FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended December 31, 1995
Commission File Number 0-11720
AIR TRANSPORTATION HOLDING COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1206400
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Post Office Box 488, Denver, North Carolina 28037
(Address of principal executive offices)
(704) 377-2109
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
2,693,933 Common Shares, par value of $.25 per share were outstanding as
of January 31, 1996.
This filing contains pages.
The exhibit index is on page 13.
<PAGE>
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Earnings
for the three and nine-month periods ended
December 31, 1995 and 1994 (Unaudited) . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets at
December 31, 1995 (Unaudited)
and March 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash
Flows for the nine-month periods
ended December 31, 1995 and 1994 (Unaudited) . . . . . . . . . . . . . 5
Notes to Consolidated Financial
Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . 6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations. . . . . . . . . . . . . . . . . . . . . . . . . .8-10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 11-12
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14-84
2<PAGE>
<TABLE>
AIR TRANSPORTATION HOLDING COMPANY, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
<CAPTION> Three Months Ended Nine Months
Ended
December 31, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating Revenues:
Cargo $ 4,804,623 4,695,368 $14,117,755 13,581,907
Maintenance and other 3,957,251 3,426,096 11,701,985 10,671,628
8,761,874 8,121,464 25,819,740 24,253,535
Operating Expenses:
Flight operations 3,078,322 3,162,253 9,021,657 8,951,341
Maintenance 3,863,942 3,313,436 11,803,410 10,405,635
General and admin 1,037,755 879,841 2,912,896 2,571,488
Depr & amortization 119,104 153,122 365,887 367,494
8,099,123 7,508,652 24,103,850 22,295,958
Operating Income 662,751 612,812 1,715,890 1,957,577
Non-operating Income:
Gain on sale of assets (376) - (263,457) (572)
Earnings Before
Income Taxes 663,127 612,812 1,979,347 1,958,149
Provision For
Income Taxes 309,339 228,800 805,452 710,200
Net Earnings $ 353,108 384,012 $ 1,173,895 1,247,949
Weighted Average Shares 2,982,343 3,291,251 3,048,215 3,338,896
Net Earnings Per Share $ 0.12 0.12 $ 0.38 0.37
<FN>
See notes to consolidated financial statements.
</TABLE>
3<PAGE>
<TABLE>
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31, 1995 March 31, 1995
ASSETS (Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 4,211,866 3,380,885
Accounts receivable, net 2,075,600 3,366,286
Expendable parts and supplies 493,447 269,653
Prepaid expense and other 5,096 41,096
Deferred tax asset, net 283,397 440,000
Total Current Assets 7,069,406 7,497,920
Property and Equipment 3,233,058 3,313,664
Less accumulated depreciation (1,581,989) (1,271,750)
1,651,069 2,041,914
Excess Cost of Subsidiary 165,794 429,167
Deferred Tax Asset, net - 135,620
Other 54,860 56,435
$ 8,941,129 10,161,056
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 166,207 1,574,438
Accrued liabilities 1,203,514 1,401,275
Income taxes 201,783 41,054
Current maturities of long-term debt 5,892 4,437
Total Current Liabilities 1,577,396 3,021,204
Long-Term Debt, Less Current Maturities 5,174 9,838
Stockholders' Equity:
Preferred stock, $1 par value, authorized
10,000,000 shares, none issued - -
Common stock, par value $.25; authorized
4,000,000 shares; 2,693,933 and
2,865,933 shares issued 673,483 716,483
Additional paid in capital 7,287,048 7,891,108
Deficit ( 601,972) (1,477,577)
7,358,559 7,130,014
$ 8,941,129 10,161,056
<FN>
See notes to consolidated financial statements.
</TABLE>
4<PAGE>
<TABLE>
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
Nine Months Ended
December 31,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net earnings $ 1,173,895 1,247,949
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 365,887 367,494
Change in deferred tax asset 292,223 120,200
Charge in lieu of income taxes 209,383 233,400
Other changes:
Accounts receivable 1,290,686 524,215
Parts and supplies (223,794) (149,586)
Prepaid expense and other 37,575 (4,910)
Accounts payable (1,408,231) (158,664)
Accrued expenses (197,761) (214,903)
Income taxes payable 160,729 142,077
Total adjustments 526,697 859,323
Net cash provided by
operating activities 1,700,592 2,107,272
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (184,209) (864,401)
Net proceeds from disposal of equipment 263,157 35,428
Collection of officer note receivable - 280,000
Net cash provided by (used in)
investing activities 78,948 (548,973)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt (3,209) (3,972)
Repurchase of common stock (748,735) (482,400)
Exercise of stock options 4,000 -
Dividend (200,615) (174,746)
Net cash used in financing activities (948,559) (661,118)
NET INCREASE IN CASH & CASH EQUIVALENTS 830,981 897,181
CASH & CASH EQUIVALENTS AT BEGINNING
OF PERIOD 3,380,885 1,748,259
CASH & CASH EQUIVALENTS AT END OF PERIOD $ 4,211,866 2,645,400
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 664 810
Income/Franchise taxes 229,020 359,327
<FN>
See notes to consolidated financial statements.
</TABLE>
5<PAGE>
AIR TRANSPORTATION HOLDING COM
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. Financial Statements
The Consolidated Balance Sheet as of December 31, 1995, the Consolidated
Statements of Earnings for the three and nine-month periods ended December 31,
1995 and 1994 and the Consolidated Statements of Cash Flows for the nine-month
periods ended December 31, 1995 and 1994 have been prepared by Air
Transportation Holding Company, Inc. (the Company) without audit. In the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows as of December 31, 1995, and for prior periods
presented, have been made.
It is suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended March 31, 1995. The results of
operations for the period ended December 31 are not necessarily indicative of
the operating results for the full year.
B. Income Taxes
The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes", as of the beginning of fiscal 1994.
The tax effect of temporary differences and net operating loss carryforwards
that gave rise to the Company's deferred tax asset is broken down between
current and noncurrent amounts in the accompanying December 31, 1995 and March
31, 1995 consolidated balance sheets.
The Company has recorded a valuation allowance in order to reduce its
deferred tax asset to an amount which is more likely than not to be realized.
Changes in the valuation allowance, related to future utilization of net
operating losses, reduced the provision for income taxes by $99,000 and
$83,000, respectively, during the nine months ended December 31, 1995 and
1994. Of the valuation allowance of approximately $254,000, approximately
$220,000 relates to potential benefits from pre-acquisition carryforwards.
Benefits derived from these carryforwards, amounting to $209,000 and $237,000,
respectively, during the nine months ended December 31, 1995 and 1994, have
been credited directly to goodwill.
6<PAGE>
B. Income Taxes (cont'd)
The income tax provisions for the three and nine months ended December
31, 1995 and 1994 differ from the federal statutory rate primarily as a result
of state income taxes and reductions in the valuation allowance.
The Company has federal net operating loss carryforwards available for
tax return purposes of approximately $1,100,000. These carryforwards expire
in varying amounts from 1996 to 1997. The potential utilization of certain of
these carryforwards is subject to the separate return limitation rules
pursuant to Treasury regulations. These carryforwards, to the extent
realized, will result in a reduction of goodwill, until goodwill is reduced to
zero.
C. Net Earnings Per Share
Primary earnings per share has been compiled by dividing net earnings by
weighted average number of common shares outstanding during each period.
There was no difference between primary and fully diluted earnings per share.
Shares issuable under employee stock options are considered common share
equivalents and were included in the weighted average common shares as of
December 31, 1995 and 1994.
7<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
The Company's revenue is generated through its air cargo subsidiaries,
Mountain Air Cargo, Inc. (MAC) and CSA Air, Inc. (CSA), which are short-haul
express air freight carriers flying nightly under contracts with a major
express delivery company out of 60 cities, principally located in 28 states in
the eastern half of the United States, Puerto Rico, Canada and the Virgin
Islands. In 1993, the Company organized Mountain Aircraft Services, LLC (MAS)
to engage in the sale of commercial aircraft parts and provide aircraft engine
overhaul management and component repair services. Revenues from this
operation contributed approximately $2,743,000 (10.6%) and $803,000 (3.3%),
respectively, to the Company's revenues for the nine months ended December 31,
1995 and 1994.
Under the terms of its dry-lease service contracts (which currently cover
approximately 97% of the revenue aircraft operated), the Company passes
through to its customer certain cost components of its air freight operations
without markup. The cost of fuel, landing fees, outside maintenance, aircraft
certification and conversion, parts and certain other direct operating costs
are included in operating expenses and billed to the customer, as cargo and
maintenance revenue.
Consolidated revenue increased $1,566,000 (6.5%) to $25,820,000 for the
nine-month period ended December 31, 1995 and $640,000 (7.9%) for the three-
month period ended December 31, 1995 compared to their equivalent 1994
periods. The change in revenue primarily resulted from increases in cargo
revenue generated by an increase in the number of customer-owned aircraft
operated and increased utilization of company-owned aircraft and other revenue
related to the expansion of MAS, partially offset by decreases in cargo
maintenance billing.
Operating expenses increased $1,808,000 (8.1%) to $24,104,000 for the
nine-month period ended December 31, 1995 and $590,000 (7.9%) for the three-
month period ended December 31, 1995 compared to their equivalent 1994
periods. The increase in operating expenses for the nine-month period
consisted of the following changes: cost of flight operations increased
$70,000 (0.8%) primarily due to increase in pilots; maintenance expense
increased $1,398,000 (13.4%), primarily as a result of increases in cost of
sales related to aircraft parts sold by MAS; depreciation decreased $2,000
(0.4%); general and administrative expense increased $341,000 (13.3%) as a
result of increased staffing at MAS, cost associated with the Company's future
relocation of maintenance operations and increased employee benefits and
salary and wage rates.
8<PAGE>
Results of Operations (cont'd)
The $263,000 increase, for the nine-month period December 31, 1995, in
non-operating income reflects a gain on disposal of Company-owned aircraft.
Pretax earnings increased $21,000 and $50,000 respectively, for the nine
and three-month periods ended December 31, 1995 compared to 1994. The
increases were due to the gain on disposal of Company-owned aircraft and
increased earnings by MAS, partially offset by increased administration cost
and decreased cargo aircraft maintenance revenue.
The provision for income taxes for the nine-month period ended December
31, 1995 increased $95,000, and $81,000 for the three-month period ended
December 31, 1995 compared to their respective fiscal 1995 periods. Both
periods experienced increased effective tax rates due to the complete
utilization of certain net operating loss carryforwards during the third
quarter of fiscal 1995 (see Note B. Income Taxes).
Liquidity and Capital Resources
As of December 31, 1995 the Company's working capital amounted to
$5,492,000, an increase of $1,015,000 compared to March 31, 1995. The net
increase, primarily resulted from profitable operations and disposal of
aircraft, as reflected by a $831,000 increase in cash, a $1,606,000 decrease
in accounts payable and accrued liabilities, partially offset by a $1,291,000
decrease in accounts receivable.
In January 1995 the Company obtained an accounts receivable and inventory
financing line from a new bank lender. The line, which provides credit, at
the lender's prime rate, in the aggregate of up to $2,250,000, extends to July
1996. Substantially all of the Company's non-aircraft assets have been
pledged as collateral under this financing and other loan arrangements. As of
December 31, 1995, the Company was in a net investment position against its
credit line and had $530,000 available to borrow. Management believes that
funds anticipated from operations and existing credit facilities will provide
adequate cash flow to meet the Company's future financial needs.
The respective nine-month periods ended December 31, 1995 and 1994
resulted in the following changes in cash flow: operating activities provided
$1,701,000 and $2,107,000, investing activities provided $79,000 and used
$549,000 and financing activities used $950,000 and $661,000. Net cash
increased $831,000 and $897,000 for the respective nine-month periods ended
December 31, 1995 and 1994.
9<PAGE>
Liquidity and Capital Resources (cont'd)
Cash provided by operating activities was $407,000 less for the nine
months ended December 31, 1995 compared to the similar 1994 period. This was
primarily due to reductions in accounts payable. Cash provided by investing
activities for the nine months ended December 31, 1995 was approximately
$628,000 more than the comparable period in 1994, principally due to the
acquisition of two aircraft in fiscal 1995 and the disposal of two aircraft in
fiscal 1996. Cash used in financing activities was $287,000 more in the 1995
nine month period due to the repurchase of common stock.
During the nine months ended December 31, 1995 the Company repurchased
109,000 shares of its common stock at a total cost of $745,000. Pursuant to
its previously announced stock repurchase program, $84,000 remains available
for repurchase of common stock.
There are currently no commitments for significant capital expenditures
and none are anticipated during the current fiscal year. The Company paid a
$.07 per share cash dividend in May 1995; no determination has been made
whether additional dividends will be paid in the future.
Impact of Inflation
The Company believes the impact of inflation and changing prices on its
revenues and earnings is not material since the major cost components of its
operations, consisting principally of fuel, aircraft, crew and certain
maintenance costs are passed thru to its customer under current contract
terms.
10<PAGE>
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
No. Description
4.1 Specimen Common Stock Certificate, incorporated by reference to
Exhibit 4.1 of the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1994.
10.1 Domestic Aircraft Wet Lease Agreement dated April 1, 1994 between
Mountain Air Cargo, Inc. and Federal Express Corporation, Inc.,
incorporated by reference to Exhibit 10.4 to Amendment No. 1 on
form 10-Q/A to the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1994.
10.2 Form of option to purchase the following amounts of Common Stock
issued by the Company to the following executive officers during
the following fiscal years ended March 31:
Number of Shares
Executive Officer 1993 1992 1991
J. Hugh Bingham 150,000 150,000 200,000
Walter Clark 100,000 100,000 100,000
John J. Gioffre 100,000 100,000 125,000
William H. Simpson 200,000 200,000 300,000
Incorporated by reference to Exhibit 10.8 of the Company's
Annual Report on Form 10-K for the fiscal year ended March
31, 1993.
10.3 Aircraft Dry Lease and Service Agreement dated February 2, 1994
between Mountain Air Cargo, Inc. and Federal Corporation.,
incorporated by reference to Exhibit 10.13 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended June
30, 1994.
10.4 Loan Agreement among NationsBank of North Carolina, N.A. the
Company and its subsidiaries, dated January 12, 1995, incorporated
by reference to Exhibit 10.7 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended December 31, 1994.
10.5 Premises and Facilities Lease dated November 16, 1995 between
Global Transpark Foundation, Inc. and Mountain Air Cargo, Inc.
11.1 Computation of primary and fully diluted earnings per share.
27.1 Financial Data Schedule
(b) None
11<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AIR TRANSPORTATION HOLDING COMPANY, INC.
(Registrant)
Date: February 2, 1996 ___________________________
David Clark, Chief Executive Officer
Date: February 2, 1996 ___________________________
John J. Gioffre, Vice President-Finance
12<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AIR TRANSPORTATION HOLDING COMPANY, INC.
(Registrant)
Date: February 2, 1996 /s/ David Clark
David Clark, Chief Executive Officer
Date: February 2, 1996 /s/ John Gioffre
John J. Gioffre, Vice President-Finance
12<PAGE>
AIR TRANSPORTATION HOLDING COMPANY, INC.
EXHIBIT INDEX
Exhibit PAGE
10.5 Premises and Facilites Lease......................14-82
11.1 Computation of Primary and Fully Diluted
Earnings Per Common Share.......................... 83
27.1 Financial Data Schedule............................ 84
13<PAGE>
<TABLE>
AIR TRANSPORTATION HOLDING COMPANY, INC. AND SUBSIDIARIES
Exhibit 11.1
Computation of Primary and Fully Diluted Earnings Per Common Share
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET EARNINGS $ 353,788 384,012 $ 1,173,895 1,247,949
WEIGHTED AVERAGE COMMON SHARES:
Primary:
Weighted average shares
outstanding 2,728,133 2,840,966 2,793,222 2,888,611
Dilutive stock options 254,210 450,285 254,993 450,285
2,982,343 3,291,251 3,048,215 3,338,896
Fully Diluted:
Weighted average shares
outstanding 2,728,133 2,840,966 2,793,222 2,888,611
Dilutive stock options 253,627 424,625 257,616 424,625
2,981,760 3,265,591 3,050,838 3,313,236
EARNINGS PER COMMON SHARE:
Primary $ 0.12 0.12 $ 0.38 0.37
Fully Diluted $ 0.12 0.12 $ 0.38 0.37
<FN>
</TABLE>
83<PAGE>
CONFORMED COPY
AIRPORT USE AGREEMENT
among
City of Kinston,
County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission,
North Carolina Global TransPark Authority,
Mountain Air Cargo, Inc.,
and
Mountain Aircraft Services, LLC
Dated as of November 16, 1995
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETIVE MATTERS
Section 1.1.Definitions.................................................... 3
Section 1.2.Interpretation and Construction................................ 3
ARTICLE II
REPRESENTATIONS
Section 2.1.Representations and Covenants by Kinston and Lenoir
County ........................................................ 5
Section 2.2.Representations and Covenants by the Authority................. 6
Section 2.3.Representations and Covenants by the Companies................. 7
ARTICLE III
USE OF THE AIRPORT AND ACCESS TO THE FACILITIES
Section 3.1.Use of Airport Facilities; Air Operations Generally............ 9
Section 3.2.Use of Ramp and Apron Area..................................... 9
Section 3.3.Disabled Aircraft; Dangerous Conditions....................... 10
Section 3.4.Access to the Facilities...................................... 10
Section 3.5.Modification of Access Route.................................. 10
ARTICLE IV
LANDING FEES AND OTHER CHARGES UNDER THIS AGREEMENT
Section 4.1.Aircraft Operated by the Companies............................ 12
Section 4.2.Payment of Landing Fees....................................... 12
Section 4.3.Availability of Records....................................... 12
ARTICLE V
ACQUISITION, CONSTRUCTION AND EQUIPPING OF
FUEL FACILITIES; FUEL THROUGHPUT CHARGES
Section 5.1.Fuel Facilities............................................... 14
Section 5.2.Fuel Tank Charges............................................. 14
Section 5.3.Restriction on Fuel Stored in Fuel Tank....................... 14
ARTICLE VI
USE AND MAINTENANCE OF THE AIRPORT AND THE FACILITIES
Section 6.1.Maintenance of Airfield; Snow Removal; Damage by
Companies..................................................... 15
Section 6.2.Compliance with Airport Regulations........................... 15
Section 6.3.Compliance with Other Governmental Regulations................ 16
Section 6.4.No Obstruction to Air Navigation.............................. 16
Section 6.5.Utilities..................................................... 16
Section 6.6.Trash, Garbage, and Other Refuse.............................. 16
Section 6.7.Signs......................................................... 16
Section 6.8.Security...................................................... 17
Section 6.9.Manuals, Violations, and Fines................................ 17
ARTICLE VII
SPECIAL COVENANTS
Section 7.1.Assignments by Companies...................................... 18
Section 7.2.United States Department of Transportation, Federal Aviation
Administration Provisions..................................... 18
ARTICLE VIII
INSURANCE AND INDEMNIFICATION
Section 8.1.Indemnification............................................... 20
Section 8.2.Insurance..................................................... 20
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1.Events of Default Defined..................................... 21
Section 9.2.Force Majeure................................................. 21
Section 9.3.Remedies on Default........................................... 22
Section 9.4.No Remedy Exclusive........................................... 22
Section 9.5.No Additional Waiver Implied by One Waiver; Consents to
Waivers....................................................... 22
ARTICLE X
TERM OF AGREEMENT; AUTHORITY AS SUCCESSOR
TO AIRPORT SPONSORS
Section 10.1.Term of This Agreement....................................... 23
Section 10.2.Exercise of Option by Authority.............................. 23
ARTICLE XI
OTHER PROVISIONS
Section 11.1.Development of the Airport................................... 24
Section 11.2.Quiet Enjoyment.............................................. 24
Section 11.3.Relationship of the Parties.................................. 24
ARTICLE XII
MISCELLANEOUS
Section 12.1.Notices...................................................... 25
Section 12.2.No Personal Liability........................................ 27
Section 12.3.No Limitation on Previous Agreements......................... 27
Section 12.4.Binding Effect............................................... 27
Section 12.5.Assignment................................................... 27
Section 12.6.Third Parties................................................ 27
Section 12.7.Attachments.................................................. 27
Section 12.8.Numbers; Gender; Captions; Capitalized Terms; Certain
Definitions.................................................. 27
Section 12.9.Further Assurances........................................... 28
Section 12.10.Dispute Resolution; Mediation............................... 28
Section 12.11.Governing Law; Venue........................................ 29
Section 12.12.Integration................................................. 29
Section 12.13.Amendments, Changes and Modifications....................... 29
Section 12.14.Severability................................................ 29
Section 12.15.Partial Invalidity.......................................... 29
Section 12.16.Multiple Counterparts....................................... 30
Section 12.17.Agreements with United States............................... 30
EXHIBIT A -Survey Map Showing the Premises
EXHIBIT A-1 -Description of Parcel B
EXHIBIT A-2 -Description of Parcel F
EXHIBIT B -Minimum Standards for Airport Aeronautical Activities
EXHIBIT C -Airport Joint Use Agreement
EXHIBIT D -Airport Usage Fee Schedule
EXHIBIT E -Kinston Regional Jetport - Rules & Regulations, June 21, 1994
EXHIBIT F -Avigation Easement
EXHIBIT G -Federal Airport Assurances - Airport Sponsors
EXHIBIT H -Reverter to Grantor
EXHIBIT I -Nondiscrimination in Airport - Employment Opportunities
EXHIBIT J -Disadvantaged Business Enterprises - Required Statements
<PAGE>
AIRPORT USE AGREEMENT dated as of November 16, 1995, (this "Agreement"), by
and among City of Kinston (hereinafter referred to as "Kinston") and the
County of Lenoir (hereinafter referred to as "Lenoir County"), North Carolina,
the Lenoir County/City of Kinston Airport Commission (hereinafter referred to
as the "Commission"), the North Carolina Global TransPark Authority
(hereinafter referred to as the "Authority"), a body politic and corporate of
the State of North Carolina (hereinafter referred to as the "State"), Mountain
Air Cargo, Inc., a North Carolina corporation (hereinafter referred to as
"MAC") and Mountain Aircraft Services, LLC, a North Carolina limited liability
company (hereinafter referred to as "MAS").
RECITALS
WHEREAS, the Authority was created by the General Assembly of the State for
the purpose of developing an unique business complex, to be called the North
Carolina Global TransPark (the "Global TransPark"); and
WHEREAS, the Authority has identified the Kinston Regional Jetport (the
"Airport") located in Lenoir County, North Carolina, as the preferred location
for the Global TransPark; and
WHEREAS, the Authority has entered into an Option Agreement and Offer to
Transfer dated October 13, 1992 (the "Option Agreement"), by and among
Kinston, Lenoir County, the Commission, and the Authority, whereby the
Authority is granted an option to acquire the Airport upon the terms and
conditions set forth in the Option Agreement at any time prior to October 13,
1997; and
WHEREAS, the Authority has concluded an agreement by and among Kinston, Lenoir
County, and the Authority, whereby the Authority has acquired a certain tract
of real property at the Airport (the "Authority's Airport Property"); and
WHEREAS, it is in the best interests of Kinston, Lenoir County, the
Commission, and the Authority to encourage and assist in the development of
activities relating to air transportation at the Airport in the furtherance of
the development of the Global TransPark; and
WHEREAS, the Authority has leased to Global TransPark Foundation, Inc., a
North Carolina nonprofit corporation (the "Foundation") approximately eight
and two tenths (8.2) acres (the "Foundation's Leasehold") of the Authority's
Airport Property as shown on Exhibit A attached to, and in accordance with the
terms and conditions of, a certain Long-Term Premises Lease dated as of August
29, 1995 (the "Long Term Lease"), between the Authority and the Foundation;
and
WHEREAS, Air Transportation Holding Company, Inc. (hereinafter referred to as
"AirT"), a Delaware corporation, is the parent company and sole shareholder of
MAC and a member of MAS; and
WHEREAS, MAC is an airline company authorized to provide air freight service
at the Airport and to operate on and from the Airport in the business of
transporting property, cargo and mail, or one or more thereof, to and from the
Airport by aircraft and MAS is a company authorized to operate on and from the
Airport an aircraft maintenance and other aviation-related businesses; and
WHEREAS, the Companies (as hereinafter defined) desire to occupy and use a new
aircraft hangar (the "Hangar") to be constructed by the Foundation on a
portion of the Authority's Airport Property (the "Premises") as shown on
Exhibit A hereto, consisting of the parcel identified by the letter "B" and
described on Exhibit A-1 hereto and certain facilities within the Hangar,
including an aircraft maintenance facility, an air freight facility, air
operations facilities, and office space (collectively, the "Facilities"), and
MAC desires to lease the Facilities and the Premises upon which the Facilities
are to be located (collectively, the "Leased Property") from the Foundation in
accordance with the terms and conditions contained in that certain Premises
and Facilities Lease to be dated as of November 16, 1995 (the "Sub-Lease"),
between the Foundation and MAC; and
WHEREAS, Kinston, Lenoir County, the Authority, and the Companies have made
certain representations and warranties one to another, and have reached
certain agreements pursuant to which certain of the parties shall have certain
obligations and others of the parties shall have certain rights with respect
to certain designated facilities at the Airport, all subject to certain
conditions; and
WHEREAS, the parties hereto desire to set forth in this Agreement the terms
and conditions upon which the Airport Sponsor (as hereinafter defined) grants
to the Companies certain rights to use the Airport during the term of this
Agreement; and
NOW, THEREFORE, in consideration of the respective representations and
covenants contained herein, the parties hereto do hereby agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETIVE MATTERS
Section 1.1.Definitions. All terms used herein which are defined in the Long-
Term Lease or the Sub-Lease, but not herein, shall have the meanings assigned
to them in such documents, respectively, unless the context otherwise
requires.
Section 1.2.Interpretation and Construction. For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a)All references in this Agreement designated "Articles," "Sections,"
"subsections," "paragraphs," "clauses" and other subdivisions are to the
designated Articles, Sections, subsections, paragraphs, clauses and other
subdivisions of this Agreement. The words "herein," "hereof," "hereto,"
"hereby," and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision.
(b)Every "request," "order," "demand," "application," "appointment,"
"notice," "statement," "certificate," "consent" or similar action hereunder by
any party shall be in writing and signed on behalf of such party by the Mayor,
the Chairman, the President, the Executive Director, or a Vice President, as
the case may be, or on behalf of such party by its Authorized Representative
who shall be such person so designate, from time to time, by such party to the
other parties hereto pursuant to notice given hereunder.
(c)In the computation of a period of time from a specified date to a later
specified date, the word "from" means "from and including" and each of the
words "to" and "until" means "to but excluding."
(d)As used in this Agreement, the phrase "to the knowledge" shall mean,
with respect to either party hereto, that the party, after reasonable inquiry,
has no actual knowledge to the contrary.
(e)The term "aircraft" shall refer to any aircraft which lands or takes off
at the Airport in connection with the business of the Companies conducted at
the Airport.
(f)The term "airfield" shall mean that portion of the Airport which
comprises the landing field, including the runways, taxiways, clear zones,
instrument landing areas, and terminal ramps and aprons for loading and
unloading and parking of aircraft, and all other areas and services incident
to providing safe, efficient, and adequate aircraft operations at the Airport.
(g)The term "FAA" shall mean the Federal Aviation Administration, or any
successor agency in function.
(h)The term "landing weight" shall mean the certified maximum allowable
gross landing weight, expressed in pounds, as certified by the FAA. In any
case where the FAA shall not have certified a maximum allowable gross landing
weight for any type of aircraft, the term "landing weight" shall mean the
actual, maximum allowed landing weight of the aircraft as stated by its
manufacturer.
(i)The term "revenue producing flight" shall mean all flights operated by
the Companies into or from the Airport except courtesy, test, training,
inspection, and maintenance flights, and flights returning to the Airport
without having landed at another airport.
(j)The term "exclusive space" shall mean that portion of the Airport with
respect to which the Companies have exclusive use and control to provide
aviation related services.
(k)The term "non-exclusive space" shall mean that portion of the Airport
with respect to which the Companies have been granted a right to use under
joint arrangements with another air carrier or another tenant of the Airport
and/or have been granted a right of common use shared by the Companies and
other tenants of the Airport.
(l)The term "Airport Sponsor" shall mean (i) prior to the date of closing
of the transactions contemplated by the Option Agreement, only Kinston, Lenoir
County, and the Commission, as the context may require, and/or as its or their
interests may appear; except, however, with respect to the receipt of
payments, when such term shall mean only the Commission; and except, further,
with respect to Article VIII hereof, where such term shall include the
Authority among those indemnified; and (ii) on and after the date of closing
of the transactions contemplated by the Option Agreement, only the Authority;
except, further, with respect to indemnification under Article VIII hereof,
such terms shall include Kinston, Lenoir County, and the Commission, as the
content may require, and/or as its or their interests may appear, in respect
of circumstances, conditions, events, or actions having existed or occurred
prior to the date of closing of the transactions contemplated by the Option
Agreement.
(m)The term the "Companies" shall mean collectively, and jointly and
severally unless the context otherwise requires, MAC or MAS, and any other
corporation, company, or other legal entity owned or controlled by either of
them or by AirT, either existing on the date of commencement of flight
operations by the Companies at the Airport or thereafter organized or acquired
by either one of them or by AirT, and engaged in flight operations at the
Airport; provided, however, that the term the "Companies" shall not include
any corporation, company, or other legal entity with respect to which any one
of AirT, MAC, MAS, or the shareholders collectively of AirT, own less than
ninety-five percent (95%) of the equity interest in such new corporation,
company, or other legal entity.<PAGE>
ARTICLE II
REPRESENTATIONS
Section 2.1.Representations and Covenants by Kinston and Lenoir County.
Kinston and Lenoir County, severally, hereby represent and covenant that:
(a)Each is a body politic and corporate, duly organized and existing under
the laws of the State.
(b)Each is duly authorized and empowered to enter into the transactions
contemplated by this Agreement and to carry out its respective obligations
hereunder.
(c)Each, as tenants in common, own the Airport in fee simple, without
encumbrances other than the obligations undertaken between them as the Airport
Sponsor and the FAA.
(d)Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, materially
conflict with or will result in a material breach of the terms, conditions or
provisions of any restriction or any agreement or instrument to which either
of them is now a party or by which either of them is bound, or constitute a
default under any of the foregoing.
(e)When executed by the respective authorized officers of each of them and
the other parties hereto, respectively, this Agreement will constitute the
valid, binding and enforceable obligation of each of them, respectively,
enforceable against each of them, respectively, in accordance with its terms
except to the extent that enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time
to time in effect which affect creditors' rights generally, (ii) legal and
equitable limitations on the availability of injunctive relief, specific
performance, and other equitable remedies, and (iii) general principles of
equity and applicable laws or court decisions limiting the enforceability of
indemnification provisions.
(f)To the knowledge of either of them, no person holding office of either
of them or the Commission, either by election or appointment, has any
interest, either directly or indirectly, in any contract being entered into or
with respect to any work to be carried out in connection with the construction
and equipping of the Facilities.
(g)To the knowledge of either of them, with respect to the Airport, each of
them and the Commission are in full compliance with all applicable
environmental laws, rules, requirements, orders, directives, ordinances and
regulations of the United States of America, the State, and Lenoir County and
any other lawful authority having jurisdiction over or affecting the Airport,
and neither of them nor the Commission is aware of any potential claim or
liability under any such environmental laws, rules, requirements, orders,
directives, ordinances and regulations or of any events, conditions,
circumstances, activities, practices, actions or plans which may give rise to
any such claim or liability.
Section 2.2.Representations and Covenants by the Authority. The Authority
hereby represents and covenants that:
(a)The Authority is a body politic and corporate, duly organized and
existing under the laws of the State.
(b)The Authority is duly authorized and empowered to enter into the
transactions contemplated by this Agreement and to carry out its obligations
hereunder.
(c)The Authority owns the Authority's Airport Property in fee simple,
subject only to (i) a reversionary interest of Kinston and Lenoir County
reserved in a certain North Carolina deed with reverter to grantor dated June
29, 1995, by Kinston and Lenoir County as Grantor and the Authority as
Grantee, and recorded in Book 1031, at Page 96, in the office of the Register
of Deeds of Lenoir County, North Carolina, (ii) a certain North Carolina Deed
of Trust dated June 29, 1995, by and between the Authority as Grantor,
Southern National/Branch Banking and Trust Companies, as Trustee, and the
Treasurer of the State of North Carolina, as Beneficiary, and recorded in Book
1031, at Page 118, in the office of the Register of Deeds of Lenoir County,
North Carolina, and (iii) the matters referred to in Section 7.2 hereof.
(d)Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, materially
conflict with or will result in a material breach of the terms, conditions or
provisions of any restriction or any agreement or instrument to which the
Authority is now a party or by which it is bound, or constitute a default
under any of the foregoing.
(e)When executed by the authorized officers of the Authority and the other
parties hereto, respectively, this Agreement will constitute the valid,
binding and enforceable obligation of the Authority enforceable against the
Authority in accordance with its terms except to the extent that
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws from time to time in effect which
affect creditors' rights generally, (ii) legal and equitable limitations on
the availability of injunctive relief, specific performance, and other
equitable remedies, and (iii) general principles of equity and applicable laws
or court decisions limiting the enforceability of indemnification provisions.
(f)To the knowledge of the Authority, no person holding office of the
Authority, either by election or appointment, has any interest, either
directly or indirectly, in any contract being entered into or with respect to
any work to be carried out in connection with the construction and equipping
of the Facilities.
(g)To the knowledge of the Authority, with respect to the Authority's
Airport Property, the Authority is in full compliance with all applicable
environmental laws, rules, requirements, orders, directives, ordinances and
regulations of the United States of America, the State and Lenoir County and
any other lawful authority having jurisdiction over or affecting such
property, and the Authority is not aware of any potential claim or liability
under any such environmental laws, rules, requirements, orders, directives,
ordinances and regulations or of any events, conditions, circumstances,
activities, practices, actions or plans which may give rise to any such claim
or liability.
Section 2.3.Representations and Covenants by the Companies. MAC and MAS,
jointly and severally, hereby represents and covenants that:
(a)MAC is a corporation duly incorporated and in good standing in the State
and is not in violation of any provision of its Articles of Incorporation or
its by-laws; MAS is a limited liability company duly organized and in good
standing in the State and is not in violation of any provision of its Articles
of Organization or its Operating Agreement; and each of the Companies has full
legal power to own its properties and conduct its business, has full legal
right, power and authority to enter into this Agreement, and to consummate all
transactions contemplated by this Agreement and by proper legal action has
duly authorized the execution and delivery of this Agreement.
(b)Neither the execution and delivery by the Companies, respectively, of
this Agreement, nor the consummation by the Companies, respectively, of the
transactions contemplated hereby, nor the fulfillment of or compliance by the
Companies, respectively, with the terms and conditions of this Agreement,
materially conflict with or will result in a breach of or default under or
will result in the imposition of any lien on any property of the Companies,
respectively, pursuant to the Articles of Incorporation or by-laws of MAC, or
pursuant to the Articles of Organization or Operating Agreement of MAS,
respectively, or the terms, conditions or provisions of any statute, order,
rule, regulation, agreement or instrument to which either of the Companies is
a party or by which either of the Companies is bound.
(c)When executed and delivered by the respective authorized officers of the
Companies and the other parties hereto, respectively, this Agreement will
constitute the legal, valid and binding obligation of the Companies,
respectively, enforceable against the Companies, respectively, in accordance
with its terms except to the extent that enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
from time to time in effect which affect creditors' rights generally, (ii) by
legal and equitable limitations on the availability of injunctive relief,
specific performance, and other equitable remedies, and (iii) general
principles of equity and applicable laws or court decisions limiting the
enforceability of indemnification provisions.
(d)There are no pending or threatened actions or proceedings before any
court or administrative agency which individually (or in the aggregate in the
case of any group of related lawsuits) is expected to have a material adverse
effect on the financial condition of the Companies, respectively, or the
ability of the Companies, individually or collectively, to perform its or
their respective obligations under this Agreement.
(e)To the knowledge of the Companies, respectively, no person holding
office of the Companies, respectively, either by election or appointment, has
any interest, either directly or indirectly, in any contract being entered
into or with respect to any work to be carried out in connection with the
construction and equipping of the Facilities.
(f)Each of the Companies, respectively, is the owner of, or fully
authorized to use, any and all services, processes, machines, articles, marks,
color schemes, names, or slogans to be used by it in its operations under, or
in any way connected with, this Agreement.<PAGE>
ARTICLE III
USE OF THE AIRPORT AND ACCESS TO THE FACILITIES
Section 3.1.Use of Airport Facilities; Air Operations Generally.
(a)The Airport Sponsor hereby grants to the Companies a non-exclusive right
to use the airfield and other areas of the Airport on the terms and conditions
set forth in this Agreement in connection with their conduct of an air cargo,
an aircraft maintenance, and other aviation-related businesses.
(b)The Companies shall have the following non-exclusive rights and
privileges in connection with its use of the Airport:
(i)The non-exclusive right and license to use, and to permit their
employees, patrons, suppliers, furnishers of services, and invitees to use, in
common with other users, in accordance with the non-discriminatory rules and
regulations heretofore or hereafter adopted for governing activities at or
upon the Airport (including, without limitation, the payment of rates, fees,
and other charges established by the Airport Sponsor).
(ii)The non-exclusive right and privilege to engage in commercial
aviation activities in accordance with the "Minimum Standards for Airport
Aeronautical Activities," adopted by the Commission on November 4, 1991, and
attached hereto, for informational purposes only, as Exhibit B.
(c)The Companies understand and agree that no right or privilege granted
hereunder shall cause or prevent any person, firm, or corporation from
operating aircraft on the Airport or from performing any service on its own
aircraft with its own regular employees, including, but not limited to,
maintenance and repairs that it may choose to perform.
(d)The Companies understand and agree that nothing herein contained shall
be construed to grant or authorize the granting of an exclusive right or
privilege as described in 49 U.S.C. 40103(e), being a portion of the Federal
Aviation Act of 1958, as amended.
Section 3.2.Use of Ramp and Apron Area.
(a)The Airport Sponsor grants to the Companies a non-exclusive right and
license to use the ramp and apron area adjacent to, or in the immediate
vicinity of, the Hangar as shown on Exhibit A, identified by the letter "F,"
and described in Exhibit A-2 hereto for loading, unloading, and parking of
aircraft operated by the Companies.
(b)The parties hereto recognize that such ramp and apron area adjacent to,
or in the immediate vicinity of, the Hangar is subject to use by military
aircraft of the United States of America; and that such use is governed by
that certain agreement entitled "Airport Joint Use Agreement Between Lenoir
County/City of Kinston Airport Commission, County of Lenoir, City of Kinston,
North Carolina Global TransPark Authority, and the Air Force Reserve," made
and entered into on June 20, 1995, and attached hereto, for informational
purposes only, as Exhibit C hereto.
Section 3.3.Disabled Aircraft; Dangerous Conditions.
(a)The Companies shall provide sufficient equipment and properly trained
personnel to remove any disabled aircraft operated by the Companies from the
airfield. If such aircraft were disabled under circumstances requiring an
investigation, such removal shall be performed in an expeditious manner and
shall be commenced immediately upon release by the National Transportation
Safety Board, or its successor agency in function, or the FAA, as the
circumstances may require; and, if no such investigation is required, as soon
as is reasonable under the circumstances. Such removal shall be diligently
pursued and shall be completed within a reasonable time.
(b)The Companies shall report to the Manager of the Airport any hazardous
or dangerous conditions upon or at any part of the Leased Property or upon any
other part of the Airport being used by the Companies, immediately upon the
discovery of such condition by the Companies.
Section 3.4.Access to the Facilities. Subject to any rules and regulations
heretofore or hereafter adopted and promulgated by the Airport Sponsor
regarding the Airport, including, without limitation, any nondiscriminatory
rules and regulations governing entrance to and use of the Airport, the
Airport Sponsor shall provide the Companies, subject to the provisions of
Section 3.5 hereof, the non-exclusive use of roadways, driveways, walkways, or
other rights-of-way for the purposes of ingress, egress, regress, access, the
installation and maintenance of utilities, and further subdivision, from the
Premises over or through any other property owned or controlled by the Airport
Sponsor for the Companies' employees, agents, guests, patrons, and invitees,
its or their suppliers of materials and furnishers of service, and its or
their equipment, vehicles, machinery and other property; and no fee, charge or
toll shall be charged directly or indirectly for access rights. The foregoing
shall not preclude the Airport Sponsor or its concessionaires or licensees
from making and collecting a charge for the use of public motor vehicle
parking areas, sightseeing facilities or ground transportation to or from the
Airport furnished by the Airport Sponsor or its concessionaires or licensees.
Section 3.5.Modification of Access Route. The Airport Sponsor may, at any
time, temporarily or permanently, close, modify, alter, change the location
of, consent to, or request the closing of, any roadway, driveway, walkway, or
other right-of-way for such ingress, egress, regress, and access over or
through any property owned or controlled by the Airport Sponsor, and any other
area at the Airport or in its environs presently or hereafter used as such, so
long as a means of ingress, egress, regress, and access reasonably equivalent
to that formerly provided is substituted therefor and is concurrently made
available therefor. The Companies hereby release and discharge the Airport
Sponsor of and from any and all claims, demands or causes of action which the
Companies now, or at any time hereafter, may have against the Airport Sponsor
arising or alleged to have arisen out of the closing of any roadway, driveway,
walkway, or other right-of-way for such ingress, egress, regress and access or
other area at the Airport or in its environs used as such, so long as the
Airport Sponsor makes available a means of ingress, egress, regress, and
access reasonably equivalent to that existing prior to each such modification,
if any.<PAGE>
ARTICLE IV
LANDING FEES AND OTHER CHARGES UNDER THIS AGREEMENT
Section 4.1.Aircraft Operated by the Companies. All flights of aircraft
operated by the Companies, except for any revenue producing flights operated
by the Companies to the Airport, shall be exempt from landing fees at the
Airport.
Section 4.2.Payment of Landing Fees.
(a)The Companies shall pay to the Airport Sponsor for each calendar month a
landing fee in respect of all aircraft operated by the Companies, except those
exempt from landing fees pursuant to Section 4.1 hereof, computed at the rate
of Thirty-Eight Cents ($.38) per thousand (1,000) pounds of aggregate gross
landing weight of all such aircraft or a minimum fee of Eight Dollars ($8.00)
per landing ("Landing Fees"), whichever shall be greater, all as determined in
the manner set forth in this Section 4.2; provided, however, that Landing Fees
shall not be increased during the initial two (2) year period following
commencement of flight operations by the Companies at the Airport; and,
provided, further, that, thereafter, Landing Fees shall be adjusted only in
accordance with procedures established by the Airport Sponsor.
(b)For purposes of this Section 4.2, the aggregate landing weight of all
aircraft landings for any calendar month shall be the sum of the products
obtained by multiplying the actual certified weight of each type of such
aircraft by the number of landings at the Airport during such calendar month.
Not later than the tenth (10th) day of each calendar month during the term of
this Agreement, the Companies shall certify in writing to the Airport Sponsor
the number of actual landings made at the Airport and the type of aircraft
making such landings, and shall furnish to the Airport Sponsor a schedule
setting forth the landing weight of each type of aircraft operated by the
Companies and approved by the FAA.
(c)The aggregate Landing Fees for each calendar month shall be paid to the
Airport Sponsor by the Companies no later than thirty (30) days after the
Airport Sponsor shall have submitted to the Companies a statement of the
aggregate Landing Fees due for such calendar month. The Companies shall use
their best efforts to assist the Airport Sponsor in the collection of landing
fees in respect of aircraft operated by parties other than the Companies and
involved in maintenance or other work to be performed by the Companies.
Section 4.3.Availability of Records. The Companies shall make their records
available to the Airport Sponsor or to its duly designated agents during
regular business hours and upon reasonable notice, for the purpose of
permitting the Airport Sponsor to verify the accuracy of all information
necessary to determine the computation of the appropriate aggregate Landing
Fees to be charged pursuant to this Article IV.
Except as specifically set forth in this Article IV, nothing contained in this
Article IV, or elsewhere in this Agreement, shall be deemed to relieve, the
Companies or any other person or entity from other field-use charges ("Field-
Use Charges") as established by the Airport Sponsor in the "Airport Usage Fee
Schedule," as the same is now in effect, or as it may be modified or amended,
from time to time; provided, however, that Field-Use Charges shall be adjusted
only in accordance with procedures established by the Airport Sponsor. The
current Field-Use Charges adopted and promulgated by the Airport Sponsor are
entitled "Lenoir County/City of Kinston Airport Commission, Airport Usage Fee
Schedule, dated October 20, 1993," and attached hereto, for informational
purposes only, as Exhibit D hereto.
<PAGE>
ARTICLE V
ACQUISITION, CONSTRUCTION AND EQUIPPING OF
FUEL FACILITIES; FUEL THROUGHPUT CHARGES
Section 5.1.Fuel Facilities. The Airport Sponsor shall rehabilitate and
provide to the Companies for their exclusive use, during the term of this
Agreement or any extension thereof, an aviation fuel storage tank having a
capacity of not less than Twenty Thousand (20,000) gallons of aviation fuel,
together with such valves, pumps, and other appurtenant equipment necessary,
convenient, or customary thereto for the storage and loading of aviation fuel
into fuel trucks owned by the Companies.
Section 5.2.Fuel Tank Charges. As fuel tank storage charges and rental
payments ("Fuel Storage Charges") for the exclusive use of the aviation fuel
storage tank capacity referred to in Section 5.1 hereof, the Companies shall
pay to the Airport Sponsor the sum of Three Cents ($.03) per gallon for all
aviation fuel purchased by the Companies for use at the Airport and stored in
the storage tank referred to in Section 5.1 hereof; provided, however, that
Fuel Storage Charges shall not be increased during the initial five (5) year
period following commencement of flight operations by the Companies at the
Airport; and, provided, further, that, thereafter, Fuel Storage Charges shall
be adjusted only in accordance with procedures established by the Airport
Sponsor. The aggregate sum of such rentals shall be paid monthly by the
Companies to the Airport Sponsor on or before the tenth (10th) day of the
month next succeeding the month during which such fuel was purchased and
stored in such storage tank.
Section 5.3.Restriction on Fuel Stored in Fuel Tank. The Companies shall use
the aviation fuel purchased and stored in the fuel storage tank referred to in
Section 5.1 hereof only for refueling of (a) aircraft operated by the
Companies or (b) aircraft operated by customers of the Companies and when such
refueling is incidental to major inspections of, or other maintenance on, such
aircraft being performed by the Companies at the Airport.<PAGE>
ARTICLE VI
USE AND MAINTENANCE OF THE AIRPORT AND THE FACILITIES
Section 6.1.Maintenance of Airfield; Snow Removal; Damage by Companies.
(a)The Airport Sponsor shall maintain the airfield in good condition during
the term of this Agreement, in accordance with the requirements of the FAA
applicable to the operations of the type of aircraft operated by the
Companies. In the event that the airfield is damaged, the Airport Sponsor
shall repair the airfield with reasonable diligence and at its own cost and
expense.
(b)The Airport Sponsor shall be responsible for any and all snow removal
necessary from the airfield, including, without limitation, the ramp and apron
area shown on Exhibit A and described on Exhibit A-2 hereto; subject, however,
to the condition that the Companies shall cooperate fully and in an
expeditious manner with the movement of aircraft owned or controlled by the
Companies within such areas to permit efficient and timely snow removal
operations.
(c)The Companies shall be liable to the Airport Sponsor for any damage to
the airfield including, without limitation, the ramp and apron area shown on
Exhibit A hereto and described on Exhibit A-2 hereto (excluding, however,
ordinary wear and tear from normal usage) caused by the Companies, their
shareholders, directors, officers, employees, agents, or by any aircraft or
vehicle owned by or under the control of the Companies. Any and all repairs
which may be necessary under provisions of this Section 6.1(c) shall be made
by the Airport Sponsor, but shall be at the cost and expense of the Companies.
Section 6.2.Compliance with Airport Regulations. The Companies shall comply
with, and shall cause their directors, officers, employees, and any other
persons over whom they have control, to comply with, such reasonable rules and
regulations governing the use of the Leased Property and any other portion of
the Airport as from time to time may be adopted and promulgated by the Airport
Sponsor for the management, operation and control of the Airport and
pertaining to the operation of automobile and vehicular traffic and parking
facilities thereon, and with such reasonable amendments, revisions, additions
and extensions thereof as from time to time may be adopted and promulgated;
provided, however, that such rules and regulations shall not be inconsistent
with the specific rights granted to the Companies herein and to the extent
that such rules and regulations do not conflict with rules and procedures
prescribed by the FAA for landing and takeoffs at the Airport of aircraft
operated by the Companies; and provided, further, that nothing herein shall be
deemed to restrict the police power of the Airport Sponsor.
The current rules and regulations adopted and promulgated by the Airport
Sponsor are entitled "Kinston Regional Jetport Rules & Regulations, dated June
21, 1994" and attached hereto, for informational purposes only, as Exhibit E
hereto.
Section 6.3.Compliance with Other Governmental Regulations. The Companies
shall, at all times in the operation and use, maintenance and repair, or
otherwise in connection with their occupancy of the Leased Property,
faithfully obey and comply with all existing and future laws, rules and
regulations adopted by Federal, State, local, or other governmental bodies,
including, without limitation, the FAA, and the Airport Sponsor and applicable
to or affecting the Companies and their operations and activities on and at
the Airport, including, without limitation, on, in, or upon the Leased
Property; provided, however, that the Companies, without being considered to
be in breach of this Agreement, may contest any such laws, rules and
regulations so long as such contest is diligently commenced and prosecuted.
Section 6.4.No Obstruction to Air Navigation. The Companies agree that no
obstruction to air navigation, as such is determined by application from time
to time of the criteria of the FAA will be permitted on the Premises, and any
such obstruction placed on the Premises by the Companies shall be removed by
them at their own cost and expense.
Section 6.5.Utilities. The Companies understand and agree that, except as
otherwise provided in this Section 6.5, all utility services required by them
for use on the Premises or in or upon the Facilities must be obtained and
secured by the Companies at their sole expense. Any relocation of utility
lines and mains shall be at the sole cost and expense of the Companies. Any
power lines, cables, pipes, and the like constructed or installed by or for
the Companies shall at all times conform to the height and route limitations
imposed from time to time by the Airport Sponsor and the FAA.
Any relocation of utility lines and mains permitted under this Section 6.5
shall be subject to the condition that the Companies, at their sole expense,
make suitable arrangements for relocation of any affected Federal or Airport
utility lines, cables, or other utilities or equipment. In no case, shall the
Companies pave roads or ramps over utility lines, cables, or other utilities
or equipment without the prior written approval of the Airport Sponsor.
Section 6.6.Trash, Garbage, and Other Refuse. The Companies shall provide, or
cause to be provided, adequate sanitary handling and disposal off property of
the Airport for all trash, garbage, and other refuse caused from or by the
operations of the Companies on the Leased Property or elsewhere on the
Airport. The Companies shall provide and use, at their sole expense, suitable
covered metal receptacles for all such garbage, trash, and other refuse. The
Companies shall not pile or otherwise permit boxes, cartons, barrels, damaged
aircraft, aircraft parts, or other similar items on the Premises outside of
the Facilities. The Companies shall dispose of any lavatory waste from any
aircraft or other source in full compliance with all existing public health
rules and regulations. The Companies shall dispose of drain oil and dump fuel
in a manner prescribed and approved by all Federal or State environmental
agencies.
Section 6.7.Signs. The Companies agree that any signs identifying the
Companies on the Leased Property will conform to reasonable standards
established by the Airport Sponsor with respect to type, size, design, and
location.
Section 6.8.Security. The Companies shall take reasonable security
precautions to maintain the Leased Property in a manner as to keep it secure
from unauthorized intrusion and shall with respect to any area of the Leased
Property opening to an air operations area of the Airport provide for an
adequate security system designed to prevent unauthorized persons or vehicles
from entering such air operations area. An "air operations area" is defined
to mean any area of the Airport used or intended to be used for landing,
takeoff or surface maneuvering of aircraft. An "adequate security system" is
further defined as providing for security at a standard no less than required
and set out in Part 107 of the Federal Aviation Regulations of the FAA, as the
same may be modified or amended, from time to time, or superseded.
Section 6.9.Manuals, Violations, and Fines. The Companies shall maintain a
copy of, and comply with, the "Airport Certification Manual" and the "Airport
Security Program" as these documents now exist and as the same may be modified
or amended, from time to time, or superseded, pursuant to rules and
regulations of the FAA. The Companies shall be liable for any fines imposed
upon the Airport for failure of the Companies to adhere to the provisions
contained in such documents or any other applicable Federal or State
regulations.
At any time during the term of this Agreement, when requested in writing, the
Companies shall submit to the Airport Sponsor the security plans that are
being used or are to be used by the Companies on, in, or upon all or any part
of the Leased Property or elsewhere on the Airport.<PAGE>
ARTICLE VII
SPECIAL COVENANTS
Section 7.1.Assignments by Companies. The Companies shall not assign or
otherwise transfer their interest in this Agreement, in whole or in part, or
any right or interests granted to them by this Agreement, without the prior
written consent (which consent shall not be delayed or withheld unreasonably)
of the Airport Sponsor.
Section 7.2.United States Department of Transportation, Federal Aviation
Administration Provisions.
(a)This Agreement in its entirety is subject and subordinate to the terms,
reservations, restrictions, and conditions of any existing or future
agreements between the Airport Sponsor and the United States of America, the
execution of which has been or may be required as a condition precedent to the
transfer of Federal rights or property to the Airport Sponsor for airport
purposes, and the expenditure of Federal funds for the extension, expansion or
development of the Airport or the construction or development of the Global
TransPark.
(b)Without in any way derogating from the generality of the foregoing
subsection (a) of this Section 7.2, the Companies:
(i)acknowledge that the Premises are subject to an Avigation Easement,
reserved by the Airport Sponsor as set forth on Exhibit F hereto;
(ii)shall make no use of the Premises, including any construction,
building, activity, or other endeavor that would interfere with the use of the
Airport for public aviation purposes; the Companies, and any assignee of the
Companies, shall comply with 14 CFR Part 77, such that no proposed or actual
use of the Premises would contravene the safety and efficiency restrictions
established by said Regulations;
(iii)shall take no action that, directly or indirectly, would make it
impossible for the Airport Sponsor, or its successors in interest, to comply
with the Regulations issued by, and other requirements of, and to carry out
its agreements with, the Federal Aviation Administration, including, but not
limited to, the Assurances found in 14 CFR Part 152, Appendix D, set forth on
Exhibit G hereto;
(iv)acknowledges that the Authority's airport property is subject to the
reverter retained by Airport Sponsors in that certain North Carolina Deed with
Reverter to Grantor made the 29th day of June, 1995, by and between the
Airport Sponsors, as Grantor, and the Authority, as Grantee, being recorded
in Book 1031, at Page 96, in the office of the Register of Deeds of Lenoir
County, North Carolina, and set forth on Exhibit H hereto; and the Companies
further acknowledge that the Premises may be used only for aviation-related or
aeronautical purposes; and the Companies further acknowledge that failure to
comply with said limitation shall cause the Premises to revert to Airport
Sponsors or their successors in interest;
(v)shall make no use of the Premises, nor of any portion or part thereof,
and shall take no action that, directly or indirectly, would cause, or
threaten to cause, the Authority's Airport Property to revert to the Airport
Sponsors or their successors in interest pursuant to the reverter referred to
in subsection (iv) of this Section 7.2;
(vi)assure that they will comply with the applicable requirements of law
relating to Non-Discrimination and Airport Employment Opportunities which, for
informational purposes only, are set forth in current form on Exhibit I
hereto; and
(vii)assure that they will comply with the policy of the Department of
Transportation with respect to Disadvantaged Business Enterprises which, for
informational purposes only, is set forth in its current form on Exhibit J
hereto.<PAGE>
ARTICLE VIII
INSURANCE AND INDEMNIFICATION
Section 8.1.Indemnification. The Companies, jointly and severally, agree to
fully indemnify, save and hold harmless and defend the Airport Sponsor and its
elected officials, directors, commissioners, officers, employees, and agents
from and against all claims, suits and actions, and all expenses incidental to
the investigation and defense thereof, based upon or arising out of damages or
injuries to third persons or their property, caused by the fault or negligence
of Companies, their shareholders, directors, officers, employees, agents, or
invitees, in connection with or incident to Companies' operations at or upon
the Airport; provided, however that Companies shall not be liable under this
section for any injury or damage or loss occasioned by the negligence of the
Airport Sponsor, its elected officials, directors, commissioners, officers,
employees, or agents; and, provided, further, that the Airport Sponsor shall
give the Companies prompt and reasonable notice of any such claims, suits or
actions against the Airport Sponsor and the Companies shall have the right to
investigate and defend the same.
Section 8.2.Insurance. The Companies, at their sole cost and expense, shall
carry and maintain in force, comprehensive public liability insurance covering
personal injury and property damage.
The Companies shall furnish to the Airport Sponsor a proper Certification of
Insurance certifying that such insurance is in force during the period of this
Agreement, shall furnish certification of changes in such insurance not less
than ten (10) days prior to any such change, and shall provide certification
that no cancellation thereof shall be effective until after not less than
thirty (30) days written notice of such cancellation has been given to the
Airport Sponsor.
All insurance policies shall be maintained with an insurance carrier which is
authorized to conduct business in North Carolina. Kinston, Lenoir County, the
Commission, the Authority, and the Foundation and their respective elected
officials, directors, commissioners, officers, employees, and agents shall be
included thereon as additional named insurers, as their interests may result
from this Agreement.<PAGE>
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1.Events of Default Defined. The occurrence of any one or more of
the events described in the following subsections (a), (b), and (c) of this
Section 9.1 shall constitute a "default" for all purposes of this Agreement;
and each such default shall, after the giving of notice, if any, passage of
time, if any, or occurrence of an event, if any, specified in the subsection
describing such default, constitute an "event of default" for all purposes of
this Agreement:
(a)Failure by the Companies to pay within ten (10) days after notice of
failure to pay any Landing Fees or other Field-Use Charges required to be paid
under Article IV hereof.
(b)Failure by the Companies to pay within ten (10) days after notice of
failure to pay any Fuel Storage Charges with respect to the aviation fuel
storage tank required to be paid under Section 5.2 hereof.
(c)Any material breach by the Companies of any of their representations or
warranties made in this Agreement, any failure by the Companies to make any
payment required to be made by them hereunder or any failure by the Companies
to observe and perform any of the covenants, conditions or agreements made on
their part to be observed or performed hereunder, other than a breach, failure
to pay or failure to observe and perform referred to in subsections (a) or (b)
of this Section 9.1, for a period of thirty (30) days after written notice
specifying such breach, failure to pay or failure to observe and perform and
requesting that it be remedied, given to the Companies by the Airport Sponsor
unless (i) the Airport Sponsor shall agree in writing to an extension of such
time prior to its expiration, or (ii) if the breach, failure to pay or failure
to observe and perform be such that it can be corrected but cannot be
corrected within the applicable period, corrective action is instituted by the
Companies within the applicable period and is being diligently pursued.
Section 9.2.Force Majeure. The Airport Sponsor shall be excused for the
period of any delay in the performance of any obligation under this Agreement
and the Companies shall be excused for the period of any delay in the
performance of any non-monetary obligation hereunder when such delay is
occasioned by causes beyond the control of the Airport Sponsor or beyond the
control of the Companies, respectively, including, without limitation, war,
invasion, or other hostility; work stoppages, boycotts, slowdowns, strikes or
other labor unrest; shortages of materials, equipment, labor, or energy;
man-made or natural casualties or disasters; unusual weather conditions; acts
or omissions of governmental or other political bodies; or riots or civil
disturbances or unrest; and the period for the performance of any such
obligation shall be extended for the period of such delay.
Section 9.3.Remedies on Default. Whenever any event of default referred to in
Section 9.1 hereof shall have occurred and be continuing, the Airport Sponsor
shall have the right, at its election, then or at any time thereafter, to:
(a)Terminate this Agreement, effective at such time as may be specified by
written notice to the Companies, and demand (and, if such demand is refused,
cause) the Companies to cease and desist from all operations at the Airport
and declare all payments payable under this Agreement to be due and payable
immediately, and upon any such declaration, all remaining such payments shall
become and be immediately due and payable.
(b)Take whatever action at law or in equity may appear necessary,
appropriate, or advisable to collect the payments and other amounts then due
and thereafter to become due hereunder or to enforce performance and
observance of any obligation, agreement, or covenant of the Companies under
this Agreement.
No action taken pursuant to this Section 9.3 shall relieve the Companies from
the Companies' obligations to make any payments required to be made by them
hereunder.
Section 9.4.No Remedy Exclusive. No remedy herein conferred upon or reserved
to the Airport Sponsor is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law, in equity, or by statute. No delay or omission
to exercise any right or power accruing upon any event of default shall impair
any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be
deemed expedient.
Section 9.5.No Additional Waiver Implied by One Waiver; Consents to Waivers.
In the event any agreement contained in this Agreement should be breached by
any party and thereafter waived by any other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive
any other breach hereunder. No waiver shall be effective unless it is in
writing and signed by the party making the waiver.<PAGE>
ARTICLE X
TERM OF AGREEMENT; AUTHORITY AS SUCCESSOR
TO AIRPORT SPONSORS
Section 10.1.Term of This Agreement. If not earlier terminated pursuant to
the terms of Article IX hereof, this Agreement shall terminate on the earlier
of (a) the termination of the Sub-Lease pursuant to its terms or (b) the
expiration of the term of the Sub-Lease.
The Companies shall furnish to the Airport Sponsor, by notice as provided in
Section 12.1 hereof, (a) copies of any instrument executed by either of the
Companies with respect to the Sub-Lease and (b) copies of any notice given or
received by MAC with respect to the Sub-Lease.
Section 10.2.Exercise of Option by Authority. In the event that the Authority
shall exercise its option pursuant to the Option Agreement, the Authority
shall succeed to all the rights, privileges, duties, immunities and other
obligations of Kinston, Lenoir County, or the Commission hereunder. If the
Companies shall not be in default hereunder, the terms and conditions of this
Agreement shall continue in full force and effect as if this Agreement
originally had been executed by and between only the Companies and the
Authority. The Companies agree to accept the Authority as the successor to
Kinston, Lenoir County, and/or the Commission and agree to perform their
obligations and to make all payments required under this Agreement as if this
Agreement originally had been executed by and between only the Companies and
the Authority.<PAGE>
ARTICLE XI
OTHER PROVISIONS
Section 11.1.Development of the Airport. The Airport Sponsor reserves the
right, at any time, and from time to time, to increase the size or capacity of
any public aircraft facilities or common use portions of the Airport, to make
alterations thereto, to reconstruct or to relocate them, the modify the design
or type of construction thereof, or to close them or any portions of them
either temporarily or permanently; provided, however, that prior written
notice is given to the Companies; and, provided, further, that no additional
charges not otherwise provided for herein are made to the Companies. The
Airport Sponsor reserves the right to renovate, reconstruct, make alterations
or improvements to, any portion of the Airport or to any of the aeronautical
or other facilities thereon. The Companies hereby consent and agree to any
such renovations, reconstruction, alterations, or improvements and if any such
renovations, reconstructions, alterations, or improvements shall require the
Companies to temporarily or permanently modify or relocate any of its
operations at the Airport, the Companies hereby consent and agree to such
modification or relocation. Prior to commencing any such work, the Airport
Sponsor shall provide reasonable notice in writing to the Companies; and, in
the event that temporary relocation or modification of the Companies'
operations is required, the Airport Sponsor shall diligently seek to provide
adequate alternate space or facilities to permit the Companies to carry on
their operations with the minimum necessary interruptions. No such work,
action, or temporary interruption or relocation by or on behalf of the Airport
Sponsor shall cause or constitute, or shall be deemed to cause or constitute,
a termination or breach of this Agreement. For purposes of this Agreement the
term "temporary" shall mean a period of ninety (90) days or less.
Section 11.2.Quiet Enjoyment. The Airport Sponsor represents that it has full
power and authority to enter into this Agreement and to grant to the Companies
the right to use the facilities of, and certain portions of, the Airport as
set forth herein. The Airport Sponsor covenants that, on the payment of the
fees and charges, and upon faithful performance of the covenants and
agreements imposed on the Companies hereunder, the Companies shall have and
enjoy the rights and uses at the Airport as granted in this Agreement.
Section 11.3.Relationship of the Parties. The relationship between the
Airport Sponsors, on the one hand, and the Companies, on the other hand, shall
always and only be that of an airport sponsor with respect to the Airport and
companies engaged in aviation-related businesses desiring to operate on and
from the Airport pursuant to regulations promulgated, from time to time, by
the FAA. The execution and delivery of this Agreement shall not constitute
the Companies as, nor permit the Companies to become, the agents of the
Airport Sponsor; and the Airport Sponsor shall never be responsible for the
acts or omissions of the Companies, their shareholders, directors, offices,
employees, agents, or other persons under their control.<PAGE>
ARTICLE XII
MISCELLANEOUS
Section 12.1.Notices. All notices, certificates, or other communications
hereunder shall be sufficiently given and shall be deemed given to the parties
required hereunder to receive such notice, certificate or communication when
mailed by registered or certified mail, postage prepaid, addressed as follows:
If to the Authority:North Carolina Global TransPark Authority
Post Office Box 27406
Raleigh, North Carolina 27611-7406
Attention: Mr. William T. Powell, Jr.
Executive Director
with copies to:Mark C. Cramer, Esq.
Secretary to the Authority
1850 East 3rd Street, Suite 350
Charlotte, North Carolina 28204
David L. Ward, Jr., Esq.
Ward and Smith, P.A.
Post Office Box 867
New Bern, North Carolina 28563-0867
If to Lenoir County:Chairman, Lenoir County Board of Commissioners
Post Office Box 3289
Kinston, North Carolina 28501
with copy to:County Manager, County of Lenoir
Post Office Box 3289
Kinston, North Carolina 28501
If to Kinston:Mayor, City of Kinston
Post Office Drawer 339
Kinston, North Carolina 28502
with copy to:City Manager, City of Kinston
Post Office Drawer 339
Kinston, North Carolina 28502
If to the Commission:Chairman, Lenoir County/City of Kinston
Airport Commission
Route 7, Box 89B
Stallings Field
Kinston, North Carolina 28501
with copy to:Airport Director, Lenoir County/City of Kinston
Airport Commission
Route 7, Box 89B
Stallings Field
Kinston, North Carolina 28501
In each case, with copies to:Thomas B. Griffin, Esq.
Griffin & Griffin
Post Office Box 3062
Kinston, North Carolina 28502-3062
Vernon H. Rochelle, Esq.
Wallace, Morris, Barwick & Rochelle, P.A.
Post Office Box 3557
Kinston, North Carolina 28502-3557
If to the MAC:Mountain Air Cargo, Inc.
Post Office Box 488
Denver, North Carolina 28037
Attention: Vice President and Treasurer
If to MAS:Mountain Aircraft Services, LLC
Post Office Box 488
Denver, North Carolina 28037
Attention: President
with copy to:Thomas B. Henson, Esq.
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246-1900
Any party hereto, by notice given hereunder, may designate any further or
different addresses to which subsequent notices, certificates, or other
communications shall be sent. In the event that one or more corporations,
companies, or other legal entities are hereafter formed or acquired by the
Companies and are intended to be included within the defined term the
"Companies" as used herein, the Companies shall, by notice given hereunder,
provide the name, address, and name or position of the person to whom notice,
with respect to such corporation, company, or other legal entity, hereunder
should be directed. No notice need be given to any party listed in this
Section 12.1 if such party is no longer a party to the transactions
contemplated by this Agreement.
Section 12.2.No Personal Liability. No director, officer, employee, or other
agent of any party hereto shall be personally liable under or in connection
with this Agreement.
Section 12.3.No Limitation on Previous Agreements. It is expressly understood
that the terms and provisions of this Agreement in no way shall affect or
impair the terms, obligations, or conditions of any existing or prior
agreement between or among any two (2) or more parties hereto.
Section 12.4.Binding Effect. This Agreement shall inure to the benefit of and
shall be binding upon each party hereto and their respective successors and
permitted assigns; and any reference to a party in this Agreement also shall
be deemed to be a reference to a successor or a permitted assign.
Section 12.5.Assignment. This Agreement, together with all rights and
privileges thereunder, is fully assignable by Kinston, Lenoir County, and/or
the Commission to the Authority, or by the Authority either prior or
subsequent to the exercise by the Authority of its option under the Option
Agreement, and any such assignee shall acquire all right, title, and interest
of its assignor hereunder. None of the rights, privileges, or obligations of
the Companies may be assigned without the prior written consent of the Airport
Sponsor.
Section 12.6.Third Parties. This Agreement does not, and shall not be deemed
or construed to, confer upon or grant to any third party or parties (except
any successor to, or assignee of, the Airport Sponsor and except in accordance
with Section 7.1 hereof) any right to claim damages or to bring any suit,
action or other proceeding against any party hereto because of any breach
hereof or because of any of the terms, covenants, and conditions herein
contained.
Section 12.7.Attachments. All Exhibits to this Agreement hereby are
incorporated into this Agreement and made a part hereof as if set out in full
where reference is made thereto.
Section 12.8.Numbers; Gender; Captions; Capitalized Terms; Certain
Definitions. Whenever the context so requires the singular numbers shall
include the plural and the plural shall include the singular, and the gender
of any pronoun shall include the other genders. Titles and captions of or in
this Agreement are inserted only as a matter of convenience and for reference
and in no way define, limit, extend, or describe the scope of this Agreement
or the intent of any provision of this Agreement. The parties hereto agree to
all capitalized terms used as definitions in this Agreement and to the
definitions and the interpretation and construction rules set forth in Article
I hereof.
Section 12.9.Further Assurances. Each party hereto, severally, agrees that,
from time to time, it shall execute and deliver such further instruments and
take such further actions as reasonably may be required to carry out the
purposes of this Agreement.
Section 12.10.Dispute Resolution; Mediation. The parties hereto shall attempt
in good faith to resolve any controversy or claim arising out of or relating
to this Agreement promptly by negotiations between the parties or through
mediation as provided in this Section 12.10.
(a)The following named persons, or their respective successors in the
positions they now hold (singularly, an "Authorized Representative" or,
collectively, the "Authorized Representatives"), shall be deemed the
authorized representatives of their respective parties:
Party Authorized Representative
City of Kinston Vernon H. Rochelle, Esq.
Lenoir County Thomas B. Griffin, Esq.
Commission Steven V. Brian
Authority William T. Powell, Jr.
Companies J. Hugh Bingham
(b)If a controversy or claim should arise, the Authorized Representatives
will meet at least once and will attempt to resolve the matter. Any
Authorized Representative may request any other to meet within fourteen (14)
days for this purpose at a mutually agreed time and place.
(c)If the matter has not been resolved within twenty (20) days of their
first meeting, the Authorized Representatives shall refer the matter to senior
executives of their respective parties (the "Senior Executives"), who shall
have authority to settle the dispute. Thereupon, the Authorized
Representatives promptly shall prepare and exchange memoranda stating the
issues in dispute and their respective positions, summarizing the negotiations
which have taken place, and attaching relevant documents. The Senior
Executives shall meet for negotiations within fourteen (14) days of the end of
the twenty (20) day period referred to above, at a mutually agreed time and
place.
(d)If the matter has not been resolved within thirty (30) days of the
meeting of the Senior Executives, the parties shall attempt in good faith to
resolve the controversy or claim in accordance with the Center for Public
Resources Model Procedure for Mediation of Business Disputes (Revised 1991) or
such other mediation procedures to which the parties mutually agree.
(e)If the matter has not been resolved pursuant to the aforesaid mediation
procedure within sixty (60) days of the commencement of such procedure, or if
any party will not participate in mediation, any party may initiate
litigation.
(f)All periods of time specified in this Section 12.10 may be extended by
mutual agreement between or among the affected parties.
(g)The procedures specified in this Section 12.10 shall be the sole and
exclusive procedures for the resolution of disputes between or among the
parties arising out of or relating to this Agreement; provided, however, that
any party may seek a preliminary injunction or other preliminary judicial
relief, if in its sole judgment, such action is necessary to avoid irreparable
damage. Despite such action, the parties hereto shall continue to participate
in good faith in the procedures specified in this Section 12.10. All
applicable statutes of limitation shall be tolled while the procedures
specified in this Section 12.10 are pending. The parties shall take such
action, if any, required to effectuate such tolling.
Section 12.11.Governing Law; Venue. This Agreement shall be performed in the
State and each party hereto agrees, notwithstanding the principles of
conflicts of law, that the internal laws of the State shall govern and control
the validity, interpretation, performance, and enforcement of this Agreement.
Further, each party hereto agrees that any action relating to this Agreement
shall be instituted and prosecuted in the courts of Lenoir County; and each
party hereto, severally, consents to the jurisdiction of said courts and waive
any right or defense relating to such jurisdiction and venue.
Section 12.12.Integration. This Agreement (which includes the Exhibits, if
any, hereto) supersedes all prior negotiations, agreements, and understandings
by, between, or among the parties hereto with respect to the subject matter
hereof, including, without limitation, all prior negotiations, agreements, and
understandings, by, between, or among any of the parties hereto, with respect
to the subject matter hereof; and this Agreement (which includes the Exhibits,
if any, hereto) constitutes the entire agreement between or among the parties
hereto with respect to the subject matter hereof.
Section 12.13.Amendments, Changes and Modifications. This Agreement may not
be amended, changed, modified, altered, or terminated by any party hereto
except as provided for herein.
Section 12.14.Severability. In the event that any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof; but this Agreement shall remain in full force and effect and shall be
construed and enforced as if such invalid or unenforceable provision had not
been contained herein.
Section 12.15.Partial Invalidity. In the event that any court of competent
jurisdiction shall determine that any term or provision, or any part thereof,
of this Agreement is in violation of law, for any reason, then this Agreement,
excluding such term, provision, or part thereof determined to be in violation
of law, shall be deemed to be the agreement of the parties hereto.
Section 12.16.Multiple Counterparts. This Agreement may be executed in any
number of duplicate counterparts, each of which shall be regarded for all
purposes as an original, and all such counterparts shall constitute but one
and the same instrument; and the parties hereto, severally, acknowledge
receipt of one such counterpart, agree that the duplicate counterparts hereof
are identical, and further agree that any counterpart shall be admissible in
any proceeding, legal or otherwise, without the production of any other such
counterpart.
Section 12.17.Agreements with United States.This Agreement in its entirety is
subject and subordinate to the provisions of any agreement heretofore or
hereafter made between the Airport Sponsor and the United States of America
relative to the operation or maintenance of the Airport, the execution of
which has been or is required as a condition precedent to the transfer of
Federal rights or property to the Airport Sponsors for airport purposes or for
the expenditure of Federal funds for the extension, expansion or development
of the Airport or of the Global TransPark.
IN WITNESS WHEREOF, each of the undersigned bodies politic and corporate has
caused this Agreement to be executed in its legal name by its duly authorized
Official or Officials, attested by its Clerk or Secretary, and its official
seal to be affixed hereunto, all by order of its Governing Board first duly
given, and with the intent to be legally bound thereby; MAC has caused this
Agreement to be executed in its corporate name by its Executive Vice
President, attested by its Secretary, and its corporate seal to be affixed
hereunto, all by order of its Board of Directors first duly given, and with
the intent to be legally bound thereby; and MAS has caused this Agreement to
be executed in its company name by its President, attested by its Secretary,
and said company has adopted as its seal the typewritten word "SEAL" appearing
beside its company name, all as authorized in its Operating Agreement, and
with the intent to be legally bound thereby; all done as of the day and year
first above written.
COUNTY OF LENOIR, NORTH CAROLINA
By: GEORGE W. GRAHAM, JR.
George W. Graham, Jr.
Chairman of the Board of
Commissioners of the County of
Lenoir, North Carolina
Attest:
PAMELA M. McLAWHORN
Pamela M. McLawhorn
Clerk to the Board of Commissioners
[OFFICIAL SEAL]<PAGE>
CITY OF KINSTON, NORTH CAROLINA
By: O. A. RITCH
O. A. Ritch
Mayor of the City of Kinston,
North Carolina
Attest:
PEGGY D. BOONE
Peggy D. Boone
City Clerk
[OFFICIAL SEAL]
LENOIR COUNTY-CITY OF KINSTON AIRPORT
COMMISSION
By: JIMMIE S. WOODALL
Jimmie S. Woodall
Chairman of the Commission
Attest:
STEVEN V. BRIAN
Steven V. Brian
Secretary to the Commission
[OFFICIAL SEAL]
NORTH CAROLINA GLOBAL TRANSPARK
AUTHORITY
By: SHERWOOD H. SMITH, JR.
Sherwood H. Smith, Jr.
President
By: WILLIAM T. POWELL, JR.
William T. Powell, Jr.
Executive Director
Attest:
MARK C. CRAMER
Mark C. Cramer
Secretary to the Authority
[OFFICIAL SEAL]
MOUNTAIN AIR CARGO, INC.
By: WILLIAM H. SIMPSON
William H. Simpson
President
Attest:
JOHN J. GIOFFRE
John J. Gioffre
Secretary
[CORPORATE SEAL]
MOUNTAIN AIRCRAFT SERVICES, LLC (SEAL)
By: J. HUGH BINGHAM
J. Hugh Bingham
President
Attest:
JOHN J. GIOFFRE
John J. Gioffre
Secretary
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF LENOIR
I, GRENE S. SHACKELFORD , a Notary Public in and for said County and
State, do hereby certify that on the 15th day of November , 1995,
before me personally appeared GEORGE W. GRAHAM, JR. with whom I am personally
acquainted, who, being by me duly sworn, says that he is Chairman of the Board
of Commissioners of the County of Lenoir, North Carolina and that PAMELA M.
McLAWHORN is Clerk to the Board of Commissioners of the County of Lenoir,
North Carolina, the body politic and corporate described in and which executed
the foregoing instrument; that he knows the official seal of said body; that
the seal affixed to the foregoing instrument is said official seal; that the
name of said County was subscribed thereto by the said Chairman; that said
Chairman and Clerk subscribed their names thereto and said official seal was
affixed, all by order of the Board of Commissioners of the County of Lenoir;
and that said instrument is the act and deed of said County.
WITNESS my hand and notarial seal, this the 15th day of November , 1995.
GRENE S. SHACKLEFORD
Notary Public
My Commission Expires:
3/2/2000
[NOTARY SEAL]<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF LENOIR
I, GRENE S. SHACKELFORD , a Notary Public in and for said County and
State, do hereby certify that on the 15th day of November , 1995,
before me personally appeared O. A. RITCH with whom I am personally
acquainted, who, being by me duly sworn, says that he is Mayor of the City of
Kinston, North Carolina and that PEGGY D. BOONE is the City Clerk of the City
of Kinston, North Carolina, the body politic and corporate described in and
which executed the foregoing instrument; that he knows the official seal of
said body; that the seal affixed to the foregoing instrument is said official
seal; that the name of said City was subscribed thereto by said Mayor; that
said Mayor and Clerk subscribed their names thereto and said official seal was
affixed, all by order of the City Council of the City of Kinston, North
Carolina; and that said instrument is the act and deed of said City.
WITNESS my hand and notarial seal, this the 15th day of November , 1995.
GRENE S. SHACKELFORD
Notary Public
My Commission Expires:
3/2/2000
[NOTARY SEAL]
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF LENOIR
I, GRENE S. SHACKELFORD , a Notary Public in and for said County and
State, do hereby certify that on the 15th day of November ,
1995, before me personally appeared JIMMIE S. WOODALL with whom I am
personally acquainted, who, being by me duly sworn, says that he is Chairman
of the Lenoir County-City of Kinston Airport Commission and that STEVEN V.
BRIAN is Secretary to said Commission, the body politic described in and which
executed the foregoing instrument; that he knows the official seal of said
body; that the seal affixed to the foregoing instrument is said official seal;
that the name of said Commission was subscribed thereto by said Chairman; that
said Chairman and Secretary subscribed their names thereto and said official
seal was affixed, all by order of the Lenoir County-City of Kinston Airport
Commission; and that said instrument is the act and deed of said Commission.
WITNESS my hand and notarial seal, this the 15th day of November , 1995.
GRENE S. SHACKELFORD
Notary Public
My Commission Expires:
3/2/2000
[NOTARY SEAL]<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF LENOIRWAKE
I, MARTHA BORDEN ROBERSON, a Notary Public in and for said County and State,
do hereby certify that on the 13th day of November , 1995, before
me personally appeared SHERWOOD H. SMITH, JR. with whom I am personally
acquainted, who, being by me duly sworn, says that he is President, that
WILLIAM T. POWELL, JR. is Executive Director, and that MARK C. CRAMER is
Secretary of the North Carolina Global TransPark Authority, the body politic
and corporate described in and which executed the foregoing instrument; that
he knows the official seal of said body; that the seal affixed to the
foregoing instrument is said official seal; that the name of said Authority
was subscribed thereto by said President and Executive Director; that said
President, Executive Director, and Secretary subscribed their names thereto
and said official seal was affixed, all by order of the Board of Directors of
said Authority; and that said instrument is the act and deed of said
Authority.
WITNESS my hand and notarial seal, this the 13th day of November ,
1995.
MARTHA BORDEN ROBERSON
Notary Public
My Commission Expires:
February 17, 1998
[NOTARY SEAL]
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF Lincoln
I, JOY S. HANSLEY , a Notary Public in and for said County
and State, do hereby certify that on the 9th day of Nov. , 1995, before
me personally appeared WILLIAM H. SIMPSON with whom I am personally
acquainted, who, being by me duly sworn, says that he is President and that
JOHN J. GIOFFRE is Secretary of MOUNTAIN AIR CARGO, INC., the corporation
described in and which executed the foregoing instrument; that he knows the
common seal of said corporation; that the seal affixed to the foregoing
instrument is said common seal; that the name of the corporation was
subscribed thereto by said President; that said President and said Secretary
subscribed their names thereto and said common seal was affixed, all by order
of the Board of Directors of said corporation; and that said instrument is the
act and deed of said corporation.
WITNESS my hand and notarial seal, this the 9th day of November ,
1995.
JOY S. HANSLEY
Notary Public
My Commission Expires:
4/4/2000
[NOTARY SEAL]
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF Lincoln
I, JOY S. HANSLEY , a Notary Public in and for said County and
State, do hereby certify that on the 9th day of Nov. , 1995, before
me personally appeared J. HUGH BINGHAM with whom I am personally acquainted,
who, being by me duly sworn, says that he is President and that JOHN J.
GIOFFRE is Secretary of MOUNTAIN AIRCRAFT SERVICES, LLC, the limited liability
company described in and which executed the foregoing instrument; that said
company has duly adopted as its common seal the seal affixed to the foregoing
instrument; and that the seal affixed to the foregoing instrument is said
common seal; that the name of said company was subscribed thereto by said
President; that said President and said Secretary subscribed their names
thereto and said common seal was adopted and affixed, all as authorized by the
Operating Agreement of said company; and that said instrument is the act and
deed of said limited liability company.
WITNESS my hand and notarial seal, this the 9th day of November , 1995.
JOY S. HANSLEY
Notary Public
(Printed Signature)
My Commission Expires:
4/4/2000
[Notarial Seal]
92-0476(L)
WSMAIN/151843.10<PAGE>
EXHIBIT A
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir, Lenoir County/City of Kinston,
Airport Commission
and North Carolina Global TransPark Authority
and Mountain Air Cargo, Inc.
Dated as of August 29, 1995
Survey Map Showing the Premises<PAGE>
EXHIBIT A-1
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission
and
North Carolina Global TransPark Authority
and
Mountain Air Cargo, Inc.
Dated As of August 29, 1995
_____________________________________________________________________________
Parcel B
All that certain tract or parcel of land lying and being situate in Vance
Township, Lenoir County, North Carolina, being described more particularly as
follows:
Beginning at a point in the centerline of John Mewborne Road (NCSR 1581),
which point is located the following courses and distances from North Carolina
Geodetic Survey Monument "Vacant 1967," said monument having North Carolina
Grid Coordinates of N = 577,680.609 and E = 2,416,154.505: North 24 47' 22"
East 1010.23 feet and North 61 19' 08" East 102.45 feet. Thence from said
point of beginning so located, North 28 40' 52" West 12.00 feet to a point;
thence along and with a curve to the left having a delta angle of 90 31' 10",
a radius of 40.00 feet, a tangent of 40.36 feet, and an arc length of 63.19
feet, a chord bearing and distance of North 16 03' 31" East 56.82 feet to a
point; thence North 29 12' 04" West 20.88 feet to a point; thence along and
with a curve to the left having a delta angle of 20 30' 00", a radius of
149.00 feet, a tangent of 26.94 feet, and an arc length of 53.31 feet, a chord
bearing and distance of North 39 26' 57" West 53.03 feet to a point; thence
North 49 41' 59" West 29.09 feet to a point; thence South 40 18' 10" West
14.39 feet to a point; thence North 49 41' 53" West 25.08 feet to a point;
thence South 85 18' 10" West 49.38 feet to a point; thence North 29 18' 43"
West 102.92 feet to a point; thence North 40 18' 06" East 416.96 feet to a
point; thence South 49 41' 52" East 183.17 feet to a point; thence South 40
18' 06" West 37.00 feet to a point; thence South 49 42' 08" East 14.33 feet to
a point; thence South 40 18' 06" West 100.04 feet to a point; thence South 49
41' 45" East 15.00 feet to a point; thence South 40 18' 06" West 34.92 feet to
a point; thence North 49 41' 53" West 15.00 feet to a point; thence South 40
18' 06" West 100.04 feet to a point; thence North 49 41' 53" West 47.50 feet
to a point; thence South 40 18' 09" West 80.50 feet to a point; thence along
and with a curve to the left having a delta angle of 89 59' 49", a radius of
25.00 feet, a tangent of 25.00 feet, and an arc length of 39.27 feet, a chord
bearing and distance of South 04 41' 54" East 35.36 feet to a point; thence
South 49 41' 54" East 10.57 feet to a point; thence along and with a curve to
the right having a delta angle of 20 20' 16", a radius of 175.00 feet, a
tangent of 31.65 feet, and an arc length of 62.61 feet, a chord bearing and
distance of South 39 26' 57" East 62.28 feet to a point; thence South 29 11'
57" East 21.84 feet to a point; thence along and with a curve to the left
having a delta angle of 89 28' 56", a radius of 40.00 feet, a tangent of 39.64
feet, and an arc length of 62.47 feet, a chord bearing and distance of South
73 56' 21" East 56.31 feet to a point; thence South 28 40' 52" East 12.00 feet
to a point in the centerline of John Mewborne Road; thence along and with the
centerline of John Mewborne Road South 61 19' 08" West 106.00 feet to the
point of beginning.
92-0476(A)/WSMAIN/156273.<PAGE>
EXHIBIT A-2
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission
and
North Carolina Global TransPark Authority
and
Mountain Air Cargo, Inc.
Dated As of August 29, 1995
______________________________________________________________________________
Parcel F
All that certain tract or parcel of land lying and being situate in Vance
Township, Lenoir County, North Carolina, being described more particularly as
follows:
Beginning at a point which is located the following courses and distances from
North Carolina Geodetic Survey Monument "Vacant 1967," said monument having
North Carolina Grid Coordinates of N = 577,680.609 and E = 2,416,154.505:
North 24 47' 22" East 1010.23 feet, North 49 41' 53" West 221.38 feet, North
22 26' 30" West 37.93 feet, and North 40 18' 06" East 282.63 feet. Thence
from said point of beginning so located, North 49 41' 53" West 293.31 feet to
a point; thence North 40 18' 07" East 480.00 feet to a point; thence South 49
41' 53" East 293.31 feet to a point; thence South 40 18' 06" West 480.00 feet
to the point of beginning.
92-0476(A)/WSMAIN/156273.
<PAGE>
EXHIBIT B
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir, Lenoir County/City of Kinston,
Airport Commission
and North Carolina Global TransPark Authority
and Mountain Air Cargo, Inc.
Dated as of August 29, 1995
Minimum Standards for Airport Aeronautical Activities<PAGE>
EXHIBIT C
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir, Lenoir County/City of Kinston,
Airport Commission
and North Carolina Global TransPark Authority
and Mountain Air Cargo, Inc.
Dated as of August 29, 1995
Airport Joint Use Agreement<PAGE>
EXHIBIT D
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir, Lenoir County/City of Kinston,
Airport Commission
and North Carolina Global TransPark Authority
and Mountain Air Cargo, Inc.
Dated as of August 29, 1995
Airport Usage Fee Schedule<PAGE>
EXHIBIT E
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir, Lenoir County/City of Kinston,
Airport Commission
and North Carolina Global TransPark Authority
and Mountain Air Cargo, Inc.
Dated as of August 29, 1995
Kinston Regional Jetport - Rules & Regulations, June 21, 1994<PAGE>
EXHIBIT F
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission
and
North Carolina Global TransPark Authority
and
Mountain Air Cargo, Inc.
Dated as of November 16, 1995
______________________
Avigation Easement
AVIGATION EASEMENT: The Airport Sponsor (hereinafter called the "Grantor") as
Grantor, for itself, its successors, and assigns, for the benefit of the
public in its use of the Kinston Regional Jetport, hereby reserves and retains
a right of flight in the airspace above the tract or parcel of land described
on Exhibit A hereto for the passage of aircraft operated in a non-negligent
manner overflying, landing at, or taking off from, the Kinston Regional
Jetport, together with the right to cause to emanate from such aircraft upon
such land and any improvements thereon, and in the air space above such land,
such noise as may now or hereafter be incident to the non-negligent operation
of aircraft overflying, landing at, or taking off from, the Kinston Regional
Jetport.
Without in anyway derogating from the generality of the foregoing paragraph,
the Grantor, for itself, its successors, and assigns, hereby reserves and
retains an avigation easement over the tract or parcel of land described on
Exhibit A hereto for the purpose of establishing, constructing, maintaining,
and operating one or more air navigation systems or instrument landing systems
of a kind now in use, or hereafter devised for use, at or in connection with
the Kinston Regional Jetport; such avigation easement reserves to and retains
in Grantor, it successors, and assigns, for the benefit of the public in its
use of such airport, certain rights and privileges, and denies to Grantee, its
successors, and assigns, certain rights and privileges, as follows:
1.Grantee, its successors, and assigns, shall not hereafter erect, or
permit the erection, or growth of, any structure, tree, or other object on any
portion of the tract or parcel of land described on Exhibit A hereto which
lies within any enroute flight area, clear zone approach area, transitional
area, or any other areas designated by application, from time to time, of the
criteria of the Federal Aviation Administration, or its successor agency in
function, over which any air navigation or instrument landing system may now
or hereafter be in service, required, convenient, or advisable for effective
and safe operation of aircraft overflying, landing at, or taking off from, the
Kinston Regional Jetport, to a height above the ground which would interfere
with, or present a safety hazard to, aircraft overflying landing at, or taking
off from, the Kinston Regional Jetport, or otherwise as may be required by, or
recommended in, any statute, regulation, or agreement applicable to the
Kinston Regional Jetport.
2.Grantor, itself and its successors, and assigns, and their agents,
servants, and employees shall have a continuing right and easement: (a) to
take any action necessary to prevent the erection, or growth, of any
structure, tree, or other object into the airspace referred to in Paragraph 1
above, above such land, designated as a part of any such air navigation or
instrument landing system, and to remove from such airspace, or mark and light
as obstructions to air navigation, any and all structures, trees, or other
objects that may at any time, or from time to time, project or extend above
such land and into such airspace, together with a right of ingress to, egress
from, and passage over such land for such purposes; and (b) to cut at any
time, or from time to time, to a level measured twelve (12) inches above the
ground any and all trees growing, or which may grow, upon such land and, at
the election of Grantor, its successors and assigns, to leave such trees so
cut upon such land or to remove them and to sell such trees. The proceeds of
the sale of such trees, after deducting the costs of cutting and removal,
shall be paid to Grantee, its successors and assigns; and for such purpose,
Grantor, for itself, its successors, and assigns hereby reserves and retains
the right of ingress to and egress from, and passage over such land. In the
exercise of its right hereunder, Grantor, its successors, and assigns, shall
not be responsible or liable for loss or cost of any structure, tree, or other
object so removed or prevented from being erected or growing, except that
Grantee, its successors, and assigns, shall be entitled to the net sales price
for any trees removed as provided above; provided, however, Grantor shall be
responsible and liable for any damage to such land and any improvements
thereon caused by the exercise of its rights reserved hereunder to the extent
that such damage shall exceed the normal damage incident to the exercise of
such rights.
Grantor, its successors and assigns, shall hold this avigation easement and
all rights reserved or retained herein until Kinston Regional Jetport shall be
abandoned and shall cease to be used for purposes of a public airport.
This avigation easement and rights reserved and retained herein shall run with
the land, and any portion of such land, which lies beneath the airspace
referred to herein shall be the servient tenement and the Kinston Regional
Jetport shall be the dominant tenement.
By its acceptance of the conveyance of the property conveyed herein, Grantee,
for itself and its successors, and assigns, hereby releases Grantor, its
successors, and assigns, from any and all claims, liabilities, or causes of
actions that it has or it or they will have against Grantor, its successors,
and assigns, on account of noise emanating upon the property conveyed herein
and any improvements thereon which may now or hereafter may be incident to the
non-negligent operation of aircraft overflying, landing at, or taking off
from, the Kinston Regional Jetport, as well as any claim, liability, or cause
of action for inverse condemnation arising out of the non-negligent operation
of aircraft overflying, landing at, or taking off from, the Kinston Regional
Jetport.<PAGE>
EXHIBIT G
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission
and
North Carolina Global TransPark Authority
and
Mountain Air Cargo, Inc.
Dated as of November 16, 1995
______________________
FEDERAL AIRPORT ASSURANCES
Airport Sponsors
A.General.
1.These assurances shall be complied with in the performance of grant
agreements for airport development, airport planning, and noise
compatibility program grants for airport sponsors.
2.These assurances are required to be submitted as part of the project
application by sponsors requesting funds under the provisions of Title
49, U.S.C., subtitle VII, as amended. As used herein, the term
"public agency sponsor" means a public agency with control of a
public-use airport; the term "private sponsor" means a private owner
of a public-use airport; and the term "sponsor" includes both public
agency sponsors and private sponsors.
3.Upon acceptance of the grant offer by the sponsor, these assurances
are incorporated in and become part of the grant agreement.
B.Duration and Applicability.
1.Airport development or Noise Compatibility Program Projects Undertaken
by a Public Agency Sponsor. The terms, conditions and assurances of
the grant agreement shall remain in full force and effect throughout
the useful life of the facilities developed or equipment acquired for
an airport development or noise compatibility program project, or
throughout the useful life of the project items installed within a
facility under a noise compatibility program project, but in any event
not to exceed twenty (20) years from the date of acceptance of a grant
offer of Federal funds for the project. However, there shall be no
limit on the duration of the assurance against exclusive rights or the
terms, conditions and assurances with respect to real property
acquired with Federal funds. Furthermore, the duration of the Civil
Rights assurance shall be specified in the assurances.
2.Airport Development or Noise Compatibility Projects Undertaken by a
Private Sponsor. The preceding paragraph 1 also applies to a private
sponsor except that the useful life of project items installed within
a facility or the useful life of the facilities developed or equipment
acquired under an airport development or noise compatibility program
project shall be no less than ten (10) years from the date of
acceptance of Federal aid for the project.
3.Airport Planning Undertaken by a Sponsor. Unless otherwise specified
in the grant agreement, only Assurances 1, 2, 3, 5, 6, 13, 18, 30, 32,
33, and 34 in section C apply to planning projects. The terms,
conditions and assurances of the grant agreement shall remain in full
force and effect during the life of the project.
C.Sponsor Certification. The sponsor hereby assures and certifies, with
respect to this grant that:
<PAGE>
1.General Federal Requirements. It will comply with all applicable
Federal laws, regulations, executive orders, policies, guidelines, and
requirements as they relate to the application, acceptance and use of
Federal funds for this project including but not limited to the
following:
Federal Legislation
a.Title 49, U.S.C., subtitle VII, as amended.
b.Davis-Bacon Act - 40 U.S.C. 276(a), et seq.1
c.Federal Fair Labor Standards Act - 29 U.S.C. 201, et seq.
d.Hatch Act - 5 U.S.C. 1501, et seq.2
e.Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970 - 42 U.S.C. 4601, et seq.1 2
f.National Historic Preservation Act of 1966 - Section 106 - 16
U.S.C. 470(f).1
g.Archeological and Historic Preservation Act of 1974 - 16 U.S.C. 469
through 469c.1
h.Flood Disaster Protection Act of 1973 - Section 102(a) - 42
U.S.C. 4012a.1
i.Rehabilitation Act of 1973 - 29 U.S.C. 794.
j.Civil Rights Act of 1964 - Title VI - 42 U.S.C. 2000d through d-4.
k.Age Discrimination Act of 1975 - 42 U.S.C. 6101, et seq.
l.Architectural Barriers Act of 1968 - 42 U.S.C. 4151, et seq.1
m.Powerplant and Industrial Fuel Use Act of 1978 - Section 403 - 2
U.S.C. 8373.1
n.Contract Work Hours and Safety Standards Act - 40 U.S.C. 327, et
seq.1
o.Copeland Antikickback Act - 18 U.S.C. 874.1
p.National Environmental Policy Act of 1969 - 42 U.S.C. 4321, et
seq.1
q.Endangered Species Act - 16 U.S.C. 668(a), et seq.1
r.Single Audit Act of 1984 - 31 U.S.C. 7501, et seq.2
s.Drug-Free Workplace Act of 1988 - 41 U.S.C. 702 through 706.
Executive Orders
Executive Order 12372 - Intergovernmental Review of Federal Programs.
Executive Order 11246 - Equal Employment Opportunity1
Executive Order 12699 - Seismic Safety of Federal and Federally Assisted New
Building Construction1
Federal Regulations
a.49 CFR Part 18 - Uniform administrative requirements for grants and
cooperative agreements to state and local governments.3
b.49 CFR Part 21 - Nondiscrimination in federally-assisted programs
of the Department of Transportation - effectuation of Title VI of
the Civil Rights Act of 1964.
<PAGE>
c.49 CFR Part 23 - Participation by minority business enterprise in
Department of Transportation programs.
d.49 CFR Part 24 - Uniform relocation assistance and real property
acquisition for Federal and federally assisted programs.1 2
e.49 CFR Part 27 - Nondiscrimination on the basis of handicap in
programs and activities receiving or benefitting from Federal
financial assistance.1
f.49 CFR Part 29 - Governmentwide debarment and suspension (non-
procurement and governmentwide requirements for drug-free workplace
(grants).
g.49 CFR Part 30 - Denial of public works contracts to suppliers of
goods and services of countries that deny procurement market access
to U.S. contractors.
h.29 CFR Part 1 - Procedures for predetermination of wage rates.1
i.29 CFR Part 3 - Contractors and subcontractors on public building
or public _________ financed in whole or part by loans or grants
from the United States.1
j.29 CFR Part 5 - Labor standards provisions applicable to contracts
covering federally financed and assisted construction (also labor
standards provisions applicable to nonconstruction contracts
subject to the Contract Work Hours and Safety Standards Act).1
k.41 CFR Part 60 - Office of Federal Contract Compliance Programs,
Equal Employment Opportunity, Department of Labor (Federal and
federally assisted contracting requirements).1
l.14 CFR Part 150 - Airport noise compatibility planning.
m.49 CFR Part 41 - Seismic safety of Federal and federally assisted
or regulated new building construction.1
n.49 CFR Part 20 - New restrictions on lobbying.
Office of Management and Budget Circulars
a.A-87 - Cost Principles Applicable to Grants and Contracts with
State and Local Governments.
b.A-128 - Audits of State and Local Governments.
1 These laws do not apply to airport planning sponsors.
2 These laws do not apply to private sponsors.
3 49 CFR Part 18 and OMB Circular A-87 contain requirements for
State and Local Governments receiving Federal assistance. Any
requirement levied upon State and Local Governments by this
regulation and circular shall also be applicable to private
sponsors receiving Federal assistance under the Airport and
Airway Improvement Act of 1982, as amended.
Specific assurances required to be included in grant agreements by any of the
above laws, regulations or circulars are incorporated by reference in the
grant agreement.
<PAGE>
2.Responsibility and Authority of the Sponsor.
a.Public Agency Sponsor: It has legal authority to apply for the
grant, and to finance and carry out the proposed project; that a
resolution, motion or similar action has been duly adopted or
passed as an official act of the applicant's governing body
authorizing the filing of the application, including all
understandings and assurances contained therein, and directing and
authorizing the person identified as the official representative of
the applicant to act in connection with the application and to
provide such additional information as may be required.
b.Private Sponsor: It has legal authority to apply for the grant and
to finance and carry out the proposed project and comply with all
terms, conditions, and assurances of this grant agreement. It
shall designate an official representative and shall in writing
direct and authorize that person to file this application,
including all understandings and assurances contained therein; to
act in connection with this application; and to provide such
additional information as may be required.
3.Sponsor Fund Availability. It has sufficient funds available for that
portion of the project costs which are not paid by the United States. It has
sufficient funds available to assure operation and maintenance of items funded
under the grant agreement which it will own or control.
4.Good Title.
a.It holds good title, satisfactory to the Secretary, to the landing
area of the airport or site thereof, or will give assurance
satisfactory to the Secretary that good title will be acquired.
b.For noise compatibility program projects to be carried out on the
property of the sponsor, it holds good title satisfactory to the
Secretary to that portion of the property upon which Federal funds
will be expended or will give assurance to the Secretary that good
title will be obtained.
5.Preserving Rights and Powers.
a.It will not take or permit any action which would operate to
deprive it of any of the rights and powers necessary to perform any
or all of the terms, conditions, and assurances in the grant
agreement without the written approval of the Secretary, and will
act promptly to acquire, extinguish or modify any outstanding
rights or claims of right of others which would interfere with such
performance by the sponsor. This shall be done in a manner
acceptable to the Secretary.
<PAGE>
b.It will not sell, lease, encumber, or otherwise transfer or dispose
of any part of its title or other interests in the property shown
on Exhibit A to this application or, for a noise compatibility
program project, that portion of the property upon which Federal
funds have been expended, for the duration of the terms,
conditions, and assurances in the grant agreement without approval
by the Secretary. If the transferee is found by the Secretary to
be eligible under the Airport and Airway Improvement Act of 1982 to
assume the obligations of the grant agreement and to have the
power, authority, and financial resources to carry out all such
obligations, the sponsor shall insert in the contract or document
transferring or disposing of the sponsor's interest, and make
binding upon the transferee of all of the terms, conditions, and
assurances contained in this grant agreement.
c.For all noise compatibility program projects which are to be
carried out by another unit of local government or are on property
owned by a unit of local government other than the sponsor, it will
enter into an agreement with that government. Except as otherwise
specified by the Secretary, that agreement shall obligate that
government to the same terms, conditions, and assurances that would
be applicable to it if it applied directly to the FAA for a grant
to undertake the noise compatibility program project. That
agreement and changes thereto must be satisfactory to the
Secretary. It will take steps to enforce this agreement against
the local government if there is substantial non-compliance with
the terms of the agreement.
d.For noise compatibility program projects to be carried out on
privately owned property, it will enter into an agreement with the
owner of that property which includes provisions specified by the
Secretary. It will take steps to enforce this agreement against
the property owner whenever there is substantial non-compliance
with the terms of the agreement.
e.If the sponsor is a private sponsor, it will take steps
satisfactory to the Secretary to ensure that the airport will
continue to function as a public-use airport in accordance with
these assurances for the duration of these assurances.
f.If an arrangement is made for management and operation of the
airport by any agency or person other than the sponsor or an
employee of the sponsor, the sponsor will reserve sufficient rights
and authority to insure that the airport will be operated and
maintained in accordance with the Airport and Airway Improvement
Act of 1982, the regulations and the terms, conditions and
assurances in the grant agreement and shall insure that such
arrangement also requires compliance therewith.
<PAGE>
6.Consistency with Local Plans. The project is reasonably consistent with
plans (existing at the time of submission of this application) of public
agencies that are authorized by the State in which the project is located to
plan for the development of the area surrounding the airport. For noise
compatibility program projects, other than land acquisition, to be carried out
on property not owned by the airport and over which property another agency
has land use control or authority, the sponsor shall obtain from each such
agency a written declaration that such agency supports the project and the
project is reasonably consistent with the agency's plans regarding the
property.
7.Consideration of Local Interest. It has given fair consideration to the
interest of communities in or near where the project may be located.
8.Consultation with Users. In making a decision to undertake any airport
development project under the Airport and Airway Improvement Act of 1982, it
has undertaken reasonable consultations with affected parties using the
airport at which project is proposed.
9.Public Hearings. In projects involving the location of an airport, an
airport runway, or a major runway extension, it has afforded the opportunity
for public hearings for the purpose of considering the economic, social, and
environmental effects of the airport or runway location and its consistency
with goals and objectives of such planning as has been carried out by the
community and it shall, when requested by the Secretary, submit a copy of the
transcript of such hearings to the Secretary. Further, for such projects, it
has on its management board either voting representation from the communities
where the project is located or has advised the communities that they have the
right to petition the Secretary concerning a proposed project.
10.Air and Water Quality Standards. In projects involving airport location, a
major runway extension, or runway location it will provide for the Governor of
the state in which the project is located to certify in writing to the
Secretary that the project will be located, designed, constructed, and
operated so as to comply with applicable air and water quality standards, In
any case where such standards have not been approved and where applicable air
and water quality standards have been promulgated by the Administrator of the
Environmental Protection Agency, certification shall be obtained from such
Administrator. Notice of certification or refusal to certify shall be
provided within sixty (60) days after the project application has been
received by the Secretary.
11.Pavement Preventive Maintenance. With respect to a project approved after
January 1, 1995, for the replacement or reconstruction of pavement at the
airport, it assures or certifies that it has implemented an effective airport
pavement maintenance-management program and it assures that it will use such
program for the useful life of any pavement constructed, reconstructed or
repaired with Federal financial assistance at the airport. It will provide
such reports on pavement condition and pavement management programs as the
Secretary determines may be useful.
<PAGE>
12.Terminal Development Prerequisites. For projects which include terminal
development at a public airport, it has, on the date of submittal of the
project grant application, all the safety equipment required for certification
of such airport under section 612 of the Federal Aviation Act of 1958 and all
the security equipment required by rule or regulation, and has provided for
access to the passenger enplaning and deplaning area of such airport to
passengers enplaning and deplaning from aircraft other than air carrier
aircraft.
13.Accounting System, Audit, and Recordkeeping Requirements.
a.It shall keep all project accounts and records which fully disclose
the amount and disposition by the recipient of the proceeds of the
grant, the total cost of the project in connection with which the
grant is given or used, and the amount or nature of that portion of
the cost of the project supplied by other sources, and such other
financial records pertinent to the project. The accounts and
records shall be kept in accordance with an accounting system that
will facilitate an effective audit in accordance with the Single
Audit Act of 1984.
b.It shall make available to the Secretary and the Comptroller
General of the United States, or any of their duly authorized
representatives, for the purpose of audit and examination, any
books, documents, papers, and records of the recipient that are
pertinent to the grant. The Secretary may require that an
appropriate audit be conducted by a recipient. In any case in
which an independent audit is made of the accounts of a sponsor
relating to the disposition of the proceeds of a grant or relating
to the project in connection with which the grant was given or
used, it shall file a certified copy of such audit with the
Comptroller General of the United States not later than six (6)
months following the close of the fiscal year for which the audit
was made.
14.Minimum Wage Rates. It shall include, in all contracts in excess of $2,000
for work on any projects funded under the grant agreement which involve labor,
provisions establishing minimum rates of wages, to be predetermined by the
Secretary of Labor, in accordance with the Davis Bacon Act, as amended (40
U.S.C. 276a-276a-5), which contractors shall pay to skilled and unskilled
labor, and such minimum rates shall be stated in the invitation for bids and
shall be included in proposals or bids for the work.
15.Veteran's Preference. It shall include in all contracts for work on any
project funded under the grant agreement which involve labor, such provisions
as are necessary to insure that, in the employment of labor (except in
executive, administrative, and supervisory positions), preference shall be
given to Veterans of the Vietnam era and disable veterans as defined in
Section 515(c)(1) and (2) of the Airport and Airway Improvement Act of 1982.
However, this preference shall apply only where the individuals are available
and qualified to perform the work to which the employment relates.
<PAGE>
16.Conformity to Plans and Specifications. It will execute the project
subject to plans, specification, and schedules approved by the Secretary.
Such plans, specifications, and schedules shall be submitted to the Secretary
prior to commencement of site preparation, construction, or other performance
under this grant agreement, and, upon approval of the Secretary, shall be
incorporated into this grant agreement. Any modification to the approved
plans, specifications, and schedules shall also be subject to approval of the
Secretary, and incorporated into the grant agreement.
17.Construction Inspection and Approval. It will provide and maintain
competent technical supervision at the construction site throughout the
project to assure that the work conforms to the plans, specification, and
schedules approved by the Secretary for the project. It shall subject the
construction work on any project contained in an approved project application
to inspection and approval by the Secretary and such work shall be in
accordance with regulations and procedures prescribed by the Secretary. Such
regulations and procedures shall require such cost and progress reporting by
the sponsor or sponsors of such project as the Secretary shall deem necessary.
18.Planning Projects. In carrying out planning projects:
a.It will execute the project in accordance with the approved program
narrative contained in the project application or with the
modifications similarly approved.
b.It will furnish the Secretary with such periodic reports as
required pertaining to the planning project and planning work
activities.
c.It will include in all published material prepared in connection
with the planning project a notice that the material was prepared
under a grant provided by the United States.
d.It will make such material available for examination by the public,
and agrees that no material prepared with funds under this project
shall be subject to copyright in the United States or any other
country.
e.It will give the Secretary unrestricted authority to publish,
disclose, distribute, and otherwise use any of the material
prepared in connection with this grant.
f.It will grant the Secretary the right to disapprove the sponsor's
employment of specific consultants and their subcontractors to do
all or any part of this project as well as the right to disapprove
the proposed scope and cost of professional services.
g.It will grant the Secretary the right to disapprove the use of the
sponsor's employees to do all or any part of the project.
<PAGE>
h.It understands and agrees that the Secretary's approval of this
project grant or the Secretary's approval of any planning material
developed as part of this grant does not constitute or imply any
assurance or commitment on the part of the Secretary to approve any
pending or future application for a Federal airport grant.
19.Operation and Maintenance.
a.It will suitably operate and maintain the airport and all
facilities thereon or connected therewith, with due regard to
climatic and flood conditions. Any proposal to temporarily close
the airport for nonaeronautical purposes must first be approved by
the Secretary. The airport and all facilities which are necessary
to serve the aeronautical users of the airport, other than
facilities owned or controlled by the United States, shall be
operated at all times in a safe and serviceable condition and in
accordance with the minimum standards as may be required or
prescribed by applicable Federal, state and local agencies for
maintenance and operation. It will not cause or permit any
activity or action thereon which would interfere with its use for
airport purposes.
In furtherance of this assurance, the sponsor will have in effect
at all times arrangements for-
(1) Operating the airport's aeronautical facilities whenever
required;
(2) Promptly marking and lighting hazards resulting from airport
conditions, including temporary conditions; and
(3) Promptly notifying airmen of any condition affecting
aeronautical use of the airport.
Nothing contained herein shall be construed to require that the
airport be operated for aeronautical use during temporary periods
when snow, flood or other climatic conditions interfere with such
operation and maintenance. Further, nothing herein shall be
construed as requiring the maintenance, repair, restoration, or
replacement of any structure or facility which is substantially
damaged or destroyed due to an act of God or other condition or
circumstance beyond the control of the sponsor.
b.It will suitably operate and maintain noise compatibility program
items that it owns or controls upon which Federal funds have been
expended.
20.Hazard Removal and Mitigation. It will take appropriate action to assure
that such terminal airspace as is required to protect instrument and visual
operations to the airport (including established minimum flight altitudes)
will be adequately cleared and protected by removing, lowering, relocating,
marking, or lighting or otherwise mitigating existing airport hazards and by
preventing the establishment or creation of future airport hazards.
<PAGE>
21.Compatible Land Use. It will take appropriate action, including the
adoption of zoning laws, to the extent reasonable, to restrict the use of land
adjacent to or in the immediate vicinity of the airport to activities and
purposes compatible with normal airport operations, including landing and
takeoff of aircraft. In addition, if the project is for noise compatibility
program implementation, it will not cause or permit any change in land use,
within its jurisdiction, that will reduce its compatibility, with respect to
the airport of the noise compatibility program measures upon which Federal
funds have been expended.
22.Economic Nondiscrimination.
a.It will make its airport available as an airport for public use on
fair and reasonable terms and without unjust discrimination, to all
types, kinds and classes of aeronautical use.
b.In any agreement, contract, lease, or other arrangement under which
a right or privilege at the airport is granted to any person, firm,
or corporation to conduct or engage in any aeronautical activity
for furnishing services to the public at the airport, the sponsor
will insert and enforce provisions requiring the contractor to-
(1)furnish said services on a fair, reasonable, and not unjustly
discriminatory basis to all users thereof, and
(2)charge fair, reasonable, and not unjustly discriminatory
prices for each unit or service, provided that the contractor may
be allowed to make reasonable and nondiscriminatory discounts,
rebates, or other similar types of price reductions to volume
purchasers.
c.Each fixed-based operator at any airport owned by the sponsor shall
be subject to the same rates, fees, rentals, and other charges as
are uniformly applicable to all other fixed-based operators making
the same or similar uses of such airport and utilizing the same or
similar facilities.
d.Each air carrier using such airport shall have the right to service
itself or to use any fixed-based operator that is authorized or
permitted by the airport to serve any air carrier at such airport.
e.Each air carrier using such airport (whether as a tenant,
nontenant, or subtenant of another air carrier tenant) shall be
subject to such nondiscriminatory and substantially comparable
rules, regulations, conditions, rates, fees, rentals, and other
charges with respect to facilities directly and substantially
related to providing air transportation as are applicable to all
such air carriers which make similar use of such airport and
utilize similar facilities, subject to reasonable classifications
such as tenants or nontenants and signatory carriers and
nonsignatory carriers. Classification or status as tenant or
signatory shall not be unreasonably withheld by any airport
provided an air carrier assumes obligations substantially similar
to those already imposed on air carriers in such classification or
status.
f.It will not exercise or grant any right or privilege which operates
to prevent any person, firm, or corporation operating aircraft on
the airport; from performing any services on its own aircraft with
its own employees (including, but not limited to maintenance,
repair, and fueling) that it may choose to perform.
g.In the event the sponsor itself exercises any of the rights and
privileges referred to in this assurance, the services involved
will be provided on the same conditions as would apply to the
furnishing of such services by contractors or concessionaires of
the sponsor under these provisions.
h.The sponsor may establish such fair, equal, and not unjustly
discriminatory conditions to be met by all users of the airport as
may be necessary for the safe and efficient operation of the
airport.
i.The sponsor may prohibit or limit any given type, kind or class of
aeronautical use of the airport or necessary to serve the civil
aviation needs of the public.
23.Exclusive Rights. It will permit no exclusive right for the use of the
airport by any person providing, or intending to provide, aeronautical
services to the public. For purposes of this paragraph, the providing of the
services at an airport by a single fixed-based operator shall not be construed
as an exclusive right if both of the following apply:
a.It would be unreasonably costly, burdensome, or impractical for
more than one fixed-based operator to provide such services, and
b.If allowing more than one fixed-based operator to provide such
services would require the reduction of space leased pursuant to an
existing agreement between such single fixed-based operator and
such airport.
It further agrees that it will not, either directly or indirectly, grant or
permit any person, firm, or corporation, the exclusive right at the airport to
conduct any aeronautical activities, including, but not limited to charter
flights, pilot training, aircraft rental and sightseeing, aerial photography,
crop dusting, aerial advertising and surveying, air carrier operations,
aircraft sales and services, sale of aviation petroleum products whether or
not conducted in conjunction with other aeronautical activity, repair and
maintenance of aircraft, sale of aircraft parts, and any other activities
which because of their direct relationship to the operation of aircraft can be
regarded as an aeronautical activity, and that it will terminate any exclusive
right to conduct an aeronautical activity now existing at such an airport
before the grant of any assistance under the Airport and Airway Improvement
Act of 1982.
24.Fee and Rental Structure. It will maintain a fee and rental structure
consistent with Assurance 22 and 23 for the facilities and services being
provided the airport users which will make the airport as self-sustaining as
possible under the circumstances existing at the particular airport, taking
into account such factors as the volume of traffic and economy of collection.
No part of the Federal share of an airport development, airport planning or
noise compatibility project for which a grant is made under the Airport and
Airway Improvement Act of 1982, the Federal Airport Act or the Airport and
Airway Development Act of 1970 shall be included in the rate basis in
establishing fees, rates, and charges for users of that airport.
25.Airport Revenues. If the airport is under the control of a public agency,
all revenues generated by the airport and any local taxes on aviation fuel
established after December 30, 1987, will be expended by it for the capital or
operating costs of the airport; the local airport system; or other local
facilities which are owned or operated by the owner or operator of the airport
and directly and substantially related to the actual air transportation of
passengers or property; or for noise mitigation purposes on or off the
airport. Provided, however, that if covenants or assurances in debt
obligations issued before September 3, 1982, by the owner or operator of the
airport, or provisions enacted before September 3, 1982, in governing statutes
controlling the owner or operator's financing, provide for the use of the
revenues from any of the airport owner or operator's facilities, including the
airport, to support not only the airport but also the airport owner or
operator's general debt obligations or other facilities, then this limitation
on the use of all revenues generated by the airport (and, in the case of a
public airport, local taxes on aviation fuel) shall not apply.
26.Reports and Inspections. It will:
(a)submit to the Secretary such annual or special financial and
operations reports as the Secretary may reasonably request and make such
reports available to the public;
(b)make available to the public at reasonable times and places a report
of the airport budget in a format prescribed by the Secretary;
(c)for airport development projects, make the airport and all airport
records and documents affecting the airport, including deeds, leases,
operation and use agreements, regulations and other instruments,
available for inspection by any duly authorized agent of the Secretary
upon reasonable request;
(d)for noise compatibility program projects, make records and documents
relating to the project and continued compliance with the terms,
conditions, and assurances of the grant agreement including deeds,
leases, agreements, regulations, and other instruments, available for
inspection by any duly authorized agent of the Secretary upon reasonable
request; and
<PAGE>
(e)in a format prescribed by the Secretary, provide to the Secretary and
make available to the public, not later than sixty (60) days following
each of its fiscal years, ending after March 1, 1995, an annual report
listing in detail:
(i)all amounts paid by the airport to any other unit of government
and the purposes for which each such payment was made; and
(ii)all services and property provided by the airport to other units
of government and the amount of compensation received for provision of
each such service and property.
27.Use by Government Aircraft. It will make available all of the facilities
of the airport developed with Federal financial assistance and all those
usable for landing and takeoff of aircraft to the United States for use by
Government aircraft in common with other aircraft at all times without charge,
except, if the use by Government aircraft is substantial, charge may be made
for a reasonable share, proportional to such use, for the cost of operating
and maintaining the facilities used. Unless otherwise determined by the
Secretary, or otherwise agreed to by the sponsor and the using agency,
substantial use of an airport by Government aircraft will be considered to
exist when operations of such aircraft are in excess of those which, in the
opinion of the Secretary, would unduly interfere with use of the landing areas
by other authorized aircraft, or during any calendar month that-
a.Five (5) or more Government aircraft are regularly based at the
airport or on land adjacent thereto; or
b.The total number of movements (counting each landing as movement)
of Government aircraft is 300 or more, or the gross accumulative
weight of Government aircraft using the airport (the total movement
of Government aircraft multiplied by gross weights of such
aircraft) is in excess of five million pounds.
28.Land for Federal Facilities. It will furnish without cost to the Federal
Government for use in connection with any air traffic control or air
navigation activities, or weather-reporting and communication activities
related to air traffic control, any areas of land or water, or estate therein,
or rights in buildings of the sponsor as the Secretary considers necessary or
desirable for construction, operation, and maintenance at Federal expense of
space or facilities for such purposes. Such areas or any portion thereof will
be made available as provided herein within four (4) months after receipt of a
written request from the Secretary.
<PAGE>
29.Airport Layout Plan.
a.It will keep up to date at all times an airport layout plan of the
airport showing (1) boundaries of the airport and all proposed
additions thereto, together with the boundaries of all offsite
areas owned or controlled by the sponsor for airport purposes and
proposed additions thereto; (2) the location and nature of all
existing and proposed airport facilities and structures (such as
runways, taxiways, aprons, terminal buildings, hangars and roads),
including all proposed extensions and reductions of existing
airport facilities; and (3) the location of all existing and
proposed nonaviation areas and of all existing improvements
thereon. Such airport layout plans and each amendment, revision,
or modification thereof, shall be subject to the approval of the
Secretary which approval shall be evidenced by the signature of a
duly authorized representative of the Secretary on the face of the
airport layout plan. The sponsor will not make or permit any
changes or alterations in the airport or any of its facilities
which are not in conformity with the airport layout plan as
approved by the Secretary and which might, in the opinion of the
Secretary, adversely affect the safety, utility or efficiency of
the airport.
b.If a change or alteration in the airport or the facilities is made
which the Secretary determines adversely affects the safety,
utility, or efficiency of any federally owned, leased, or funded
property on or off the airport and which is not in conformity with
the airport layout plan as approved by the Secretary, the owner or
operator will, if requested by the Secretary (1) eliminate such
adverse effect in a manner approved by the Secretary; or (2) bear
all costs of relocating such property (or replacement thereof) to a
site acceptable to the Secretary and all costs of restoring such
property (or replacement thereof) to the level of safety, utility,
efficiency, and cost of operation existing before the unapproved
change in the airport or its facilities.
30.Civil Rights. It will comply with such rules as are promulgated to assure
that no person shall, on the grounds of race, creed, color, national origin,
sex, age, or handicap be excluded from participating in any activity conducted
with or benefitting from funds received from this grant. This assurance
obligates the sponsor for the period during which Federal financial assistance
is extended to the program, except where Federal financial assistance is to
provide, or is in the form of personal property or real property or interest
therein or structures or improvements thereon in which case the assurance
obligates the sponsor or any transferee for the longer of the following
periods: (a) the period during which the property is used for a purpose for
which Federal financial assistance is extended, or for another purpose
involving the provision of similar services or benefits, or (b) the period
during which the sponsor retains ownership or possession of the property.
<PAGE>
31.Disposal of Land.
a.For land purchased under a grant for airport noise compatibility
purposes, it will dispose of the land, when the land is no longer
needed for such purposes, at fair market value, at the earliest
practicable time. That portion of the proceeds of such disposition
which is proportionate to the United States' share of acquisition
of such land will, at the discretion of the Secretary, 1) be paid
to the Secretary for deposit in the Trust Fund, or 2) be reinvested
in an approved noise compatibility project as prescribed by the
Secretary.
b.(1)For land purchased under a grant for airport development
purposes (other than noise compatibility), it will, when the land
is no longer needed for airport purposes, dispose of such land at
fair market value or make available to the Secretary an amount
equal to the United States' proportionate share of the fair market
value of the land. That portion of the proceeds of such
disposition which is proportionate to the United States' share of
the cost of acquisition of such land will, (a) upon application to
the Secretary, be reinvested in another eligible airport
improvement project or projects approved by the Secretary at that
airport or within the national airport system, or (b) be paid to
the Secretary for deposit in the Trust Fund if no eligible project
exists.
(2)Land shall be considered to be needed for airport purposes under
this assurance if (a) it may be needed for aeronautical purposes
including runway protection zones) or serve as noise buffer land,
and (b) the revenue from interim uses of such land contributes to
the financial self-sufficiency of the airport. Further, land
purchased with a grant received by an airport operator or owner
before December 31, 1987, will be considered to be needed for
airport purposes if the Secretary or Federal agency making such
grant before December 31, 1987, was notified by the operator or
owner of the uses of such land, did not object to such use, and the
land continues to be used for that purpose, such use having
commenced no later than December 15, 1989.
c.Disposition of such land under (a) or (b) will be subject to the
retention or reservation of any interest or right therein necessary
to ensure that such land will only be used for purposes which are
compatible with noise levels associated with operation of the
airport.
32.Engineering and Design Services. It will award each contract, or sub-
contract for program management, construction management, planning studies,
feasibility studies, architectural services, preliminary engineering, design,
engineering, surveying, mapping or related services with respect to the
project in the same manner as a contract for architectural and engineering
services is negotiated under Title IX of the Federal Property and
Administrative Services Act of 1949 or an equivalent qualifications-based
requirement prescribed for or by the sponsor of the airport.
<PAGE>
33.Foreign Market Restrictions. It will not allow funds provided under this
grant to be used to fund any project which uses any product or service of a
foreign country during the period in which such foreign country is listed by
the United States Trade Representative as denying fair and equitable market
opportunities for products and suppliers of the United States in procurement
and construction.
34.Policies, Standards, and Specifications. It will carry out the project in
accordance with policies, standards, and specifications approved by the
Secretary including but not limited to the advisory circulars listed in the
Current FAA Advisory Circulars for AIP projects, dated ____________ and
included in this grant, and in accordance with applicable state policies,
standards, and specifications approved by the Secretary.
35.Relocation and Real Property Acquisition. (1) It will be guided in
acquiring real property, to the greatest extent practicable under State law,
by the land acquisition policies in Subpart B of 49 CFR Part 24 and will pay
or reimburse property owners for necessary expenses as specified in Subpart B.
(2) It will provide a relocation assistance program offering the services
described in Subpart C and fair and reasonable relocation payments and
assistance to displaced persons as required in Subpart D and E of 49 CFR Part
24. (3) It will make available within a reasonable period of time prior to
displacement, comparable replacement dwellings to displaced persons in
accordance with Subpart E of 49 CFR Part 24.
<PAGE>
EXHIBIT H
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission
and
North Carolina Global TransPark Authority
and
Mountain Air Cargo, Inc.
Dated as of November 16, 1995
______________________
Reverter to Grantor
REVERTER: All right, title, claim, and interest of Grantee to the property
conveyed herein and all improvements then located thereon shall revert, ipso
facto, to Grantor upon the happening of any of the events set out below, and
thereafter Grantee shall have no further right, title, claim, or interest in
such property or such improvements:
1.If Grantee shall fail to exercise the right of option contained in
that certain Option Agreement and Offer to Transfer dated October 13,
1992, between Grantor and Grantee, within the time limits specified
therein, or any extension thereof (hereinafter called the "Option
Period"). With respect to said Option and Agreement and Offer to
Transfer, a Memorandum of Option to Purchase is filed in Book 962, at
Page 285, in the office of the Register of Deeds of Lenoir County,
North Carolina.
2.If, during the Option Period, Grantee, or its successor agency in
function, shall be dissolved or if the statutory purposes of Grantee,
or its successor agency in function, shall be changed substantially by
action of the General Assembly of North Carolina from those purposes
set forth in N.C. Gen. Stat. Chapter 63A, as the same may be amended
from time to time.
3.If Grantee shall use the property conveyed herein for any purpose
other than aviation or aeronautical purposes as such terms may be
interpreted, from time to time, by the Federal Aviation
Administration, or its successor agency in function.
<PAGE>
EXHIBIT I
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission
and
North Carolina Global TransPark Authority
and
Mountain Air Cargo, Inc.
Dated as of November 16, 1995
______________________
Nondiscrimination in Airport
Employment Opportunities
The Companies assure that they will comply with pertinent statutes, executive
orders and such rules as are promulgated to assure that no person shall, on
the grounds of race, creed, color, national origin, sex, age, or handicap be
excluded from participating in any activity conducted with or benefiting from
Federal assistance. This provision obligates the Companies for the period
during which Federal assistance is extended to the Airport program, except
where Federal assistance is to provide, or is in the form of personal property
or real property or an interest therein or structures or improvements thereon.
In these cases, this provision obligates the Companies for the longer of the
following periods: (a) the period during which the property is used by the
Foundation or any transferee for a purpose for which Federal assistance is
extended, or for another purpose involving the provision of similar services
or benefits; or (b) the period during which the Foundation or any transferee
retains ownership or possession of the property. In the case of contractors,
this provision binds the contractors from the bid solicitation period through
the completion of the contract
It is unlawful for airport operators and their lessees, tenants,
concessionaires and contractors to discriminate against any person because of
race, color, national origin, sex, creed, or handicap in public services and
employment opportunities.
<PAGE>
EXHIBIT J
to
AIRPORT USE AGREEMENT
among
City of Kinston, County of Lenoir,
Lenoir County/City of Kinston,
Airport Commission
and
North Carolina Global TransPark Authority
and
Mountain Air Cargo, Inc.
Dated as of November 16, 1995
______________________
Disadvantaged Business Enterprises - Required Statements
Policy. It is the policy of the Department of Transportation that
disadvantaged business enterprises as defined in 49 CFR Part 23 shall have the
maximum opportunity to participate in the performance of leases as defined in
49 CFR Part 23.5. Consequently, these leases are subject to 49 CFR Part 23 as
applicable.
Companies' Obligations. The Companies hereby assure that no person shall be
excluded from participation in, denied the benefits of or otherwise
discriminated against in connection with the award and performance of any
contract, including leases, covered by 49 CFR Part 23 on the grounds of race,
color, national origin or sex.
Sublease Clause. The Companies hereby assure that they will include the above
clauses in all subleases and cause sublessees to similarly include such
clauses in further subleases.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"This schedule contains summary financial information extracted from Air
Transportation Holding Company, Inc. SEC Form 10-Q for period ended December
31, 1995 (identify specific financial statements) and is qualified in its
entirety by reference to such financial statements."
</LEGEND>
<S> <C>
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<PERIOD-END> DEC-31-1995
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0
0
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</TABLE>
