Exhibit 99.6
CESSNA CITATION AIRCRAFT SUBLEASE AGREEMENT
THIS CESSNA CITATION AIRCRAFT SUBLEASE AGREEMENT (the "Sublease") is
made and entered into as of the 25th day of July 2001, by and between American
Trans Air, ExecuJet, Inc., an Indiana corporation whose mailing address is
X.X. Xxx 00000, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"Sublessor"), and American Trans Air, Inc., an Indiana corporation with its
office at 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000
(hereinafter referred to as "Sublessee").
WITNESSETH:
WHEREAS, Sublessor desires to sublease to Sublessee a certain 1988
Cessna Citation II, Serial No. 551-0591, Registration No. N1AT, including two
(2) engines and other appliances, communications equipment, accessories,
instruments, parts and other items of equipment installed therein and all logs
and records pertaining thereto (the "Aircraft"); and
WHEREAS, Sublessee desires to sublease the Aircraft from Sublessor.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto do hereby agree as follows:
1. TERM. Sublessor hereby subleases the Aircraft to the Sublessee
commencing on July 25, 2001, and said Sublease shall continue through the 24th
day of July 2004, unless sooner terminated or extended as herein provided.
2. RENTAL AND OTHER CHARGES.
A. The Sublessee agrees to pay for the full term of this Sublease a
rental in the sum of Fifty Thousand Dollars ($50,000.00) per month in
advance. Said rental shall be paid on or before the first business day of
each calendar month to Sublessor at the above-stated address, or as
otherwise directed by Sublessor.
B. In addition to the monthly payments set forth above, Sublessee
shall pay Sublessor $325 per hour for each block hour flown on the
Aircraft. Such payments shall be made by Sublessee by the tenth (10th)
day of each month during the Term hereof.
3. TERMINATION. Upon termination of this Sublease, Sublessee shall
return the Aircraft to Sublessor at Indianapolis, Indiana, or at some other
point to be mutually agreed. Upon such return, the Aircraft shall be in the
same condition (i.e., for the right engine (Serial No. 71514), 1,180 hours
remaining until hot section and 2,728 hours remaining until overhaul; for the
left engine (Serial No. 71510), 1,180 hours remaining until hot section and
2,788 hours remaining until overhaul) as when delivered to Sublessee and
equipped with the same or better equipment, except for reasonable wear and
tear for ordinary use, subject to the provisions herein; provided, however,
that reasonable wear and tear should not include the lowering of the number of
engine and component hours available. If, however, the number of engine and
component hours available until the next major overhaul at the time of
redelivery of the Aircraft by Sublessee to Sublessor is less than 5,456 hours
in the aggregate, and/or the number of engine hours available until the next
hot section at the time of redelivery is less than 2,360, Sublessee shall
reimburse the Sublessor for the difference at the industry standard hourly
rate.
Sublessee shall, not less than one (1) day or more than four (4)
days prior to the termination of the Sublease, make the Aircraft available to
Sublessor at Indianapolis, Indiana, or at such other airport as shall be
agreeable to Sublessor, for the purpose of permitting Sublessor to make an
inspection of the Aircraft. At such inspection, Sublessor shall be entitled to
an acceptance flight check of not more than one hour's duration, at
Sublessee's expense, and Sublessee will, at its own expense and at Sublessor's
request, correct any condition of said Aircraft discovered on such acceptance
check, which condition makes the Aircraft unairworthy. In the event
rehabilitation and repairs are necessary to return the Aircraft in the
prescribed condition, the terms of this Sublease shall be deemed extended for
the period required to enable Sublessee to make such rehabilitation, repairs
and correction (herein referred to as "Correction"). In the event the
Sublessee does not proceed promptly to make such Correction, the Sublessor may
retake possession of the Aircraft and rental shall thereafter continue to be
payable to the Sublessor for the period reasonably required for the making of
such Correction. Rent shall be paid by the Sublessee to the Sublessor on a
pro-rata basis per day for such additional periods.
In the event the Aircraft during the term of this Sublease should be
lost or totally destroyed and Sublessor shall have received payment in full
for all loss or damage sustained by Sublessor by reason of said total
destruction, then this Sublease shall automatically be cancelled and
terminated as of the date of such loss, and Sublessee shall be obligated to
pay only the pro-rata rental due to the date of such loss. In the event of a
partial loss, the rental shall be unabated, and if the time necessary to
repair the Aircraft goes beyond the termination date of the Sublease, this
Sublease shall be extended to provide sufficient time to repair the Aircraft,
and full rental shall be paid during this extended period.
4. MAINTENANCE AND OTHER EXPENSES. Sublessee shall be responsible
for all maintenance on the Aircraft. Sublessor will not be responsible for any
maintenance, overhaul or work resulting from anything other than ordinary wear
and tear, and in any case shall have a right to reimbursement for all amounts
expended.
5. LOG BOOKS AND RECORDS. Sublessee shall maintain all log books and
records pertaining to said Aircraft during the term of this Sublease and will
return and deliver said log books and records to Sublessor upon return of said
Aircraft to Sublessor, and will during the term of this Sublease, make them
available for inspection by Sublessor or its duly authorized agents or
representatives.
6. COSTS OF INSPECTION, DIRECTIVES, ETC. Except as provided
elsewhere in this Sublease, all inspections, repairs, modifications,
directives and overhaul work shall be accomplished by the Sublessee and shall
be performed at Sublessee's expense by personnel duly licensed to perform such
work and shall be in accordance with the standards of the manufacturer and
with all applicable governmental regulations.
7. ALTERATIONS AND MODIFICATIONS. Subject to the terms of this
Sublease, Sublessee shall have the right to alter, modify or make additions
and improvements to the Aircraft after having obtained the prior consent of
Sublessor, provided that such alterations, modifications, additions or
improvements are at Sublessee's cost and do not reduce the value of the
Aircraft.
8. USE OF AIRCRAFT. Sublessee may operate the Aircraft only by
pilots holding valid Federal Aviation licenses, certificates and
qualifications, with the exceptions as stated in the following paragraph;
provided, however, that it shall not use the Aircraft in violation of any
foreign, federal, state, territorial or municipal law or regulation and shall
be solely responsible for any fines, penalties or forfeitures and taxes
occasioned by any violation thereof, and if such fines or penalties are
imposed upon Sublessor and paid by it, Sublessee shall reimburse it therefor
within ten (10) days after demand by Sublessor. Sublessee agrees that in the
event of
2
seizure of the Aircraft under the provisions of Title 49 of the United States
Code, Section 1473, it will indemnify the Sublessor for the payment of any
civil penalty assessed under such title and section and shall, in the event of
such seizure, post bond in such amount and with such terms as shall be
required to cause the immediate resublease of the Aircraft to Sublessor.
9. NO LIENS OR ENCUMBRANCES. Sublessee shall have no right to
consent to, allow or permit any liens or encumbrances on the Aircraft.
Sublessee shall promptly pay and discharge all taxes, assessments and
governmental charges or levies imposed upon the Aircraft. Upon Sublessee's
default in the discharge of any such taxes, assessment or encumbrances,
Sublessor may do so at Sublessee's expense and charge same to Sublessee, and
such cost and expense thereof shall become due and payable on demand of
Sublessor.
Sublessee shall have absolute control, direction and responsibility
for, and shall bear and pay all costs of operating and maintaining the
Aircraft, including excise taxes, gasoline taxes, licensing fees, landing fees
or any other airport fees, or any other operating expenses of whatever nature
and kind as set out herein. Sublessee shall have responsibility for and shall
promptly, on a pro-rata basis, reimburse Sublessor for Federal use taxes
incurred by the Aircraft during the term of this Sublease. The taxes, levies
and charges which Sublessee undertakes to pay under this paragraph are, except
with respect to the Federal use tax, limited to those arising out of
Sublessee's operation only and shall exclude such costs which relate to
Sublessor's interest, ownership or income from the Aircraft or from this
Sublease.
10. INDEMNIFICATION. Sublessee agrees and covenants to indemnify,
hold harmless and defend Sublessor, its directors, officers, agents and
employees and any mortgagees of the Aircraft against any and all expenses,
loss or damages, including reasonable attorneys' fees, caused by or arising
out of, in whole or in part, the possession, management or operation of the
Aircraft by Sublessee and/or its sublessees, bailees, agents or
representatives. The expenses, loss or damages referred to in this paragraph
do not include loss of earnings or income of Sublessor.
11. INSPECTION. Sublessee agrees to permit Sublessor or its duly
authorized agent to inspect the Aircraft at any reasonable time, and to
furnish to Sublessor or its duly authorized agent any information in respect
to the Aircraft and its use that Sublessor may reasonably request.
12. ASSIGNMENT. Sublessee shall not assign its rights under this
Sublease or delegate its duties under this Sublease without the prior written
consent of the Sublessor. Any sublease, if agreed to in writing by Sublessor,
shall contain the same terms and conditions as this Sublease, and nothing
therein shall relieve Sublessee of its liability to Sublessor hereunder.
13. INSURANCE. Sublessee shall at all times during the term of this
Sublease and any extensions thereof, carry and maintain insurance with such
insurers and brokers as shall be satisfactory to Sublessor; and the Sublessor,
Sublessee and National City Bank, or any other lending institution designated
by Sublessor, shall be named as loss payees as their interests may appear in
the following amounts:
A. General liability insurance of not less than One Hundred Million
Dollars ($100,000,000.00) per occurrence and hull insurance covering all
risks in an amount not less than $3,000,000.
B. Casualty insurance (including coverage for fire, theft and
weather damage) for not less than Five Hundred Thousand Dollars
($500,000.00), with Sublessor, Sublessee and National City Bank to be
jointly listed as loss payees, as their interests may appear.
3
C. Sublessee shall provide Sublessor with proof of the above
insurance on demand.
D. In the event of the occurrence of any loss or accident affecting
the rights of either party under said insurance policies, Sublessee and
Sublessor, their agents or employees shall comply with all the terms and
conditions of said insurance policies and do all things necessary or
proper to protect and preserve the other party's rights as named insured
on said policies.
E. Sublessee agrees to pay the cost of carrying and maintaining
insurance on the Aircraft.
14. NO WARRANTIES OR REPRESENTATIONS. SUBLESSOR MAKES NO WARRANTIES
OR REPRESENTATIONS AS TO THE CONDITION, MERCHANTABILITY OR FITNESS OF THE
AIRCRAFT FOR ANY PARTICULAR PURPOSE. SUBLESSOR SHALL NOT BE LIABLE FOR ANY
DEFECTS, EITHER LATENT OR PATENT, IN SAID AIRCRAFT, OR FOR ANY CONSEQUENTIAL
DAMAGE THEREFROM, AND SUBLESSEE WAIVES ALL WARRANTIES AND ALL OBLIGATIONS AND
LIABILITIES THEREUNDER, EXPRESS OR IMPLIED, AND ALL OTHER OBLIGATIONS AND
LIABILITIES OF SUBLESSOR WITH RESPECT TO THE CONDITION OR AIRWORTHINESS OF
SAID AIRCRAFT OR FOR CONSEQUENTIAL DAMAGE RESULTING THEREFROM.
15. TITLE OF SUBLESSOR. Sublessor warrants that it has sufficient
title to said Aircraft and has the right and power to enter into this
Sublease.
16. NOTICES. Service of all notices under this Sublease shall be
sufficient if given in writing and delivered personally to the parties
subscribing below or sent by certified mail to the parties at their addresses
herein above set forth, or at such addresses as the parties may provide for in
writing from time to time.
17. NO WAIVER OF BREACH. The failure of Sublessor or Sublessee in
any one or more instances to insist upon strict performance or observance of
one or more of the covenants or conditions hereof, or to exercise any remedy,
privilege or option herein conferred upon or reserved to Sublessor or
Sublessee, shall not be construed as a waiver of any future breach of any
covenants or conditions or of the right to enforce the same or to exercise
such privilege, option or remedy, but the same shall continue in full force
and effect.
18. TIME IS OF THE ESSENCE. Time is of the essence of this Sublease
and each and every of its provisions herein. This Sublease shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
19. GOVERNING LAWS. This Sublease, regardless of where executed,
shall be construed and performance shall be determined in accordance with the
laws of the State of Indiana.
20. DEFAULT. If Sublessee defaults in any terms, covenants and
conditions of this Sublease, Sublessor at its option, upon ten (10) days'
prior written notice to Sublessee, may elect to terminate this Sublease, and
said Sublease shall be terminated at the end of said ten (10) day period
unless Sublessee shall correct the default within said period. In the event of
such termination, Sublessee shall return said Aircraft to Sublessor at the
place designated hereinbefore for return at the end of said Sublease term, and
the Sublessor shall further have the right:
4
A. To declare the entire amount of rent hereunder immediately due
and payable without further notice or demand to Sublessee.
B. To xxx for and recover all rents and other payments it has
accrued or will thereafter accrue with respect to the Aircraft.
C. To take possession of the Aircraft without further demand or
notice wherever same may be located, without any Court Order or other
process of law, and Sublessee hereby waives any and all damages
occasioned by said possession.
D. To pursue any other remedy either in law or equity.
21. INSOLVENCY OF SUBLESSEE. In the event of any act of insolvency
by the Sublessee, including the application for or consent to the appointment
of a receiver, trustee or liquidator for all or for a substantial part of its
assets; or if the Sublessee shall be unable, or admit in writing its inability
to pay its debts as they mature; or make a general assignment for the benefit
of creditors; or be adjudicated as bankrupt or insolvent; or file a voluntary
petition in bankruptcy or a petition or answer seeking reorganization or an
arrangement with creditors or to take advantage of any insolvency law; or file
an answer admitting the material allegations of, or consent to, or default in
answering, a petition filed against it in any bankruptcy reorganization or
insolvency proceeding; or take any action under the laws of any applicable
jurisdiction analogous to any of the foregoing; or if corporate action shall
be taken by it for the purpose of effecting any of the foregoing, then and in
that event, Sublessor shall have and may exercise any one or more of the
remedies set forth herein, and at the option of Sublessor, this Sublease may
be terminated without prior notice.
22. NOTICE TO SUBLESSOR OF PROCEEDING. Sublessee shall furnish
promptly to Sublessor notice of any material litigation that may be brought,
or to the knowledge of Sublessee, threatened against Sublessee and will keep
Sublessor continuously advised of any developments with respect thereto.
Sublessee shall also give notice promptly to Sublessor of all proceedings
before any governmental agency which, if adversely determined, would
materially and adversely affect Sublessee's licenses and/or operations.
In the event the Sublessor should be required to engage the services
of an attorney to collect any sums due to it by the Sublessee hereunder, or to
enforce compliance by the Sublessee with any of the terms of this Sublease, or
to recover possession of the Aircraft, either from the Sublessee or from some
third party, the Sublessee shall pay to the Sublessor all reasonable
attorneys' fees so incurred by the Sublessor, together with any and all other
reasonable costs incurred by the Sublessor in connection with such action.
23. USE BY SUBLESSOR. Sublessor, with Sublessee's prior consent, may
utilize the Aircraft under the following conditions: (i) Sublessee does not
require use of the Aircraft at the time use thereof is requested by Sublessor;
(ii) Sublessor shall reimburse Sublessee for all actual costs of such usage,
including but not limited to fuel and landing fees; and (iii) for each
Aircraft flight hour flown by Sublessor, Sublessor shall provide Sublessee
with a "flight hours credit" or an equivalent "dollar credit" (at the industry
standard hourly rate) to be utilized by Sublessee pursuant to the Return
Conditions section of this Agreement.
5
IN WITNESS WHEREOF, the parties have authorized this Sublease to be
executed by their respective officers as of the day and year first written
above.
SUBLESSOR:
AMERICAN TRANS AIR EXECUJET, INC.
By
----------------------------------
Xxxxxx X. Xxxxxxx, Secretary
SUBLESSEE:
AMERICAN TRANS AIR, INC.
By
----------------------------------
Xxxxx X. Xxxx, Vice President
and Secretary
