EXHIBIT 10.30(b)
"TERMINAL LEASE"
OR
"B" LEASE
FIRST AMENDED AND RESTATED
SPECIAL FACILITIES
LEASE AGREEMENT
(CONTINENTAL AIRLINES, INC. TERMINAL IMPROVEMENT PROJECTS)
_________________________________________
by and between
CITY OF HOUSTON, TEXAS
as Lessor
and
CONTINENTAL AIRLINES, INC.
as Lessee
_________________________________________
Dated as of March 1, 1997
Amended and Restated as of December 1, 1998
SPECIAL FACILITIES
LEASE AGREEMENT
(CONTINENTAL AIRLINES, INC. TERMINAL IMPROVEMENT PROJECTS)
I N D E X
Page No.
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01: Definitions . . . . . . . . . . . . . . . . . . .2
Section 1.02: Interpretations . . . . . . . . . . . . . . . . .7
ARTICLE II
REPRESENTATIONS
Section 2.01: Representations by the City . . . . . . . . . . .7
Section 2.02: Representations by Lessee . . . . . . . . . . . .7
ARTICLE III
LEASE AND TERM; GRANT OF EASEMENTS AND GROUND LEASES
Section 3.01: Lease of Special Facilities . . . . . . . . . . .8
Section 3.02: Term of Lease of Special Facilities . . . . . . .8
Section 3.03: Easements and Ground Leases . . . . . . . . . . .8
Section 3.04: Condition of Special Facilities . . . . . . . . .9
Section 3.05: City Right of Entry . . . . . . . . . . . . . . .9
ARTICLE IV
ISSUANCE OF BONDS; PAYMENT OF COSTS OF THE PROJECTS
Section 4.01: Issuance of Series 1997B Bonds and
Series 1998B Bonds. . . . . . . . . . . . . . . 10
Section 4.02: Issuance of Additional Bonds. . . . . . . . . . 10
Section 4.03: Application of Proceeds; Insufficiencies. . . . 10
Section 4.04: Refunding Bonds . . . . . . . . . . . . . . . . 11
Section 4.05: Optional Redemption of Bonds. . . . . . . . . . 11
ARTICLE V
DESIGN, CONSTRUCTION AND ACQUISITION OF THE SPECIAL FACILITIES
Section 5.01: General . . . . . . . . . . . . . . . . . . . . 11
Section 5.02: Special Provisions for the 1997B Project. . . . 13
Section 5.03: Inventory of Special Facilities; Replacements . 13
Section 5.04: Title to Projects . . . . . . . . . . . . . . . 13
Section 5.05: Design, Construction and Acquisition of Additional
Special Facilities. . . . . . . . . . . . . . . 13
Section 5.06: Personal Property Not Constituting Special
Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
NET RENT AND GROUND RENT
Section 6.01: Net Rent While Bonds Outstanding. . . . . . . . 14
Section 6.02: Obligation to Pay Net Rent Unconditional. . . . 16
Section 6.03: Pledge of Net Rent. . . . . . . . . . . . . . . 16
Section 6.04: Operation and Maintenance Expenses; Other Costs 16
Section 6.05: Charges for Ground Lease Properties and Easements17
ARTICLE VII
USE OF SPECIAL FACILITIES; REPRESENTATIONS AND UNDERTAKINGS BY
LESSEE AND CITY
Section 7.01: General . . . . . . . . . . . . . . . . . . . . 17
Section 7.02: Rights to Use Lessee's Terminal Improvements
Subject to Use and Lease Agreement. . . . . . . 17
Section 7.03: Reservation to City of Special Rights with
Respect to Special Facilities in Terminal B . . 18
Section 7.04: Non-Extension of Terminal B Lease . . . . . . . 20
Section 7.05: Non-Extension of Terminal C Lease . . . . . . . 20
Section 7.06: Non-Extension of IAB License Agreement. . . . . 20
ARTICLE VIII
LESSEE'S OBLIGATIONS AND CONDITIONS TOLESSEE'S USE OF SPECIAL
FACILITIES
Section 8.01: Maintenance of Special Facilities at
Lessee's Expense. . . . . . . . . . . . . . . . 21
Section 8.02: Taxes, Charges, Utilities, Liens. . . . . . . . 21
Section 8.03: Compliance with Airport Rules and Regulations
and Law; Nondiscrimination. . . . . . . . . . . 22
Section 8.04: Compliance with Tax Law . . . . . . . . . . . . 22
Section 8.05: Environmental Matters . . . . . . . . . . . . . 22
Section 8.06: City's Right To Maintain or Repair Special
Facilities. . . . . . . . . . . . . . . . . . . 25
Section 8.07: Termination Procedures. . . . . . . . . . . . . 25
ARTICLE IX
LIABILITY, INSURANCE AND CONDEMNATION
Section 9.01: Release and Indemnification of City . . . . . . 26
Section 9.02: General Insurance Requirements. . . . . . . . . 28
Section 9.03: Risks and Minimum Limits of Coverage. . . . . . 28
Section 9.04. Other Provisions. . . . . . . . . . . . . . . . 29
Section 9.05: Disposition of Insurance Proceeds . . . . . . . 30
Section 9.06: Condemnation. . . . . . . . . . . . . . . . . . 31
Section 9.07: Reconstruction or Repair. . . . . . . . . . . . 32
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.01: Events of Default. . . . . . . . . . . . . . . 32
Section 10.02: Remedies on Default. . . . . . . . . . . . . . 34
Section 10.03: Additional Remedy. . . . . . . . . . . . . . . 35
Section 10.04: No Remedy Exclusive. . . . . . . . . . . . . . 35
Section 10.05: Agreement to Pay Attorneys' Fees and Expenses. 35
Section 10.06: No Additional Waiver Implied by One Waiver . . 36
Section 10.07: Enforcement by City Attorney . . . . . . . . . 36
ARTICLE XI
ASSIGNMENTS, SUBLETTING AND TERMINATION BY LESSEE
Section 11.01: Assignments and Subletting by Lessee . . . . . 36
Section 11.02: Termination of Agreement by Lessee . . . . . . 37
ARTICLE XII
MISCELLANEOUS
Section 12.01: Lessee to Maintain Its Corporate Existence . . 37
Section 12.02: Exempt Facilities. . . . . . . . . . . . . . . 37
Section 12.03: Notices. . . . . . . . . . . . . . . . . . . . 37
Section 12.04: Consents and Approvals . . . . . . . . . . . . 39
Section 12.05: Rights Reserved to City . . . . . . . . . . . 40
Section 12.06: Force Majeure. . . . . . . . . . . . . . . . . 40
Section 12.07: Severability Clause. . . . . . . . . . . . . . 40
Section 12.08: Place of Performance; Laws Governing . . . . . 40
Section 12.09: Brokerage. . . . . . . . . . . . . . . . . . . 40
Section 12.10: Individuals Not Liable . . . . . . . . . . . . 41
Section 12.11: Binding Nature of Agreement; Benefits of
Agreement. . . . . . . . . . . . . . . . . . . 41
Section 12.12: Ambiguities. . . . . . . . . . . . . . . . . . 41
Section 12.13: Survival . . . . . . . . . . . . . . . . . . . 41
Section 12.14: No Merger of Title . . . . . . . . . . . . . . 41
Section 12.15: Entire Agreement . . . . . . . . . . . . . . . 41
Description of Project Exhibit "A"
Description of Easements Exhibit "B"
Description of Ground Lease Properties Exhibits "C" and "D"
Deed and ▇▇▇▇ of Sale for Project Exhibit "E"
FIRST AMENDED AND RESTATED
SPECIAL FACILITIES
LEASE AGREEMENT
(Continental Airlines, Inc. Terminal Improvement Projects)
THE STATE OF TEXAS
COUNTY OF ▇▇▇▇▇▇
THIS SPECIAL FACILITIES LEASE AGREEMENT (hereinafter called
"Agreement") dated as of the 1st day of March, 1997 (Amended and
Restated as of December 1, 1998), is made and entered into between
the CITY OF HOUSTON, TEXAS, a municipal corporation and Home Rule
City, situated principally in ▇▇▇▇▇▇ County, Texas (hereinafter
called "City"), and CONTINENTAL AIRLINES, INC., a corporation
organized and existing under the laws of the State of Delaware,
duly authorized to do business in the State of Texas (hereinafter
called "Lessee").
W I T N E S S E T H :
WHEREAS, City is the owner of land and certain improvements
known as the ▇▇▇▇▇▇ ▇▇▇▇ Intercontinental Airport/Houston, located
in the City of Houston, ▇▇▇▇▇▇ County, Texas (hereinafter called
"Airport"), which is operated as a public airport, as a part of the
City's Airport System (as hereinafter defined), and City has the
power and authority to lease premises and facilities thereon and to
grant rights and privileges with respect thereto, including those
set forth herein; and
WHEREAS, Lessee is engaged in the business of commercial air
transportation as a scheduled air carrier and is certificated or
otherwise authorized by the United States Government and the
hereinafter described Use and Lease Agreement to engage in such
business at the Airport (hereinafter referred to as "authorized
business"); and
WHEREAS, City and Lessee have heretofore entered into the Use
and Lease Agreement and IAB License Agreement (both as hereinafter
defined) pursuant to which the City has leased to Lessee certain
space and facilities in Terminals B and C at the Airport and
granted certain occupancy rights to Lessee in the IAB at the
Airport; and
WHEREAS, Lessee has heretofore requested the City to undertake
the financing of the 1997B Project (as hereinafter defined), and
the City has done so through the issuance of its Series 1997B Bonds
(as hereinafter defined); and
WHEREAS, Lessee has heretofore requested the City to undertake
the financing of the 1998B Project (as hereinafter defined); and
WHEREAS, the City has found and determined that it is in the
public interest and a public purpose for the City to finance the
costs of the Projects (as hereinafter defined) through the issuance
of certain special facilities revenue bonds payable from certain
net rentals of the Projects; and
WHEREAS, all ordinances heretofore adopted by the City
authorizing the issuance of its Airport System Revenue Bonds
payable from any or all gross revenues, tolls, rents, lease moneys,
returns, and charges derived by the City from the operation of its
Airport System, which includes the Airport, provide for the
exclusion from the pledge of such revenues "any rentals (except
ground rentals) from net rent leases which may be executed in the
future wherein the lease consideration is pledged or otherwise
utilized to finance the construction of buildings or facilities for
lessee-tenants of the City, but only for such time and to such
extent in each case as the rentals reserved in the lease or any
extension or renewal thereof (other than ground rent) are required
to be deposited in a separate interest and redemption fund in order
to meet the City's obligation for interest payments and principal
repayment on the bonds or other instruments of indebtedness issued
or sold to finance the improvement which is the subject matter of
the lease"; and
WHEREAS, the City and Lessee desire to enter into this
Agreement (i) to constitute a "net rent lease", to provide for the
construction and acquisition of certain Special Facilities
initially consisting of the Projects, to provide for the issuance
of revenue bonds to finance certain costs of such Special
Facilities, and to provide for the payment by Lessee of certain Net
Rent at times and in amounts sufficient to meet the City's
obligation for interest payments and principal repayment on all
revenue bonds sold to finance the costs of such Special Facilities
and (ii) to set forth certain other agreements of the parties with
respect to the Special Facilities;
NOW, THEREFORE, for and in consideration of the premises and
of the mutual covenants and agreements herein contained and in
consideration of the rentals and other amounts to be paid as herein
provided, the City and Lessee do hereby covenant and agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01: Definitions. In this Agreement, the following
terms shall have the following meanings, respectively, unless the
context clearly indicates otherwise:
"Additional Bonds" shall mean all additional bonds which may
be issued by the City payable from the same source as the Series
1997B Bonds and the Series 1998B Bonds (including Net Rent payable
under this Agreement) for the purposes and in the general manner
specified in Section 4.02 hereof.
"Airport" shall mean ▇▇▇▇▇▇ ▇▇▇▇ Intercontinental
Airport/Houston, Houston, Texas, as it now exists or may be
modified or expanded from time to time in the future.
"Airport System" shall mean all airport, heliport and aviation
facilities, or any interest therein, now or from time to time
hereafter owned, operated or controlled in whole or in part by the
City, together with all properties, facilities and services
thereof, and all additions, extensions, replacements and
improvements thereto, and all services provided or to be provided
by the City in connection therewith, but expressly excluding
Special Facilities. The Airport System currently includes the
present airports of the City, known as "▇▇▇▇▇▇ ▇▇▇▇ Interconti-
nental Airport/Houston," "▇▇▇▇▇▇▇ ▇. Hobby Airport" and "▇▇▇▇▇▇▇▇▇
Field" and the "CBD Heliport."
"Baggage Transfer Facility" shall mean that facility more
fully described in Exhibit "A" to this Agreement.
"Bonds" shall mean collectively the Series 1997B Bonds, the
Series 1998B Bonds and any Additional Bonds and Refunding Bonds
from time to time hereafter issued.
"Bus Stations" shall mean the bus stations to be located at
Terminals B and C as more fully described in Exhibit "A" to this
Agreement.
"Business Day" shall mean any day other than a Saturday,
Sunday, or legal holiday or the equivalent (other than a
moratorium) on which banking institutions generally in Houston,
Texas or New York, New York are authorized or required by law or
executive order to close.
"City" shall mean the City of Houston, Texas, or such other
agency, board, authority, or private entity which may succeed to
the jurisdiction of the City over the Airport.
"Costs of the Project" or "Costs of the Special Facilities"
shall mean all costs of financing the construction and acquisition
of the Projects or Special Facilities, as the case may be, and the
issuance of Bonds for such purpose, including without limitation
the following:
(i) all amounts paid by the Lessee, or authorized
by the Lessee and paid by or on behalf of Lessee, to
design, construct, acquire, fabricate, equip and install
the Projects or Special Facilities, including without
limitation, all costs of utility extensions and
connections and all amounts paid under all contracts for
goods, services and facilities related thereto;
(ii) all amounts necessary to provide for work
performed, material purchased or expenditures incurred,
pertaining to or in connection with the Projects or any
other Special Facilities approved by City and Lessee
including, without limitation, the charges of any
architects or engineers for plans, specifications,
drawings, supervision and inspection for the Projects or
Special Facilities;
(iii) all expenses incurred by the Lessee and
the City for the review of plans, specifications and
contracts for the Projects or the Special Facilities and
for the inspection in connection with the construction
and acquisition thereof;
(iv) the cost of any and all permits, licenses,
fees, performance and payment bonds, appraisals and
insurance policies procured in connection with the
acquisition and construction of the Projects or Special
Facilities;
(v) legal, accounting and bond advisory,
underwriting and consultant fees and expenses, including
any fees and expenses of any bond insurer and the
provider of any reserve fund surety, and all costs and
expenses incident to the authorization, issuance,
delivery and sale of the Bonds, including without
limitation the preparation, execution, delivery and
recording of this Agreement, the Trust Indenture, any
preliminary and the final offering documents pertaining
to the Bonds, and any printing fees for such documents,
any purchase agreements pursuant to which the Bonds will
be sold, all credit agreements and other documents
providing security for the Bonds or the Lessee's
obligations and all other agreements and documents
involved and contemplated hereby, the costs and fees,
including legal fees, incident to the qualification of
the Bonds for offer and sale under securities laws and
the preparation of any memorandum as to the eligibility
of the Bonds for offer and sale and for investment under
state laws if required or if applicable;
(vi) interest accruing on the Bonds during the
period of construction of the Projects or Special
Facilities financed with the proceeds thereof, the term
of which period shall be determined in the Trust
Indenture;
(vii) such other and additional fees, costs,
expenses and expenditures of whatever nature incidental
or pertaining to the design, acquisition, construction,
fabrication, equipping and installation of the Projects
or the Special Facilities, including funding of the
Reserve Account, and all other costs and expenses that
may properly be capitalized as costs of the Projects or
the Special Facilities; and
(viii) any costs of a prior Project for which
insufficient funds are available from the proceeds of the
Series of Bonds issued for such prior Project.
"Director" shall mean the Director of the Department of
Aviation of the City or his designee.
"Easements" shall mean all of the easement or easements
described in Exhibit "B" attached hereto.
"Event of Default" shall mean those events so defined in
Section 10.01 hereof.
"Ground Lease Properties" shall mean those portions of the
Leased Premises under the Use and Lease Agreement in Terminal B as
are reasonably necessary to make the Special Facilities leasable
and in Terminal C as are located underneath the Special Facilities
located therein and those portions of the Leased Premises under the
IAB License Agreement as are reasonably necessary to make the
Special Facilities in the IAB leasable.
"Ground Rentals" shall mean the rentals to be paid by Lessee
directly to the City pursuant to Section 6.05 as consideration for
those portions of the Leased Premises under the Use and Lease
Agreement and IAB License Agreement that constitute Ground Lease
Properties and Easements.
"Ground Support Equipment" shall mean that equipment
appurtenant to the space and gates in Terminal B as more fully
described in Exhibit "A" to this Agreement.
"Guaranty" shall mean the guaranty agreement dated as of
March 1, 1997, from the Lessee to the Trustee with respect to the
Series 1997B Bonds and the guaranty agreement dated as of December
1, 1998, from the Lessee to the Trustee with respect to the 1998B
Bonds.
"IAB" shall mean the ▇▇▇▇▇▇ ▇▇▇▇▇▇ International Airlines
Building at the Airport.
"IAB License Agreement" shall mean collectively or
individually those certain license and lease agreements from time
to time in effect with respect to the Lessee's occupancy of the IAB
at the Airport.
"Interest and Redemption Fund" shall mean the fund so defined
in the Trust Indenture for the collection of Net Rent and payment
of the Bonds.
"Leased Premises" under the Use and Lease Agreement and/or
under the IAB License Agreement shall mean that certain space and
improvements in and around at the Airport which were or will be
leased by the City to Lessee pursuant to the Use and Lease
Agreement and/or licensed by the City to Lessee pursuant to the IAB
License Agreement.
"Lessee" shall mean Continental Airlines, Inc., a Delaware
corporation, and its successors and assigns as lessee hereunder.
"Lessee's IAB Improvements" shall mean those tenant
improvements, fixtures, equipment and related facilities in the
International Airlines Building as more fully described in
Exhibit "A-1" to this Agreement.
"Lessee's Terminal B Improvements" shall mean those tenant
improvements, fixtures, equipment and related facilities in
Terminal B as more fully described in Exhibits "A" and "A-1" to
this Agreement.
"Lessee's Terminal C Improvements" shall mean those tenant
improvements, fixtures, equipment and related facilities in
Terminal C as more fully described in Exhibits "A" and "A-1" to
this Agreement.
"Net Rent" shall mean the net rentals payable by Lessee to the
Trustee on behalf of the City pursuant to Section 6.01(a)(i) and
(ii) hereof for the purpose of being applied to the payment of the
Bonds and making required deposits to the Interest and Redemption
Fund.
"1997B Project" shall mean the Lessee's Terminal B
Improvements, Lessee's Terminal C Improvements, the Prior Tenant
Improvements, the Bus Stations and the Ground Support Equipment,
and, at Lessee's option, to be exercised no later than December 31,
1999, may include the Baggage Transfer Facility, all as more fully
described in Exhibit "A" attached hereto and by this reference made
a part hereof, together with any modifications, additions or
reductions thereto approved by the Director and the Lessee. The
1997B Project shall constitute the initial Special Facilities.
"1998B Project" shall mean the Lessee's Terminal B
Improvements, Lessee's Terminal C Improvements, and Lessee's IAB
Improvements, all as more fully described in Exhibit "A-1" attached
hereto and by this reference made a part hereof, together with any
modifications, additions or reductions thereto approved by the
Director and the Lessee.
"Outstanding" shall have the meaning assigned in the Trust
Indenture.
"Prior Tenant Improvements" shall mean the remaining leasehold
estate and tenant improvements of the tenant or tenants located in
Terminal B occupying such space prior to Lessee's occupancy of
Terminal B, as more fully described in Exhibit "A" to this
Agreement.
"Project" or "Projects" means, either individually or
collectively, the 1997B Project and the 1998B Project.
"Qualified Terminal C Occupancy Agreement" shall mean, for the
period beginning January 1, 2018 (i) an extension or renewal of the
Use and Lease Agreement with respect to all or a material portion
of Terminal C airline space, (ii) an interim extension or renewal
agreement for all or a material portion of Terminal C airline space
pending negotiation of a definitive extension or renewal of the Use
and Lease Agreement, or (iii) a written document evidencing
Lessee's commitment to occupy all or a material portion of
Terminal C airline space for a specified period of time pursuant to
the terms of a City ordinance; provided, however, if any of the
foregoing relate to a material portion but not all of Terminal C
airline space, then it shall be accompanied by a written
certification of the Director of the Department of Aviation of the
City as containing provisions reasonably satisfactory to the
Director of the Department of Aviation of the City that will
reasonably allow (i) Lessee to make use of the Special Facilities,
and (ii) other airline tenants, if any, in Terminal C to use those
Special Facilities as may, in the reasonable opinion of the
Director, be required to support the tenancy of such other airline
tenants.
"Refunding Bonds" shall mean all refunding bonds which may be
issued by the City for the purposes set forth in Sections 4.04
hereof, and which shall be payable from the same sources as the
Series 1997B Bonds and Series 1998B Bonds (including Net Rent
payable under this Agreement).
"Series 1997B Bonds" shall mean the first series of Bonds to
be issued pursuant to this Agreement, which shall be entitled the
"City of Houston, Texas, Airport System Special Facilities Revenue
Bonds (Continental Airlines, Inc. Terminal Improvement Projects),
Series 1997B."
"Series 1998B Bonds" shall mean the second series of Bonds to
be issued pursuant to this Agreement, which shall be entitled the
"City of Houston, Texas, Airport System Special Facilities Revenue
Bonds (Continental Airlines, Inc. Terminal Improvement Projects),
Series 1998B."
"Special Facilities" shall mean the Projects, all extensions,
additions, modifications and improvements thereto and all other
improvements, fixtures, equipment and facilities that, pursuant to
this Agreement or any supplement hereto or amendment hereof, are
financed with any proceeds of the Series 1997B Bonds, the Series
1998B Bonds or any Additional Bonds.
"Trust Indenture" shall mean the Trust Indenture, dated as of
March 1, 1997, as supplemented by the First Supplemental Trust
Indenture dated as of December 1, 1998, together with all
supplements and amendments thereto, entered into by and between the
City and the Trustee to provide for the issuance of and security
for the Series 1997B Bonds and the Series 1998B Bonds.
"Trustee" shall mean the bank designated as Trustee under the
Trust Indenture, or any successor trustee thereunder.
"Use and Lease Agreement" shall mean that certain Use and
Lease Agreement with respect to Terminals B and C at the Airport
effective as of January 1, 1998, entered into between the City and
Lessee.
Section 1.02: Interpretations. All terms defined herein and
all pronouns used in this Agreement shall be deemed to apply
equally to singular and plural and to all genders. The table of
contents, titles and headings of the articles and sections of this
Agreement have been inserted for convenience of reference only and
are not to be considered a part hereof and shall not in any way
modify or restrict any of the terms or provisions hereof. This
Agreement and all the terms and provisions hereof shall be
liberally construed to effectuate the purposes set forth herein
and, to provide for the full and timely payment of all Bonds from
time to time hereafter issued by the City, which Bonds shall be
secured by a pledge of the Net Rent payable under this Agreement.
In the event of any ambiguity contained herein, it shall not be
construed for or against any party hereto on the basis that such
party did or did not author same.
ARTICLE II
REPRESENTATIONS
Section 2.01: Representations by the City. The City makes
the following representations as the basis for its undertakings in
this Agreement:
(a) The City, as the owner of the Airport, is authorized to
enter into this Agreement;
(b) The City has the power and authority to grant the
Easements and the Ground Lease Properties to the Lessee for the
purposes of constructing, installing, equipping, maintaining and
operating the Projects;
(c) The City has the power and authority to acquire the
Projects constructed, installed and equipped by Lessee on the
Ground Lease Properties and the Easements, to acquire the other
Special Facilities, and to lease same to Lessee pursuant to the
terms and conditions contained herein;
(d) The City has the power and authority to issue the Bonds
for the purpose of paying the Costs of the Special Facilities and
to pledge to the payment of the Bonds the Net Rent payable under
this Agreement and by proper municipal action it has been
authorized to execute and deliver this Agreement; and
(e) All representations relating to the City contained in the
recitals to this Agreement are true and correct in all material
respects.
Section 2.02: Representations by Lessee. The Lessee makes
the following representations as the basis for its undertakings in
this Agreement:
(a) Lessee is a corporation validly existing under the laws
of the State of Delaware; it is in good standing under its
certificate of incorporation and the laws of the State of Delaware;
it is duly authorized to do business in the State of Texas; it has
the power to enter into this Agreement without violating the terms
of any other agreement to which it is a party; and by proper cor-
porate action it has been duly authorized to execute and deliver
this Agreement;
(b) Lessee will occupy and possess the Easements and Ground
Lease Properties for the purposes and upon the terms and conditions
set forth herein; it will, subject to the City's issuance and sale
of the Series 1997B Bonds and the Series 1998B Bonds, construct,
install and equip the Projects substantially in the manner herein
provided; it will convey the Projects to, or cause title to the
Projects to vest in, the City in the manner herein provided; and it
will occupy, possess, operate and maintain the Projects and any
other Special Facilities for the purposes and in the manner
provided herein, all subject to the terms and conditions of this
Agreement; and
(c) All representations relating to Lessee contained in the
recitals to this Agreement are true and correct in all material
respects.
ARTICLE III
LEASE AND TERM; GRANT OF EASEMENTS AND GROUND LEASES
Section 3.01: Lease of Special Facilities. Subject to the
terms and conditions of this Agreement, the City hereby leases,
lets and demises unto Lessee, and Lessee hereby leases and rents
from the City, the Special Facilities, which shall consist
initially of the Projects.
Section 3.02: Term of Lease of Special Facilities. The term
of this Agreement and the leasehold estate hereby created in the
Special Facilities shall commence on April 17, 1997, for the 1997B
Project, and January 20, 1999, for the 1998B Project (being the
respective dates of delivery by both the City and Lessee of the
original form of this Agreement and the first amended and restated
form of this Agreement) and shall continue, unless sooner
terminated in accordance with this Agreement, until the 31st day of
December, 2017; provided, however, that with respect to Lessee's
Terminal C Improvements, such term shall continue, so long as the
Use and Lease Agreement with Lessee for Terminal C remains in
effect through extension or renewal (including interim extensions
or renewals) or so long as Lessee continues to occupy Terminal C
pursuant to a Qualified Terminal C Occupancy Agreement, until the
31st day of December, 2027 and provided, further, that with respect
to Lessee's IAB Improvements, such term shall continue, so long as
the IAB License Agreement remains in effect through extension or
renewal until the 15th day of July, 2029; provided, further,
however, that at such time, if ever, as Lessee shall have no right
to occupy Terminal B or C or IAB, then Lessee's rights of occupancy
under this Agreement shall end with respect to that portion of the
Special Facilities as follows: (i) if its right to occupy Terminal
C ceases, then all rights to occupy Special Facilities shall also
terminate; if Lessee's rights to occupy the IAB shall terminate,
then only Lessee's rights to occupy the Special Facilities in the
IAB shall terminate; and if Lessee's rights to occupy Terminal B
shall cease, then only Lessee's rights to occupy the Special
Facilities in Terminal B shall also terminate, except to the extent
necessary to support Lessee's obligation to sublease such Special
Facilities in Terminal B to the City pursuant to Section 7.03.
Section 3.03: Easements and Ground Leases. (a) Subject to
the terms and conditions of this Agreement, the City hereby grants
and conveys to Lessee the Easements for a term corresponding to the
term of Lessee's leasehold estate in the Special Facilities located
in or appurtenant to such Easement including any extensions or
renewals thereof. The Easements shall be used solely for the
purpose of constructing, equipping, acquiring, operating and
maintaining the Special Facilities.
(b) Subject to the terms and conditions contained in the Use
and Lease Agreement and the IAB License Agreement, the City has
leased to Lessee the Leased Premises under the Use and Lease
Agreement and the IAB License Agreement. Those portions of the
Leased Premises under the Use and Lease Agreement and the IAB
License Agreement designated in Exhibits "C" and "D" (or other
portions approved by the Director) may be used for the purpose of
constructing, equipping, acquiring, operating and maintaining the
Special Facilities.
(c) Subject to the terms hereof, Lessee shall have the right
of reasonable ingress to and egress from the Special Facilities
over the portions of the Airport necessary for the construction,
operation and maintenance of the Special Facilities in accordance
with the terms hereof, including the operation of buses between the
bus stations constituting part of the Special Facilities, but
subject to reasonable regulations promulgated by the Director.
(d) In the event the City and Lessee determine it is
necessary or desirable to amend, correct, further define or
delineate, delete from or add to any descriptions of the Ground
Lease Properties, the Easements or the portions of the Leased
Premises under the Use and Lease Agreement and the IAB License
Agreement shown on Exhibits "C" and "D," they may do so by a
supplement or addendum hereto duly executed by the respective
parties.
Section 3.04: Condition of Special Facilities. The Lessee
has full and exclusive responsibility for ascertaining the
suitability of the Special Facilities, Easements, and Ground Lease
Properties for their intended use. The City makes no
representations or warranties, either express or implied, as to the
condition of the Special Facilities, Easements, and Ground Lease
Properties for the use intended by the Lessee. The Lessee takes
the Special Facilities, Easements, and Ground Lease Properties in
their "as-is" condition. The City acknowledges that Lessee does
not assume any responsibility, except to the extent caused by
Lessee, for any Hazardous Materials (as defined in Section 8.05C
below) that existed on the Easements or Ground Lease Properties as
of the respective dates of commencement of the term.
Section 3.05: City Right of Entry The City may enter upon
the Easements, Ground Lease Properties and Special Facilities
(i) at any reasonable time for any purpose necessary, incidental to
or connected with the performance of Lessee's obligations
hereunder, or in the exercise of the City's governmental functions,
and (ii) upon the termination or cancellation of this Agreement in
accordance with the provisions of Article X hereof, and such entry
or reentry shall not constitute a trespass nor give Lessee a cause
of action for damages against the City; provided, however, the City
shall use all reasonable efforts to minimize any interference or
interruption with Lessee's business operations.
ARTICLE IV
ISSUANCE OF BONDS; PAYMENT OF COSTS OF THE PROJECTS
Section 4.01: Issuance of Series 1997B Bonds and Series 1998B
Bonds. Subject to the terms and conditions of this Agreement, the
City has heretofore issued the Series 1997B Bonds to pay costs of
the 1997B Project, and the City shall diligently use its best
efforts to issue, sell and deliver the Series 1998B Bonds in
amounts sufficient to pay the Costs of the 1998B Project and
unfunded 1997B Project Costs, which amounts shall be established in
the Trust Indenture. The City shall have no obligations to issue,
sell, or deliver the Series 1998B Bonds if (i) there exists an
Event of Default under this Agreement by Lessee, or (ii) Lessee has
not given written approval of the Trust Indenture. The City shall
not authorize the sale of the Series 1998B Bonds or enter into any
related supplement to the Trust Indenture until the terms of such
Bonds and the form of such Trust Indenture have been approved in
writing by Lessee in the manner provided in Section 12.04 hereof,
which written approval shall be conclusively binding upon Lessee.
Section 4.02: Issuance of Additional Bonds. The City, at the
direction of Lessee, may issue Additional Bonds in amounts
sufficient to pay (i) any part of the Costs of the Projects not
fully funded or provided for out of the proceeds of the Series
1997B Bonds or Series 1998B Bonds, or (ii) the Costs of the Special
Facilities for any additional Special Facilities approved pursuant
to Section 5.05 hereof. The City agrees to use its best efforts to
issue any Additional Bonds required under Clause (i) above, and the
Director shall cooperate in a reasonable manner with Lessee to
request the City to issue Additional Bonds under Clause (ii) above;
however, no representation is made or assurance given or implied by
the City that it will be able to issue, sell and deliver Additional
Bonds on terms and conditions satisfactory to Lessee or that it
will agree to issue Additional Bonds for any other purpose than as
set forth above. Moreover, the issuance of Additional Bonds is
made subject to the same conditions enumerated in Section 4.01 and
the additional condition that there shall have been executed a
supplement to this Agreement to provide for the manner of
construction, acquisition and payment for any additional Special
Facilities to be financed with such Additional Bonds and to provide
for any other matters reasonably deemed necessary by the City in
connection with such financing. All Additional Bonds shall be
secured and payable as provided in the Trust Indenture. Upon the
issuance of any Additional Bonds, the Net Rent payable hereunder
shall automatically be increased in the amounts required to provide
for the full and timely payment of all principal, interest,
redemption premiums, Trustee charges and other related costs and
expenses on all Bonds then outstanding, including the Additional
Bonds to be issued. However, the City shall not authorize the
issuance of Additional Bonds until the terms thereof and of the
supplement to the Trust Indenture relating thereto have been
approved in writing by Lessee, which written approval shall be
conclusively binding upon Lessee.
Section 4.03: Application of Proceeds; Insufficiencies.
Subject to the other terms and provisions hereof, the City hereby
agrees to apply the proceeds of the Series 1997B Bonds and Series
1998B Bonds (by depositing the proceeds into the "Acquisition Fund"
and other Funds as established, defined and provided in the Trust
Indenture) and any Additional Bonds to pay (but only to the extent
of such proceeds) the Costs of the Special Facilities financed
therewith. In the event that the proceeds of the Series 1997B
Bonds, Series 1998B Bonds or any Additional Bonds shall be
insufficient to pay all Costs of the Special Facilities for which
such Bonds were issued, then Lessee shall deposit into the
Acquisition Fund amounts which, together with other amounts
therein, shall be sufficient to pay all Costs of the Projects or
Special Facilities as the case may be. Proceeds of such Bonds and
deposits, if any, shall be applied first to make any deposits
required by the Trust Indenture authorizing the issuance of such
Bonds, second to pay all Costs of the Special Facilities incurred
on behalf of the City by the Lessee (and which are reasonably
approved by Lessee), including the cost of issuance of such Bonds,
and last to pay any Costs of the Special Facilities incurred by or
on behalf of Lessee. Any proceeds of the Bonds remaining after
paying all Costs of the Special Facilities shall be deposited into
the Interest and Redemption Fund as provided under the Trust
Indenture.
Section 4.04: Refunding Bonds. Lessee reserves the right to
request the City from time to time to issue Refunding Bonds in any
manner permitted by law for the purpose of refunding any of the
Bonds from time to time outstanding. Although no representation is
made or assurance given or implied by the City that it will agree
to issue such Refunding Bonds or that it will be able to issue,
sell and deliver such Refunding Bonds on terms and conditions
satisfactory to the Lessee, the City agrees to use its best efforts
to issue Refunding Bonds at Lessee's request provided they have a
similar maturity pattern, similar redemption features and similar
security. All Refunding Bonds, if any, shall be secured and
payable as provided in the Trust Indenture, and the Net Rent
payable hereunder shall automatically be adjusted to provide for
the full and timely payment of all principal, interest, redemption
premiums, Trustee charges and other related costs and expenses on
all Bonds to be outstanding following the issuance of the Refunding
Bonds. Notwithstanding the foregoing, the City shall not authorize
the sale of any Refunding Bonds or authorize any supplement to the
Trust Indenture for such purpose until the terms of such Refunding
Bonds and the supplement to the Trust Indenture are approved in
writing by Lessee in the manner provided in Section 12.04 hereof,
and it is provided further that the City's receipt of such approval
shall be conclusively binding upon Lessee.
Section 4.05: Optional Redemption of Bonds. The City agrees
that at the written request of Lessee, the City will exercise any
reserved right of optional redemption for any of the Bonds,
provided that Lessee makes such request in sufficient time as
specifically set forth in the Trust Indenture to permit the City to
give any notice required by the Trust Indenture and provided
further that Lessee gives the City adequate assurances that it will
pay all additional Net Rent required to provide for the payment of
the applicable redemption price for such Bonds, together with any
related costs and expenses in connection with such redemption.
ARTICLE V
DESIGN, CONSTRUCTION AND ACQUISITION OF THE SPECIAL FACILITIES
Section 5.01: General. Lessee shall cause the Special
Facilities to be designed, procured, constructed and installed in
accordance with the following provisions.
(a) All plans and specifications for the design, procurement,
construction and installation of any discrete element of the
Special Facilities, including any alteration or addition thereto,
shall be submitted to and receive the written approval of the
Director prior to the commencement of any such discrete element of
procurement, construction, alteration or installation. The City
acknowledges that time is of the essence in reviewing such plans
and specifications and shall use diligence to review and respond to
all submissions of plans and specifications in a prompt and timely
manner; provided that the City will continue its review to the
extent practical, as determined by the City, while awaiting
additional information from the Lessee. The City's review and
response shall be conducted to avoid material, adverse impacts to
the most recently published construction schedule approved by the
City and the Lessee. The Lessee acknowledges that the City cannot
review and respond in such a timely manner unless the Lessee
assures that complete and thorough submissions are made to the City
for review. Further, the Lessee acknowledges timely review and
response by the City requires reasonable response by the Lessee to
requests of the City for additional information necessary to
complete the City's review.
(b) All such procurement, construction, alteration or
installation may be made only after obtaining any required building
or construction licenses and permits, which the City agrees to use
reasonable efforts to expedite or to assist in obtaining, and, in
addition to usual City inspection, shall be subject to inspection
by the Director to see that the approved plans and specifications
are being followed; provided, however, that the City shall use
reasonable efforts to eliminate or avoid any interference or
interruption with the construction of the Project.
(c) All such procurement, construction, alteration and
installation shall be designed and carried out in accordance with
the Department of Aviation's Tenant Improvement Manual, except to
the extent inconsistent herewith, which is incorporated herein by
reference and a copy of which has been provided to Lessee or as
otherwise agreed by the Director and Lessee. All such procurement,
construction, alteration or installation shall be carried out and
completed substantially in accordance with the most recently
published construction schedule approved by Director and Lessee.
Upon completion of construction, Lessee shall provide the Director
with as-built drawings of improvements all on CADD diskette.
(d) Lessee shall make good faith efforts to ensure that its
Special Facilities contractors meet the City's overall MWBE
participation goals of 24% for design, 17% for construction and 11%
for procurement. Lessee shall provide periodic reports as may be
reasonably required by the Director or the City's Director of
Affirmative Action. The City shall have the right to audit
Lessee's efforts under this subsection throughout the term of this
Agreement in the same manner as it audits other City contractors.
(e) Lessee shall make good faith efforts to ensure that its
Special Facilities contractors that supply services and/or labor
comply with the City's drug free work place policy as set forth in
City of Houston Executive Order 1-31, as amended.
(f) Upon completion of each Project, Lessee shall (i) submit
to the City an affidavit executed by any officer authorized to bind
Lessee of Lessee certifying that the Project has been constructed
in substantial accordance with the plans and specifications
approved by the Director as provided in Section 5.01; all
contractors, subcontractors, laborers, materialmen, architects,
engineers, and all other parties who have performed work on or
furnished materials for the construction, landscaping, fixturing
and equipping the Project has been paid in full together with, when
appropriate, executed and delivered releases of lien; the Project
is fully equipped, furnished, and supplied and are ready for
operation; and Lessee has obtained all necessary licenses, permits,
and other authorization required as of such date from all
governmental authorities having jurisdiction, and (ii) cause the
architect of the Project to execute and deliver to the City an
affidavit stating that the Project has been constructed and
equipped substantially in accordance with the plans and
specifications referred to in Section 5.01.
(g) In the event of default of any contractor or
subcontractor under any contract made by it in connection with the
Projects or in the event of breach of warranty with respect to any
materials, workmanship, or performance guarantee, the Lessee will
promptly proceed, either separately or in conjunction with the
City, to exhaust the remedies of the Lessee against the contractor,
subcontractor or supplier so in default and against the surety for
the performance of such contract, to the extent of commercial
practicability. The Lessee agrees to advise the City of the steps
it intends to take in connection with any such default.
Section 5.02: Special Provisions for the 1997B Project. The
following special conditions relate to the design and construction
of the 1997B Project:
(a) Lessee shall cause all amounts paid for Prior Tenant
Improvements to be applied for the construction, acquisition,
equipping and furnishing of other eligible airport improvements in
conformity with Section 5.4 of the Trust Indenture and Section 8.04
of this Agreement.
(b) The Ground Support Equipment, although to be used
primarily as equipment pertinent to the space and gates in Terminal
B, may be moved by Lessee about the Airport and its use need not be
limited solely to support of gates at Terminal B.
Section 5.03: Inventory of Special Facilities; Replacements.
Upon completion of the Projects, and upon the construction and
acquisition of any additional Special Facilities, Lessee shall
provide the Director with a detailed written inventory of all
furnishings, fixtures and equipment constituting a material part of
such Special Facilities, certified by any officer authorized to
bind Lessee, which inventory shall include a complete description
of each such item or class of items of such furnishings, fixtures
and equipment including make, model and serial numbers, if any.
Lessee shall from time to time, upon the reasonable request by
Director, amend and revise such inventory to reflect all
replacements and substitutes of any such items; provided, however,
that Lessee may substitute for or replace commercially fungible
items in such inventory with substantially comparable items and
take the other actions permitted in Sections 8.01 and 8.04 hereof
without notice.
Section 5.04: Title to Projects. In consideration for the
City's issuance of Bonds to finance the Costs of the Projects as
provided herein, the City shall acquire title to the Projects at
the time of construction, acquisition or installation and from time
to time during construction, subject to the terms and provisions of
this Agreement and the leasehold estate of Lessee herein created
and such title shall automatically vest in the City immediately
upon such construction, acquisition or installation without further
notice or action. In this regard, Lessee hereby agrees to execute
and deliver to the City the Deed and ▇▇▇▇ of Sale for Projects,
after completion thereof, as set forth in Exhibit "D" and such
further documentation as shall be reasonably requested by the City
to evidence the City's acquisition of title to the Projects in
accordance with the terms of this Agreement.
Section 5.05: Design, Construction and Acquisition of
Additional Special Facilities.
(a) From time to time hereafter, Lessee may request the City
to undertake to issue Additional Bonds to finance additional
Special Facilities. The Director shall cooperate in a reasonable
manner with Lessee to request the City to provide such financing,
and if consummated, then this Agreement shall be supplemented to
provide for the design, construction and acquisition of such
Special Facilities, for payment of the Costs of the Special
Facilities and any other matters deemed appropriate by the City and
Lessee. The Net Rent payable hereunder shall automatically be
increased to provide for the payment of the Additional Bonds, in
the amount and manner set forth in Section 4.02 hereof.
(b) It is expressly acknowledged and understood by Lessee
that this Agreement shall impose no obligation of any kind upon the
City to issue or undertake to issue any Additional Bonds to finance
additional Special Facilities except for the best efforts
obligations set forth in Section 4.02. If the City elects not to
issue Additional Bonds for such purpose, Lessee may construct such
improvements at its sole cost.
Section 5.06: Personal Property Not Constituting Special
Facilities. Lessee's equipment, trade fixtures and personal
property not financed with Bonds and not constituting a
replacement, repair or substitution for Special Facilities under
Section 8.04(b) may be located on the Easements or Ground Lease
Properties without becoming Special Facilities and, so long as no
Event of Default by Lessee has occurred and is continuing
hereunder, may be removed by Lessee provided that such removal will
not damage or impair the Special Facilities or that Lessee at its
expense restores the Special Facilities to the same or better
condition than existed prior to such removal. Any and all such
equipment, trade fixtures and personal property not removed by
Lessee prior to the expiration of this Agreement, or if this
Agreement ends by early termination, within 60 days after receipt
by Lessee of a written notice issued by the Director to remove such
property, shall thereupon become a part of the land upon which it
is located and title thereto shall thereupon vest in the City, and
City reserves the right to remove such property not so removed by
Lessee, and if such removal is accomplished within the 30 day
period after the expiration of this Agreement or the 60 day period
referred to above (after the early termination of the Agreement),
such removal by the City shall be at Lessee's expense.
ARTICLE VI
NET RENT AND GROUND RENT
Section 6.01: Net Rent While Bonds Outstanding. (a) Lessee
shall pay to the City, by depositing directly with the Trustee for
the account of the Interest and Redemption Fund, Net Rent for so
long as any Bonds remain Outstanding within the meaning of the
Trust Indenture at such times and in such amounts as follows, which
obligation shall survive the termination of this Agreement:
(i) on or before each interest and/or principal
payment date on the Bonds,
(A) all interest payable on all Bonds on
such date; plus
(B) all principal (if any) payable on
all Bonds on such date, whether payable at
maturity or earlier redemption (regardless of
whether such redemption is optional,
extraordinary or mandatory); plus
(C) all redemption premiums (if any)
payable on all Bonds on such date.
(ii) immediately upon receipt of written notice from
the Trustee for the Bonds advising it that such amounts
are due and payable:
(A) all unpaid principal, accrued
interest and redemption premiums and/or
indemnifications on all Bonds which are
declared due and payable under any ex-
traordinary redemption or acceleration
provision in the Trust Indenture;
provided, however, that if the Trust Indenture allows payments
of such amounts on a later date or in installments, they shall
be payable as required by the Trust Indenture without further
notice by the Trustee.
In addition to the above described Net Rent, Lessee shall pay (x)
directly to the Trustee, all Trustee charges and any other related
costs and expenses in connection with the payment of principal,
interest or redemption premiums on the Bonds in accordance with the
Trust Indenture, (y) directly to the Trustee at such times and in
such amounts, together with amounts available therefor under the
Trust Indenture so as to ensure compliance with the provisions of
Section 148 of the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder, and (z) directly to any
bond insurer or provider of a reserve fund surety, all fees,
charges, reimbursements, expenses and interest charges due in
connection therewith.
(b) The Net Rent payable under subsection 6.01(a) of this
Agreement shall be reduced by the total of any amounts then on
deposit in the Interest and Redemption Fund in excess of the amount
then needed for the purpose of paying previously matured interest,
principal, matured or redeemed Bonds, and redemption premiums, if
any, whether such excess amounts become available by reason of (i)
amounts deposited in the Interest and Redemption Fund from the
proceeds of the Bonds, (ii) previous overpayments of Net Rent,
(iii) surplus funds from proceeds of the Bonds deposited to the
credit of such Interest and Redemption Fund at the end of the
construction and acquisition of the Project, (iv) interest earnings
from the investment or deposit of any amounts from time to time
credited to the Interest and Redemption Fund, or (v) any other
circumstance which results in excess funds being properly deposited
in the Interest and Redemption Fund that are available for such
purpose. The reductions in the Net Rent payments contemplated by
this subsection 6.01(b) shall be made by applying such excess
amounts as a credit(s) against the next Net Rent payment(s) due
after such excess amounts have actually become available in the
Interest and Redemption Fund, until such excess amounts are
exhausted. The City shall request the Trustee to calculate such
reductions and furnish them to the Lessee in a timely manner prior
to the date on which Net Rent is payable. In the event the Trustee
fails to furnish Lessee with the amount of any such reduction, it
shall be the Lessee's obligation to ascertain the correct amount of
such reductions or pay as Net Rent the full amount provided in
subsection 6.01(a) hereof. After all Net Rent has been paid and no
Bonds remain Outstanding within the meaning of the Trust Indenture
and no amounts remain due and owing under the Trust Indenture,
then, any amounts remaining in the Interest and Redemption Fund
which are paid over to the City by the Trustee shall be deemed
overpayments of Net Rent and paid over by the City to Lessee within
30 days of their receipt by the City.
Section 6.02: Obligation to Pay Net Rent Unconditional. It
is understood and acknowledged by the Lessee that the Bonds will be
sold to the purchasers thereof in reliance upon the commitment of
Lessee to make the payments of Net Rent provided in Section 6.01
above, subject only to the reductions provided in subsection (b)
thereof. Accordingly, the obligations of the Lessee to make the
payments of Net Rent thus required shall be absolute and
unconditional and so long as the Bonds remain outstanding within
the meaning of the Trust Indenture, the Lessee (i) will not suspend
or discontinue any payments of Net Rent provided herein or seek any
offset against its obligations to pay such amounts or recoupment of
any amounts so paid, and (ii) will not terminate this Agreement or
otherwise seek to avoid or to reduce the payment of Net Rent for
any reason, including without limiting the generality of the
foregoing, termination of the Use and Lease Agreement or IAB
License Agreement, failure of the Lessee to complete the Projects,
failure of the City to acquire the Projects, failure of the Lessee
or the City to complete the construction or acquisition of any
other Special Facilities, failure of the City to pay or cause to be
paid any Costs of the Special Facilities (but without limiting the
City's obligations under Section 4.03 hereof) or any acts or
circumstances that may constitute failure of consideration,
destruction or damage to or condemnation of such facilities, or
frustration of purpose, any change in the tax or other laws of the
United States of America or the State of Texas, or any political
subdivision of either thereof or any failure of the City to perform
or observe any agreement, whether expressed or implied, or any
duty, liability or obligation arising out of or connected with this
Agreement. It is provided, however, that nothing contained in this
Section shall be construed to release the City from the performance
of any of the agreements on its part herein contained, and in the
event the City should fail to perform such agreement, the Lessee
may, without limitation of any other rights that the Lessee may
then have, institute such actions against the City as it may deem
necessary to compel the performance thereon, to seek damages or
other relief or to restrain or enjoin forbidden acts provided that
such institution of such actions shall not result in a reduction of
the payment of Net Rent hereunder.
Section 6.03: Pledge of Net Rent. It is expressly understood
and agreed that the Net Rent payable hereunder shall be pledged to
the payment of the Bonds and amounts due under the Trust Indenture
in accordance with the Trust Indenture, and that, so long as any
Bonds remain Outstanding, such Net Rent shall be paid in the
amounts and manner herein specified. In the Trust Indenture the
City shall covenant not to permit any modification of or amendment
to Section 6.01 of this Agreement or to any other provision hereof
that would have the effect of reducing, altering or modifying the
commitments of Lessee contained in Sections 6.01 or 6.02 hereof or
would materially minimize, reduce or lessen the rights of the City
after an Event of Default in the payment of Net Rent by Lessee or
would materially and adversely affect the security provided for the
payment of the Bonds, and no such modification or amendment hereto
shall be permitted while the Bonds remain Outstanding.
Section 6.04: Operation and Maintenance Expenses; Other
Costs. The Net Rent, which is to be pledged to the payment of the
Bonds and amounts due under the Trust Indenture, is intended to be
a net return to the City. Accordingly, in addition to the payment
of all Net Rent hereunder, the Lessee hereby agrees to pay (or
cause to be paid pursuant to the Use and Lease Agreement and IAB
License Agreement) all operation and maintenance expenses
applicable to the Special Facilities, including, without
limitation, utility costs, any insurance premiums applicable
thereto, any and all ad valorem or other property taxes lawfully
levied or assessed against the Special Facilities or Lessee's
leasehold estate therein, any and all lawful excise and other types
of taxes imposed on or in respect of such properties, the expenses
of upkeep thereof of every kind and character, including the repair
or ordinary restoration thereof, and every other item of expense
imposed on Lessee pursuant to this Agreement, and if the Special
Facilities are operated by the City, all direct and allocable
indirect Airport System costs of operating and maintaining the
Special Facilities (while operated by the Airport System) in a
manner consistent with other such allocations equitably applied on
an Airport-wide basis.
Section 6.05: Charges for Ground Lease Properties and
Easements. All charges for Ground Lease Properties (which
constitute part of the Leased Premises under the Use and Lease
Agreement and IAB License Agreement) and Easements are or will be
included in rents and charges under the Use and Lease Agreement and
IAB License Agreement.
ARTICLE VII
USE OF SPECIAL FACILITIES;
REPRESENTATIONS AND UNDERTAKINGS BY LESSEE AND CITY
Section 7.01: General. Lessee shall have the rights to use
and enjoy the Special Facilities, including the rights of
possession and quiet enjoyment of the Special Facilities, for the
purpose of (i) constructing, maintaining and operating the Projects
in accordance with the terms hereof and (ii) subject to the terms
of the Use and Lease Agreement and IAB License Agreement,
conducting other authorized activities of Lessee not inconsistent
with the terms hereof.
Section 7.02: Rights to Use Lessee's Terminal Improvements
Subject to Use and Lease Agreement. (a) The Lessee's rights to
design, construct, equip, furnish, repair, maintain, occupy, use
and enjoy Lessee's Terminal B Improvements, Lessee's Terminal C
Improvements and Lessee's IAB Improvements and any other Special
Facilities located in or attached to Terminals B or C or the IAB
shall not exist independent of Lessee's right to use, or to obtain
a lease for the use of, Terminals B and/or C pursuant to the Use
and Lease Agreement or the IAB pursuant to the IAB License
Agreement, respectively. Additionally, to the extent that such
Special Facilities overlie, adjoin or abut space designated as
public space in the Use and Lease Agreement or IAB License
Agreement, then such Special Facilities shall not be used or
occupied by Lessee in any way that would impede or prevent public
access to or enjoyment of such overlaid, adjoining or abutting
public space as provided in the Use and Lease Agreement or IAB
License Agreement.
(b) Lessee shall have the right to use Special Facilities in
Terminals B and C and the IAB for the purpose of maintaining and
operating club rooms for its guests, invitees, and passengers and
may serve alcoholic beverages and appetizers therein with or
without charge and subject to all applicable laws, regulations and
ordinances; provided, however, that the City reserves the right to
charge Lessee applicable percentages of Lessee's gross revenues
from the sale of food and beverages consistent with the percentages
charged to its food and beverage concessionaires at the Airport, as
shall be provided in the Use and Lease Agreement or IAB License
Agreement; provided that no such payment shall be required with
respect to items obtained from concessionaires already obligated to
make such payments to the City with respect to such obtained items.
Section 7.03: Reservation to City of Special Rights with
Respect to Special Facilities in Terminal B.
A. City's Right to Review Space Utilization in Terminal B
and Take Back Space; Sublease of Certain Special Facilities to
City.
1. In July 2003, the City will evaluate Lessee's
utilization of Terminal B in terms of average number of daily
flights per gate for the immediately preceding 6-month period
(January 1 through June 30, 2003, referred to hereafter as the
"Test Period"). If Lessee's average gate utilization in
Terminal B is less than four flights per day during the Test
Period (determined by taking the total number of Terminal B
scheduled flights during the Test Period by Lessee, its code-
share airlines, Continental Express and other scheduled
airlines for which Lessee has a ground handling agreement, and
dividing by the product of total number of available gates in
Terminal B times 181 days) the Director may, at his option and
in order to accommodate the needs of other airline users of
the Airport, require Lessee to relinquish (as hereinbelow
provided) (1) a proportionate number of its gates at Terminal
B such that, on a pro-forma basis, excluding such relinquished
gates, the remaining gates would have demonstrated an average
utilization of at least 4 flights per day during the Test
Period and (2) a substantially identical proportionate amount
of holdroom, operations, ticket counter, ATO, baggage make-up,
and baggage claim space.
2. In the event the Director requires Lessee to
relinquish such space and gates, the Director and Lessee will
confer to determine which gates and space will be
relinquished. Lessee will be required to relinquish
contiguous gates, holdrooms and other exclusive leased space.
The Director and Lessee shall conduct good faith negotiations
in accordance with the foregoing to select the location of the
space and gates to be relinquished. If after sixty days of
good faith negotiations no agreement has been reached, the
Director shall select the gates and space to be relinquished.
Lessee will continue to have the nonexclusive right to use the
holdrooms and gates it relinquishes as a result of this
provision at rates established by the Director for such
nonpreferential use.
3. In evaluating gate utilization in Terminal B during
the Test Period, the City will adjust the data for Terminal B
flights to compensate for any unusual reductions by Lessee in
the number of flights operated in Terminal C during the Test
Period.
4. In order to accomplish the relinquishment of gates
and support space in Terminal B as hereinabove provided, the
Lessee agrees that it shall sublease to the City such Special
Facilities as may be located in or as may be necessary to
support such relinquished gates and space (or an appropriate
undivided interest or right of use therein) for the remaining
term hereof (or such shorter term as may be provided in the
Use and Lease Agreement if Lessee is permitted to reinstate
its lease of such relinquished gates and space) for a rental
equal to the sum of (i) the allocable expenses of operation
and maintenance of such Special Facilities or interest
therein, including City charges, if any, for allocable
indirect Airport System costs, plus (ii) an amount per annum
(or any portion thereof) equal to the annual debt service or
any portion thereof that would have been payable on the amount
of Bonds and any additional capital expenditures by Lessee not
funded with Bonds (documented to the reasonable satisfaction
of the Director) required to finance such allocable share of
Special Facilities determined as if the Bonds (i) were issued
in an original principal amount increased by the amount of any
unreimbursed capital expenditure by Lessee, (ii) had a final
maturity of December 31, 2017 and (iii) had an amortization
schedule such that they had equal debt service from the
average weighted date of beneficial occupancy of the Special
Facilities until December 31, 2017 (but not less than 18.0
years). The foregoing sublease provisions shall not relieve
Lessee from any responsibility with respect to its obligations
as Lessee under this Agreement, including particularly its
obligation to pay the full amount of Net Rent hereunder and
all of its other obligations with respect to the Bonds;
provided, however, that such sublease to the City shall
provide that the City shall use its best efforts to
continually require on Lessee's behalf that any occupant
receiving such occupancy rights from the City be obligated to
provide insurance and indemnification with respect to such
Special Facilities for the benefit of the City and Lessee to
the same extent that Lessee is obligated to do so herein and
provided further that Lessee shall not be required to
indemnify the City for acts of subtenants or their passengers
in and about such Special Facilities.
B. City's Right to Reconstruct Terminal B Flight Stations;
Sublease, Replacement or Acquisition of Certain Special Facilities.
1. In the event the City, on or after January 1, 2008,
determines that the Terminal B flight stations should be
demolished and replaced as recommended in the approved Airport
master plan, the Director may, upon giving Lessee 6-months
written notice, take back (as hereinbelow provided) portions
of Lessee's Terminal B leased premises in order to carry out
such reconstruction; provided, however, that in no event will
more than 25% of the gates and holdroom space be taken out of
service at any one time for such reconstruction; and provided
further that the City provides Lessee with reasonably
comparable substitute interim space during such
reconstruction. Lessee shall have the right of first refusal
to lease the reconstructed space at fully compensatory rates.
2. In order to accomplish the foregoing reconstruction
of certain Terminal B flight stations, the City shall (A) if
Lessee wishes to lease such reconstructed space (which Lessee
shall have the first right of refusal to lease), (i) at City
expense relocate at the new flight stations those salvageable
or reusable Special Facilities (e.g. passenger loading bridges
and Ground Support Equipment) and (ii) replace any demolished
or non-reusable Special Facilities with replacement facilities
of equivalent value and utility to Lessee determined as of the
date of such replacement in the reconstructed flight stations
leased to Lessee and (B) acquire such demolished or removed
Special Facilities for a purchase price equal to the original
principal amount of Bonds and any additional capital
expenditures by Lessee not funded with Bonds (documented to
the reasonable satisfaction of the Director) allocable to such
Special Facilities multiplied by a fraction, the numerator of
which is the number of days from the date of acquisition to
December 31, 2017 and the denominator of which is the number
of days (but not less than 18.0 years) from the average
weighted date of beneficial occupancy of such Special
Facilities to December 31, 2017. Any such acquisition, but
not relocation, costs shall be treated by the City as costs of
the replacement flight stations, subject to rents and charges
as provided in the Use and Lease Agreement. Under no
circumstances will the foregoing described demolition and
replacement of flight stations in Terminal B, nor the
relocation, substitution or acquisition of Special Facilities
as aforesaid relieve Lessee of its obligations under this
Agreement, particularly with respect to the payment of Net
Rent or any of its other obligations with respect to the
Bonds.
Section 7.04: Non-Extension of Terminal B Lease. The City
may elect not to renew the Use and Lease Agreement with respect to
Terminal B beyond December 31, 2007 provided the City shall have
(i) exercised certain rights with respect to taking over the
Automated People Mover and assumed or refinanced the Series 1997A
Bonds issued contemporaneously with the Bonds (and any additional
bonds issued on a parity therewith) in accordance with the Series
1997A Special Facilities Lease and (ii) purchased all of Lessee's
rights in the Special Facilities located in Terminal B (other than
the Ground Support Equipment and, if built, the Baggage Transfer
Facility) for a price equal to the original principal amount of
Bonds and any additional capital expenditures, by Lessee not funded
by Bonds (documented to the reasonable satisfaction of the
Director) allocable to such purchased Special Facilities in
Terminal B (but excluding any such amounts allocable to the Prior
Tenant Improvements) multiplied by a fraction, the numerator of
which is the number of days from the date of acquisition to
December 31, 2017 and the denominator of which is the number of
days (but not less than 18.0 years) from the average weighted date
of beneficial occupancy of such Special Facilities to December 31,
2017.
In the event of such non-renewal of the Use and Lease
Agreement with respect to Terminal B, the Series 1997B Bonds
maturing in 2017 shall become subject to extraordinary required
redemption as provided in the Trust Indenture. In such case Lessee
shall remain responsible for the payment of Net Rent, as herein
provided, in amounts fully sufficient to fund in a timely manner
all costs and expenses of paying such Bonds upon such extraordinary
required redemption.
Upon any such extraordinary required redemption of such Bonds,
the City shall convey to Lessee all of its right, title and
interest in and to the Ground Support Equipment.
Section 7.05: Non-Extension of Terminal C Lease. In the
event that the City and Lessee have not provided the Trustee with
a certified Qualified Terminal C Occupancy Agreement by no later
than December 31, 2017 (or by no later than the subsequent
scheduled expiration date of a previously delivered Qualified
Terminal C Occupancy Agreement), then all then Outstanding Bonds
maturing in 2027 and Series 1998B Bonds shall be subject to
extraordinary required redemption as provided in the Trust
Indenture on February 28, 2018 or such later date that is 60 days
after the expiration date of any Qualified Terminal C Occupancy
Agreement and the Lessee shall be responsible for the payment of
Net Rent, as herein provided, in amounts fully sufficient to fund
in a timely manner all costs and expenses of such extraordinary
required redemption, and the City shall have no obligation
whatsoever with respect to such Bonds or such Net Rent.
Section 7.06: Non-Extension of IAB License Agreement. In the
event the City certifies the Trustee at any time that it has not
extended the IAB License Agreement pertaining to the IAB Special
Facilities, then $1,600,000 of the Series 1998B Bonds shall be
subject to extraordinary required redemption as provided in the
Trust Indenture, and the Lessee shall be responsible for the
payment of Net Rent, as herein provided, in amounts fully
sufficient to fund in a timely manner all costs and expenses of
such extraordinary required redemption, and the City shall have no
obligation whatsoever with respect to such Bonds or such Net Rent.
However, the City covenants that so long as Lessee has
international operations which it schedules in to or out from the
IAB and is not in default (beyond any notice and cure period) under
the IAB License Agreement, the City shall not terminate or refuse
to renew or extend the IAB License Agreement to the extent
reasonably required to accommodate such international operations
and the 1998B Project.
ARTICLE VIII
LESSEE'S OBLIGATIONS AND CONDITIONS TO
LESSEE'S USE OF SPECIAL FACILITIES
Section 8.01: Maintenance of Special Facilities at Lessee's
Expense. Subject to the other terms of this Agreement, Lessee
shall throughout the term of this Agreement assume the entire
responsibility, cost and expense, for the operation and all repair
and maintenance whatsoever of the Special Facilities, whether such
repair or maintenance be ordinary or extraordinary, structural or
otherwise. Additionally, without limiting the generality of the
foregoing, Lessee shall:
(a) Maintain at all times the Special Facilities in a good
state of repair and preservation, excepting ordinary wear and tear
and obsolescence in spite of repair.
(b) Replace or substitute any furnishings, fixtures and
equipment constituting a part of the Special Facilities (other than
Ground Support Equipment and the Prior Tenant Improvements) which
are reasonably considered by the Director to have become
inadequate, worn out or unsuitable with furnishings, fixtures and
equipment having a value at least as great as the original value of
the furnishings, fixtures and equipment replaced or substituted;
provided, however, that unencumbered title (free of all liens) to
all replacement or substitute furnishings, fixtures and equipment,
unless removable by Lessee in accordance with Section 5.06 hereof,
shall vest in the City at the expiration hereof.
(c) Keep at all times, in a clean and orderly condition and
appearance, the Special Facilities which are open to or visible by
the general public.
Section 8.02: Taxes, Charges, Utilities, Liens. (a) Lessee
shall pay all taxes that may be levied, assessed or charged upon
the Special Facilities or Lessee's leasehold estate therein by the
State of Texas or any of its political subdivisions or municipal
corporations, and shall obtain and pay for all licenses and permits
required by law. However, Lessee shall have the right to contest,
in good faith, the validity or application of any such tax, license
or permit and shall not be considered in default hereunder as long
as such contest is in progress and diligently prosecuted. City
agrees to cooperate with Lessee in all reasonable ways in
connection with any such contest other than a contest of any tax,
permit or license of the City.
(b) Lessee shall pay for all water, heat, electricity, air
conditioning, sewer rents and other utilities to the extent that
such utilities are furnished to the Special Facilities other than
pursuant to the Use and Lease Agreement or IAB License Agreement.
(c) Lessee shall neither cause or permit any laborers,
mechanics, builders, carpenters, materialmen, contractors, or other
liens or encumbrances (including judgment and tax liens) against
the Special Facilities or any City property by virtue of the
construction, repair or replacement of the Special Facilities;
provided, however, that Lessee may at its own expense in good faith
contest the validity of any alleged or asserted lien and may permit
any contested lien to remain unsatisfied and undischarged during
the period of such contest and any appeal therefrom unless by such
action any part of the Special Facilities may be subject to a
material risk of loss or forfeiture, in any of which events such
lien shall be promptly satisfied or bonded around in accordance
with Texas law.
Section 8.03: Compliance with Airport Rules and Regulations
and Law; Nondiscrimination. With respect to the Special
Facilities, Lessee shall observe and obey Airport rules and
regulations promulgated pursuant to the Use and Lease Agreement,
shall comply with applicable law as provided in the Use and Lease
Agreement, and shall not discriminate against any person or class
of persons by reason of race, color, religion, sex, national origin
or ancestry, age or physical or mental handicaps as provided in the
Use and Lease Agreement.
Section 8.04: Compliance with Tax Law. With respect to the
Special Facilities, Lessee hereby covenants and agrees as follows:
(a) Lessee shall comply or cause to be complied with all tax
covenants with respect to the Special Facilities and the Bonds
contained in the Trust Indenture;
(b) Lessee shall continuously repair, preserve, replace or
substitute, as needed, all Special Facilities, at its expense, to
the extent necessary to maintain and/or extend the reasonably
expected economic life of the Special Facilities to satisfy the tax
covenant contained in the Trust Indenture. All property for which
replacements or substitutions are made by Lessee as provided herein
shall become Lessee's property (and such replacement or substituted
property shall become the City's property);
(c) Lessee hereby elects not to claim depreciation or an
investment credit for federal income tax purposes with respect to
any portion of the Special Facilities; Lessee will take all actions
necessary to make this election binding on all its successors in
interest under this Agreement; and this election shall be
irrevocable.
Section 8.05: Environmental Matters.
A. Lessee shall comply with all federal, state, local
statutes, ordinances, regulations, rules, policies, codes or
guidelines now or hereafter in effect, as same may be amended from
time to time, which govern Hazardous Materials (as hereinbelow
defined) or relate to the protection of human health, safety or the
environment and which are applicable to the conduct of Lessee's
business operations from the Special Facilities, and shall include
but not be limited to: the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. Section 136 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300(f) et seq.; the Oil Pollution
Control Act of 1990, 33 U.S.C. Section 270 et seq.; the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601 et seq.; and as
amended by the Superfund Amendments and Reauthorization Act of
1986, Pub. Law ▇▇. ▇▇-▇▇▇, ▇▇▇ ▇▇▇▇. ▇▇▇▇; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act as
amended, 42 U.S.C. Section 7401 et seq.; the Clean Water Act, 33
U.S.C. Section 1251, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C., Section 6901 et seq.; and
those substances defined as hazardous waste or as hazardous
substances under the laws of Texas and/or the United States or in
regulations promulgated pursuant to such laws (collectively,
"Environmental Laws").
B. Any fines or penalties that may be levied against the
City by the Environmental Protection Agency or the Texas Natural
Resource Conservation Commission or any other governmental agency
for Lessee's failure to comply with the Environmental Laws as
required by Section 8.05(A) hereof shall be reimbursed to the City
by Lessee within ten (10) days of receipt of an invoice from City
for such fines or penalties.
C. Lessee shall prevent the presence, use, generation,
release, omission, discharge, storage, disposal or transportation
of any Hazardous Materials on, under, in, above, to or from
facilities subject to this Agreement by Lessee, other than in
strict compliance with all Environmental Laws. For purposes of
this Section, "Hazardous Materials" shall be interpreted in the
broadest sense to include any and all substances, materials,
wastes, pollutants, oils, or governmental regulated substances or
contaminants as defined or designated as hazardous, toxic,
radioactive, dangerous, or any other similar term in or under any
of the Environmental Laws, including but not limited to, asbestos
and asbestos containing materials, petroleum products including
crude oil or any fraction thereof, gasoline, aviation fuel, jet
fuel, diesel fuel, lubricating oils and solvents, urea
formaldehyde, flammable explosives, PCBs, radioactive materials or
waste, or any other substance that, because of its quantity,
concentration, physical, chemical, or infectious characteristics
may cause or threaten a present or potential hazard to human health
or the environment when improperly generated, used, stored,
handled, treated, discharged, distributed, disposed or released.
Hazardous Materials shall also mean any and all hazardous
materials, hazardous wastes, toxic substances, or regulated
substances under any Environmental Laws.
D. Lessee acknowledges that the Airport is subject to the
National Pollution Discharge Elimination System Program ("NPDES")
and its regulations relating to stormwater discharges, 40 CFR Part
122, for operations that occur at the Airport. Lessee further
acknowledges that it is familiar with these NPDES stormwater
regulations, that it will conduct operations at the Special
Facilities subject to 40 CFR Part 122 as it may be amended from
time to time.
E. City and Lessee both acknowledge that close cooperation
is necessary to ensure compliance with any NPDES stormwater
discharge permit, as well as to ensure safety and to minimize
costs. Lessee acknowledges that it may be necessary to undertake
to minimize the exposure of stormwater to significant materials
generated, stored, handled or otherwise used by Lessee at the
Special Facilities as defined in the federal stormwater
regulations, by implementing and maintaining "Best Management
Practices" as defined in 40 CFR, Part 122.2, as it may be amended
from time to time.
F. Lessee acknowledges that City's NPDES stormwater
discharge permit, to the extent affecting the Special Facilities,
is incorporated by reference into this Agreement and any subsequent
amendments, extensions or renewals. Lessee agrees to be bound by
all applicable portions of said permit. City shall promptly notify
Lessee of any changes to any portions of said permit applicable to,
or that affect, Lessee's operations.
G. City shall provide Lessee with written notice of those
NPDES stormwater discharge permit requirements that Lessee shall be
obligated to perform from time to time at the Special Facilities,
including, but not limited to: certification of non-stormwater
discharges; collection of stormwater samples; preparation of
stormwater pollution prevention or similar plans; implementation of
"good housekeeping" measures or Best Management Practices; and
maintenance of necessary records. Such written notice shall
include applicable deadlines. Lessee, within 15 days of receipt of
such written notice, shall notify City in writing if it disputes
any of the NPDES stormwater discharge permit requirements it is
being directed to undertake. If Lessee does not provide such
timely notice, it is deemed to assent to undertake such
requirements. If Lessee provides City with written notice, as
required above, that it disputes such NPDES stormwater discharge
permit requirements, City and Lessee agree to negotiate a prompt
resolution of their differences. Lessee warrants that it will not
object to City notices required pursuant to this paragraph unless
Lessee has a good faith basis to do so.
H. City and Lessee agree to provide each other upon request,
with any non-privileged information collected and submitted to any
governmental entity(ies) pursuant to applicable NPDES stormwater
regulations applicable to the Special Facilities.
I. Lessee agrees to participate in any reasonable manner
requested by the City in any City organized task force or other
work group established to coordinate stormwater activities at the
Airport.
J. All such remedies of City with regard to environmental
requirements as set forth herein shall be deemed cumulative in
nature and shall survive termination of this Agreement.
K. LESSEE SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD HARMLESS
THE CITY AND ITS OFFICERS, AGENTS AND EMPLOYEES FROM AND AGAINST
ANY LOSS, COST, CLAIM, DEMAND, PENALTY, FINE, SETTLEMENT, LIABILITY
AND EXPENSE (INCLUDING BUT NOT LIMITED TO REASONABLE ATTORNEYS' AND
CONSULTANTS' FEES, COURT COSTS AND LITIGATION EXPENSES) RELATED TO
(1) LESSEE'S USE OF HAZARDOUS MATERIALS OF WHATEVER KIND OR
NATURE, KNOWN OR UNKNOWN, ON THE SPECIAL FACILITIES;
(2) ANY ACTUAL, THREATENED OR ALLEGED CONTAMINATION BY
HAZARDOUS MATERIALS ON THE GROUND LEASE PROPERTIES, EASEMENTS OR
SPECIAL FACILITIES BY LESSEE OR ITS AGENTS;
(3) THE DISPOSAL, RELEASE OR THREATENED RELEASE OF HAZARDOUS
MATERIALS BY LESSEE OR ITS AGENTS AT THE GROUND LEASE PROPERTIES,
EASEMENTS OR SPECIAL FACILITIES THAT IS ON, FROM OR AFFECTS THE
SOIL, AIR, WATER, VEGETATION, BUILDINGS, PERSONAL PROPERTY, OR
PERSONS;
(4) ANY PERSONAL INJURY, DEATH OR PROPERTY DAMAGE (REAL OR
PERSONAL) ARISING OUT OF OR RELATED TO HAZARDOUS MATERIALS USED BY
LESSEE AT THE GROUND LEASE PROPERTIES, EASEMENTS OR SPECIAL
FACILITIES; OR
(5) ANY VIOLATION BY LESSEE OF ANY ENVIRONMENTAL LAWS AT
GROUND LEASE PROPERTIES, EASEMENTS OR THE SPECIAL FACILITIES.
PROVIDED HOWEVER, THAT NONE OF THE FOREGOING INDEMNITY SHALL
BE APPLICABLE TO LOSSES, COSTS, EXPENSES, CLAIMS, DEMANDS,
PENALTIES, FINES, SETTLEMENTS, LIABILITIES AND EXPENSES WHICH
RESULT FROM CONDITIONS EXISTING AS OF THE EFFECTIVE DATE OF THIS
AGREEMENT OR WHICH RESULT FROM THE ACTION OF THE CITY OR ITS
AGENTS.
Section 8.06: City's Right To Maintain or Repair Special
Facilities. In the event Lessee fails (i) to commence within
thirty (30) days after written notice from the Director to do any
maintenance or repair work to the Special Facilities required to be
done under the provisions of this Agreement, other than preventive
maintenance; (ii) to commence such work within a period of ninety
(90) days if such notice specifies that the work to be accomplished
by the Lessee involves preventive maintenance only; or (iii) to
diligently continue to completion any such work as required under
this Agreement; then, the Director or the City may, at its option,
and in addition to any other remedies which may be available to it,
enter the Special Facilities, without such entering causing or
constituting a cancellation of this Agreement or an interference
with the possession of the Special Facilities, and repair,
maintain, replace, rebuild or paint all or any part of the Special
Facilities and do all things reasonably necessary to accomplish the
work required, and the reasonable cost and expense thereof shall be
payable to the City by Lessee on written demand; provided, however,
if in the reasonable opinion of the Director or the City, the
Lessee's failure to perform any such repair or maintenance
endangers the safety of the public, the employees or other tenants
at the Airport, and the Director or the City so states same in its
notice to Lessee, the Director or the City may perform such
maintenance at any time after the giving of such notice, and Lessee
agrees to pay to City the reasonable cost and expense of such
performance on demand. In the event of the exercise by City of any
repair work on the Special Facilities, City shall use all
reasonable efforts to minimize any interference or interruption
with Lessee's business operations.
Section 8.07: Termination Procedures. Upon the expiration or
termination of this Agreement pursuant to any terms hereof, Lessee
shall surrender the Special Facilities to the City in a good state
of repair and preservation, excepting ordinary wear and tear and
obsolescence in spite of repair, unless otherwise permitted in
Article IX hereof.
ARTICLE IX
LIABILITY, INSURANCE AND CONDEMNATION
Section 9.01: Release and Indemnification of City.
A. THE LESSEE, ITS SUCCESSORS AND ASSIGNS OF THIS AGREEMENT
(IN THIS SECTION, THE "AIRLINE") HEREBY RELEASE, RELINQUISH AND
DISCHARGE THE CITY, ITS PREDECESSORS, SUCCESSORS, ASSIGNS, LEGAL
REPRESENTATIVES AND ITS COLLECTIVE FORMER, PRESENT AND FUTURE
AGENTS, EMPLOYEES AND OFFICERS (COLLECTIVELY IN THIS SECTION
"CITY") FROM ANY LIABILITY OF THE CITY FOR (i) ANY DAMAGE TO
PROPERTY OF AIRLINE OR (ii) FOR CONSEQUENTIAL DAMAGES SUFFERED BY
AIRLINE, WHERE ANY SUCH DAMAGE IS SUSTAINED IN CONNECTION WITH OR
ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT.
B. WITH NO INTENT TO AFFECT AIRLINE'S ENVIRONMENTAL
INDEMNIFICATION SET FORTH IN SECTION 8.05(L), AIRLINE, EXPRESSLY
AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD THE CITY COMPLETELY
HARMLESS FROM AND AGAINST (BUT SUBJECT TO SECTIONS D, E AND F
HEREOF): (I) ANY AND ALL LIABILITIES, LAWSUITS, CAUSES OF ACTION,
LOSSES, CLAIMS, JUDGMENTS, DAMAGES, FINES OR DEMANDS ARISING BY
REASON OF OR IN CONNECTION WITH THE ACTUAL OR ALLEGED ERRORS,
OMISSIONS, OR NEGLIGENT ACTS OF AIRLINE OR OF THE CITY IN
CONNECTION WITH OR ARISING OUT OF THE PERFORMANCE OF THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, BODILY INJURY, ILLNESS,
PHYSICAL OR MENTAL IMPAIRMENT, DEATH OF ANY PERSON, OR THE DAMAGE
TO OR DESTRUCTION OF ANY REAL OR PERSONAL PROPERTY; AND (II) ALL
COSTS FOR THE INVESTIGATION AND DEFENSE OF ANY AND ALL LIABILITIES,
LAWSUITS, CAUSES OF ACTION, LOSSES, CLAIMS, JUDGMENTS, DAMAGES,
FINES OR DEMANDS REFERRED TO IN THE PRECEDING CLAUSE (I) INCLUDING,
BUT NOT LIMITED TO, REASONABLE ATTORNEY FEES, COURT COSTS,
DISCOVERY COSTS, AND EXPERT FEES). SUBJECT TO SUBSECTIONS D, E AND
F HEREOF, AIRLINE'S AGREEMENT TO PROTECT, DEFEND, INDEMNIFY AND
HOLD HARMLESS THE CITY EXPRESSLY EXTENDS TO THE ACTUAL OR ALLEGED
JOINT OR CONCURRENT NEGLIGENCE OF CITY AND AIRLINE.
C. UPON THE FILING BY ANYONE OF ANY TYPE OF CLAIM, CAUSE OF
ACTION, OR LAWSUIT AGAINST THE CITY FOR ANY TYPE OF DAMAGES ARISING
OUT OF INCIDENTS FOR WHICH CITY IS TO BE INDEMNIFIED BY AIRLINE
PURSUANT TO THIS SECTION 9.01, THE CITY SHALL, WITHIN 45 DAYS OF
CITY BECOMING AWARE THEREOF, NOTIFY AIRLINE OF SUCH CLAIM, CAUSE OF
ACTION OR LAWSUIT. IN THE EVENT THAT AIRLINE DOES NOT SETTLE OR
COMPROMISE SUCH CLAIM, CAUSE OF ACTION, OR LAWSUIT AT ITS OWN COST,
TO THE EXTENT AIRLINE IS REQUIRED TO INDEMNIFY CITY PURSUANT TO
THIS SECTION 9.01, THEN AIRLINE SHALL UNDERTAKE THE LEGAL DEFENSE
OF SUCH CLAIM, CAUSE OF ACTION, OR LAWSUIT AT ITS OWN COST THROUGH
COUNSEL OF RECOGNIZED CAPACITY OR OTHERWISE NOT REASONABLY
DISAPPROVED BY THE CITY BOTH ON BEHALF OF ITSELF AND ON BEHALF OF
CITY UNTIL FINAL DISPOSITION, INCLUDING ALL APPEALS. THE CITY MAY,
AT ITS SOLE COST AND EXPENSE, PARTICIPATE IN THE LEGAL DEFENSE OF
ANY SUCH CLAIM, CAUSE OF ACTION, OR LAWSUIT BY AIRLINE TO DEFEND
AGAINST SUCH CLAIM, CAUSE OF ACTION OR LAWSUIT. ANY FINAL JUDGMENT
RENDERED AGAINST CITY FOR ANY CAUSE FOR WHICH CITY IS TO BE
INDEMNIFIED AGAINST PURSUANT TO THIS SECTION 9.01 SHALL BE
CONCLUSIVE AGAINST AIRLINE AS TO LIABILITY AND AMOUNT UPON THE
EXPIRATION OF THE TIME FOR ALL APPEALS.
D. THE PROVISIONS OF SECTION 9.01B AND C HEREOF SHALL NOT
APPLY TO ANY CLAIM OR DEMAND (I) ARISING AT ANY TIME WHEN THE CITY
IS OPERATING THE PROJECT (OR IS RESPONSIBLE FOR THE OPERATION
THEREOF PURSUANT TO ANY SUBLEASE OR OTHER AGREEMENT), (II) ARISING
SOLELY FROM THE NEGLIGENCE OF THE CITY OR SOLELY FROM THE BREACH OF
THE CITY'S EXPRESS OBLIGATIONS HEREUNDER, OR WHEN THE CITY IS MORE
THAN 50% LIABLE, (III) IF SUCH CLAIM OR DEMAND RELATES TO ANY ACT
OR OMISSION OCCURRING OUTSIDE THE PREMISES LEASED EXCLUSIVELY OR
PREFERENTIALLY TO AIRLINE UNDER THIS AGREEMENT, UNLESS AIRLINE IS
MORE LIABLE FOR (I.E., IS MORE AT FAULT FOR) SUCH CLAIM OR DEMAND
THAN EACH OTHER PARTY TO SUCH CLAIM OR DEMAND, OR (IV) TO THE
EXTENT THE CLAIM OR DEMAND IS COVERED UNDER THE INSURANCE CARRIED
PURSUANT TO SECTIONS 9.02 AND 9.03 HEREOF; PROVIDED, THAT, IF (a)
A CLAIM OR DEMAND IS MADE AGAINST AIRLINE BY A THIRD PARTY FOR
WHICH AIRLINE HAS INSURANCE COVERAGE PURSUANT TO SECTIONS 9.02 AND
9.03 HEREOF, AND (b) THERE IS A DEDUCTIBLE CARRIED BY AIRLINE
APPLICABLE TO SUCH CLAIM OR DEMAND (OR AIRLINE, THROUGH SELF-
INSURANCE OR OTHER SELF-FUNDED INSURANCE PROGRAM, BEARS THE
FINANCIAL RISK OF ANY PORTION OF SUCH CLAIM OR DEMAND AS TO THE
DEDUCTIBLE ONLY), THEN THE PROVISIONS OF SECTION 9.01B AND C (AND
BY REFERENCE, SUBSECTIONS D AND E HEREOF) SHALL APPLY TO SUCH
PORTION OF THE CLAIM OR DEMAND THAT IS SUBJECT TO SUCH DEDUCTIBLE
OR SELF-INSURANCE OF THE DEDUCTIBLE OR OTHER SELF-FUNDED INSURANCE
PROGRAM AS TO THE DEDUCTIBLE (AND TO ANY OTHER PORTION OF THE CLAIM
OR DEMAND AS TO THE CITY THAT IS NOT SATISFIED WITH INSURANCE
PROCEEDS). FOR PURPOSES OF THIS SECTION, LESSEE STIPULATES THAT AS
TO EACH CLAIM OR DEMAND THAT MAY BE SUBJECT TO THE PROVISIONS
HEREOF, THE DEDUCTIBLE AMOUNT SHALL NEVER BE DEEMED TO BE GREATER
THAN $1,000,000.
E. NOTWITHSTANDING ANYTHING IN THIS SECTION TO THE CONTRARY,
THE LIABILITY OF THE AIRLINE UNDER SECTION 9.01.B AND C SHALL NOT
EXCEED $1,000,000 PER OCCURRENCE.
F. THE PROVISIONS OF THIS SECTION 9.01.B, C, D AND E SHALL
BE INDEPENDENT OF ANY INDEMNITIES TO WHICH THE CITY MAY BE ENTITLED
UNDER THE PROVISIONS OF THE USE AND LEASE AGREEMENT.
Section 9.02: General Insurance Requirements. With no intent
to limit Lessee's liability or the indemnification provisions
herein, Lessee shall provide and maintain certain insurance in full
force and effect at all times during the term of this Agreement and
all extensions thereto, as set forth in Section 9.03 below. If any
of the insurance is written as "claims made" coverage, then Lessee
agrees to keep such claims made insurance in full force and effect
by purchasing policy period extensions for at least three years
after the expiration or termination of this Agreement.
Section 9.03: Risks and Minimum Limits of Coverage.
Worker's Compensation: Statutory
Employer's Liability: Bodily injury by accident -
$1,000,000 (each accident)
Bodily injury by disease -
$1,000,000 (policy limit)
Bodily injury by disease -
$1,000,000 (each employee)
Commercial General Liability:
(including broad form Combined single limit of:
coverage, contractual $100,000,000 per occurrence/
liability, personal aggregate
injury, and products Products and Completed Operations
and completed operations)$10,000,000 aggregate
All Risk:
(Covering Special Replacement value of the Special
Facilities including Facilities, but not less than the
fire, lightning, principal amount of Bonds
vandalism, and extended Outstanding
coverage perils)
and extended coverage perils) Bonds Outstanding
Automobile Liability Insurance:
(For automobiles used by $5,000,000 combined single limit
Lessee in the course of per occurrence
its performance under
this Agreement, including
Lessee's non-owned and
hired autos)
In connection with the design, construction, procurement and
installation of the Special Facilities, Lessee shall
contractually require its principal construction contractors
and architects/engineers contracting with Lessee (as the case
may be) to carry the following additional coverages and limits
of liability, unless Lessee carries policies of insurance
covering such risk; provided, however, if reasonable under the
circumstances, Lessee may, with the concurrence of the
Director, require lower limits of liability:
Professional Liability $2,000,000 per occurrence/aggregate
(in the case of architects
and engineers)
Builders Risk: Replacement value of the Special
(in the case of Facilities, but not less than the
contractors) principal amount of Bonds
Outstanding
(Aggregate limits are per 12-month period unless otherwise
indicated.)
Section 9.04. Other Provisions.
A. Form of Policies. The insurance carried by Lessee may be
in one or more policies of insurance, the form of which shall be
reasonably satisfactory to the Director. Nothing the Director does
or fails to do shall relieve Lessee from its duties to provide the
required coverage hereunder (unless specifically provided otherwise
in such action), and the Director's actions or inactions shall not
be construed as waiving the City's rights hereunder.
B. Issuers of Policies. The issuer of any policy carried by
Lessee shall have a Certificate of Authority to transact insurance
business in the State of Texas and have a Best's rating of at least
B+ and a Best's Financial Size Category of Class VI or better,
according to the most current edition of Best's Key Rating Guide,
Property-Casualty United States. Each issuer must be responsible
and reputable, must have financial capability consistent with the
risks covered, and shall be subject to approval by the Director.
C. Insured Parties. Each policy carried by Lessee, except
those for Workers Compensation, Professional Liability and
Employer's Liability, shall name the City (and its officers,
agents, and employees) as Additional Insured parties on the
original policy and all renewals or replacements during the term of
this Agreement. The City, the Trustee and Lessee shall be named
joint Loss Payees on All Risk and Builders Risk coverages, subject
to distribution of proceeds as provided elsewhere herein.
D. Deductibles. Subject to Section 9.01(D) herein, Lessee
shall assume and bear any claims or losses to the extent of any
deductible amounts (or deductible amounts that are self-insured by
Lessee) and waives any claim it may ever have for the same against
the City, its officers, agent, or employees.
E. Cancellation. Each policy carried by Lessee shall
expressly state that it may not be canceled, materially modified or
not renewed unless the insurance company gives thirty (30) days'
advance written notice in writing to the Director.
F. Aggregates. Lessee shall give written notice to the
Director within five (5) days of the date upon which total claims
by any party against Lessee reduce the aggregate amount of coverage
below the amounts required by this Agreement. In the alternative,
the policy may contain an endorsement establishing a policy
aggregate for the particular project or location subject to this
Agreement.
G. Subrogation. Each policy carried by Lessee shall contain
an endorsement to the effect that the issuer waives any claim or
right in the nature of subrogation to recover against the City, its
officers, agents, or employees.
H. Endorsement of Primary Insurance. Each policy hereunder
except Worker's Compensation and Professional Liability shall be
primary insurance to any other insurance available to the
Additional Insured and Loss Payee with respect to claims arising
hereunder.
I. Liability for Premium. Lessee shall be solely
responsible for payment of all insurance premiums required
hereunder, and the City shall not be obligated to pay any premiums.
J. Contractors and Subcontractors. Lessee shall
contractually require all its contractors, and all its contractors
to require its subcontractors, to carry insurance naming the City
and the Trustee as an additional insured; however, contractual
liability shall be limited to the extent of such contractor's or
subcontractor's indemnification obligations under the applicable
contract. Such insurance shall meet all of the above requirements
as Lessee can successfully require such contractors or
subcontractors to meet, except amount. The amount shall be
commensurate with the amount of the contract. Lessee shall provide
copies of such insurance certificates to the Director.
K. Proof of Insurance. Within five (5) days of the
effective date of this Agreement and at any time during the term of
this Agreement, Lessee shall furnish the Director with certificates
of insurance, along with an affidavit from Lessee confirming that
the certificates accurately reflect the insurance coverage that
will be available during the term. If requested in writing by the
Director, Lessee shall furnish the City with certified copies of
Lessee's insurance policies.
Notwithstanding the proof of insurance required to be carried by
Lessee as set forth above, it is the intention of the parties
hereto that Lessee, continuously and without interruption, maintain
in force the required insurance as set forth above. Lessee agrees
that the City shall never be argued to have waived or be estopped
from asserting its right to terminate this Agreement hereunder
because of any acts or omissions by the City regarding its review
of insurance documents provided by Lessee, its agents, employees,
or assigns.
Section 9.05: Disposition of Insurance Proceeds. In the
event all of the Special Facilities or any part thereof is damaged
or destroyed by an insured casualty and any Bonds remain
Outstanding, then, notwithstanding any provision to the contrary in
the Use and Lease Agreement or IAB License Agreement, the following
provisions shall be applicable to the expenditure of any insurance
proceeds relating to such Special Facilities:
(i) If either (A) the insurance proceeds (less the
cost of removing the debris resulting from such casualty)
together with any moneys in the Interest and Redemption
Fund (including any Reserve Account) are sufficient to
pay all of the interest, principal and other obligations
accrued and to accrue on said Bonds until they are fully
and finally paid and all other amounts due under the
Trust Indenture and the Lessee requests that the Special
Facilities not be repaired or rebuilt, or (B) the
insurance proceeds (less the cost of removing the debris
resulting from such casualty) together with any moneys
available in the Interest and Redemption Fund (including
the Reserve Account) are insufficient and the Lessee
agrees to pay the deficiency and requests that the
Special Facilities not be repaired or rebuilt, then in
either case the Lessee may, if the casualty loss is
substantial, elect to terminate this Agreement and be
released from all unaccrued obligations hereunder;
provided that the insurance proceeds (less the cost of
removing the debris resulting from such casualty) and the
deficiency payments, if any, paid by the Lessee shall be
deposited into the Interest and Redemption Fund for the
Bonds and the moneys therein shall be applied to pay the
obligations with respect to the Outstanding Bonds and
other amounts due under the Trust Indenture. If the said
proceeds and funds are in excess of the amount then
necessary to pay the obligations with respect to the
Outstanding Bonds and other amounts due under the Trust
Indenture, any such excess after payment or provision for
the payment of the Bonds within the meaning of the Trust
Indenture and other amounts due under the Trust Indenture
has been made shall be divided between the City and the
Lessee as their respective interests appear at the time
of such damage or destruction; or
(ii) If all Bonds are not repaid as provided in
clause (i) above, Lessee agrees to cause such insurance
proceeds to be deposited in the Acquisition Fund under
the Trust Indenture and to promptly repair and rebuild
the Special Facilities with the insurance proceeds, and
if such proceeds are insufficient for such purposes, the
Lessee shall pay the deficiency. If such proceeds are in
excess of the amount necessary for such purposes, any
such excess shall be transferred by the Trustee to the
Interest and Redemption Fund as a credit to the next due
payments of Net Rent, with such credit to continue until
the amount thereof is exhausted and if the Net Rent is
paid in full, thereafter, any excess proceeds paid to
Lessee. The repair or restoration of the Special
Facilities shall either be in accordance with the
original plans and specifications, together with
alterations or modifications made or agreed upon prior to
the casualty, or in accordance with new or modified plans
and specifications, the alternative to be determined by
the mutual agreement of the City and Lessee. Before any
reconstruction or repair under this paragraph, Lessee
shall submit plans and specifications to the Director for
approval and such reconstruction or repair shall be
substantially in accordance therewith subject to such
changes as may be reasonably requested by Lessee and
approved by the City.
Section 9.06: Condemnation. In the event that the Special
Facilities or any part thereof shall be taken or condemned in any
eminent domain, condemnation, compulsory acquisition or like
proceeding by any competent authority or conveyed under threat
thereof for any public or quasipublic use or purpose and at such
time Bonds remain Outstanding within the meaning of the Trust
Indenture or any other amounts remain due under the Trust
Indenture, then, notwithstanding any provision to the contrary in
the Use and Lease Agreement and IAB License Agreement, the
condemnation proceeds shall be applied as follows:
(i) If all or a substantial part of the Special
Facilities is taken and either (A) the condemnation
proceeds attributable to the Special Facilities together
with any moneys in the Interest and Redemption Fund are
sufficient to pay all of the interest, principal and
other obligations accrued and to accrue on the Bonds
until they are fully and finally paid and all other
amounts due under the Trust Indenture and the Lessee
requests that the Special Facilities not be rebuilt else-
where, or (B) the condemnation proceeds attributable to
the Special Facilities and moneys available in the
Interest and Redemption Fund are insufficient to pay all
of the interest, principal and other obligations accrued
and to accrue on the Bonds until they are fully and
finally paid and all other amounts due under the Trust
Indenture and the Lessee agrees to pay the deficiency and
requests that the Special Facilities not be rebuilt
elsewhere or terminal facilities suitable for such
purpose are not available elsewhere, the City will
terminate this Agreement and release the Lessee from all
unaccrued obligations hereunder, provided that the
condemnation proceeds attributable to the Special
Facilities and deficiency, if any, paid by Lessee shall
be deposited into the Interest and Redemption Fund for
the Bonds and moneys therein shall be applied to pay the
obligations with respect to the outstanding Bonds and all
other amounts due under the Trust Indenture. If the said
proceeds and funds are in excess of the amount then
necessary to pay the obligations with respect to the
Outstanding Bonds and all other amounts due under the
Trust Indenture, any such excess after payment or
provision for the payment of the Bonds and all other
amounts due under the Trust Indenture within the meaning
of the Trust Indenture has been made shall be divided
between the City and the Lessee as their respective
interests appear at the time of the taking.
(ii) If all or a substantial part of the Special
Facilities is taken and the Lessee requests that the
Special Facilities be rebuilt elsewhere, the Special
Facilities shall be rebuilt elsewhere and paid for with
the condemnation proceeds attributable to the Special
Facilities, and if such proceeds are insufficient for
such purposes the Lessee shall pay the deficiency. If
such proceeds attributable to the Special Facilities are
in excess of the amount necessary for such purpose, any
such excess shall be paid to the City and deposited by it
to the Interest and Redemption Fund for said Bonds as a
credit to the next due payments of Net Rent, with such
credit to continue until the amount thereof is exhausted
and, thereafter, any excess proceeds paid to Lessee.
(iii) In the event that title to or use of less
than a substantial part of the Special Facilities is
taken by the power of eminent domain (that is, if the
primary use of the Special Facilities is not
substantially impaired by deletion of the part taken) the
Lessee shall determine whether any rebuilding is
necessary. Any condemnation proceeds attributable to the
Special Facilities that are not used for the purposes of
rebuilding shall be assigned to the City and deposited
into the Interest and Redemption Fund and applied to
redeem as many Bonds as may be redeemed at the next
available redemption date.
Section 9.07: Reconstruction or Repair. The rebuilding of
the Special Facilities under Sections 9.05 or 9.06 shall be either
in accordance with the original plans and specifications, together
with alterations or modifications made or agreed upon prior to the
taking, or in accordance with new or modified plans and
specifications, the alternative to be determined by the mutual
agreement of the Lessee and the Director.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.01: Events of Default. The following shall be
Events of Default as to the Lessee under this Agreement:
(a) Failure by the Lessee to pay the Net Rent required to be
paid under Article VI hereof.
(b) Failure by the Lessee to observe and perform any
covenant, condition or agreement on its part to be observed or
performed under this Agreement other than as referred to in
subsection (a) above, for a period of thirty (30) days after
written notice, specifying such failure and requesting that it be
remedied, is given to the Lessee by the City (except (i) if any
insurance required to be maintained by Lessee is to be canceled or
not renewed, such notice and the period for remedy by Lessee shall
be limited to the period ending on the date on which such
cancellation or nonrenewal is scheduled to occur and (ii) where
fulfillment of another obligation requires activity over a period
of time, and the Lessee shall commence to perform whatever may be
required for fulfillment within thirty (30) days after the receipt
of notice and shall diligently continue such performance without
interruption, except for causes beyond its control).
(c) Any material lien shall be filed against the Special
Facilities or Ground Lease Properties or Lessee's interest therein
or any part thereof in violation of this Agreement by a party other
than the City and shall remain unreleased for a period of sixty
(60) days from the date of such filing unless within said period
the Lessee is contesting in good faith the validity of such lien in
accordance with Section 8.02(c) hereof.
(d) Whenever an involuntary petition shall be filed against
Lessee under any bankruptcy or insolvency law or under the
reorganization provisions of any law of like import or a receiver
of Lessee for all or substantially all of the property of Lessee
shall be appointed without acquiescence and such petition or
appointment is not discharged within ninety (90) days after its
filing.
(e) The dissolution or liquidation of the Lessee or the
filing by the Lessee of a voluntary petition in bankruptcy, or
failure by the Lessee within ninety (90) days to lift any
execution, garnishment or attachment of such consequence as will
impair its ability to carry on its operations at the Special
Facilities, or general assignment by the Lessee for the benefit of
its creditors, or the entry by the Lessee into an agreement of
composition with its creditors, or the approval by a court of
competent jurisdiction of a petition applicable to the Lessee in
any proceeding for its reorganization or liquidation instituted
under the provisions of the federal bankruptcy laws, or under any
similar laws which may hereafter be enacted. The term "dissolution
or liquidation of the Lessee," as used in this subsection, shall
not be construed to include the cessation of the corporate
existence of the Lessee resulting either from a merger or
consolidation of the Lessee into or with another corporation or a
dissolution or liquidation of the Lessee following a transfer of
all or substantially all of its assets as an entirety, under the
conditions permitting such actions contained in Section 12.01
hereof.
(f) Whenever Lessee shall fail to provide adequate assurance
(i) that Lessee will promptly cure all defaults hereunder, if any;
(ii) that Lessee will compensate, or provide adequate assurance
that Lessee will promptly compensate, the City for any actual
pecuniary loss to the City resulting from any Event of Default
hereunder; and (iii) of future performance by Lessee of the terms
and conditions of this Agreement, each within thirty (30) days
after (1) the granting of an Order for Relief with respect to
Lessee pursuant to Title XI of the United States Code; (2) the
initiation of a proceeding under any bankruptcy or insolvency law
or the reorganization provisions of any law of like import; or (3)
the granting of the relief sought in an involuntary proceeding
against the Lessee under any bankruptcy or insolvency law. As used
in this Agreement, adequate assurance of future performance of this
Agreement shall include, but shall not be limited to, adequate
assurance (1) of the source of Net Rent and other consideration due
hereunder and (2) that the assumption or assignment of this
Agreement will not breach any provision, such as a use, management,
or ownership provision, in this Agreement, any other material
lease, any financing agreement, or master agreement relating to the
Leased Premises under the Use and Lease Agreement and/or Special
Facilities.
Section 10.02: Remedies on Default. Whenever any Event of
Default referred to in Section 10.01 hereof shall have happened and
continue to exist, then the City may take any one or more of the
following remedial steps as against the Lessee:
(a) The City may, and upon a payment default shall, re-enter
and take possession of the Special Facilities and the Ground Lease
Properties without terminating this Agreement and use its best
efforts to (i) complete construction and equipping of the Special
Facilities (and apply proceeds of the Bonds for such purpose) and
(ii) either (x) operate the Special Facilities and impose rates and
charges on airline tenants in Terminals B and/or C and/or the IAB,
as appropriate, for their availability, operation and maintenance
in accordance with the Use and Lease Agreement or IAB License
Agreement, as applicable or (y) sublease the Special Facilities and
Ground Lease Properties on a net rent lease basis, provided further
that in either event the City shall use its best efforts to impose
and collect rates and charges or rental rates sufficient to provide
for operating and maintenance expenses and Ground Rentals to the
same extent as Lessee is obligated to do so (it being understood
that for the IAB "Ground Rentals" shall be the rental amount then
charged for the IAB Leased Premises without consideration of any
Special Facilities located therein) and to provide additional
amounts equal to the Net Rent set forth in Section 6.01, all for
the account of the Lessee, holding the Lessee liable for the
difference between the rents and other amounts payable by the
Lessee hereunder and the charges received from airline tenants
and/or the rents and other amounts received from any sublessee with
respect to the Special Facilities. All gross proceeds derived by
the City from any charges and/or rents (net of operating and
maintenance expenses and any Ground Rent payable or remaining
unpaid hereunder, and up to the amount of all Net Rent payable
hereunder) shall be remitted to the Trustee for deposit in the
Interest and Redemption Fund to support repayment of the Bonds.
(b) The City may terminate this Agreement, exclude the Lessee
from possession of the Special Facilities and the Ground Lease
Properties and use its best efforts to (i) complete construction
and equipping of the Special Facilities (and apply proceeds of the
Bonds for such purpose) and (ii) either (x) operate the Special
Facilities and impose rates and charges on airline tenants in
Terminals B and/or C and/or the IAB for their availability,
operation and maintenance in accordance with the Use and Lease
Agreement and IAB License Agreement; or (y) lease the same on a net
rent lease basis, provided further that in either event the City
shall use its best efforts to impose and collect rates and charges
or rental rates sufficient to provide for operating and maintenance
expenses and Ground Rentals to the same extent as Lessee is
obligated to do so and to pay the Net Rent set forth in Section
6.01, all for the account of the Lessee, holding the Lessee liable
for all rents and other amounts due under this Agreement and not
received by the City from charges or rents with respect to the
Special Facilities. All gross proceeds derived by the City from
any charges and/or rents (net of operating and maintenance expenses
and any allocable Ground Rentals payable or remaining unpaid
hereunder, and up to the amount of all Net Rent payable hereunder)
shall be remitted to the Trustee for deposit in the Interest and
Redemption Fund to support repayment of the Bonds.
(c) The City may take whatever other action at law or in
equity as may appear necessary or desirable to collect the rent
then due and thereafter to become due, or to enforce performance
and observance of any obligation, agreement or covenant of the
Lessee under this Agreement. The City shall use its best efforts
to cause the Special Facilities to be either operated or leased on
a net rent lease basis for the account of Lessee as provided in
clauses (a) and (b) above after an Event of Default by Lessee,
whether or not City retakes possession of the Special Facilities or
terminates this Agreement.
(d) In connection with any reletting of the Special
Facilities and Ground Lease Properties associated with Terminal B
or C or the IAB, the City agrees to use its best efforts to relet
such Special Facilities to the same tenant(s) who use and occupy
Terminal B or C or the IAB. It is recognized that such tenant(s)
will also be required to pay the City Ground Rentals and certain
other rentals in connection with the use and occupancy of such
Terminals. In connection with a reletting of such Terminals, the
City agrees not to charge such tenant(s) ground rentals in excess
of those charged (or that would be charged) to Lessee for the areas
in such Terminals.
(e) In connection with any reletting by the City during the
original term of this Agreement, Lessee shall be subrogated to the
right of the Trustee to receive payments hereunder to support
repayment of the Bonds to the extent that Lessee has made payments
on the Bonds under the Guaranty.
Section 10.03: Additional Remedy. In addition to the other
remedies herein provided, the City may, in the case of an Event of
Default under Section 10.01(b), enter the Special Facilities and
Ground Lease Properties (without such entering causing or
constituting a termination of this Agreement or an interference
with the possession of the Special Facilities and Ground Lease
Properties by Lessee) and do all things reasonably necessary to
cure such Event of Default, charging to Lessee the reasonable cost
and expense thereof and Lessee agrees to pay to City upon demand
such charge in addition to all other amounts payable by Lessee
hereunder.
Section 10.04: No Remedy Exclusive. No remedy herein
conferred upon or reserved to the City 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 hereafter existing under law
or in equity (to the extent not inconsistent with the terms
hereof). 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. In order to entitle the City to exercise
any remedy reserved to it in this Article, it shall not be
necessary to give any notice, unless such notice is herein
expressly required or is required by law.
Section 10.05: Agreement to Pay Attorneys' Fees and Expenses.
In the event there should be an Event of Default under any of the
provisions of this Agreement and the City should determine that the
services of an attorney are required or the City incurs other
expenses for the collection of rent or the enforcement of
performance or observance of any obligation or agreement on the
part of Lessee, the Lessee agrees that it will on demand therefor
pay to the City the reasonable, just and necessary fee of such
attorneys and other reasonable expenses so incurred.
Section 10.06: No Additional Waiver Implied by One Waiver.
In the event any covenant contained in this Agreement should be
breached by either party and thereafter waived by the other party,
such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder. Failure
of either party hereto to insist on the strict performance of any
of the agreements herein or to exercise any rights or remedies
accruing hereunder upon an Event of Default or failure of
performance shall not be considered a waiver of the right to insist
on, and to enforce by any appropriate remedy, strict compliance
with any other obligation hereunder or to exercise any right or
remedy occurring as a result of any future default or failure of
performance.
Section 10.07: Enforcement by City Attorney. The City
Attorney or his or her designee shall have the right to enforce all
legal rights and obligations under this Agreement without further
authorization. Lessee covenants to provide to the City Attorney
all documents and records within Lessee's possession that the City
Attorney reasonably deems necessary to assist in determining
Lessee's compliance with this Agreement, with the exception of
those documents made confidential by federal or state law or
regulation and provided that the provision of such documents and
records by Lessee shall further be limited in any respect that the
provision of any documents or records by the City pertaining to
this Agreement would be limited pursuant to Chapter 552, Texas
Government Code, as amended, or otherwise.
ARTICLE XI
ASSIGNMENTS, SUBLETTING AND TERMINATION BY LESSEE
Section 11.01: Assignments and Subletting by Lessee. (a)
This Agreement may not be assigned or otherwise transferred in
whole or in part by Lessee (except pursuant to Section 12.01
hereof) without the prior written consent of the Director;
provided, however, that, unless permitted by Section 7.6(b) of the
Trust Indenture or Section 12.01 hereof, the City will not consent
to any assignment by Lessee of its rights hereunder without first
obtaining a written agreement from the Lessee that Lessee shall
remain primarily liable for Net Rent hereunder. Lessee may sublet
the Special Facilities or any part thereof to any party to whom
Lessee has the right to sublease all or any portion of the Leased
Premises under the Use and Lease Agreement and/or IAB License
Agreement as applicable. Lessee may also sublet the Special
Facilities or any part thereof to any other party, subject to the
condition that in either instance Lessee first obtains the written
consent of the Director to such subletting and all the terms
thereof, unless such subletting is expressly authorized herein.
(b) If Lessee sublets all or any part of the Special
Facilities or if all or any part of the Special Facilities are
occupied (pursuant to a written consent from the Director) by
anyone other than Lessee (including any subsidiary of Lessee or a
code-share affiliate of Lessee), the City may, if an Event of
Default shall have occurred hereunder and be continuing, collect
rent or Net Rent from such sublessee or occupant and the City shall
apply the amount collected to the extent possible to satisfy the
obligations of Lessee hereunder, but no such collection shall be
deemed a waiver by the City of the covenants contained herein or an
acceptance by the City of any such sublessee, claimant or occupant
as a successor Lessee, nor a release of Lessee by the City from the
further performance by the Lessee of the covenants imposed upon
Lessee herein.
(c) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY, SO LONG AS ANY BONDS REMAIN OUTSTANDING NO SUCH SUBLEASE
OR ASSIGNMENT SHALL BE AUTHORIZED IF IN ANY WAY IT RELEASES LESSEE
FROM ITS PRIMARY OBLIGATIONS HEREUNDER, INCLUDING ITS OBLIGATION TO
PAY NET RENT.
Section 11.02: Termination of Agreement by Lessee. Lessee
shall not terminate this Agreement for any reason whatsoever as
long as any of the Bonds remain Outstanding within the meaning of
the Trust Indenture or any other amounts are due and owing under
the Trust Indenture.
ARTICLE XII
MISCELLANEOUS
Section 12.01: Lessee to Maintain Its Corporate Existence.
The Lessee shall throughout the term hereof maintain its corporate
existence, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or
merge into another entity or permit one or more other entities to
consolidate with or merge into it; provided, that the Lessee may,
without violating the agreement contained in this Section,
consolidate with or merge into another entity, or permit one or
more other entities to consolidate with or merge into it, or sell
or otherwise dispose of all or substantially all of its assets as
an entirety and thereafter dissolve, provided, if Lessee is not the
surviving corporation, the surviving, resulting or transferee
corporation, as the case may be, (i) assumes in writing all of the
obligations of the Lessee herein and (ii) qualifies or is qualified
to do business in Texas.
Section 12.02: Exempt Facilities. In order to assure that
interest on the Bonds shall be exempt from federal income taxation,
the Lessee covenants and agrees that it shall not, and it shall not
permit or allow any other person to, construct, acquire, use,
employ, modify, rebuild or repair the Project or any Special
Facilities in any manner that would cause or allow it or them to be
or become facilities which are not included within those set forth
and described in Sections 142(a)(1) and (c) of the Internal Revenue
Code of 1986, as amended, and the regulations prescribed
thereunder, and the City covenants and agrees that it will not
permit or allow any of the foregoing to occur. The Lessee hereby
makes an irrevocable election, which it shall cause to be binding
on all successors in interest under this Agreement, not to claim
for federal income tax purposes depreciation or investment credit
with respect to the Special Facilities or any component thereof.
It is further agreed and acknowledged by Lessee that the City shall
never be required or requested hereunder to issue any Bonds or
expend any proceeds thereof to pay any Costs of the Special
Facilities that would have the effect of causing interest on any of
the Bonds not to be exempt from federal income taxation.
Section 12.03: Notices. (a) Any and all notices required or
permitted to be given hereunder shall be deemed sufficiently given
when delivered or when mailed by registered or certified mail,
return receipt requested, postage prepaid, or when given by
telephone immediately confirmed in writing by telecopier or other
communication device to any party hereto as follows or at such
other address, telephone number or telecopier number as any party
may from time to time designate in writing to the other parties
hereto:
City:
Director, Department of Aviation
City of Houston
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
City ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: City Attorney
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Lessee:
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇. ▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇. ▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Corporate Real Estate
and Environmental Affairs
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
Continental Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇. ▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Corporate Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Trustee:
Chase Bank of Texas, National Association
Attention: Global Trust Service
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) All computations for the expiration of time periods
required by this Agreement shall be computed from the date such
notice is deposited in the United States mail, as set forth above;
provided, however, that should the last day of the period fall on
a Saturday, Sunday or legal holiday, the period shall run until the
end of the next day which is neither a Saturday, Sunday nor legal
holiday.
Section 12.04: Consents and Approvals. (a) With respect to
the approvals herein required of the Lessee, Lessee shall from time
to time furnish to the City a certificate signed by its Secretary
or an Assistant Secretary, and such certificate shall set forth the
officers or representatives of Lessee who are authorized to grant
such approvals and to bind the Lessee thereto; and the City and all
third parties affected by any such approvals, including the holders
of Bonds, may rely upon any writing purporting to grant such
approvals signed by any officer or representative thus certified as
being conclusively binding upon Lessee, and any such writing shall
itself constitute conclusive evidence that any and all corporate
actions necessary to be taken with respect to the matter thus
approved by such officer or representative to have been so taken by
the corporation, and that the approval therein given has been
authorized by the corporation.
(b) Any consent or approval herein required of the City may
be given by the City's Director of the Department of Aviation
unless otherwise provided.
(c) All consents or approvals of the City, or any department
thereof, or Lessee when required herein shall not be unreasonably
withheld or delayed.
(d) All consents and approvals required or permitted herein
by either party shall be given in writing.
(e) An approval by the Director, or by any other
instrumentality of the City, of any part of Lessee's performance
shall not be construed to waive compliance with this Agreement
except as expressly set forth in such approval or to establish a
standard of performance other than required by this Agreement or by
law.
Section 12.05: Rights Reserved to City. Nothing contained
herein shall unlawfully impair the right of City to exercise its
governmental or legislative functions. This Agreement is made
subject to the Constitution and laws of the State of Texas and to
the provisions of the Airport Improvement Program Grant Agreements
applicable to the Airport and its operation, and the provisions of
such agreements, insofar as they are applicable to the terms and
provisions of this Agreement, shall be considered a part hereof to
the same extent as though copied herein at length to the extent,
but only to the extent, that the provisions of any such agreements
are required generally by the United States at other civil airports
receiving federal funds. To the best of City's knowledge, nothing
contained in such laws or agreements conflicts with the express
provisions of this Agreement.
Section 12.06: Force Majeure. Neither the City nor Lessee
shall be deemed in violation of this Agreement if it is prevented
from performing any of the obligations hereunder by reason of
strikes, boycotts, labor disputes, embargoes, shortage of material,
acts of God, acts of the public enemy, acts of superior
governmental authority, weather conditions, floods, riots,
rebellion, sabotage, war, or any other circumstances for which it
is not responsible or which is not in its control, and the time for
performance shall be automatically extended by the period the party
is prevented from performing its obligations hereunder; provided,
however, that these provisions shall not apply to any failure by
the Lessee to pay the rentals and other charges pursuant to Article
VI hereof, expressly including the Net Rent payable thereunder.
Section 12.07: Severability Clause. If any word, phrase,
clause, paragraph, section or other part of this Agreement shall
ever be held to be invalid or unconstitutional by any court of
competent jurisdiction, the remainder of this Agreement and the
application of such word, phrase, clause, sentence, paragraph,
section or other part of this Agreement to any other person or
circumstance shall not be affected thereby and it is expressly
agreed and understood that the obligation of Lessee to make the
rental payments to City required under the provisions of Article VI
hereof shall continue to remain in full force and effect.
Section 12.08: Place of Performance; Laws Governing. This
Agreement shall be performable and enforceable in ▇▇▇▇▇▇ County,
Texas, and shall be construed in accordance with the laws of the
State of Texas, the City Charter and Ordinances of the City of
Houston, Federal law and all applicable State and Federal
regulations. Lessee acknowledges that, to the extent the City's
Charter or Texas law requires any expenditure of funds that may be
contemplated to be made by the City herein to be prefunded to be
valid, then such expenditure shall be subject to City Council
approval; provided, that, the City agrees to use its best efforts
to obtain such approval.
Section 12.09: Brokerage. The Lessee and the City each to
the other represents and warrants that no brokers have been
concerned on their behalf in the negotiation of this Agreement and
that there are no such brokers who are or may be entitled to be
paid commissions in connection therewith. The Lessee and the City
shall indemnify and save harmless each other of and from any claim
for commission or brokerage made by any such brokers when such
claims are based in whole or in part upon any acts or omissions of
the Lessee or the City as applicable.
Section 12.10: Individuals Not Liable. No director, officer,
agent or employee of the City or Lessee shall be charged personally
or held contractually liable by or to the other party under any
term or provision of this Agreement or of any supplement or
amendment hereto because of any breach thereof or because of his or
their execution of same.
Section 12.11: Binding Nature of Agreement; Benefits of
Agreement. This Agreement shall inure to the benefit of, and be
binding upon, the City and Lessee, and their respective legal
representatives, successors and assigns. This Agreement is not
made for the benefit of, nor may it be relied upon by, any third
party other than the holders of the Bonds and any bond insurer,
unless expressly herein provided.
Section 12.12: Ambiguities. In the event of any ambiguity in
any of the terms of this Agreement, it shall not be construed for
or against any party hereto on the basis that such party did or did
not author the same.
Section 12.13: Survival. Lessee and the City shall remain
obligated to the other party hereto under all clauses of this
Agreement that expressly or by their nature extend beyond the
expiration or termination of this Agreement, including but not
limited to the indemnity provisions hereof.
Section 12.14: No Merger of Title. There shall be no merger
of this Agreement (or of the leasehold estate created by this
Agreement) with the ownership of any portion of or interest in the
Special Facilities or Ground Lease Properties by reason of the fact
that the same person or entity may acquire, own or hold, directly
or indirectly, this Agreement (or the rights and interests created
by this Agreement) together with an ownership, leasehold or other
right or interest in the Special Facilities or Ground Lease
Properties; and no such merger shall occur unless and until the
City and all persons and entities holding (a) the rights and
interest created by this Agreement and (b) the ownership, leasehold
or other rights or interest in the Special Facilities and Ground
Lease Properties or any part thereof shall join in a written
instrument expressly effecting such merger. Without limiting the
generality of the foregoing, it is agreed that no merger of title
shall arise if the City becomes a sublessee hereunder.
Section 12.15: Entire Agreement. This Agreement, together
with the Trust Indenture, constitutes the entire agreement between
the City and Lessee pertaining to the subject matter hereof.
IN WITNESS WHEREOF, this Agreement has been entered into and
effective as of the date first above written, and executed in
multiple counterparts by the respective officers of the parties
hereto.
ATTEST: CITY OF HOUSTON
___________________________ By__________________________
City Secretary Mayor
APPROVED AS TO FORM COUNTERSIGNED BY
___________________________ _____________________________
Senior Assistant City Attorney City Controller
APPROVED
___________________________
Director, Department of Aviation
CONTINENTAL AIRLINES, INC.
ATTEST: By:__________________________
Title: ______________________
___________________________
Title: ____________________
THE STATE OF TEXAS
COUNTY OF ▇▇▇▇▇▇
BEFORE ME, the undersigned authority, a Notary Public in and
for ▇▇▇▇▇▇ County, Texas, on this day personally appeared ▇▇▇
▇▇▇▇▇, Mayor of the CITY OF HOUSTON, known to me to be the person
and officer whose name is subscribed to the foregoing instrument,
and acknowledged to me that he executed the same for the purposes
and consideration therein expressed, as the act and deed of the
CITY OF HOUSTON, the said municipal corporation, and in the
capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the ______ day of
_______________, 199__.
________________________
Notary Public in and for
▇▇▇▇▇▇ County, Texas
THE STATE OF TEXAS
COUNTY OF ▇▇▇▇▇▇
BEFORE ME, the undersigned authority, on this day personally
appeared _______________, ___________________ of Continental
Airlines, Inc., a corporation, known to me to be the person and
officer whose name is to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consideration
therein expressed, in the capacity therein stated, and as the act
and deed of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _______ day
of ___________________, 199__.
________________________
Notary Public in and for
▇▇▇▇▇▇ County, Texas
EXHIBITS TO BE ATTACHED
Exhibit "A" Description of 1997B Project
Exhibit "A-1" Description of 1998B Project
Exhibit "B" Description of Easements
Exhibit "C" Description of Location of Special Facilities
Exhibit "D-1" Description of Additional Locations of
Special Facilities
Exhibit "E" Deed and ▇▇▇▇ of Sale for Project
EXHIBIT "A"
(Series 1997B Bonds)
DESCRIPTION OF 1997B PROJECT
All properties, facilities, structures, equipment, fixtures,
furnishings, finishes and appurtenances to be acquired,
constructed, fabricated and/or installed in, on, as a part of or
around the Ground Lease Properties and the Easements that are
financed with proceeds of the Series 1997B Bonds and leased to the
Lessee pursuant to the Special Facilities Lease Agreement, includ-
ing without limitation the following:
1. Lessee's Terminal B Improvements: Terminal B elements of
the Project include the renovation and upgrading of
Terminal B's four flight stations, including new
finishes, floor coverings, millwork, gate and hold room
furniture and telecommunications, elevators, flight
information display systems and signage; the acquisition
and installation of passenger loading bridges throughout
the four flight stations; the renovation of Continental's
exclusive use areas in the terminal's ticketing lobby,
including upgrading ticketing, check-in and baggage make-
up facilities; and the addition of a new airline club
facility.
2. Lessee's Terminal C Improvements: Terminal C elements of
the Project include the construction and installation of
a new baggage make-up and sortation system for
Terminal C; the expansion of the existing baggage claim
area for Terminal C to include baggage service offices
and package processing areas; installation of a moving
conveyor connecting such a system to the IAB baggage
system; the installation of new flight arrival and
departure monitors and displays; the construction of a
new airline club facility comprised of approximately
8,000 square feet to be located in the southern portion
of Terminal C; and any expansion of Continental Express's
passenger hold room areas. Also included in Terminal C
element are the expansion and furnishing of the
operations center; and the expansion and furnishing of
additional administrative support areas.
3. Prior Tenant Improvements: Prior tenant improvements in
the Project include acquisition of the tenant
improvements and equipment installed and owned or leased
by prior tenants in Terminal B.
4. Bus Stations: Bus station elements of the Project
include the construction and furnishing of bussing
stations at Terminals B and C to facilitate the transfer
of passengers between the terminals pending completion of
the APM system linking such terminals. Bussing stations
include elevator, escalators, furnishings, and finishes.
5. Ground Support Equipment: Ground support element of the
Project include the purchase of belt loaders, push
trailers, ground power units, tow bars, rugs, bag carts,
freight carts, tail carts, A/C maintenance vehicles, ▇▇▇
tails, motor stairs, connect vans food service vehicles,
air start units, GSE shop vehicles and equipment
essential to supporting the expanded operations.
6. Baggage Transfer Facility: A high speed automatic
baggage transfer system to facilitate the transfer of
passenger baggage between Terminal B and Terminal C.
However, there is expressly excluded from the Project any and
all properties, facilities, structures, equipment, fixtures,
furnishings, finishes and appurtenances provided to the Lessee by
the City pursuant to the Use and Lease Agreement.
EXHIBIT "A-1"
(Series 1998B Bonds)
DESCRIPTION OF THE 1998B PROJECT
All properties, facilities, structures, equipment, fixtures,
furnishings, finishes and appurtenances to be acquired,
constructed, fabricated and/or installed in, on, as a part of or
around the Ground Lease Properties and the Easements that are
financed with proceeds of the Series 1998B Bonds and leased to the
Lessee pursuant to the Special Facilities Lease Agreement, includ-
ing without limitation the following:
1. Lessee's Terminal B Improvements: The Terminal B
elements of the 1998B Project include the installation of
Ramp Information Displays systems at the gate areas; the
renovation of Continental's employee restroom facilities;
and improvements for a training center for Continental
Express flight crews and other personnel.
2. Lessee's Terminal C Improvements: The Terminal C
elements of the 1998B Project include renovation and
upgrading of the Terminal C lobby; the construction of
two new gates; the construction of administrative areas
for pilots and other in-flight crew; the construction of
two ramp towers to provide improved traffic control of
aircraft on the ground in the vicinity of the terminal;
installation of Ramp Information Display systems at the
gate; replacement of 5 loading bridges; the improvement
and upgrading of the passenger service centers; buildout
of additional employee training facilities; renovation of
Continental's employee restroom facilities; and
renovations to the weather briefing room.
3. Lessee's IAB Improvements: The IAB elements of the 1998B
Project consist of the construction and furnishing of a
new approximately 4,500 square foot President's Club on
the departures level of that terminal; and enhancement of
facilities used to assist Continental's international
passengers checking-in at the IAB.
EXHIBIT "B"
(Series B)
DESCRIPTION OF EASEMENTS
The Easements shall consist of the following:
Baggage Transfer Facility
(1) An aerial easement for an aerial Baggage Transfer
Facility running between Terminals B and C to be
suspended from the Automated People Mover or APM (as more
fully described in that certain Special Facilities Lease
Agreement (Automated People Mover Project) between the
City and Lessee dated of even date with the Agreement) as
depicted in the diagrams attached as Exhibit B-1 as a
"High Speed Baggage Connect" and located in the corridor
between Terminals B and C with minimum clearance below
the Baggage Transfer Facility of at least 20 feet,
0 inches above the roadway or ground below or such other
clearance and/or height as shall be approved by the
Director.
▇▇▇▇▇▇▇ "▇"
(▇▇▇▇▇▇ ▇▇▇▇▇)
DESCRIPTION OF LOCATION OF SPECIAL FACILITIES
Lessee's Terminal B Improvements and Bus Station in Terminal
B shall be located in the shaded areas in Terminal B as depicted in
the diagrams attached as Exhibit C-1 (sheets 1 of 6 through 5 of
6), together with the area depicted in the diagram attached as
Exhibit C-1 (sheet 6 of 6) as Bus Terminal "B" and Lessee's
Terminal C Improvements and Bus Station in Terminal C shall be
located in the shaded areas in Terminal C as depicted in the
diagrams attached as Exhibits C-2 through C-7, or such other areas
as shall be approved in writing by the Director.
EXHIBIT "D-1"
(Series 1998B Bonds)
DESCRIPTION OF ADDITIONAL LOCATIONS OF SPECIAL FACILITIES
The Special Facilities related to the Series 1998B Bonds will
be located in some of the areas described on Exhibit "C" to which
this Exhibit "D-1" is attached and also in the shaded areas in the
IAB Terminal as depicted in the diagram attached as Exhibit D-1
(one sheet) hereto.
EXHIBIT "E"
DEED AND ▇▇▇▇ OF SALE
THE STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF ▇▇▇▇▇▇
THAT CONTINENTAL AIRLINES, INC., a corporation (hereinafter
called "Grantor"), for and in consideration of the sum of Ten and
No/100 Dollars ($10.00) cash and other good and valuable
considerations to it in hand paid by the CITY OF HOUSTON, TEXAS, a
municipal corporation and home-rule City situated principally in
▇▇▇▇▇▇ County, Texas (hereinafter called "Grantee"), the receipt
and sufficiency of which are here acknowledged and confessed, has
GRANTED, BARGAINED, SOLD AND CONVEYED and by these presents does
GRANT, BARGAIN, SELL AND CONVEY unto the Grantee that certain
airport Special Facilities more fully described in Exhibit "A"
attached hereto located in and at ▇▇▇▇▇▇ ▇▇▇▇ Intercontinental
Airport in leased space and/or in the easements leased or granted
to Grantee by Grantor which leased space and/or easements are more
fully described in Exhibit "B" attached hereto.
TO HAVE AND TO HOLD the aforesaid Special Facilities, together
with all and singular the rights and appurtenances thereto in any
way belonging unto Grantee, its successors and assigns forever; and
it is hereby agreed that Grantor, its successors and legal
representatives are hereby bound to WARRANT AND FOREVER DEFEND, all
and singular, said property unto Grantee, its successors and
assigns against every person whosoever lawfully claiming or to
claim the same, or any part thereof, by, through or under Grantor,
but not otherwise.
THE EXECUTION, delivery and acceptance of this conveyance is
made pursuant to the terms of that certain Special Facilities Lease
Agreement dated as of _______, 1997, as amended by and between
Grantor and Grantee.
EXECUTED as of the _______ day of ________, 199_.
CONTINENTAL AIRLINES, INC.
By______________________
Title: ________________
ATTEST:
_______________________________
Assistant Secretary
THE STATE OF TEXAS
COUNTY OF ▇▇▇▇▇▇
BEFORE ME, the undersigned authority, on this day personally
appeared ____________________, ______________________________ of
the CONTINENTAL AIRLINES, INC., a corporation, known to me to be
the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed, in the capacity
therein stated, and as the act of said corporation.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this _______ day of
_______, 199_.
________________________
Notary Public in and for
▇▇▇▇▇▇ County, Texas
(SEAL)