SLOT LEASE AGREEMENT
between
Continental Airlines, Inc.
and
Calair L.L.C.
dated as of
April 17, 1998
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TABLE OF CONTENTS
Page
Section 1 Definitions ......................................... 1
Section 2 Lease of Slots ...................................... 3
Section 3 Term and Rent ....................................... 3
Section 4 Representations, Warranties and Covenants ........... 4
Section 5 Encumbrances ........................................ 5
Section 6 Impositions ......................................... 5
Section 7 Use of Leased Slots ................................. 6
Section 8 Indemnification ..................................... 6
Section 9 Subleases ........................................... 7
Section 10 Events of Default ................................... 7
Section 11 Remedies ............................................ 7
Section 12 Notices ............................................. 8
Section 13 Right to Purchase Leased Slots or to Request that
Lessor Exchange Leased Slots......................... 9
Section 14 Amendments and Miscellaneous ........................11
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SLOT LEASE AGREEMENT
This Slot Lease Agreement (this "LEASE") is made and entered into by and between CALAIR L.L.C. ("Lessor"), a limited liability company organized and existing under the laws of the State of Delaware, and CONTINENTAL AIRLINES, INC. ("LESSEE"), a corporation incorporated and existing under the laws of the State of Delaware; to be effective the 17th day of April, 1998, (the "COMMENCEMENT DATE").
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS. As used herein:
AFFILIATE. With respect to any Person, (i) any Person directly or indirectly controlling, controlled by or under common control with such Person, (ii) any executive officer, director or general partner of such Person or (iii) any Person who is an executive officer, director, general partner, or trustee of any Person described in clauses (i) and (ii) of this sentence. For the purpose of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or agency or otherwise.
BUSINESS DAY. Any day other than a Saturday, Sunday, or other day on which commercial banks in the City of New York, or in Columbus, Ohio, are authorized by law to close.
CAL SALE AGREEMENT. That certain Sale Agreement, effective of even date with this Lease, by and between Lessor and Lessee.
CEA. Chase Equity Associates, L.P.
CLAIMS. As defined in Section 8 hereof.
COMMENCEMENT DATE. As defined in the first paragraph of this Lease.
ENCUMBRANCE: Any mortgage, lien, security interest, pledge, charge, encumbrance, claim, restriction or burden.
EVENT OF DEFAULT. As defined in Section 10 hereof.
FAA. The Federal Aviation Administration of the United States Department of Transportation or any successor agency. 4
GOVERNMENTAL AUTHORITY(IES): Individually, any one of, and collectively, any two or more of, the United States of America or any other foreign country or jurisdiction, any state, commonwealth, territory or possession thereof and any political subdivision of any of the foregoing, including but not limited to courts, departments, commissions, boards, bureaus, agencies or other instrumentalities.
IMPOSITIONS. As defined in Section 6 hereof.
INDEMNIFIED PERSON. As defined in Section 8 hereof.
LAW. Any law, treaty, statute, rule, regulation, order, code, judgment, decree, injunction, writ, requirement or decision of or agreement with or by any government or governmental department, commission, board, court, authority or agency having jurisdiction of the matter in question.
LIEN. Any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or otherwise), priority, security interest or other security device or arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code (as in effect from time to time in the relevant jurisdiction) or otherwise, or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).
LLC AGREEMENT. That certain Amended and Restated Company Agreement of Calair L.L.C., effective of even date with this Lease.
LEASED SLOT(S): Individually, any one of, and collectively, any two or more of, the Slots listed on Exhibit A attached hereto, as the same may be replaced by Substitute Slots or Swapped Slots, or both.
OPERATIVE DOCUMENTS. Collectively, the LLC Agreement, the CAL Sale Agreement, this Lease, and the Redemption Option Agreement.
PERMITTED ENCUMBRANCES. (i) Bankers' rights of set-off for uncollected items and routine fees and expenses arising in the ordinary course of business, (ii) Liens created by or pursuant to, or expressly permitted under this Lease and the Operative Documents, (iii) Liens for taxes and other governmental charges and assessments (and other Liens imposed by Law) not yet delinquent or being contested in good faith and by proper proceedings and as to which appropriate reserves (in the good faith judgment of the relevant Person) are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors, (iv) restrictions on transfers of securities or voting under applicable Laws and (v) restrictions on the transfer of assets of Lessor under any Operative Documents.
PERSON: Any individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization or association or other entity.
PURCHASED SLOTS. As defined in Section 13(b) hereof.
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REDEMPTION OPTION AGREEMENT. That certain Redemption Option Agreement, effective of even date with this Lease, between Lessor and Chase Equity Associates, L.P.
RENT. shall mean $8,141,931, and shall be payable in arrears on the 1st day of each April and October during the Term following the Commencement Date.
SLOT. As defined in Section 93.213 of the Slot Regulations.
SLOT REGULATIONS. The Federal Aviation Regulations, Title 14 Code of Federal Regulations, Part 93, Subpart S, as amended, or any successor provisions or regulations.
SLOT TRADE. A temporary "swap" of operating authority with respect to a Slot in exchange for operating authority with respect to another Slot or a temporary "slide" transaction with the FAA or equivalent Government Authority with respect to a Slot, in each case in accordance with standard airline industry practice.
SUBSTITUTE SLOTS. As defined in Section 13(c) hereof.
SWAPPED SLOTS. As defined in Section 13(b) hereof.
TERM. The term of this Lease, as specified in Section 3(a) hereof.
USE PROVISIONS. Section 93.227 of the Slot Regulations.
SECTION 2. LEASE OF SLOTS.
Subject to the terms and conditions of this Lease, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the Leased Slots for the Term.
SECTION 3. TERM AND RENT.
(a) The term of this Lease shall begin on the Commencement Date, unless Lessee has not received written confirmation of the Lease from the FAA pursuant to Section 93.221 of the Slot Regulations, in which case the term of this Lease shall begin on the date such written confirmation is received by Lessee, and shall continue until April 1, 2008, unless terminated earlier in accordance with the provisions of Section 11(a) hereof.
(b) All payments of Rent hereunder shall be made by wire transfer of immediately available funds not later than 12:30 p.m. (New York City time) on the 1st day of each April and October following the Commencement Date, and on the last Business Day of the Term, and shall be paid to Lessor at Account No. 323095852 at The Chase Manhattan Bank, ABA No. 021000021, 55 Water Street, New York, New York, 10041, or at such other account as Lessor may direct by notice in writing to Lessee. If any April 1 or October 1 of any year shall not be Business Day, then the payment of Rent shall be made on the next succeeding Business Day with the same force and effect as if made on the originally specified payment date for Rent; provided, however, that, if such payment of Rent is made on the next succeeding Business Day, no additional Rent shall accrue for
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the period from and after such payment date to the next succeeding Business Day. The first installment of Rent shall be prorated based on the actual number of days since the Commencement Date, and the payment of Rent on the last day of the Term shall be prorated based on the actual number of days since the immediately preceding April 1st or October 1st, as applicable, in each case, divided by 182 or 183, as applicable.
(c) Other than a termination pursuant to Section 11(a) hereof, this Lease shall not terminate, nor shall the respective obligations of Lessor or Lessee be affected, by reason of any interference with the use of the Leased Slots by any private person, corporation or Governmental Authority, or the invalidity or unenforceability or lack of due authorization of this Lease or lack of right, power of authority of Lessor to enter into this Lease. It is the express intention of Lessor and Lessee that all Rent payable by Lessee hereunder shall be, and continue to be, payable in all events unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Lease.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Lessee represents that Lessee is an air carrier certificated under 49 U.S.C. ss. 44705, that is authorized to use the Leased Slots under the Slot Regulations and Use Provisions.
(b) Lessee represents that Lessee has obtained all approvals necessary to consummate this transaction.
(c) Upon request by Lessor, Lessee shall provide Lessor with a copy of all use reports for the Leased Slots filed with the FAA by the Lessee pursuant to the Use Provisions promptly after such reports are delivered to the FAA.
(d) EXCEPT AS SET FORTH IN SECTION 5(B), LESSOR SHALL NOT BE DEEMED TO HAVE MADE AND LESSOR HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, AS TO THE LEASED SLOTS. LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE OF ANY KIND OR NATURE WHATSOEVER (INCLUDING STRICT LIABILITY IN TORT) NOR SHALL THERE BE ANY ABATEMENT OF RENTAL, ARISING DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH (I) THE USE OF THE LEASED SLOTS, (II) ANY INTERRUPTION OR LOSS OF SERVICE OR USE OF THE LEASED SLOTS, OR (III) ANY LOSS OF BUSINESS OR OTHER CONSEQUENTIAL LOSS OR DAMAGE WHETHER OR NOT RESULTING FROM ANY OF THE FOREGOING. LESSEE WILL DEFEND, INDEMNIFY AND HOLD LESSOR HARMLESS AGAINST ANY AND ALL CLAIMS, DEMANDS, COSTS, EXPENSES, DAMAGES, LOSSES AND LIABILITIES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE LEASED SLOTS.
SECTION 5. ENCUMBRANCES.
(a) Other than Permitted Encumbrances and those Encumbrances arising pursuant to subleases and Slot Trades permitted by Section 9 hereof, (i) Lessee will not directly or indirectly
-4- 7 create, incur, assume any Encumbrances on its interest in the Leased Slots and (ii) Lessee will not directly or indirectly create, incur, or assume any Encumbrances on or with respect to the Leased Slots which challenge or in any way restrict Lessor's ownership interest in the Leased Slots (and Lessee will promptly, at its own expense, take such action as may be necessary duly to discharge any such Encumbrance). Lessee shall not be responsible for any Encumbrance created or incurred by Lessor with respect to the Leased Slots, other than Encumbrances created at the request of Lessee.
(b) Other than Permitted Encumbrances, Lessor will not directly or indirectly create, incur, assume or suffer to exist any Encumbrances on its title to or interest in the Leased Slots (and Lessor will promptly, at its own expense, take such action as may be necessary duly to discharge any such Encumbrance).
SECTION 6. IMPOSITIONS.
This Lease is intended to be a completely net lease. In connection therewith, Lessee agrees to pay and to indemnify Lessor for, and hold Lessor harmless from and against, all expenses and costs of any kind or nature whatsoever relating to the use, ownership, retention, maintenance, or sale of the Leased Slot ...
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