrimination; and (3) Airline shall use the 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,Part21,Nondiscrimination in Federally-Assisted Programs of the Department
of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, as said Regulations may be amended.
In the event of breach of any of the above nondiscrimination covenants, City shall have the right to
terminate the Agreement and to re-enter and repossess said Premises and the facilities thereon, and hold the
same as if an agreement had never been made or issued. This provision does not become effective until the
procedures of 49 CFR Part 21 are followed and completed including expiration of appeal rights.
Airline shall furnish its services on a fair, equal and not unjustly discriminatory basis to all users thereof
and it shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service; provided
Airline may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar type of
price reductions to volume purchasers.
Noncompliance with the preceding paragraph shall constitute a material breach thereof and,inthe event
of such noncompliance, City shall have the right to terminate this Agreement and the leasehold interest hereby
created without liability therefore or,at the election of City orthe Untied States, either or both said Governments
shall have the right to judicially enforce Provisions.
Airline agrees that it shall insert the provisions in the five preceding paragraphs in any agreement by
which Airline grants a right or privilege to any person, firm or corporation to render services to the public on the
Airport.
Airline assures that it will undertake an affirmative action program as required by 14 CFR Part 152,
Subpart E, to insure that no person, on the grounds of race, creed, color, national origin, or sex be excluded
from participating in any employment activities covered in 14 CFR Part 152, Subpart E. Airline assures that no
Airport Use and Lease Agreement 50 Dated 07/01/94
person shall be excluded on these grounds from participating in or receiving the services or benefits of any
program or activity covered by this subpart. Airline assures that it will require that its covered suborganizations
provide assurances to Airline that, similarly, they will undertake affirmative action programs and that they will
require assurances from their suborganizations to the same effort, as required by 14 CFR 152, Subpart E.
City reserves the right to further develop or improve the landing area of the Airport as it sees fit
regardless of the desires or view of Airline and without interference or hindrance.
City reserves the right, but shall not be obligated to Airline, to maintain and keep in repair the landing
area of the Airport and all publicly-owned facilities of the Airport,together with the right to direct and control all
activities of Airline in this regard.
This Agreement shall subordinate to the provisions and requirements of any existing or future
agreement between City and the United States, relative to the development, operation or maintenance of the
Airport.
There is hereby reserved to City, its successors and assigns, for the use and benefit of the public, a
right of flights for the passage of aircraft in the airspace above the surface of the Airport herein. This public right
of flight shall include the right to cause in said airspace any noise inherent in the operation of any aircraft used
for navigation or flight through the said airspace or landing at, taking off from, or operation on the Airport.
Airline agrees to comply with the notification and review requirements covered in Part 77 of the Federal
Aviation Regulations in the event future construction of a building is planned for the Airport, or in the event of
any planned modifications or alterations of any present or future building or structure situated on the Airport.
Airline, by accepting this Agreement, expressly agrees for itself, its successors and assigns that it will
not erect nor permit the erection of any structure or object, nor permit the growth of any tree on the land leased
hereunder above the mean sea level elevation of 600 feet. In the event the aforesaid covenants are breached.
City reserves the right to enter upon the Premises and to remove the offending structure or object and cut the
offending tree, all of which shall be at the expense of Airline.
Airline, by accepting this Agreement, agrees for itself, its successors and assigns that it will not make
use of the Airport in any manner which might interfere with the landing and take off of aircraft from the Airport
or otherwise constitute a hazard. In the event the aforesaid covenant is breached, City reserves the right to
enter upon the Premises hereby leased and cause the abatement of such interference at the expense of Airline.
It is understood and agreed that nothing contained shall be construed to grant or authorize the granting
of an exclusive right within the meaning of Section 308a of the Federal Aviation Act of 1958(49 U.S.C. 1349a).
Airport Use and Lease Agreement 51 Dated 07/01/94
This Agreement and all the provisions hereof shall be subject to whatever right the United States
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 23.02 Federal Grants
This Agreement shall be subordinate to the provisions of any existing and future agreements between
the City and the United States of America, its boards, agencies, or commissions, relative to the operation or
maintenance of the Airport, the execution of which has been, or will be, required as a condition to the
expenditure of Federal funds for the development of the Airport.
ARTICLE XXIV
CONDEMNATION
Section 24.01 Condemnation
A. Total Taking. In the event the entire Premises shall be appropriated ortaken underthe power
of eminent domain by any public or quasi-public authority, this Agreement shall terminate and expire as of the
date of such taking, and City and Airline shall each thereupon be released from any liability thereafter accruing
hereunder.
B. Substantial Taking. In the event more than twenty percent(20%) of the square footage of the
Premises is taken under the power of eminent domain by any public or quasi-public authority, or if by reason
of any appropriation ortaking, regardless of the amount so taken,the remainder of the Premises is not useable
for Air Transportation,eitherCity or Airline shall have the right to terminate this Agreement as of the date Airline
is required to vacate a portion of the Premises, upon giving notice in writing of such election within thirty (30)
days after receipt by Airline from City of written notice that said Premises have been so appropriated or taken.
City agrees immediately after learning of any appropriation or taking to give to Airline notice in writing thereof.
C. Right to Award. If this Agreement is terminated in either manner hereinabove provided. City
shall be entitled to the entire award or compensation in such proceedings. Airline's right to receive
compensation or damages for its fixtures and personal property shall not be affected in any manner hereby.
D. Restoration. If both City and Airline elect not to so terminate this Agreement, or if neither has
the right to so terminate this Agreement following any such taking, then in either such event City agrees, at
City's cost and expense, to the extent of any severance damages attributable to damages to the Premises
Airport Use and Lease Agreement 52 Dated 07/01/94
available to City,to as soon as reasonably possible restore the Premises on the land remaining to a complete
unit of like quality and character as existed prior to such appropriation or taking.
E. Voluntary Sale:Waiver. Forthe purposes of this Section,a voluntary sale or conveyance in lieu
of condemnation shall be deemed an appropriation ortaking underthe powerof eminent domain. Airline hereby
waives any statutory rights of termination which may arise by reason of any partial taking of the Premises under
the power of eminent domain.
ARTICLE XXV
MISCELLANEOUS
Section 25.01 Non-Waiver of Rights
Continued performance by either party hereto pursuant to the terms of this Agreement after a default
in any of the terms, covenants and conditions herein contained to be performed, kept or observed by the other
party hereto,shall not be deemed a waiver of any right to cancel this Agreement for any subsequent default and
no waiver of any such default shall be construed, or act as a waiver of any subsequent default.
Section 25.02 Invalidity of Clauses
The invalidity of any Article, Section, portion, paragraph, provision, or clause of this Agreement shall
have no effect upon the validity of any other part or portion hereof.
Section 25.03 Approval by the Parties
Whenever the consent or approval of the City or the Airline is called for herein, it is understood and
agreed that such approval shall be in writing and obtained in advance and shall not be unreasonably withheld
or delayed.
Section 25.04 Headings
The Article and Section titles shown in this Agreement are included only as a matterof convenience and
for reference and in no way define, limit, broaden or describe the scope or intent of any provisions of this
Agreement.
Section 25.05 Remedies
The rights and remedies given to the City and Airline in this Agreement are distinct, separate and
cumulative, and no one of them, whether or not exercised by either party, shall be deemed to be in exclusion
of any of the others herein or by law or in equity provided.
Airport Use and Lease Agreement 53 Dated 07/01/94
a �
Section 25.06 Governing Law
The parties hereto agree that this Agreement shall be governed and construed in accordance with the
laws of the State of California.
Section 25.07 Non-Liability
No board member, Commissioner, director, officer, agent, consultant or employee of the City or Airline
shall be charged personally or be held liable by or to the other party under any term or provision of this
Agreement, or any amendment thereto, or because of any breach hereof, or because of its execution.
Section 25.08 Attorneys' Fees and Costs
In the event any action or suit or proceeding is brought by either party to collect the fees and charges
due or to become due hereunder or any portion thereof or to take possession of said Premises or to enforce
compliance with this Agreement for failure to observe any of the covenants of this Agreement, and such party
is successful in such action, suit or proceeding, the losing party agrees to pay such sums as the Court may
judge reasonable attorneys' fees and costs to be allowed in said suit, action or proceeding.
Section 25.09 Notices
(a) Any request, demand, authorization, direction, notice, consent or waiver provided or permitted to
be made upon, given by, or furnished to, the City or Airline shall be sufficient for every purpose hereunder if
in writing and mailed by certified or registered mail, postage prepaid and addressed as follows:
(1) if to the City, at: Palm Springs Regional Airport
3400 East Tahquitz Canyon Way, Suite OFC
Palm Springs, CA 92262
Attention: Allen Smoot, Executive Director-Airports
(2) if the Airline, at: CONTINENTAL AIRLINES, INC.
1600 SMITH_HQSPF
HOUSTON, TX 77002
Attention: VP CORPORATE BEAT ESTATE
The foregoing addresses may be changed by either party giving to the other party the same type of
notice described above providing a substitute address.
(b) Any such notice or other document shall be deemed to be received as of three days after the date
deposited in the mail, if mailed in accordance with subsection (a) of this Section.
Airport Use and Lease Agreement 54 Dated 07/01/94
Section 25.10 Termination of Prior Agreement
City and Airline agree that the Airline Use Agreement for Palm Springs Regional Airport as amended
('Prior Agreement'), and expiring on , 1994, is terminated as of the Effective Date of this
Agreement.
Section 25.11 Exhibits
All Exhibits attached to this Agreement are incorporated herein by this reference.
Section 25.12 Agreement Not to Grant More Favorable Terms
Subject to the other provisions of this Section 24.13, City agrees not to enter into any lease, contract
or other agreement with any other Aircraft Operator engaged in Air Transportation containing more favorable
terms than this Agreement, or to grant to such Aircraft Operator 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. Notwithstanding the foregoing, it is understood and agreed that rentals and fees charged
for terminal buildings, associated gate positions, ramp areas, and other facilities constructed in the future and
not described in this Agreement may vary from the fees and charges established herein for the premises
depending upon the capital cost and financing arrangements involved, and therefore may be more or less than
the fees and charges established herein for similar facilities.
In the event an Aircraft Operator shall use the facilities or any services of the Airport without first
executing an agreement with City substantially identical to this Agreement, such Aircraft Operator shall pay
rentals, fees and other charges computed at rates established by the City which are not less than those
applicable to Airline as provided hereunder.
Section 25.13 Entire Agreement
This Agreement, together with all Exhibits and Appendices hereto, constitutes the entire agreement
between the parties hereto relating to the subject matter hereof and may be amended only in writing, executed
by duly authorized representatives of the party to be bound.
Section 25.14 Invalidity of Covenants, Conditions or Provisions
In the event any covenant, condition or provision herein is held to be invalid by final judgement of any
court of competent jurisdiction or any governmental agency, the invalidity of such covenant, condition or
provision shall not in any way affect any other covenant, condition or provision herein.
Airport Use and Lease Agreement 55 Dated 07/01/94
Section 25.15 Jurisdiction and Venue
The parties hereto agree that the State of California is the properjurisdiction for litigation of any matters
relating to this Agreement,and service mailed to the address of airline set forth herein shall be adequate service
for such litigation. The parties further agree that Riverside County, California is the proper place for venue as
to any such litigation and Airline agrees to submit to the personal jurisdiction of such court in the event of such
litigation.
Section 25.16 No Oral Agreements
This Agreement(i)covers in full each and every agreement of every kind or nature whatsoever between
the parties hereto concerning this Agreement, (ii)supersedes,any and all previous obligations,agreements and
understandings, if any, between the parties, oral or written, and (iii) merges all preliminary negotiations and
agreements of whatsoever kind or nature herein. Airline acknowledges that no representations or warranties
of any kind or nature not specifically set forth herein have been made by City or its agents or representatives.
Airport Use and Lease Agreement 56 Dated 07/01/94
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the
date first written above.
CITY OF PALM SPRINGS
ATTEST: a municipal corporation
a t City Clerk C)5 City Manager
APPROVED AS TO FORM: 4Z,
Procurement& Contracting
By:
Initials �6 Date 1 l �3
City Attorney titles'
CONTRACTOR: Check one:_Individual_Partnership_Corporation
Corporations require two notarized signatures One from each of the following: A. Chairman of Board,President,or any Vice
President:AND B.Secretary,/Assistant Secretary,Treasurer,Assistant Treasu r,or Chief Financ
ial Officer).
By: O C./. ( _ By:
Signature (notarized) Signature(notarized)
Name: Charles R. Coble Name: John F. Wombwell
Title: VP, Airport Service & Properties &Title: Secretary
Facilities
State of �e �` State of a.S
County of �SS County of ''''SA�S ��((,�,,,,���� J�,,
On )Z�I2��,p1o�y Vle6f�'L.0 G/IE. On befoore me,JJGYJ &h('Z. 1 �ImW,5on
perssoonallpppearedyaJGY..:CC)Ir Vl ,/ � personallAppeared John r ' VE.JVI`CU0,l�
personally knoWh to me (or proved to me on tlpers&andly kfiown to me (or proved to me on the basis
satisfactory satisfactoryevidence)
subscribed to the within instrument and acknowledged to r bscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s)capanity(itttxj, and that by his/her/their signature(s) on thl
instrument the person(s),or the entity upon behalf of which the instrument the person(s),or the entity upon behalf of which the
person(s)acted,executed the instrument. person(s)acted,executed the instrument.
WITNESS my hand and official seal. WITNESS my hand and official seal.
�nr
Notary Signature:_ � V v `� '�' Notary Signature:_k P,
Notary Seal: Notary Seal:
\�"t'ru�.��,+.,r.„:.c mnwv:.r�.o2y�..va�s.'s�c,ty rq:�>;:�',ra•�-�:,^.;':..rQ.r-t,�,^�v�i:::,�;�u�_ .�„
u1 bPl Pp1 F .✓.lug
DEBORAH R.ANDERSOIV� I"y �aR°°�sl DF,BORAf-I R.ANDERSON
N07AI'{Y PI,IBLIC,STATE OF TEXAS� � N T4RV PUBLIC,STATE OF TEXAS
i'OMI013bION EXPIRES G '"i. � Q M'V COMMISSION FXPIRES }
kl , n 2003 AUG 4 2003
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EXHIBIT B-1
EXCLUSIVE USE SPACE
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EXHIBIT B
Page 2 of 3
JOINT USE BAGGAGE CLAIM/COMMON AREAS
4.
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K
. . . "
EXHIBIT
Page 3of3
JOINT USE WALKWAY
EXHIBIT C
EXCLUSIVE USE SPACE
SPACE SQ.FT.
g 1 Exclusive 2453.0
Outbound 0
2 Exclusive 1770.0
Outbound 1350.0
3 Exclusive 562.5
Outbound 450.0
4 Exclusive 562.5
Outbound 450.0
5 Exclusive 609.0
Outbound 450.0
6 Exclusive 1 .0
450
Outbound 450.0
1 7 Exclusive 821.0
Outbound 450.0
8 Exclusive 286.0
Outbound 136.0
9 Exclusive 1371.0
Outbound 395.0
_ 10 Exclusive 1130.0
Outbound 504.0
2
4
5
6
C � 7
gI.
�.........................
Note: This section is counter space and front office only.
EXHIBIT D
FIRST LEVEL CONCOURSE BUILDING
0 0
0
0
� 0
o000
fA I
a
4 /
EXHIBIT E
SECOND LEVEL CONCOURSE BUILDING
o�o 0
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EXHIBIT F
AIRPORT TERMINAL DEVELOPMENT PROGRAM
Construction of an air-conditioned concourse with eight(8) second level passenger boarding bridges. The use
of a tensile fabric construction on the concourse will protect the main circulation areas from the elements,while
providing opportunities for natural ventilation, shade and illumination. Development of expanded opportunities
for concessions as well as an outdoor patio area. Construction of a central utility plant and expanded airside
tenant operations areas on the apron level.
Airport Use and Lease Agreement Dated 07/01/94
EXHIBIT G
MAINTENANCE AND OPERATIONS RESPONSIBILITIES
Area/Item Responsibility
Airport Airline
Aircraft Parking Ramp
Pavement Maintenance X
Striping X
Sweeping X
Fuel Spill Cleanup X
Airline Exclusive Use Space
Exterior Shell/Structure X
Access Control X
Airline Security Control X
Janitorial X
General Electrical/Mechanical X
Light Bulbs X
Interior Painting X
Carpeting X
Ticket Counter Shell X
Ticket Counter Inserts X
Security Checkpoint
Equipment X
Cabinetry X
Custodial X
Checkpoint Office Custodial X
Boarding Gate Areas
Counters/Inserts X
Signage (Directional) X
Arrival and Departure Boards X
Public Address System X
Commuter Gates 9 - 11 Counter Shells X
Commuter Gates 9 - 11 Counter Inserts X
Hold Rooms
Custodial X
Furniture X
Airport Use and Lease Agreement Dated 07/01/94
EXHIBIT H
SUPPLEMENTAL SPACE
Airline elects to lease Supplemental Space. Said Supplemental Space Lease shall become effective
and shall run until airline elects to lease the following space:
Type Space Sq Ft Rate
Office Trailer Space Same as "Exclusive Use"
Sq.Ft. Rate
Upstairs Offices $25.21/Sq.Ft./Annum
Open Storage Space /Sq.Ft./Annum
Descriptive information about the space leased is as follows:
Airline
Dated
Airport Use and Lease Agreement Dated 07/01/94
EXHIBIT I
PREFERENTIAL USE OF CONCOURSE GATE POSITIONS
All assignment of Concourse Gate Positions shall be made in strict accordance with reasonable rules,
regulations and directives adopted and promulgated by City, consistent with this Agreement. The Director of
Aviation, in making preferential but nonexclusive assignment of gate positions to Aircraft Operators, shall take
into account the needs and requirements of Airline for use of Concourse Gate Positions.
Preferential Use of Concourse Gate Positions
Airlines who are a Signatory Airline as of the Effective Date may be guaranteed Preferential Use of the
Gate Position(s) as follows:
1. Preferential Use of One Gate Position for each Airline.
2. If an Airline had (during the preceding January) regularly scheduled daily operations which
required simultaneous use of at least two Gate Positions, at least three times daily, the
Preferential Use of a Second Gate Position, at all times; for as long as the simultaneous use
of two gates three times a day is required.
3. If an Airline had (during the preceding January) regularly scheduled daily operations which
required simultaneous use of at least two Gates Position but less than three times a day, the
Preferential Use of a Second Gate Position during the time frame(s) coinciding with the
scheduled times of the flights requiring the use of the second concourse Gate Position; for as
long as the simultaneous use of two gates is required.
4. If an Airline has qualified for two Preferential Concourse Gate Positions pursuant to
subparagraph 2 above and had (during the preceding January) regularly scheduled daily
operations which required simultaneous use ofthree Concourse Gate Positions,the Preferential
Use of a third Concourse Gate Position during the time frame(s)coinciding with the scheduled
time(s) of the flights requiring the use of the third Concourse Gate Position for as long as the
simultaneous use of three concourse gate positions is required.
A"time frame"as referred to above shall mean the Scheduled Departure or Arrival Time as published
on the preceding January; or as may thereafter be changed as follows:
1. A one hour adjustment in conjunction with time zone change from Standard Time to Daylight
Savings Time, and/or;
Airport Use and Lease Agreement Dated 07/01/94
2. An adjustment of a particular schedule by no more than one half hour before or one half hour
after the schedule published on the preceding January.
The City retains the right to permit other Aircraft Operators ("itinerant operators")to use one or more of
Airline's Concourse Gate Position(s) (or component thereof) when they are not required by Airline. However,
Airline will not be required to make such Concourse Gate Positions(s) available to an itinerant operator if a
Concourse Gate Position(s) (or component thereof) not preferentially used by another Aircraft Operator and
meeting all necessary and reasonable requirements of the City is available during the time period involved or
if the use by the itinerant operator is projected to conflict with the scheduled arrival or departure of Airline's
aircraft using such Concourse Gate Position(s) (or component thereof). Airline will not be required to move its
aircraft from any of its Aircraft Parking Position(s) if an unoccupied Aircraft Parking Position(s) is available
during the time period involved. In determining which Concourse Gate Position (or component thereof)will be
assigned to the itinerant operator, City shall consider the flight schedules of all Aircraft Operators using the
Terminal Building Complex.
Whenever Airline is required to move its aircraft from an Aircraft Parking Position pursuant to this
Section, the City shall provide paved aircraft parking space in a reasonably convenient area of the Airport
designated by the City for such purposes to accommodate such removed aircraft, at no additional charge for
the aircraft parking space.
When practicable, City shall require that any such itinerant operator, as a condition precedent to using
any of Airline's Concourse Gate Positions(orcomponents thereof),execute an agreement containing indemnity
and liability insurance provisions substantially similarto those set out in Article XII of this Agreement,which will
protect Airline from liabilities, losses, suits, claims, judgments, fines, and demands arising out of or in
connection with the itinerant operator's use of such Concourse Gate Positions.
Preferential Use of Commuter Concourse Gate Positions
The Commuter Concourse Gate Positions are intended to be used by Aircraft Operators operating
aircraft with thirty four(34) seats or less, as prescribed by City. The assignment of aircraft with more than thirty
four(34) seats to the First Level Concourse Gate Positions shall be at the sole option of the City. The Director
of Aviation; in making preferential but Non-Exclusive assignment of gate positions to aircraft operators, shall
take into account the needs and requirements of Airline for use of concourse Gate Positions. Signatory Airlines
as of July 1, 1994 shall be guaranteed one preferential use Gate Position. Signatory airlines as of July 1, 1994,
operating more than 12 flights per day in the preceding January, shall be allocated two Preferential Use
Airport Use and Lease Agreement Dated 07/01/94
F #
Commuter Concourse Gate Positions. Commuter Concourse Gate Positions remaining shall be assigned at
the sole option of the City.
Order of Selection
Gate position order of selecton shall be based upon a point system derived from individual percentages
of Enplaned Passengers, number of landings and seniority. These categories shall be weighted as follows:
Enplaned Passengers -45%, number of landings -45% and seniority- 10%.
Fab-20-2003 15:23 From-CONTINENTAL AIRLINES + T-621 P.001/006 F-676
Continental Airlines
TO: Janet Buck
City of Palm Springs
FAX NUMBER: 760-318-3815
DATE: February 20, 2003
FROM: Julie Brewer
Manager, Property& Casualty Insurance
Risk Management
Ph: (713) 324-5215;Fx: (713) 324-2631
Email:ibrewe@coair.com
PAGES: 6
RF-. Certificate of Insurance
Please End attached the revised certificates of insurance. We have removed the reference to the
old airline pen-nit numbers.
Should you have any questions,please let me know.
Julie
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02/13/2003 14:57 FAX 760 318 3815 PSP INT'L ARPT U 003
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The terms, conditions and prwWom Poled below atq hereby of ached to he "Ptiancd certificate as additional deaeription of the
coverage afforded by the insum(s). This attachment does not contain all terms, conditions, coverages or excluaions contained in the
policy.
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02/13/2003 14:57 FAX 760 318 3815 PSP INT'L ARPT Z 007
WILLIS OF TEXAS, INC. "
Global Aviation
One Rivezway, Suite 900
Houston, Texas 77056
CERTIFICATE OF
AIRCRAFT HULL AND COMPREHENSIVE
AIRLINE LIABILITY INSURANCE
DATE OF ISSUE,: December 15,2002
THIS IS TO CERTIFY TO:
City of Palm Springs
Department of Aw tion
Palm Springs International Airport
3400 E.Tahquirtz Canyon Way, Suite OFC
Palm Springs, CA 92262
AUn: Richard Stricbland
that Insurers, EACH FOR HIS OWN PART AND NOT ONE FOR THE OTHER, are providing the following
insurance:
NAMED INSURED Express,let Airlines, Inc, d.b.a. Continental
Express and all subsidiaries and affiliated,
managed, or owned companies.
NAMED INSURED'S ADDRESS: 1600 Smith Street
Houston, Texas 77002
PERIOD OF INSURANCE.- See Addendum
GEOGRAPHICAL LIMITS: Worldwide
AIRCRAFT INSURED: Any aircraft owned or leased to and operated by
the Named Insured_
DESCRIPTION OF COVERAGE: COMPREHENSIVE AIRLINE LIABILITY
INSURANCE, including Aircraft Liability and
Comprehensive General Liability, Passenger
Legal Liability, Premises Liability,
Hangarkeepers Liability and Products and
Completed Operations Liability,
LIMIT OF LIABILITY: Combined Single Limit Bodily Injury (including
Passengers) and Property Damage Liability
$50,000,000 Each Occurrence/Aircraft.
EXA-0133 W1 I S
PAGE TWO
SPECIAL PROVISIONS
To the extent required, but only in connection with the Airport Use and Lease Agreement between City of
Palm Springs and ExpressJet Airlines, Inc., such insurance as is afforded under the policies shall apply as
follows:
1. City of Palm Springs, its officers, employees and agents are included as Additional Insureds
under the policy(ies) as respects the operations of the Named Insured as required by written
agreement.
2. Automobile Liability Insurance is included for vehicles on Airport Premises.
3. Excess Automobile Liability Insurance is included subject to a CSL Bodily Injury and Property
Damage of $24,000,000 each occurrence excess of a Primary Automobile Liability limit of
$1,000,000 each occurrence.
4. The Insurers agree to waive their rights to the extent that the Named Insured has waived its
rights by written agreement. - -
5. Such insurance hereby evidenced to the Certificate Holder shall be primary without right of
contribution from any other insurance which is carried by the Certificate Holder.
6. Insurers agree that, in the event they cancel or materially change the above policies, they will
give thirty (30) days advance written notice of such cancellation or material change to the
Certificate Holder.
The Insurers have authorized Willis of Texas, Inc. - Global Aviation, as Insurance Brokers, to issue this
certificate on their behalf. Willis of Texas, Inc. - Global Aviation has no obligation or liability of any kind in
respect to the above policies nor as a result of the preparation of this document.
This certificate or verification of insurance is not an insurance policy and does not amend, extend or alter
the coverage afforded by the policies listed herein. Notwithstanding any requirement, term, or condition of
any contract or other document with respect to which this certificate or verification of insurance may be
issued or may pertain, the insurance afforded by the policies described herein is subject to all terms,
exclusions, and conditions of such policies.
DATE: December 15, 2002 WILLIS OF TEXAS, INC.
Global Aviation
A,jk �—
Authorized Representative
EXA-0133 W1 I I I J
EXPRESSJET AIRLINES, INC.
Addendum 2002
NAMED INSURED: CONTINENTAL AIRLINES, INC., ExpressJet Airlines, Inc. d/b/a Continental
Express, Inc., Continental Micronesia, Inc. and all subsidiaries and
affiliated, managed, or owned companies.
THIS IS TO CERTIFY TO: City of Palm Springs
Department of Aviation
Palm Springs International Airport
3400 E. Tahquirtz Canyon Way, Suite OFC
Palm Springs, CA 92262
Attn: Richard Strickland
PERIOD OF INSURANCE: December 15, 2002 to December 15, 2003 (12:01 A.M. C.S.T.)
Insurers-Hull & Liability Policy No. Share
- Global Aerospace -- ---- SP-6596 _ _20_.0%
Lloyd's of London & Various
Companies c/o Willis Global Aviation AFA1811 38.25%
London
Rubicon Indemnity Limited c/o Willis AFA1853 16.75%
Global Aviation London
Generali France c/o LaReunion 2002/28920 10.0%
Aerienne
American Home Assurance Company HL3387441-05 10 0%
XL Specialty Insurance Co. c/o XL PXLA37000087-01 5.0%
Aerospace
100.0%
The Insurance afforded by the policies described herein is subject to all terms, conditions, limitations and
exclusions of such policies. Each of the above Insurers, individually for its policy only, has authorized the
undersigned to issue this Certificate on its behalf as a matter of convenience. The undersigned is not an
Insurer and has no liability as an Insurer as a result of issuing this Certificate or under the above policies.
The subscribing Insurers' obligations under policies to which they subscribe are limited solely to the extent
of their individual participations.
RE: Airport Use and Lease Agreement
DATE: December 15, 2002 WILLIS OF TEXAS, INC.
Global Aviation
AAJAL64,
Authorized Representative
FICA-0133 Wl I I I S