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Home My WebLink AboutECAT10-137 United Air Lines_terminal lease\a■r-1 EM EAGLE COUNTY AIR TERMINAL CORPORATION Terminal Building Lease EAGLE COUNTY AIR TERMINAL CORPORATION TERMINAL BUILDING LEASE "VMV `40! Table of Contents Page ARTICLE 1 DEFINITIONS....................................................................................................... 2 Section1.1 Definitions................................................................................................................2 Section 1.2Cross-References.....................................................................................................7 Section 1.3Construction of Certain Words................................................................................7 ARTICLE2 TERM......................................................................................................................8 Section2.1 Term 8.........................................................................................8 Section2.2Holding Over...........................................................................................................8 ARTICLE 3 RIGHTS AND PRIVILEGES................................................................................ 9 Section 3.1Use of the Terminal Building..................................................................................9 Section 3.2Use of the Airport ....................................................................................................9 Section 3.3 Specific Rights of Airline at the Airport..................................................................9 Section 3ALimitations on Use by Airline................................................................................11 ARTICLE 4 LEASED PREMISES...........................................................................................13 Section 4.1Terminal Building Space.......................................................................................13 Section 4.2Surrender of the Premises......................................................................................14 Section 4.3Accommodation of New and/or Existing Airlines.................................................14 Section 4ARemodeling and New Construction.......................................................................15 Section4.5Access....................................................................................................................15 ARTICLE 5 TERMINAL BUILDING CAPITAL IMPROVEMENTS...................................17 Section 5.1 Terminal Building Capital Improvement...............................................................17 Section 5.2Improvements and Development by the Corporation............................................17 ARTICLE 6 RENTALS, OTHER PAYMENTS AND REVENUE SHARING .......................19 Section 6.1 Consideration.........................................................................................................19 Section 6.2Terminal Building Total Rental Requirement.......................................................19 Section 6.3Principal Backstop Payment..................................................................................20 Section 6.4Debt Service Coverage Account............................................................................20 Section 6.5Extraordinary Payment to Cover Shortfall............................................................20 Section 6.6Year-End Refund of Net Concession Revenue......................................................21 Section6.7Other Charges........................................................................................................22 Section 6.8Partial Month Charges...........................................................................................22 Section6.9Late Payments........................................................................................................22 Section 6.10 Disputed Charges................................................................................................23 Section 6.11 Security for Payment of Rent..............................................................................23 Section 6.12 Information to be Supplied by Airline................................................................24 Section 6.13 Passenger Facility Charges.................................................................................25 ii L`/ Lwam f EAGLE COUNTY AIR TERMINAL CORPORATION TERMINAL BUILDING LEASE Table of Contents (Cont'd.) Page ARTICLE 7 CALCULATION OF TERMINAL BUILDING RENT.......................................26 Section 7.1 Effective Date of Rate Calculations.......................................................................26 Section 7.2Corporation Records..............................................................................................26 Section 7.3Items Excluded from Operations and Maintenance Expenses...............................26 Section 7AConsultation Process for Annual Rent Calculation...............................................27 Section 7.5Calculation of Terminal Building Total Rental Requirement................................28 Section 7.6Reconciliation of Prior Year Terminal Building Rent...........................................30 Section 7.7Extraordinary Adjustments of Terminal Building Rental Rates ............................31 Section 7.8Most Favored Nations Clause and Other Corporation Covenants .........................31 ARTICLE 8 MAINTENANCE, REPAIR, ALTERATIONS AND IMPROVEMENTS .........33 Section 8.1 Airline's Responsibilities.......................................................................................33 Section 8.2Corporation's Responsibilities...............................................................................34 Section 8.3Corporation's Right to Inspect and Make Repairs.................................................35 Section 8AAlterations and Improvements...............................................................................35 ARTICLE 9 DAMAGE OR DESTRUCTION OF PREMISES................................................36 Section9.1Minor Damage.......................................................................................................36 Section 9.2Substantial Damage...............................................................................................36 Section9.3Total Damage.........................................................................................................36 Section 9AScope of Restoration of Premises..........................................................................37 Section 9.5Damage from Airline Negligence or Willful Act ................................................. 38 ARTICLE 10 RESERVATIONS OF THE COUNTY.................................................................39 Section 10.1 County Reservations...........................................................................................39 Section 10.2 Non -Compliance with County Reservations......................................................40 ARTICLE 11 INDEMNIFICATION AND INSURANCE..........................................................41 Section11.1 Indemnification...................................................................................................41 Section 11.2 Airline Insurance.................................................................................................42 iii 1400/ EAGLE COUNTY AIR TERMINAL CORPORATION TERMINAL BUILDING LEASE Table of Contents (Cont'd.) Pale ARTICLE 12 RULES AND REGULATIONS, COMPLIANCE WITH LAWS, NON- DISCRIMINATION AND AFFIRMATIVE ACTION.........................................44 Section 12.1 Rules and Regulations...................................................................................44 Section 12.2 Compliance with Laws.................................................................................44 Section 12.3 Non -Discrimination and Affirmative Action................................................45 ARTICLE 13 DEFAULT AND TERMINATION......................................................................48 Section 13.1 Events of Default..........................................................................................48 Section 13.2 Events Permitting Termination of Lease by Airline.....................................50 Section 13.3 Events Permitting Termination of Lease by Corporation .............................51 Section 13.4 Possession by Corporation............................................................................52 ARTICLE 14 ASSIGNMENT, SUBLETTING, MERGER AND BANKRUPTCY ..................53 Section 14.1 Assignment and Subletting...........................................................................53 Section 14.2 Non -Waiver of Responsibility......................................................................53 Section 14.3 Relinquishment of Space..............................................................................53 Section 14.4 Ground Handling Agreements......................................................................54 Section14.5 Bankruptcy....................................................................................................54 Section 14.6 Subsequent Transfers....................................................................................55 Section 14.7 Airline's Consent to Corporation's Assignment...........................................55 ARTICLE 15 SUBORDINATION TO BOND ORDINANCES.................................................56 ARTICLE 16 GENERAL PROVISIONS....................................................................................57 Section 16.1 Successors and Assigns Bound.....................................................................57 Section 16.2 Governing Law.............................................................................................57 Section16.3 Severability...................................................................................................57 Section 16.4 Quiet Enjoyment...........................................................................................57 Section16.5 Taxes.............................................................................................................57 Section16.6 Liens..............................................................................................................58 Section 16.7 Obtaining Federal and State Funds...............................................................59 Section 16.8 Subordination to Agreements with the U.S. Government ............................59 Section 16.9 Incorporation of Exhibits..............................................................................59 Section 16.10 Entire Lease..................................................................................................60 Section 16.11 Non -Waiver of Rights...................................................................................60 Section16.12 Force Majeure...............................................................................................60 Section16.13 Headings.......................................................................................................60 iv Imwoj EAGLE COUNTY AIR TERMINAL CORPORATION TERMINAL BUILDING LEASE Table of Contents (Cont'd.) Page ARTICLE 16 GENERAL PROVISIONS (Cont'd.) Section 16.14 Non -Exclusive Rights...................................................................................60 Section 16.15 Inspection of Books and Records.................................................................61 Section 16.16 Generally Accepted Accounting Principles ..................................................61 Section 16.17 Consent Not to be Unreasonably Withheld ..................................................61 Section 16.18 Authority of Manager...................................................................................61 Section 16.19 Amendments.................................................................................................61 Section 16.20 Attorney Fees................................................................................................62 Section 16.21 Vending Machines........................................................................................62 Section 16.22 Public Address System.................................................................................62 Section 16.23 Employees of Airline....................................................................................62 Section 16.24 Removal of Disabled Aircraft.......................................................................62 Section 16.25 Licenses, Fees and Permits...........................................................................63 Section 16.26 National Emergency......................................................................................63 Section 16.27 Time is of the Essence..................................................................................63 Section 16.28 Employee Parking.........................................................................................63 Section16.29 Notices..........................................................................................................64 EXHIBITS A AIRLINE PREMISES - EXCLUSIVE USE SPACE AND JOINT USE SPACE B CALCULATION OF TERMINAL BUILDING RENT C AIRLINE AND AFFILIATE INSURANCE REQUIREMENTS v EAGLE COUNTY AIR TERMINAL CORPORATION TERMINAL BUILDING LEASE This TERMINAL BUILDING LEASE (the "LEASE") made and entered into this day of , 2009, by and between the Eagle County Air Terminal Corporation, a not for profit 63-20 corporation created under the laws of the State of Colorado, hereinafter called "CORPORATION," and United Air Lines, Inc., a corporation authorized to do business in the State of Colorado, hereinafter called "AIRLINE". WITNESSETH: WHEREAS, CORPORATION is owner and operator of the commercial passenger terminal facilities located at the Eagle County Regional Airport in Eagle County, Colorado, which airport is owned and operated by Eagle, County (the "COUNTY"); and WHEREAS, CORPORATION 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, 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 is willing to lease and grant same to AIRLINE under terms and conditions hereinafter stated; and WHEREAS, CORPORATION and AIRLINE have the power and authority to enter into this LEASE; NOW, THEREFORE, for and in consideration of the PREMISES and the mutual covenants and considerations herein contained, CORPORATION and AIRLINE agree as follows: ARTICLE 1 DEFINITIONS Section 1.1 Definitions The terms and phrases defined in this Article 1 for all purposes of this TERMINAL BUILDING LEASE shall have the following meanings: 1.1.1 "Air Transportation" shall mean the carriage of persons, property, cargo and mail by aircraft. 1.1.2 "AIRLINE's Authorized Representative" shall mean such person designated by AIRLINE in writing to the MANAGER prior to the commencement of the term hereof and from time -to -time during the term hereof setting forth the name, title and authority of such person. 1.1.3 "Airport" shall mean the Eagle County Regional Airport in Eagle County, Colorado, which is owned and operated by Eagle County, as it may hereafter be modified, changed or developed from time -to -time. 1.1.4 "AIRPORT Purpose" shall mean any action or undertaking by the CORPORATION directly relating to the development and preservation of the AIRPORT for air commerce in accordance with all applicable laws (federal, state and local, statutory, regulatory and decisional) and this LEASE. 1.1.5 "Af diate(s) or Affiliated Airline(s)" shall mean any AIR TRANSPORTATION company that is specifically designated as such by AIRLINE during the Term of this LEASE and is approved by the prior written consent of CORPORATION which shall not be unreasonably withheld. AIRLINE shall give the CORPORATION thirty (30) days prior written notice of any change in airlines that AIRLINE chooses to use as an AFFILIATE operating at the TERMINAL BUILDING. During such period of time that an airline is an AFFILIATE in accordance with the terms hereof, such AFFILIATE shall (1) be charged at the same TERMINAL BUILDING rental rates as AIRLINE without payment of any premiums and (2) participate in any reconciliation process related to TERMINAL BUILDING rent provided AIRLINE (a) remains a signatory to this LEASE and (b) agrees and shall be obligated to serve as a financial guarantor for all rent, activity fees and any other charges incurred by all AFFILIATES of AIRLINE at the TERMINAL BUILDING. rWnvl�l 1.1.6 "Annual Budget" shall mean the budget of the CORPORATION pertaining to the TERMINAL BUILDING for any FISCAL YEAR. 1.1.7 "Bonds" shall mean that certain debt issued by the CORPORATION to finance construction of the TERMINAL BUILDING (Airport Terminal Project Revenue Bonds, Series 1996), that certain debt issued by the CORPORATION to finance expansion of the TERMINAL BUILDING (Airport Terminal Project Revenue Bonds, Series 2001 A), that certain debt issued by the CORPORATION to finance the PURCHASE OF COMMERCIAL PASSENGER SERVICE RIGHTS (Taxable Airport Terminal Project Revenue Bonds, Series 2001B) and any other debt, financing instrument or obligation issued by the CORPORATION to finance projects for the expansion, improvement or preservation of the TERMINAL BUILDING and related facilities and services. 1.1.8 "Capital Improvement" shall mean any single item having an estimated useful life of more than one year and a gross cost in excess of thirty thousand dollars ($30,000) acquired, purchased, or constructed to improve, maintain, or develop the TERMINAL BUILDING, as well as any extraordinary or substantial expenditure whose object is to preserve, enhance or protect the operational capability and capacity of the TERMINAL BUILDING. Those items which cost less than or equal to thirty thousand dollars ($30,000) are hereinafter referred to as "Minor Capital Expenditures". 1.1.9 "Commercial Passenger Service Rights Purchase" shall mean the 2001 purchase by the CORPORATION of the right to provide commercial passenger service facilities and services from the AIRPORT'S fixed base operator, such purchase that was financed with that certain debt (Taxable Airport Terminal Project Revenue Bonds, Series 2001B) issued by the CORPORATION. 1.1.10 "Exclusive Use Space" shall mean, at any time, that portion of the PREMISES leased by the CORPORATION to AIRLINE on an exclusive use basis as more particularly set forth in Exhibit A, as the same may be amended from time -to -time. 1.1.11 "FAA" shall mean the Federal Aviation Administration of the U.S. Government or any federal agency succeeding to all or part of its jurisdiction. �%� 114W/ 1.1.12 "Fiscal Year" shall mean the twelve (12) months commencing on January 1" and ending on December 31 th of any year or such other twelve (12) month period as may be designated by the CORPORATION from time -to -time. 1.1.13 "Force Majeure" shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemies, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, arrests and restraints of rulers and people, civil disturbances, explosions, inability with reasonable diligence to obtain materials and any other causes not within the control of the party claiming a suspension, which by the exercise of due diligence such party shall not have been able to avoid or overcome. 1.1.14 "Joint Use Formula" shall mean the formula used to prorate eighty percent (80%) of the specified charge for Joint Use Space according to the ratio of the number of each SIGNATORY AIRLINES enplaned passengers at the Airport during the most recent calendar year for which such information is available to the total number of enplaned passengers of all SIGNATORY AIRLINE users of the service or space during that same calendar year. The remaining twenty percent (20%) is to be prorated equally among all SIGNATORY AIRLINE users of the service or space. Joint Use Formula may also mean any other formula as may be agreed upon by all SIGNATORY AIRLINES using the service or space. 1.1.15 "Joint Use Space" shall mean, at any time, that portion of the PREMISES leased and used jointly by AIRLINE with other SIGNATORY AIRLINES, as more particularly set forth in Exhibit A, as the same may be amended by from time -to -time. 1.1.16 "Manager" shall mean the person responsible for the daily management of the TERMINAL BUILDING, designated as such by the CORPORATION. The word also means the chief assistant of that official or acting MANAGER, if any, of the CORPORATION whenever the MANAGER is unable to act in such capacity, or the successor of the MANAGER in functions, if any. 1.1.17 "Net Revenues" for a FISCAL YEAR shall mean Airport Revenues less Operations and Maintenance Expenses and Financing Costs for that FISCAL YEAR. 1.1.18 "Non -Signatory Airline(s)" shall mean any airline providing scheduled or unscheduled service to the TERMINAL BUILDING which is not a SIGNATORY AIRLINE. 4 1.1.19 "Operations and Maintenance Expenses" shall mean all reasonable and necessary current expenses of CORPORATION, paid or accrued, for operating, maintaining and repairing the Airport including administrative expenses, depreciation or the principal portion of debt service (but not both) on CORPORATION funded capital improvement expenditures and other CORPORATION expenses reasonably allocated to the Airport. 1.1.20 "Passenger Facility Charge(s) or PFC(s)" shall mean any PASSENGER FACILITY CHARGE which CORPORATION may impose upon passengers enplaning at the AIRPORT pursuant to 14 CFR Part 158, as it may be amended or superceded from time -to -time. 1.1.21 "Premises" shall mean AIRLINE's leased EXCLUSIVE USE SPACE and JOINT USE SPACE, as designated in Exhibit A. 1.1.22 "Public Areas" shall mean at any time those TERMINAL BUILDING areas not leased on an exclusive or joint use basis, or otherwise, to any person, company or corporation and any areas of the TERMINAL BUILDING that are not suitable for public access or where public access is restricted by the CORPORATION due to operations, safety or security requirements. 1.1.23 "Requesting Airline" shall mean a SIGNATORY AIRLINE desiring to provide new or increased commercial AIR TRANSPORTATION service at the TERMINAL BUILDING, or to provide a change of aircraft for existing service for which the SIGNATORY AIRLINE does not have appropriate facilities at the TERMINAL BUILDING. 1.1.24 "Rules and Regulations" shall mean those lawful, reasonable and non- discriminatory rules, regulations and resolutions promulgated by CORPORATION (including the AIRPORT's Minimum Standards for Aeronautical Activities which have been adopted by the CORPORATION) or operating directives issued by the MANAGER for the orderly use of the TERMINAL BUILDING by both the SIGNATORY AIRLINES and other tenants and users of the AIRPORT as the same may be amended, modified or supplemented from time -to -time, but which are not inconsistent with the express terms of this LEASE and which have not been found by a court of law to be unlawful, unreasonable or discriminatory. F J �M ✓ 11"■V 1.1.25 "Signatory Airline(s)" shall mean those airlines which provide AIR TRANSPORTATION pursuant to published schedules over specified routes to and from the TERMINAL BUILDING and which hold the necessary authority from the FAA to provide such transportation and that have executed substantially similar agreements to this LEASE with the CORPORATION, including term, covering the lease, use and occupancy of facilities at the TERMINAL BUILDING. A SIGNATORY AIRLINE or an AFFILIATE of such airline must lease EXCLUSIVE USE SPACE at the TERMINAL BUILDING, subject to the availability of space solely determined at the discretion of the CORPORATION. Except as otherwise provided herein, no SIGNATORY AIRLINE shall have any right pursuant to this LEASE to object to the CORPORATION's entry into the LEASE with any other airline. 1.1.26 "TERMINAL BUILDING" shall mean the building, as designated in Exhibit A, and its surrounding improvements which facilitate the provision of AIR TRANSPORTATION services by airlines and supports other related businesses, as such building and improvements currently exist, or as they may hereafter be relocated, constructed, modified, changed or developed from time -to -time. TERMINAL BUILDING includes the passenger TERMINAL BUILDING and those related facilities funded through the CORPORATION including perimeter concrete (not including the aircraft apron), associated security fencing, terminal entrance/exit roads and vehicle circulation areas, curb fronts, employee and public parking lots, rental car parking, service and ready/return areas, utilities and any attached structures which serve tenants in the building structure. 1.1.27 "TERMINAL BUILDING Revenues" shall mean any income and revenue lawfully derived directly or indirectly by the CORPORATION from the operation and use of, or otherwise relating to, the TERMINAL BUILDING. The term does not include any grants, PASSENGER FACILITY CHARGES, appropriations, loans, gifts or bond proceeds from federal, state or local governments. 6 `4� Section 1.2 Cross -References All references to articles, sections and exhibits in this LEASE pertain to material in this LEASE, unless specifically noted otherwise. Section 1.3 Construction of Certain Words Words used in this LEASE may be construed as follows: 1.3.1 Number - Words used in the singular include the plural and words used in the plural include the singular. 1.3.2 Tense - Words used in the present tense include the future. 1.3.3 Gender - Words used in the masculine include the feminine and neuter, and vice - versa. 1.3.4 Capitalized Words - Words with all letters capitalized indicate a defined term in this LEASE. 7 \"MP/ 114� Section 2.1 Term ARTICLE 2 TERM The Term of this LEASE (the "Term") shall begin on December 1, 2009 ("Commencement Date") and shall terminate in thirty-six (36) consecutive months thereafter (except as it may be terminated or extended in accordance with this LEASE), and the rentals, fees and charges shall be effective on the Commencement Date, but only in the event that the AIRLINE PREMISES are then tendered to AIRLINE ready for use and occupancy in accordance with the terms and provisions of this LEASE." Section 2.2 Holding Over If AIRLINE remains in possession of the AIRLINE PREMISES after the expiration of this LEASE without any written renewal thereof, such holding over shall not be deemed as a renewal or extension of this LEASE, but shall create only a tenancy from month to month that may be terminated at any time by CORPORATION upon thirty (30) days prior written notice. Such holding over shall otherwise be upon the same terms and conditions as set forth in this LEASE, and amendments hereto executed prior to its expiration. CORPORATION acknowledges and agrees that the foregoing sets forth AIRLINE's entire obligation and liability for any holding over. 8 elm `4� 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, including the runways, ramps, taxiways, aprons or any other facility of the AIRPORT except to the TERMINAL BUILDING which is owned and operated by the CORPORATION. Such rights and privileges for the use of the AIRPORT are granted to the AIRLINE in a separate resolution adopted by the COUNTY. Section 3.3 Specific Rights of AIRLINE at the TERMINAL BUILDING AIRLINE shall have the right, in addition to all rights elsewhere granted in this LEASE, but subject to the RULES AND REGULATIONS of the CORPORATION or COUNTY to use the TERMINAL BUILDING for the following purposes: 3.3.1 The operation of an AIR TRANSPORTATION business by aircraft for the carriage of persons, property, cargo and mail, including all activities reasonably necessary to such operation; 3.3.2 Within the TERMINAL BUILDING, the loading and unloading of aircraft or the servicing, parking, storing and testing of other equipment owned, or operated by, AIRLINE, or 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; 3.3.3 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 AIRPORT 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 carrier for such right as CORPORATION or COUNTY may set by agreements, orders or RULES AND REGULATIONS; 3.3.4 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; 3.3.5 The purchase of AIRLINE's requirements of personal property or services, including fuel, lubricants, food, beverage and other passenger supplies, and any other materials and supplies used by AIRLINE from any person or company of AIRLINE's choice authorized to do business on the 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 of AIRLINE's AIR TRANSPORTATION business. Nothing herein shall restrict CORPORATION from levying a reasonable and non-discriminatory concession fee on any person or company providing property or services to AIRLINE that are not incidental to AIRLINE's AIR TRANSPORTATION business, 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; 3.3.6 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 restrict CORPORATION or COUNTY from levying a reasonable and non- discriminatory parking charge for use of these employee parking spaces; 3.3.7 The installation and operation of identifying signs, posters and graphics on AIRLINE's 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 10 REGULATIONS and in compliance with all applicable laws and resolutions. AIRLINE shall be responsible for obtaining CORPORATION or COUNTY approval of signage; 3.3.8 The installation, maintenance and operation of computer data lines, telephone communications equipment, 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 3.3.8.1 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; 3.3.8.2 the use and location of such equipment shall not conflict or interfere with the operation of other similar equipment in or around the TERMINAL BUILDING; 3.3.8.3 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 3.3.8.4 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 3.4 Limitations on Use by AIRLINE In connection with the exercise of its rights under this LEASE, AIRLINE shall not: 3.4.1 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; 3.4.2 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; 3.4.3 Dispose of, or permit any other person within its control (including service contractors) to dispose of, any waste material taken from, or products used (whether 11 �%� 114W� liquid or solid) with respect to, its aircraft into the sanitary or storm sewers at, surrounding or adjacent to 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; 3.4.4 Keep or store within enclosed portions of the TERMINAL BUILDING, during any twenty-four (24) hour period, flammable liquids in excess of AIRLINE's working requirements during said twenty-four (24) hour period, except in storage facilities specially constructed for such purposes in accordance with standards established by the National Board of Fire Underwriters, and approved in writing by the MANAGER from the standpoint of safety; 3.4.5 Do, or permit to be done, upon the AIRPORT or TERMINAL BUILDING any act or thing within its control that will be in conflict with Federal Aviation Administration Regulations Part 139 or jeopardize the AIRPORT's operating certificate; 3.4.6 Do, or permit to be done, any act or thing within its control in conflict with the TERMINAL BUILDING or AIRPORT's Security Plan or federal security requirements; 3.4.7 Do, or permit to be done, any act or thing within its control in conflict with or in violation of the RULES AND REGULATIONS; 3.4.8 Do, or permit to be done, any act, or let any condition exist, which is in conflict with current or future Environmental Protection Agency, State of Colorado or other governmental entities' rules, regulations or directives related to environmental protection; 3.4.9 Do, or permit to be done, at the TERMINAL BUILDING heavy maintenance (i.e., aircraft or other equipment engine changes, control surface replacements, overhauls, etc.) within AIRLINE's control, providing that suitable, reasonably accessible space is available from the CORPORATION or COUNTY for such purpose. 12 lm� ARTICLE 4 LEASED PREMISES Section 4.1 TERMINAL BUILDING Space 4.1.1 AIRLINE hereby leases its assigned EXCLUSIVE USE SPACE in the TERMINAL BUILDING being more particularly delineated on Exhibit A, as the same may be amended from time -to -time. 4.1.2 AIRLINE hereby leases the JOINT USE SPACE it uses with other SIGNATORY AIRLINES in the TERMINAL BUILDING being more particularly delineated on Exhibit A, as the same may be amended from time -to -time. 4.1.3 AIRLINE shall use its EXCLUSIVE USE SPACE for office and operations purposes and for the handling, ticketing, billing and manifesting of passengers, baggage, cargo, property and mail in the conduct of its AIR TRANSPORTATION business. If AIRLINE desires to use its EXCLUSIVE USE SPACE on behalf of any other AIR TRANSPORTATION company authorized by the MANAGER to use the TERMINAL BUILDING, AIRLINE must first obtain written approval of MANAGER, other than for AFFILIATED AIRLINES, as defined in this LEASE. 4.1.4 AIRLINE shall use the JOINT USE SPACE for purposes designated for such space by the MANAGER, which shall include: 4.1.4.1 Loading, unloading and related processing of passengers within the passenger holdroom area of the TERMINAL BUILDING; 4.1.4.2 Baggage claim area (delivery and display of inbound passenger baggage and passenger waiting areas for delivery of their baggage); 4.1.4.3 Tug cart circulation and baggage loading and unloading; 4.1.4.4 Storage of AIRLINE ramp equipment within areas adjacent to the TERMINAL BUILDING appropriate for such storage that is necessary for the conduct of AIR TRANSPORTATION operations around and adjacent to the terminal aircraft apron; 4.1.4.5 Areas adjacent to the PREMISES that are available to airline employees for circulation and the convenience of operations and are not available to the public. 13 Section 4.2 Surrender of the PREMISES 4.2.1 CORPORATION shall not be required to give notice to quit possession of the PREMISES hereunder upon expiration of the term of this LEASE. CORPORATION acknowledges that the following conditions shall also be excluded from AIRLINE's duty to surrender the PREMISES, and that AIRLINE shall not be liable for, or required to correct or make good any damage caused by (a) any willful or negligent act or omission of the CORPORATION, its employees, contractors or agents, or, in the case of any jointly or commonly used portion of the PREMISES, any damage due to any willful or negligent act or omission of any other airline or other tenant, their employees or agents; (b) any latent defect in any TERMINAL BUILDING improvement not constructed by or on behalf of AIRLINE, and (c) any other damage or loss that AIRLINE is not responsible to repair under the terms of this LEASE. AIRLINE covenants and agrees that, on expiration of the term of this LEASE, 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 expense, in, on or about the TERMINAL BUILDING, except that AIRLINE shall not remove fixtures, equipment and other personal property for which the CORPORATION is required to reimburse AIRLINE pursuant to Section 4.4; and 4.2.2 AIRLINE shall not abandon any of its property on the PREMISES without the prior written consent of the MANAGER. Any and all property not removed by AIRLINE within the thirty (30) day period, except as otherwise mutually agreed upon by the parties hereto, shall thereupon, at the option of the CORPORATION, become a part of the land on which it is located, and title thereto shall vest with the 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 4.3 Accommodation of New and/or Existing Airlines The parties hereto agree that every reasonable effort will be made to accommodate any other new entrant or incumbent SIGNATORY AIRLINE, such carrier to be referred to hereinafter as "REQUESTING AIRLINE". The parties acknowledge that the CORPORATION will make every effort to accommodate such REQUESTING AIRLINE through direct lease of space between CORPORATION and REQUESTING AIRLINE. In the event that no space which will accommodate the REQUESTING AIRLINE, as determined at the sole discretion of the CORPORATION, is available for lease from the CORPORATION, the parties hereto recognize that it may become necessary to share the use of the PREMISES demised herein with other 14 lklv� 1140� SIGNATORY AIRLINES so as to reasonably accommodate new and/or additional AIR TRANSPORTATION service at the AIRPORT. AIRLINE agrees to cooperate with the CORPORATION by giving appropriate consideration to any request by the CORPORATION to accommodate such REQUESTING AIRLINE in its PREMISES. If AIRLINE accommodates such REQUESTING AIRLINE, AIRLINE may charge the REQUESTING AIRLINE a reasonable and non-discriminatory fee for secondary use of AIRLINE's space, and REQUESTING AIRLINE shall be required to indemnify the incumbent airline to the same extent that the incumbent airline is required to indemnify the CORPORATION for the use and occupancy of the PREMISES under this LEASE. Section 4.4 Remodeling and New Construction CORPORATION reserves the right to provide EXCLUSIVE USE SPACE to a REQUESTING AIRLINE by remodeling existing space or constructing new space, subject to the provisions of Article 5 hereof and after consultation with all SIGNATORY AIRLINES. 4.4.1 "Remodeling" will be treated as a tenant improvement and the sole cost will be borne by the REQUESTING AIRLINE as well as the reasonable undepreciated book value of improvements made to the existing space by the incumbent airline, not to exceed an estimated useful life of five years, and all remodeling and relocation costs, if any, incurred by any incumbent airline that has accommodated the REQUESTING AIRLINE. Rentals, fees and other charges for the REQUESTING AIRLINE's space will be determined in accordance with Articles 6 and 7 of this LEASE. 4.4.2 "New construction" will be treated as a common cost element of the TERMINAL BUILDING, and all costs involving additions or building modifications (including financing costs, if any) will be included in the TERMINAL BUILDING REQUIREMENT used to calculate TERMINAL BUILDING rental rates, subject to the provisions of Articles 6 and 7 hereof. Section 4.5 Access 4.5.1 Subject to the provisions hereof, the RULES AND REGULATIONS, and such restrictions as AIRLINE may impose with respect to its EXCLUSIVE USE SPACE, the 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 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 the CORPORATION and shall at all times remain public property to be used only as public airport facilities, except as may be otherwise provided herein. 4.5.2 The ingress and egress provided for in Section 4.5.1 above shall not be used, enjoyed 15 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. 4.5.3 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 LEASE 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 TERMINAL BUILDING. CORPORATION shall suffer no liability including, but not limited to consequential damages, by reason thereof, and such action shall in no way alter or affect any of AIRLINE's obligations under this LEASE. 16 Lew✓ ARTICLE 5 TERMINAL BUILDING CAPITAL IMPROVEMENTS Section 5.1 TERMINAL BUILDING Capital Improvements 5.1.1 The parties hereto recognize that capital improvements to the TERMINAL BUILDING may be required during the term of this LEASE to preserve, protect, enhance, expand or otherwise improve the TERMINAL BUILDING or any part thereof. 5.1.2 The CORPORATION has previously incurred and may incur additional indebtedness and make expenditures for capital improvements to the TERMINAL BUILDING, and all costs associated with capital improvements including Financing Costs, if any, shall be included in the calculations of AIRLINE rates, fees and charges in accordance with Article 7. Section 5.2 Improvements and Development by the CORPORATION 5.2.1 At any time the CORPORATION intends to undertake a CAPITAL IMPROVEMENT which affects rentals, fees and charges as described in Article 6 and calculated in Article 7 and which does not require immediate action, the CORPORATION shall first notify the SIGNATORY AIRLINES in writing of the proposed improvement(s). The notification shall include: 5.2.1.1 A description of the proposed improvement(s) (the "Project"), together with a statement of the intended use for the Project; 5.2.1.2 The cost estimate of the Project and the CORPORATION's intended means of funding the Project; 5.2.1.3 An estimate of the financial impact of the Project upon AIRLINE's rates, fees and charges for use of the TERMINAL BUILDING. 5.2.2 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. Said meeting shall be at a mutually convenient time and place for the purpose of discussing the Project proposed. 17 5.2.3 The CORPORATION agrees to fully consider the comments, suggestions and recommendations of the SIGNATORY AIRLINES related to planned capital costs, financing mechanisms to be utilized, benefits derived and revenue sharing or cost recovery for concession development capital projects that solely generate non -airline revenue prior to finalizing its proposed CAPITAL IMPROVEMENT Project. 18 ARTICLE 6 RENTALS, OTHER PAYMENTS AND REVENUE SHARING Section 6.1 Consideration In consideration of the rights and privileges granted under this LEASE, AIRLINE agrees to pay CORPORATION, without deduction or setoff, during the Term of this LEASE, certain rentals, fees and charges as set forth herein. Section 6.2 AIRLINE TERMINAL BUILDING Total Rental Requirement 6.2.1 AIRLINE's TERMINAL BUILDING Total Rental Requirement payable to the CORPORATION shall include rent for AIRLINE's EXCLUSIVE USE SPACE, and its proportionate share, in accordance with the JOINT USE FORMULA, of rent for its use of the JOINT USE SPACE at the rate and in the amount then currently determined in the Calculation of Terminal Building Rent provided in Exhibit B for each year of the LEASE. AIRLINE's TERMINAL BUILDING Total Rental Requirement shall also include its proportionate share of: (i) the debt service, (ii) the debt service coverage requirement (to the extent such requirement is not funded) and (iii) all other debt -related costs associated with the COMMERCIAL PASSENGER SERVICE RIGHTS PURCHASE then currently determined in the Calculation of Terminal Building Rent provided in Exhibit B for each year of the LEASE. AIRLINE's proportionate share of rent related to the COMMERCIAL PASSENGER SERVICE RIGHTS PURCHASE shall be based on the ratio of the number of each SIGNATORY AIRLINESs enplaned passengers at the AIRPORT during the most recent calendar year for which such information is available to the total number of enplaned passengers of all SIGNATORY AIRLINES during that same calendar year. 6.2.2 Without demand or invoicing, AIRLINE shall pay to CORPORATION in advance, its total annual rental amount due in four (4) equal installments on December I", January I", February 1" and March 1" of each year of the LEASE in accordance with amounts currently determined in the Calculation of Terminal Building Rent provided in Exhibit B for each year of the LEASE. 6.2.2.1 If AIRLINE has provided a cash security deposit as specified in Section 6.11.1 and is not in default of any provision of this LEASE, CORPORATION shall apply the cash security deposit to the rental payment due on March 1" of each year of the Term. 19 E! 5 �%W 6.2.2.2 If AIRLINE has provided a security for the payment of rent as specified in Sections 6.11.2, 6.11.3 and 6.11.4, AIRLINE is required to provide the rental payment due on March I". Section 6.3 Principal Backstop Payment In addition to the TERMINAL BUILDING Total Rental Requirement to be paid by AIRLINE as specified in Section 6.2, in the event that PFC's allocated to pay debt service on the BONDS are not received or are insufficient to pay debt service on the BONDS, the TERMINAL BUILDING Total Rental Requirement due by AIRLINE, along with the rents of all other SIGNATORY AIRLINES, may be increased (proportionally based on enplanements) to include an amount (the "Principal Backstop Payment") equal to the deficiency in collected PFCs necessary for payment of that portion of the total annual debt service due on the BONDS that would have been eligible for PFC funding under the AIRPORT's PFC application approved by the FAA; provided however, that in no event shall the Principal Backstop Payment exceed (from all SIGNATORY AIRLINES together) $450,000 annually. The Principal Backstop Payment, which is eligible for payment with PFCs, shall be due and payable within ten (10) business days of the CORPORATION's written notice to the AIRLINE that collected PFCs are insufficient to pay the PFC eligible portion of debt service on the BONDS. Section 6.4 Debt Service Coverage Account A reserve account (the "Debt Coverage Reserve Account") has been established by CORPORATION in the amount of thirty percent (30%) of the maximum annual debt service due on Series 1996 of the BONDS plus twenty percent (20%) of the maximum annual debt service due on Series 2001A and 2001B of the BONDS. The BONDS' debt indenture requirements for the Debt Coverage Reserve Account were previously paid, in part, by SIGNATORY AIRLINES and were fully fiinded as of the Commencement Date of this LEASE. Section 6.5 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 debt indenture requirements that Available Revenues in each FISCAL YEAR be at least equal to one -hundred thirty percent (130%) of the aggregate annual principal and interest due on Series 1996 of the BONDS in such FISCAL YEAR and one -hundred twenty percent (120%) of the aggregate annual debt principal and interest due on Series 2001 A and 2001 B of the 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 AIRPORT bears to the sum of all of the SIGNATORY AIRLINE's total annual enplanements at the AIRPORT 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 20 for any FISCAL YEAR will be repaid to such SIGNATORY AIRLINE in cash within three (3) business days of the CORPORATION's receipt of such payment from such SIGNATORY AIRLINE. For these purposes "Available Revenue" in each FISCAL YEAR shall include PFCs, Principle Backstop Payments and all TERMINAL BUILDING REVENUES plus the balance in the Debt Coverage Reserve Account, minus the total amount of OPERATIONS AND MAINTENANCE EXPENSES, Minor Capital Expenditures and other miscellaneous costs, expenses, judgments, assessments or charges incurred in such FISCAL YEAR. Section 6.6 Year -End Refund of Net Concession Revenue 6.6.1 Except as set forth hereafter, at the end of each FISCAL YEAR or part thereof falling within the LEASE term, the CORPORATION will refund AIRLINE, along with other SIGNATORY AIRLINES, within sixty (60) days of the close of the annual financial audit, fifty percent (50%) of any Net Concession Revenues up to $600,000 which would result in a maximum refund of $300,000 to AIRLINE and Other SIGNATORY AIRLINES. Any Net Concession Revenues in excess of $600,000 will be retained by CORPORATION along with fifty percent (50%) of the first $600,000. The SIGNATORY AIRLINES' share of Net Concession Revenue shall be distributed to them pro rata based on actual enplanements from the TERMINAL BUILDING during such FISCAL YEAR. AIRLINE's Year -End Refund of Net Concession Revenue shall be subject to offset according to the Reconciliation of Prior Year TERMINAL BUILDING Rent as further described in Section 7.6. Furthermore, if AIRLINE is in default of any section of the LEASE, as amended, payment of any share of Net Concession Revenue determined by CORPORATION to be due to AIRLINE shall be immediately withheld from AIRLINE until such default is cured and any such Net Concession Revenue share shall result in an immediate offset against any amounts due to the CORPORATION. In the event that at the end of any FISCAL YEAR or part thereof falling within the LEASE term at which time the CORPORATION shall determine that there shall have accrued to the AIRLINE a refundable share of Net Concession Revenue and the AIRLINE shall, at that time, be the subject of a "Filing" (as that term is defined in Article 14), the AIRLINE's refundable share of Net Concession Revenue shall be held by the CORPORATION until the earlier of the dismissal and closing of the Filing, the court -approved and authorized assumption of the LEASE, or the court approved and authorized rejection of the LEASE, in which event, the AIRLINE's refundable share of Net Concession Revenue shall be collateral first for any pre -petition amounts outstanding under the LEASE and then for any post -petition amounts outstanding under the LEASE. 21 lllqw� 6.6.2 "Net Concession Revenues" shall equal Concession Revenues reduced by the TERMINAL BUILDING Shortfall. For these purposes: 6.6.2.1 "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 providers, automobile parking, TERMINAL BUILDING advertising (including print, radio and television), ski rentals and other retail sales and services. 6.6.2.2 The "TERMINAL BUILDING Shortfall" for each FISCAL YEAR shall equal the TERMINAL BUILDING Total Rental Requirement (as set forth in Article 7) reduced by the sum of (i) AIRLINE's actual rental payments and the rents or similar charges of all other SIGNATORY AIRLINES, and (ii) the rents or similar charges paid by NON -SIGNATORY AIRLINES for use of the TERMINAL BUILDING. Section 6.7 Other Charges Other Charges may include charges for special items or activities including, but not limited to, telephone fees, public address system, electrical usage, automobile parking fees and mailbox rentals. The CORPORATION may assess reasonable, non-discriminatory and cost -recovery based charges for these special items or activities. All new charges will be reviewed with AIRLINE prior to implementation. Other Charges payable by AIRLINE, shall be paid by AIRLINE to CORPORATION no later than thirty (30) days following receipt by AIRLINE of billing therefor. Section 6.8 Partial Month Charges In the event the beginning or termination date with respect to any of the particular leased PREMISES, facilities, rights, licenses, services or privileges as herein provided falls on any day other than the first day of a calendar month, the applicable rentals, fees and charges for that month shall be paid for said month on a prorated basis according to the number of days during which said particular leased PREMISES, facilities, rights, licenses, services or privileges were enjoyed by AIRLINE during that month. Section 6.9 Late Payments In the event AIRLINE fails to make payment within fifteen (15) days of the dates due as set forth in this Article 6, then AIRLINE shall pay and CORPORATION may charge, upon reasonable written notice to AIRLINE, a service charge equal to the lesser of 2% per month or the highest rate allowed by law on any such overdue amount, and if AIRLINE fails to make payment within 22 �51 ten (10) days after written notice from CORPORATION to AIRLINE that such payments are late, AIRLINE shall also pay reasonable administrative costs and attorneys' fees incurred by CORPORATION in attempting to obtain payment. Section 6.10 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 LEASE. 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 rental, fee or Other Charge shall first be applied to any past due sums before it is refunded to AIRLINE. Any overpayment that is not a disputed charge shall be immediately returned to AIRLINE. Section 6.11 Security for Payment of Rent 6.11.1 On or before September Ist of each year of the Term, AIRLINE shall provide a cash security deposit in an amount equal to one-fourth (1/4) of the AIRLINE's annual total of TERMINAL BUILDING rent and Other Charges. CORPORATION shall apply the cash security deposit to the fourth rental payment due to the CORPORATION on March 1 St of each year of the Term, as specified in Section 6.2.2 provided that AIRLINE is not in default in its payments or other obligations under this LEASE. 6.11.1.1 If AIRLINE fails to provide the cash security deposit when due, AIRLINE shall be required to provide, and maintain throughout the duration of the LEASE, security for payment of rent as specified in Sections 6.11.2, 6.11.3 and 6.11.4. 6.11.2.1 If AIRLINE has provided and maintains security for payment of rent as specified in Sections 6.11.2, 6.11.3 and 6.11.4, the cash security deposit required in Section 6.11.1 is waived under this LEASE. 6.11.2 AIRLINE shall, upon the occurrence of any event specified in Section 6.11.3, file and maintain with the CORPORATION a good and sufficient corporate surety bond or bonds or other security as may be acceptable to the CORPORATION. The form and terms of such bond or other security shall be filed and maintained in accordance with the requirements of the laws of the state of Colorado and shall be subject to the approval of the CORPORATION. 23 1_4 � 114� 6.11.3 AIRLINE shall be required to provide security in an amount equal to one -forth (1 /4) of the AIRLINE's annual total of TERMINAL BUILDING rent and Other Charges on the occurrence of any of the following events: 6.11.3.1 Nonpayment by AIRLINE of any and all fees, rentals and Other Charges when due to the CORPORATION in accordance with this LEASE; 6.11.3.2 Nonperformance by AIRLINE of any of the terms and conditions of this LEASE, as may be amended and extended from time -to -time. 6.11.4 The security provided under this Section 6.11 by any SIGNATORY AIRLINE that ceases to conduct AIR TRANSPORTATION operations at the TERMINAL BUILDING after termination of this LEASE for any reason, shall remain in full force and effect or on deposit with the CORPORATION, as the case may be, until such time as the reconciliation of prior year rates and charges is completed and deficit amounts, if any, are determined and paid by the AIRLINE to the CORPORATION as specified in Section 7.6. Section 6.12 Information to be Supplied by AIRLINE 6.12.1 Within ten (10) business days after the end of each month, AIRLINE shall provide CORPORATION with a written report of its passenger enplanements for that preceding month. In the event AIRLINE fails to submit all such monthly reports necessary for the annual calculation of TERMINAL BUILDING rent, CORPORATION shall determine estimates as to AIRLINE's monthly activity for use in the calculation of AIRLINE's rent, and CORPORATION's determination will be accepted as accurate and final by AIRLINE. 6.12.2 The acceptance by CORPORATION of any AIRLINE payment shall not preclude CORPORATION from verifying the accuracy of AIRLINE's reports on which AIRLINE's rental is based, and shall not be construed as a waiver of late payment penalty due on full or partial underpayment, if any. 24 Section 6.13 PASSENGER FACILITY CHARGES 6.13.1 The CORPORATION reserves the right to assess and collect PASSENGER FACILITY CHARGES subject to terms and conditions and such methods of collection set forth in the Aviation Safety and Capacity Expansion Act of 1990, (the "PFC Act"), as amended. No PASSENGER FACILITY CHARGES shall be used for that portion of projects for which Airport Improvement Program grants are received by the CORPORATION and 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. 6.13.2 If AIRLINE fails to remit the PFC amount due to the CORPORATION within the lesser of (i) the time limits established by the PFC Regulations, or (ii) forty-five (45) days from the last day of the month in which the PFC amount was collected by the AIRLINE, AIRLINE shall be deemed to be in default pursuant to Article 6 hereof. In addition, any late payment of PFCs shall be subject to the payment of service fees, as specified in Section 6.9. 6.13.3 It is further agreed that AIRLINE acknowledges and agrees that all PASSENGER FACILITY CHARGES collected by AIRLINE or its agents shall be held in trust by AIRLINE for the benefit of the CORPORATION. Nothing contained herein shall be construed to supercede the rights and obligations provided in 14 CFR Part 158 regarding PASSENGER FACILITY CHARGES. In the event that a conflict exists between such federal regulations and this LEASE, the federal regulations shall govern. 25 ARTICLE 7 CALCULATION OF TERMINAL BUILDING RENT Section 7.1 Effective Date of Rate Calculations The TERMINAL BUILDING Total Rental Requirement shall be calculated annually during the term of this LEASE as hereinafter set forth. Such calculated rental amounts shall be effective on December 1st of each year of the LEASE for which they apply. Section 7.2 CORPORATION Records 7.2.1 The CORPORATION has an accounting system and shall maintain appropriate accounting records that document the following items: 7.2.1.1 TERMINAL BUILDING REVENUES 7.2.1.2 OPERATIONS AND MAINTENANCE EXPENSES 7.2.1.3 Debt service, debt service coverage requirements and other debt -related costs for the BONDS 7.2.2 The CORPORATION shall further maintain records evidencing CAPITAL IMPROVEMENT costs, Minor Capital Expenditures, asset depreciation and capital funding sources including federal grants, PFC revenues, debt, CORPORATION funds and other sources related to the TERMINAL BUILDING. All federal grant monies received by the CORPORATION with respect to any project or CAPITAL IMPROVEMENT of the TERMINAL BUILDING and all PFC revenues shall be deposited in the appropriate fund or funds. Section 7.3 Items Excluded from OPERATIONS AND MAINTENANCE EXPENSES Notwithstanding anything to the contrary stated or implied in this LEASE, OPERATIONS AND MAINTENANCE EXPENSES shall not include (or shall have deducted from them, as the case may be) and shall not be chargeable or passed through to the AIRLINE, directly or indirectly, with respect to any of the following: 7.3.1 CAPITAL IMPROVEMENT costs, to the extent that they are funded from PFC collections or the proceeds of any federal support program; 7.3.2 Wages or other compensation (including benefits) of any employee or contractor, to the extent that such wages, compensation or benefits are attributable to work or services not related to the TERMINAL BUILDING; 26 � \"no/ 7.3.3 Expenses incurred for any goods, services or other benefits of a type which (a) AIRLINE is not entitled to receive under this LEASE, but which are provided (with or without reimbursement by direct payment) to another TERMINAL BUILDING tenant or licensee, or (b) are not provided for the common benefit of all TERMINAL BUILDING tenants; 7.3.4 Expenses for which AIRLINE is charged directly, or for which AIRLINE otherwise reimburses CORPORATION by direct payment over and above rent due from the AIRLINE; 7.3.5 Costs of repair or other work occasioned by fire, windstorm or other casualty or hazard, to the extent that CORPORATION is, or is eligible to be, reimbursed by proceeds of any insurance policy; 7.3.6 Damages incurred due to default or violation by the CORPORATION, of the terms and conditions of any lease or agreement, including this LEASE; 7.3.7 OPERATIONS AND MAINTENANCE EXPENSES to the extent they are funded or reimbursed by the FAA, Department of Homeland Security, Transportation Security Administration or other federal support program; Section 7.4 Consultation Process for Annual Rent Calculation 7.4.1 On or before July I" of each year, the MANAGER will request from AIRLINE and AIRLINE agrees to submit to MANAGER, an estimate of its flight schedule (including originating city, aircraft type, maximum certificated landing weight approved by the FAA and frequency) for the succeeding year of the LEASE. In the event AIRLINE does not provide the estimate by July 151h, the CORPORATION will determine an appropriate estimate. 7.4.2 On or before August I" of each year, CORPORATION shall submit to AIRLINE its proposed Calculation of Terminal Building Rent (as provided in Exhibit B) for the succeeding year, including: 7.4.2.1 The ANNUAL BUDGET of TERMINAL BUILDING OPERATIONS AND MAINTENANCE EXPENSES, Minor Capital Expenditures, debt service and related costs on the BONDS, debt service and related costs on the COMMERCIAL PASSENGER SERVICE RIGHTS PURCHASE and the application of PFC collections to eligible debt service; 7.4.2.2 The square footage of rented AIRLINE EXCLUSIVE USE SPACE and JOINT USE SPACE and non -airline rentable space, as set forth in Exhibit Aand B; 27 \Wjol� 7.4.2.3 A preliminary calculation of the TERMINAL BUILDING Rental Rate and Total Rental Requirement, in accordance with Sections 7.4 and 7.5, as set forth in Exhibit B. 7.4.3 Upon request by any SIGNATORY AIRLINE, MANAGER shall then call a meeting of the SIGNATORY AIRLINES to discuss the proposed Calculation of Terminal Building Rent. CORPORATION shall give appropriate consideration to the comments of the SIGNATORY AIRLINES in finalizing the Calculation of Terminal Building Rent for the succeeding year of the LEASE. The resulting TERMINAL BUILDING Rental Rate and Total Rental Requirement presented in the final Calculation of Terminal Building Rent shall be consistent with the provisions of this LEASE. 7.4.4 CORPORATION shall then adopt, as part of the annual budget approval process, the final Calculation of Terminal Building Rent. The MANAGER shall promptly furnish AIRLINE with a copy of the final Calculation of Terminal Building Rent which shall set forth the TERMINAL BUILDING Rental Rate and Total Rental Requirement that shall be effective for the succeeding year of the LEASE. 7.4.5 If, for any reason, the Calculation of Terminal Building Rent has not been adopted as of December 1st of the succeeding year of the LEASE Term, the Rental Rate and Total Rental Requirement in effect during the preceding year of the LEASE shall continue in effect until the new Calculation of Terminal Building Rent has been determined by the CORPORATION in accordance Sections 7.4 and 7.5 and has been adopted by the CORPORATION. The new TERMINAL BUILDING Rental Rate and Total Rental Requirement shall then be made effective retroactive to December 1 st of the current year of the LEASE. Section 7.5 Calculation of TERMINAL BUILDING Total Rental Requirement The TERMINAL BUILDING Total Rental Requirement for all SIGNATORY AIRLINES shall be calculated annually in the following manner: 7.5.1 The TERMINAL BUILDING Total Space Costs for the succeeding year of the LEASE shall be calculated by totaling the following amounts: 7.5.1.1 FISCAL YEAR ANNUAL BUDGET of OPERATIONS AND MAINTENANCE EXPENSES and Minor Capital Expenditures (as set forth in Exhibit B); 7.5.1.2 Debt service, any debt service coverage requirements (to the extent such requirements are not funded) and other debt -related costs on the TERMINAL CONSTRUCTION BONDS, less PFC revenues that are budgeted to be applied to eligible, FAA approved portions of debt service 28 on the TERMINAL CONSTRUCTION BONDS (as set forth in Exhibit B); 7.5.1.3 The estimated amount of any assessment, judgment or charge (net of insurance proceeds) to become payable by the CORPORATION relating directly to the TERMINAL BUILDING or its operation (as set forth in Exhibit B). 7.5.2 The TERMINAL BUILDING Space Rental Rate and Total Space Rent for all SIGNATORY AIRLINES for the succeeding year of the LEASE shall then be calculated as follows: 7.5.2.1 Divide the Total Space Costs calculated in Section 7.5.1 by the total square footage of rentable space in the TERMINAL BUILDING (which, as set forth in Exhibit B, consists of all SIGNATORY AIRLINES' leased PREMISES, concession rented space, other non -airline rented space and other non -airline rentable space that is not leased) to determine the full cost recovery Space Rental Rate. The Space Rental Rate to be applied to AIRLINE PREMISES shall be the full cost recovery Space Rental Rate reduced by the subsidy percentages specified in Exhibit B during each year of the Lease. 7.5.2.2 Multiply the subsidized Space Rental Rate (per square foot per year) calculated in Section 7.5.2.1 times the square footage of all SIGNATORY AIRLINES' leased PREMISES to determine the AIRLINES' Total Space Rent for the TERMINAL BUILDING. 7.5.3 The TERMINAL BUILDING Joint Rights Purchase Rent for all SIGNATORY AIRLINES for the succeeding year of the LEASE shall consist of the debt service, any debt service coverage requirements (to the extent such requirements are not funded) and other debt -related costs on the RIGHTS PURCHASE BONDS. 7.5.4 The TERMINAL BUILDING Total Rental Requirement for all SIGNATORY AIRLINES shall consist of the sum of the Total Space Rent and the Joint Rights Purchase Rent as provided in Exhibit B, Calculation of Terminal Space Rent, for the succeeding year of the LEASE. AIRLINE's allocation of the annual Total Rental Requirement shall be determined as follows: 7.5.4.1 AIRLINE's rent for EXCLUSIVE USE SPACE shall be determined by multiplying the Space Rental Rate (calculated in Section 7.5.2.2) times the square footage of AIRLINE's EXCLUSIVE USE SPACE (as set forth in Exhibits A and B). 7.5.4.2 The total rent for the JOINT USE SPACE shall be determined by multiplying the Space Rental Rate (calculated in Section 7.5.2.2) times the 29 total square footage of the JOINT USE SPACE (as set forth in Exhibits A and B). AIRLINE's share of rent for the JOINT USE SPACE shall be based on the JOINT USE FORMULA. 7.5.4.3 AIRLINE's share of the Joint Rights Purchase Rent shall be based on the ratio of the number of AIRLINE's enplaned passengers at the AIRPORT during the most recent calendar year for which such information is available to the total number of enplaned passengers of all SIGNATORY AIRLINES during that same calendar year. 7.5.5 For each year of the LEASE, CORPORATION shall establish by resolution a NON - SIGNATORY AIRLINE TERMINAL BUILDING rental rate equal to the Total Rental Requirement (as set forth in Section 7.5.4 and Exhibit B) divided by the total square footage of rentable space in the TERMINAL BUILDING (as set forth in Section 7.5.2.1 and Exhibit B) plus fifty percent (50%). Section 7.6 Reconciliation of Prior Year TERMINAL BUILDING Rent 7.6.1 After completion and approval of the annual audit of the CORPORATION's financial statements conducted by an independent accountant, the CORPORATION shall provide a final accounting of the Calculation of TERMINAL BUILDING Rent for the prior year of the LEASE in accordance with provisions of this Article 7. The actual TERMINAL BUILDING Total Rental Requirement shall be calculated by the CORPORATION based on actual OPERATIONS AND MAINTENANCE EXPENSES, Minor Capital Expenditures, debt service, debt service coverage requirements (if any), other debt -related costs, TERMINAL BUILDING rentable space and other relevant factors. The CORPORATION shall then calculate the amounts of TERMINAL BUILDING rentals that should have been paid by each of the SIGNATORY AIRLINES during the preceding year of the LEASE based on such actual data, following the procedures set forth in Sections 7.4 and 7.5. Amounts paid in excess of actual requirements (surpluses) shall be refunded by the CORPORATION, subject to offset by the CORPORATION of any other amounts owed to the CORPORATION by the AIRLINE, to the SIGNATORY AIRLINES that conducted AIR TRANSPORTATION operations at the AIRPORT during the preceding year of the LEASE within thirty (30) days of the CORPORATION's approval of the completed audit. The CORPORATION shall prepare and transmit invoices to the SIGNATORY AIRLINES that conducted AIR TRANSPORTATION operations at the AIRPORT for amounts actually required in excess of amounts paid (deficits) within twenty (20) days of the CORPORATION's approval of the completed audit. AIRLINE shall then pay the CORPORATION within thirty (30) days of the invoice date, subject to offset of Net Concession Revenue Refunds due to Airline from the CORPORATION in accordance with Section 6.6. 7.6.2 Upon written request of the AIRLINE, CORPORATION shall furnish a copy of the 30 ,%WW✓ lmw/ CORPORATION's annual audit report after its completion and approval covering the operation of the TERMINAL BUILDING for the preceding FISCAL YEAR. Section 7.7 Extraordinary Adjustments of TERMINAL BUILDING Total Rental Requirement 7.7.1 Notwithstanding any other provisions hereof, if at any time during the Term of this LEASE, the estimated amount of the TERMINAL BUILDING Total Rental Requirement is reasonably projected by the CORPORATION to vary by twenty percent (20%) or more from the amounts set forth in the most recent Calculation of TERMINAL BUILDING Rent (as provided in Exhibit B), the TERMINAL BUILDING Total Rental Requirement and resulting rental amounts due from each AIRLINE provided for in this Article 7 may, if deemed necessary by the MANAGER following consultation with the SIGNATORY AIRLINES, be adjusted for the balance of such year of the LEASE if the then existing rental amounts due from the AIRLINES would result in an overpayment or underpayment of TERMINAL BUILDING REVENUES or to ensure that sufficient total TERMINAL BUILDING REVENUES will be generated during the FISCAL YEAR to meet the requirements of the ANNUAL BUDGET. 7.7.2 The CORPORATION shall notify the SIGNATORY AIRLINES of its intent to make such revision and adjustments and the effective date thereof which shall be no earlier than thirty (30) days from the date of mailing. Such notice shall provide a revised projection of the TERMINAL BUILDING rental amounts due from each AIRLINE for the remainder of such LEASE year in sufficient detail to allow the SIGNATORY AIRLINES to make informed comments thereon. The SIGNATORY AIRLINES may submit written comments on such notice from the CORPORATION. The CORPORATION shall give due consideration to all comments submitted in a timely manner by the SIGNATORY AIRLINES. If requested, the CORPORATION shall convene a meeting with the SIGNATORY AIRLINES to discuss such revisions and adjustments. Section 7.8 Most Favored Nations Clause and Other CORPORATION Covenants 7.8.1 Most Favored Nations Clause - The CORPORATION shall not enter into any lease, contract or any other agreement with any other AIR TRANSPORTATION company containing more favorable terms than this LEASE, or to grant any tenant engaged in AIR TRANSPORTATION, rights or privileges with respect to the TERMINAL BUILDING that are not accorded AIRLINE hereunder, unless the same rights, terms and privileges are concurrently made available to AIRLINE or, unless another AIR TRANSPORTATION company commits AIR TRANSPORTATION services to the CORPORATION which are materially greater than the AIR TRANSPORTATION services committed by AIRLINE to the CORPORATION under this LEASE. 31 �"Ww � 7.8.2 The CORPORATION covenants that for purposes of keeping its books of account, it will observe sound business principles for effective and prudent control of OPERATIONS AND MAINTENANCE EXPENSES and CAPITAL IMPROVEMENT expenditures. 7.8.3 CORPORATION shall operate the TERMINAL BUILDING in a manner so as to produce revenues from concessionaires, tenants and other users of the TERMINAL BUILDING in amounts which would be produced by a reasonably prudent operator of an airport of substantially similar size, use and activity, and with due regard for the interests of the public. 7.8.4 The CORPORATION shall not include the cost of any goods or services provided by any governmental agency other than the CORPORATION as an expense in the calculation of rentals and Other Charges payable by AIRLINE unless a direct charge is paid, or an exchange of goods or services at fair market value is made, by CORPORATION to the governmental agency providing such goods or services. 7.8.5 The CORPORATION shall apply all rentals, fees, charges, concession revenues and any other amounts collected (including proceeds of insurance) solely to defray the costs of operating, maintaining, improving or expanding the TERMINAL BUILDING, except as may otherwise be required by federal law. 7.8.6 CORPORATION agrees to expend TERMINAL BUILDING REVENUES generated from operations only for valid TERMINAL BUILDING purposes as prescribed by federal statutory provisions governing the use of airport revenues. 7.8.7 The CORPORATION agrees that TERMINAL BUILDING REVENUES will not be transferred to non -TERMINAL BUILDING facilities of the CORPORATION or any other governmental entity except when transfers reflect the value of services actually received or facilities actually used at the TERMINAL BUILDING or in cases otherwise permitted by federal statutory provisions governing the use of airport revenue. 32 ARTICLE 8 MAINTENANCE, REPAIR, ALTERATIONS AND IMPROVEMENTS Section 8.1 AIRLINE's Responsibilities AIRLINE shall have the following maintenance and repair obligations: 8.1.1 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. 8.1.2 AIRLINE, except as hereinafter provided, shall not call on the 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: 8.1.2.1 Maintain its EXCLUSIVE USE SPACE in reasonably good, tenantable condition; 8.1.2.2 Maintain the aircraft ramp area adjacent to, and used in connection with, TERMINAL BUILDING operations in a neat, clean and orderly condition, free from litter, debris, refuse, petroleum products or grease that may result from activities of its passengers, employees, agents or suppliers; and remove from its aircraft parking positions, all oil, fuel and grease spillage attributable to AIRLINE's aircraft and equipment. 8.1.2.3 Perform, at its sole expense, ordinary preventive maintenance and ordinary upkeep and nonstructural repair of all EXCLUSIVE USE SPACE and all AIRLINE owned fixtures, personal property and equipment. 8.1.2.4 Immediately repair any damage in any other space at the AIRPORT occasioned by the fault or negligence of AIRLINE, its servants, agents, employees and licensees. 8.1.3 Except as may be caused by the negligence of CORPORATION, AIRLINE expressly agrees that the CORPORATION shall not be liable to AIRLINE, its employees, passengers or 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. 33 8.1.4 If AIRLINE fails to perform its obligations under this Article 8 after the notice and reasonable opportunity to cure such failure as provided in Article 13, CORPORATION may do so and recover its entire cost plus a fifteen percent (15%) administrative charge from AIRLINE as Other Charges in the manner specified in Section 6.7. Section 8.2 CORPORATION's Responsibilities 8.2.1 The CORPORATION, during the term of this LEASE, shall keep in good repair, or arrange for the safe, orderly, economical operation, maintenance and reasonably good repair of, all areas and facilities of the TERMINAL BUILDING except as specifically otherwise assigned by this LEASE, including, but not limited to, the PUBLIC AREAS and the JOINT USE SPACE of the TERMINAL BUILDING, vehicular parking areas, roadways and all appurtenances, facilities and services now or hereafter connected with the foregoing. 8.2.2 The CORPORATION shall operate and maintain the TERMINAL BUILDING in a reasonably prudent manner and in accordance with the rules, regulations and orders of any federal or state agency having jurisdiction with respect thereto. 8.2.3 The CORPORATION shall maintain the exterior portions of the walls, ceiling and roof of the EXCLUSIVE USE SPACE and all central mechanical distribution systems in good repair and condition. 8.2.4 The undertakings by the CORPORATION under this Section 8.2 do not relieve AIRLINE of its duties to maintain its EXCLUSIVE USE SPACE and aircraft ramp areas adjacent to, and used in connection with, TERMINAL BUILDING operations as specified in Section 8.1 and to use JOINT USE SPACE with due care. 8.2.5 The CORPORATION shall operate the TERMINAL BUILDING and lease space to concessionaires, other tenants and other commercial operators in a manner so as to produce, subject to the provisions of this LEASE, revenues of a nature and amount which would be produced by a reasonably prudent airport terminal operator and to maximize such revenues to the extent reasonably practicable. 8.2.6 CORPORATION shall use its best efforts to keep the TERMINAL BUILDING open and in operation for the conduct of AIR TRANSPORTATION activities. In such regard, CORPORATION shall employ or cause to be employed construction, reconstruction and repair techniques (including supervision and construction management) which will minimize TERMINAL BUILDING operational delays or disruptions reasonably expected to result from such construction, reconstruction or repair, including but not limited to coordination with affected AIRLINE's representatives or its designee. 34 Section 8.3 CORPORATION's Right to Inspect and Make Repairs 8.3.1 The 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 under the circumstances and with as little interruption of AIRLINE's operations as is reasonably practicable) to enter AIRLINE's EXCLUSIVE USE SPACE and JOINT USE SPACE for the following purposes: 8.3.1.1 To inspect such space to determine whether AIRLINE has complied and is complying with the terms and conditions of this LEASE; 8.3.1.2 To accomplish repairs or replacements by CORPORATION pursuant to Section 8.2, or in any case, where AIRLINE is obligated to make repairs or replacements and has failed to do so, after notice as provided herein, make such repairs or replacements on AIRLINE's behalf; and 8.3.1.3 In the exercise of CORPORATION's police powers. 8.3.2 No such entry by or on behalf of CORPORATION upon any EXCLUSIVE USE SPACE or JOINT 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. The 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 LEASE; provided that, and so long as each entry by the CORPORATION, is conducted to minimize inconvenience, disruption or interference with AIRLINE's operations and activities. Section 8.4 Alterations and Improvements AIRLINE shall make no alterations, additions, improvements to, or installations on the leased PREMISES without the prior written approval of the MANAGER, which approval will not be unreasonably withheld. If the CORPORATION intends to require the removal of any alteration, improvement or addition upon termination of this LEASE, the CORPORATION shall so indicate to AIRLINE at the time the CORPORATION consents to the installation. If not indicated at the time CORPORATION consents to the installation, CORPORATION shall be precluded from requiring its removal at time of termination of this LEASE. 35 "low1 ARTICLE 9 DAMAGE OR DESTRUCTION OF PREMISES Section 9.1 Minor Damage If any part of AIRLINE PREMISES, or adjacent facilities directly and substantially affecting the use of AIRLINE PREMISES, shall be partially damaged by fire or other casualty, but said circumstances do not render AIRLINE PREMISES untenantable or unusable for the purpose intended as reasonably determined by the CORPORATION, the same shall be repaired to usable condition with due diligence by the CORPORATION as provided in Section 9.4. Section 9.2 Substantial Damage If any part of AIRLINE PREMISES, or adjacent facilities directly and substantially affecting the use of AIRLINE PREMISES, shall be so extensively damaged by fire, or other casualty, as to render any portion of said AIRLINE PREMISES untenantable but capable of being repaired, as reasonably determined by the CORPORATION, the same shall be repaired to usable condition with due diligence by the CORPORATION as provided in Section 9.4. In such case, the rentals payable hereunder with respect to affected AIRLINE PREMISES shall be paid up to the time of such damage and shall thereafter be abated ratably in the proportion that the part of the area rendered untenantable or unusable for the purpose intended bears to total AIRLINE PREMISES of the same category and area. Such abatement in rent will continue until such time as such affected AIRLINE PREMISES shall be restored adequately for AIRLINE's use. The CORPORATION shall use its best efforts to provide alternate facilities to continue AIRLINE's operation while repair, reconstruction or replacement is being completed, at a rental rate not to exceed that provided in this LEASE for comparable space. Section 9.3 Total Damage 9.3.1 If any part of AIRLINE PREMISES, or adjacent facilities directly and substantially affecting the use of AIRLINE PREMISES, shall be damaged by fire or other casualty, and shall be so extensively damaged as to render any portion of said AIRLINE PREMISES incapable of being repaired, as reasonably determined by the CORPORATION, the CORPORATION shall notify AIRLINE within a period of sixty (60) days after the date of such damage of its decision whether to reconstruct or replace said space. However, the CORPORATION shall be under no obligation to replace or reconstruct such PREMISES. The rentals payable hereunder with respect to affected AIRLINE PREMISES shall be paid up to the time of such damage and thereafter shall cease until such time as reasonable and comparable replacement or reconstructed space shall be available for use by AIRLINE. 36 9.3.2 In the event the CORPORATION elects to reconstruct or replace affected AIRLINE PREMISES, the CORPORATION shall use its best efforts to provide alternate facilities to continue AIRLINE's operation while repair, reconstruction or replacement is being completed, at a rental rate not to exceed that provided in this LEASE for comparable space. However, if such damaged space shall not have been replaced or reconstructed, or the CORPORATION is not diligently pursuing such replacement or reconstruction, within three (3) months after the date of such damage or destruction, AIRLINE shall have the right, upon giving the CORPORATION thirty (30) days advance written notice, to delete the affected AIRLINE PREMISES from this LEASE, but this LEASE shall remain in full force and effect with respect to the remainder of said AIRLINE PREMISES, unless such damaged or destroyed PREMISES prevent AIRLINE from operating at the TERMINAL BUILDING. 9.3.3 In the event the CORPORATION elects not to reconstruct or replace affected AIRLINE PREMISES, the CORPORATION shall meet and consult with AIRLINE on ways to permanently provide AIRLINE with adequate replacement space for affected AIRLINE PREMISES. AIRLINE shall have the right, upon giving the CORPORATION thirty (30) days advance written notice, to delete the affected AIRLINE PREMISES from this LEASE, but this LEASE shall remain in full force and effect with respect to the remainder of said AIRLINE PREMISES, unless the loss of such PREMISES prevents AIRLINE from operating at the TERMINAL BUILDING. Section 9.4 Scope of Restoration of PREMISES 9.4.1 The CORPORATION's obligations to repair, reconstruct or replace affected PREMISES under the provisions of this Article 9 shall in any event be limited to using due diligence and best efforts to restore affected AIRLINE PREMISES to substantially the same condition that existed prior to any such damage and shall further be limited to the extent of insurance proceeds available to the CORPORATION for such repair, reconstruction or replacement. AIRLINE agrees that if the CORPORATION elects to repair, reconstruct or replace affected PREMISES as provided in this Article 9, then AIRLINE shall proceed with reasonable diligence and at its sole cost and expense to repair, reconstruct or replace its signs, fixtures, furnishings, equipment and other items provided or installed by AIRLINE in or about AIRLINE PREMISES in a manner and in a condition at least equal to that which existed prior to said damage or destruction. However, in the event CORPORATION chooses not to replace space in kind, AIRLINE may delete said space from its obligation. 37 lvw� 9.4.2 In lieu of the CORPORATION's repair, reconstruction or replacement of the affected PREMISES, as provided in Section 9.4.1, if AIRLINE requests to perform said function with respect to damage under Sections 9.1 and 9.2, the CORPORATION may in its sole discretion, allow the AIRLINE to perform such work. AIRLINE shall not be performing such work as an agent or contractor of the CORPORATION. The CORPORATION shall reimburse AIRLINE for the cost of such work performed by AIRLINE that was otherwise the obligation of the CORPORATION if prior to performing such work, the CORPORATION and AIRLINE agree that such work is the obligation of the CORPORATION to perform. Section 9.5 Damage from AIRLINE Negligence or Willful Act Notwithstanding the provisions of this Article 9, in the event that due to the negligence or willful act of AIRLINE, its agents, servants or employees, or those under its control, AIRLINE PREMISES shall be damaged or destroyed by fire, casualty or otherwise, there shall be no abatement of rent during the restoration or replacement of said AIRLINE PREMISES and AIRLINE shall have no option to delete the affected AIRLINE PREMISES from this LEASE under the provisions of this Article 9. To the extent that the costs of repairs shall exceed the amount of any insurance proceeds payable to the CORPORATION by reason of such damage or destruction, AIRLINE shall pay the amount of such additional costs to the CORPORATION. 38 \Q071 ARTICLE 10 RESERVATIONS OF THE COUNTY Section 10.1 COUNTY Reservations This LEASE 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: 10.1.1 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 COUNTY at the AIRPORT for public and common use by aircraft operators. 10.1.2 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 LEASE except on a temporary basis, or diminish its ability to 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 LEASE. 10.1.3 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, for the 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. 39 10.1.4 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. 10.1.5 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 LEASE 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 LEASE. 10.1.6 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. 10.1.7 The COUNTY further reserves the right to 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. Section 10.2 Non -Compliance with COUNTY Reservations Non-compliance with this section shall constitute a breach or default of this LEASE and in the event of such non-compliance, the CORPORATION shall have the right to terminate this LEASE, 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. 40 ARTICLE 11 INDEMNIFICATION AND INSURANCE Section 11.1 Indemnification 11.1.1 AIRLINE shall indemnify, defend and hold harmless the CORPORATION and COUNTY, their commissioners, directors, officers, agents and employees, individually or collectively, from and against any and all claims, actions, damages, loss and liability, together with all reasonable expenses incidental to the investigation and defense thereof claimed by anyone by reason of injury or damage to persons or property sustained in whole or in part as a result of an act, omission or negligence of AIRLINE, its officers, agents or employees, subtenants, contractors, subcontractors or by anyone acting pursuant to the express or implied authority or permission of AIRLINE arising out of, or incident to, the operations of AIRLINE at the AIRPORT, including but not limited to: operations on or about the runways, taxiways, and aprons; and any actions in the TERMINAL BUILDING pursuant to this LEASE. The provisions of this Section 11.1.1 and of Section 11.1.2 shall exclude claims or actions arising out of the sole negligence or willful act of the CORPORATION or COUNTY, their commissioners, officers, agents or employees. The CORPORATION and COUNTY shall give to AIRLINE prompt and reasonable notice of any claims or actions, and AIRLINE shall have the right to investigate and compromise said claims or actions. The provisions of this Section 11.1.1 shall survive the expiration or earlier termination of this LEASE, but only as they relate to incidents that occurred during the Term of this LEASE by the AIRLINE. 11.1.2 AIRLINE shall indemnify, defend and hold harmless, the CORPORATION and COUNTY, their commissioners, directors, officers, agents and employees, individually or collectively from and against any and all claims, actions, damages, fines, loss and liability, together with all reasonable expenses incidental to the investigation and defense thereof, in any way arising from or based upon the violation of any federal, state or municipal laws, statutes, ordinances or regulations, by AIRLINE, its officers or agents, employees, subtenants, contractors, subcontractors or by anyone acting pursuant to the express or implied authority or permission of AIRLINE arising out of, or incident to, the operations of AIRLINE at the AIRPORT, including but not limited to: operations on or about the runways, taxiways, and aprons; and any actions in the TERMINAL BUILDING pursuant to this LEASE. AIRLINE shall be responsible for the investigation expenses pursuant to this Section 11.1.2 only in the event that AIRLINE is shown to be responsible for violation of a federal, state or municipal law, statute, ordinance or regulation. The provisions of this Section 11.1.2 shall survive the expiration or earlier termination of this LEASE, but only as they relate to incidents that occurred during the Term of this LEASE by the AIRLINE. 11.1.3 CORPORATION and COUNTY shall, within the limits of state law, indemnify, 41 11� \�M� defend and hold harmless AIRLINE, its directors, managers, officers, agents and employees, individually or collectively, from and against any and all claims, actions, damages, loss and liability, together with all reasonable expenses incidental to the investigation and defense thereof by anyone by reason of injury or damage to persons or property sustained in whole or in part as a result of an act, omission or negligence of CORPORATION or COUNTY, their commissioners, directors, officers, agents or employees arising out of, or incident to, this LEASE. The provisions of this Section 11.1.3 shall exclude claims or actions arising out of sole negligence or willful act of AIRLINE, its directors, managers, officers, agents or employees. AIRLINE shall give to CORPORATION and COUNTY prompt and reasonable notice of any claims or actions, and CORPORATION and COUNTY shall have the right to investigate and compromise said claims or actions. The provisions of this Section 11.1.3 shall survive the expiration or earlier termination of this LEASE, but only as they relate to incidents that occurred during the occupancy of the Leased Premises by the AIRLINE. Nothing herein shall be deemed a waiver of any provision of the Colorado Governmental Immunity Act as it relates to a claim or defense of anyone not a party to this LEASE. Section 11.2 AIRLINE Insurance 11.2.1 AIRLINE shall maintain liability insurance for the protection of AIRLINE and the CORPORATION and COUNTY, their commissioners, directors, officers, agents and employees, insuring against damages because of personal injury, bodily injury, death, property damage, including loss of use thereof, and arising out of any operations of AIRLINE in connection with this AGREEMENT. Coverage shall provide limits per occurrence to a combined single limit in amounts not less than those set forth in Exhibit C, to be considered and applied individually by the AIRLINE and each of its AFFILIATES. Such insurance shall name the CORPORATION and COUNTY, their commissioners, directors, officers, agents and employees as additional insureds, but only as respects the operations of the named insured AIRLINE, as their interests may appear, with the stipulation that this insurance, as to the interest of the CORPORATION and COUNTY only, shall not be invalidated by any act or neglect or breach of contract by AIRLINE, so long as the CORPORATION or COUNTY has not caused, contributed to or knowingly condoned the said act, neglect or breach of contract. The coverage provided by this policy(ies) shall be primary coverage and any other insurance carried by the CORPORATION and COUNTY is excess. 11.2.2 AIRLINE shall provide workers' compensation insurance coverage that satisfies Colorado law for all subject workers. Employer's Liability Insurance is also required. The specifically required coverage types and amounts are provided in Exhibit C, to be considered and applied individually by the AIRLINE and each of its AFFILIATES. 11.2.3 AIRLINE shall furnish the CORPORATION, no later than thirty (30) days following the execution of this LEASE, a certificate(s) of insurance as evidence that the then 42 required amounts and types of such insurance are in force. The CORPORATION and COUNTY reserves the right to require a certified copy of such certificates upon request. AIRLINE shall name the CORPORATION and COUNTY as an additional insured on such insurance policy or policies. Said policies shall be in a form, content and for a term generally used by Scheduled Air Carriers similar to AIRLINE in their routine operations and shall provide for thirty (30) days' written notice to the CORPORATION prior to the cancellation of, or any material change in, such policies. 11.2.4 CORPORATION, COUNTY and AIRLINE agree to have all property, fire and extended coverage, all risk and material damage insurance carried with respect to the TERMINAL BUILDING and AIRPORT or any portion thereof with a clause which waives all rights of subrogation which the insurer of one party might have against the other party. 11.2.5 CORPORATION, COUNTY, AIRLINE and all parties claiming under them, mutually release and discharge each other from all claims and liabilities arising from or caused by any casualty or hazard covered or required hereunder to be covered in whole or in part by insurance carried with respect to the TERMINAL BUILDING and AIRPORT or any portion thereof, without regard to whether such loss or damage was occasioned by the negligence of the other, its agents or employees. 43 \ftw� ARTICLE 12 RULES AND REGULATIONS, COMPLIANCE WITH LAW, NON-DISCRIMINATION AND AFFIRMATIVE ACTION Section 12.1 RULES AND REGULATIONS 12.1.1 AIRLINE shall observe and obey all CORPORATION and COUNTY resolutions and RULES AND REGULATIONS governing conduct on and operations at the TERMINAL BUILDING and AIRPORT and use of its facilities. CORPORATION and COUNTY agrees that all RULES AND REGULATIONS so promulgated shall not be inconsistent with the express terms of this LEASE or any legally authorized rule or regulation of the FAA, or any other federal or state agency, which is binding in law on AIRLINE, as the same now are or may from time -to -time be amended or supplemented. Except as so expressly limited, CORPORATION's and COUNTY's authority to promulgate or amend RULES AND REGULATIONS shall not be affected by this LEASE. CORPORATION and COUNTY shall give AIRLINE reasonable notice of amendment to RULES AND REGULATIONS. 12.1.2 AIRLINE shall not violate, nor permit its agents, contractors or employees acting on AIRLINE's behalf to violate any such RULES AND REGULATIONS that are now in effect or as may from time -to -time during the term hereof be promulgated by CORPORATION and COUNTY. Copies of the RULES AND REGULATIONS, as adopted, shall be forwarded to AIRLINE's local manager. 12.1.3 CORPORATION and COUNTY, acting in their governmental capacity and not as AIRPORT operator, shall prescribe civil penalties and injunctive remedies for violations of such RULES AND REGULATIONS, and the same may be applied to AIRLINE for violations by its agents, employees and contractors acting on AIRLINE's behalf. Nothing contained in this Section 11.1 shall prevent AIRLINE from contesting in good faith any RULES AND REGULATIONS. CORPORATION and COUNTY agree not to discriminate against AIRLINE in the enforcement of their RULES AND REGULATIONS. Section 12.2 Compliance with Law 12.2.1 AIRLINE shall not use its PREMISES, 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 LEASE, comply with all applicable resolutions, laws and RULES AND REGULATIONS of the CORPORATION, COUNTY, state of Colorado, the United States government or any other governmental agency, and of any commission thereof that may have jurisdiction to pass laws or ordinances or to make and enforce 44 rules or regulations with respect to the uses hereunder or to the PREMISES, TERMINAL BUILDING. or AIRPORT. 12.2.2 At all times during the term of this LEASE, AIRLINE shall, in connection with AIRLINE's activities and operations at the TERMINAL BUILDING and AIRPORT: 12.2.2.1 Comply with and conform to all existing and future statutes, resolutions and ordinances, and the RULES AND REGULATIONS promulgated thereunder, of all federal, state and other governmental bodies of competent jurisdiction that apply to or affect, either directly or indirectly, AIRLINE or AIRLINE's operations and activities under this LEASE. 12.2.2.2 Make, at AIRLINE's own expense, all nonstructural improvements, repairs, and alterations to its EXCLUSIVE USE SPACE, equipment and personal property that are required to comply with or conform to any of such laws, ordinances, and RULES AND REGULATIONS referred to in Section 12.2.2.1, to which this LEASE is expressly subject. 12.2.2.3 Reimburse CORPORATION for AIRLINE's pro rata share in accordance with the JOINT USE FORMULA of all nonstructural improvements, repairs and alterations to AIRLINE's JOINT USE SPACE that are required to comply with or conform to any of such laws, ordinances, and RULES AND REGULATIONS referred to in Section 12.2.2.1, to which this LEASE is expressly subject. 12.2.2.4 Be and remain an independent contractor with respect to all installations, construction and services performed by or at the request of AIRLINE, hereunder. Section 12.3 Non -Discrimination and Affirmative Action AIRLINE, as part of the consideration hereof and as a covenant running with the lease, hereby covenants and agrees that: 12.3.1 In the event facilities are constructed, maintained or otherwise operated for a purpose for which a Federal Department of Transportation and Transportation Security Administration program or activity is extended or for another purpose involving the provision of similar services or benefits, AIRLINE shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non -Discrimination in Federally Assisted Programs of the Department of Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, and as such regulations may be amended. 45 12.3.2 No person on the grounds of race, creed, color, national origin, sex, age or physical handicap shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities. 12.3.3 No person on the grounds of race, creed, color, national origin, sex, age or physical handicap shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination in the construction of any improvements on, over, or under the AIRLINE PREMISES and the furnishing of services thereon. 12.3.4 AIRLINE shall use the AIRLINE PREMISES in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non - Discrimination in Federally Assisted Programs of the Department of Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, and as such regulations may be amended. 12.3.5 AIRLINE agrees that it shall insert the provisions of Sections 12.3.1, 12.3.2, 12.3.3 and 12.3.4, inclusive, in any lease or other agreement by which it grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the PREMISES herein leased. 12.3.6 In the event of breach of any of the non-discrimination covenants set forth in this Section 12.3, CORPORATION shall have the right to terminate this LEASE and to reenter and repossess the PREMISES and the facilities thereon, and hold the same as if this LEASE had never been made or issued. This provision shall not become effective until the procedures of Title 49, Code of Federal Regulations, Part 21, are followed and completed, including the expiration of appeal rights. 12.3.7 AIRLINE will undertake an affirmative action program to the extent required by FAA Regulations, Title 14, Code of Federal Regulations, Part 152, Subpart E, entitled "Non -Discrimination in Airport Aid Program," or otherwise approved by the FAA, to ensure that no person shall, on the grounds of race, creed, color, national origin, sex, age or physical handicap, be excluded from participation in any employment activities covered in such Subpart E. No person shall be excluded by AIRLINE on such grounds from participating in or receiving the services or benefits of any program or activity covered by such Subpart E. AIRLINE will require that its covered suborganizations provide assurances to AIRLINE that they similarly will undertake affirmative action programs and that they will require assurances from their suborganizations, to the extent required by Title 14, Code of Federal Regulations, Part 152, Subpart E, to the same effect. tl lv� \ W/ 12.3.8 AIRLINE covenants and agrees that no person shall be excluded from participation in, denied the benefits of, or otherwise discriminated against in the performance of this LEASE on the grounds of race, color, national origin, or sex, as provided in Part 23, of Title 49, of the Code of Federal Regulations entitled "Participation by Disadvantaged Business Enterprises in Department of Transportation Programs." 12.3.9 In the event of a breach by AIRLINE of any of the assurances or covenants in Sections 12.3.7 and 12.3.8, CORPORATION shall have the right to terminate this LEASE, and to reenter and repossess any leased facilities hereunder, and to hold the same as if this LEASE had never been made or issued, but not without the express prior concurrence or direction of the U.S. Department of Transportation or the FAA following suitable review, if any, of such breach and affording AIRLINE a reasonable opportunity to rectify the same, if appropriate. 47 \4wp� ARTICLE 13 DEFAULT AND TERMINATION Section 13.1 Events of Default 13.1.1 If AIRLINE: 13.1.1.1 Fails to pay rentals, fees or charges or make any other payment past due hereunder within fifteen (15) days after receipt of written notice of nonpayment; 13.1.1.2 Fails, subject to events specified in Section 16.12 of this LEASE, to commence immediately to keep and perform any of its covenants and agreements within thirty (30) days after receipt of written notice of default and to diligently pursue the completion of such cure of such non -monetary default; 13.1.1.3 Fails to continue to complete any of its covenants and agreements after performance is commenced; or 13.1.1.4 Is the subject of any petition, proceedings or action by, for, or against AIRLINE under any insolvency, bankruptcy or reorganization act of law; 13.1.2 Then, at the election of the CORPORATION: 13.1.2.1 The CORPORATION may accelerate all rent payments due hereunder which shall then become immediately due and payable. 13.1.2.2 The CORPORATION may terminate this LEASE, in which event AIRLINE immediately shall surrender the EXCLUSIVE USE SPACE and JOINT USE SPACE to CORPORATION, and if AIRLINE fails so to do, the CORPORATION may, without prejudice to any other remedy which it may have for possession, or arrearages in rent, enter upon and take possession of the PREMISES and expel or remove AIRLINE and any other person who may be occupying the PREMISES or any part thereof, without being liable for prosecution or any claim of damages therefor, and AIRLINE agrees to pay to CORPORATION on demand the amount of all loss and damage which CORPORATION may suffer by reason of such termination, whether through inability to relet the PREMISES on satisfactory terms or otherwise. 48 13.1.2.3 The CORPORATION may enter upon and take possession of the PREMISES and expel or remove AIRLINE and any other person who may be occupying the PREMISES or any part thereof, without being liable for prosecution or any claim for damages therefor, and relet the PREMISES for such terms ending before, on or after the expiration date of the LEASE term, at such rentals and upon such other conditions (including concessions and prior occupancy periods) as the CORPORATION in its sole discretion may determine, and receive the rent therefor; and AIRLINE agrees to pay to the CORPORATION on demand any deficiency that may arise by reason of such reletting. The CORPORATION shall use reasonable efforts to mitigate its damages by reletting the PREMISES. In the event the CORPORATION is successful in reletting the PREMISES at a rental in excess of that agreed to be paid by AIRLINE pursuant to the terms of this LEASE, the CORPORATION and AIRLINE each mutually agree that AIRLINE shall not be entitled, under any circumstances, to such excess rental, and AIRLINE does hereby specifically waive any claim to such excess rental. 13.1.2.4 The CORPORATION may enter upon the PREMISES, without being liable for prosecution of any claim for damages therefor, and do whatever AIRLINE is obligated to do under the terms of this LEASE; and AIRLINE agrees to reimburse the CORPORATION on demand for any expenses which the CORPORATION may incur in thus effecting compliance with AIRLINE's obligations under this LEASE, and AIRLINE further agrees that the CORPORATION shall not be liable for any damages resulting to the AIRLINE from such action, whether caused by the negligence of the CORPORATION or otherwise. 13.1.2.5 Whether or not the CORPORATION retakes possession or relets the PREMISES, the CORPORATION shall have the right to recover unpaid rent and all damages caused by AIRLINE's default, including attorney fees. Damages shall include, without limitation: All rentals lost, all legal expenses and other related costs incurred by the CORPORATION following AIRLINE's default, all costs incurred by the CORPORATION in restoring the PREMISES to good order and condition, or in remodeling, renovating or otherwise preparing the PREMISES for reletting, all costs (including without limitation any brokerage commissions and the value of the CORPORATION's time) incurred by the CORPORATION, plus interest thereon from the date of expenditure until fully repaid at the rate of eighteen percent (18%) per annum. 13.1.2.6 Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein provided or any other remedies provided by law, such remedies being cumulative and non-exclusive, nor shall pursuit of any remedy herein provided constitute a forfeiture or waiver of any rent 49 14� 'Wow/ due to CORPORATION hereunder or of any damages accruing to the CORPORATION by reason of the violation of any of the terms, provisions and covenants herein contained. No act or thing done by the CORPORATION or its agents during the LEASE term hereby granted shall be deemed a termination of this LEASE or an acceptance of the surrender of the PREMISES, and no agreement to terminate this LEASE or accept a surrender of the PREMISES shall be valid unless in writing signed by the CORPORATION. No waiver by the CORPORATION of any violation or breach of any of the terms, provisions and covenants herein contained shall be deemed or construed to constitute a waiver of any other violation or breach of any of the terms, provisions and covenants herein contained. The CORPORATION's acceptance of the payment of rental or other payments hereunder after the occurrence of an event of default shall not be construed as a waiver of such default, unless the CORPORATION so notifies AIRLINE in writing. Forbearance by the CORPORATION to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default or of the CORPORATION's right to enforce any such remedies with respect to such default or any subsequent default. If, on account of any breach or default by AIRLINE in AIRLINE's obligations under the terms and conditions of this LEASE, it shall become necessary or appropriate for the CORPORATION to employ or consult with an attorney concerning or to enforce or defend any of CORPORATION's rights or remedies hereunder, AIRLINE agrees to pay any reasonable attorneys' fees so incurred. 13.1.3 CORPORATION shall have all additional rights and remedies as may be provided to landlords by Colorado state law. Section 13.2 Events Permitting Termination of LEASE by AIRLINE 13.2.1 AIRLINE may terminate this LEASE by giving the MANAGER written notice that is received by the CORPORATION during the five (5) business days which precede April 1 s` or during the five (5) business days which precede September 1 s` of each year during the Term of this LEASE unless AIRLINE is in default in its payments or other obligations to CORPORATION hereunder. If such dates include a legal state or federal holiday or a weekend day, termination notice must be received by the CORPORATION on the next business day. LEASE shall remain in full force and effect if AIRLINE fails to notify CORPORATION of termination during the dates specified in this Section 13.2.1. 50 13.2.2 AIRLINE may terminate this LEASE at any time that AIRLINE is not in default in its payments or other obligations to CORPORATION hereunder, by giving the MANAGER thirty (30) days advance written notice provided that: 13.2.2.1 The CORPORATION is in default of any material provision of this LEASE; or 13.2.2.2 AIRLINE becomes subject to any order, rule or regulation of any federal or state agency or to a court order which prevents or substantially prevents AIRLINE's use of the Airport for more than ninety (90) days following written notice by AIRLINE to the MANAGER. 13.2.3 With respect to 13.2.2.1, AIRLINE termination shall not be effective unless and until at least thirty (30) days have elapsed after written notice to the CORPORATION specifying the date upon which such termination shall take effect and the reason for such termination. CORPORATION may cure the cause of such termination within said (30) day period, or such longer time as the parties may agree thereto. If CORPORATION so cures, AIRLINE's right to terminate ceases for that particular instance or situation, and the LEASE shall continue in full force and effect. Section 13.3 Events Permitting Termination of LEASE by CORPORATION 13.3.1 CORPORATION, at its option, may declare this LEASE terminated on the happening of any one or more of the following events, and may exercise all rights of entry and reentry of AIRLINE's PREMISES: 13.3.1.1 If AIRLINE has failed to cure a default in the LEASE after notice required in Section 13.1 herein above; 13.3.1.2 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; 13.3.1.3 In the event AIRLINE fails to provide scheduled AIR TRANSPORTATION service for a period of thirty (30) days (except for periods outside the time frame from December 1" to April 71h of each year or events of FORCE MAJEURE) or to pay rentals and fees when due, CORPORATION may cancel this LEASE on fifteen (15) days written notice. However, if AIRLINE cures the breach within this fifteen (15) day period, the LEASE shall continue in full force and effect; 51 �qwv 13.3.1.4 If AIRLINE abandons and fails to use its leased PREMISES for a period of thirty (30) days at any one time, except during periods outside the time frame from December 1st to April 7th of each year or when such abandonment and cessation are due to fire, earthquake, strike, governmental action, weather conditions which prevent aircraft operations, mechanical failure of aircraft which prohibits operations under FAA regulations, default of CORPORATION or other cause beyond AIRLINE's control; 13.3.1.5 If AIRLINE fails to operate at least five (5) weekly scheduled passenger service departures from the AIRPORT, for a period of thirty (30) days or more (except during periods outside the time frame from December Ist to April 7th of each year or by reason of an event of FORCE MAJEURE). 13.3.1.6 Upon the payment or defeasance of the BONDS, at maturity or earlier as provided in the Trust Indenture with respect to any BONDS, the LEASE shall without further notice or action terminate, as of the date of such payment or defeasance, and AIRLINE shall vacate the PREMISES leased hereunder within not more than ninety (90) days. CORPORATION will give 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. Section 13.4 Possession by CORPORATION 13.4.1 In any of the aforesaid events, the CORPORATION may take possession of the AIRLINE PREMISES upon thirty (30) days notice and remove AIRLINE's effects, without being deemed to have trespassed. On said default, all rights of AIRLINE shall be forfeited, provided the CORPORATION shall have and reserve all of its available remedies at law as a result of said breach of this LEASE. 13.4.2 Failure of the CORPORATION to declare this LEASE terminated on default of AIRLINE for any of the reasons set forth herein shall not operate to bar, destroy or waive the right of the CORPORATION to cancel this LEASE by reason of any subsequent violation of the terms hereof. 52 �qw/ ARTICLE 14 ASSIGNMENT, SUBLETTING, MERGER AND BANKRUPTCY Section 14.1 Assignment and Subletting AIRLINE shall not assign this LEASE, or any part hereof in any manner whatsoever or sublet the AIRLINE PREMISES or any part thereof or any of the privileges recited herein without the prior written consent of the CORPORATION. However, AIRLINE shall have the right to assign all or any part of its rights and interests under this LEASE to an AFFILIATE of the AIRLINE or any successor to its business through merger, consolidation, voluntary sale or transfer of substantially all of its assets, and the consent of CORPORATION thereto shall not be required; provided, however, due notice of any such assignment shall be given to the MANAGER. Section 14.2 Non -Waiver of Responsibility No assignment, transfer, conveyance, sublease or granting a nonexclusive license by AIRLINE shall relieve AIRLINE of its responsibility for payment of rent and performance of all other obligations provided in this LEASE, without specific written consent of the MANAGER to such relief. Section 14.3 Relinquishment of Space 14.3.1 If AIRLINE desires to relinquish any of its EXCLUSIVE USE SPACE or any rights to JOINT USE SPACE, AIRLINE may notify the MANAGER of the space available, and the MANAGER shall use a best effort to reassign the space to another AIRLINE. No reassignment by the MANAGER, nor any assignment, transfer, conveyance or sublease by AIRLINE shall relieve AIRLINE of its primary responsibility for payment of rent and performance of all other obligations provided in this LEASE, without specific written consent by the MANAGER to such relief. 14.3.2 If at any time during the Term of this LEASE, AIRLINE reduces its number of regularly scheduled aircraft arrivals by more than thirty percent (30%), other than at the end of the winter season (occurring no later than April 151h of each year of the LEASE), then the CORPORATION may require that AIRLINE relinquish a portion of its EXCLUSIVE USE SPACE that is sufficient to accommodate the commercial passenger operations of another airline as determined by CORPORATION. If CORPORATION notifies AIRLINE of such required relinquishment, AIRLINE shall be relieved of payment of a proportionate share of its rent for the EXCLUSIVE USE SPACE relinquished by the AIRLINE. 53 lq=d 114� Section 14.4 Ground Handling Agreements In the event AIRLINE agrees to ground handle any portion of the operations of another AIRLINE, AIRLINE shall provide the MANAGER advance written notice of such proposed activities, including a description of the type and extent of services to be provided. Section 14.5 Bankruptcy Notwithstanding Section 14.1, in the event that a petition for relief under Title 11 of the United States Code or under any similar or successor federal, state or local statute is filed by or against the AIRLINE (a "Filing"): 14.5.1 The AIRLINE shall give the CORPORATION immediate verbal notice of the Filing followed by written notice within ten (10) days of the filing; 14.5.2 Within sixty (60) days of the date of the Filing, the AIRLINE will confirm the outstanding amount of any obligations hereunder due the CORPORATION as of the date of Filing; 14.5.3 The AIRLINE will fully and timely perform all obligations arising hereunder commencing as of the date of the Filing and thereafter for the purposes of this provision and of Section 365(d)(3) of Title 11 of the United States Code, the parties agree that, in the event that the AIRLINE shall be the subject of a Filing commenced on a day (the "Filing Date") when the rent due for the then -current month is outstanding and unpaid, the obligation for rent during that month in which the Filing shall have occurred shall be considered to accrue and be due pro rata on a daily basis during that month and the AIRLINE will pay the CORPORATION the pro rata rent for the period from the Filing Date through the end of that month within thirty (30) days of written demand therefore by the CORPORATION. 14.5.4 If the AIRLINE determines that it wishes to assume the LEASE, the AIRLINE will cure all defaults, provide the CORPORATION with adequate assurances of future performance and comply with any and all other statutory or legal requirements prior to the effective date of such assumption; 14.5.5 If the AIRLINE determines that it wishes to assume the LEASE and assign the LEASE to a third -party, the AIRLINE shall seek the consent of the CORPORATION which consent shall not be unreasonably withheld and shall provide to the CORPORATION all pertinent information with respect to the proposed assignee, cure all defaults, provide the CORPORATION with adequate assurances of future performance through the proposed assignee and comply with any and all other statutory or legal requirements; 14.5.6 If the AIRLINE wishes to reject the unexpired term of the LEASE, if any, the 54 EMM �ft� AIRLINE will not seek to have the effective date of such rejection determined to be a date earlier than that date on which (i) the AIRLINE shall have returned control and possession of the PREMISES to the CORPORATION in the condition and on the terms set forth herein and relevant to the redelivery of possession to the CORPORATION, and (ii) the AIRLINE shall have obtained court approval and authorization for such rejection; and the AIRLINE shall fully and timely pay all rent and other charges through the date of such rejection; and 14.5.7 The AIRLINE shall be deemed to have expressly consented to the modification of the stays of proceedings in any Filing in the event of any post -Filing default by the AIRLINE under the terms of this LEASE for the purpose of allowing the CORPORATION to exercise any default rights or remedies arising from such default. Section 14.6 Subsequent Transfers Consent by the CORPORATION to any type of transfer provided for by this Article 14 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 14.7 AIRLINE's Consent to CORPORATION's Assignment AIRLINE hereby consents to any assignment of CORPORATION's rights or duties under this LEASE to COUNTY, and agrees that thereupon CORPORATION immediately shall be discharged from any and all duties under this LEASE to the extent such duties are assumed by the assignee and relieved from any and all liabilities arising from the duties so assumed. 55 ARTICLE 15 SUBORDINATION TO BOND ORDINANCES 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 any time by CORPORATION to secure BONDS and any additional or subsequent BONDS or other financing issued to finance the purchase, construction or maintenance 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. 56 ARTICLE 16 GENERAL PROVISIONS Section 16.1 Successors and Assigns Bound This LEASE shall be binding on and inure to the benefit of the successors and assigns of the parties hereto. Section 16.2 Governing Law This LEASE and all disputes arising hereunder shall be governed by the laws of the State of Colorado. Section 16.3 Severability If any covenant, condition or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of any such covenant, condition or provision shall in no way affect any other covenant, condition or provision herein contained, provided that the invalidity of any such covenant, condition or provision does not materially prejudice either party hereto in its respective rights and obligations contained in the valid covenants, conditions or provisions in this LEASE. Section 16.4 Quiet Enjoyment AIRLINE shall, upon payment of the rentals and fees herein required, and subject to performance and compliance by AIRLINE of the covenants, conditions and agreements on the part of AIRLINE to be performed and complied with hereunder, peaceably have and enjoy the rights, uses and privileges of the Airport, its appurtenances and facilities as granted hereby and by the RULES AND REGULATIONS. Section 16.5 Taxes 16.5.1 AIRLINE shall pay, but such payment shall not be considered part of TERMINAL BUILDING Revenues, all taxes (including any possessory interest tax), assessments and charges of a like nature, if any, which at any time during the term of this LEASE may be levied or become a lien by virtue of any levy, assessment or charge by the federal government, the State of Colorado, the COUNTY, any municipal corporation, any local government entity, any government successor in authority to the foregoing, or any other tax or assessment levying bodies, in whole or in part, upon or in respect 57 lq� \qmw' to any of the space leased under this LEASE (including AIRLINE's pro rata share for any taxes, assessments or charges imposed upon the PREMISES) or such facilities of the TERMINAL BUILDING as are made available for use by AIRLINE hereunder, or upon or in respect to any personal property belonging to AIRLINE situated on the PREMISES leased under this LEASE. Payment of such taxes, assessments and charges, when and if levied or assessed, shall be made by AIRLINE directly to the taxing or assessing authority charged with collection thereof. 16.5.2 AIRLINE may, at its own expense, contest the amount or validity of any tax or assessment, or the inclusion of the PREMISES leased under this LEASE as taxable or assessable property, directly against the taxing or assessing authority. AIRLINE shall indemnify the CORPORATION from all taxes, penalties, costs, expenses and attorney fees incurred by the CORPORATION resulting directly or indirectly from all such tax contests except where AIRLINE prevails in contesting a tax assessed by the CORPORATION. 16.5.3 On any termination of this LEASE, all lawful taxes then levied or a lien upon any such property or taxable interest therein shall be paid in full by AIRLINE forthwith, or as soon as a statement thereof has been issued by the tax collector if termination occurs during the interval between attachment of the lien and issuance of a statement. Section 16.6 Liens 16.6.1 AIRLINE shall cause to be removed promptly any and all liens of any nature arising out of or because of any construction performed by AIRLINE or any of its contractors or subcontractors upon EXCLUSIVE or JOINT USE SPACE or arising out of or because of the performance of any work or labor by or for it or them at said PREMISES. 16.6.2 Notwithstanding the foregoing provision of this Section 16.6, AIRLINE may withhold payment of any claim in connection with a good -faith dispute over the obligation to pay. In the event a lien is filed as a result of AIRLINE's nonpayment, AIRLINE shall, within 10 days after the filing, secure the removal of the lien or deposit with the CORPORATION or a court of competent jurisdiction cash or sufficient corporate surety bond or other security satisfactory to the CORPORATION or the court in an amount equaling 150% of the total lien amount or $20,000, whichever is greater. Within two years after providing the CORPORATION or the court with security for the lien, AIRLINE shall, upon CORPORATION's written request, secure the removal of the lien. Should AIRLINE fail to remove the lien within the two year period, AIRLINE acknowledges and agrees that CORPORATION in its sole unfettered discretion may secure the removal of the lien and apply the security provided by AIRLINE to the costs of discharging the lien, including the CORPORATION's administrative costs and attorney fees. In the event CORPORATION has accepted a cash deposit as satisfactory security under this Section 16.6, the CORPORATION shall distribute to AIRLINE any portion of the deposit remaining after full payment of all such costs relating to the discharge of the lien has been made. In the event a mechanic's lien is asserted or filed against the PREMISES for improvements made by AIRLINE, AIRLINE shall hold CORPORATION harmless from such claim, including the cost of defense. Section 16.7 Obtaining Federal and State Funds The CORPORATION shall use its best efforts to obtain appropriate grants from federal and state agencies or other sources, when consistent with prudent management of the TERMINAL BUILDING. Section 16.8 Subordination to Agreements with the U.S. Government This LEASE is subject and subordinate to the provisions of any agreements heretofore or hereafter made between the CORPORATION and the United States, relative to the operation or maintenance of the TERMINAL BUILDING, or to the expenditure of federal funds for the improvement or development of the TERMINAL BUILDING, including the expenditure of federal funds for the development of the TERMINAL BUILDING 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, acts establishing or related to the Transportation Security Administration (TSA) and the Airport and Airway Improvement Act of 1982, as such acts have been amended, supplemented or replaced from time -to -time. In the event that the FAA or TSA requires, as a condition precedent to the granting of funds for the improvement of the TERMINAL BUILDING, modifications or changes to this LEASE, AIRLINE agrees to consent to such amendments, modifications, revisions, supplements or deletions of any of the terms, conditions or requirements of this LEASE as may be required to enable the CORPORATION to obtain such grant of funds. Section 16.9 Incorporation of Exhibits All exhibits referred to in this LEASE are intended to be and hereby are specifically made a part of this LEASE. W Section 16.10 Entire Lease This LEASE, together with all exhibits attached hereto, constitutes the entire agreement between the parties hereto, and all other representations or statements heretofore made, verbal or written, are merged herein, and this LEASE may be amended only in writing, and executed by duly authorized representatives of the parties hereto. Section 16.11 Non -Waiver of Rights No waiver of default by either party of any of the terms, covenants and conditions hereof to be performed, kept and observed by the other party shall be construed, or shall operate, as a waiver of any subsequent default of any of the terms, covenants or conditions herein contained, to be performed, kept and observed by the other party. Section 16.12 FORCE MAJEURE In the event of either party being rendered unable wholly, or in part, by FORCE MAJEURE to carry out its obligations under this LEASE, other than its obligations to make payments of money due hereunder then on such party's giving notice and full particulars of such FORCE MAJEURE in writing to the other party as soon as possible after the occurrence of the cause relied on, then the obligation of the party giving such notice, so far as it is affected by such FORCE MAJEURE, shall be suspended during the continuance of any inability so caused, but for no longer period, and such cause shall, as far as possible, be remedied with all reasonable dispatch. In the event either party hereto has with its employees what is commonly known as,, labor dispute, each party does hereby reserve unto itself the right to handle said dispute in its own fashion and as it shall, in its uncontrolled discretion, deem best and without interference from the other party. Section 16.13 Headings The headings of the several articles and sections of this LEASE are inserted only as a matter of convenience and for reference and do not define or limit the scope or intent of any provisions of this LEASE and shall not be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. Section 16.14 Non -Exclusive Rights It is understood and agreed that nothing herein contained shall be construed to grant to AIRLINE any exclusive right or privilege within the meaning of Section 308 of the Federal Aviation Act for the conduct of any activity in the TERMINAL BUILDING, except that, subject to the terms and provisions hereof, AIRLINE shall have the right to exclusive possession of the EXCLUSIVE .E USE SPACE leased to AIRLINE under the provisions of this LEASE. Section 16.15 Inspection of Books and Records Each party hereto, at its expense and on reasonable notice, shall have the right from time -to -time to inspect the books, records and other data of the other party relating to the provisions and requirements hereof, provided such inspection is made during regular business hours. Each party shall retain all such records for a period of at least three (3) years. On at least thirty (30) days prior written notice, AIRLINE agrees to make any records required hereunder available to the CORPORATION at AIRLINE's offices at the TERMINAL BUILDING. Section 16.16 Generally Accepted Accounting Principles Whenever any report or disclosure referred to in this LEASE consists, either in whole or in part, of financial information, such report or disclosure shall be prepared in accordance with generally accepted accounting principles, except as specifically provided to the contrary in this LEASE. Section 16.17 Consent Not to be Unreasonably Withheld Whenever consent, permission or prior written approval is required by either the CORPORATION or AIRLINE, such consent, permission or prior written approval is not to be unreasonably withheld or delayed. Section 16.18 Authority of MANAGER All rights and obligations of the CORPORATION under this LEASE may be exercised by the MANAGER or the MANAGER'S designee, unless specifically provided otherwise or required by law. Section 16.19 Amendments This LEASE may be amended in whole or in part without further consideration upon mutual written consent of CORPORATION and AIRLINE. 61 11%� llvd Section 16.20 Attorney Fees In the event any action or proceeding is brought to collect sums due or to become due hereunder or any portion thereof or to take possession of the AIRLINE PREMISES or to enforce compliance with this LEASE for failure to observe or perform any of the covenants, terms or conditions of this LEASE, the losing party agrees to pay to the prevailing party such fees, including attorney fees, and costs as the court may judge reasonable in such action or proceeding, and in any appeal therefrom. Section 16.21 Vending Machines AIRLINE shall ensure that no amusement, vending or self -ticketing machines, public pay telephones or other machines operated by coins, tokens or credit cards are installed or maintained in or at AIRLINE's EXCLUSIVE USE SPACE except with the prior written permission of the MANAGER. Section 16.22 Public Address System AIRLINE agrees that the use of the CORPORATION's public address system will be professional and non -promotional. AIRLINE shall not install, cause to be installed or use any other public address system in the TERMINAL BUILDING without the prior written approval of the MANAGER. Section 16.23 Employees of AIRLINE AIRLINE shall require all of its employees, subcontractors or independent contractors hired by AIRLINE working in view of the public and about the TERMINAL BUILDING area to wear clean and neat attire and to display appropriate identification. Section 16.24 Removal of Disabled Aircraft AIRLINE shall promptly remove any of its disabled aircraft from any part of the AIRPORT (including, without limitation, runways, taxiways, aprons and gate positions) and place any such disabled aircraft in such storage areas as may be designated by the MANAGER. AIRLINE may store such disabled aircraft only for such length of time and on such terms and conditions as may be established by CORPORATION. If AIRLINE fails to remove any of its disabled aircraft promptly, the MANAGER may, after informing AIRLINE of his intent to do so, but shall not be obligated to, cause the removal of such disabled aircraft; provided, however, the obligation to remove or store such disabled aircraft shall not be inconsistent with federal laws and regulations. AIRLINE agrees to reimburse the CORPORATION for all costs of such removal, and AIRLINE further hereby releases the CORPORATION from any and all claims for damage, except as the 62 result of negligent or willful misconduct, to the disabled aircraft or otherwise arising from or in any way connected with such removal by the CORPORATION. Section 16.25 Licenses, Fees and Permits AIRLINE shall obtain and pay for all licenses, fees, permits or other authorization or charges as required under federal, state or local laws and regulations insofar as they are necessary to comply with the requirements of this LEASE and the privileges extended hereunder. Section 16.26 National Emergency This LEASE and all the provisions hereof shall be subject to whatever right the U.S. Government now has, or in the future may have or acquire, affecting the control, operation, regulation and taking over of said AIRPORT or the exclusive or nonexclusive use of the AIRPORT by the United States during the time of war or national emergency. Section 16.27 Time is of the Essence Time is of the essence in this LEASE. Section 16.28 Employee Parking The CORPORATION shall provide and AIRLINE shall have the right to the use of vehicle parking facilities, for its employees employed at the AIRPORT. Such facilities shall be located in an area designated by the CORPORATION. The CORPORATION reserves the right to charge AIRLINE and/or its employees reasonable fees, not to exceed actual net costs, for use of such facilities and to regulate such use. 63 \q=/ Section 16.29 Notices Notices required herein shall be in writing and served by reliable overnight courier 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) President Eagle County Air Terminal Corporation P.O. Box 850 Eagle, CO 81631 Telephone: (970) 524-8246 Fax: (970) 524-8247 And also, Eagle County Attorney P.O. Box 850 Eagle, CO 81631 Telephone: (970) 328-8685 Fax: (970) 328-8699 (2) AIRLINE: UNITED AIR LINES, INC. Attention: Vice President Corporate Real Estate Address: 77 West Wacker Drive Chicago, IL 60601 Telephone:(312) 997-8603 Fax: With a copy to: Dallas Belt Regional Manager — Corporate Real Estate United Airlines — DENFP 8900 Pena Blvd. Denver, CO 80249 Telephone:(303) 348-3061 64 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 16. N ... ... IN WITNESS HEREOF, the parties or their duly authorized representatives have signed the TERMINAL BUILDING LEASE the day and year first written above. AIRLINE executes this LEASE and indicates acceptance of the Term specified in Section 2.1, by signing immediately below: AIRLINE: UNITED AIR L rV 0 Title:, Corpi�raGe-Ee'al Estate Date: 0-'S/ 1912—c)1 CORPORATION: M - PV&E� I D15(\T Approved as to Form: By: \qw/ \990� EXHIBIT C AIRLINE AND AFFILIATE INSURANCE REQUIREMENTS 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 indicated below. Insurance limits of liability for each of AIRLINE's AFFILIATES shall be determined by the capacity in passenger seats of the largest aircraft in each AFFILIATE's fleet as indicated below: 1. Not less than one hundred fifty million dollars ($150,000,000) per occurrence 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; Personal injury not less than twenty-five million dollars ($25,000,000) per occurrence and in the annual aggregate with respect to passengers; 4. Not less than twenty million dollars ($20,000,000) per occurrence for airlines operating aircraft of nineteen (19) or fewer seats. B. Hangar Keepers Liability Insurance (If Applicable) 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. Automobile Liability Insurance in an amount adequate to cover automobile insurance while on Airport property in an amount not less than one million dollars ($1,000,000) per person per occurrence. D. Liquor Liability Insurance (If Applicable) 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. E. Workers' Compensation Insurance and Employer's Liability Insurance with coverage and in amounts as required by the laws of Colorado. 67 r TERM SHEET 1) Requested hearing date: (First choice) (Second choice) May 4, 2010 May 11, 2010 2) For County Manager signature: N/A 3) Requesting department: Airport \ \ 4) Title: ,-\ 1. Eagle County Air Terminal Corporation Te inal uilding Lease between Eagle County Air Terminal Corporation d United 'r Lines, Inc. 5) Convening as another board or authority? Sta name CAT 6) Check one: Consent: On the Record: 7) Staff submitting: Chris Anderson 8) Purpose: Lease for United airline space in the terminal for three years. United Airlines has taken over the space lease that SkyWest, operating as a subsidiary of United Airlines, has typically held in the past for United operations. All leases carry the same terms for each airline. 9) Schedule: Term period of December 1, 2009 —November 30, 2012 10) Financial considerations: Square footage rates for airline space increased 1 % for the term year starting December 1, 2009. Overall lease revenue to ECAT from airline leases will total $2,128,325 for the term of December 1, 2009 — November 30, 2011. Lease year revenue from the prior year totaled $2,137,935. Overall reduction was due to a reduction of lease space resultant of the Delta/Northwest Airlines merger. 9) Other: V S TO FORM sy:_� Eagle County Attorney's O cffi e By: Eagle County Commissioners' Officd