EXHIBIT 10.30(c)
"NON-TERMINAL LEASE"
OR
"C" LEASE
FIRST AMENDED AND RESTATED
SPECIAL FACILITIES
LEASE AGREEMENT
(CONTINENTAL AIRLINES, INC. AIRPORT 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. AIRPORT IMPROVEMENT PROJECTS)
I N D E X
Page No.
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01: Definitions . . . . . . . . . . . . . . . . . . .2
Section 1.02: Interpretations . . . . . . . . . . . . . . . . .6
ARTICLE II
REPRESENTATIONS
Section 2.01: Representations by the City . . . . . . . . . . .6
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 . . . . . . . . . . .7
Section 3.02: Term of Lease of Special Facilities and
Ground Leases . . . . . . . . . . . . . . . . . .8
Section 3.03: Easements and Ground Leases . . . . . . . . . . .8
Section 3.04: Condition of Special Facilities and
Ground Lease Properties . . . . . . . . . . . . .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 1997C Bonds and
Series 1998C Bonds. . . . . . . . . . . . . . . .9
Section 4.02: Issuance of Additional Bonds. . . . . . . . . . .9
Section 4.03: Application of Proceeds; Insufficiencies. . . . 10
Section 4.04: Refunding Bonds . . . . . . . . . . . . . . . . 10
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: [Omitted] . . . . . . . . . . . . . . . . . . . 12
Section 5.03: Inventory of Special Facilities; Replacements . 12
Section 5.04: Title to Projects, Plans and Contracts. . . . . 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. . . . 15
Section 6.03: Pledge of Net Rent. . . . . . . . . . . . . . . 16
Section 6.04: Operation and Maintenance Expenses; Other Costs 16
Section 6.05: Ground Rentals. . . . . . . . . . . . . . . . . 17
ARTICLE VII
USE OF SPECIAL FACILITIES
Section 7.01: Use . . . . . . . . . . . . . . . . . . . . . . 18
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. . . . . . . . . . . . . . . . 20
Section 8.02: Taxes, Charges, Utilities, Liens. . . . . . . . 22
Section 8.03: Compliance with Airport Rules and Regulations
and Law; Nondiscrimination. . . . . . . . . . . 22
Section 8.04: Compliance with Tax Law . . . . . . . . . . . . 23
Section 8.05: Environmental Matters . . . . . . . . . . . . . 23
Section 8.06: City's Right To Maintain or Repair Special
Facilities. . . . . . . . . . . . . . . . . . . 26
Section 8.07: Termination Procedures. . . . . . . . . . . . . 26
Section 8.08: Annual Inspections. . . . . . . . . . . . . . . 26
Section 8.09: Restoration of Airport Property . . . . . . . . 27
Section 8.10: Airport Rules . . . . . . . . . . . . . . . . . 27
Section 8.11: Certain Federal Requirements. . . . . . . . . . 27
Section 8.12: Other Rules, Regulations and Requirements . . . 28
ARTICLE IX
LIABILITY, INSURANCE AND CONDEMNATION
Section 9.01: Release and Indemnification of City . . . . . . 29
Section 9.02: General Insurance Requirements. . . . . . . . . 30
Section 9.03: Risks and Minimum Limits of Coverage. . . . . . 31
Section 9.04. Other Provisions. . . . . . . . . . . . . . . . 32
Section 9.05: Disposition of Insurance Proceeds . . . . . . . 33
Section 9.06: Condemnation. . . . . . . . . . . . . . . . . . 34
Section 9.07: Reconstruction or Repair. . . . . . . . . . . . 35
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.01: Events of Default. . . . . . . . . . . . . . . 36
Section 10.02: Remedies on Default. . . . . . . . . . . . . . 37
Section 10.03: Additional Remedy. . . . . . . . . . . . . . . 38
Section 10.04: No Remedy Exclusive. . . . . . . . . . . . . . 38
Section 10.05: Agreement to Pay Attorneys' Fees and Expenses. 39
Section 10.06: No Additional Waiver Implied by One Waiver . . 39
Section 10.07: Enforcement by City Attorney . . . . . . . . . 39
ARTICLE XI
ASSIGNMENTS, SUBLETTING AND TERMINATION BY LESSEE
Section 11.01: Assignments and Subletting by Lessee . . . . . 39
Section 11.02: Termination of Agreement by Lessee . . . . . . 40
ARTICLE XII
MISCELLANEOUS
Section 12.01: Lessee to Maintain Its Corporate Existence . . 40
Section 12.02: Exempt Facilities. . . . . . . . . . . . . . . 40
Section 12.03: Notices. . . . . . . . . . . . . . . . . . . . 41
Section 12.04: Consents and Approvals . . . . . . . . . . . . 42
Section 12.05: Rights Reserved to City. . . . . . . . . . . . 43
Section 12.06: Force Majeure. . . . . . . . . . . . . . . . . 43
Section 12.07: Severability Clause. . . . . . . . . . . . . . 43
Section 12.08: Place of Performance; Laws Governing . . . . . 43
Section 12.09: Brokerage. . . . . . . . . . . . . . . . . . . 44
Section 12.10: Individuals Not Liable . . . . . . . . . . . . 44
Section 12.11: Binding Nature of Agreement; Benefits of
Agreement. . . . . . . . . . . . . . . . . . . 44
Section 12.12: Ambiguities. . . . . . . . . . . . . . . . . . 44
Section 12.13: Survival . . . . . . . . . . . . . . . . . . . 44
Section 12.14: No Merger of Title . . . . . . . . . . . . . . 44
Section 12.15: Entire Agreement . . . . . . . . . . . . . . . 45
Description of Project Exhibit "A"
Description of Easements Exhibit "B"
Description of Ground Lease Properties Exhibit "C"
Deed and ▇▇▇▇ of Sale for Project Exhibit "D"
FIRST AMENDED AND RESTATED
SPECIAL FACILITIES
LEASE AGREEMENT
(Continental Airlines, Inc. Airport 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 to engage in
such business at the Airport (hereinafter referred to as
"authorized business"); and
WHEREAS, Lessee has heretofore requested the City to undertake
the financing of the 1997C Project (as hereinafter defined), and
the City has done so through the issuance of its Series 1997C Bonds
(as hereinafter defined); and
WHEREAS, Lessee has heretofore requested the City to undertake
the financing of the 1998C 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 and Ground Lease Properties;
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
1997C Bonds and the Series 1998C 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."
"Bonds" shall mean collectively the Series 1997C Bonds, the
Series 1998C Bonds, and any Additional Bonds and Refunding Bonds
from time to time hereafter issued.
"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" shall mean the lease of the Ground Lease
Properties by the City to Lessee pursuant to Section 3.03(b)
hereof.
"Ground Lease Properties" shall mean the properties described
in Exhibit "C" attached hereto. The Ground Lease Properties shall
consist of (i) the Maintenance Site (as described in Exhibit C),
(ii) the Mail Sort Site (as described in Exhibit C), (iii) the
Inflight Training Site (as described in Exhibit C), (iv) the JFK
Blvd. Site (as described in Exhibit C), and (v) the Warehouse Site
(as described in Exhibit C). The Ground Lease Properties shall
include all improvements located thereon, excepting the Special
Facilities.
"Ground Rentals" shall mean the rentals to be paid by Lessee
directly to the City pursuant to Section 6.05 as consideration for
the Ground Lease Properties and Easements.
"Guaranty" shall mean the guaranty agreement dated as of
March 1, 1997, from the Lessee to the Trustee with respect to the
Series 1997C Bonds and the guaranty agreement dated as of December
1, 1998, from the Lessee to the Trustee with respect to the Series
1998C Bonds.
"Hangar Maintenance Facility" shall mean that facility more
fully described in Exhibits "A" and "A-1" to this Agreement.
"Inflight Training Facility" shall mean that facility as more
fully described in Exhibit "A-1" to this Agreement.
"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.
"JFK Blvd. Facility" shall mean that facility as more fully
described in Exhibit "A-1" to this Agreement.
"Lessee" shall mean Continental Airlines, Inc., a Delaware
corporation, and its successors and assigns as lessee hereunder.
"Mail Sort Facility" shall mean that facility as more fully
described in Exhibit "A" 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.
"1997C Project" shall mean the Hangar Maintenance Facility and
the Mail Sort Facility all as more fully described in Exhibit "A"
attached hereto and by this reference made a part hereof, together
with any modifications or additions thereto approved by the
Director and Lessee. The 1997C Project shall constitute the
initial Special Facilities.
"1998C Project" shall mean the Hangar Maintenance Facility,
the Inflight Training Facility, the JFK Blvd. Facility and the
Warehouse Facility all as more fully described in Exhibit "A-1"
attached hereto and by this reference made a part hereof, together
with any modifications or additions thereto approved by the
Director and Lessee.
"Outstanding" shall have the meaning assigned in the Trust
Indenture.
"Project" or "Projects" means, either individually or
collectively, the 1997C Project and the 1998C Project.
"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 1997C Bonds and the Series 1998C Bonds (including Net Rent
payable under this Agreement).
"Series 1997C 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. Airport Improvements Project),
Series 1997C."
"Series 1998C 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. Airport Improvements Project),
Series 1998C."
"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 1997C Bonds, the Series
1998C 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 1997C Bonds and the Series 1998C Bonds.
"Trustee" shall mean the bank designated as Trustee under the
Trust Indenture, or any successor trustee thereunder.
"Warehouse Facility" shall mean that facility as more fully
described in Exhibit "A-1" to this Agreement.
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 1997C Bonds and the Series 1998C 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. (a) 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.
(b) The City's lease to Lessee of the Inflight Training Site
and the JFK Blvd. Site shall be deemed to be a renewal and
extension, and an amendment and restatement, of the previously
entered into leases between the City and Continental for such
sites. It is the intent of the parties that such previous leases
be considered for all purposes to have been renewed and extended,
and amended and restated in their entirety rather than terminated
and recommenced, by this Agreement, such that the terms of this
Agreement shall govern the rights and duties of the parties hereto
with respect to such sites. City and Lessee acknowledge that the
JFK Blvd. Site that is continuing to be leased under this Agreement
is only a part of the parcel of land leased by the City to the
Lessee pursuant to another agreement (or agreements) and agree that
such other agreement (or agreements) shall continue in full force
and effect as to the parcel or parcels of land not leased hereunder
and such other agreement or agreements are not affected hereby for
the purpose of leasing such other parcel or parcels.
Section 3.02: Term of Lease of Special Facilities and Ground
Leases. (a) The term of this Agreement and the leasehold estate
hereby created in the Special Facilities shall commence on
April 17, 1997, for the 1997C Project, and January 20, 1999, for
the 1998C 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, 2027; except with
respect to Lessee's Warehouse Facility, such term shall continue
until December 31, 2004 and, shall thereafter automatically renew
on a year to year basis for up to five additional one year terms,
unless Lessee notifies the City in writing at least 60 days prior
to the expiration date (as such expiration date may be extended),
that Lessee does not wish to extend the term for another year and
provided that no Event of Default by Lessee shall have occurred and
be continuing at the beginning of such renewal period; provided
further, however, that if City has in writing at least 60 days
prior to the then relevant expiration date advised Lessee that it
intends to use the land upon which the Warehouse Facility is
located during the next one-year period for Airport expansion
purposes, then Lessee may not exercise any such, or any further,
extension option.
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
including any extensions or renewals thereof. The Easements shall
be used solely for the purpose of permitting extension, use and
maintenance of utilities to the Special Facilities.
(b) Subject to the terms and conditions contained herein, the
City hereby leases and demises to Lessee the Ground Lease
Properties for a term corresponding to the term of Lessee's
leasehold estate in the Special Facilities, including any
extensions or renewals thereof. The Ground Lease Properties may be
used for the purpose of constructing, equipping, acquiring,
operating and maintaining the Special Facilities. On the
commencement date of this Agreement, the City and Lessee mutually
agree that all existing leases between the City and Lessee (as
successor or assignee of the original lessees) with respect to the
Ground Lease Properties shall be superseded by this Agreement and
shall be of no further force and effect, except that any unearned
portion of rentals paid for the month during which such leases are
superseded shall be applied to compensate the City for the demise
of the Ground Lease Properties under this Agreement for the period
from the effective date of this Agreement to the first Ground
Rental payment date hereunder.
(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 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 Easements
or the Ground Lease Properties , they may do so by a supplement or
addendum hereto duly executed by the respective parties.
(e) During the term of this Agreement, and subject to the
rules and regulations from time to time adopted by the City and the
Director as provided herein which are generally applicable to other
airlines or lessees of the City at the Airport, and subject to the
other terms and provisions hereof, Lessee is hereby granted the
non-exclusive right and privilege to use and operate its vehicles
on such service roads, aircraft aprons and other non-public areas
of the Airport as shall be reasonably necessary to carry out its
authorized business on the Special Facilities.
Section 3.04: Condition of Special Facilities and Ground
Lease Properties. 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, or for which Lessee would be liable prior to the
date hereof by operation of law or contractual agreement for any
Hazardous Materials (as defined in Section 8.05C below) that
existed on the Easements or the 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 1997C Bonds and Series 1998C
Bonds. Subject to the terms and conditions of this Agreement, the
City has heretofore issued the Series 1997C Bonds in amounts
estimated to be sufficient to pay costs of the 1997C Project, and
the City shall diligently use its best efforts to issue, sell and
deliver the Series 1998C Bonds in amounts sufficient to pay the
Costs of the 1998C Project and unfunded 1997C Project Costs, which
amounts shall be established in the Trust Indenture. The City
shall have no obligations to issue, sell, or deliver the Series
1998C 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 1998C 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
1997C Bonds or Series 1998C 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 1997C Bonds and the
Series 1998C 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 1997C Bonds and the Series 1998C 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 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 City 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: [Omitted]
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, Plans and Contracts. (a) 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.
(b) As further consideration for the City's issuance of Bonds
to finance the Costs of the Projects, the City shall acquire an
interest (on a par with Lessee's interest therein) in all plans,
specifications, drawings, contracts, warranties, bonds and other
documents and contractual rights relating to the Special Facilities
on the Maintenance Site only, the cost of which constitutes a Cost
of the Projects (collectively, the "Projects Plans and Contracts").
Moreover, Lessee agrees and shall cause the City to be authorized,
as owner of an interest in the Projects Plans and Contracts, to
have the authority, right and power to use, enjoy and exercise all
rights under the Projects Plans and Contracts available to Lessee
in order to be able to cause the design, construction, acquisition,
completion and operation of the Projects. The City agrees that it
will not exercise any such authority, rights or powers under this
subsection so long as no Event of Default by Lessee has occurred
and is continuing hereunder.
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 constituting Special Facilities (i.e. 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 Property 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, 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, all
Ground Rentals directly to the City and to pay (or cause to be
paid), all operation and maintenance expenses applicable to the
Special Facilities and Ground Lease Properties, 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 and Ground Lease
Properties 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.
Section 6.05: Ground Rentals.
(a) In addition to Net Rent, Lessee shall pay to the City, as
Ground Rentals for the Ground Lease Properties, the following
monthly rental amounts, payable in advance on the first business
day of each month beginning on the first day of the first payment
period shown below:
Mail Sort Site
Land/Ramp Rental
Fixed
Monthly Annual No. of Monthly
Period Payment Rate P.S.F. Sq. Ft. Subtotal
5/1/97-12/31/98 $3,316.20 $0.25 13,742 $ 286.29
1/1/99-12/31/99 n/a $0.25 676,982 14,103.79
1/1/00-12/31/03 n/a $0.25 676,982 14,103.79
Improvements Rental
Annual No. of Monthly Monthly
Rate P.S.F. Sq. Ft. Subtotal Rent Total
5/1/97-12/31/98 n/a n/a n/a $3,602.49
1/1/99-12/31/99 $3.10 18,488 $4,776.07 18,879.86
1/1/00-12/31/03 $4.72 18,488 7,271.95 21,375.74
1/1/04 and thereafter 15% escalation every fifth year beginning
January 1, 2004
Maintenance Site
Land/Ramp Rental
Fixed
Monthly Annual No. of Monthly
Period Payment Rate P.S.F. Sq. Ft. Subtotal
5/1/97-12/31/99 $4,180.00 $0.25 145,515 $ 3,031.56
1/1/00-12/31/04 n/a $0.25 981,515 20,448.23
Improvements Rental
Annual No. of Monthly Monthly
Rate P.S.F. Sq. Ft. Subtotal Rent Total
5/1/97-12/31/99 n/a n/a n/a $7,211.56
1/1/00-12/31/04 $4.71 47,345 $18,582.91 39,031.14
1/1/05 and thereafter 15% escalation every fifth year beginning
January 1, 2005
Inflight Training Site
Land/Ramp Rental
Fixed
Monthly Annual No. of Monthly
Period Payment Rate P.S.F. Sq. Ft. Subtotal
1/1/99-10/31/99 $________ $0.06 627,000 $3,135.00
11/1/99 and thereafter -- See Section 6.05(d)
Improvements Rental
Annual No. of Monthly Monthly
Rate P.S.F. Sq. Ft. Subtotal Rent Total
1/1/99-6/30/00 ____ _____ ____ $____
JFK Blvd. Site
Land/Ramp Rental
Fixed
Monthly Annual No. of Monthly
Period Payment Rate P.S.F. Sq. Ft. Subtotal
1/1/99-6/30/00 $________ $0.06 485,717 $2,964.38
7/1/00-6/30/05 $0.28 485,717 $13,833.75
7/1/05-6/30/10 $0.30 485,717 $14,821.00
1/1/11 and thereafter -- See Section 6.05(d)
Improvements Rental
Annual No. of Monthly Monthly
Rate P.S.F. Sq. Ft. Subtotal Rent Total
1/1/99-6/30/00 ____ _____ ____ $____
Warehouse Site
Land/Ramp Rental
Fixed
Monthly Annual No. of Monthly
Period Payment Rate P.S.F. Sq. Ft. Subtotal
1/1/99-12/31/04 $________ $0.28 97,500 $2,275.00
_________ and thereafter -- See Section 6.05(d)
Improvements Rental
Annual No. of Monthly Monthly
Rate P.S.F. Sq. Ft. Subtotal Rent Total
1/1/99-12/31/04 ____ _____ ____ $____
(b) All Ground Rentals payments to the City shall be made at
the Office of the Director or such other place as shall be
designated in writing by the City. All Ground Rentals not paid to
the City on or before the due date, as established herein, may, at
the discretion of the Director, bear interest at the rate of
fifteen percent (15%) per annum until paid.
(c) Lessee shall provide to the City and maintain during the
term of this Agreement rent security for Ground Rentals in the
amount of $350,000 by means of a letter of credit in favor of the
City from a bank and in a form reasonably acceptable to the
Director, or a bond in a form reasonably acceptable to and approved
by the Director. Such rent security shall cease to be required
after the later of January 1, 1999 or the substantial completion of
the Project if Lessee has a corporate credit rating from Standard &
Poor's of "B" or better (or comparable rating from another
nationally recognized rating agency if Standard & Poor's no longer
rates Lessee's credit); provided, that if such rating ever falls
below "B," such rent security shall be required again and shall
continue until Lessee achieves such a rating of "B" or better
again.
(d) For the Inflight Training Facility, JFK Blvd. Site and
Warehouse Facility, after the expiration of periods for which
scheduled Ground Rentals have been determined, Ground Rentals shall
be based upon appraisals of such properties (without taking into
account Special Facilities for which Lessee is responsible for
paying Net Rent) conducted by the City in accordance with the
City's Home-Rule Charter to be performed prior to the expiration of
the respective scheduled Ground Rental periods. To the extent
permitted by law, Director will allow Lessee to submit appraisal
data regarding each facility's fair market value to be considered
during the appraisal process. Immediately following the appraisal
process the Director and the Lessee shall enter into a memorandum
memorializing the Ground Rentals established in the appraisal
process. Such memorandum shall be deemed to be incorporated into
this Agreement.
ARTICLE VII
USE OF SPECIAL FACILITIES
Section 7.01: Use. (a) Lessee shall have the rights to use
and enjoy the Special Facilities and Ground Lease Properties,
including the rights of possession and quiet enjoyment of the
Special Facilities and Ground Lease Properties, for the purpose of
(i) constructing and maintaining the Special Facilities and Ground
Lease Properties in accordance with the terms hereof and (ii)
subject to all the terms and provisions hereof, conducting, as a
part of Lessee's (or its subsidiaries') air transport business, the
following authorized activities in or upon the Special Facilities
and Ground Lease Properties on a non-exclusive basis on the
Airport, in connection with the Lessee's (i) operation of a Mail
Sort Facility, (ii) Hangar Maintenance Facility, (iii) operation of
Inflight Training Facility, (iv) operation of JFK Blvd. Facility,
and (v) operation of Warehouse Facility (except where otherwise
noted, references in this Section to Lessee's subsidiaries shall
mean only those subsidiaries engaged in the air transport business
where Lessee is the owner of a majority interest in such
subsidiary):
(1) as to the Mail Sort Facility and Hangar Maintenance
Facility, the repairing, modifying, overhauling, testing,
maintaining, conditioning, washing, servicing, parking,
basing and storage of aircraft and other equipment of
Lessee and its subsidiaries operated or used in its air
transport business;
(2) as to all Special Facilities and Ground Lease Properties,
the giving of instruction in the operating and
maintenance of aircraft of all types and the conduct of
ground training courses for pilots, including but not
limited to cockpit simulator for pilots and cabin
simulator for flight attendants and crew training for the
Lessee's and its subsidiaries' employees;
(3) subject to subsection b(8) below, the sale, purchase,
storage, rental, disposal and exchange of aircraft,
aircraft engines, electronic equipment, accessories, and
other aircraft parts, equipment and supplies;
(4) as to the Special Facilities and the Ground Lease
Properties, the storage of food, dry goods, bonded
products and materials, and for the preparation and sale
of food and beverages to employees of Lessee and its
subsidiaries and employees of contractors on the Special
Facilities and Ground Lease Properties and to others to
whom Lessee can sell such items under agreement
(including amendments thereto) between the Lessee and the
City;
(5) as to all Special Facilities and Ground Lease Properties,
the installation of signs advertising the business of
Lessee and Continental Express (including any of their
operating divisions); provided, however, the type, size,
design, number, location and elevation of such signs
shall be subject to and in accordance with the prior
written approval of the Director;
(6) as to all Special Facilities and Ground Lease Properties,
subject to the prior written approval of the Director,
the installation, maintenance and operation of antennas
and of such electronic, communications, meteorological
and aerial navigational equipment and facilities as may
be necessary or convenient for the operation of Lessee's
business, provided (i) the location, elevation,
installation, maintenance or operation of such antennas,
equipment or facilities does not interfere with
operations conducted or equipment operated by the Federal
Aviation Administration, (ii) they meet any and all
requirements of all governmental authorities, and
(iii) they are used solely in connection with Lessee's,
its subsidiaries', or its code share affiliates'
operation of its or their air transport business (and for
which Lessee or such other parties receive no commercial
value from third parties);
(7) as to all Special Facilities and Ground Lease Properties,
any other use authorized by reasonable implication herein
directly relating to the servicing, storage, operating,
repair, and maintenance of aircraft directly and
primarily for the Lessee's and its subsidiaries'
operation of its air transport business;
(8) on the Mail Sort Site only, processing, storage and
handling of mail and related incidental cargo; and
(9) subject to subsection (b)(7) below as to the Mail Sort
Facility and Hangar Maintenance Facility, the processing,
storage and handling of air cargo.
(b) Should any Lessee engage in a prohibited activity under
this subsection (b) or in an activity not authorized by subsection
(a) above unless the prior written approval of the Director is
obtained, then such event shall constitute a breach of this
Agreement. The Lessee does not have the right to engage in and
shall not engage in or permit the conduct of any of the following
prohibited activities upon the Special Facilities and Ground Lease
Properties:
(1) sale of aviation fuels to others, except to Lessee's
subsidiaries, code share affiliates or to other airlines
of the type described in subsection (c) below;
(2) sale of food/beverages or other food products to others
except as specifically provided herein;
(3) loading and unloading of passengers except in connection
with the delivery, acceptance or maintenance of aircraft
operated by Lessee, its subsidiaries or its code share
affiliates, or in (i) connection with promotional flights
of such parties (but not to include the loading or
unloading of revenue passengers) and (ii) emergency
circumstances;
(4) automobile parking for other than the employees of Lessee
or its subsidiaries, vendors, or service providers;
(5) automobile rental business;
(6) ticket sales or ticket office;
(7) cargo operations that involve the loading or unloading of
aircraft not owned or operated by Lessee or its
subsidiaries or code share affiliates, except for mail-
related incidental cargo as described in subsection
(a)(8) above;
(8) offering to others the services, limited or otherwise, of
a fixed base operator, except to other airlines of the
type described in subsection (c) below.
(c) Lessee shall have the right, subject to the prior written
approval of the Director, and subject to all of the terms and
provisions hereof, to cause or permit the conduct upon the Special
Facilities and Ground Lease Properties of any one or more of the
activities permitted to be performed by Lessee pursuant to the
provisions of subsection (a) hereof by or through an independent
contractor, sublessee, or other third parties, provided that Lessee
shall not thereby be relieved of any of its obligations or
liabilities hereunder. Further activities listed in subsection (a)
may also be performed for, or in cooperation with, airlines
certificated under 14 CFR 121 and 129.
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 Ground Lease Properties and 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) [Omitted]
(c) Keep at all times, in a clean and orderly condition and
appearance, the Ground Lease Properties and Special Facilities
which are open to or visible by the general public.
(d) Provide and maintain all obstruction lights and similar
devices, fire protection and safety equipment and all other
equipment of every kind and nature required by laws, rule, order,
ordinance, resolution or regulation of any competent authority,
including the City and Director.
(e) Repair any damage caused by Lessee to paving or other
surfaces of the Special Facilities or Ground Lease Properties
caused by any oil, gasoline, grease, lubricants or other flammable
liquids and substances having a corrosive or detrimental effect
thereon.
(f) Take reasonable measures to prevent erosion, including
but not limited to, the planting and replanting of grass with
respect to all portions of the premises not paved or built upon,
and in particular, plant, maintain and replant any landscaped
areas; and in designing and constructing improvements, preserve as
many trees as possible consistent with Lessee's construction and
operations on the Ground Lease Properties.
(g) Be responsible for the maintenance and repair of all
utility services lines placed on the Ground Lease Properties or
Easements and used by Lessee exclusively, including, but not
limited to, water lines, gas lines, electrical power and telephone
conduits and lines, sanitary sewers and storm sewers.
(h) Take all reasonable measures (i) to reduce to a minimum
vibrations tending to damage any equipment, structure, building or
portion of building which is located elsewhere on the Airport; (ii)
to keep the sound level of its operations as low as possible; and
(iii) not to produce on the Airport through the operation of
machinery or equipment any electrical, electronic or other distur-
bance that interferes with the operation by the City, the Federal
Aviation Administration or the scheduled airlines, of air naviga-
tional, communication or flight equipment on the Airport or on
aircraft using the Airport, or with ground transportation communi-
cations.
(i) Within reason, control the conduct, demeanor and appear-
ance of its officers, agents, employees, invitees and of those
doing business with it; and, upon reasonable objection from
Director concerning the conduct, demeanor or appearance of any such
person, immediately take all reasonable steps necessary to remove
the cause of the objection.
(j) Commit no nuisances, waste or injury, and not do, or
permit to be done, anything which may result in the creation,
commission or maintenance of such nuisance, waste or injury on the
Ground Lease Properties or the Special Facilities.
(k) Not cause nor create, nor permit to be caused or created,
upon the Ground Lease Properties, any noxious odor, smoke, noxious
gas or vapor. Odors emitted in the operation of Lessee's
authorized activities pursuant to Section 7.01 shall comply with
the requirements of all generally applicable air pollution and
nuisance statutes and ordinances.
(l) Subject to the Lessee's rights to use City services on
the same basis as other customers of the City, not do, nor permit
to be done, anything which may interfere with the effectiveness or
accessibility of the drainage system, sewerage system, fire
protection system, sprinkler system, alarm system and fire hydrants
and hoses, if any, installed or located on the Ground Lease
Properties or the Special Facilities.
(m) Collect all garbage, debris and waste material (whether
solid or liquid) arising out of its occupancy of the Ground Lease
Properties, store same pending disposal in covered metal or other
rigidly and sturdily constructed receptacles and dispose of same
off the Airport at regular intervals, except for sewage which may
be disposed of in the City's sewer system, all at Lessee's expense,
in the manner reasonably required by the Director.
Section 8.02: Taxes, Charges, Utilities, Liens. (a) Lessee
shall pay all taxes that may be levied, assessed or charged upon
the Ground Lease Properties and 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 Ground Lease Properties or the
Special Facilities.
(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
Ground Lease Properties or the Special Facilities or any City
property by virtue of the construction, repair or replacement of
the Ground Lease Properties or 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 Ground Lease Properties or 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 all applicable Airport
rules and regulations, 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.
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 Section 5.4 of 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 Section 5.4(c) of 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, plus an administrative fee of 15% of such
cost and expense promptly on demand. Furthermore, should the
Director, the City, its officers, employees, agents, or contractors
undertake any work hereunder, Lessee hereby waives any claim for
damages, consequential or otherwise, as a result therefrom. The
foregoing shall in no way affect or alter the primary obligations
of Lessee as set forth in this Agreement, and shall not impose or
be construed to impose upon the Director or the City any obligation
to maintain the Ground Lease Properties or the Special Facilities,
unless specifically stated otherwise herein. 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.
Section 8.08: Annual Inspections. Lessee agrees that upon
written request by the Director not more often than annually,
Lessee will cause an annual inspection of the Ground Lease
Properties and Special Facilities to be made by an architect or
engineer selected by Lessee, and at Lessee's expense, in the
presence of a representative of the City designated by the Director
and that it will file with the Director immediately following each
such inspection a certificate signed by two (2) of its representa-
tives, one of whom shall be a vice president, certifying that the
Ground Lease Properties and Special Facilities have been
maintained, repaired and preserved and are being operated in
conformity with this Article. In the event that Lessee fails to
file such certificate with the City or is unable to make such
certification within 30 days following request by the City, the
City may cause an inspection of the Ground Lease Properties and
Special Facilities to be made by an architect or engineer of its
choosing at the expense of Lessee. In the event that the report of
any such inspection made by such architect or engineer shall show
that the Ground Lease Properties and Special Facilities have not
been so maintained, repaired or preserved or are not being operated
in conformity with this Article, Lessee shall within fifteen (15)
days from receipt of such notice from the City make such repairs
that shall in the opinion of said architect or engineer be
necessary to correct such defect, and if Lessee refuses, neglects
or fails to commence and diligently pursue to completion such
corrective action, the City or its designee may do so and Lessee
shall pay to City the cost thereof plus an administrative fee equal
to 15% of such cost promptly upon demand.
Section 8.09: Restoration of Airport Property. In the event
it shall be necessary for Lessee to disturb any paved area or any
other property on the Ground Lease Properties or at any other place
on the Airport by excavation or otherwise for the purpose of making
repairs, replacements or alterations to the Ground Lease
Properties, Lessee shall obtain from City all required permits, and
Lessee shall restore all such properties and paved areas excavated
or otherwise disturbed to a condition at least as good as that in
which they were prior to such work, and Lessee shall post any bonds
required by general ordinance of City to guarantee that such
property will be restored in the manner and to the condition
required. Lessee shall guarantee its repairs, replacements and
alterations for a period of one year.
Section 8.10: Airport Rules. From time to time City will
adopt and enforce generally applicable rules and regulations with
respect to the occupancy and use of the Airport, its services and
facilities, by persons, vehicles, aircraft and equipment that in
its opinion will reasonably insure the safe, efficient and economi-
cally practicable operation thereof, provide for the safety and
convenience of those using the Airport and to protect the Airport
and its facilities and the public from damage or injury resulting
from operations on, into and from the Airport. Lessee agrees to
observe and obey such rules and regulations and to require its
officers, agents, employees, contractors and suppliers, to observe
and obey the same, and City reserves the right to deny access to
the Airport and/or its facilities to any person, firm or corpora-
tion that fails or refuses to obey and comply with such rules and
regulations. Such rules and regulations will not be inconsistent
with the terms of this Agreement, valid rules, regulations, orders
and procedures of the Federal Aviation Administration, or any other
governmental agency, duly authorized to make and enforce rules and
regulations for the operation of the Airport and the operation of
aircraft at the Airport. A current copy of City's rules and
regulations and any amendments thereto shall be made available to
Lessee upon request.
Section 8.11: Certain Federal Requirements. (a) Lessee,
for itself, its legal representatives, successors in interest, and
assigns, as a part of the consideration hereof does hereby covenant
and agree as a covenant running with the land that in the event
facilities are constructed, maintained, or otherwise operated on
the said property described in this Agreement for a purpose for
which a Department of Transportation program or activity is
extended or for another purpose involving the provisions of similar
services or benefits, the Lessee shall maintain and operate such
facilities and services in compliance with all requirements imposed
pursuant to Title 49, Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part 21, Non-
discrimination in federally-assisted programs of the Department of
Transportation-Effectuation of Title VI of the Civil Rights Act of
1964, and as said Regulations may be amended.
(b) Lessee, for itself, its legal representatives, successors
in interest and assigns, as a part of the consideration hereof,
does hereby covenant and agree as a covenant running with the land
that (1) no person on the grounds of race, color, or national
origin shall be excluded from participation in, denied the benefits
of, or be otherwise subjected to discrimination in the use of said
facilities, (2) in the construction of any improvements on, over,
or under such land and the furnishing of services thereon, no
person on the grounds of race, color or national origin shall be
excluded from participation in, denied the benefits of, or other-
wise be subjected to discrimination, and (3) the Lessee shall use
the premises in compliance with all requirements imposed by or
pursuant to Title 49, Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part 21, Non-
discrimination in federally assisted programs of the Department of
Transportation Effectuation of Title VI of the Civil Rights Act of
1964, and as said Regulations may be amended.
(c) Lessee acknowledges and agrees that its rights hereunder
are and shall be subject to the provisions of all existing and
future agreements between the City and the United States of America
relative to the operation or maintenance of the Airport, the
execution of which has been or may be, required as a condition
precedent to the obtaining or expediting of Federal funds for the
expansion or development of the Airport pursuant to the Airport and
Airway Development Act of 1970, as amended, or any other federal
program.
(d) Nothing herein shall be deemed to grant Lessee any
exclusive right for the use of any landing area or air navigation
facility upon which Federal funds have been expended within the
meaning of Section 308 of the Federal Aviation Act of 1958, as
amended.
Section 8.12: Other Rules, Regulations and Requirements. (a)
Lessee shall construct, maintain and operate the Ground Lease
Properties and Special Facilities and conduct its operations
thereon in compliance with all of the following: (i) all health and
safety laws and requirements of all federal, state and local
governmental authorities, including the City, having jurisdiction
over the Airport and the Ground Lease Properties and Special
Facilities, (ii) all police, fire, sanitary and other laws and
requirements of the City and all other governmental authorities
having jurisdiction over operations at the Airport, (iii) all
requirements of insurers of the Ground Lease Properties and Special
Facilities concerning the use and condition thereof for the purpose
of reducing fires, hazards and other casualties, and (iv) all
applicable laws and requirements of all governmental authorities
from which Lessee has obtained licenses, franchises, certificates,
permits or other authorization which may be necessary to the
conduct of Lessee's operations at the Airport. In addition, Lessee
shall not do, nor knowingly permit to be done, any act or thing
upon the Ground Lease Properties and Special Facilities that would
invalidate or conflict with any fire insurance policies covering
the Ground Lease Properties and Special Facilities of any part
thereof, or that would create or constitute an extra hazardous
condition so as to increase the risks normally attendant upon the
operations permitted by this Agreement.
(b) Lessee understands and acknowledges that fines and/or
penalties may be assessed by the Federal Aviation Administration
for the Lessee's non-compliance with the provisions of 14 CFR
Paragraph 107 and 108 (1988) entitled "Airport Security." Any
fines or penalties assessed against the City because of the
Lessee's non-compliance with 14 CFR Paragraph 107, as amended from
time to time, shall be promptly reimbursed to the City by the
Lessee.
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.
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 coverage, Combined single limit of:
contractual liability, bodily and $100,000,000 per
personal injury, and products occurrence/aggregate
and completed operations) Products and Completed
operations
$10,000,000 aggregate
All Risk:
(Covering Special Facilities Replacement value of the
including fire, lightning, Special Facilities, but
vandalism, and extended not less than the principal
coverage perils) amount of Bonds Outstanding
Automobile Liability Insurance:
(For automobiles used by Lessee $5,000,000 combined single
in the course of its performance limit per occurrence
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/
(in the case of architects aggregate
and engineers)
Builders Risk: Replacement value of the
(in the case of contractors) Special Facilities, but
not less than the 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) and the Trustee 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) or covered under any self-funded insurance program of
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 on Lessee's
policies 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, 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 the 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 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 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, 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 pay any Ground Rentals due
within fifteen (15) Business Days after being notified in writing
by the City of such failure.
(c) 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) or (b) next 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).
(d) Any material lien shall be filed against the Special
Facilities 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.
(e) 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.
(f) 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.
(g) 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
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 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) sublease the Special Facilities and Ground Lease Properties on
a net rent lease basis, provided further that the City shall use
its best efforts to impose and collect 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 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 rents and other
amounts received from any sublessee with respect to the Special
Facilities and Ground Lease Properties. All proceeds derived by
the City from any 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.
(b) The City may terminate this Agreement, exclude the Lessee
from possession of the Special Facilities and 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) lease the same on a net rent lease
basis, provided further that the City shall use its best efforts to
impose and collect 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 rents with respect to the Special
Facilities and Ground Lease Properties. All gross proceeds derived
by the City from any 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 lease the Special Facilities 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 and Ground Lease Properties or terminates
this Agreement.
(d) Notwithstanding anything in the Agreement to the
contrary, the reletting duties of the City herein shall not apply
to the Warehouse Facility after the date upon which the term of
this Agreement with respect to the Warehouse Facility was scheduled
to expire had there been no Event of Default (after giving effect
to any effective renewal option in respect of which the City has
not notified Lessee that the City intends to use the land on which
the Facility is located for Airport expansion purposes in
accordance with Section 3.02).
(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(c), 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 551, 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 and Ground Lease Properties or any part
thereof to any party, subject to the condition that 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 and/or Ground Lease Properties 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 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, 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 Project
Exhibit "B" Description of Easements
Exhibit "C" Description of Ground Lease Properties
Exhibit "D" Deed and ▇▇▇▇ of Sale for Project
EXHIBIT "A"
(Series 1997C Bonds)
DESCRIPTION OF 1997C 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 1997C Bonds and leased to the
Lessee pursuant to the Special Facilities Lease Agreement, includ-
ing without limitation the following:
1. Hangar Maintenance Facility. The aircraft hangar,
maintenance and parts storage facility consists of an
enclosed complex of approximately 255,800 square feet
anticipated to be located in and adjacent to Continental's
existing maintenance area on the airfield side of the
Airport, including approximately 124,300 square feet of
hangar space and maintenance shops and approximately
131,500 square feet of warehouse and office space as well
as improvements to the existing hangar.
2. Mail Sort Facility The mail sort facility will consist of
a building of approximately 40,000 square feet anticipated
to be located near Continental's existing "B check"
maintenance facility and certain fixtures, furnishings and
equipment necessary for the operation of the facility.
The facility consists of trans-loading facilities and
mechanical sorting equipment with appropriate offices.
However, there is expressly excluded from the Project any and
all properties, facilities, structures, equipment, fixtures,
furnishings, finishes, and appurtenances not financed with the
proceeds of Series 1997C Bonds.
EXHIBIT "A-1"
(Series 1998C Bonds)
DESCRIPTION OF 1998C 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 1998C Bonds and leased to the
Lessee pursuant to the Special Facilities Lease Agreement, includ-
ing without limitation the following:
1. Hangar Maintenance Facility. The Hangar Maintenance
Facility elements of the 1998C Project include the
additions to the Hangar Maintenance Facility under the
1997C Project, which additions include the increase of the
size of the Hangar Maintenance Facility to approximately
_____ square feet, together with other scope changes,
including the construction of an aircraft pad and blast
fence and the addition of new ground equipment for use in
connection with the Hangar Maintenance Facility.
2. In-flight Training Facility. The In-flight Training
Facility element of the 1998C Project consists of an
addition of approximately 12,400 square feet to the
existing 42,200 square foot facility which will house
training equipment related to Continental's newly acquired
Boeing 777 and Next Generation Boeing 737 aircraft.
3. JFK Blvd. Facility. The JFK Blvd. Facility elements of
the 1998C Project consist of an addition of approximately
27,620 square feet to the existing Continental flight
simulator facility to allow for the installation of flight
simulators for Continental's new Boeing 777 and Next
Generation 737 aircraft as well as classrooms and
administrative offices; and the construction of a new
approximately 30,000 square foot simulator building for
Continental Express to permit installation of flight
simulators for the EMB-135 and EMB-145 aircraft as well as
classrooms and administration offices.
4. Warehouse Facility. The Warehouse Facility element of the
1998C Project consists of renovations and upgrades to a
former flight kitchen including replacement of the roof,
replacement of lighting, installation of an underground
fire main, and other renovations to provide for dry
storage of materials to support the Chelsea Flight Kitchen
in-flight meal preparation function.
EXHIBIT B
DESCRIPTION OF EASEMENTS
The Easements shall consist of the following:
All reasonably necessary easements within the Airport to
permit the extension of water, sanitary sewer, electric power, gas
and telephone service to the Ground Lease Properties and the
Special Facilities located thereon. Such easements shall be
provided by the City to the Lessee by the time or times needed by
Lessee to extend such services.
EXHIBIT C
DESCRIPTION OF GROUND LEASE PROPERTIES
Ground Lease Properties shall consist of the following:
1. Maintenance Site
The area containing approximately 22.60 acres of land as
shown as "Hangar Maintenance Facility" comprised of two
tracts which are shaded on the diagram attached as Exhibit
C-1 and which is described by metes and bounds in such
Exhibit C-1 attached hereto, together with all
improvements located thereon except Special Facilities.
2. Mail Sort Site
The area containing approximately 15.5414 acres of land as
shown on the diagram attached as Exhibit C-2 and which is
described by metes and bounds in such Exhibit C-2 attached
hereto, together with all improvements located thereon,
except Special Facilities.
3. Inflight Training Site
The area containing approximately 14.3939 acres of land as
shown on the diagram attached as Exhibit C-3 and which is
described by metes and bounds in such Exhibit C-3 attached
hereto, together with all improvements located thereon,
except Special Facilities.
4. JFK Blvd. Site
The area containing approximately 11.1505 acres of land as
shown on the diagram attached as Exhibit C-4 and which is
described by metes and bounds in such Exhibit C-4 attached
hereto, together with all improvements located thereon,
except Special Facilities.
5. Warehouse Site
The area containing approximately 2.2383 acres of land as
shown on the diagram attached as Exhibit C-5 and which is
described by metes and bounds in such Exhibit C-5 attached
hereto, together with all improvements located thereon,
except Special Facilities.
EXHIBIT D
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)