Amended And Restated Airport Use Agreement Salt Lake International Airport. Salt Lake City Corporation For the Benefit of the

Transcription

1 Amended And Restated Airport Use Agreement Salt Lake International Airport Between Salt Lake City Corporation For the Benefit of the Salt Lake City Department of Airports And Delta Air Lines, Inc. As of July 1, 2006

2 AMENDED AND RESTATED AIRPORT USE AGREEMENT SALT LAKE INTERNATIONAL AIRPORT SECTION 1. DEFINITIONS... 1 SECTION 2. AMENDED AND RESTATED AGREEMENT SECTION 3. CITY COVENANTS... 8 A. NO CITY CHARGES IN EXCESS OF COSTS B. INSURANCE... 8 C. AIRPORT MONIES... 9 D. BUDGET SUBMISSION E. BUDGET COMMENTS F. AUDIT G. ANNUAL STATEMENT H. RESERVED I. GRANT AID J. SUBMIT BOND RESOLUTION K. COMPLIANCE WITH PFC REQUIREMENTS AND ASSURANCES SECTION 4. GRANTS BY CITY A. RIGHTS IN COMMON B. GATE POSITIONS D. PREFERENTIAL USE SPACE E. MEMORIALIZING CHANGES IN SPACE SECTION 5. CONSIDERATION BY AIRLINE SECTION 6. LATE PAYMENTS SECTION 7. SERVICES BY CITY SECTION 8. MANDATED FEDERAL SERVICES SECTION 9. RIGHT OF ENTRY BY CITY SECTION 10. IMPROVEMENTS BY AIRLINE SECTION 11. SIGNS SECTION 12. DISABLED AIRCRAFT SECTION 13. RECORDS BY AIRLINE SECTION 14. AIRLINE INDEMNITIES SECTION 15. INSURANCE AND WAIVER OF SUBROGATION SECTION 16. DAMAGE OR DESTRUCTION A. EFFECTS OF DAMAGE B. INSURANCE PROCEEDS SECTION 17. EVENTS OF DEFAULT, AIRLINE A. FAILURE TO PAY B. OTHER OBLIGATIONS C. ENCUMBRANCES D. INSOLVENCY SECTION 18. RIGHTS OF CITY IN EVENT OF DEFAULT ii

3 A. TERMINATION B. ENTRY C. TERMINATION REQUIREMENTS SECTION 19. RIGHTS OF TERMINATION A. CITY S RIGHT TO TERMINATE B. AIRLINE S RIGHT TO TERMINATE SECTION 20. TAXES SECTION 21. SURRENDER OF PREMISES SECTION 22. HOLDOVER BY AIRLINE SECTION 23. IMPROVEMENT FUND AND CONTINGENCY FUND SECTION 24. ASSIGNMENT, SUBLEASE SECTION 25. WAIVER SECTION 26. OPTION OF CITY TO PERFORM SECTION 27. ATTORNEY S FEES SECTION 28. DISCRIMINATION SECTION 29. CONSENTS SECTION 30. NOTICES SECTION 31. RESERVED SECTION 32. CHANGES IN LAW OR REGULATIONS SECTION 33. PREFERENCE TO OTHERS SECTION 34. QUIET ENJOYMENT SECTION 35. SUBORDINATION SECTION 36. GOVERNING LAW SECTION 37. EFFECTIVE AND TERMINATION DATES SECTION 38. AIRPORT S RIGHT TO AUTHORIZE USE OF AIRLINE SPACE A. USE BY OTHERS B. CHARGES FOR USE SECTION 39. AIRPORT S RIGHT TO REASSIGN PREMISES A. RIGHTS TO REASSIGN B. REASSIGNMENT PROCESS C. RECONSIDERATION AND EFFECT OF DECISION SECTION 40. REPRESENTATION REGARDING ETHICAL STANDARDS FOR CITY OFFICERS AND EMPLOYEES AND FORMER CITY OFFICERS AND EMPLOYEES SECTION 41. COMPLY WITH ALL LAWS SECTION 42. HEADINGS SECTION 43. NO EXCLUSIVE REMEDIES SECTION 44. SEVERABILITY SECTION 45. ENTIRE AGREEMENT iii

4 EXHIBIT A EXHIBIT B EXHIBIT C AIRPORT COST CENTER MAP LEASED SPACE MAP FEES, CHARGES, RENTS iv

5 AMENDED AND RESTATED AIRPORT USE AGREEMENT SALT LAKE INTERNATIONAL AIRPORT This Amended and Restated Airport Use Agreement is made and entered into as of July 1, 2006 (the Agreement ) by and between Salt Lake City Corporation, a municipal corporation of the State of Utah ( City ), and Delta Air Lines, Inc., a corporation organized under the laws of the State of Delaware ( Airline ). WITNESSES Whereas, City is the owner and operator of the Salt Lake City International Airport (the Airport ); and Whereas, Airline desires to enter into an agreement for the use of the airfield facilities and for the lease of space in the Terminal on the Airport, and City is willing to enter into such an agreement; and Whereas, such use at the Airport was previously governed under the terms of an Airport Use Agreement that City entered with Airline as of June 1, 1980, as subsequently amended and restated as of July 1, 2003, and the parties desire to enter this Agreement to amend and restate the same to govern use at the Airport as of the date first written above; Now therefore, in consideration of the mutual promises herein, it is hereby agreed by the parties hereto as follows: SECTION 1. DEFINITIONS. Terms used herein are defined as follows: Activities Incidental to Airline s Air Transportation Business shall include landing, takeoff, taxiing, towing and pushing of aircraft, selling services for the transport of persons, property and mail by air including activities incidental thereto (such as reservations, ticketing, air-billing), loading and unloading persons and property into and out of aircraft, service and repair of aircraft, service and repair of equipment used in connection with its air transportation services or those of other airlines serving the Airport, training of persons and testing of aircraft and equipment, sale, lease or other disposition of Airline s property used by Airline on the Airport and that has

6 become excess to Airline s needs at the Airport, purchase and receipt of equipment, fuel, supplies and services, preparation of flight meals (but only for consumption on board its own aircraft except to the extent that Airline has or obtains the right to prepare flight meals for others under a separate agreement with City, in which case the terms of said separate agreement shall govern Airline s right to prepare flight meals for others and the duration thereof), furnishing ground transportation services without charge for its air passengers to or from the Airport in connection with the enplanement or deplanement of such passengers at another airport, making reservations without charge for its air passengers for overnight accommodations or for rental cars, and furnishing without charge food and drinks to its air passengers; but shall not include selling or operating ground transportation for a charge, sale of insurance or merchandise of any kind, rental of automobiles, or sale of food or drink except that if and when permitted by the law of the State of Utah, Airline may sell alcoholic beverages to its air passengers only within such of its Leased Space as may be authorized by City and subject to such limitations and regulations as City may prescribe from time to time that do not unjustly discriminate against Airline relative to other airlines using the Airport. No fees or charges other than those provided for in this Agreement may be imposed by City upon Airline for the right or privilege of carrying on any Activities Incidental to Airline s Air Transportation Business at the Airport, and no fees or charges may be assessed by City against any of Airline s patrons or suppliers of fuel, material and services to Airline for carrying on any activities that are reasonably necessary to effect transactions with Airline that, with respect to Airline, are Activities Incidental to Airline s Air Transportation Business at the Airport, except that suppliers of flight meals for consumption on board aircraft, suppliers of food for consumption at the Airport, suppliers of aircraft maintenance and repair services performed on the Airport may be subject to fees or charges by City in connection with the sale or provision of such merchandise or services on the Airport. Agreed Perils means fire, lightning, windstorm or hail, explosion, smoke, aircraft or vehicles, riot, riot attending a strike or civil commotion, vandalism, and malicious mischief as such perils are customarily assured against in Utah at the time. Agreement means this Amended and Restated Airport Use Agreement for the Salt Lake City International Airport dated as of July 1, 2006, including all exhibits hereto (which are incorporated herein), as amended from time to time. 2

7 AOA or Air Operations Area means that term as now or hereafter defined in the Federal Aviation Administration or Transportation Security Administration Regulations for Airport security purposes. Airline means the air carrier entering this Agreement as first written above. Airport means Salt Lake City International Airport as delineated in Exhibit A attached hereto and made a part hereof plus future additions thereto and all present and future improvements and facilities thereon or acquired or constructed for purposes associated therewith. Airport Bonds means the Revenue Bonds. Annual Period means a period of one year commencing after June 30, 2008, during which this Agreement is in effect, starting on July 1 and ending on June 30. Auxiliary Airports means the airports presently known as Airport No. 2 and the Tooele Valley Airport, and all other airports operated by City in the future except the Salt Lake City International Airport. Bond Document means the document or documents in effect from time to time providing for the issuance of and security for Revenue Bonds. A Bond Document may be a master resolution, a master indenture or other similar document, as amended from time to time, a copy of which has been provided to the Airline pursuant to Section 3(j) of this Agreement. If all Revenue Bonds issued under a particular Bond Document have been paid or provision for payment has been made for such Revenue Bonds in accordance with the Bond Document, it shall no longer constitute a Bond Document for all purposes of this Agreement. Capital Amount means $100,000.00, adjusted at the end of every three (3) Fiscal Years when this Agreement is in effect after June 30, 2006 (the first adjustment, if any, to occur June 30, 2009) either upward or downward for inflation (or deflation) in increments of $15, as follows: (1) as proposed by City if accepted by a Majority In Interest of the Participating Airlines, or (2) failing such acceptance, an adjustment of $15, upwards or downwards for each full increment of 20% of increase or decrease in the GNP Implicit Price Deflator Index (as published by the U.S. Department of Commerce) that occurs between July 1, 2006 and the end of the Fiscal Year when the adjustment is to be made. 3

8 City means Salt Lake City Corporation, a municipal corporation of the State of Utah. City Airports means Salt Lake City International Airport and the Auxiliary Airports. City Council means the City Council of the City of Salt Lake City, Utah as it may be constituted at the time. City Return Rate means with respect to each item of City investment, annual interest rate equal to the average return on City funds invested for the Fiscal Year in accordance with the Utah Money Management Act, or any successor act thereto. Commitment against Improvement Fund means (1) the estimated cost of constructing improvements on the City Airports that have been approved by the City Council, for which at least preliminary plans exist and of which the Participating Airlines have received notice either in a capital budget adopted by City or otherwise, and (2) any legally binding obligation of City to pay money, which obligation is payable from the Improvement Fund. Contingency Fund means the fund by that name established in Section 23 of this Agreement. Department means the Salt Lake City Department of Airports. Director of Airports means the Executive Director of the Salt Lake City Department of Airports. Enplaned Passengers means all passengers boarded on revenue flights, including any passenger that previously disembarked from another aircraft of the same or different airline, or from the same aircraft previously operating under a different flight number. Fiscal Year means the fiscal year of City as it may exist from time to time, and as of the date of this Agreement means July 1 through June 30. Grant Aid means any grants in aid made to City for the City Airports by the federal government or by the State of Utah or other agencies, but shall not 4

9 include fuel tax refunds made by the State of Utah to City. Improvement Fund means that account in the Surplus Fund into which shall be made all transfers from the Surplus Fund other than transfers pursuant to the Bond Document to the Principal and Interest Fund and to the Reserve Instrument Fund created under the Bond Document, and from which payments can be made - for improvements on, additions to and acquisitions for the City Airports, including without limitation industrial development on the City Airports. for debt service on Airport Bonds. to any reserve fund for Airport Bonds to the extent required to bring the balance thereof up to the amount required by authorizing resolutions of City. for repairs, replacements and maintenance to City Airports. for the purchase or retirement of Airport Bonds (but not for the purchase of or call and redemption prior to maturity of Special Purpose Bonds). for any other lawful City Airports purpose. Investment Service means the concept by that name described in Part I (F) of Exhibit C, which is attached hereto and made a part hereof. Joint Use Space means space in the Terminal that City leases to Airline and one or more additional airlines as further described in Section 4(c). Leased Space means all Preferential Use Space leased by Airline under this Agreement. Majority In Interest of the Participating Airlines means a majority (50% or more) in number of the Participating Airlines which together in the preceding Fiscal Year enplaned at the Airport a majority of the passengers enplaned at the Airport by all of the Participating Airlines. Mandated Service Charge means charges to reimburse City when providing 5

10 services mandated by the federal government as provided in Exhibit C, Part III. Operating Expenditures means all of those items identified as Operation and Maintenance Costs in the Bond Document in effect at the time when the expenditure is incurred. In any event, Operating Expenditures shall not include expenditures paid or reimbursed with Grant Aid, or with PFC Revenues either directly or indirectly, for the purpose of establishing a rate, fee or charge pursuant to any contract with an air carrier or foreign air carrier. Operating Revenues means the total of (1) all those items identified as Revenues as defined in the Bond Document in effect at the time when the Department recognizes the revenue. In any event, Operating Revenues shall not include PFC Revenues either directly or indirectly for the purpose of establishing a rate, fee or charge pursuant to any contract with an air carrier or foreign air carrier, and shall not include Grant Aid, or proceeds received from Airport Bonds or other debt instruments issued or sold by City. Participating Airlines means all airlines operating passenger service into the Airport which have entered into an agreement substantially identical to this Agreement with City for, at a minimum, the use of gate holdroom space as Leased Space in the Terminal, and the use of Joint Use Space in the Terminal. PFC Revenues means all revenues which are remitted to and received by City from any air carrier or foreign air carrier pursuant to authority granted to City by the Federal Aviation Administration to impose a passenger facility charge pursuant to applicable federal and state law, including 49 U.S.C. App or any successor thereto, and any interest, profits or other income derived from the investment thereof. Preferential Use Space means space in the Terminal that Airline leases on a preferential use basis as further described in Section 4(d). Rented Square Feet with respect to the Terminal means the number of square feet of fully enclosed space (not open covered space except airline curbside check-in facilities) in the Terminal that is rented to tenants pursuant to a written agreement, or that is City administrative space. Among other things, Rented Square Feet does not include utility rooms, areas and ductways; janitorial rooms and closets; stairways and hallways; gate holdroom area for unleased gates; elevators and escalators; entrance-ways and public or common use lobbies and areas; public and common use toilet areas; and other areas used for the 6

11 operation, maintenance or security of the Terminal (even if used solely by City). Required Amount means with respect to any Fiscal Year the total of (1) the Operating Expenditures in that Fiscal Year, plus (2) the debt service payable by City on Airport Bonds in that Fiscal Year less the amount of any PFC Revenues used in that Fiscal Year to pay debt service on Airport Bonds, plus (3) 25% of the debt service payable by City on Revenue Bonds in that Fiscal Year less the amount of any PFC Revenues used in that Fiscal Year to pay debt service on Revenue Bonds. Revenue Bonds means all revenue bonds issued by City which are secured by the revenues of the City Airports, except Special Purpose Revenue Bonds. Revenue Fund shall mean the fund by that name established pursuant to the Bond Document. SLC Airlines means all common and contract carriers of passengers or property by air, landing at the Airport any aircraft that has a certificated maximum gross landing weight in excess of 12,500 pounds. Special Purpose Revenue Bonds are bonds the proceeds from which are used to construct a particular facility on the City Airports and which are secured only by revenues from such particular facility. Supplemental Agreement means an agreement signed by Airline and City to supplement the terms of this Agreement to address matters that affect the operations or leasehold of Airline, or those of several airlines, when such matters do not affect all Participating Airlines as a whole. Without limitation, such matters may include terms to govern special improvements, utilities for extraordinary uses, special facilities, equipment needs, service needs or other matters. A Supplemental Agreement shall become a part of this Agreement upon its execution, but no Supplemental Agreement shall be interpreted to delete, conflict with or supercede any of the terms of this Agreement. Surplus Fund means the fund designated by that name under the Bond Document. All surplus in the Revenue Fund shall be transferred to the Surplus Fund as of the end of each month. Surplus in the Revenue Fund means the amount by which the balance in the Revenue Fund exceeds an adequate provision for working capital to pay 7

12 Operating Expenditures, and required payments to the Principal and Interest Fund under the Bond Document, for a reasonable period in the future, such adequate provision to be not less in amount than that required under the Bond Document to remain in the Revenue Fund after transfers out of the Revenue Fund to the Surplus Fund. Terminal means the airline terminal complex at the Airport as it may exist from time to time, including all terminal buildings, concourses, mechanical plants, connectors and other related facilities. SECTION 2. AMENDED AND RESTATED AGREEMENT. Air carriers at the Airport formerly made use of the Airport pursuant to an Airport Use Agreement that City entered with Airline as of June 1, 1980, with a term extending through June 30, 2003, as such agreement was previously amended or supplemented. Such Airport Use Agreement was subsequently amended and restated as of July 1, 2003, with a term extending through June 30, 2006, as amended or supplemented during such term. This Agreement amends and restates such agreement effective as of the date first written above. SECTION 3. CITY COVENANTS. The parties hereto recognize that the charges to be paid by Airline hereunder are based upon the costs to be incurred by City in operating, maintaining and repairing the City Airports in the future and that Airline is entitled to information relative to such costs and the budgeting and control of such costs. To that end, the following shall apply. a. No City Charges In Excess of Costs. City shall not charge to the City Airports as a separate enterprise any amounts for services or facilities provided by City either on or off the City Airports in excess of the costs incurred in providing such services or any amount for facilities or services not requested by the City Airports as a separate enterprise for lawful City Airports purposes (which shall include without limitation any purpose for which the Improvement Fund can be used). b. Insurance. City shall adequately insure (the cost thereof to be included in Operating Expenditures) for fire and extended coverage risks the improvements, buildings and 8

13 facilities on the City Airports. c. Airport Monies. City shall not use any monies of the City Airports for any but lawful City Airports purposes (which shall include, without limitation, any purpose for which the Improvement Fund can be used) and fully credit to funds belonging to the City Airports as a separate enterprise all earnings from the investment of such monies. d. Budget Submission. City shall submit to Airline each year the proposed operating and capital budgets for the City Airports for the next Fiscal Year at least 30 days before such budgets are finally adopted. e. Budget Comments. City shall receive and consider (but not necessarily adopt) all objections timely made by Airline to any operating or capital budget for the City Airports as a separate enterprise prior to final adoption of such budgets. f. Audit. City shall cause the books and accounts of the City Airports as a separate enterprise to be audited after the end of each Fiscal Year by an independent firm of certified public accountants of national reputation appointed and paid by the City, and provide Airline a copy of the final certified audit report immediately upon its completion. Such audit and such certificate shall specifically cover but shall not be limited to all transactions between City as an entity and the City Airports as a separate enterprise and include an opinion on whether or not charges and credits made by City to the City Airports as a separate enterprise with respect to those transactions satisfy City s obligations hereunder. g. Annual Statement. After the end of each Fiscal Year, City shall cause to be prepared an annual statement on the operation of the City Airports covering that Fiscal Year based upon figures audited as provided in subsection 3(f) above and with accounting treatment in accordance with that to be employed in computing Airline s charges hereunder. 9

14 h. Reserved. i. Grant Aid. City shall exercise reasonable diligence to submit applications for such Grant Aid as may be available for the City Airports, but shall not be obligated to make any acquisition or any improvement or meet conditions unacceptable to City in order to obtain any Grant Aid. j. Submit Bond Resolution. City shall submit to Airline at least 30 days before final action thereon by the City Council a copy of any proposed modification to or replacement of the then-existing Bond Document and receive and consider (but not necessarily adopt) all objections or proposals for changes timely made by Airline relative thereto. During the term of this Agreement, City agrees that any bonds issued for the benefit of the Airport shall be issued pursuant to the Salt Lake City Airport Authority Resolution No. 45 of 1989 Providing for the Issuance of Airport Revenue Bonds, adopted April 11, 1989 by the Salt Lake City Council as supplemented and amended from time to time. k. Compliance with PFC Requirements and Assurances. City will comply with the requirements of 49 U.S.C. App (e)(7), or any successor thereto, and of all assurances required in connection with authority granted by the Federal Aviation Administration to impose and/or use a passenger facility charge at the Airport pursuant to Title 14, Code of Federal Regulations, Part 158, or any successor thereto. Without limiting the generality of the foregoing, (1) City will not treat PFC Revenues as Operating Revenues for the purpose of establishing a rate, fee or charge pursuant to any contract with an air carrier or foreign air carrier; (2) City will not include in its rate base by means of depreciation, amortization, debt service or any other method, that portion of the capital costs of a project paid for by PFC Revenues for the purpose of establishing a rate, fee or charge pursuant to a contract with an air carrier or foreign air carrier; and (3) notwithstanding the limitation provided in subparagraph (2), with respect to a project for terminal development, gates and related areas, or a facility occupied or used by one or more air carriers or foreign air carriers on an exclusive or preferential basis, the rates, fees, and charges payable by such carriers that use such facilities will be no less than the rates, fees, and charges paid by such carriers using similar facilities at the Airport that were not financed by PFC Revenues. 10

15 SECTION 4. GRANTS BY CITY. City hereby leases and grants to Airline, and Airline hires and takes from City, the premises, facilities, rights and privileges described below in this Section 4 for Activities Incidental to Airline s Air Transportation Business, except as limited below in this Section 4 and subject to applicable laws, lawful ordinances and such reasonable rules not inconsistent with the provisions of this Agreement as may be prescribed by City from time to time. a. Rights in Common. The right in common with others to use the airfield, common use and public facilities of the Airport and the right of ingress to and egress from the Airport, Airline s Leased Space and Joint Use Space for Airline and its patrons, suppliers and invitees provided such use, ingress and egress is for Activities Incidental to Airline s Air Transportation Business. b. Gate Positions. The preferential, but not exclusive, right to use the gate positions on the apron of the Terminal as identified in Exhibit B attached hereto and made a part hereof. Airline may perform, while its aircraft is parked upon the apron at the Terminal, customary fueling and servicing of aircraft preparatory to loading and takeoff or immediately following landing and unloading. Airline shall not do or perform any major repair or maintenance work upon its aircraft while parked upon said apron and shall not store aircraft upon said apron in a manner to restrict the loading and unloading of passengers. Overnight storage or major repair or maintenance work may be permitted when said apron is not needed for loading or unloading passengers. As used herein, major work means work that normally requires more than two hours to complete. All repair, maintenance and overhaul work (other than non major work), testing, washing or storage of aircraft or other equipment of Airline shall be performed only upon premises designated for such use by City or upon premises leased to Airline for such use or upon the premises of concessionaires authorized by City to render such service on the Airport. c. Joint Use Space. The right in common with other airlines as lessee to use for itself and its customers the space in the Terminal that is shown in Exhibit B attached hereto as Joint Use Space. 11

16 d. Preferential Use Space. The preferential use as the lessee thereof of the space assigned to Airline in the Terminal that is shown in Exhibit B attached hereto as Airline s Preferential Use Space. e. Memorializing Changes in Space. All changes in Airline s Leased Space or Airline s Joint Use Space shall be made by a written amendment to this Agreement signed by both parties. When City changes any space affecting other Participating Airline(s) or other areas, but not affecting Airline, City will provide Airline with a cumulative annual written notice of such changes without amending this Agreement, and Airline agrees that such notice shall supercede any space designations contained in Exhibit B to the contrary with respect to space for such other Participating Airline(s) or other areas not affecting Airline. SECTION 5. CONSIDERATION BY AIRLINE. In consideration of the premises, facilities, rights and privileges herein granted and leased, Airline shall pay City the fees, charges and rents described in Exhibit C attached hereto and made a part hereof. All sums due to City in connection with this Agreement or any of Airline s operations in connection herewith shall constitute rent for purposes of this Agreement. SECTION 6. LATE PAYMENTS. Any portions of fees, charges and rents not paid by the due date shall bear interest at 12% per annum from the due date, and Airline shall pay to City any such unpaid fees, charges and rentals, together with interest thereon, upon demand by City. 12

17 SECTION 7. SERVICES BY CITY. City shall with reasonable diligence and in a manner consistent with that of a reasonably prudent operator of an airport of comparable size in the continental United States manage, operate, maintain and keep in good order and repair the airfield, the Terminal and its parking aprons, and the public roads, ways and walks of the Airport. City shall provide the following services in Airline s Leased Space and in the Joint Use Space, without additional charge except for extraordinary uses pursuant to a Supplemental Agreement: a. Lighting. b. Electric power. c. Heat. d. Air conditioning. e. Water. f. Janitorial service. SECTION 8. MANDATED FEDERAL SERVICES. City shall provide law enforcement officers at or nearby passenger screening points in the Terminal or other services as may be required by federal law or regulations, and shall comply with all federal security requirements. City and Airline shall meet from time to time to review levels of staffing or other matters required to comply with such law and regulations and as may be needed to adjust for changes in airline schedules, changes in facilities and other matters affecting staffing levels. SECTION 9. RIGHT OF ENTRY BY CITY. City and its authorized employees, agents, contractors and subcontractors shall have the right at all reasonable times to enter upon Airline s Leased Space and Joint Use Space to make inspections, to perform maintenance and make repairs and replacements, and to make structural additions and alterations, provided such entries shall not unreasonably interfere with Airline s use of the space. 13

18 SECTION 10. IMPROVEMENTS BY AIRLINE. Airline shall not construct or install any equipment or improvements or affix any trade fixtures to the premises in Airline s Leased Space or Joint Use Space without the City s prior written consent, which shall not be unreasonably withheld. City has authorized certain Airline equipment, improvements and affixed trade fixtures to be located in Airline s Leased Space as of the date of this Agreement. If Airline requests to construct or install any other equipment or improvements on the Leased Premises, City and Airline shall determine who will hold title to the same before City will determine whether to give any approval in connection with such a request. However, Airline may place personal property on the Leased Premises at any time, such as equipment and trade fixtures that are not affixed to the premises, and title to such personal property shall at all times remain in Airline. Airline shall have the right at any time to remove any or all of Airline s personal property from the Leased Premises. At the termination of this Agreement, or at any time when Airline ceases using any space pursuant to Section 39 of this Agreement, unless permitted by the City to do otherwise Airline shall remove any affixed equipment or improvements installed or constructed by it in Airline's Leased Space to which it has retained title and restore the premises to the condition existing prior to such installation or construction, reasonable wear and tear excepted. In the event title to such equipment and improvements has been transferred to City, Airline shall have no obligation to remove said affixed equipment and improvements or to perform such restoration, but Airline shall leave the affixed equipment and improvements in place as the property of City and subject thereafter to such use as City may elect. SECTION 11. SIGNS. Subject to the prior written approval of City as to compliance with the decor and signing scheme for the Terminal, Airline shall have the right to install such identifying signs in premises leased by it in the Terminal as it may deem necessary to the operation of its business. No advertising or promotional signs or posters that are visible to persons in public areas of the Terminal or the Airport shall be installed or placed by Airline in any areas of the Terminal except with the prior written approval of City. SECTION 12. 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; may place any such disabled aircraft only in areas leased by Airline on which such use is 14

19 authorized or in such storage areas as may be designated by City; and may store such disabled aircraft in such designated storage areas only for such length of time and upon such reasonable terms and conditions as may be established by City. Should Airline fail to remove any of its disabled aircraft promptly in accordance with this section, City may, but shall not be obligated to, cause the removal of such disabled aircraft, and Airline agrees to reimburse City for all costs of such removal; and Airline further hereby releases City from any and all claims for damage to the disabled aircraft or otherwise arising from or in any way connected with such removal by City. This Section 12 shall be subject to and subordinated to the lawful rules, regulations and orders of the National Transportation Safety Board, Federal Aviation Administration, Transportation Security Administration, or any successor or other governmental agency having authority for the same. SECTION 13. RECORDS BY AIRLINE. Airline shall at all times maintain and keep records at Salt Lake City, Utah, wherein are accurately kept all entries reflecting the total number of passengers enplaned and deplaned (including online transfers) at the Airport by Airline and the total number of aircraft landings made by it at the Airport and the certificated maximum gross landing weight of each such aircraft and make periodic reports thereof to City as required by City. Such records shall be available upon reasonable advance notice for examination by City or its duly authorized representative at all reasonable business hours. Airline, or its agent shall submit timely reports to the State of Utah on fuel purchases made and aviation fuel tax rebates claimed by Airline at the Airport as required by law and shall submit a copy thereof to City at the same time. SECTION 14. AIRLINE INDEMNITIES. Airline shall indemnify, defend, and keep and hold City, its elected officials, board members, officers, agents and employees, harmless from any and all claims and actions arising in connection with Airline s use or occupancy of the Airport, and all expenses incidental to the investigation and defense thereof, brought by anyone by reason of injury, death or damage to persons or property proximately caused by the acts or negligence of Airline, its officers, agents or employees and not proximately caused by the concurrent or antecedent acts or negligence of City, its elected officials, board members, officers, agents or employees; provided, however, that the City s status as landlord shall not be considered as an act or negligence of City for the purposes of this indemnity provision. Airline shall at its expense maintain liability insurance coverage on its operations at and use of any part of the Airport, including its liability under the indemnities stated in this Section 14, and name City as an additional assured 15

20 under liability coverages, but only as respects operations of the Named Insured as their interests may appear. The insurance policy shall have not less than $100,000,000 combined single limit coverage and shall not be subject to cancellation or material change affecting the requirements of the City under this Agreement except after notice to City by certified mail at least 30 days prior to the date of such cancellation or material change. Without limitation, the terms of this indemnity include an agreement by Airline to indemnify, defend and hold harmless City from and against any and all expense, loss, claim, damage, or liability suffered by City by reason of Airline s breach of any environmental requirement existing under federal, state or county law, regulation, order or other legal requirement in connection with any of Airline s acts, omissions, operations or uses of property relating to this Agreement, or such a breach by the act or omission of any of Airline s officers, employees, agents, or invitees, whether direct or indirect, or foreseen or unforeseen, including (but not limited to) all cleanup and remedial costs actually and reasonably incurred to satisfy any applicable remediation obligation required by federal, state or county law, and reasonable legal fees and costs incurred by City in connection with enforcement of this provision, but excluding damages solely relating to diminution in the value of City real property. The provisions of this section shall survive the termination of Airline s tenancy or of this Agreement. This indemnity shall be construed in a manner consistent with Utah law. Without expanding Airline s obligations under this section, nothing herein shall be construed to require the indemnitor to indemnify the indemnitee against the indemnitee s sole negligence. Airline shall be responsible to the extent of the requirements of applicable law and regulations relative to Airline or to City to prevent any unauthorized entry onto any part of the AOA of the Airport through Airline s Leased Space. Airline indemnifies City against any loss or expense resulting to City from any such unauthorized entry through Airline s Leased Space, and Airline indemnifies City against loss or expense resulting to City from any such unauthorized entry through Joint Use Space that is accomplished wholly or partly as a consequence of the acts or negligence of Airline and not accomplished wholly or partly as a consequence of the acts or negligence of City or of any airline making use of Airline s Leased Space pursuant to Section 38 of this Agreement or the Joint Use Space; provided however, the indemnities in this paragraph shall not apply where such unauthorized entry is accomplished by force or threat of force. City shall give to Airline prompt and reasonable notice of any claims or actions that are subject to the indemnities given by Airline under this Section 14, and Airline shall have the right to investigate, compromise and defend the same. 16

21 SECTION 15. INSURANCE AND WAIVER OF SUBROGATION. City shall maintain fire and extended coverage insurance on the Terminal, except that Airline shall be responsible for all losses from casualty, perils and risks relative to its equipment, furnishings and improvements in the Terminal. City and Airline hereby mutually release each other from liability, and waive all right of recovery against, each other from any loss of property in or attached to the Terminal from Agreed Perils, whether or not the party incurring the loss has actually obtained such insurance. SECTION 16. DAMAGE OR DESTRUCTION. Rents payable by Airline hereunder shall not abate in any amount in the event of damage to or destruction of Airline s Leased Space, Joint Use Space, or any other space used by Airline in the Terminal, except as provided below in this Section 16. a. Effects of Damage. In the event of damage to or destruction of Airline s Leased Space, Joint Use Space, or other space in the Terminal used by Airline, City shall (1) make such temporary provisions as are reasonable to permit Airline to continue operations and its business at the Airport. (2) elect and notify Airline thereof within 30 days after the occurrence of the damage or destruction whether or not it will repair or rebuild. (3) negotiate with Airline, if the damage or destruction resulted from an Agreed Peril, a credit equal to that portion of the rental paid by Airline for the period between the occurrence of the damage or destruction and completion of the repair or reconstruction as represents the value of the rental payments the benefit of which has been lost by Airline and pay out of the Improvement Fund to the extent possible the amount of such credit to Airline in installments at the end of each Fiscal Year thereafter until the credit is paid in full, each such installment to be the largest amount possible but not when added to other such installments payable to other Participating Airlines, in excess of the amount by which Operating Revenues exceeded the sum of the Operating Expenditures plus the debt service payable on Airport Bonds in such Fiscal Year; provided however, if the damage or destruction resulted from a peril not an Agreed Peril or 17

22 Airline is dissatisfied with the credit offered by City or the possibility of payment of the credit, Airline shall have the option to be exercised by notice in writing to City within 30 days after receipt by Airline of offer of the credit by City to cancel and terminate this Agreement either in its entirety or with respect to the damaged areas of Leased Space effective at the date specified in such notice, which date shall not be earlier than 30 days after receipt of such notice by City. b. Insurance Proceeds. If the damage or destruction results from an insured peril, City shall apply any insurance proceeds received only (1) to the rebuilding or restoration of the premises damaged or destroyed, or (2) to the construction or acquisition of a substitute facility, or (3) to the purchase or retirement of Airport Bonds. If the damage or destruction results from an insured peril and City elects not to repair or rebuild, all future obligations and rights with respect to Airline s Leased Space, Joint Use Space or other space in the Terminal used by Airline not repaired or rebuilt shall terminate effective on the date of the occurrence of the damage or destruction. Airline, together with others losing space as a result of such damage or destruction, shall have a preferential right to lease any new space constructed with insurance proceeds received by City as a result of such damage or destruction. SECTION 17. EVENTS OF DEFAULT, AIRLINE. In any of the events listed below in subsections (a) through (d) of this Section 17, Airline shall be in default hereunder. a. Failure to Pay. If Airline fails to pay when due and owing any fees, charges, rents, or interest thereon and such failure shall not be cured within 20 days after written notice thereof is given to Airline by City. b. Other Obligations. If Airline fails to observe or perform any other of Airline s covenants, agreements or obligations hereunder and such failure shall not have been cured by Airline, or if such failure cannot be cured within 60 days, if Airline has not commenced to effect such cure, within 60 days after written notice thereof is given to Airline by City. 18

23 c. Encumbrances. If Airline s interest in this Agreement or any part thereof is mortgaged, pledged or otherwise encumbered or transferred either voluntarily or by operation of law, or such interest or any part thereof is assigned or sublet by Airline, except in accordance with the provisions of Section 24 hereof. d. Insolvency. If Airline files any petition or institutes any proceeding under the Bankruptcy Act, either as such act now exists or under any amendment thereof which may hereafter be enacted, or under any act or acts, state or federal, dealing with or relating to bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt, or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby Airline asks to be adjudicated a bankrupt, or to be discharged from all or any of Airline s debts or obligations, or offers to Airline s creditors to effect a composition or extension of time to pay Airline s debts, or asks for a reorganization or to effect a plan of reorganization or for an adjustment of Airline s debts or for any similar relief; or if an involuntary petition in bankruptcy is filed against Airline and the same is not discharged within 60 days from such filing, or if any other petition or any other proceedings of similar kind or character be filed or be instituted or taken against Airline, or if a receiver of the business or of the property or assets of Airline shall be appointed by any court, except a receiver appointed at the request of City, or Airline shall make a general or any assignment for the benefit of the Airline s creditors. SECTION 18. RIGHTS OF CITY IN EVENT OF DEFAULT. If Airline shall be in default under this Agreement as provided in Sections 17 or 28 of this Agreement, then the following shall apply. a. Termination. City may, at its election, at the time Airline shall be in default hereunder or at any time thereafter while such event of default shall continue, give Airline written notice of intention to terminate this Agreement on a date specified in said notice, which date shall not be earlier than 10 days after such notice is given, and if all defaults have not been cured on the date so specified, Airline s rights hereunder shall thereupon cease, with or without re-entry by City, and City may then re-enter and take possession of Airline s Leased Space and any other space in the Terminal used by Airline, and Airline shall forthwith surrender possession of all said space; provided that Airline shall be, and shall 19

24 remain, liable for all rents accrued to the date such termination becomes effective and for all other sums then owing by Airline hereunder. In the event Airline disputes whether or not it is in default and brings before the termination date specified in said notice legal action against City in any court having jurisdiction asking for determination of the issue, such termination shall not be effective until 10 days after judgment in that legal action becomes final (not subject to appeal) and then only if the event of default still continues. b. Entry. If under any of the foregoing provisions of this Section 18 City shall have the right to re-enter and take possession of Airline s Leased Space, City may enter and expel Airline and those claiming through or under it and remove their property and effects (forcibly if necessary) without being guilty of any manner of trespass and without liability therefor and without prejudice to any other remedies of City, and without liability for any interruption of the conduct of the affairs of Airline or those claiming through or under it which may result from such entry. If upon such re-entry there remains any personal property of Airline or of any other person in the Airline s Leased Space, City may, but without obligation to do so, remove said personal property and hold it for the owners thereof or may place the same in a public garage or warehouse, all at the expense and risk of the owners thereof. Airline hereby waives any and all claims for damages which may be caused by City in lawfully re-entering and taking possession of Airline s Leased Space as herein provided and all claims for damages to or loss of any property belonging to Airline that may be in Airline s Leased Space, except damage to or loss of such property caused by City s gross negligence or wrongful conduct. c. Termination Requirements. Notwithstanding any termination of Airline s rights under this Agreement or reentry hereunder, the liability of Airline for the rent payable under this Agreement shall not be extinguished for the balance of the term, and Airline agrees to compensate City on demand for any deficiency. No re-entry or taking possession of the premises or other action by City on or following the occurrence of any default by Airline shall be construed as an election by City to terminate this Agreement or as an acceptance of any surrender of the premises, unless City provides Airline written notice of such termination or acceptance. Following a default by Airline under the Agreement, City shall exercise commercially reasonable, good faith efforts to mitigate its damages in accordance with Utah law, including, without limitation, when Airline does not possess the Leased Space by using its best efforts as an Airport to relet the Leased Space and credit any applicable rents received to Airline. 20

25 SECTION 19. RIGHTS OF TERMINATION. a. City s Right to Terminate. City may, at its option, terminate and cancel this Agreement, or any portion thereof, immediately upon abandonment for a period of 90 days by Airline of the conduct of its scheduled air transportation business at the Airport. Abandonment shall not include any period that Airline is not operating because of a strike or labor dispute. b. Airline s Right to Terminate. Airline shall have the option to terminate this Agreement upon occurrence of any of the following events, such option to be exercised by notice in writing mailed to City while such event continues and not thereafter: (1) The issuance of any order, rule or regulation by the Department of Transportation, the Transportation Security Administration, the Federal Aviation Administration, its or their successor federal agencies, or other competent governmental authority, state or federal, or the issuance by any court of competent jurisdiction of an injunction, materially and substantially restricting for a period of at least 90 days the use of the Airport for scheduled air transportation; provided that none of the foregoing has been initiated, caused or contributed to by Airline. (2) The suspension or revocation of the Airport Operating Certificate for the Airport that continues for a period of at least 90 days. (3) The commencement by City of the operation of an airport serving Salt Lake City other than the Airport that is used by airlines for providing regularly scheduled air transportation services to the public with jet aircraft having a certificated maximum gross landing weight in excess of 80,000 pounds, provided Airline gives written notice of such termination to City within 30 days of such commencement. (4) The material and substantial restriction of City s operation of the Airport by action of the United States Government or any authorized agency thereof under its wartime or emergency powers and the continuance thereof for a period of not less than 90 days. (5) The default by City in the performance of any covenant or 21