HomeMy WebLinkAboutC03-332 Mesa Airlines, Inc.'~ FIRST AMENDMENT TO EAGLE COUNTY AIR TERMINAL CORPORATION "SIGNATORY AIRLINE-TYPE C" TERMINAL BUILDING LEASE THIS FIRST AMENDMENT to the Eagle County Air Terminal Corporation Signatory Airline-Type C Terminal Building Lease (hereinafter "First Amendment") is made and entered into this ~`wday of ~ , 2003, by and between Eagle County Air Terminal Corporation, a not for profit 63-20 Corporation of the State of Colorado, hereinafter called "Corporation" and Mesa Airlines, Inc., a corporation organized and existing under the laws of the State of Nevada and authorized to do business in the State of Colorado, hereinafter called "AIRLINE." RECITALS The circumstances surrounding the making of this l+'~rst Amendment are as follows: A. Air Wisconsin Airlines Corporation and CORPORATION entered into a Signatory Airline-Type C Terminal Building Lease Agreement ("Agreement") on January 14, 2003 for a one-year term. B. Pursuant to Paragraph 15.1 of the Agreement Air Wisconsin Airlines Corporation upon notice to CORPORATION assigned its interest in the Agreement to Mesa Airlines, Inc. Mesa Airlines, Inc. as a result of that assignment and as successor in interest to Air Wisconsin Airlines Corporation hereby states and affirms that it has assumed all obligations, duties, right title and interest under that Agreement and agrees to be bound by the same. C. Mesa Airlines, Inc. as the successor tenant to Air Wisconsin Airlines Corporation and CORPORATION wish to extend that Agreement as amended for an additional three-year term. Paragraph 18.9 of the Agreement provides that the Agreement maybe amended in writing and executed by duly authorized representatives of the parties. AGREEMENT THEREFORE, based upon and in consideration of the recitals, promises and covenants set forth herein and those set forth in the Agreement, the parties hereto agree to amend the Agreement as follows: 1. Section 1.1 Definitions is hereby amended by the amendment of Sections 1.1K and 1N which paragraphs shall read as follows: "K. "Signatory Airline" shall mean those airlines, including code sharing or wholly owned subsidiaries of such airlines, providing AIR TRANSPORTATION to and from the AIRPORT using the TERMINAL BUILDING that have executed similar residual type '~ r~ ~~ agreements to this AGEEMENT with CORPORATION covering the lease, use and occupancy of facilities at the TERMINAL BUILDING with a term of three years, five years or at least ten years." "N. "Signatory Airline- Type C" shall mean those airlines, including code sharing or wholly owned subsidiaries of such airlines, providing AIR TRANSPORTATION to and from the AIltPORT using the TERMINAL BUILDING that have executed similar residual type agreements to this AGREEMENT with CORPORATION covering the lease, use and occupancy of facilities at the TERMINAL BUILDING with a term of three years." 2. Section 1.1 (A) the definition of "Affiliate" is hereby deleted. 3. Section 2.1 Term shall be amended to read as follows: __._ ___"Section 2.1 Terffi. This Agr~Prnent_shall ~e~come ef~e.~tve at 1?~~l a~:na local time on November 21, 2003, hereinafter called the "Ei~echve llate", and shall continue for three years, expiring at 11:59 p.m. on December 1, 2006 subject to prior termination as provided in Article 14 hereof. The parties agree that this is a Signatory Airline- Type C Agreement as a result of such three year lease term." 4. Section 7.2 Base Rent and Base Rent Premium shall be amended to read as follows: "Section 7.2 Base Rent. AIRLINE shall pay to CORPORATION an annual rent ("Base Rent") for AIRLINE'S exclusively leased premises and joint use premises. AIRLINE'S annual rent consisting of Base Rent shall not exceed $765,000. AIRLINE is considered a Signatory Airline-Type C for purposes of calculation of Base Rent. The Base Rent shall be paid annually in four equal monthly installments on December 1, January 1, February 1, and March 1 during the term of this First Amendment." 5. Section 7.5 Rent Deposit shall be amended to read as follows: "Section 7.5 Rent Deposit. AIRLINE shall pay a deposit equal to three months, or one-quarter of the annual, whichever is larger, Base Rent prior to the commencement of the lease term. This requirement shall be waived for an AIlZLINE that has been current for a period of eighteen months in its payments to CORPORATION and COUNTY." 6. Section 7.8 Passenger Facility Charges shall be amended to read as follows: "Section 7.8 Passenger Facility Charges. No Passenger Facility Charges shall be used for that portion of the TERMINAL BUILDING exclusively leased by AIRLINE. No depreciation or amortization charges for facility costs funded from the proceeds of a Passenger Facility Charge shall be included in the determination U of rates for AIRLINE rentals and fees. Subject to Federal law enacted subsequent to this Amendment, it is further agreed that AIRLINE acknowledges and agrees that any Passenger Facility Charges held by AIRLINE are hereby deemed to be held in trust by AIRLINE for the benefit of CORPORATION: ' 7. Section 8.1 (A) Year-End Refund of Net Concession Revenue shall be amended to read as follows: "Section 8.1 Year-End Refund of Net Concession Revenue. A. Except as set forth hereafter, at the end of each FISCAL YEAR or part thereof falling within the lease term, the CORPORATION will refund AIlZLINE, along with other SIGNATORY AIRLINES, within sixty (60) days of the close of the audit, 50% of any Net Concession Revenues. The SIGNATORY AIRLINE' S share of Net Concession R PvPoue shall bo _ _ _ distributed to them prorata based on actual enplanements from the TERMINAL BUILDING during such FISCAL YEAR. AIRLINE'S year- end refund of Net Concession Revenue shall be subject to adjustment according to the year-end reconciliation of the AIRLINE' S base rent allocation recalculation further described in Section 8.2A. Furthermore, if AIRLINE is in default of any section of the Agreement, as amended, payment of any share of Net Concession Revenue determined by CORPORATION to be due to AIRLINE shall be immediately withheld from AIRLINE until such default is cured and any such Net Concession Revenue share shall result in an immediate offset against any amounts due to the CORPORATION. In the event that at the end of any FISCAL YEAR or part thereof falling within the lease term at which time the CORPORATION shall determine that there shall have accrued to the AIRLINE a refundable share of Net Concession Revenue and the AIRLINE shall, at that time, be the subject of a "Filing" (as that term is defined hereafter) the AIRLINE'S refundable share of Net Concession Revenue shall be held by the Corporation until the earlier of the dismissal and closing of the Filing, the court-approved and authorized assumption of the Agreement, or the court approved and authorized rejection of the Agreement, in which event, the AIRLINE's refundable share of Net Concession Revenue shall be collateral first for any pre-petition amounts outstanding under the Agreement and then for any post- petition amounts outstanding under the Agreement." The remainder of Section 8.1 as set forth in the Agreement shall remain in full force and effect. 8. Section 8.2 (A) Base Rent Allocation Among Air Transportation Companies shall be amended to read as follows: • "Section 8.2 Base Rent Allocation Among Air Transportation Companies. A. Base Rent for all AIRLINE'S consists of the following three components calculated annually: 1. EXCLUSIVE USE SPACE 2. JOINT USE SPACE 3. COMMERCIAL PASSENGER SERVICE RIGHTS PURCHASE CORPORATION will calculate the base rent equivalent square footage rate (Base Rental Rate) annually during the term of this lease by dividing: (i) $2,150,000 (the amount of Airline rent projected to be needed by the CORPORATION to fund operations and maintenance_expenses, depreciation of .' - _- ~ '~ORPOR7~TION -runded assets, othei truscellan~oa~ c~~s debt 3r-vi~e coverage and the debt operations and maintenance reserve requirement) (ii) less a fixed amount of $300,000 from the CORPORATION applied to subsidize and lower the SIGNATORY AIRLINES' total unallocated base rent by the sum of the EXCLUSIVE USE SPACE and JOINT USE SPACE rented by all AIRLINE's during the year. This Base Rental Rate will be used to calculate AIRLINE'S Exclusive Use portion of Base Rent, by multiplying the EXCLUSIVE USE SPACE square footage times the Base Rental Rate. The JOINT USE SPACE portion of the base rent for AlItLINE is the base rental rate multiplied by the total square footage of all JOINT USE SPACE rented less the annual debt service and coverage requirements for the purchase of the commercial service rights from the fixed base operator at the Airport. The COMMERCIAL PASSENGER SERVICE RIGHTS PURCHASE portion of the Base Rent for all AIRLINE's is the annual debt service and coverage amount required to be paid by CORPORATION during the year for the purchase of the commercial service rights from the fixed base operator at the Airport. The annual Base Rent amount for all three components for AIRLINE will not be more than the amount described in Section 7.2 during the term of the lease. A Joint Use Formula will be used to prorate eighty percent (80%) of the JOINT USE SPACE rent according to the ratio of the number of each SIGNATORY Al12LINE's enplaning passengers at the TERMINAL BUII,DING during the most recent calendar year to the total number of enplaning passengers of all SIGNATORY AIRLINE users of the space during that same year. The remaining twenty percent (20%) of the JOINT USE SPACE rent is to be divided equally among all SIGNATORY AIRLINE USERS of the space. Solely for purposes of this formula, the twenty percent (20 %) equal pro-rata share shall not apply to any SIGNATORY AIRLINE operating only aircraft weighing less than thirty thousand (30,000) pounds gross landed weight. For new SIGNATORY AIRLINES, the twenty percent (20%) portion of the JOINT USE SPACE rent will be paid monthly, calculated on an annualized basis; the eighty percent • ~ ~ ~ • (80 %) portion will be paid monthly per enplanement at a rate calculated by dividing the previous calendar year's eighty percent (80%) JOINT U5E SPACE rent by the total SIGNATORY AIRLINES enplanements during that year, and will be subject to adjustment during the year-end reconciliation. A formula will be used to prorate one hundred percent (100 %) of the COMMERCIAL PASSENGER SERVICE RIGHTS PURCHASE portion of the Base Rent according to the ratio of the number of each SIGNATORY AIRLINE'S enplaning passengers at the TERMINAL BUII,DING during the most recent calendar year to the total number of enplaning passengers of all SIGNATORY AIRLINE users during that same year. As part of the annual year-end reconciliation and prior to the year-end refund of Net Concession Revenue, a recalculation of AIRLINE'S base rent allocation will be prepared by the CORPORATION, and CORPORATION shall provide a final accounting of the prior year's base rent allocation based on actual enplanements at the TERMINAL BUILDING - _ . - -- - _ _ during the most recent fiscal year: If amounts were paid in excess of the recoucile~l base rent recalculation amount, the excess amount will be added to the AIlZLINE'S refund of Net Concession Revenue. If amounts actually required are in excess of base rent amounts paid, this excess amount will be deducted from the year-end refund of the Net Concession Revenue. If the excess amount of base rent exceeds the year-end refund of AIRLINE'S share of Net Concession Revenue, CORPORATION shall invoice AIItLINE and AIRLINE shall pay the net amount due for the difference between the year-end base rent excess and the year-end refund of Net Concession Revenue so long as as said amount is within the base rent of $765,000.00. Adjustments to this base rent amount due, based on the prior year reconciliation pursuant to this Article 8, shall apply without the necessity of formal amendment of the Agreement. CORPORATION has calculated the base rent equivalent square footage rate based upon the actual space constructed and rented by all AIRLINEs. The calculation for the first year of the lease term under this First Amendment is attached hereto as Exhibit "B" which maybe amended from time to time as set forth herein." The remainder of Section 8.2 as set forth in the Agreement shall remain in full force and effect. 9. Section 9.1(C) is hereby deleted. 10. Section 15.1 Assignment and Subletting is hereby amended to read as follows: "Section 15.1 Assignment and Subletting. AIRLINE shall not assign this Agreement, or any part hereof, or any of the privileges recited herein, in any manner whatsoever, nor sublet any portion of the premises leased hereby, without the prior written consent of CORPORATION, which consent shall not be • unreasonably withheld, provided that AIRLINE acknowledges that CORPORATION need not consent to any such assignment or subletting at any time, and to the extent that, CORPORATION has space available to lease to AIlt TRANSPORTATION companies." 11. Section 15.4 Bankruppcy is hereby amended to read as follows: "Section 15.4 Bankruptcy. Notwithstanding Section 15.1 in the event that a petition for relief under Title 11 of the United States Code or under any similar or successor federal, state or local statute is filed by or against the AIRLINE (a "Filing"): (A) The AIRLINE shall give the CORPORATION immediate written notice of the Filing; _ _ ___ _ . (B) The AIRLINE will"promptly confirm the outstanding amount of any obligations hereunder due the Corporation as of the date of Filing; (C) The AIRLINE will fully and timely perform all obligations arising hereunder commencing as of the date of the Filing and thereafter for the purposes of this provision and of Section 365(d)(3) of Title 11 of the United States Code, the parties agree that, in the event that the AIRLINE shall be the subject of a Filing commenced on a day (the "Filing Date") when the rent due forthethen-current month is outstanding and unpaid, the obligation for rent during that month in which the Filing shall have occurred shall be considered to accrue and be due pro rata on a daily basis during that month and the AIlZLINE will pay the CORPORATION the pro rata rent for the period from the Filing Date through the end of that month within thirty (30) days of written demand therefore by the CORPORATION. (D) The AIRLINE will promptly determine whether it intends to assume or reject the unexpired term of this Lease, if any, and shall promptly advise the CORPORATION of such determination; (E) The AIRLINE will not seek to delay the date by which it will make the determination under (D) above and obtain any necessary third-party authorization (including court approval) therefor beyond the 60~ day following the date of the Filing without the prior express consent of the CORPORATION; (F) If the AIRLINE determines that it wishes to assume the Lease, the AIRLINE will cure all defaults, compensate the CORPORATION for all damages incurred as a result of such defaults, provide the CORPORATION with adequate assurances of future performance and comply with any and all other statutory or legal requirements prior to the effective date of such assumption; (G) If the AIRLINE determines that it wishes to assume the Lease and ~ ~ assign the Lease to athird-party, the AIRLINE shall seek the consent of the CORPORATION which consent shall not be unreasonably withheld and shall provide to the CORPORATION all pertinent information with respect to the proposed assignee, cure all defaults, compensate the CORPORATION for all damages incurred as a result of such defaults, provide the CORPORATION with adequate assurances of future performance through the proposed assignee and comply with any and all other statutory or legal requirements; (H) IF the AIRLINE wishes to reject the unexpired term of the Lease, if any, the AIlZLINE will not seek to have the effective date of such rejection determined to be a date earlier than that date on which (i) the AIRLINE shall have returned control and possession of the premises to the CORPORATION in the condition and on the terms set forth herein and relevant to the redelivery of possession to the CORPORATION, and (ii) the AIRLINE shall have obtained court approval and authorization for such rejection; and the AIRLINE shall fully and timely pay all rent and other charges through the date of such rejection; and _. _ _. _ (I) The AIRLIlQE shall be "deemed to have expressly consented to the modification of the stays of proceedings in any Filing in the event of any post-Filing default by the AIlZLINE under the terms of this Lease for the purpose of allowing the CORPORATION to exercise any default rights or remedies arising from such default " 12. Article 17 (1) and (2) are hereby amended as follows: "(1) President Eagle County Air Terminal Corporation P.O. Box 850 Eagle, CO 81631 Telephone: (970) 524-8246 Fax: (970) 524-8247 and also Eagle County Attorney P.O. Box 850 Eagle, CO 81631 Telephone: (970) 328-8685 Fax: (970) 328-8699 (2) MESA AIRLINES, INC. ATTN: Hal Fahrenbruch 410 N 44~' Street Suite 700 Phoenix AZ 85008 Telephone: (602) 685 4078 Fax: (602) 685 4578 Email: hal.fahrenbruch@mesa-air.com 13. The parties hereby state and reaffirm that Air Wisconsin Airlines Corporation and 7 • r <• i CORPORATION entered into a Signatory Airline-Type C Terminal Building Lease Agreement on Januazy 14, 2003 for cone-yeaz term. Pursuant to Pazagraph 15.1 of that Agreement Air Wisconsin Airlines Corporation assigned its interest in the Agreement to Mesa Airlines, Inc. Mesa Airlines, Inc. hereby represents and wazrants that it has assumed all obligations, duties, right, title and interest in, to and under the Agreement and agrees to pay, perform, observe and be bound by all of the covenants, agreements, provisions, conditions and obligations of the tenant under that Agreement. Mesa Airlines, Inc. fiuther states and affirms that it has the authority to enter into this First Amendment and agrees to be bound by the terms hereof. 14. Any reference to Exhibit "A" in the Agreement or this First Amendment shall mean the Exhibit "A" which is attached to the Agreement and incorporated herein by reference thereto. 15. Any reference to Exhibit "B" in the Agreement or this First Amendment shall mean the Exhibit "B" which is attached to this First Amendment and incorporated herein by reference. i 6. 'The terms of the Agreement shall-eontinue in full force and erect except as modified by this First Amendment. IN WITNESS WHEREOF the parties hereto have executed this First Amendment on the day and year first written above. CORPORATION: EAGL O AIR TERNIINAL CORr ' O ~~ By: Arn ni, President AIRLINE: MI 99? By: G:~DHM~AIItPOR1lMesaAirGroup~Mesaamend2.DOC EAGLE COUNTY AIR TERMINAL CORPORATION ECATALRENT0304c.123 Exhibit B Calculation of Terminal Rent for Ski Season 2003-04 (No Rent Pr®mium with 3 Year Leas®s for UIX,De1ta,NW~CO; Subsidy Provld®d) 30-Jul-03 Exclusive and Joint Use Space; Rate/Sq Ft Calculation Exclusive Sg Ft Rate/Sg Ft Space Rent American 4,512 $38.92 $175,620 United Express 2,918 $38.92 113,577 Delta 1,082 $38.92 42,114 Northwest 865 $38.92 33,668 Continental 1,825 $38.92 71,034 Total Exclusive Space/Rent Total Joint Use Space Total Exclusive and Joint Space Terminal Rent per Section 8 Less Temporary Subsidy Total Exclusive and Joint Space Calculated Rental Rate/Sq Ft Terminal Rent Net of United Less Exclusive Space Rent Total Joint Rent to Allocate Less FBO Business Purchase Joint Rent Total Joint Space Rent to Allocate 11,202 $436.013 38,328 47.530 $2,150,000 (300,000) $1,850,000 47,530 $38.92 $1,850,000 (436,013) $1,413,987 (631,750) 20% 80% $782.237 $156447 $625 790 Joint Space Rent Allocation Joint 20% Equal 2002 Actual Market 80% Allocated Space Share Enplanements Share Share Rent American $31,289 80,046 47.3% $295,835 $327,124 United Express 31,289 41,548 24.5% 153,554 184,843 Delta 31,289 16,509 9.7% 61,014 92,304 Northwest 31,289 15,088 8.9% 55,762 87,052 Continental 31,289 16,133 9.5% 59 625 90,914 Total $156.447 169.324 100.0% $625 790 $782.237 FBO Business Purchas® Joint Rent Allocation FBO FBO Business Market Business Purchase Share Purchase Joint Rent Amartcan 47.3% $631,750 $298,653 United Express 24.5% $631,750 155,016 Delta 8.7% $631,750 61,595 Northwest 8.9% $631,750 56,294 Continental 9.5% $631,750 60,192 100.0% $631.750 Page 1 of 2 e • - EAGLE COIiNTY AIR TERMINAL CORPORATION ECATAI.RENT03o4c.123 EXhibit B Calculation of Terminal Rent for Ski Season 2003-04 (No Rent Premium with 3 fear Leases for UEX,De1ta,NW~CO; Subsidy Provided) 30-Jul-03 Components of Alrllne Terminal Rent (Excludes Refund of Net Concession Revenue Share After Year End) 1st Year 2nd Yr & Later American (10 teasel: _ Annual Payments (4) Payments (12) Base Rent -Exclusive $175,620 Allocated Base Rent -Joint (2G-% Equal Shares) 31,289 Allocated Base Rent -Joint (k 3'a Enplanements) 295,835 Allocated Base Rent- FBO 6'!:°ness Purchase (0%h00%) 298,653 Less Adjustment Due to AA $150,000 Cap (51,397) Total American Rent $750.000 $62.500 Unted Express (3 Year Leasel: Allocated Base Rent -Exclusive $113,577 Allocated Base Rent -Joint (20°lo Equal Shares) 31,289 Allocated Base Rent- Joint (80% Enplanements) 153,554 Total Space Rent $298,420 Base Rent Premium (00%) p Allocated Base Rent -Business Purchase (0°/d100%) 155,016 Total United Express Rent $453.436 $113 359 Delta (3 Year Lease); Allocated Base Rent- ExdusNe $42,114 Allocated Base Rent -Joint (20% Equal Shares) 31,289 Allocated Base Rent -Joint (80% Enplanements) 61,014 Total Space Rent $134,418 Base Rent Premium (00%) p Allopted Base Rent- FBO Business Purchase (0%/100%) 61,595 Total Delta Rent $196.013 $49.003 Northwest (3 Year Leaset: Allocated Base Rent -Exclusive $33,668 Allocated Base Rent -Joint (20% Equal Shares) ~ 31,289 Allocated Base Rent -Joint (80% Enplanements) 55 762 Total Space Rent $120,720 • Base Rant Premium (00%) p Allocated Base Rent - FBO Business Purchase (0%/100%) 56,294 Total Northwest Rent $177.014 $44 253 Continental (9 Year Leasel: Allocated Base Rent -Exclusive $71,034 Allocated Base Rent -Joint (20% Equal Shares) 31,289 Allopted Base Rent -Joint (80% Enplanements) 59,625 Total Space Rent $161,948 Base Rent Premium (00%) p Allocated Base Rent - FBO Business Purchase (0%/100%) 60,192 Total Continental Rent Total Airline Rent: 5222.141 $55 535 Total Base Rent -Exclusive $436,013 Total Allocated Base Rent -Joint 782,237 Total Base Rent Premium 0 Allocated Base Rent- FBO Business Purchase (0%/100%) 631,750 Less Adjustment Due to AA $750,000 Cap (51,397) Total Rent $1.798.603 $262.151 $62 500 Page 2 of 2