EXHIBIT 10.7
SECOND AMENDED AND RESTATED AIRPORT AGREEMENT
BETWEEN
THE CHARTER COUNTY OF WAYNE, MICHIGAN
AND
NORTHWEST AIRLINES, INC.
DATED AS OF OCTOBER 10, 1996
TABLE OF CONTENTS
PAGE(S)
ARTICLE I PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . 2
A. Use of Airport . . . . . . . . . . . . . . . . . . . . . . . . 2
B. Lease of Space . . . . . . . . . . . . . . . . . . . . . . . . 7
1. Exclusive Existing Terminal Space . . . . . . . . . . . . 7
2. Exclusive Midfield Terminal Space . . . . . . . . . . . . 8
3. Preferential Midfield Terminal Space. . . . . . . . . . . 9
4. Joint Use Midfield Space. . . . . . . . . . . . . . . . . 16
5. Common Use Midfield Terminal Space. . . . . . . . . . . . 16
C. Public Space . . . . . . . . . . . . . . . . . . . . . . . . . 17
D. Parking Space. . . . . . . . . . . . . . . . . . . . . . . . . 17
E. Right of Ingress and Egress. . . . . . . . . . . . . . . . . . 17
F. Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III RENTALS AND FEES. . . . . . . . . . . . . . . . . . . . . 19
A. Rentals with Respect to Terminal Facilities. . . . . . . . . . 19
1. Exclusive Existing Terminal Space . . . . . . . . . . . . 20
2. Lessee's Exclusive Midfield Terminal Space and
Lessee's Preferential Midfield Terminal Space . . . . . . 20
3. Lessee's Joint Use Midfield Terminal Space. . . . . . . . 24
4. Common Use Midfield Terminal Space. . . . . . . . . . . . 26
B. Activity Fees and Capital Expenditures . . . . . . . . . . . . 29
1. Activity Fees . . . . . . . . . . . . . . . . . . . . . . 29
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TABLE OF CONTENTS (CONT'D)
PAGE(S)
2. Lessor Covenants; Capital Expenditures. . . . . . . . . . 32
C. Charges for Electrical Current . . . . . . . . . . . . . . . . 37
D. Charges for Water and Sewerage Facilities. . . . . . . . . . . 38
E. Continuing Rental Obligation . . . . . . . . . . . . . . . . . 39
F. Payment of Rentals and Activity Fees . . . . . . . . . . . . . 41
1. Information on Lessee Operations. . . . . . . . . . . . . 41
2. Projection of Rentals and Activity Fees . . . . . . . . . 41
3. Payment of Rentals and Activity Fees. . . . . . . . . . . 42
4. Adjustment of Rentals and Activity Fees . . . . . . . . . 43
5. Preliminary Annual Settlement and Final Audit . . . . . . 44
G. Supplemental Capital Cost Payments . . . . . . . . . . . . . . 46
ARTICLE IV [Intentionally Omitted] . . . . . . . . . . . . . . . . . 46
ARTICLE V CONSTRUCTION, MAINTENANCE, REPAIR AND
OPERATION BY LESSEE . . . . . . . . . . . . . . . . . . . 47
ARTICLE VI RIGHT OF ENTRY BY LESSOR. . . . . . . . . . . . . . . . . 49
ARTICLE VII MAINTENANCE, OPERATION AND REPAIR
BY LESSOR . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VIII UTILITY SERVICES. . . . . . . . . . . . . . . . . . . . . 53
ARTICLE IX SPACE FOR UNITED STATES WEATHER BUREAU, POSTAL
SERVICE, FEDERAL AVIATION ADMINISTRATION, AND
EXPRESS AGENCIES. . . . . . . . . . . . . . . . . . . . . 53
ARTICLE X RESTAURANT. . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XI RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . 54
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TABLE OF CONTENTS (CONT'D)
PAGE(S)
ARTICLE XII CONTROL OF RATES, FARES OR CHARGES. . . . . . . . . . . . 55
ARTICLE XIII DAMAGE OR DESTRUCTION OF PREMISES . . . . . . . . . . . . 55
ARTICLE XIV CANCELLATION BY LESSOR. . . . . . . . . . . . . . . . . . 56
ARTICLE XV CANCELLATION BY LESSEE. . . . . . . . . . . . . . . . . . 58
ARTICLE XVI SUSPENSION AND ABATEMENT. . . . . . . . . . . . . . . . . 60
ARTICLE XVII ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE XVIII INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE XIX INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE XX QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE XXI TITLE TO EQUIPMENT, IMPROVEMENTS AND
FACILITIES ERECTED BY LESSEE. . . . . . . . . . . . . . . 63
ARTICLE XXII SURRENDER OF POSSESSION . . . . . . . . . . . . . . . . . 65
ARTICLE XXIII MINERAL RIGHTS. . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XXIV CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XXV ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . 66
ARTICLE XXVI SUBSIDIARY COMPANIES. . . . . . . . . . . . . . . . . . . 66
ARTICLE XXVII NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XXVIII DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XXIX PARAGRAPH HEADINGS. . . . . . . . . . . . . . . . . . . . 75
ARTICLE XXX INVALID PROVISION . . . . . . . . . . . . . . . . . . . . 75
ARTICLE XXXI SUCCESSORS AND ASSIGNS BOUND
BY COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 76
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TABLE OF CONTENTS (CONT'D)
PAGE(S)
ARTICLE XXXII RIGHT TO LEASE TO UNITED STATES
GOVERNMENT. . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE XXXIII COVENANTS AGAINST DISCRIMINATION. . . . . . . . . . . . . 76
A. Covenant Pursuant to Requirements of the
Department of Transportation . . . . . . . . . . . . . . . . . 76
B. Employment . . . . . . . . . . . . . . . . . . . . . . . . . . 77
C. Affirmative Action Program . . . . . . . . . . . . . . . . . . 78
D. Disadvantaged Business Enterprise. . . . . . . . . . . . . . . 78
ARTICLE XXXIV CONFORMITY OF AGREEMENT . . . . . . . . . . . . . . . . . 79
EXHIBITS
Exhibit A Airport
Exhibit B [Intentionally Omitted]
Exhibit C Lessee's Exclusive Existing Terminal Space
Exhibit D Lessee's Midfield Terminal Space
Exhibit E Allocation of Bond Debt Service
Exhibit F O & M Expense Allocation
Exhibit G Capital Improvement Program
Exhibit H Certain Airport Positions and Renumeration
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NORTHWEST AIRLINES, INC.
SECOND AMENDED AND RESTATED
AIRPORT AGREEMENT
This Second Amended and Restated
Airport Agreement (this "Agreement") made
and entered into this 10th day of October, 1996, by and between the County of
Xxxxx, a Michigan Charter County, by and through its Chief Executive Officer,
with principal offices located at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
hereinafter referred to as "Lessor", and Northwest Airlines, Inc., a Minnesota
corporation, with principal offices located at 0000 Xxxx Xxx Xxxxxxx, Xxxxx,
Xxxxxxxxx 00000 hereinafter referred to as "Lessee". Capitalized terms shall
have the meanings set forth in Article XXVIII hereof.
Witnesseth:
WHEREAS, Lessor owns and operates Detroit Metropolitan Xxxxx County Airport
(the "Airport"), said airport being more fully described in EXHIBIT A attached
hereto and hereby made a part hereof, with the power to lease premises and
facilities and to grant rights and privileges with respect thereto pursuant to
the provisions of the Aeronautics Code of the State of Michigan; and
WHEREAS, Lessee is engaged in the Air Transportation business; and
WHEREAS, Lessor and Lessee are parties to the Basic Agreement, pursuant to
which Lessee leases certain premises, facilities, rights, licenses, services and
privileges with and on the Airport; and
WHEREAS, Lessor and Lessee are parties to the Project Development
Agreement, under which certain new midfield terminal facilities at the Airport
which are described (the "Midfield Terminal") are to be designed and
constructed; and
WHEREAS, simultaneously with the execution of this Agreement, Lessor and
Lessee are entering into a First Amended and Restated
Airport Agreement (the
"First Amended and Restated
Airport Agreement"), which amends and restates the
Basic Agreement and which shall be effective until the Date of Beneficial
Occupancy of the Midfield Terminal;
WHEREAS, this Agreement shall become effective upon the Date of Beneficial
Occupancy of the Midfield Terminal, and at such time shall amend and restate,
and supersede in all respects, the First Amended and Restated
Airport Agreement;
NOW, THEREFORE, for and in consideration of the premises and of the mutual
covenants and agreements herein contained, and other valuable considerations, as
of the effectiveness of this Agreement Lessor does hereby grant, demise and let
unto Lessee and Lessee does hereby hire and take from Lessor, certain premises
and facilities, rights, licenses, services and privileges hereinafter described
in connection with and upon the Airport.
ARTICLE I
PREMISES
A. USE OF AIRPORT: In common with others so authorized, Lessee shall have the
use of the common areas of the Airport and its appurtenances, together with all
facilities, equipment, improvements and services which have been, or may
hereafter be, provided at or in connection with the Airport from time to time,
including, without limiting the generality hereof and subject to the rules and
regulations of Lessor
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promulgated in accordance with Article XI hereof, the landing field and any
extensions thereof or additions thereto, passenger and cargo ramp areas and
facilities, aircraft parking areas and facilities, roadways, runways, aprons,
taxiways, sewage and water facilities, floodlights, landing lights, beacons,
control tower, signals, radio aids, and all other conveniences for flying,
landings and take-offs of aircraft of Lessee, which use, without limiting the
generality hereof, shall include:
1. The right to operate thereat and therefrom a transportation system by
aircraft for the carriage of persons, property, cargo and mail;
2. The right to repair, maintain, condition, service, test, park or store
aircraft or other equipment of Lessee, or of any other scheduled air
transportation company, or aircraft of the U.S. Armed Forces or the FAA
within such areas as are designated by Lessor; provided, that such right
shall not be construed as authorizing the conduct of a separate business by
Lessee, but shall permit Lessee to perform such functions as an incident to
its conduct of Air Transportation;
3. The right to train, subject to rules and regulations as promulgated
under Article XI hereof, on the Airport, personnel in the employ of or to
be employed by Lessee or any scheduled air transportation company, or of
the U.S. Armed Forces, or of the FAA, provided, that such right shall not
be construed as authorizing the conduct of a separate business by Lessee,
but shall permit Lessee to perform such functions as an incident to its
conduct of Air Transportation;
4. The right to sell, dispose of or exchange Lessee's aircraft, engines,
accessories, supplies or other personal property; provided, that such right
shall not be construed as authorizing the conduct of a separate business by
Lessee,
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but shall permit such sales as an incident to its conduct of Air
Transportation or accommodation to others engaged therein;
5. The right, subject to the terms and conditions hereof, to purchase or
otherwise obtain personal property of any nature (including aircraft,
engines, accessories, gasoline, oil, greases, lubricants, other fuel or
propellant, food, beverages, other equipment and supplies and any articles
or goods) reasonably necessary or convenient for its operations, from any
supplier of its choice;
6. The right to service, by Lessee or others selected by Lessee, Lessee's
aircraft or other equipment by truck or otherwise, with gasoline, oil,
greases, lubricants, or any other fuel or propellant or other supplies,
required by Lessee; such right to include, without limiting the generality
thereof, the right to install and maintain on the Airport, separately or in
common with others, appropriate pipes (including a pipeline or lines
between Lessee's sources of supply and its storage facilities for gasoline,
oil, greases, lubricants or other fuel or propellant and from such storage
facilities to the point or points of servicing), pumps, motors, filters and
other appurtenances incidental to the use thereof, either through
construction and maintenance by Lessee or by a nominee of Lessee in
accordance with plans and specifications therefor approved by Lessor;
provided, however, that Lessor shall not be responsible for the cost of
excavation, construction, installation and maintenance of any such storage
facilities, pipes or pipelines, pumps, motors, filters or other
appurtenances;
7. The right to land, take-off, fly, taxi, tow, park, load, and unload
Lessee's aircraft and other equipment used in the operation of schedule,
shuttle, courtesy,
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test, training, inspection, emergency, special, charter, sightseeing and
other flights;
8. The right to transfer, load and unload persons, cargo, property and
mail to, from and at the Airport by such loading and unloading devices,
motor cars, buses, trucks or other means of conveyance as Lessee may choose
or require in the operation of its Air Transportation system; with the
non-exclusive right to designate and enter into arrangements with any
carrier or carriers of its choice to transport to and from the Airport,
passengers and their baggage, cargo, property and mail carried or to be
carried by air by Lessee provided that with respect to passengers, Lessee
shall not enter into arrangements with a carrier for transportation to or
from the Airport except for such period or periods during which there is no
satisfactory ground transportation service provided by bus or limousine
operator selected by the Lessor;
9. The right to install, maintain and operate, without cost to Lessor, by
Lessee alone, or in conjunction with any other air transportation companies
who are lessees at the Airport, or through a nominee, a message tube system
and other communication systems between suitable locations in the aircraft
loading areas and suitable locations in or about Lessee's hangar, and
between any or all of said locations and Lessee's offices;
10. The right to install, maintain and operate, without cost to Lessor, by
Lessee alone, or in conjunction with any other air transportation companies
that are lessees at the Airport, or through a nominee, suitable aircraft
air-conditioning equipment, including, but not limited to, trucks, or a
suitable airplane air-conditioning system in the loading area.
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11. The right to provide in any hangar or other non-public space
exclusively or preferentially leased by Lessee without cost to Lessor, by
Lessee alone, a subsidiary of Lessee or by contract with a supplier or
caterer, foods and beverages for consumption by employees and occasional
invitees of Lessee on such premises for business purposes. Without
limiting the generality of the foregoing, said right shall include the
right to install, maintain, and operate, or cause to be installed,
maintained and operated without cost to Lessor, in any hangar on premises
leased to Lessee for its exclusive use at the Airport, a cafeteria,
restaurant or other plant for the purpose of preparing, cooking, and
dispensing of foods and beverages for consumption as aforesaid;
12. The right to provide, without cost to Lessor, by Lessee alone, a
subsidiary of Lessee, or by contract with a supplier or caterer of its
choice, food and beverages for consumption on aircraft of Lessee; provided,
however, that if Lessee shall purchase such foods and beverages by contract
with a supplier or caterer other than the Airport food concessionaire,
Lessee shall require such supplier or caterer, other than its wholly-owned
subsidiary, to pay to Lessor the same percentage commission as would be
paid to Lessor by the Airport food concessionaire;
13. The right to install and operate, at Lessee's expense, a reasonable
number and type of company identification signs, subject to the right of
Lessor to approve the same as to type and location;
14. The right to install, maintain and operate, at Lessee's expense, by
Lessee alone, or in conjunction with any other air transportation companies
who are lessees at the Airport, or through a nominee, such radio
communications,
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meteorological and aerial navigation equipment and facilities in or on
premises leased exclusively to Lessee, and, subject to the approval of
Lessor's Airport manager with respect to location of installation,
elsewhere on the Airport as may be necessary or convenient in the opinion
of Lessee for its operations; provided, however, that such approval shall
not be withheld unless such installation, maintenance and operation at the
location selected by Lessee shall interfere with the reasonable use of the
Airport by other authorized persons;
15. The right to conduct operations or activities other than those
enumerated in Subparagraphs (1) to (14), inclusive, of this paragraph,
reasonably related to the landing, taking off, flying, moving, loading,
unloading, or servicing of aircraft which are reasonably necessary or
convenient to the conduct by it of Air Transportation; provided, however,
that all such other operations and activities shall be subject to the
approval of the Lessor.
B. LEASE OF SPACE:
1. EXCLUSIVE EXISTING TERMINAL SPACE. As of the effectiveness of this
Agreement, Lessor leases to Lessee, and grants to Lessee, its employees,
agents, guests, patrons and invitees, the exclusive use of the Exclusive
Existing Terminal Space identified on EXHIBIT C attached hereto
(hereinafter referred to as "Lessee's Exclusive Existing Terminal Space");
provided that, as of the effectiveness of this Agreement, EXHIBIT C shall
be amended, if necessary, to delete any space which is reflected on
EXHIBIT C but which is not then leased to Lessee in the Existing Terminal
Facilities for its Air Transportation business and to add any space that is
then leased to Lessee in the Existing Terminal Facilities for its Air
Transportation business that is not then included on EXHIBIT C. As
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promptly as possible after the commencement of Lessee's Air Transportation
business in the Midfield Terminal, but in any event not more than 60 days
after such commencement, Lessee shall vacate Lessee's Exclusive Existing
Terminal Space, and the lease hereunder of Lessee's Exclusive Existing
Terminal Space shall terminate upon the later of (x) the earlier of the
date Lessee vacates such space, and the date 60 days after such
commencement and (y) the date on which the Northwest Demolition Project (as
defined in the Project Development Agreement) shall have been completed.
Lessee and Lessor shall cooperate with one another in the transfer of
Lessee's Air Transportation activities to the Midfield Terminal so as to
(a) minimize the cost to Lessee and the inconvenience to Lessee and its
passengers, (b) facilitate the relocation of other air carriers within the
Existing Terminal Facilities and the renovation of space within the
Existing Terminal Facilities, and (c) facilitate the demolition of the
space in the Existing Terminal Facilities scheduled for demolition in
accordance with the Project Development Agreement (hereinafter referred to
as "Lessee's Existing Terminal Space To Be Demolished").
2. EXCLUSIVE MIDFIELD TERMINAL SPACE. At such time as such space is
available for beneficial occupancy, as evidenced by written notice thereof
from Lessor to Lessee, Lessor leases to Lessee, and grants to Lessee, its
employees, agents, guests, patrons and invitees, the exclusive use of the
Exclusive Midfield Terminal Space generally identified on EXHIBIT D
attached hereto (hereinafter referred to as "Lessee's Exclusive Midfield
Terminal Space"). Prior to commencement of Lessee's Air Transportation
business in the Midfield
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Terminal, an updated and revised EXHIBIT D agreed to by both
parties shall be attached to this Agreement.
3. PREFERENTIAL MIDFIELD TERMINAL SPACE.
(a) At such time as such space is available for beneficial
occupancy, Lessor grants to Lessee, its employees, agents, guests,
patrons and invitees, the preferential use of space, improvements and
facilities in the Midfield Terminal consisting of the Preferential
Midfield Terminal Space generally identified on EXHIBIT D attached
hereto (hereinafter referred to as "Lessee's Preferential Midfield
Terminal Space"). Prior to commencement of Lessee's Air
Transportation business in the Midfield Terminal, an updated and
revised EXHIBIT D agreed to by both parties shall be attached to this
Agreement. Lessee shall have the right to permit its code share
partners and commuter carriers to have access to Lessee's Preferential
Midfield Terminal Space.
(b) Preferential Midfield Terminal Space shall be available to Lessee
in accordance with the following preferential use provisions:
(i) Lessee shall have priority in using such space, subject to
the provisions of subsection (iii) below. In addition, Lessor hereby
grants to Lessee, and Lessee hereby accepts from Lessor, for so long
as Lessee leases the premises preferentially leased pursuant to
Article IB.3.(a), the preferential right to use the aircraft parking
positions adjacent to such preferentially leased premises, as shown on
EXHIBIT D, for the parking of aircraft and support vehicles and the
loading and unloading of passengers and cargo.
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(ii) Lessor intends to maintain a policy of providing open
access to the Airport and achieving a balanced utilization of Airport
facilities. To achieve that goal, Lessor reserves the right to
require shared use of Preferential Use Premises as described in
subsection (iii) below.
(iii) (A) If an airline, including any airline seeking to
expand its service or an airline seeking entry into the Airport, is
in need of space or facilities at the Airport after the Date of
Beneficial Occupancy of the Midfield Terminal, which need cannot be
met by use of then unleased premises, if any, in the Existing Terminal
Facilities or expansions thereto, Lessor shall direct such airline to
request the use of leased space or facilities of all Signatory
Airlines on a voluntary basis. Lessee and the other Signatory Airlines
shall make reasonable efforts to accommodate such requests in a timely
manner from any Preferential Use Premises leased to them.
(B) In the event (I) Lessor receives a written request
from an airline requesting space or facilities of a type granted to
Signatory Airlines on a preferential use basis, (II) the requesting
airline demonstrates to Lessor that it has contacted all Signatory
Airlines and has exhausted all reasonable efforts to find reasonable
accommodation for its proposed operations and the space or facilities
it needs, and (III) Lessor determines that (x) such requesting airline
needs the requested space or facilities to accommodate passengers or
aircraft and (y) Lessor cannot provide such space or facilities to
such airline on a timely basis, then Lessor may grant such requesting
airline the right of temporary or shared use of a
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designated portion of Lessee's Preferential Midfield Terminal Space,
including, but not limited to, the use of passenger loading bridges
and other appurtenant equipment which are reasonably necessary for the
effective use of such space, whether owned by the Lessee or the
Lessor, as well as the aircraft parking positions adjacent to such
space.
(C) In the event Lessor determines that a requesting
airline's needs require granting such requesting airline the right to
share or temporarily use Preferential Use Premises, Lessor shall serve
written notice to all Signatory Airlines of that determination and
notice of Lessor's intention to make a further determination, in not
less than 15 calendar days, as to how the requesting airline will be
accommodated.
(D) In accordance with the rules and priorities set forth
in subparagraph (F) below, Lessor may grant the requesting airline the
right of shared or temporary use of a designated portion of Lessee's
Preferential Midfield Terminal Space, as well as rights of ingress and
egress, the right to use the aircraft parking positions adjacent
thereto and the right to use passenger loading bridges and other
appurtenant equipment are reasonably necessary for the effective use
of such space, provided, that:
(I) such proposed user provides Lessee with
indemnification and proof of insurance satisfactory to Lessee;
provided, however, that Lessee may not require any
indemnification more favorable to it than that which Lessee
provides to Lessor hereunder;
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(II) such proposed user agrees to pay Lessee the sum
of the following:
(x) an amount equal to a pro rata share of the
sum of the terminal rentals and any other applicable
payments, fees or taxes payable by Lessee hereunder with
respect to such areas during such shared or temporary use
period as calculated herein; and
(y) additional amounts sufficient to recover
Lessee's direct costs and operation and maintenance
expenses, if any, of such shared or temporary use,
including a reasonable allocation of any capital and
equipment costs for property and equipment owned by
Lessee;
(III) such proposed user enters into a written
agreement with Lessee therefor, which agreement shall not be
inconsistent with the terms and conditions stated herein and
shall be submitted to Lessor for written approval prior to the
effective date thereof.
(E) Lessee agrees to make reasonable efforts to
facilitate the temporary or shared accommodation of the requesting
airline's scheduled operations, including the use of Lessee's
passenger loading bridges and other portions of the Lessee's
Preferential Midfield Terminal Space as may be reasonably necessary
to accommodate the requesting airline in the event Lessor requires
such use. In the event that the requesting airline and Lessee are not
able to agree to a form of written
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agreement pursuant to subparagraph (D)(III) above after reasonable
efforts by both parties, Lessor shall have the right, after
consultation with both parties, to set the final terms of such written
agreement, which shall provide no less protection of Lessee's
interests than Lessee provides for Lessor's interest hereunder, and be
binding on both the requesting airline and Lessee.
(F) In the event that, pursuant to subparagraph (B)
above, Lessor determines that a requesting airline is in need of
facilities to accommodate passengers or aircraft and such facilities
should be made available from Preferential Use Premises, Lessor will
follow the following rules and priorities in designating the specific
premises for temporary or shared use by the requesting airline:
(I) Preferential Use Premises shall be designated
for temporary or shared use in the reverse order of the magnitude
of the then present utilization by Signatory Airlines.
(II) In assessing the degree of such utilization by
Signatory Airlines, Lessor will consider all factors deemed
relevant, which may include: (u) the average number of flight
arrivals and departures per aircraft parking position per day;
(v) flight scheduling considerations; (w) potential labor
conflicts; (x) the number, availability and type (e.g. wide-body
or narrow body) of aircraft parking position locations; (y) the
preferences of the Signatory Airlines as to which of their
specific premises are
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designated for temporary or shared use by the requesting airline
and (z) other operational considerations.
(III) In the event Lessee is required to share
Lessee's Preferential Midfield Terminal Space, Lessee shall have
priority in all aspects of usage of such shared premises over all
other airlines; provided that Lessee shall not change its
scheduling or ordinary course usage of such premises for the
purpose of interfering with the usage of such premises by a
requesting airline sharing such premises.
(IV) Notwithstanding the foregoing, Lessee shall not
be required to make any of Lessee's Preferential Midfield
Terminal Space available during any consecutive two calendar
quarters in the event that, for the six months preceding such
consecutive two calendar quarter period, Lessee shall have
maintained an average level of 200 flights per day departing from
the Midfield Terminal. For purposes of calculating the number of
flights per day of Lessee departing from the Midfield Terminal,
Lessee's flights shall be deemed to include the jet flights of
Lessee and KLM and shall not include Lessee's code share partners
other than KLM, commuter carriers, or any other air carriers
whose Air Transportation operations are handled by Lessee at the
Airport. If Lessee does not meet the foregoing utilization
standard in any six month period, Lessor may require Lessee to
make available during the following two consecutive calendar
quarters, pursuant to and in accordance
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with the provisions of this Article IB.3.(b)(iii), not more than
the minimum number of gates which, if not under lease to Lessee
in such prior six month period, would have resulted in an average
of not less than three departing flights of Lessee (calculated as
aforesaid) per gate per day for such prior six month period with
respect to Lessee's remaining gates.
(G) The foregoing provisions of this Article IB.3.(b)(iii)
notwithstanding, Lessor may grant a requesting airline the right to
temporarily use a designated portion of Lessee's Preferential Midfield
Terminal Space in non-recurring emergency or safety-related
circumstances, so long as such use will not unreasonably adversely
affect Lessee's Air Transportation operations at the Airport.
(H) During the use of Lessee's Preferential Midfield
Terminal Space or other related facilities by other airlines scheduled
by Lessor pursuant to this Article IB.3., Lessee shall not be held
liable by Lessor with regard to any claim for damages or personal
injury arising out of or in connection with such requesting airline's
use of Lessee's Preferential Midfield Terminal Space or other related
facilities, unless caused by the negligence of Lessee, its employees
or agents.
(I) In the event that Lessee shall be required to share
its Preferential Midfield Terminal Space pursuant hereto, until such
time as alternative facilities at the Airport are provided to airlines
being accommodated in Lessee's Preferential Midfield Terminal Space,
Lessee must continue to share such space with the accommodated
airlines, even
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if Lessee thereafter meets the utilization standards set forth in
subsection (F)(IV) above. Lessor agrees that, under such
circumstances, upon an affirmative vote of a Weighted Majority for
necessary capital improvements, Lessor shall take all practical steps
to construct and provide additional terminal facilities at the site of
the Existing Terminal Facilities to provide permanent space for the
airline being accommodated by Lessee.
4. JOINT USE MIDFIELD SPACE. At such time as such space is available for
beneficial occupancy, Lessor grants to Lessee, its employees, agents,
guests, patrons and invitees, the joint use, along with all other air
carriers operating Air Transportation businesses in the Midfield Terminal
to whom such joint use has been granted, of space, improvements and
facilities in the Midfield Terminal consisting of the Joint Use Midfield
Terminal Space identified on EXHIBIT D attached hereto (hereinafter
referred to as "Lessee's Joint Use Midfield Terminal Space").
5. COMMON USE MIDFIELD TERMINAL SPACE. At such time as such space is
available for beneficial occupancy, Lessor grants to Lessee, its employees,
agents, guests, patrons and invitees, the common use, along with all other
air carriers operating Air Transportation businesses in the Midfield
Terminal, of space, improvements and facilities in the Midfield Terminal
consisting of the Common Use Midfield Terminal Space identified on
EXHIBIT D attached hereto (hereinafter referred to as "Lessee's Common Use
Midfield Terminal Space"). The Common Use Midfield Terminal Space shall be
allocated
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for use by the users thereof in accordance with the priorities
described in Exhibit D-1 attached hereto.
C. PUBLIC SPACE: Lessee, its employees, passengers, guests, patrons and
invitees, in common with others, shall have the use of all public space in the
Existing Terminal Facilities and the Midfield Terminal, and all additional
public space which may thereafter be made available therein and in any additions
thereto, including, without limiting the generality thereof, lobbies, passenger
lounges and waiting rooms, hallways, rest rooms and rooms for other public and
passenger convenience.
D. PARKING SPACE: Vehicular parking spaces shall be provided near the
Existing Terminal Facilities (adequate in Lessor's judgment, considering the
number of vehicles and traffic to be accommodated) and the Midfield Terminal for
the use of Lessee, its employees, passengers and limousine operators, in common
with any other scheduled air transportation companies, their employees,
passengers and limousine operators. Lessor or its concessionaires may make a
reasonable charge to passengers for the use of the parking space provided for
them, but no charges shall be made for use of such adequate parking spaces as
are designated by Lessor for the respective use of Lessee's employees or
limousine operators.
E. RIGHT OF INGRESS AND EGRESS: Subject to the reasonable rules and
regulations promulgated by Lessor in accordance with Article XI hereof, Lessee
shall have the right and privilege over the Airport of ingress to and egress
from the premises and facilities described in this Article I for its employees,
agents, passengers, guests, patrons and invitees, its or their suppliers of
materials and furnishers of service, its or their aircraft, equipment, vehicles,
machinery and other property, and, except as herein otherwise specifically
provided, no charges, fees or tolls of any nature, direct or indirect,
-17-
shall be imposed by Lessor upon Lessee, its employees, agents, passengers,
guests, patrons and invitees, its or their suppliers of materials and
furnishers of service for such right of ingress and egress, or for the
privilege of purchasing, selling or using any materials, or services
purchased or otherwise obtained by Lessee, or for transporting, loading,
unloading or handling persons, property, cargo or mail in connection with
Lessee's business or exercising any right or privilege granted by Lessor
hereunder. Nothing in this Article I shall limit Lessor's right to impose,
collect and use PFCs.
F. FUEL: Lessee shall have the right during the term of this Agreement to
lease land in the common fuel storage area as shown in the Airport Master Plan,
at a rental rate of not to exceed five cents ($.05) per square foot per year,
together with the right to install thereon underground fuel storage tanks,
pumps, piping, and appurtenances for the storage of aviation fuel; the location
and amount of such land to be determined by written agreement of the parties
hereto, a copy of which agreement, if entered into prior to the effective date
of this Agreement, will be attached to this Agreement as an exhibit.
ARTICLE II
TERM
Except as expressly provided otherwise in Article IB.1., Lessee shall have
full authority to use the premises and facilities and to exercise the rights,
licenses and privileges set forth in Article I hereof for a term beginning on
the Date of Beneficial Occupancy of the Midfield Terminal and ending on the last
day of the Fiscal Year that is 30 years after the Fiscal Year in which the Date
of Beneficial Occupancy of the Midfield Terminal occurs.
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ARTICLE III
RENTALS AND FEES
Lessee agrees to pay to Lessor for the use of the premises, facilities,
rights, licenses, services and privileges granted hereunder, the following
rentals, fees and charges, all payable in monthly installments in accordance
with paragraph F. below. In the event that the commencement or termination of
the term with respect to any of the particular premises, facilities, rights,
licenses, services or privileges as herein provided falls on any date other than
the first or last day of a calendar month, the applicable rentals, fees and
charges for that month shall be paid for said month pro rata according to the
number of days in that month during which the particular premises, facilities,
rights, licenses, services or privileges were enjoyed. No rentals, fees,
charges or tolls imposed by Lessor other than those specifically provided in
this Agreement are payable by Lessee for the use of or access to the Airport,
provided that the foregoing shall not be construed to prohibit Lessor from
imposing and collecting charges and fees from passengers for the use of the
public auto parking areas on the Airport, from operators of ground
transportation to, from and on the Airport or from any concessionaire at the
Airport in accordance with the terms of a contract with Lessor for the operation
of such concession; and provided, further, that Lessor reserves the right to
impose and use PFCs; and provided, further, that the foregoing shall not
preclude Lessor from imposing or levying any permit or license fee not
inconsistent with the rights and privileges granted to Lessee hereunder.
A. RENTALS WITH RESPECT TO TERMINAL FACILITIES: During the term hereof,
Lessee shall pay to Lessor the following Terminal Charges:
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1. EXCLUSIVE EXISTING TERMINAL SPACE: For so long as Lessee shall retain
any Lessee's Exclusive Existing Terminal Space pursuant to Article IB.1.,
Lessee shall be obligated to pay rental charges for such premises equal to
that which would have been applicable for such space under the Basic
Agreement, as in effect immediately prior to the effectiveness of this
Agreement.
2. LESSEE'S EXCLUSIVE MIDFIELD TERMINAL SPACE AND LESSEE'S PREFERENTIAL
MIDFIELD TERMINAL SPACE:
(a) Lessee shall pay the following Midfield Exclusive and
Preferential Rental Charges:
(i) commencing on the date on which the first facilities in the
Midfield Terminal become available for beneficial occupancy by Lessee,
as evidenced by written notice thereof from Lessor to Lessee, for each
Fiscal Year or portion thereof (on a pro rated basis), through Fiscal
Year 2008, Lessee shall pay an amount equal to the product of the
total number of square feet of Lessee's Exclusive Midfield Terminal
Space and Lessee's Preferential Midfield Terminal Space multiplied by
the following rental rates per square foot for the following Fiscal
Years:
2001 $17.92 2005 $19.71
2002 17.92 2006 19.71
2003 18.22 2007 19.71
2004 19.71 2008 20.04
(ii) commencing on the first day of Fiscal Year 2009, for Fiscal
Year 2009 and each Fiscal Year thereafter or portion thereof (on a pro
rated basis), Lessee shall pay an amount equal to (x) the product of
(I) the total number of square feet, if any, of Lessee's Exclusive
Midfield Terminal
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Space and Lessee's Preferential Midfield Terminal Space in each case
in the Domestic Area of the Midfield Terminal multiplied by (II) the
Midfield Domestic Exclusive and Preferential Rental Rate for such
Fiscal Year, plus (y) the product of (I) the total number of square
feet, if any, of Lessee's Exclusive Midfield Terminal Space and
Lessee's Preferential Midfield Terminal Space in each case in the
International Area of the Midfield Terminal multiplied by (II) the
Midfield International Exclusive and Preferential Rental Rate for such
Fiscal Year.
(b) The Midfield Domestic Exclusive and Preferential Rental Rate for
any Fiscal Year shall be the sum of the Midfield Domestic O&M Rate for
such Fiscal Year and the Midfield Domestic Bond Debt Service Rate for
such Fiscal Year. The Midfield Domestic O&M Rate for any Fiscal Year
shall be determined by dividing (i) Midfield O&M Expenses for such
Fiscal Year allocated to the Domestic Area of the Midfield Terminal by
(ii) the total number of Useable Square Feet in the Domestic Area of
the Midfield Terminal. The Midfield Domestic Bond Debt Service Rate
for any Fiscal Year shall be determined by dividing (i) Bond Debt
Service allocated to the Domestic Area of the Midfield Terminal for
such Fiscal Year by (ii) the total number of Useable Square Feet in
the Domestic Area of the Midfield Terminal.
(c) The Midfield International Exclusive and Preferential Rental Rate
for any Fiscal Year shall be the sum of the Midfield International O&M
Rate for such Fiscal Year and the Midfield International Bond Debt
Service Rate for such Fiscal Year. The Midfield International O&M
Rate for any
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Fiscal Year shall be determined by dividing (i) Midfield O&M Expenses
for such Fiscal Year allocated to the International Area of the
Midfield Terminal by (ii) the total number of Useable Square Feet in
the International Area of the Midfield Terminal. The Midfield
International Bond Debt Service Rate for any Fiscal Year shall be
determined by dividing (i) Bond Debt Service allocated to the
International Area of the Midfield Terminal for such Fiscal Year by
(ii) the total number of Useable Square Feet in the International Area
of the Midfield Terminal.
(d) Lessor shall maintain accurate records allocating Bond Debt
Service for each Fiscal Year between (i) the Midfield Terminal, (ii)
the Existing Terminal Facilities and (iii) the rest of the Airport,
and within the Midfield Terminal, between (A) the Domestic Area of the
Midfield Terminal and (B) the International Area of the Midfield
Terminal. The allocation of Bond Debt Service to the Midfield
Terminal, the Existing Terminal Facilities and the rest of the Airport
shall be based on capital expenditures made out of the proceeds of
Bonds. Bond Debt Service shall be allocated within the Midfield
Terminal to the Domestic Area of the Midfield Terminal and the
International Area of the Midfield Terminal as set forth on EXHIBIT E
attached hereto.
(e) Commencing with the Fiscal Year in which the Date of Beneficial
Occupancy of the Midfield Terminal occurs, for each Fiscal Year an
amount of PFC revenues equal to the lesser of (i) the PFC revenues
received by Lessor in such Fiscal Year that are attributable to a PFC
of $3, and (ii) the PFC revenues received by Lessor in Fiscal Year
2001 that are
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attributable to a PFC of $3, shall be allocated by Lessor to the
Midfield Terminal and the Existing Terminal Facilities on a pro rata
basis in accordance with the capital expenditures for the Midfield
Terminal and the Existing Terminal Facilities made out of the proceeds
of Bonds that are approved for PFC funding, and, for purposes of
calculating Terminal Charges payable by Lessee, such PFC revenues
allocated to the Midfield Terminal and the Existing Terminal
Facilities shall be netted, on the same pro rata basis, against the
Bond Debt Service allocated to the Midfield Terminal and the Existing
Terminal Facilities, as the case may be, for such Fiscal Year. The
foregoing notwithstanding, for the Fiscal Year in which the Date of
Beneficial Occupancy of the Midfield Terminal occurs, the amount of
PFC revenues otherwise allocable to the Midfield Terminal and the
Existing Terminal pursuant to the immediately preceding sentence shall
be reduced by a fraction the numerator of which is the number of
calendar months in such Fiscal Year preceding the month in which the
Date of Beneficial Occupancy of the Midfield Terminal occurs, and the
denominator of which is 12.
(f) Lessor shall maintain accurate records identifying O&M Expenses
for each Fiscal Year and allocating such expenses among (i) the
Midfield Terminal, (ii) the Existing Terminal Facilities and (iii) the
rest of the Airport, and within the Midfield Terminal, among (A) the
Domestic Area of the Midfield Terminal and (B) the International Area
of the Midfield Terminal, in conformity with the methodologies set
forth in EXHIBIT F attached hereto.
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3. LESSEE'S JOINT USE MIDFIELD TERMINAL SPACE:
(a) Lessee shall pay the following Midfield Joint Use Rental
Charges:
(i) commencing on the date on which the first facilities in the
Midfield Terminal become available for beneficial occupancy by Lessee,
as evidenced by written notice thereof from Lessor to Lessee, for each
Fiscal Year or portion thereof (on a pro rated basis), through Fiscal
Year 2008, Lessee shall pay an amount equal to (x) the product of the
total number of square feet of Lessee's Joint Use Midfield Terminal
Space multiplied by the following rental rates per square foot for the
following Fiscal Years:
2001 $17.92 2005 $19.71
2002 17.92 2006 19.71
2003 18.22 2007 19.71
2004 19.71 2008 20.04
times (y) a fraction the numerator of which is the number of Lessee's
domestic deplaned passengers accommodated in such Joint Use Midfield
Terminal Space during the prior Fiscal Year in the event that the
Joint Use Midfield Terminal Space is in the Domestic Area of the
Midfield Terminal or the number of Lessee's international deplaned
passengers accommodated in such Joint Use Midfield Terminal Space
during the prior Fiscal Year in the event that the Joint Use Midfield
Terminal Space is in the International Area of the Midfield Terminal,
and the denominator of which is the total number of domestic deplaned
passengers of all Signatory Airlines having use of such Joint Use
Midfield Terminal Space which passengers are accommodated in such
Joint Use Midfield Terminal
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Space in the event that Joint Use Midfield Terminal Space is in the
Domestic Area of the Midfield Terminal and the total number of
international deplaned passengers of all Signatory Airlines having
use of such Joint Use Midfield Terminal Space which passengers are
accommodated in such Joint Use Midfield Terminal Space in the event
that the Joint Use Midfield Terminal Space is in the International
Area of the Midfield Terminal; and
(ii) commencing on the first day of Fiscal Year 2009, for Fiscal
Year 2009 and for each Fiscal Year thereafter or portion thereof (on a
pro rated basis), Lessee shall pay an amount equal to (x) the product
of the total number of square feet of Lessee's Joint Use Midfield
Terminal Space in the Domestic Area of the Midfield Terminal
multiplied by the Midfield Domestic Joint Use Rental Rate for such
Fiscal Year, plus (y) the product of the total number of square feet
of Lessee's Joint Use Midfield Terminal Space in the International
Area of the Midfield Terminal multiplied by the Midfield International
Terminal Joint Use Rental Rate for such fiscal year.
(b) The Midfield Domestic Joint Use Rental Rate for any fiscal year
shall be (x) the sum of the Midfield Domestic O&M Rate for such fiscal
year and the Midfield Domestic Bond Debt Service Rate for such fiscal
year, multiplied by (y) a fraction the numerator of which is the
number of Lessee's domestic deplaned passengers accommodated in such
Joint Use Midfield Terminal Space during such Fiscal Year and the
denominator of which is the number of domestic deplaned passengers of
all Signatory Airlines having use of such Joint Use Midfield Terminal
Space which
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passengers are accommodated in such Joint Use Midfield Terminal
Space during such Fiscal Year.
(c) The Midfield International Joint Use Rental Rate for any Fiscal
Year shall be (x) the sum of the Midfield International O&M Rate for
such Fiscal Year and the Midfield International Bond Debt Service Rate
for such Fiscal Year, multiplied by (y) a fraction the numerator of
which is the number of Lessee's international deplaned passengers
accommodated in such Joint Use Midfield Terminal Space during such
Fiscal Year and the denominator of which is the total number of
international deplaned passengers of all Signatory Airlines having use
of such Joint Use Midfield Terminal Space which passengers are
accommodated in such Joint Use Midfield Terminal Space during such
Fiscal Year.
4. COMMON USE MIDFIELD TERMINAL SPACE:
(a) Lessee shall pay the following Midfield Common Use Rental
Charges:
(i) commencing on the date on which the first facilities in the
Midfield Terminal become available for beneficial occupancy by Lessee,
as evidenced by written notice thereof from Lessor to Lessee, for each
Fiscal Year or portion thereof (on a pro rated basis), through Fiscal
Year 2008, Lessee shall pay an amount equal to (x) the product of the
total number of square feet of Common Use Midfield Terminal Space
multiplied by the following rental rates per square foot for the
following Fiscal Years:
2001 $17.92 2005 $19.71
2002 17.92 2006 19.71
2003 18.22 2007 19.71
2004 19.71 2008 20.04
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times (y) a fraction the numerator of which is the number of domestic
deplaned passengers of Lessee accommodated in such Common Use Midfield
Terminal Space during such Fiscal Year in the event that the Common
Use Midfield Terminal Space is in the Domestic Area of the Midfield
Terminal or the number of international deplaned passengers of Lessee
accommodated in such Common Use Midfield Terminal Space during such
Fiscal Year in the event that the Common Use Midfield Terminal Space
is in the International Area of the Midfield Terminal, and the
denominator of which is the total number of domestic deplaned
passengers of all Signatory Airlines accommodated in such Common Use
Midfield Terminal Space during such Fiscal Year in the event that the
Common Use Midfield Terminal Space is in the Domestic Area of the
Midfield Terminal or the total number of international deplaned
passengers of all Signatory Airlines accommodated in such Common Use
Midfield Terminal Space during such Fiscal Year in the event such
Common Use Midfield Terminal Space is in the International Area of the
Midfield Terminal; provided that, for Common Use Midfield Terminal
Space in the International Area of the Midfield Terminal that is used
for both domestic and international operations (e.g., ramp access
facilities, holdrooms and jet bridges), Lessee shall pay for each
Fiscal Year an amount equal to (A) the product of the number of square
feet of such space multiplied by the rental rate set forth above for
the applicable Fiscal Year, times (B) a fraction the numerator of
which is the total number of domestic and international deplaned
passengers of Lessee accommodated
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in such Common Midfield Terminal Space during such Fiscal Year and the
denominator of which is the total number of domestic and international
deplaned passengers of all Signatory Airlines accommodated in such
Common Midfield Terminal Space during such Fiscal Year; and
(ii) commencing on the first day of Fiscal Year 2009, for Fiscal
Year 2009 and for each Fiscal Year thereafter or portion thereof (on a
pro-rated basis), Lessee shall pay an amount equal to (x) the product
of (A) the total number of Useable Square Feet of Common Use Midfield
Terminal Space in the Domestic Area of the Midfield Terminal
multiplied by the sum of the Midfield Domestic O&M Rate and the
Midfield Domestic Bond Debt Service Rate for such Fiscal Year, times
(B) a fraction the numerator of which is the total number of domestic
deplaned passengers of Lessee accommodated in Common Use Midfield
Terminal Space in the Domestic Area of the Midfield Terminal in such
Fiscal Year and the denominator of which is the total number of
domestic deplaned passengers of all Signatory Airlines accommodated in
Common Use Midfield Terminal Space in the Domestic Area of the
Midfield Terminal in such Fiscal Year, plus (y) the product of (A) the
total number of Useable Square Feet of Common Use Midfield Terminal
Space in the International Area of the Midfield Terminal multiplied by
the sum of the Midfield International O&M Rate and the Midfield
International Bond Debt Service Rate for such Fiscal Year, times (B) a
fraction the numerator of which is the total number of international
deplaned passengers of Lessee accommodated in Common Use Midfield
Terminal Space in the International Area of the Midfield
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Terminal in such Fiscal Year and the denominator of which is the total
number of international deplaned passengers of all Signatory Airlines
accommodated in Common Use Midfield Terminal Space in the
International Area of the Midfield Terminal in such Fiscal Year;
provided, that, for Common Use Midfield Terminal Space in the
International Area of the Midfield Terminal that is used for both
domestic and international operations (e.g., ramp access facilities,
holdrooms and jet bridges), Lessee shall pay for each Fiscal Year an
amount equal to (x) the product of the total number of Useable Square
Feet of such space times the sum of the Midfield International O&M
Rate and the Midfield International Bond Debt Service Rate, for such
Fiscal Year, multiplied by (y) a fraction the numerator of which is
the total number of domestic and international deplaned passengers of
Lessee accommodated in such space during such Fiscal Year and the
denominator of which is the total number of domestic and international
deplaned passengers of all Signatory Airlines accommodated in such
space during such Fiscal Year.
B. ACTIVITY FEES AND CAPITAL EXPENDITURES:
1. ACTIVITY FEES: All rentals, fees and charges for the use of the
premises, facilities, rights, licenses, services and privileges granted
hereunder, except those for which rentals, fees or charges are otherwise
specifically provided herein, shall be combined in and represented by an
"Activity Fee" calculated for each Fiscal Year, and which shall be an amount
equal to the product of the number of thousand pounds of Approved Maximum
Landing Weight of aircraft landed at the Airport in such Fiscal
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Year, multiplied by the Activity Fee rate for such Fiscal Year. The Activity
Fee rate for any Fiscal Year shall be the quotient arrived at by dividing:
(a) the Revenue Requirement, as below defined, for such Fiscal Year,
by
(b) the aggregate amount of Approved Maximum Landing Weight of
aircraft, in units of one thousand pounds, of all Signatory Airlines,
for such Fiscal Year.
The "Revenue Requirement" for any Fiscal Year as used herein shall mean that
amount of revenue required to produce total net Airport revenue equal to the
following amount:
(1) O&M Expenses for such Fiscal Year; plus
(2) (a) one hundred twenty-five percent (125%) of the amount of
principal and interest due (net of any capitalized interest) for such
Fiscal Year on all then outstanding Bonds, less (b) any amounts on
deposit in the Revenue Fund at the beginning of such Fiscal Year
representing so-called "coverage" funds collected for so-called
"rolling coverage" pursuant to any bond ordinance under which Bonds
were issued that requires such rolling coverage, less (c) any PFC
revenues received by Lessor during such Fiscal Year and allocated by
Lessor to pay principal and interest on outstanding Bonds in such
Fiscal Year; plus
(3) deposits into the Bond Reserve Account, the Operation and
Maintenance Reserve Fund and the Renewal and Replacement Fund required
for such Fiscal Year pursuant to the provisions of the Bond Ordinance;
plus
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(4) commencing in Fiscal Year 2001, an amount equal to $5 million
(which amount shall be escalated each Fiscal Year beginning in Fiscal
Year 2002 to reflect percentage increases in the Producer Price Index
during the most recently ended 12-month period for which such index is
available) minus the amount, if any, deposited for such Fiscal Year
into the ACE Account; plus
(5) commencing in the Fiscal Year in which no Airport Revenue Bonds
are subject to Paid-in Coverage (as defined in Article IIB.2.(a)
below), $350,000; minus
(6) all other Airport revenues (including, but not limited to, all
rental charges for Existing Terminal Facilities, Terminal Charges and
all concession and parking revenue) received [or receivable if the
Lessor is on an accrual accounting basis] during such Fiscal Year
(excepting Special Facility Revenues).
The unit thus arrived at shall be the Activity Fee rate per thousand pounds
of Approved Maximum Landing Weight payable by Lessee to Lessor for such of
Lessee's aircraft, or aircraft of its subsidiary, as have landed at the Airport
during the Fiscal Year for which such calculation is made.
The Activity Fee as herein established shall not be subject to further
adjustment except by agreement of the parties hereto, or as provided in Article
IIIF.
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2. LESSOR COVENANTS; CAPITAL EXPENDITURES:
(a) Lessor covenants:
(i) That it will provide efficient management and operation of
the Airport on the basis of sound business principles and that it will
not incur expense for Airport operation, maintenance and
administration in excess of the amounts reasonably and necessarily
required therefor.
(ii) That it shall operate the Airport in a manner so as to
produce revenues from concessionaires, tenants, and users of a nature
and amount which would be produced by a reasonably prudent operator of
an airport.
(iii) That it will comply in all respects with the revenue
retention requirement in Section 511(a)(12) of the Airport and Airway
Improvement Act of 1982, as amended, now codified at 49 U.S.C.
Section 47107(b). Commencing in Fiscal Year 1997, Lessor may include
in O&M Expenses for each Fiscal Year administrative charges not in
excess of $5 million, provided that the foregoing cap amount shall be
escalated each Fiscal Year, commencing in Fiscal Year 1998, by
multiplying the prior year's cap amount by a factor of one (1) plus
the percentage increase, if any, in the index of average hourly
earnings for production workers for manufacturing industries in the
United States, as published by the United States Department of Labor,
Bureau of Labor Statistics (or if this index is discontinued or
otherwise becomes unavailable to the public, the most nearly
comparable index of such average hourly earnings published by a
recognized financial institution, financial publication or university)
during the most recently ended 12-month period for which such index is
available. The annual
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administrative charges of $5 million shall pay for all services
provided directly or indirectly by any department, division or agency
of Lessor other than the Airport, or Central Communications to the
extent operated by the Airport, in the nature of administration and
legislative oversight, finance, budget, accounting, legal, payroll,
purchasing, personnel, information processing, imaging, planning and
development. Administrative charges shall not include (A) optional
contracted services by the Airport, such as landscaping, mowing,
engineering (design, construction, inspection and project management)
and mechanical, electrical and plumbing trade services to be performed
on Airport property, or (B) payroll and fringe benefit costs for the
employee positions described in Exhibit H; provided that any increase
in such costs or the number of such positions above those shown on
Exhibit H must be approved by a majority in number of the Signatory
Airlines.
(iv) That it will utilize competitive bidding procedures for the
award of all maintenance and operation contracts and construction
contracts for the Airport.
(v) That all senior appointed Airport officials shall have
professional qualifications commensurate with the responsibilities of
the jobs to be performed by such officials.
(vi) That it will take all necessary actions to assure that the
personnel of Lessor, whose wages and benefits are included in O&M
Expenses, are actually performing work for the Airport as represented
by such inclusion.
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(vii) That it will operate Willow Run Airport only as a reliever
airport for the Airport with no scheduled air carrier or public
charter passenger service.
(viii) That PFC revenues received by Lessor in each of Fiscal
Years 2002, 2003, 2004, 2005, 2006, 2007 and 2008 that exceed in such
year, by reason of increases in passenger activity levels at the
Airport, the amount of PFC revenues received by Lessor in Fiscal Year
2001 that is attributable to a PFC of $3 shall be used by Lessor to
pay for capital projects in the Capital Improvement Program attached
hereto as EXHIBIT G that are approved by a Weighted Majority and by
the FAA for PFC funding, whether on a pay-as-you-go basis or to pay
Bond Debt Service on Bonds issued to fund such projects.
(ix) That PFC revenues received by Lessor through Fiscal Year
2008 that are attributable to increases in the PFC from $3 per
enplaned passenger shall be applied (A) as required by FAA Letter of
Intent No. AGL-90-01, Amendment No. 7, dated August 21, 1996, and then
(B) to capital projects at the Airport for safety or security, or to
FAA required capital projects, so long as such projects are approved
by the FAA for PFC funding, and then (C) to capital projects in the
Capital Improvement Program attached hereto as EXHIBIT G that are
approved by the FAA for PFC funding.
Lessor and Lessee recognize that payment of the Activity Fee, as
herein provided, together with other funds, will result in an annual
surplus, because, among other things, Ordinance 319 currently requires the
collection by Lessor
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of rates and charges necessary to produce in each Fiscal Year revenues that
include 125% of the principal and interest due in such year on Airport
Revenue Bonds (exclusive of capitalized interest thereon) (the excess 25%
required to be collected is herein referred to as "Paid-in Coverage").
Lessor covenants to utilize such surplus only for the retirement of Bonds
or as follows:
(1) Fifty percent (50%) of the amount attributable to the Paid-in
Coverage, if any, on the Airport Revenue Bonds shall be deposited into
the Airline Equity Account and allocated among the Airline Equity
Subaccounts in accordance with the respective landed weights of each
Signatory Airline for the applicable period;
(2) Three Hundred Fifty Thousand Dollars ($350,000) shall be
deposited annually into the County Discretionary Fund;
(3) Fifty percent (50%) of the amount attributable to the Paid-in
Coverage, if any, on the Airport Revenue Bonds (less $350,000
annually) shall be deposited into the ACE Account;
(4) Deposits shall be made into the Subordinate Bond Reserve Account,
the Operation and Maintenance Reserve Fund and the Renewal and
Replacement Fund pursuant to the provisions of Ordinance 319, and into
any other funds for similar purposes established pursuant to other
ordinances under which Bonds are issued; and
(5) Amounts includible each Fiscal Year in the Revenue Requirement
pursuant to item (4) of the definition thereof in Article IIIB.1.
shall be deposited into the Airport Development Fund, to be
established and held by Lessor for the purposes described in Article
IIIB.2.(c)(4) below.
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(b) Lessor may issue Bonds to finance the costs (including all reasonable
costs incidental to the issuance and sale of such bonds) of capital
projects and may include the Bond Debt Service (including, among other
things, coverage requirements) on such Bonds in Lessee's fees hereunder
only after first receiving approval of a Weighted Majority for such capital
projects.
Lessor may assign, in accordance with the Bond Ordinance and the terms
of this Agreement, certain of its interests in and pledge certain revenues
and receipts of the Airport as security for payment of the principal of,
premium, if any, and interest on Bonds. Except as set forth in the
preceding sentence and except for residential property acquired by the
Airport pursuant to the Airport's noise mitigation program, Lessor shall
not pledge, sell, convey, mortgage, encumber, assign or otherwise transfer
the Airport or any portion thereof during the term of this Agreement.
(c) The following limitations shall apply to expenditures from the below-
described funds and accounts:
(1) EXPENDITURES TO BE MADE FROM THE COUNTY DISCRETIONARY FUND.
Lessor may make expenditures from the County Discretionary Fund
without approval by the air carriers for any lawful Airport-system
purpose, except that expenditures for Willow Run Airport shall only be
made if Lessor is in compliance with its covenant in
Article III B.2.(a)(vii).
(2) CAPITAL EXPENDITURES TO BE MADE FROM THE ACE ACCOUNT. If Lessor
proposes to make a capital expenditure from the ACE Account it shall
be subject to the approval of the air carriers if such capital
expenditure greater than Fifty Thousand dollars ($50,000). Such
approval shall be
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deemed given unless within thirty (30) days after receipt of Lessor's
proposal to make such expenditure Lessor is notified by a
Majority-in-Interest of the air carriers that such expenditure is
disapproved, such notification to contain specific reasons and grounds
therefor.
(3) EXPENDITURES TO BE MADE FROM THE AIRLINE EQUITY SUBACCOUNTS.
Each Signatory Airline may choose to use any amounts deposited into
its Airline Equity Subaccount for any of the following purposes:
(i) as a direct credit against Activity Fees payable by it;
(ii) for capital expenditures at the Airport; or
(iii) to service Special Facility Revenue Bond debt for capital
improvements at the Airport.
(4) EXPENDITURES TO BE MADE FROM AIRPORT DEVELOPMENT FUND.
Lessor may make capital expenditures from the Airport Development Fund
without approval by the air carriers for any lawful Airport-system
related purpose, provided that Lessor shall not pledge the Airport
Development Fund as security for any Bond or other debt of Lessor
without approval of a Majority-in-Interest of the air carriers, and
provided, further, that capital expenditures for Willow Run Airport
shall only be made if Lessor is in compliance with its covenant in
Article III B.2.(a)(vii).
(d) In order to permit Lessor to issue Bonds in compliance with applicable
securities laws, Lessee agrees that, upon the request of Lessor, Lessee
shall provide to Lessor such information with respect to Lessee as Lessor
deems reasonably necessary in order for Lessor to issue Bonds in compliance
with the requirements of Rule 15c-2(12) of the Securities and Exchange
Commission.
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C. CHARGES FOR ELECTRICAL CURRENT: Lessee shall pay to Lessor for Lessee's
use and occupancy of Exclusive Use Premises, Preferential Use Premises, Joint
Use Premises and Common Use Premises under this Agreement, a charge for
electrical current furnished by Lessor to each such area, said charge to be
computed as follows:
(1) In metered areas at a rate not exceeding that which Lessee would have
to pay if it established the same demand and took the same quantity
directly from the public utility (or other third party provider)
supplying electrical current to the Midfield Terminal.
(2) In unmetered areas at a rate per square foot of occupied space as
established by an electrical consultant appointed by Lessor. In the
event the parties hereto shall be unable to agree on the
aforementioned charges, the controversy shall be subject to
arbitration in the manner provided in Article XVII of this Agreement.
(3) In Common Use Premises the electrical current charge shall be shared
with the other common users, 20% equally and 80% to be allocated on
the basis of enplaned passengers.
(4) In Joint Use Premises the electrical current charge shall be shared by
the users of such premises based on the number of passengers of each
such user.
D. CHARGES FOR WATER AND SEWERAGE FACILITIES: Lessor shall charge Lessee for
water and sewerage facilities supplied to Lessee's Exclusive Use Premises and
Preferential Use Premises and the amount of such charge shall be subject to
future agreement of the parties hereto. In the event the parties hereto shall
be unable to agree
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on such amount, the controversy shall be subject to arbitration in the manner
provided in Article XVII of this Agreement.
E. CONTINUING RENTAL OBLIGATION
1. Should any scheduled air carrier, including Lessee, having an
agreement with Lessor substantially similar to the Basic Agreement or this
Agreement, terminate its operations at the Airport by reason of the loss of its
operating authority to serve the Detroit Metropolitan Area and exercise the
right of cancellation provided for in such case in Article XV of the Basic
Agreement or in this Agreement, its continued obligation to pay to Lessor
charges thereafter due under the Basic Agreement or this Agreement, including
space rentals and Activity Fees, shall, subject to the provisions of the
paragraph next following, thereupon terminate. Payment of rentals and Activity
Fees thereafter required shall be the responsibility of such of the other
aforesaid scheduled air carriers which continue to provide air transportation
service to the Detroit Metropolitan Area.
Should (a) all such aforesaid air carriers lose their operating authority
to serve the Detroit Metropolitan Area, or (b) should Lessor fail to maintain
the necessary certifications required to permit scheduled air carrier operations
at the Airport, and ALL of such air carriers exercise the right of cancellation
provided for in either event in said Article XV, the obligation to pay such
aforesaid charges shall terminate subject, however, to the following condition.
Until Fiscal Year 2009, upon such termination all such aforesaid carriers then
operating at the Airport (including Lessee if such be the case) shall be
obligated, to the extent hereinafter required, to pay annually, or in such
installments as Lessor may require, an amount not in excess of three hundred
percent (300%) of their respective annual rentals (calculated in the manner set
forth in
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paragraph 2 immediately below) payable at that time for terminal building
space at the Airport (whether leased under the Basic Agreement, this
Agreement or otherwise) for the purpose of providing funds to be applied to
Bond Debt Service (exclusive of any additional coverage) on the then
outstanding issues of Bonds. Payments required of such carriers shall be
assessed against each of them in a uniform manner per square foot leased and
shall be diminished pro rata to the extent that Airport revenues or capital
funds are realized from other sources and are available for application to
the debt service on the said Bonds as provided for in Subparagraph 3 below.
2. For the purpose of calculating payments which such carriers may be
obligated to make, Lessor shall first determine the average annual rental rate
per square foot paid for such terminal building space by all such carriers by
dividing their total annual rentals for such space by the total square footage
of the space. The square footage leased by each carrier shall then be
multiplied by such average rate in order to obtain an annual rental of each such
carrier for the purpose of establishing the three hundred percent (300%) maximum
annual limitation.
3. In the event Lessor fails to maintain the necessary certifications
required to permit scheduled air carrier operations at the Airport and
thereafter operates at the Airport for other purposes, any revenues earned as a
result shall, after providing for necessary operating and maintenance expenses,
be first applied each year to such debt service requirements before requiring
payments by the carriers pursuant to paragraph 1 above. In the foregoing
circumstances and as long as any of the aforesaid Bonds are outstanding, Lessor
shall use its best efforts to operate or lease the Airport properties so as to
produce sufficient revenues to satisfy the requirements of the aforesaid Bonds.
If under such circumstances the Airport properties or portion thereof are sold
by Lessor,
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the proceeds of such sale(s) shall first be used (or set aside) and be
applied to current and future debt service requirements or to retire the
aforesaid Bonds before requiring payments by the carriers pursuant to
subparagraph 1 above.
F. PAYMENT OF RENTALS AND ACTIVITY FEES
1. INFORMATION ON LESSEE OPERATIONS:
(a) Not earlier than 120 days nor later than 90 days prior to the
last day of each Fiscal Year, Lessee shall furnish Lessor with an
estimate for the next ensuing Fiscal Year of (i) the total Approved
Maximum Landing Weight of all aircraft to be landed at the Airport by
Lessee, (ii) the total number of enplaned domestic and international
passengers and deplaned domestic and international passengers of
Lessee, (iii) the total number of arriving and departing domestic and
international flights of Lessee, and (iv) the Midfield O&M Expenses to
be reimbursed to Lessee pursuant to Article VII.B.
(b) Lessee shall, no later than the 20th day of each calendar month,
transmit to Lessor a report, certified by Lessee, setting forth (i)
the actual number of Lessee's enplaned passengers and deplaned
passengers for the preceding calendar month, (ii) the actual aggregate
Approved Maximum Landing Weight for all aircraft operated by Lessee
and landed at the Airport during the preceding calendar month,
(iii) the actual number of Lessee's arriving and departing domestic
and international flights for the preceding month, and (iv) the
Midfield O&M Expenses actually paid by Lessee pursuant to
Article VII.B. for the preceding calendar month.
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2. PROJECTION OF RENTALS AND ACTIVITY FEES: Not later than 60 days prior
to the end of each Fiscal Year, Lessor shall furnish Lessee with a projection
for the next ensuing Fiscal Year (the "Projection") of the Terminal Charges to
be paid hereunder, and the Activity Fee rate per thousand pounds of Approved
Maximum Landing Weight. Such Projection will include Lessor's proposed Airport
budget, and shall set forth a calculation of the Activity Fee (including all
sources of revenue and all expenses) for the next ensuing Fiscal Year, together
with other information relevant thereto reasonably requested by Lessee. Lessor
shall give due consideration to any suggestions and comments made by Lessee with
respect to the Projection. The Projection, as revised by Lessor after
considering Lessee's suggestions and comments, shall be the basis for computing
Lessee's Terminal Charges and Activity Fees for the next ensuing Fiscal Year
unless and until otherwise revised pursuant to paragraph 4 below.
3. PAYMENT OF RENTALS AND ACTIVITY FEES:
(a) Not later than the 20th day of each calendar month of each Fiscal
Year, Lessee shall pay Lessor, without demand or invoice, an amount
equal to 1/12 of Lessee's aggregate Terminal Charges for such Fiscal
Year, computed in accordance with Article IIIA, and based on the
Projection, as such projection may have been revised pursuant to
paragraph 4 below.
(b) Not later than the 20th day of each calendar month of each Fiscal
Year, Lessee shall pay Lessor, without demand or invoice, an amount
equal to Lessee's aggregate Activity Fees for the preceding calendar
month, calculated by multiplying the total Approved Maximum Landing
Weight for aircraft landed by Lessee at the Airport during the
preceding
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calendar month by the Activity Fee rate for such Fiscal Year, computed
in accordance with Article IIIB.1., and based on the Projection, as
such projection may have been revised pursuant to paragraph 4 below.
(c) Lessee may net from the payments to be made to Lessor pursuant to
paragraphs (a) and (b) above the amount of Midfield O&M Expenses
actually paid by Lessee pursuant to Article VII.B. for the preceding
calendar month.
4. ADJUSTMENT OF RENTALS AND ACTIVITY FEES: Not later than the 150th day
of each Fiscal Year, Lessor shall furnish Lessee with a revised Projection (the
"Mid-Year Projection"), which shall reflect the most recently available
information with regard to the amounts actually incurred or realized during such
Fiscal Year for Bond Debt Service, O&M Expenses, and the Revenue Requirement, as
well as any changes in the number of useable square feet in the Midfield
Terminal and the Existing Terminal Facilities, together with the most recently
available information with regard to Terminal Charges and Activity Fees actually
received by Lessor. Lessor shall give due consideration to any suggestions and
comments made by Lessee with respect to the Mid-Year Projection. If the
Mid-Year Projection, as revised by Lessor after considering Lessor's
suggestions and comments, indicates that aggregate payments of Terminal Charges
and Activity Fees, at the then-existing rates would result in an overpayment or
underpayment of the aggregate amount required to be generated by Lessor through
Terminal Charges and Activity Fees, Lessor shall revise the Projection and
adjust the rates set forth therein for such Fiscal Year to conform to the
Mid-Year Projection.
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5. PRELIMINARY ANNUAL SETTLEMENT AND FINAL AUDIT:
(a) Within 60 days after the end of each Fiscal Year, Lessor will
furnish Lessee with a preliminary report, containing a preliminary
calculation, based on actual data, in accordance with this Agreement,
of Terminal Charges and Activity Fees estimated to be chargeable to
Lessee for the preceding Fiscal Year, and setting forth the amounts
actually paid by Lessee for such period. If such report indicates
that the aggregate of such fees and charges actually paid by Lessee
were greater than the aggregate amounts chargeable to Lessee, then
within 90 days after the end of such Fiscal Year Lessor shall refund
80% of any such estimated excess to Lessee. If such report indicates
that the aggregate of such fees and charges paid by Lessee were less
than the amounts chargeable to Lessee, then within 90 days after the
end of such Fiscal Year Lessee shall pay to Lessor 80% of the amount
of any such estimated deficiency. Interest shall accrue at a rate of
7% per annum, and be payable by Lessee in cash, on any portion of any
deficiency not paid by Lessee when due. Interest shall accrue at a
rate of 7% per annum, and be payable by Lessor, through a reduction in
the amount of Lessor's administrative costs includible in O&M Expenses
for the then Fiscal Year pursuant to Article IIIB.2.(a)(iii), on any
portion of any excess not refunded to Lessee when due.
(b) By the 180th day of each Fiscal Year, Lessor shall furnish to
Lessee a copy of an annual audit report prepared by a nationally
recognized accounting firm, covering the operation of the0 Airport for
the preceding Fiscal Year (the "Final Audit"). Lessor shall prepare a
calculation, based
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on the Final Audit, in accordance with this Agreement, of all Terminal
Charges and Activity Fees chargeable to Lessee for the preceding
Fiscal Year, and setting forth the amounts actually paid by Lessee for
such period, taking into account all payments and refunds pursuant to
paragraph 5.(a) above. If aggregate fees and charges actually paid by
Lessee were greater than the aggregate amount chargeable, then within
30 days after delivery of the Final Audit Lessor shall refund the
amount of such overpayment to Lessee. If aggregate fees or charges
actually paid by Lessee were less than the aggregate amount chargeable
to Lessee, then within 30 days after receipt of the Final Audit Lessee
shall pay to Lessor the amount of any such deficiency. The amount of
Lessor's administrative costs includible in O&M Expenses for the then
Fiscal Year shall be reduced by $50,000 for each month that delivery
of the Final Audit to Lessee is delayed beyond the 180th day of such
Fiscal Year.
(c) The payment by Lessee of any fees and charges hereunder and the
acceptance by Lessor thereof for any Fiscal Year, shall not preclude
either Lessee or Lessor from questioning, within a period of one (1)
year from the date of receipt by Lessee of the Final Audit for such
Fiscal Year, the accuracy of any report or statement on the basis of
which such payment was made, or preclude Lessor from making any claim
against Lessee for any additional amount payable by Lessee, or
preclude Lessee from making any claim against Lessor for the return of
any excess amount paid by Lessee.
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G. SUPPLEMENTAL CAPITAL COST PAYMENTS: In addition to all other rentals and
charges payable hereunder by Lessee, Lessee shall pay the following annual Bond
Debt Service charges, which shall be billed on a monthly basis in advance each
month, in respect of certain projects that were constructed for the benefit of
Lessee in the Existing Terminal Facilities pursuant to the Basic Agreement:
1. $753,317.26 for the United Airlines relocation project;
2. $19,507.27 for the Concourse G elevator project;
3. $412,648.00 for the extension to Concourse C; and
4. $1,958,194.00 for the new Concourse G and related projects.
Lessee will pay the above annual Bond Debt Service on that portion of the 1986
and 1993 General Airport Revenue Bonds even though the term of such debt service
obligation extends beyond the term of the lease of such temporary facilities.
The foregoing notwithstanding, the parties acknowledge that (a) the aforesaid
amounts represent annual Bond Debt Service charges in effect on the execution
date of this Agreement and include amounts for 25% Paid in Coverage, and (b)
such amounts will be adjusted if and when coverage requirements change and/or
the Bonds to which such debt service charges relate are refinanced or refunded.
ARTICLE IV
[INTENTIONALLY OMITTED]
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ARTICLE V
CONSTRUCTION, MAINTENANCE, REPAIR
AND OPERATION BY LESSEE
Lessee may construct or install at its own expense any equipment,
improvements and facilities, and any additions thereto, upon all or any part of
the premises hereunder leased to Lessee for its exclusive use or preferential
use and may construct or install at its own expense, any equipment, improvements
and facilities authorized under Article I hereof upon any Airport property not
leased to Lessee for its exclusive use or preferential use at such locations as
may be approved by Lessor. Plans and specifications of any proposed
construction or installation of improvements and facilities (including any
substantial alteration or addition thereto) shall be submitted to and receive
the prior approval of Lessor. Lessor shall have the right to refuse approval of
such plans and specifications if the external appearance of such improvements
and facilities does not meet Lessor's reasonable requirements for substantial
uniformity of appearance of improvements and facilities on the Airport, or, if
the type or time of construction or installation, or the location thereof does
not meet Lessor's reasonable requirements for safe use of the Airport and
appurtenances by other authorized persons. Lessor may, at its own cost, inspect
any such construction or installation.
Lessee shall keep and maintain all premises hereunder leased to Lessee for
its exclusive use or preferential use and all such improvements and facilities
and additions thereto, whether constructed or installed by it upon premises
hereunder leased to it for its exclusive use or preferential use or upon Airport
property not leased to it for its exclusive use or preferential use, in good
condition and repair, reasonable wear and tear excepted, and damage by fire or
other casualty excepted. Lessee shall not be liable for
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the repair or restoration of damage to premises hereunder leased where such
damage results from fire, structural defect, or other casualty for which
Lessor has obtained and there is in effect adequate insurance protection
covering such fire or other casualty. No restriction shall be placed upon
Lessee as to the architects, builders or contractors who may be employed by
it in connection with any construction, installation, alteration, repair or
maintenance of any such equipment, improvements, facilities and additions.
Lessee shall keep such premises leased to Lessee for its exclusive use or
preferential use in a sanitary and sightly condition, and shall provide all
necessary janitor services with respect thereto.
In the event that Lessee fails to perform for a period of thirty days after
written notice from Lessor so to do, any obligation required by this Article V
to be performed by Lessee at Lessee's cost, or fails to correct any construction
or installation by it of any equipment, improvements or facilities not completed
in accordance with the plans and specifications approved by Lessor within thirty
days of Lessor's notice to Lessee of a deviation from such plans and
specifications and request for appropriate changes in such construction and
installation, Lessor, upon the expiration of such thirty day period, may, but
shall not be obligated to, enter upon the premises involved and perform such
obligation of Lessee, charging Lessee the reasonable cost and expense thereof,
and Lessee agrees to pay Lessor such charge in addition to any other amounts
payable by Lessee hereunder; provided, however, that if Lessee's failure to
perform any such obligation adversely affects or endangers the health or safety
of the public or of employees of Lessor, and if Lessor so states in its
aforesaid notice to Lessee, Lessor may but shall not be obligated to perform
such obligation of Lessee at any time after the giving of such notice and
without awaiting the expiration of said thirty day period, and
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charge to Lessee, and Lessee shall pay, as aforesaid, the reasonable cost and
expense of such performance. If Lessor shall perform any of Lessee's
obligations in accordance with the provisions of this section, Lessor shall
not be liable to Lessee for any loss of revenues to Lessee resulting from
such performance.
ARTICLE VI
RIGHT OF ENTRY BY LESSOR
Lessor may enter upon the premises now or hereafter leased exclusively or
preferentially to Lessee hereunder at any reasonable time for any purpose
necessary, incidental to, or connected with the performance of its obligations
hereunder, in the exercise of its governmental functions, or in the event of any
emergency.
ARTICLE VII
MAINTENANCE, OPERATION AND REPAIR BY LESSOR
A. Lessor shall operate, maintain and keep in good repair the areas and
facilities described in Article I hereof. Lessor shall keep the Airport free
from obstruction, including, without limitation, the clearing and removal of
snow, vegetation, stones and other foreign matter from the runways, taxiways,
and loading areas and areas immediately adjacent to such runways, taxiways and
loading areas, as may be reasonably necessary for the safe, convenient and
proper use of the Airport by Lessee, and shall maintain and operate the Airport
in all respects in a manner at least equal to the highest standards or ratings
issued by the FAA for airports of similar size and character and in accordance
with all rules and regulations of the FAA.
Lessor, at its cost, shall provide and supply adequate heat to and air
conditioning for the premises hereunder leased to Lessee for its exclusive use
or preferential use or for its use jointly or in common with others, and shall
provide reasonable illumination
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and drinking water in the public and passenger space in the Midfield Terminal
and the Existing Terminal Facilities and, except as otherwise provided
herein, for the areas and facilities adjacent thereto respecting which Lessee
is given a non-exclusive use hereunder. Lessor, at its cost, shall also
provide adequate lighting for the vehicular parking spaces and adequate field
lighting on and for the Airport, including, without limiting the generality
hereof, boundary lights, landing lights, flood lights and beacons. Lessor, at
its cost, shall also provide all janitor services and other cleaners
necessary to keep the vehicular parking spaces and the landing field of the
Airport at all times clean, neat, orderly, sanitary and presentable.
Lessor shall provide adequate guards, at such times as may be required by
the circumstances, at all parts of the Airport which Lessee is entitled to use
jointly and in common with others.
In the event that Lessor fails to perform for a period of thirty days after
written notice from Lessee so to do, any obligation required by this Article VII
to be performed by Lessor at Lessor's cost, Lessee, upon the expiration of such
thirty day period, may but shall not be obligated to perform such obligation of
Lessor and deduct the reasonable cost to Lessee of performing such obligation
from any rentals, fees or charges subsequently becoming due from Lessee to
Lessor under this Agreement; provided, however, that if Lessor's failure to
perform any such obligation adversely affects or endangers the health or safety
of Lessee or of any of any of its employees, agents, passengers, guests,
patrons, invitees, or its or their suppliers of materials or furnishers of
service or any of its or their property, and if Lessee so states in its
aforesaid notice to Lessor, Lessee may but shall not be obligated to perform
such obligation of Lessor at any time after the giving of said notice and
without awaiting the
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expiration of said thirty day period, and Lessee may deduct its reasonable
costs of performance thereof from any rentals, fees or charges as aforesaid.
Lessor shall have the right to relocate at its own cost any equipment,
improvements and facilities constructed or installed by Lessee upon the Airport
property not leased hereunder to Lessee for its exclusive use or preferential
use pursuant to authorization therefor under Article I hereof; provided,
however, that such relocation shall be performed in such a manner and at such
times as are calculated to reduce to the minimum possible under the
circumstances any interference with Lessee's operations at the Airport, and that
the relocated equipment, improvements and facilities shall, when completed, be
commensurate with the equipment, improvements and facilities existing prior to
such relocation.
B. Notwithstanding the foregoing, Lessor hereby appoints Lessee as its
agent for the performance of, and Lessee agrees to and undertakes to perform,
the Assigned Operations and Maintenance Functions to be performed by Lessor
pursuant to this Article VII in, on and under the Midfield Terminal, pursuant to
the following agreements:
1. Lessee agrees to perform the Assigned Operations and Maintenance
Functions in a manner and to standards as are established for Lessor in this
Article VII.
2. In the event that Lessee fails to perform, for a period of 30
days after written notice from Lessor so to do, any obligation required by this
Article VII to be performed by Lessee at Lessee's cost, Lessor, upon the
expiration of such 30 day period, may, but shall not be obligated to, enter upon
the premises involved and perform such obligation of Lessee, provided, however,
that if Lessee's failure to perform any such obligation adversely affects, or
endangers the health or safety of the public or of
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employees of Lessor, and if Lessor so states in its aforesaid notice to Lessee,
Lessor may, but shall not be obligated to, perform such obligation of Lessee, at
any time after the giving of such notice and without awaiting the expiration of
said 30 day period.
3. As required by Article IIIF.1.(b)(vii) above, Lessee shall
render a detailed statement for reimbursement of the out of pocket costs
incurred by Lessee in connection with the Assigned Operations and Maintenance
Functions undertaken by Lessee under this Article VII within 20 days after the
end of each month, and Lessee shall be entitled to net such amounts against
payments due Lessor pursuant to Article IIIF.3. above. Lessor shall be entitled
to audit any monthly statement of costs rendered by Lessee and Lessee will make
available to Lessor all of the records supporting such statements. With respect
to employees of Lessee, Lessee shall be entitled to reimbursement for any
out-of-pocket costs incurred by it for salaries and benefits of Lessee's
employees exclusively assigned to the Assigned Operations and Maintenance
Functions and who are based at, and spend substantially all of their work time
at, the Airport. The payments made by Lessor to Lessee pursuant to this
subsection shall be deemed to be Midfield O&M Expenses.
4. In the performance of the functions undertaken pursuant to this
Article VII by contractor or third party forces engaged by Lessee, Lessee shall
require payment of wage rates and provision of benefits comparable to the wage
rates and benefits paid and provided to workers engaged in similar skilled
trades work for building maintenance projects in the Detroit Metropolitan Area.
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ARTICLE VIII
UTILITY SERVICES
Lessor shall, directly or by arrangement with appropriate utility companies
or suppliers, supply Lessee with electrical current, gas, water, telephone and
sewerage facilities, and shall charge Lessee for such utility services at rates
not exceeding those which Lessee would have to pay if it established the same
demand and took the same quantity directly from such utility companies or
suppliers. Lessor shall also supply electrical current to the ramp areas to be
used by Lessee in common with others and shall charge Lessee its appropriate
share of such electrical current at the rates hereinabove specified.
ARTICLE IX
SPACE FOR UNITED STATES WEATHER BUREAU, POSTAL SERVICE,
FEDERAL AVIATION ADMINISTRATION, AND EXPRESS AGENCIES
Lessor shall, upon request of such persons or governmental or express
agencies make available reasonable and convenient space and facilities at the
Airport for the use of the United States Postal Service, or any person required
to use such space by regulations thereof, and for the use of an express agency
or agencies at a reasonable rental charge to such persons, governmental agency
and express agencies; and Lessor shall in like manner make available reasonable
and convenient space and facilities at the Airport for the use of the United
States Weather Bureau and FAA.
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ARTICLE X
RESTAURANT
Any other provision of this Agreement to the contrary notwithstanding,
Lessee shall have the right to operate directly or through a designee, assignee
or sub-lessee, private club facilities within such appropriate space leased to
it in the Midfield Terminal for such purposes, which club facilities shall be
authorized to serve food and beverages; provided, however, food and beverages
served in such private club facilities will be obtained by Lessee from the
Airport food concessionaire to the extent that same are available for purchase
from said Airport food concessionaire.
ARTICLE XI
RULES AND REGULATIONS
Lessor shall adopt and enforce reasonable rules and regulations and any
reasonable amendments thereto, with respect to the use of the Airport, which
shall provide for the safety of those using the Airport, and Lessee agrees to
observe and obey the same; provided, that such rules and regulations shall be
consistent with safety and with rules, regulations and orders of the FAA with
respect to aircraft operations at the Airport; and provided further, that such
rules and regulations shall not be inconsistent with the procedures prescribed
or approved from time to time by the FAA with respect to the operation of
Lessee's aircraft at the Airport. Lessee shall be given notice of all amendments
to rules and regulations as are from time to time adopted by Lessor and no such
amendment shall be effective as to Lessee until thirty (30) days after the date
of such notice unless Lessor states in said notice that the amendment is of an
emergency nature, in which case the amendment shall be immediately effective.
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ARTICLE XII
CONTROL OF RATES, FARES OR CHARGES
Lessor shall have no control whatsoever over the rates or charges that
Lessee may prescribe for any of its services to, from, through or at the
Airport, or between the Airport and Lessee's ticket offices or other stopping
places in the City of Detroit or the County of Xxxxx, or elsewhere, nor shall
Lessor, except to the extent reasonably necessary to prevent physical damage or
injuries to persons or property at the Airport, in any manner whatsoever,
control the type, design, style, figuration, weight, allowable loads,
specifications or means of propulsion of, or use of space on, the aircraft
Lessee may operate to and from said Airport, or the point of origin or
destination of flights operated by Lessee to or from the Airport.
ARTICLE XIII
DAMAGE OR DESTRUCTION OF PREMISES
Notwithstanding the provisions of Article V as to maintenance and repair of
premises by Lessee, if any terminal at the Airport shall be partially damaged by
fire, the elements, the public enemy or other casualty but not rendered
untenantable, the same shall be repaired with due diligence by Lessor at its own
cost and expense. In case any such terminal is so damaged or destroyed by fire,
the elements, the public enemy or other casualty, that it will or does become
untenantable, the said building shall be repaired, reconstructed or restored as
the case may be, with due diligence by Lessor at its own cost and expense, and
the rent payable hereunder with respect to said building shall be paid up to the
time of such damage or destruction and shall thenceforth xxxxx until such time
as the said building shall be made tenantable. Lessor shall maintain insurance
sufficient to enable it to fulfill its obligations under this Article.
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In the event that the Airport or any other premises herein leased are
rendered untenantable or unusable because of the condition thereof, there shall
be a reasonable and proportionate abatement of the rentals, fees and charges
provided for herein during the period that the same are so untenantable or
unusable.
ARTICLE XIV
CANCELLATION BY LESSOR
Lessor may cancel this Agreement by giving Lessee sixty (60) days advance
written notice to be served as hereinafter provided, upon or after the happening
of any one of the following events:
(a) The filing by Lessee of a voluntary petition in bankruptcy;
(b) The institution of proceedings in bankruptcy against Lessee and the
adjudication of Lessee as a bankrupt pursuant to such proceedings if such
adjudication shall remain unvacated or unstayed for a period of at least sixty
(60) days;
(c) The taking by a court of competent jurisdiction of Lessee and its
assets pursuant to proceedings brought under the provisions of any Federal
reorganization act if the judgment of such court shall remain unvacated or
unstayed for a period of at least sixty (60) days;
(d) The appointment of a receiver of Lessee's assets if such appointment
by a court of competent jurisdiction shall remain unvacated or unstayed for a
period of at least sixty (60) days;
(e) The divestiture of Lessee's estate herein by other operation of law;
(f) The abandonment by Lessee of its conduct of Air Transportation at the
Airport;
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(g) If the Lessee shall be prevented for a period of sixty (60) days
(after exhausting or abandoning all appeals) by any action of any governmental
authority, board, agency or officer having jurisdiction thereof from conducting
Air Transportation at the Airport unless it is so prevented from conducting Air
Transportation, either (1) by reason of the United States or any agency thereof
acting directly or indirectly, taking possession of and operating, in whole or
in substantial part, the premises and space leased or operated by the Lessee, or
premises required for the actual operation of Lessee's aircraft to and from the
Airport, or (2) if all or a substantial part of the premises and space leased by
the Lessee shall be acquired in the manner described in Article XXIV hereof;
(h) The default by Lessee in the performance of any covenant or agreement
herein required to be performed by Lessee and the failure of Lessee to remedy
such default for a period of sixty (60) days after receipt from Lessor 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 Lessee shall
have remedied the default prior to receipt of Lessor's notice of cancellation;
Notwithstanding anything to the contrary herein contained, Lessor shall not
have the right to cancel, or give notice of cancellation of, this Agreement
solely by reason of Lessee's failure or refusal to pay any part of the rentals,
fees or charges provided for in this Agreement if, within sixty (60) days after
such failure or refusal, Lessee shall have given to Lessor a written notice
stating that Lessee in good faith predicates such failure or refusal upon either
or both of the following: (1) Any provision of this Agreement granting to Lessee
in specified events a reduction in or abatement of any rentals, fees or charges
payable by Lessee to Lessor hereunder, or (2) Any provision of this
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Agreement authorizing Lessee in specified events to deduct from any such
rentals, fees or charges, the reasonable cost to Lessee of performing any
obligation or obligations required by this Agreement to be performed by Lessor.
No waiver or default by Lessor of any of the terms, covenants or conditions
hereof to be performed, kept and observed by Lessee shall be construed to be or
act as a waiver of any subsequent default of any of the terms, covenants and
conditions herein contained to be performed, kept and observed by Lessee. The
acceptance of rental by Lessor 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 Lessee, shall not be deemed a waiver of any right on the part of
Lessor to cancel this Agreement for failure by Lessee to so perform, keep or
observe any of the terms, covenants or conditions of this Agreement.
ARTICLE XV
CANCELLATION BY LESSEE
Lessee, in addition to any other right of cancellation herein given to
Lessee or any other rights to which Lessee may be entitled by law or otherwise,
may, so long as Lessee is not in default in any payments to Lessor hereunder,
cancel this Agreement by giving Lessor sixty (60) days advance written notice to
be served as hereinafter provided, upon or after the happening of any one of the
following events:
(a) The failure or refusal, for reasons beyond the control of Lessee, of
the FAA, at any time during the term of this Agreement or any renewal thereof,
to permit Lessee to operate into or from the Airport with any type of aircraft
which Lessee may be licensed to operate into or from other airports of like size
and character and which Lessee may reasonably desire to operate into or from the
Airport;
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(b) Issuance by any court of competent jurisdiction of an injunction in
any way substantially preventing or restraining the use of the Airport or any
part thereof necessary for Lessee's operations, and the remaining in force of
such injunction for a period of at least sixty (60) days at least after Lessor
has exhausted or abandoned all appeals;
(c) The inability of Lessee due to circumstances beyond its control to
use, for a period in excess of ninety (90) days, the Airport or to exercise any
rights and privileges granted to Lessee hereunder and necessary to its
operations because of any law or ordinance, or because of any order, rule,
regulation or other action or any non-action of the FAA or any other
governmental authority, or, because of earthquake, other casualty (excepting
fire) or because of Acts of God or the public enemy;
(d) The default by Lessor in the performance of any covenant or agreement
herein required to be performed by Lessor and the failure of Lessor to remedy
such default for a period of ninety (90) days after receipt from Lessee 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 Lessor shall
have remedied the default prior to receipt of Lessee's notice of cancellation.
Lessee's performance of all or any part of this Agreement for or during any
period or periods after a default of any of the terms, covenants and conditions
herein contained to be performed, kept and observed by Lessor, shall not be
deemed a waiver of any right on the part of Lessee to cancel this Agreement for
failure by Lessor so to perform, keep or otherwise observe any of the terms,
covenants, or conditions hereof to be performed, kept and observed by Lessor, or
be construed to be or act as a waiver by Lessee of any
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subsequent default of any of the terms, covenants and conditions herein
contained to be performed, kept and observed by Lessor.
ARTICLE XVI
SUSPENSION AND ABATEMENT
In the event that Lessor's operation of the Airport or Lessee's operation
at the Airport should be restricted substantially by action of any court of
competent jurisdiction or by action of the federal government or any agency
thereof, or by action of the State of Michigan or any agency thereof, then
either party hereto shall have the right, upon written notice to the other, to a
suspension of this Agreement and an abatement of a just proportion of the
services and facilities to be afforded hereunder, or a just proportion of the
payments to become due hereunder, from the time of such notice until such
restriction shall have been remedied and normal operations restored.
Ascertainment of all matters under this Article shall be determined by agreement
or by arbitration as provided in Article XVII hereof.
ARTICLE XVII
ARBITRATION
If any controversy or claim should arise out of, under, or relating to, the
provisions of Articles III or XVI of this Agreement, then either party may by
notice in writing to the other, submit the controversy or claim to arbitration.
The party desiring such arbitration shall give written notice to that effect to
the other party, specifying in said notice the name and address of the person
designated to act as arbitrator on its behalf. Within fifteen (15) days after
the service of such notice, the other party shall give written notice to the
first party specifying the name and address of the person designated to act as
arbitrator on its behalf. The arbitrators thus appointed shall
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appoint a third disinterested person of recognized competence in such field, and
such three arbitrators shall as promptly as possible determine the controversy
or claim.
If the two arbitrators appointed by the parties shall be unable to agree
upon the appointment of a third arbitrator within fifteen (15) days after the
appointment of the second arbitrator, then within fifteen (15) days thereafter
either of the parties upon written notice to the other party, on behalf of both,
may request the appointment of a disinterested person of recognized competence
in the field involved as the third arbitrator by the then chief judge of the
United States District Court for the Eastern District of Michigan, Southern
Division, or upon his failure, refusal or inability to act, may request such
appointment by the then miscellaneous presiding judge of the Circuit Court
(Third Judicial Circuit) of the State of Michigan, County of Xxxxx, or, upon his
failure, refusal or inability to act, may apply to the Circuit Court (Third
Judicial Circuit) of the State of Michigan, County of Xxxxx for the appointment
of such third arbitrator, and the other party shall not raise any question as to
the court's full power and jurisdiction to entertain the application and make
the appointment. If none of the parties shall so request such appointment of a
third arbitrator within fifteen (15) days after the expiration of the period
within which the two arbitrators are to appoint a third arbitrator as
hereinabove provided, the rights of each party to arbitrate the matter shall be
deemed to have been waived and either of the parties may proceed to enforce
whatever remedies, legal or otherwise, it may otherwise have.
The decision in which any two of the three arbitrators so appointed and
acting hereunder concur shall in all cases be binding and conclusive upon the
parties. Each party shall pay the fees and expense of the arbitrator appointed
by such party and one-half of the other expense of the arbitration properly
incurred hereunder.
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Each of the parties hereto agree that if, in the opinion of the other
party, any separate agreement is required by law in order to effectuate or
enforce the arbitration provisions hereinabove contained, it will execute such
separate agreement provided that the same is not inconsistent with the terms and
provisions of this Agreement.
ARTICLE XVIII
INDEMNITY
Lessee agrees to indemnify and hold Lessor harmless from and against all
liability for injuries to persons or damage to property caused by Lessee's use
and occupancy of or operations at the Airport; provided, however, that Lessee
shall not be liable for any injury, damage or loss caused by Lessor's sole
negligence or by the joint negligence of Lessor and any person other than
Lessee; and provided further that Lessor shall give to the Lessee prompt and
timely notice of any claim made or suit instituted which in any way, directly or
indirectly, contingently or otherwise, affects or might affect Lessee, and
Lessee shall have the right to compromise and defend the same to the extent of
its own interest.
ARTICLE XIX
INSURANCE
Lessee shall, at all times during the term of this Agreement maintain in
effect policies of insurance issued by a company or companies of sound and
adequate financial responsibility, insuring Lessee against all liabilities to
the public for loss resulting from injury to persons or damage to property
arising out of or caused by Lessee's operations, acts or omissions or those of
Lessee's employees, agents or contractors. Such policies shall name the Lessor
as additional assured thereunder,
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subject to the limitations set forth in Article XVIII hereof in respect of
Lessor's negligence, and shall be in at least the following amounts:
Aircraft Public Liability Insurance - $ 5,000,000 per person
50,000,000 per accident
Aircraft Property Damage Insurance - $10,000,000 per accident
Comprehensive Public Liability Ins. - $ 5,000,000 per person
10,000,000 per accident
Comprehensive Property Damage Ins. - $ 5,000,000 per accident
Lessee shall furnish to Lessor certificates evidencing such insurance.
ARTICLE XX
QUIET ENJOYMENT
Lessor agrees that on payment of the rentals, fees and charges as herein
provided and performance of the covenants and agreements on the part of Lessee
to be performed hereunder, Lessee shall peaceably have and enjoy the leased
premises and all the rights and privileges of the Airport, its appurtenances and
facilities granted herein.
ARTICLE XXI
TITLE TO EQUIPMENT, IMPROVEMENTS
AND FACILITIES ERECTED BY LESSEE
It is agreed that title to any equipment, improvements, and facilities, and
any additions thereto, irrespective of whether the same would otherwise become a
fixture under Michigan law (including without limitation all buildings, hangars,
structures, storage tanks, pipes, pumps, wires, poles, machinery and air-
conditioning equipment), constructed or installed by Lessee upon the premises
leased hereunder to Lessee for its exclusive or preferential use or upon other
Airport property (other than equipment,
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improvements and facilities financed by Lessor, whether with the proceeds of
Bonds, PFCs, Federal funds or otherwise), shall remain the property of Lessee,
unless it has at any time during the term of this Agreement by written notice
and election, vested title to all or any part thereof in Lessor. Lessee shall
have the right at any time during the term of this agreement, or any renewal or
extension hereof, to remove any or all of such equipment, improvements and
facilities, provided Lessee is not at any such time in default in its payments
to Lessor hereunder and subject further to Lessee's obligation to repair all
damage, if any, reasonable wear and tear excepted, resulting from such removal.
If at any time during this Agreement, Lessee has exercised its right to vest
title to such equipment, improvements and facilities in Lessor, it shall no
longer have the right to remove such property. Lessee agrees to remove said
equipment, improvements and facilities at the expiration or other termination of
this Agreement irrespective of whether it has exercised its right of election to
vest title to the same in Lessor, if so requested by Lessor, and, upon failure
so to do, Lessor shall have the right to remove the same and charge to Lessee
the actual cost of such removal and restoration of the site to its original
condition, ordinary wear and tear excepted. Any such equipment, improvements or
facilities not removed by Lessee prior to the expiration or other termination of
this Agreement shall thereupon become the property of Lessor.
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ARTICLE XXII
SURRENDER OF POSSESSION
Upon the expiration or earlier termination of this Agreement or any renewal
hereof, Lessee shall forthwith surrender possession of the premises in as good
condition as when received, reasonable wear and tear, damage by flood, fire,
earthquake, other casualty, Acts of God or the public enemy, excepted.
ARTICLE XXIII
MINERAL RIGHTS
It is agreed and understood that all water, gas, oil and mineral rights in
and under the soil are expressly reserved to Lessor.
ARTICLE XXIV
CONDEMNATION
Upon the acquisition by condemnation or the exercise of the power of
eminent domain under any Federal or state statute by the Federal Government, the
State of Michigan, or any Federal or state agency or any other person vested
with such power, of a temporary or permanent interest in all or any part of the
Airport, the Lessor and the Lessee each shall have the right to appear and file
claims for damages, to the extent of their respective interests, in the
condemnation or eminent domain proceedings, to participate in any and all
hearings, trials and appeals therein, and to receive and retain such amount as
they may lawfully be entitled to receive as damages or payment as a result of
such acquisition.
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ARTICLE XXV
ASSIGNMENT AND SUBLETTING
A. Lessee shall not at any time assign this Agreement or any part hereof,
or sublet any premises now or hereafter leased to Lessee, without the consent in
writing of Lessor, which consent will not be unreasonably withheld; provided,
that the foregoing shall not prevent the assignment of this Agreement to any
corporation with which Lessee may merge or consolidate, or which may succeed to
the business of Lessee. No such subletting, however, shall release Lessee from
its obligations to pay any and all of the rentals, charges, and fees provided or
from any other obligation under this Agreement.
B. Except as provided in Article IIIB.2.(b), Lessor shall not at any time
assign this Agreement or any part hereof, or pledge, sell, convey, mortgage,
encumber, assign or otherwise transfer the Airport or any portion thereof during
the term of this Agreement.
ARTICLE XXVI
SUBSIDIARY COMPANIES
The right to use the premises and facilities leased to Lessee under Article
I hereof, or which it may subsequently be entitled to use in accordance with the
exercise of options pursuant to this Agreement, in the manner specified in such
Article and any other Articles of this Agreement, shall be extended to all of
Lessee's subsidiary companies at no additional cost.
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ARTICLE XXVII
NOTICES
Notices to Lessor provided for herein shall be sufficient if sent by
registered mail, postage prepaid, addressed to Director of Airports, Detroit
Xxxxxxxxxxxx Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000; and notices to
Lessee, if sent by registered mail, postage prepaid, addressed to Northwest
Airlines, Inc., 0000 Xxxxxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention:
General Counsel, or to such other respective addresses as the parties may
designate to each other in writing from time to time.
ARTICLE XXVIII
DEFINITIONS
1. "ACE ACCOUNT" shall mean the AIRLINE CAPITAL EXPENDITURE (SUBORDINATE LIEN)
ACCOUNT OF THE SUBORDINATE LIEN COVERAGE FUND as established pursuant to
Ordinance 319.
2. "ACTIVITY FEE" shall have the meaning set forth in Article IIIB.1.
3. "AGREEMENT" shall mean this Second Amended and Restated
Airport Agreement.
4. "AIRLINE EQUITY ACCOUNT" shall mean that account as established pursuant to
Ordinance 319.
5. "AIRLINE EQUITY SUBACCOUNTS" shall mean those subaccounts of the Airline
Equity Accounts as established pursuant to Ordinance 319.
6. "AIRPORT" shall have the meaning set forth in the first "Whereas" clause of
this Agreement.
7. "AIRPORT DEVELOPMENT FUND" shall mean that fund created by Lessor pursuant
to Article IIIB.2.(a)(5).
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8. "AIRPORT REVENUE BONDS" shall mean Bonds issued pursuant to Ordinance 319.
9. "AIRPORT-SYSTEM" shall mean the Airport and Willow Run Airport.
10. "AIR TRANSPORTATION" shall mean the business of transporting natural
persons, property, cargo and mail by aircraft.
11. "APPROVED MAXIMUM LANDING WEIGHT" for any aircraft shall mean the maximum
landing weight approved by the FAA for landing such aircraft at the
Airport.
12. "ASSIGNED OPERATIONS AND MAINTENANCE FUNCTIONS" shall mean: (a) operations
and maintenance for all of Lessee's Exclusive Midfield Terminal Space,
Lessee's Preferential Midfield Terminal Space and Lessee's Joint Use
Midfield Terminal Space, (b) operation and maintenance (including
janitorial services, cleaning and minor repairs) of all of the Common Use
Midfield Terminal Space and public space in the Midfield Terminal and the
mechanical equipment therein, (c) the operation and maintenance of all
building-wide services, such as heating, cooling, lighting, and electrical
services and (d) the maintenance and repairs of the interior and exterior
floors, walls, ceilings and roof of the Midfield Terminal. The foregoing
notwithstanding, Assigned Operations and Maintenance Functions shall not
include: (i) operation of the Common Use Midfield Terminal Space in the
Midfield Terminal (including gate allocation and utilization, and federal
inspection services facilities), (ii) the selection of concessionaires in
the Midfield Terminal and operations and maintenance functions to be
performed by such concessionaires in the Midfield Terminal, and (iii)
police and building security functions in the Midfield Terminal.
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13. "BASIC AGREEMENT" shall mean that certain
Airport Agreement dated February
26, 1959, as amended, to which Lessor and Lessee were parties as of the
execution of this Agreement.
14. "BONDS" shall mean bonds issued by the Lessor pursuant to the Bond
Ordinance or any other ordinance of the Lessor pursuant to which airport
revenue bonds secured by a pledge of Airport revenue, on a senior or
subordinate lien basis, are issued.
15. "BOND DEBT SERVICE" shall mean, for any fiscal year, all amounts of any
nature whatsoever payable during such fiscal year under Ordinance 319 into
the Bond Fund (including, but not limited to, the Bond Reserve Account),
the Operation and Maintenance Reserve Fund and the Renewal and Replacement
Fund, any other payment required by Section 604 of Ordinance 319
(including, but not limited to, amounts required to satisfy Lessor's rate
covenant) and all amounts of any nature whatsoever payable during such
fiscal year under any other ordinance of Lessor pursuant to which Bonds are
issued into funds with purposes similar to the aforementioned Ordinance 319
funds, including coverage payments, reduced in all cases by an amount equal
to any interest payable on Bonds during such fiscal year from Bond
proceeds.
16. "BOND ORDINANCE" shall mean Ordinance 319 and such other ordinances enacted
and amended from time to time under which Lessor is authorized to issue
Bonds.
17. "BOND RESERVE ACCOUNT" shall mean the fund of such name as established
pursuant to Ordinance 319.
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18. "COMMON USE MIDFIELD TERMINAL SPACE" shall mean Common Use Premises in the
Midfield Terminal.
19. "COMMON USE PREMISES" shall mean space, improvements and facilities at the
Airport to be used in common by air carriers.
20. "COUNTY DISCRETIONARY FUND" shall mean the fund of such name as established
pursuant to Ordinance 319.
21. "DATE OF BENEFICIAL OCCUPANCY" shall mean, with regard to any terminal
facility, the date on which an air transportation company occupies such
facility for the operation of its Air Transportation business.
22. "DOMESTIC AREA OF THE MIDFIELD TERMINAL" shall mean that portion of the
Midfield Terminal identified on EXHIBIT B as Domestic Area.
23. "EXCLUSIVE EXISTING TERMINAL SPACE" shall mean Exclusive Use Premises in
the Existing Terminal Facilities.
24. "EXCLUSIVE MIDFIELD TERMINAL SPACE" shall mean Exclusive Use Premises in
the Midfield Terminal.
25. "EXCLUSIVE USE PREMISES" shall mean space, improvements and facilities at
the Airport leased for the exclusive use of an air carrier.
26. "EXISTING TERMINAL FACILITIES" shall mean space, improvements and
facilities in the terminals in operation at the Airport immediately prior
to the Date of Beneficial Occupancy of any space in the Midfield Terminal.
27. "FAA" shall mean the Federal Aviation Administration, or any successor
agency.
28. "FINAL AUDIT" shall have the meaning set forth in Article IIIF.5.(b).
29. "FISCAL YEAR" shall mean December 1 of any year through November 30 of the
following year, or such other fiscal year as Lessor may adopt for the
Airport.
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30. "INTERNATIONAL AREA OF MIDFIELD TERMINAL" shall mean that portion of the
Midfield Terminal identified on EXHIBIT B as International Area.
31. "JOINT USE MIDFIELD TERMINAL SPACE" shall mean Joint Use Premises in the
Midfield Terminal.
32. "JOINT USE PREMISES" shall mean space, improvements and facilities at the
Airport leased for the joint use of two or more (but not all) air carriers.
33. "LESSEE'S COMMON USE MIDFIELD TERMINAL SPACE" shall have the meaning set
forth in Article IB.5.
34. "LESSEE'S EXCLUSIVE EXISTING TERMINAL SPACE" shall have the meaning set
forth in Article IB.1.
35. "LESSEE'S EXCLUSIVE MIDFIELD TERMINAL SPACE" shall have the meaning set
forth in Article IB.2.
36. "LESSEE'S EXISTING TERMINAL SPACE TO BE DEMOLISHED" shall have the meaning
set forth in Article IB.1.
37. "LESSEE'S JOINT USE MIDFIELD TERMINAL SPACE" shall have the meaning set
forth in Article IB.4.
38. "LESSEE'S PREFERENTIAL MIDFIELD TERMINAL SPACE" shall have the meaning set
forth in Article IB.3.(a).
39. "MAJORITY-IN-INTEREST OF THE AIR CARRIERS" shall mean either (i) seventy-
five percent (75%) of the Signatory Airlines who together have landed
fifty-one percent (51%) of the total landed weight of all such Signatory
Airlines during the immediately preceding calendar year (as such weight is
reflected by official Airport records), or (ii) fifty-one percent (51%) of
the Signatory Airlines who have together landed seventy-five percent (75%)
of the total landed weight of all such
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Signatory Airlines during the immediately preceding calendar year (as such
weight is reflected by official Airport records).
40. "MIDFIELD COMMON USE RENTAL CHARGES" shall mean the charges established in
Article IIIA.4.(a).
41. "MIDFIELD DOMESTIC BOND DEBT SERVICE RATE" shall mean the rate established
as such pursuant to Article IIIA.2.(b).
42. "MIDFIELD DOMESTIC EXCLUSIVE AND PREFERENTIAL RENTAL RATE" shall mean the
rate established as such pursuant to Article IIIA.2.(b).
43. "MIDFIELD DOMESTIC JOINT USE RENTAL RATE" shall mean the rate established
as such pursuant to Article IIIA.3.(b).
44. "MIDFIELD DOMESTIC O&M RATE" shall mean the rate established as such
pursuant to Article IIIA.2.(b).
45. "MIDFIELD EXCLUSIVE AND PREFERENTIAL RENTAL CHARGES" shall mean the charges
established in Article IIIA.2.(a).
46. "MIDFIELD INTERNATIONAL BOND DEBT SERVICE RATE" shall mean the rate
established as such pursuant to Article IIIA.2.(c).
47. "MIDFIELD INTERNATIONAL EXCLUSIVE AND PREFERENTIAL RENTAL RATE" shall mean
the rate established as such pursuant to Article IIIA.2.(c).
48. "MIDFIELD INTERNATIONAL JOINT USE RENTAL RATE" shall mean the rate
established as such pursuant to Article IIIA.3.(c).
49. "MIDFIELD INTERNATIONAL O&M RATE" shall mean the rate established as such
pursuant to Article IIIA.2(c).
50. "MIDFIELD JOINT USE RENTAL CHARGES" shall mean the charges established in
Article IIIA.3.(a).
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51. "MIDFIELD O&M EXPENSES" shall mean direct O&M Expenses of the Midfield
Terminal (but excluding all administrative charges by Lessor and other
indirect O&M expenses).
52. "MIDFIELD TERMINAL" shall have the meaning set forth in the fourth
"Whereas" clause of this Agreement.
53. "MID-YEAR PROJECTION" shall have the meaning set forth in Article IIIF.4.
54. "O&M EXPENSES" shall mean, for any Fiscal Year, expenses of maintenance,
operation and administration of the Airport (including, but not limited to,
the Midfield Terminal) for such Fiscal Year.
55. "OPERATION AND MAINTENANCE RESERVE FUND" shall mean the fund of such name
as established pursuant to Ordinance 319.
56. "ORDINANCE 319" shall mean that ordinance of Lessor dated July 24, 1986
entitled "Charter County of Xxxxx Ordinance Number 319," as such ordinance
has been amended or supplemented from time to time.
57. "PERSONS" shall mean natural persons, firms, corporations, partnerships,
limited liability companies and other legal entities.
58. "PAID-IN COVERAGE" shall have the meaning set forth in Article IIB.2.(a).
59. "PFCS" shall mean passenger facility charges imposed by Lessor pursuant to
the Aviation and Safety Capacity Expansion Act of 1990, Pub. L. 101-508,
Title IX, Subtitle B, Sections 9110 and 911, recodified as 49 U.S.C. 40117,
as amended from time to time, and Part 158 of the Federal Aviation
Regulations (14 CFR Part 158), as amended from time to time.
60. "PREFERENTIAL MIDFIELD TERMINAL SPACE" shall mean Preferential Use Premises
in the Midfield Terminal.
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61. "PREFERENTIAL USE PREMISES" shall mean space, improvements and facilities
at the Airport provided to an air carrier on a preferential, non-exclusive
manner, e.g, in the manner provided in Article IB.3.(b).
62. "PRODUCER PRICE INDEX" shall mean the Producer Price Index/All Commodities
published by the United States Department of Labor, Bureau of Labor
Statistics (January, 1996 = 100), or if such index is discontinued or
otherwise becomes unavailable to the public, the most nearly comparable
index published by a recognized financial institution, financial
publication or university.
63. "PROJECT DEVELOPMENT AGREEMENT" shall mean the Project Development
Agreement dated as of October 10, 1996, between Lessor and Lessee.
64. "PROJECTION" shall have the meaning set forth in Article IIIF.2.
65. "RENEWAL AND REPLACEMENT FUND" shall mean the fund of such name as
established pursuant to Ordinance 319.
66. "RESERVE FUND" shall mean the fund of such name as established pursuant to
Ordinance 319.
67. "REVENUE FUND" shall mean the fund of such name as established pursuant to
Ordinance 319.
68. "REVENUE REQUIREMENT" shall have the meaning set forth in Article IIIB.1.
69. "SIGNATORY AIRLINES" shall mean Lessee and those air carriers who have
executed an agreement substantially similar to the Basic Agreement. After
December 1, 2008, in order to be a Signatory Airline, an air carrier shall
also have executed an agreement substantially similar to this Agreement
(except for the premises leased thereunder).
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70. "SPECIAL FACILITY REVENUES" shall have the meaning for such term set forth
in Ordinance 319.
71. "SPECIAL FACILITY REVENUE BOND" shall mean a bond of Lessor secured solely
by Special Facility Revenues.
72. "SUBORDINATE BOND RESERVE ACCOUNT" shall mean the account of such name as
established pursuant to Ordinance 319.
73. "TERMINAL CHARGES" shall mean the charges established pursuant to Article
IIIA.
74. "USEABLE SQUARE FEET" shall mean square feet of space available for public
and tenant use exclusive of nonpublic mechanical, service and support
areas.
75. "WEIGHTED MAJORITY" shall mean either (a) Signatory Airlines which, in the
aggregate, landed eighty-five percent (85%) or more of the landed weight of
all Signatory Airlines for the preceding twelve-month period for which
records are available, or (b) all but one of the Signatory Airlines
regardless of landed weight.
ARTICLE XXIX
PARAGRAPH HEADINGS
The paragraph headings contained herein are for convenience in reference
and are not intended to define or limit the scope of any provision of this
Agreement.
ARTICLE XXX
INVALID PROVISION
In the event any covenant, condition or provision herein contained is held
to be invalid by any 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 that the invalidity of any
such covenant, condition or
-75-
provision does not materially prejudice either Lessor or Lessee in its
respective rights and obligations contained in the valid covenants, conditions
or provisions of this Agreement.
ARTICLE XXXI
SUCCESSORS AND ASSIGNS BOUND BY COVENANTS
All the covenants, stipulations and agreements in this Agreement shall
extend to and bind the legal representatives, successors and assigns of the
respective parties hereto.
ARTICLE XXXII
RIGHT TO LEASE TO UNITED STATES GOVERNMENT
It is agreed that during time of war or national emergency the Lessor shall
have the right to lease the landing area or any part thereof to the United
States Government for military or naval use, and, if any such lease is executed,
the provisions of this instrument insofar as they are inconsistent with the
provisions of the lease to the Government shall be suspended.
It is agreed that this lease shall be subordinate to the provisions of any
existing or future agreement between the Lessor and the United States, relative
to the operation or maintenance of the Airport, the execution of which has been
or may be required as a condition precedent to the expenditure of Federal funds
for the development of the Airport.
ARTICLE XXXIII
COVENANTS AGAINST DISCRIMINATION
A. COVENANT PURSUANT TO REQUIREMENTS OF THE DEPARTMENT OF TRANSPORTATION:
Lessee, for itself, its personal representatives, successors in
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interest, and assigns, as a part of the consideration hereof, does hereby
covenant and agree as a covenant running with the land, that (1) no person on
the grounds of race, color, national origin or gender shall be excluded from
participation in, denied the benefits of, or be otherwise subjected to
discrimination in the use of facilities at the Airport, (2) that in the
construction of any improvements on, over, or under land at the Airport and the
furnishing of services thereon, no person on the grounds of race, color,
national origin or gender shall be excluded from participation in, denied the
benefits of, or otherwise be subjected to discrimination, (3) that Lessee shall
use the premises in compliance with all other requirements imposed by or
pursuant to Title 49, Code of Federal Regulations, Department of Transportation,
Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in
Federally-assisted Programs of the Department of Transportation - Effectuation
of Title VI of the Civil Rights Act of 1964, and as said Regulations may be
amended.
In the event of a breach of any of the above non-discrimination covenants,
Lessor shall have the right to terminate this agreement and to reenter and
repossess said land and the facilities thereon, and hold the same as if said
agreement had never been made or issued.
B. EMPLOYMENT: The parties hereto hereby covenant not to discriminate
against an employee or applicant for employment with respect to his or her hire,
tenure, terms, conditions or privileges of employment, or any matter directly or
indirectly related to employment because of his or her age or sex, except where
based on a bona fide occupational qualification, or because of his or her race,
color, religion, national origin or ancestry, and to require a similar covenant
on the part of any sublessee hereunder and any subcontractor employed as a
result, or in connection with the
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exercise of rights granted and/or the performance of obligations assumed under
this Agreement.
C. AFFIRMATIVE ACTION PROGRAM: In addition to the foregoing, the parties
hereto agree to carry out and be subject to the provisions of Addendum 1,
entitled "NON-DISCRIMINATION AFFIRMATIVE ACTION AND SET ASIDE PROGRAMS FOR XXXXX
COUNTY" attached hereto and made a part hereof.
D. DISADVANTAGED BUSINESS ENTERPRISE: Lessee agrees to comply with the
following policy and requirements of the Department of Transportation:
1. POLICY. It is the policy of the Department of Transportation that
disadvantaged business enterprises as defined in 49 CFR Part 23 shall
have the maximum opportunity to participate in the performance of
contracts financed in whole or in part with Federal funds under this
Agreement. Consequently the disadvantaged business enterprise
requirements of 49 CFR Part 23 apply to this Agreement.
2. DBE OBLIGATION. (i) The recipient or its contractor agrees to
ensure that disadvantaged business enterprises as defined in 49 CFR
Part 23 have the maximum opportunity to participate in the performance
of contracts and subcontracts financed in whole or in part with
Federal funds provided under this Agreement. In this regard all
recipients or contractors shall take all necessary and reasonable
steps in accordance with 49 CFR Part 23 to ensure that disadvantaged
business enterprises have the maximum opportunity to compete for and
perform contracts. Recipients and their contractors shall not
discriminate on the basis of
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race, color, national origin, or sex in the award and performance of
Department of Transportation-assisted contracts.
Failure of a contractor or subcontractor to carry out the
requirements set forth in paragraph 23.43(a) of 49 CFR Part 23 shall
constitute a breach of contract and, after notification of the
Department of Transportation, may result in termination of the
Agreement or contract by the recipient or such remedy as the recipient
deems appropriate.
The definitions set forth in paragraph 23.5 of 49 CFR Part 23
shall apply to the foregoing statements concerning disadvantaged
business enterprises.
ARTICLE XXXIV
CONFORMITY OF AGREEMENT
In the event that Lessor shall hereafter enter into any lease, contract or
agreement with any other scheduled air transport operator, with respect to the
use of the Airport or terminal facilities, containing more favorable terms than
this Agreement, or shall hereafter grant to any other scheduled air transport
operator, rights or privileges with respect thereto which are not accorded to
Lessee hereunder, then the same rights, privileges and more favorable terms
shall be concurrently and automatically made available to Lessee.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
COUNTY OF XXXXX
CHIEF EXECUTIVE OFFICER
/s/ Xxxxxx X. XxXxxxxx
----------------------------------------
Xxxxxx X. XxXxxxxx
NORTHWEST AIRLINES, INC.
By XXXXX X. XXXXXXXXX
-----------------------------------
Its VP FACILITIES AND AIRPORT AFFAIRS
-----------------------------------
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EXHIBIT A
EXISTING AIRPORT LAYOUT PLAN
[Site Plan]
DAVEY TERMINAL
MAIN LEVEL - NORTH PORTION
[Site Plan]
EXHIBIT # NWA-1
DATE 1-1-1996
DAVEY TERMINAL
APRON LEVEL - CENTRAL PORTION
[Site Plan]
EXHIBIT # NWA-2
DATE 1-1-1996
DAVEY TERMINAL
APRON LEVEL - NORTH PORTION
[Site Plan]
EXHIBIT # NWA-3
DATE 1-1-1996
DAVEY TERMINAL
MEZZANINE LEVEL
[Site Plan]
EXHIBIT # NWA-4
DATE 0-0-0000
XXXXX XXXXXXXX
XXXX XXXXX - XXXXX XXXXXXX
[Site Plan]
EXHIBIT # NWA-5
DATE 0-0-0000
XXXXX XXXXXXXX
XXXXX XXXXX - XXXXX XXXXXXX
[Site Plan]
EXHIBIT # NWA-6
DATE 1-1-1996
CONCOURSE A - MAIN LEVEL
[Site Plan]
EXHIBIT # NWA-7
DATE 1-1-1996
CONCOURSE B - MAIN LEVEL
[Site Plan]
EXHIBIT # NWA-8
DATE 1-1-1996
CONCOURSE B - APRON LEVEL
[Site Plan]
EXHIBIT # NWA-9
DATE 1-1-1996
CONCOURSE 'C'
MAIN LEVEL - SOUTH EXPANSION
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
CONCOURSE C
APRON LEVEL - SOUTH EXPANSION PORTION
[Site Xxxx]
XXXXXXX # XXX-00
DATE 0-0-0000
XXXXXXXXX X
XXXX XXXXX - XXXXXXXXX XXXXXXX
[Site Xxxx]
XXXXXXX # XXX-00
DATE 0-0-0000
XXXXXXXXX X
XXXXX XXXXX - XXXXXXXXX XXXXXXX
[Site Plan]
EXHIBIT # NWA-13
DATE 1-1-1996
X.X. XXXXX TERMINAL
MAIN LEVEL - CENTRAL PORTION
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
X.X. XXXXX TERMINAL
APRON LEVEL - NORTHWEST PORTION
[Site Plan]
EXHIBIT # NWA-15
DATE 1-1-1996
CONCOURSE C - MAIN LEVEL
[Site Xxxx]
XXXXXXX # XXX-00
DATE 0-0-0000
XXXXXXXXX X
XXXXX XXXXX - XXXXXXXXX XXXXXXX
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
CONCOURSE D - MAIN LEVEL
[Site Plan]
EXHIBIT # NWA-18
DATE 1-1-1996
CONCOURSE D - APRON LEVEL
[Site Plan]
EXHIBIT # NWA-19
DATE 1-1-1996
CONCOURSE E: - MAIN LEVEL
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
CONCOURSE E - APRON LEVEL
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
CONCOURSE F - MAIN LEVEL
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
CONCOURSE F - APRON LEVEL
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
CONCOURSE F - TUNNEL LEVEL
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
CONCOURSE G
APRON LEVEL - NORTH PORTION
[Site Plan]
EXHIBIT # NWA-25
DATE 1-1-1996
CENTRAL SERVICES - MAIN LEVEL
[Site Plan]
EXHIBIT # NWA-26
DATE 1-1-1996
CENTRAL SERVICES - APRON LEVEL (SOUTH)
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
INTERNATIONAL TERMINAL
APRON LEVEL - SOUTH PORTION
[Site Xxxx]
XXXXXXX # XXX-00
DATE 1-1-1996
INTERNATIONAL TERMINAL
MEZZANINE LEVEL
[Site Plan]
EXHIBIT # NWA-29
DATE 0-0-0000
XXXX XXXXX - XXX XXXX (XXX)
[Site Xxxx]
XXXXXXX # XXX-00
DATE 7-1-1996
APRON XXXXX XXX XXXX
[Xxxx Xxxx]
XXXXXXX # XXX-00
DATE 7-1-1996
EXHIBIT D
TERMINAL AND EAST CONCOURSES
INTERNATIONAL ARRIVAL LEVEL
[Site Plan]
EXHIBIT D
EAST CONCOURSE - SOUTH
APRON LEVEL
[Site Plan]
EXHIBIT D
EAST CONCOURSE - SOUTH
APRON LEVEL
[Site Plan]
EXHIBIT D
TEMINAL AND EAST CONCOURSE - CENTER
DOMESTIC ARRIVAL / APRON LEVEL
[Site Plan]
EXHIBIT D
EAST CONCOURSE - NORTH
APRON LEVEL
[Site Plan]
EXHIBIT D
EAST CONCOURSE - SOUTH
CONCOURSE LEVEL
[Site Plan]
EXHIBIT D
TERMINAL AND EAST CONCOURSE - CENTER
DEPARTURE / CONCOURSE LEVEL
[Site Plan]
EXHIBIT D
EAST CONCOURSE - NORTH
CONCOURSE LEVEL
[Site Plan]
EXHIBIT D
EAST CONCOURSE
MEZZANINE LEVEL
[Site Plan]
EXHIBIT D
WEST CONCOURSE ALL LEVELS
[Site Plan]
CONCOURSE LEVEL
[Site Plan]
APRON LEVEL
[Site Xxxx]
XXXXXXXX XXXXX
XXXXXXX X-0
Protocol for Use of International Gates
Midfield Terminal
The international gates, together with related holdrooms, jetbridges, ramp
access and baggage facilities, will be made available in accordance with the
following priority of use:
1. Regularly scheduled international airline service, with existing service
having precedence over new service;
2. International charter arrivals, if and for so long as the Federal government
prohibits FIS operations at the Xxxxx International Terminal;
3. Regularly scheduled Northwest domestic service;
4. Delayed international charter arrivals when the expected delay for the
flight to use the Xxxxx International Terminal will exceed 90 minutes and
use of a Midfield Terminal FIS gate will not interfere with the scheduled
international or domestic use of the gate.
5. Non-scheduled or irregular charter arrivals and the use of a Midfield
Terminal FIS gate will not interfere with the scheduled international or
domestic use of that gate.
In making the determination of whether an international non-stop passenger
flight to the Airport is a regularly scheduled flight or a charter operation for
purposes of this protocol, the Airport will apply the following criteria:
1. Does the international operation generally have passengers connecting at the
Airport on-line, inter-line, or via code share, and the operational need for
connecting facilities?
2. Is the carrier operating the flight a signatory under the
airport agreement
for the Airport?
3. Does the carrier operating the flight hold all necessary government
approvals to operate international regularly scheduled service?
4. Is the carrier's international service primarily scheduled on a year-round
basis or does it primarily offer seasonal services to different locations?
5. Are the carrier's schedules published each month in the Official Airline
Guide and displayed in computer reservation systems? Are the fares regularly
published by the Airline Tariff Publishing Company?
6. Does the carrier providing the service provide reservation services and
create PNR (passenger name records) for the flights with its own employees?
International operations that meet these criteria overall shall be considered
international regularly scheduled flights for purposes of this protocol.
However, the failure to meet any one or more criteria shall not necessarily
preclude the operation from being considered an international regularly
scheduled flight. The Airport's goal of optimizing overall airport operating
efficiency shall be an important consideration.
-2-
Exhibit E
ALLOCATION OF BOND DEBT SERVICE
Detroit Metropolitan Xxxxx County Airport
(All figures in thousands, except where noted)
This exhibit details the methodology for allocating Bond Debt Service to
various components of the Airport. This is required when terminal rental rates
transition to a compensatory-based approach in FY2009. These steps should be
followed for each bond series and issuance. An example is provided to illustrate
the allocation methodology.
STEP 1: IDENTIFY NET FINANCEABLE COSTS FROM EACH BOND ISSUANCE
The first step is determine the net financeable project costs which
constitute each bond issuance. Net financeable costs should be grouped into one
of the following categories: Midfield Domestic Terminal, Midfield International
Terminal, Midfield Overhead, Existing Terminals, and all Airfield projects. The
following projects, related to the construction of the Midfield Terminal
Complex, are considered Midfield Overhead; tunnels and walkways, terminal
arrival and departure roadways, powerplant and utilities, and relocated
facilities.
EXAMPLE: 1998 BONDS
1998 BONDS
Bond Debt Service $11,400
NET FINANCEABLE COSTS
Midfield-Domestic $73,400
Midfield-International 7,600
Midfield-Overhead 10,700
Existing Terminals 1,000
Airfield 3,400
-------
Total Costs $96,100
STEP 2: ALLOCATE MIDFIELD OVERHEAD CAPITAL COSTS
The next step is to allocate the Midfield Overhead capital costs to either
the Midfield Domestic Terminal or the Midfield International Terminal. The
allocation of Midfield Overhead capital costs will be based on each terminal
(Midfield Domestic and International) share of net financeable costs in the bond
issuance.
EXAMPLE: 1998 BONDS
$ Share % Share
-------- -------
NET FINANCEABLE COSTS
Midfield-Domestic $73,400 90.6%
Midfield-International 7,600 9.4%
ALLOCATION OF MIDFIELD OVERHEAD COSTS
Midfield-Overhead $10,700
TO:
Midfield-Domestic $ 9,696
Midfield-International $ 1,004
-1-
Exhibit E-continued
ALLOCATION OF BOND DEBT SERVICE
Detroit Metropolitan Xxxxx County Airport
(All figures in thousands, except where noted)
STEP 3: DETERMINE PERCENTAGE SHARE OF NET FINANCEABLE COSTS
The third step is to determine the percentage share of net financeable costs
for each category. This share will be used to allocate Bond Debt Service. After
Step 2, allocation of Midfield Overhead costs, there will be four remaining
categories--Midfield Domestic terminal, Midfield International terminal,
Existing Terminals, and all Airport projects.
EXAMPLE: 1998 BONDS
NET FINANCEABLE COSTS
Midfield-Domestic $73,400
From Midfield-Overhead 9,696
-------
Total Midfield-Domestic $83,096 86.47%
Midfield-International $ 7,600
From Midfield-Overhead 1,004
-------
Total Midfield-International $ 8,604 8.95%
Existing Terminals $ 1,000 1.04%
Airfield $ 3,400 3.54%
------- -------
Total Costs $96,100 100.00%
STEP 4: ALLOCATE BOND DEBT SERVICE
The last step is to allocate Bond Debt Service to one of the four
categories. The allocation of Bond Debt Service is based on the percentage
share of net financeable costs calculated in Step 3. The allocated Bond Debt
Service will be incorporated into the compensatory-based terminal rental
rates.
EXAMPLE: 1998 BONDS
$ Share % Share
------- -------
1998 BONDS
Bond Debt Service $11,400
BOND DEBT SERVICE ALLOCATION
Midfield-Domestic $ 9,858 86.47%
Midfield-International 1,020 8.95%
Existing Terminals 119 1.04%
Airfield 403 3.54%
------- -------
Total Bond Debt Service $11,400 100.00%
Exhibit E
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Exhibit F
O&M EXPENSE ALLOCATION
Detroit Metropolitan Xxxxx County Airport
O&M EXPENSES ARE ALLOCATED TO MIDFIELD THEN DIVIDED BY GENERATING O&M
AND EXISTING TERMINAL COMPLEXES TOTAL USEABLE EXPENSES PER SQ FT
SPACE RENTAL RATES
Midfield-Domestic Midfield-Domestic Midfield-Domestic O&M
1) Midfield Complete Expense/ Sq Ft
Midfield-International Midfield-International Midfield-International
O&M Expenses/ Sq Ft
2) Existing Complex Existing Terminal Existing Terminal Complex
Complex O&M Expense/ Sq Ft
3) Other Airport Expenses Flow to
(Airfield, indirect Activity Fee
O&M, etc.)
STEP 1
O&M Expenses are allocated to Midfield and Existing Complexes. The
allocated O&M Expenses will be directly related to the operation and
maintenance of either the Domestic Midfield Terminal, the International
Midfield Terminal, or the Existing Complex (Smith, Davey, and Xxxxx)
Terminals. Other Airport O&M Expenses, like airfield and other indirect
operating costs will flow to the activity fee.
STEP 2
Allocated O&M Expenses for each terminal (Midfield Domestic, Midfield
International and Existing Terminals) are then divided by the total
useable space of each respective terminal. This generates an O&M Expense
per square foot which air carriers will begin paying in FY2009.
STEP 3
Indirect O&M Expenses will flow to the activity fee. Signatory Airlines
will pay these indirect O&M Expenses in proportion to their landed weight
at the Airport.
Exhibit G
CAPITAL IMPROVEMENT PROGRAM
Detroit Metropolitan Xxxxx County Airport
(In thousands of dollars, except as noted)
-----------------------------------------------------------------------------------------------------------------
1995 $ Construction A&E/Other Total Project
Cost(2) Fees(3) Contingency(3) Cost
-------------------------------------------------- ------------ ---------- -------------- -------------
AIRFIELD
1. Apron Replacement (Phase III-VII) $ 14,696 $ 7$5 $ 1,470 $ 16,900
2. Permanent Secondary De-icing $ 609 $ 30 $ 61 $ 700
3. Extend Taxiway "PP": between Taxiway Fox & Arc $ 3,306 $ 165 $ 330 $ 3,800
4. Runway 4/22 and Taxiways & Related Projects $ 92,348 $ 4,617 $ 9,235 $ 106,200
5. Extend Taxiway "S" from Fox to Runway 9R/27L $ 3,043 $ 152 $ 304 $ 3,500
6. Construct Taxiway Parallel to Taxiway "T" $ 8,000 $ 400 $ 800 $ 9,200
7. Parallel Xxxxx & Poet Pump Station 6B $ 18,609 $ 930 $ 1,861 $ 21,400
8. Rehab Runway 3l and 3C $ 5,565 $ 278 $ 557 $ 6,400
9. Hold Apron East of Runway 21C $ 2,522 $ 126 $ 252 $ 2,900
10. Replace 3C Keel Section $ 3,913 $ 196 $ 391 $ 4,500
11. Balance of SCAN Systems $ 609 $ 30 $ 61 $ 700
------------ ---------- -------------- -------------
SUB=TOTAL AIRFIELD PROJECTS $ 153,217 $ 7,661 $ 15,322 $ 176,200
------------ ---------- -------------- -------------
OTHER
12. Renovate/Replace Waste Disposal Building $ 2,609 $ 130 $ 261 $ 3,000
13. Sanitary Lift Station #1 $ 2,174 $ 109 $ 217 $ 2,500
14. Replace/Renovate Electric Secondary $ 5,652 $ 283 $ 565 $ 6,500
15. Revise Powerhouse Monitoring $ 1,130 $ 57 $ 113 $ 1,300
16. Chiller, Air Handling Unit, DDC Controls/Hotel $ 14,435 $ 722 $ 1,443 $ 16,600
17. Replace 4 Old Switchhouse on Xxxxxxx $ 1,739 $ 87 $ 174 $ 2,000
18. Burn Pit $ 2,483 $ 124 $ 248 $ 2,855
19. 12" Water Loop Connection (N-S and E-W) $ 4,435 $ 222 $ 443 $ 5,100
20. Expand Green Lot $ 348 $ 17 $ 35 $ 400
21. Noise Mitigation Program(1) $ 100,000 $ 5,000 $ 10,000 $ 115,000
22. Airport Equipment/Vehicles $ 17,391 $ 870 $ 1,739 $ 20,000
23. Roadway (Inner Perimeter Security Road) $ 8,696 $ 435 $ 870 $ 10,000
24. Concession Expansion (Miscellaneous) $ 1,739 $ 87 $ 174 $ 2,000
25. Re-roof Powerhouse $ 174 $ 9 $ 17 $ 200
26. South Access Road (Phases 2,3 & 4) $ 61,130 $ 3,057 $ 6,113 $ 70,300
27. Willow Run Project $ 12,174 $ 609 $ 1,217 $ 14,000
------------ ---------- -------------- -------------
SUB=TOTAL OTHER PROJECTS $ 236,309 $ 11,815 $ 23,631 $ 271,755
------------ ---------- -------------- -------------
TOTAL -- ALL PROJECTS $ 389,526 $ 19,476 $ 38,953 $ 447,955
------------ ---------- -------------- -------------
(1) MII-approved portion of the Noise Mitigation Program approximately
$55.05 million.
(2) Construction costs per Northwest Memorandum of Understanding (MOU) of
11/28/95 and or County and Northwest negotiations.
(3) Calculated based on rates in Northwest MOU (A&E/Other Fees @ 5%,
Contingency @ 10%).
EXHIBIT H
Corporation Counsel Staff Assigned to
Detroit Metropolitan Airport
Position Description Salary
-------- ----------- ------
9979 Principal Attorney $ 89,355
9976 Asst. Corp. Counsel $ 70,836
Attorney IV
9913 Asst. Corp. Counsel $ 58,909
Attorney III
Total Salaries $219,100
Fringe Benefits @ 59.47% $130,299
Total Salaries & Fringe Benefits $349,399
The above positions are assigned to the Airport on a full-time basis.
AIRPORT FINANCE OFFICE
996 SALARIES AND FRINGE INFORMATION
POSITION # CLASSIFICATION SALARY
---------- -------------- ------
66900 Dept Mgr 7 $ 57,967
66901 Dept Exec 6 67,244
66903 Buyer 2 32,249
66904 Dept Mgr 1 35,967
66905 Account Clerk 2 29,308
66907 Dept Mgr 3 39,555
66908 Clerical Leader 25,736
66909 Accountant 3 34,304
66910 Typist 3 20,303
66912 Clerical Leader 28,716
--------
TOTAL $371,349
FRINGES $220,841
The above positions are assigned to the Airport on a full-time basis.
