Merced Regional Airport Telephone 209/385

- 6873 Fax 209/388

- 8994

May 20 , 2010

Airline/EAS Provider

RE: Opportunity to Propose on Essential Air Service (EAS) Service for Merced, CA

Dear Airline/EAS Provider :

The US Department of Transportation has issued a Request for Proposals for EAS service to Merced,

California. McCarran International Airport in Las Vegas is Merced’s current destination, and has

historically provided the greatest number of enplanements. You have the opportunity to propose on

this EAS service to the Department of Transportation, and we invite your interest in this opportunity.

A copy of the DOT Order may be found on the Federal Docket Management System at:

http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480ae6a3c

.

Merced is a growing market, and passenger enplanements are significantly rebounding now that

service has returned to Las Vegas . According to the population estimates released by the California

State Department of Finance, Merced Regional Airport s erves a region of just over 710,000 people in

four counties. With the opening and expansion of the new University of California campus in Merced

and a just opened new Medical Center, Merced is poised for future aviation growth.

Merced Regional Airport is ready t oday for your airline to start service. To promote a seamless

transition of air service from our current provider to a possible successor airline , we are providing

each proposer with identical information on the lease of the Merced Reg ional Airport Termin al, a cost

which should be reflected in your EAS proposal to the Department of Transportation.

The lease cost for the Merced Terminal is $5,100 monthly or $61,200 annually. I am including for

your information a Terms Sheet that summarizes other key lease points. This financial information is

also being forwarded to the USDOT, so that they can realistically review proposers’ financials.

I would like to work with you as you develop your proposal for the Merced EAS route. Please feel free

to contact me, v ia phone or e

- mail, with any questions you may have.

Sincerely,

Ronald K. Elliott

Airport Superintendent

209

- 385

- 6873

elliottr@cityofmerced.orgTerms Sheet for Lease, Merced Regional Airport Terminal

Parties: Lessor: The City of Merced, 678 West 18 th Street, Merced, California 95340

(“City”)

Lessee: to be named

Premises: The leased Premises are located at the Merced Regional Airport Terminal, 20

Macready Drive, Merced, CA, and consist of app roximately 834 square feet of

offices and counters for Lessee’s exclusive use, 768 square feet

(approximately) of modular building space and approximately 1,250 square feet

of common area for Lessee’s non

- exclusive use, including restrooms and lobb y.

Lessee also receives non

- exclusive rights to use of the Airport and its aviation

improvements, including aprons, taxiways, and runways.

Term: The Term of the Lease shall be two (2) years.

Commencement Date: Commencement Date of the Lease shal l be ____________.

Rent: The Monthly Rent is: $5,100 monthly.

Payment of Rents: Lessee shall pay Rents each month in advance, with the first month’s

payment due within five days of the execution of the Lease by both parties.

Deposits: Lessee shall make a Good Faith Deposit of $5,000 upon execution of the Lease

by the parties, in the form of cash.

Uses: The leased Premises shall be used for the purpose of commercial passenger

aviation, including passenger assembly, ticketing and sales, and wai ting. Uses

may be subject to Federal Aviation Administration rules and restrictions.

Maintenance: Lessee shall keep the Premises and all improvements in

good repair and condition.

Common Area Maintenance and Utilities: Lessee acknowledges that

Lessor provides common area maintenance and janitorial service to non

exclusive use areas of the Premises, and utilities (electricity and natural

gas) to both exclusive and non

- exclusive use areas of the Premises. As

compensation, Lessee shall pay $850.00 per m onth in Common Area

Maintenance charges.

Landing Fees: Notwithstanding any other policy or rate established for

use of the Merced Regional Airport, Lessee shall pay to City $17.00 for

each landing at the Airport.

Taxes: Lessee shall pay all property tax es, liens or assessments when

due, without offset or reduction by Lessor.Other: Other provisions shall be included in the Lease, covering nondiscrimination,

notices, defaults, and cure of defaults, FAA requirements, and others.

Broker: Neither party is represented by a broker in this transaction.

Conditions: Any Lease Agreement is subject to the approval of the Merced City Council,

and may be subject to the consent of the Federal Aviation Administration.