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HomeMy WebLinkAboutC96-126 Eagle County Air Terminal CorporationC'9612b70 ASSIGNMENT AND ASSUMPTION OF LEASE This Assignment And Assumption Of Lease (the "Assignment") is made effective as of June 1, 1996, by and between the County of Eagle, State of Colorado ("County"), a body politic and corporate, acting by and through its Board of County Commissioners, and Eagle County Air Terminal Corporation ("Terminal Corporation"), a corporation. RECITALS A. County entered into a lease with American Airlines dated April 19, 1996, by the terms of which County agreed to construct a commercial air passenger terminal at the Eagle County Regional Airport ("Airport") and American Airlines agreed to lease certain space within that terminal ("Lease"). A true copy of the Lease is attached hereto. B. County has organized Terminal Corporation as a nonprofit Colorado corporation for the benefit of Eagle County with the specific purpose of financing and constructing a commercial air passenger terminal at the Airport. C. The Lease expressly contemplated the formation of Terminal Corporation and the assignment of the Lease provided herein, and American Airlines consented to such assignment. D. By separate agreement, Terminal Corporation has leased land at the Airport for the purpose of constructing the commercial air passenger terminal. ASSIGNMENT In consideration of the promises and conditions contained herein, the s ,fficiency of which is mutually acknowledged, the parties agree as follows: 1. County hereby assigns, transfers and conveys to Terminal Corporation all of its rights, title and interests in and to the Lease, including the delegation of all of its obligations and duties under the Lease. 2. County warrants and represents that County has not assigned or agreed to assign the Lease or any rights, title or interest it has pursuant thereto to any other party. 3. County warrants and represents that the Lease is in full force and effect and there exist no defaults thereunder, nor any facts or events which with the passage of time or the giving of notice could become defaults thereunder. 4. Terminal Corporation agrees to enter into a Project Construction and Management Agreement with County for the purpose of County managing the construction and operation of the terminal, in compliance with Terminal Corporation's financing and applicable law. 5. Terminal Corporation represents and warrants that it is authorized to enter into this Assignment And Assumption. 6. Terminal Corporation hereby accepts the foregoing assignment and assumes all of County's obligations and duties under the Lease. IN WITNESS WHEREOF, the parties hereto have executed this agreement effective as of the day and year first written above. COUNTY OF EAGLE, STATE OF COLORADO, by and through its BOARD OF COUNTY COMMISSIONERS COUNTY OF EAGLE, STATE OF a , COLORADO, By and Through Its ATTEST: • $' BOARD OF COUNTY COMMISSIONERS ,�� C01LOQL ('D By: Clerk to the BArd of Georg �Adates,Chairman County Commissioners EAGLE COUNTY AIR TERMINAL CORPORATION James Hartmann, Vice -President \bobwip\air\assign Mr. George Gates Chairman, Board County of Eagle, 500 Broadway P.O. Box 850 Eagle, Colorado Z4L�-Airline e� ,_. �- C X96 1 7 0 April 19, 1996 of County Commissioners State of Colorado 81631 Re: New Terminal at EGE Dear Mr. Gates: We are pleased with the progress made to date in discussions concerning Eagle County's (the "County") proposed construction of a new passenger terminal at Eagle County Airport (the "Airport"). The terms and conditions of the proposed transaction are summarized below: 1. The County will construct a new passengerfacility citthe $9 Airport at a total cost (excluding financing) approximately million, substantially in accordance with the schematic drawings, dated April 15, 1996, prepared by the Van Sant Group (the "Terminal Building"). In addition, the County will make available to airlines using the Terminal Building an outbound curb -side baggage system and at least three ramp parking positions suitable for Boeing 757 or comparably -sized aircraft. 2. . (a) The County will make leasehold space in the Terminal Building available to carriers who wish to serve the Airport, including'American Airlines, Inc. ("American"). American and such other carriers who become signatories to Terminal Building leases are hereinafter referred to as "Signatory Airlines". American will lease for its exclusive use approximately 10 counter positions and office and other space consisting of a total of approximately 3000 sq. ft. of exclusive -use space in the Terminal Building, as shown on the schematic drawing referred to above. The County will be responsible for and bear the cost of finishing out the interior of the Terminal Building, including American's exclusive -use space, except as further detailed below. The Lease shall provide for an initial term of ten (10) years beginning on American's occupancy of the Terminal Building, as described further in Sections 7 and 8 hereof. The parties will promptly begin negotiating to reach a written definitive lease agreement, containing representations, warranties, indemnities, conditions and agreements (including, without limitation, environmental indemnities by the County in favor of American for conditions predating the lease) customarily found in municipal airport terminal facilities leases and reflecting the terms of this Letter Agreement (the Lease Agreement"). The County and -its counsel will prepare the initial P 0 BOX 619616 DALLASIFORT WORTH AIRPORT TEXAS 75261-9616 shall the Principal Backstop Payment exceed $450,000 annually. 5. (a) At the end of each fiscal year or part thereof falling within the lease term, the County will credit against future rent (within 60 days of the close of the audit) of American and the other -Signatory Airlines 50% of any Net Concession Revenues. The Signatory Airlines' share of Net Concession Revenues shall be distributed to them prorata based on enplanements from the Terminal Building during such fiscal year. Notwithstanding the foregoing, prior to such 50/50 split (i) at the and of the fiscal years ending December 31, 1996 and December 31, 1997 only, there shall first be subtracted from Net Concession Revenues (if any), and paid into an O&M reserve fund established by the County, an amount equal to 10$ of such fiscal year's operating and maintenance expenses, and (ii) at the end of the fiscal year ending December 31, 1998 only, there shall first be subtracted from Net Concession Revenues (if any), and paid to the Signatory Airlines• (prorata based on enplanements), an amount equal to the amounts previously paid into such O&M reserve. (b) "Net Concession Revenues" shall equal Concession Revenues reduced by the Terminal Building Shortfall. For these purposes: (i) "Concession Revenues" shall mean all Terminal Building revenues derived by the County from food, beverage, news and gift vendors, rental car and other ground transportation vendors, parking, terminal advertising(including print, radio and television), ski rentals and any other retail sales and services. (ii) the "Terminal Building Shortfall" for each fiscal year shall equal the Terminal Building Requirement reduced by the sum of (A) American's Base Rent and the rents or similar charges of all other Signatory Airlines, and (B) the rents or similar charges paid by non -signatory airlines for use of the Terminal Building. (iii) the "Terminal Building Requirement" for eac hefiscal al year shall equal the sum of the following amounts: (A) amount of operations and maintenance expenses and depreciation expense on airport -funded assets of the Terminal Building for such fiscal year, (B) the total amount of that portion of the principal due and owing on the Bonds during such fiscal year that is not eligible for PFC funding, (C) the total amount of interest due and owing on the Bonds during such fiscal year, plus (D) other miscellaneous costs, expenses, judgments, assessments or charges (net of insurance proceeds and excluding judgments and other amounts from which American is entitled to be held harmless under Section 14 hereof) incurred in such fiscal year and reasonably and fairly allocated to the Terminal Building. 6. (a) American further understands that the County shall 3 establish a reserve account (the "Debt Coverage Reserve Account") which shall equal approximately $360,000 in the aggregate and shall be funded initially by a portion of the Base Rent payable by American in the first four months of the lease term coinciding with the Ski Season specifically, December 1, 1996, January 1, 1997, February 1, 1997 and March 1, 1997. (b) In the event that the County is unable to generate Available Revenues sufficient to satisfy the Bond requirement that Available Revenues in each fiscal year be at least equal to 130 percent of the aggregate annual principal and interest due on the Bonds in such fiscal year, American and all other Signatory Airlines shall pay an amount equal to the shortfall. Such shortfall shall be allocated to each Signatory Airline in the same proportion that its total annual enplanements at the Terminal Building bears to the sum of all of the Signatory Airlines' total annual enplanements at the Terminal Building and shall be payable as of the last day of the fiscal year in which such shortfall occurs. Any shortfall amount paid by a Signatory Airline for any fiscal year will be repaid to such Signatory Airline in cash within 3 business days of the County's receipt of such shortfall payment from such Signatory Airline. For these purposes "Available Revenues" in each fiscal year shall include PFCs, Principal Backstop Payments and all rental, concession and other revenues from the Terminal Building plus the balance in the Debt Coverage Reserve Account, minus the total amount of operations and maintenance expenses and other miscellaneous costs, expenses, judgments, assessments or charges incurred in such fiscal year and reasonably and fairly allocated to the Terminal Building. 7. The County will complete construction of the Terminal Building and ensure its availability for occupancy by American by November 25, 1996. The County shall grant to American the right of ingress and egress in, to and from the Terminal Building at least ten (10) business days before such date to finish out its exclusive -use space. 8. (a) The parties intend this Letter Agreement to set forth the material terms of their agreement with respect to the matters described herein and to be binding, with the understanding that other terms shall be included in the Lease Agreement, as provided in Section 2(a). (b) The County understands and acknowledges that American will allow its current facility lease at the Airport to expire on November 30, 1996 in reliance on the County's undertaking to enter into the Lease Agreement and make leasehold space in the Terminal Building available to American as herein provided. If, for any reason, the Terminal Building is not ready for occupancy on time, the County will provide suitable temporary facilities (including utilities) for American's use until the Terminal Building is ready 4 for occupancy by American. The rent and other charges for American's use of the temporary facilities and utilities will not in total exceed the actual cost of providing such facilities and utilities (but in no event shall exceed $272,000 on an annualized basis). Any period of occupancy of the temporary facility will be in addition to the lease term provided for in the Lease Agreement. The County will reimburse American (or credit against Base Rent) for any incremental moving expenses (not in excess of $ 5,000) incurred by American as a result of the double relocation necessitated by American's occupancy of the temporary facilities. Furthermore, in the event the Terminal Building has not been substantially completed by May 1, 1997 for any reason, American may terminate this Letter Agreement and the Lease Agreement (and such temporary occupancy) upon written notice to the County given by five p.m. local time (of the party to be notified) on May 4, 1997. (c) American understands and acknowledges that the County will in reliance on this Letter Agreement exert additional efforts and incur expenses in planning, financing, and constructing the Terminal Building. 9. American shall have the right from time to time during the term of this Letter Agreement and the Lease Agreement, upon five (5) days prior written notice, to review the County's construction and financing plans, books and records pertaining to the Terminal Building and related Airport operations to ensure that construction of the Terminal Building is progressing substantially in accordance with the schematic drawings referred to above, and that PFCs, Terminal Building rentals and Concession Revenues are and will be applied in a manner consistent with the terms of this Letter Agreement and the Lease Agreement. 10.. (a) American's responsibility to finish out its exclusive -use space within the Terminal Building shall be limited to the installation of ticket counter inserts, signage and computer terminals, printers and related equipment. (b) American shall at its own expense provide passenger security screening equipment for use at the Terminal Building. The passenger security checkpoint shall be manned by American or its contractors and the associated O&M costs shall be borne by American and the other Signatory Airlines prorata based on enplanements. 11. If for any reason the County (or the Terminal Corporation as its assignee) has not closed on the sale of the Bonds by June 25, 1996, the County (or such Terminal Corporation) may terminate this Letter Agreement and the Lease Agreement upon written notice to American given by five P.M. local time (of the party to be notified) on June 30, 1996; provided, further, that if for any reason such financing has not closed by September 1, 1996, either party may terminate this Letter Agreement and the Lease Agreement 5 upon written notice to the other party given by five p.m. local time (of the party to be notified) on September 4, 1996. 12. It is understood that the executed Lease Agreement is needed to finance the construction of the Terminal Building. Accordingly, the parties acknowledge that if for any reason the Lease Agreement has not been executed and delivered by May 28, 1996, the County may terminate this Letter Agreement by written notice to American given not later than May 30. 13. (a) American acknowledges that the County may, in its sole discretion, assign its rights and/or duties under this Letter Agreement to the Financing Entity. American hereby consents to any such assignment, and agrees that the County immediately thereupon shall be discharged from any and all duties under this Letter Agreement to the extent of such assignment and relieved from any and all liabilities arising from the duties assigned; provided, however, that in the event of the County's assignment of its obligations under the indemnity and related provisions of Section 14 of this Letter Agreement, the County and the Terminal Corporation shall be jointly and severally liable to American for the full and timely discharge thereof. (b) American also consents to the County granting a security interest in all of its right, title and interest in the Lease Agreement in support of the Bond financing 14. The County agrees to defend and indemnify American and its affiliates, directors, officers and employees, from and against any and all losses, liabilities, claims, damages or expenses (including, without limitation, except as provided below, reasonable attorneys' fees and reasonable fees for expert witnesses, consultants and litigation support services and costs for post judgment and appellate proceedings) arising from or in connection with any suit, claim or action pertaining to events or allegations described in that certain letter to the County, dated March 18, 1996, from attorneys for Fixed Base Operators, Inc. d/b/a Vail/Beaver Creek Jet Center, except to the extent that any such losses, liabilities, claims, damages or expenses arise out of American's breach of a contractual obligation or tortious conduct as determined in a final, non -appealable adjudication. The County shall assume all responsibility for conducting the defense or settlement of any such suits, claims or actions with counsel reasonably acceptable to American. American shall have the right, but not the duty, to participate in the defense and settlement of any such suits, claims or actions with separate counsel of its own choosing without relieving the County of any of the foregoing indemnity obligations; provided, however, that the County shall not be required to indemnify American for such separate counsel's fees, expenses and costs unless American shall have reasonably concluded that there is a conflict of interest between the County and C. American in the conduct of such defense or settlement. leo compromise or settlement of such a suit, claim or action may be effected without American's written consent which shall not be unreasonably withheld or delayed; if American rejects a compromise or settlement which the County desires, the County's total liability on the suit, claim or action, including the costs of. defense, shall not exceed the amount of the expenses and costs to it incurred up to the rejection plus the amount of such compromise or settlement. The provisions of this Section 14 shall survive the termination of this Letter Agreement for any reason. 15. This Letter Agreement shall be governed by and construed in accordance with the internal laws of the State of Colorado without regard to conflicts of law. 16. In the event that any one or more of the provisions of this Letter Agreement is determined by a court of competent jurisdiction to be invalid, unenforceable or illegal, such invalidity, unenforceability or illegality shall not affect any other provisions of this Letter Agreement, and the Letter Agreement shall be construed as if the challenged provision had never been contained herein. The parties further agree that in the event such provision is an essential part of this Letter Agreement, they will immediately begin negotiations for a suitable replacement provision. 17. Except as otherwise provided herein, each party shall be responsible for and bear all of its own costs incurred at any time in connection with preparing the Lease Agreement and pursuing or consummating the proposed transaction. i Please confirm your agreement to and acceptance of the foregoing by countersigning this Letter Agreement and returning it to the undersigned. Yours sincerely, AMERICAN AIRLINES, INC. Gary F. Kennedy Mng. Director eorporate Real Estate Approved and Agreed: County of Eagle, State of Colorado JOY By: Name: Title: P:\USER\364592\AGREEMNT\EGE-LOI.418 0 wt z 0 J_ m J a z a� w 0 w 0. O.. 0 x CL dnoNo 1NHS NUA WU9E : t Z 96, BT Ndd 0 M J a z 0 M w ac z D 0 U w J a w