1
EXHIBIT 10(f)
-----------------------------------------------------------------------
AIRCRAFT LEASE
DATED AS OF FEBRUARY 11, 1998
BETWEEN
MIRAMONTE AVIATION, LLC,
as Lessor
AND
MPW MANAGEMENT SERVICES CORP.,
as Lessee
-----------------------------------------------------------------------
2
TABLE OF CONTENTS
-----------------
Page
Definitions...................................................................1
SECTION 1. LEASE OF AIRCRAFT................................................4
SECTION 2. TERM, RENT AND LESSOR USAGE......................................4
SECTION 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
LESSOR...........................................................5
SECTION 4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
LESSEE...........................................................6
SECTION 5. NET LEASE........................................................7
SECTION 6. RETURN OF AIRCRAFT...............................................7
SECTION 7. LIENS............................................................8
SECTION 8. TAXES............................................................8
SECTION 9. MAINTENANCE AND OPERATION; COMPLIANCE AND USE;
REPLACEMENT PARTS; ADDITIONS.....................................9
SECTION 10. INSPECTION......................................................11
SECTION 11. LOSS OR DESTRUCTION; REQUISITION OF USE.........................11
SECTION 12. INSURANCE.......................................................12
SECTION 13. INDEMNIFICATION.................................................13
SECTION 14. SUBLEASE; POSSESSION............................................14
SECTION 15. TAX INDEMNIFICATION.............................................14
SECTION 16. EVENT OF DEFAULT................................................15
SECTION 17. REMEDIES........................................................17
SECTION 18. NOTICES.........................................................17
SECTION 19. SUCCESSORS AND ASSIGNS..........................................18
i
3
SECTION 20. MISCELLANEOUS...................................................18
SECTION 21. PERFORMANCE OF OBLIGATIONS OF LESSEE BY LESSOR..................19
SECTION 22. TRUTH-IN-LEASING................................................19
ii
4
AIRCRAFT LEASE
--------------
THIS AIRCRAFT LEASE dated as of February 11, 1998 (the "Lease"),
between MIRAMONTE AVIATION, LLC ("Lessor") and MPW MANAGEMENT SERVICES CORP., an
Ohio corporation ("Lessee"). Certain capitalized terms as used in this Lease are
defined below, and such definitions are hereby incorporated herein and made a
part hereof.
DEFINITIONS
(a) All references in the Lease to designated Sections and other
Sections and other subdivisions are to such designated Sections and other
subdivisions only, and the words "herein", "hereof" and "hereunder" and other
words of similar import refer to the Lease as a whole and not to any particular
Section or other subdivision.
(b) Except as otherwise indicated, all the agreements or instruments
defined herein or shall mean such agreements or instruments as the same may from
time to time be supplemented or amended or the terms thereof waived or modified
to the extent permitted by, and in accordance with, the terms thereof.
(c) The terms defined in this Lease shall, for purposes of the lease
and all Exhibits hereto, have the meanings assigned to them and shall include
the plural as well as the singular.
(d) The following terms shall have the following meanings for all
purposes of the Lease:
"Abatement" shall have the meaning defined in Section 5.
"Aircraft" shall mean the 1989 Cessna Citation V Airframe,
Manufacturer's Serial Number 560-0007, Registration Number N57VP
delivered and leased under the Lease with (i) the Engines installed on
such Airframe, and (ii) all Parts leased in connection therewith.
"Airframe" shall mean the Aircraft defined herein and any and all Parts
so long as the same shall be incorporated or installed in or attached
to such aircraft, or so long as title thereto shall remain vested in
Lessor in accordance with the terms of Section 11 of the Lease. Unless
the context requires otherwise, the term Airframe shall not include the
Engines from time to time installed on the Airframe.
"Casualty Value" means the value of the Aircraft on the date of an
Event of Loss which will be calculated based on the assessment of an
agreed upon third party aircraft valuation expert.
"Claims" shall have the meaning defined in Section 13.
"Daily Prorated Rent" shall mean the Rent divided by 365, which equals
$965.30.
5
"Default" shall mean an event that, after the giving of notice or lapse
of time, or both, would constitute an Event of Default.
"Depreciation Deduction" shall have the meaning set forth in the
definition of "Tax Benefits."
"Delivery Date" shall mean the date the Aircraft is delivered by Lessor
and accepted by Lessee under this Lease.
"Engine" shall mean (i) the two JT 15D-5A engines described in the Used
Aircraft Purchase Agreement and originally installed on the Airframe
covered by such Lease Supplement whether or not from time to time
thereafter no longer installed on such Airframe, and (ii) any engine
which may from time to time be substituted for an Engine leased
thereunder; together in each case with any and all Parts incorporated
or installed in or attached thereto or any and all Parts removed
therefrom so long as title thereto shall remain vested in Lessor after
removal from such Engine.
"Engines" shall mean, as of any date of determination, all Engines then
leased under the Lease.
"Event of Default" shall have the meaning set forth in Section 16 of
the Lease.
"Event of Loss" with respect to the Aircraft, the Airframe or any
Engine shall mean any of the following events with respect to such
property: (i) loss of such property or the use thereof for more than
sixty (60) days due to theft, disappearance, destruction, damage beyond
repair or rendition of such property permanently unfit for normal use
for any reason whatsoever; (ii) any damage to such property that
results in an insurance settlement with respect to such property on the
basis of a total loss; (iii) the condemnation, confiscation or seizure
of, or requisition of title to or use of, except for a period not
extending beyond the term of the Lease, such property by the act of any
government (foreign or domestic) or of any state or local authority or
any instrumentality or agency of the foregoing ("Requisition of Use");
(iv) as a result of any rule, regulation, order or other action by any
government (foreign or domestic) or governmental body (including,
without limitation, the Federal Aviation Administration or any foreign
governmental body) having jurisdiction, the use of such property shall
have been prohibited, or such property shall have been declared unfit
for use, for a period of six consecutive months, unless Lessor, prior
to the expiration of such six-month period, shall have undertaken and,
in the opinion of Lessor, shall be diligently carrying forward all
steps that are necessary or desirable to permit the normal use of such
property by Lessee or, in any event, if use shall have been prohibited,
or such property shall have been declared unfit for use, for a period
of twelve consecutive months, (v) with respect to an Engine, the
removal thereof from the Airframe for a period of six months or longer,
whether or not such Engine is operational; (vi) such property shall be
returned to the manufacturer other than for modification in the event
of patent infringement or for repair or replacement (any such return
being herein referred to as a "Return to Manufacturer"). The date of
such
2
6
Event of Loss shall be the date of such theft, disappearance,
destruction, damage, Requisition of Use, unfitness for use for the
stated period or Return to Manufacturer. An Event of Loss with respect
to the Aircraft shall be deemed to have occurred if an Event of Loss
occurs with respect to the Airframe that is part of such Aircraft. An
Event of Loss with respect to any Engine shall not, without loss of the
Airframe, be deemed an Event of Loss with respect to the Aircraft.
"Expiration Date" shall mean the date on which the original Lease Term
expires.
"Extension Period" shall mean any period in which the Lease is in
effect after the Expiration Date.
"FAA" and "Federal Aviation Administration" means the United States
Federal Aviation Administration, the administrator thereof and any
agency or instrumentality of the United States government succeeding to
their functions.
"Federal Aviation Act" shall mean the Federal Aviation Act of 1958, as
amended.
"Impositions" shall have the meaning set forth in Section 8 of the
Lease.
"Lessor's Lien" shall mean a Lien on or in respect of the Aircraft or
any part thereof securing a claim against Lessor or any other Person
that claim results from an act or omission on the part of Lessor or a
claim arising by, through or under Lessor.
"Liens" shall mean any mortgage, pledge, lien, charge, disposition of
title, encumbrance, lease, exercise of rights, security interest,
easement, servitude, or claim of any kind whatsoever.
"Loss" and "Foreign Loss" shall have the meanings set forth
respectively in Section 15 of the Lease.
"Maintenance Cost Limitation" shall have the meaning set forth in
Section 9.1.
"Parts" shall mean all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other
than Additions or complete Engines), which may from time to time be
incorporated or installed in or attached to the Airframe or any Engine.
"Person" shall mean any individual, partnership, corporation, trust,
unincorporated association or joint venture, a government or any
department or agency thereof, or any other entity.
"Rent" shall mean the Base Rent and Excess Rent as defined in Section
2.2 hereof.
"Replacement Parts" shall have the meaning set forth in Section 9 of
the Lease.
3
7
"Tax Benefits" shall mean certain assumptions of Lessor with respect to
its treatment of the Aircraft Lessor's rights hereunder for income tax
purposes, as follows: (i) that the Lessor will be treated as owner of
the Aircraft for Federal, state and local income tax purposes; (ii)
that the Lessor will be entitled to the maximum depreciation deductions
allowable pursuant to Section 167(a) of the Code ("Depreciation
Deduction") determined pursuant to Section 168(a) of the Code,
beginning in Lessor's taxable year that includes the Delivery Date;
(iii) that the Depreciation Deduction is determined on a five (5) year
recovery period, as defined in Section 168(c) of the Code and the
applicable depreciation method pursuant to Section 168(b) of the Code;
and (iv) that the Depreciation Deduction over the recovery period shall
be Lessor's Cost.
"Term" shall have the meaning set forth in Section 2.1.
"Used Aircraft Purchase Agreement" means agreement UA-9522 between The
Cessna Aircraft Company and MPW Industrial Services, Inc. dated
September 15, 1995 and attached hereto as Exhibit One.
SECTION 1. LEASE OF AIRCRAFT
Lessee hereby agrees to lease from Lessor the Aircraft pursuant to the
terms and conditions of this Lease.
SECTION 2. TERM, RENT AND LESSOR USAGE
2.1 Except as set forth in the next succeeding sentence, the leasing of
the Aircraft by Lessor to Lessee shall be for a Term beginning on February 1,
1998 and ending on January 31, 2003 unless this Lease shall have been terminated
or extended in accordance with the terms hereof. Notwithstanding the previous
sentence, either party shall have the right to terminate this lease on not less
than 120 days' prior written notice to the other party, and the date set forth
in such written notice shall be deemed to be the expiration of the Term.
2.2 Lessee shall pay Lessor Rent in the amount of $360,000 per year
(the "Base Rent"), payable in equal monthly installments of $30,000 per month on
the 1st day of each month commencing February 1, 1998 plus applicable state and
local sales taxes with respect to this Lease and payable in United States
currency. The parties agree that the Base Rent is calculated on the basis that
Lessee will use the Aircraft for no more than 250 engine hours per year (the
"Base Usage"). To the extent that for any year of the Term, the Aircraft is used
for more than the Base Usage, Lessee shall pay to Lessee, no later than 45 days
following the end of such year, an amount equal to $250 for each engine hour
that the Aircraft is used by Lessee in excess of the Base Usage (the "Excess
Rent").
2.3 All payments of Rent hereunder shall be made on the date payable
hereunder to Lessor in immediately available funds or by check at 0000
Xxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000, Attn: Xxxxx X. Xxxxx, or at such other
address or to such other Person as Lessor may direct by notice in writing to
Lessee.
4
8
2.4 As additional consideration for this Lease, Lessee agrees that
Lessor shall have the right to use the Aircraft, including the pilots, fuel and
other goods and services provided with the Aircraft, at mutually convenient
times. Lessor agrees to pay Lessee for such use of the Aircraft at a rate of
$700 per engine hour, which amount shall be payable upon receipt of an invoice
therefor, or may be setoff by Lessee from amounts of Rent due hereunder.
SECTION 3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
LESSOR
Lessor represents, warrants and agrees:
3.1 that during the term of this Lease as long as no Event of Default
has occurred, Lessee's use of the Aircraft shall not be interrupted by Lessor or
anyone claiming through or under Lessor.
3.2 that Lessor is a limited liability company with authority to enter
into, and consummate, the transactions contemplated by, this Lease and that this
Lease has been duly authorized, executed and delivered by the Lessor and
constitutes a valid, enforceable and binding obligation of the Lessor in
accordance with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general application affecting the
enforcement of creditor's rights and general principles of equity, including
without limitation, specific performance.
LESSEE EXPRESSLY AGREES TO LEASE THE AIRCRAFT "AS-IS, WHERE-IS". LESSOR
SHALL NOT BE DEEMED TO HAVE MADE, AND LESSOR HEREBY DISCLAIMS, ANY OTHER
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE
AIRCRAFT, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE
QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT TO THE PROVISIONS AND
SPECIFICATIONS OF ANY PURCHASE AGREEMENT OR AGREEMENTS RELATING THERETO, THE
ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR THE
ABSENCE OF ANY INFRINGEMENT OR ANY PATENT, TRADEMARK OR COPYRIGHT, NOR SHALL
LESSOR BE LIABLE REGARDLESS OF ANY ACTUAL OR ALLEGED NEGLIGENCE OF LESSOR, OR
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY IN
TORT, AND ANY RISKS WITH RESPECT THERETO SHALL BE ASSUMED BY LESSEE. THE
FOREGOING SHALL NOT, HOWEVER, BE CONSTRUED TO RELIEVE LESSOR FROM LIABILITY TO
LESSEE FOR DAMAGES PROXIMATELY CAUSED BY LESSOR'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OR LESSOR'S ACTS OF NEGLIGENCE IN THE UNDERTAKING OF AFFIRMATIVE
ACTS. The warranties set forth hereinabove are in lieu of all other warranties
of Lessor, whether written, oral or implied with respect to this Lease or the
Aircraft, and Lessor shall not be deemed to have modified in any respect the
obligations of Lessee pursuant to Section 5 hereof, which obligations are
absolute and unconditional.
5
9
SECTION 4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE
Lessee represents, warrants and agrees as follows:
4.1 DUE ORGANIZATION. Lessee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio. Lessee is and
will continue to be a "Citizen of the United States" within the meaning of
Section 101(16) of the Federal Aviation Act, and has the corporate power and
authority to carry on its business as presently conducted, to hold property
under lease and to enter into and perform its obligations under this Lease.
4.2 DUE AUTHORIZATION; ENFORCEABILITY. The Lease has been duly
authorized by all necessary corporate action on the part of Lessee and does not
require any approval of the stockholders of Lessee, and has been or will be duly
executed and delivered by Lessee and, assuming due authorization, execution and
delivery by the other party thereto, is or will be legal, valid and binding
obligations of Lessee, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws of general application affecting the enforcement of creditor's rights and
general principles of equity, including without limitation, specific
performance.
4.3 NO VIOLATION. The execution and delivery of the Lease by Lessee is
not, and the performance by it of its obligations under the Lease will not be,
inconsistent with its articles of incorporation or code of regulations, does not
and will not contravene any law, governmental rule or regulation, judgment or
order applicable to or binding on Lessee, does not and will not contravene any
provision of, or constitute a default or result in the creation of any Lien
(other than as permitted by Section 7 hereof) under any indenture, mortgage,
contract or other instrument to which Lessee is a party or by which it is bound,
and does not and will not require any approval or consent of any trustee or
holders of indebtedness or obligations of Lessee, except such as have been duly
obtained.
4.4 GOVERNMENTAL APPROVALS. No consent or approval of, giving of notice
to, registration with, or taking of any other action in respect of or by, any
Federal, state or local governmental authority or agency except with respect to
the operation and maintenance of Aircraft (including, without limitation, the
Federal Aviation Administration) or other Person is required with respect to the
execution, delivery and performance by Lessee under the Lease or the
consummation of any of the transactions by Lessee contemplated hereby or
thereby, or if any such approval, notice, registration or action is required, it
has been duly given or obtained.
4.5 LOCATION OF CHIEF EXECUTIVE OFFICES. 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 0000 Xxxxxxxxx Xxxx X.X., X.X. Xxx 000,
Xxxxxx, Xxxx 00000, and Lessee agrees to give Lessor not less than ten (10) days
prior written notice of any relocation of said chief executive office or chief
place of business from its present location.
4.6 COPIES ON AIRCRAFT. A copy of this Lease, related Lease
Supplements, and a current and valid AC Form 8050-1 will be kept on the Aircraft
at all times during the term of this Lease.
6
10
SECTION 5. NET LEASE
This Lease is a net lease, and Lessee acknowledges and agrees that
Lessee's obligation to pay all Rent hereunder, and the rights of Lessor in and
to such Rent, shall be absolute and unconditional and shall not be subject to
any abatement, reduction, set-off, defense, counterclaim or recoupment
("Abatements") for any reason whatsoever, including without limitation,
Abatements due to any present or future claims of Lessee against Lessor under
this Lease or otherwise, against the Airframe Manufacturer or Engine
Manufacturer or against any other Person other than Lessor for whatever reason.
Except as otherwise expressly provided herein, this Lease shall not terminate,
nor shall the obligations of Lessee be affected, by reason of any defect in or
damage to, or any loss or destruction of, the Aircraft or any part thereof from
whatsoever cause, or the interference with the use thereof by Lessor or any
Person, or the invalidity or unenforceability or lack of due authorization of
this Lease or lack of right, power or authority of Lessor or Lessee to enter
into this Lease, or for any other cause, whether similar or dissimilar to the
foregoing, any present or future law or regulation to the contrary
notwithstanding, it being the express intention of Lessor and Lessee that all
Rent payable by Lessee hereunder shall be, and continue to be, payable in all
events unless the obligation to pay the same shall be terminated pursuant to the
express provisions of this Lease. Provided, however, nothing contained herein
shall be deemed a waiver of or prevent Lessee from enforcing any of its rights
against Lessor hereunder.
SECTION 6. RETURN OF AIRCRAFT
6.1 MANUALS AND RECORDS. Upon the expiration or termination of this
Lease (except under Section 11), Lessee, at its own expense, will return the
Aircraft to Lessor and shall deliver all logs, manuals and data, 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 Federal Aviation Administration, along with a currently
effective Federal Aviation Administration airworthiness certificate to Lessor to
any location within the continental United States as Lessor shall direct.
Subject to the consent of the maintenance or warranty provider, as applicable,
Lessee shall, upon request, assign to Lessor its rights under any maintenance
service contract or 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, except that any cost to assign any
maintenance contract or warranty shall be Lessor's obligation. If Lessee desires
to obtain for its own use the United States "N" registration number that is on
the Airframe, prior to the return of the Aircraft to Lessor, Lessee, at its
expense, shall make application to the FAA for a new "N" number designated by
Lessor, and shall have such new number painted on the Airframe in such location
and to such specifications as Lessor shall direct.
6.2 CONDITION OF AIRCRAFT. The Aircraft when returned to Lessor shall
be in as good operating condition as when delivered to Lessee, ordinary wear and
tear and Event of Loss excepted. In addition, the Aircraft shall be returned (a)
in the condition in which the Aircraft is required to be maintained pursuant to
Section 9 hereof, but with all logos or other identifying marks of Lessee
removed; (b) free and clear of all Liens other than Lessor's liens; (c) such
that each Engine is current on the service required under the Engine
Manufacturer's maintenance service program or an equivalent service program
authorized in writing by Lessor.
7
11
6.3 DELAYED RETURN. If Lessee fails to return the Aircraft on
termination or expiration of the Term, Lessor shall be entitled to damages equal
to the Daily Prorated Rent for the Aircraft. 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.
6.4 SURVIVAL. All of Lessor's rights contained in this Section shall
survive the expiration or other termination of this Lease.
SECTION 7. LIENS
Title to the Aircraft shall remain in the Lessor exclusively. Lessee
will not directly or indirectly create, incur, assume or suffer to exist any
Liens on or with respect to the Aircraft or any part thereof, Lessor's title
thereto or any interest of Lessor therein (and Lessee will promptly, at its own
expense, take such action as may be necessary duly to discharge any such Lien),
except (a) the respective rights of Lessor and Lessee as herein provided, (b)
the rights of others under agreements or arrangements to the extent expressly
provided by the terms of Xxxxxxx 00 xxxxxx, (x) Xxxxxx'x Xxxxx, (x) Liens for
taxes either not yet due or being contested by Lessee in good faith (and for the
payment of which adequate assurances in Lessor's reasonable judgment have been
provided Lessor), and (e) 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 reasonable
judgment have been provided Lessor).
SECTION 8. TAXES
Lessee shall not be liable for any taxes on or measured by the income
or net worth of Lessor. Lessee agrees to pay and to indemnify Lessor for, and
hold Lessor harmless from and against, all other license and registration fees,
sales, use, excise, personal property, ad valorem, value added, leasing, leasing
use, stamp, landing, airport use or other taxes, levies, imposts, duties,
charges, or withholdings of any nature, together with any penalties, fines or
interest thereon ("Impositions"), arising out of the transactions contemplated
by this Lease and imposed against Lessor, Lessee or the Aircraft or any part
thereof by any Federal, state, local or foreign government or other taxing
authority upon or with respect to the Aircraft or any part thereof or upon the
sale, purchase, ownership, delivery, leasing, possession, use, operation,
return, transfer or other disposition thereof or upon the rentals, receipts or
earnings arising therefrom (other than those Impositions arising therefrom after
the expiration of the Lease term, for which Lessor shall be responsible), or
upon or with respect to this Lease, unless, and only to the extent that, Lessee
shall have given to Lessor written notice of any such Imposition, which notice
shall state that such Imposition is being contested by Lessee in good faith with
due diligence and by appropriate proceedings. The foregoing notwithstanding,
Lessor, not Lessee, shall be responsible for any Impositions, including but not
limited to fines, penalties and interest, resulting from Lessor's failure to
file returns, reports and/or pay in a timely manner any Impositions assessed
Lessor, unless Lessor and Lessee agree in writing that Lessee and not Lessor
will file any such returns or reports. If a claim is made against Lessee or
Lessor for any Imposition, the party receiving notice of such claim shall
promptly notify the other, but the failure of either party to so notify the
other shall not relieve Lessee of its obligation under this Section to indemnify
Lessor, provided that the party failing to promptly notify the other party shall
8
12
be liable for any and all damages, costs, fines, pending, and/or other expense
proximately caused by such failure.
SECTION 9. MAINTENANCE AND OPERATION; COMPLIANCE AND USE; REPLACEMENT PARTS;
ADDITIONS
9.1 MAINTENANCE AND OPERATION. Except as set forth in the next
succeeding sentence, Lessee shall (i) maintain, inspect, service, repair,
overhaul and test the Airframe and each Engine in accordance with (a) all
required procedures under any maintenance manuals initially furnished with the
Aircraft, including any subsequent amendments or supplements to such manuals
issued by the Airframe Manufacturer or Engine Manufacturer from time to time,
(b) all mandatory "Service Bulletins" and "Aircraft Modification Kits" issued,
supplied, or available by or through the Airframe Manufacturer and/or the Engine
Manufacturer with respect to the Aircraft, and (c) all "airworthiness alerts"
and Airworthiness Directives issued by the Federal Aviation Administration or
similar regulatory agency having jurisdictional authority, and whenever possible
causing compliance to such Directives to be completed through corrective
modification in lieu of operating manual restrictions; (ii) maintain all
records, logs and other materials required by the Federal Aviation
Administration to be maintained in respect of the avionics, Airframe and each
Engine or by the Airframe Manufacturer or Engine Manufacturer for enforcement of
any warranties; (iii) with due diligence after written request, furnish to
Lessor such information as may be required to enable Lessor to timely file any
reports required by any governmental authority as a result of Lessor's ownership
of the Aircraft; and (iv) not change the Aircraft's primary hangar location
without the consent of Lessor, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Lessor shall be responsible for the costs and
expenses of the Hot Section Inspection and 3,000 Hours Time Between Overhaul, as
such terms are defined in the Cessna Maintenance Manual. Lessee shall not remove
the Aircraft from the Continental United States, or from the base indicated for
a period in excess of thirty (30) days, without the express, prior written
consent of Lessor. All maintenance procedures required by Section 9.1(i) shall
be undertaken and completed in accordance with Airframe Manufacturer's or Engine
Manufacturer's required procedures, and only by properly trained, licensed, and
certificated maintenance sources and maintenance personnel, so as to keep the
Airframe 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 Federal Aviation Act. Lessee further agrees that it shall
comply with the Engine Manufacturer's maintenance service program currently in
force (a certified copy of which has been provided to Lessor), or an equivalent
maintenance program authorized in writing by Lessor, for the full term of the
Lease and shall take all steps necessary under the terms thereof to keep such
maintenance service program in effect with respect to the Engines.
9.2 COMPLIANCE AND USE. Lessee agrees that the Aircraft will be
maintained, used and operated in compliance with any and all statutes, laws,
ordinances, regulations and mandatory standards or directives issued by any
governmental agency applicable to the maintenance, 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 also
represents and warrants that it will operate the Aircraft primarily in the
conduct of its business and not operate or permit the Aircraft to be
9
13
operated at any time or in any geographic area when insurance required by the
provisions of Section 12 hereof shall not be in effect. Throughout the term of
this Lease, except as otherwise expressly stated, the possession, use and
maintenance of the Aircraft shall be at the sole risk and expense of Lessee and
the Aircraft shall be based and properly hangared at the primary hanger
location. At all times the Aircraft will be operated only by duly-qualified,
currently-certificated pilots having the minimum total pilot hours required by
the requirements of Lessee's insurance carriers, and for such certification by
the Federal Aviation Administration.
9.3 REPLACEMENT PARTS. Lessee shall as soon as practicable replace all
Parts that may from time to time become worn out, lost, stolen, destroyed,
seized, confiscated, damaged beyond repair or permanently rendered or declared
unfit for use for any reason whatsoever (such substituted parts hereinafter
called Replacement Parts). In addition, in the ordinary course of maintenance,
service, repair, overhaul or testing, Lessee may, at its own cost and expense,
remove serviceable parts, provided that Lessee shall, at its own cost and
expense, replace such serviceable Parts as promptly as practicable. All
Replacement Parts shall be free and clear of all Liens except Lessor Liens and
shall be in as good operating condition as, and shall have a value and utility
as least equal to, the Parts replaced assuming such replaced Parts were in the
condition and repair required to be maintained by the terms hereof. All Parts at
any time removed from the Airframe or any Engine shall remain the property of
Lessor, no matter where located, until such time as such Parts shall be replaced
by Parts that have been incorporated or installed in or attached to the Airframe
or such Engine and which meet the requirements for Replacement Parts specified
above. Immediately upon any Replacement Part becoming incorporated or installed
in or attached to the Airframe or any Engine as above provided, without further
act, (a) title to the removed Part shall thereupon vest in Lessee, free and
clear of all rights of Lessor and shall no longer be deemed a Part hereunder,
(b) title to such Replacement Part shall thereupon vest in Lessor, and (c) such
Replacement Part shall become subject to the Lease and be deemed part of the
Airframe or Engine, as the case may be, for all purposes hereof to the same
extent as the Parts originally incorporated or installed or attached to the
Airframe or such Engine.
9.4 AIRCRAFT MARKING. Lessee agrees, at its own cost and expense, to
(a) cause the Airframe and the Engines to be conspicuously identified with the
Registration Number N57VP; (b) notify Lessor of any change in an Engine serial
number resulting from a replacement of an Engine pursuant to this Lease and file
an appropriate Lease Supplement with the FAA with respect thereto; (c)
prominently display on the Aircraft the Registration Number N57VP; (d) affix and
maintain in the Aircraft reasonably adjacent to the airworthiness certificate a
nameplate bearing the Aircraft Registration Number and such other markings as
from time to time may be required by law or otherwise deemed necessary or
advisable by Lessor in order to protect the title of Lessor to the Aircraft and
the rights of Lessor under this Lease.
9.5 ALTERATIONS. Lessee shall not make any alterations, additions, or
improvements to the Aircraft without the express, prior written consent of
Lessor. Any additions and improvements to the Aircraft during the term of this
Lease shall be at the sole cost and expense of Lessor. All additions and
improvements of whatsoever kind or description made to the Aircraft shall belong
and become the property of Lessor upon their creation and Lessee shall have no
interest therein.
10
14
SECTION 10. INSPECTION
Lessor shall have the right, upon reasonable notice, but not the duty,
to inspect the Aircraft and any Engine at any reasonable time at Lessee's
primary hangar location. Lessee shall, at any reasonable time, make Lessee's
books and records pertaining to the Aircraft available to Lessor for inspection
at Lessee's primary hangar location.
SECTION 11. LOSS OR DESTRUCTION; REQUISITION OF USE
11.1 NOTIFICATION OF EVENT OF LOSS AIRCRAFT. Upon the occurrence of an
Event of Loss with respect to the Airframe, or any Engine (whether or not then
installed on such Airframe), or any engine installed on such Airframe, Lessee
shall notify Lessor thereof within ten (10) days of the date thereof. Within
thirty (30) days following the date of an Event of Loss with respect to the
Airframe or the Airframe and any Engines then installed thereon Lessee shall pay
the lessor the Casualty value of the Aircraft determined as of the Rent Date
immediately preceding the date of such Event of Loss plus an amount equal to the
Daily Prorated Rent, together with any Rent then due. Upon making Payment of
such Casualty Value in respect thereof and all Rent due and owing with respect
thereto, Lessee's obligation to pay further Rent for the Aircraft for months
commencing subsequent to such Event of Loss shall cease. Upon making the payment
of the Casualty Value together with any rent due and owing, Lessor shall convey
all of Lessor's right, title and interest in the Aircraft to Lessee or to
Lessee's insurance carrier, as Lessee may direct, free and clear of any and all
Lessor's Liens and Lessor shall have no further rights, title or interest in the
Aircraft.
11.2 RISK OF LOSS: NO RELEASE OF OBLIGATIONS. Lessee shall bear the
risk of loss and shall not be released from its obligations hereunder in the
event of any damage to the Aircraft or any part thereof or any Event of Loss
relating thereto.
11.3 APPLICATION OF INSURANCE PROCEEDS. As between Lessor and Lessee,
it is agreed that all insurance proceeds under policies required hereby received
as the result of the occurrence of an Event of Loss with respect to the Aircraft
will be applied as follows: proceeds that shall not exceed the Casualty Value
required to be paid by Lessee pursuant to Section 11.1 shall be applied in
reduction of Lessee's obligation to pay such Casualty Value, if not already paid
by Lessee, or, if already paid by Lessee and no Event of Default has occurred
and is continuing shall be applied to reimburse Lessee for its payment of such
Casualty Value, and the balance, if any, of such insurance proceeds remaining
thereafter will be paid to the order of Lessee. The proceeds of any insurance
received by Lessor on account of or for any loss not constituting an Event of
Loss shall be released upon written application signed by the President, the
Treasurer or a Vice President of Lessee for the payment of, or to reimburse the
Lessee for the payment of, the cost of repairs and Replacement Parts (which
application shall be accompanied by evidence satisfactory to Lessor of such cost
and evidence of good title to such Replacement Parts in Lessor and a statement
(i) that such repairs have been completed and (ii) that no Event of Default has
occurred and is continuing) and any balance remaining shall be paid to Lessee;
provided that, if Lessee is at the time of such application or payment in
Default in the payment of any other liability of Lessee to Lessor hereunder,
such proceeds may be applied against any such liability by Lessor in its sole
discretion, and such amount shall be paid to Lessee at such time as there no
longer exists any Default or Event of Default.
11
15
SECTION 12. INSURANCE
12.1 PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE. Lessee represents
and warrants that it will maintain in effect, at its own expense, with insurers
of recognized responsibility reasonably satisfactory to Lessor, (a) public
liability insurance against personal injury and property damage claims
(including, without limitation, passenger legal liability) in an amount not less
than $ 50,000,000 for each single occurrence and (b) such other property damage
insurance (exclusive of manufacturer's product liability insurance) with respect
to the Aircraft as is the type and in the amounts usually carried by
corporations engaged in the same or a similar business, similarly situated with
Lessee, and owning or operating similar aircraft and engines and which covers
risks of the kind customarily insured against by such corporation. Lessee shall
provide at its own expense workmen's compensation insurance with all-states
coverage for the crew and maintenance personnel.
12.2 INSURANCE AGAINST LOSS OR DAMAGE TO THE AIRCRAFT. Lessee
represents and warrants that it will maintain in effect, at its own expense,
with insurers of recognized responsibility reasonably satisfactory to Lessor,
all-risk ground and flight aircraft hull insurance covering the Aircraft,
including F.O.D. (foreign object damage), fire and explosion coverage, ingestion
and lightning and electrical damage, and with respect to any Engines or Parts
while removed form the Aircraft, and with respect to any engines or parts while
temporarily installed on the Aircraft, provided that such insurance shall at all
times while the Aircraft is subject to this Lease be for an amount that, when
paid, will be not less than the greater of Fair Market Sales Value or the
Casualty Value of the Aircraft from time to time. Not less than five (5) days
prior to the expiration of any policy of insurance, Lessee shall deliver to
Lessor renewals or new policies in like amounts covering the same risks.
12.3 LESSOR AS ADDITIONAL INSURED; NOTICE. Any policies of insurance
carried in accordance with this Section and any policies taken out in
substitution or replacement for any such policies (a) shall be amended to name
Lessor, as owner of the Aircraft, as additional named insured as its interest
may appear, (b) with respect to insurance carried in accordance with Section
12.2 covering the Aircraft shall provide that any amount(s) payable thereunder
shall be paid to Lessor as loss payee (and such amounts shall be disbursed by
Lessor to Lessee or other appropriate Person in payment of the costs actually
incurred with respect to repairs made to the Aircraft so as to restore it to the
operating condition required by Section 9 hereof or shall be disbursed by Lessor
as otherwise required by this Lease), (c) shall provide that if the insurers
cancel such insurance for any reason whatsoever, or any substantial change is
made in the coverage that adversely affects the interests of Lessor, or the same
is allowed to lapse for nonpayment of premium or such insurance coverage is
reduced, such cancellation, change, lapse or reduction shall not be effective as
to Lessor for thirty (30) days following receipt by Lessor of written notice by
such insurers of such cancellation, change, lapse or reduction and (d) shall
provide that in respect of the interest of Lessor in such policies the insurance
shall not be invalidated by any action or inaction of Lessee or any other Person
(other than Lessor) and shall insure Lessor's interest, as it appears,
regardless of any breach or violation of any warranties, declarations or
conditions contained in such policies by Lessee or any other Person (other than
Lessor). Each insurance policy and its respective coverage amounts obtained in
accordance with the requirements set forth in Sections 12.1 and 12.2 shall (i)
be primary without right of contribution from any other insurance that is
carried by Lessor to the extent that such other insurance provides Lessor with
contingent and/or excess liability insurance with respect to its interest as
such in the Aircraft and (ii) expressly provide that all of the provisions
thereof, except the limits of liability, shall
12
16
operate in the same manner as if there were a separate policy covering each
insured, and shall waive any right of the insurers to any set-off or
counterclaim or any other deduction, by attachment or otherwise, in respect of
Lessor or Lessee. Lessee shall arrange for appropriate certification as to the
satisfaction of the requirements set forth above in this Section 12 to be
delivered promptly (and in any case not later than the Delivery Date for such
Aircraft) to Lessor by each insurer with respect thereto, which certification
shall specifically acknowledge that the insurance is in conformity with this
Section.
12.4 REPORTS, ETC. Annually on the renewal date of insurance, Lessee
shall furnish to Lessor a report describing in reasonable detail the insurance
then carried and maintained on the Aircraft and certifying that such insurance
complies with the terms hereof and a certificate of the insurer as to such
insurance. Lessee will advise Lessor in writing promptly of any default in the
payment of any premium and of any other act or omission on the part of Lessee
which might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft pursuant to this Section. In the event Lessee shall
fail to maintain insurance as herein provided, Lessor may, at its option,
provide such insurance, and Lessee shall, upon demand, reimburse Lessor for the
cost thereof.
SECTION 13. INDEMNIFICATION
Lessee assumes liability for, and hereby agrees to indemnify, protect,
save and keep harmless Lessor from and against any and all liabilities,
obligations, losses, damages, penalties, claims (including, without limitation
(except as set forth in the provision below) claims involving or alleging
Lessor's negligence and claims involving or alleging strict or absolute
liability in tort), actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable legal fees and expenses) of any kind
and nature whatsoever ("Claims") that may be imposed on, incurred by or asserted
against Lessor, whether or not Lessor shall also be indemnified as to any such
Claim by any other Person, in any way relating to or arising out of this Lease
or any documents contemplated hereby, or the performance or enforcement of any
of the terms hereof or thereof, or in any way relating to or arising out of the
manufacture, purchase, acceptance, rejection, ownership, delivery, lease,
sublease, possession, use, operation, maintenance, condition, registration,
sale, return, storage or other disposition of the Aircraft or any part thereof
or any accident in connection therewith (including, without limitation, latent
and other defects, whether or not discoverable and any claim for patent,
trademark or copyright infringement); provided, however, that Lessee shall not
be required to indemnify Lessor for (a) any Claim in respect of the Aircraft
arising from acts or events that occur after possession of the Aircraft has been
redelivered to Lessor in accordance with Section 6 hereof, or (b) any Claim
arising from acts that would Constitute the willful misconduct or gross
negligence of Lessor. If any claim is made against Lessee or Lessor, the party
receiving notice of such Claim shall promptly notify the other, but the failure
of the party receiving notice to so notify the other shall not relieve either
party of any obligation hereunder. Lessee shall have the right to assume the
defense of any Claim or litigation arising from any Claim through counsel
reasonably acceptable to Lessor in such matter provided if Lessee shall so
assume the defense of such Claim or litigation, Lessor shall nevertheless have
the right to participate in such defense through its counsel at the expense of
Lessor and Lessee shared equally if in Lessor's reasonable judgment such
participation is necessary to ensure against any impairment of its interests.
Lessor will cooperate with Lessee in the defense of any Claim.
LESSEE AGREES THAT LESSOR SHALL NOT BE LIABLE TO LESSEE FOR ANY
CLAIM CAUSED DIRECTLY OR INDIRECTLY BY THE INADEQUACY OF THE
13
17
AIRCRAFT OR ANY PART THEREOF FOR ANY PURPOSE OR ANY DEFICIENCY OR DEFECT THEREIN
OR THE USE OR MAINTENANCE THEREOF OR ANY REPAIRS, SERVICING OR ADJUSTMENTS
THERETO OR ANY DELAY IN PROVIDING OR FAILURE TO PROVIDE ANY SERVICE OR
INTERRUPTION OR LOSS OF SERVICE OR USE THEREOF OR ANY LOSS OF BUSINESS, ALL OF
WHICH SHALL BE THE RISK AND RESPONSIBILITY OF LESSEE.
All of Lessor's rights, privilege and indemnities contained in this
Section 13 shall survive the expiration or other termination of this Lease and
the rights, privileges and responsibilities contained herein are expressly made
for the benefit of, and shall be enforceable by Lessor, its successors and
assigns. The liability of Lessee to make indemnification payments pursuant to
this Section 13 shall, notwithstanding any expiration or termination of the
Lease, continue to exist until such indemnity payments are made by Lessee, in
full and received by Lessor. This Section 13 shall not apply to, and Lessee does
not indemnify Lessor against, any impositions or assessments or assessments for
federal, state or local income taxes or for taxes which are covered by Section 8
hereof.
SECTION 14. SUBLEASE; POSSESSION
Lessee will not, without the prior written consent of Lessor, which
consent shall not be unreasonably withheld, assign any of its rights hereunder
or sublet or otherwise relinquish possession of the Airframe or any Engine or
install any Engine or Part, or permit any Engine or Part to be installed, on any
airframe other than the Airframe. In no event may the Aircraft be subleased to a
Person who is not a United States citizen or "United States Resident" within the
meaning of the Federal Aviation Act.
SECTION 15. TAX INDEMNIFICATION
15.1 Lessee represents, warrants and covenants that (a) at the
commencement of this Lease, no Improvements, modifications or additions to the
Aircraft (other than ancillary items of equipment of a kind that customarily are
selected and furnished by purchasers or lessees of similar equipment) will be
required in order to render it complete for its intended use by Lessee, and (b)
at no time during the term of this Lease will Lessee take or omit to take, any
action not otherwise permitted by Lessor or the terms of this Lease, which will
result in the disqualification of the Aircraft or any portion thereof for, or
recapture of, all or any portion of Depreciation Deductions, and (c) at no time
during the term of this Lease will Lessee 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 terms of this Lease), which will result in
the disqualification of the Aircraft or any portion thereof for, or recapture
of, all or any portion of Depreciation Deductions. If as a result of a breach of
any representation, warranty or covenant contained in the immediately preceding
sentence (x) tax counsel of Lessor, in its reasonable opinion, 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 the Aircraft, or (y) any such Tax
Benefit claimed on the federal income tax return of Lessor is disallowed or
adjusted by the Internal Revenue Service, or (2) any such Tax Benefit is
recomputed or recaptured by Lessor's tax counsel (any such determination,
disallowance, adjustment, recomputation or recapture being hereinafter called a
"loss"), THEN Lessee shall pay, upon demand, to Lessor, as an indemnity and as
additional Rent, such amount as shall cause Lessor's after-tax economic yields
and cash flows,
14
18
computed on the same assumptions including tax rates, as were utilized by lessor
in originally evaluating the transaction (such yields and flows 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.
15.2 Lessee hereby further represents, warrants and covenants that all
amounts includible in the gross income of Lessor with respect to the Aircraft,
and all deductions or credits allowable to Lessor with respect to the Aircraft,
will be treated as primarily derived from or allocable to sources within the
United States in each and every year throughout the term of this Lease. In the
event of a breach of the representation, warranty and covenant contained in the
immediately preceding sentence, if any item of income credit or deduction with
respect to the Aircraft shall not be treated as derived from, or allocable to,
sources within the United States for a given taxable year (any such event
hereinafter referred to as a "Foreign Loss"), then Lessee shall pay to Lessor as
an indemnity, on the next succeeding Rent Date, or in any event within thirty
(30) days after written demand to Lessee by Lessor, such amount as, after
deduction of all taxes required to be paid by Lessor in respect of the receipt
of such amounts under the laws of any Federal, state or local government or
taxing authority of the United States, shall equal the sum of: (a) the excess of
(x) the foreign tax credits which Lessor would have been entitled to for such
year had no such Foreign Loss occurred over (y) the foreign tax credits to which
Lessor was limited as a result of such year had no such Foreign Loss occurred
plus (b) the amount of any interest, penalties or additions to tax payable as a
result of such Foreign Loss.
15.3 Lessee shall not be required to make any indemnity payment
pursuant to Section 15.1 or 15.2 to the extent that the loss giving rise to such
indemnity payment is a direct result of any event whereby Lessee is required to
pay by the terms of this Lease, and shall have paid in full, the Casualty Value.
15.4 All of Lessor's rights, privileges and indemnities contained in
this Section 15 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 successor's and
assigns.
SECTION 16. EVENT OF DEFAULT
The term Event of Default, whenever 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).
16.1 Lessee shall fail to make any payment of Rent when due, and such
failure shall continue for more than ten (10) days after written notice thereof
from Lessor to Lessee; or
16.2 Lessee shall fail to keep in full force and effect insurance
required under this Lease; or
15
19
16.3 Lessee shall fail to perform or observe any covenant, condition or
agreement (other than that referred to in 16.1 or 16.2 above) 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 sixty (60) days after written notice thereof from Lessor to Lessee;
provided, however, if such failure is not reasonably susceptible to cure within
such sixty (60) day period, and Lessee has commenced to cure such failure within
said sixty (60) day period, Lessee shall have an additional period of time to
cure as may be required to effect such cure if Lessee continues to diligently
prosecute such cure to completion.
16.4 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 or sublet the Aircraft or any part thereof, use the
Aircraft for an illegal purpose, or permit the same to occur; or
16.5 Lessee fails to pay its debts as they become due or files 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 in any such proceeding, or Lessee by voluntary petition, answer
or consent, seeks 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)
providing for the reorganization or liquidation or corporations, or providing
for an agreement, composition, extension or adjustment with its creditors; or
16.6 A petition against Lessee 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 in each case), as now or hereafter in effect, is filed and shall not
be 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, any court of competent jurisdiction shall assume jurisdiction, custody
or control of Lessee or of any substantial part of its property and such
jurisdiction, custody or control shall remain in force relinquished, unstayed or
unterminated for a period of sixty (60) days; or
16.7 Lessee (a) defaults on the payment of any obligation for borrowed
money, under any lease (whether or not capitalized) or for the deferred purchase
price of property, including interest thereon, beyond the period of grace, if
any, provided with respect thereto, or (b) defaults in the performance or
observance of any other term, condition or agreement contained in any such
obligation or in any agreement relating thereto, if the effect of either such
default is to cause, or permit the holder or holders of such obligation (or a
trustee on behalf of such holder or holders) to cause such obligation to become
due prior to its stated maturity or to realize upon any collateral given as
security therefor and such default results in material adverse change in the
financial condition of Lessee.
16
20
SECTION 17. REMEDIES
17.1 Upon the occurrence of any Event of Default and so long as the
same shall be continuing, Lessor may, at its option, declare this Lease to be in
default by written notice to such effect given to Lessee, and at any time
thereafter, Lessor may exercise one or more of the following remedies, as Lessor
in its sole discretion shall lawfully elect.
(a) proceed by appropriate court action, either at law or in
equity, to enforce performance by Lessee of the applicable covenants of this
Lease or to recover damages for the breach thereof;
(b) by notice in writing terminate this Lease, whereupon all
rights of Lessee to the use of the Aircraft or any part thereof shall absolutely
cease and terminate but Lessee shall remain liable as hereinafter provided; and
thereupon Lessee, if so requested by Lessor, shall at its expense promptly
return the Aircraft to the possession of Lessor at such place within the United
States (excluding Alaska and Hawaii) as Lessor shall designate and in the
condition required upon the return thereof pursuant to and in accordance with
the terms hereof, or Lessor, at its option, may enter upon the premises where
the Aircraft is located and take immediate possession of and remove the same
together with any Engines and Parts by summary proceedings or otherwise. Lessee
shall, without further demand, forthwith pay to Lessor an amount equal to any
unpaid Rent due and payable for all periods up to Rent Date immediately
following the date on which Lessor has declared this Lease to be in default,
plus, as liquidated damages for loss of a bargain and not as a penalty, an
amount equal to the Casualty Value of the Aircraft, computed as of the Rent Date
immediately preceding the date on which Lessor has declared this Lease to be in
default.
17.2 Lessee shall be liable for all costs, charges and expenses
incurred by Lessor by reason of the occurrence of any Event of Default or the
exercise of Lessor's remedies with respect thereto.
17.3 No remedy referred to herein is intended to be exclusive, but each
shall be cumulative and in addition to any other remedy referred to above or
otherwise available to Lessor at law or in equity. No express or implied waiver
by Lessor of any Default or Event of Default hereunder shall in anyway be, or be
construed to be, a waiver of any future or subsequent Default or 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 particularly right by Lessor shall not exhaust the same or
constitute a waiver of any other right provided herein.
SECTION 18. NOTICES
All communications and notices provided for herein shall be in writing
and shall become effective when deposited in the United States mail, with proper
postage for first-class mail, prepaid, addressed if to Lessor or Lessee at their
respective addresses set forth below or such other address as either party may
hereafter designate by written notice to the other:
17
21
LESSOR: Miramonte Aviation, LLC
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attn.: Xxxxx X. Xxxxx
LESSEE: MPW Management Services Corp.
0000 Xxxxxxxxx Xxxx, X.X.
X.X. Xxx 000
Xxxxxx, Xxxx 00000
Attn.: Xxxxxx X. Xxxxxxx
SECTION 19. SUCCESSORS AND ASSIGNS
This Lease, including all agreements, covenants, representations and
warranties, shall be binding upon and inure to the benefit of, any may be
enforced by, (a) Lessor and its successors, assigns, and (b) Lessee and its
successors and assigns; PROVIDED, HOWEVER, that neither party shall assign this
Lease without the prior written consent of the other party.
SECTION 20. MISCELLANEOUS
20.1 The terms of this Lease shall not be waived, altered, modified,
amended, supplemented or terminated in any manner whatsoever by written
instrument signed by Lessor and Lessee.
20.2 All agreements, indemnities, representations and warranties
contained in this Lease or any agreement, document or certificate delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery of this Lease and the expiration or other termination
of this Lease.
20.3 Any provision of this Lease that may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, Lessee and Lessor for themselves hereby waives any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
20.4 Lessor's failure at any time or times to require strict
performance by Lessee of any of the terms or provisions hereof shall not waive,
affect or diminish any right of Lessor to demand strict compliance and
performance thereof, and any waiver of any default shall not waive or affect any
other or subsequent default. None of the conditions, provisions, and terms
contained herein shall be deemed to have been waived by any act or knowledge of
Lessor, its agents, officers, or employees. No waiver shall be effective unless
in writing specifically identifying such waiver and signed by Lessor.
18
22
20.5 This Lease represents the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes any and all prior
understandings. This Lease shall constitute an agreement of lease and nothing
herein shall be construed as conveying to Lessee any right, title or interest in
or to the Aircraft, except as Lessee only.
20.6 This Lease shall be deemed to have been delivered in, and shall be
governed by and construed in accordance with the laws of the State of Ohio.
20.7 This Lease may be executed in any number of counterparts and by
the different parties hereto on separate counterparts.
20.8 The division of this Lease into sections, the provision of a table
of contents and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretations of this Lease.
20.9 Although this Lease is dated as of the date first above written
for convenience, the actual dates of execution hereof by the parties hereto are
respectively the dates set forth under the signatures hereto, and this Lease
shall be effective on the latest of such dates.
20.10 Lessee agrees to execute and deliver to Lessor all instruments,
documents and other writings as may be necessary to carry out the intent and
purposes of this Aircraft Lease. All charges relating to the delivery of the
Aircraft to Lessee or of the return of same to Lessor including costs, expenses,
and attorney fees shall be borne by Lessee and shall be paid to Lessor,
forthwith.
20.11 If Lessee holds beyond the termination date of this Aircraft
Lease, Lessee shall pay rent therefor at the said rate until the Aircraft
arrives at Lessor's premises.
SECTION 21. PERFORMANCE OF OBLIGATIONS OF LESSEE BY LESSOR
If an Event of Default should occur hereunder, Lessor may thereafter
make the payment or perform or comply with the agreement, the nonpayment,
nonperformance or noncompliance with which caused such Event of Default, and the
amount of such payment and the amount of reasonable expenses of Lessor incurred
in connection with such payment or the performance of or compliance with such
agreement, as the case may be, shall be payable by Lessee upon demand by Lessor,
and such action by Lessor shall not be deemed a cure or waiver of any Default or
Event of Default hereunder.
SECTION 22. TRUTH-IN-LEASING
22.1 Lessee has reviewed the Aircraft's 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 regulations of the Federal
Aviation Administration. Lessee certifies that the Aircraft presently complies
with the applicable maintenance and inspection requirements of Part 91 of the
regulations of the Federal Aviation Administration.
19
23
22.2 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 regulations of the Federal Aviation Administration.
22.3 Lessee certifies that the Aircraft will be maintained and
inspected under Part 91 of the regulations of the Federal Aviation
Administration for operations to be conducted under this Lease. Lessee
understands that an explanation of Factors being an 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.
IN WITNESS WHEREOF, the parties hereto have each caused this Lease to
be duly executed by the respective officers thereunto duly authorized.
LESSOR:
MIRAMONTE AVIATION, LLC
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Printed Name: Xxxxx X. Xxxxx
-----------------------------
Its: President
--------------------------------------
LESSEE:
MPW MANAGEMENT SERVICES CORP.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Printed Name: Xxxxxx X. Xxxxxxx
-----------------------------
Its: Vice President and CFO
--------------------------------------
20
