EXHIBIT 10.30
AIRPORT USE AND LEASE AGREEMENT
by and between
CITY OF HOUSTON
and
CONTINENTAL AIRLINES, INC.
Effective January 1, 1998
TABLE OF CONTENTS
Page
Article I
DEFINITIONS
Article II
RIGHTS AND PRIVILEGES
Section 2.01. Use of Airport . . . . . . . . . . . . . . 7
Section 2.02. Rights Reserved by City. . . . . . . . . . 8
Section 2.03. Limitations of Use of Airport. . . . . . . 9
Section 2.04. Parking. . . . . . . . . . . . . . . . . . 10
Section 2.05. Ingress and Egress . . . . . . . . . . . . 10
Section 2.06. Sales or Distribution of Food / Beverages. 11
Section 2.07. Use of IAB Facilities for International
Arriving Passengers. . . . . . . . . . . . 12
Article III
TERM
Section 3.01. Term . . . . . . . . . . . . . . . . . . . 13
Section 3.02. Option to Extend Term of Terminal B Lease. 13
Section 3.03. Airline's Rights Upon Expiration or
Early Termination of Agreement . . . . . . 13
Article IV
LEASED PREMISES
Section 4.01. Terminal B Leased Premises . . . . . . . . 14
Section 4.02. Terminal C Leased Premises . . . . . . . . 18
Section 4.03. Airline's Use of Terminal Improvements
and Ground Lease Premises Conveyed By B
Special Facilities Lease . . . . . . . . . 19
Section 4.04. Surrender of Leased Premises . . . . . . . 19
Section 4.05. Covenant Against Liens . . . . . . . . . . 20
Section 4.06. Quiet Enjoyment. . . . . . . . . . . . . . 20
Article V
RENTALS AND FEES
Section 5.01. General. . . . . . . . . . . . . . . . . . 21
Section 5.02. Statistical Report . . . . . . . . . . . . 21
Section 5.03. Terminal Building Rentals. . . . . . . . . 22
Section 5.04. Security Fees. . . . . . . . . . . . . . . 22
Section 5.05. Apron Fees / Ground Area Rental. . . . . . 22
Section 5.06. Landing Fees . . . . . . . . . . . . . . . 22
Section 5.07. Other Fees and Charges . . . . . . . . . . 22
Section 5.08. Security Deposit . . . . . . . . . . . . . 23
Section 5.09. Payment Provisions . . . . . . . . . . . . 23
Section 5.10 No Other Fees and Charges. . . . . . . . . 24
Article VI
RECALCULATION OF RENTALS AND FEES
Section 6.01. General. . . . . . . . . . . . . . . . . . 25
Section 6.02. Terminal Rental Rates. . . . . . . . . . . 25
Section 6.03. Apron Fee Rates. . . . . . . . . . . . . . 26
Section 6.04. Landing Fee Rate . . . . . . . . . . . . . 28
Section 6.05. Automated People Mover System Costs. . . . 28
Section 6.06. Mid-Year Rate Adjustments. . . . . . . . . 29
Section 6.07. Year-End Adjustment to Actual
and Settlement . . . . . . . . . . . . . . 30
Article VII
CONSTRUCTION OF IMPROVEMENTS
Section 7.01. Construction By City . . . . . . . . . . . 31
Section 7.02. Construction By Airline. . . . . . . . . . 32
Section 7.03. Future Capital Improvements. . . . . . . . 33
Article VIII
OPERATION AND MAINTENANCE
Section 8.01. Obligations of City. . . . . . . . . . . . 34
Section 8.02. Obligations of Airline . . . . . . . . . . 35
Article IX
INDEMNIFICATION
Section 9.01. Release and Indemnification of City. . . . 37
Article X
INSURANCE
Section 10.01. General. . . . . . . . . . . . . . . . . . 39
Section 10.02. Risks and Minimum Limits of Coverage . . . 39
Section 10.03. Other Provisions . . . . . . . . . . . . . 40
Article XI
DAMAGE OR DESTRUCTION OF LEASED PREMISES
Section 11.01. Leased Premises Inhabitable. . . . . . . . 43
Section 11.02. Leased Premises Uninhabitable. . . . . . . 43
Section 11.03. Automatic Termination. . . . . . . . . . . 43
Section 11.04. Airline Improvements . . . . . . . . . . . 43
Section 11.05 Insurance. . . . . . . . . . . . . . . . . 44
Article XII
TERMINATION
Section 12.01. Termination by City. . . . . . . . . . . . 45
Section 12.02. Termination by Airline . . . . . . . . . . 46
Article XIII
ASSIGNMENT AND SUBLETTING
Section 13.01. Assignment and Subletting. . . . . . . . . 48
Article XIV
MISCELLANEOUS PROVISIONS
Section 14.01. Rules and Regulations. . . . . . . . . . . 49
Section 14.02. Compliance with Law. . . . . . . . . . . . 49
Section 14.03. Nondiscrimination. . . . . . . . . . . . . 53
Section 14.04. Payment of Taxes . . . . . . . . . . . . . 54
Section 14.05. Right to Lease to United States Government 54
Section 14.06. Notice or Consent. . . . . . . . . . . . . 55
Section 14.07. Rights Reserved to City. . . . . . . . . . 55
Section 14.08. Favored Nations. . . . . . . . . . . . . . 55
Section 14.09. Right of Entry . . . . . . . . . . . . . . 55
Section 14.10. Notices. . . . . . . . . . . . . . . . . . 56
Section 14.11. City's Right to Audit Books and Records. . 57
Section 14.12. Force Majeure. . . . . . . . . . . . . . . 57
Section 14.13. Non-Waiver . . . . . . . . . . . . . . . . 57
Section 14.14. Place of Payments. . . . . . . . . . . . . 57
Section 14.15. Nonliability of Individuals. . . . . . . . 57
Section 14.16. Remedies to be Nonexclusive. . . . . . . . 58
Section 14.17. Exclusiveness of Airline's Rights. . . . . 58
Section 14.18. Other Land and Buildings Excluded. . . . . 58
Section 14.19. Titles . . . . . . . . . . . . . . . . . . 58
Section 14.20. Invalid Provisions . . . . . . . . . . . . 58
Section 14.21. Enforcement. . . . . . . . . . . . . . . . 58
Section 14.22. Operation of Airport . . . . . . . . . . . 59
Section 14.23. Entire Agreement . . . . . . . . . . . . . 59
Section 14.24. Successors and Assigns . . . . . . . . . . 59
Section 14.25. Subordination. . . . . . . . . . . . . . . 59
EXHIBITS
Airport Layout and Cost Center Plan
Terminal B
Terminal C
Illustrative Calculation of Gate Use Fee
Statistical Report Format
Illustrative Calculation of Rates and Charges
Terminal B Improvements
Terminal C Improvements. . . . . . . . . . . . . . . . . .
AIRPORT USE AND LEASE AGREEMENT
THE STATE OF TEXAS )(
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF HARRIS )(
THAT, this Airport Use and Lease Agreement ("Agreement") is
made and entered into on the date of countersignature by the City
Controller ("Effective Date") by and between the City of Houston,
Texas, a municipal corporation and home-rule city principally
situated in Harris County (hereinafter defined and referred to as
"City") and Continental Airlines, Inc., a corporation doing
business in the State of Texas (hereinafter defined and referred to
as "Airline").
WITNESSETH:
WHEREAS, City is the owner of the George Bush Intercontinental
Airport/Houston (hereinafter defined and referred to as "Airport"
and more completely identified on Exhibit A attached hereto and
made a part hereof), which is located in the City of Houston,
Harris County, Texas; and
WHEREAS, Airline is engaged in the business of commercial air
transportation of persons, property, cargo, and mail as a scheduled
air carrier and is certificated or otherwise authorized by the
United States Government to engage in such business; and
WHEREAS, Airline has requested City grant it certain rights,
privileges and services in connection with the use of said Airport
and its facilities in the conduct of Airline's business as a
scheduled air carrier; and
WHEREAS, City is willing to grant Airline such rights,
privileges and services upon the terms and conditions and for the
consideration hereinafter stated; and
WHEREAS, City and Airline deem it desirable to enter into a
written agreement setting forth the respective rights, privileges,
obligations and duties of the parties hereto and defining the
rights, services and privileges granted and the terms, conditions
and consideration on which they are granted;
NOW, THEREFORE, for and in consideration of the Leased
Premises and the mutual covenants herein contained and the rentals,
charges and fees to be paid by Airline, it is agreed and understood
by and between the City and Airline as follows:
Article I
DEFINITIONS
The following words and phrases, wherever used in this
Agreement, shall, for the purpose of this Agreement, have the
following meanings:
1. "Airline" means the entity that has executed this
Agreement and that is identified in the first paragraph of this
Agreement. However, for purposes of the enjoyment of the rights
conferred on Airline hereunder, it is agreed that any subsidiary of
Airline that is wholly owned as of the date hereof (a "subsidiary")
shall have the rights afforded Airline hereunder without payment of
any additional charges or premiums; provided, however, that Airline
shall be responsible for the actions of (including the payment of
any activity fees incurred by) any such subsidiary while such
subsidiary operates at the Airport until Airline notifies the City
in a writing delivered to the City, that Airline will no longer be
responsible for the actions (or activity fees) of such subsidiary,
which notice Airline shall have the right to give only if such
subsidiary ceases to be a wholly-owned subsidiary of Airline, and
if such notice is given, then from and after (but not until) the
date that the City approves (if at all) a partial assignment by
Airline to such subsidiary of the space at the Airport occupied by
such subsidiary (along with a partial assignment of the rights
utilized by such subsidiary in connection with its operations at
the Airport) in accordance with the provisions of Section 13.01
hereof, Airline shall no longer be responsible for the actions (or
activity fees) of such subsidiary.
2. "Airport" means George Bush Intercontinental Airport/
Houston, Texas, as generally depicted in Exhibit A, Airport Layout
and Cost Center Plan, attached hereto and made a part hereof, as it
now exists or may be modified or expanded from time to time in the
future.
3. "Airport System" means 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 "George
Bush Intercontinental Airport/Houston," "William P. Hobby Airport",
"Ellington Field" and the "CBD Heliport."
4. "Airport Cost Centers" means the direct cost areas to be
used in accounting for Airport costs for the purposes of
calculating compensatory rates and charges hereunder, as depicted
in Exhibit A, Airport Layout and Cost Center Plan, as such areas
now exist or may hereafter be modified or expanded and as more
particularly described below:
A. "Terminal A Airline Area" means the space in
Terminal A leased to or available for lease to airlines.
B. "Terminal A Public Area" means the space in
Terminal A available for public circulation and waiting, rest
rooms, and concessions.
C. "Terminal A Apron Area" means the apron area at
Terminal A.
D. "Terminal B Airline Area" means the space in
Terminal B leased to or available for lease to airlines, as
depicted in Exhibit B.
E. "Terminal B Public Area" means the space in
Terminal B available for public circulation and waiting, rest
rooms, and concessions, as depicted in Exhibit B.
F. "Terminal B Apron Area" means the apron area at
Terminal B, as depicted in Exhibit B.
G. "Terminal C Airline Area" means the space in
Terminal C leased to or available for lease to airlines, as
depicted in Exhibit C.
H. "Terminal C Public Area" means the space in
Terminal C available for public circulation and waiting, rest
rooms, and concessions, as depicted in Exhibit C.
I. "Terminal C Apron Area" means the apron area at
Terminal C, as depicted in Exhibit C.
J. "IAB Airline Area" means the space in Terminal IAB
leased to or available for lease to airlines.
K. "IAB Public Area" means the space in Terminal IAB
available for public circulation and waiting, rest rooms, and
concessions.
L. "IAB Apron Area" means the apron area designated at
Terminal IAB.
M. "Airfield" means the runways, taxiways, and apron
areas (other than the Terminal A Apron Area, the Terminal B
Apron Area, and the Terminal C Apron Area, IAB Apron Area, and
common use cargo aprons), navigational aids, hazard
designation and warning devices, airfield security roads and
fencing, blast fencing, lighting, clear zones and safety areas
for landing, taking off and taxiing of aircraft, aviation
easements, land utilized in connection therewith or acquired
for such purpose, and facilities, the acquisition,
construction or installation cost of which is wholly or
partially paid by the City, as depicted in Exhibit A.
N. "International Airlines Building" or "IAB" means
the Mickey C. Leland International Airlines Building as may be
modified or expanded and all appurtenances thereto, as
depicted in Exhibit A.
5. "Amortization" means the level annual charge required to
recover the net cost of a Capital Improvement over the Useful Life
of such Capital Improvement at the City's Cost of Capital.
6. "Automated People Mover" or "APM" means the automated
people mover system the first phase of which, connecting Terminals
B and C, is to be designed and constructed by Airline as part of
the Continental Special Facilities and financed with the Series
1997A SFRBs, as further described in Section 7.02 hereof and which
may be expanded from time to time.
7. "Base Capital Charge" means the fixed annual charge per
square foot to be charged for certain Leased Premises as herein
provided, the original cost of which has been fully amortized.
8. "Capital Improvement" means any improvement or asset, or
series of related improvements or assets, acquired or constructed
by City at the Airport, including without limitation any security
facilities or equipment under Section 5.04, which has a net cost of
$150,000 or more (adjusted annually for changes in the Consumer
Price Index from July 1, 1998 to a maximum of $300,000) and a
Useful Life of more than one year (but excluding facilities
acquired or constructed with the proceeds of special facility
revenue bonds which are secured solely by the net rent payable
under the special facility lease for such facility and which debt
service is in fact retired in such manner, unless such facilities
are subsequently acquired by City). For the purposes of this
Agreement, the net cost of each Capital Improvement shall be the
total cost (including actual construction costs; architectural and
engineering fees, program management fees, testing and inspection
fees, construction management fees, permit fees, and other direct
or allocable fees; interest during construction; and allocable out-
of-pocket financing costs) less any grants-in-aid or similar
amounts used in financing the Capital Improvement.
9. "City" means the City of Houston, Texas, or such other
agency, board, authority, or private entity which may succeed to
the jurisdiction of City over the Airport.
10. "Cost of Capital" means (a) for Capital Improvements
financed with Airport System Revenue Bonds, the effective interest
rate on the Bonds used to finance the particular Capital
Improvement and (b) for Capital Improvements financed with other
Airport funds, the current Revenue Bond Index (of 22-year+, "A"
rated bonds) published daily in the Wall Street Journal (or
successor publication thereto), on June 30 of the year the Capital
Improvement is placed in service.
11. "Director" means the Director of City's Department of
Aviation or his or her designee, or such other officer to whom the
duties and authority of the Director may be assigned by the City
Council of City or by any agency, board or authority which may
subsequently succeed to the jurisdiction of City over the Airport.
12. "Fiscal Year" refers to City's fiscal year and means the
twelve-month period commencing July 1 and extending through June 30
of the following calendar year, or such other fiscal year as City
Council may establish by ordinance.
13. "Ground Handling Agreement" means an agreement between
Airline and a third party (including another airline) governing the
provision of Ground Handling Services by Airline to another airline
or to Airline by a third party.
14. "Ground Handling Services" means any of the following:
on and off loading of passengers, baggage, mail or cargo; into-
plane fueling; servicing aircraft lavatories; providing ground
power, potable water and preconditioned air; cleaning the interior
or exterior of aircraft; and emergency maintenance of aircraft
engines and systems, and any other similar ground services.
15. "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 or which may impair the beneficial use of
property for Airport purposes. Hazardous Materials shall also mean
any and all hazardous materials, hazardous wastes, toxic or
hazardous substances, or substances regulated under any
Environmental Laws set forth in Section 14.02.C.1. hereof.
16. "Leased Premises" means the Exclusive Use Space and the
Preferential Use Apron Area leased to Airline pursuant to Sections
4.01 and 4.02 hereof.
17. "Mayor" means the Mayor of the City of Houston or such
other officer to whom the duties and authority of the Mayor may be
assigned by the Charter of the City of Houston or by an act of the
Legislature of the State of Texas or by any agency, board, or
authority which may succeed to the jurisdiction of City over the
Airport.
18. "Operation and Maintenance Expenses" means all
reasonable and necessary current expenses of City, paid or accrued,
of operating, maintaining, repairing, and administering the
Airport; including, without necessarily limiting thereto, salaries
and wages, fringe benefits, contractual services, utilities,
professional services, police protection services, fire protection
services, administrative expenses, the cost of materials and
supplies used for current operations, equipment, insurance
premiums, the reasonable charges of any paying agents and any other
depository bank pertaining to the Airport, as well as overhead
expenses of (a) the Department of Aviation (which shall be fairly
allocated among City's airport facilities in accordance with
generally accepted accounting practices) and (b) other City
departments whose services are directly related or reasonably
allocable to the administration of the Airport (which shall be
determined in accordance with a City-wide administrative cost
allocation plan then in effect); provided, however, Operation and
Maintenance Expenses shall not include any allowance for
depreciation, payments in lieu of taxes, Capital Improvements, any
charges for the accumulation of reserves for capital replacements
or charges resulting from the negligence or breach of existing
agreements by the City, its employees or contractors.
19. "Renewal and Replacement Fund" means the Airport System
Renewal and Replacement Fund established by the City's Airport
System Revenue Bond ordinances.
20. "Special Facilities" means the Special Facilities
defined and described in the Special Facilities Leases which have
been financed with the Special Facilities Revenue Bonds, including
the Automated People Mover Project, the Terminal Improvements
Project, and the Airport Improvements Project, and any additional
special facilities which may be undertaken from time to time
hereafter pursuant to the Special Facilities Leases and financed
with additional Special Facilities Revenue Bonds.
21. "Special Facilities Leases" means the Special Facilities
Lease Agreements for the Automated People Mover Project (the "A
Special Facilities Lease"), the Terminal Improvements Project (the
"B Special Facilities Lease"), and the Airport Improvements Project
(the "C Special Facilities Lease") between City and Airline with
respect to the Special Facilities, all of which are dated March 1,
1997.
22. "Special Facilities Revenue Bonds" or "SFRBs" means the
City of Houston, Texas, Airport System Special Facilities Revenue
Bonds, Series 1997A (Automated People Mover Project), Series 1997B
(Continental Airlines, Inc. Terminal Improvement Projects), and
Series 1997C (Continental Airlines, Inc. Airport Improvement
Projects) issued by the City on behalf of Airline to finance the
Special Facilities, and any additional bonds or refunding bonds
which may be issued from time to time hereafter under the trust
indentures for the SFRBs and any supplements thereto.
23. "Systems" means the systems, facilities and improvements
located on and serving the Airport, including but not limited to:
(a) the access roads and other roadways serving the terminal
complex; (b) the interterminal passenger transportation system; (c)
the heating, ventilation, and air conditioning (HVAC) plant and
related distribution systems; (d) terminal building mechanical
areas and systems; and (e) the incinerators / compactors.
24. "Systems Costs" means the total of annual Operation and
Maintenance Expenses and annual Amortization charges associated
with each of the Systems.
25. "Useful Life" means the estimated period of time that a
Capital Investment is to be recovered through the Amortization
process. In general, Useful Lives will be assigned to Capital
Improvements by the Director based on generally accepted airport
accounting practices. For purposes of calculating rates and fees
under this Agreement, improvements to Terminals B and C financed by
City will be assigned Useful Lives of 20 years.
Article II
RIGHTS AND PRIVILEGES
Section 2.01. Use of Airport
As long as it does so in accordance with the terms and
provisions hereof, Airline, in common with all other scheduled
airlines using the Airport, may utilize the Airport (other than the
exclusive space of other tenants) and its facilities for the
purpose of conducting Airline's business of a scheduled air carrier
certificated or otherwise authorized by the United States
Government to engage in the business of commercial air
transportation of persons, property, cargo, and mail (hereinafter
sometimes referred to as "air transportation business"). The
privileges granted hereby include the following:
A. The use of landing field areas, aprons, roadways,
runways, taxiways, runway and taxiway lights, beacons, facilities,
equipment, improvements, services and other conveniences for
flying, landing, taxiing and takeoffs of aircraft.
B. The landing, taking-off, flying, taxiing, towing,
loading and unloading of aircraft and other equipment used by
Airline in its operation of its air transportation business.
C. The repairing, maintaining, conditioning, servicing,
testing, including engine "runups" subject to Section 2.03.E.
hereof, loading, unloading, parking and storing of aircraft or
other equipment of Airline in areas on the Airport designated by
the City for such purposes.
D. The training of personnel in the employ of or to be
employed by Airline including employees of Airline's contract
service providers.
E. The installation, maintenance and operation, at
Airline's expense, by Airline alone, or in conjunction with any
other airline or airlines who are lessees at the Airport or through
a nominee, of radio, telephone, and data communications equipment
and meteorological and aerial navigation equipment and facilities
in or on the Leased Premises leased exclusively to Airline for use
by Airline in the conduct of its air transportation business;
provided, however, that any exterior installations shall be subject
to the prior written approval of the Director.
F. The selling, exchanging or disposing of gasoline, oil,
grease, lubricants, fuels, or propellants for use by Airline in
connection with the conduct of its air transportation business (in
compliance with existing laws and any applicable agreement
therefor).
G. The purchasing or otherwise obtaining of services or
personal property of any nature including aircraft, engines,
accessories, gasoline, oil, greases, lubricants, fuels,
propellants, food, beverages, and other equipment or supplies
necessary to Airline in the conduct of its air transportation
business and in the exercise of its rights and privileges herein
granted and in the discharge of the obligations herein imposed upon
Airline.
H. The installing, maintaining, and operation, without cost
to City, by Airline alone or in conjunction with any other airline
lessee or lessees on the Airport, of communication systems between
suitable locations in the terminal area, subject to the approval of
the Director as to location of the installation of said system.
I. The transporting, directly or through a nominee of
Airline's choice, of Airline's employees, passengers, cargo,
property (including baggage) and mail to, from and at the Airport.
J. Subject to the prior written approval of the Director,
the installation and maintenance at Airline's expense, on Leased
Premises leased to it or under its control, of advertising or
identifying signs representing its business. Such signs shall be
uniform in size, type and location as approved by the Director and
shall be consistent with published Department of Aviation signage
criteria.
K. The conduct of any other operation or activity that is
necessary for or related to Airline's air transportation business,
subject to the provisions of Section 2.02. hereof.
L. Ground Handling of Airline by Others. Airline may
contract with, or receive from other airlines serving the Airport
or other companies, Ground Handling Services for Airline's
aircraft, provided that Airline provides advance written notice to
the Director (or his designated representative) of such
arrangements and uses reasonable efforts to ensure that such other
airline or other company shall have entered into an operating
permit or agreement or other similar contract with City prior to
commencing Ground Handling Services with Airline.
M. Ground Handling of Others by Airline. Airline may
provide Ground Handling Services to aircraft of other airlines
using the Airport provided that Airline provides advance written
notice to the Director (or his designated representative) of such
arrangements and uses its best efforts to ensure that such other
airline has entered into an operating permit or agreement or
similar contract with City prior to conducting its operations at
the Airport. Airline's insurance, as required in this Agreement,
shall provide insurance coverage for such Ground Handling Services.
Section 2.02. Rights Reserved by City
A. City reserves the exclusive right to itself, its
agents and its franchisees, to operate all concession services
(including but not limited to food/beverage and news/gift
concessions, specialty retail shops and carts, vending machines,
pay telephones, fax machines and other voice and data
telecommunications systems, advertising displays, baggage lockers
and baggage carts) in the public use areas of Terminals A, B, and
C and the IAB (including public use Leased Premises such as
holdrooms and baggage claim areas with prior notice to Airline and
providing Airline the ability to comment) and to retain the revenue
therefrom; provided however, that City agrees that no concession
services shall be located or operated by City or its nominees in
any non-public use Exclusive Use Space without Airline's prior
consent and providing that City shall not exercise such right in a
manner that will materially impede passenger ingress or egress or
Airline's business operations.
B. City shall operate all concessions and provide such
other services (with reasonable due consideration to requests made
by Airline) for scheduled airline passenger operations at the
Airport as it deems necessary or appropriate. Nothing herein shall
limit or preclude City from operating whatever concessions or
providing whatever services it may desire at any and all airports
and other facilities owned by City.
Section 2.03. Limitations of Use of Airport
A. Use of Facilities. Airline shall not knowingly
permit any act or omission at or about the Airport that may
interfere with the effectiveness or accessibility of the drainage
and sewage system, electrical system, heating and air conditioning
system, fire protection system, sprinkler system, alarm system,
fire hydrants and hoses, and security systems, if any, installed or
located on or within the Leased Premises or the Airport.
B. Insurance Requirements Compliance. Airline shall
not knowingly permit any act upon the Airport that will invalidate
or conflict with any fire or other casualty insurance policies
(copies of which, together with premium schedules, shall be
furnished to Airline on request) covering the Airport or any part
thereof.
C. Waste Disposal. Airline shall not dispose of or
knowingly permit disposal of any waste material taken from or
products used (whether liquid or solid) with respect to its
aircraft into the sanitary or storm sewers at the Airport unless
such waste material or products shall first be properly treated by
equipment installed for that purpose or otherwise disposed of
pursuant to law. In addition to obtaining approval from the
governmental agencies regulating equipment and disposal described
in this paragraph, Airline shall also obtain the approval of the
Director. All such disposal shall comply with regulations of the
United States Department of Agriculture and shall be in compliance
with Section 14.02 of this Agreement.
D. Flammable Liquids. Airline shall not keep or
store, during any 24-hour period, flammable liquids within the
enclosed portion of the Leased Premises in excess of Airline's
working requirements during said 24-hour period, except in storage
facilities especially constructed for such purposes in accordance
with standards established by the National Board of Fire
Underwriters and approved by a governmental agency with authority
to inspect such facilities for safety compliance. Any such liquids
having a flash point of less than 100 degrees fahrenheit shall be
kept and stored in safety containers of a type approved by the
Underwriters Laboratories.
E. Engine Runups. Airline shall perform aircraft
engine runups only at locations and during time periods approved in
writing in advance by the Director.
F. Other. Airline's use of the Airport shall be
limited to activities directly connected to the transportation of
passengers, persons, property, cargo and mail by air, and Airline
shall not enter into activities which compete with City in City's
development of any revenue from Airport passengers, tenants, and
other users. However, it is the intent of the foregoing that
Airline shall be permitted to continue to conduct any activity that
Airline was currently conducting as of July 1, 1996.
Section 2.04. Parking
A. In the event City develops or causes to be
developed an area or areas at the Airport as common parking
facilities for the employees of Airline and other Airport tenants,
the Director, in consultation with the Airline, will determine a
reasonable charge for the use of such facilities to cover return on
capital investment and costs associated with their development,
operation, supervision and maintenance. Public vehicular parking
facilities will be provided by City at reasonable charges to be
determined by City.
B. Only employees of Airline may park on such employee
parking facilities.
Section 2.05. Ingress and Egress
Subject to the other provisions hereof and to the rules and
regulations adopted by City under the provisions of Article XIV
hereof, the following privileges of ingress and egress with respect
to the Airport are hereby granted:
A. For Airline, its agents, employees, contractors,
subcontractors and permitted sublessees and assigns: To the public
areas of the Airport and to those areas and facilities designated
herein for exclusive use by Airline or by Airline in common with
other airlines. This right shall extend to Airline's aircraft,
vehicles, machinery and equipment used in its air transportation
business.
B. For Airline's passengers, guests and invitees: To
areas leased exclusively to Airline and to areas provided for use
of Airline's passengers, guests and invitees in common with those
of other airlines and to public areas and public facilities. This
privilege shall extend to vehicles of such passengers, guests and
invitees.
C. For Airline's suppliers of materials and furnishers
of service: To the public areas of the Airport and to areas and
facilities leased exclusively to Airline and to areas and
facilities provided for the common use by Airline or its suppliers
of materials and furnishers of services. This privilege shall
extend to vehicles, machinery or equipment of such suppliers and
furnishers used in their business of furnishing such supplies and
services to Airline.
The ingress and egress provided for above shall not be
used, enjoyed or extended to any person, airline or vehicle
engaging in any activity or performing any act or furnishing any
service for or on behalf of Airline that Airline is not authorized
to engage in or perform under the provisions hereof unless
expressly authorized by the Director.
Section 2.06. Sales or Distribution of Food / Beverages
A. Distribution of In-Flight Food/Beverages. The
distribution, serving or sale of food and/or beverages (including
alcoholic beverages) meant to be consumed aboard Airline's aircraft
by Airline or its in-flight catering provider shall be limited to
Airline's passengers who are in the passenger loading bridge or
entrance to the passenger loading bridge and in the process of
boarding Airline's aircraft. The provisions of this section
notwithstanding, all distribution of alcoholic beverages shall
comply with applicable laws.
Distribution of food and/or beverages (at no cost to the
public) by Airline shall be permitted in passenger holdrooms with
twenty-four hours advance written notice to the Director for up to
eight (8) days (inclusive of partial days of distribution) per year
in connection with holidays and promotional events. All food
and/or beverages so distributed shall be purchased from the City's
food and beverage concessionaires operating at the Airport (if such
food and beverage products are available from such concessionaires
after reasonable inquiry of such concessionaires by Airline),
except for soft drinks, bottled water, canned juice, coffee and
packaged Airline snacks which shall be supplied by Airline's in-
flight catering provider. Airline shall have the right to request
in writing to the Director additional days to distribute packaged
Airline snacks and/or beverages in passenger holdrooms. The
Director, in his sole discretion, shall give Airline written notice
of his decision regarding any such request.
B . Club Rooms. Airline shall have the right to
utilize space in Terminal B and Terminal C for the purpose of
maintaining and operating club rooms for its guests, invitees, and
passengers and may serve beverages, including alcoholic beverages,
and appetizers therein with or without charge and subject to all
applicable laws, regulations and ordinances; provided, however,
that the City reserves the right to charge Airline applicable
percentages of its gross revenues from the sale of food and
beverages consistent with the percentages charged to its food and
beverage concessionaires at the Airport, not to exceed 10% on the
sale of food and nonalcoholic beverages and 15% on the sale of
alcoholic beverages; provided that no such payment shall be
required with respect to items obtained from concessionaires
already obligated to make such payments to City with respect to
such obtained items.
C. Cafeteria / Vending Machines. Airline or its
nominee may install, maintain and operate a cafeteria for use only
by Airline's employees and vending machines for Airline employees
and contractors in Airline's Exclusive Use Space not accessible to
the public.
D. Other Distribution of Food/Beverages Prohibited.
Except as allowed in this Section 2.06, all other serving,
distribution or sale of food or beverages by Airline at the Airport
is prohibited.
Section 2.07. Use of IAB Facilities for International Arriving
Passengers
During the first ten (10) years of this Agreement
(January 1, 1998 through December 31, 2007), all arriving
international passengers who have not been pre-cleared shall be
processed through the Federal Inspection Services facilities in the
IAB.
(THIS SPACE INTENTIONALLY LEFT BLANK)
Article III
TERM
Section 3.01. Term
A. The term of this Agreement with respect to
Airline's use of the Airport and its Leased Premises in Terminal C,
shall begin on January 1, 1998 and end on December 31, 2017.
B. The term of this Agreement with respect to
Airline's use of its Leased Premises in Terminal B, shall begin on
January 1, 1998 and end on December 31, 2007, with a ten (10) year
option as provided in Section 3.02 below.
Section 3.02. Option to Extend Term of Terminal B Lease
Airline is hereby granted the option to extend the term
of its use of its Leased Premises in Terminal B for an additional
ten (10) years through December 31, 2017, by giving written notice
to City on or before June 30, 2007, unless the City (A) elects in
writing, prior to June 1, 2007, to (1) exercise certain rights as
provided in Section 7.01.F hereof and Section 7.03 (a) and (d) of
the A Special Facilities Lease to purchase, acquire, and/or assume
Airline's leasehold obligations for the B-C Link of the APM and (2)
purchase all of Airline's rights to the Special Facilities located
in Terminal B (other than the ground support equipment and, if
built, the baggage transfer facility) as provided in Section 7.04
of the B Special Facilities Lease and (B) exercises such rights
before December 31, 2007.
Section 3.03. Airline's Rights Upon Expiration or Early
Termination of Agreement
Upon expiration or early termination of this Agreement,
all of Airline's rights, authority, and privileges to use the
Leased Premises, services and facilities of the Airport as herein
granted shall cease.
Article IV
LEASED PREMISES
Section 4.01. Terminal B Leased Premises
A. Exclusive Use Space. Airline hereby leases from
City and City hereby leases to Airline for its exclusive use the
areas in Terminal B shown in Exhibit B, attached hereto and by
reference made a part hereof for all purposes, which areas are to
be used for the general purposes shown, as summarized below:
Area (sq. ft.) Estimated
as of Area (sq. ft.)*
Type of Space July 1, 1998 as of Feb. 1, 1999
Ticket counter 1,641 1,641
Ticket counter queuing 2,038 2,038
Ticket office 3,881 3,645
Baggage claim 3,967 7,934
Baggage make-up 13,314 29,395
Curb check-in 242 484
Operations 27,362 37,078
Baggage service office 409 844
Security 954 1,942
Other offices 1,627 1,721
Holdrooms 32,891 41,573
Club rooms 4,219 4,430
Baggage cart circulation 8,890 17,780
Special Facilities space -
Series B
Mezzanine Level 5,174 5,174
*Square footage subject to final verfication based on
as-built drawings.
The space indicated on Exhibit B as Special Facilities
space - Series A is included as part of the Ground Lease Properties
under the A Special Facilities Lease and is expressly excluded from
Airline's Leased Premises under this Agreement.
B. Preferential Use Apron Area.
1. Designation of Preferential Use Apron Area.
Airline hereby leases from City and City hereby leases to Airline
for its preferential use, but not for its exclusive use, the apron
area at Terminal B including 6,532 sq. ft. of Special Facilities
space - Series B located on the apron level as shown in Exhibit B,
attached hereto and by reference made a part hereof for all
purposes.
2. Nonpreferential Use of Airline's Apron Area by
Other Airlines. Airline is being granted preferential use of said
apron area, but not exclusive use. At those times that Airline has
no scheduled use for an aircraft parking position on Airline's
apron area and there are no other aircraft parking positions at the
Airport available for use, Airline shall allow other scheduled or
nonscheduled airlines authorized by City to use Airport facilities
to use such aircraft parking position as circumstances and the
public interest may require for loading and unloading only, but in
no event shall said use by others take precedence over Airline's
use. Airline shall have the right to limit the duration of such
usage to the actual time required for unloading, loading, and
flight service operations and may require that such user tow off
and back on to accommodate Airline's use. When such use is to be
made of Airline's apron area, Airline shall be properly compensated
for such use by the user of the facilities based on and in
accordance with the attached Illustrative Calculation of Gate Use
Fee in Exhibit D hereof.
3. Parking of Airline's Aircraft. Airline shall
have the right to locate any number of aircraft within the Terminal
B Apron Area for the purpose of loading and unloading passengers,
baggage, cargo and mail; provided, that Airline shall not park
aircraft in such a manner as would prohibit access, ingress, and
egress to and from all aircraft parking positions by aircraft, ramp
equipment, and traffic of other airlines or would prohibit the
movement of aircraft and ramp equipment to and from the most
convenient taxiway and terminal building.
C. City's Right to Review Space Utilization and Take
Back Space.
1. In July, 2003, City will evaluate Airline's
utilization of Terminal B in terms of average number of daily
flights per gate for the immediately preceding six-month period
(January through June 2003, referred to hereafter as the "Test
Period"). If Airline's average gate utilization is less than four
flights per day during the Test Period (determined by taking the
total number of scheduled flights during the Test Period by
Airline, its code-share airlines, Continental Express, Inc. and
other scheduled airlines for which Airline has a ground handling
agreement, and dividing by the product of total number of available
gates in Terminal B times 181 days) the Director may within 180
days of the conclusion of the Test Period, at his option and in
order to accommodate the needs of other airline users of the
Airport, require in writing Airline to relinquish (as hereinbelow
provided) (1) a proportionate number of its gates at Terminal B
such that, on a pro-forma basis, excluding such relinquished gates,
the remaining gates would have demonstrated an average utilization
of at least 4 flights per day during the Test Period and (2) a
substantially identical proportionate amount of holdroom,
operations, ticket counter, ticket office, baggage make-up, and
baggage claim space.
2. In the event Director requires Airline to
relinquish such space and gates, Director and Airline will confer
to determine which gates and space will be relinquished. Airline
will be required to relinquish contiguous gates, holdrooms and
other exclusive leased space. City and Airline shall conduct good
faith negotiations in accordance with the foregoing to select the
location of the space and gates to be relinquished. If after sixty
(60) days of good faith negotiations no agreement has been reached,
City shall select the gates and space to be relinquished. Airline
will continue to have the nonexclusive right to use the holdrooms
and gates it relinquishes as a result of this provision at rates
established by City for such nonpreferential use.
3. In evaluating gate utilization in Terminal B
during the Test Period, City will adjust the data for Terminal B
flights to compensate for any unusual reductions in the number of
flights operated in Terminal C during the Test Period insofar as
such flights might have been relocated to operate through
Terminal B.
4. In order to accomplish the relinquishment of
gates and support space in Terminal B as hereinabove provided,
Airline agrees that it shall sublease to City such Special
Facilities as may be located in or as may be necessary to support
such relinquished gates and space (or an appropriate undivided
interest or right of use therein) for the remaining term of the B
Special Facilities Lease (or such shorter term as may be applicable
if Airline is permitted to reinstate its lease of such relinquished
gates and space under this Agreement) for a rental equal to the sum
of (i) the allocable expenses of operation and maintenance of such
Special Facilities or interest therein, including City charges, if
any, for allocable indirect Airport System costs, plus (ii) an
amount per annum (or any portion thereof) equal to the annual debt
service or any portion thereof that would have been payable on the
amount of the Series 1997B Bonds and any additional capital
expenditures by Airline not funded with Series 1997B Bonds
(documented to the reasonable satisfaction of the Director)
required to finance such allocable share of Special Facilities
determined as if the bonds (i) were issued in an original principal
amount increased by the amount of any unreimbursed capital
expenditure by Airline, (ii) had a final maturity of December 31,
2017 and (iii) had an amortization schedule such that they had
equal debt service from the date of beneficial occupancy of the
Special Facilities until the final maturity of the bonds (but not
less than 18.0 years). The foregoing sublease provisions shall not
relieve Airline from any responsibility with respect to its
obligations as lessee under the B Special Facilities Lease,
including particularly its obligation to pay the full amount of Net
Rent thereunder and all of its other obligations with respect to
the Series 1997B Bonds; provided, however, that such sublease to
City shall provide that City shall use its best efforts to
continually require on Airline's behalf that any occupant receiving
such occupancy rights from City be obligated to provide insurance
and indemnification with respect to such Special Facilities for the
benefit of City and Airline to the same extent that Airline is
obligated to do so herein, and provided further that Airline shall
not be required to indemnify City for acts of subtenants or their
passengers in and about such Special Facilities.
D. City's Right to Reconstruct Terminal B Flight
Stations.
1. In the event City, on or after January 1,
2008, determines that the Terminal B flight stations should be
demolished and replaced as recommended in the approved Airport
master plan, City may, upon giving Airline six-months written
notice, take back (as hereinbelow provided) portions of Airline's
Terminal B Leased Premises in order to carry out such
reconstruction; provided, however, that in no event will more than
25% of such gates and holdroom space to be reconstructed be taken
out of service at any one time for such reconstruction; and
provided further that City provides Airline with reasonably
comparable substitute interim space during such reconstruction.
Airline shall have the right of first refusal to lease the
reconstructed space at full compensatory rates.
2. In order to accomplish the foregoing reconstruction
of certain Terminal B flight stations, City shall (A) if Airline
wishes to lease such reconstructed space (which Airline shall have
the first right of refusal to lease), (i) at City expense relocate
at the new flight stations those salvageable or reusable Special
Facilities (e.g. passenger loading bridges and Ground Support
Equipment) and (ii) replace any demolished or non-reusable Special
Facilities with replacement facilities of equivalent value and
utility to Airline determined as of the date of such replacement in
the reconstructed flight stations leased to Airline and (B) acquire
such demolished or removed Special Facilities for a purchase price
equal to the original principal amount of Bonds and any additional
capital expenditures by Airline not funded with Bonds (documented
to the reasonable satisfaction of the Director) allocable to such
Special Facilities multiplied by a fraction, the numerator of which
is the number of days from the date of acquisition to December 31,
2017 and the denominator of which is the number of days (but not
less than 18.0 years) from the average weighted date of beneficial
occupancy of such Special Facilities to December 31, 2017. Any
such acquisition, but not relocation, costs shall be treated by
City as costs of the replacement flight stations, subject to rents
and charges as provided in Article V hereof. Under no
circumstances will the foregoing described demolition and
replacement of flight stations in Terminal B, nor the relocation,
substitution or acquisition of Special Facilities as aforesaid
relieve Airline of its obligations under the B Special Facilities
Lease, particularly with respect to the payment of Net Rent or any
of its other obligations with respect to the Series 1997B Bonds.
Section 4.02. Terminal C Leased Premises
A. Exclusive Use Space. Airline hereby leases from City
and City hereby leases to Airline for its exclusive use the areas
in Terminal C shown in Exhibit C, attached hereto and by reference
made a part hereof for all purposes, which areas are to be used for
the general purposes shown, as summarized below:
Type of Space Area
(square feet)
Ticket counter 3,784
Ticket counter queuing 5,063
Ticket office 10,948
Baggage claim including bag service office 42,775
Baggage make-up 177,790
Curbside / remote check-in 264
Operations 127,688
Security 3,862
Other offices 12,778
Holdrooms 131,766
Club rooms 9,786
Baggage cart circulation 62,960
B. Preferential Use Apron Area.
1. Designation of Preferential Use Apron Area. Airline
hereby leases from City and City hereby leases to Airline for its
preferential use, but not for its exclusive use, the apron area at
Terminal C including 9,830 sq. ft. of Special Facilities space -
Series B on south concourse apron level as shown in Exhibit C,
attached hereto and by reference made a part hereof for all
purposes.
2. Nonpreferential Use of Airline's Apron Area by
Other Airlines. Airline is being granted preferential use of said
apron area, but not exclusive use. At those times that Airline has
no planned use for an aircraft parking position on Airline's apron
area, and there are no other aircraft parking positions at the
Airport available for use, Airline shall allow other scheduled or
nonscheduled airlines authorized by the City to use Airport
facilities to use such aircraft parking position as circumstances
and the public interest may require for loading and unloading only,
but in no event shall said use by others take precedence over
Airline's use. Airline shall have the right to limit the duration
of such usage to the actual time required for unloading, loading,
and flight service operations and may require that such user tow
off and back on to accommodate Airline's use. When such use is to
be made of Airline's apron area, Airline shall be properly
compensated for such use by the user of the facilities based on and
in accordance with the attached Illustrative Calculation of Gate
Use Fee in Exhibit D hereof.
3. Parking of Airline's Aircraft. Airline shall have
the right to locate any number of aircraft within the Terminal C
Apron Area for the purpose of loading and unloading passengers,
baggage, cargo and mail; provided, however, that Airline shall not
park aircraft in such a manner as would prohibit access, ingress,
and egress to and from all aircraft parking positions by aircraft,
ramp equipment, and other traffic or would prohibit the movement of
aircraft and ramp equipment to and from the most convenient taxiway
and terminal building.
Ground Area. Airline hereby leases from City and City hereby
leases to Airline for its exclusive use 5,740 sq. ft. of Special
Facilities space - Series B at Terminal C as shown in Exhibit C,
attached hereto and by reference made a part hereof for all
purposes.
Section 4.03. Airline's Use of Terminal Improvements and Ground
Lease Premises Conveyed By B Special Facilities
Lease
Airline's rights under the B Special Facilities Lease to
design, construct, equip, furnish, repair, maintain, occupy, use
and enjoy Terminal B Improvements and Terminal C Improvements (as
defined in the B Special Facilities Lease) and any other Special
Facilities located in or attached to Terminals B or C shall not
exist independent of Airline's right to use Terminals B and C
pursuant to this Agreement. Additionally, to the extent that such
Special Facilities overlie, adjoin or abut space designated as
public space in this Agreement, then such Special Facilities shall
not be used or occupied by Airline in any way that would impede or
prevent public access to or enjoyment of such overlaid, adjoining
or abutting public space as provided in this Agreement.
Section 4.04. Surrender of Leased Premises
A. Upon expiration or early termination of this Agreement,
Airline shall surrender the Leased Premises to City in as good
condition as such Leased Premises were in at the time of the
original occupancy by Airline, excepting, however, (1) reasonable
wear and tear that could not be prevented through routine
maintenance required to be done by Airline, (2) damage by fire and
other casualty, and (3) acts of God or the public enemy.
B. Except as otherwise provided in this Section, all
equipment, trade fixtures, and other personal property installed or
placed by Airline in the Leased Premises or on or about the Airport
and which can be removed without structural damage to the Leased
Premises or any other City-owned property, shall remain the
property of Airline unless otherwise provided in subsequent
agreements between Airline and City, and Airline shall have the
right at any time during the term of this Agreement and prior to
its expiration or early termination to remove any and all of said
property from the Airport provided Airline is not in default in its
payments hereunder (beyond all applicable notice and opportunity to
cure periods). Airline agrees to repair or pay for all damages, if
any, resulting from such removal. All City property damaged by or
as a result of the removal of Airline's property shall be restored
at Airline's expense to the same or better condition that it was
prior to such damage. Any and all property not removed by Airline
prior to the expiration of this Agreement, or, if this Agreement
ends by early termination, within sixty (60) days after receipt by
Airline of a written notice 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 City; and City
reserves the right to remove such property not so removed by
Airline, 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 Airline's expense.
Section 4.05. Covenant Against Liens
Airline shall not cause nor permit any lien against the Leased
Premises or any improvements thereto to arise out of or accrue from
any action or use thereof by Airline; provided, however, that
Airline may in good faith contest the validity of any alleged lien.
Section 4.06. Quiet Enjoyment
Upon payment by Airline of the rentals, fees and charges as
herein required and subject to performance and compliance by
Airline of the covenants, conditions, and agreements on the part of
Airline to be performed and complied with hereunder, Airline shall
peaceably have and enjoy the rights, uses and privileges of the
Airport, its appurtenances and facilities as granted herein.
Article V
RENTALS AND FEES
Section 5.01. General
In consideration for the use of the Leased Premises,
facilities, rights, and privileges granted hereunder and for the
undertakings of City, Airline agrees to pay City, without set-off,
as follows:
A. During the initial six-month period of this Agreement
(January 1 - June 30, 1998), the rentals, fees, and other charges
calculated for Fiscal Year 1997-98 will remain under the provisions
of the existing use and lease agreements which expired December 31,
1997.
B. During the remaining term of this Agreement, the rentals
and fees as set forth in this Article V and as recalculated
according to the procedures of Article VI. hereof.
Section 5.02. Statistical Report
Airline shall submit in writing to the Director on or before
the 15th day of each month the following statistical information
relative to its scheduled, nonscheduled and charter operations at
the Airport for the immediately preceding calendar month, in a
format consistent with that provided in Exhibit E, attached hereto
and by reference made a part hereof for all purposes:
Total number of domestic enplaned and deplaned passengers, by
terminal
Total number of originating and connecting passengers, by
terminal
Total number of international enplaned and deplaned passengers
Total number of landings by type of aircraft and maximum gross
certificated landed weight by type of aircraft
Total pounds of air cargo enplaned and deplaned
Total pounds of air mail enplaned and deplaned
The above statistical information shall be in addition to any
other information elsewhere herein required to be submitted by the
Airline each month for City's use in calculating landing fees and
other charges pertinent to Airline's operations on the Airport.
Section 5.03. Terminal Building Rentals
Airline shall pay City for its Exclusive Use Space in Terminal
B and Terminal C monthly rent based on the annual compensatory
rental rates for Terminal B and Terminal C calculated each Fiscal
Year in accordance with Section 6.02 hereof.
Section 5.04. Security Fees
Airline shall pay City monthly amounts sufficient to reimburse
City for Airline's appropriate share of City's actual costs of
providing (1) armed law enforcement support for the security
screening operation as required by FAR Parts 107 and 108 and (2) if
required by Federal law, security screening, explosives detection,
and other security measures at the Airport. Any fines or penalties
assessed against City because of Airline's noncompliance with 14
CFR Part 107 shall promptly be reimbursed to City by Airline within
thirty (30) days of receipt of written notice from the Director
setting forth the amount of such fine or penalty; provided,
however, that such payment shall not be construed as waiving
Airline's right to contest such fine or penalty.
Section 5.05. Apron Fees / Ground Area Rental
A. Apron Fees. Airline shall pay City for its apron area
at Terminals B and C monthly rent based on the annual compensatory
apron fee rates for Terminals B and C calculated each Fiscal Year
in accordance with Section 6.03 hereof.
B. Ground Area Rental. Airline shall pay City for its
Ground Area at Terminal C monthly rent based on $0.28 per sq. ft.
per annum and escalating 15% on January 1, 2003, and 15% on each
succeeding fifth year during the term of this Agreement.
Section 5.06. Landing Fees
Airline shall pay City for its use of the Airfield monthly
landing fees based on the annual landing fee rate calculated each
Fiscal Year in accordance with Section 6.04 hereof. City will use
its best efforts to charge and collect landing fees from all
commercial air transportation users of the Airfield as Director may
reasonably determine. As determined by City, the fees payable by
noncommercial air transportation users for the use of the Airfield
may be based on some method other than aircraft landed weight.
Section 5.07. Other Fees and Charges
A. Utilities. With respect to its Leased Premises and
Airline-installed equipment, machinery and facilities, Airline
agrees to pay all water, sewage, electricity, gas and other utility
charges which may be charged to Airline for the use thereof, if
such charges are separately assessed or metered as appropriate to
Airline. Utility bills for metered utilities furnished by the City
will be paid monthly or less frequently depending on billing
schedule established by the City. For those areas not separately
metered, both exclusive and common, charges for utility services
(other than illumination which is to be provided by City and
included in the base rental rate) will be assessed by City on a
proportionate basis related to area leased or number of fixtures
served. Meters will be installed where it is economically and
mechanically feasible.
B. Other. City reserves the right to assess, and Airline
agrees to pay reasonable charges for the use of City-provided
facilities including but not limited to: employee parking
facilities; flight information display systems; public address
systems; and issuance of security identification badges.
Section 5.08. Security Deposit
In the event Airline, at any time during the term of this
Agreement, fails to make any of the payments required under this
Article V when due (beyond all applicable notice and opportunity to
cure periods), City reserves the continuing right to require a
security deposit in an amount equal to six times Airline's average
monthly amount of rentals and fees payable under this Agreement,
during the immediately succeeding six-month period. Such security
deposit shall be provided to City by Airline, as a letter of credit
or in such other form specified by the Director, within thirty (30)
days of written demand therefor by City and shall be held by City
until Airline has made timely payment of all rentals and fees
payable under this Agreement for a period of twelve (12)
consecutive months at which time such security deposit shall be
returned to Airline.
Section 5.09. Payment Provisions
A. Terminal Building Rentals and Apron Fees. Terminal
building rentals and apron fees shall be due and payable on the
first day of each month in advance without invoice from the City.
B. Landing Fees. Landing fees for each month shall be due
and payable without invoice from the City on or before the
fifteenth (15th) day following the last day of the preceding month
and shall be transmitted to City together with Airline's monthly
statistical report for the month as required in Section 5.02
hereof.
C. Other Fees. All other rentals, fees, and charges
required hereunder shall be due and payable within thirty (30) days
of the date of the invoice therefor.
D. Right of City to Verify Airline's Payment. The
acceptance of any payment made by Airline shall not preclude City
from verifying the accuracy of Airline's report and computations or
from recovering any additional payment actually due from Airline or
preclude Airline from later demonstrating that Airline's report was
inaccurate and that a lesser amount was properly owed (and to
recover any such overpayment).
E. Interest on Overdue Amounts. Any payment not received
within five business days of the due date may accrue interest at
the rate of 1.5% per month from the due date until the date when
full payment is made.
F. Form of Payment. Payments shall be made to the order of
"City of Houston Department of Aviation" and shall be sent to the
Director's office or such other place as may be designated by the
Director from time to time. City and Airline shall cooperate in
the development of a procedure for the electronic transfer of funds
as the preferred method of payment.
Section 5.10 No Other Fees and Charges
City agrees that it will not impose any rental, fee or charge,
direct or indirect, on Airline for the exercise and enjoyment of
the rights and privileges granted herein except those rentals, fees
and charges provided for in this Agreement, and such other rentals,
fees and charges as are mutually agreed upon by City and Airline;
provided, however, there is excepted from this provision any and
all fees and charges imposed or required by any rule, regulation or
law of any governmental authority other than City. This provision
is not intended to prevent City from making agreements concerning
rentals, fees and charges with individuals or firms providing goods
or services on the Airport who are tenants of City.
Article VI
RECALCULATION OF RENTALS AND FEES
Section 6.01. General
Effective July 1, 1998 (for the Fiscal Year ending June 30,
1999), and for each Fiscal Year thereafter, rentals and fees will
be reviewed and recalculated based on the principles and procedures
set forth in this Article. The methodology for the calculation of
airline rentals and fees described in this Article VI is
illustrated in Exhibit F. For rate setting purposes, the
calculations will be made on the basis of Department of Aviation
estimates of costs and expenses and airline estimates of total
landed weight and shall be provided to Airline at least thirty (30)
days prior to the beginning of the Fiscal Year. For final
settlement purposes all calculations will be made on the basis of
actual costs and expenses incurred and will be provided to Airline
as soon as possible following the completion of the annual audit of
the Department of Aviation's financial statements.
Section 6.02. Terminal Rental Rates
A. Terminal B. The Total Costs of the Terminal B Airline
Area will be calculated by adding together the following amounts:
1. Direct and indirect Operation and Maintenance
Expenses allocable to the Terminal B Airline Area
2. A Base Capital Charge of $6.50 per square foot
times the Terminal B Airline Area which area shall be reduced for
any space demolished or replaced as contemplated in Section 4.01.D.
The Exclusive Use Space identified in Section 4.01.A. as ticket
counter queuing and security areas shall receive a credit of $1.50
per square foot. The Exclusive Use Space identified in Section
4.01.A. as Special Facilities space - Series B Mezzanine Level
shall receive a credit of $6.50 per square foot.
3. Amortization of the net cost of each Capital
Improvement placed in service in the Terminal B Airline Area on or
after July 1, 1998, together with amortization of the net costs of
any of the planned Capital Improvements in Terminal B set forth in
Exhibit H which may be placed in service prior to July 1, 1998
4. Interest on the cost of land allocable to the
Terminal B Airline Area computed at City's historical average Cost
of Capital
5. Annual Systems Costs allocable to the Terminal B
Airline Area
6. Annual replenishment of the Renewal and Replacement
Fund allocable to the Terminal B Airline Area, if necessary as
required by City's master airport revenue bond ordinance
The annual Terminal B Rental Rate will then be calculated by
dividing the Total Costs allocable to the Terminal B Airline Area
by the total square footage of airline space in the Terminal B
Airline Area and multiplying by Airline's Exclusive Use Space.
B. Terminal C. The Total Costs of the Terminal C Airline
Area will be calculated by adding together the following amounts:
1. Direct and indirect Operation and Maintenance
Expenses allocable to the Terminal C Airline Area
2. Amortization of the unamortized net cost of each
Capital Improvement in the Terminal C Airline Area as of June 30,
1998 over the remaining useful life of the Capital Improvement at
the City's weighted Cost of Capital for all Airport Capital
Improvements as of that date
3. Amortization of the net cost of each Capital
Improvement placed in service in the Terminal C Airline Area on or
after July 1, 1998
4. Interest on the cost of land allocable to the
Terminal C Airline Area computed at City's historical average Cost
of Capital
5. Annual Systems Costs allocable to the Terminal C
Airline Area
6. Annual replenishment of the Renewal and Replacement
Fund allocable to the Terminal C Airline Area, if necessary as
required by City's master airport revenue bond ordinance
The annual Terminal C Rental Rate will then be calculated by
dividing the Total Costs allocable to the Terminal C Airline Area
by the total square footage of airline space in the Terminal C
Airline Area.
Section 6.02.B.2 shall be subject to negotiation by City and
Airline with respect to the value of the fully amortized Airline
area in Terminal C, effective January 1, 2010.
Section 6.03. Apron Fee Rates
A. Terminal B. The Total Costs of the Terminal B Apron
Area will be calculated by adding together the following amounts:
1. Direct and indirect Operation and Maintenance
Expenses allocable to the Terminal B Apron Area.
2. A Base Capital Charge of $0.50 per square foot
times the Terminal B Apron Area which area shall be reduced for any
space demolished or replaced as contemplated in Section 4.01.D.
3. Amortization of the unamortized net cost of each
Capital Improvement in the Terminal B Apron Area (including
improvements associated with the fuel system) as of June 30, 1998
over the remaining useful life of the Capital Improvement at the
City's weighted Cost of Capital for all Airport Capital
Improvements as of that date
4. Amortization of the net cost of each Capital
Improvement placed in service in the Terminal B Apron Area on or
after July 1, 1998
5. Interest on the cost of land allocable to the
Terminal B Apron Area computed at City's historical average Cost of
Capital
6. Annual Systems Costs allocable to the Terminal B
Apron Area
7. Annual replenishment of the Renewal and Replacement
Fund allocable to the Terminal B Apron Area, if necessary as
required by City's master airport revenue bond ordinance
The annual Terminal B Apron Fee Rate will then be calculated
by dividing the Total Costs allocable to the Terminal B Apron Area
by the total square footage of pavement designated as apron area at
Terminal B and multiplied by the Airline's Preferential Use Apron
Area.
B. Terminal C. The Total Costs of the Terminal C Apron
Area will be calculated by adding together the following amounts:
1. Direct and indirect Operation and Maintenance
Expenses allocable to the Terminal C Apron Area
2. Amortization of the unamortized cost of each
Capital Improvement in the Terminal C Apron Area (including
improvements associated with the fuel system) as of June 30, 1998
over the remaining useful life of the Capital Improvement at the
City's weighted Cost of Capital for all Airport Capital
Improvements as of that date
3. Amortization of the cost of each Capital
Improvement placed in service in the Terminal C Apron Area on or
after July 1, 1998
4. Interest on the cost of land allocable to the
Terminal C Apron Area computed at City's historical average Cost of
Capital
5. Annual Systems Costs allocable to the Terminal C
Apron Area
6. Annual replenishment of the Renewal and Replacement
Fund allocable to the Terminal C Apron Area, if necessary as
required by City's master airport revenue bond ordinance.
The annual Terminal C Apron Fee Rate will then be calculated
by dividing the Total Costs allocable to the Terminal C Apron Area
by the total square footage of pavement designated as apron area at
Terminal C.
Section 6.03.B.2 shall be subject to negotiation by City and
Airline with respect to the value of the fully amortized Terminal
C Apron Area, effective January 1, 2010.
Section 6.04. Landing Fee Rate
The Total Costs of the Airfield Area will be calculated by
adding together the following amounts:
1. Direct and indirect Operation and Maintenance
Expenses allocable to the Airfield Area
2. Amortization of the unamortized net cost of each
Capital Improvement in the Airfield Area as of June 30, 1998, over
the remaining useful life of the Capital Improvement at the City's
weighted Cost of Capital for all Airport Capital Improvements as of
that date
3. Amortization of the net cost of each Capital
Improvement placed in service in the Airfield Area on or after July
1, 1998
4. Interest on the cost of land allocable to the
Airfield Area computed at City's historical average Cost of Capital
5. Annual Systems Costs allocable to the Airfield Area
6. Annual replenishment of the Renewal and Replacement
Fund allocable to the Airfield Area, if necessary as required by
City's master airport revenue bond ordinance.
The Net Costs of the Airfield Area will then be calculated by
subtracting revenues from general aviation fuel flowage fees. The
Landing Fee Rate will then be calculated by dividing the Net Costs
of the Airfield Area by the total aircraft landed weight of all
airlines using the Airport.
Section 6.05. Automated People Mover System Costs
In the event the City purchases, acquires and/or assumes
Airline's leasehold obligations for the B-C Link of the APM and
extends the APM, as contemplated by Section 7.01.F.3 below and the
City assumes the responsibility for the costs of the expanded APM,
those costs shall be allocated as follows:
A. Capital Costs. If the City assumes the Series 1997A
Bonds, the annual capital cost of the expanded APM shall be the sum
of (1) the actual debt service on the Series 1997A Bonds, (2) the
amortization of any consideration paid Airline by City related to
Airline's investment in the APM from sources other than the
proceeds of the Series 1997A Bonds, as contemplated by Section
7.03(g) of the A Special Facilities Lease, and (3) the amortization
of the City's investment in the expansion of the APM. If the City
retires the Series 1997A Bonds from other sources, the annual
capital cost of the expanded APM shall be the annual amortization
of the City's total investment in the acquisition and expansion of
the APM. The annual capital cost shall be allocated to each "link"
of the system (B-C, C-IAB, and, if applicable, A-B) based on the
actual costs of each link. The annual capital cost of each link
shall then be further allocated to each of the terminals served by
that link on an equal (50% / 50%) basis. The total annual capital
cost allocable to each terminal shall then be charged to the
airline user groups in the respective terminals (i.e., the Terminal
A airlines for the Terminal A share, Airline for the Terminal B and
Terminal C shares, and Airline and the IAB airlines for the IAB
share).
B. Operating Costs. The costs of operating and maintaining
the expanded APM system shall be allocated among the airlines based
on an equitable allocation methodology to be determined through
consultation with Airline and the other airlines affected by the
allocation.
C. Other City Funds. If the City provides any funds in
respect to the costs of the APM system that are not reimbursable
through airline rates and charges, then Airline shall share
proportionately in the recovery of such funds.
Section 6.06. Mid-Year Rate Adjustments
In the event that, at any time during a Fiscal Year, the Total
Costs of the Terminal B Airline Area, Terminal C Airline Area,
Terminal B Apron Area, Terminal C Apron Area, or Airfield Area, or
the aggregate Total Landed Weight of all airlines, is projected by
City to vary ten percent (10%) or more from the estimates used in
setting terminal rental rates, apron fee rates, or the landing fee
rate, such rates may be adjusted either up or down for the balance
of such Fiscal Year, provided that such adjustment is deemed
necessary by City. An upward adjustment shall only be used to
ensure that adequate revenues will be available from such fees to
recover the estimated Total Costs of the airline-supported cost
centers. For each such adjustment, City shall provide Airline with
a written explanation of the basis for the rate adjustment(s) and
will provide thirty (30) days advance written notice before putting
such adjustment(s) into effect. Unless extraordinary circumstances
warrant additional adjustments, City will seek to limit such rate
adjustments to no more than once each Fiscal Year.
Section 6.07. Year-End Adjustment to Actual and Settlement
On or about September 1 of each year, City shall furnish
Airline with a preliminary estimate of the year-end adjustment (as
described below) to assist Airline in budgeting for any deficiency
to be paid by Airline in the settlement process.
City shall furnish Airline by December 1 with an accounting of
the costs and expenses actually incurred, revenues and other
credits actually realized (reconciled to the audited financial
statements of the Airport System), and actual enplaned passengers
and landed weights during such Fiscal Year with respect to each of
the components of the calculation of terminal building rental
rates, apron fee rates, and the landing fee rate in this Article VI
and shall recalculate the rates, fees, and charges required for the
Fiscal Year based on those actual costs and revenues. If requested
by an airline, City shall convene a meeting of the airlines to
discuss the calculation of the year-end settlement.
In the event that Airline's rentals, fees, and charges billed
during the Fiscal Year were more than the amount of Airline's
rentals, fees, and charges required (as recalculated based on
actual costs and revenues), such excess amount shall be paid in
lump sum or issued as a credit to Airline within sixty (60) days of
the calculation of such final settlement.
In the event that Airline's rentals, fees, and charges billed
during the Fiscal Year were less than the amount of Airline's
rentals, fees, and charges required (as recalculated based on
actual costs and revenues), such deficiency shall be billed to
Airline and payable by Airline within sixty (60) days of the date
of invoice. However, in the event that the amount of the Airline
deficiency exceeds $350,000, Airline may pay the deficiency to City
in equal monthly installments without interest over the remaining
months of the current Fiscal Year.
Article VII
CONSTRUCTION OF IMPROVEMENTS
Section 7.01. Construction By City
A. Terminal A Improvements. In conjunction with the
planned relocation of certain airlines from Terminal B to Terminal
A, City will design and construct improvements and renovations to
Terminal A as it deems necessary to meet the anticipated future
needs of the airlines and public using that Terminal, including
rebuilding, expansion and/or renovation of holdroom areas, baggage
claim and make-up areas, and other areas of the land-side building.
No costs of the Terminal A improvements will be included in the
rate base for any of Airline's terminal facilities. City and
Airline will coordinate regarding the overall phasing plan for the
improvements to Terminal A and the relocation of American Airlines
from Terminal B to Terminal A to facilitate Airline's occupancy of
Terminal B.
B. Terminal B Improvements. City will renovate Flight
Station 6 and portions of the Terminal B land-side building (public
and concession area improvements, utility systems, exterior
refurbishment, etc.) to accommodate Airline's expanded domestic
operations in Terminal B, as summarized in Exhibit G. Every
reasonable effort will be made by City to ensure that construction
of public area improvements in Terminal B will not adversely affect
Airline's use and occupancy of Terminal B. However, Airline
acknowledges that construction of the public area improvements may
cause some disruption of Airline's operations in Terminal B after
the effective date of this Agreement. Further, it is recognized
that (1) American Airlines was not relocated to Terminal A prior to
the expiration of its use and lease agreement on December 31, 1997,
(2) the renovation of such airline's space for Airline's use will
commence promptly after that airline has relocated, and, therefore,
(3) Airline will not have the beneficial use of such improvements
until after such renovation is completed (currently estimated for
January 19, 1999, and which renovation shall be prosecuted with all
due diligence by City as circumstances warrant).
C. Terminal C Improvements. City will renovate and
expand Terminal C as summarized in Exhibit H.
D. Future Investments in Terminals B and C. Subject
to an appropriation being made therefor, City agrees to spend from
the Airport Improvement Fund on improvements to Terminals B and/or
C at least $2.4 million during the initial ten (10) year term of
Airline's use of its Terminal B Leased Premises and at least $6.8
million during the subsequent ten (10) year term of Airline's use
of its Terminal B Leased Premises (provided the term of Airline's
use of its Terminal B Leased Premises is extended as provided in
Section 3.02).
E. Concession Area Improvements. City will use its
best efforts to provide comparable quality of finishes and
comparable availability and quality of concessions in the public
areas of Terminal A, Terminal B, and Terminal C.
F. Automated People Mover System.
1. Future Extension of the APM. City intends, at
its expense, to extend the APM to the IAB (the C-IAB Link) soon
after the initial link between Terminals B and C (the B-C Link) is
constructed and may further extend the APM to Terminal A at a later
date. Airline will coordinate in any reasonable manner with City
to facilitate the extension of the APM, and City will use its best
efforts to ensure that construction of such extension(s) does not
interfere with Airline's operations.
2. City Option to Purchase, Acquire and/or Assume
Airline's Leasehold Obligations for the B-C Link of the APM. City
shall have the option to purchase, acquire, and/or assume Airline's
leasehold obligations for the B-C Link of the APM, as provided in
Section 7.03(d) of the A Special Facilities Lease, and take over
responsibility for, and operating control of, the APM at any time
after the B-C Link of the APM is operational; provided, however,
that City shall take no action that jeopardizes the tax exempt
status of the SFRBs.
3. Assumption of Airline's Obligations Upon
Extension of APM. In the A Special Facilities Lease, City
covenants that it will not operate any extensions of the APM
separately from B-C Link, but will take appropriate steps so that
the entire APM, as extended to the IAB and/or Terminal A, is
operated as a single system. Therefore, in the event City extends
the APM to the IAB and/or Terminal A, as contemplated in Section
7.01.F.1 above, then City shall exercise its option to purchase,
acquire, and/or assume Airline's leasehold obligations for the B-C
Link of the APM, as provided in Section 7.01.F.2 above, and shall,
unless otherwise mutually agreed, undertake to maintain and operate
the entire APM, as provided in Section 8.01.E below. In such
event, City shall, at its option, either (i) assume Airline's
obligations for the Series 1997A Bonds or (ii) defease or retire
the Series 1997A Bonds from the proceeds of Airport System Revenue
Bonds or other Airport System funds, as provided in Section 7.03(d)
of the A Special Facilities Lease.
Section 7.02. Construction By Airline
A. Continental Special Facilities--General. Airline
has undertaken to design, construct, install, and operate the
Continental Special Facilities set forth in Article V of each such
Special Facilities Lease.
City has authorized and issued the SFRBs, in the total
principal amount of $190 million to pay the costs of the Special
Facilities, together with associated costs of issuance, debt
service reserve fund requirement and capitalization. The SFRBs
are payable solely from the net rent required by Section 6.01 of
the Special Facilities Leases. As provided in Section 6.02 of the
Special Facility Leases, the payment of net rent by Airline is
unconditional.
B. Automated People Mover. The A Special Facilities
Lease provides for Airline to design, construct, acquire, install,
test, and operate, at its sole cost and expense, the initial link
of the Automated People Mover between Terminals B and C. The
capital costs of the initial B-C Link shall be paid from the
proceeds of the Series 1997A Special Facilities Revenue Bonds to
the extent available. The initial B-C Link is to be designed as
the first phase of an Airport-wide APM system that may eventually
connect the IAB and Terminal A with the Terminal B-C Link. The APM
will be operated without direct charge to the passengers using the
system.
C. General / Approval of Plans. Airline may construct
or install at its own expense any improvements, facilities or
equipment, and any additions thereto, in the Leased Premises;
provided, however plans and specifications of any such proposed
construction or installation, including any alteration or addition
thereto, shall be submitted to and receive the written approval of
the Director prior to the commencement of construction, alteration
or installation. All such construction, alteration, or
installation may be made only after obtaining requisite building or
construction licenses and permits and, in addition to usual City
inspection, shall be subject to inspection and approval by said
Director to see that said approved plans and specifications are
being followed. All such construction, alteration, and
installation shall be designed and carried out in accordance with
the Department of Aviation's Tenant Improvement Manual as may be
amended in any reasonable manner from time to time which is
incorporated herewith by reference. Upon completion of
construction, Airline shall provide City with as-built drawings of
the improvements on CADD diskette.
D. Airline Right to Select Architects and Contractors.
No restrictions shall be placed on Airline as to architects,
builders or contractors which it may employ in connection with any
construction, installation, alteration, repair or maintenance by
Airline in the Leased Premises.
E. Title to Airline-Constructed Improvements. Title
to all Airline-constructed improvements in the Leased Premises,
other than the equipment, trade fixtures and personal property that
Airline is permitted to remove under the provisions of Section
4.04.B hereof, shall vest in City immediately upon completion
thereof.
F. Contractor Indemnity and Warranty. Airline will
use its best efforts to provide an indemnity from its construction
contractors to City to the same extent as Airline obtains an
indemnity from such contractor. Additionally, Airline will use its
best efforts to cause all construction contractor warranties to
inure to the benefit of City.
Section 7.03. Future Capital Improvements
City may expand and improve the Airport as the City, in
its sole judgment, may deem necessary to provide required
facilities in the interest of the public and City. City will
confer and coordinate with Airline and the other airlines serving
the Airport regarding planned Capital Improvements at the Airport
and at other airports in the Airport System, and, at least
annually, provide the airlines with a detailed schedule of such
planned Capital Improvements. However, City will retain the
discretion to make capital investment decisions and issue bonds, as
needed, to ensure that adequate facilities are provided on a timely
basis to meet public and airline needs.
Article VIII
OPERATION AND MAINTENANCE
Section 8.01. Obligations of City
A. Exclusive Use Space. In the Exclusive Use Space,
City will furnish only structural maintenance of City-constructed
facilities. City shall provide maintenance and operation of City-
installed systems, which will include outside window and building
cleaning. City shall use reasonable efforts to furnish sufficient
heat and air conditioning through its installed systems in those
areas so equipped for such services and will install area lighting;
however, City will furnish electrical power for interior area
lighting only.
B. Apron Area. City shall provide structural
maintenance for the apron area.
C. Common Use Airport Facilities. City agrees to
operate, maintain and keep in good repair the areas and facilities
provided by City for the common use of the airlines and the public
in accordance with the practices of a reasonably prudent airport
operator. City agrees to use its best efforts to keep the Airport
free from obstructions and to do all things reasonably necessary
for the safe, convenient and proper use of the Airport by those who
are authorized to use the same.
D. Public Areas of Terminal Buildings. City will
operate, maintain and keep in good, sanitary and neat condition and
repair the public areas of the terminal buildings (except for those
areas therein leased to others for their exclusive use) and all
additions, improvements and facilities now or hereafter provided by
City at or in connection with the terminal buildings and for common
use by all airlines and the public, excepting any improvements or
facilities constructed or installed by Airline, either individually
or jointly with others, and those that Airline has agreed under the
provisions hereof to operate or maintain as aforesaid. City will
keep the roof, structure and utility systems of the terminal
buildings in good repair. City will keep the public areas in and
around the terminal buildings adequately supplied, equipped and
furnished to accommodate the public using same and will operate and
maintain directional signs in said public areas, including by way
of example, but not by way of limitation, signs indicating the
location in the terminal buildings of public facilities provided by
City on the Airport (but excluding permanent new Terminal B signage
to be installed as part of the Continental Special Facilities).
City will use reasonable efforts to provide (1) sufficient heat and
air conditioning to those areas on the Airport equipped for such
service; (2) illumination and drinking water in the public areas in
the terminal buildings; (3) adequate lighting for the public
vehicular parking facilities and aircraft apron; and (4) such
janitorial and cleaning services as necessary to keep the public
areas of the terminal buildings and areas adjacent thereto in a
reasonably presentable and usable condition at all times.
E. Automated People Mover System.
1. Option to Contract with City for APM
Maintenance. Airline may elect to contract with City for City to
operate the APM as provided in the A Special Facilities Lease. In
such event, City will enter into a contract with Airline with
respect thereto, and pursuant to such contract, the operating and
maintenance costs of the B-C Link shall be billed to and paid by
Airline; provided, however, that in the event other tenant airlines
use the B-C Link, such airlines shall pay a pro rata share of such
costs in accordance with Section 6.05 hereof.
2. City Obligation to Maintain and Operate the
APM Upon Purchase, Acquisition, and/or Assumption of Airline's APM
Leasehold Obligations or Extension of the APM. In the event that
City (1) exercises its option to purchase, acquire, and/or assume
Airline's leasehold obligations for the B-C Link of the APM as
provided in Section 7.01.F.2 above or (2) extends the APM to the
IAB and/or Terminal A and, thereby becomes obligated to purchase,
acquire, and/or assume Airline's leasehold obligations for the B-C
Link of the APM as provided in Section 7.01.F.3 above, then City
shall take over operating control of the APM and, unless otherwise
mutually agreed, assume such responsibility for operating and
maintaining the APM and use its best efforts to cause the APM to be
operated so as to provide the same or substantially similar levels
of service (based on frequency and capacity) to Terminals B and C
as were provided prior to such date.
Section 8.02. Obligations of Airline
A. Exclusive Use Space. Airline shall provide all
maintenance in the Exclusive Use Space not otherwise provided by
City under Section 8.01 hereof. In addition, Airline shall furnish
all janitorial services within the Exclusive Use Space. Airline
shall also provide electrical relamping, all decorating and
redecorating when required, and all maintenance and operation of
tenant-installed improvements and systems in its Exclusive Use
Space. Airline shall maintain the Exclusive Use Space in a neat,
clean, sanitary, sightly and operable condition.
B. Apron Area. Airline shall perform or cause to be
performed such cleaning of the apron area leased to Airline as
shall be necessary to keep said area in a clean, neat and orderly
condition free of foreign objects and shall periodically on an as-
needed basis remove grease, oil, and fuel spills caused by Airline
with ramp scrubbing equipment and repair any foreign object damage.
C. Automated People Mover System. Subject to
Section 8.01.E.1, Airline shall be solely responsible for all
operating and maintaining costs and all taxes, charges, utilities,
and liens associated with the B-C Link of the APM (as provided in
Sections 6.04, 8.01, and 8.02 of the A Special Facilities Lease)
unless City exercises its option to purchase, acquire, and/or
assume Airline's leasehold obligations for the B-C Link of the APM
(as provided in Section 7.01.F.2 or 7.01.F.3 hereof and Section
7.02(d) of the A Special Facilities Lease), in which event, unless
otherwise mutually agreed, the City will assume such
responsibilities.
D. Other Continental Special Facilities. Airline
shall be responsible for paying all operation and maintenance costs
and all taxes, charges, utilities, and liens associated with all
Special Facilities other than the APM, as provided in Sections
6.04, 8.01, and 8.02 of the Special Facility Leases.
E. Airline-Constructed Improvements. Airline shall
cause all improvements and facilities, and additions thereto,
constructed or installed by Airline, either alone or in conjunction
with other airline tenants, and all vehicles and equipment operated
by Airline on the Airport to be kept and maintained in a safe
condition and in good repair (except those repairs and maintenance
undertaken by City in Section 8.01 hereof) in accordance with
uniform standards applicable to all Airport tenants as established
from time to time by the Director. Airline shall keep the
Exclusive Use Space and improvements thereon in a sanitary and neat
condition and, during construction, shall cause compliance with all
health, safety and other laws and requirements applicable thereto;
provided, however, that notwithstanding anything herein to the
contrary, Airline shall not be obligated to make any capital
repairs or structural alterations to so comply, unless necessitated
as a result of Airline's construction activities or required under
the Special Facility Leases.
F. Performance by City Upon Failure of Airline to
Maintain. In the event Airline fails within thirty (30) days after
receipt of written notice from City to perform any obligation
required under this Section to be performed by Airline, City may
enter the Leased Premises involved, without such entering causing
or constituting a termination of this Agreement or an interference
with the possession of said Leased Premises by Airline, and do all
things reasonably necessary to perform such obligation. City may
charge Airline the reasonable cost and expense of performing such
obligation and Airline agrees to pay to City upon demand such
charge in addition to any other amounts payable by Airline
hereunder; provided, however, if Airline's failure to perform any
such obligation endangers the safety of the public, the employees
or property of City, or other tenants of the Airport and City so
states in its written notice to Airline, City may perform such
obligation of Airline at any time after the giving of such notice
and charge to Airline the reasonable cost and expense of such
performance which Airline shall pay as aforesaid.
Article IX
INDEMNIFICATION
Section 9.01. Release and Indemnification of City.
A. Airline, for itself, its successors and assigns
hereby releases and discharges city, its predecessors, successors,
assigns, legal representatives and its agents, employees and
officers (collectively in this section "city") from any liability
of 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 14.02(d), airline expressly
agrees to protect, defend, indemnify and hold city completely
harmless from and against (but subject to sections d and e 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 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 reasonable, out-of-pocket costs
incurred to establish city's right to indemnification hereunder;
and (iii) all costs for the investigation and defense of any and
all liabilities, lawsuits, causes of action, losses, claims,
judgments, damages, fines or demands including, but not limited to,
reasonable attorney fees, court costs, discovery costs and expert
fees. Subject to subsections d and e hereof, airline's agreement
to protect, defend, indemnify and hold harmless 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 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, city shall, as soon as
practical, and, in any event, within 10 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 (subject to section 9.01e)
through counsel of recognized capacity or otherwise not reasonably
disapproved by city both on behalf of itself and on behalf of city
(assuming no substantial conflicts of interest exist) until final
disposition, including all appeals. city may, at its sole risk,
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 without such participation
affecting airline's obligation herein. 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) to the extent arising from the
negligence of city when city is more than 50% liable, under this
agreement, or from the breach of city's express obligations
hereunder; or (ii) 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; (iii) to the extent
the claim or demand is covered under the insurance available to
city as an additional insured under article x herein; (iv) to the
extent the claim or demand is covered under a third party insurance
policy owned or carried by city and/or any of its agencies or
instrumentalities; or (v) unless the claim or demand is covered by,
or city has asserted a defense based on governmental or sovereign
immunity. City shall be responsible for asserting any defense of
governmental immunity as it may exist from time to time, and it
shall do so upon the timely written request of airline or its
insurance carrier(s); 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 10.02 and 10.03 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 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 city that is not satisfied with insurance proceeds).
For purposes of this section, airline covenants and agrees 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 for city's negligence,
inclusive of all defense costs expended solely for city's defense,
under section 9.01B and C shall not exceed $1,000,000 per
occurrence.
Article X
INSURANCE
Section 10.01. General
With no intent to limit or increase Airline's liability
or the indemnification provisions herein, Airline shall provide and
maintain certain insurance (except as to Environmental/Impairment
Pollution coverage as set forth below) in full force and effect at
all times during the term of this Agreement and all extensions
thereto, as set forth Section 10.02 below. If any of the insurance
is written as "claims made" coverage, then Airline agrees to keep
such "claims made" insurance in full force and effect by purchasing
policy period extensions for at least five years after the
expiration or termination of this Agreement.
Section 10.02. Risks and Minimum Limits of Coverage
Workers 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, contractual liability, bodily
and personal injury, and products and completed operations)
Combined single limit of:
$10,000,000 per occurrence / aggregate
Products and Completed operations:
$10,000,000 aggregate
Aircraft Liability:
(covering owned, hired, and nonowned aircraft including
passenger liability)
$200,000,000 combined single limit
Environmental Impairment / Pollution:
(including coverage for receiving, dispensing, transporting,
removal and handling of aviation fuels or any other
pollutants, as well as any other operations involving
pollutants)
$1,000,000 combined single limit per occurrence
Coverage required contingent upon Airline's election, in its sole
discretion, to purchase this coverage
All Risk:
(Covering Airline improvements, trade fixtures and equipment,
including fire, lighting, vandalism, and extended coverage
perils)
Replacement value
Automobile Liability Insurance:
(For automobiles used by Airline in the course of its
performance under this Agreement, including Airline's non-
owned and hired autos)
$5,000,000 combined single limit per occurrence
(Aggregate limits are per 12-month period unless otherwise
indicated.)
Section 10.03. Other Provisions
A. Form of Policies. The insurance may be in one or
more policies of insurance. Nothing the Director does or fails to
do shall relieve Airline from its duties to provide the required
coverage hereunder, and the Director's actions or inactions shall
not be construed as waiving City's rights hereunder.
B. Issuers of Policies. The issuer of any policy
shall have a Certificate of Authority to transact insurance
business in the State of Texas or 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.
C. Insured Parties. Each policy, except those for
Workers Compensation, Professional Liability and Employer's
Liability, shall name City (and its officers, agents, and
employees) as Additional Insured as its interest may appear on the
issued certificate of insurance and all renewal certificates (such
certificates to accurately reflect City's Additional Insured status
on Airline's original policies and any renewals or replacements
thereof during the term of this Agreement). City shall be named
Loss Payee on All Risk and Builders Risk coverages (except to the
extent coverage relates to Airline's equipment and personal
property).
D. Deductibles. Without increasing, decreasing or
expanding its duties under Section 10.01. hereof, Airline shall
assume and bear any claims or losses to the extent of any
deductible amounts and waives any claim it may ever have for the
same against City, its officers, agents, or employees; provided,
however, that nothing herein stated shall diminish Airline's rights
or increase Airline's obligations in respect to its undertakings or
hold harmless, defense and indemnification set forth in Article IX
hereof.
E. Cancellation. Each policy shall expressly state
that it may not be cancelled, materially modified or nonrenewed
unless thirty (30) days advance written notice is given in writing
to the Director by the insurance company.
F. Aggregates. Airline shall give written notice to
the Director within twenty (20) days of the date upon which total
claims by any party against Airline 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 shall contain an
endorsement to the effect that the issuer waives any claim or right
in the nature of subrogation to recover against City, its officers,
agents, or employees.
H. Endorsement of Primary Insurance. Each policy
hereunder except Workers 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. Airline shall be solely
responsible for payment of all insurance premiums required
hereunder, and City shall not be obligated to pay any premiums.
J. Contractors and Subcontractors.
1. With the exception set forth in Section
10.03.J.2 below, Airline shall contractually require all
contractors and subcontractors involved in the provision of any
labor, materials or services on, at or within the Leased Premises,
to carry insurance naming City as an additional insured and meeting
all of the requirements in Sections 10.01, 10.02, and 10.03 hereof,
except coverage amount. The coverage amount shall be commensurate
with the amount of the particular contract and shall be subject to
the approval of the Director. Airline shall provide in its
contracts with its contractors and subcontractors that they submit
to the Director copies of insurance certificates for the coverages
required herein.
2. Airline shall be under no obligation to
require its contractors or subcontractors to provide aircraft
liability coverage.
3. In connection with the design and construction
of any Airline improvements to the Leased Premises, Airline shall
require:
a. The architect/engineer to secure Professional
Liability coverage with a minimum of $1,000,000 per
occurrence/aggregate if the project construction cost is
estimated to exceed $10,000,000;
b. The construction contractor and/or its
subcontractors to secure Builder's Risk coverage equal to the
replacement value of the improvements; and
c. The construction contractor and/or its
subcontractors to secure Asbestos Abatement liability coverage
if the project includes work with asbestos.
Such Asbestos Abatement liability insurance shall include
coverage for liability arising from the encapsulation, removal,
handling, storage, transportation, and disposal of asbestos-
containing materials and shall be in a minimum amount of $1,000,000
combined single limit per occurrence.
K. Proof of Insurance. Within ten (10) days of the
Effective Date of this Agreement and at any time during the term of
this Agreement, Airline shall furnish the Director with
certificates of insurance, along with an affidavit from Airline
confirming that the certificates accurately reflect the insurance
coverage that will be available during the term. If requested in
writing by the Director, Airline shall furnish City with copies of
Airline's insurance policies.
Notwithstanding the proof of insurance requirements set
forth above, it is the intention of the parties hereto that
Airline, continuously and without interruption, maintain in force
the required insurance coverages to be carried by Airline set forth
above. Airline agrees that City shall never be argued to have
waived or be estopped to assert its right to terminate this
Agreement hereunder because of any acts or omissions by City
regarding its review of insurance documents provided by Airline,
its agents, employees, or assigns.
L. City Right to Review and Adjust Coverage Limits.
City reserves the right at reasonable intervals during the Term of
this Agreement to cause the insurance requirements of this Article
X to be reviewed by an independent insurance consultant experienced
in insurance for public airports in Texas, taking into
consideration changes in statutory law, court decisions, or the
claims history of the airline industry as well as that of Airline,
and, based on the written recommendations of such consultant, and
in consultation with Airline, to reasonably adjust the insurance
coverages and limits required herein but not more often than every
twelve (12) months.
Article XI
DAMAGE OR DESTRUCTION OF LEASED PREMISES
Section 11.01. Leased Premises Inhabitable
If any of the Leased Premises shall be partially damaged
by fire or other casualty, but such Leased Premises remain
inhabitable, same will be repaired with due diligence by the City
to the condition existing just prior to such casualty, but City's
responsibility in this regard shall be limited to the extent of the
proceeds of insurance received with respect to such premises and to
the extent funds are appropriated for such repair by the City's
governing body.
Section 11.02. Leased Premises Uninhabitable
If any of the Leased Premises shall be completely
destroyed or partially damaged by fire or other casualty rendering
all or a substantial portion of the Leased Premises uninhabitable
and it is reasonably estimated by the Director that it will take
more than 180 days to repair, Director shall notify Airline in
writing within ninety (90) days of such casualty whether the
damaged or destroyed Leased Premises will be repaired. If any or
all of the Leased Premises is to be repaired, it shall be repaired
with due diligence by the City, and the rental allocable to the
damaged or destroyed Leased Premises shall be abated for the period
from the occurrence of the damage to the substantial completion of
the repairs. If the repair period is estimated to exceed 180 days,
City shall make good faith efforts to provide Airline with
temporary substitute space, if available, during such period of
repair, at a rental rate for comparable space based on the rates
and charges principles set forth in this Agreement.
Section 11.03. Automatic Termination
If the City shall fail to notify Airline of its decision
as set forth in Section 11.02 above (or gives written notice of its
intent not to repair), City shall be deemed to have elected to
terminate this Agreement only as to the Leased Premises damaged or
destroyed, and the Agreement shall automatically terminate as to
such Leased Premises as of the date of the damage or destruction,
with no further liability therefor by either City or Airline except
those liabilities that accrued, including rent, prior to such
damage or destruction.
Section 11.04. Airline Improvements
Airline shall reconstruct all its improvements in the
damaged or destroyed Leased Premises necessary for the conduct of
Airline's business operations in the manner existing just prior to
the casualty, consistent with the City's obligations set forth in
Sections 11.01, 11.02 and 11.03.
Section 11.05. Insurance
The terminal buildings in which Airline's Exclusive Use
Space is located, exclusive of Airline's property, will be insured
by City under a policy of fire and extended coverage insurance to
the extent of not less than eighty percent (80%) of the insurable
value of such property if such percentage of coverage is available.
Insurance moneys and funds received on account of the damage to or
destruction of such property will be applied by the City to the
repair, construction, or replacement of such damaged or destroyed
property. Premiums paid by the City for insurance provided in
compliance herewith shall be included by the City as a part of
Airport operation and maintenance expenses.
Article XII
TERMINATION
Section 12.01. Termination by City
City, in addition to any other right of cancellation
herein given to it or any other rights to which it may be entitled
by law or equity or otherwise, may cancel this Agreement by giving
Airline sixty (60) days advance written notice, to be served as
hereinafter provided, upon or after the happening of any one or
more of the following events, except default in timely payment of
any money due City including Passenger Facility Charges (PFCs), if
applicable, for which fifteen (15) days written notice shall be
given and except default in providing copies of insurance policies
or maintaining required insurance coverages described in Section
10.03K, for which ten (10) days written notice shall be given:
A. The filing by Airline of a voluntary petition in
bankruptcy or any assignment for benefit of creditors of all or any
part of Airline's assets; or
B. Any institution of proceedings in bankruptcy
against Airline and the adjudication of Airline as a bankrupt
pursuant to such proceedings; or
C. The taking of jurisdiction by a court of competent
jurisdiction of Airline or its assets pursuant to proceedings
brought under the provisions of any Federal reorganization act; or
D. The appointment of a receiver or trustee of
Airline's assets by a court of competent jurisdiction or by a
voluntary agreement with Airline's creditors; or
E. The abandonment by Airline of its conduct of its
air transportation business at the Airport and in this connection,
suspension of operations for a period of ninety (90) days will be
considered abandonment in the absence of an explanation
satisfactory to and accepted in writing by the Director; or
F. If Airline shall be prevented for a period of
ninety (90) days, after exhausting or abandoning all appeals, by
any action of any governmental authority, board, agency or officer
having jurisdiction thereof from conducting its air transportation
business at the Airport, or it is so prevented from conducting its
air transportation business, either by (a) reason of the United
States or any agency thereof, acting directly or indirectly, taking
possession of, in whole or substantial part, the Leased Premises or
premises required for the actual operation of Airline's aircraft to
and from the Airport; or (b) if all or a substantial part of the
Leased Premises shall be acquired through the process of eminent
domain; or
G. The default by Airline in the performance of any
covenant, obligation or condition herein required to be performed
by Airline and the failure of Airline to remedy such default for a
period of thirty (30) days after receipt from City of written
notice to remedy the same, except default in timely payment of any
money due City under this Agreement, for which a total of fifteen
(15) days written notice will be given and except default in
providing copies of insurance policies or maintaining required
insurance coverages described in Section 10.03K, for which ten (10)
days written notice shall be given; provided, however, that no
notice of cancellation as above provided shall be of any force or
effect if Airline shall have remedied the default prior to receipt
of City's notice of cancellation or within the said 30-day period
Airline commences the process of remedying the default and
diligently prosecutes the same to completion. Failure by City to
take any authorized action upon default by Airline of any of the
terms, covenants or conditions required to be performed, kept and
observed by Airline shall not be construed to be or act as a waiver
of said default or of any subsequent default of any of the terms,
covenants and conditions herein contained to be performed, kept and
observed by Airline. The acceptance of rentals by City from
Airline for any period or periods after a default by Airline of any
of the terms, covenants and conditions herein required to be
performed, kept and observed by Airline shall not be deemed a
waiver or estoppel of any right on the part of City to cancel this
Agreement for failure by Airline to so perform, keep or observe any
of said terms, covenants or conditions.
Section 12.02. Termination by Airline
In addition to any other right of cancellation herein
given to Airline or any other rights to which it may be entitled by
law, equity, or otherwise, as long as Airline is not in default in
payment to City of any amounts due City under this Agreement or
otherwise, Airline may cancel this Agreement and thereby terminate
all of its rights and unaccrued obligations hereunder by giving
City sixty (60) days advance written notice, to be served as
hereinafter provided, upon or after the happening of any of the
following events:
A. Termination, suspension, revocation or
cancellation, by any federal agency with competent jurisdiction of
Airline's right or authority to operate as a scheduled air carrier
serving the Airport;
B. Issuance by a court of competent jurisdiction of an
injunction which in any way substantially prevents or restrains the
use of the Airport or any part thereof necessary for Airline's
scheduled flight operations and which injunction remains in force
for a period of at least thirty (30) days after City has exhausted
or abandoned all appeals, if such injunction is not necessitated by
or issued as the result of an act or omission of Airline;
C. If, at any time during the term of this Agreement,
because of City's failure to provide within a reasonable time safe
aircraft operating facilities, the Federal Aviation Administration
or its successor fails or refuses to certify the Airport as
adequate to accommodate aircraft which Airline is licensed to
operate and is operating into and from all other airports of like
size and character and with similar facilities and which aircraft
are in general use on Airline's scheduled transportation route
system; and which Airline may reasonably desire to operate into or
from the Airport; provided such refusal or failure is not due to
any fault of Airline;
D. The inability of Airline for a continuing period in
excess of ninety (90) days to use the Airport or to exercise any
rights or privileges granted to Airline hereunder and necessary to
its scheduled flight operations because of any law or ordinance by
any governmental authority having jurisdiction over the operations
of the Airport or Airline, or because of any order, rule,
regulation or other action or any nonaction of the Federal Aviation
Administration, its successor or any other authorized governmental
agency; prohibiting such use, or because of earthquake or other
casualty (excepting fire), acts of God or the public enemy, and
beyond the control of Airline.
E. The default by City in the performance of any
covenant or condition within the control of City and herein
required to be performed by City and failure of City to use its
best efforts to remedy such default for a period of thirty (30)
days after receipt from Airline of written notice to remedy the
same; provided, however, that no notice of cancellation as above
provided shall be of any force or effect if City shall have
remedied the default prior to receipt of Airline's notice of
cancellation or within the aforesaid thirty (30) day period or
during said period commences the process of remedying the same and
diligently prosecutes the same to completion.
F. The assumption by the United States Government or
any authorized agency thereof of the operation, control or use of
the Airport and facilities, or any substantial part thereof, in
such a manner as substantially to restrict Airline, for a
continuous period of at least ninety (90) days, from operating its
air transportation business.
G. Termination, suspension or discontinuation of
Airline's services to the Airport by a governmental agency
authorized to do so because of a war or national emergency declared
by the government. Airline's performance of all or any part of
this Agreement for or during any period or periods after a default
of the terms, covenants and conditions herein contained to be
performed, kept and observed by City shall not be deemed a waiver
of any right on the part of Airline to cancel this Agreement for
failure by City so to perform, keep or otherwise observe any if the
terms, covenants or conditions hereof to be performed, kept and
observed by City, or be construed to be or act as a waiver by
Airline of said default or of any subsequent default of any of said
terms, covenants and conditions herein contained and to be
performed, kept and observed by City.
H. In any event where the usage of the Airport by
Airline is materially affected as provided in this Section 12.02,
and whether or not Airline is entitled to cancel this Agreement as
herein provided, while such event is continuing, an equitable
adjustment to the rentals herein required to be paid by Airline
shall be made by City, as are determined to be reasonable by City
in its sole judgment.
Article XIII
ASSIGNMENT AND SUBLETTING
Section 13.01. Assignment and Subletting
A. Airline shall not at any time assign this Agreement
in whole or in part without the prior written consent of the
Director; provided, however, that the foregoing shall not prevent
the assignment of this Agreement to any corporation with which
Airline may merge or consolidate or which may succeed to the
business of Airline and provided further that, in connection with
any such requested assignment, Airline may request City to release
the assigned portion of said Leased Premises from this Agreement
and to relieve Airline of rental obligation therefor. In the event
City fails or refuses to approve such request and relief, Airline
may then assign all or a portion of the Leased Premises to another
air transportation company or companies that have executed an
airport use and lease agreement with City.
B. Airline may sublet all or any part of the Leased
Premises only after obtaining the prior written consent of the
Director, but if an event of default shall occur and be continuing
under this Agreement, City may collect rent from such sublessee or
occupant and apply the amount collected to the extent possible to
satisfy the obligations of Airline hereunder, but no such
collection shall be deemed a waiver by the City of the covenants
contained herein or the acceptance by the City of such sublessee or
occupant as a successor to Airline or a release of Airline by City
from its obligations hereunder.
C. All of the terms, provisions, covenants,
stipulations, conditions and consideration in this Agreement shall
extend to and bind the legal representatives, successors,
sublessees, and assigns of the respective parties hereto.
Article XIV
MISCELLANEOUS PROVISIONS
Section 14.01. Rules and Regulations
From time to time the Director may adopt and enforce
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 his opinion will reasonably insure
the safe, efficient, and economically practicable operation thereof
and 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. Airline agrees to observe and obey any and all
rules and regulations as are currently in place and as may be
reasonably established from time to time, and to require its
officers, agents, employees, contractors, and suppliers, to observe
and obey the same. City reserves the right to deny access to the
Airport or its facilities to any person, firm or corporation that
fails or refuses to obey and comply with such rules and
regulations. Such rules and regulations of City will not be
inconsistent with the terms of this Agreement nor with valid rules,
regulations, orders and procedures of the Federal Aviation
Administration or any other government agency duly authorized to
make or enforce rules and regulations for the operation of the
Airport and the operation of aircraft using the Airport. Airline
at all times shall be furnished (at the notice address provided
herein and to Airline's on-Airport manager) a current copy of any
such City rules or regulations and any amendments thereto, and
Airline reserves the right to contest any such rules and
regulations which it believes to be unreasonable.
Section 14.02. Compliance with Law
A. General. Airline shall not use the Airport or any
part thereof, or knowingly permit the same to be used by any of its
employees, officers, agents, subtenants, contractors, invitees, or
licensees for any illegal purposes and shall, at all times during
the term of this Agreement, comply with all applicable regulations,
ordinances, and laws of the City, the State of Texas, or the
Federal Government, and of any governmental bodies which may have
jurisdiction over the Airport. Nothing in this Section 14.02 shall
modify the provisions of Section 14.01 or limit Airline's rights
thereunder.
B. Compliance with Statutes, Ordinances and
Regulations. At all times during the term of this Agreement,
Airline shall, in connection with its activities and operations at
the Airport:
1. Comply with and conform to all applicable
present and future statutes and ordinances, and regulations
promulgated thereunder, of all Federal, State, and other government
bodies of competent jurisdiction that apply to or affect, either
directly or indirectly, Airline or Airline's operations and
activities under this Agreement. Airline shall comply with all
applicable provisions of the Americans with Disabilities Act of
1990 (42 U.S.C. Section 12101), as may be amended from time to
time, and federal regulations promulgated thereunder that may be
made applicable as a result of construction activities conducted by
Airline.
2. Subject to prior written approval of the
Director, make, at its own expense, all non-structural
improvements, repairs, and alterations to its Exclusive Use Space,
equipment, and personal property that are required to comply with
or conform to any of such statutes, ordinances, or regulations
(subject to Section 14.01).
3. As respects the City, be and remain an
independent contractor with respect to all installations,
construction, and services performed by or on behalf of Airline
hereunder.
C. Compliance with Environmental Laws.
1. Airline 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 or relate to the
protection of human health, safety or the environment,
applicability of which are invoked by the conduct of Airline's
business operations at the Airport and shall include but not be
limited to: the Federal Insecticide, Fumicide, 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 No.
99-499, 100 Stat. 1613; the Toxic Substances Control Act, 15
U.S.C., Section 2601 et seq.; the Clean Air Act, 42 U.S.C. 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.; or their State counterparts; and all
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").
2. Any fines, penalties, or remediation costs
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 Airline's failure to comply with the
Environmental Laws as required herein shall be reimbursed to the
City by Airline within twenty-one (21) days of receipt of an
invoice from City for such fines or penalties.
3. Airline shall prevent the presence, use,
generation, release, omission, discharge, storage, disposal or
transportation of any Hazardous Materials by Airline on, under, in,
above, to or from the Airport or any other areas or facilities
subject to this Agreement, other than in strict compliance with all
Environmental Laws.
4. Airline 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. Airline further acknowledges that it is familiar with
these NPDES stormwater regulations, that it will conduct operations
at the Airport in compliance with 40 CFR Part 122 or any applicable
NPDES permit, as either may be amended from time to time.
5. City and Airline 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. Airline acknowledges that it may be necessary to
undertake to minimize the exposure of stormwater to materials
generated, stored, handled or otherwise used by Airline as defined
in the federal stormwater regulations, by implementing and
maintaining "Best Management Practices" as defined in 40 CFR,
Part 122.2 and as implemented in any applicable NPDES permit, as
either may be amended from time to time.
6. Airline acknowledges that City's NPDES
stormwater discharge permit and any subsequent amendments,
extensions or renewals thereto, to the extent affecting Airline's
operations at the Airport, is incorporated by reference into this
Agreement. Airline agrees to be bound by all applicable portions
of said permit. City shall promptly notify Airline of any changes
to any portions of said permit applicable to, or that affect,
Airline's operations.
7. City shall provide Airline with written notice
of those NPDES stormwater discharge permit requirements (including
any modifications thereto) that Airline shall be obligated to
perform from time to time at the Airport, 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.
Airline, within fifteen (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 Airline does not provide such timely notice, it
is deemed to assent to undertake such requirements. If Airline
provides City with written notice, as required above, that it
disputes such NPDES stormwater discharge permit requirements, City
and Airline agree to negotiate a prompt resolution of their
differences. Airline warrants that it will not object to City
notices required pursuant to this paragraph unless Airline has a
good faith basis to do so.
8. City and Airline 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.
9. Airline 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.
10. Upon reasonable notice based on the
circumstances and without materially disrupting Airline's
operations (except in case of emergencies when notice shall not be
required), City shall have the right at any time and from time to
time to enter upon Airline's Leased Premises for purposes of
inspection to ensure that Airline is complying with this
Section 14.02.C. without such inspection constituting a trespass.
11. 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.
D. INDEMNIFICATION. Airline shall protect, defend,
indemnify, and hold harmless City and its officers, agents, and
employees from and against any loss, cost, claim (including claims
for remediation costs or in kind remediation), demand, penalty,
fine, liability and expense (including but not limited to
attorneys' and consultants' fees, court costs and litigation
expenses) and hereafter referred to as "liability" from whomever
received, whether a private person or governmental entity related
to:
1. Airline's use or the presence caused by
airline of hazardous materials of whatever kind or nature, known or
unknown, contingent or otherwise on the Airport, which liability
may arise out of any investigation, monitoring, cleanup,
containment, removal, storage or restoration work required or
incurred hereunder by City or any other entity or person in a
reasonable belief that such work is required by any applicable
environmental law;
2. Any actual, threatened, or alleged
contamination by hazardous materials on the Airport premises by
airline or its agents;
3. The disposal, release or threatened release of
hazardous materials by airline or its agents at the Airport that is
on, from, or affects 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 (including storage or disposal) by Airline at the Airport; or
5. Any violation by Airline of Environmental
Laws;
provided, however, that the foregoing indemnity shall not be
applicable to losses, costs, expenses, claims, demands, penalties,
fines, settlements, liabilities and expenses resulting from
conditions existing as of the effective date of this Agreement and
which such conditions are not the result of any operations,
activities, actions or inactions of airline or its agents, or which
are caused solely by city or its agents.
E. Airline shall not be responsible in any way for any
Hazardous Materials that exist on the Airport, the presence of
which was not caused by Airline. In the event that any such
presence of Hazardous Materials not caused by Airline results in
Airline being substantially deprived of the use or benefit of any
material portion of the Leased Premises, City agrees to use its
best efforts to provide replacement space for Airline during the
period of such depravation or to abate the rent due hereunder in an
equitable manner.
Section 14.03. Nondiscrimination
A. General. In the use and occupation of the Airport,
Airline shall not unlawfully discriminate against any person or
class of persons by reason of race, color, religion, sex, national
origin or ancestry, age, or physical or mental handicap.
B. Civil/Human Rights Laws. In its operations at the
Airport and in its use of the Airport, Airline shall not, on the
grounds of race, color, religion, sex, national origin or ancestry,
or age, discriminate or permit discrimination against any person or
group of persons in any manner prohibited by Part 21 of the Federal
Aviation Regulations, the Civil Rights Act of 1964, as amended, the
Equal Pay Act of 1963, the Rehabilitation Act of 1973, and Section
15-17 of the City's Code of Ordinances. Without limiting the
generality of the foregoing, Airline agrees to not discriminate
against any employee or applicant for employment because of race,
color, religion, sex, national origin or ancestry, or age. Airline
agrees to take affirmative action to ensure that applicants are
employed, and that employees are treated during employment without
regard to their race, color, religion, sex, national origin or
ancestry, age, or physical or mental handicap. Such action shall
include, but not be limited to: employment, upgrading, demotion, or
transfer; recruitment or recruitment advertising; layoff or
termination; rates of pay or other forms of compensation; selection
for training; and disciplinary actions and grievances. Airline
agrees to post, in conspicuous places available to employees and
applicants for employment, notices to be provided setting forth the
provisions of this nondiscrimination clause.
C. USDOT Requirements. Airline, for itself, its
successors in interest, and assigns, as a part of the consideration
of this Agreement, does hereby covenant and agree that, in the
event improvements are constructed, maintained, or otherwise
operated on the Airport for a purpose for which a United States
Department of Transportation program or activity is extended or for
another purpose involving the provision of similar services or
benefits, Airline shall maintain and operate such improvements and
services in compliance with all other requirements imposed pursuant
to 49 CFR, Part 21 (Non-discrimination in Federally Assisted
Programs of the Department of Transportation), as said regulations
may be amended.
Airline, for itself, its heirs, personal
representatives, successors in interest, and assigns, as a part of
the consideration of this Agreement, does hereby covenant and agree
that: (1) no person on the grounds of race, color, religion, sex,
national origin or ancestry, or age, shall be excluded from
participation in, denied the benefits of, or otherwise be subjected
to discrimination in the use of said improvements; (2) that 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, religion, sex, national origin or ancestry, or age,
shall be excluded from participation in, denied the benefits of, or
otherwise be subjected to unlawful discrimination; (3) that Airline
shall use the Airport facilities in compliance with all other
requirements imposed by, or pursuant to, 49 C.F.R., Part 21 (Non-
discrimination in Federally Assisted Programs of the Department of
Transportation), as said regulations may be amended; and
(4) Airline assures that it will undertake an affirmative action
program as required by 14 C.F.R., Part 152, Subpart E, Non-
discrimination Airport in Aid Program, to ensure that no person
shall on the grounds of race, color, religion, national origin or
ancestry, sex, age, or physical or mental handicap be excluded from
participating in any employment activities covered in 14 CFR, Part
152, Subpart E, or such employment activities covered in Section
15-17 of the City's Code of Ordinances. Airline assures that no
person shall be excluded on these grounds from participating in or
receiving the services or benefits of any program or activity
covered by this Section 14.03. Airline assures that it will require
that any covered suborganization similarly will undertake
affirmative action programs and that the suborganization will
require assurance from the suborganization's suborganization, as
required by 14 CFR., Part 152, Subpart E, to the same affect.
Section 14.04. Payment of Taxes
Airline shall pay all taxes that may be levied, assessed
or charged upon Airline or its property located on the Airport 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, Airline 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. Further, Airline
agrees to diligently prosecute such contest.
Section 14.05. Right to Lease to United States Government
During time of war or national emergency City shall have
the right to lease the Airport landing area or any part thereof to
the United States Government for use by the Armed Forces and, if
any such lease is executed, the provisions of this Agreement
insofar as they are inconsistent with the provisions of the lease
to the Government shall be suspended; however, such suspension
shall not extend the term of this Agreement. If, as a result of
any such lease, the rights or duties of Airline hereunder are
materially affected, then Airline shall receive an equitable rental
adjustment.
Section 14.06. Notice or Consent
Any notice or consent required herein to be obtained
from or given by City (or Director) may be given by Director unless
otherwise provided. Consent of City or Airline when required
herein shall not be unreasonably withheld, delayed or conditioned.
Section 14.07. 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 Charter of the City of
Houston, 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 the City's knowledge, nothing contained in such laws or
agreements conflicts with the express provisions of this Agreement.
Section 14.08. Favored Nations
Airline shall have the same rights and privileges and
pay the same City-established fees and charges, not to exceed those
established under the provisions of this Agreement as periodically
revised under the terms hereof, with respect to the use of the
Airport as are granted to or charged any other airline executing a
use and lease agreement with City for use of the Airport. It is
understood that ground rentals and lease rentals are set by City
Council, as provided by City Charter, and to the extent permitted
under applicable Federal law therefore may vary between lessees on
account of the different premises to be leased at the time thereof.
It is further understood that lease rentals and charges in terminal
buildings, flight stations and associated aircraft apron areas
constructed in the future and not described in this Agreement may
vary from the lease rentals and charges established herein for the
facilities, depending upon the capital cost and financing
arrangements involved and, therefore may be more or less than the
lease rentals established herein for similar facilities.
Section 14.09. Right of Entry
Upon reasonable notice based on the circumstances and
without materially disrupting Airline's operations (except in case
of emergencies when notice shall not be required), City may enter
upon the Leased Premises to which Airline is given rights and
privileges under the provisions hereof and which is leased
exclusively to Airline hereunder at any time for any purpose
necessary, incidental to or connected with the performance of
Airline's obligations hereunder, or in the exercise of City's
governmental functions, and upon the termination or cancellation of
this Agreement, and such entry or reentry shall not constitute a
trespass nor give Airline a cause of action for damages against
City.
Section 14.10. Notices
Except notices required under Sections 14.02.C.10 and
14.01 herein where notice shall be acceptable if given either in
writing or verbally to Airline's Vice President of hub operations,
or his/her designee, notices to City and/or Airline provided for
herein shall be deemed sufficiently given when delivered or when
mailed by certified or registered mail, postage prepaid, or when
given by telephone immediately confirmed in writing by telecopier
(or other communications device acceptable to the party) as follows
or to such other address, telephone or telecopier number as a party
may from time to time designate in writing to the other party
hereto:
To City:
Director of Aviation
City of Houston
16930 J.F. Kennedy Boulevard
Houston Intercontinental Airport
Houston, Texas 77032
Telephone: (281) 233-1877
Telecopier: (281) 233-1864
To Airline:
(When Delivered) (When Mailed)
Continental Airlines, Inc. Continental Airlines, Inc.
1600 Smith Street Dept. HQS-PF P. O. Box 4607 Dept. HQS-PF
Houston, Texas 77002 Houston, Texas 77210
Attention: Vice President Attention: Vice President
Corporate Real Estate Corporate Real Estate
Telephone: (713) 324-2245
Telecopier: (713) 324-6954
With a copy to: With a copy to:
Continental Airlines, Inc. Continental Airlines, Inc.
1600 Smith Street Dept. HQS - LG P. O. Box 4607 Dept. HQS-LG
Houston, Texas 77002 Houston, Texas 77002
Attention: General Counsel Attention: General Counsel
Telephone: (713) 324-2950
Telecopier: (713) 520-6329
Section 14.11. City's Right to Audit Books and Records
Airline agrees to keep books and records on its
operations at the Airport and the Director or any other authorized
City representative upon reasonable advance written notice to
Airline shall have the right to inspect and audit such books and
records to ensure compliance with the prevailing municipal bond
disclosure requirements and to determine that City has received
from Airline all moneys due the City under the terms hereof
including, but not limited to, the rentals and fees and PFCs (if
applicable) payable to Airport by Airline.
Section 14.12. Force Majeure
Neither City nor Airline shall be deemed in violation of
this Agreement if it is prevented from performing any of its
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, tides, riots, rebellion, sabotage, or any other
circumstances for which it is not responsible or which is not in
its control; provided, however, that these provisions shall not
excuse Airline from paying the rentals and fees hereinbefore
specified in Article V.
Section 14.13. Non-Waiver
The acceptance of fees by City for any period or periods
after a default of any of the terms, covenants and conditions
herein contained to be performed, kept and observed by Airline,
shall not be deemed a waiver of any right on the part of City to
terminate this Agreement for failure by Airline to perform, keep or
observe any of the terms, covenants or conditions of this
Agreement, and shall not be deemed a waiver of the right of City to
terminate this Agreement pursuant to Article XII of this Agreement.
Section 14.14. Place of Payments
All payments required of the Airline by this Agreement
shall be made payable to the City of Houston and shall be mailed to
the office of the Director of Aviation, City of Houston, P.O. Box
60106, George Bush Intercontinental Airport, Houston, Texas 77205-
0106, or to such other officer or address as may be substituted
therefor in writing to Airline by the Director.
Section 14.15. Nonliability of Individuals
No director, officer, agent or employee of either party
shall be charged personally or held contractually liable by or to
the other party under any term or provision of this Agreement or
because of any breach thereof or because of its or their execution
or attempted execution.
Section 14.16. Remedies to be Nonexclusive
All remedies provided in this Agreement shall be deemed
cumulative and additional and not in lieu of or exclusive of each
other or of any other remedy available to City or Airline at law or
in equity (to the extent not inconsistent with the express
provisions hereof) and the exercise of any remedy or the existence
herein of other remedies or indemnities shall not prevent the
exercise of any other remedy.
Section 14.17. Exclusiveness of Airline's Rights
Nothing herein contained shall be deemed to grant to
Airline any exclusive right or privilege within the meaning of
Section 308 of the Federal Aviation Act for the conduct of any
activity on the Airport, except that, subject to the terms and
provisions hereof, Airline shall have the right to exclusive
possession of the exclusive areas leased to Airline under the
provisions of this Agreement.
Section 14.18. Other Land and Buildings Excluded
It is agreed and understood that it is not intended by
this Agreement or any Exhibit hereto to lease any building, space
or area, or set any rental rates for any building, space or area,
other than what is specifically described herein.
Section 14.19. Titles
The titles of the several articles of this Agreement are
inserted herein for convenience only and are not intended and shall
not be construed to affect in any manner the terms and provisions
hereof or the interpretation or construction thereof.
Section 14.20. Invalid Provisions
In the event any covenant, condition or provision herein
contained is held to be invalid by a court of competent
jurisdiction, the invalidity of any such covenant, condition or
provision shall in no way affect any other covenant, condition, or
provision herein contained, provided the invalidity of any such
covenant, condition or provision does not materially prejudice
either City or Airline in its respective rights and obligations
contained in the valid covenants, conditions and provisions of this
agreement.
Section 14.21. Enforcement
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. Airline covenants to
provide to the City Attorney all documents and records that the
City Attorney reasonably requests to assist in determining
Airline's compliance with this Agreement when a good faith basis
exists for the belief that Airline is not in compliance with this
Agreement, with the exception of those documents made confidential
by federal or state law or regulations and provided that the
provision of such documents and records by Airline shall be further
limited in any respect that the provision of any documents or
records of City pertaining to this Agreement would be limited
pursuant to Chapter 552, Texas Gov't. Code, as amended or
otherwise.
Section 14.22. Operation of Airport
City agrees to maintain and operate the Airport in
accordance with all applicable standards, rules and regulations of
the Federal Aviation Administration or its successor. City shall
exercise its rights hereunder and otherwise operate the Airport
with due regard for the operational requirements and long-term
interests of the airlines and the interests of traveling public, in
a manner that is consistent with applicable law, federal aviation
regulation, federal grant assurances, and City airport revenue bond
ordinances.
Section 14.23. Entire Agreement
This Agreement constitutes the entire Agreement of the
parties on the subject matter hereof and may not be changed,
modified, discharged or extended except by written instrument duly
executed by City and Airline. Airline agrees that no
representations or grant of rights or privileges shall be binding
upon City unless expressed in writing in this Agreement.
Section 14.24. Successors and Assigns
The provisions of this Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the
parties hereto; provided, however, this provision shall in no way
whatsoever alter the restriction herein regarding assignment and
subletting by Airline.
Section 14.25. Subordination
City agrees that the Director, in his discretion, and
subject to approval of the City Attorney, shall be permitted to,
from time to time, execute any agreement providing for the
subordination of any statutory or constitutional landlord's lien
over any of Airline's property acquired in connection with any bona
fide, third party purchase money equipment (or other personal
property) financing (whether through a sale leaseback financing or
other equipment lease financing transaction), it being further
agreed that the financing of costs expended by Airline for the
purchase of equipment or personal property within twelve (12)
months prior to such financing transaction shall be considered
purchase money financing hereunder; provided, however, that such
subordination shall be limited to Airline's property that is
financed or refinanced in such transaction.
EXECUTED this ______ day of ____________________, A.D. 19__.
ATTEST: CITY OF HOUSTON:
_____________________________ By:___________________________
City Secretary Mayor
ATTEST: CONTINENTAL AIRLINES, INC.
_____________________________ By: ____________________________
Secretary
APPROVED: COUNTERSIGNED:
_____________________________ By: ___________________________
Director, Department of Aviation City Controller
APPROVED AS TO FORM: DATE COUNTERSIGNED:
_____________________________ By: ____________________________
Senior Assistant City Attorney
THE STATE OF TEXAS )(
COUNTY OF HARRIS )(
BEFORE ME, the undersigned authority, a notary public in and
for Harris County, Texas, on this day personally appeared LEE P.
BROWN, 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 considerations therein expressed as the act and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _________ day
of _______________________, A.D. 19___.
_____________________________________
Notary Public in and
for Harris County, Texas
THE STATE OF TEXAS )(
COUNTY OF HARRIS )(
BEFORE ME, the undersigned authority, on this day personally
appeared ________________________________________________, Vice-
President of the corporation above named,
__________________________________________________, known to me to
be the person whose name is subscribed to the foregoing instrument,
and acknowledges to me that he executed the same for the purpose
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 _______________________, A.D. 19___.
____________________________________
Notary Public in and
for Harris County, Texas