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EXHIBIT 10.21
AIRPORT USE AND
LEASE AGREEMENT
RICHLAND-LEXINGTON AIRPORT DISTRICT
and
AIR SOUTH, INC.
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and
AIR SOUTH, INC.
Airport Use and Lease Agreement
I N D E X
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Article I Term 2
Article II Lessor to Maintain and Operate Airport 2
Article III Rights of Airline 2-5
Article IV Passenger Terminal Building 6-7
Article V Landing Fees and Landing Fee Rate 7-8
Article VI Establishment of Rates and Charges in Future 8-13
Article VII No Other Charges 13-14
Article VIII Quiet Enjoyment 14
Article IX Inspection By Lessor 14
Article X Indemnification and Liability Insurance 14-15
Article XI Letter of Credit 15-16
Article XII Rules and Regulations 16
Article XIII Assignment and Subletting 16
Article XIV Force Majeure 16-17
Article XV Surrender of Possession 17
Article XVI Cancellation By Lessor 17-18
Article XVII Cancellation By Airline 18-19
Article XVIII Damage or Destruction of Leased Premises 19-20
Article XIX Right To Convert Rate Formula 20
Article XX Non-Waiver of Rights 21
Article XXI Invalidity of Clauses 21
Article XXII Approval By Lessor 21
Article XXIII Headings 21
Article XXIV Equal Terms 21
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Table of Contents (continued)
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Article XXV Title to Airline Installed Improvements
and Property 22
Article XXVI Alterations and Additions 22
Article XXVII Licenses and Permits 22
Article XXVIII Notices 22
Article XXIX Charges for Late Payment 23
Article XXX Attorneys Fees 23
Exhibit "A"
Exhibit "B" (2 Pages)
Exhibit "C"
Exhibit "D"
Exhibit "E"
Exhibit "F"
Exhibit "G"
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AIRPORT USE AND LEASE AGREEMENT
THIS AGREEMENT, made and entered into as of the 15th day of August 1994
by and between the RICHLAND-LEXINGTON AIRPORT DISTRICT, a public body corporate
organized under the laws of the State of South Carolina, hereinafter called
"Lessor" and AIR SOUTH, INC., a South Carolina based corporation, hereinafter
called "Airline".
W I T N E S S E T H:
WHEREAS, Lessor owns and operates the Airport known as Columbia
Metropolitan Airport, which is depicted on the attached Exhibit A, which as it
now exists, or as it may be changed in the future, is hereinafter called
"Airport"; and
WHEREAS, Lessor has the right to lease property on the Airport together
with the facilities, rights, licenses and privileges hereinafter granted, and
has full power and authority to enter into this Agreement in respect thereof;
and
WHEREAS, Airline has applied for certification to engage in the
business of air transportation by aircraft for carriage of persons, property and
mail, hereinafter called "Air Carrier Service"; and
WHEREAS, Approval by all regulatory authority shall be required prior
to the commencement of service by Airline at Airport; and,
WHEREAS, Airline desires to lease certain premises, facilities, rights
and privileges and to use the Airport in connection with the operation of its
Air Carrier Service and Lessor is willing to lease such premises, facilities,
rights and privileges and to grant the use of the Airport to Airline for such
purposes upon the terms and conditions hereafter stated; and,
WHEREAS, Airport is now operating with all Airlines on a residual cost
rate formula but plans to convert to a modified residual rate formula as early
as practicable so that the revenues received from operating the airfield and the
passenger terminal facilities are allocated in accordance with the cost of the
provision and operation of those facilities;
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NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained to be observed and performed, the parties hereto
hereby formally covenant, agree and bind themselves as follows:
ARTICLE I
TERM
The term of this Agreement shall be for a period of 14 years, 4 months
and 16 days, commencing on August 15, 1994 and terminating at the end of
December 31, 2008.
ARTICLE II
LESSOR TO MAINTAIN AND OPERATE AIRPORT
Throughout the term of this Agreement, Lessor shall operate, maintain,
manage and control the Airport in a first class, efficient, economical and
businesslike manner. Such operation, maintenance, management and control shall
comply with all pertinent requirements of the Federal Aviation Administration,
or successor in duties related thereto, and shall include without limitation the
adequate and proper operation and maintenance of the land, runways, taxiways,
navigation aids, lighting, equipment, entrances, exits, roads, parking areas and
all other public facilities and appurtenances within the boundaries of the
Airport.
ARTICLE III
RIGHTS OF AIRLINE
Lessor does hereby grant to Airline the non-exclusive use of the
Airport, in common with other users of the Airport.
In addition, but not as a limitation upon the generality of any other
provision hereof, Airline may use the Airport, excepting those areas exclusively
leased to others, for the following specific purposes:
(a) The operation of its Air Carrier Service;
(b) The landing, taking off, flying over, taxiing, pushing,
towing, parking, loading and unloading of aircraft and other
equipment, including the right to handle all or part of the
operation or services of another airline;
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(c) The repairing, maintaining, conditioning and servicing of
aircraft and other equipment;
(d) The sale of air transportation tickets and service,
conveniences and facilities related to air travel and the
processing of passengers and their baggage for air travel; the
sale, handling and providing of mail, freight and express
services and conveniences related thereto and the performance
of other activities connected with the operation of its Air
Carrier Service;
(e) The training at the Airport of personnel in the employ of or
to be employed by Airline, and the testing of aircraft and
other equipment owned or operated by Airline such training and
testing to be incidental to the use of the Airport in the
operation by Airline of its Air Carrier Service provided,
however, that such training and testing will not unreasonably
hamper or interfere with the use of the Airport and its
facilities by other users entitled to the use of the same;
(f) The sale, disposal or exchange of Airline's aircraft, engines,
accessories, aviation fuels, ground vehicle fuels, oil,
greases, lubricants, and other materials, supplies and
equipment related to its Air Carrier Service;
(g) The full right to purchase at the Airport, or elsewhere, from
any person, or company, of its choice, its lubricating oil,
greases, and all other materials and supplies and services;
and no charges, fees, licenses, exercise or operating taxes,
tolls, or charges upon any such purchases shall be charged or
collected by Lessor from Airline, or from any other person for
the privilege of, or in connection with the purchasing,
handling, loading, unloading, storing, servicing, using, or
transporting, to, from, or at, the Airport, such materials and
supplies, or other property in connection with Airline's
business;
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(h) The servicing by Airline, or its suppliers, at appropriate
locations, of aircraft and other equipment, owned, or
operated, by Airline, or its suppliers of materials and
furnishers of services; by truck, or otherwise, with aviation
fuel, ground vehicle fuel, lubricating oil, greases, and all
other materials and supplies and services required by Airline
in the conduct of its Air Carrier Service; such right shall
include, without limiting the generality hereof, the right to
erect, or install and maintain on the Airport, adequate
storage facilities for such aviation fuel, ground vehicle
fuel, lubricating oil, greases and other materials and
supplies, at convenient locations, in accordance with
insurance underwriters' standards, together with the necessary
pipes, pumps, motors, filters and other appurtenances
incidental to the use thereof; such structures and
appurtenances to be and remain the severable property of
Airline.
(i) The loading and unloading of persons, property and mail by
such motor vehicles, or other means of conveyance as Airline
may require in the operation of its Air Carrier Service and
Airline may designate the particular carrier, or carriers,
which may transport Airline's employees, property, mail,
express and freight, to, from and on the Airport;
(j) The right to install and operate identifying signs on the
Airport and the general type, design and location thereof to
be subject to the approval of Lessor;
(k) The right to install, maintain and operate, in, on and about
the Airport, such radio communications, meteorological and
aerial navigation equipment and facilities as may be
necessary, or convenient, for its operation; such equipment
and facilities to be located in areas leased to Airline for
its exclusive use, or on such other portions of the Airport as
may be designated for that purpose by Lessor;
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(1) Such rights of way as it may require for communications
controls, teletype, telephone, interphone, pneumatic tubes and
power lines, in and between the Passenger Terminal Building
and other points on the Airport, provided, however, that the
location of such rights of way shall be subject to the
approval of Lessor;
(m) The conduct of any other function, or operation, reasonably
necessary to the proper performance and operation by Airline
of its Air Carrier Service;
(n) The full, free and unobstructed ingress to and egress from the
Airport and all premises leased exclusively or preferentially
to it, or in common with others; subject to the provisions of
Article XI herein, which provides for Rules and Regulations of
Lessor; for Airline, its employees, passengers, invitees,
suppliers of materials and furnishers of services; its, or
their, aircraft, equipment, vehicles, or machinery and
furnishers of services; provided, however, that such rights
shall not be construed to prevent Lessor from charging ground
vehicle parking fees to the public in the area designated by
Lessor for public parking. Ground vehicle parking charges to
Airline's employees, if applicable, are covered elsewhere
herein.
(o) Airport reserves the right to charge all users of the Airport,
except Airlines its employees, Airline's suppliers of
materials and furnishers of services, a minimum parking fee
for ground vehicles to enter the Airport.
Nothing herein contained shall be construed to mean that Airline is
authorized to conduct a business of any kind on the Airport except its Air
Carrier Service and nothing herein contained shall be construed as authorizing
Airline, in its conduct of its business, to interfere, unreasonably, with other
persons, or tenants, lawfully using, or leasing, Airport facilities.
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ARTICLE IV
PASSENGER TERMINAL BUILDING
Lessor hereby leases to Airline the areas in the Passenger Terminal
Building area as set forth on Exhibit B, which is attached hereto; for which
Airline shall pay monthly rentals, in advance, as set forth on Exhibit C which
is attached hereto; for the time periods specified on the said Exhibit C.
Services, Utilities and Maintenance - Lessor and Airline shall each
respectively furnish in the Passenger Terminal Building the services, utilities
and maintenance, and pay the costs and expenses therefor, as indicated on
Exhibit D attached hereto.
Employee Ground Vehicle Parking - Lessor shall make available to
Airline's employees reasonably adequate automobile parking facilities. Lessor
may, at its discretion, charge Airline's employees a parking fee, to recover its
costs and expenses for providing such parking facilities.
Rent for Aircraft Loading Positions - Lessor has the right to include
the charges for the use of the aircraft loading and unloading positions serving
the Passenger Terminal Building, (herein referred to as "Aircraft Loading
Positions" in the singular as well as in the plural form;) in the Landing Fee
Rate, or to negotiate a separate rental, or use charge, therefor, at any time
that the Landing Fee rate is established.
Use of Aircraft Loading Positions and Passenger Hold Rooms - Airline is
granted the preferential use of the Aircraft Loading Position designated on
Exhibit B, which is attached hereto, for loading and unloading aircraft. Lessor
retains the right to permit other authorized airlines to use the Aircraft
Loading Position for loading and unloading aircraft and to use the Passenger
Hold Room related thereto for the processing of passengers, when it is not
required by Airline for such purpose. Airline covenants to use its best efforts
to minimize its time of usage of such facilities and to remove its aircraft
promptly when they are not being loaded, or unloaded, from the Aircraft Loading
Position, and to make available the use of the related Passenger Hold Room
(including any Passenger Loading Bridge which may be attached thereto), whenever
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Lessor notifies it that the said Aircraft Loading Position and related Passenger
Hold Room, are required for loading, or unloading, aircraft of other authorized
airlines. Whenever such facilities are used by others, Airline has the right to
charge such other users its reasonable costs and expenses related to providing
such facilities. Airline agrees to submit to Lessor a schedule of its charges
for the use of such facilities during the following year. However, Airline shall
not have the right to make a use charge for the Aircraft Loading Position if the
use thereof is included in the Landing Fee Rate and Lessor makes no separate
rental, or use, charge to Airline, therefor.
Flights originating at Airport will not be parked on an Aircraft
Loading Position for a period of time longer than one hour prior to such
flight's scheduled departure, if the Lessor advises that such is required for
loading, or unloading, aircraft of others not having such facilities available
for their use during the time involved.
Whenever Lessor requires Airline to move its aircraft from the Aircraft
Loading Positions, Lessor will provide substitute parking facilities for such
aircraft, of an adequate nature, in the event that Airline does not have space
for such aircraft, on the premises which it leases on the Airport.
If the Airport is required by an agency of the United States government
to modify, or add to, the facilities exclusively or preferentially leased to
Airline herein, or leased in common to Airline and other airlines herein; for
safety, or other reasons; the expense of such, amortized over a reasonable
period of time, will be charged to Airline as additional rental, at the time
that the modifications, or additions, are made ready for beneficial use or
occupancy.
ARTICLE V
LANDING FEES AND LANDING FEE RATE
Charges for the non-exclusive use of facilities, rights, licenses and
privileges at Airport which are granted to Airline herein, except those
expressly set forth herein and in separate lease agreements with Airline, shall
be combined in and represented by Landing Fees which shall be determined by
multiplying the Landing Fee Rate of Forty-Two and 95 Hundredth Cents ($.4295)
per thousand pounds, times the total number of thousands of pounds of maximum
certificated gross landing weight of Airline's aircraft
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actually landing at the Airport, in revenue service including training flight
landings, during the preceding month; from August 15, 1994 through the end of
December 31, 1994.
Airline shall submit to Lessor not later than the 5th day of each month
during the term hereof, a statement showing the information set forth below
pertaining to Airline's actual landing of revenue and training flights at the
Airport for the preceding month, and the Airline shall pay Landing Fees to
Lessor promptly upon receipt of an invoice for such, as applicable:
1. The number of aircraft actually landing at the Airport in
revenue service and for training purposes, separately stated
by types of aircraft, and whether such are in revenue, or
training service.
2. The number of enplaned passengers and the number of deplaned
passengers, separately stated, and the pounds of enplaned
mail, freight and express separately stated; and if available
the pounds of deplaned mail, freight and express separately
stated.
The term "maximum certificated gross landing weight" of aircraft as
used herein, shall mean the maximum landing weight as published by Airline in
the then current Flight Operations Manual and approved by the Federal Aviation
Administration, or its successor in duties, for landing such aircraft at the
Airport.
ARTICLE VI
ESTABLISHMENT OF RATES AND CHARGES IN FUTURE
During the term hereof, Landing Fees and Terminal Rentals will be
established annually for the ensuing one year period. Prior to the end of each
fiscal year Commission will furnish to Airline a statement of estimated Airport
Revenues and Expenses along with Commission's proposed budget for the following
fiscal year for which new rates and charges are to be adopted. The information
furnished to Airline will include the estimated rates and charges to be payable
by Airline pursuant to the new budget. Also prior to the end of the fiscal year
and prior to the adoption of the estimated rates and charges, Commission's
representatives will meet with Airline and other signatory airlines to discuss
the estimated revenues and expenses for the year
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ending, and the proposed budget for the new year and the resulting estimated
rates and charges. Airline will have the opportunity to comment on and be heard
with respect to the matters to be discussed at the meeting.
Following such meeting Commission will adopt its new budget and
proposed rates and charges after giving effect to the changes therein, if any,
suggested by/pursuant to Airline's comments. Commission will provide Airline
with a copy of the final budget and the new rates and charges to be effective in
the new fiscal year: Provided, however, that the new rates and charges will not
be finally adopted or placed into effect until after Commission's audited
financial statements from the prior year have been accepted by Commission and
Commission issues its letter to Airline establishing such new final rates and
charges. From the first day of each new fiscal year Airline shall continue to
pay rentals and landing fees at the prior year's rates until notified by
Commission that the final rates are in effect. The final rates shall be
retroactive to the first day of the new fiscal year and Commission will cause
its invoice to Airline to be issued giving effect to such new rates, including a
credit for any overpayment by Airline or an additional charge for any
underpayment by Airline under the new schedule of rates and charges. When
establishing such fees, rentals and charges it is agreed that the following
principles shall be observed:
1. The Airport is operated primarily for the benefit of the users
thereof and in accordance with this premise it is the purpose
of Lessor to establish fair and reasonable Airport rates, fees
and charges for all such users which will return to Lessor,
when added to other Airport income, sufficient revenues which
will enable it to operate the Airport in a competent,
efficient and economical manner, considering the factors set
forth in this Article VI and elsewhere herein.
2. Grants and participating funds from the United States of
America, or an agency thereof, and grants and participating
funds from the State of South Carolina, or an agency thereof,
shall be applied to
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reduce the costs and expenses of the Airport before computing
Airline's fees, rentals, or charges, hereunder.
3. No depreciation will be charged to land which is considered to
be a non-depreciating asset.
4. Reasonable fees, rentals and charges, as appropriate, will be
charged to all users of the Airport.
5. Lessor agrees to use its best efforts to maximize concession
revenue and ancillary income in order to help defray the
expenses of the Airport.
6. Consistent with good business practices Lessor agrees to use
its best efforts to obtain the maximum amount of grants and
participating funds for the Airport from the United States of
America, or an agency thereof.
7. Payments, coverage requirements, deposits into funds and
accounts as required by future acts authorizing the issuance
of bonds for Airport purposes will be chargeable as Airport
expense following the date hereof, as provided for herein.
8. Sound accounting principles recognizing the particular
requirements of airports, consistently applied, will be used
by Lessor for keeping the books, accounts and records of the
Airport.
9. The overhead and indirect expenses of Lessor will be
determined and allocated equitably to the various cost centers
of the Airport.
10. Deficits or surpluses of the Airport during the preceding rate
period will be carried forward and applied to increase or
reduce, as the case may be, the fees, rentals and charges to
be charged in the following rate period.
11. Forecasted income and expenses for the Airport for the next
ensuing rate period will be taken into consideration.
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12. Passenger boarding taxes, use fees or similar charges upon
passengers using the Airport will be credited to the costs,
expenses, financing and bond requirements of the Airport.
13. The projects called for in the Airport's Master Plan as
approved by the Federal Aviation Administration, may be
undertaken by Lessor and the amortization of the costs and
expenses related thereto, not covered by grants and
participating funds from the United States of America, or an
agency thereof; will be considered as Airport expense,
including all payments and deposits required by
authorizations for the issuance of bonds, payments to banks
and other lenders and the amortization of Airport funds.
14. Projects required by the Federal Aviation Administration for
safety will be undertaken by Lessor when it is prudent to do
so and the amortization of the costs and expenses related
thereto, not covered by grants and participating funds from
the United States of America, or an agency thereof; or the
State of South Carolina, or an agency thereof; will be
considered as Airport expense, including all payments and
deposits required by authorizations for the issuance of bonds,
payment to banks and other lenders and the amortization of
Airport funds.
15. Payments and deposits required by authorization for the
issuance of bonds, or payments to banks and other lenders,
will not be charged to Airport cost or expense, for projects
that are not included in the then current Master Plan of the
Airport, which has been approved by the Federal Aviation
Administration; or are not required by Federal Aviation
Administration for safety; unless such projects are entirely
self-supporting through lease commitments made by the user or
users, thereof, to make all payments required related thereto;
unless such bonds or borrowing are approved by a
Majority-In-Interest of the Airlines. A Majority-In-Interest
of the
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Airlines is defined to consist of a least one half in number
of the airlines serving the Airport which have agreements in
effect substantially similar to this one, which collectively
enplaned at least fifty percent of the passengers at the
Airport during the preceding calendar year.
16. Principal and interest on the bonds which fall due as set
forth on the attached Exhibit E will be treated for the
purpose hereof as Airport expense.
17. Lessor will furnish to Airline annually the proposed Airport
budget for the following year as soon as it is available and
in a reasonable time prior to its being adopted by Lessor, in
order to provide Airline with sufficient opportunity to
provide comments and to present objections thereto, if it
desires to do so.
18. Beginning on January 1, 1992 the Airport rate base will be
increased by an amount equal to the discount previously
granted airlines, having agreements substantially similar to
this one with Lessor, serving the Airport, during the period
January 1, 1979 through the end of December 31, 1981, as set
forth on Exhibit F, which is attached hereto. The said
discount will be computed in accordance with the provisions of
Exhibit F and the total amount so computed will be amortized
over a period of ten (10) years, without interest, and will be
deposited in the Capital Fund as set forth in Article V
herein, and will not be treated as surplus income when
establishing rates and charges in the future years as provided
for in this Article.
19. The gross revenues derived from the Airport shall be used
solely for the operation, maintenance, improvement,
acquisition of equipment and supplies, management, expansion
and financing requirements of the Airport.
20. All costs and expenses associated with screening passengers,
other persons, baggage and hand-carried objects, entering the
aircraft
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boarding areas of the Passenger Terminal Building, pursuant to
applicable Federal Air Regulations; will be paid for by
Airline, on a pro rata basis with other airlines serving the
Airport; which airlines are required to, or actually do, use
the passenger screening facilities.
21. Lessor agrees to exercise prudence in the operation,
maintenance, improvement, expansion, management and financing
of the Airport.
There is currently pending a resolution to a controversy involving
interpretation of the Airport Use and Lease Agreement with Delta Air Lines,
USAir Air Lines, United Air Lines, and American Airlines. Airline agrees that
resolution of that issue may effect signatory rates and charges hereunder and
agrees that it will participate in such additional charges as may be ordered or
agreed to between the parties or receive reductions in signatory airline rates
as may occur.
ARTICLE VII
NO OTHER CHARGES
Lessor agrees that no rents, fees, charges, or tolls, other than those
expressly provided for in this Agreement or other Agreements between Lessor and
Airline; shall be charged or collected by it from Airline, from Airline's
passengers, employees, suppliers of materials, or furnishers of services; for
the use of any of the premises, facilities, licenses and privileges expressed in
or reasonably inferred from these presents, or for any of the services required
to be performed by Lessor; the rents, fees and charges expressly provided
herein, being full and complete consideration and compensation to Lessor for the
use of said premises, facilities, licenses and privileges and the performance of
said services.
Notwithstanding the foregoing, Lessor has the right to make a separate
and additional charge to Airline, for additional facilities leased to it; for
its exclusive use, preferential use or for common use with other airlines, or
other users; not expressly covered herein; provided such is included in a
written agreement.
In the event that the Congress of the United States shall permit, or it
shall otherwise become lawful at any time in the future; to assess and collect a
head tax,
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passenger boarding tax, use fee, or similar charge upon passengers using the
Airport, or any of its facilities, or services; this provision shall not limit
the right of Lessor to assess and collect such tax, fee or charge.
ARTICLE VIII
QUIET ENJOYMENT
Lessor agrees that on payment of the rents, fees and other charges
provided for herein and the performance of the covenants and agreements on the
part of Airline to be performed hereunder, Airline shall peaceably have and
enjoy the premises, appurtenances, facilities, rights, licenses and privileges
granted herein.
ARTICLE IX
INSPECTION BY LESSOR
Lessor may enter upon any premises which are leased exclusively or
preferentially to Airline, or jointly to Airline and others, at any reasonable
time, for any purpose necessary, incidental to, or connected with, the
performance of its obligations hereunder, or in the exercise of its governmental
functions as it relates to public health, safety and general welfare of the
Airport.
ARTICLE X
INDEMNIFICATION AND LIABILITY INSURANCE
Airline shall protect, defend and hold Lessor completely harmless from
and against any and all liabilities, losses, suits, claims, judgments, fines or
demands arising by reason of injury or death of any person or damage to any
property, (including but not limited to attorney fees, court costs, and expert
fees), of any nature whatsoever arising out of or incidental to this Lease and
the use or occupancy of the Premises or the acts or omissions of Airline's
directors, officers, agents, employees, contractors, subcontractors or
licensees; however, the above indemnity shall not apply to any injury, death or
damage caused by the negligence or wilful misconduct of Lessor, its
commissioners, directors, officers, agents and employees, Lessor shall give
reasonable notice of any such claims or actions. The provisions of this section
shall survive the expiration of early termination of this Lease.
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Airline agrees to carry and keep in force public liability insurance
with an insurance company of recognized responsibility covering personal injury
and property damage to protect the Lessor, its commissioners, directors, agents,
officers and employees from liability covered by the indemnification provisions
of this Article. Without limiting its liability as aforesaid, Airline agrees to
carry and keep in force such insurance with limits of liability for death,
personal injury and property damage in a sum not less than Fifty Million and
No/100 ($50,000,000.00) Dollars with the Lessor and its commissioners,
directors, officers, agents and employees as additional named insured. The
aforesaid minimum amounts may be reviewed from time-to-time by the parties
hereto and adjusted so as to be adequate after consultation with an insurance
underwriting consultant. Airline will furnish Lessor with proper certification
that such insurance is in force.
ARTICLE XI
LETTER OF CREDIT
Airline covenants and agrees that no later than fourteen (14) calendar
days from the date of Airline's execution of this Agreement, Airline will
provide Airport an irrevocable Letter of Credit in the form of Exhibit G. The
Letter of Credit shall name the Richland-Lexington Airport District as
beneficiary and shall be in a stated amount of not less than three (3) months'
pecuniary obligation calculated by reference to Exhibit C and Article V.
If at any time Airline fails to make timely payment under the terms of
this Agreement, Airport may draw on the Letter of Credit or any portion of it
for payment or to compensate Airport for any damages sustained by Airport
resulting from Airline's default. Airline shall immediately on demand provide
Airport with another irrevocable Letter of Credit equal to that portion of the
Letter of Credit expended or applied by Airport to bring payments current or
cure such default as to maintain an irrevocable Letter of Credit in the sum
initially provided to Airport. Airport's obligations to Airline with respect to
the Letter of Credit are those of a beneficiary and not a creditor or trustee.
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Airline's failure to provide Airport with a Letter of Credit within the
period stated herein shall be deemed a material default of this Agreement's
terms, covenants, and conditions and upon the happening of same this Agreement
shall be terminated without further notice to Airline.
ARTICLE XII
RULES AND REGULATIONS
Lessor may adopt and enforce reasonable rules and regulations, which
Airline agrees to observe and obey, with respect to the use of the Airport and
appurtenances, together with all facilities, improvements, equipment and
services of the Airport for the purpose of providing for safety, good order,
good conduct, sanitation and preservation of the Airport and its facilities;
provided that such rules and regulations are not inconsistent with the rules,
regulations and orders of the Federal Aviation Administration, or its successor
in duties, with respect to aircraft operations at the Airport; and provided
further that such are not inconsistent with the provisions of this Agreement, or
other agreements with Airline at the Airport; or the procedures prescribed, or
approved, from time-to-time by the Federal Aviation Administration, or its
successor in duties, with respect to the operation of aircraft operated by
Airline at the Airport.
ARTICLE XIII
ASSIGNMENT AND SUBLETTING
Airline shall not assign this Agreement, or any part thereof, without
the prior written approval of Lessor; provided, however, that Airline may,
without such consent, assign this Agreement to any person, firm or corporation
with which Airline may merge, or consolidate, or which may succeed to the
business of Airline.
Airline shall not sublet all or any part of the premises leased
hereunder without the prior written approval of Lessor.
ARTICLE XIV
FORCE MAJEURE
Neither Lessor, nor Airline, shall be deemed in violation of this
Agreement if it is prevented from performing any of its obligations hereunder by
reasons of strikes,
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boycotts, labor disputes, embargoes, shortages of material, acts of God, acts of
the public enemy, acts of superior governmental authority, weather conditions,
floods, riots, rebellions, acts of sabotage, or any other circumstances for
which it is not responsible, or which are not in its control; provided, however,
that this Article does not apply to failure by Airline to pay the rentals, fees
and charges set forth herein. In any such case, a prompt written notice shall be
given to the other party of the existence of such cause and of readiness to
resume performance upon the removal, or non-existence thereof.
ARTICLE XV
SURRENDER OF POSSESSION
Airline agrees to yield and deliver to Lessor possession of the
premises leased exclusively, preferentially, or in common with others, at the
termination of this Agreement, by expiration or otherwise, or of any renewal or
extension thereof, in good condition in accordance with its express obligations
hereunder, except for reasonable wear and tear, fire or other casualty, and
Airline shall have the right any time during said term, or any renewal or
extension hereof, and for thirty (30) days after the termination hereof, to
remove its trade fixtures and equipment situated on the premises which were
installed, or placed by it, at its expense, in, on, or about, the premises
leased hereunder; subject, however, to any valid lien which Lessor may have
thereon for unpaid rents, fees, or charges.
ARTICLE XVI
CANCELLATION BY LESSOR
Lessor may cancel this Agreement and terminate all of its obligations
hereunder at any time that it is not in default upon or after the happening of
any of the following events:
(a) Airline shall file a voluntary petition in bankruptcy; or
(b) Proceedings in bankruptcy shall be instituted against Airline
and Airline is hereafter adjudicated bankrupt pursuant to such
proceedings; or
17
21
(c) A court shall take jurisdiction of Airline and its assets
pursuant to proceedings brought under the provisions of any
Federal reorganization act; or
(d) A receiver of Airline's assets shall be appointed; or
(e) Airline shall be lawfully divested of, or prevented by any
final action of any cognizant Federal, or State Authority,
from conducting and operating its Air Carrier Service at the
Airport; or
(f) Airline voluntarily abandons its conduct of its Air Carrier
Service at the Airport for a period of thirty days, except if
such is due to a labor strike, or labor dispute, in which
Airline is involved; or
(g) Any assignment is made by Airline for the benefit of its
creditors; or
(h) The material default by Airline of any of the covenants or
agreements herein contained and the failure of Airline to
remedy such default as hereinafter provided. In the event of
such material default Lessor may give Airline notice in
writing to correct such default and if such default shall
continue for sixty days after the receipt of such notice by
Airline (except where fulfillment of its obligation requires
activity over a period of time and Airline shall commence to
perform whatever may be required for the fulfillment within
forty-five days after the receipt of notice and continues such
performance without interruption, except for causes beyond its
control), Lessor may, after the lapse of said sixty day
period, cancel this Agreement, without forfeiture, waiver, or
release of Lessor's rights to any sum of money due under the
provisions of this Agreement.
ARTICLE XVII
CANCELLATION BY AIRLINE
Airline may cancel this Agreement and terminate all of its obligations
hereunder at any time that Airline is not in default in the payment of any
rentals, fees, or charges,
18
22
to Lessor hereunder, by giving Lessor twenty (20) days written notice if Airline
shall be prevented from operating its Air Carrier Service to and from the
Airport by reason of its inability to use a substantial part, or all, of the
runways, taxiways and Aircraft Loading Positions; as hereinafter set forth:
(a) For a period of longer than thirty (30) consecutive days,
resulting from any condition of the Airport not due to the
fault of Airline; or
(b) For a period of longer than ninety (90) consecutive days,
resulting from a permanent injunction issued by any court of
competent jurisdiction; or
(c) For a period of longer than ninety (90) consecutive days,
resulting from any order, rule, or regulation, of the Federal
Aviation Administration or any governmental agency having
jurisdiction over the operations of Airline at the time, with
which Airline is unable to comply at reasonable cost, or
expense.
Airline may also cancel this Agreement if any governmental agency
having jurisdiction over the operations of Airline at the time, suspends for a
period of sixty (60) days, or longer; cancels; or terminates Airline's right to
serve the Airport; unless Airline voluntarily sought, or failed to take
reasonable action to prevent, such suspension, cancellation, or termination.
If Lessor shall fail to perform any of its obligations under this
Agreement within thirty (30) days after receipt of notice of default thereunder
from Airline (except where fulfillment of its obligation requires activity over
a period of time and Lessor shall commence to perform whatever may be required
for fulfillment within twenty (20) days after the receipt of notice and
continues such performance without interruption, except for causes beyond its
control) then Airline may terminate this Agreement, such termination to be
effective upon the date set forth in such notice.
ARTICLE XVIII
DAMAGE OR DESTRUCTION OF LEASED PREMISES
If any property, part or all of which is leased to Airline, shall be
partially damaged by fire or other casualty but not rendered untenantable, the
same shall be
19
23
repaired with due diligence by the Lessor at its own cost and expense, unless
such fire or other casualty was caused by the negligence of Airline; if the
damage shall be so extensive as to render part or all of such premises
untenantable but capable of being repaired in sixty (60) days, the same shall be
repaired with due diligence by the Lessor at its own expense, and the rent
payable hereunder shall be proportionately paid up to the time of such damage
and shall thenceforth cease as to the untenantable premises until such time as
they shall be tenantable; and in case such property, or any part thereof, is
completely destroyed by fire or other casualty or so damaged as to remain
untenantable for more than sixty (60) days, at the option of Airline either (1)
said premises shall be repaired or reconstructed with due diligence by the
Lessor at its own cost and expense and the rent payable hereunder for the
destroyed premises shall be proportionately paid up to the time of such damage
or destruction and shall thenceforth cease until such time as the premises shall
be put in order; or (2) within ninety (90) days after the time of such damage or
destruction and before the said premises shall be put in order and before
contract for repair or reconstruction thereof has been signed, the Airline shall
give Lessor notice of its intention to cancel this Agreement in its entirety, or
the portion thereof relating to such property, shall forthwith cease and
terminate.
ARTICLE XIX
RIGHT TO CONVERT RATE FORMULA
Notwithstanding any other provision in this Agreement, the Airport
reserves the right to convert from its current residual cost rate formula to a
modified residual rate formula which will provide for rates and charges based on
a determination of the cost of provision of and operating the airfield and the
passenger terminal facilities and other facilities used by Airline by allocating
these costs to other airlines and this Airline in proportion to their use of
airfield and passenger terminal facilities at Airport. This modification shall
not take place until sixty (60) days after the Agreement is reached with other
Airlines operating at the Airport to the adoption to the modified residual rate
system or a modification of same.
20
24
ARTICLE XX
NON WAIVER OF RIGHTS
Continued performance by either party hereto pursuant to the terms of
this Agreement after a default of any of the terms, covenants and conditions
herein contained to be performed, kept or observed, by the other party hereto,
shall not be deemed a waiver of any right to cancel this Agreement for any
subsequent default and no waiver of any such default shall be construed or act
as a waiver of any subsequent default.
ARTICLE XXI
INVALIDITY OF CLAUSES
The invalidity of any portion, paragraph, provision, or clause of this
Agreement, shall have no effect upon the validity of any other part, or portion
hereof.
ARTICLE XXII
APPROVAL BY LESSOR
Wherever the approval of Lessor is called for herein it is understood
and agreed that such approval shall be in writing and shall not be unreasonably
withheld.
ARTICLE XXIII
HEADINGS
The Article title shown in this Agreement is inserted only as a matter
of convenience and for reference and in no way define, limit or describe the
scope or intent of any provision of this Agreement.
ARTICLE XXIV
EQUAL TERMS
Lessor covenants and agrees that if it enters into any contract,
agreement, or lease; with any other Airline which offers to the public the same
or substantially the same scheduled daily passenger service at the Airport,
containing more favorable terms than those set forth in this Agreement; or if
Lessor grants to any other such air transportation operator, or Airline; rights,
licenses, or privileges with respect to the Airport; which are more favorable
than those accorded to Airline; then the same terms and conditions will
automatically and concurrently be made available to Airline.
21
25
ARTICLE XXV
TITLE TO AIRLINE INSTALLED IMPROVEMENTS AND PROPERTY
As to improvements and property installed and paid for by Airline under
the terms of this Agreement, Airline will retain title to all of its trade
fixtures and equipment only, except as may otherwise be provided for in this
Agreement, or other Agreements, between the parties hereto.
ARTICLE XXVI
ALTERATIONS AND ADDITIONS
Airline shall make no alterations, or additions, to its premises leased
hereunder without the prior written approval of Lessor.
ARTICLE XXVII
LICENSES AND PERMITS
It is agreed that any licenses, permits, or documentary stamps required
shall be paid by Airline.
ARTICLE XXVIII
NOTICES
Notices to Lessor provided for herein shall be in writing and shall be
sufficient if sent by registered, or certified, mail, postage prepaid; or by
hand, addressed to and receipted for by Lessor, as follows:
Executive Director
Columbia ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
and to Airline as follows:
Air South, Inc.
Office of General Counsel
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ARTICLE XXIX
CHARGES FOR LATE PAYMENT
Time is of the essence for the payment of all charges hereunder. Should
Airline fail to make payment on statements so that it is received by Lessor by
no later than
22
26
thirty (30) days of its due date, the sum shall be adjudged to be past due and a
late penalty of one and one-half (1 1/2%) percent shall be due and payable.
Thereafter, a late penalty of 1 1/2% per month shall continue to accrue until
paid.
ARTICLE XXX
ATTORNEY'S FEES
In the event of any action, suit or proceeding brought to collect the
rentals and fees (or any portion thereof) due or to become due hereunder, to
take possession of the demised premises, to enforce compliance with this
Agreement, or for failure to observe any of the covenants of this Agreement,
Airline shall pay Lessor's attorney fees in such sum as the Court may adjudge
reasonable for attorney's fees to be allowed in said suit, action or proceeding.
IN WITNESS WHEREOF, the parties hereto have executed these presents as
of the day and year first above written.
ATTEST: LESSOR:
RICHLAND-LEMNGTONAIRPORTDISTRICT
/s/ BY: /s/ H. ▇▇▇ ▇▇▇▇
----------------------------------- -------------------------------------
Secretary Chairman
/s/ BY: /s/
----------------------------------- -------------------------------------
Executive Director
ATTEST: AIRLINE:
AIR SOUTH, INC.
/s/ BY: /s/
----------------------------------- -------------------------------------
Title Chief Financial Officer
-----------------------------------
APPROVED AS TO FORM:
/s/
-----------------------------------
Attorney for RLAD
August 12, 1994
-----------------------------------
Date
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27
[ROAD MAP]
28
AS4
SQUARE 1994 RATE 1994 ANNUAL 1994 MONTHLY
1994 AIR SOUTH RATE FEET PER SQUARE INVOICED INVOICED
SIGNATORY AIRLINE RATES LEASED FOOT CHARGE CHARGE
8/01/94 (PER DRAWING)
---------------------------------------------------------------------------------------
AIR SOUTH
------------
SECOND LEVEL
------------
TICKET COUNTER 210.00 $33.19 $6,969.90 $580.83
OFFICE 510.00 $24.90 $12,699.00 $1,058.25
BAGGAGE MAKE-UP 277.00 $23.19 $6,423.63 $535.30
CANOPY 980.00 $10.49 $10,280.20 $856.68
------------- ------------------------------
SUB TOTAL 1,977.00 $36,372.73 $3,031.06
------------- ------------------------------
LOWER LEVEL
-----------
COMMON BAG CLAIM 482.00 $25.63 $12,353.66 $1,029.47
BAGGAGE OFFICE 0.00 $24.90 $0.00 $0.00
------------- ------------------------------
SUB TOTAL 482.00 $12,353.66 $1.029.47
------------- ------------------------------
EAST CONCOURSE
--------------
HOLD ROOM GATE 11 3,853.00 $27.34 $105,341.02 $8,778.42
OPERATIONS 708.00 $20.01 $14,167.08 $1,180.59
RAMP STORAGE 333.00 $16.60 $5,527.80 $460.65
------------- ------------------------------
SUB TOTAL 4,894.00 125,035.90 10,419.66
------------- ------------------------------
TOTALS 7,353.00 173,762.29 14,480.19
============= ==============================
(Per Article V, Landing Fees For 3 Months Estimated at $22,000)
EXHIBIT C
AUGUST 1, 1994
29
[TERMINAL BUILDING FLOOR PLAN - MAIN LEVEL]
30
[TERMINAL BUILDING FLOOR PLAN - CONCOURSE LEVEL]
31
COLUMBIA METROPOLITAN AIRPORT
Passenger Terminal Space Usage & Services
TERMINAL
Airfine Leased Space S Q U A R E F E E T
------------------------------------------------------------------------------------------------------------------------------------
SECOND LEVEL Delta American USAir United Air South
Ticket Counter Area 632 158 396 177 210
Offices 1,110 587 963 547 510
Baggage Make Up 1,269 225 883 271 277
Canopy 745 144 279 275 980
TOTAL 3,756 1,114 2,521 1,270 1,977
LOWER LEVEL
Offices 211 527 225 229
Common Bag Claim 4,893.58 1,117.85 2,578.53 1,040.04 482
TOTAL 5,104.58 1,644.85 2,803.53 1,269.04 482
CONCOURSE
Hold Rooms 4,477 2,492 3,156 1,930 3,853
Operations 1,729 643 1,195 141 708
Crown Room 822 -- -- -- --
Maintenance 397 -- -- -- --
Ramp Storage 918 154 58 333 1,463
Employee Lounge 358 -- -- -- --
TOTAL 8,701 3,289 4,409 2,071 4,894
GRAND TOTAL 17,561.58 6,047.85 9,733.53 4,610.04 7,353
TERMINAL
SERVICE PROVIDED
Airfine Leased Space A=Airport T=Tenant
------------------------------------------------------------------------------------------------------------------------------
SECOND LEVEL TOTAL Cleaning Electricity Relarnping ACMQ
Ticket Counter Area 1,573 T A A A
offices 3,717 T A A A
Baggage Make Up 2,925 T A A A
Canopy 2,423
TOTAL 10,638
LOWER LEVEL
Offices 1,192 T A A A
Common Bag Claim 10,112 A A A A
TOTAL 11,304
CONCOURSE
Hold Rooms 15,908 A A A A
Operations 4,416 T A A A
Crown Room 822 T A A A
Maintenance 397 T A A A
Ramp Storage T A A A
Employee Lounge 358 T A A A
TOTAL 23,364
GRAND TOTAL 45,306
32
COLOMBIA METROPOLITAN AIRPORT
INCOME REQUIREMENTS - 1979, 1980, 1981
1979 1980 1981
---- ---- ----
,307,220 $1,436,175 $1,536,708 Maintenance & Operation Costs
734,397 734,397 734,397 Average Bond Debt Service
(See Exhibit E)
-189,067 (25.6% off) -269,139 (36.6% off) -344,752 (46.9% off) Total Debt Service
discount = $802,958 to be
added to Landing Fees beginning
Jan. 1, 1992 and amortized over 10
years without interest.
-------------------- ------------------------ ----------------
852,550 $1,901,433 $1,926,353
546,320 -$1,546,320 -$1,546,320 Credit Estimated 1978 Income
121,920 -121,920 -121,920 Credit Estimated Interest
Income
-------------------- ------------------------ ----------------
668,240 -$1,668,240 -$1,668,240 Total Credit
184,310 $ 233,193 $ 258,113 Added Revenue, over 1978
Estimated Income, required to
break even (Line 4 minus Line 7)
*******************
86,280 $ 86,280 $ 86,280 Credit Budget Forcast of Revenue
increase in 1979 vs. 1978 (See page
3 of Budget)
- 48,883 73,803 Projected Concession Increase over
1979 - airline forecast increase in passenger
@ $1.04 to Airport
51,935 59,935 51,935 Added Rent produced by increased square
footage of bag claim area occupied 10-1-78
at rate of $7.75 per square foot
-------------------- ------------------------ ----------------
38,215 $ 187,098 $ 212,018
*******************
34,310 $ 233,193 $ 258,113 Line 8 above
38,215 -187,098 -212,018 Line 12 above
-------------------- ------------------------ ----------------
46,095 $ 46,095 $ 46,095 Net added income from Landing Fees
to break even
3.5c 3.5c 3.5c Added Landing Fee Rate required to break
even: 1c = $13,170 of Landing Fee in 1978
80.0c +30.0c +30.0c Landing Fee Rate 1978
-------------------- ------------------------ ----------------
83.5c 33.5c 33.5c Total Landing Fee Rate required to break
even.
(ENCLOSED FOR INFORMATION ONLY) EXHIBIT F
APRIL 28, 1979
33
EXHIBIT G
IRREVOCABLE LETTER OF CREDIT
Irrevocable Letter of Credit Number: _____________________________
_____________________________
Date:
To: The State of South Carolina
Richland-Lexington Airport District
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
From: Bank: _________________________________________
Address: _________________________________________
_________________________________________
Authorized _________________________________________
Signature: _________________________________________
Title: _________________________________________
We have established this irrevocable letter of credit solely in favor
of the Richland-Lexington Airport District for drawings up to $________ U.S.
Dollars (Currency and Amount in Words:_____________________ ) and expiring on
close of business on _____________, provided that this letter of credit shall be
deemed automatically extended without amendment for one year from the expiration
date, or any future expiration date, unless sixty (60) days prior to the
expiration date, the advising bank notifies the Richland-Lexington Airport
District that it elects not to consider this letter of credit renewed for such
additional period.
This undertaking is not subject to any condition or qualification. The
obligation of this bank under this letter of credit shall be the individual
obligation of the bank, and no way contingent upon reimbursement with respect
thereto. This letter of credit shall be governed by the laws of South Carolina,
and any legal proceedings initiated with respect to payment of this letter of
credit shall be brought in the State of South Carolina, County of Lexington,
subject to the laws of the State of South Carolina.
--------------------------------------------------------------------------------
BANK USE ONLY
Approved:________________ City:______________ Date:__________________
_________________________ Telephone:_________ Fee:___% RC
Account Officer
Second Charge DDA#:_______ Purpose/Collateral Code:__
Level
Approval:________________ Facility ID:_______ Credit Grade:
_________________________ Customer SIC Code:
(Print Name and Title)
Exhibit G
▇▇
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SCHEDULE OF GENERAL LONG-TERM DEBT PROJECTED DEBT SERVICE
Year Ended December 31, 1985
Bond Maturity Schedule
--------------------------------
Year
Ending
December 31 Principal Interest Total
----------- --------- -------- -----
1985 $ 420,000 $ 154,595 $ 574,595
1986 420,000 132,370 552,370
1987 400,000 109,700 509,700
1988 400,000 88,600 488,600
1989 400,000 67,000 467,000
1990 410,000 45,000 455,000
1991 410,000 22,500 432,000
---------- ---------- ----------
$5,760,000 $2,001,889 $7,761,889
EXHIBIT E