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HomeMy WebLinkAboutECAT C01-164 Terminal Building Lease with United Air Lines- (� -01 —/61�- �0 EAGLE COUNTY AIR TERMINAL CORPORATION "SIGNATORY AIRLINE -TYPE A" TERMINAL BUILDING LEASE This TERMINAL BUILDING Lease, hereinafter called "AGREEMENT', made and entered into this9day of - i , g '01, by and between Eagle County Air Terminal Corporation, a not for profit 63!i Corporation of the State of Colorado, hereinafter called "CORPORATION ", and United Air Lines, Inc. a corporation organized and existing under the laws of the State of Delaware -and authorized to do business in the State of Colorado, hereinafter called "AIRLINE ". WITNESSETH: WHEREAS, CORPORATION is owner, constructor and operator of the passenger TERMINAL BUILDING (TERMINAL BUILDING) located on Eagle County Regional Airport in Eagle County, Colorado, and has the right to lease portions of the TERMINAL BUILDING and to grant operating privileges thereon subject to the terms and conditions hereinafter set forth; and WHEREAS, AIRLINE is a corporation primarily engaged in the business of providing AIR TRANSPORTATION of persons, property, cargo, and mail; and WHEREAS, AIRLINE desires to lease certain premises within the TERMINAL BUILDING, and use certain facilities at the TERMINAL BUILDING, and acquire certain rights and privileges from CORPORATION in connection with its use of the TERMINAL BUILDING and CORPORATION !swilling to lease and grant same to AIRLINE underterms and conditions hereinafter stated; and WHEREAS, CORPORATION and AIRLINE, respectively, have the power and authority to enter into this agreement; NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and considerations herein contained, CORPORATION and AIRLINE agree as follows: 5 63 } FAAGREvIENTWnited 10 Year.wpd 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 $4 4/ 41 ARTICLE 'I DEFINITIONS Section 1.1 Definitions The terms and phases defined in this Article 1 for all purposes of this AIRLINE TERMINAL BUILDING Lease Agreement shall have the following meanings: A. "Air Transportation" shall mean the carriage of persons, property, cargo and mail by aircraft. B. "Airport" shall mean the Eagle County Regional Airport, as it now exists or as it may hereafter be modified, changed or developed from time -to -time including the TERMINAL BUILDING. C. "Bonds" shall mean all debt issued by CORPORATION to finance acquisition or construction of the TERMINAL BUILDING and related facilities and services, including the purchase of the commercial passenger service rights from the fixed base operator at the Airport. D. "Commercial Passenger Service Rights Purchase" shall mean the 2001 purchase of the commercial passenger service rights from the fixed base operator at the Airport. E. "Date of Beneficial Occupancy" or "DBO" shall mean the day twenty business days following the day on which the exclusive -use premises for AIRLINE are deemed substantially complete. Substantial completion shall occur when the Corporation's architects certify that AIRLINE exclusive -use premises have been substantially completed in accordance with the construction documents and are available to AIRLINE to finish out its exclusive -use space. F. "Exclusive Use Space" shall mean, at any time, the space leased by CORPORATION to AIRLINE on an exclusive use basis as more fully set forth in Exhibit "A," as may be amended by agreement of the parties from time -to -time. G. "Fiscal Year" shall mean the calendar year. H. "Joint Use Space" shall mean, at any time, the premises available to be leased or jointly used by AIRLINE and other airlines, as more particularly set forth on Exhibit "A," as the same may be amended from time -to -time. "Manager" shall mean the Terminal Manager, designated as such by the Eagle United 10 Year.wpd 2 4- 25 -01; 5:05PM ;EAGLE COUNTY AIRPORT ;9705248247 * 5/ 41 County Terminal Corporation. The word also means the chief assistant of that official or acting Terminal Manager, if any, of CORPORATION whenever the Terminal Manager is unable to act in such capacity, or the successor of the Terminal Manager in functions, if any. J. "Rules and Regulations" shall mean those lawful, reasonable and nondiscriminatory rules and regulations promulgated by CORPORATION or COUNTY, or operating directives issued by the Manager for the orderly use of the Terminal as may be amended, modified, or supplemented from time -to -time, provided that they do not conflict with the terms of this AGREEMENT. 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 agreements to this AGREEMENT with CORPORATION covering the lease, use and occupancy of facilities at the TERMINAL BUILDING with a term of one year, five year or at least ten years. L. "Signatory Airline - Type A" 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 agreements to this AGREEMENT with CORPORATION covering the lease, use and occupancy of facilities at the TERMINAL BUILDING with a term of at least ten years. M. "Signatory Airline - Type B" 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 agreements to this AGREEMENT with CORPORATION covering the lease, use and occupancy of facilities at the TERMINAL BUILDING with a term of five 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 theAIRPORT 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 one year. O. "Terminal Building" shall mean and refer to the building and all accompanying facilities constructed or to be constructed as shown on Exhibit "A ", including as the same may from time -to -time be remodeled or expanded. United 10 Year.wpd 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 6/ 41 r '! P. "Terminal Building Requirement" for each FISCAL YEAR shall mean the sum of the following amounts: (A) the total amount of operations and maintenance expenses and depreciation expense on AIRPORT - funded assets of the TERMINAL BUILDING for such FISCAL YEAR, (B) the total amount of that portion of the principal due and owing on the BONDS during such FISCAL YEAR that is not eligible or not available for payment with PFC's, (C) the total amount of interest due and owing on the BONDS during such FISCAL YEAR, plus (D) other miscellaneous costs, expenses, judgements, assessments or charges incurred in such FISCAL YEAR and reasonably and fairly allocated to the TERMINAL BUILDING. Section 1.2 Cross - References All references to articles, sections and exhibits in this Agreement pertain to material in this Agreement, unless specifically noted otherwise. Section 1.3 Construction of Certain Words Words used in this Agreement may be construed as follows: (A) Number - Words used in the singular include the plural, and words used in the plural include the singular. (B) Tense - Words used in the present tense include the future. (C) Gender - Words used in the masculine include the feminine and neuter, and vice - versa. ARTICLE 2 TERM Section 2.1 Term This Agreement shall become effective on 12:01 a.m. local time on the Date of Beneficial Occupancy, hereinafter called the "Effective Date ", and continue for ten years, expiring at 12:01 a.m. on the tenth anniversary of the Date of Beneficial Occupancy, subject to prior termination as provided in Article 14 hereof. Section 2.2 Holding Over United 10 Year.wpd 4 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 7/ 41 If AIRLINE remains in possession of the leased premises after the expiration of this Agreement without any written renewal thereof, such holding over shall not be deemed as a renewal or extension of this Agreement, but shall create only a tenancy from month to month that may be terminated at any time by AIRLINE or CORPORATION upon thirty (30) days written notice to the other party. Such holding over shall otherwise be upon the same terms and conditions as set forth in this agreement. ARTICLE 3 RIGHTS AND PRIVILEGES Section 3.1 Use of the TERMINAL BUILDING AIRLINE, its employees, passengers, guests, patrons, and invitees shall have the right to the use of its EXCLUSIVE USE SPACE and also the use (in common with other duly authorized users) of the TERMINAL BUILDING and its appurtenances, together with all facilities, improvements, equipment, and services that have been or may hereafter be provided for common use at, or in connection with, the TERMINAL BUILDING, subject to the Rules and Regulations of CORPORATION and COUNTY and any other applicable laws. Section 3.2 Use of the AIRPORT This Agreement grants no rights or privileges to AIRLINE for the use of the AIRPORT, includingthe runways, ramps, taxiways, aprons or any other facility of the AIRPORT except to the TERMINAL BUILDING. AIRLINE will enter into a use agreement with COUNTY to obtain such rights and privileges. Section 3.2 Specific Rights of AIRLINE at the TERMINAL BUILDING AIRLINE shall have the right, in addition to all rights elsewhere granted in this Agreement, but subject to the Rules and Regulations of the CORPORATION or COUNTY to use the TERMINAL BUILDING for the following purposes: (A) The operation of an AIR TRANSPORTATION business by aircraft for the carriage of persons, property, cargo, and mail, including all activities reasonably necessary to such operation. (B) Within the TERMINAL BUILDING, the loading, unloading, servicing, parking, storing, and testing of aircraft or other equipment of, or operated by, AIRLINE, or United 10 Year.wpd 5 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 t+: 8/ 41 other certificated AIR TRANSPORTATION companies with which CORPORATION has an agreement, including the right to provide or handle all or part of the operations or services of such other companies, all of which are subject to CORPORATION's and COUNTY's Rules and Regulations. (C) The sale of tickets, documentation of shipments, handling of reservations, and the loading and unloading of persons, property, cargo, and mail at the TERMINAL BUILDING by such motor vehicles or other means of conveyance as AIRLINE may desire to use in the operation of its AIR TRANSPORTATION business, or that of other certificated AIR TRANSPORTATION companies with which CORPORATION or COUNTY has an agreement. Any ground transportation commercial carrier including AIRLINE (except for such ground transportation as AIRLINE may provide or arrange solely for the benefit of its employees) regularly transporting persons or their baggage to and from the Al RPORT shall first secure and thereafter hold a valid lease, license, or other agreement with CORPORATION or COUNTY for the right to carry persons or their baggage to and from the AIRPORT and shall pay CORPORATION or COUNTY such rentals, fees, and percentages of the fares of such ground transportation commercial carrierfor such right as CORPORATION or COUNTY may set by agreements, orders, or Rules and Regulations. (D) The ground training at the TERMINAL BUILDING of persons and testing of equipment, such training and testing to be limited to that incidental to AIRLINE's AIR TRANSPORTATION business at the TERMINAL BUILDING; provided that nothing in this paragraph shall preclude AIRLINE and CORPORATION from entering into separate agreements for training at the TERMINAL BUILDING. (E) The purchase ofA1RLINE's requirements of personal property or services, including fuel, lubricants, food, beverage, and other passenger supplies, and any other materials and supplies used byAIRLINE from any person or company of AIRLINE's choice authorized to do business on AIRPORT, and the making of agreements with any person or company of AIRLINE's choice for services to be performed by AIRLINE that are incidental to the operation ofAIRLINE's AIR TRANSPORTATION business. Nothing herein shall restrict CORPORATION from levying a reasonable and non - discri minatory concession fee on any person or company providing properly or services to AIRLINE that are not incidental to AIRLINE's AIR TRANSPORTATION business, provided that no such fee shall apply to any corporate affiliate of AIRLINE to the extent that it is providing property or services to AIRLINE. (F) The parking of employee automobiles in designated employee parking spaces provided by the CORPORATION or COUNTY for AIRLINE and its employees while at work at the AIRPORT. Such spaces shall be used in common with other tenants of the TERMINAL BUILDING, their employees, and employees of the CORPORATION or COUNTY and shall be provided on the same basis that CORPORATION provides parking spaces to such other users. Nothing herein shall United 10 Year.wpd 6 4- 25 -01; 5:05PM ;EAGLE COUNTY AIRPORT C 9705248247 * 9/ 41 restrict CORPORATION or COUNTY from levying a reasonable and non- discriminatory parking charge for use of these employee parking spaces. (G) The installation and operation of identifying signs, posters, and graphics on AIRLI NE's leased premises, subject to the prior written approval of the MANAGER, which approval shall not be unreasonably withheld. Such signs shall be substantially uniform in size, types, and location with those of other airlines, consistent with CORPORATION's and COUNTY's graphic standards, Rules and Regulations, and in compliance with all applicable laws and resolutions. AIRLINE shall be responsible for obtaining COUNTY approval of signage. (H) The installation, maintenance, and operation of computer data lines, telephone communications equipment and associated conduits, and telephone communications switchgear and support computers at suitable locations at the TERMINAL BUILDING, as may be necessary or convenient in the opinion of AIRLINE for its operations; provided that (1) the location of such equipment shall be subject to the prior written approval of the MANAGER, if such location is not included in AIRLINE's EXCLUSIVE USE SPACE; (2) the use and location of such equipment shall not conflict with other similar equipment on the AIRPORT; (3) the location of such equipment (other than conduit and cable) at the TERMINAL BUILDING shall be subject to payment of such fee or rental charge established by CORPORATION for such use of space by AIRLINE unless such space is already leased to AIRLINE; and (4) CORPORATION reserves the right to install a central telephone switch system and to make that system available to AIRLINE and other TERMINAL BUILDING tenants. Section 3.3 Limitations on Use by AIRLINE In connection with the exercise of its rights under this Agreement, AIRLINE shall not: (A) Do, or permit to be done, anything within its control at or about the TERMINAL BUILDING that may interfere with the effectiveness or accessibility of the drainage and sewage system, water system, electrical system, heating system, natural gas system, air conditioning system, fire protection system, sprinkler system, alarm system, or fire hydrants and hoses, if any, installed or located on or within the premises of the TERMINAL BUILDING. United 10 Year.wpd 7 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT C C ;9705248247 * 10/ 41 (B) Do, or permit to be done, at the TERMINAL BUILDING any act or thing within its control that will invalidate or conflict with any fire or other casualty insurance policies (copies of which, together with premium schedules, shall be furnished to AIRLINE on request) covering the TERMINAL BUILDING or any part thereof. (C) Dispose of, or permit any other person within its control (including service contractors) to dispose of, any waste material taken from, or products used (whether liquid or solid) with respect to, its aircraft into the sanitary or storm sewers at the TERMINAL BUILDING unless such waste material or products are first properly treated by equipment installed with the approval of the MANAGER for that purpose. (D) Do, or permit to be done, upon the AIRPORT any act or thing within its control that will be in conflict with Federal Aviation Regulations Part 139 or jeopardize the TERMINAL BUILDING orAIRPORT's operating certificate. (E) Do, or permit to be done, any act or thing within its control in conflict with the TERMINAL BUILDING orAIRPORT's Security Plan. (F) Do, or permit to be done, any act or thing within its control in conflict with or violation of the Rules and Regulations. (G) To the extent within AIRLINE's control, do or permit to be done any act, or let any condition exist, which is in conflict with current or future Environmental Protection Agency, and other governmental entities' rules, regulations or directives. (H) Do, or permit to be done, at the TERMINAL BUILDING heavy maintenance (i.e., engine changes, control surface replacements, overhauls) withinAIRLINE's control, providing that suitable, reasonably accessible space is available from the COUNTY for such purpose. United 10 Year.wpd 4- 25 -01; 5:05PM ;EAGLE COUNTY AIRPORT ;9705248247 # it/ 41 ARTICLE 4 TERMINAL BUILDING CONSTRUCTION Section 4.1 Construction Expansion The CORPORATION will construct an expansion to the new passenger facility at the AIRPORT at a total cost (excluding financing) of approximately $10.4 million, substantially in accordance with the schematic drawings, dated December 15, 2000, prepared by the Van Sant Group (the "TERMINAL BUILDING "). The CORPORATION will also make available to airlines using the TERMINAL BUILDING an outbound curb -side and airline ticket office baggage system. In addition, the CORPORATION will purchase the commercial passenger service rights from Vail Valley Jet Center (the "FBO ") for $4.25 million. Section 4.2 Construction Financing Construction of the expansion to the TERMINAL BUILDING will be financed by tax exempt revenue BONDS issued with a term of not less than thirty (30) years by CORPORATION. Repayment of principal of such BONDS is to be partially funded by Passenger Facility Charges ( "PFC's "). The remaining principal not eligible or not available to be paid for with PFCs annually will be incorporated into the current years Terminal Building Requirement. Section 4.3 Commercial Passenger Service Rights Financing Purchase of the commercial service passenger service rights from the FBO will be financed by revenue BONDS issued with a term of not less than twelve (12) years by CORPORATION. Repayment of principal and interest of such BONDS annually will be incorporated into the current years Terminal Building Requirement. Section 4.4 Construction Completion The CORPORATION will complete construction of the expansion to the TERMINAL BUILDING and ensure its availability for occupancy by AIRLINE by December 15, 2001. The CORPORATION shall grant to AIRLINE the right of ingress and egress in, to and from the TERMINAL BUILDING at least twenty (20) business days before such date to finish out its exclusive -use space. Section 4.5 Temporary Facilities If, for any reason, the original TERMINAL BUILDING is not ready for occupancy on time, CORPORATIONwill provide temporary facilities (including utilities) suitable in size, location United 10 Year.wpd 9 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT C; ;9705248247 * 12/ 41 and amenities for AIRLINE'S use until the TERMINAL BUILDING is ready for occupancy by AIRLINE. The rent and other charges for AIRLINE'S use of the temporary facilities and utilities will not in total exceed the actual cost of providing such facilities and utilities, but in no event shall exceed $498,500 on an annualized basis. Any period of occupancy of the temporary facilities will be in addition to the lease term provided in this agreement. CORPORATION will reimburse AIRLINE (or credit against Base Rent) for any incremental moving expenses (not in excess of $5,000) incurred by AIRLINE as a result of the double relocation necessitated by AIRLINE's occupancy of the temporary facilities. Section 4.6 AIRLINE'S improvement of Exclusive -Use Space AIRLINE'S responsibility to finish out its exclusive -use space within the TERMINAL BUILDING shall be limited to the installation of ticket counter inserts, signage and computer terminals, printers and related equipment. AIRLINE shall provide furniture in its exclusive -use space. ARTICLE 5 PREMISES Section 5.1 - TERMINAL BUILDING Space D. AIRLINE hereby leases the following areas (hereinafter referred to as AIRLINE's "EXCLUSIVE USE SPACE ", and "JOINT USE SPACE") in the TERMINAL BUILDING being more particularly delineated on Exhibit "A," as the, same may be amended from time to time, and constituting approximately 3,763 square feet EXCLUSIVE USE SPACE and three (3) ticket counter positions along with approximately 40,722 square feet JOINT USE SPACE: EXCLUSIVE USE SPACE Ticket Counter Ticket Offices Operations Offices JOINT USE SPACE Baggage Claim Outbound Curb -side Baggage System Security Screening Area Holdrooms B. AIRLINE shall use its EXCLUSIVE USE SPACE for office purposes and the sale of United 10 Year.wpd 10 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 7t 13J 41 AIR TRANSPORTATION, handling, ticketing, billing, and manifesting of passengers, baggage, cargo, property, and mail in the conduct of its AIR TRANSPORTATION business or on behalf of any other AIR TRANSPORTATION company authorized by the MANAGER to use the TERMINAL BUILDING. C. AIRLINE shall use the JOINT USE SPACE for purposes designated for such space by the MANAGER, which shall include: (1) security screening; (2) baggage claim (delivery and display of inbound passenger baggage); (3) outbound curb -side baggage system (delivery of outbound passenger baggage; (4) passengers awaiting delivery of their baggage; and (5) checking -in and boarding of passengers. Section 5.2 Surrender of the Premises CORPORATION shall not be required to give notice to quit possession of the premises leased hereunder upon expiration of the term of this Agreement. AIRLINE covenants and agrees that, on expiration of the term of this Agreement, or on earlier termination as hereinafter provided, it will peaceably surrender possession of the premises leased hereunder in good condition, reasonable wear and tear, acts of God, fire, and other casualties excepted, and CORPORATION shall have the right to take possession of said premises. AIRLINE shall have the right on termination, and within thirty (30) days thereafter, to remove all trade fixtures, equipment, and other personal property installed or placed by it at its expenses, in, on, or about the TERMINAL BUILDING, except that AIRLINE's right shall be subject to any valid lien that CORPORATION may have thereon for unpaid rentals or fees. AIRLINE shall not abandon any of its property on the premises without the prior written consent of the MANAGER. Any and all property not removed by AIRLINE within the thirty (30) day period, except as otherwise mutually agreed upon by the parties hereto, shall thereupon, at the option of CORPORATION, become a part of the land on which it is located, and title thereto shall vest with CORPORATION. All CORPORATION property damaged by, or as the result of, the removal of AIRLINE`s property shall be restored by AIRLINE, at its own expense, to the condition existing prior to such damage or according to such other arrangement to which CORPORATION and AIRLINE may agree. Section 5.3 Accommodation of New and /or Existing Airlines The parties hereto agree that every reasonable effort will be made to accommodate any other new entrant or incumbent AIRLINE. United 10 Ycar.wpd 11 4- 25 -01; 5:OSPM;EAGLE COUNTY AIRPORT ;9705248247 # 14/ 41 c Section 5.4 Access A. Subject to the provisions hereof, the Rules and Regulations, and such restrictions as AIRLINE may impose with respect to its EXCLUSIVE USE SPACE, CORPORATION hereby grants to AIRLINE, its agents, suppliers, employees, contractors, passengers, guests, and invitees, the right and privilege of access, ingress, and egress to the leased premises and to public areas and public facilities of the TERMINAL BUILDING, together with all improvements, facilities and equipment now or hereafter located thereon. The public areas shall be in the possession and control of CORPORATION and shall at all times remain public property to be used only as public TERMINAL BUILDING facilities, except as may be otherwise provided herein. B. The ingress and egress provided for in Section 5.5 A above shall not be used, enjoyed, or extended to any person engaging in any activity or performing any act or furnishing any service for or on behalf of AIRLINE that is not incidental to AIRLINE's AIR TRANSPORTATION business and that AIRLINE is not authorized to engage in or perform under the provisions hereof unless expressly authorized by the MANAGER. C. CORPORATION shall have the right at any time to close, relocate, reconstruct, change, alter, or modify any such means of access, ingress, and egress provided for AIRLINE's use pursuant to this Agreement or otherwise, either temporarily or permanently, provided that reasonable notice to AIRLINE and a reasonably convenient and adequate means of access, ingress, and egress shall exist or be provided in lieu thereof. CORPORATION shall use its best efforts to limit such closing to the duration appropriate to the circumstances. CORPORATION shall consult with AIRLINE prior to any such closing which would adversely affect AIRLINE's operations unless such closing is necessitated by circumstances which pose an immediate threat to the health or safety of persons using the AIRPORT. CORPORATION shall suffer no liability by reason thereof, and such action shall in no way alter or affect any of AIRLINE's obligations under this Agreement. ARTICLE 6 TERMINAL BUILDING CAPITAL IMPROVEMENTS Section 6.1 TERMINAL BUILDING Capital Improvement Program A. The parties recognize that capital development of the TERMINAL BUILDING will be required during the term of this Agreement to preserve, protect, enhance, expand, or otherwise improve the TERMINAL BUILDING or any part thereof. B. The CORPORATION may incur indebtedness and make expenditures for capital United 10 Year.wpd 12 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 tC 75/ 41 improvements at the TERMINAL BUILDING, and all costs associated with capital improvements including financing costs, if any, shall be included in the calculations of TERMINAL BUILDING REQUIREMENT. Section 6.2 Improvements and Development by the CORPORATION A. At any time the CORPORATION intends to undertake a Capital Improvement which is to be included in calculation of TERMINAL BUILDING REQUIREMENT and which does not require immediate action, the CORPORATION shall first notify the AIRLINES in writing of the proposed improvement(s). The notification shall include: (1) A description of the proposed improvement(s) (the "project" ), together with a statement of the intended use for the project; (2) The cost estimate of the project and the CORPORATION's intended means of funding the project; (3) Expected revenues, if any, to be derived from the project; and (4) An estimate of the financial impact of the project upon the TERMINAL BUILDING REQUIREMENT. B. If requested by any SIGNATORY AIRLINE within fifteen (15) business days of the CORPORATION's notice, a meeting between the CORPORATION and the SIGNATORY AIRLINES shall be held within a reasonable time, but not longer than sixty (60), days after the date of the CORPORATION's notice. C. The CORPORATION agrees to fully consider the comments and recommendations of AIRLINES prior to finalizing its proposed capital improvements. D. Before constructing new EXCLUSIVE USE SPACE for another AIR TRANSPORTATION company, CORPORATION will first ask AIRLINE whether itwill sublet (on the same terms and conditions which would be available from CORPORATION) or surrender some of its space to meet the other AIR TRANSPORATION company's needs. ARTICLE 7 RENTALS AND FEES Section 7.1 Consideration United 10 Year.wpd 13 4- 25 -01; 5:05PM ;EAGLE COUNTY AIRPORT ;9705248247 # 16/ 41 Inconsideration of the rights and privileges granted underthis Agreement, AIRLINE agrees to pay CORPORATION, without deduction or set off, during the term of this agreement, certain rentals and fees as set forth herein. Section 7.2 Base Rent and Base Rent Premium AIRLINE shall pay to CORPORATION an annual rent of up to $850,000 ( "Base Rent ") for AIRLINE'S exclusively leased premises and joint use premises. AIRLINE will not pay an annual Base Rent surcharge. A Base Rent Premium in addition to the Base Rent will be charged to all airlines signing a Signatory Airline -Type B or Signatory Airline -Type C lease. AIRLINE is considered a Signatory Airline -Type A for purposes of the calculation of Base Rent and Base Rent Premium. In the first year of the lease term, the Base Rent shall be paid in four equal monthly installments on November 1, 2001, January 1, 2002, February 1, 2002 and March 1, 2002. Beginning with the second year of the lease term; the Base Rent shall be paid in twelve equal monthly installments in advance, on the first day of each month. Section 7.3 Principal Backstop Payment A. In addition to Base Rent, in the event PFC's allocated to pay bond principal are not received or are not sufficient to pay the principal on the BONDS, the Base Rent of AIRLINE and the rents of other SIGNATORY AIRLINES may be increased (prorata based on rent) to include an amount (the "Principal Backstop Payment ") equal to that portion of the annual principal amount due and owing on the BONDS that would have been eligible for PFC funding under federal law; provided however, that in no event shall the Principal Backstop Payment exceed (from all SIGNATORY AIRLINES) of $450,000 annually. The Principal Backstop Payment shall be due and payable ten (10) business days before principal is due on the BONDS. Section 7.4 Partial Month Charges In the event the beginning or termination date with respect to any of the particular premises, facilities, rights, licenses, services, or privileges as herein provided falls on any day other than the first day of a calendar month, the applicable rentals, fees, and charges for that month shall be paid for said month on a prorated basis according to the number of days during which said .particular premises, facilities, rights, licenses, services, or privileges were enjoyed during that month. Section 7.5 Rent Deposit AIRLINE shall pay a deposit equal to three months, or one - quarter of the annual, United 10 Year.wpd 14 4- 25 -01; 5:05PM ;EAGLE COUNTY AIRPORT ;9705248247 tk 17/ 41 whichever is larger, Base Rent and Base Rent Premium priorto the commencement of the lease term or, if applicable, before CORPORATION commences construction of improvements relative to such lease. This requirement shall be waived for an AIRLINE that has been current for a period of eighteen months in its payments to CORPORATION and COUNTY. Section 7.6 Late Payments In the event AIRLINE fails to make payment within fifteen (15) days of the dates due as set forth in this Article 7, then AIRLINE shall pay and CORPORATION may charge, upon reasonable written notice to AIRLINE, a monthly service charge equal to the lesser of 2% per month orthe highest rate allowed by law on any such overdue amount, and if AIRLINE fails to make payment within ten (10) days after written notice from CORPORATION to AIRLINE that such payments are late, AIRLINE shall also pay reasonable administrative costs and attomeys' fees incurred by CORPORATION in attempting to obtain payment. Section 7.7 Disputed Charges It is the obligation of AIRLINE to pay all rentals, fees and other Charges, free of any "set offs" or claims, in the amounts and at the times specified in this Agreement. In the event AIRLINE desires to contest the validity or amount of any rental, fee or other charge, AIRLINE shall first pay the same to CORPORATION, and may then seek a refund in any appropriate forum. Any overpayment of a particular disputed rental fee or other charge, together with any earnings attributed thereto, shall first be applied to any past due sums before it is refunded to AIRLINE. Any overpayment that is not of a disputed charge shall be immediately returned to AIRLINE. Section 7.8 Passenger Facility Charges No Passenger Facility Charges shall be used forthat 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 of rates for AIRLINE rentals and fees. Section 7.9 No Other Charges Except as provided in this Agreement, the rentals, fees, and charges payable by AIRLINE to CORPORATION hereunder shall not be increased by CORPORATION without the consent ofAlRLINE. CORPORATION shall not, without the consent of AIRLINE, add any new rent, fee, or charge payable by AIRLINE to CORPORATION for any of the privileges granted to AIRLINE or space leased by AIRLINE hereunder; provided, however, nothing herein contained shall prevent CORPORATION from charging rent or levying fees or United 10 Year.wpd 15 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 * 18/ 41 charges in a manner consistent with the terms of this Agreement for any additional space furnished to and accepted by AIRLINE, or for any additional service provided or privileges granted to and accepted by AIRLINE, if said space furnished, service provided, or privilege granted is not a part of the space leased, services provided, or privileges specified herein. CORPORATION shall not be prevented from charging in a manner consistent with the terns of this Agreement for any space or service which CORPORATION is required to furnish AIRLINE under any Federal, State or Local Law, Resolution, or Regulation, if said space or service is not a part of the space leased or services provided herein. Notwithstanding the above, should AIRLINE engage in any activity not specifically provided for herein for which fees are paid to CORPORATION by others conducting similar activities, then CORPORATION reserves the right to charge AIRLINE comparable fees unless otherwise provided for herein. Section 7.10 Corporate Inspection re Enplanements Within ten days of the end of each month, AIRLINE shall provide CORPORATION a written report of enplanements during that month. ARTICLE 8 ADJUSTMENT OF BASE RENT AND EXTRAORDINARY PAYMENT Section 8.1 Effective Date of Adjustments The TERMINAL BUILDING Base Rent and Base Rent Premium shall be adjusted annually during the term of this Agreement as hereinafter set forth. Such adjustments shall be effective on the first day of the FISCAL YEAR for which they apply. Section 8.2 Adjustments Apply Without Amendment Adjustments to the Base Rent and the Base Rent Premium pursuant to this Article 8 shall apply without the necessity of formal amendment of this Agreement. However, CORPORATION will notify AIRLINE in writing of all adjustments to the Base Rent and the Base Rent Premium which apply to it. Section 8.3 Year -End Refund of Net Concession Revenue A. At the end of each FISCAL YEAR or part thereof falling within the lease term, the CORPORATION will refund (within sixty (60) days of the close of the audit) AIRLINE and the other SIGNATORY AIRLINE 50% of any Net Concession Revenues. The SIGNATORY AIRLINES'S share of Net Concession Revenue shall be distributed to them prorata based on enplanements from the TERMINAL United 10 Year.wpd 16 4- 26 -01; 8:43AM;EAGLE COUNTY AIRPORT ;9705248247 # 18/ 42 C t BUILDING during such FISCAL YEAR. B. "Net Concession Revenues" shall equal Concession Revenues reduced by the TERMINAL BUILDING Shortfall. For these purposes: (i) "Concession Revenues" shall mean all TERMINAL BUILDING revenues derived by the CORPORATION from food, beverage catering, news and gift vendors, rental car and other ground transportation vendors, air -side groundhandling, parking, TERMINAL BUILDING advertising (including print, radio and television), ski rentals and other retail sales and services. (ii) The "TERMINAL BUILDING Shortfall" for each FISCAL YEAR shall equal the TERMINAL BUILDING REQUIREMENT reduced by the sum of (A) AIRLINE' Base Rent and the rentw or similar charges of all other SIGNATORY AIRLINES, and (B) the rents or similar charges paid by non - SIGNATORY AIRLINES for use of the TERMINAL BUILDING. Section 8.4 Base Rent Allocation Among Air Transportation Companies C. 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 $2,150,000 (the amount of airline rent projected to be needed by the CORPORATION to fund operations and maintenance expenses, depreciation of CORPORATION - funded assets, other miscellaneous costs, debt service, debt service coverage and the debt operations and maintenance reserve requirement) 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 AIRLINE is the base rental rate multiplied by the total square footage ofall JOINT USE SPACE rented less the annual debtservice 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 yearforthe purchase of the commercial service rights from the fixed base operator at the Airport. The annual Base Rent amount for all three components forAIRLINE will not be more than the amount described in Section 7.2 during the term of the lease. United 10 Yearmpd 17 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 * 20/ 41 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 AIRLINE's enplaning passengers at the TERMINAL BUILDING 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 ofthis 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 USE 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 aocording to the ratio of the number of each SIGNATORY AIRLINE's enplaning passengers at the TERMINAL BUILDING during the most recent calendar year to the total number of enplaning passengers of all SIGNATORY AIRLINE users during that same year. Within thirty (30) days of DBO, CORPORATION will calculate the base rent equivalent square footage rate based on the actual space constructed and rented by all AIRLINE'. A sample calculation, for illustrative purposes only, is attached hereto as Exhibit °B ". D. CORPORATION reserves the right to provide EXCLUSIVE USE SPACE to other AIR TRANSPORTATION companies which have, in addition to AIRLINES, become SIGNATORY AIRLINES, by remodeling existing space or constructing new space, subject to the provisions below: (1) Remodeling of existing space will be treated as a tenant improvement and the sole cost will be paid, in cash, by the requesting AIR TRANSPORTATION company and the base rent per square foot per annum will be assessed at the same rate as that paid for similar space under lease by other SIGNATORY AIRLINES at the TERMINAL BUILDING; (2) Construction of new space will be treated as a common cost element of the TERMINAL BUILDING, and all costs involving additions or building modifications (including financing costs, if applicable,) will be included in United 10 Yeanwpd 18 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 21/ 41 the TERMINAL BUILDING REQUIREMENT. CORPORATION reserves the right to construct additional space in the TERMINAL BUILDING. This new construction will be treated a as common cost element of the TERMINAL BUILDING, and all costs involving additions or building modifications (including financing costs, if applicable) will be included in the TERMINAL BUILDING REQUIREMENT as depreciation on CORPORATION funded assets. New construction shall be consistent in appearance, quality, materials and workmanship with the originally constructed building. Section 8.5 Debt Coverage Reserve Account A reserve account (the "Debt Coverage Reserve Account") will be established by CORPORATION in an amount notto exceed thirty percent (30 %) of the maximum annual debt service and shall be funded initially from a portion of the Base Rent and Base Rent Premium payable by AIRLINE in the first four months of the lease term. Section 8.6 Extraordinary Payment to Cover Shortfall Notwithstanding any other provisions hereof, in the event that the Corporation is unable to generate Available Revenues sufficient to satisfy the Bond requirement that Available Revenues in each FISCAL YEAR be at least equal to 130 percent of the aggregate annual principal and interest due on the 1996 bonds in such FISCAL YEAR and 120 percent of the aggregate annual debt principal and interest due on the 2001 bonds in such FISCAL YEAR, AIRLINE and all other SIGNATORY AIRLINES shall pay an amount equal to the shortfall. Such shortfall shall be allocated to each SIGNATORY AIRLINE in the same proportion that its total annual enplanements at the TERMINAL BUILDING bears to the sum of all of the SIGNATORY AIRLINES' total annual enplanements at the TERMINAL BUILDING and shall be payable as of the last day of the FISCAL YEAR in which such shortfall occurs. Any shortfall amount paid by a SIGNATORY AIRLINE for any FISCAL YEAR will be repaid to such SIGNATORY AIRLINE in cash within 3 businessdaysofthe CORPORATION's receiptof such paymentfromsuch SIGNATORY AIRLINE. For these purposes Available Revenue" in each FISCAL YEAR shall include PFCs, Principle Backstop Payments and all rental, concession and other revenues from the TERMINAL BUILDING plus the balance in the Debt Coverage Reserve Account, minus the total amount of operations and maintenance expenses and other miscellaneous costs, expenses, judgments, assessments or changes incurred in such FISCAL YEAR and reasonably and fairly allocated to the TERMINAL BUILDING. United 10 Year.wpd 19 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 22/ 41 ARTICLE 9 MAINTENANCE, REPAIR, ALTERATIONS, AND IMPROVEMENTS Section 9.1 AIRLINE' Responsibilities A. AIRLINE shall have the following maintenance and repair obligations: AIRLINE agrees that, upon AIRLINE's occupancy of its EXCLUSIVE USE SPACE, such space is in good, tenantable condition unless otherwise noted in writing to the MANAGER within thirty (30) days of the commencement of this Lease. 2. AIRLINE, except as hereinafter provided, shall not call on CORPORATION for any of the following janitorial services or nonstructural repairs to its EXCLUSIVE USE SPACE and AIRLINE shall, at its sole expense and in a manner acceptable to CORPORATION: (a} Maintain its EXCLUSIVE USE SPACE in reasonably good, tenantable condition. (b) Perform, at its sole expense, ordinary preventive maintenance and ordinary upkeep and nonstructural repair of all facilities, fixtures, personal property, and equipment. (c) Immediately repair any damage in any other space at the TERMINAL BUILDING occasioned by the fault or negligence of AIRLINE, its servants, agents, employees and licensees. B. Except as may be caused by the sole negligence of CORPORATION, AIRLINE expressly agrees that CORPORATION shall not be liable to AIRLINE, its employees, passengers, or business visitors for bodily injury or for any loss or damage to real or personal property occasioned by flood, fire, earthquake, lightning, windstorm, hail, explosion, riot, strike, civil commotion, smoke, vandalism, malicious mischief, or acts of civil authority. C. AIRLINE shall at its own expense provide passenger security screening equipment for use at the TERMINAL BUILDING. The passenger security checkpoint shall be manned by AIRLINE or its contractors and the associated O &M costs shall be borne by AIRLINE and the other SIGNATORY AIRLINES prorata based on enplanements. D. If AIRLINE fails to perform its obligations under this Article 9 after notice and reasonable opportunity to cure such failure, CORPORATION may do so and recover its entire cost plus a fifteen percent (15 %) administrative charge from AIRLINE as Additional Rent on the next rental due date. United 10 Year.wpd 20 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 7R 23/ 41 s Section 9.2 CORPORATION's Right to Inspect and Make Repairs CORPORATION, by its authorized officers, employees, agents, contractors, subcontractors, and other representatives, shall have the right (at such time and upon reasonable notice to AIRLINE as may be reasonable underthe circumstances and with as little interruption ofAIRLINE's operations as is reasonably practicable) to enterAIRLINE's EXCLUSIVE USE SPACE and JOINT USE SPACE for the following purposes: (A) to inspect such space to determine whether AIRLINE has complied and is complying with the terms and conditions of this Agreement; (B) to accomplish repairs or replacements by CORPORATION, or in any case where AIRLINE is obligated to make repairs or replacements and has failed to do so, after notice as provided herein, make such repairs or replacements on AIRLINE's behalf, and No such entry by or on behalf of CORPORATION upon any EXCLUSIVE USE SPACE leased to AIRLINE shall cause or constitute a termination of the letting thereof or be deemed to constitute an interference with the possession thereof by AIRLINE. Section 9.3 Alterations and Improvements AIRLINE shall make no alterations, additions, improvements to, or installations on the space leased under this Agreement without the prior written approval of the MANAGER, which approval will not be unreasonably withheld. ARTICLE 10 RESERVATIONS OF THE COUNTY This Agreement is subordinate to CORPORATION'S lease with COUNTY. AIRLINE acknowledges the following reservations by COUNTY in that lease, to which AIRLINE'S rights and privileges hereunder are subject: "For the purposes of this Agreement, "Public Aircraft Facilities" shall mean (1) Runways; (2) Taxiways; (3) Passenger Ramp and Apron Areas; and (4) Any extensions or additions to the above and any other space or facilities provided by the COUNTY at the AIRPORT for public and common use by aircraft operators in connection with the landing and taking off of aircraft, or in connection with operations hereinafter authorized to be performed by aircraft operators upon the aforesaid runways, taxiways, and public passenger ramp and apron areas; but only as and to the extent that they are from time to time provided by the United 10 Year.wpd 21 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT c c ;9705248247 * 24/ 41 COUNTY at the AIRPORT for public and common use by aircraft operators. "The COUNTY reserves the right to further develop or improve the AIRPORT as it sees fit, regardless of the desires or views of CORPORATION, and without interference or hindrance, except that the COUNTY may not arbitrarily violate or unreasonably diminish CORPORATION's rights as provided elsewhere in this Agreement except on a temporary basis, ordiminish its abilityto perform the obligations undertaken by it hereunder; provided, however, that any general or partial closure of any public aircraft facilities for the purpose and duration of construction or repair shall not be considered a violation or diminishing of CORPORATION's rights or ability to perform. COUNTY shall suffer no liability by reason thereof, and such action shall in no way alter or affect any of CORPORATION's obligations under this Agreement. "The COUNTY reserves the right to maintain and keep in repair the public aircraft facilities of the AIRPORT and all publicly owned facilities of the AIRPORT, together with the right to direct and control all activities of CORPORATION in this regard. "There is hereby reserved to the COUNTY, its successors and assigns, forthe use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of any premises leased by CORPORATION in connection with the conduct of its AIR TRANSPORTATION business at the AIRPORT, together with the right to cause in said airspace such noise as may be inherent in the operation of aircraft, now known or hereafter used for navigation of flight in the air, using said airspace for landing at, taking off from, or operating on the AIRPORT. "The COUNTY reserves the right to take any action it considers necessary to protect the aerial approaches of the AIRPORT against obstruction, together with the right to prevent CORPORATION from erecting or permitting to be erected, any building or other structure on or adjacent to the AIRPORT which when erected will be above a mean sea level elevation of six thousand five hundred eighty -nine feet and/or which would limit the usefulness of the AIRPORT or constitute a hazard to aircraft. "COUNTY shall have the right at any time to close, relocate, reconstruct, change, alter, or modify any means of access, ingress, and egress provided for CORPORATION's use pursuant to this Agreement or otherwise, either temporarily or permanently, provided that reasonable notice to CORPORATION and a reasonably convenient and adequate means of access, ingress, and egress shall exist or be provided in lieu thereof. COUNTY shall use its best efforts to limit such closing to the duration appropriate to the circumstances. COUNTY shall suffer no liability by reason thereof, and such action shall in no way alter or affect any of AIRLINE's obligations under this Agreement. "The COUNTY reserves the right to direct and control all activities of CORPORATION on the public aircraft facilities area at the AIRPORT in the event of an emergency or if CORPORATION's operations are interfering with the use by others of the public aircraft facilities of the AIRPORT, and to further develop and improve said AIRPORT as the COUNTY, in its sole discretion, may deem proper. United 10 Yearmpd 22 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT C Ci ;9705248247 * 25/ 41 "The COUNTY further reserves the rightto inspect CORPORATION's books and to procure such additional financial information as may be deemed appropriate and necessary by the COUNTY. Notices shall be provided to CORPORATION by the COUNTY at least five days in advance to inspect CORPORATION's books or records." Non - compliance with this section shall constitute a breach ordefault of this Agreement and in the event of such non - compliance, the CORPORATION shall have the right to terminate this Agreement, or at the election of CORPORATION, the CORPORATION, COUNTY or the United States or both of said governments, shall have the right to enforce judicially this subsection. ARTICLE 11 DAMAGE OR DESTRUCTION Section 11.1 Partial Damage Should the premises occupied by AIRLINE hereunder or portions thereof be damaged by fire or other casualty, and if the damage is repairable within a reasonable time from the date of the occurrence, the premises shall be repaired with due diligence by CORPORATION. In the meantime the rental allocable to the portion of the premises rendered untenantable, for that part of the period from the occurrence of the damage to the completion of repairs during which AIRLINE is offering scheduled service, shall be abated in the same proportion that the untenantable portion thereof bears to the whole thereof, or, if the damage or destruction has rendered the entirety of the building untenantable, said rental shall be abated entirely. Section 11.2 Complete Damage Should the premises used by AIRLINE hereunder or buildings or structures of which portions of such premises may be a part be completely destroyed by fire or other casualty, or should they be damaged to such an extent that the damage cannot, in the opinion of CORPORATION, be repaired within a reasonable time after the occurrence, CORPORATION shall have the option to terminate this Agreement to the extent that itshall apply to the particular building, rooms or other portions of the premises so rendered untenantable on sixty days written notice effective as of any date not more than ninety days after the occurrence. In the event that this paragraph shall become applicable, CORPORATION shall advise AIRLINE within thirty days after the happening of any such damage whether CORPORATION has elected to continue the Agreement in effect as to the portions of the premises damaged or destroyed or to terminate it. If CORPORATION shall elect to continue this Agreement in effect, it shall commence and prosecute with due United 10 Ycar.wpd 23 4- 25- 01 ;,.5:05PM;EAGLE COUNTY AIRPORT ;9705248247 * 26/ 41 diligence any work necessary to restore or repair the premises and will exert its best efforts to provide AIRLINE with temporary substitute space while the repairs are being completed. If CORPORATION shall fail to notify AIRLINE of its election within said thirty day period, CORPORATION shall be deemed to have elected to terminate this Agreement as to the portions of the premises damaged or destroyed and the Agreement shall automatically terminate as to such portions ninety days after the occurrence of the damage. Forthat part of the period from the occurrence of any damage to the premises to the date of completion of the repairs to the premises during which AIRLINE is offering scheduled service the rental allocable to the particular portion of the premises involved shall be abated in the same proportion as the untenantable portion thereof bears to the whole thereof. If temporary substitute space is furnished by CORPORATION, a reasonable rental shall be charged therefor. ARTICLE 12 INSURANCE, INDEMNIFICATION AND RELEASE OF LIABILITY Section 12.1 CORPORATION'S Insurance CORPORATION shall insure or cause to be insured at all times during the term of this Agreement all of CORPORATION's buildings structures, fixtures and equipment on the AIRPORT unless such are insured by others under the terms of other agreements against direct physical damage or loss from fire and against the hazards and risks covered under extended coverage in an amount not less than ninety percent of the replacement value of the property so insured; provided, however, if at any time CORPORATION shall be unable to obtain such insurance to the extent required above, CORPORATION shall maintain such insurance to the extent reasonable obtainable. Section 12.2 AIRLINE Insurance AIRLINE shall purchase and maintain in force, as applicable, the following insurance coverage: (A) AIRLINE Liability Insurance and Comprehensive General Liability Insurance Insurance limits of liability for AIRLINE shall be determined by the capacity in passenger seats of the largest aircraft in AIRLINE'S fleet as follows: 1. Not less than one hundred fifty million dollars ($150,000,000) peroccurrence United 10 Year.wpd 24 4- 26 -01; 8:08AM;EAGLE COUNTY AIRPORT ;9705248247 # 3/ 3 for AIRLINES operating aircraft of one hundred (100) seats or more; 2. Not less than one hundred million dollars ($100,000,000) per occurrence for AIRLINES operating aircraft of between sixty (60) and ninety -nine (99) seats; 3. Not less than fifty million dollars ($50,000,000) per occurrence for AIRLINES operating aircraft of between twenty (20) and fifty -nine (59) seats; 4. Not less than twenty million dollars ($20,000,000) per occurrence for AIRLINES operating aircraft of nineteen (19) of fewer seats. (B) Hangarkeepers Liability Insurance Hangerkeepers liability insurance in an amount adequate to cover any non - owned property in the care, custody, and control of AIRLINE on the AIRPORT, but in any event in an amount not less than five million dollars ($5,000,000). (C) Liquor liability insurance for any facility of AIRLINE serving alcoholic beverages on the AIRPORT in an amount not less than ten million dollars ($10,000,000) per occurrence. (D) Automobile liability insurance in an amount adequate to cover automobile insurance while on AIRPORT premises in an amount not less than one million dollars ($1,000,000) per person and per occurrence. (E) Workers' compensation insurance with coverage and in amounts as required by the laws of Colorado. The parties understand and agreethatthe minimum limits of the insurance herein required may become inadequate during the term of this Agreement; AIRLINE agrees that it will increase such minimum limits by reasonable amounts on request of CORPORATION. All policies of insurance required herein shall be in a form and with a company or companies of recognized responsibility in the aviation industry and reasonably satisfactory to CORPORATION and shall name CORPORATION and COUNTY as an additional insured. Policies or certificates of required coverages shall be delivered to CORPORATION. At least thirty (30) days before the expiration of any then - current policy of insurance, AIRLINE shall deliverto CORPORATION evidence that such insurance coverage has been renewed. Within fifteen (15) days after the date of written notice from the insurer of cancellation or reduction in coverage, AIRLINE shall deliver to CORPORATION a policy or certificate of insurance reinstating or otherwise providing the required insurance. United 10 Year.wpd 25 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 * 28i 41 If at any tirneAIRLINE shall fail to obtain or maintain in force the insurance required herein, CORPORATION may notify AIRLINE of CORPORATION's intention to purchase such insurance for AIRLINE's account. If AIRLINE has not delivered evidence of insurance to CORPORATION before the date on which the current insurance expires, CORPORATION may but is not required to provide such insurance by taking out policies in companies satisfactory to CORPORATION. Such insurance shall be in amounts no greaterthan those stipulated herein or as may be in effect from time to time. The amount of the premiums paid for such insurance by CORPORATION shall be payable by AIRLINE on receipt of CORPORATION's billing therefore, with interest at the maximum legal rate per year commencing at the date of payment by CORPORATION. Section 12.3 Notice of Claims If any claim for damages is filed with AIRLINE or if any lawsuit is instituted against AIRLINE, AIRLINE shall give prompt and timely notice thereof to CORPORATION, provided that claims and lawsuits subject to such notice are only those that arise out of or are in any way connected with AIRLINE's operations or activities in regard to the AIRPORT. Notice shall be deemed prompt and timely if given within fifteen (15) days following the date of receipt of a claim or fifteen (15) days following the date of service of process of a lawsuit. Accident or property damage claims in an amount less than five thousand dollars ($5,000) shall be excluded from the requirements of this section. If any claim for damages is filed with CORPORATION or if any lawsuit is instituted against CORPORATION, CORPORATION shall give prompt and timely notice thereofto AIRLINE, provided that claims and lawsuits subject to such notice are only those that arise out of or are in any way connected with the operation of the AIRPORT by CORPORATION and that in any way, directly or indirectly, contingently or otherwise, affect or might reasonably affect AIRLINE. Notice shall be deemed prompt and timely if given within fifteen (15) days following the date of receipt of a claim or fifteen (15) days following the date of service of process of a lawsuit. Accident or property damage claims in an amount less than five thousand dollars ($5,000) shall be excluded from the requirements of this section. The time limitations set forth herein are discretionary. If the notice required to be given by these sections is late, that is, if notice is not given within the time period set forth herein, neither party is precluded from establishing that the notice actually given was prompt and timely under the circumstances of the particular claim or lawsuit unless, by the failure to give such notice within the applicable time period, the other party has been prejudiced in its ability to consider such claim or to respond or to properly defend such lawsuit. If the other party is so prejudiced by a late notice, then the late notice shall not be deemed to be prompt and timely. Section 12.4 Indemnification Generally United 10 Year.wpd 26 4- 26 -01; 8:08AM;EAGLE COUNTY AIRPORT C/ ro , ;9705248247 # 2/ 3 i AIRLINE shall protect, defend, and hold CORPORATION, COUNTY, and their respective directors, officers, agents, and employees completely harmless from and against any and all liabilities, losses, suits, claims, judgments, fines, or demands arising by reason of injury or death of any person or damage to any property, including all reasonable costs for investigation and defense thereof (including but not limited to attorney fees, court costs, and expert fees), of any nature whatsoever arising out of or incident to this Agreement, or the negligence, actions or omissions or misconduct of AIRLINE, its officers, agents, employees, licensees or invitees in connection with the AIRLINE's operations at or about the AIRPORT, except to the extent that such injury, death or damage is caused by the negligence or intentional wrongdoing of the CORPORATION, COUNTY, or their respective employees, agents or predecessors in interest. AIRLINE shall consult with CORPORATION in AIRLINE's selection of counsel in carrying out its obligations hereunder. The provisions of this Section shall survive the expiration or early termination of this Agreement with respect to causes of action that arose during the term of this Agreement. Section 92.5 Release of Liability re: Certain Damages CORPORATION's obligation hereunder shall be subject to the limitations and exclusions that typically apply to any liability insurance policy or government pool coverage carried by CORPORATION, and shall be subjectto the restrictions, provisions and damage limitations contained in the Colorado Governmental Immunity Act, Article 10 of Title 24, Colorado Revised Statutes, as such statute may be subsequently amended or any statute superseding the Act, to the extent, if any, the Act is applicable to CORPORATION. Nothing contained herein shall be construed to constitute a waiver by CORPORATION of the protections, defenses, and immunities, afforded it under Article 10 of Title 24, C.R.S., now existing or as subsequently amended or any statute superseding the Act. Nothing in this Agreement shall be construed or interpreted to require or provide for indemnification of AIRLINE by CORPORATION for any injury to any person or any property damage whatsoever which is caused by the negligence or other misconduct of AIRLINE, its officers, agents, employees, licensees or invitees. CORPORATION agrees to protect AIRLINE from liability as provided herein only as to those torts or actions which lie in tort or may lie in tort forwhich CORPORATION would not be immune underthe Act and only to the extent of the damage limitations as set forth in the Act. Section 12.6 Indemnity - Compliance with Laws, etc. If AIRLINE fails to comply with Rules and Regulations, and with all other federal, state, COUNTY and municipal laws, ordinances, codes, resolutions, and other regulatory measures now in existence or as may hereafter be adopted, modified or amended, applicable to AIRLINE and /or the AIRPORT, and such failure results in damage orexpense to CORPORATION or COUNTY, AIRLINE shall indemnify CORPORATION for that damage or expense. United 10 Yearmpid 27 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 30/ 41 Without limiting the generality of the foregoing, if a prohibited incursion into the Air Operations Area occurs, or the safety or security of the Air Operations Area, the Field and Runway Area, or other sterile area safety or security is breached by or due to the negligence or willful act or omission of any of AIRLINE's employees, agents or contractors, and such incursion or breach results in a civil penalty action being brought against the COUNTY, as the certificate holder, by the U.S Government, AIRLINE will reimburse CORPORATION and COUNTY for all reasonable expenses, including reasonable attorney's fees, incurred by COUNTY in defending against the civil penalty action and for any civil penalty or settlement amount paid by COUNTY as a result of such incursion or breach of airfield or sterile area security. CORPORATION or COUNTY shall promptly notify AIRLINE of any allegation, investigation or proposed or actual civil penalty sought by the U.S. Government for such incursion or breach. Civil penalties and settlement and associated expenses reimbursable under this paragraph include but are not limited to those paid or incurred as a result of violation of FAR Part 107, AIRPORT Security, FAR Part 108, Airplane Operator Security, or FAR Part 139, Certification and Operations : Land Airports Serving Certain Air Carriers and any successors thereto. The provisions of this section shall survive the expiration or early termination of this Agreement for matters arising before such expiration or early termination. Section 12.7 Environmental Indemnity to AIRLINE To the extent allowed by law, CORPORATION agrees to defend and indemnify AIRLINE and its affiliates, directors, officers and employees, from and against any and all losses, liabilities, claims, damages or expenses, including remediation costs, arising from or in connection with any suit, claim, demand or action alleging violation of the environmental laws of the United States or Colorado with respect to conditions of the premises as of or before the commencement of the Term of this Lease. Notwithstanding the foregoing or anything to the contrary stated or implied elsewhere in this Agreement, AIRLINE's obligations under this Section 12.7 shall not extend to any damage, loss or injury, to the extent caused by the CORPORATION, the COUNTY, or their respective employees, agents, or predecessors in interest. ARTICLE 13 RULES AND REGULATIONS, COMPLIANCE WITH LAW, NONDISCRIMINATION Section 13.1 Rules and Regulations (A)AIRLINE shall observe and obey all Rules and Regulations promulgated by United 10 Year.wpd 28 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 31i 41 COUNTY governing conduct on and operations at the AIRPORT and use of its facilities. COUNTY's authority to promulgate or amend Rules and Regulations shall not be affected by this Agreement. (B)AIRLINE shall observe and obey all Rules and Regulations promulgated by CORPORATION governing conduct on and operations at the TERMINAL BUILDING. CORPORATION's authority to promulgate or amend Rules and Regulations shall not be affected by this Agreement. (C)AIRLINE shall not violate, nor permit its agents, contractors, vendors or employees acting on AIRLINE's behalf to violate any such Rules and Regulations that are now in effect or as may from time to time during the term hereof be promulgated by COUNTY or CORPORATION. Copies of the Rules and Regulations, as adopted, shall be forwarded to AIRLINE's local MANAGER in a timely manner. Section 13.2 Compliance with Law (A) AIRLINE shall not use the TERMINAL BUILDING, or any part thereof, or permit the same to be used by any of its employees, officers, agents, subtenants, invitees, or licensees for any illegal purposes and shall, at all times during the term of this Agreement, comply with all applicable ordinances, resolutions, laws, rules and regulations of COUNTY and of any city, county, state, and United States government or any political division, subdivision, agency, or commission thereof that may have jurisdiction to pass laws or ordinances or to make and enforce rules or regulations with respect to the uses of the AIRPORT or the TERMINAL BUILDING. (13) At all times during the term of this Agreement, AIRLINE shall, in connection with AIRLINE's activities and operations at the TERMINAL BUILDING: (1) Comply with and conform to all existing and future statutes, resolutions and ordinances, and the rules and regulations promulgated thereunder, of all Federal, state, and other governmental bodies of competent jurisdiction that apply to or affect, either directly or indirectly, AIRLINE or AIRLINE's operations and activities under this Agreement. (2) To the extent required pursuant to federal statutes, rules, orders or regulations, AIRLINE shall complywith all assurances previously or hereafter given by COUNTY or CORPORATION as a condition for the receipt of grants or PFC approvals. To the extent applicable to AIRLINE, AIRLINE agrees to conduct its operations in the TERMINAL BUILDING for the use and benefit of the public, more specifically as follows: (a) To furnish good, prompt, and efficient services adequate to meet United 10 Year.wpd 29 4- 25 -01; 5:05PM;EAGLE COUNTY / AIRPORT ;9705248247 # 32J 41 i, "'"'` all the demands for its services at the AIRPORT, (b) To furnish said services on a fair, equal, and non - discriminatory basis to all users thereof, and (c) To charge fair, reasonable, and non - discriminatory prices foreach unit of sale or service, provided thatAIRLINE may be allowed to make reasonable and non - discriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. (d) 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 in the use of said facilities. (e) In the construction of any improvements at the TERMINAL BUILDING and the furnishing of services therein, 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. (f) 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 Vl of the Civil Rights Act of 1964, as said Regulations may be amended. (g) AIRLINE assures that it will undertake an affirmative action program, as required by 14 CFR Part 152, Subpart E, to ensure that no person shall, on the ground of race, creed, color, national origin, orsex, be excluded from participating in any employment, contracting, or leasing activities covered in 14 CFR Part 152, Subpart E. AIRLINE assures that no 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. (h) AIRLINE agrees to comply with any affirmative action plan or steps for equal employment opportunity required by 14 CFR, Part 152, Subpart E, as part of the affirmative action program or by any Federal, state or local agency or court, including those resulting from a conciliation Lease, a consent decree, court order, or similar mechanism. Terminal Corporation agrees that state or local affirmative action plan will be used in lieu of any affirmative action plan or steps required by 14 CFR Part 152, Subpart E, only when they fully meet the standards set forth in 14 CFR 152.409. AIRLINE United 10 Year.wpd 30 4-25—Dl; 5:05PM;EAGLE COUNTY AIRPORT a ;9705248247 * 33/ 41 agrees to obtain a similar assurance from its sub - lessees' covered organizations, and to cause them to require a similar assurance of their covered suborganizations, as required by 14 CFR Part 152, Subpart E. (3) Make, at AIRLINE's own expense, all nonstructural improvements, repairs, and alterations to its equipment and personal property that are required to comply with or conform to any of such laws, ordinances, and rules and regulations referred to herein, to which this Agreement is expressly subject. (4) Be and remain an independent contractor with respect to all installations, construction, and services performed by or at the request of AIRLINE, hereunder. ARTICLE 14 TERMINATION Section 14.1 Events Permitting Termination of Agreement by AIRLINE (A) If for any reason CORPORATION has not closed on the sale of BONDS by September 1, 2001, AIRLINE may terminate this Agreement upon written notice to CORPORATION given by 5:00 p.m. Mountain Time on September 4, 2001. (B) In the eventthe TERMINAL BUILDING has not been substantially completed by May 1, 2002 for any reason, AIRLINE may terminate this Agreement upon written notice to the CORPORATION given by 5:00 p.m. Mountain Time on May 4, 2002. (C) AIRLINE may terminate this Agreement and all of its future obligation hereunder at any time that AIRLINE is not in material default in its payments or other obligations to CORPORATION hereunder by giving CORPORATION written notice if CORPORATION is in default of any material provision of this Agreement and has failed to commence reasonable steps to cure such default within forty-five days of receiving AIRLINE's written notice of the default or such longer time as the parties may agree. (D) AIRLINE may terminate this AGREEMENT and all of its future obligation hereunder at any time that AIRLINE is not in material default in its payments or other obligations to CORPORATION hereunder by giving CORPORATION written notice if COUNTY refuses to enter into an AIRPORT use agreement United 10 Year.wpd 31 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 34/ 41 on the same terms and conditions offered to otherAIR TRANSPORTATION companies or revokes without cause AIRLINE's use agreement. Section 14.2 Events Permitting Termination of Agreement by CORPORATION (A) CORPORATION, at its option, may declare this Agreement terminated on the happening of any one or more of the following events: (1) if the rent, or other money payments that AIRLINE herein agrees to pay, or any part thereof, shall be unpaid within fifteen (15) days of the date the same become due, or, in the case of the extraordinary payments to cover shortfall provided in Article 8.5 hereof, on the date the same become due; provided that the allowance of the fifteen- day grace period does not waive any late payment penalties or interest provided for elsewhere in this AGREEMENT. (2) If any act occurs that deprives AIRLINE permanently of the rights, power, and privileges necessary for the proper conduct and operation of its AIR TRANSPORTATION business. (3) CORPORATION may terminate this Agreement and all of its future obligation hereunder at any time that CORPORATION is not in material default in its payments or other obligations to AIRLINE hereunder by giving AIRLINE written notice if AIRLINE is in default of any material provision of this Agreement and has failed to commence reasonable steps to cure such default within forty -five days of receiving CORPORATION'S written notice of the default or such longer time as the parties may agree. (4) If AIRLINE is in violation of any material provision of this Agreement not cured within forty -five (45) days written notice thereof, or, if any such violation cannot with due diligence be cured within such forty -five (45) day period, if AIRLINE has not commenced corrective action within the forty -five (45) day period and diligently pursued such action until the violation is cured. Failure of CORPORATION to declare this Agreement terminated on default of AIRLINE for any of the reasons set forth herein shall not operate to bar, destroy, or waive the right of CORPORATION to cancel this Agreement by reason of any subsequent violation of the terms hereof, nor shall it operate to bar, destroy, or waive any other remedy provided hereunder or by law for such default. (B) Upon the defeasance ofthe BONDS, following maturity orearlieras provided in the Trust Indenture with respect to the BONDS, the AGREEMENT shall terminate, as of the date of defeasance, and AIRLINE shall vacate the premises leased hereunder within not more than ninety (90) days. CORPORATION will give United 10 Yearmpd 32 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 Yt 35/ 41 not less than thirty (30) and not more than sixty (60) days notice of an intent to defease the BONDS in accordance with the Trust Indenture. CORPORATION also will give AIRLINE notice of the date of defeasance within two (2) business days following the actual defeasance. ARTICLE 15 ASSIGNMENT, SUBLETTING, MERGER, AND BANKRUPTCY 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 AIR TRANSPORTATION companies. However, AIRLINE shall have the right to assign all or any part of its rights and interests under this Agreement, or sublet, to any affiliated AIR TRANSPORTATION company, or to assign to any successor to its business through merger, consolidation, voluntary sale, or transfer of substantially all of its assets, and the consent of CORPORATION thereto shall not be required; provided, however, due notice of any such assignment or subletting shall be given to CORPORATION at least thirty (30) days prior to such assignment or subletting. Section 15.2 Nonwaiver of Responsibility No assignment, transfer, conveyance, sublease, or granting a nonexclusive license by AIRLINE shall relieve AIRLINE of its responsibility for payment of fees and performance of all other obligations provided in this Agreement, without specific written consent of the CORPORATION to such relief. Section 15.3 Agreements With Other AIRLINES AIRLINE must obtain advance consent by MANAGER of any agreement by which AIRLINE agrees to handle any portion of the operations of anotherAIRLINE, which will not be unreasonably withheld. AIRLINE shall provide the MANAGER written notice of such proposed activities, including a description of the type and extent of services to be provided. United 10 Year.wpd 33 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 # 36/ 41 Section 15.4 Bankruptcy Notwithstanding Section 15. 1, any party to this Agreement which seeks protection under the Bankruptcy Code, or is currently operating under the protection of the Bankruptcy Code, herein called "Debtor", shall be prohibited from conveying its interest under this Agreement to any other entity without written authorization of CORPORATION at least thirty (30) days prior to such assignment. In the event that such a Debtor intends to assume the Agreement, or assume and assign the Agreement pursuant to 11 U.S.C. §365, the Debtor shall be required to immediately cure any and all defaults and provide adequate assurance of future performance under the Agreement which shall include, but not be limited to: (A) Adequate assurance of the reliability of the proposed source for the fees due under this Agreement on the assumption or assignment of this Agreement. (B) Adequate assurance that all other consideration due under this Agreement shall be forthcoming after the assumption or assignment of this Agreement. Section 15.5 Subsequent Transfers Consent by CORPORATION to any type of transfer provided for by this Article 15 shall not in any way be construed to relieve AIRLINE from obtaining further consent for any subsequent transfer or assignment of any nature whatsoever. Section 15.6 AIRLINE'S Consent to CORPORATION'S Assignment - Other AIRLINE hereby consents to any assignment of CORPORATION'S rights or duties under this Agreement to COUNTY, and agrees that thereupon CORPORATION immediately shall be discharged from any and all duties under this Agreement to the extent of such assignment and relieved from any and all liabilities arising from the duties assigned. ARTICLE 16 SUBORDINATION This Agreement and all rights of AIRLINE hereunder are expressly subordinated and subject to the lien and provisions of any pledge, transfer, hypothecation or assignment made at anytime by CORPORATION to secure BONDS and any additional orsubsequent BONDS or other financing issued to finance the purchase, construction or maintenance United 10 Year.wpd 34 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 tk 37/ 41 C/ � q i of TERMINAL BUILDING and related facilities at the AIRPORT, and the holders of such BONDS shall to the extent provided under the applicable bond indenture possess, enjoy and may exercise all rights of CORPORATION hereunder to the extent such possession, enjoyment and exercise are necessary to insure compliance by AIRLINE and CORPORATION with the terms of this Agreement. AIRLINE hereby consents to all such liens, pledges, transfers, hypothecations and assignments as well as of the real property 'interests of CORPORATION in support of BOND financing. ARTICLE 17 NOTICES Notices required herein shall be in writing and served personally or sent by registered or certified mail, postage prepaid. Personal delivery shall be made, if at all, to the MANAGER, on behalf of the CORPORATION, and to AIRLINE'S station manager, on behalf of AIRLINE, or to a corporate officer or registered corporate agent of either. Any such notice mailed pursuant to this paragraph shall be presumed to have been received by the addressee three (3) business days after deposit of same in the mail. Either party shall have the right, by giving written notice to the other, to change the address at which its notices are to be received. Until any such change is made, notices shall be addressed and delivered as follows: (1) CORPORATION James P. Elwood, A.A.E. President Eagle County Air Terminal Corporation P. 0. Box 850 Eagle, Colorado 81631 Telephone: 970- 524 -9490 Fax: 970- 524 -8247 and also: Eagle County Attorney P.O. Box 850 Eagle, CO. 81631 (2) AIRLINE ATTN: Telephone: United 10 Year.wpd 35 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 7k 38/ 41 v t` Fax: If notice is given in any other manner or at any other place, it will also be given at the place and in the manner specified in this Article 17. ARTICLE 18 MISCELLANEOUS Section 18.1 Successors and Assigns Bound This Agreement shall be binding on and inure to the benefit of the successors and assigns of the parties hereto. Section 18.2 Third Parties Not Benefitted The terms and provisions of this Agreement are for the sole benefit of AIRLINE and CORPORATION and shall not be construed or interpreted to create rights in any third - party beneficiary. Section 18.3 Governing Law and Jurisdiction This Agreement and all disputes arising hereunder shall be governed by the internal laws of the State of Colorado without regard to conflicts of law. The parties agree that venue and jurisdiction over any claim arising from this Agreement shall lie in the courts of the Fifth Judicial District of Colorado. Section 18.4 Severability It is understood and agreed by and between AIRLINE and CORPORATION that if any covenant, condition or provision contained in this Agreement is held to be invalid by any court of competent jurisdiction, or otherwise appears to AIRLINE and CORPORATION to be invalid, such invalidity shall not affect the validity of any other covenant condition or provision herein contained; provided, however, that the invalidity of any such covenant, condition, or provision does not materially prejudice either CORPORATION or AIRLINE in its respective rights and obligations contained in the remaining valid covenants, conditions or provisions of this Agreement. United 10 Year.wpd 36 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 tk 39/ 41 Section 18.5 Consents Wherever approval or consent of CORPORATION or AIRLINE is required under this Agreement, such shall not be unreasonably withheld ordelayed norshall CORPORATION or AIRLINE impose unreasonable conditions to its approval or consent. Section 18.6 Nonliability of CORPORATION's or AIRLINE's Officers, Agents, and Employees No director, officer, agent, or employee of either party shall be charged personally or held contractually liable by or to the other party under any term or provision of this Agreement or because of any breach thereof or because of its or their execution of duties or attempted execution thereof. Section 18.7 Subordination to Agreements with the U. S. Government This Agreement is subject and subordinate to the provisions of any agreements heretofore or hereafter made between COUNTY and the United States relative to the operation or maintenance of the AIRPORT, or to the expenditure of Federal funds for the improvement or development of the AIRPORT, including the expenditure of Federal funds for the development of the AIRPORT in accordance with the provisions of the Federal Aviation Act of 1958, the Federal Aid to Airport Act, the Airport and Airway Development Act of 1970, and the Airport and Airway Improvement Act of 1982, Airport Noise and Capacity Act of 1990, as such acts have been amended or replaced from time to time. In the event that the FAA requires, as a condition precedent to the granting of funds or the approval of a PFC for the improvement of the AIRPORT, modifications or changes to this Agreement, AIRLINE agrees to consent to such amendments, modifications, revisions, supplements, or deletions of any of the terms, conditions, or requirements of this Agreement as may be required to enable COUNTY to obtain such grant of funds of PFC approval. Section 18.8 No Conflicts with Assurances It is understood that COUNTY has made and will in the future make certain assurances as a condition to obtain grant funds and PFC approvals from FAA. Nothing in this Agreement shall conflict with such assurances. Section 18.9 Entire Agreement This Agreement, togetherwith all exhibits attached hereto, constitutes the entire agreement between the parties hereto, and all other representations or statements heretofore made, United 10 Year.wpd 37 4- 25 -01; 5:05PM;EAGLE COUNTY AIRPORT ;9705248247 * 40/ 41 verbal or written, are merged herein, and this Agreement may be amended only in writing, and executed by duly authorized representatives of the parties hereto. Section 18.10 Nonwaiver of Rights No waiver of default by either party of any of the terms, covenants, and conditions hereof to be performed, kept, and observed by the other party shall be construed, or shall operate, as a waiver of any subsequent default of any of the terms, covenants, or conditions herein contained, to be performed, kept, and observed by the other party. Section 18.11 No Exclusive Right It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive right prohibited by federal law, including grant assurances with respect to FAA grants to the COUNTY for AIRPORT development. Section 18.12 Other Air Transportation Agreements If CORPORATION during the term of the AGREEMENT enters into a lease with another SIGNATORY AIRLINE -TYPE B or SIGNATORY AIRLINE -TYPE C or otherwise permits a non- SIGNATORYAIRLINE to use the TERMINAL BUILDING upon more favorable terms and conditions than those contained herein, CORPORATION shall immediately make available to AIRLINE (retroactively to the effective date of such third -party lease or use agreement) such more favorable terms or conditions. 111 [rest of page is blank; next page is signature page] 111 United 10 Year.wpd 38 C IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. CORPORATION EAGLE COUNTY AIR TERMINAL CORPORATION By: e P. Elwood, A.A.E., ident United 10 Year.wpd 39 Amos S. R`a:zr Vice President, 4— ,25- 0i ;11:54AM;EAGLE CO AIRPORT ;9705248247 Q t Apr 241 01 09.42p Stephen H. Horton (303)696 -9308 173 ECA1LlNSE2 EAGLE COUNTY AIR TERMINAL CORPORATION . Illustrative Calculation of Terminal Rent Exhibit B Using Projectl rmMstlmates for Ski Season Year 2001 -02 (All Amounts Are Estima)&s; Total Errors Ana Due to Addition of Calculated Amounts) Exciushre SpacelRent Tote( Base Rent Less Exclusive Space Rent Total Joint Rent to Allocate Less FBO Business Purchase Joint Rent TOW Joint space Rent to Allocate $2.150,000 (421,767) 51,728,233 !769,472) 20% 80% 68761 17 17 0 Joint Space Rteftt AOatition 20 %-Equal — 3haea Projected En lane Tout 86% Allocated Jane �e� American EsNwhre American ao Ra—WBR Ft Sasca Reett United 2.n 542.44 5127,235 Delta 3.783 442,44 158,701 Nortbvest 1.001 M44 42,482 Continental 986 842.44 41,831 65,811 1.180 442.04 50 418 Total Htrpuslve Space/Rent 8.Z% --j= 181,184 Continental 9.938 0.6% 4708,472 1421.767 Tote( Base Rent Less Exclusive Space Rent Total Joint Rent to Allocate Less FBO Business Purchase Joint Rent TOW Joint space Rent to Allocate $2.150,000 (421,767) 51,728,233 !769,472) 20% 80% 68761 17 17 0 Joint Space Rteftt AOatition FBO Business Purchase Joint Rent Allocation 20 %-Equal — 3haea Projected En lane Market 86% Allocated Jane �e� American 536,350 ernes 87.566 sham 5 lktb 38.330 60.207 47. 29.4% 8304,962 225.208 5403 331 W ore 38.350 38,350 12.884 8.3% 46,193 263,550 86,544 ConOn9nta Continental 38,350 17.594 15.799 8.8% 65,811 104.161 Total 5791.752 6.3% 4749,472 8.Z% --j= 181,184 Continental = ---®•a 0.6% 4708,472 66.022 9959091 FBO Business Purchase Joint Rent Allocation Page 1 of 2 p.2 # 3/ 4 Teo FBO Maket 9usirew! Business American _ shsrs Pnrcgeae Purcltsee Joist Rent Unted 47.11% 5M.472 4 Delta 28.4% 5768,472 228.B3Z Northwest 6.3% 4749,472 48,348 Continental 0.6% 4708,472 66.022 8.2% $769,472 63,035 ma.0% 5768.472 Year End Net Concession Revenue Refund to be Shared Based an En lanements 0%1700°!. Terminal Revenues Total Aldine Runt Before Concession share $2,149,518 Allocation of S Con ReVet3 d: Gross Concession Revenues 1.727,193 Aldidss' Allocated Market Conoessren cascseelon Tale! Terminal Raystwes 53.876,711 American Share Shoes Shorts 10 m j1 IBU Idin e i e t Unto 47,8% 29.4% 883,055 $03,055 539,520 24,387 O&M Expense$ Depreciation of ECAT_Funded Assets $t,3e6,754 Delta Nonhtrest 6.3% 6.6% $83.055 583.055 5,219 7,126 Other Miscellaneous Costs 0 0 Cordiinental 62% 483.055 6,804 Saps 1996 Revenue Bonds 701,816 Series 2001A Revenue Bonds (FBO Businscs l »2,828 100.0% — $83.055 Sense 20018 Revenue Bonds A ( Er�artsicn) 1,047,758 Dent OW Reserve Requirement (10 %) 63,066 Less Additional PFC Revenue Cofected 61 440 Total Terminal Building Requearnent 33,710,501 NotConcessica Rcmnues to be Shand 5168,110 a 50% Signatory sibes, Concession Shale $83 055 Page 1 of 2 p.2 # 3/ 4 4...25- 01;11:54AM ;EAGLE CO 4` AIRPORT `;9705248247 Apr 2 01 09:43p Stephen B. Horton 13031696 -9308 Ecan.EASEZ izn EAGLE COUNTY AIR TERAMNAL CORPORATION F-1 hkwt s illustrative Calculation of Terminal Rent Using Projections/Estimates for Ski Season Year 2001 -02 (All Amounts Are Estimates; Total Errors Are Die to Addition of Calculated Amounts) Components of Airline Rent Al0ehlan t10 yr laseal: Base Rent - Ezalltshre (5 couriers) Mb led base Rent - JNnt (20% Equal Shares) Alto= Rase Rent - Joint (0M Eriplanoments) AIIocalad Base Rent- FBO Business Purchase (0761100 %) LawAlorated Yaw End Concession ammue Refund Lass Adjustment Dire to AA $760,000 Cep Net Rent United 110 Yearlaaeel• Ahmled but Rent - Exclusive (3 counters) Abated Base Rent - ion (Zo% Equal Shares) adbeated Bass Rant -Joint (80% Ehplaraunenht) Allocated Bane Rend- Business pUMhwa (09td100 %) Lela Adjusmant Due In UAL 5850,000 Cap Lau Allocated Year End Concession Revenue Refund Net Rent Dob 111 Year Lease]: Allocated Baas Rent - Exclusive (t 712 counters) Allocated One Rent- Joint (Z(P% Equal Stoics) Allocated Oases Rent- Joint (8076 Enplanamsnts) Total Space Rant Baca Rent Praedurn (25 %) Almaled Bass Rant- FBO Business Purchase (0%t1 0o %) uce Mccoled Year End Concession Revenue Refund Net Reel Northwest fl YearLeaeek Aloh:aled Dam Rent- Eaduaira (1 112 counters) Allocated Base Rent- JON (20% Equal Shares) Allocated One Rent - Joint teo% Enplammants) Toed Space Rant Base Rant Prarnton (29%) Allocated Base Rent- F80 Business purchase (0%4100 %) Less Allocated Year End Concession Reverwe Refund Net Rani ContlnsaW M Year Leant: Aloested Bea* Mani! - EKWu6i" (2 counters) Allocated Bssa Rant - Joint (20% Equd Shares) Allocated Base Rent - Joint (80% EnplanenaMs) Total Space Rant Base Rent Premium (25%) Abated Base Rent - FSO 8uslness purchase (0'/a11 00Y.) Less Allocated Year End Concession Revenue Refund Nei Rant Total ANne Rant; Total Base Real. EsJus" TOW AlocMed Base Rent - Joint Total 8wa Assn Pramlwn Allocated Base Rent- FBQ Business purchase (OW100%j Lass Adiusonent Dee to AA $750,000 Cop Less Adjustment Due to UAL $850,000 Cap Less Allocated Year End Concession Revenue Refund Total NO Rent Page 2 of 2 $127,ms 38,350 384,902 356,134 (39.520) (107,182 5750.000 $158,701 30,350 225,209 226,932 0 ,_ 124.397). 5624.606 *42,462 38,350 4111.1193 5128,026 32,258 48,348 (5.2181 5204.412 $41.931 38,350 65,all $146,092 36,523 68.022 0,128) 5241.611 VA41B 38,360 62.834 S161,5W 37.901 63,035 (8.604) 5245.735 $421,787 858,761 108,880 769,472 (107.162) 0 _ B3,055 52.066.463 P-3 * 4/ 4 4- .25 -0 1 ; l 1:54AM ;EAGLE CO C; AIRPORT Ah,R 25 101 11:15AM . I III i. .9705248247 Y< 2/ 4 a " s x 0. a z w aa 0 w r., H H pq N pC i -P. 4 Eagle County Air Terminal Corporation Signatory Airline -Type B Terminal Building Lease TABLE OF CONTENTS ARTICLE1 Definitions ..................................................................... ..............................2 ARTICLE2 Term ............................................................................. ..............................4 ARTICLE 3 Rights and Privileges .................................................... ..............................5 ARTICLE 4 Terminal Building Construction ..................................... ..............................9 ARTICLE5 Premises ...................................................................... .............................10 ARTICLE 6 Terminal Building Capital Improvements ...................... .............................12 ARTICLE 7 Rentals and Fees ........................................................ .............................13 ARTICLE 8 Adjustment of Base Rent and Extraordinary Payment .............................16 ARTICLE 9 Maintenance, Repair, Alterations and Improvements .. .............................20 ARTICLE 10 Reservations of the County ......................................... .............................21 ARTICLE 11 Damage or Destruction ................................................ .............................23 ARTICLE 12 Insurance, Indemnification and Release of Liability ..... .............................24 ARTICLE 13 Rules and Regulations, Compliance with Law, Nondiscrimination ........... 28 ARTICLE14 Termination ................................................................. .............................31 ARTICLE 15 Assignment, Subletting, Merger and Bankruptcy ......... .............................32 ARTICLE16 Subordination .............................................................. .............................34 ARTICLE17 Notices ........................................................................ .............................35 ARTICLE 18 Miscellaneous .............................................................. .............................35 EXHIBITS A Terminal Layout B Illustrative Calculation of Rates and Charges United 10 Year.wpd 40 4- 25 -01; 5:05PM ;EAGLE COUNTY AIRPORT ;9705248247 l q A Eagle County Air Terminal Corporation Signatory Airline Type B Terminal Building Lease TABLE OF CONTENTS ARTICLE1 Definitions ..................................................................... ..............................2 ARTICLE2 Term ............................................................................. ..............................4 ARTICLE 3 Rights and Privileges .................................................... ..............................5 ARTICLE 4 Terminal Building Construction ..................................... ..............................9 ARTICLE5 Premises ..................................................................... .............................10 ARTICLE 6 Terminal Building Capital Improvements ...................... .............................12 ARTICLE 7 Rentals and Fees ........................................................ .............................13 ART!'LE 8 Adjustment of Base Rent and Extraordinary Payment .............................16 ARTICLE 9 Maintenance, Repair, Alterations and Improvements .. .............................20 ARTICLE 10 Reservations of the County ......................................... .............................21 ARTICLE 11 Damage or Destruction ................................................ .............................23 ARTICLE 12 Insurance, Indemnification and Release of Liability ..... .............................24 ARTICLE 13 Rules and Regulations, Compliance with Law, Nondiscrimination ........... 28 ARTICLE14 Termination ................................................................. .............................31 ARTICLE 15 Assignment, Subletting, Merger and Bankruptcy ......... .............................33 ARTICLE 16 Subordination .............................................................. .............................34 ARTICLE17 Notices ........................................................................ .............................35 ARTICLE 18 Miscellaneous .............................................................. .............................36 EXHIBITS A Terminal Layout B Illustrative Calculation of Rates and Charges United 10 Year.wpd * 2/ 41