Exhibit 10.1
AIRCRAFT DRY LEASE
This Lease of aircraft is made, effective as of July 12, 1999, by and
between Wyoming Associates, Inc., a corporation incorporated under the laws of
the State of South Carolina, with principal offices at 000 Xxxx Xxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000 (hereinafter referred to as "Lessor") and ESA Management,
Inc., a corporation incorporated under the laws of the State of Delaware, with
principal offices at 000 Xxxx Xxx Xxxx Xxxx., Xx. Xxxxxxxxxx, Xxxxxxx 00000
(hereinafter referred to as "Lessee").
RECITALS
The parties recite that:
A. Lessor owns a 1987 Gates Learjet Model 55B aircraft, Serial No. 132 and
currently registered as N122S (hereinafter referred to as the "Aircraft"). The
Aircraft is available for use by a qualified Lessee; and
B. Lessee desires to lease the Aircraft under such terms and conditions as
are mutually satisfactory to the parties.
The parties agree as follows:
SECTION ONE
LEASE OF AIRCRAFT
For Fifty-Seven Thousand Dollars and No/100 ($57,000.00) monthly, Lessor
agrees to lease the Aircraft to Lessee on a nonexclusive basis. The Aircraft
shall be delivered to Lessee at Ft. Lauderdale Hollywood International Airport
in Ft. Lauderdale, Florida on July 12, 1999, at which time Lessee shall inspect
the
Aircraft to the extent deemed necessary. Lessee shall have ten (10) flight
hours following delivery of the Aircraft in which to notify Lessor in writing of
any defects in the Aircraft or its equipment or accessories. If, at the end of
such period, Lessor has not received such notification, it shall be conclusively
presumed between the parties that Lessee has fully inspected the Aircraft having
knowledge that it is in good condition and repair and that Lessee is satisfied
with and has accepted the Aircraft in such condition and repair.
SECTION TWO
TERM
This Lease shall commence on July 12, 1999 and continue for one year after
said date. Thereafter, this Lease shall be automatically renewed on a month to
month basis, unless sooner terminated by either party as hereinafter provided.
Either party may at any time terminate this Lease upon thirty (30) days written
notice to the other party, delivered personally or by certified mail, return
receipt requested, at the address for said other party as set forth above.
SECTION THREE
COMMERCIAL OPERATION RESTRICTION
Neither Lessee nor Lessor will make the Aircraft available for hire within
the meaning of the Federal Aviation Regulations. The Aircraft is to be operated
strictly in accordance with 14 C.F.R. Part 91.
2
SECTION FOUR
INSURANCE
At all times during the term of this Lease, Lessee shall cause to be
carried and maintained, at Lessee's cost and expense, physical damage insurance
with respect to the Aircraft in the amount set forth below:
Aircraft Physical Damage $5,650,000.00
(No Deductible While
In Motion or Not In Motion)
At all times during the term of this Lease, Lessee shall also cause to be
carried and maintained, at Lessee's cost and expense, third party aircraft
liability insurance, passenger legal liability insurance, property damage
liability insurance, and medical expense insurance in the amounts set forth
below:
Combined Liability Coverage for
Bodily Injury and Property Damage
Including Passengers -
Each Occurrence $100,000,000.00
Medical Expense Coverage -
Each Person $5,000.00
Lessee shall also bear the cost of paying any deductible amount on any
policy of insurance in the event of a claim or loss.
Any policies of insurance carried in accordance with this Lease: (i) shall
name Lessor as an additional insured; and (ii) shall contain a waiver by the
underwriter thereof of any right of subrogation against Lessor; and (iii) shall
provide that in respect of the interests of Lessor, such policies of insurance
shall not be invalidated by any action or inaction of Lessee or
3
any other person and shall insure Lessor (subject to the limits of liability and
war risk exclusion set forth in such policies) regardless of any breach or any
violation of any warranty, declarations or conditions contained in such policies
by Lessee or any other person; and (iv) shall provide that if the insurers
cancel insurance for any reason whatsoever, or the same is allowed to lapse for
non-payment of premium, or if there is any material change in policy terms and
conditions, such a cancellation, lapse or change shall not be effective as to
Lessor, except upon thirty (30) days prior written notice. Each liability policy
shall be primary without right of contribution from any other insurance which is
carried by Lessee or Lessor and shall expressly provide that all of the
provisions thereof, except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each insured.
Lessee shall submit this Lease for approval to the insurance carrier for
each policy of insurance on the Aircraft. Lessee shall arrange for a
Certificate of Insurance evidencing appropriate coverage as to the Aircraft and
the satisfaction of the requirements set forth above to be given by its
insurance carriers to Lessor.
SECTION FIVE
RESTRICTIONS ON USE
Lessee may operate the Aircraft only for the purposes and within the
geographical limits set forth in the insurance policy or policies obtained in
compliance with Section Four of this
4
Lease. The Aircraft shall be operated at all times in accordance with the flight
manual and all manufacturer's suggested operating procedures. Furthermore,
Lessee 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 occasioned by any violation by Lessee. If
such fines or penalties are imposed on Lessor and paid by Lessor, Lessee shall
reimburse Lessor for the amount thereof within thirty (30) days of receipt by
Lessee of written demand from Lessor. Lessee will not base the Aircraft, or
permit it to be based, outside the limits of the United States of America,
without the written consent of Lessor.
The Aircraft shall be flown only by certificated and qualified pilots and
shall be maintained only by certificated and qualified mechanics. In the event
the insurance on the Aircraft would be invalidated because Lessee is unable to
obtain certificated and qualified pilots and mechanics, Lessee shall not operate
the Aircraft until such time as certificated and qualified pilots and mechanics
are obtained and insurance on the Aircraft is made valid.
Lessee will not directly or indirectly create, incur, assume or suffer to
exist any lien on or with respect to the Aircraft. Lessee will promptly, at its
own expense, take such action as may be necessary to discharge any lien not
excepted above if the same shall arise at any time.
5
SECTION SIX
INSPECTION BY LESSOR
Lessee agrees to permit Lessor or any authorized agent to inspect the
Aircraft at any reasonable time and to furnish any information in respect to the
Aircraft and its use that Lessor may reasonably request.
SECTION SEVEN
ALTERATIONS
Except in accordance with other written agreements entered into subsequent
to the date of this Lease between Lessee and Lessor regarding maintenance of the
Aircraft, Lessee shall not have the right to alter, modify, or make additions or
improvements to the Aircraft without the written permission of Lessor. All such
alterations, modifications, additions, and improvements as are so made shall
become the property of Lessor and shall be subject to all of the terms of this
Lease.
SECTION EIGHT
MAINTENANCE AND REPAIR
Lessee, at Lessee's own cost and expense, shall repair and maintain the
Aircraft during the term of this Lease so as to keep it in as good and safe
operating condition as when delivered by Lessor to Lessee, ordinary wear and
tear from use and ordinary deterioration excepted. Lessee shall pay all costs
and expenses of new parts and accessories for replacement, including
transportation charges thereon. Lessee shall be entitled to any and all salvage
from broken or worn out parts. The workmen who inspect, maintain, and repair
the Aircraft on Lessee's behalf
6
shall not be employees of Lessor, but shall at all times be employees of Lessee
or independent contractors, and Lessor shall have no control or authority to
direct, employ, discharge or pay compensation to such employees. Subject to the
foregoing limitations, Lessee agrees to indemnify Lessor against any liability
arising from the negligent repair and maintenance of the Aircraft, as well as
from failure to repair and maintain the Aircraft, and also against any claim or
liability arising out of the repair work, and the delivery of material to and
from the place where such repair and maintenance work is performed.
All inspections, repairs, modifications, maintenance, and overhaul work to
be accomplished by Lessee shall be performed by personnel certificated to
perform such work and shall be performed in accordance with the standards set by
the Federal Aviation Regulations. Lessee shall maintain all log books and
records pertaining to the Aircraft during the term of this Lease in accordance
with the Federal Aviation Regulations. Such records shall be made available for
examination by Lessor, and Lessee, at the termination of this Lease, shall
deliver such records to Lessor.
SECTION NINE
TITLE
The registration of and title to the Aircraft shall be in the name of the
Lessor, and the Aircraft, at all times during the term of this Lease or any
extension, shall bear United States registration markings. All responsibility
and obligations in
7
regard to the operation of the Aircraft as above owned, registered, and marked
shall be borne by Lessee during the term of this Lease.
SECTION TEN
PAYMENT OF TAXES
Lessee shall pay or cause to be paid all taxes incurred by reason of
ownership of the Aircraft during the term of this Lease, including personal
property taxes. Lessee shall pay all taxes associated with Lessee's use of the
Aircraft on Lessee's own business, including landing fees, fuel taxes, and any
other taxes or fees which may be assessed against a specific flight by Lessee.
SECTION ELEVEN
ASSIGNMENT
Lessee shall not assign this Lease or any interest in the Aircraft, or
sublet the Aircraft, without prior written consent of Lessor. Subject to the
foregoing, this Lease inures to the benefit of, and is binding on, the heirs,
legal representatives, successors, and assigns of the parties.
SECTION TWELVE
ACCIDENT AND CLAIM
Lessee shall immediately notify Lessor of each accident involving the
Aircraft, which notification shall specify the time, place, and nature of the
accident or damage, the names and addresses of parties involved, persons
injured, witnesses, and owners of properties damaged, and such other information
as may be known. Lessee shall advise Lessor of all correspondence,
8
papers, notices, and documents whatsoever received by Lessee in connection with
any claim or demand involving or relating to the Aircraft or its operation, and
shall aid in any investigation instituted by Lessor and in the recovery of
damages from third persons liable therefor.
SECTION THIRTEEN
RETURN OF AIRCRAFT TO LESSOR
On the termination of this Lease by expiration or otherwise, Lessee shall
return the Aircraft to Lessor at Spartanburg Downtown Airport in Spartanburg,
South Carolina, in as good operating condition and appearance as when received,
ordinary wear, tear and deterioration excepted, and shall indemnify Lessor
against any claim for loss or damage occurring prior to the actual physical
delivery of the Aircraft to Lessor.
SECTION FOURTEEN
MODIFICATION OF AGREEMENT
This Lease constitutes the entire understanding between the parties, and
any change or modification must be in writing and signed by both parties.
SECTION FIFTEEN
GOVERNING LAW
This Lease is entered into under, and is to be construed in accordance
with, the laws of the State of South Carolina.
SECTION SIXTEEN
TRUTH IN LEASING STATEMENT
THE AIRCRAFT, A 1987 GATES LEARJET, MODEL 55B, MANUFACTURER'S SERIAL NO.
132, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N122SU,
HAS BEEN MAINTAINED
9
AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF
THIS LEASE.
THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR
OPERATIONS TO BE CONDUCTED UNDER THIS LEASE. DURING THE DURATION OF THIS LEASE,
ESA MANAGEMENT, INC., 000 XXXX XXX XXXX XXXX., XX. XXXXXXXXXX, XXXXXXX 00000, IS
CONSIDERED RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE.
AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT
FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT
STANDARDS DISTRICT OFFICE.
THE "INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS"
ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.
I, THE UNDERSIGNED XXXXXX X. XXXXXXX AS VICE PRESIDENT OF ESA MANAGEMENT,
INC., 000 XXXX XXX XXXX XXXX., XX. XXXXXXXXXX, XXXXXXX 00000, CERTIFY THAT I AM
RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT I UNDERSTAND MY
RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
IN WITNESS WHEREOF, the parties have executed this Lease.
WYOMING ASSOCIATES, INC.
/s/ Xxxxxx Xxxx Xxxxxxx, Jr. July 9, 1999 2:30 p.m.
---------------------------- -------------------------------
XXXXXX XXXX XXXXXXX, Jr. Date and Time of Execution
President
ESA MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxxxx July 9, 1999 3:00 p.m.
---------------------------- -------------------------------
XXXXXX X. XXXXXXX Date and Time of Execution
Vice President
10
