Exhibit 10.3(f)

 

 

 

Contract No. 38171

CLEVELAND HOPKINS INTERNATIONAL AIRPORT

 

AMENDMENT NO. 1

to

AGREEMENT AND LEASE

between

 

City of Cleveland, Ohio

Lessor

 

and

Continental Airlines, Inc.

Lessee

TABLE OF CONTENTS

 

 

ARTICLE I DEFINITIONS 2

ARTICLE II RIGHTS, PRIVILEGES AND PREMISES 11

Section 2.01 Use of Airport and Leased Premises 11

Section 2.02 Preferential Leased Premises 14

Section 2.06 Rights May be Extended to Affiliate 17

ARTICLE III OCCUPANCY; TERM 18

Section 3.01 Term 18

Section 3.03 Termination of Agreement 18

ARTICLE VII RENTALS, CHARGES AND FEES 18

Section 7.02 Rates and Charges 18

ARTICLE VIIi READJUSTMENT OF RENTALS AND LANDING

FEE 19

Section 8.03 Annual Reports 19

Section 8.04 Adjustment of Rentals 20

Section 8.05 Adjustment of Landing Fees 23

Section 8.06 Operating and Maintenance Expense

      Incentive Program 26

Section 8.09 Alternative Funding 29

ARTicle ix revenue bond funds 30

Section 9.02 Special Funds 30

Section 9.04 Payment to Bond Service Fund; Application

      Thereof 31

Section 9.06 Payment to Operating and Maintenance

      Fund; Application Thereof 32

article x rules and regulations; compliance with

LAWS 44

Section 10.02 Compliance with Laws 44

 

article xiii indemnification - liability insurance 46

Section 13.01 Indemnification 46

Section 13.02 Liability Insurance 46

article xiv waiver of subrogation - Property

INSURANCE 48

ARTICLE XVI ASSIGNMENT AND SUBLETTING 49

Section 16.01 Assignment 49

article xvii termination of lease in entirety 49

Section 17.03 Renegotiation of the Lease 49

article xix holding over 50

article xx miscellaneous provisions 50

Section 20.13 Non-Exclusivity 50

Section 20.14 Approvals 50

Section 20.22 Public Contract 51

Section 20.25 Continuation of Warranties 51

Signatures 52

THIS AMENDMENT NO. 1 TO AGREEMENT AND LEASE (hereinafter referred to as the
"First Amendment "), effective January 1, 2006, is entered into by and between
the City of Cleveland, Ohio, a municipal corporation and political subdivision
of the State of Ohio ("City"), through its Director of Port Control, pursuant to
the authority of Ordinance No. 1961-04, passed by the Council of the City on
November 15, 2004, and Continental Airlines, Inc., a corporation organized and
existing under the laws of the State of Delaware and authorized to do business
as a foreign corporation in the State of Ohio ("Airline"), duly authorized by
resolution of its Board of Directors, represented herein by an authorized
officer.

All capitalized terms contain herein and not otherwise defined are used as
defined in the Original Agreement identified below.

WITNESSETH:

WHEREAS, the City owns and operates the Airport; and

WHEREAS, the Airline is a Scheduled Airline that operates at the Airport and
desires to use or lease from the City certain premises and facilities at the
Airport and to acquire from the City certain rights and privileges in connection
with its use of those premises and facilities at the Airport; and

WHEREAS, the existing agreement between the City and the Airline terminates at
midnight, December 31, 2005 ("Original Agreement"); and

WHEREAS, the City and the Airline desire to amend the Original Agreement and
extend the term of the Original Agreement, as amended, to December 31, 2015 (the
Original Agreement as amended by this First Amendment is referred to as the
"Agreement").

NOW THEREFORE, in consideration of the premises and of the mutual promises made
in the Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the City and the Airline hereby agree to amend certain provisions of the
Original Agreement between the parties as follows:

ARTICLE I - DEFINITIONS

Article I is amended and restated to read in its entirety as follows:

The following words, terms and phrases, whenever used in the Agreement shall,
for the purpose of the Agreement, have the following meanings:

1.01 "Additional Revenue Bonds" means the additional revenue bonds issued
pursuant to the Agreement and the Indenture.

1.02 "Additional Term" means each 12-month period commencing on January 1 and
ending on the following December 31.

1.03 "Affiliate" shall mean an Air Carrier that is (i) a parent or subsidiary of
Airline, or shares an International Air Transport Association (IATA) flight
designator code with Airline at the Airport (Code-Sharing Partner), and (ii)
otherwise operates at the Airport under essentially the same trade name as
Airline, or a derivative thereof, and uses essentially the same livery as
Airline; provided that no major airline, as such term is defined by the FAA,
shall be classified as an Affiliate of another major airline, unless clause (i)
and clause (ii) above define the relationship between such airlines at the
Airport; and provided, further, that Airline may at any time give the City
ninety (90) days prior written notice that such an Air Carrier otherwise meeting
the definition of an "Affiliate" hereunder shall no longer be considered an
Affiliate of Airline for purposes of the Agreement.

1.04 "Air Carrier" means a carrier certificated by the Secretary of
Transportation under 49 U.S.C. Section 41102.

1.05 "Airfield Area" means those portions of the Airport, including the Ramp
Area, as they now exist or hereafter may be modified, changed or expanded,
providing for the landing and takeoff, handling, servicing, loading and
unloading, and other operations of aircraft. The Airfield Area and the Terminal
Complex in their present condition are shown on Exhibit __ of the First
Amendment.

1.06 "Airline" means Continental Airlines, Inc., a corporation organized and
existing under and by virtue of the laws of the State of Delaware.

1.07 "Airline Constructed Space" means space located within the Terminal Complex
at the Airport constructed at the sole cost and expense of an Air Carrier.

1.08 "Airport" means Cleveland Hopkins International Airport, more fully
described in Exhibit __ of the First Amendment, as it now exists or hereafter
may be changed, modified or expanded.

1.09 "Airport Development Fund" means the Special Fund created under the Sixth
Supplemental Indenture, consisting of the Airport Account and the Airline
Account.

1.10 "Airport Revenue Bonds" means the revenue bonds authorized and issued by
City pursuant to the Agreement and the Indenture.

1.11 "Airport Revenues" means: (a) all rentals, charges, landing fees, use
charges and concession revenue now or hereafter received by or on behalf of City
in its proprietary capacity as the owner of the Airport System in connection
with the operation, improvement and enlargement of the Airport System, or any
part thereof; (b) subject to the provisions of the Indenture, all income or
revenues resulting from the investment of any of the Special Funds; and (c) all
gifts, grants, reimbursements or payments received from governmental units or
public agencies for the benefit of the Airport System which are (i) not
restricted in application to a special purpose and (ii) otherwise lawfully
available for the payment of charges with respect to the Revenue Bonds. Airport
Revenues shall not include any revenue or income from any Special Facility to
the extent such revenue or income is pledged to pay principal, interest or any
other charges for Special Revenue Bonds or other obligations issued in
anticipation thereof, or to the extent such revenue or income is for the use of
City in reimbursement of costs incurred by it in the construction or provision
of Special Facilities.

1.12 "Airport System" means the Airport and Burke Lakefront Airport.

1.13 "Airport System Cost Centers" means those cost centers more fully defined
in Exhibit __ of the First Amendment.

1.14 "Annual Budget" means the budget referred to in Section 8.03 of the
Agreement prepared by the Director of Port Control and approved by resolution of
the Board of Control.

1.15 "Annual Reports" means the reports prepared by the Director of Port Control
pursuant to Section 8.03 of the Agreement.

1.16 "Authorizing Legislation" means the legislation enacted by the Council from
time to time authorizing the Revenue Bonds, as the same may from time to time be
lawfully amended, modified or supplemented.

1.17 "Board of Control" means the Board of Control of City or such division,
department, bureau or agency as may from time to time be designated by the City
to exercise functions equivalent or similar to those now exercised by the Board
of Control with respect to the Airport System or any part thereof.

1.18 "Burke Lakefront Airport" means the reliever airport facility operated by
City more fully described in Exhibit __ of the First Amendment , as it now
exists or may hereafter be changed, expanded or modified.

1.19 "Commissioner of Airports" means the Commissioner of Cleveland Hopkins
International Airport as designated by City, or such other person, division,
department, bureau or agency as may from time to time exercise functions
equivalent or similar to those now exercised by the Commissioner of Airports.

1.20 "Common Use Facilities" means facilities at the Airport under the control
of the City, managed by the City or by a third party contracted by the City, and
made available to itinerant users on the terms and conditions described in the
City's Common Use Policy as in effect from time to time.

1.21 "Concourse" means, respectively, the A, B, C and D Concourses, as they now
exist or hereafter may be changed, expanded or modified. For purposes of the
Concourse Improvement Factor referred to in Section 8.04(a)(iii) of Article
VIII, "Concourse" shall not mean any expansion of the A, B, C, or D Concourses
built at the sole cost and expense of a Scheduled Airline and not financed by
Revenue Bonds or General Obligation Debt. The A, B, C and D Concourses are shown
in their present condition in Exhibits __, __ and __ of the First Amendment.

1.22 "Council" means the City Council of City or such other division,
department, bureau or agency as may from time to time be designated by Council
to exercise functions equivalent or similar to those now exercised by the
Council with respect to the Airport System or any part thereof.

1.23 "CPI" means the Consumer Price Index for All Urban Consumers - All Items
(1982-1984 = 100), U.S. City Average, published by the United States Department
of Labor, Bureau of Labor Statistics. In the event the Bureau of Labor
Statistics issues a revised index with a conversion table by which the CPI can
be made applicable and the CPI is no longer published, the revised index, as
converted, shall be applicable.

1.24 "Credit Support Instruments" means letters of credit, lines of credit,
stand-by, contingent, or firm securities purchase agreements, insurance, surety
arrangements, guarantees, and other arrangements that provide for direct or
contingent payment of Bond service charges on Revenue Bonds, debt charges on
Subordinated Indebtedness or General Obligation Debt or amounts owed under Hedge
Agreements, or for security in the event of nonpayment of those Bond service
charges, debt charges or other amounts, or upon certain conditions occurring
under put or similar arrangements, or for otherwise supporting the credit or
liquidity of Revenue Bonds, Subordinated Indebtedness, General Obligation Debt
or Hedge Agreements, and includes credit, reimbursement, marketing, remarketing,
indexing, carrying, and subrogation agreements, and other agreements and
arrangements for payment and reimbursement of the person providing the credit
support.

1.25 "Director of Port Control " means the person so designated by City or such
other person, division, department, bureau or agency as may from time to time
exercise functions equivalent or similar to those now exercised by the Director
of Port Control.

1.26 "Environmental Laws" means each and every applicable law, statute,
ordinance, regulation, rule, judicial or administrative order or decree, permit,
license, approval, authorization or similar requirement of each and every
applicable federal, state and local governmental authority relating to any
Hazardous Substances, including but not limited to the Clean Water Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Hazardous Materials Transportation Act, the Resource Conservation
and Recovery Act, the Hazardous Substances Account Act, the Hazardous Substances
Act, the Underground Storage Tank Act of 1984, the Toxic Substances Control Act,
and the Superfund Amendments and Reauthorization Act.

1.27 "Exclusive Leased Premises" means any portions of the Leased Premises in
the Terminal Complex that are under control of Airline and no other Scheduled
Airline, as specifically described in Exhibit ____ of the First Amendment .

1.28

"Federal Aviation Administration" means the Federal Aviation Administration,
created by the United States Government under the Federal Aviation Act of 1958,
as amended, or such other agency or agencies of the United States Government as
may from time to time have similar jurisdiction over Airline or its business.

1.29 "F.I.S." means the federal inspection facility at the Airport that is
operated by agencies of the United States Government for the inspection of
internationally arrived passengers, cargo and freight, or such other division,
department, bureau or agency as may from time to time exercise functions
equivalent or similar to those now exercised at the F.I.S. with respect to the
Airport System or any part thereof.

1.30 "Fiscal Year" means the twelve-month period commencing on January 1 and
expiring on December 31 during the period of the Agreement.

1.31 "General Obligation Debt" means any general obligation notes and bonds
issued by City in connection with the financing of improvements and additions to
the Airport System. As of January 1, 2006 there is no outstanding General
Obligation Debt of the City relating to the Airport System.

1.32 "Hazardous Substance(s)" means any substance, material, condition, mixture
or waste which is now or hereafter: (a) defined as a "hazardous waste",
"hazardous material", "hazardous substance", "extremely hazardous waste", or
"restricted hazardous waste" under any provision of State, federal or other
applicable law; (b) classified as radioactive materials; (c) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
Section 1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307
of the Clean Water Act (33 U.S.C. Section 1317); (d) defined as a "hazardous
waste" pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq. (42 U.S.C. Section 6903); (e) defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. 9601);
(f) determined to be a "hazardous chemical substance or mixture" pursuant to the
Toxic Substance Control Act, 15 U.S.C. Section 2601 et seq. (15 U.S.C. Section
2605);or (g) determined by State, federal or local governmental authorities to
pose or be capable of posing a risk of injury to human health, safety or
property (including but not limited to petroleum and petroleum byproducts,
asbestos, polychlorinated biphenyls, polynuclear aromatic hydrocarbons, cyanide,
lead, mercury, acetone, styrene and "hazardous air pollutants" listed pursuant
to the Clean Air Act, 42 U.S.C. Section 7412).

1.33 "Hedge Agreement" means interest rate swaps, swap option, rate cap, rate
collar and other arrangements undertaken with respect to Revenue Bonds or
Subordinated Indebtedness to reduce costs of borrowing or optimize relative
amounts of fixed and variable rate obligations or reduce the risk of variations
in debt service costs, including without limitation, arrangements by which
different interest costs or receipts at, between or among fixed or variable
interest rates, or at different fixed or variable interest rates or maturities
are exchanged in respect of Revenue Bonds or Subordinated Indebtedness.

1.34 "Indenture" means the Trust Indenture, dated as of November 1, 1976,
between City and J.P. Morgan Trust Company National Association, as successor
Trustee, including the Authorizing Legislation, as the same may be duly amended,
modified or supplemented in accordance with the provisions thereof.

1.35

"Joint Leased Premises" means the Leased Premises in the Terminal Complex that
are under the control of Airline and one or more other Scheduled Airlines, as
specifically described in Exhibit ____ of the First Amendment.

1.36 "Joint Use Formula" is a formula pursuant to which (i) twenty per cent of
any specified charge shall be prorated equally among those Scheduled Airlines
using the Joint Leased Premises, and (ii) eighty per cent of any specified
charge shall be based on a percentage representing that Scheduled Airline's
number of passengers deplaning at the Airport as a percentage of the total
number of deplaning passengers of all Scheduled Airlines at the Airport during
the latest year for which such figures are available as to all Scheduled
Airlines. For the purposes of the Agreement, the term "deplaning" shall relate
to only those passengers disembarking an aircraft at the Airport who do not
immediately board another aircraft departing from the Airport.

1.37 "Leased Premises" means, with respect to the Airline, its Exclusive Leased
Premises, its Preferential Leased Premises and its Joint Leased Premises.

1.38 "Majority In Interest" means, except with respect to the Terminal Complex,
either: (i) fifty percent or more in number of all the Scheduled Airlines, which
percentage has, on the date in question, more than fifty percent of the
aggregate by Maximum Landing Weight of Revenue Aircraft Arrivals of all
Scheduled Airlines at the Airport during the latest twelve-month period for
which such figures are available as to all Scheduled Airlines; or,
alternatively, (ii) forty percent or more in number of all Scheduled Airlines,
which percentage has, on the date in question, more than seventy percent of the
aggregate by Maximum Landing Weight of Revenue Aircraft Arrivals of all
Scheduled Airlines at the Airport during the latest twelve-month period for
which such figures are available as to all Scheduled Airlines. "Majority in
Interest" with respect to the Terminal Complex means fifty percent or more in
number of all Scheduled Airlines having Exclusive Leased Premises and
Preferential Leased Premises in the Terminal Complex, which percentage has, on
the date in question, more than fifty percent of the total Exclusive Leased
Premises and Preferential Leased Premises of all Scheduled Airlines, on a square
foot basis, in the Terminal Complex.

1.39 "Maximum Landing Weight" means the maximum weight, in 1,000 pound units, at
which each aircraft operated by Airline or the Scheduled Airlines is authorized
to land at the Airport, as specified in Airline's flight manual approved by the
Federal Aviation Administration governing that type of aircraft.

1.40 "Non-Scheduled Airlines" means any Air Carrier that is not a Scheduled
Airline.

1.41 "Other Available Funds" means any moneys transferred to the Revenue Fund by
the City from any other Special Fund, including without limitation, moneys
transferred to the Revenue Fund from the Improvement Fund or the Surplus Fund or
the Airport Development Fund, and any moneys not otherwise constituting Airport
Revenues and deposited in, or transferred to, the Revenue Fund or the Bond Fund,
including without limitation, Passenger Facility Charges; provided that any such
moneys have not been taken into account in the calculation of the amount of Bond
service charges on outstanding Revenue Bonds with the effect of reducing those
Bond service charges.

1.42 "Preferential Leased Premises" means the space within the Terminal Complex
described in Exhibit __ of the First Amendment that is leased to Airline on a
preferential, nonexclusive use basis as provided in Section 2.02. Premises shall
be assigned on a preferential leased basis only to Scheduled Airlines.

1.43 "Ramp Area" means the aircraft parking and maneuvering areas adjacent to
the Terminal Building and the Concourses.

1.44 "Revenue Aircraft Arrivals" means any aircraft arrival at the Airport for
which Airline has received or made a monetary fee or charge, including, without
limitation, scheduled trips, charters, sightseeing, and other trips for which
revenue is received. Such term shall also include training and test flights,
ferry, courtesy, inspection, or other trips for which no fee or charge is
received, but only to the extent that the number of such flights operated by
Airline during any calendar month is in excess of five percent of the number of
Revenue Aircraft Arrivals of Airline at the Airport during such calendar month.
A revenue flight which returns to the Airport because of mechanical,
meteorological, or other precautionary reasons, without landing at another
airport, shall not be considered a Revenue Aircraft Arrival.

1.45 "Revenue Bonds" means any or all of the Airport Revenue Bonds and
Additional Revenue Bonds. In determining the interest payable with respect to
any Revenue Bonds, there shall be included any amounts owed by the City to a
provider of a Credit Support Instrument for those Revenue Bonds and to a
counterparty under any Hedge Agreement relating to those Revenue Bonds in
respect of periodic, interest equivalent payments but not any amounts owed in
respect of early termination of any Hedge Agreement or Credit Support
Instrument.

1.46 "Scheduled Airline(s)" means any Air Carrier that either: (a) has entered
into an agreement with the City in all material respects equivalent to the
Agreement and commits to lease from the City one or more preferential use
aircraft gates or in the case of an all cargo Air Carrier commits to
concurrently sign a lease for a cargo building or other premises containing at
least 5,000 square feet, if that space is available. If that minimum amount of
square footage is not available for lease to an all cargo Air Carrier, the
Director of Port Control may grant Scheduled Airline status to an all cargo Air
Carrier leasing a lesser amount of space, provided that if additional cargo
premises becomes available, the cargo Air Carrier shall commit to increase the
space leased from the City or other on-Airport lessee, or; (b) an existing lease
from the City under which the Air Carrier leases one or more exclusive use
aircraft gates, provided that the scheduled expiration of such lease is expected
to occur after the scheduled expiration of the Agreement and such Air Carrier
has signed (or is then willing to sign) an agreement in all material respects
equivalent to the Agreement (with no additional requirement that additional
space be leased).

1.47 "Special Facility or Facilities" means any hangar, maintenance buildings,
or any other facility, improvement, or structure, acquired or constructed on the
Airport System, the cost of construction, acquisition, maintenance and operation
of which are financed by Special Revenue Bonds and user charges.

1.48 "Special Funds" means any and all funds or accounts identified in Article
IX and held and administered by the Trustee or City.

1.49 "Special Revenue Bonds" means City's revenue bonds or other obligations
authorized and issued for the purpose of acquiring, constructing or improving a
Special Facility to be leased to, or contracted for operation by, any person or
entity, including City, with the income therefrom to be used for the payment of
sums adequate to pay all principal, interest, redemption premiums, if any, and
reserves, if any, as required in the legislation authorizing such Special
Revenue Bonds and all operating expenses incurred in the operation of the
Special Facility. Special Revenue Bonds are not issued under or secured by the
Indenture.

1.50 "Subordinated Indebtedness" means any obligation or evidence of
indebtedness incurred by the City in accordance with the Indenture, the debt
service charges of which are payable and secured on a basis subordinate to Bond
service charges on Revenue Bonds. In determining the interest payable with
respect to any Subordinated Indebtedness, there shall be included any amounts
owed by the City to a provider of a Credit Support Instrument for that
Subordinated Indebtedness and to a counterparty under any Hedge Agreement
relating to that Subordinated Indebtedness in respect of periodic, interest
equivalent payments but not any amounts owed in respect of early termination of
any Hedge Agreement or Credit Support Instrument.

1.51 "Terminal Building" means the terminal building and the parking and roadway
system, as they now exist or hereafter may be expanded, changed or modified.
Those facilities are shown in their present condition on Exhibit __ of the First
Amendment.

1.52 "Terminal Complex" means the Terminal Building, the Concourses and any
Airline Constructed Space.

ARTICLE II - RIGHTS, PRIVILEGES AND PREMISES

Sections 2.01 and 2.02 of the Original Agreement are amended and restated, and a
new Section 2.06 is added to the Original Agreement as follows:

2.01 Use of Airport and Leased Premises

Subject to the terms and conditions hereinafter set forth, the rules and
regulations prescribed by City and such other agreements as Airline may have
with City as are not terminated (as herein provided for), Airline shall have the
right to operate at the Airport its air transportation system for the carriage
of persons, property and mail, including, to the extent such are normally
incidental to such air transportation system, the following:

(a) The use, in common with other duly authorized users, of the Airfield Area
and the public areas of the Terminal Complex.

(b) The right of landing, taking off, taxiing, pushing, towing, loading,
unloading, repairing, maintaining, conditioning, catering, servicing, testing or
parking its aircraft of its choice or other equipment owned or operated by
Airline, including the right to provide or handle all or part of the operations
or services of another air transportation company.

(c) The right of purchase, sale, disposal and exchange of Airline's aircraft,
engines, accessories, fuel, oil, lubricants and other equipment, and materials
or supplies.

(d) The right of servicing of aircraft and other equipment owned, or operated,
by Airline or other Scheduled Airlines, by truck or otherwise, with fuel, oil,
lubricants, parts, or aircraft supplies, at aircraft loading and unloading
aprons and other locations designated by City for such servicing; provided,
however, that any entity providing such service at the Airport, other than a
Scheduled Airline, may be required to first secure and thereafter hold a valid
lease, license or other agreement with City for the right to operate at the
Airport, and shall pay City such reasonable rentals, fees and/or percentages of
the charges for such services as City and such entity may agree upon for such
right.

(e) The right of ticketing passengers, of loading and unloading persons,
property and mail at the Airport by such motor vehicles or other means of
conveyance as Airline may require as is consistent with normal airport practice;
provided, however, that any entity providing such service at the Airport, other
than a Scheduled Airline, may be required to first secure and thereafter hold a
valid lease, license or other agreement with City for the right to operate at
the Airport, and shall pay City such reasonable rentals, fees and/or percentages
of the charges for such services as City and such entity may agree upon for such
right; and provided, further, that any ground transportation commercial carrier
(including Airline, except for such ground transportation as Airline may provide
solely for the benefit of its employees) regularly transporting persons or their
baggage to and from the Airport shall first secure and thereafter hold a valid
lease, license or other agreement with City for the right to carry persons or
their baggage to and from the Airport and shall pay City such rentals, fees
and/or percentages of the charges for such ground transportation as City and
such carrier may agree upon for such right.

(f) The right to install at Airline's expense identifying signs on the Leased
Premises, the number, type, size, design and location of all such signs as may
be subject to graphic standards adopted by City. Airline shall have in each
instance the prior written approval of City, and such right shall be subject to
City's right to lease space for advertising signs throughout the Terminal
Complex, excluding the Exclusive Leased Premises. City will provide Airline
information concerning the content of any advertising that will be placed in the
Preferential Leased Premises occupied by Airline in advance of placement. Unless
Airline objects to the content of the advertising by written notice delivered to
the Director of Port Control within two business days of Airline's receipt of
the information, Airline shall be deemed to have no objection to the
advertising. If Airline timely objects to the advertising, City shall seek
Airline's consent to alternative content.

(g) The right to install, maintain and operate such radio, communication,
meteorological, security screening and aerial navigation equipment and
facilities as may be necessary, in the opinion of Airline, for its operation;
provided, however, that the location of such equipment and facilities must be
first approved by City and shall not interfere with the full and proper use of
the Airport System.

Airline shall not install or operate pay telephones in the Terminal Complex but
may have pay telephones installed by companies having agreements with City for
such installations, if such shall be for the use of Airline's employees and
located in areas not available to the general public; provided, however, that if
such company or companies choose not to install such devices, Airline may make
arrangements for installation of such devices, subject to City's standard fees
and charges and provided City shall have the right to charge for the cost of
electric power used in the operation of the pay telephones.

Airline shall have the right to install drink vending machines and food vending
machines in its non-publicly accessible Leased Premises for the sole use of
Airline's employees, contractors and agents. For avoidance of doubt, it is
agreed that neither Airline nor any such vendor shall be required to pay the
City any concession or privilege fee with respect to those vending machines.
Vending machines shall not be within the view of the general public and all
machine locations are subject to the prior approval of City. City shall have the
mutual right to install drink vending machines and food vending machines in its
non-publicly accessible areas for the sole use of City's employees, contractors
and agents.

Section 2.02 Preferential Leased Premises

(a) City grants to Airline the nonexclusive use in accordance with the Agreement
of the areas in and around the Terminal Complex that are described in Exhibit __
of the First Amendment (the Preferential Leased Premises). Airline shall have
priority in using the Preferential Leased Premises. City seeks to maintain open
access to the Airport and to achieve balanced utilization of the Airport and,
accordingly, City may require the shared use of the Preferential Leased Premises
as provided in this Section.

(b) If an Air Carrier seeks to expand its services at the Airport or an Air
Carrier seeks entry at the Airport and, in either case, the City cannot meet the
space needs of that Air Carrier from then unleased space in the Terminal
Complex, the City shall direct that Air Carrier to request one or more Scheduled
Airlines to voluntarily permit that Air Carrier to use portions of the Scheduled
Airlines' preferentially leased space. If the Air Carrier makes that request of
Airline, Airline shall make a reasonable effort to accommodate the request in a
timely manner from any of its Preferential Leased Premises.

(c) In the event that:

(1) an Air Carrier has requested space from the Scheduled Airlines because the
City was not able to meet its space needs from unleased space, and

(2) that Air Carrier was unable to obtain the space or facilities needed for its
operations from any of the Scheduled Airlines, and

(3) that Air Carrier has demonstrated to the satisfaction of the City that it
contacted all Scheduled Airlines and exhausted all reasonable efforts to find
reasonable accommodations for its proposed operations,

then, upon receipt by the City from that Air Carrier of a written request for
space or facilities of a type leased by the City to the Scheduled Airlines on a
preferential basis, the City may grant that Air Carrier the right of temporary
or shared use of a designated portion of Airline's Preferential Leased Premises,
including the use of passenger loading bridges and other equipment reasonably
necessary for the effective use of the space, whether owned by the City or by
Airline, but excluding Airline's members-only clubs within its Preferential
Leased Premises. The City shall follow the provisions in paragraph (d) of this
Section in connection with any grant to an Air Carrier of the right to use any
portion of Airline's Preferential Leased Premises.

(d) Upon determining that an Air Carrier needs space or facilities leased to
Scheduled Airlines on a preferential basis, the City shall serve written notice
to all Scheduled Airlines of that determination and of the City's intention to
make a decision in not less than fifteen (15) calendar days as to how the Air
Carrier will be accommodated. In determining how to accommodate the Air Carrier,
the City will assess the degree of utilization of space in the Terminal Complex
by all Scheduled Airlines. The City will consider all factors it deems relevant.
Those factors may include: the average number of flight arrivals and departures
per aircraft parking position per day; flight scheduling considerations;
potential labor conflicts; the number, availability and type of aircraft parking
position locations (e.g. wide body or narrow body); the preferences of the
Scheduled Airlines as to which of their specific premises are designated for
temporary or shared use by the Air Carrier requesting space; and other
operational considerations.

The Air Carrier requesting space shall enter into written agreements with the
City and with each Scheduled Airline providing space. Those agreements shall
provide for the indemnification of the City and each Scheduled Airline providing
space on terms substantially similar to the indemnification provided to the City
by Airline under the Agreement. Those agreements further shall provide for the
provision of insurance, naming both the City and the Scheduled Airlines
providing space as additional insureds, providing coverage substantially similar
to that provided to the City by Airline under the Agreement.

The Air Carrier shall agree to pay each Scheduled Airline providing the shared
space an amount equal to (x) the pro rata share of the sum of the rentals and
other amounts payable by each Scheduled Airline under its agreement with the
City with respect to the use of space in the Terminal Complex for the portion of
that space to be used by the Air Carrier, plus (y) an amount sufficient to
recover each Scheduled Airline's direct costs, operation and maintenance
expenses and any capital and equipment costs reasonably allocable to the
property owned by the Scheduled Airline that is to be shared with the Air
Carrier. Airline agrees that, in the event that Airline is one of the Scheduled
Airlines providing the shared premises to the Air Carrier, it will provide the
City and the Air Carrier an estimate of Airline's direct costs, operation and
maintenance expenses and any capital and equipment costs reasonably allocable to
the space to be shared or temporarily used. The City may, in its sole
discretion, review Airline's allocation methodology and/or audit its costs. In
the event the Air Carrier fails to make prompt and full payment to any Scheduled
Airline providing shared space, the Scheduled Airline shall not have any
obligation to continue to provide the shared space.

The written agreement between the Air Carrier obtaining shared space and the
Scheduled Airline providing the shared space shall be submitted to the City for
review and written approval prior to the effective date of that agreement.

In the event that Airline is required to share with an Air Carrier a portion of
its Preferential Leased Premises, Airline shall have priority in all aspects of
the use of the shared portion of the Preferential Leased Premises (including
overnight parking of its aircraft) over all other Air Carriers using those
Preferential Leased Premises. Airline shall provide not less than thirty (30)
days' prior written notice to the Airport and the Air Carrier sharing the
Airline's Preferential Leased Premises of any change in Airline's scheduling or
ordinary course of usage of those premises that may affect the availability of
the premises for use by the Air Carrier sharing them.

(e) Notwithstanding anything in the Agreement to the contrary, the City may
grant an Air Carrier the right to temporarily use a designated portion of
Airline's Preferential Leased Premises (excluding Airline's member-only clubs)
in nonrecurring emergency or safety related circumstances so long as such use
will not unreasonably adversely affect Airline's air transportation operations
at the Airport. Airline shall not be responsible for any damage, destruction or
loss of property caused by such Air Carrier's temporary use of the Airline's
Preferential Leased Premises. The City agrees to make commercially reasonable
efforts to cause any Air Carrier that damages or destroys any portion of
Airline's Preferential Leased Premises to pay all costs of repairing and
restoring any property so damaged or destroyed. Airline shall cooperate with the
City to enable the City to make any necessary repairs to the damaged
Preferential Leased Premises, including making those Premises available to the
City, making personnel available to the City and providing drawings or other
relevant documents to the City. Airline shall not be charged rent for any such
damaged or destroyed Preferential Leased Premises, during the period of time
those Premises are not available for use by Airline, and Airline shall not be
responsible for any such damage or destruction.

Section 2.06 Rights May be Extended to Affiliate. Airline may submit a written
request to the City that the rights and obligations of Airline under the
Agreement be given to one or more entities meeting the standards for an
Affiliate of Airline (and also that Airline may provide services that are
permitted under the Agreement to be performed by Airline for that Affiliate)
without the payment of any additional fees, charges, or premiums, including that
the Affiliate shall (1) be charged at the same landing fee rates as Airline, (2)
be considered as one party with Airline for purposes of calculating any joint
use or shared use space charges, and (3) participate in any reconciliation
process related to landing fees. That written request shall be accompanied by
(a) information concerning the legal organization of the Affiliate, its legal
relationship to the Airline, copies of its most recent audited financial
statements and other information about its organization, operations and
financial condition as may reasonably be requested by the City, (b) a written
guarantee from Airline, in a form acceptable to the Director of Law of the City,
of the payment of all terminal rentals, landing fees or other scheduled rates
and charges owed in respect of such Affiliates(s) operations under the
Agreement, and (c) an agreement between the City and the Affiliate,
substantially in the form of the Agreement between Airline and City, signed by
authorized officials of the Affiliate. Upon receipt of that information and that
guarantee and agreement, and so long as Airline remains a signatory to the
Agreement, City, agrees to treat that Air Carrier as an Affiliate of Airline
under the Agreement. If Airline notifies the City that such Air Carrier shall no
longer be considered an Affiliate of Airline under the Agreement, its guarantee
shall not apply to any fees or charges incurred by such Air Carrier after the
effective date of termination of "Affiliate" status as provided in Section 1.03
of the Agreement. Affiliate will not be entitled to a separate Majority In
Interest vote as a result of this relationship to Airline; provided that
Affiliate's operational statistics shall be consolidated with Airline's for
purposes of determining Airline's Majority In Interest voting status.

ARTICLE III - OCCUPANCY; TERM

Sections 3.01 and 3.03 are amended and restated as follows:

3.01 Term

The Original Agreement as amended by the First Amendment, and all obligations,
including rentals, charges and fees payable pursuant thereto, shall commence on
the date of the First Amendment and terminate at midnight, December 31, 2015,
except rentals, charges and fees accruing or incurred prior to the termination
date shall be paid thereafter by Airline as otherwise provided in Article VII,
and any excess or deficit of Airport Revenue over Airport System Expense (as
defined in Article VIII hereof) for the final Additional Term shall be payable
by City or Airline, as the case may be, upon receipt of the annual statements
referred to in Section 20.16 for such final Additional Term.

3.03 Termination of Agreement

If Airline does not continue to lease Preferential Leased Premises and Airline's
scheduled service decreases below three departures per calendar day and such
decrease continues for more than thirty (30) consecutive calendar days, then the
Agreement may be terminated by the City and Airline shall be subject to the same
obligations, fees and charges as other airlines using the Airport which are not
Scheduled Airlines as defined in the Agreement.

ARTICLE VII - RENTALS, CHARGES AND FEES

Section 7.02 of the Agreement is amended and restated in its entirety as
follows:

7.02. Rates and Charges

The Agreement governs the methods of determining the rentals, charges and fees
to be paid by Airline during the term of the Agreement. Section 20.03 of the
Agreement shall not be construed to permit, and accordingly the City agrees that
it shall not enter into, any modification, supplement or amendment to the
Indenture that would prejudice the rights of the Airline under the Agreement.
The City represents to Airline that, as of the date hereof, nothing in the
Agreement materially conflicts with the provisions of the Indenture.

ARTICLE VIII - READJUSTMENT OF RENTALS AND LANDING FEE.

Sections 8.03, 8.04, 8.05, 8.06 and 8.09 are amended and restated as follows:

8.03 Annual Reports

(a) At least 120 days prior to the end of the then current Additional Term, the
Scheduled Airlines, including Airline, shall submit to City in writing their
composite Maximum Landing Weight forecast for the succeeding Additional Term. At
least 90 days prior to the end of the then current Additional Term, City shall
submit to the Scheduled Airlines the following Annual Reports as to each Airport
System Cost Center:

(1) Its proposed Annual Budget for the succeeding Additional Term reflecting all
estimated Airport System maintenance, operating and administrative expenses,
including administrative expenses of City to be vouchered to the Airport System
during the succeeding Additional Term, and all capital improvements at the
Airport System for the succeeding Additional Term which are not separately
scheduled pursuant to subsection (4) hereof and the amounts of all loans or
advances which may have been made by City, in its discretion, to the Airport for
the payment of Airport System Expenses which are to be repaid in the succeeding
Additional Term.

(2) A schedule of the principal and interest payments to accrue during the
succeeding Additional Term in connection with the Revenue Bonds, any
Subordinated Indebtedness and any General Obligation Debt. A statement of any
amounts owed with respect to Credit Support Instruments or Hedge Agreements.

(3) A statement of estimated Airport Revenues for the succeeding Additional Term
from other than the Scheduled Airlines.

(4) A schedule of the capital improvements at the Airport System proposed for
the succeeding Additional Term, the inclusion of which as capital improvements
in such succeeding Additional Term is subject to the provisions of Section 8.07
hereof.

(5) City's calculation of adjusted Rentals and Landing Fees for the succeeding
Additional Term.

(b) Within thirty days after receipt of the Annual Reports, a formal discussion
shall be held between representatives of City and the Scheduled Airlines at
which the Scheduled Airlines may present objections to the Annual Reports, or
any item therein. City shall give due consideration to any suggestions, comments
or requests of Airline. Before the beginning of the succeeding Additional Term,
City shall, through resolution of its Board of Control, adopt the Annual Budget
substantially in accordance with the proposed Annual Budget submitted as part of
the Annual Reports, as it may have been revised as a result of City's
discussions with the Scheduled Airlines and shall promptly furnish Airline with
a copy of such approved Annual Budget together with its resulting calculation of
Rentals and Landing Fees which shall be effective from and after January 1 of
such Additional Term. If an Annual Budget shall not have been so adopted by the
Board of Control prior to commencement of such Additional Term, the Rentals and
Landing Fees in effect in the preceding Term shall remain in effect until a new
Annual Budget has been so adopted by the Board of Control and City has
calculated Rentals and Landing Fees in accordance therewith, which revised
Rentals and Landing Fees shall be effective retroactively to January 1 of such
Additional Term.

8.04 Adjustment of Rentals

The Rentals shall be adjusted annually in the following manner:

(a) An average rental rate for the Terminal Building, an average rental rate for
each Concourse, and an average rental rate for Airline Constructed Space shall
be computed for each Additional Term as follows:

(i) The total estimated maintenance, operating and administrative expenses of
the Terminal Building, all Concourses, Airline Constructed Space and the Parking
and Roadways Cost Centers for the succeeding Additional Term, all as set forth
in the Annual Reports, shall be divided by the total square footage of Terminal
Complex space leased to Scheduled Airlines, as may be adjusted for any operating
and maintenance expenses directly allocable to specific areas of the Terminal
Complex, the resulting quotient being referred to as the Terminal and Concourse
Maintenance Factor.

(ii) The total amount to be accrued in the succeeding Additional Term for
payment of Revenue Bonds, any Subordinated Indebtedness, any General Obligation
Debt, any Credit Support Instruments and any Hedge Agreements allocated to the
Terminal Building Cost Center, plus the cost of capital improvements, all as
contained in the Annual Reports for the Terminal Building, shall be divided by
the total square footage of Terminal Building space leased to the Scheduled
Airlines, with the resulting quotient being referred to as the Terminal
Improvement Factor.

(iii) The total amount to be accrued in the succeeding Additional Term for
payment of Revenue Bonds, any Subordinated Indebtedness, any General Obligation
Debt, any Credit Support Instruments and any Hedge Agreements allocated to each
Concourse Cost Center, plus the cost of capital improvements, all as contained
in the Annual Reports for each such Concourse, shall be divided by the total
square footage in each such Concourse of space leased to the Scheduled Airlines,
with the resulting quotients for each Concourse being referred to as the
Concourse Improvement Factor for such Concourse. For purposes of this Section
8.04(a)(iii) of Article VIII, the definition of "Concourse" shall not include
any expansion of any of the A, B, C and/or D Concourses built at the sole cost
and expense of a Scheduled Airline and not financed by Revenue Bonds,
Subordinated Indebtedness or General Obligation Debt.

(iv) In the event that space originally constructed as Airline Constructed Space
is subsequently improved by City expenditures, the total amount to be accrued in
the succeeding Additional Term for payment of any Revenue Bonds, any
Subordinated Indebtedness, any General Obligation Debt, any Credit Support
Instruments and any Hedge Agreements allocated to Airline Constructed Space,
plus the cost of capital improvements, all as contained in the Annual Reports
for such Airline Constructed Space, shall be divided by the total square footage
of such Airline Constructed Space leased to the Scheduled Airlines, with the
resulting quotient being referred to as the Airline Constructed Space
Improvement Factor.

(v) The total amount to be accrued in the succeeding Additional Term for payment
of Revenue Bonds, any Subordinated Indebtedness, any General Obligation Debt,
any Credit Support Instruments and any Hedge Agreements allocated to the Parking
and Roadways Cost Center, plus the cost of capital improvements, all as
contained in the Annual Reports for Parking and Roadways, shall be divided by
the total square footage of Terminal Complex space leased to the Scheduled
Airlines, with the resulting quotient being referred to as the Parking
Improvement Factor.

(vi) The sum of the Terminal and Concourse Maintenance Factor, the Terminal
Improvement Factor and the Parking Improvement Factor shall be the average
rental rate for the Terminal Building. The sum of the Terminal and Concourse
Maintenance Factor, the respective Concourse Improvement Factors, any Airline
Constructed Space Improvement Factor and the Parking Improvement Factor shall be
the average rental rate for each Concourse and any Airline Constructed Space.

References to capital improvements in this Section 8.04(a) means capital
improvements that have been reviewed with the Scheduled Airlines as required
under Section 8.07 of the Agreement and any capital improvements that are not
subject to that review as provided in Section 8.07.

(b) The average annual rental rates so determined shall be weighted for the
various categories of Leased Premises, as follows: ticket counter, holdroom and
passenger-related space, at 100% of the premium rate; baggage make-up facilities
at 50% of the premium rate; baggage and roadway (tug road) facilities at 30% of
the premium rate; operations facilities, offices, baggage claim and other space
as designated by the Director of Port Control of the City, at 75% of the premium
rate.

(c) The total estimated Airport Revenue from all sources in the Terminal
Building, all Concourses, and the Parking and Roadways Cost Centers for the
succeeding Additional Term, excluding rentals paid by the Scheduled Airlines and
excluding net revenues from any duty free retail operations, as contained in the
Annual Reports, shall be multiplied by the percentage determined by dividing the
number of the Airline's enplaning passengers at the Airport by the total number
of enplaning passengers of all Scheduled Airlines at the Airport for the most
recent twelve-month period for which such figures are available as to all
Scheduled Airlines. The product of that multiplication for each Scheduled
Airline shall be referred to as that Scheduled Airline's Terminal and Concourse
Revenue Factor. Each Scheduled Airline shall receive a credit against its rental
payments for the Terminal Building, Concourses and any Airline Constructed Space
equal to its Terminal and Concourse Revenue Factor. For purposes of this
Section, each Scheduled Airline shall include the enplaning passengers of its
operations attributable to its Affiliates in the aggregate number of its
enplaning passengers at the Airport.

(d) Any Airport Revenues associated with any duty free retail operations located
within the Terminal Complex, less the operating and maintenance expenses and
capital costs associated with those operations, shall be allocated to the
Scheduled Airlines based on each Scheduled Airline's share of international
enplaned passengers for the most recent twelve-month period for which such data
is available. Each Scheduled Airline shall receive a credit against its rental
payments for the Terminal Building, Concourses and any Airline Constructed Space
equal to it share of those net revenues from duty free retail operations. In the
event that no Scheduled Airline offers international air transportation services
at the Airport but other Air Carriers do offer international air transportation
services at the Airport, and the activities of those Air Carriers generate net
duty free revenues, those duty free net revenues will be considered Airport
Revenues for purposes of Section 8.05 of the Agreement.

8.05 Adjustment of Landing Fees

The Landing Fee shall be adjusted annually for each Additional Term in the
following manner:

(a) The Landing Fee for each Additional Term shall be computed in accordance
with the following equation:

Landing Fee = E - (R + S - D)

W

The symbols in the foregoing equation shall have the following meanings:

E - The estimated Airport System Expenses as hereinafter defined and as set
forth in the Annual Reports for such Additional Term.

R - The estimated Airport Revenues for such Additional Term as set forth in the
Annual Reports, including Rentals from Scheduled Airlines for the Additional
Term but excluding all Landing Fees estimated to be paid by Scheduled Airlines
in such Additional Term and excluding any net revenues derived from any duty
free retail operations in the Terminal Complex that are allocable to the
Scheduled Airlines. For this purpose, Airport Revenues shall include any Other
Available Funds, as defined in the Indenture, including without limitation, any
funds transferred from the Airport Development Fund to the Coverage Account of
the Revenue Fund, and determined in the Annual Reports for such Additional Term
to be made available for the payment of Revenue Bonds, any Passenger Facility
Charges determined in the Annual Reports for the Additional Term to be available
for the payment of Revenue Bonds and any funds made available as capitalized
interest for such Term.

S - The amount, if any, by which Airport Revenues for the then current Term are
estimated to exceed Airport System Expenses for such Term.

D - The amount, if any, by which Airport System Expenses for the then current
Term, are estimated to exceed Airport Revenues for such Term.

W - The composite Maximum Landing Weight, as determined by City, of all
estimated Revenue Aircraft Arrivals of Scheduled Airlines in such Additional
Term.

(b) For the purpose of the foregoing computation, the term "Airport System
Expense" shall mean the total of the following:

(i) All costs and expenses incurred by City for operation, maintenance, repair,
administration and improvements of the Airport System, including all costs
incurred by City pursuant to the Agreement, as set forth in the Annual Reports,
but excluding, except as otherwise provided herein:

(a) any charges for depreciation or obsolescence or reserves therefor,
amortization of intangibles or other bookkeeping entries of a similar nature,

(b) all charges for payment of Revenue Bonds, any Subordinated Indebtedness, any
General Obligation Debt, any Credit Support Instrument and any Hedge Agreement,

(c) capital improvements to the Airport System, for the succeeding Additional
Term scheduled pursuant to Section 8.03(a)(4),

(d) losses from the sale, abandonment, reclassification, revaluation or other
disposition of any properties of the Airport System, or

(e) all maintenance, operating and administrative expenses of the Airport System
attributable to the operation of Burke Lakefront Airport, together with all debt
service attributable to General Obligation Bonds issued by City in connection
with improvements at Burke Lakefront Airport (collectively, the "Burke Costs").

(ii) An amount equal to the greater of:

(a) An amount equal to 116% of the amount to be accrued in such Additional Term
to provide for the payment of principal and interest on all outstanding Revenue
Bonds and General Obligation Debt; or

(b) An amount equal to 125% of the amount to be accrued in such Additional Term
to provide for the payment of principal and interest on outstanding Revenue
Bonds.

(iii) Amounts payable in the succeeding Additional Term with respect to any
outstanding Subordinated Indebtedness, any General Obligation Debt, any Credit
Support Instrument and any Hedge Agreement.

(iv) Such amount for capital improvements to the Airport System scheduled
pursuant to Section 8.03(a)(4) for the succeeding Additional Term and included
as provided in Section 8.07.

(v) Such amounts as may be required to fund or replenish Special Funds.

(vi) All of the Burke Costs, but solely to the extent that the projected deficit
of Airport Revenues attributable to Burke Lakefront Airport over the Burke Costs
for such succeeding Additional Term (the "Burke Deficit") does not exceed the
Burke Deficit as reflected in the audited financial statements for the Airport
System for the twelve-month period ended December 31, 2005, as adjusted as
follows:

The Burke Deficit for the

period from January 1,

2005 through December 31,

2005

 

 

 

 

X

The CPI in effect for the most recent month prior to the date of issuance of the
Annual Reports for such Additional Term divided by the CPI in effect for the
same month of 2005.

(vii) In the event City and a Majority In Interest agree that operation of Burke
Lakefront Airport as an airport should cease, such amount as will satisfy all
obligations arising from such cessation including amounts for the repayment of
all sums required to be repaid to federal or state agencies, all liabilities
incurred in connection with terminated lease obligations and all other sums
arising out of or related to such cessation of operation.

8.06 Operating and Maintenance Expense Incentive Program

The parties agree that for forecasting purposes only, the City will assume that
the Airport System Expenses contained in the Annual Report for an Additional
Term will increase over the actual Airport System Expenses for the current Term
directly proportional to the increase in the Consumer Price Index for All Urban
Consumers, All Items (1982-1984=100), U.S. City Average, as published by the
United States Department of Labor, Bureau of Labor Statistics, for the
immediately preceding twelve month period for which such data is available over
the twelve month period prior to that, adjusted for the percentage change in the
total enplaned passengers at the Airport for the immediately preceding twelve
month period for which such data is available over the total annual enplaned
passengers at the Airport during the twelve month period prior to that. The
forecasted Airport System

Expenses (referred to in this Section 8.06 as the "Targeted Expenses") for each
Additional Term shall be calculated in the following manner:

Targeted Expenses for Additional Term

=

Actual Airport System

Expenses for Current Term

x

CPI Index

(last 12 months)

 

 

x

Total Enplaned

Passengers at the Airport

(last 12 months)

CPI Index

(12 months prior to last 12 months)

Total Enplaned

Passengers at the Airport

(12 months prior to last 12 months)

The City agrees to manage Airport System Expenses so that, to the extent
reasonably practicable, actual Airport System Expenses may be less than the
Targeted Expenses in each Additional Term, as calculated above. As an additional
incentive to manage Airport System Expenses, in any Additional Term that the
City is able to manage Airport System Expenses such that the actual Airport
System Expenses in that Additional Term are less than the Targeted Expenses for
that Additional Term, the City will be entitled to an additional deposit to the
Airport Account of the Airport Development Fund in the succeeding Additional
Term. The City's actual Airport System Expenses shall be determined at the end
of the City's Fiscal Year, as a part of the annual reconciliation process.

If actual Airport System Expenses are determined to be less than the Targeted
Expenses established in the Annual Report, then the amount of additional moneys
to be deposited in the Airport Account of the Airport Development Fund in the
succeeding Additional Term shall be calculated in the following manner:

If actual Airport System Expenses in an Additional Term are less than three
percent (3%) below the Targeted Expenses for that Additional Term, then there
shall be no additional deposit made to the Airport Account of the Airport
Development Fund in the succeeding Additional Term.

If actual Airport System Expenses in an Additional Term are three percent (3%)
or greater, but less than five percent (5%) below the Targeted Expenses for that
Additional Term, then the additional deposit made to the Airport Account of the
Airport Development Fund in the succeeding Additional Term shall be increased by
an amount equal to fifteen percent (15%) of the difference between the Targeted
Expenses and the actual Airport System Expenses for that Term.

If actual Airport System Expenses in an Additional Term are five percent (5%) or
greater, but less than ten percent (10%) below the Targeted Expenses for that
Additional Term, then the additional deposit made to the Airport Account of the
Airport Development Fund in the succeeding Additional Term shall be increased by
an amount equal to twenty percent (20%) of the difference between the Targeted
Expenses and the actual Airport System Additional Expenses for that Term.

If actual Airport System Expenses in an Additional Term are at least ten percent
(10%) below the Targeted Expenses for that Additional Term, then the additional
deposit made to the Airport Account of the Airport Development Fund in the
succeeding Additional Term shall be increased by an amount equal to twenty-five
percent (25%) of the difference between the Targeted Expenses and the actual
Airport System Expenses for that Term.

8.09

Alternative Funding

The City may issue Additional Revenue Bonds and incur Subordinated Indebtedness
to fund any of the capital improvements that have not been disapproved by vote
of a Majority In Interest given as provided in Section 8.07. The City may issue
Additional Revenue Bonds and incur Subordinated Indebtedness to refund
outstanding Revenue Bonds or Subordinated Indebtedness. However, any such
refunding transaction that does not generate net debt service savings on an
average annual basis and an aggregate basis shall be submitted to the Scheduled
Airlines for review and may be undertaken by the City only if the refunding
transaction has not been disapproved by vote of a Majority In Interest given as
provided in Section 8.07. The City may also enter into Hedge Agreements and
obtain Credit Support Instruments that are not considered to be obligations in
respect of principal or interest on Revenue Bonds or Subordinated Indebtedness,
subject to review of such arrangements by the Scheduled Airlines and provided
that such arrangements have not been disapproved by vote of a Majority In
Interest given as provided in Section 8.07. The debt service, debt service
reserve and other payment requirements of any such Additional Revenue Bonds,
Subordinated Indebtedness, Credit Support Instruments and Hedge Agreements shall
be considered in any subsequent adjustment of Rentals or Landing Fees hereunder.

ARTICLE IX - REVENUE BOND FUNDS

Sections 9.02, 9.04 and 9.06 are amended and restated as follows:

9.02 Special Funds

The Indenture creates and establishes the following separate trust funds, in
addition to the Airport Revenue Fund, held by the Trustee:

Airport Revenue Bond Service Fund, to be held by the Trustee;

Airport Revenue Bond Service Reserve Fund, to be held by the Trustee;

Airport Operating and Maintenance Fund, to be held by City;

Airport Subordinated Debt Service Fund, to be held by City;

Airport General Obligation Debt Service Fund, to be held by City;

Airport Renewal and Replacement Fund, to be held by City;

Airport Improvement Fund, to be held by City

Airport Surplus Fund, to be held by City; and

Airport Development Fund, and the Airport Account and the Airline Account
therein, each to be held by City.

All of the Special Funds and the moneys and investments therein are pledged by
the Indenture to the purposes, and to be maintained and applied, solely and
exclusively in the manner provided in this Agreement and in the Indenture.

9.04

Payment to Bond Service Fund; Application Thereof. (a) First, to the Bond
Service Fund, (i) to the Interest Account, the amount that, if deposited in
approximately equal monthly installments, would be sufficient, taking into
account other moneys on deposit in the Interest Account available therefor, to
pay interest due on the Revenue Bonds on the next ensuing interest payment date;
(ii) to the Principal Account, the amount that, if deposited in approximately
equal monthly installments, would be sufficient, taking into account other
moneys on deposit in the Principal Account available therefor, to pay the
principal of the Revenue Bonds payable on the next ensuing principal payment
date, whether by mandatory sinking fund redemption or due at stated maturity;
provided such monthly payments need not begin sooner than the twelfth month
prior to the date principal is payable; and (iii) to the Redemption Account, the
amount needed, together with other moneys in that Account available therefor, to
pay the redemption price payable on the redemption date of any Revenue Bonds
called for redemption prior to maturity; and (iv) in addition to the
requirements of the foregoing subparagraphs (i), (ii) and (iii) any amount as
may be necessary, after complying with those requirements, to make up any
previous deficiency in the Bond Service Fund.

(b) In the event the City enters into a Hedge Agreement with respect to any
series of Revenue Bonds, there shall be deposited in the Interest Account of the
Bond Service Fund by the Trustee on the first day of each month from moneys
deposited in the Revenue Fund, the net amount owed to the Hedge Counterparty in
the next succeeding 30 days by the City in respect of periodic,
interest-equivalent payments under the Hedge Agreement, net of amounts then on
deposit in the Interest Account for the purpose, or amounts to be netted against
the payment obligations of the City. In the event that payments are made under
the Hedge Agreement on a basis less frequently than monthly, the deposit to the
Interest Account of the Bond Service Fund on the first day of each month shall
be such equal monthly amount as shall result in a balance in the Interest
Account, on or before the date payment is due to the Hedge Counterparty, of an
amount not less than the net amount owed to the Hedge Counterparty on the next
payment date. There shall be deposited in the Interest Account of the Bond
Service Fund, as and when received, amounts from the Hedge Counterparty paid to
the City in respect of periodic, interest-equivalent amounts owed under the
Hedge Agreement.

(c) All income and earnings on the investment and reinvestment of the moneys in
the Bond Service Fund shall be retained by the Trustee and maintained as a part
of the Bond Service Fund.

(d) The Bond Service Fund is pledged to, and shall be used and applied as
provided in Article V of the Indenture solely and exclusively for, the payment
of Bond service charges on Revenue Bonds and amounts owed under Hedge Agreements
in respect of periodic interest equivalent payments (but not any amounts owed in
respect of early termination of any Hedge Agreement), as they are due and
payable, including, in the case of Bond service charges, upon stated maturity of
Revenue Bonds or upon their optional or mandatory redemption. Pending that
application, moneys in the Bond Service Fund shall be subject to a lien and
pledge in favor of the holders of the Revenue Bonds and, to the extent of
periodic, interest equivalent amounts owed under Hedge Agreements, in favor of
the counterparties under those Hedge Agreements.

9.06 Payment to Operating and Maintenance Fund; Application Thereof

(a) Third, commencing on the date provided in the Indenture, to City, for
deposit to the credit of the Operating and Maintenance Fund, the balance
remaining in the Revenue Fund. From the moneys in the Operating and Maintenance
Fund City shall first pay all maintenance and operating expenses of the Airport
System as provided in the Annual Reports; provided, however, that nothing
contained herein shall be deemed to prohibit City of its own volition from
paying such expenses, or any portion thereof, from other funds of City lawfully
available for the purpose. After retaining such amount as found by City on the
basis of past and prospective operations of the Airport System, to be necessary
to provide an adequate working capital reserve not to exceed an amount estimated
to be needed to meet one quarter of the gross cost contained in the Annual
Budget for the next twelve month period together with such amounts as may be
established by City to fund any of the capital improvements included in its
applicable Annual Reports, the City shall transfer and deposit the remaining
moneys in the Operating and Maintenance Fund as follows:

(b) Payment to Subordinated Debt Service Fund; Application Thereof. If and so
long as any Subordinated Indebtedness is outstanding, to the Subordinated Debt
Service Fund: (i) the equal monthly sum necessary (after allowing for any moneys
then on hand in the Subordinated Debt Service Fund), to provide for the payment
of interest due and payable on the next ensuing interest payment date on the
then outstanding Subordinated Indebtedness; (ii) the equal monthly sum necessary
(after allowing for any moneys then on hand in the Subordinated Debt Service
Fund) to provide for the payment of the principal required to be paid on the
next ensuing principal payment date on all the then outstanding Subordinated
Indebtedness; provided such monthly payments need not begin sooner than the
twelfth month prior to the date principal is payable; (iii) the amount needed,
together with other moneys on deposit in the Subordinated Debt Service Fund
available therefor, to pay the redemption price payable on the redemption date
of any Subordinated Indebtedness called for redemption prior to maturity; (iv)
the amount needed, together with other moneys on deposit in the Subordinated
Debt Service Fund available therefor, to cause any reserve account to be equal
to the required reserve, and (v) the amount, if any, required to restore any
deficiency in the Subordinated Debt Service Fund for any amounts transferred
therefrom to the Bond Service Fund as described below.

In the event the City enters into a Hedge Agreement with respect to any
Subordinated Indebtedness, there shall be deposited in the Subordinated Debt
Service Fund on the first day of each month, the net amount owed to the Hedge
Counterparty in the next succeeding 30 days by the City in respect of periodic,
interest-equivalent payments under the Hedge Agreement, net of amounts then on
deposit in that Fund for the purpose, or amounts to be netted against the
payment obligations of the City. In the event that payments are made under the
Hedge Agreement on a basis less frequently than monthly, the deposit to the
Subordinated Debt Service Fund on the first day of each month shall be such
equal monthly amount as shall result in a balance in the Fund, on or before the
date payment is due to the Hedge Counterparty, of an amount not less than the
net amount owed to the Hedge Counterparty on the next payment date. There shall
be deposited in the Subordinated Debt Service Fund, as and when received,
amounts from the Hedge Counterparty paid to the City in respect of periodic,
interest-equivalent amounts owed under the Hedge Agreement.

In the event Subordinated Indebtedness is secured by a reserve account of the
Subordinated Debt Service Fund, there shall be deposited in that reserve
account, after making all of the deposits described above, such amount that, if
deposited in approximately equal monthly installments, would be sufficient,
taking into account other moneys in the reserve account, to satisfy the reserve
requirement for the Subordinated Indebtedness.

If on the fifth day preceding any interest or principal payment date the Bond
Service Fund is insufficient to meet the respective Bond service charges to be
paid therefrom on such date, the Trustee shall request the City to transfer from
the Subordinated Debt Service Fund to the Trustee for deposit in the Bond
Service Fund the amount sufficient to make up any such deficiency, and the City
shall, unless the City provides moneys for such transfer from some other lawful
source, immediately transfer from the Subordinated Debt Service Fund to the
Trustee for deposit in the Bond Service Fund, the amount sufficient to make up
such deficiency in the Bond Service Fund (or the entire balance of the
Subordinated Debt Service Fund if less than sufficient) subject, however, to
such deficiency having been first made up by application of moneys in the
General Obligation Debt Service Fund, Renewal and Replacement Fund, Improvement
Fund, Surplus Fund or Airport Development Fund as hereinafter provided. In
addition, if at any time there is a deficiency in the Bond Service Reserve Fund,
the Trustee shall request the City to transfer moneys from the Subordinated Debt
Service Fund to the Bond Service Reserve Fund and the City shall, provided no
deficiency exists in the Bond Service Fund and unless the City provides moneys
for such transfer from some other lawful source, immediately transfer from the
Subordinated Debt Service Fund, but only after using any moneys then in the
General Obligation Debt Service Fund, the Renewal and Replacement Fund, the
Improvement Fund, the Surplus Fund or the Airport Development Fund as provided
below, to the Trustee for deposit in the Bond Service Reserve Fund an amount
sufficient to make up such deficiency (or the entire balance in the Subordinated
Debt Service Fund if less than sufficient).

Subject to the provisions of the preceding paragraph, City shall transfer the
moneys deposited to the credit of the Subordinated Debt Service Fund to the
appropriate paying agents to pay interest and principal as the same become due
and payable on any Subordinated Indebtedness then outstanding, and, until such
Subordinated Indebtedness is paid in full, or other provision made for its
payment, City covenants and agrees to promptly make such payments so that all
such moneys deposited to the credit of the Subordinated Debt Service Fund as
aforesaid will be applied to pay the principal and interest on its Subordinated
Indebtedness.

Subject to the provisions of the foregoing paragraphs as to transfers, all
income and earnings on the investment and reinvestment of the moneys in the
Subordinated Debt Service Fund shall be retained by City and maintained as a
part of that Fund.

Upon the discharge of all Subordinated Indebtedness, any moneys remaining in the
Subordinated Debt Service Fund shall be transferred to the Trustee for deposit
in the Revenue Fund.

(c) Payment to General Obligation Debt Service Fund; Application Thereof. If and
so long as General Obligation Debt is outstanding, to the General Obligation
Debt Service Fund: (i) the equal monthly sum necessary (after allowing for any
moneys then on hand in the General Obligation Debt Service Fund), to provide for
the payment of interest due and payable on the next ensuing interest payment
date on the then outstanding General Obligation Debt; (ii) the equal monthly sum
necessary (after allowing for any moneys then on hand in the General Obligation
Debt Service Fund) to provide for the payment of the principal required to be
paid on the next ensuing principal payment date on all the then outstanding
General Obligation Debt; provided that such monthly payments need not begin
sooner than the twelfth month prior to the date principal is payable; (iii) the
amount needed, together with other moneys on deposit in the General Obligation
Debt Service Fund available therefore, to pay the redemption price payable on
any General Obligation Debt on the redemption date of any General Obligation
Debt called for redemption prior to maturity; and (iv) the amount, if any,
required to restore any deficiency in the General Obligation Debt Service Fund
for any amounts transferred therefrom to the Bond Service Fund, the Bond Service
Reserve Fund or the Subordinated Debt Service Fund. No monthly payments need to
be made with respect to the principal of any general obligation notes to the
extent that the principal of those general obligation notes will be paid by the
City at the maturity thereof from the proceeds of renewal general obligation
notes, general obligation bonds, Revenue Bonds or from any other lawful source
other than moneys in the General Obligation Debt Service Fund.

If on the fifth day preceding any interest or principal payment date the Bond
Service Fund is insufficient to meet the respective Bond service charges to be
paid therefrom on such date, the Trustee shall request City that moneys be
transferred from the General Obligation Debt Service Fund to the Bond Service
Fund and City shall, unless City provides moneys for such transfer from some
other lawful source, immediately transfer from the General Obligation Debt
Service Fund to the Trustee for deposit in the Bond Service Fund, the amounts
sufficient to make up such deficiency in the Bond Service Fund (or the entire
balance of the General Obligation Debt Service Fund if less than sufficient)
subject, however, to such deficiency having been first made up by application of
moneys in the Renewal and Replacement Fund, Improvement Fund, Surplus Fund or
Airport Development Fund as hereinafter provided. In addition, if at any time
there is a deficiency in the Bond Service Reserve Fund, the Trustee shall
request the City to transfer moneys from the General Obligation Debt Service
Fund to the Bond Service Reserve Fund and the Issuer shall, provided no
deficiency exists in the Bond Service Fund and unless the City provides moneys
for such transfer from some other lawful source, immediately transfer from the
General Obligation Debt Service Fund, but only after using any moneys then in
the Renewal and Replacement Fund, the Improvement Fund, the Surplus Fund or the
Airport Development Fund as provided below, to the Trustee for deposit in the
Bond Service Reserve Fund an amount sufficient to make up such deficiency (or
the entire balance of the General Obligation Debt Service Fund if less than
sufficient).

Subject to the provisions of the preceding paragraph, City shall transfer the
moneys deposited to the credit of the General Obligation Debt Service Fund to
the appropriate paying agents to pay interest and principal as the same become
due and payable on any General Obligation Debt then outstanding, and, until such
General Obligation Debt is paid in full, or other provision made for its
payment, City covenants and agrees to promptly make such payments so that all
such moneys deposited to the credit of the General Obligation Debt Service Fund
as aforesaid will be applied to pay the principal and interest on its General
Obligation Debt.

Subject to the provisions of the foregoing paragraphs as to transfers, all
income and earnings on the investment and reinvestment of the moneys in the
General Obligation Debt Service Fund shall be retained by City and maintained as
a part of said Fund.

Upon the retirement of all General Obligation Debt, any moneys remaining in the
General Obligation Debt Service Fund shall be transferred to the Trustee for
deposit in the Revenue Fund.

(d) Payment to Renewal and Replacement Fund; Application Thereof. To the Renewal
and Replacement Fund, the equal monthly sum necessary (after allowing for any
moneys then on hand in the Renewal and Replacement Fund) to restore in the next
succeeding twelve months to the Renewal and Replacement Fund any amounts
previously transferred from the Renewal and Replacement Fund, as hereinafter
provided, until the amount therein is equal to the Renewal and Replacement Fund
Payment.

If on the seventh day preceding any interest or principal payment date the Bond
Service Fund is insufficient to meet the then respective Bond service charges to
be paid therefrom on such date, the Trustee shall request City that moneys be
transferred from the Renewal and Replacement Fund to the Bond Service Fund and
City shall, prior to using any moneys then in the Bond Service Reserve Fund or
the Subordinated Debt Service Fund or the General Obligation Debt Service Fund,
but after using any money then in the Improvement Fund, Surplus Fund or Airport
Development Fund, as hereinafter provided, unless City provides moneys for such
transfer from other lawful sources, immediately transfer from the Renewal and
Replacement Fund to the Trustee for deposit in the Bond Service Fund the amount
sufficient to make up such deficiency in the Bond Service Fund (or the entire
balance of the Renewal and Replacement Fund if less than sufficient). In
addition, if at any time there is a deficiency in the Bond Service Reserve Fund,
the Trustee shall request City that moneys be transferred from the Renewal and
Replacement Fund to the Bond Service Reserve Fund and City shall, provided no
deficiency exists in the Bond Service Fund and unless City provides moneys for
such transfer from some other lawful source, immediately transfer from the
Renewal and Replacement Fund, but only after using any money then in the
Improvement Fund, Surplus Fund or Airport Development Fund, as hereinafter
provided, to the Trustee for deposit in the Bond Service Reserve Fund amounts
sufficient to make up such deficiency (or the entire balance in the Renewal and
Replacement Fund if less than sufficient).

Subject to the foregoing, provided all payments have been made to the Bond
Service Fund and Bond Service Reserve Fund, and there is no deficiency in either
of those Special Funds, and so long as there is no default under the terms of
the Bond proceedings and the Indenture and a deficiency exists in the
Subordinated Debt Service Fund, City shall transfer moneys first from the
Renewal and Replacement Fund to the Subordinated Debt Service Fund to the
Trustee for deposit in the Subordinated Debt Service Fund an amount sufficient
to make up any deficiency in the Subordinated Debt Service Fund (or the entire
balance in the General Obligation Debt Service Fund and the Renewal and
Replacement Fund if less than sufficient).

Subject to the foregoing, provided all payments have been made to the Bond
Service Fund, the Bond Service Reserve Fund and the Subordinated Debt Service
Fund, and there is no deficiency in any of those Special Funds, and so long as
there is no default under the terms of the Bond proceedings and the Indenture
and a deficiency exists in the General Obligation Debt Service Fund, City shall
transfer moneys from the Renewal and Replacement Fund to the General Obligation
Debt Service Fund and City shall transfer from the Renewal and Replacement Fund
to the Trustee for deposit in the General Obligation Debt Service Fund an amount
sufficient to make up any deficiency in the General Obligation Debt Service Fund
(or the entire balance in the Renewal and Replacement Fund if less than
sufficient).

All income and earnings on the investment and reinvestment of the Renewal and
Replacement Fund shall be retained in and maintained as part of the Renewal and
Replacement Fund until such time as the amount therein equals the Renewal and
Replacement Fund Payment and if after attaining such amount the Renewal and
Replacement Fund is diminished all such excess income and earnings shall be
similarly applied, as earned; provided, however, that if such amount is
maintained all such income and earnings shall be transferred, in equal amount to
the Improvement Fund and Surplus Fund until the amount in each such Fund equals
Three Hundred Fifty Thousand Dollars ($350,000), and if after attaining such
amounts either Fund is diminished all such excess income and earnings shall be
similarly applied, as earned; provided, however, that if such amounts are
maintained all such excess income and earnings shall be transferred in equal
amounts to the Airport Account and the Airline Account of the Airport
Development Fund.

Subject to the provisions of this Section, moneys in the Renewal and Replacement
Fund may be applied by City in its sole discretion for payment of costs of
rebuilding, reconstructing, repairing, altering, replacing and renewing the
Airport System. The City will consult with the Scheduled Airlines prior to
making an expenditure from the Renewal and Replacement Fund (other than
expenditures for nonrecurring emergencies or safety-related repairs or
replacements) that will reduce the balance in the Renewal and Replacement Fund
to a level that will require a material increase in the landing fee to generate
Airport Revenue sufficient to restore the balance in the Renewal and Replacement
Fund to the Renewal and Replacement Fund Payment.

(e) Payments to Improvement Fund and Surplus Fund; Applications Thereof. To the
Improvement Fund and the Surplus Fund (i) prior to January 1, 2007, on a monthly
basis, the balance remaining in the Operating and Maintenance Fund after making
the deposits provided in (b), (c) and (d) above, in equal amounts, and (ii)
thereafter, the equal monthly sum necessary (after allowing for any moneys then
on hand in those Funds) to restore in the next succeeding twelve months any
amounts previously transferred from the Improvement Fund and/or Surplus Fund,
until the amount on deposit in each Fund is at least Three Hundred Fifty
Thousand Dollars ($350,000).

If on the ninth day preceding any interest or principal payment date, the Bond
Service Fund is insufficient to meet the then respective Bond service charges to
be paid therefrom on such date, the Trustee shall request City to transfer
moneys in equal amounts from the Improvement Fund and the Surplus Fund to the
Bond Service Fund and City shall, prior to the application of moneys in the Bond
Service Reserve Fund, the Subordinated Debt Service Fund, the General Obligation
Debt Service Fund or the Renewal and Replacement Fund as herein provided, and
unless City provides moneys for such transfer from other lawful sources,
immediately transfer from the Improvement Fund and the Surplus Fund to the
Trustee for deposit in the Bond Service Fund the amount or amounts sufficient to
make up such deficiency in the Bond Service Fund (or the entire balance in both
the Improvement Fund and the Surplus Fund if less than sufficient). If at any
time there is a deficiency in the Bond Service Reserve Fund, and no deficiency
exists in the Bond Service Fund, the Trustee shall request City to transfer
moneys in equal amounts from the Improvement Fund and the Surplus Fund to the
Bond Service Reserve Fund and City shall, unless City provides moneys for such
transfer from some other lawful source, immediately transfer from the
Improvement Fund and the Surplus Fund to the Bond Service Reserve Fund amounts
sufficient to make up such deficiency (or the entire balance in both the
Improvement Fund and the Surplus Fund if less than sufficient).

Subject to the foregoing, on or before December 31, 2006: (i) all moneys on
deposit in the Improvement Fund in excess of Three Hundred Fifty-Thousand
Dollars ($350,000) shall be transferred to the Airline Account of the Airport
Development Fund, (ii) from the moneys then on deposit in the Surplus Fund there
shall be transferred to the Coverage Account of the Revenue Fund the amount of
Two Million Three Hundred and Forty Thousand Dollars ($2,340,000), and (iii) the
balance of the moneys in the Surplus Fund in excess of Three Hundred Fifty
Thousand Dollars ($350,000) shall be transferred to the Airport Account of the
Airport Development Fund.

Subject to the foregoing, provided all payments have been made to the Bond
Service Fund and Bond Service Reserve Fund, and there is no deficiency in either
of those Special Funds, and a deficiency exists in the Subordinated Debt Service
Fund, City shall transfer moneys in equal amounts from the Improvement Fund and
Surplus Fund to the Subordinated Debt Service Fund in an amount sufficient to
make up any deficiency which may then exist in the Subordinated Debt Service
Fund (or the entire balance in each Fund if less than sufficient).

Subject to the foregoing, provided all payments have been made to the Bond
Service Fund the Bond Service Reserve Fund and the Subordinated Debt Service
Fund, and there is no deficiency in any of those Special Funds, and a deficiency
exists in the General Obligation Debt Service Fund, City shall transfer moneys
in equal amounts from the Improvement Fund and Surplus Fund to the General
Obligation Debt Service Fund in sum sufficient to make up any deficiency which
may then exist in the General Obligation Debt Service Fund (or the entire
balance in each Fund if less than sufficient).

Subject to the provisions of the foregoing paragraphs as to transfers, and
subject to the procedures of Section 8.07 of the Agreement, moneys remaining in
the Improvement Fund on such ninth day preceding any interest or payment date
may be applied to any proper Airport System purpose.

Subject to the provisions of the foregoing paragraphs as to transfers, moneys
remaining in the Surplus Fund on such ninth day preceding any interest or
principal payment date may be used by City in its sole discretion for any proper
Airport System purpose.

Subject to the foregoing provisions as to transfers, all income and earnings on
the investment and reinvestment of moneys in the Improvement Fund and the
Surplus Fund shall be retained by City and maintained as a part of those Funds.

(f) Payments to Airport Development Fund. On and after January 1, 2007, after
making the deposits provided in (b), (c), (d) and (e) above, annually the amount
of $4,250,000 shall be deposited in the Airport Account of the Airport
Development Fund and annually the amount of $4,250,000 shall be deposited in the
Airline Account of the Airport Development Fund, in equal monthly installments.

Money in the Airport Development Fund may be used for any Airport System
purpose. Money in the Airport Account will be used at the discretion of the
City. Money in the Airline Account will be used at the discretion of a Majority
In Interest of the Scheduled Airlines. However, no prior consent shall be
required for transfer of money in either Account of the Airport Development Fund
to another Special Fund, as set forth in Article IX of the Agreement.

Subject to the foregoing, the Scheduled Airlines and the City may agree, in
connection with the preparation of the Annual Reports for any Additional Term,
that amounts on deposit in the Airline Account and/or the Airport Account of the
Airport Development Fund shall be made available as Other Available Funds in the
calculation of the landing fee for that Additional Term to aid in the reduction
of airport rates and charges. Amounts to be made available as Other Available
Funds shall be transferred to the Coverage Account of the Revenue Fund
established in the Indenture. In the event that the amount in the Coverage
Account of the Revenue Fund exceeds twenty-five percent (25%) of the maximum
annual debt service on all outstanding Revenue Bonds occurring in any subsequent
Fiscal Year, the amount in excess of that twenty-five per cent (25%) shall be
transferred to the Airport Development Fund, unless the City and the Scheduled
Airlines otherwise agree in connection with the preparation of the Annual
Reports. Any moneys to be so transferred from the Coverage Account of the
Revenue Fund to the Airport Development Fund shall be transferred to the Airport
Account and the Airline Account in amounts proportionate to any transfers made
to the Coverage Account from the Surplus Fund, Improvement Fund and the Accounts
of the Airport Development Fund.

The annual deposits to the Airport Account and the Airline Account shall be
adjusted beginning January 1, 2008 through such date as the annual deposits to
each Sub-fund first equal or exceed Five Million Dollars ($5,000,000), based on
the change in the Consumer Price Index for All Urban Consumers, All Items
(1982-1984=100), U.S. City Average, as published by the United States Department
of Labor, Bureau of Labor Statistics, for the immediately preceding twelve
months for which such data is available over the twelve month period prior to
that, adjusted for the percentage change in the total enplaned passengers at the
Airport for the immediately preceding twelve months for which such data is
available over the total annual enplaned passengers at the Airport during the
twelve month period prior to that; provided that the yearly required deposits
for any Additional Term shall not be reduced below the prior year's deposits.

[image2.gif]

Annual Deposit for
Additional Term1 =

Prior Year Deposit

 

 

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1Annual Deposit for Additional Term shall not be less than the amount of the
prior year's deposit.

After such time as the annual deposits in each Account first equal or exceed
Five Million Dollars ($5,000,000), the annual deposits to the Airport Account
and the Airline Account shall be increased (or decreased) as provided below, but
based on the change in the Consumer Price Index for All Urban Consumers, All
Items (1982-1984=100), U.S. City Average, as published by the United States
Department of Labor, Bureau of Labor Statistics, for the immediately preceding
twelve months for which such data is available over the twelve month period
prior to that, adjusted for the percentage change in the total annual enplaned
passengers at the Airport in the last twelve months that such data is available
over the total annual enplaned passengers at the Airport for the immediately
preceding twelve months for which such data is available over the total annual
enplaned passengers at the Airport during the twelve month period prior to that;
provided that the yearly required deposits for such Additional Term shall not be
reduced below Five Million Dollars ($5,000,000).

Annually in connection with the year-end settlement performed under Section
8.10(c), a determination shall be made of any additional deposits required to be
made to the Airport Account of the Airport Development Fund as provided in this
paragraph, based upon the growth of non-airline revenues (excluding any future
duty-free concession revenues) realized from the following Cost Centers:
Terminal Building, all Concourses, Airline Constructed Space and Parking and
Roadways. Beginning January 1, 2006, for each year during which the finally
determined non-airline revenue (as defined above) per enplaned passenger,
exclusive of international passengers, exceeds the finally determined nonairline
revenue per enplaned passenger during 2005, exclusive of international
passengers, by ten percent (10%) (with such aggregate amount being adjusted
annually beginning in 2006 based on changes in CPI as set forth above (and with
such adjusted level being herein referred to as the "trigger amount")), then
fifty percent (50%) of all non-airline revenues per enplaned passenger,
exclusive of international passengers, in excess of the trigger amount, shall be
deposited annually into the Airport Account of the Airport Development Fund. The
City agrees that it will use commercially reasonable efforts to maximize
non-airline revenue during 2005.

If on the tenth day preceding any interest or principal payment date, the Bond
Service Fund is insufficient to meet the then respective Bond service charges to
be paid therefrom on such date, the Trustee shall transfer moneys in equal
amounts from the Airport Account and the Airline Account of the Airport
Development Fund to the Bond Service Fund, prior to the application of moneys in
the Bond Service Reserve Fund, the Subordinated Debt Service Fund, the General
Obligation Debt Service Fund, the Renewal and Replacement Fund, the Improvement
Fund or the Surplus Fund, as herein provided, and unless City provides moneys
for such transfer from other lawful sources, the amount sufficient to make up
such deficiency in the Bond Service Fund (or the entire balance in both Accounts
of the Airport Development Fund if less than sufficient); provided further, that
if at any time there is a deficiency in the Bond Service Reserve Fund, and no
deficiency exists in the Bond Service Fund, the Trustee shall transfer moneys in
equal amounts from those Accounts of the Airport Development Fund to the Bond
Service Reserve Fund in amounts sufficient to make up such deficiency (or the
entire balance in both those Accounts of the Airport Development Fund if less
than sufficient).

Subject to the foregoing, provided all payments have been made to the Bond
Service Fund and Bond Service Reserve Fund, and there is no deficiency in either
of those Special Funds, and a deficiency exists in the Subordinated Debt Service
Fund, the Trustee shall transfer moneys in equal amounts from the Airport
Account and the Airline Account of the Airport Development Fund to the
Subordinated Debt Service Fund in an amount sufficient to make up any deficiency
which may then exist in the Subordinated Debt Service Fund (or the entire
balance in each Account of the Airport Development Fund if less than
sufficient).

Subject to the foregoing, provided all payments have been made to the Bond
Service Fund, the Bond Service Reserve Fund and the Subordinated Debt Service
Fund, and there is no deficiency in any of those Special Funds, and a deficiency
exists in the General Obligation Debt Service Fund, the Trustee shall transfer
moneys in equal amounts from the Airport Account and Airline Account of the
Airport Development Fund to the General Obligation Debt Service Fund in sum
sufficient to make up any deficiency which may then exist in the General
Obligation Debt Service Fund (or the entire balance in each Account of the
Airport Development Fund if less than sufficient).

Subject to the foregoing provisions as to transfers, all income and earnings on
the investment and reinvestment of moneys in the respective Accounts of the
Airport Development Fund shall be maintained as part of those Accounts.

ARTICLE X - RULES AND REGULATIONS; COMPLIANCE WITH LAWS

Section 10.02 is amended and restated as follows:

10.02 Compliance with Laws

In connection with its operations at the Airport System, Airline:

(a) Shall comply with and conform to all present and future laws and ordinances
of City, federal, state and other government bodies of competent jurisdiction
and the rules and regulations promulgated thereunder, including but not limited
to all Environmental Laws, applicable to or affecting, directly or indirectly,
the Airline, the Leased Premises, or Airline's operations and activities under
this Agreement.

(b) Shall, at its expense, make all non-structural improvements, repairs, and
alterations to the Leased Premises and its equipment and personal property
required to comply with or conform to any of such laws, ordinances, rules and
regulations referred to in subsection (a) above, to which this Agreement is
expressly subject.

(c) Shall at all times during the term of this Agreement subscribe to and comply
with the Workers' Compensation Laws of the State of Ohio and pay such premiums,
if any, as may be required thereunder and save City harmless from any and all
liability arising from or under said act. Airline shall also furnish, upon
commencing operations under this Agreement and at such other times as may be
requested, a copy of the official certificate or receipt showing the payments
hereinbefore referred to or a copy of an official certificate from the State of
Ohio evidencing permission for Airline to self-insure Workers' Compensation
liability.

(d) Shall be and remain an independent contractor with respect to all
installations, construction and services performed hereunder and agrees to and
does hereby accept full and exclusive liability for the payment of any and all
contributions or taxes for social security, unemployment insurance, or old age
retirement benefits, pensions, or annuities now or hereafter imposed under any
state or federal law which are measured by the wages, salaries, or other
remuneration paid to persons employed by Airline on work performed under the
terms of this Agreement and further agrees to obey all rules and regulations
which are now or hereafter may be issued or promulgated under said respective
laws by any duly authorized state or federal officials; and Airline shall
indemnify and save harmless City from any such contributions or taxes or
liability therefor.

ARTICLE XIII - INDEMNIFICATION - LIABILITY INSURANCE

Sections 13.01 and 13.02 are amended and restated as follows:

13.01 Indemnification

Subject to the provisions for waiver of subrogation set forth in Article XIV of
this Agreement, City, its officers, agents and employees, shall not be liable to
Airline, or to any other parties claiming under Airline, for claims or
liabilities arising out of any injury (including death) to any persons, or for
loss of or damage to any property, regardless of how such injury or damage may
be caused or sustained, as a result of any condition (including existing or
future defects) or act or omission whatsoever in, on or about the Airport
System, except to the extent that such claim or liability shall arise from an
act or omission that is the result of the sole negligence, intentional
wrongdoing or willful misconduct of City, its officers, agents and employees. In
addition, subject to the provisions for waiver of subrogation set forth in
Article XIV below, City, its officers, agents and employees, shall not be liable
to Airline or to any other parties claiming under Airline for claims or
liability arising out of injury (including death) to persons or loss of or
damage to property caused or sustained as a result of any fault, negligence, act
or omission, intentional wrongdoing or willful misconduct of Airline, or any of
its officers, employees, agents, or contractors. Airline shall defend, indemnify
and save harmless City, its officers, agents and employees with respect to and
shall assume the defense of any and all claims, liabilities, obligations,
damages, penalties, costs, charges and expenses, including reasonable attorneys'
fees which may be imposed upon or incurred by City, its officers, agents and
employees by reason of any such fault, negligence, act or omission, intentional
wrongdoing or willful misconduct. The City shall provide Airline with prompt
notice of any claim subject to the Airline's duties of defense and
indemnification and such support and cooperation in connection therewith as
Airline may reasonably require. The insurance provided in Section 13.02 hereof
shall not be construed to limit Airline's indemnity obligations hereunder.

13.02 Liability Insurance

Airline, at its sole cost and expense, for the mutual benefit of Airline and
City, shall purchase and maintain, from an insurance company reasonably
acceptable to City, public and aviation liability insurance on an occurrence
basis with retention or "self-insured" amounts reasonably acceptable to the City
for claims resulting from acts or omissions occurring during the term of the
Agreement for bodily injury (including death), personal injury for
discrimination, violation of rights and false arrest/detention and damage to
property occurring in, on or about the Airport System or in connection with
operations of Airline (including claims arising during the period of
construction of Airline's improvements to the Leased Premises) in an amount of
at least $10,000,000 combined single limit (or equivalent split limits). Any
aggregate limits to such coverage shall apply exclusively to the Agreement. City
shall be named as an additional insured with respect to Airline's public and
aviation liability insurance for Airline's operation, maintenance and use of the
Airport System, subject to the limitations set forth in Section 13.01. Airline
shall provide City with a certificate of insurance, which indicates that the
insurance company will provide City with at least fifteen days' advance notice
of cancellation or material restriction or change in coverage thereof. In
addition to the foregoing specified minimum limits of liability, Airline shall
purchase and maintain additional limits of liability insurance in such amounts
as are considered customary in connection with the operation of the business of
Airline but in no event less than $65,000,000 single limit (or equivalent split
limit). Each policy of insurance whether or not specifically referred to herein
shall not, as a condition of coverage, prohibit any insured from waiving his
right of recovery against any party. The failure of City, at any time, to
enforce the provisions of this Section 13.02 concerning insurance coverage shall
not constitute a waiver of those provisions nor in any respect reduce the
obligation of Airline to defend, indemnify and hold the City, its officers,
agents and employees harmless with respect to any injury or damage covered by
this Article XIII. Airline annually shall provide to the Director of Port
Control and the Director of Law of the City a certificate or certificates of
insurance evidencing that Airline has obtained and is maintaining the insurance
required hereunder. Upon request by either the Director of Port Control or the
Director of Law, Airline shall make available to the City all insurance policies
of Airline under which the City is a named insured for the City's review. If,
upon such review, the Director of Law observes that coverage, limits or carrier
are unusual and non-customary in such types of policies, the Director of Law
shall have the right to call a meeting between the City and the Airline to
discuss Airline's insurance policies. It is understood that the Airline
maintains a fleet policy. Accordingly, changes in insurance coverage may not be
possible. However, Airline will endeavor to comply with any reasonable requests
made by the Director of Law with respect to its insurance arrangements. At least
fifteen days prior to the expiration or termination of any policy provided
hereunder, Airline shall deliver to the Director of Port Control and the
Director of Law certificates evidencing the renewal or replacement of such
policies.

City, for the mutual benefit of the City and Airline, shall purchase and
maintain public and aviation liability insurance for claims or liabilities for
any bodily injury (including death) to any persons or loss of or damage to any
property occurring in, on or about the Airport System during the term of the
Agreement in an amount agreed upon from time to time by both City and Airline
which shall not be less than $75,000,000. The Airline shall be named as an
additional insured with respect to the City's operation, maintenance and use of
the Airport System, but only to the extent of the City's sole negligence.

ARTICLE XIV - WAIVER OF SUBROGATION - PROPERTY INSURANCE

is amended and restated as follows:

Airline and City, each for its own account, agree to purchase property
insurance, subject to such deductibles as are reasonable, at replacement cost on
buildings, contents, equipment (mobile and fixed) and improvements and
betterments owned or for which each may be responsible (it being agreed that
City shall be responsible for buildings in which the Leased Premises form a part
and for which the City is the owner, excluding any Airline-owned leasehold
improvements, fixtures, equipment and other personal property), to cover damage
caused by fire and perils normally covered by extended coverage insurance and,
at the option of either party, and such other perils as are customarily included
in the term "all risk", available in Cleveland, Ohio. Each insurance policy,
whether or not specifically referred to herein, shall not, as a condition of
coverage, prohibit any insured from waiving his right of recovery against any
party for loss or damage to the insured property. Subject to the foregoing, City
and Airline each hereby waive all claims and right of recovery against the other
for damage to the insured property to the extent that recovery is obtained or
could be obtained from the insurance company. Extent of recovery shall include
that amount actually paid by an insurance company less any deductibles
applicable to any such policy.

ARTICLE XVI - ASSIGNMENT AND SUBLETTING

Section 16.01 is amended and restated as follows:

16.01 Assignment

Airline covenants that it will not assign, transfer, convey, sublet, sell,
mortgage, pledge or encumber the Agreement, the Leased Premises or in any part
thereof, or any rights of Airline hereunder or allow the use of the Leased
Premises hereunder by any other person or entity, except as otherwise provided
in the Agreement, without in each instance having first obtained written
approval from the Board of Control of City; provided, however, that without such
consent Airline may assign its rights under the Agreement to any corporation
with which Airline may merge or consolidate or which may succeed to all or
substantially all of the business of Airline. Consent by the Board of Control to
any type of transfer described in this paragraph or elsewhere in the Agreement
shall not in any way be construed to relieve Airline from obtaining further
authorization from the Board of Control for any subsequent transfer of any
nature whatsoever. Notwithstanding the foregoing, Airline may transfer or sublet
any part of the Leased Premises to an Affiliate, or allow the use of the Leased
Premises by an Affiliate, as provided in Section 2.06 and without the prior
written approval of the Board of Control of the City.

If Airline assigns the Agreement without consent, as provided for above, then
the provisions of Section 15.04, Agreement Security, shall apply to the airline
being assigned the Agreement, regardless of the time that the airline being
assigned the Agreement has served the Airport.

ARTICLE XVII - TERMINATION OF LEASE IN ENTIRETY

Section 17.03 is created as follows:

17.03 Renegotiation of the Lease

In the event that, based on data collected by the Airport from the Scheduled
Airlines, the connecting passengers as a percent of total passengers at the
Airport falls below fifteen percent (15%) for any consecutive three-month period
during the term of the Agreement, the City and Airline may begin discussions to
renegotiate the terms of the Agreement. If such discussions are begun, and
mutually agreeable terms cannot be reached within one calendar year, then the
Agreement shall terminate.

ARTICLE XIX - HOLDING OVER

Article XIX is amended and restated as follows:

Prior to the expiration of the term of the Agreement, the City may agree, in its
sole discretion, to permit Airline to continue a tenancy at the Airport on a
month to month basis. The City or Airline may terminate that month to month
tenancy upon thirty days' prior written notice to the other respective party.
During any month to month tenancy, Airline shall pay to City the same rates of
rental and landing fees as were in effect at the expiration of the term of the
Agreement, as subsequently adjusted as provided in the Agreement, unless a
different rental and landing fees shall be agreed upon. Airline shall be bound
by the provisions of the Agreement during any month to month tenancy.

ARTICLE XX - MISCELLANEOUS PROVISIONS

Sections 20.13, 20.14, 20.22 and 20.25 are amended and restated as follows:

20.13 Non-Exclusivity

Nothing herein contained shall be deemed to grant to Airline any exclusive right
or privilege within the meaning of Section 30 of the Federal Aviation Act for
the conduct of any activity on the Airport.

20.14 Approvals

Whenever the approval of the City is required under the Agreement, that approval
shall be given in the discretion of the Director of Port Control. Whenever the
approval of Airline or City is required under the Agreement, no such approval
shall be unreasonably requested, withheld or delayed. All approvals shall be in
writing.

20.22 Public Contract

This Agreement is a " contract" and Airline is a "contractor" within the meaning
of Chapter 187 of the Codified Ordinances of the City of Cleveland, 1976.

20.25 Continuation of Warranties

The City will take all steps reasonably necessary to enforce full and faithful
performance of all warranties, express or implied, by contractors, materialmen
and suppliers given to City in connection with capital improvements to the
Airport.

Except as set forth herein the terms of the Original Agreement shall remain in
full force and effect.

 

(Balance of page intentionally left blank.)

 

(Signature page follows.)

IN WITNESS WHEREOF, this First Amendment has been signed by authorized
representatives of the City and Airline on the dates indicated below and in the
acknowledgements but effective as of the date first above written.

THE CITY OF CLEVELAND

December 23, 2005 By: /s/ John C. Mok

John C. Mok

Director of Port Control

 

 

CONTINENTAL AIRLINES, INC.

December 22, 2005 By: /s/ Holden Shannon

Name: Holden Shannon

Title: SVP Global Real Estate

 

 

The within instrument is approved as to legal form

and correctness this 23rd day of December, 2005.

 

Teresa M. Beasley

Director of Law

 

By:/s/ Jack M. Arnold
Jack M. Arnold

Assistant Director of Law

STATE OF OHIO

)

) ss.

COUNTY OF CUYAHAGOA

)

ON THIS 23rd day of December, 2005, before me personally appeared John C. Mok,
to me known to be the Director of Port Control of the City of Cleveland, who
signed Amendment No. 1 to Agreement and Lease and who acknowledged that signing
to be his free and voluntary act, and who on oath stated that he is duly
authorized by Ordinance of the Council of the City of Cleveland to sign that
instrument.

WITNESS my hand and official seal hereto the day and year first above written.

/s/ Louis H. Rice

Notary Public

My Commission expires: _______

Louis H. Rice, Attorney

NOTARY PUBLIC STATE OF OHIO

My Commission has no expiration date

Section 147.03 R.O.

STATE OF Texas )

) ss.

COUNTY OF

Harris )

ON THIS 22nd day of December, 2005, before me personally appeared Holden
Shannon, to me known to be Senior Vice President of Global Real Estate of
Continental Airlines, Inc. who signed Amendment No. 1 to Agreement and Lease and
who acknowledged that signing to be his free and voluntary act, and who on oath
stated that he is duly authorized by the Board of Directors of that airline to
sign that instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year first above written.

/s/ Dashawanda D. Mitchell

Notary Public

My Commission expires: 04-04-2006