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EXHIBIT 10(p)(2)
AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT, dated as of November 12, 1998 (together with all
supplements, annexes, exhibits and schedules hereto hereinafter referred to as
the "Lease"), between GENERAL ELECTRIC CAPITAL CORPORATION, with an office at
0000 XXXXXX XXXXXXX/XXXX 00 XXXXXX XXXX/XXXX, XXXXX 000, XXXX XXXX, XX 00000
(hereinafter called, together with its successors and assigns, if any, "LESSOR")
and AUTOCAM CORPORATION , a corporation organized and existing under the laws of
the State of Michigan with its mailing address and chief place of business at
0000 X. XXXXX XXXXXX , XXXXXXXX, XX 00000 (hereinafter called "LESSEE").
WITNESSETH:
I. LEASING:
(a) Subject to the terms and conditions set forth below, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the aircraft, including
the airframe, engines and all appurtenant equipment (together hereinafter the
"AIRCRAFT") described in Annex A.
(b) The obligation of Lessor to purchase the Aircraft from the manufacturer
or supplier thereof ("SUPPLIER") and to lease the same to Lessee hereunder shall
be subject to the Commencement Date of the Lease, as that term is hereinafter
defined in Section 11, occurring on or prior to the Last Delivery Date specified
in Annex B, on the representations and warranties of Lessee contained herein
being true and accurate as of the Commencement Date and further conditioned on
receipt by Lessor, on or prior to the Commencement Date, of each of the
following documents in form and substance satisfactory to Lessor: (i) a copy of
this Lease executed by Lessee, (ii) unless Lessor shall have delivered its
purchase order for such Aircraft or received a xxxx of sale for the Aircraft in
the name of lessor (and in form and substance satisfactory to Lessor), the
Purchase Document(s) Assignment and Consent in the form of annex C, with copies
of the purchase order or other purchase documents attached thereto; (iii) copies
of insurance policies or, at Lessor's option, such other evidence of insurance
which complies with the requirements of Section X, (iv) evidence of an N number
for the Aircraft together with an assignment of the rights thereto to Lessor;
(v) evidence that the Aircraft has been duly certified as to type and
airworthiness by the Federal Aviation Administration ("FAA"); (vi) evidence that
Lessor's designated FAA escrow agent (which may be FAA counsel) has received in
escrow the executed xxxx of sale and AC Form 8050-1 Aircraft Registration Form
(except for the pink copy which shall be available to be placed on the Aircraft
upon acceptance thereof), and an executed duplicate of this Lease all in proper
form for filing with the FAA; (vii) resolution of lessee authorizing this Lease
in the form of annex D; (viii) a completed inspection and/or survey with respect
to the Aircraft in accordance with the requirements set forth in the Certificate
of acceptance; and (ix) such other documents as Lessor may reasonably request.
Lessor's obligation to lease the Aircraft hereunder is further conditioned upon
(aa) the cost to Lessor of the acquisition of the Aircraft not exceeding the
Capitalized Lessor's Cost stated on Annex A; (bb) upon delivery of the Aircraft,
Lessee's execution and delivery to Lessor of a Certificate of Acceptance in the
form of annex E; and (cc) filing of all necessary documents with, and the
acceptance thereof by, the FAA.
(c) Lessor hereby appoints Lessee its agent for inspection and acceptance
of the Aircraft from the Supplier. Subject to the aforestated conditions, upon
execution by Lessee of the Certificate of Acceptance, the Aircraft described
thereon shall be deemed to have been delivered to, and irrevocably accepted by,
Lessee for lease hereunder.
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II. TERM, RENT AND PAYMENT:
(a) The rent ("RENT") payable hereunder and Lessee's right to use the
Aircraft shall commence on the date of execution by Lessee of the Certificate of
Acceptance ("COMMENCEMENT DATE"). The term ("TERM") of this Lease shall commence
on the Commencement Date and shall continue, unless earlier terminated pursuant
to the provisions hereof, until and including the Expiration Date stated in
Annex B. If any Term is extended or renewed, the word "Term" shall be deemed to
refer to all extended or renewal Terms, and all provisions of this Lease shall
apply during any such extension or renewal Terms, except as may be otherwise
specifically provided in writing.
(b) Rent shall be paid to Lessor at its address stated above, except as
otherwise directed by Lessor. Payments of Rent shall be in the amount, payable
at such intervals and shall be due in accordance with the provisions of annex B.
(Each payment of rent is hereinafter referred to as a "Rent Payment".) If one or
more Advance Rent is payable, such Advance Rent shall be (i) set forth on Annex
B and due in accordance with the provisions of annex B, and (ii) when received
by Lessor, applied to the first Basic Term for Rent Payment as set forth on
Annex B and the balance, if any, to the final Rent Payment(s), in inverse order
of maturity. In no event shall any Advance Rent or any other Rent Payment be
refunded to Lessee. If Rent is not paid within ten (10) days of its due date,
Lessee agrees to pay a late charge of five cents (50) per dollar on, and in
addition to, the amount of such Rent but not exceeding the lawful maximum, if
any.
III. RENT ADJUSTMENT:
(a) The periodic rent payments in Annex B have been calculated on the
assumption (which, as between Lessor and Lessee, is mutual) that the maximum
effective corporate income tax rate (exclusive of any minimum tax rate) for
calendar-year taxpayers ("Effective Rate") will be thirty-five percent (35%)
each year during the Term of this Lease.
(b) If, solely as a result of Congressional enactment of any law
(including, without limitation, any modification of, or amendment or addition
to, the Internal Revenue Code of 1986 as amended (the "Code"), the Effective
Rate is higher than thirty-five percent (35%) for any year during the lease
term, then Lessor shall have the right to increase such rent payments by
requiring payment of a single additional sum equal to the product of (i) the
Effective Rate (expressed as a decimal) for such year less .35 (or, in the event
that any adjustment has been made hereunder for any previous year, the Effective
Rate (expressed as a decimal) used in calculating the next previous adjustment)
times (ii) the adjusted Termination Value divided by the difference between the
new Effective Tax Rate (expressed as a decimal) and one (1). The adjusted
Termination Value shall be the Termination Value (calculated as of the first
rental due in the year for which such adjustment is being made) less the Tax
Benefits that would be allowable under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all subsequent years
of the lease term). Lessee shall pay to Lessor the full amount of the additional
rent payment on the later of (i) receipt of notice or (ii) the first day of the
year for which such adjustment is being made.
(c) Lessee's obligations under this Section Ill shall survive any
expiration or termination of this Lease.
IV. TAXES AND FEES: Except as provided in Sections III and XV(c), Lessee shall
have no liability for taxes imposed by the United States of America or any State
or political subdivision thereof which are on or measured by the net income of
Lessor. Lessee shall report (to the extent that it is legally permissible) and
pay promptly all other taxes, fees and assessments due, imposed, assessed or
levied against the Aircraft (or the purchase, ownership, delivery, leasing,
possession, use or operation thereof), this Lease (or any rentals or receipts
hereunder), Lessor or Lessee by any foreign, federal, state or local government
or taxing authority during or related to the Term of this Lease, including,
without limitation, all license and registration fees, and all sales, use,
personal property, excise, gross receipts, franchise, stamp, value added,
customer duties, lending fees, airport charges, navigation services charges,
route navigation charges or other taxes, imposts, duties and charges, together
with any penalties, fines or interest thereon (all hereinafter called "Taxes").
Lessee shall (a) reimburse Lessor upon receipt of written request for
reimbursement for any Taxes charged to or assessed against Lessor, (b) on
request of Lessor, submit to Lessor written evidence of Lessee's payment of
Taxes, (c) on all reports or returns show the ownership of the Aircraft by
Lessor, and (d) send a copy thereof to Lessor.
V. REPORTS: Lessee will provide Lessor with the following in writing within the
time periods specified: (a) notice of tax or other lien which attaches to the
Aircraft within ten (10) days of Lessee's obtaining knowledge of such attachment
and such
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additional information with respect to the tax or lien forthwith upon request of
Lessor; (b) Lessee's balance sheet and profit and loss statement within ninety
(90) days of the close of each fiscal year of lessee, and any further financial
information or reports, upon request; (c) notice to Lessor of the Aircraft's
location, and the location of all information, logs, documents and records
regarding or in respect to the Aircraft and its use, maintenance and/or
condition, immediately upon request; (d) notice to Lessor of the relocation of
the Aircraft's primary hangar location, ten (10) days prior to any relocation;
(e) notice of loss or damage to the Aircraft (which would cost more than the
lesser of (i) ten percent (10%) of the original Capitalized Lessor's Cost or
(ii) $250,000 to repair or replace) within ten (10) days of such loss or damage;
(f) notice of any accident involving the Aircraft causing personal injury or
property damage within ten (10) days of such accident; (g) copies of the
insurance policies or other evidence of insurance required by the terms hereof,
promptly upon request by Lessor; (h) copies of all information, logs, documents
and records regarding or in respect to the Aircraft and its use, maintenance
and/or condition, within ten (10) days of such request; (i) beginning on the
first anniversary of the Commencement Date of this Lease and on each anniversary
date thereafter, a certificate of the authorized officer of Lessee stating that
he has reviewed the activities of Lessee and that, to the best of his knowledge,
there exists no default (as described in Section XII) or event which with notice
or lapse of time (or both) would become such a default; 0) such information as
may be required to enable Lessor to file any reports required by any
governmental authority as a result of Lessor's ownership of the Aircraft
promptly upon request of Lessor; (k) copies of any manufacturer's maintenance
service program contract for the airframe or engines, promptly upon request; (1)
evidence of Lessee's compliance with FAA airworthiness directives and advisory
circulars and of compliance with other maintenance provisions of Section VII
hereof and the return provisions of Section XI, upon request of Lessor; and (in)
such other reports as Lessor may reasonably request.
VI. DELIVERY, REGISTRATION, USE AND OPERATION:
(a) The Aircraft shall be delivered directly from the Supplier to Lessee
unless the Aircraft is being leased pursuant to a sale leaseback transaction in
which case Lessee acknowledges that it is in possession of the Aircraft as of
the Lease Commencement Date.
(b) Lessee, at its own cost and expense, shall cause the Aircraft to be
duly registered in the name of Lessor under the Title 49, Subtitle VII of the
United States Code, as amended (the "FAA ACT"), and shall not register the
Aircraft under the laws of any other country.
(c) The possession, use and operation of the Aircraft shall be at the sole
risk and expense of Lessee. Lessee acknowledges that it accepts full operational
control of the Aircraft. Lessee agrees that the Aircraft will be used and
operated in compliance with any and all statutes, laws, ordinances, regulations
and standards or directives issued by any governmental agency applicable to the
use or operation thereof, in compliance with any airworthiness certificate,
license or registration relating to the Aircraft issued by any agency and in a
manner that does not modify or impair any existing warranties on the Aircraft or
any part thereof. Lessee will not use or operate and will not permit the
Aircraft to be used or operated in violation of any United States export control
law. Lessee will operate the Aircraft predominantly in the conduct of its
business and will not operate or permit the Aircraft to be operated (i) in a
manner wherein the predominance of use during any consecutive twelve month
period would be for a purpose other than transportation for Lessee, or in a
manner, for any time period, such that Lessor or a third party shall be deemed
to have "operational control" of the Aircraft, or (ii) for the carriage of
persons or property for hire or the transport of mail or contraband. The
Aircraft will, at all times be operated by duly qualified pilots holding at
least a valid airline transport pilot certificate and instrument rating and any
other certificate, rating, type rating or endorsement appropriate to the
Aircraft purpose of flight, condition of flight or as other-wise required by the
Federal Aviation Regulations ("FAR"). Pilots shall be employed and/or paid and
contracted for by Lessee, shall meet all recency of flight requirements and
shall meet the requirements established and specified by the insurance policies
required hereunder and the FAA. The primary hangar location of the Aircraft
shall be as stated in Annex B. Lessee shall not relocate the primary hangar
location to a hangar location outside the United States.
(d) AT ALL TIMES DURING THE TERM OF THE LEASE, THE AIRCRAFT WILL BE LOCATED
AND USED SOLELY WITHIN THE CONTINENT OF NORTH AMERICA AND THE CARIBBEAN.
(i) AT ALL TIMES DURING THE TERM OF THE LEASE, LESSEE AGREES NOT TO
OPERATE OR LOCATE THE AIRCRAFT, OR SUFFER OR PERMIT THE AIRCRAFT TO BE OPERATED,
LOCATED, OR OTHERWISE PERMITTED TO GO INTO OR OVER ANY AREA OF HOSTILITIES, ANY
GEOGRAPHIC AREA WHICH IS NOT
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COVERED BY THE INSURANCE POLICIES REQUIRED BY THIS LEASE, OR ANY COUNTRY OR
JURISDICTION FOR WHICH EXPORTS OR TRANSACTIONS ARE SUBJECT TO SPECIFIC
RESTRICTIONS UNDER ANY UNITED STATES EXPORT OR OTHER LAW OR UNITED NATIONS
SECURITY COUNCIL DIRECTIVE, INCLUDING WITHOUT LIMITATION: THE TRADING WITH THE
ENEMY ACT, 50 U.S.C. APP. SECTIONS I ET SEQ., THE INTERNATIONAL EMERGENCY
ECONOMIC POWERS ACT, 50 U.S.C. APP. SECTIONS 1701 ET SEQ., AND THE EXPORT
ADMINISTRATION ACT, 50 U.S.C. APP. SECTIONS 2401 ET SEQ. OR TO OTHER WISE
VIOLATE, OR SUFFER OR PERMIT THE VIOLATION OF, SUCH LAWS OR DIRECTIVES, LESSEE
ALSO AGREES TO PROHIBIT ANY NATIONAL OF SUCH RESTRICTED NATIONS FROM OPERATING
THE AIRCRAFT.
(ii) Lessee represents and warrants that it does not on this date hold
a contract or other obligation to operate the Aircraft in any of the following
countries: Cuba, Iraq, Libya, Myanmar, North Korea, and the Federal Republic of
Yugoslavia (Serbia and Montenegro).
(iii) The engines set forth on Annex A shall be used only on the
airframe described in Annex A and shall only be removed for maintenance in
accordance with the provisions hereof
(a) Lessee agrees ---, the Aircraft will be maintained in compliance with
any and all statutes, laws, ordinances, regulations and standards or directives
issued by any governmental agency applicable to the maintenance thereof, in
compliance with any airworthiness certificate, license or registration relating
to the Aircraft issued by any agency and in a manner that does not modify or
impair any existing warranties on the Aircraft or any part thereof
(b) Lessee shall maintain, inspect service, repair, overhaul and test the
Aircraft (including each engine of same) in accordance with (i) all maintenance
manuals initially furnished with the Aircraft including any subsequent
amendments or supplements to such manuals issued by the manufacturer from time
to time, (ii) all mandatory or otherwise required "SERVICE BULLETINS" issued,
supplied, or available by or through the manufacturer and/or the manufacturer of
any engine or part with respect to the Aircraft, (iii) all airworthiness
directives applicable to the Aircraft issued by the FAA or similar regulatory
agency having jurisdictional authority, and causing compliance to such
directives to be completed through corrective modification in lieu of operating
manual restrictions, and (iv) all maintenance requirements set forth in Annex G
hereto. Lessee shall maintain all records, logs and other materials required by
the manufacturer thereof for enforcement of any warranties or by the FAA. All
maintenance procedures required hereby shall be undertaken and completed in
accordance with the manufacturer's recommended procedures, and by properly
trained, licensed, and certificated maintenance sources and maintenance
personnel, so as to keep the Aircraft and each engine in as good operating
condition as when delivered to Lessee hereunder, ordinary wear and tear
excepted, and so as to keep the Aircraft in such operating condition as may be
necessary to enable the airworthiness certification of such Aircraft to be
maintained in good standing at all times under the FAA.
(c) Lessee agrees, at its own cost and expense, to (i) cause the Aircraft
and each engine thereon to be kept numbered with the identification in serial
number therefor as specified in Annex A; (ii) prominently display on the
Aircraft that N number, and only that N number, specified in Annex A; (iii)
notify Lessor in writing thirty (30) days prior to making any change in the
configuration (other than changes in configuration mandated by the FAA),
appearance and coloring of the Aircraft from that in effect at the time the
Aircraft is accepted by Lessee hereunder, and in the event of such change or
modification of configuration, coloring or appearance, to restore, upon request
of Lessor, the Aircraft to the configuration, coloring or appearance in effect
on the Commencement Date or, at Lessor's option to pay to Lessor an amount equal
to the reasonable cost of such restoration. Lessee will not place the Aircraft
in operation or exercise any control or dominion over the same until such
Aircraft marking has been placed thereon. Lessee will replace promptly any such
Aircraft marking which may be removed, defaced or destroyed.
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(d) Lessee shall be entitled from time to time during the Term of this
Lease to acquire and install on the Aircraft at Lessee's expense, any additional
accessory, device or equipment as Lessee may desire (each such accessory, device
or equipment, an "ADDITION"), but only so long as such Addition (i) is ancillary
to the Aircraft; (ii) is not required to render the Aircraft complete for its
intended use by Lessee; (iii) does not alter or impair the originally intended
function or use of the Aircraft; and (iv) can be readily removed without causing
material damage. Title to each Addition which is not removed by Lessee prior to
the return of the Aircraft to Lessor shall vest in Lessor upon such return.
Lessee shall repair all damage to the Aircraft resulting from the installation
or removal of any Addition so as to restore the Aircraft to its condition prior
to installation, ordinary wear and tear excepted.
(e) Any alteration or modification (each an "ALTERATION") with respect to
the Aircraft that may at any time during the Term of this Lease be required to
comply with any applicable law or any governmental rule or regulation shall be
made at the expense of Lessee. Any repair made by Lessee of or upon the Aircraft
or replacement parts, including any replacement engine, installed thereon in the
course of repairing or maintaining the Aircraft, or any Alteration required by
law or any governments] rule or regulation, shall be deemed an accession, and
title thereto shall be immediately vested in Lessor without cost or expense to
Lessor.
(f) Except as permitted under this Section VII, Lessee will not modify the
Aircraft or affix or remove any accessory to the Aircraft leased hereunder.
(g) If the Aircraft is to be operated at any time under Part 135 with the
prior written consent of Lessor, then the Aircraft shall be maintained and
operated in accordance with the applicable Part 135 standards.
VIII. LIENS, SUBLEASE AND ASSIGNMENT:
(a) LESSEE SHALL NOT SELL, TRANSFER, ASSIGN OR ENCUMBER THE AIRCRAFT, ANY
ENGINE OR ANY PART THEREOF, LESSOR'S TITLE OR ITS RIGHTS UNDER THIS LEASE AND
SHALL NOT SUBLET, CHARTER OR PART WITH POSSESSION OF THE AIRCRAFT OR ANY ENGINE
OR PART THEREOF OR ENTER INTO ANY INTERCHANGE AGREEMENT. Lessee shall not permit
any engine to be used on any other Aircraft. Lessee shall keep the Aircraft each
engine and any part thereof free and clear of all liens and encumbrances other
than those which result from (i) the respective rights of Lessor and Lessee as
herein provided; (ii) liens arising from the acts of Lessor; (iii) liens for
taxes not yet due; and (iv) inchoate materialmen's, mechanics', workmen's,
repairmen's, employees' or other like liens arising in the ordinary course of
business of Lessee for sums not yet delinquent or being contested in good faith
(and for the payment of which adequate assurances in Lessor's judgment have been
provided Lessor).
(b) Lessor and any assignee of Lessor may assign this Lease, or any part
hereof and/or the Aircraft subject hereto. Lessee hereby waives and agrees not
to assert against any such assignee, or assignee's assigns, any defense,
set-off, recoupment claim or counterclaim which Lessee has or may at any time
have against Lessor for any reason whatsoever.
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IX. LOSS, DAMAGE AND STIPULATED LOSS VALUE: Lessee hereby assumes and shall bear
the entire risk of any loss, theft, confiscation, expropriation, requisition,
damage to, or destruction of, the Aircraft, any engine or part thereof from any
cause whatsoever. Lessee shall promptly and fully notify Lessor in writing if
the Aircraft, or any engine thereto shall be or become worn out, lost stolen,
confiscated, expropriated, requisitioned, destroyed, irreparably damaged or
permanently rendered unfit for use from any cause whatsoever (such occurrences
being hereinafter called "CASUALTY OCCURRENCES"). In the event that in the
opinion of Lessor, a Casualty Occurrence has occurred which affects only the
engine(s) of the Aircraft, then Lessee, at its own cost and expense, shall
replace such engine(s) with an engine(s) acceptable to Lessor and shall cause
title to such engine(s) to be transferred to Lessor for lease to Lessee
hereunder. Upon transfer of title to Lessor of such engine(s), such engine(s)
shall be subject to the terms and conditions of this Lease, and Lessee shall
execute whatever documents or filings Lessor deems necessary and appropriate in
connection with the substitution of such replacement engine(s) for the original
engine(s). In the event that, in the opinion of Lessor, a Casualty Occurrence
has occurred in respect to the Aircraft in its entirety, on the Rent Payment
Date next succeeding a Casualty Occurrence (the "PAYMENT DATE"), Lessee shall
pay Lessor the sum of (a) the Stipulated Loss Value as set forth in Annex F
calculated as of the Rent Payment Date immediately preceding such Casualty
Occurrence; and (b) all Rent and other amounts which are due hereunder as of the
Payment Date. Upon payment of all sums due hereunder, the Term of this Lease as
to the Aircraft shall terminate and Lessor shall be entitled to recover
possession of the salvage thereof
X. INSURANCE: Lessee shall secure and maintain in effect at its own expense
throughout the Term hereof insurance against such hazards and for such risks as
Lessor may direct. All such insurance shall be with companies satisfactory to
Lessor. Without limiting the generality of the foregoing, Lessee shall maintain
(a) breach of warranty insurance, (b) liability insurance covering public
liability and property, cargo and environmental damage, in amounts not less than
fifty (50) million U.S. dollars for any single occurrence, (c) all-risk aircraft
hull and engine insurance (including, without limitation, foreign object damage
insurance) in an amount which is not less than the then Stipulated Loss Value,
and (d) confiscation, expropriation and war risk insurance. All insurance shall
name the Lessor as owner of the Aircraft and as loss payee and additional
insured (without responsibility for premiums) and shall provide that any
cancellation or substantial change in coverage shall not be effective as to the
Lessor for thirty (30) days after receipt by Lessor of written notice from such
insurer(s) of such cancellation or change, shall insure Lessor's interest
regardless of any breach or violation by Lessee of any warranties, declarations
or conditions in such policies, shall include a severability of interest clause
providing that such policy shall operate in the same manner as if there were a
separate policy covering each insured, shall waive any right of set-off against
Lessee or Lessor, and shall waive any rights of subrogation against Lessor. Such
insurance shall be primary and not be subject to any offset by any other
insurance carried by Lessor or Lessee. Lessee hereby appoints Lessor as Lessee's
attomey-in-fact to make proof of loss and claim for and to receive payment of
and to execute or endorse all documents, checks or drafts in connection with all
policies of insurance in respect of the Aircraft. Any expense of adjusting or
collecting insurance proceeds shall be home by Lessee. Upon the occurrence of a
default hereunder, Lessor may, at its option, apply proceeds of insurance, in
whole or in part to (i) repair the Aircraft or repair or replace any part
thereof or (ii) satisfy any obligation of Lessee to Lessor hereunder.
XI. RETURN OF AIRCRAFT:
(a) On the date of expiration or termination of this Lease (the Return
Date), Lessee, at its own expense, will return the Aircraft and shall deliver
all logs, loose equipment manuals and data associated with the Aircraft,
including without limitation, inspection, modification and overhaul records
required to be maintained with respect thereto under this Lease or under the
applicable rules and regulations of the FAA and under the manufacturers
recommended maintenance program, along with a currently effective FAA
airworthiness certificate to Lessor to any location within the continental
United States as Lessor shall direct. Lessee shall, upon request, assign to
Lessor its rights under any manufacturer's maintenance service contract or
extended warranty for the Aircraft any engine or part thereof All expenses for
return of the Aircraft and delivery of the aforementioned logs, manuals and data
shall be borne by Lessee. The Aircraft shall be returned in the condition in
which the Aircraft is required to be maintained pursuant to Section VII hereof,
but with all logos or other identifying marks of Lessee removed. Additionally,
Lessee shall ensure that the Aircraft complies with all requirements and
conditions set forth on Annex G hereto.
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(b) Lessor shall arrange for the inspection of the Aircraft on the Return
Date to determine if the Aircraft has been maintained and returned in accordance
with the provisions hereof. Lessee shall be responsible for the cost of such
inspection and shall pay Lessor such amount as additional Rent within ten (10)
days of demand for same. In the event that the results of such inspection
indicate that the Aircraft any engine thereto or part thereof, has not been
maintained or returned in accordance with the provisions hereof, Lessee shall
pay to Lessor within ten (10) days of demand, as liquidated damages, the
estimated cost ( "Estimated Cost") of servicing or repairing the Aircraft,
engine or part. The Estimated Cost shall be determined by Lessor by obtaining
two quotes for such service or repair work and taking the average of same.
Lessee shall bear the cost, if any, incurred by Lessor in obtaining such quotes.
(c) If Lessee fails to return the Aircraft on termination or expiration of
the Term, Lessor shall be entitled to damages equal to the higher of (i) the
Rent for the Aircraft, pro-rated on a per them basis, for each day the Aircraft
is retained in violation of the provisions hereof, or (ii) the daily fair market
rental for the Aircraft at termination or expiration, as applicable. Such
damages for retention of the Aircraft after termination or expiration of the
Term shall not be interpreted as an extension or reinstatement of the Term.
(d) All of Lessor's rights contained in this Section shall survive the
expiration or other termination of this Lease.
XII. EVENTS OF DEFAULT: The term "EVENT OF DEFAULT", wherever used herein, shall
mean any of the following events under this Lease, whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary, or come about
or be effected by operation of law, or be pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation or any
administrative or governmental body: (a) Lessee shall fail to make any payment
of Rent or any other sums payable hereunder within ten (10) days after the same
shall become due; or (b) Lessee shall fail to keep in full force and effect
insurance required under this Lease; or (c) Lessee shall or shall attempt to
(except as expressly permitted by the provisions of this Lease) remove, sell,
transfer, encumber, part with possession of, assign, charter or sublet the
Aircraft, any engine or any part thereof, use the Aircraft for an illegal
purpose, or permit the same to occur; or (d) Lessee shall fail to perform or
observe any covenant condition or agreement not included within (a), (b) or (c)
above which is required to be performed or observed by it under this Lease or
any agreement, document or certificate delivered by Lessee in connection
herewith, and such failure shall continue for twenty (20) days after written
notice thereof from Lessor to Lessee; or (e) any representation or warranty made
by Lessee in this Lease or any agreement, document or certificate delivered by
Lessee in connection herewith or pursuant hereto shall prove to have been
incorrect in any material respect when any such representation or warranty was
made or given (or, if a continuing representation or warranty, at any material
time); or (o Lessee or any guarantor or other obligor for any of the obligations
hereunder (collectively "GUARANTOR") shall generally fail to pay its debts as
they become due or shall file a voluntary petition in bankruptcy or a voluntary
petition or an answer seeking reorganization in a proceeding under any
bankruptcy laws (as now or hereafter in effect) or an answer admitting the
material allegations of a petition filed against Lessee or any Guarantor in any
such proceeding, or Lessee or any Guarantor hereof shall, by voluntary petition,
answer or consent, seek relief under the provisions of any other now existing or
future bankruptcy or other similar law (other than a law which does not provide
for or permit the readjustment or alteration of Lessee's obligations hereunder
or the obligations of any guaranty hereto providing for the reorganization or
liquidation of corporations, or providing for an agreement composition,
extension or adjustment with its creditors; or (g) a petition is filed against
Lessee or any Guarantor in a proceeding under applicable bankruptcy laws or
other insolvency laws (other than any law which does not provide for or permit
any readjustment or alteration of Lessee's obligations hereunder or the
obligations of any guaranty hereof in each case), as now or hereafter in effect,
and is not withdrawn or dismissed within ninety (90) days thereafter, or if,
under the provisions of any law (other than any law which does not provide for
or permit any readjustment or alteration of Lessee's obligations hereunder in
each case) providing for reorganization or liquidation of corporations which may
apply to Lessee or any Guarantor hereof, any court of competent jurisdiction
shall assume jurisdiction, custody or control of Lessee or any Guarantor hereof
or of any substantial part of any of such party's property and such
jurisdiction, custody or control shall remain in force unrelinguished, unstayed
or unterminated for a period of sixty (60) days; or (h) Lessee breaches or is in
default under any other agreement by and between Lessor and Lessee; or (i) there
is a material adverse change in the financial condition of Lessee or any
Guarantor hereof from the time of execution hereof, or 0) there is any
dissolution, termination of existence, merger, consolidation, change in
controlling ownership, insolvency, or business failure of Lessee or any
Guarantor hereof, or if Lessee or any Guarantor is a natural person, any death
or incompetency of Lessee or such Guarantor.
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XIII. REMEDIES:
(a) Upon the occurrence of any Event of Default and so long as the same
shall be continuing, Lessor may, at its option, at any time thereafter, exercise
one or more of the following remedies, as Lessor in its sole discretion shall
lawfully elect: (i) demand that Lessee forthwith pay as liquidated damages, for
loss of a bargain and not as a penalty, an amount equal to the Stipulated Loss
Value of the Aircraft computed as of the Basic Rent Date immediately preceding
such demand together with all Rent and other amounts due and payable for all
periods up to and including the Basic Term Rent Date following the date on which
Lessor made its demand for liquidated damages; (ii) demand that Lessee pay all
amounts due for failure to maintain or return the Aircraft as provided herein
and cause Lessee to assign to Lessor Lessee's rights under any manufacturer's
service program contract or any extended warranty contract in force for the
Aircraft; (iii) proceed by appropriate court action, either at law or in equity,
to enforce the performance by Lessee of the applicable covenants ofthis Lease or
to recover damages for breach hereof, (iv) by notice in writing terminate this
Lease, whereupon all rights of Lessee to use of the Aircraft or any part thereof
shall absolutely cease and terminate, and Lessee shall forthwith return the
Aircraft in accordance with Section Xi, but Lessee shall remain liable as
provided in Section XI; (v) request Lessee to return the Aircraft to a
designated location in accordance with Section XI; (vi) enter the premises, with
or without legal process, where the Aircraft is believed to be and take
possession thereof, (vii) sell or other-wise dispose of the Aircraft at private
or public sale, in bulk or in parcels, with or without notice, and without
having the Aircraft present at the place of sale; (viii) lease or keep idle all
or part of the Aircraft; (ix) use Lessee's premises for storage pending lease or
sale or for holding a sale without liability for rent or costs; (x) collect from
Lessee all costs, charges and expenses, including reasonable legal fees and
disbursements, incurred by Lessor by reason of the occurrence of any Event of
Default or the exercise of Lessor's remedies with respect thereto; (xi) in the
case of a failure of Lessee to comply with any provision of this Lease, Lessor
may effect such compliance, in whole or in part, and collect from Lessee as
additional Rent, all monies spent and expenses incurred or assumed by Lessor in
effecting such compliance; and/or (xii) declare any Event of Default under the
terms of this Lease to be a default under any other agreement between Lessor and
Lessee.
(b) The foregoing remedies are cumulative, and any or all thereof may be
exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute.
(c) Lessor shall have the right to any proceeds of sale, lease or other
disposition of the Aircraft if any, and shall have the right to apply same in
the following order of priorities: (i) to pay all of Lessor's costs, charges and
expenses incurred in enforcing its rights hereunder or in taking, removing,
holding, repairing, selling, leasing or otherwise disposing of the Aircraft;
then, (ii) to the extent not previously paid by Lessee, to pay Lessor all sums
due from Lessee hereunder; then (iii) to reimburse to Lessee any sums previously
paid by Lessee as liquidated damages; and (iv) any surplus shall be retained by
Lessor. Lessee shall pay any deficiency in (i) and (ii) forthwith.
(d) Waiver of any Event of Default shall not be a waiver of any other or
subsequent Event of Default. Lessor's effecting compliance in accordance with
sub-section (a)(xi) hereof shall not constitute a waiver of an Event of Default.
The failure or delay of Lessor in exercising any rights granted it hereunder
upon any occurrence of any of the contingencies set forth herein shall not
constitute a waiver of any such right upon the continuation or recurrence of any
such contingencies or similar contingencies and any single or partial exercise
of any particular right by Lessor shall not exhaust the same or constitute a
waiver of any other right provided for in this Lease.
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XIV. NET LEASE; NO SET-OFF, ETC:
This Lease is a net lease. Lessee's obligation to pay Rent and other amounts due
hereunder shall be absolute and unconditional. Lessee shall not be entitled to
any abatement or reduction of, or set-offs against said Rent or other amounts,
including, without limitation, those arising or allegedly arising out of claims
(present or future, alleged or actual, and including claims arising out of
strict tort or negligence of Lessor) of Lessee against Lessor under this Lease
or otherwise. Nor shall this Lease terminate or the obligations of Lessee be
affected by reason of any defect in or damage to, or loss of possession, use or
destruction of, the Aircraft from whatsoever cause. It is the intention of the
parties that Rent and other amounts due hereunder shall continue to be payable
in all events in the manner and at the times set forth herein unless the
obligation to do so shall have been terminated pursuant to the express terms
hereof.
XV. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify, save and keep harmless Lessor, its
agents, employees, successors and assigns from and against any and all losses,
damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature, in contract or tort whether caused by
the active or passive negligence of Lessor or otherwise, and including, but not
limited to, Lessor's strict liability in tort, arising out of (i) the selection,
manufacture, purchase, acceptance or rejection of the Aircraft, the ownership of
Aircraft during the Term of this Lease, and the delivery, lease, possession,
maintenance, use, condition, return or operation of the Aircraft (including,
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee and any claim for patent, trademark or copyright infringement),
or (ii) the condition of the Aircraft sold or disposed of after use by Lessee,
any sublessee or employees of Lessee. Lessee shall, upon request, defend any
actions based on, or arising out of, any of the foregoing.
(b) Lessee hereby represents and warrants that (i) on the Commencement
Date, the Aircraft will qualify for all of the items of deduction and credit
specified in Annex B ("TAX BENEFITS") in the hands of Lessor (all references to
Lessor in this Section XV include Lessor and the consolidated taxpayer group of
which Lessor is a member), and (ii) at no time during the Term of this Lease
will Lessee take or omit to take, nor will it permit any sublessee or assignee
to take or omit to take, any action (whether or not such act or omission is
otherwise permitted by Lessor or the provisions of this Lease), which will
result in the disqualification of the Aircraft for, or recapture of, all or any
portion of such Tax Benefits.
(c) If as a result of a breach of any representation, warranty or covenant
of the Lessee contained in this Lease (i) tax counsel of Lessor shall determine
that Lessor is not entitled to claim on its federal income tax return all or any
portion of the Tax Benefits with respect to any Aircraft or (ii) any such Tax
Benefit claimed on the Federal income tax return of Lessor is disallowed or
adjusted by the Internal Revenue Service, or (iii) any such Tax Benefit is
recomputed or recaptured (any such determination, disallowance, adjustment,
recomputation or recapture being hereinafter called a "LOSS"), then Lessee shall
pay to Lessor, as an indemnity and as additional Rent such amount as shall, in
the reasonable opinion of Lessor, cause Lessor's after-tax economic yields and
cash flows, computed on the same assumptions, including tax rates (unless any
adjustment has been made under Section III hereof, in which case the Effective
Rate used in the next preceding adjustment shall be substituted), as were
utilized by Lessor in originally evaluating the transaction (such yields and
flows being hereinafter called the "Net Economic Return") to equal the Net
Economic Return that would have been realized by Lessor if such Loss had not
occurred. Such amount shall be payable upon demand accompanied by a statement
describing in reasonable detail such Loss and the computation of such amount.
(d) All of Lessor's rights, privileges and indemnities contained in this
Section shall survive the expiration or other termination of this Lease and the
rights, privileges and indemnities contained herein are expressly made for the
benefit of, and shall be enforceable by Lessor, its successors and assigns.
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XVI. DISCLAIMER:
LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE AIRCRAFT WITHOUT ANY
ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES AND THAT LESSOR IS LEASING THE
AIRCRAFT IN AN 'AS IS" CONDITION. LESSOR DOES NOT MAKE, HAS NOT MADE, NOR SHALL
BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS
OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE AIRCRAFT LEASED HEREUNDER OR
ANY COMPONENT THEREOF, OR ANY ENGINE INSTALLED THEREON, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY AS TO CONDITION, AIRWORTHINESS, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS
FOR ANY PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT
INFRINGEMENT, OR TITLE. All such risks, as between Lessor and Lessee, are to be
borne by Lessee. Without limiting the foregoing, Lessor shall have no
responsibility or liability to Lessee or any other person with respect to any of
the following, regardless of any negligence of Lessor (i) any liability, loss or
damage caused or alleged to be caused directly or indirectly by any Aircraft,
any inadequacy thereof, any deficiency or defect (latent or otherwise) therein,
or any other circumstance in connection therewith; (ii) the use, operation or
performance of any Air-craft or any risks relating thereto; (iii) any
interruption of service, loss of business or anticipated profits or
consequential damages; or (iv) the delivery, operation, servicing, maintenance,
repair, improvement or replacement of any Aircraft. If, and so long as, no
default exists under this Lease, Lessee shall be, and hereby is, authorized
during the Term to assert and enforce, at Lessee's sole cost and expense, from
time to time, in the name of and for the account of Lessor and/or Lessee, as
their interests may appear, whatever claims and rights Lessor may have against
any Supplier of the Equipment.
XVII. REPRESENTATIONS AND WARRANTIES OF LESSEE:
Lessee hereby represents and warrants to Lessor that on the date hereof and
at all times during the Term hereof
(a) Lessee has adequate power and capacity to enter into, and perform
under, this Lease and all related documents (together, the "Documents") and is
duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Aircraft is or
is to have its primary hangar location.
(b) The Documents have been duly authorized, executed and delivered by
Lessee and constitute valid, legal and binding agreements, enforceable in
accordance with their terms, except to the extent that the enforcement of
remedies therein provided may be limited under applicable bankruptcy and
insolvency laws.
(c) No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into or
performance by Lessee of the Documents except such as have already been
obtained.
(d) The entry into and performance by Lessee of the Documents will not: (i)
violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or By-Laws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Aircraft pursuant to any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Lease) to which Lessee is a party,
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee, which will have a material adverse effect on the ability of Lessee to
fulfill its obligations under this Lease.
(f) Each Balance Sheet and Statement of Income delivered to Lessor has been
prepared in accordance with generally accepted accounting principles, and since
the date of the most recent such Balance Sheet and Statement of Income, there
has been no material adverse change.
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(g) Lessee is and will be at all times validly existing and in good
standing under the laws of the State of its incorporation (specified in the
first sentence of this Lease) and Lessee is and will continue to be a "CITIZEN
OF THE UNITED STATES" within the meaning of Section 40102(15) of the FAA. Lessee
shall not consolidate, reorganize or merge with any other corporation or entity
or sell, convey, transfer or lease all or substantially all of its property
during the Term hereof
(h) The chief executive office or chief place of business (as either of
such terms is used in Article 9 of the Uniform Commercial Code) of Lessee is
located at the address set forth above, and Lessee agrees to give Lessor prior
written notice of any relocation of said chief executive office or chief place
of business from its present location.
(i) A copy of this Lease, and a current and valid AC Form 8050-1 will be
kept on the Aircraft at all times during the Term of this Lease.
(j) Lessee has selected the Aircraft manufacturer and vendor thereof, and
all maintenance facilities required hereby.
(k) Lessee shall maintain all logs, books and records (including any
computerized maintenance records) pertaining to the Aircraft and engines and
their maintenance during the Term in accordance with FAA rules and regulations.
(l) Lessee shall not operate the Aircraft under Part 135 of the Federal
Aviation Regulations without the prior written approval of Lessor.
(m) Lessee shall notify the local Flight Standards District Office of the
FAA forty-eight (48) hours prior to the first flight of the Aircraft under this
Lease.
(n) Throughout the Term of this Lease, Lessee will not use or operate and
will not permit the Aircraft to be used or operated "predominately" outside the
United States as that phrase is used in Section 168(g)(1)(A) of the Code.
XVIII. EARLY TERMINATION:
(a) On or after the First Termination Date (specified in Annex B), Lessee
may, so long as no default exists hereunder, terminate this Lease upon at least
ninety (90) days prior written notice to Lessor effective on the Rent Payment
Date ("TERMINATION DATE") specified in such notice.
(b) Lessee shall, and Lessor may, solicit cash bids for the Aircraft on an
AS IS, WHERE IS basis without recourse to or warranty ftom Lessor, express or
implied ("AS IS BASIS"). Prior to the Termination Date, Lessee shall, (i)
certify to Lessor any bids received by Lessee; and (ii) pay to Lessor, (a) the
Termination Value (calculated as of the Termination Date) for the Aircraft; and
(b) all Rent and other sums due and unpaid as of the Termination Date. Neither
Lessee nor its agents shall be permitted to bid.
(c) Provided that all amounts due hereunder have been paid on the
Termination Date, Lessor shall (i) sell the Aircraft on an AS IS BASIS for cash
to the highest bidder; and (ii) refund the proceeds of such sale (net of any
related expenses) to Lessee up to the amount of the Termination Value paid by
Lessee. If such sale is not consummated, no termination shall occur and Lessor
shall refund the Termination Value (less any expenses incurred by Lessor) to
Lessee.
(d) Notwithstanding the foregoing, Lessor may elect by written notice, at
any time prior to the Termination Date, not to sell the Aircraft. In that event,
on the Termination Date Lessee shall: (i) return the Aircraft (in accordance
with Section XI); and (ii) pay to Lessor all amounts required under Section
XVIII(B) less the amount of the highest bid certified by Lessee to Lessor.]
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XIX. PURCHASE OPTION:
(a) So long as no default exists hereunder and the lease has not been
earlier terminated, Lessee may at Lease expiration, upon at least ninety (90)
days, but not more than one hundred and eighty (180), days, prior written notice
to Lessor, purchase the Aircraft on an AS IS BASIS for cash equal to its then
Fair Market Value (plus all applicable sales taxes).
(b) "FAIR MARKET VALUE" shall mean the price which a willing buyer (who is
neither a lessee in possession nor a used equipment dealer) would pay for the
Aircraft in an arm's-length transaction to a willing seller under no compulsion
to sell; provided, however, that in such determination: (i) the Aircraft shall
be assumed to be in the condition in which it is required to be maintained and
returned under this Lease; (ii) in the case of any installed additions to the
Aircraft, same shall be valued on an installed basis; and (iii) costs of removal
of the Aircraft from the current location shall not be a deduction from such
valuation. If Lessor and Lessee are unable to agree on the Fair Market Value at
least sixty (60) days before Lease expiration, Lessor shall appoint an
independent appraiser (reasonably acceptable to Lessee) to determine Fair Market
Value, and that determination shall be final, binding and conclusive. Lessee
shall bear all costs associated with any such appraisal.
(c) Lessee shall be deemed to have waived this option unless it provides
Lessor with written notice of its irrevocable election to exercise the same
within fifteen (IS) days after Fair Market Value is determined (by agreement or
appraisal).
XX. EARLY PURCHASE OPTION:
(a) Provided that the Lease has not been terminated and no default exists
hereunder, LESSEE SHALL HAVE THE OPTION TO PURCHASE THE AIRCRAFT ON THE EARLY
PURCHASE OPTION DATE INDICATED ON ANNEX B (the "PURCHASE OPTION DATE") FOR A
PURCHASE PRICE EQUAL TO THE EARLY PURCHASE OPTION PRICE (the "OPTION PRICE")
INDICATED ON ANNEX X. Xxxxxx and Lessee agree that the Option Price is a
reasonable prediction of the price that a willing buyer (who is neither a lessee
in possession or a used aircraft dealer) would pay for the Aircraft on the
Purchase Option Date in an arm's length transaction to a willing seller under no
compulsion to sell.
(b) LESSEE MAY EXERCISE SUCH OPTION ONLY BY GIVING NOTICE TO LESSOR
AT LEAST 30 DAYS (BUT NOT MORE THAN 90 DAYS) PRIOR TO THE PURCHASE OPTION DATE.
(c) On the Purchase Option Date, if Lessee has elected to purchase the
Aircraft and no default has occurred and is continuing under the Lease or any
other agreement between Lessee and Lessor:
(i) Lessee shall pay to Lessor any rent and other sums due and unpaid on
the Purchase Option Date; and
(ii)Lessee shall purchase from Lessor, and Lessor shall sell to Lessee, the
Aircraft on an AS IS, WHERE IS basis, without recourse to or warranty
from Lessor (express or implied), for a consideration equal to the
Option Price (together with any applicable sales taxes).]
XXI. MISCELLANEOUS:
(a) Unless and until Lessee exercises its rights under Sections XIX or XX
above, nothing herein contained shall give or convey to Lessee any right, title
or interest in and to the Aircraft except as a lessee under this Lease. Any
cancellation or termination by Lessor, pursuant to the provisions of this Lease,
or any supplement or amendment hereto, or the lease of any Aircraft hereunder,
shall not release Lessee from any then outstanding obligations to Lessor
hereunder.
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(b) Time is of the essence of this Lease. Lessee agrees, upon Lessor's
request, to execute any instrument necessary or expedient for filing, recording
or perfecting the interest of Lessor. LESSEE HEREBY UNCONDITIONALLY WAIVES ITS
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF, DIRECTLY OR INDIRECTLY, THIS LEASE, ANY OF THE RELATED DOCUMENTS, ANY
DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING
ESTABLISHED BETWEEN LESSEE AND LESSOR. The scope of this waiver is intended to
be all encompassing of any and all disputes that may be filed in any court
(including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND
THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS LEASE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. In the event
of litigation, this Lease may be filed as a written consent to a trial by the
court. All notices required to be given hereunder shall be deemed adequately
given if delivered in hand or sent by registered or certified mail to the
addressee at its address stated herein, or at such other place as such addressee
may have designated in writing. This Lease and any Annexes hereto constitute the
entire agreement of the parties with respect to the subject matter hereof, and
all Annexes referenced herein are incorporated herein by reference. NO VARIATION
OR MODIFICATION OF THIS LEASE OR ANY WAIVER OF ANY OF ITS PROVISIONS OR
CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF EACH PARTY HERETO.
(c) Any Rent or other amount not paid to Lessor when due hereunder shall
bear interest both before and after any judgment or termination hereof, at the
lesser of eighteen percent (18%) per annum or the maximum rate allowed by law.
Any provisions in this Lease which are in conflict with any statute, law or
applicable rule shall be deemed omitted, modified or altered to conform thereto.
XXII. TRUTH-LEASING:
(a) LESSEE HAS REVIEWED THE AIRCRAFRS MAINTENANCE AND OPERATING LOGS SINCE
ITS DATE OF MANUFACTURE AND HAS FOUND THAT THE AIRCRAFT HAS BEEN MAINTAINED AND
INSPECTED UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS. LESSEE CERTIFIES
THAT THE AIRCRAFT PRESENTLY COMPLIES WITH THE APPLICABLE MAINTENANCE AND
INSPECTION REQUIREMENTS OF PART 91 OF THE FEDERAL AVIATION REGULATIONS.
(b) LESSEE CERTIFIES THAT LESSEE, AND NOT LESSOR, IS RESPONSIBLE FOR
OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE DURING THE TERM HEREOF.
LESSEE FURTHER CERTIFIES THAT LESSEE UNDERSTANDS ITS RESPONSIBILITY FOR
COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
(c) LESSEE CERTIFIES THAT THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED
UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS FOR OPERATIONS TO BE CONDUCTED
UNDER THIS LEASE. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON
OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED
FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT
OFFICE, OR AIR CARRIER DISTRICT OFFICE.
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IN WITNESS WHEREOF, Lessee and Lessor have caused this Lease to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION AUTOCAM CORPORATION
By: /s/ Xxxxxx X. Mahimud By: /s/ Xxxxxx X. Xxxxxxx
Title: Risk Analyst Title: Treasurer
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AMENDMENT TO AIRCRAFT LEASE AGREEMENT DATED NOVEMBER 12, 1998
BETWEEN GENERAL ELECTRIC CAPITAL CORPORATION AS LESSOR,
AND AUTOCAM CORPORATION AS LESSEE
This Amendment dated as of November 12, 1998 amends and modifies the
above-referenced Aircraft Lease Agreement (the "Lease") and is hereby
incorporated into the Lease as though set forth therein. All terms not otherwise
defined herein shall have the meaning ascribed to them in the Lease.
A. AMENDMENT TO AIRCRAFT LEASE AGREEMENT
SECTION I. LEASING
(b) Section I (b) is hereby deleted in its entirety and replaced with the
following: "The obligation of Lessor to purchase the Aircraft from
Lessee and to lease the same to Lessee hereunder shall be subject to
the Commencement Date of the Lease, as that term is hereinafter defined
in Section 11, occurring on or prior to the Last Delivery Date
specified in Annex B, on the representations and warranties of Lessee
contained herein being true and accurate as of the Commencement Date
and further conditioned on receipt by lessor, on or prior to the
Commencement Date, of each of the following documents in form and
substance satisfactory to Lessor: (i) a copy of this Lease executed by
Lessee, (ii) Xxxx of Sale in the form of Annex C, transferring Lessee's
interest in the Aircraft to Lessor, (iii) copies of insurance policies
or, at Lessor's option, such other evidence of insurance which complies
with the requirements of Section X, (iv) evidence of Lessee's
reservation of an N number for the Aircraft together with an assignment
of the rights thereto to Lessor, (v) evidence that the Aircraft has
been duly certified as to type and airworthiness by the Federal
Aviation Administration ("FAA"), (vi) evidence that the FAA counsel has
received in escrow the executed xxxx of sale and AC Form 8050-1
Aircraft Registration Form (except for the pink copy which shall be
available to be placed on the Aircraft upon acceptance thereof), and an
executed duplicate of this Lease all in proper form for filing with the
FAA, (vii) resolution of Lessee authorizing this Lease in the form of
Annex D, (viii) a completed survey with respect to the Aircraft in
accordance with subsection (c) hereof, and (ix) such other documents as
Lessor may reasonably request. Simultaneous with the execution of the
Xxxx of Sale, Lessee shall also execute a Certificate of Acceptance in
the form of Annex E, covering the Aircraft described in the Xxxx of
Sale. Lessor's obligation to lease the Aircraft hereunder is further
conditioned upon (aa) the cost to Lessor of the acquisition of the
Aircraft not exceeding the Capitalized Lessor's Cost stated on Annex A,
(bb) upon delivery of the Aircraft, Lessee's execution and delivery to
Lessor of a Certificate of Acceptance in the form of Annex E, and (cc)
filing of all necessary documents with, and the acceptance thereof, by
the FAA.
(c) Section I (c) is hereby deleted in its entirety and replaced with the
following: "Subject to the aforestated conditions, upon execution by
Lessee of the Certificate of Acceptance, the Aircraft described thereon
shall be deemed to have been delivered to, and irrevocably accepted by,
Lessee for lease hereunder.
SECTION III. RENT ADJUSTMENT
(b) Section Ill (b) will be amended by inserting the following after the
last sentence in this Section: "If the Effective Rate is lower than 35%
for 1998 or any subsequent year during the lease term, Lessee shall
have the right, upon request to a decrease in the rent payments
calculated in the same manner as described above. Lessor shall
effectuate any decrease due pursuant to the section by (i) remitting
the decreased rent payment to Lessee as a single additional sum or,
(ii) crediting such decrease against the next rent payment and
subsequent rent payments, or (iii) decreasing the periodic rent
payments by an amount equal to the total decrease divided by the number
of periodic rent payments remaining under the Lease, at its sole
discretion. The decrease in rent payment will be effective on the later
of (x) receipt of notice of (y) the first day of the year for which the
rent adjustment is being made. After the initial rent adjustment, the
rent adjustment shall be calculated in the manner set forth above
whenever the Effective Rate Changes for the one used for the previous
rent adjustment."
SECTION IV. TAXES AND FEES
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The second sentence of Section IV is hereby amended by inserting the following,
"(other than Lessor's Michigan Single Business Tax)" after "franchise," but
before "stamp".
SECTION XXI. MISCELLANEOUS
(c) The first sentence in Section XXI (c) is hereby amended by deleting the
words "eighteen percent (18%)" and replacing them with "twelve percent
(12%)".
B. MISCELLANEOUS
Except as expressly modified herein, all terms and provisions of the Lease shall
remain in full force and effect. This Amendment shall not be binding nor
effective with respect to the Lease of the Aircraft until executed by duly
authorized representatives of Lessor and Lessee.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Amendment to be executed
by their duly authorized representatives as of this 12th day of November, 1998.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION AUTOCAM CORPORATION
By: /s/ Xxxxxx X. Mahimud By: /s/ Xxxxxx X. Xxxxxxx
Title: Risk Analyst Title: Treasurer
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ANNEX A
DESCRIPTION OF AIRCRAFT, LESSOR'S COST, AND AIRCRAFT MARKINGS
I. DESCRIPTION COST:
Cessna, Model Citation V 560 Aircraft which consists of the following $4,900,000.00
components:
(a) Airframe bearing FAA Registration Xxxx N80GE and Manufacturer's
Serial No. 0187;
(b) , ( ) Xxxxx &
Whitney JT15D-SA engines bearing Manufacturer's Serial Nos. PCE108382 and
PCE 108383 respectively (each of which has 750 or more rated takeoff
horsepower or the equivalent of such horsepower);
(c) , ( )
propellers bearing, respectively
bearing, Manufacturer's Serial Nos. N/A and N/A, each being rated as
follows:
(d) Standard accessories and optional equipment and such other items fitted
or installed on the Aircraft and set forth hereinafter:
(e) Those items of Lessee Furnished Equipment described in a xxxx of sale
or bills of sale therefor (copies of which are appended hereto), delivered
by Lessee to Lessor which constitute appliances and equipment which will be
installed on the Aircraft;
(f) Sales Tax
(g) Other
CAPITALIZED LESSOR'S COST $4,900,000.00
II. AIRCRAFT MARKINGS (REFERENCED IN THE MAINTENANCE SECTION OF LEASE)
(a) Four-by-six inch plaque to be maintained in cockpit and affixed in
conspicuous position stating:
GENERAL ELECTRIC CAPITAL CORPORATION Owner and Lessor.
AUTOCAM CORPORATION Lessee under a certain Lease dated as of November 12, 1998
has operational control of this aircraft.
(b) Similar markings shall be permanently affixed to each engine.
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Initials:
Lessee: /s/ WAV Lessor: /s/ NSM
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ANNEX B
DATED THIS NOVEMBER 12, 1998
TO AIRCRAFT LEASE AGREEMENT
DATED AS OF NOVEMBER 12, 1998
Lessor & Mailing Address: Lessee & Mailing Address:
GENERAL ELECTRIC CAPITAL CORPORATION AUTOCAM CORPORATION
0000 XXXXXX XXXXXXX/XXXX 00 XXXXXX XXXX/XXXX, XXXXX 000 0000 X. XXXXX XXXXXX
XXXX XXXX, XX 00000 XXXXXXXX, XX 00000
Capitalized terms not defined herein shall have the meanings assigned to them in
the Aircraft Lease Agreement identified above.
A. AIRCRAFT.
Pursuant to the terms of the Lease, Lessor agrees to acquire and lease
to Lessee the Aircraft described on Annex A to the Lease.
B. FINANCIAL TERMS.
1. Advance Rent (if any): (a) Amount: $30,072.00.
(b) Due Date: 11/12/98
2. Capitalized Lessor's Cost: $4,900,000.00.
3. Basic Term Commencement Date: November 12, 1998
4. Basic Term: 180 months.
5. First Basic Term Rent Date: November 12, 1998
6. Basic Term Rent Dates: ________________________.
7. First Termination Date: (36) months after the Basic Term Commencement Date.
8. Last Basic Term Rent Date: ________________________.
9. Last Delivery Date: November 12, 1998.
10. Primary Hangar Location: Kent County International Airport; Grand Rapids, MI
11. Supplier: Autocam Corporation.
12. Lessee Federal Tax ID No.: 00-0000000.
13. Early Purchase Option: Option Date: 84 months from the Basic Term Commencement Date
Option Price: $4,246,830.00
14. Expiration Date: November 11, 2013
15. Daily Lease Rate Factor: 84 @ .00020457; 96 @.00024719.
16. Basic Term Lease Rate Factor:
Factor Rental No.
.00613714 1-84
.00741571 85-180
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C. TAX BENEFITS.
Depreciation Deductions:
a. Depreciation Method: 200% declining balance method, switching to
straight line method for the I st taxable year for which using the
straight line method with respect to the adjusted basis as of the
beginning of such year will yield a larger allowance.
b. Recovery Period: 5 YEARS.
c. Basis: 100% of Capitalized Lessor's Cost.
D. TERM AND RENT.
1. Interim Rent. For the period from and including the Commencement
Date to the Basic Tenn Commencement Date ("INTERIM PERIOD"),
Lessee shall pay as Rent ("INTERIM RENT") for each unit of
Aircraft, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in
the Interim Period. Interim Rent shall be due on N/A.
2. Basic Term Rent. Commencing on November 12, 1998 and on the same
day of each month thereafter (each, a "RENT PAYMENT DATE") during
the Basic Term, Lessee shall pay as Rent ("BASIC TERM RENT") the
product of the Basic Term Lease Rate Factor times the Capitalized
Lessor's Cost of the Aircraft on this Annex B.
E. INSURANCE.
1. Public Liability: $50,000,000.00 total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the
Aircraft.
F. ADDITIONAL MAINTENANCE REQUIREMENTS.
G. AMENDMENTS TO LEASE.
Except as expressly modified hereby, all terms and provisions of the Lease shall
remain in full force and effect. This Annex B is not binding or effective with
respect to the Lease or Aircraft until executed on behalf of Lessor and Lessee
by authorized representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Annex B to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION AUTOCAM CORPORATION
By: /s/ Xxxxxx X. Mahimud By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Mahimud Name: Xxxxxx X. Xxxxxxx
Title: Risk Analyst Title: Treasurer
ATTEST
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
ANNEX C
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TO
AIRCRAFT LEASE AGREEMENT
DATED AS OF NOVEMBER 12, 1998
XXXX OF SALE
AUTOCAM CORPORATION (the "SELLER"), in consideration of the sum of FOUR MILLION,
NINE HUNDRED THOUSAND AND 00/100 DOLLARS ($4,900,000.00) plus sales taxes in the
amount of DOLLARS ($ ) (if exemption from
sales tax is claimed, an exemption certificate must be furnished to Buyer
herewith), paid by GENERAL ELECTRIC CAPITAL CORPORATION (the "BUYER"), receipt
of which is acknowledged, hereby grants, set assigns, transfers and delivers to
Buyer the equipment (the "EQUIPMENT") described in the above schedule (said
schedule and related lease being collective referred to as "LEASE"), along with
whatever claims and rights Seller may have agaitm the manufacturer and/or
supplier of the Equipment (the "SUPPLIER" including but not limited to all
warranties and representations. At Buyers request, Seller will cause Supplier to
execute the attached Acknowledgement.
Buyer is purchasing the Equipment for leasing back to Seller pursuant to the
Lease. Seller represents and wan-ants to Buyer that (1) Buyer will acquire by t
terms of this Xxxx of Sale good title to the Equipment free from all liens and
encumbrances whatsoever (2) Seller has the right to sell the Equipment; and (the
Equipment has been delivered to Seller in good order and condition, and conforms
to the specifications, requirements and standards applicable thereto; a (4) the
equipment has been accurately [awed, consistent with the requirements of 40 CFR
part 82 Subpart E, with respect to products manufactured with controlled
(ozone-depleting) substance.
Seller agrees to save and hold harmless Buyer from and against any and all
federal, state, municipal and local license fees and taxes of any kind or nature
including, without limiting the generality of the foregoing, any and all excise,
personal property, use and sales taxes, and from and against any and
liabilities, obligations, losses, damages, penalties, claims, actions and suits
resulting therefrom and imposed upon, incurred by or asserted against Buyer a
consequence of the sale of the Equipment to Buyer.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale this 12th day of
November, 1998.
SELLER:
AUTOCAM CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Title: Treasurer
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ANNEX D
CERTIFICATE
CORPORATE LESSEE'S BOARD OF DIRECTORS RESOLUTION
REGARDING AIRCRAFT LEASE AGREEMENT AUTHORIZATION AND
INCUMBENCY OF OFFICERS
The undersigned hereby certifies that he is the.Assistant Secretary of
AUTOCAM CORPORATION, a corporation validly existing and organized under the laws
of the State of Michigan, which Corporation is presently subsisting and in good
standing under the laws of such State and is duly qualified to conduct its
business within the States of Michigan that the following is a true, accurate
and compared transcript of resolutions duly adopted at a meeting of the Board of
Directors of said Corporation duly held on the 24th day of July, 1998, at which
meeting a quorum was present and that the proceedings were in accordance with
the Articles and by-laws of said Corporation, and that said resolutions have not
been amended, rescinded, modified or revoked, and are in full force and effect:
"RESOLVED, that each of the officers of this Corporation, whose name
appears below, or the duly elected or appointed successor in office of any or
all of them, be and he hereby is authorized and empowered in the name and on
behalf of this Corporation to enter into, execute and deliver the Aircraft Lease
Agreement dated as of November 12, 1998, with GENERAL ELECTRIC CAPITAL
CORPORATION (hereinafter called "LESSOR") as Lessor and this Corporation as
Lessee and providing for the leasing to (or sale and leaseback by) this
Corporation of Aircraft; and (ii) further providing for this Corporation to
execute and deliver any Annexes and supplements necessary to effectuate such
Lease in such form and substance as may be agreed upon between Lessor and such
ofricers or any of them as agent(s) of the Corporation; and (iii) to indemnify
said Lessor against certain occurrences set forffi in the Lease; and
FURTHER RESOLVED, that each officer of this Corporation is hereby
authorized to do and perform all other acts and deeds that may be requisite or
necessary to carry fully into effect the foregoing resolution; and
FURTHER RESOLVED, that said Lessor is authorized to rely upon the
aforesaid resolutions until receipt by it of written notice of any change, which
changes of whatever nature shall not be effective as to said Lessor to the
extent that it has theretofore relied upon the aforesaid resolutions in the
above form."
Treasurer Vice President
(Signature) /s/ Xxxxxx X. Xxxxxxx (Signature)
--------------------------
I FURTHER CERTIFY that the duly elected officers of this Corporation
named in the foregoing resolution continue to hold their respective offices and
that the signature set below the name of each such officer is the true and
correct signature of such officer.
IN WITNESS WHEREOF, I have set my hand and affixed the seal of said Corporation
this 12th day of November, 1998.
(CORPORATE SEAL)
/s/ Xxxx X. Xxxxxxxx
Assistant Secretary
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ANNEX F
STIPULATED LOSS AND TERMINATION VALUES
The Stipulated Loss and Termination Value of the Aircraft shall be the
percentage of Capitalized Lessor's Cost of the aircraft set forth opposite the
applicable rent payment.
CAPITALIZED LESSOR'S COST $4,900,000.00
TERMINATION
VALUE STIPULATED LOSS VALUE TERMINATION VALUE STIPULATED LOSS VALUE
RENTAL PERCENTAGE PERCENTAGE RENTAL PERCENTAGE PERCENTAGE
1 103.429 107.413 91 84.046 86.538
2 103.437 107.403 92 83.603 86.078
3 103.420 107.370 93 83.160 85.618
4 103.400 107.334 94 82.712 85.154
5 103.378 107.296 95 82.264 84.690
6 103.347 107.247 96 81.815 84.224
7 103.306 107.190 97 81.362 83.755
8 103.255 107.122 98 80.909 83.285
9 103.194 107.045 99 80.454 82.814
10 103.131 106,965 100 79.996 82.339
11 103.058 106.876 101 79.535 81.861
12 102.976 106.777 102 79.073 81.382
13 102.891 106.675 103 78.609 80.902
14 102.796 106.564 104 76.145 80.421
15 102.692 106.443 105 77.680 79.939
16 102.585 106.319 106 77.211 79.454
17 102.475 106.193 107 76.741 78.968
18 102.359 106.061 108 76.271 78.481
19 102.238 105.923 109 75.797 77.990
20 102.110 105.779 110 75.321 77.498
21 101.977 105.628 111 74.845 77.006
22 101.840 105.476 112 74.366 76.510
23 101.698 105.317 113 73.883 76.010
24 101.550 105.152 114 73.399 75.510
25 101.399 104.984 115 72.914 75.008
26 101.242 104.811 116 72.428 74.506
27 101.079 104.631 117 71.942 74.002
28 100.913 104.449 118 71.451 73.496
29 100.745 104.264 119 70.960 72.988
30 100.573 104.076 120 70.468 72.479
31 100.397 103,883 121 69.972 71.967
32 100.218 103.687 122 69.476 71.454
33 100.034 103.487 123 68.978 70.940
34 99.848 103.284 124 68.477 70.422
35 99.658 103.078 125 67.973 69.901
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TERMINATION
VALUE STIPULATED LOSS VALUE TERMINATION VALUE STIPULATED LOSS VALUE
RENTAL PERCENTAGE PERCENTAGE RENTAL PERCENTAGE PERCENTAGE
36 99.464 102.867 126 67.467 69.379
37 99.268 102.654 127 66.961 68.856
38 99.067 102.437 128 66.454 68.332
39 98.863 102.217 129 65.946 67.807
40 98.656 101.993 130 65.434 67.279
41 98.447 101.768 131 64.921 66.750
42 98.234 101.538 132 64.407 66.220
43 98.017 101.304 133 63.890 65.686
44 97.796 101.067 134 63.372 65.151
45 97.571 100.825 135 62.853 64.616
46 97.344 100.581 136 62.331 64.076
47 97.113 100.334 137 61.805 63.534
48 96.878 100.082 138 61.278 62.990
49 96.640 99.828 139 60.750 62.446
50 96.399 99.570 140 60.221 61.901
51 96.153 99.308 141 59.691 61.354
52 95.905 99.044 142 59.158 60.804
53 95.655 98.776 143 58.624 60.254
54 95.402 98.507 144 58.089 59.702
55 95.147 98.236 145 57.550 59.147
56 94.890 97.962 146 57.010 58.590
57 94.631 97.686 147 56.470 58.033
58 94.369 97.407 148 55.926 57.473
59 94.105 97.127 149 55.378 56.909
60 93.838 96.844 150 54.830 56.344
61 93.569 96.558 151 54.280 55.778
62 93.298 96.270 152 53.730 55.211
63 93.025 95.980 153 53.179 54.643
64 92.748 95.688 154 52.624 54.071
65 92.470 95.392 155 52.068 53.499
66 92.191 95.097 156 51.512 52.926
67 91.911 94.800 157 50.951 52.349
68 91.630 94.503 158 50.390 51.771
69 91.349 94.206 159 49.828 51.193
70 91.066 93.906 160 49.263 50.611
71 90.782 93.605 161 48.694 50.025
72 90.497 93.304 162 48.124 49.439
73 90.210 93.000 163 47.553 48.851
74 89.922 92.695 164 46.981 48.263
75 89.633 92.390 165 46.408 47.673
76 89.342 92.083 166 45.832 47.080
77 89.049 91.772 167 45.255 46.487
78 88.754 91.462 168 44.676 45.892
X-00
00
XXXXXXXXXXX XXXXXXXXXXX STIPULATED LOSS
VALUE STIPULATED LOSS VALUE VALUE VALUE
RENTAL PERCENTAGE PERCENTAGE RENTAL PERCENTAGE PERCENTAGE
79 86.460 91.150 169 44.095 45.294
80 88.164 90.838 170 43.512 44.694
81 87.869 90.526 171 42.928 44.094
82 87.570 90.211 172 42.341 43.491
83 87.272 89.896 173 41.751 42.883
84 86.972 89.580 174 41.169 42.285
85 86.670 89.261 175 40.595 41.694
86 86.238 88.813 176 40.029 41.112
87 85.805 88.363 177 39.472 40.538
88 85.369 87.910 178 38.911 39.961
89 84.929 87.454 179 38.359 39.392
90 84.488 86.996 180 37.814 38.831
Initials: /s/ NSM /s/ WAV
Lessor Lessee
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