Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except: (a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or (b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or (c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case: (i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement; (ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date; (iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor; (iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A); (v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date; (vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and (vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee. Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
Appears in 10 contracts
Samples: Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.), Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.), Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.)
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease; provided that, so long as no Default of the type referred to in Section 14(a), 14(b) or 14(e) or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation or such Wet Lease, and so long as the action to be taken shall not deprive the Indenture Trustee of the perfected first priority Lien of the Trust Indenture on the Airframe or (subject to the further proviso (B) to clause (i) of this Section 7(b)) any Engine, and so long as Lessee (or any Sublessee) shall comply with the provisions of Sections 7(a) and 11 hereof, Lessee (or, except with respect to clause (x) below, any Sublessee) may, without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe which is owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Secured Certificates shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) such mortgage liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor; or
(x) Lessee may, at any time, enter into any sublease with (1) a U.S. Air Carrier, (2) any Person approved in writing by Lessor, which approval shall not be unreasonably withheld or (3) after the Depreciation Period, any Permitted Sublessee if (A) in any such case, the Sublessee under such sublease which may be redacted is not subject to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date such sublease is entered into, (B) in the event that the Sublessee under such sublease is a foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains diplomatic relations with the requirements of Clause 14, provided, howevercountry in which such proposed Sublessee is principally based at the time such sublease is entered into (or, in the case of a sublease to a Permitted proposed Sublessee principally based in Taiwan, maintains diplomatic relations at least as good as those in effect on the Delivery Date) and (C) in the event that the Sublessee under such sublease is a foreign air carrier, Lessor and the Indenture Trustee shall have received an opinion of counsel to Lessee to the effect that (I) the terms of the proposed sublease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable against the proposed Sublessee in the country in which the proposed Sublessee is principally based, (II) there exist no possessory rights in favor of the Sublessee under such Sublease under the laws of such Sublessee's country of domicile that would, upon bankruptcy or insolvency of or other default by Lessee and assuming at such time such Sublessee is not insolvent or bankrupt, prevent the return or repossession of the Aircraft in accordance with the terms of this Lease, (III) the laws of such Sublessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use, and (IV) the laws of such Sublessee's country of domicile would give recognition to Lessor's title to the Aircraft, to the registry of the Aircraft in the name of the Lessor (or Lessee, as "lessee", or the proposed Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(vas "sublessee", as appropriate) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater Lien of the Trust Indenture, provided, however, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this paragraph (b) (other than the rights transfer of Lessee under this Agreement and an Engine which is deemed an Event of Loss) shall state that it is be effectively subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documentsto, and secured any Sublease permitted by this paragraph (b) shall be expressly subject and subordinate to, all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor the terms of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreementto the Lien of the Trust Indenture, including, without limitation, the covenants contained in Section 7(a) hereof and Lessor's rights to repossession pursuant to Section 15 hereof and to avoid such Sublease upon such repossession, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease to the same extent as if there were no sublease in existence; such Sublease or transfer had not occurred, and, except as otherwise provided always that if herein, the terms of any obligation which is required such Sublease shall not permit any Sublessee to take any action not permitted to be performed taken by Lessee pursuant in this Lease with respect to the Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine or Wet Lease shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Any sublease permitted under this Agreement is performed Section 7(b) shall expressly prohibit any further sub-sublease by a sublesseethe Sublessee. Lessor agrees, then performance by such sublessee shall for the purposes benefit of this Agreement constitute performance Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine (other than an Engine) owned by LesseeLessee (or any Sublessee), any lessor of any engine (other than an Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that none of Lessor, its successors or assigns will acquire or claim, as against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; provided, however, that such agreement of Lessor shall not be for the benefit of any lessor or secured party of any airframe (other than the Airframe) leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee of or any other holder of a security interest in an airframe owned by Lessee (or any Sublessee), unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. Lessee shall pay on demand all costs provide to the Owner Participant and expenses associated with the Indenture Trustee (i) written notice of any Sublease hereunder (such notice to be given not later than five days prior to entering into such sublease including the reasonable costs Sublease, if practicable, but in any event promptly after entering into any such Sublease) and expenses (ii) a copy of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing Sublease which has a term of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreementmore than three months.
Appears in 6 contracts
Samples: Lease Agreement (Northwest Airlines Holdings Corp/Pred), Lease Agreement (Northwest Airlines Holdings Corp/Pred), Lease Agreement (Northwest Airlines Inc /Mn)
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another that is a solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Owner, Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, LessorOwner’s rights as owner and lessor of the Aircraft under the Head Lease, Lessor’s rights as lessor of the Aircraft hereunder and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee. Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
Appears in 4 contracts
Samples: Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.), Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.), Aircraft Lease Agreement (Controladora Vuela Compania De Aviacion, S.A.B. De C.V.)
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease, and so long as Lessee (or any Sublessee) shall comply with the provisions of Section 7(a) and Section 11 hereof, Lessee may (or may permit any Sublessee to), without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to interchange agreements or any Engine to pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements or pooling or similar arrangements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Equipment Notes shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) the documents creating such mortgage liens or other security interests (or, if applicable, another written agreement governing such mortgage liens or other security interests) effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by clause (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither clause (iii) nor clause (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States Government or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the Lessor, Air Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States Government or any instrumentality or agency thereof pursuant to a contract, a copy of such which shall be provided to Lessor; or
(x) Lessee may, at any time in its sole discretion, enter into any sublease with (A) any Person domiciled in the United States, (B) after the Depreciation Period, any Permitted Sublessee or (C) after the Depreciation Period, any other Person approved in writing by Lessor, which may approval shall not be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, unreasonably withheld; provided, however, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft or renew the Lease in accordance with the terms hereof at the end of the Basic Term or Renewal Term, as the case may be, to a date beyond the latest permissible expiration date of such sublease; provided, further, with respect to a sublease to a Permitted Sublesseeunder subclauses (B) or (C) of this clause (x), Lessee shall deliver to Lessor an opinion of counsel to the effect that (I) the obligations of Lessee and the rights and remedies of the Lessor under the Lease remain valid, binding and (subject to customary bankruptcy and equitable remedies exceptions and to other exceptions customary in such Opinions) enforceable; (II) the terms of the sublease constitute valid and binding obligations of the Sublessee and (subject to customary bankruptcy and equitable remedies exceptions and to other exceptions customary in such Opinions) enforceable against Sublessee (it being understood that such opinion may be exempted from an opinion as to the requirements form of the Sublease only and may assume due authorization, execution, delivery, requisite approvals and absence of conflicts with laws, contracts or organizational documents) under this sub-clause 9.3(c)(iv)(A);
the laws of the jurisdiction governing the sublease, (vIII) that there is no tort liability of the owner of an aircraft not in possession thereof under the laws of the jurisdiction of the proposed sublessee other than tort liability which might have been imposed on such owner under the laws of the United States or any such sublease shall not, and shall state thereof (it being understood that it shall not, create in the event such opinion cannot be given such opinion requirement shall be waived if insurance reasonably satisfactory to Lessor, in its individual capacity, is provided at Lessee's expense) and (IV) unless Lessee shall have agreed to provide insurance covering the risk of requisition of use of the Aircraft by the government of the jurisdiction of the proposed sublessee rights reasonably satisfactory to the Owner Participant, that the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use; and provided finally that, with respect to any sublease to any Affiliate of Lessee, (I) such sublessee shall be a Certificated Air Carrier and (II) Lessee shall deliver to Lessor an opinion of counsel to the effect that Lessee would be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the Aircraft greater than if such Affiliate were to be a debtor in a case under Chapter 11 of the rights of Lessee under this Agreement and shall state that it is Bankruptcy Code, such opinion to be subject to customary assumptions and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lesseequalifications. Lessee shall pay on demand all costs and expenses associated provide Lessor with entering into such a copy of any sublease including the reasonable costs and expenses which has a term of each Lessor Party and any Lender more than one (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c1). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
Appears in 4 contracts
Samples: Lease Agreement (Us Airways Inc), Lease Agreement (Us Airways Inc), Lease Agreement (Us Airways Inc)
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease; provided that, so long as no Default of the type referred to in Section 14(a), 14(b) or 14(e) or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation or such Wet Lease, and so long as the action to be taken shall not deprive the Indenture Trustee of the perfected first priority Lien of the Trust Indenture on the Airframe or (subject to the further proviso (B) to clause (i) of this Section 7(b)) any Engine, and so long as Lessee (or any Sublessee) shall comply with the provisions of Sections 7(a) and 11 hereof, Lessee (or, except with respect to clause (x) below, any Sublessee) may, without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe which is owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Secured Certificates shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) such mortgage liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor; or
(x) Lessee may, at any time, enter into any sublease with (1) a U.S. Air Carrier, (2) any Person approved in writing by Lessor, which approval shall not be unreasonably withheld or (3) after the Depreciation Period, any Permitted Sublessee if (A) in any such case, the Sublessee under such sublease which may be redacted is not subject to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date such sublease is entered into, (B) in the event that the Sublessee under such sublease is a foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains diplomatic relations with the requirements of Clause 14, provided, howevercountry in which such proposed Sublessee is principally based at the time such sublease is entered into (or, in the case of a sublease to a Permitted proposed Sublessee principally based in Taiwan, maintains diplomatic relations at least as good as those in effect on the Delivery Date) and (C) in the event that the Sublessee under such sublease is a foreign air carrier, Lessor and the Indenture Trustee shall have received an opinion of counsel to Lessee to the effect that (I) the terms of the proposed sublease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable against the proposed Sublessee in the country in which the proposed Sublessee is principally based, (II) there exist no possessory rights in favor of the Sublessee under such Sublease under the laws of such Sublessee's country of domicile that would, upon bankruptcy or insolvency of or other default by Lessee and assuming at such time such Sublessee is not insolvent or bankrupt, prevent the return or repossession of the Aircraft in accordance with the terms of this Lease, (III) the laws of such Sublessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use, and (IV) the laws of such Sublessee's country of domicile would give recognition to Lessor's title to the Aircraft, to the registry of the Aircraft in the name of the Lessor (or Lessee, as "lessee", or the proposed Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(vas "sublessee", as appropriate) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater Lien of the Trustee Indenture, provided, however, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this paragraph (b) (other than the rights transfer of Lessee under this Agreement and an Engine which is deemed an Event of Loss) shall state that it is be effectively subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documentsto, and secured any Sublease permitted by this paragraph (b) shall be expressly subject and subordinate to, all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor the terms of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreementto the Lien of the Trust Indenture, including, without limitation, the covenants contained in Section 7(a) hereof and Lessor's rights to repossession pursuant to Section 15 hereof and to avoid such Sublease upon such repossession, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease to the same extent as if there were no sublease in existence; such Sublease or transfer had not occurred, and, except as otherwise provided always that if herein, the terms of any obligation which is required such Sublease shall not permit any Sublessee to take any action not permitted to be performed taken by Lessee pursuant in this Lease with respect to the Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine or Wet Lease shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Any sublease permitted under this Agreement is performed Section 7(b) shall expressly prohibit any further sub-sublease by a sublesseethe Sublessee. Lessor agrees, then performance by such sublessee shall for the purposes benefit of this Agreement constitute performance Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine (other than an Engine) owned by LesseeLessee (or any Sublessee), any lessor of any engine (other than an Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that none of Lessor, its successors or assigns will acquire or claim, as against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; provided, however, that such agreement of Lessor shall not be for the benefit of any lessor or secured party of any airframe (other than the Airframe) leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee of or any other holder of a security interest in an airframe owned by Lessee (or any Sublessee), unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. Lessee shall pay on demand all costs provide to the Owner Participant and expenses associated with the Indenture Trustee (i) written notice of any Sublease hereunder (such notice to be given not later than five days prior to entering into such sublease including the reasonable costs Sublease, if practicable, but in any event promptly after entering into any such Sublease) and expenses (ii) a copy of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing Sublease which has a term of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreementmore than three months.
Appears in 3 contracts
Samples: Lease Agreement (Northwest Airlines Corp), Lease Agreement (Northwest Airlines Corp), Lease Agreement (Northwest Airlines Corp)
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease, and so long as Lessee (or any Sublessee) shall comply with the provisions of Section 7(a) and Section 11 hereof, Lessee may (or may permit any Sublessee to), without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to interchange agreements or any Engine to pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements or pooling or similar arrangements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Equipment Notes shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) the documents creating such mortgage liens or other security interests (or, if applicable, another written agreement governing such mortgage liens or other security interests) effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by clause (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither clause (iii) nor clause (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States Government or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States Government or any instrumentality or agency thereof pursuant to a contract, a copy of such which shall be provided to Lessor; or
(x) Lessee may, at any time in its sole discretion, enter into any sublease with (A) any Person domiciled in the United States, (B) after the Depreciation Period, any Permitted Sublessee or (C) after the Depreciation Period, any other Person approved in writing by Lessor, which may approval shall not be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, unreasonably withheld; provided, however, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft or renew the Lease in accordance with the terms hereof at the end of the Basic Term or Renewal Term, as the case may be, to a date beyond the latest permissible expiration date of such sublease; provided, further, with respect to a sublease to a Permitted Sublesseeunder subclauses (B) or (C) of this clause (x), Lessee shall deliver to Lessor an opinion of counsel to the effect that (I) the obligations of Lessee and the rights and remedies of the Lessor under the Lease remain valid, binding and (subject to customary bankruptcy and equitable remedies exceptions and to other exceptions customary in such Opinions) enforceable; (II) the terms of the sublease constitute valid and binding obligations of the Sublessee and (subject to customary bankruptcy and equitable remedies exceptions and to other exceptions customary in such Opinions) enforceable against Sublessee (it being understood that such opinion may be exempted from an opinion as to the requirements form of the Sublease only and may assume due authorization, execution, delivery, requisite approvals and absence of conflicts with laws, contracts or organizational documents) under this sub-clause 9.3(c)(iv)(Athe laws of the jurisdiction governing the sublease, (III) that there is no tort liability of the owner of an aircraft not in possession thereof under the laws of the jurisdiction of the proposed sublessee other than tort liability which might have been imposed on such owner under the laws of the United States or any state thereof (it being understood that in the event such opinion cannot be given such opinion requirement shall be waived if insurance reasonably satisfactory to Lessor, in its individual capacity, is provided at Lessee's expense);
(v) any such sublease shall not, and (IV) unless Lessee shall state have agreed to provide insurance covering the risk of requisition of use of the Aircraft by the government of the jurisdiction of the proposed sublessee reasonably satisfactory to the Owner Participant, that it shall not, create the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use; and provided finally that, with respect to any sublease to any Affiliate of Lessee, (I) such sublessee rights in shall be a Certificated Air Carrier and (II) Lessee shall deliver to Lessor an opinion of counsel to the effect that Lessee would be entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to the Aircraft greater than if such Affiliate were to be a debtor in a case under Chapter 11 of the rights of Lessee under this Agreement and shall state that it is Bankruptcy Code, such opinion to be subject to customary assumptions and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lesseequalifications. Lessee shall pay on demand all costs and expenses associated provide Lessor with entering into such a copy of any sublease including the reasonable costs and expenses which has a term of each Lessor Party and any Lender more than one (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c1). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
Appears in 2 contracts
Samples: Lease Agreement (Us Airways Inc), Lease Agreement (Us Airways Inc)
Possession and Subleases. The Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of the Lessor;, which consent will not be unreasonably withheld or delayed, lease, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install any Engine or permit any Engine to be installed on any airframe other than the Airframe; provided that so long as no Lease Event of Default or Special Default shall have occurred and be continuing at the time of such delivery, transfer or relinquishment of possession or installation and the Lessee shall continue to comply with the provisions of Section 7(a) and Section 10 hereof, the Lessee may, without the prior written consent of the Security Trustee:
(ivi) prior to Customary Pooling Arrangements. Subject the execution and delivery of any sublease Airframe and the commencement Engines or engines installed thereon to any interchange agreements or any Engine to normal pooling or similar arrangements customary in the airline industry and entered into by the Lessee in the ordinary course of the leasing of the Aircraft under such subleaseits business with, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of the Lessee or any U.S. Air Carrier, another U.S. Air Carrier, (B) a sublease to Foreign Air Carrier that is a Permitted SublesseeSublessee under this Section 7(c), (C) a manufacturer of aircraft, engines or parts or (D) any other Person if approved in writing by the Security Trustee (which approval will not be unreasonably withheld or delayed); provided that (1) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (2) if the Lessor’s title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and the Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(vor shall cause a Sublessee to) comply with Section 9(d) hereof in respect thereof, and (3) any such sublease interchange agreement to which the Airframe may be subject shall notbe with a U.S. Air Carrier, and shall state that it shall not, create a Foreign Air Carrier or any other air carrier if approved in writing by the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease Security Trustee (which approval will terminate on not be unreasonably withheld or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee. Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(cdelayed). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
Appears in 1 contract
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease; provided that, so long as no Default of the type referred to in Section 14(a), 14(b) or 14(e) or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation or such Wet Lease, and so long as the action to be taken shall not deprive the Indenture Trustee of the perfected first priority Lien of the Trust Indenture on the Airframe or (subject to the further proviso (B) to clause (i) of this Section 7(b)) any Engine, and so long as Lessee (or any Sublessee) shall comply with the provisions of Sections 7(a) and 11 hereof, Lessee (or, except with respect to clause (x) below, any Sublessee) may, without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe which is owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Secured Certificates shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) such mortgage liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor; or
(x) Lessee may, at any time, enter into any sublease with (1) a U.S. Air Carrier or (2) after the Depreciation Period, any Permitted Sublessee if (A) in any such case, the Sublessee under such sublease which may be redacted is not subject to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date such sublease is entered into, (B) in the event that the Sublessee under such sublease is a foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains diplomatic relations with the requirements of Clause 14, provided, howevercountry in which such proposed Sublessee is principally based at the time such sublease is entered into (or, in the case of a sublease to a Permitted proposed Sublessee principally based in Taiwan, maintains diplomatic relations at least as good as those in effect on the Delivery Date) and (C) in the event that the Sublessee under such sublease is a foreign air carrier, Lessor and the Indenture Trustee shall have received an opinion of counsel to Lessee to the effect that (I) the terms of the proposed sublease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable against the proposed Sublessee in the country in which the proposed Sublessee is principally based, (II) there exist no possessory rights in favor of the Sublessee under such Sublease under the laws of such Sublessee's country of domicile that would, upon bankruptcy or insolvency of or other default by Lessee and assuming at such time such Sublessee is not insolvent or bankrupt, prevent the return or repossession of the Aircraft in accordance with the terms of this Lease, (III) the laws of such Sublessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use, and (IV) the laws of such Sublessee's country of domicile would give recognition to Lessor's title to the Aircraft, to the registry of the Aircraft in the name of the Lessor (or Lessee, as "lessee", or the proposed Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(vas "sublessee", as appropriate) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater Lien of the Trustee Indenture, provided, however, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this paragraph (b) (other than the rights transfer of Lessee under this Agreement and an Engine which is deemed an Event of Loss) shall state that it is be effectively subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documentsto, and secured any Sublease permitted by this paragraph (b) shall be expressly subject and subordinate to, all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor the terms of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreementto the Lien of the Trust Indenture, including, without limitation, the covenants contained in Section 7(a) hereof and Lessor's rights to repossession pursuant to Section 15 hereof and to avoid such Sublease upon such repossession, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease to the same extent as if there were no sublease in existence; such Sublease or transfer had not occurred, and, except as otherwise provided always that if herein, the terms of any obligation which is required such Sublease shall not permit any Sublessee to take any action not permitted to be performed taken by Lessee pursuant in this Lease with respect to the Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine or Wet Lease shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Any sublease permitted under this Agreement is performed Section 7(b) shall expressly prohibit any further sub-sublease by a sublesseethe Sublessee. Lessor agrees, then performance by such sublessee shall for the purposes benefit of this Agreement constitute performance Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine (other than an Engine) owned by LesseeLessee (or any Sublessee), any lessor of any engine (other than an Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that none of Lessor, its successors or assigns will acquire or claim, as against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; provided, however, that such agreement of Lessor shall not be for the benefit of any lessor or secured party of any airframe (other than the Airframe) leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee of or any other holder of a security interest in an airframe owned by Lessee (or any Sublessee), unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. Lessee shall pay on demand all costs provide to the Owner Participant and expenses associated with the Indenture Trustee (i) written notice of any Sublease hereunder (such notice to be given not later than five days prior to entering into such sublease including the reasonable costs Sublease, if practicable, but in any event promptly after entering into any such Sublease) and expenses (ii) a copy of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing Sublease which has a term of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreementmore than three months.
Appears in 1 contract
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease, and so long as Lessee (or any Sublessee) shall comply with the provisions of Section 7(a) and Section 11 hereof, Lessee may (or may permit any Sublessee to), without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to interchange agreements or any Engine to pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements or pooling or similar arrangements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Equipment Notes shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) the documents creating such mortgage liens or other security interests (or, if applicable, another written agreement governing such mortgage liens or other security interests) effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by clause (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither clause (iii) nor clause (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States Government or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States Government or any instrumentality or agency thereof pursuant to a contract, a copy of such which shall be provided to Lessor; or
(x) Lessee may, at any time in its sole discretion, enter into any sublease with (A) any Person domiciled in the United States, (B) after the Depreciation Period, any Permitted Sublessee or (C) after the Depreciation Period, any other Person approved in writing by Lessor, which may approval shall not be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, unreasonably withheld; provided, however, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft or renew the Lease in accordance with the terms hereof at the end of the Basic Term or Renewal Term, as the case may be, to a date beyond the latest permissible expiration date of such sublease; provided, further, with respect to a sublease to a Permitted Sublesseeunder subclauses (B) or (C) of this clause (x), Lessee shall deliver to Lessor an opinion of counsel to the effect that (I) the obligations of Lessee and the rights and remedies of the Lessor under the Lease remain valid, binding and (subject to customary bankruptcy and equitable remedies exceptions and to other exceptions customary in such Opinions) enforceable; (II) the terms of the sublease constitute valid and binding obligations of the Sublessee and (subject to customary bankruptcy and equitable remedies exceptions and to other exceptions customary in such Opinions) enforceable against Sublessee (it being understood that such opinion may be exempted from an opinion as to the requirements form of the Sublease only and may assume due authorization, execution, delivery, requisite approvals and absence of conflicts with laws, contracts or organizational documents) under this sub-clause 9.3(c)(iv)(Athe laws of the jurisdiction governing the sublease, (III) that there is no tort liability of the owner of an aircraft not in possession thereof under the laws of the jurisdiction of the proposed sublessee other than tort liability which might have been imposed on such owner under the laws of the United States or any state thereof (it being understood that in the event such opinion cannot be given such opinion requirement shall be waived if insurance reasonably satisfactory to Lessor, in its individual capacity, is provided at Lessee's expense);
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of (IV) unless Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered agreed to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor provide insurance covering the risk of requisition of use of the Aircraft and by the Lender’s rights government of the jurisdiction of the proposed sublessee reasonably satisfactory to the Owner Participant, that the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all event of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance requisition by such sublessee shall for the purposes government of this Agreement constitute performance by Lesseesuch use. Lessee shall pay on demand all costs and expenses associated provide Lessor with entering into such a copy of any sublease including the reasonable costs and expenses which has a term of each Lessor Party and any Lender more than one (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c1). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.
Appears in 1 contract
Samples: Lease Agreement (Us Airways Inc)
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease; PROVIDED that, so long as no Default of the type referred to in Section 14(a) or 14(e) or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation or such Wet Lease, and so long as the action to be taken shall not deprive the Indenture Trustee of the perfected first priority Lien of the Trust Indenture on the Airframe or (subject to the further proviso (B) to clause (i) of this Section 7(b)) any Engine, and so long as Lessee (or any Sublessee) shall comply with the provisions of Sections 7(a) and 11 hereof, Lessee (or, except with respect to clause (x) below, any Sublessee) may, without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; PROVIDED that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be permitted under clause (i) above, PROVIDED that Lessor's title to such Engine and, if any Secured Certificates shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, PROVIDED that (as regards this clause (C)) such mortgage liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, PROVIDED that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, PROVIDED that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; PROVIDED that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor; or
(x) Lessee may, at any time, enter into any sublease with (1) a U.S. Air Carrier, (2) any Person approved in writing by Lessor, which approval shall not be unreasonably withheld or (3) after the Depreciation Period, any Permitted Sublessee if (A) in any such case, the Sublessee under such sublease which may be redacted is not subject to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date such sublease is entered into, (B) in the event that the Sublessee under such sublease is a foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains diplomatic relations with the requirements of Clause 14, provided, howevercountry in which such proposed Sublessee is principally based at the time such sublease is entered into (or, in the case of a sublease to a Permitted proposed Sublessee principally based in Taiwan, maintains diplomatic relations at least as good as those in effect on the Delivery Date) and (C) in the event that the Sublessee under such sublease is a foreign air carrier, Lessor and the Indenture Trustee shall have received an opinion of counsel to Lessee to the effect that (I) the terms of the proposed sublease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable against the proposed Sublessee in the country in which the proposed Sublessee is principally based, (II) there exist no possessory rights in favor of the Sublessee under such Sublease under the laws of such Sublessee's country of domicile that would, upon bankruptcy or insolvency of or other default by Lessee and assuming at such time such Sublessee is not insolvent or bankrupt, prevent the return or repossession of the Aircraft in accordance with the terms of this Lease, (III) the laws of such Sublessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use, and (IV) the laws of such Sublessee's country of domicile would give recognition to Lessor's title to the Aircraft, to the registry of the Aircraft in the name of the Lessor (or Lessee, as "lessee", or the proposed Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(vas "sublessee", as appropriate) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater Lien of the Trustee Indenture, PROVIDED, HOWEVER, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this paragraph (b) (other than the rights transfer of Lessee under this Agreement and an Engine which is deemed an Event of Loss) shall state that it is be effectively subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documentsto, and secured any Sublease permitted by this paragraph (b) shall be expressly subject and subordinate to, all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor the terms of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreementto the Lien of the Trust Indenture, including, without limitation, the covenants contained in Section 7(a) hereof and Lessor's rights to repossession pursuant to Section 15 hereof and to avoid such Sublease upon such repossession, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease to the same extent as if there were no sublease in existence; such Sublease or transfer had not occurred, and, except as otherwise provided always that if herein, the terms of any obligation which is required such Sublease shall not permit any Sublessee to take any action not permitted to be performed taken by Lessee pursuant in this Lease with respect to the Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine or Wet Lease shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Any sublease permitted under this Agreement is performed Section 7(b) shall expressly prohibit any further sub-sublease by a sublesseethe Sublessee. Lessor agrees, then performance by such sublessee shall for the purposes benefit of this Agreement constitute performance Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine (other than an Engine) owned by LesseeLessee (or any Sublessee), any lessor of any engine (other than an Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that none of Lessor, its successors or assigns will acquire or claim, as against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; PROVIDED, HOWEVER, that such agreement of Lessor shall not be for the benefit of any lessor or secured party of any airframe (other than the Airframe) leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee of or any other holder of a security interest in an airframe owned by Lessee (or any Sublessee), unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. Lessee shall pay on demand all costs provide to the Owner Participant and expenses associated with the Indenture Trustee (i) written notice of any Sublease hereunder (such notice to be given not later than five days prior to entering into such sublease including the reasonable costs Sublease, if practicable, but in any event promptly after entering into any such Sublease) and expenses (ii) a copy of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing Sublease which has a term of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreementmore than three months.
Appears in 1 contract
Possession and Subleases. Lessee shall not will not, without the prior written ------------------------ consent of Lessor, sublease or charter otherwise in any manner deliver, transfer or otherwise part with relinquish possession of the Aircraft exceptAirframe or any Engine or install or permit any Engine to be installed on any airframe other than the airframe; provided, that -------- so long as no Lease Default or Lease Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation, and so long as any Sublessee Federal Express Boeing 727-2D4 N362PA shall continue to comply with the provisions of Sections 7.1 and 11 hereof, Lessee may, without the prior written consent of Lessor:
(ai) subject the Engines or engines then installed on the Airframe to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or any Sublessee) in the ordinary course of its business; provided, that if Lessor's title to any Engine shall be divested under any -------- such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10.2 hereof in respect thereof;
(ii) deliver possession of the Airframe or any Engine to the manu- facturer thereof or to any other Person for testing, service, overhaul workrepair, maintenance or repair overhaul work on the Airframe or alterations, Engine or any Part of any thereof or for alterations or modifications in or additions in accordance with this Agreement; orto such Airframe or Engine to the extent required or permitted by the terms of Section 8.4 hereof;
(biii) install an Engine on terms whereby an airframe owned by Lessee (or any Sublessee) which airframe is free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the Aircraft shall at all times engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that permitted under subparagraph (i) of this Section 7.2; provided, that Lessor's title to such -------- Engine shall not be divested as a result thereof, and (C) mortgage Liens or other security interests; provided, that (as regards this clause (C)), such -------- mortgage Liens or other security interests effectively provide that such Engine shall not become subject to the Aircraft shall continue lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) install an Engine on an airframe leased to be registered in the State of Registration and maintained in accordance with the Maintenance Program, Lessee (iior any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other secu- Federal Express Boeing 727-2D4 N362PA
(1) the insurance requirements under this Agreement continue right of the parties to be satisfied the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (2) Liens of the type permitted by subparagraph (iii) of this Section 7.2 and (B) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the terms lien of such wet lease, charter conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (iii) nor subparagraph (iv) of this Section 7.2 is applicable; provided, that such installation shall -------- be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10.2 hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10.2;
(vi) transfer (or permit any Sublessee to transfer) possession of the Airframe or any Engine to the Government pursuant to the Civil Reserve Air Fleet Program for a period, including all permissible renewal periods, that does not extend beyond the end of the Term and so long as Lessee (or any such agreement is expressly subordinated to this Agreement and the rights of Sublessee) shall promptly notify Lessor hereunder in respect upon transferring possession of the AircraftAirframe or any Engine to the Government pursuant to the Civil Reserve Air Fleet Program, provided, that if such transfer of possession continues -------- beyond the end of the Basic Term or the then-current Renewal Term, the Basic Term or such Renewal Term, as applicable, shall be automatically extended (including the obligation to pay Rent at the rate then applicable) for a period of six (6) months thereafter;
(vii) transfer possession of the Airframe or any Engine to the Government pursuant to a contract, a copy of which shall be provided to Lessor, provided that the term of such contract, including all permissible renewal Federal Express Boeing 727-2D4 N362PA periods, shall not continue beyond the end of the Term; or
(cviii) pursuant so long as the Sublessee is not subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the sublease is entered into, Lessee may, at any time (subject to the notice requirements specified in the second to last paragraph of this Section 7.2), in its sole discretion, enter into a sublease with (xA) a U.S. Air Carrier, (B) after the fifth anniversary of the Commencement Date, any Permitted Sublessee or (yC) another solventany other Person approved in writing by each owner Participant, commercial air carrier which approval shall not be unreasonably withheld; provided, however, that: -------- -------
(1) no Sublease, including all permissible renewal periods, entered into pursuant to this subparagraph (viii), shall extend beyond the date three months prior to the expiration of the Basic Term or air operator (such air carrier any Renewal Term then in effect, unless Lessee shall have irrevocably committed to purchase the Aircraft or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in renew this Lease at the end of the Basic Term or Renewal Term, as the case may be, to a date at least three months beyond the latest permissible expiration date of subclause such sublease;
(y2) onlyeach Sublease, including all permissible renewal periods, entered into pursuant to this subparagraph (viii) the prior express written consent of Lessor acting reasonably provided shall provide that in each case:
(i) no Default is then continuing the Sublessee may not operate the Aircraft (A) in countries with which the United States does not maintain diplomatic relations or (B) in areas of armed hostilities, and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term Sublease shall terminate if the Subleases's country of domicile and the United States terminate normal diplomatic relations; and
(3) no Sublease, including all permissible renewal periods, entered into pursuant to this subparagraph (viii) shall be made to a Person described in clause (C) of this subparagraph (viii) which is not domiciled in a country listed in Exhibit D, as in effect from time to time, unless Lessor and each Owner Participant shall have received reasonably satisfactory assurances Federal Express Boeing 727-2D4 N362PA regarding the protection of the rights of lessors under the laws of such sublease shall not extend or be capable Person's jurisdiction and domicile, including a favorable opinion of extension beyond the Expiry Date;
counsel (iiiwhich counsel and opinion are reasonably satisfactory to Lessor and each Owner Participant) in such sublease shall provide jurisdiction (a) that the sublessee terms (including, without limitation, the governing-law, service-of-process and jurisdictional-submission provisions thereof) of the Sublease and the Lease are legal, valid, binding and enforceable in such jurisdiction against third parties to, substantially the same extent as in the United States, and that the Sublease is subject and subordinate to the Lease, (b) that it is not necessary for the Owner Trustee or either Owner Participant to register or qualify to do business in such jurisdiction, (c) that there is no tort liability of the owner of an aircraft not in possession thereof under the laws of such jurisdiction (it being understood that, in the event such latter opinion cannot be given in a form satisfactory to the Lessor and each Owner Participant, such opinion shall not enter intobe waived if insurance reasonably satisfactory to Lessor, each Owner Participant and the Owner Trustee in its individual capacity is available to cover such risk and is provided by Lessee or agree the Sublessee), (d) unless Lessee shall have provided insurance reasonably satisfactory to enter into, any sub-sublease or otherwise part with possession or Lessor and each Owner Participant covering the risk of requisition of use of the Aircraft or any part thereof (except by the government of such jurisdiction so long as the Aircraft is subleased, that the laws of such jurisdiction require fair compensation by the government of such jurisdiction payable in a currency freely convertible into Dollars for the purpose loss of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement of the leasing use of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts in the event of the proposed sublease requisition by such government of such use, (e) that there exist no possessory rights in favor of such Sublessee under the laws of such jurisdiction which would, upon bankruptcy of Lessee or other default by Lessee or Sublessee, prevent the return of the Aircraft to Lessor in accordance with and all related documentation for review and final approval where permitted by the Lessorterms of Sections 14 and 15 hereof upon the exercise by Lessor of its remedies under Section 15 hereof and the practical realization by Lessor of its rights and benefits under Section 15, and (Bf) have delivered to such further effect Federal Express Boeing 727-2D4 N362PA with respect to such other matters as Lessor a complete certified true copy of such sublease which or either Owner Participant may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with reasonably request or unless the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming Owner Participant shall otherwise approve. Upon receipt of the foregoing opinion of counsel by Lessor and acknowledging that each Owner Participant, Exhibit D shall be amended to add such sublease will terminate on country. If at any time Lessor or before the Termination Date;
either Owner Participant determines (vi) Lessee and sublessee which determination shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to be evidenced by an opinion of local legal counsel) with respect to a country then listed on Exhibit D, that the opinion of counsel addressing referred to in this subclause (3) would not be obtainable or that the foregoing United States does not maintain normal diplomatic relations with such country, Exhibit D shall be amended to delete such country; provided, that such deletion -------- will not impair any Sublease or any interchange agreement or pooling or similar arrangement then in effect. If the Aircraft shall be subject to a Sublease at any time within the last four months of the Term, the Aircraft shall be returned to Lessee's active fleet upon the expiration of such Sublease. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this Section 7.2 (other than the transfer of an engine which is deemed an Event of Loss) shall be subject and otherwise subordinate to, and any Sublease permitted by this Section 7.2 shall be made expressly subject and subordinate to, all the terms of this Lease, including, without limitation, the covenants contained in form Section 7.1 hereof and substance Lessor's rights to repossession pursuant to Section 15 hereof and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) void such Sublease upon such repossession, and Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease, and the terms of any such Sublease shall not permit any Sublessee to take any action not permitted to be taken by Lessee or such Sublessee in this Lease with respect to the same extent Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Lessor agrees, for the benefit of Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine owned by Lessee (or any Sublessee), any lessor of any engine leased to Lessee (or any Sublessee) and any conditional vendor of any engine purchased by Lessee (or any Sublessee) Federal Express Boeing 727-2D4 N362PA subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that neither Lessor nor its successors or assigns will acquire or claim, as if there were no sublease against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in existencesuch engine as the result of such engine being installed on the Airframe; provided always provided, however, that if such agreement -------- ------- of Lessor shall not be for the benefit of any obligation lessor or secured party of any airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee of or any other holder of a security interest in an airframe owned by Lessee (or any Sublessee), unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which is required agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. Lessee shall provide each Owner Participant written notice and a copy of any Sublease hereunder which has a term of more than three (3) months (such notice to be performed by given in any event promptly after entering into such Sublease). Lessor acknowledges that any Wet Lease or similar arrangement under which Lessee pursuant to this Agreement is performed by maintains operational control of the Aircraft shall not constitute a sublesseedelivery, then performance by such sublessee shall transfer or relinquishment of possession for the purposes of this Agreement constitute performance Section 7.2, provided that any Wet Lease entered into by a Sublessee shall comply with -------- the restrictions that would otherwise be applicable under this Section 7.2 if such Wet Lease were a Sublease. Lessor acknowledges that any consolidation or merger of Lessee or conveyance, transfer or lease of all or substantially all of Lessee. Lessee 's assets permitted hereunder shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted not be prohibited by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this AgreementSection 7.2.
Appears in 1 contract
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease; provided that, so long as no Default of the type referred to in Section 14(a) or 14(e) or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation or such Wet Lease, and so long as the action to be taken shall not deprive the Indenture Trustee of the perfected first priority Lien of the Trust Indenture on the Airframe or (subject to the further proviso (B) to clause (i) of this Section 7(b)) any Engine, and so long as Lessee (or any Sublessee) shall comply with the provisions of Sections 7(a) and 11 hereof, Lessee (or, except with respect to clause (x) below, any Sublessee) may, without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Secured Certificates shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) such mortgage liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor; or
(x) Lessee may, at any time, enter into any sublease with (1) a U.S. Air Carrier, (2) any Person approved in writing by Lessor, which approval shall not be unreasonably withheld or (3) after the Depreciation Period, any Permitted Sublessee if (A) in any such case, the Sublessee under such sublease which may be redacted is not subject to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date such sublease is entered into, (B) in the event that the Sublessee under such sublease is a foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains diplomatic relations with the requirements of Clause 14, provided, howevercountry in which such proposed Sublessee is principally based at the time such sublease is entered into (or, in the case of a sublease to a Permitted proposed Sublessee principally based in Taiwan, maintains diplomatic relations at least as good as those in effect on the Delivery Date) and (C) in the event that the Sublessee under such sublease is a foreign air carrier, Lessor and the Indenture Trustee shall have received an opinion of counsel to Lessee to the effect that (I) the terms of the proposed sublease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable against the proposed Sublessee in the country in which the proposed Sublessee is principally based, (II) there exist no possessory rights in favor of the Sublessee under such Sublease under the laws of such Sublessee's country of domicile that would, upon bankruptcy or insolvency of or other default by Lessee and assuming at such time such Sublessee is not insolvent or bankrupt, prevent the return or repossession of the Aircraft in accordance with the terms of this Lease, (III) the laws of such Sublessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use, and (IV) the laws of such Sublessee's country of domicile would give recognition to Lessor's title to the Aircraft, to the registry of the Aircraft in the name of the Lessor (or Lessee, as "lessee", or the proposed Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(vas "sublessee", as appropriate) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater Lien of the Trustee Indenture, provided, however, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this paragraph (b) (other than the rights transfer of Lessee under this Agreement and an Engine which is deemed an Event of Loss) shall state that it is be effectively subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documentsto, and secured any Sublease permitted by this paragraph (b) shall be expressly subject and subordinate to, all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor the terms of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreementto the Lien of the Trust Indenture, including, without limitation, the covenants contained in Section 7(a) hereof and Lessor's rights to repossession pursuant to Section 15 hereof and to avoid such Sublease upon such repossession, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease to the same extent as if there were no sublease in existence; such Sublease or transfer had not occurred, and, except as otherwise provided always that if herein, the terms of any obligation which is required such Sublease shall not permit any Sublessee to take any action not permitted to be performed taken by Lessee pursuant in this Lease with respect to the Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine or Wet Lease shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Any sublease permitted under this Agreement is performed Section 7(b) shall expressly prohibit any further sub-sublease by a sublesseethe Sublessee. Lessor agrees, then performance by such sublessee shall for the purposes benefit of this Agreement constitute performance Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine (other than an Engine) owned by LesseeLessee (or any Sublessee), any lessor of any engine (other than an Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that none of Lessor, its successors or assigns will acquire or claim, as against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; provided, however, that such agreement of Lessor shall not be for the benefit of any lessor or secured party of any airframe (other than the Airframe) leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee of or any other holder of a security interest in an airframe owned by Lessee (or any Sublessee), unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. Lessee shall pay on demand all costs provide to the Owner Participant and expenses associated with the Indenture Trustee (i) written notice of any Sublease hereunder (such notice to be given not later than five days prior to entering into such sublease including the reasonable costs Sublease, if practicable, but in any event promptly after entering into any such Sublease) and expenses (ii) a copy of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing Sublease which has a term of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreementmore than three months.
Appears in 1 contract
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease, and so long as Lessee (or any Sublessee) shall comply with the provisions of Section 7(a) and Section 11 hereof, Lessee may (or may permit any Sublessee to), without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to interchange agreements or any Engine to pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; provided that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier.
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements or pooling or similar arrangements which would be permitted under clause (i) above, provided that Lessor's title to such Engine and, if any Equipment Notes shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, provided that (as regards this clause (C)) the documents creating such mortgage liens or other security interests (or, if applicable, another written agreement governing such mortgage liens or other security interests) effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by clause (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither clause (iii) nor clause (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States Government or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the Lessor, Air Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof and (B) have delivered to promptly notify Lessor a complete certified true copy upon transferring possession of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(v) Airframe or any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and Engine to the Aircraft greater than United States of America or any agency or instrumentality thereof pursuant to such program; (viiifor a period not to extend beyond the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor end of the Aircraft Term, enter into a Wet Lease for the Airframe and the Lender’s rights in the Aircraft and under this Engines or engines then installed thereon with any third party; provided that if Lessee (or any Sublessee) shall enter into any Wet Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, for a period of more than one year (including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(viirenewal options) Lessee shall remain primarily liable hereunder for the performance provide Lessor written notice of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required such Wet Lease (such notice to be performed by Lessee pursuant given prior to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee. Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and Wet Lease, if practicable, but in any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(cevent promptly after entering into such Wet Lease). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.;
Appears in 1 contract
Samples: Lease Agreement (Us Airways Inc)
Possession and Subleases. Lessee shall not will not, without the prior ------------------------ written consent of Lessor, sublease or charter otherwise in any manner deliver, transfer or otherwise part with relinquish possession of the Aircraft exceptAirframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe; provided that, so long as no Default or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation, Lessee may, without the prior written consent of Lessor:
(ai) subject the Airframe and the Engines or engines then installed thereon to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or any Sublessee) in the ordinary course of its business and, in the case of the Airframe, with a U.S. Air Carrier or a Permitted Sublessee or any other air carrier reasonably approved by Lessor; provided, that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe or any Engine, and (B) if, in spite of Lessee's reasonable efforts to prevent the same, Lessor's interest in any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof; [First Amended and Restated Lease Agreement (1989 I)]
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof or to any other Person for testing, service, overhaul workrepair, maintenance or repair overhaul work on the Airframe or alterations, Engine or any Part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Sections 7(a) and 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) which airframe is free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be permitted under clause (i) above, provided that Lessor's interest in accordance with such Engine shall not be divested as a result thereof and (C) mortgage Liens or other security interests, provided that (as regards this Agreement; orclause (C)), such mortgage Liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (B) Liens of the type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on terms whereby the Aircraft shall at all times be in the possession and operational control of such airframe;
(v) install an Engine on an airframe owned by Lessee and operated (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee’s flight crew; provided always that Lessee (ior any Sublessee) the Aircraft shall continue subject to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements a conditional sale or other security agreement under this Agreement continue to be satisfied and circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) transfer (or permit any Sublessee to transfer) possession of the terms Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program for a period, including all permissible renewal periods (so long as such wet leaserenewal options have been irrevocably exercised by Lessee), charter or other agreement shall that does not extend beyond the end of the Term so long as Lessee (or any [First Amended and any such agreement is expressly subordinated to this Restated Lease Agreement and the rights of (1989 I)] Sublessee) shall promptly notify Lessor hereunder in respect (x) upon transferring possession of the AircraftAirframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program and (y) of the name and address of the Contracting Office Representative for the Military Airlift Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof;
(vii) transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor provided that the term of such contract, including all permissible renewal periods (so long as such renewal options have been irrevocably exercised by Lessee), shall not continue beyond the end of the Term; or
(cviii) pursuant so long as the Sublessee is not subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the sublease is entered into, Lessee may, at any time (subject to the notice requirements specified in the second to last paragraph of this Section 7(b)), in its sole discretion, enter into a sublease with (x1) a U.S. Air Carrier, (2) after the Restricted Period, any Permitted Sublessee or Sublessee, (y3) another solventafter the Restricted Period, commercial air carrier or air operator (any other Person approved in writing by the Owner Participant, which approval shall not be unreasonably withheld if prior to Lessee's entering into such air carrier or air operator to be a duly certificated air carrier holding a current sublease, Lessor, Owner Participant and valid air operator’s certificate issued by a Government Entity in a country the Indenture Trustee receive an opinion of counsel reasonably acceptable to Lessor) with (Lessor and Owner Participant that the terms of the sublease and other Operative Documents will be valid in the case country where the Permitted Sublessee is domiciled; that no Participant is required to register to do business in the Sublessee's country of subclause (y) only) the prior express written consent domicile; that there is no tort liability for owners not in possession that is more extensive than under United States law or any state law; that fair compensation in a currency freely convertible into United States dollars is mandated if there is requisition of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, use or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use title of the Aircraft or any part thereof by the country in which the Sublessee is domiciled (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor;
(iv) prior it being understood that if such opinion cannot be given in a form satisfactory to the execution and delivery of any sublease and Owner Participant) such opinion will be waived if insurance reasonably satisfactory to the commencement Owner Participant is provided at Lessee's expense to cover such risk); that there exist no possessory rights in favor of the leasing Sublessee which upon Lessee's bankruptcy or other Default hereunder (assuming the Sublessee is not bankrupt) would prevent the return of the Aircraft under such sublease, Lessee shall in accordance with the terms hereof or inhibit the Lessor's rights therein; or (A4) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval any other Person approved in writing by the LessorOwner Participant, and which approval shall not be unreasonably withheld if conditions similar to those set forth in clause (Bviii)(3) above have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, been satisfied; provided, however, that no sublease, including all permissible renewal periods, entered into pursuant to this clause (viii) shall extend beyond the Basic Term or any Renewal Term then in effect, unless Lessee shall have irrevocably committed to purchase the Aircraft or renew this Lease in accordance with the terms hereof at the end of the Basic Term or Renewal Term, as the case may be, to a date beyond the latest permissible expiration date of such sublease. [First Amended and Restated Lease Agreement (1989 I)] The rights of any Sublessee or other transferee who receives possession by reason of a sublease to a Permitted Sublessee, Lessee transfer permitted by this paragraph (b) (other than the transfer of an Engine which is deemed an Event of Loss) shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(v) any such sublease shall notsubject and subordinate to, and the terms of any Sublease permitted by this Section 7(b) shall state that it shall notbe subject and subordinate to, create all the terms of this Lease, including, without limitation, the covenants contained in Section 7(a) hereof and Lessor's (and, so long as the sublessee Trust Indenture is in effect, the Indenture Trustee's (as Lessor's assignee)) rights in to repossession pursuant to Section 15 hereof and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that void such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all Sublease upon such documentsrepossession, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease to the same extent as if there were no sublease in existence; provided always that if such Sublease or transfer had not occurred, and the terms of any obligation which is required such Sublease shall not permit any Sublessee to take any action not permitted to be performed taken by Lessee in this Lease with respect to the Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Lessor agrees, for the benefit of Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine (other than an Engine) owned by Lessee (or any Sublessee), any lessor of any engine (other than an Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that neither Lessor nor its successors or assigns will acquire or claim as against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe. Lessee shall give the Lessor and the Indenture Trustee written notice (which notice, to the extent feasible, shall be given prior to entering into such Sublease) of any Sublease entered into pursuant to the terms hereof which has a term of more than three months. Lessee shall, upon request, provide Lessor with a copy of any Sublease hereunder which has a term of more than three months. Lessor acknowledges that any Wet Lease or similar arrangement under which Lessee maintains operational control of the Aircraft shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 7(b). Lessor acknowledges that any consolidation or merger of Lessee or conveyance, transfer or lease of all or substantially all of Lessee's assets permitted by the Operative Documents shall not be prohibited by this Section 7(b). No sublease permitted pursuant to this Agreement is performed by a sublessee, then performance by such sublessee Section 7(b) shall for the purposes of this Agreement constitute performance by Lessee. Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and permit any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any further sub-subleasing of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this AgreementAircraft.
Appears in 1 contract
Possession and Subleases. Lessee shall not will not, without the prior written consent of Lessor, sublease or charter otherwise in any manner deliver, transfer or otherwise part with relinquish possession of the Aircraft exceptAirframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe; provided that, so long as no Default or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation, and so long as the action to be taken shall not deprive the Mortgagee of the lien of the Trust Indenture on the Airframe or any Engine and Lessee and any Sublessee shall continue to comply with the provisions of Sections 6, 7(a) and 11, Lessee may, without the prior written consent of Lessor:
(a1) subject the Engines or engines then installed on the Airframe to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or any Sublessee) in the ordinary course of its business, provided that if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 19(b) hereof in respect thereof;
(2) deliver possession of the Airframe or any Engine to the manufacturer thereof or to any other Person for testing, service, overhaul workrepair, maintenance or repair overhaul work on the Airframe or alterations, Engine or any Part of any thereof or for alterations or modifications in or additions in accordance with to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(3) install an Engine on an airframe owned by Lessee (or any Sublessee) which airframe is free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliance, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements, provided that Lessor's title to such Engine shall not be divested as a result thereof and (C) mortgage Liens or other security interests, provided, that (as regards this Agreement; orclause (C)), such mortgage Liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(4) install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, provided that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the lease or conditional sale or other security agreement covering such airframe, or their assignees, and (B) Liens of the type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the Lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on terms whereby the Aircraft shall at all times be in the possession and operational control of such airframe;
(5) install an Engine on an airframe owned by Lessee and operated (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee’s flight crew; provided always that Lessee (ior any Sublessee) the Aircraft shall continue subject to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements a conditional sale or other security agreement under this Agreement continue to be satisfied and circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, provided that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 19(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(6) transfer (or permit any Sublessee to transfer) possession of the terms airframe or any Engine to the United States of such wet leaseAmerica or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program for a period, charter or other agreement shall including all permissible renewal periods, that does not extend beyond the end of the Term and so long as Lessee (or any such agreement is expressly subordinated to this Agreement and the rights of Sublessee) shall promptly notify Lessor hereunder in respect upon transferring possession of the AircraftAirframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to the Civil Reserve Air Fleet Program;
(7) transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor, provided that the term of such contract, including all permissible renewal periods, shall not continue beyond the end of the Term; or
(c) pursuant 8) so long as the Sublessee is not subject to a proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date the sublease is entered into, Lessee may, at any time (subject to the notice requirements specified in the third to last paragraph of this Section 7(b)), in its sole discretion, enter into a sublease with (x1) a U.S. Air Carrier, (2) after the close of the calendar year in which occurs the seventh anniversary of the Closing Date, any Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity that is domiciled in a country reasonably acceptable to Lessor) that maintains normal diplomatic relations with the United States (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions which for purposes of this Agreement;
Section 7(b) (iiviii) shall include Taiwan and any other country that is similarly situated) or (3) after the term close of such sublease the calendar year in which occurs the seventh anniversary of the Closing Date, any other Person approved in writing by the Lessor, which approval shall not be unreasonably withheld; provided, however, (A) that no sublease, including all permissible renewal periods, entered into pursuant to this clause (viii), shall extend or be capable of extension beyond the Expiry Date;
(iii) such sublease Term, unless Lessee shall provide that the sublessee shall not enter into, or agree have irrevocably committed to enter into, any sub-sublease or otherwise part with possession or use of purchase the Aircraft or any part thereof (except for renew this Lease in accordance with the purpose of maintenance and repairs as permitted under this Agreement) without terms hereof at the prior written consent of Lessor;
(iv) prior to the execution and delivery of any sublease and the commencement end of the leasing Term to a date beyond the latest permissible expiration date of the Aircraft under such sublease, Lessee shall (A) promptly deliver drafts of the proposed sublease and all related documentation for review and final approval by the Lessor, and (B) have delivered that prior to Lessor a complete certified true copy of entering into such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted SublesseeSublease, Lessee shall be exempted from provide assurances reasonably satisfactory to Lessor and the requirements under this sub-clause 9.3(c)(iv)(A);
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and Mortgagee to the Aircraft greater effect that the provisions of Section 11 hereof have been complied with after giving effect to such Sublease. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this paragraph (b) (other than the rights transfer of Lessee under this Agreement and an Engine which is deemed an Event of Loss) shall state that it is be subject to and subordinate to all the terms of this Agreement and Lease, including, without limitation, Lessor's (and, so long as the relevant sublessee shall provide a subordination acknowledgment Trust Indenture is in effect, the Mortgagee's (as Lessor's assignee)) rights to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered repossession pursuant to Lessor any and all such documentsSection 15 hereof, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease, and the terms of any such Sublease shall not permit any Sublessee to take any action not permitted to be taken by Lessee in this Lease with respect to the same extent Aircraft. No pooling agreement, sublease or other relinquishment of possession shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Lessor agrees, for the benefit of Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine owned by Lessee (or any Sublessee), any lessor of any engine leased to Lessee (or any Sublessee) and any conditional vendor of any engine purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that neither Lessor not its successors or assigns will acquire or claim, as if there were no sublease against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in existence; provided always that if such engine as the result of such engine being installed on the Airframe. Lessee shall give the Owner Participant and the Mortgagee (i) prior written notice of any obligation which is required Sublease to be performed entered into pursuant to the terms hereof and (ii) upon written request, a copy of any Sublease hereunder which has a term of more than one year. Lessor acknowledges that any Wet Lease or similar arrangement under which Lessee maintains operational control of the Aircraft shall not constitute a delivery, transfer or relinquishment of possession for purposes of this Section 7(b). Lessor acknowledges that any consolidation or merger of Lessee or conveyance, transfer or lease of all or substantially all of Lessee's assets permitted by Lessee the Operative Documents shall not be prohibited by this Section 7(b). No Sublease permitted pursuant to this Agreement is performed by a sublessee, then performance by such sublessee Section shall for the purposes of this Agreement constitute performance by Lessee. Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and permit any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing further sub-leasing of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this AgreementAircraft.
Appears in 1 contract
Possession and Subleases. Lessee shall not will not, without the prior written consent of Lessor and the Indenture Trustee (but in regard to the Indenture Trustee, only so long as the Original Loan Participant is a Holder), sublease or charter otherwise in any manner deliver, transfer or otherwise part with relinquish possession of the Aircraft except:
(a) for testingAirframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe; provided that, serviceso long as no Section 14(a), overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program), (iif) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (yg) another solventDefault or, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause paragraph (yviii) onlyof this Section 7(b), no Section 14(d) (solely with respect to Lessee's obligations under Section 7(a) or (b)(viii) hereof or Section 8 hereof) Default, or any Event of Default shall have occurred and be continuing at the prior express written consent time of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing such sublease, delivery, transfer or relinquishment of possession or installation, and such sublease shall be on such terms so long as shall ensure that the sublessee shall not, in complying with such terms, cause Lessee action to be in breach taken shall not deprive the Indenture Trustee of the perfected lien of the Trust Indenture on the Airframe or any of, or cause a Default under, Engine and Lessee and any Sublessee shall continue to comply with the provisions of this Agreement;
(iiSections 6, 7(a) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter intoand 11 hereof, or agree to enter intoLessee may, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor:
(i) subject the Engines or engines then installed on the Airframe to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or any Sublessee) in the ordinary course of its business; provided that if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof;
(ivii) prior deliver possession of the Airframe or any Engine to the execution and delivery manufacturer thereof or to any other Person for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any Part of any sublease thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe owned by Lessee (or any Sublessee) which airframe is free and the commencement clear of the leasing of the Aircraft under such subleaseall Liens, Lessee shall except: (A) promptly deliver drafts of the proposed sublease Permitted Liens and all related documentation for review and final approval by the Lessor, and (B) have delivered to Lessor a complete certified true copy of such sublease which may be redacted to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance with the requirements of Clause 14, provided, however, in the case of a sublease to a Permitted Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(v) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater than the rights of Lessee under this Agreement and shall state that it is subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documents, and secured all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreement, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if there were no sublease in existence; provided always that if any obligation which is required to be performed by Lessee pursuant to this Agreement is performed by a sublessee, then performance by such sublessee shall for the purposes of this Agreement constitute performance by Lessee. Lessee shall pay on demand all costs and expenses associated with entering into such sublease including the reasonable costs and expenses of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreement.those
Appears in 1 contract
Possession and Subleases. Lessee shall not sublease or charter or otherwise part with possession of the Aircraft except:
(a) for testing, service, overhaul work, maintenance or repair or alterations, modifications or additions in accordance with this Agreement; or
(b) on terms whereby the Aircraft shall at all times be in the possession and operational control of Lessee and operated by Lessee’s flight crew; provided always that (i) the Aircraft shall continue to be registered in the State of Registration and maintained in accordance with the Maintenance Program, (ii) the insurance requirements under this Agreement continue to be satisfied and (iii) the terms of such wet lease, charter or other agreement shall not extend beyond the end of the Term and any such agreement is expressly subordinated to this Agreement and the rights of Lessor hereunder in respect of the Aircraft; or
(c) pursuant to a sublease to (x) a Permitted Sublessee or (y) another solvent, commercial air carrier or air operator (such air carrier or air operator to be a duly certificated air carrier holding a current and valid air operator’s certificate issued by a Government Entity in a country reasonably acceptable to Lessor) with (in the case of subclause (y) only) the prior express written consent of Lessor acting reasonably provided that in each case:
(i) no Default is then continuing and such sublease shall be on such terms as shall ensure that the sublessee shall will not, in complying with such terms, cause Lessee to be in breach of any of, or cause a Default under, the provisions of this Agreement;
(ii) the term of such sublease shall not extend or be capable of extension beyond the Expiry Date;
(iii) such sublease shall provide that the sublessee shall not enter into, or agree to enter into, any sub-sublease or otherwise part with possession or use of the Aircraft or any part thereof (except for the purpose of maintenance and repairs as permitted under this Agreement) without the prior written consent of Lessor, sublease or otherwise in any manner deliver, transfer or relinquish possession of the Airframe or any Engine or install or permit any Engine to be installed on any airframe other than the Airframe or enter into any Wet Lease; PROVIDED that, so long as no Default of the type referred to in Section 14(a), 14(b) or 14(e) or Event of Default shall have occurred and be continuing at the time of such sublease, delivery, transfer or relinquishment of possession or installation or such Wet Lease, and so long as the action to be taken shall not deprive the Indenture Trustee of the perfected first priority Lien of the Trust Indenture on the Airframe or (subject to the further proviso (B) to clause (i) of this Section 7(b)) any Engine, and so long as Lessee (or any Sublessee) shall comply with the provisions of Sections 7(a) and 11 hereof, Lessee (or, except with respect to clause (x) below, any Sublessee) may, without the prior written consent of Lessor:
(i) subject the Airframe and the Engines or engines then installed thereon to normal interchange agreements or any Engine to normal pooling or similar arrangements, in each case customary in the airline industry and entered into by Lessee (or, if a Sublease is then in effect, by Sublessee) in the ordinary course of its business; PROVIDED that (A) no such agreement or arrangement contemplates or requires the transfer of title to the Airframe, (B) if Lessor's title to any Engine shall be divested under any such agreement or arrangement, such divestiture shall be deemed to be an Event of Loss with respect to such Engine and Lessee shall (or shall cause Sublessee to) comply with Section 10(b) hereof in respect thereof, and (C) any interchange agreement to which the Airframe may be subject shall be with a U.S. Air Carrier or a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any Engine to the manufacturer thereof (or for delivery thereto) or to any organization (or for delivery thereto) for testing, service, repair, maintenance or overhaul work on the Airframe or Engine or any part of any thereof or for alterations or modifications in or additions to such Airframe or Engine to the extent required or permitted by the terms of Section 8(c) hereof;
(iii) install an Engine on an airframe which is owned by Lessee (or any Sublessee) free and clear of all Liens, except: (A) Permitted Liens and those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe (but not to the airframe as an entirety), (B) the rights of third parties under interchange agreements which would be permitted under clause (i) above, PROVIDED that Lessor's title to such Engine and, if any Secured Certificates shall be outstanding, the first priority Lien of the Trust Indenture shall not be divested or impaired as a result thereof and (C) mortgage liens or other security interests, PROVIDED that (as regards this clause (C)) such mortgage liens or other security interests effectively provide that such Engine shall not become subject to the lien of such mortgage or security interest, notwithstanding the installation thereof on such airframe;
(iv) prior install an Engine on an airframe leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement, PROVIDED that (x) such airframe is free and clear of all Liens, except: (A) the rights of the parties to the execution lease or conditional sale or other security agreement covering such airframe, or their assignees, and delivery of any sublease and the commencement (B) Liens of the leasing type permitted by subparagraph (iii) of this paragraph (b) and (y) such lease, conditional sale or other security agreement effectively provides that such Engine shall not become subject to the lien of such lease, conditional sale or other security agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Lessee (or any Sublessee), leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement under circumstances where neither subparagraph (iii) nor subparagraph (iv) of this paragraph (b) is applicable, PROVIDED that such installation shall be deemed an Event of Loss with respect to such Engine and Lessee shall (or shall cause any Sublessee to) comply with Section 10(b) hereof in respect thereof, Lessor not intending hereby to waive any right or interest it may have to or in such Engine under applicable law until compliance by Lessee with such Section 10(b);
(vi) to the extent permitted by Section 8(b) hereof, subject any appliances, Parts or other equipment owned by Lessor and removed from the Airframe or any Engine to any pooling arrangement referred to in Section 8(b) hereof;
(vii) subject (or permit any Sublessee to subject) the Airframe or any Engine to the Civil Reserve Air Fleet Program and transfer (or permit any Sublessee to transfer) possession of the Aircraft under such subleaseAirframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet Program, so long as Lessee (or any Sublessee) shall (A) promptly deliver drafts notify Lessor upon subjecting the Airframe or any Engine to the Civil Reserve Air Fleet Program in any contract year and provide Lessor with the name and address of the proposed sublease and all related documentation Contracting Office Representative for review and final approval by the LessorAir Mobility Command of the United States Air Force to whom notice must be given pursuant to Section 15 hereof, and (B) have delivered promptly notify Lessor upon transferring possession of the Airframe or any Engine to the United States of America or any agency or instrumentality thereof pursuant to such program;
(viii) for a period not to extend beyond the end of the Term, enter into a Wet Lease for the Airframe and Engines or engines then installed thereon with any third party; PROVIDED that if Lessee (or any Sublessee) shall enter into any Wet Lease for a period of more than one year (including renewal options) Lessee shall provide Lessor written notice of such Wet Lease (such notice to be given prior to entering into such Wet Lease, if practicable, but in any event promptly after entering into such Wet Lease);
(ix) for a complete certified true period not to extend beyond the end of the Term, transfer possession of the Airframe or any Engine to the United States of America or any instrumentality or agency thereof pursuant to a contract, a copy of which shall be provided to Lessor; or
(x) Lessee may, at any time, enter into any sublease with (1) a U.S. Air Carrier, (2) any Person approved in writing by Lessor, which approval shall not be unreasonably withheld or (3) after the Depreciation Period, any Permitted Sublessee if (A) in any such case, the Sublessee under such sublease which may be redacted is not subject to remove confidential financial information and a certificate of insurance and broker’s letter of undertaking evidencing compliance proceeding or final order under applicable bankruptcy, insolvency or reorganization laws on the date such sublease is entered into, (B) in the event that the Sublessee under such sublease is a foreign air carrier (other than a foreign air carrier principally based in Taiwan), the United States maintains diplomatic relations with the requirements of Clause 14, provided, howevercountry in which such proposed Sublessee is principally based at the time such sublease is entered into (or, in the case of a sublease to a Permitted proposed Sublessee principally based in Taiwan, maintains diplomatic relations at least as good as those in effect on the Delivery Date) and (C) in the event that the Sublessee under such sublease is a foreign air carrier, Lessor and the Indenture Trustee shall have received an opinion of counsel to Lessee to the effect that (I) the terms of the proposed sublease will be legal, valid, binding and (subject to customary exceptions in foreign opinions generally) enforceable against the proposed Sublessee in the country in which the proposed Sublessee is principally based, (II) there exist no possessory rights in favor of the Sublessee under such Sublease under the laws of such Sublessee's country of domicile that would, upon bankruptcy or insolvency of or other default by Lessee and assuming at such time such Sublessee is not insolvent or bankrupt, prevent the return or repossession of the Aircraft in accordance with the terms of this Lease, (III) the laws of such Sublessee's country of domicile require fair compensation by the government of such jurisdiction payable in currency freely convertible into Dollars for the loss of use of the Aircraft in the event of the requisition by such government of such use, and (IV) the laws of such Sublessee's country of domicile would give recognition to Lessor's title to the Aircraft, to the registry of the Aircraft in the name of the Lessor (or Lessee, as "lessee", or the proposed Sublessee, Lessee shall be exempted from the requirements under this sub-clause 9.3(c)(iv)(A);
(vas "sublessee", as appropriate) any such sublease shall not, and shall state that it shall not, create in the sublessee rights in and to the Aircraft greater Lien of the Trust Indenture, PROVIDED, HOWEVER, that no sublease entered into pursuant to this clause (x) shall extend beyond the expiration of the Basic Term or any Renewal Term then in effect unless Lessee shall have irrevocably committed to purchase the Aircraft. The rights of any Sublessee or other transferee who receives possession by reason of a transfer permitted by this paragraph (b) (other than the rights transfer of Lessee under this Agreement and an Engine which is deemed an Event of Loss) shall state that it is be effectively subject to and subordinate to this Agreement and the relevant sublessee shall provide a subordination acknowledgment to Lessor and each Lender confirming the foregoing and acknowledging that such sublease will terminate on or before the Termination Date;
(vi) Lessee and sublessee shall have executed and delivered to Lessor any and all such documentsto, and secured any Sublease permitted by this paragraph (b) shall be expressly subject and subordinate to, all such approvals and consents from any person or Government Entity as Lessor shall reasonably require in order to preserve and protect its rights and interests hereunder, Lessor’s rights as owner and lessor the terms of the Aircraft and the Lender’s rights in the Aircraft and under this Lease and any Security Agreementto the Lien of the Trust Indenture, including, without limitation, the covenants contained in Section 7(a) hereof and Lessor's rights to repossession pursuant to Section 15 hereof and to avoid such Sublease upon such repossession, and Lessor’s and Lender’s rights to the proceeds hereof, including but not limited to an opinion of local legal counsel addressing the foregoing and otherwise in form and substance and from a qualified law firm of recognized standing reasonably acceptable to Lessor; and
(vii) Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement Lease to the same extent as if there were no sublease in existence; such Sublease or transfer had not occurred, and, except as otherwise provided always that if herein, the terms of any obligation which is required such Sublease shall not permit any Sublessee to take any action not permitted to be performed taken by Lessee pursuant in this Lease with respect to the Aircraft. No pooling agreement, sublease or other relinquishment of possession of the Airframe or any Engine or Wet Lease shall in any way discharge or diminish any of Lessee's obligations to Lessor hereunder or constitute a waiver of Lessor's rights or remedies hereunder. Any sublease permitted under this Agreement is performed Section 7(b) shall expressly prohibit any further sub-sublease by a sublesseethe Sublessee. Lessor agrees, then performance by such sublessee shall for the purposes benefit of this Agreement constitute performance Lessee (and any Sublessee) and for the benefit of any mortgagee or other holder of a security interest in any engine (other than an Engine) owned by LesseeLessee (or any Sublessee), any lessor of any engine (other than an Engine) leased to Lessee (or any Sublessee) and any conditional vendor of any engine (other than an Engine) purchased by Lessee (or any Sublessee) subject to a conditional sale agreement or any other security agreement, that no interest shall be created hereunder in any engine so owned, leased or purchased and that none of Lessor, its successors or assigns will acquire or claim, as against Lessee (or any Sublessee) or any such mortgagee, lessor or conditional vendor or other holder of a security interest or any successor or assignee of any thereof, any right, title or interest in such engine as the result of such engine being installed on the Airframe; PROVIDED, HOWEVER, that such agreement of Lessor shall not be for the benefit of any lessor or secured party of any airframe (other than the Airframe) leased to Lessee (or any Sublessee) or purchased by Lessee (or any Sublessee) subject to a conditional sale or other security agreement or for the benefit of any mortgagee of or any other holder of a security interest in an airframe owned by Lessee (or any Sublessee), unless such lessor, conditional vendor, other secured party or mortgagee has expressly agreed (which agreement may be contained in such lease, conditional sale or other security agreement or mortgage) that neither it nor its successors or assigns will acquire, as against Lessor, any right, title or interest in an Engine as a result of such Engine being installed on such airframe. Lessee shall pay on demand all costs provide to the Owner Participant and expenses associated with the Indenture Trustee (i) written notice of any Sublease hereunder (such notice to be given not later than five days prior to entering into such sublease including the reasonable costs Sublease, if practicable, but in any event promptly after entering into any such Sublease) and expenses (ii) a copy of each Lessor Party and any Lender (including reasonable legal fees and expenses) to the extent incurred in connection with any subleasing Sublease which has a term of the Aircraft pursuant to Clause 9.3(c). Notwithstanding any such parting with possession permitted by this Clause 9.3, Lessee shall remain responsible for procuring observance of and compliance with all of its obligations under this Agreementmore than three months.
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