Exhibit 10.67
EXECUTION VERSION
-----------------
TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL
PAPER (AS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY
APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT
LEASE AGREEMENT MAY BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY
COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, WHICH SHALL BE
IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE ORIGINAL ON THE
SIGNATURE PAGE OF THIS AGREEMENT BY GE CAPITAL AVIATION SERVICES,
INC.
AIRCRAFT LEASE AGREEMENT
DATED AS OF MAY 12, 2000
BETWEEN
AVIATION FINANCIAL SERVICES INC.
AS LESSOR
AND
ALOHA AIRLINES, INC.
AS LESSEE
IN RESPECT OF AIRCRAFT: BOEING MODEL 737-700
SERIAL NO: 28640
U.S. REGISTRATION NO.: N740AL
------------------------------------
INCORPORATING THE PROVISIONS OF A
COMMON TERMS AGREEMENT
DATED AS OF MAY 12,2000
AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT is made as of May 12,2000 and is
BETWEEN:
(1) AVIATION FINANCIAL SERVICES INC., a corporation incorporated under
the Laws of the State of Delaware having its principal place of
business and chief executive office at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 ("LESSOR"); and
ALOHA AIRLINES, INC., a corporation incorporated under the Laws of
the State of Delaware with its principal place of business and chief
executive office at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000
("LESSEE").
WHEREAS:
(A) Lessee wishes to lease the Aircraft (as defined below) from Lessor,
and Lessor wishes to lease the Aircraft to Lessee, on the terms and
subject to the conditions provided herein;
(B) General Electric Capital Corporation ("GECC"), an Affiliate of
Lessor, and Lessee have entered into the Common Terms Agreement
(as defined below) in respect of aircraft that may be leased from
time to time by Lessee or one of its Affiliates from GECC or one of
its Affiliates; and
(C) Lessor and Lessee wish to incorporate by reference such Common Terms
Agreement, as well as Schedules A and B attached hereto, into this
Aircraft Lease Agreement for the Aircraft and a true and complete
copy of such Common Terms Agreement is attached hereto as Schedule C;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. INTERPRETATION
1.1 DEFINITIONS: In this Aircraft Lease Agreement, the following
capitalized words and expressions have the respective meanings set
forth below:
AIRCRAFT means the Airframe and Engines described on Schedule A
hereto.
AIRFRAME STRUCTURAL CHECK, AIRFRAME SUPPLEMENTAL RENT, ANNUAL
SUPPLEMENTAL RENT ADJUSTMENT, APU SUPPLEMENTAL RENT AND ASSUMED RATIO
are not applicable.
COMMON TERMS AGREEMENT means the "Aircraft Lease Common Terms
Agreement" dated as of May 12, 2000 executed by GECC and Lessee (as
in effect on the date hereof
-1-
without, unless Lessor and Lessee otherwise expressly agree, giving
any effect to any subsequent amendment, supplement, waiver or other
modification thereto), and which forms part of this Aircraft Lease
Agreement.
DELIVERY CONDITION REQUIREMENTS means the requirements specified in
Part II of Schedule A.
DELIVERY LOCATION means Seattle, Washington or such other location
as Lessor and Lessee mutually agree in order to minimize any Taxes
that may be applicable to the Delivery.
DEPOSIT means all amounts payable pursuant to Section 3.1 hereof
ENGINE SUPPLEMENTAL RENT AND ENGINE LLP SUPPLEMENTAL RENT are not
applicable.
FINAL DELIVERY DATE means the date that is 90 days after the last
day of the Scheduled Delivery Month.
FINANCING DOCUMENTS means the documents, if any, relating to any
indebtedness of Lessor secured, in whole or in part, by Lessor's
interest in the Aircraft and this Aircraft Lease Agreement.
FINANCING DOCUMENTS CONTEST RIGHTS, FINANCING DOCUMENTS INDEMNITY
AMOUNTS AND FINANCING DOCUMENTS TAX AMOUNTS are all inapplicable.
FINANCING PARTIES means the Persons, if any, that hold the
indebtedness of Lessor evidenced by the Financing Documents, and
shall include the Financing Parties Representative.
FINANCING PARTIES' REPRESENTATIVE the Person, if any, identified by
Lessor to Lessee in writing as the representative of the Financing
Parties and the beneficiary of the Security Interest in the Aircraft
and this Aircraft Lease Agreement created by the Financing
Documents, and its successors and assigns.
GUARANTOR is inapplicable.
INDEMNITEE means each of Lessor, Owner, GECC, GECAS, the Financing
Parties and their respective successors and permitted assigns, and
each of their respective shareholders, subsidiaries, affiliates,
partners, contractors, directors, officers, representatives, agents
and employees.
LANDING GEAR SUPPLEMENTAL RENT is not applicable.
-2-
MANUFACTURER means the manufacturer of the Airframe or an Engine, as
the case may be, as set forth on Schedule A hereto.
OWNER means Lessor.
PRE-APPROVED BANK means (i) First Hawaiian Bank for so long as its
long-term unsecured Dollar denominated debt carries a rating from S&P
of A or better, and (ii) any bank organized under the laws of the
United States or any State thereof, or the New York branch of a major
international bank for only so long as its long-term Dollar
denominated unsecured debt (or if it does not have long-term
unsecured Dollar denominated debt, its parent corporation's long-term
unsecured Dollar denominated debt) carries a rating from S&P of A or
better.
REDELIVERY LOCATION means any location in the State of Washington,
Oregon or California as Lessor may designate to Lessee or such other
location as may be agreed in writing by Lessor and Lessee.
RENT COMMENCEMENT DATE means the date on which Lessor tenders the
Aircraft under Clause 4.3.(a) of the Common Terms Agreement and the
Lessee Conditions Precedent are met or could reasonably be expected
to be met if the Delivery of the Aircraft had occurred.
SCHEDULED DELIVERY DATE means the date that Aircraft is scheduled to
be delivered by Lessor to Lessee under the Lease, as notified by
Lessor to Lessee pursuant to Section 4.1 of the Common Terms
Agreement, and, notwithstanding any subsequent delays in delivery,
the "Scheduled Delivery Date" shall remain the first such date
notified by Lessor to Lessee pursuant to Section 4.1 of the Common
Terms Agreement.
SCHEDULED DELIVERY MONTH means March 2001.
SCHEDULED DELIVERY WEEK means the week during which the Scheduled
Delivery Date is anticipated to fall, as the same is notified by
Lessor to Lessee pursuant to Section 4.1 of the Common Terms
Agreement.
SCHEDULED EXPIRY DATE means the day immediately preceding the
fifteenth (15th) anniversary of the Rent Commencement Date (or in
the event that such date is a day that is not a Business Day, the
immediately preceding Business Day), which date shall be specifically
set forth in Lease Supplement No. 1; provided, however, that Lessee
shall receive a credit for Rent actually paid by Lessee to Lessor, on
a per diem basis, against other obligations owed by Lessee to Lessor
at the Return Occasion in respect of any non-Business Days which are
truncated from the Term based on this provision.
STATE OF DESIGN means the United States.
-3-
TAX INDEMNITEE means each of Owner, Lessor, and each member of the
consolidated group of which Lessor or Owner is a member for United
States Federal Income Tax purposes, and their successors and
permitted assigns.
1.2 INTERPRETATION: Unless otherwise defined herein, words and
expressions defined in the Common Terms Agreement have the same
respective meanings for the purposes of this Aircraft Lease
Agreement. The construction provisions of Section 1.2 of the Common
Terms Agreement shall apply to this Aircraft Lease Agreement.
2. LEASING
2.1 AGREEMENT TO LEASE: Subject to the terms and conditions of the
Lease, Lessor will lease the Aircraft to Lessee and Lessee will take
delivery of and lease the Aircraft from Lessor in accordance with
the Lease for the duration of the Term.
2.2 TERM: Subject to Sections 4.1 through 4.4 of the Common Terms
Agreement, Delivery of the Aircraft will occur at the Delivery
Location, whereupon Lessee shall accept the Aircraft hereunder and
evidence such Delivery and acceptance by executing and delivering
Lease Supplement No. 1 as provided in Section 4.3 of the Common
Terms Agreement. The Term will commence on the Delivery Date, which
Delivery Date is scheduled to occur in the Scheduled Delivery Month,
and will expire on the Scheduled Expiry Date unless terminated
earlier in accordance with the provisions of the Lease.
2.3 [Not applicable].
3. PAYMENTS
3.1 DEPOSIT AND LETTER OF CREDIT: Lessee shall pay to Lessor the Deposit
in cash (to which Deposit Section 5.13 of the Common Terms Agreement
shall apply) in the amount and at the times provided in Schedule B
hereto. Lessee shall be permitted to deliver to Lessor an
irrevocable Letter of Credit in lieu of a portion of the Deposit in
an amount up to the amount provided in Schedule B as the LC Amount,
which Letter of Credit shall comply with the provisions of Section
5.14 of the Common Terms Agreement.
3.2 RENT: Lessee shall pay Rent to Lessor on each Rent Date during the
Term in the amount provided in Schedule B hereto and as provided in
Sections 5.2 and 5.3 of the Common Terms Agreement. The first
installment of Rent shall be due and payable on the Rent
Commencement Date as defined herein.
3.3 SUPPLEMENTAL RENT: Lessee shall have no obligation to pay
Supplemental Rent.
-4-
3.4 LESSOR'S MAINTENANCE CONTRIBUTION: Lessor shall have no obligation
to make Maintenance Contribution payments.
3.5 LESSOR'S BANK ACCOUNT: For the purposes of Section 5.5 of the Common
Terms Agreement, Lessor's bank account and wire transfer
particulars, to which all payments to Lessor shall be made, are at
the date hereof: Bankers Trust Company, New York, ABA 021 001 033,
For the account of: Aviation Financial Services Inc., Account
Number: 00-000-000.
3.6 MACRS: Lessor has assumed that MACRS Deductions shall be available in
respect of the leasing of the Aircraft and accordingly the provisions
of Section 5.7(d) of the Common Terms Agreement and the related
provisions of Schedule B shall apply under this Agreement.
4. CONDITION OF THE AIRCRAFT AT DELIVERY
4.1 On the Delivery Date, as a condition to Lessee's obligation to
accept delivery thereof, the Aircraft shall be in the condition
provided in Part III of Schedule A hereto.
5. CONDITION OF THE AIRCRAFT AT REDELIVERY
5.1 On the Return Occasion, Lessee shall redeliver the Aircraft to
Lessor at the Redelivery Location and at such redelivery the
Aircraft shall be in the condition provided in Part II of Schedule
A hereto and in the Common Terms Agreement, including Schedule 6 of
the Common Terms Agreement.
6. ADDRESSES FOR NOTICES
The addresses and facsimile and telephone numbers of Lessor and
Lessee are as follows:
Lessor: Aviation Financial Services Inc.
Address: c/o GE Capital Aviation Services
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Executive Vice President Risk and Portfolio
Management
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Lessee: Aloha Airlines, Inc.
Address: 000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Executive Vice President and Chief Financial
Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
-5-
7. THE SCHEDULES AND COMMON TERMS AGREEMENT
ALL THE PROVISIONS OF SCHEDULE A HERETO, SCHEDULE B HERETO, AND THE
COMMON TERMS AGREEMENT, ARE INCORPORATED BY REFERENCE HEREIN AND ARE
PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THEY WERE SET OUT IN
FULL HEREIN. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY
ITS SIGNATURE BELOW, THE LESSEE ACKNOWLEDGES AND AGREES THAT THE
LEASE OF THE AIRCRAFT HEREUNDER IS ON AN "AS IS, WHERE IS" BASIS AND
THAT THE DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY,
INDEMNITIES, THE CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, THE
LESSEE'S SUBMISSION TO PERSONAL JURISDICTION IN NEW YORK, AND THE
WAIVER OF ANY RIGHT TO A TRIAL BY JURY PROVIDED FOR IN THE COMMON
TERMS AGREEMENT ARE INCORPORATED HEREIN BY SUCH REFERENCE AND ARE
PART OF THIS AIRCRAFT LEASE AGREEMENT AS IF THE SAME WERE SET OUT IN
FULL HEREIN.
8. NO AMENDMENT EXCEPT IN WRITING
No provision of this Lease, including any provision of Schedule A,
Schedule B or the Common Terms Agreement, may be amended, rescinded,
changed, waived, discharged, terminated or otherwise modified in any
way whatsoever, except by a writing signed by the party to be
charged. Lessor and Lessee acknowledge their agreement to the
provisions of this Section 8 by their signatures below.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK. THE
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease
Agreement, each by their duly authorized representative(s), as of the date
shown at the beginning of this Aircraft Lease Agreement.
LESSOR: LESSEE:
AVIATION FINANCIAL ALOHA AIRLINES, INC.
SERVICES INC.
By: /s/ [Illegible] By: _________________________
-----------------------
Name: [Illegible] Name: _______________________
-----------------------
Title: Vice President Title:_______________________
-----------------------
By: ________________________
Name:_______________________
Title:______________________
IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease
Agreement, each by their duly authorized representative(s), as of the date
shown at the beginning of this Aircraft Lease Agreement.
LESSOR: LESSEE:
AVIATION FINANCIAL ALOHA AIRLINES, INC.
SERVICES INC.
By:_______________________ By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Name: ____________________ Name: Xxxxxx X. Xxxxxxxxx
---------------------------
Title:____________________
Title: Exec. Vice President & CFO
---------------------------
By: /s/ Xxxxx X. Xxxx
---------------------------
Name: Xxxxx X. Xxxx
---------------------------
Title: VP Planning & Development
---------------------------
SCHEDULE A
PART I-AIRFRAME AND ENGINES DESCRIPTION
AIRCRAFT
--------
Manufacturer: Boeing
Model: 737-700 ETOPS
Serial Number: 28640
U.S. Registration No. To be advised at Delivery and included in
Lease Supplement No. 1
ENGINES (each of which has 750 or more rated takeoff horsepower or the
-------
equivalent of such horsepower)
Engine Type: CFM56-7B24
Serial Nos: To be advised at Delivery and included in
Lease Supplement No. 1
A-1
SCHEDULE A
PART II-DELIVERY CONDITION REQUIREMENTS
Set forth below is a description of the condition in which the Aircraft must
be in order for Lessee to be obligated to accept the Aircraft under the Lease.
It is solely a description of such condition precedent and shall not be
construed as a representation, warranty or agreement of any kind whatsoever,
express or implied, by Lessor with respect to the Aircraft or its condition,
all of which have been disclaimed by Lessor and waived by Lessee as set forth
in the Lease, including in the Common Terms Agreement.
DELIVERY CONDITION REQUIREMENTS:
This "DELIVERY CONDITION REQUIREMENTS" are as follows:
Airframe, New from Manufacturer, configured in
Engines, accordance with GECAS Detail Specification
Components: D6-38808-34 (Revision D), except as modified
in accordance with the specification changes
noted on the Appendix to this Schedule A -
Part II
Livery Painting: Lessee's current livery as in effect on the date
of this Aircraft Lease Agreement, or such other
livery as Lessee may specify in writing to
Lessor so long as Lessee provides to Lessor,
reasonably in advance of the Scheduled
Delivery Month so as to permit Lessor to make
all necessary arrangements for such painting, all
technical specifications necessary in order to
complete the painting of the Aircraft in such
livery
A-2
APPENDIX TO
SCHEDULE A, PART II
SPECIFICATION CHANGES
---------------------
The following table outlines those specification items which the Lessee has
identified as requiring modification to make the GEF specification compatible
with those aircraft currently in operation by Lessee. Each of the items
listed under the column marked GECAS (left) shall be modified during
production to reflect the configuration listed in the Aloha column (right).
All such modifications shall be accomplished at Lessor's expense.
Notwithstanding the above, it is further agreed that Lessee will afford
Lessor or its designated representative the opportunity to discuss alternate
proposals with regard to those modifications below which cause BFE vendor
changes to Lessor's baseline specification (ref D6-38808-34);
01 GENERAL AIRPLANE DESCRIPTION GECAS ALOHA
Manuals/Instrumentation Units Metric English
03 GENERAL AIRPLANE CRITERIA
Operational Capabilities
Max Taxi Weight 133,500 lbs 155,000 lbs
Max Takeoff Weight 133,000 lbs 154,500 lbs
11 PLACARDS and MARKINGS
Exterior Registry Markings No Yes
21 AIR CONDITIONING
Cabin Ascent Rate (ft/min) 600 750
Cabin Descent Rate (ft/min) 350 500
22 AUTOMATIC FLIGHT CONTROL
DFCS Features
Control Wheel Steering Reversion in Approach Yes No
Mode
Altitude Alert (ft) 300/900 200/900
23 COMMUNICATION
Voice Recorder (1) Allied Signal 980- (1) Xxxxx Xxxxxxxxx
6022-001 ARINC 2100-1020-00
557
Man ON/Auto OFF Switch YA607-YA670 Yes
Audio Entertainment None Matsushita (MPES)
RDAX1302-11
Video Entertainment None SONY/PSU
mounted
A-3
Monitors Structural Provs 5 VCC same as GEF
Centerline Ovhd
Video Control Center (VCC) Structural Provs Aft
XX Xxxx Bin
HF System Single/Complete Dual
Provs for second
Transceiver (1) Rockwell 822- (2) Rockwell 822-
0990-001 ARINC 0330-001
719/753
VHF System Dual/Complete Provs Triple
for Third
Transceiver (2) Allied Signal 064- (3) Rockwell 822-
50000-0110 ARINC 1047-002
716
8.33 KHZ Spacing
Capable YA601-YA606 Yes
Activated YA607-YA670 No
ACARS Part Provisions for Rockwell 822-0666-
ARINC 724B 003
ELT No Artex 453-0004
24 ELECTRICAL POWER
Standby Power Load Additions
Captain's Pilot Heat YA607-YA670 No
ATC No. 1 No Yes
25 EQUIPMENT/FURNISHINGS See NOTE 1
Interior Layout (See Attached) LOPS-377-0201 LOPS-377-0203
12F@38"/112Y@
3 1 " with fixed class
divider.
Overwater Equipped No, Lifevests Only Yes, 3 x 46 man
Lifeline Yes Liferafts
Installed Positions G1, G4B G1, G2, G4B
Provisions G2 (Seat Track-3/ G2 half galley
Power/Water/ Drain/ underbin (Jamco)
Ovhd Ties)
Windscreen(s) Fwd RH Sta 336.75 Fwd Left Hand with
emerg. Equip.
stowage and closet
at BS350
Class Divider(s) Fixed
Rails Yes (Basic) Yes (Basic)
Stow Bin Cutout YA610-YA670 Yes No
Center Overhead Stowage Bins No Yes (3)
(1) Forward
(2) Center
A-4
28 FUEL
Measuring Sticks
Conversion Tables NDU to Kilograms NDU to Pounds
29 HYDRAULIC POWER
Engine Driven Pump Abex Xxxxxxx
00-00000-0
AC Electric Pump Abex
00-00000-00
31 INDICATING/RECORDING SYSTEMS
Flight Data Recorder AlliedSignal 000- X-0
0000-000 XXXXX Communications
747 2100-4043-00
Digital Flight Data Acquisition Unit Teledyne 2233000-85 AlliedSignal 967-
ARINC 717 0212-002
Printer Part Provs Half Full Format
Format
Data Loader Connector AlliedSignal 964-
0401-016
Display Format EFIS/MAP PFD/ND
Engine Instrument Display Side-by-Side Over/Under
Engine Fuel Flow N/A Full Time Display
Radio Altitude Display Below ADI Above ADI
Round Dial & Digital Radio Altitude N/A Yes
Ground Speed - Below Airspeed Tape N/A Yes
Landing Altitude Reference Bar N/A Yes
Baro Mins Pointer N/A Yes
Radio Altitude Height Alert Display No 2500 Feet
ADF Pointers in NAV Mode Display Suppressed
TCAS 3 NM Range Ring - Nav Display No Yes
FMC/ADIRU Position Difference Display Exceedence
Weather Radar Range Area Yes Yes
TCAS Resolution Advisory ADI ADI
ILS Failure Flags Inhibited
ILS Localizer Deviation Expanded Scale Autopilot & Flt Dir Autopilot & Flt Dir
Oil Quantity Display % Full Quantity Quarts
Approach Minimums Radio Based
Airspeed Bug #5 Disabled 80 Knots
Control Surface Position - System Display N/A Yes
32 NOSE GEAR TAXI LIGHT 250 Watt 450 Watt
33 LIGHTING
Passenger Cabin Lighting (Zone) Single Two
A-5
Escape Path Lighting Seat Mounted
34 NAVIGATION
Standby Altitude Indicator (1) XX Xxxxxxxx 501- Sextent
1657-02
Ground Proximity Warning Computer AlliedSignal 965- AlliedSignal 965-
0976-003-204-204 0976-003-204-204
(Enhanced) (Enhanced)
Callouts Bank Angle (Basic) Bank Angle (Basic)
"Plus 100
Minimums"
VHF Nav (VOR)/Marker Beacon Receiver (2) AlliedSignal 066- Rockwell 822-0297
50012-0101 ARINC 001
711
Multi-Mode Receiver (MMR)(ILS/GPS) (2) AlliedSignal 066- Rockwell 822-1152
50029-1101 002
ATC Transponder (2) AlliedSignal 066- Rockwell 822-0336
01127-1301 ARINC 001
718
TCAS Change 7 AlliedSignal 066- No
0 0000-0000 YA609
YA670
DME Interrogator (2) AlliedSignal 066- Rockwell 822-0329
50013-0101 ARINC 001
709
ADF Receiver (1) AlliedSignal 066- (2) Rockwell 822
50014-0101 ARINC 0299-001
712
Dual Provisions
TCAS Computer (1) AlliedSignal 066- Rockwell 622-8971
50000-1508 ARINC 020
735
TCAS Change 7 AlliedSignal 066- No
50000-2220 YA609
YA670
Flight Management Computer System
Computer (1) Smiths; Indust 10- (2) Smiths Indust
62225-003 10-62225-003
2 d Computer Partial Provisions Installed
CDU/MCDU CDU MCDU
Date Base Size
1 MEG YA601
2 MEG YA602-YA670 Yes
Built-In Test Equip Printer Receptacles No No
FMCS Definition
Runaway Offset Position Feet Feet
Alternate Destinations Predictions Inhibit Yes
A-6
Retention of Original Waypoints Inhibit Yes
Message Recall Inhibit Yes
LRRA Transceiver (2) AlliedSignal 066- Rockwell 822-0334-
50007-0101 002
Weather Radar Transceiver (1) AlliedSignal 066- Rockwell 622-5132-
50008-0405 633
Predictive Windshear Activated Activated
35 OXYGEN
Flight Crew System - Press Breathing Yes No
38 WATER/WASTE
Potable Water: Cap/Vol (US Gallons) 40/40 60/50
39 E6 PANEL Yes
52 DOORS
Airstairs, Forward Part Provisions + Installed
Install Data Kit
A-7
SCHEDULE A
PART III - PROCEDURES AND OPERATING CONDITION AT REDELIVERY
On the Return Occasion the Aircraft, subject to ordinary wear and
tear of a kind and to an extent consistent with similar aircraft
engaged in commercial airline operations, will be redelivered to
Lessor by Lessee in accordance with the procedures and in any event
in the condition set out below. For the avoidance of doubt, any
damage assessment and/or rectification criteria used in assessing
the redelivery condition shall be as prescribed in the
Manufacturer's structural repair manual ("SRM") and/or the
Manufacturer's Maintenance Planning Document, as appropriate. Any
damage outside the scope of the SRM shall require FAA 8110-3
certification.
1.1 FINAL INSPECTION
Immediately prior to the Return Occasion, Lessee will make the
Aircraft available to Lessor and Owner for inspection ("FINAL
INSPECTION") in order to verify that the condition of the Aircraft
complies with the Lease. The Final Inspection will include, and be
long enough to permit Lessor to:
(a) inspect the Aircraft Documents and Records;
(b) inspect the Aircraft (with Lessee to open or remove panels
as reasonably requested by Lessor or Owner based on
Lessor's or Owner's visual observation of the Aircraft
and/or their respective review of the Aircraft Documents
and Records), uninstalled Parts and the APU (including a
complete video borescope inspection of the APU);
(c) inspect the Engines, including (i) a complete video
borescope inspection of (A) the low pressure and high
pressure compressors and (B) turbine area and (ii) power
assurance runs (including full take-off power engine
run-up performed in accordance with the performance test
in the Engine Manufacturer's test specifications, and the
Engines shall not exceed corrected limits for all
parameters using temperature corrected charts); and
(d) observe a two hour demonstration flight at Lessee's cost
(with up to three (to the extent permitted by FARS) of
Lessor's and Owner's representatives as on-board
observers).
Furthermore, Lessee acknowledges that a purchaser or the next
operator of the Aircraft may need to inspect the Aircraft, the
Engines and the Aircraft Documents and Records prior to redelivery
and Lessee hereby agrees to cooperate reasonably at all times during
the Term
A-8
with Lessor, Owner and/or such purchaser or such next operator in
order to coordinate, assist and grant access for the above
inspections and/or sale or subsequent lease as applicable.
Lessor or Owner, as the case may be, is responsible for and will
indemnify Lessee against all Losses arising from the death or injury
to any observer or any employee of Lessor or Owner, as the case may
be, in connection with the inspection of the Aircraft under this
Section 1.1.
1.2 GENERAL CONDITION
The Aircraft will:
(a) be in the same configuration as at Delivery after giving
effect to any post-Delivery modifications to the Aircraft
paid for or otherwise provided by or on behalf of Lessor
(or as permitted by the Lease or as otherwise mutually
agreed), be in as good operating condition and appearance
as when delivered to Lessee (after giving effect to any
such post-Delivery modifications), except for ordinary
wear and tear and alterations and modifications authorized
or required under the Lease and paid for by Lessee or a
Sub-Lessee, and be clean by major passenger airline
standards;
(b) have installed the full complement of equipment, parts,
accessories, furnishings and loose equipment as when
originally delivered to Lessee (subject to Lessee's rights
under Section 8.12 to reverse certain Equipment Changes,
after giving effect to all modifications, repairs or
maintenance performed during the Term, regardless of
whether paid for by Lessee or Lessor) and the Aircraft
(including the Aircraft Documents and Records) shall be in
a condition suitable for immediate registration with the
FAA (assuming that the Owner qualifies for such
registration) and immediate operations under FAR Part 121
with a new operator, without waiver, unless the benefit of
such waiver is applicable to the next operator of the
Aircraft; and if any of the engines or parts tendered for
redelivery with the Aircraft is not one of the Engines or
Parts referred to in the Certificate of Technical
Acceptance or a Replacement Engine installed pursuant to
Section 8.11(b) following an Engine Event of Loss, Lessor
shall have no obligation to accept such engine or part
unless Lessee furnishes to Lessor all the documents and
evidence in respect of such engine or part in accordance
with Section 8.11(b), as if such engine were a
Replacement Engine or replacement Part, and otherwise
complies with such Section 8.11(b) with respect thereto;
(c) have in existence a valid and effective certificate of
airworthiness (and if required by Lessor, a valid and
effective export certificate of airworthiness) with
respect to
A-9
the Aircraft issued by the Air Authority (in the case
of an export certificate of airworthiness no earlier
than 30 days prior to the redelivery);
(d) comply with the Manufacturer's original specifications as
at the Delivery, except as modified during the Term in
accordance with the Manufacturer's service bulletins or
letters, Airworthiness Directives, Air Authority approved
data or otherwise as permitted by the Lease;
(e) be fresh out of a "C" Check (or higher check if
applicable) in block format (which shall be the next
sequential "C" Check under Lessee's Maintenance Program
following the last regularly scheduled "C" Check performed
by Lessee prior to the Return Occasion if Lessee's
Maintenance Program is based on the then current
Manufacturer's Maintenance Planning Document in block
format. If Lessee's Maintenance Program is not based on
the Manufacturer's Maintenance Planning Document in block
format, then Lessee shall integrate the Aircraft
Maintenance Program onto the then current Manufacturer's
Maintenance Planning Document Block Maintenance Program
such that all airframe inspections falling due within the
"C" check interval (which shall not be less than 4,000
Flight Hours) as defined in and in accordance with the
Manufacturer's Maintenance Planning Document have been
accomplished;
(f) have had accomplished all outstanding Airworthiness
Directives affecting that model of Aircraft issued by the
FAA requiring action during the Term or within 180 days
after the Return Occasion or the Scheduled Expiry Date,
whichever is later; for this purpose, compliance shall be
by terminating action if:
(i) Lessee has complied by terminating action for
sixty-five percent (65%) of the aircraft of the
same model and series then operated by Lessee; or
(ii) the latest date permitted by such Airworthiness
Directive for required compliance by terminating
action falls within 180 days after the Return
Occasion or the Scheduled Expiry Date, whichever is
later.
(iii) In no event shall there be any non-transferable
time extensions, waivers, deviations or alternative
means of compliance with any Airworthiness
Directions or other Regulations.
(g) have installed all applicable vendor's and Manufacturer's
service bulletin kits received free of charge by Lessee
during the Term that are appropriate for the Aircraft and
to the extent not installed, those kits will be furnished
free of charge to Lessor;
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(h) have the fuselage, empennage, wings and pylons stripped
(or sanded if only three or less coats of paint) and
painted in such livery as Lessor may designate in
accordance with standard industry practice;
(i) have all signs and decals clean, secure and legible;
(j) [NOT APPLICABLE];
(k) have no open, deferred, continued, carry over or placarded
maintenance items or watch items or placarded log book
items, and all other log book discrepancies shall be
cleared;
(l) all discrepancies discovered during the inspections
described above which exceed the Manufacturer's
maintenance manual allowable limits for in-service
aircraft shall have been repaired in accordance with
FAA-approved procedures;
(m) all repairs of a temporary or interim nature, requiring
repetitive inspections or future upgrading, including
external doublers with blind fasteners, shall be upgraded
to permanent repair in accordance with the Manufacturer's
Maintenance Planning Document or structural repair manual;
and
(n) all systems shall be fully operational for their intended
functions in accordance with the Manufacturer's
Maintenance Planning Document specifications.
1.3 COMPONENTS
(a) If the Aircraft Lease Agreement specifies Minimum
Component Flight Hours and/or Minimum Component Cycles,
each Airframe Flight Hour and Cycle controlled Hard Time
Component (other than the APU) shall have not less than
the Minimum Component Flight Hours and the Minimum
Component Cycles of life remaining to the next scheduled
removal, in accordance with the Lessee's Maintenance
Program and shall be supported by appropriate
certification documentation indicating TSN, CSN, TSO and
CSO such as FAA form 8130-1; for this purpose "Hard Time
Component" means any component which has a limited
on-wing life in accordance with the Manufacturer's
Maintenance Planning Document and which can have life
fully restored through appropriate maintenance;
(b) If the Aircraft Lease Agreement specifies a Minimum
Component Calendar Life, each calendar-limited component
including safety equipment will have not less than its
Minimum Component Calendar Life remaining to the next
scheduled removal in accordance with the Lessee's
Maintenance Program;
(c) Each "on-condition" and "condition-monitored" component
will be serviceable;
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(d) The installed components as a group will have an average
of total flight time since new of not more than that of
the Airframe;
(e) If the Aircraft Lease Agreement specifies Minimum
Component Flight Hours and/or Minimum Component Cycles,
each Airframe Life-Limited Component will have not less
than the Minimum Component Flight Hours and the Minimum
Component Cycles remaining to next scheduled removal and
will be supported by certification documentation necessary
to demonstrate back-to-birth traceability; for this
purpose "Airframe Life-Limited Component" means a
component with an ultimate life which cannot be restored
through appropriate maintenance.
1.4 ENGINES
Each Engine (or a Replacement Engine as and to the extent permitted
by Section 1.2(b)) will be installed on the Aircraft and comply with
the following:
(a) If the Aircraft Lease Agreement specifies a Minimum Engine
Flight Hours and/or Minimum Engine Cycles, each Engine
will have not less than the Minimum Engine Flight Hours
and Minimum Engine Cycles expected life remaining to the
next scheduled removal. The expected life remaining will
be determined by third party mutually acceptable to both
Lessor and Lessee (at Lessor's cost) or by the Engine
Manufacturer, in each case based on the inspection and
checks to be performed at the Return Occasion in
accordance with the Lease;
(b) Each Engine shall have just completed at the location for
Lessor's acceptance on the Return Occasion a hot
(including combustion chamber) and cold section video
borescope inspection, which inspection shall be performed
at Lessor's expense, and a power assurance run performed
at Lessee's expense in accordance with the Lessee's
Maintenance Program or Manufacturer's Maintenance Planning
Document and any defects discovered in such inspections
which exceed the Engine manufacturer's in-service limits
shall be corrected at Lessee's expense. Lessee shall cause
such borescope inspections to be performed and to be
recorded on videotape by an agency selected by Lessor and
shall provide Lessor with a copy of such videotape on the
Return Occasion. No Engine shall be on "watch" for any
reason requiring any special or out of sequence
inspection. Each Engine shall comply with the operations
specification of Lessee without waiver or exceptions. All
items beyond the Engine manufacturer's in-service limits
shall be repaired;
(c) If the Aircraft Lease Agreement specifies Minimum
Component Cycles, each Engine Life-Limited Component will
have not less than the Minimum Component Cycles remaining
per the manufacturer's then current limitations for the
part
A-12
number in question, and will be supported by certification
documentation necessary to demonstrate back-to-birth
traceability; for this purpose "Engine Life-Limited
Component" means a component with an ultimate life which
cannot be restored through appropriate maintenance; and
1.5 FUSELAGE, WINDOWS AND DOORS
(a) The fuselage will be free of major dents and abrasions in
excess of the limits specified in Manufacturer's Maintenance
Planning Document or structural repair manual; loose or
pulled or missing rivets shall be replaced;
(b) Windows will be free of delamination, blemishes and crazing,
in excess of the limits specified in the Manufacturer's
Maintenance Planning Document or structural repair manual
and will be properly sealed; and
(c) Doors will be free moving, correctly rigged and be fitted
with serviceable seals.
1.6 WINGS AND EMPENNAGE
(a) Leading edges will be free from damage in excess of the
limits specified in the Manufacturer's Maintenance Planning
Document or structural repair manual; and
(b) Unpainted surfaces of the wings and empennage will be
polished.
1.7 INTERIOR AND COCKPIT
All soft furnishings, including but not limited to carpets, seat
covers and curtains, will be in good condition, clean and free of
stains and meet FAR fire resistance regulations.
1.8 LANDING GEAR; WHEELS AND BRAKES
(a) The Landing Gear and wheel xxxxx will be clean, free of
leaks and repaired as necessary;
(b) Each installed Landing Gear shall have no more Cycles
accumulated than the Airframe and, if the Aircraft Lease
Agreement specifies Minimum Landing Gear Flight Hours and/or
Minimum Landing Gear Cycles and Minimum Landing Gear
Calendar Time, not less than the Minimum Landing Gear Flight
Hours and the Minimum Landing Gear Cycles and the Minimum
Landing Gear Calendar Time shall be remaining to the next
scheduled overhaul or removal, as the case may be, of each
installed Landing Gear in accordance with the then current
Manufacturer's Maintenance Planning Document and Lessee's
Maintenance Program; and
(c) The wheels and brakes will have not less than half of their
useful life remaining.
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1.9 RETURN OF AUXILIARY POWER UNIT (APU)
The APU shall have just completed a borescope inspection and shall
meet all air outputs and temperature limitations under load in
accordance with the Lessee's Maintenance Program and the APU
manufacturer's maintenance manual, and any defects discovered in such
inspection, which exceed the APU manufacturer's in-service limits,
shall be corrected at Lessee's expense. If the Aircraft Lease
Agreement specifies a Minimum APU Limit, the APU shall have not more
than the Minimum APU Limit since the last gas path refurbishment. If
the Aircraft Lease Agreement specifies a Minimum APU LLP Limit, APU
Life Limited Parts shall have not less than the Minimum APU LLP Limit
of useful life remaining on average.
1.10 CORROSION
(a) The Aircraft shall be in compliance with the Manufacturer's
corrosion prevention and control program (CPCP)
requirements. All CPCP inspections which would normally be
accomplished while access is provided during structural
inspection in accordance with the Lessee's Maintenance
Program during the Term shall have been accomplished;
(b) The entire fuselage will be substantially free from
corrosion and will be adequately treated in accordance with
Lessee's corrosion prevention program and the Manufacturer's
Maintenance Planning Document; and
(c) Fuel tanks will be free from contamination and corrosion and
a tank treatment program will be in operation.
1.11 FUEL
If the Aircraft Lease Agreement specifies a Minimum Measurable Fuel
Requirement, at redelivery, the Aircraft fuel tanks shall contain at
least enough fuel to meet the Minimum Measurable Fuel Requirement.
1.12 MAINTENANCE PROGRAM
(a) Prior to the Return Occasion and upon Lessor's or Owner's
request, Lessee will provide Lessor or Owner or its agent
reasonable access to the Lessee's Maintenance Program and
the Aircraft Documents and Records in order to facilitate
the Aircraft's integration into any subsequent operator's
fleet; and
(b) Lessee will, if requested by Lessor or Owner to do so,
provide sufficient access to Lessee's Maintenance Program in
order to integrate the Aircraft to the next operator's
maintenance program. Lessor and any Person to whom Lessor
grants
A-14
access to Lessee's Maintenance Program shall agree that it
will not disclose the contents of the Lessee's Maintenance
Program to any Person except to the extent necessary to
monitor Lessee's compliance with the Lease and/or to bridge
the maintenance program for the Aircraft from the Lessee's
Maintenance Program to another program after the Return
Occasion.
1.13 AIRCRAFT DOCUMENTS
At redelivery Lessee will deliver to Lessor and Owner all current and
complete historical records required to be maintained relevant to the
Aircraft, including documents, manuals, data, overhaul records, life
limited part traceability to "zero time since new", log books,
original delivery documents serviceable parts tags, FAA forms,
modification records and inspection records, and including each of
the Aircraft Documents and Records.
1.13. ETOPS:
The Aircraft shall be certified by the FAA for 180 minutes ETOPS
operation or shall be in such condition as to be eligible for
certification by the FAA for 180 minutes ETOPS operation.
A-15
SCHEDULE B
COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other
commercial and financial terms set forth in this Schedule B shall apply to
the leasing of the Aircraft under the Lease.
In addition, Lessor and Lessee understand and agree that the
commercial and financial information contained in this Schedule B are
considered by Lessor and Lessee as proprietary and confidential. Lessor and
Lessee each hereby agree, and any of their assignees, upon becoming such
shall agree that it will treat this Schedule B as proprietary and
confidential and will not, without the prior written consent of the other,
disclose or cause to be disclosed, the terms hereof or thereof to any
Person, except to its agents, representatives, advisors, employees,
counsel, underwriters, auditors, investors, financing parties, head lessors
and sub-lessees as necessary or appropriate for the leasing transaction
which is the subject hereof, or except (a) as may be required by applicable
Law or pursuant to an order, or a valid and binding request, issued by any
court or other Government Entity having jurisdiction over Lessor, Lessee or
the assignee of either of them, as the case may be, or (b) as necessary to
enable Lessor or its assignee to make transfers, assignments or other
dispositions to potential transferees, assignees or participants of its
interest in and to the Lease.
In connection with any such disclosure or any filing of the
information contained herein or therein pursuant to any such applicable
Law, Lessor, Lessee or the assignee of either of them, as the case may be,
shall request and use its best reasonable efforts to obtain confidential
treatment of this Schedule B and the other party will cooperate in making
and supporting any such request for confidential treatment.
PART I CASUALTY OCCURRENCE DEFINITIONS
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
B-1
PART II DEPOSIT; DISCOUNT RATE; LC AMOUNT; INTEREST RATE
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
PART III RENT
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
B-2
PART IV TAX DEFINITIONS; SPECIAL TAX INDEMNITY
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
B-3
PART V SUPPLEMENTAL RENT - NOT APPLICABLE
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
PART VI MAINTENANCE AND RETURN CONDITION DEFINITIONS;
AIRWORTHINESS DIRECTIVE SHARING PAYMENTS
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
B-4
PART VII SUBLEASE FEE
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
PART VIII UTILIZATION RATIO
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
B-5
EXECUTION VERSION
------------------------------------
AIRCRAFT LEASE
COMMON TERMS AGREEMENT
------------------------------------
DATED AS OF MAY 12, 2000
BETWEEN
GENERAL ELECTRIC CAPITAL CORPORATION
And
ALOHA AIRLINES, INC.
CONTENTS
SECTION PAGE
1. INTERPRETATION .................................................................1
2. REPRESENTATIONS AND WARRANTIES .................................................2
3. CONDITIONS PRECEDENT ...........................................................2
4. COMMENCEMENT ...................................................................3
5. PAYMENTS .......................................................................5
6. MANUFACTURER'S WARRANTIES .....................................................19
7. LESSOR'S COVENANTS ............................................................20
8. LESSEE'S COVENANTS ............................................................20
9. INSURANCE .....................................................................38
10. INDEMNITY .....................................................................39
11. EVENTS OF LOSS ................................................................41
12. RETURN OF AIRCRAFT ............................................................42
13. DEFAULT .......................................................................45
14. TRANSFER ......................................................................52
15. MISCELLANEOUS .................................................................54
16. DISCLAIMERS AND WAIVERS .......................................................58
17. BROKERS AND OTHER THIRD PARTIES ...............................................61
Schedule 1 Definitions
Schedule 2 Representations and Warranties
Schedule 3 Conditions Precedent
Schedule 4 Pre-Delivery Procedures and Delivery Condition
Schedule 5 Certificate of Technical Acceptance
Schedule 6 [NOT APPLICABLE]
Schedule 7 Insurance Requirements
Schedule 8 Form of Lessee's Legal Opinion
Schedule 9 Events of Default
Schedule 10 [NOT APPLICABLE]
Schedule 11 Form of Lease Termination Certificate
Schedule 12 Form of Lease Supplement No. 1
Schedule 13 Form of Letter of Credit
Schedule 14 Maintenance Performers
Schedule 15 Technical Report
COMMON TERMS AGREEMENT
THIS COMMON TERMS AGREEMENT (this "CTA") is made as of May 12,2000 BETWEEN:
(1) GENERAL ELECTRIC CAPITAL CORPORATION ("GE CAPITAL") and
(2) ALOHA AIRLINES, INC. ("ALOHA")
WHEREAS:
(A) From time to time, Aloha or one of its Affiliates may wish to
lease commercial aircraft from GE Capital or one of its
Affiliates, and GE Capital or one of its Affiliates may wish to
lease commercial aircraft to Aloha or one of its Affiliates;
(B) Each party hereto wishes to provide in one document for certain
common terms and conditions, as hereinafter provided in this CTA,
that will be applicable, unless otherwise stated, to each such
lease referred to in Recital (A); and
(C) Each such lease transaction will be concluded only on the terms
of an agreement entitled "Aircraft Lease Agreement," which
together with this CTA (which will be incorporated into and
become part of such Aircraft Lease Agreement), will constitute
the lease for the applicable aircraft as identified therein;
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. INTERPRETATION
1.1 Definitions
All references herein to "Lease" mean the integrated agreement
consisting of the various documents comprising the Lease as defined in
Schedule 1. In the Lease, capitalized words and expressions have the
meanings set out for them in Schedule 1 and in the Aircraft Lease
Agreement.
1.2 Construction
(a) In the Lease, unless otherwise stated, a reference to:
(i) "Lessor" "Lessee," "GECAS," "Owner" or any other Person
includes any of their successors and assignees;
(ii) plural concepts shall include the singular and vice versa;
(iii) any document (except this CTA unless Lessor and Lessee
otherwise expressly agree) shall include any changes to that
document and any replacement for it;
(iv) a Section or a Schedule is a reference to a clause of or a
schedule to this CTA;
(v) any Regulation shall include any changes to that Regulation
and any replacement for it;
(vi) an obligation of a Person refers to any obligation that
Person has under or in relation to the Lease; and
(vii) "includes," "including", "include" or similar terms shall
not be construed as limiting and shall mean "including,
without limitation."
(b) Headings to Sections and Schedules in the Lease are not intended to
affect their meaning.
2. REPRESENTATIONS AND WARRANTIES
2.1 Lessee's Representations and Warranties
Lessee hereby makes the representations and warranties set out in
Section 1.1 of Schedule 2 as of the date of execution of the Aircraft
Lease Agreement and as of the Delivery Date, and Lessee understands
that these statements must be true, both when the Aircraft Lease
Agreement is executed and on the Delivery Date.
2.2 Lessor's Representations and Warranties
Lessor hereby makes the representations and warranties set out in
Section 1.2 of Schedule 2 as of the date of execution of the Aircraft
Lease Agreement and as of the Delivery Date, and Lessor understands
that these statements must be true, both when the Aircraft Lease
Agreement is executed and on the Delivery Date.
3. CONDITIONS PRECEDENT
3.1 Conditions Precedent
Lessor need not deliver and start the leasing of the Aircraft under
the Lease unless each of the Lessor Conditions Precedent is satisfied
or waived in writing by Lessor. Lessee need not accept and start the
leasing of the Aircraft under the Lease unless each of the Lessee
Conditions Precedent is satisfied or waived in writing by Lessee;
provided, however, in the event that Lessee fails to accept and start
the leasing of the Aircraft under the Lease, any Lessee Condition
Precedent which reasonably could be expected to be met if the Delivery
of the Aircraft had
-2-
occurred shall be deemed to have been satisfied or waived for purposes
of determining Lessee's liability for Rent in respect of the Aircraft
in accordance with Section 4.1(b) below.
3.2 Waiver
If any Lessor Condition Precedent is not satisfied, or waived in
writing by Lessor, on or before the Delivery Date, and Lessor (in its
absolute discretion) nonetheless agrees to deliver the Aircraft to
Lessee and to start the leasing of the Aircraft, Lessee will ensure
that such Lessor Condition Precedent is fulfilled within 15 days after
the Delivery Date, and Lessor may treat as an Event of Default the
failure of Lessee to do so.
4. COMMENCEMENT
4.1 Leasing
(a) Lessor shall notify Lessee of the Scheduled Delivery Week as soon
as possible, but no later than at least thirty (30) days prior to
the Scheduled Delivery Month, and Lessor shall notify Lessee of
the Scheduled Delivery Date as soon as possible, but no later
than at least one (1) week prior to the Scheduled Delivery Week.
Subject to Sections 3.1 and 4.4, Lessor will lease the Aircraft
to Lessee and Lessee will take the Aircraft on lease for the
Term, which shall commence on the Delivery Date, and which shall
be evidenced by Lessee's execution of Lease Supplement No. 1.
(b) If (i) Lessee is unwilling or unable to accept delivery of the
Aircraft on the date on which Lessor tenders the Aircraft for
Delivery to Lessee under and in accordance with Section 4.3(a),
or Lessee fails to fulfil any Lessor Condition Precedent on or
before such date, and (ii) the Lessee Conditions Precedent are
met (or could reasonably be expected to be met if Delivery had
occurred), then the Rent Commencement Date for the Aircraft shall
be deemed to have occurred on the date on which it is tendered by
Lessor for Delivery in accordance with subclause (ii) of this
Section 4.1(b), and Lessee shall be obligated to pay Rent for
the Aircraft on and from such date regardless of whether the
Delivery Date occurs or whether Lessee executes Lease Supplement
No. 1, but Lessor shall have no obligation to deliver, and Lessee
shall have no lease interest in the Aircraft or other right to
possession of the Aircraft, unless and until Lessee fulfils all
Lessor Conditions Precedent as and when provided in the Lease and
Lessee accepts delivery of the Aircraft as evidenced by its
execution of Lease Supplement No. 1, and so long as no Default
has occurred and is continuing.
(c) Lessee will be responsible for all risks associated with any loss
of or damage to the Aircraft from the Rent Commencement Date
until possession of the Aircraft is returned
-3-
to Lessor on the Return Occasion and Lessor executes and delivers
to Lessee the acknowledgement contemplated by Section 12.4.
4.2 Procedure before Delivery
Lessor and Lessee will follow the Pre-Delivery Procedure.
4.3 Delivery and Acceptance
(a) After the Pre-Delivery Procedure has been carried out:
(i) Subject to Section 3.1, Lessor will tender delivery of the
Aircraft to Lessee at the Delivery Location.
(ii) Subject to Section 3.1, Lessee will accept the Aircraft.
Upon such acceptance, Lessee must also provide evidence of
its acceptance by signing Lease Supplement No. 1 and
delivering it to Lessor.
(b) Lessee's acceptance of the Aircraft shall be regarded as
absolute, unconditional and irrevocable.
4.4 Delayed Delivery
If Delivery takes place after the Scheduled Delivery Date or does not
happen due to an Unforeseen Event or for any other reason (other than
Lessor's willful misconduct in the performance of its obligation to
deliver the Aircraft under and subject to the conditions in the
Lease):
(a) Lessor will not be responsible for any Losses that Lessee suffers
resulting from the delay or from the non-delivery of the
Aircraft;
(b) Lessee will not, except in the circumstances described in Section
4.4(c), be entitled to terminate the Lease or to reject the
Aircraft when it is offered for Delivery because of the delay.
(c) If the Aircraft has not been tendered for Delivery, in accordance
with Section 4.3, by the Final Delivery Date, either party may
terminate the Lease by delivering notice to the other party
within 10 days of such Final Delivery Date (and if such notice is
not delivered within such 10-day period the Final Delivery Date
will be deemed extended for one additional period of 90 days).
Upon the delivery of any such notice or automatically on the
expiration of such 90-day period if no such notice has been
delivered, all obligations of each party under the Lease will end
on the date of such notice or the date of the
-4-
expiration of such period, as the case may be, except that Lessor
will repay to Lessee the Deposit (if any) or return to Lessee or
cancel any Letter of Credit and Lessee will remain obligated
under its indemnity set forth in Section 3 of Schedule 4.
(d) Lessee hereby agrees that its only right or remedy for a delay in
or failure of delivery of the Aircraft due to an Unforeseen Event
or for any other reason (other than Lessor's willful misconduct
in the performance of its obligation to deliver the Aircraft
under and subject to the conditions in the Lease) is the remedy
set forth in Section 4.4(c) above and Lessee hereby waives any
rights it may have under Section 2A-406 of the UCC or otherwise
for any delay in or failure of delivery.
5. PAYMENTS
5.1 Deposit
Lessee shall pay Lessor any Deposit that is specified in Section 3 of
the Aircraft Lease Agreement.
5.2 Rental Periods
The first Rental Period will start on the Rent Commencement Date and
each subsequent Rental Period will start on the date immediately
following the last day of the previous Rental Period. Each Rental
Period will end on the date immediately before the numerically
corresponding day in the next month, except that:
(a) if there is no numerically corresponding day in that month, it
will end on the last day of that month; and
(b) if a Rental Period would otherwise overrun the Expiry Date, it
will end on the Expiry Date.
5.3 Rent
(a) TIME OF PAYMENT: Lessee will pay to Lessor or its order Rent
in advance on each Rent Date. Lessor must receive value for
the payment on each Rent Date. If a Rental Period begins on a
day which is not a Business Day, the Rent payable in respect
of that Rental Period shall be paid on the Business Day
immediately following that day.
(b) AMOUNT: The Rent payable during the Term shall be calculated
in accordance with Schedule B of the Aircraft Lease
Agreement.
-5-
5.4 Supplemental Rent
(a) AMOUNT: If, under the Aircraft Lease Agreement, Lessee is
required to pay Supplemental Rent, Lessee will pay that
Supplemental Rent, at the rates referred to in Section 3 of the
Aircraft Lease Agreement, to Lessor in relation to each calendar
month (or part of a month) of the Term, on the fifteenth day
following the end of that calendar month (except that the last
payment of Supplemental Rent during the Term shall be paid on the
Expiry Date).
(b) ADJUSTMENT: If, under the Aircraft Lease Agreement, Lessee is
required to pay Supplemental Rent, the Supplemental Rent rates
shall be adjusted after the Delivery Date in the manner provided
in the Aircraft Lease Agreement.
(c) LESSOR'S PROPERTY: Lessee acknowledges and agrees that
Supplemental Rent is additional rent for the leasing of the
Aircraft and not cash collateral or other collateral security for
Lessee's maintenance obligations under the Lease. Once paid all
Supplemental Rent is the property of Lessor, it is not refundable
to Lessee under any circumstances whatsoever and Lessee has no
interest therein whatsoever.
5.5 Payments
All payments by Lessee to Lessor under the Lease will be made for
value on the due date in Dollars and in immediately available funds by
wire transfer to the Lessor's Account as specified in the Aircraft
Lease Agreement.
5.6 Withholding and Tax Credit
(a) WITHHOLDING: Lessee must not deduct any amount from any of its
payments under the Lease, for or on account of any Taxes, unless
it is required by law to do so, in which case Lessee must:
(i) deduct the minimum amount necessary to comply with the Law;
(ii) pay Lessor an extra amount so that Lessor receives a net
amount on the relevant payment date, that is equal to the
amount that it would have received if the reduction had not
been made (provided that Lessee shall have no obligation to
pay Lessor an extra amount on account of withholding in
relation to any Taxes with respect to which Lessee is not
required to indemnify Lessor under Section 5.7). The amount
of any such payment to Lessor must take into account the tax
treatment of that payment to Lessor applying the principles
of Section 5.10 such that Lessor shall be in no worse
position than it would have been if the deduction had not
applied in the first place;
-6-
(iii) pay the Tax to the relevant taxing authority according to
the relevant Law; and
(iv) obtain a receipt (if one is available) from the relevant
taxing authority and give it to Lessor.
(b) TAX CREDIT: If Lessor, in good faith, determines that it has
realized a tax benefit (by way of deduction, credit or otherwise)
as a result of any payment for which Lessee is liable under
Section 5.6(a), Section 5.7, Section 5.10, Section 5.21 or
Section 10, Lessor shall pay to Lessee as soon as practicable
after the tax benefit has been realized (but not before Lessee
has made all payments and indemnities to Lessor required under
this Section or Section 5.7), an amount which will ensure that
(after taking account of the payment itself) Lessor is in no
better and no worse position than it would have been if the Tax
giving rise to the payment hereunder had not been incurred.
Nothing in this Section 5.6(b) shall:
(i) interfere with the right of Lessor to arrange its tax
affairs in whatever manner it thinks fit; or
(ii) oblige Lessor to disclose any information relating to its
Tax affairs or any Tax computations (other than information
reasonably necessary for Lessee to verify Lessor's
determination, which information may be supplied on a
confidential basis to an independent third party reasonably
acceptable to Lessor and Lessee).
5.7 Tax Indemnity
(a) General:
(i) Except as provided in Section 5.7(c), Lessee will on demand
pay and indemnify each Tax Indemnitee against any and all
Taxes levied or imposed against or upon or payable by such
Tax Indemnitee or Lessee and arising from, with respect to
or in connection with the transactions pursuant to the
Lease, including all Taxes relating or attributable to
Lessee, the Lease or the Aircraft, directly or indirectly,
in connection with the importation, exportation,
registration, ownership (but only to the extent relating to
or attributable to or arising as a result of the possession,
operation, use or maintenance of the Aircraft by Lessee),
leasing, sub-leasing, purchase, delivery, possession, use,
operation, repair, maintenance, overhaul, transportation,
landing, storage, presence or redelivery of the Aircraft or
any part thereof or any rent, receipts, insurance proceeds,
income, indemnification payment or other amounts arising
therefrom, or the making of any Equipment Change or the
permanent replacement of any Engine.
-7-
(ii) All Taxes indemnified pursuant to this Section 5.7(a) shall
be paid by Lessee directly to the appropriate taxing
authority (to the extent permitted by applicable Law) at or
before the time prescribed by applicable Law. After any
payment by Lessee of any Tax directly to a taxing authority,
Lessee shall furnish to Lessor, on request, a certified copy
of a receipt for Lessee's payment of such Tax or such other
evidence of payment of such Tax as is reasonably obtainable
by Lessee and reasonably acceptable to Lessor.
(iii) Any amount payable by Lessee to a Tax Indemnitee pursuant
to Section 5.7(a) shall be paid within ten days after
receipt of a written demand therefor from the relevant Tax
Indemnitee accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the
computation of the amount so payable, provided that if an
amount of any indemnified Tax is being contested in
accordance with Section 5.9 and Lessee shall have duly
performed (and shall continue to perform) all its
obligations under Section 5.9 with respect to such contest,
then payment of the indemnity with respect to such Tax under
Section 5.7(a) shall, at Lessee's election, be deferred
until the date the contest has been completed.
(b) Sales and Use Taxes:
(i) Without limiting Section 5.7(a) above, Lessee shall pay to
Lessor (or, if permitted by applicable Law and if requested
by Lessor, Lessee shall pay to the relevant tax authority
for the account of Lessor):
(y) all sales, use, excise, rental, value added, goods and
services and similar taxes ("SALES TAXES") required to
be paid to the tax authority of the jurisdiction in
which the Delivery Location is situated or to the
jurisdiction of the Habitual Base or the State of
Incorporation with respect to the lease of the Aircraft
to Lessee pursuant to the Lease unless Lessee delivers
to Lessor on or prior to the Delivery Date such
exemption certificate or other document as may be
required by applicable law to evidence Lessor's
entitlement to exemption from all Sales Taxes imposed
by each such jurisdiction with respect to the lease of
the Aircraft pursuant to the Lease; and
(z) all Sales Taxes required to be paid to the tax
authority of any jurisdiction in which the Aircraft may
be used, operated or otherwise located from time to
time unless Lessee deliver to Lessor such exemption
certificates or other documents as may be required by
applicable law to evidence Lessee's entitlement to
exemption from all Sales Taxes imposed by each
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such jurisdiction with respect to the lease of the
Aircraft pursuant to the Lease.
(ii) Lessee and Lessor will cooperate with each other in
connection with the preparation and filing of any exemption
application or similar document that is reasonably necessary
or desirable under, applicable Law to avoid the imposition
of any Sales Taxes with respect to the transactions
contemplated by the Lease.
(iii) The specific obligations with respect to sales and use
taxes set forth in this Section 5.7(b) are in addition to,
and are not in substitution for, Lessee's obligation to
indemnify for sales and use taxes pursuant to Section
5.7(a).
(c) Lessee is not required to indemnify a Tax Indemnitee under
Section 5.7(a) or Section 5.7(b) to the extent that the Tax
arises because of
(i) the willful misconduct or gross negligence of the Tax
Indemnitee seeking indemnity under Section 5.7;
(ii) a Tax liability a Tax Indemnitee has which would have arisen
even if the Lease had not been entered into;
(iii) a Tax liability charged on or measured by a Tax
Indemnitee's net income, profits or gains by any Government
Entity in the United States; but excluding any Tax (A) that
is a Sales Tax (other than a Sales Tax that is enacted by a
Government Entity as a substitute for or replacement of a
Tax charged on or measured by net income, profits, or gains
as a revenue source for that Government Entity (a
"Replacement Sales Tax")) or (B) that is imposed by any
government or taxing authority of any jurisdiction (other
than the United States federal government) if and to the
extent that such Tax (including a Replacement Sales Tax)
results from (x) the use, operation, presence, registration
or location of the Aircraft, the Airframe, any Engine or any
Part in the jurisdiction imposing the Tax, or (y) the situs
of organization, any place of business or any activity of
Lessee or any other Person having use, possession or custody
of the Aircraft, the Airframe, any Engine or any Part in the
jurisdiction imposing the Tax;
(iv) a Tax liability charged with respect to the period, or an
event occurring, (x) prior to the Delivery Date or (y) after
the Expiry Date and, in either case, unrelated to Lessor's
dealings with Lessee or to the transactions contemplated by
the Lease;
(v) a Tax liability arising out of any voluntary transfer or
disposition by a Tax Indemnitee of any equitable or legal
interest in the Aircraft or any part thereof or
-9-
this Agreement to any Person (including a transfer or
disposition by way of security but excluding a transfer or
disposition pursuant to the exercise of remedies in
connection with an Event Default), provided, however, that
Lessor shall in connection with an Event of Default comply
with any request as Lessee shall make concerning the
appropriate jurisdiction in which such disposition shall be
made unless Lessor reasonably determines (and advises
Lessee) that compliance with such request by Lessee would
generate an adverse consequence or prejudice Lessor; or
(vi) a Tax liability with respect to a Tax based on or measured
by the value or principal amount of any loan or promissory
note (or security therefor) entered into by a Tax Indemnitee
or anyone claiming an interest in the Aircraft or any
portion thereof through a Tax Indemnitee; or
(vii) a Tax liability arising out of a Replacement Sales Tax as
described in Section 5.7(c)(iii), but excluding a
Replacement Sales Tax described in Section 5.7(c)(iii)(B).
(d) Lessee will also indemnify each Tax Indemnitee, on an After-Tax
Basis, as set forth in the Section entitled "Special Tax
Indemnity" in Schedule B of the Aircraft Lease Agreement, and the
provisions of Section 5.9 (TAX CONTEST AND INFORMATION) shall
apply thereto.
5.8 [NOT APPLICABLE]
5.9 Tax Contest and Information
(a) If a Tax Indemnitee receives a notice of an audit or a written
claim for any Tax for which Lessee would be required to pay an
indemnity pursuant to Section 5.6 or Section 5.7, Lessor or such
Tax Indemnitee shall notify Lessee promptly of such audit or
claim, provided that any failure to provide such notice will not
relieve Lessee of any indemnification obligation pursuant to
Section 5.6 or 5.7 except to the extent that such failure
precludes the right to contest such Taxes. If requested by Lessee
in writing promptly after receipt of notice hereunder, Lessor
shall or Lessor shall cause, to the extent that it has the
ability to do so through relationship or contractual privity,
such Tax Indemnitee to, upon receipt of indemnity satisfactory to
it and at the expense of Lessee (including all costs, expenses,
legal and accountants' fees and disbursements, and penalties,
interest and additions to tax incurred in contesting such claim)
permit Lessee to contest such audit or claim, or, if such contest
(w) relates to an income tax, (x) involves Taxes in addition to
those for which Lessee is responsible hereunder, (y) may not,
under applicable law be conducted by Lessee, or (z) is one for
which Lessee requests in writing
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that Lessor or the Tax Indemnitee conduct such contest, Lessor
shall, or Lessor shall cause, to the extent that it has the
ability to do so through relationship or contractual privity, the
appropriate Tax Indemnitee to in good faith contest such audit or
claim, by (i) resisting payment thereof if practicable and
appropriate, (ii) not paying the same except under protest if
protest is necessary and proper, or (iii) if payment is made,
using reasonable efforts to obtain a refund of such Taxes in
appropriate administrative and judicial proceedings. Lessor or
the Tax Indemnitee shall determine the method of any contest
conducted by Lessor or the Tax Indemnitee and (in good faith
consultation with Lessee) control the conduct thereof, except
that with respect to matters described in clause (y) or in clause
(z) above which are not also described in clause (w) or clause
(x) above Lessor shall and Lessor shall cause, to the extent that
it has the ability to do so through relationship or contractual
privity, the Tax Indemnitee to comply with the reasonable
instructions of Lessee regarding the method of any contest
conducted by Lessor or the Tax Indemnitee and Lessee shall (in
good faith consultation with Lessor) control the conduct thereof.
Lessee shall determine the method of any contest conducted by
Lessee and (in good faith consultation with Lessor or the Tax
Indemnitee) control the conduct thereof. Lessee shall pay in full
all payments of Rent and other amounts payable pursuant to the
Lease, without reduction for or on account of any Tax (except as
provided in Section 5.6), while such contest is continuing.
Lessor shall not be required to contest, or to continue to
contest, a claim for Taxes under this Section 5.9 if (x) such
contest would result in a risk of criminal penalties or risk of a
sale, forfeiture or loss of, or the imposition of a Security
Interest (other than a Permitted Lien) on, the Aircraft, or (y)
Lessee shall not have furnished, at Lessee's expense, an opinion
of independent tax counsel selected by Lessor and reasonably
satisfactory to Lessee, that a reasonable basis exists for such
contest, or (z) a Default shall be continuing (unless Lessee
shall have provided security reasonably satisfactory to Lessor
securing Lessee's performance of its obligations under this
Section 5.9). If Lessor or any Tax Indemnitee contests any claim
for Taxes by making a payment and seeking a refund thereof, then
Lessee shall advance to Lessor or such Tax Indemnitee, on an
interest-free basis, an amount equal to the Taxes to be paid by
Lessor or such Tax Indemnitee in connection with the contest and
shall indemnify Lessor or such Tax Indemnitee on an After-Tax
Basis for any adverse tax consequences to Lessor or such Tax
Indemnitee of such interest-free advance. Upon the final
determination of any contest pursuant to this Section 5.9 in
respect of any Taxes for which Lessee shall have made an advance
to Lessor or a Tax Indemnitee in accordance with the immediately
preceding sentence, the amount of Lessee's obligation shall be
determined as if such advance had not been made; any indemnity
obligation of Lessee to Lessor or a Tax Indemnitee under this
Section 5.9 and Lessor's or such Tax Indemnitee's obligation to
repay the advance will be satisfied first by setoff against each
other, and any difference owing by either party shall be paid
within ten days after such final determination.
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(b) If Lessor or any Tax Indemnitee obtains a refund or reimbursement
of all or any part of any Taxes for which a full indemnity was
paid by Lessee, Lessor shall and Lessor shall cause such Tax
Indemnitee to pay Lessee the amount of such refund or
reimbursement, reduced by any Taxes imposed on Lessor or such Tax
Indemnitee on receipt or accrual of such refund or reimbursement
and increased by any Taxes saved by Lessor or such Tax Indemnitee
by reason of the deductibility of such payment by Lessor or such
Tax Indemnitee. If, in addition to such refund or reimbursement,
Lessor or such Tax Indemnitee receives an amount of interest on
such refund or reimbursement or a recovery of costs or attorney's
fees with respect thereto that were paid by Lessee, Lessor or
such Tax Indemnitee shall pay to Lessee the portion of such
interest or recovered costs or attorney's fees which is fairly
attributable to such refund, reduced by any Taxes imposed by
Lessor or such Tax Indemnitee on receipt or accrual of such
interest and increased by any Taxes saved by reason of the
deductibility of such payment by Lessor or such Tax Indemnitee.
Neither Lessor nor the Tax Indemnitee shall be required to make
any payment to Lessee pursuant to this Section 5.9 if, and for so
long as, a Default shall have occurred and be continuing.
(c) Lessor or a Tax Indemnitee in its sole discretion (by written
notice to Lessee) may waive its rights to indemnification
pursuant to Section 5.7 with respect to any claim for any Tax and
may refrain from contesting or continuing the contest of such
claim, in which event Lessee shall have no obligation to
indemnify Lessor for the Taxes that are the subject of such
claim. If Lessor agrees to a settlement of any contest conducted
pursuant to this Section 5.9 without the prior written consent of
Lessee, which consent shall not be unreasonably withheld, then
Lessor shall be deemed to have waived its rights to the
indemnification provided for in Section 5.7 with respect to the
Tax liability accepted in such settlement or with respect to
which Lessee's ability to avoid or minimize, directly or by
instruction to the Lessor or such Tax Indemnitee regarding how to
avoid or minimize, Taxes has been materially impaired as a result
of failure of the Lessor or such Tax Indemnitee to so contest or
continue to contest.
(d) Information:
(i) If Lessee is required by any applicable Law, or by any third
party, to deliver any report or return in connection with
any Taxes for which Lessee would be obligated to indemnify
Lessor or any other Tax Indemnitee under the Lease, Lessee
will complete the same and, on request, supply a copy of the
report or return to Lessor.
(ii) If any report, return or statement is required to be made by
Lessor or any other Tax Indemnitee with respect to any Tax
for which there is an indemnity obligation of Lessee under
the Lease, and Lessee knows of, or reasonably should
-12-
have known of, such return, report or statement, Lessee will
promptly notify Lessor of the requirement and:
(y) if permitted by applicable Law, make and timely file
such report, return or statement (except for any
report, return or statement that Lessor has notified
Lessee that Lessor or any other Tax Indemnitee intends
to prepare and file), prepare such return in such
manner as will show Lessor as lessor of the Aircraft
and the ownership of the Aircraft in Lessor if required
or appropriate, and provide Lessor upon request a copy
of each such report, return or statement filed by
Lessee, or
(z) if Lessee is not permitted by applicable Law to file
any such report, return or statement, Lessee will
prepare and deliver to Lessor a proposed form of such
report, return or statement within a reasonable time
prior to the time such report, return or statement is
to be filed.
(iii) Lessee will provide such information and documents as
Lessor may reasonably request to enable Lessor or any other
Tax Indemnitee to comply with its tax filing, audit and
litigation obligations. Lessor or any other Tax Indemnitee
will provide such information or documents, at Lessee's
expense, that Lessee does not otherwise have as Lessee may
reasonably request and which are necessary to enable Lessee
to comply with its obligations under the Lease (including
Sections 5.6 and 5.7 of the CTA and Schedule B of the
Aircraft Lease Agreement) or to minimize Taxes that are the
subject of any filing, audit, or contest under this Section
5.9.
5.10 Indemnity Payments - After-Tax Basis
The amount of any payment made under Section 5.7 (TAX INDEMNITY)
(including Section 5.7(d)), Section 5.21 (EXPENSES) or Section 10
(INDEMNITY) to or for the benefit of any Indemnitee, shall include
such amount as may be necessary to hold such Indemnitee harmless on an
After-Tax Basis from all Taxes required to be paid by such Indemnitee
with respect to such payment or indemnity (including any payments
pursuant to this Section 5.10.
5.11 Lessor Obligations Following Expiry Date
Within 91 days (or such shorter period after the Expiry Date to which
Lessor may agree after Lessee demonstrates to Lessor's reasonable
satisfaction that Lessee has a net worth, determined in accordance
with GAAP, of not less than Five Million Dollars ($5,000,000.00) as of
the Expiry Date) after:
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(a) redelivery of the Aircraft to Lessor in accordance with and in
the condition required by the Lease; or
(b) payment to Lessor of the Agreed Value following an Event of Loss
after the Delivery Date;
and in each case so long as all amounts which may then be due and
payable under the Lease and the Other Agreements shall have been paid
in full and (no other Default has occurred and is continuing:
(i) Lessor will pay to Lessee the balance of the Deposit (if
any);
(ii) Lessor will pay to Lessee the amount of any Rent received in
respect of any period falling after the date of redelivery
of the Aircraft or payment of the Agreed Value, as the case
may be; and
(iii) Lessor will return to Lessee or cancel any Letter of
Credit.
5.12 Net Lease
The Lease is a net lease. The Lessee's obligation to pay Rent and to
perform all of its other obligations under the Lease is absolute and
unconditional no matter what happens and no matter how fundamental or
unforeseen the event, including any of the following: (a) any right of
set-off, counterclaim, recoupment, defense or other right which either
party to the Lease may have against the other (including any right of
reimbursement) or which Lessee may have against the Manufacturer, any
manufacturer or seller of or any Person providing services with
respect to the Aircraft, any Engine or any Part or any other Person,
for any reason whatsoever; (b) any unavailability of the Aircraft for
any reason, including a requisition of the Aircraft or any prohibition
or interruption of or interference with or other restriction against
Lessee's use, operation or possession of the Aircraft (whether or not
the same would, but for this provision, result in the termination of
the Lease by operation of law); (c) any lack or invalidity of title or
any other defect in title, airworthiness, merchantability, fitness for
any purpose, condition, design, or operation of any kind or nature of
the Aircraft for any particular use or trade, or for registration or
documentation under the Laws of any relevant jurisdiction, or any
Event of Loss in respect of or any damage to the Aircraft; (d) any
insolvency, bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution, liquidation or similar proceedings by or against
Lessor, Lessee or any other Person; (e) any invalidity or
unenforceability or lack of due authorization of, or other defect in,
the Lease; (f) any Security Interests or Taxes; and/or (g) any other
cause or circumstance which but for this provision would or might
otherwise have the effect of terminating or in any way affecting any
obligation of Lessee under the Lease. Lessee acknowledges and agrees
that it has used its own judgement in selecting the Aircraft, and has
not relied on Lessor or
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on any information supplied by Lessor, that Lessor is not a
manufacturer of or dealer in aircraft and that Lessor has all of the
rights and benefits of a lessor under a lease to which Section 2A-407
of the UCC applies as provided in such Section 2A-407.
Except as expressly set forth elsewhere in the Lease, Lessee hereby
waives, to the extent permitted by applicable Law, any and all right
which it may now have or which at any time hereafter may be conferred
upon it, by statute or otherwise, to terminate, xxxxx, cancel, quit,
reduce, defer, suspend or surrender the Lease or the Aircraft or any
obligation imposed upon Lessee under the Lease (including payment of
Rent or Supplemental Rent).
Each payment of Rent or Supplemental Rent made by Lessee shall be
final. Lessee will not seek to recover all or any part of any payment
of Rent or Supplemental Rent for any reason whatsoever except manifest
error.
If for any reason whatsoever the Lease shall be terminated in whole or
in part by operation of Law, except as specifically provided in the
Lease, Lessee waives all rights (if any) to any termination or
diminution in its Rent or Supplemental Rent obligations hereunder and
nonetheless agrees to pay to Lessor, an amount equal to each Rent and
Supplemental Rent payment at the time such payments would have become
due and payable in accordance with the terms thereof had the Lease not
been terminated in whole or in part and so long as such payments are
made and all other terms and conditions hereof are complied with by
Lessee, Lessor and Lessee will deem the Lease to remain in full force
and effect and Lessee shall continue in possession of the Aircraft
under the terms and conditions of the Lease.
Nothing in this Section 5.12 will be construed to limit Lessee's right
to institute separate legal proceedings against Lessor in the event of
Lessor's breach of the Lease as and to the extent permitted by
Sections 7.1 and 16.3 of this CTA, or to limit Lessee's rights and
remedies against any other Person.
5.13 Further Provisions regarding Deposit
(a) If, under the Lease, Lessee is required to pay a Deposit, Lessee
hereby grants a security interest in the Deposit to Lessor and
the remaining provisions of this Section shall apply. Lessee
agrees that Lessor shall be entitled to commingle the Deposit
with Lessor's general or other funds, Lessor will have no
obligation to pay any interest thereon and Lessor will not hold
any such funds as agent or in trust for Lessee or in any similar
fiduciary capacity. In this regard, Lessee acknowledges and
agrees that it is not located in the State of
New York within the
meaning of Section 7-101 1-c. (b) of the
New York General
Obligations Law and, therefore, the requirements of Section 7-101
of the
New York General Obligations Law to the effect that Lessor
hold the Deposit in a separate, interest bearing account do not
apply.
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(b) If any Event of Default or any Default under clause (g) of
Schedule 9 shall have occurred and be continuing, in addition to
all rights and remedies accorded to Lessor elsewhere in the Lease
or under Law in respect of the Deposit, Lessor may immediately or
at any time thereafter, without prior notice to Lessee, apply all
or part of the Deposit in or towards the payment or discharge of
any matured obligation owed by Lessee or any affiliate or
associate of Lessee under the Lease or the Other Agreements, in
such order as Lessor sees fit, and/or exercise any of the rights
of set-off described in Section 5.20 against all or part of the
Deposit.
(c) If Lessor exercises the rights described in Section 5.13(b)
above, Lessee shall, following a demand in writing from Lessor,
immediately restore the Deposit to the level at which it stood
immediately prior to such exercise.
5.14 Letter of Credit
(a) If, under the Lease, Lessee is required or elects to provide
Lessor with a Letter of Credit, the provisions of this Section
shall apply. Any Letter of Credit provided by Lessee to Lessor
will be issued and payable by a Pre-Approved Bank or another bank
acceptable to Lessor in its sole and absolute discretion and in
substantially the form of Schedule 13, or in another form and
substance acceptable to Lessor in its sole and absolute
discretion, and, if not issued by a Pre-Approved Bank or by the
New York branch of a major international bank acceptable to
Lessor in its sole and absolute discretion from time to time,
will be confirmed by and payable at the
New York branch of a
major international bank acceptable to Lessor in its sole and
absolute discretion from time to time, and will be issued as
security for all payment obligations of Lessee or any its
Affiliates under the Lease and each Other Agreement (including
any and all Losses suffered or incurred by Lessor or any of its
Affiliates in respect of which Lessee or any if its Affiliates is
obligated under the Lease or each Other Agreement), which shall
remain in full force and effect until the Required LC Expiry Date
and may be drawn down by Lessor upon demand at any time or times
prior to the Required LC Expiry Date following (i) the occurrence
of an Event of Default or a Default under clause (g) of Schedule
9, or (ii) the receipt by Lessor of notice of non-renewal of the
Letter of Credit under Section 5.14(b) below.
(b) The Letter of Credit may have a validity period or periods ending
prior to the Required LC Expiry Date, provided that (i) the
Letter of Credit shall be renewed automatically, without further
act or deed by any party, until such time as Lessor receives
notice of non renewal of the Letter Credit, (ii) notice of
non-renewal of the Letter of Credit shall be provided to Lessor
no less than 30 Business Days prior to its then scheduled expiry
date, (iii) Lessor shall be entitled to draw the full amount of
the Letter of Credit immediately in
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the event that Lessor receives any notice of non-renewal of the Letter
of Credit; and (iv) a Letter of Credit shall remain in force at all
times up to the Required LC Expiry Date.
(c) If at any time during the Term, the current issuing or confirming
bank for the Letter of Credit ceases to meet the requirements set
forth in the definition of Pre-Approved Bank, Lessee shall within
five (5) Business Days after the date of notice from Lessor of
such decrease in credit rating, cause the Letter of Credit to be
replaced by a Letter of Credit issued by another bank that meets
the definition of a Pre-Approved Bank and (if requested by Lessor
in its sole and absolute discretion) that such replacement Letter
of Credit is confirmed by another bank that meets the requirement
of a Pre-Approved Bank.
(d) If Lessor makes a drawing under the Letter of Credit, Lessee
shall, following a demand in writing by Lessor, immediately cause
the maximum amount available for drawing under the Letter of
Credit to be restored to the level at which it stood immediately
prior to such drawing.
5.15 Guarantee
If, under the Aircraft Lease Agreement, Lessee is required to provide
Lessor with a Guarantee, Lessee will on or prior to the Delivery Date
provide Lessor with the Guarantee.
5.16 Late Payment Interest
If Lessee fails to pay any amount payable under the Lease on the due
date, Lessee will pay on demand from time to time to Lessor interest
(both before and after judgement) on that amount, from the due date to
the date of payment in full by Lessee to Lessor, at the Interest Rate.
All such interest will be compounded monthly and calculated on the
basis of the actual number of days elapsed in the month, assuming a 30
day month and a 360 day year.
5.17 Currency
(a) Except for Losses and expenses suffered or incurred by Lessor,
which shall be payable by Lessee to Lessor in the currency and in
the amount in which such Loss is suffered or incurred, all
amounts payable to Lessor under the Lease shall be payable in
Dollars in
New York and payment in Dollars in New York is of the
essence. Lessee must indemnify Lessor against any Loss Lessor
suffers if
(i) Lessor receives an amount relating to Lessee's obligations
in a different currency from that in which payments should
be made under the Lease; or
(ii) Lessee pays a judgement or claim in a different currency
from that in which payments should be made under the Lease.
-17-
(b) Lessee relinquishes any right to pay any amount under the Lease
in a currency which is different from the currency provided in
the Lease. Notwithstanding any such receipt, judgement or claim
described in Section 5.17(a), Lessee shall have a separate
obligation to pay, and Lessor shall have a separate claim against
Lessee for, amounts to be indemnified by Lessee under this
Section 5.17.
5.18 Certificates
Except where expressly provided in the Lease, any certificate or
determination by Lessor as to any rate of interest or as to any other
amount payable under the Lease will, in the absence of manifest
error, be presumed to be correct.
5.19 Appropriation
If any sum paid or recovered by Lessor in respect of the liabilities
of Lessee under the Lease is less than the amount then due, Lessor
may apply that sum to amounts due under the Lease in such proportions
and order and generally in such manner as Lessor may determine in its
sole discretion.
5.20 Set-off
(a) In this sub-clause, references to Lessee will also include Lessee
Affiliates.
(b) Lessor may, without notice, set-off any obligations owed by
Lessee under the Lease or under the Other Agreements against any
obligation Lessor or any of its Affiliates owes Lessee under the
Lease or under the Other Agreements, regardless of the place of
payment or currency. Promptly after making any such set-off,
Lessor shall notify Lessee thereof, including in such notice such
information about the set-off as may be reasonably required to
enable a reasonable person to identify the claims so set off and
to verify the calculation of the set-off, but neither failure to
give such notice nor any alleged defect in such notice shall
affect the effectiveness of any such set-off.
If the obligations are in different currencies, Lessor may convert
either obligation at the market rate of exchange available in New
York. If the amount of an obligation is unknown, Lessor may estimate
the amount. Any difference between the estimated obligation and the
actual obligation will be paid by either Lessor or Lessee, as
appropriate, when the amount becomes known.
5.21 Expenses
Lessee will pay to Lessor on demand all reasonable expenses (including
all legal fees and expenses and the fees and expenses of other
professional advisers) that the Lessor suffers or incurs:
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(a) to deal with any amendments, extensions, consents or waivers that
are required in connection with the Lease (but excluding any
expenses incurred by Lessor or Owner in connection with any
change in the ownership or financing of the Aircraft or a change
in the Lease that is otherwise requested by Lessor or Owner, and
in each case unrelated to any consent, waiver or amendment
requested by Lessee or any other act or omission of Lessee) or to
deal with any replacement of any Engine or Part (except for the
replacement of an Engine by or at the request of Lessor prior to
the Delivery Date);
(b) for FAA counsel and otherwise to act upon any advice and obtain
assistance to perfect the Lease in the State of Registry and the
State of Incorporation (and any other appropriate place); and
(c) in contemplation of, or otherwise in connection with, the
enforcement or preservation of any of Lessor's rights under the
Lease (including under Section 10) or in respect of the
repossession of any Aircraft.
All amounts payable pursuant to this Section 5.21 will be paid in the
currency in which they are incurred by Lessor.
6. MANUFACTURER'S WARRANTIES
(a) So long as no Default has occurred which is continuing, Lessor
shall make available to Lessee during the Term the benefit of all
manufacturer's warranties in relation to the repair or remedy of
any defect in the Aircraft (including compensation for loss of
use of the Aircraft) to the extent that it is permitted to do so.
In furtherance of the foregoing, Lessor shall take such actions,
at Lessee's cost and expense, as Lessee may reasonably request to
make such warranties available to Lessee.
(b) If a Default has occurred and is continuing Lessor may
immediately recover from Lessee the proceeds of any warranty
claims previously paid to Lessee to the extent that such claims
relate to any defect in the Aircraft not fully and completely
rectified by Lessee before such Default and Lessor may:
(i) retain for its own account any such proceeds previously paid
to Lessor which would have been remitted to Lessee under
this Section 6 in the absence of such Default; and
(ii) cause any proceeds of any pending claims to be paid to
Lessor, rather than Lessee.
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(c) Lessee will take all steps at the end of the Term as may be
reasonably required to ensure that the benefit of any warranties
relating to the Aircraft which have not expired is vested in
Lessor.
7. LESSOR'S COVENANTS
7.1 Quiet Enjoyment
So long as no Default has occurred and is continuing, Lessor will not
interfere with Lessee's right to quiet use and possession of the
Aircraft during the Term. Exercise by Lessor of its rights of
inspection or other rights provided to it under the Lease in the
absence of a Default shall not be considered to be a breach of the
foregoing covenant. Lessee agrees that its only right with respect to
a default by Lessor under the Lease is to make a claim against Lessor
for actual damages resulting directly therefrom and in any event
subject to Section 16.3 hereof, and Lessee hereby waives any and all
other rights or remedies it may have under Section 2A-211 of the UCC
or Sections 2A-508 through 2A-522 of the UCC or otherwise.
7.2 Maintenance Contributions
If, under the Aircraft Lease Agreement for the Aircraft, Lessee is
required to pay Supplemental Rent, then provided no Default has
occurred and is continuing, Lessor will pay such amounts, if any, as
may be specified in the Aircraft Lease Agreement to Lessee by way of
contribution to the cost of maintenance of the Aircraft, which
payments, if any, shall be made in the amounts and in the manner
specified in the Aircraft Lease Agreement.
8. LESSEE'S COVENANTS
8.1 Duration: Lessee shall perform and comply, or cause its Permitted
Sub-Lessee or maintenance contractor to perform and comply, with its
undertakings and covenants in the Lease at all times during the Term.
All such undertakings and covenants shall, except where expressly
otherwise stated, be performed at the expense of Lessee.
8.2 Information
Lessee will:
(a) provide Lessor with a Technical Report for the Aircraft within 15
days after the end of each calendar month throughout the Term and
otherwise provide Lessor with a Technical Report for the Aircraft
within thirty (30) days after Lessor's request therefor;
(b) provide Lessor with the Financial Information;
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(c) (i) notify Lessor of any Event of Loss and of any event which is
likely to result in an insurance claim in excess of the Damage
Notification Threshold promptly after the occurrence of any such
event, (ii) consult with Lessor in the course of, and keep Lessor
fully apprised as to the details of, any negotiations with its
insurers or insurance brokers (and, in the case of repairable
damage, with any applicable repair facility) with respect to any
insurance claim arising out of such event, and (iii) obtain
Lessor's prior approval before agreeing to any disposition of any
insurance claim in excess of the Damage Notification Threshold;
(d) upon the occurrence of any event which is likely to give rise to
an insurance claim under any of the Insurances relating to the
Aircraft, Lessee shall promptly execute and deliver all documents
and instruments and take all such other action as may reasonably
be required to initiate and process any such claim under the
applicable insurance, and in any event, Lessee shall initiate
such claim, execute such documents or instruments and take such
other action promptly following a written request by Lessor that
Lessee initiate such claim, execute such document or instrument
or take such other action;
(e) provide Lessor, upon request, with evidence that all Taxes and
charges that are due and payable and were incurred by Lessee in
connection with the Aircraft, its location and its operations,
including those invoiced by airports and air traffic control
authorities have been paid in full (or are being contested in
good faith by appropriate proceedings in respect of which
adequate reserves have been provided by Lessee and non-payment of
which does not give rise to any risk of the Aircraft or any
interest therein being sold, forfeited or otherwise lost or of
criminal liability on the part of Lessor or Owner);
(f) provide Lessor with such other information concerning the
location, condition, use and operation of the Aircraft or
concerning the business or financial affairs of Lessee, as Lessor
may from time to time reasonably request;
(g) [NOT APPLICABLE];
(h) [NOT APPLICABLE];
(i) notify Lessor promptly as to any material modification to
Lessee's Maintenance Program (including, without limitation, any
change from maintenance on a block format to maintenance on a
phase-basis); provided, however, that Lessee shall not make any
modifications to Lessee's Maintenance Program which may adversely
affect the return conditions specified in Part III of Schedule A
to the Aircraft Lease Agreement without prior consultation with
Lessor. For the avoidance of doubt, changes to Lessee's
Maintenance Program extending or shortening times between
scheduled overhaul of Parts
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shall not be deemed to be material modification or to adversely
affect the return conditions;
8.3 Lawful and Safe Operation
Lessee will operate the Aircraft for commercial purposes from the
Delivery Date until the Return Occasion from a base within the State
of Registry or from such other base outside the State of Registry
pursuant to a sublease or a wet-lease complying with Section 8.4(a),
provided, always that Lessee must not use or operate the Aircraft or
suffer or permit the Aircraft to be used or operated:
(a) in violation of any applicable Regulations or in a manner causing
Lessor, Owner, any Financing Party or GECAS to be in violation of
(i) any applicable Regulations of the United States, (ii) any
applicable Regulations of any jurisdiction of which Lessee is
notified in writing by Lessor as a jurisdiction applicable to
Lessor, Owner, GECAS or any Financing Party, or (iii) any
applicable Regulations of any other jurisdiction into which or
over which the Aircraft is operated; provided, however, that
nothing in Section 8.3(a)(ii) shall be deemed to require Lessee
to comply with any Regulations of any jurisdiction other than the
United States which pertain to the maintenance or modification of
aircraft.
(b) for any purpose for which the Aircraft was not designed or which
is illegal;
(c) to carry cargo which could reasonably be expected to damage the
Aircraft;
(d) in any circumstances or place where the Aircraft is not covered
by the Insurances; or
(e) for purposes of training, qualifying or re-confirming the
status of cockpit personnel except for the benefit of Lessee's
or a Permitted Sub-Lessee's cockpit personnel, and then only
if the use of the Aircraft for such purpose is not
disproportionate to the use for such purpose of other aircraft
of the same type operated by Lessee or such Permitted Sub
Lessee, as the case may be.
8.4 Subleasing
(a) AT NO TIME PRIOR TO THE RETURN OCCASION WILL LESSEE SUB-LEASE,
WET-LEASE OR OTHERWISE GIVE POSSESSION OR CONTROL OF THE AIRCRAFT
OR ANY ENGINE TO, OR OTHERWISE PERMIT THE AIRCRAFT OR ANY ENGINE
TO BE IN THE POSSESSION OR CONTROL OF, ANY PERSON EXCEPT:
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(i) when the prior written consent of Lessor has been obtained,
which consent shall not be unreasonably withheld (it being
expressly acknowledged by Lessor and Lessee that the
withholding of Lessor's consent in respect of any sub-lease
or wet lease shall not be deemed to be unreasonable if the
terms of such sub-lease do not comply with the conditions
set out in Section 8.4(b) or the terms of such wet lease do
not comply with Section 8.4(c), as the case may be); or
(ii) where the Aircraft or Engine is delivered to a manufacturer
or maintenance facility for work to be done on it as
required or permitted under the Lease; or
(iii) to a sub-lessee of the Aircraft to which Lessor consents in
writing (a "PERMITTED SUB-LESSEE"), pursuant to a sub-lease
to which Lessor consents in (a "PERMITTED SUB-LEASE"), which
complies with the conditions set out in Section 8.4(b), and
provided that no Default shall have occurred and be
continuing at the commencement of such sub-lease;
(iv) on a wet-lease which complies with Section 8.4(c); or
(v) with respect to an Engine, as permitted under Section 8.11.
(b) If Lessor grants its consent to a proposed sub-lessee and a
proposed sub-lease, in addition to any conditions required by
Lessor as part of any such consent of Lessor, each of the
following conditions shall be required to be satisfied in
relation to any Permitted Sub Lease prior to any sub-leasing
pursuant to this Section:
(i) NOTIFICATION: at least 30 days prior to entering into any
Permitted Sub-Lease, Lessee shall give Lessor written
notice, specifying the identity of the Permitted Sub-Lessee,
the term of the Permitted Sub-Lease, the delivery date under
the Permitted Sub-Lease and the habitual base of the
Permitted Sub-Lessee;
(ii) TERM: the term of the Permitted Sub-Lease shall not be
capable of extending beyond one month (or such shorter
period as Lessor may agree (which agreement shall not be
unreasonably withheld) in giving its consent to such
Permitted Sub Lease) before the Scheduled Expiry Date;
(iii) FORM: a Permitted Sub-Lease shall:
(aa) not contain provisions inconsistent with the provisions
of the Lease (but may impose additional or more
stringent obligations on any Permitted Sub-Lessee than
are imposed on Lessee under the Lease);
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(bb) provide that no further subleases of the Aircraft by
such Permitted Sub-Lessee are permitted; and
(cc) include provisions substantially identical to or having
substantially the same effect as Sections 2.1, 5.6,
5.7, 5.10, 5.12, 5.16, 5.17, 5.21, 8, 9, 10, 11, 13,
15.1, 15.8 and 16 and Schedules 2 (Section 1.1), 7 and
9 of the Lease (but the Permitted Sub-Lease may impose
additional or more stringent obligations on any
Permitted Sub-Lessee than are imposed on Lessee under
the Lease);
(iv) SUBORDINATION AND ASSIGNMENT: the Permitted Sub-Lease shall
provide that (aa) the Permitted Sub- Lease is subject and
subordinate to the Lease in all respects and the rights of
the Permitted Sub-Lessee under the Permitted Sub-Lease are
subject and subordinate in all respects to the rights of
Lessor under the Lease; and (bb) prior to delivery of the
Aircraft to the Permitted Sub-Lessee (as a condition
precedent thereof), the Permitted Sub-Lessee shall provide
an acknowledgement to Lessor and Owner in a form reasonably
satisfactory to Lessor, confirming its agreement to this
provision and confirming that, except to the extent, if any,
that it receives a quiet enjoyment letter from Lessor
pursuant to Section 8.4(b)(v) below, its rights to
possession of the Aircraft under the Permitted Sub-Lease
will terminate immediately upon the termination of the
Lease, and that it will redeliver the Aircraft to Lessor,
upon notification from Lessor that an Event of Default has
occurred and that it has, as a result thereof, terminated
Lessee's right to possession of the Aircraft under the Lease
(the "SUBORDINATION ACKNOWLEDGEMENT"). The Permitted
Sub-Lease shall be assigned, as security, to Lessor for
Lessee's obligations under the Lease, pursuant to an
agreement reasonably acceptable to Lessor (the "SUB-LEASE
ASSIGNMENT") (and, if applicable, Lessor's interest in such
Sub-Lease Assignment may be reassigned, as security, to
Owner and/or the Financing Parties' Representative);
(v) QUIET ENJOYMENT: the Permitted Sub-Lease shall provide that
the Permitted Sub-Lessee shall have the right to quiet
enjoyment of the Aircraft for so long as no Event of Default
has occurred under the Lease; provided, however, that, upon
request by a Permitted Sub-Lessee, Lessor shall, and shall
cause the Financing Parties Representative (if applicable)
to, execute and deliver to the Permitted Sub-Lessee a letter
of quiet enjoyment in respect of the Permitted Sub-Lessee's
use and possession of the Aircraft for so long as no event
of default occurs under the Permitted Sub-Lease,
notwithstanding the occurrence of an Event of Default under
the Lease, in a form substantially similar to Section 7.1
hereof if Lessor is satisfied in its sole discretion as to
(i) the creditworthiness of the Proposed Sub-
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Lessee at the time of such request, (ii) the sufficiency of
the rentals and other payment obligations, including
indemnities under the Permitted Sub-Lease to discharge in
full the Rent and the indemnity obligations of Lessee under
the Lease, (iii) the installment frequency of the rent
payable under the Permitted Sub-Lease, (iv) the
acknowledgment of and agreement by the Permitted SubLessee
to be bound by the provisions of Section 16 hereof, (v) the
acknowledgment by each of the Permitted Sub-Lessee and the
Lessee that Lessor shall have no greater liability to either
Permitted Sub-Lessee or the Lessee in respect of Lessor's
obligations under Section 7.1 hereof or under such letter
than Lessor would have had under Section 7.1 in the absence
of the Permitted SubLease, (vi) the form and substance of
the Subordination Acknowledgment, and (vii) the terms of the
Permitted Sub-Lease in respect of the matters contemplated
by this Section 8.4(b);
(vi) OBLIGATIONS OF LESSEE: Lessee shall remain primarily liable
under the Lease for the performance and observance of all
its obligations to the same extent as if no Permitted
Sub-Lease had been entered into. To the extent that the
Permitted Sub-Lessee properly performs an obligation under
the Permitted Sub-Lease, Lessor agrees that such performance
shall also be regarded as discharging (to such extent)
Lessee's corresponding obligation;
(vii) INSURANCES: all insurance requirements herein shall be
complied with either by Lessee or by the Permitted
Sub-Lessee as if references in the insurance provisions of
the Lease to "Lessee" were references to "the Permitted
Sub-Lessee", and Lessee shall provide or cause the Permitted
Sub-Lessee to provide the insurance certificate and brokers'
letter of undertaking referred to in Section 9.3(c)(ii) at
least five (5) Business Days prior to the commencement of
the Permitted Sub-Lease;
(viii) REGISTRATION: there shall be no change in the registration
of the Aircraft from its State of Registry;
(ix) REPOSSESSION OR POLITICAL RISK INSURANCE: if reasonably
required by Lessor or if required of Lessor by Owner or the
Financing Parties' Representative, repossession or political
risk insurance, as the case may be, shall be obtained by
Lessor at Lessee's cost, provided that repossession or
political risk insurance , as the case may be, will not be
required if the Permitted Sub-Lessee meets the requirements
of Sections 8.7(iv) and (v). If repossession or political
risk insurance is required, the Permitted Sub-Lease must
provide that, if any such repossession or political risk as
the case may be, insurance cannot be obtained or renewed, a
termination event will occur upon notice by Lessor to Lessee
or the
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Permitted Sub-Lessee of an inability to procure repossession
or political risk, as the case may be, insurance;
(x) LEGAL OPINIONS: as a condition precedent to the
effectiveness of the Permitted Sub-Lease, Lessee shall
provide to Lessor the following legal opinions (at Lessee's
or Permitted Sub-Lessee's expense) addressed to Lessor,
Owner and the Financing Parties' Representative from counsel
reasonably acceptable to Lessor;
(aa) a legal opinion in relation to the Permitted Sub-Lease
in form and substance reasonably satisfactory to, and
containing such other matters set out in Schedule 8
requested by, Lessor and confirming further that each
of the Subordination Acknowledgement, the Permitted
Sub-Lease and the Sub-Lease Assignment is valid,
binding and (except as limited by any equitable
principles and applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' or lessors' rights generally) enforceable
against Permitted Sub-Lessee and, in the case of the
Sub-Lease Assignment, properly perfected as against
Lessee;
(bb) if the Habitual Base is not in the United States, one
or more legal opinions in form and from counsel
reasonably acceptable to Lessor to the effect, inter
alia, that Lessor's, Owner's and Financing Parties'
Representative's interests in the Aircraft will be
recognized under the laws of such country or countries
(it being expressly understood that there shall be no
requirement that any single legal point or issue be
covered in opinions from more than one counsel except
to the extent, if any, that the laws of more than one
jurisdiction may be at issue); and
(cc) such opinions as may be required under the Financing
Documents.
Final forms of the foregoing opinion or opinions (x)
shall be forwarded promptly to Lessor at least five
Business Days prior to the effective date of the
Permitted Sub-Lease, and (y) may, if different
opinions are required hereunder, be made by a single
counsel qualified to render opinions in each such
country;
(xi) FILINGS: Lessee shall co-operate with Lessor (at no cost to
Lessor) in connection with the execution and filing of any
documents reasonably required by Lessor to be executed and
filed from time to time with any registry or authority in
the Habitual Base, the State of Registration and State of
Incorporation (of each of Lessee and the Permitted
Sub-Lessee) in order to protect the interests of Lessor,
Owner and Financing Parties' Representative in and to the
Aircraft, the Lease or
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the Permitted Sub-Lease and/or to ensure the validity,
enforcement or priority thereof;
(xii) EXPENSES: Lessee will pay to Lessor on demand all
reasonable out of pocket expenses (including legal, survey
and other costs) and Taxes payable or incurred by Lessor,
Owner or Financing Parties' Representative in connection
with the review and approval of the documentation required
pursuant to this Section or otherwise incurred in connection
with any requested sub-lease or the sub-leasing of the
Aircraft thereunder, and will pay any Sublease Fee specified
in the Aircraft Lease Agreement for such Aircraft;
(xiii) PERMITTED SUB-LEASE: Promptly after its execution, Lessee
shall provide Lessor with a copy of the signed Permitted
Sub-Lease;
(xiv) ACKNOWLEDGEMENT BY GUARANTOR: If a Guarantee is required
under the Aircraft Lease Agreement, Lessee shall provide to
Lessor at least five Business Days prior to the effective
date of the Permitted Sub-Lease an acknowledgement by
Guarantor of the Permitted Sub-Lease and confirmation that
the Guarantee will remain in full force and effect during
the term of such Permitted Sub-Lease;
(xv) FINANCING RESTRICTIONS AND REQUIREMENTS: If Lessee requests
Lessor's consent to a sub-lease, it will not be unreasonable
for Lessor to decline its consent to such sub-lease, if such
sub-lease would result in a breach by Lessor of the
restrictions contained in or give rise to any liability or
adversely affect Lessor's rights or obligations or otherwise
result in a detriment under any of the Financing Documents;
and
(xvi) MAINTENANCE PROGRAM: Lessee shall, or shall cause the
Permitted Sub-Lessee to, provide Lessor with such
information as Lessor may reasonably request with respect to
the Maintenance Program of the Permitted Sub-Lessee, and
Lessor shall be reasonably satisfied with the Maintenance
Program of the Permitted Sub-Lessee.
(c) Notwithstanding Section 8.4 (a), Lessee shall be permitted to wet
lease the Aircraft provided such wet lease constitutes an
arrangement whereby Lessee agrees to furnish the Aircraft to a
third party pursuant to which the Aircraft (i) shall be operated
solely by regular employees of Lessee possessing all current
certificates and licenses that are required by applicable
Regulations, including by the State of Registry, and shall remain
in the operational control and possession of Lessee, (ii) shall
be subject to insurance coverage as provided for in the Lease,
(iii) shall be used and operated in accordance with the Lease and
shall be maintained or caused to be maintained by Lessee in
accordance
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with Lessee's Maintenance Program and Lessee's normal maintenance
practices, (iv) shall not be subject to any change in its State
of Registry, and (v) shall not be operated out of a Habitual Base
located outside the United States; and provided always that, such
arrangement is expressly subordinated to the Lease and the rights
of Lessor and Owner thereunder and to the Aircraft, and Lessee
provides Lessor with all opinions, certificates and other
documents requested by Lessor which are required to be provided,
and takes all other action requested by Lessor which is required
of Lessee or Lessor under any Financing Document in connection
with such a wet lease.
8.5 Inspection
(a) Lessee will permit Lessor's, Owner's and the Financing Parties'
Representative representatives to inspect the Aircraft at any
time. Unless a Default has occurred and is continuing, any such
Person will give Lessee reasonable notice of inspection and will
ensure that it does not result in a disruption to the scheduled
operation or maintenance of the Aircraft. Lessee shall comply
with the reasonable requests of Lessor's, Owner's and the
Financing Parties' Representative representatives during the
course of an inspection, including any request to travel on the
flight deck of the Aircraft as an observer, subject, to any
applicable Regulations and insurance requirements.
(b) The cost of conducting an inspection shall be home by Lessor,
Owner or the Financing Parties, as the case may be, unless, as a
result of that inspection, Lessee is found to be in material
default of its obligations under the Lease in which case the cost
shall be borne by Lessee.
(c) No liability or obligation will be incurred by Lessor, Owner,
Financing Parties' Representative or the Financing Parties, as
the case may be, by reason of non-exercise by any of them of the
inspection rights referred to in this Section.
8.6 Ownership; Property Interests; Related Matters
(a) Lessee will:
(i) fix and maintain Nameplates containing the Nameplate
Inscription in a prominent position in the cockpit or cabin
of the Aircraft and on each Engine;
(ii) in any circumstance where such interests are relevant, take
all reasonable steps to make sure that all relevant Persons
know about the interests of Owner, Lessor and Financing
Parties Representative in the Aircraft; and
(iii) pay all navigation charges, air traffic control charges,
landing charges or other amounts of any nature imposed by
any Government Entity with respect to
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Lessee, the Aircraft and/or the Lease except to the extent
that, in the reasonable opinion of Lessor, such payment is
being contested in good faith by appropriate proceedings in
respect of which adequate reserves have been provided by
Lessee and non-payment of which does not give rise to any
material likelihood of the Aircraft or any interest therein
being sold, forfeited or otherwise lost or of criminal
liability on the part of Lessor or Owner.
(b) Lessee will not:
(i) represent that it is the owner of the Aircraft or that it
has an economic interest (equivalent to ownership) in the
Aircraft for Tax treatment or other purposes;
(ii) take any action or fail to take any action, other than
action required under the Lease (including under Section
7.1) to be taken by Lessor, Affiliates of Lessor, Owner or a
Financing Party, if such action or omission could result in
a forfeiture or seizure of the Aircraft or otherwise
similarly put Owner's and/or Lessor's and/or Financing
Parties' Representative's rights or interests at risk,
(iii) represent to others that Owner, Lessor or Financing
Parties' Representative is associated with or responsible
for the business activities and/or flight operations of
Lessee;
(iv) allow the Aircraft or Owner's, Lessor's or Financing
Parties' Representative's interest in it or the Lease to
become or remain subject to any Security Interest (other
than a Permitted Lien); or
(v) allow the name of any Person to be placed on the Aircraft or
any Engine as a designation that could reasonably be
interpreted as a claim of ownership or as a Security
Interest; provided, that Lessee may place thereon, or allow
a Permitted Sub-Lessee to place thereon, its customary
livery, insignia and colors.
8.7 General
Lessee will:
(i) maintain its business as a commercial scheduled airline,
will preserve its corporate existence (other than as
permitted in Section 8.7 (vii) below) and will maintain all
rights, privileges, licenses and franchises material thereto
or material to performing its obligations under the Lease;
(ii) not operate, maintain, insure or deal with, or keep records
with respect to, the Aircraft in a manner which
discriminates against the Aircraft adversely insofar as
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Lessor's, Owner's or Financing Parties' interests are
concerned, when compared with the manner in which Lessee
operates, maintains, insures or deals with, or keep records
with respect to, similar aircraft, engines or parts in
Lessee's fleet; provided, however, in the event that Lessee
determines that any particular expenditure or modification
may not be prudent during the last nine months prior to the
Scheduled Expiry Date, then Lessor and Lessee shall discuss
the issue and negotiate in good faith to agree on a mutually
acceptable solution.
(iii) not change the location of its chief executive office from
that described in the heading of the Aircraft Lease
Agreement or otherwise be located (as defined in Section
9-103(3)(d) of the UCC) at any place in the United States
other than the location described the heading of the
Aircraft Lease Agreement, except upon 30 days prior written
notice thereof to Lessor;
(iv) remain a Certificated Air Carrier and maintain its status so
as to fall within the purview of Section 1110 of Title 11 of
the U.S.C. or any analogous statute;
(v) remain a "citizen of the United States" as defined in
Section 40102(a)(15)(c) of Title 49 of the U.S.C.;
(vi) not liquidate or dissolve; and
(vii) not consolidate with or merge into or with any other
corporation or other Person, and not convey, transfer, lease
or otherwise dispose of all or substantially all of its
property and other assets to, or acquire all or any
substantial part of the property or other assets or capital
stock of (if such acquisition is analogous in either purpose
or effect to a consolidation or merger), any corporation or
other Person, unless Lessee provides Lessor with written
notice of such transaction promptly following Lessee's
execution of a binding agreement or commitment to enter into
any such transaction, which notice shall in any event be
provided no later than 30 days prior to the effectiveness or
consummation of any such transaction and which notice shall
describe such transaction in reasonable detail and contain
or be accompanied by evidence reasonably satisfactory to
Lessor demonstrating that such transaction will comply with
the following requirements of this Section and unless:
(x) such transaction shall not have any material adverse
effect on the rights of Lessor, Owner or the Financing
Parties' Representative under or in respect of the
Lease or the Aircraft; and all applicable requirements
of the Financing Documents shall have been complied
with in connection therewith;
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(y) the Person formed by or surviving such consolidation or
merger or the Person which acquires by conveyance,
transfer, lease or other disposition all or
substantially all of such property and other assets or
stock (the "SUCCESSOR ENTITY"): (A) shall be a
corporation organized and existing under the laws of
the United States or any State thereof or the District
of Columbia; (B) immediately after giving effect to
such transaction, shall be Lessee or shall have
acquired or succeeded to all or substantially all of
the property and other assets of Lessee (if such assets
are being transferred) as an entirety, and shall have a
tangible net worth (determined in accordance with GAAP)
of not less than Lessee's tangible net worth
(determined in accordance with GAAP) immediately prior
to such transaction; (C) shall be a "citizen of the
United States" of America as defined in Section
40102(a)(15)(c) of Title 49 of the U.S.C. and a
Certificated Air Carrier; and (D) shall execute and
deliver to Lessor such recordations and filings with
any Governmental Entity and such other documents as
Lessor determines shall be reasonably necessary or
advisable to evidence, or in connection with, such
consolidation, merger, sale, lease, transfer or other
disposition and an agreement, in form and substance
reasonably satisfactory to Lessor which is a legal,
valid, binding and enforceable assumption by such
Successor Entity of the due and punctual performance
and observance of each covenant and condition of the
Lease and the other related documents to which Lessee
is a party, and an officer's certificate to such effect
and to the effect that the other requirements of this
Section have been satisfied, and a legal opinion from
counsel to such effect and otherwise in such form and
substance reasonably satisfactory to Lessor; and
(z) no Default shall have occurred and be continuing or
shall occur as a result thereof.
8.8 Records
Lessee will keep all Aircraft Documents and Records:
(a) in English;
(b) according to good United States airline practice; and
(c) so they meet the requirements of applicable Regulations
(including FAR 91.417) and Lessee's Maintenance Program.
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8.9 Protection
Lessee will:
(a) take all actions requested by Lessor that are within Lessee's
control to keep the Aircraft registered with the Air Authority in
the name of Owner and, if applicable, subject to the
first-priority Security Interest in favor of Financing Parties'
Representative; and
(b) make any and all filings required to be made with the Air
Authority registry that are within its control and take all other
actions within its control that are necessary or advisable to
reflect on the Air Authority registry any change in the ownership
of the Aircraft, or in the interests of Lessor, Owner or the
Financing Parties' Representative in the Lease or the Aircraft,
any modification to the Aircraft (such as the permanent
replacement of any Engine or Part in accordance with the Lease)
or as a result of any change in applicable Regulation. Lessor
will bear any costs incurred as a consequence of a transfer by
Lessor, Owner or the Financing Parties' Representative of the
interests of Lessor, Owner or the Financing Parties'
Representative in the Lease or the Aircraft or a change in the
identity of Lessor, Owner or the Financing Parties'
Representative (in each case, unrelated to the replacement of any
Engine or Part or a Default), and Lessee will bear any other
costs incurred in complying with this Section, including in
connection with the replacement of any Engine or Part.
8.10 Maintenance and Repair
Lessee will maintain, overhaul and repair the Aircraft (or arrange for
the Aircraft to be maintained, overhauled and repaired, through the
Maintenance Performer), so that:
(a) the Aircraft is kept in as good operating condition and repair as
the condition of the Aircraft as at Delivery and after giving
effect to any post-Delivery modifications, repairs or maintenance
paid for or otherwise provided by or on behalf of Lessor, except
for ordinary wear and tear;
(b) the Lessee has a current certificate of airworthiness (issued by
the Air Authority in the appropriate public transport category)
for the Aircraft;
(c) the Aircraft complies with (i) all applicable Regulations
including the standard stipulated by FAR Part 121 Subpart L and
any other rules and regulations of the FAA and, subject to the
provisions of ss.8.10(d), in at least the same manner and with at
least the same care, including record keeping, maintenance
scheduling, modification status and technical condition, as is
the case with respect to similar aircraft owned or otherwise
operated by Lessee and as if Lessee were to retain and continue
operating the Aircraft in its fleet after
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the Expiry Date, including All maintenance to the Airframe, any
Engine or any Part required to maintain all warranties,
performance guaranties or service life policies that are assigned
by Lessor to Lessee in full force and effect; and (ii) the
requirements of all Airworthiness Directives and all service
bulletins designated by the State of Design or State of Registry
as "mandatory," and to be carried out before the Return Occasion
or the Scheduled Expiry Date, whichever is later, or within a
period of 180 days after the Return Occasion or the Scheduled
Expiry Date, whichever is later; and
(d) all maintenance is carried out according to Lessee's Maintenance
Program in at least the same manner and with at least the same
care, including maintenance scheduling, modification status and
technical condition, as is the case with respect to similar
aircraft owned or otherwise operated by Lessee; provided,
however, in the event that Lessee determines that any particular
expenditure or modification may not be prudent during the last
nine months prior to the Scheduled Expiry Date, then Lessor and
Lessee shall discuss the issue and negotiate in good faith to
agree on a mutually acceptable solution.
8.11 Removal of Engines and Parts
(a) GENERAL: Lessee must replace, within one hundred and five (105)
days thereof, any Engine that has suffered an Engine Event of
Loss in accordance with Section 8.11(b), and any Part which is
permanently removed from the Aircraft must be replaced in
accordance with Section 8.11(b). Any Part which otherwise is
lost, stolen, destroyed, seized, obsolete, confiscated, damaged
beyond repair or permanently rendered unfit for any reason, must
be replaced in accordance with Section 8.11(b). Any Engine or
Part may be installed on another aircraft Lessee owns or leases
in accordance with Section 8.11(c). Lessee may temporarily
install an engine or part in accordance with Section 8.11(d).
Lessee shall obtain from any Person to whom possession of an
Engine is given (other than (i) any Maintenance Performer to whom
an Engine is delivered for maintenance, repair or overhaul, (ii)
the Engine Manufacturer, or (iii) any other Person to whom an
Engine is given solely for purpose of transporting the Engine),
and from the lessor of any airframe on which an Engine is
installed and from any holder of a Security Interest in any
airframe on which an Engine is installed, an agreement in writing
(which agreement, in the case of a lease or Security Interest,
may be contained in the applicable lease or Security Interest
agreement covering such airframe) that such Person will not
acquire or claim any rights, title or interest in such Engine as
a result of such Engine being installed on such other airframe at
any time while such Engine is subject to the Lease. In the event
Lessee shall have received from a lessor of or secured party
holding a Security Interest in any airframe leased to Lessee or
owned by Lessee a written agreement pursuant to the foregoing
sentence and the lease or Security Interest covering such
airframe also covers an engine or engines owned by the lessor
under such lease or subject to such Security
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Interest in favor of the secured party under such Security
Interest, Lessor hereby agrees for the benefit of such lessor or
secured party that Lessor will not acquire or claim as against
such lessor or secured party, any rights, title or interest in
any such engine as a result of such engine being installed on the
Airframe at any time while such engine is owned by such lessor
and subject to such lease or such Security Interest in favor of
such secured party.
(b) PERMANENT REPLACEMENT: If Lessee permanently replaces an Engine
or Part:
(i) in the case of an Engine, the replacement engine must be of
the same manufacturer and model, or at Lessee's option an
engine of an improved model, and have equivalent or better
remaining useful life and modification status as the Engine
it replaces, and is otherwise of an equivalent or better
value and utility and suitable for installation and use on
the Airframe without impairing the value or utility of the
Airframe and compatible with the remaining installed
Engine(s);
(ii) in the case of a Part, the replacement part must be in good
operating condition, have a value and utility the same or
better than the Part it is replacing, be of the same or a
more advanced make and model and be of the same
interchangeable modification status as the Part it is
replacing;
(iii) the replacement engine or part must have become and remain,
until replaced in accordance with this Section, the property
of Owner free from Security Interests (other than Permitted
Liens), and subject to the applicable Financing Documents;
(iv) Lessee must have full details of the source and
maintenance records of the replacement engine or part and in
the case of serialized rotable parts, also have a complete
service history; and
(v) Lessee must comply with the requirements of the Financing
Documents in connection with any such replacement including
to provide such legal opinions and other documents as may be
required under the Financing Documents.
(c) OTHER AIRCRAFT: An Engine or Part may be installed on an aircraft
which Lessee owns or leases if
(i) no Event of Default has occurred and is continuing;
(ii) Lessee or a Permitted Sub-Lessee has operational control
over the aircraft;
(iii) Owner keeps the ownership of the Engine or Part concerned
until replaced in accordance with Section 8.11(b);
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(iv) the Engine or Part does not become subject to a Security
Interest and the applicable airframe is not subject to any
Security Interest except a Permitted Lien or a lease or
Security Interest described in Section 8.11(a) above; and
(v) the Engine or Part is replaced in accordance with Section
8.11(b) or is removed from the aircraft as soon as
practicable under Lessee's engine rotation program but not
later than the Expiry Date.
(d) TEMPORARY REPLACEMENT: Lessee may install any engine or part on
the Aircraft as a temporary replacement if
(i) no Event of Default has occurred and is continuing;
(ii) there is not available an engine or part complying with the
requirements of the Lease for a replacement Engine or Part;
(iii) it would result in an unreasonable disruption of the
operation of the Aircraft or the business of Lessee to have
the Aircraft grounded until such time as an engine or part
complying with the requirements of the Lease for a
replacement Engine or Part becomes available for
installation;
(iv) as soon as practicable (under Lessee's engine rotation
program in the case of an engine) after an engine or part is
installed on the Aircraft, but before the earlier of sixty
(60) days after such temporary replacement or the Expiry
Date, Lessee removes that engine or part and replaces it
with the original Engine or Part (or by an engine or part
which is allowed by Section 8.11(b)); and
(v) the Insurances for the Aircraft are not adversely affected.
(e) POOLING/INTERCHANGE: Lessee shall not subject any Engine or Part
to any pooling, interchange, lease or similar arrangement unless
Lessee obtains Lessor's prior written consent thereto, which
consent shall not be unreasonably withheld.
(f) ENGINES: Notwithstanding anything to the contrary set forth in
Sections 8.11(c) and (d) above, so long as no Default shall have
occurred and be continuing, any Engine may remain installed on an
aircraft other than the Aircraft, and any auxiliary power unit
may remain installed on the Aircraft indefinitely during the
Term; provided, however, (i) upon the occurrence of any Default,
Lessee shall promptly, and in any case within sixty (60) days
following the occurrence of such Default, cause each Engine to be
re-installed on the Aircraft or, at Lessee's election, cause any
of the Engines to be replaced by a replacement Engine meeting the
requirements of, and in accordance with, Section 8.11(b), and
(ii) in any event Lessee shall cause such Engine to be either
re-installed on the Aircraft or
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replaced by a replacement Engine meeting the requirements of, and
in accordance with, Section 8.11 (b) on or before the Expiry
Date.
(g) APU: Notwithstanding anything to the contrary set forth in
Sections 8.11(c) and (d) above, so long as no Default shall have
occurred and be continuing, the APU may remain installed on an
aircraft other than the Aircraft, and any auxiliary power unit
may remain installed on the Aircraft indefinitely during the
Term; provided, however, (i) upon the occurrence of any Default,
Lessee shall promptly, and in any case within sixty (60) days
following the occurrence of such Default, cause the APU to be
re-installed on the Aircraft, or, at Lessee's election, cause the
APU to be replaced by a replacement auxiliary power unit meeting
the requirements of, and in accordance with, Section 8.11(b),
and (ii) in any event Lessee shall cause the APU to be either
re-installed on the Aircraft or replaced by a Replacement APU
meeting the requirements of, and in accordance with, Section
8.11(b) on or before the Expiry Date.
8.12 Equipment Changes
Lessee will not make any modification or addition to the Aircraft
(each an "EQUIPMENT CHANGE"), except for an Equipment Change which:
(i) is expressly permitted or required by the Lease; or
(ii) has (x) a cost (including labor) of less than the
Modification Approval Amount or (y) the prior written
approval of Lessor, and (z) in either case, does not
diminish the condition, utility, airworthiness or value of
the Aircraft.
So long as no Default has occurred and is continuing, Lessee may
remove or reverse any Equipment Change provided that the Equipment
Change is not required pursuant to the terms of the Lease or to
maintain the Insurances and removal or reversal does not diminish the
value, utility, airworthiness or condition of the Aircraft assuming
that such Equipment Change was not made and that Aircraft is
maintained in accordance with the Lease. Furthermore, Lessor may
require Lessee to remove or reverse any Equipment Change on the Expiry
Date and to restore the Aircraft to its condition prior to that
Equipment Change. Any Equipment Change not so removed or reversed
becomes the property of Lessor or Owner, as the case may be, at the
Expiry Date.
8.13 Title on an Equipment Change
Title to any equipment that is installed on the Airframe shall, except
in the case of an engine or an auxiliary power unit or a temporary
replacement of a Part or any In-Flight Equipment, vest in Owner solely
by virtue of its attachment to the Airframe or an Engine and it shall
then be subject
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to the Lease and, if applicable, the Financing Documents, as if it
were attached to the Aircraft at Delivery. In the case of any
replacement of an Engine or the APU pursuant to Section 8.11(b), and
otherwise if so requested by Lessor, Lessee will provide a properly
executed xxxx of sale or similar instrument to evidence the vesting of
good and marketable title, free and clear of Security Interest (except
Lessor Liens), to any such Replacement Engine, Replacement APU or
other equipment in Owner and all documents required under the
Financing Documents. After Lessor has determined that Lessee has
permanently replaced an Engine or the APU in accordance with Section
8.11(b) and this Section 8.13, Lessor will, or will procure that Owner
will, without recourse or warranty (except as to the absence of
Lessor's Liens), transfer to Lessee or will procure that Owner will
transfer to Lessee all of Lessor's or Owner's, as the case may be,
rights to the engine or the auxiliary power unit that has been
replaced, on an AS IS, WHERE IS basis, and will at Lessee's expense
provide or will procure that Owner provides a xxxx of sale or similar
instrument as Lessee may reasonably request to evidence such transfer.
Lessee shall indemnify, on an After-Tax Basis, Lessor, Owner and each
other Tax Indemnitee for all fees, expenses and Taxes incurred by
Lessor, Owner or any other Tax Indemnitee in connection with any such
transfer.
8.14 Inflight Equipment
(a) Notwithstanding any other provision of this Agreement, Lessor
acknowledges that Lessee may at any time during the Term install
a telephone system and/or an inflight entertainment system for
passenger use (collectively, the Inflight Equipment) on the
Aircraft notwithstanding that the Inflight Equipment may not be
owned by Lessee provided that:
(i) Lessee shall give Lessor notice of the installation of any
Inflight Equipment on the Aircraft and the name and address
of the owner of such Inflight Equipment;
(ii) the documents pursuant to which the owner of the Inflight
Equipment installs same on the Aircraft shall provide that
such owner shall not have any lien, security interest, claim
or other encumbrance on or against the Aircraft, and such
owners only right with respect to the Aircraft shall be to
remove the Inflight Equipment from the Aircraft and, such
documents shall also provide that such owner shall remove
the Inflight Equipment from the Aircraft not later than the
earlier of (A) thirty (30) days after notice from Lessor of
the occurrence of an Event of Default, and (B) the Expiry
Date;
(iii) such right of removal is subject to and conditioned upon
such owner restoring, or causing Lessee to restore, all
alterations made to the Aircraft in connection with the
installation of the Inflight Equipment to the condition
prior to the installation thereof (ordinary wear and tear
excepted).
(b) Lessor acknowledges that at all times:
(i) the owner of the Inflight Equipment has and will retain sole
and exclusive right and title to and in the Inflight
Equipment;
(ii) the Inflight Equipment shall not constitute a Part or a part
of the Aircraft;
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(iii) title to the Inflight Equipment shall not transfer to or
from Lessor pursuant to Clauses 8.12 and 8.13; and
(iv) the Inflight Equipment shall not become subject to the
Security Interest of any Person to whom Lessor grants a
Security Interest in the Aircraft pursuant to Clause 14.1.
9. INSURANCE
9.1 INSURANCE
Lessee will maintain the Insurance in full force during the Term, and
thereafter as expressly required in the Lease, which Insurance shall
be of the type usual and customary in the industry for comparable
operators operating similar equipment in similar circumstances, and
shall be through reputable brokers and insurers of recognized standing
in the commercial aviation insurance industry. The Insurance shall in
any event meet the requirements set forth in Schedule 7.
9.2 [NOT APPLICABLE]
9.3 Insurance Undertakings and Information: Lessee will:
(a) comply with the terms and conditions of each policy of any
Insurance and not do, consent or agree to any act or omission
which:
(i) invalidates or may invalidate any Insurance; or
(ii) renders or may render void or voidable the whole or any part
of any Insurance; or
(iii) brings any particular liability within the scope of an
exclusion or exception to any Insurance;
(b) not take out any insurance or reinsurance in respect of the
Aircraft other than that which is required under the Lease which
adversely affects the Insurance required to be maintained
hereunder; provided, however, Lessee may purchase a separate
"hull total loss" policy with respect to the Aircraft in such
amount as Lessee may desire;
(c) commence renewal procedures at least 30 days prior to expiry of
any of the Insurance and provide to Lessor:
(i) if requested by Lessor in writing, a written status report
of renewal negotiation as of the time of the request;
(ii) [NOT APPLICABLE];
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(iii) receipt of certificates of insurance (and where appropriate
certificates of reinsurance), and broker's (and any
reinsurance broker's) letter of undertaking in a form
acceptable to Lessor, detailing the coverage and confirming
compliance with the specified insurance requirements of the
Lease and, in the case of the broker's letter of
undertaking, opining that the Insurance complies with the
requirements of the Lease on or before each renewal date;
(d) on reasonable request, provide to Lessor copies of documents or
other information evidencing the Insurances; and
(e) provide any other insurance and reinsurance related information,
or assistance, in respect of the Insurance as Lessor may
reasonably require.
9.4 Failure to Insure
If Lessee fails to maintain any of the Insurance in compliance with
the Lease:
(a) each of the Indemnitees will be entitled but not bound (without
prejudice to any other rights of Lessor under the Lease) to pay
the premiums due or to effect and maintain insurance satisfactory
to such Indemnitee or otherwise remedy Lessee's failure in such
manner (including, without limitation to effect and maintain an
"owner's interest" policy) as such Indemnitee considers
appropriate. Any sums so expended by any such Indemnitee will
become immediately due and payable by Lessee on demand by Lessor
together with interest thereon at the Interest Rate, from the
date of expenditure by such Indemnitee up to the date of
reimbursement by Lessee; and
(b) Lessor at any time while such failure is continuing may require
the Aircraft to remain at any airport or to proceed to and remain
at any airport designated by Lessor until the failure is remedied
to Lessor's reasonable satisfaction.
9.5 Continuing Indemnity
Lessee shall effect and maintain product legal liability insurance
after the Expiry Date with respect to its liability under Section 10
(INDEMNITY) for two years, and such insurance shall name each
Indemnitee as an additional insured.
10. INDEMNITY
(a) Except as provided in Section 10(b) below, Lessee agrees to
assume liability for and to indemnify each of the Indemnitees
against and agrees to pay on demand any and all Losses which an
Indemnitee may at any time suffer or incur at any time, whether
directly or indirectly, arising out of, related to or in any way
connected with:
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(i) the ownership, maintenance, overhaul, service, repair,
delivery, possession, transfer of ownership or possession,
import, export, registration, control, storage,
modification, leasing, insurance, inspection, testing,
design, date processing, sub leasing, use, condition,
redelivery or other matters relating to the Aircraft, any
Engine or any Part (regardless of whether in the air or on
the ground, and regardless of whether such Losses are based
on strict liability in tort, any act or omission, including
the negligence, of any Indemnitee, or otherwise); or
(ii) any breach by the Lessee of any of its obligations under the
Lease; or
(iii) the design, testing or use of or any article or material
in, the Aircraft, any Engine or any Part or its use or
operation, including any defect in design and regardless of
whether it is discoverable, and any infringement of patent,
copyright, trademark design or other proprietary right
claimed by any Person or a breach of any obligation of
confidentiality claimed to be owed to any Person.
For the avoidance of doubt, the reference to "ownership" in
clause (i) shall not require Lessee to indemnify Lessor in
respect of (y) any defect in Lessor's or Owner's title to
the Aircraft or (z) any decline in residual value of the
Aircraft if Lessee shall have fully complied with its
obligations under the Lease.
(b) Lessee is not required to indemnify any particular Indemnitee
(provided that (i) Lessor and its Subsidiaries and Affiliates and
its and their officers, directors, representatives, agents,
partners, contractors and employees shall be treated as a single
Indemnitee, and (ii) each Financing Party and its shareholders,
subsidiaries, affiliates, partners, contractors, directors,
officers, representatives, agents and employees shall be treated
as a single Indemnitee) under this Section, to the extent a
particular Loss is:
(i) caused solely by the willful misconduct of that Indemnitee
or gross negligence of that Indemnitee, other than gross
negligence imputed to that Indemnitee by reason of its
interest in the Aircraft or the Lease;
(ii) caused solely by Lessor's breach of the Lease which does not
result from a Default;
(iii) related to any Taxes (but without prejudice to any
Indemnitee's rights under any other provision of this Lease
relating to Taxes);
(iv) caused solely by an event which occurs before the
commencement of the Term (except where the Loss is suffered
during the Term as a result of a pre-Delivery defect in or
such Loss otherwise arises out of or relates to or is any
way
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connected with the manufacture, design, maintenance, repair,
rebuilding, overhaul or modification of the Aircraft);
(v) caused solely by an event which occurs after the redelivery
of the Aircraft to Lessor in compliance with the Lease and
is not attributable to any act, omission, event or
circumstance occurring prior to such redelivery;
(vi) caused solely as a result of any sale, assignment, transfer
or other disposition (whether voluntary or involuntary) by
such Indemnitee of the Aircraft or Engine or any interest
therein that is not a replacement thereof under the Lease or
is otherwise not contemplated under the Lease, and unless
such sale, transfer or other disposition has resulted from
or occurred following a Default; or
(vii) consists of normal administrative costs and expenses of
such Indemnitee (but excluding any such costs or expenses
resulting from the occurrence of any Default); or
(viii) consists of costs or expenses for which Lessor has
expressly agreed to be responsible under any other provision
of the Lease.
11. EVENTS OF LOSS
11.1 Events of Loss
(a) If an Event of Loss occurs prior to Delivery of the Aircraft, the
Lease will immediately terminate and except as expressly stated
in the Lease neither party will have any further obligation other
than pursuant to Section 5.21 and Section 3 of Schedule 4, except
that Lessor will return the Deposit (if any) to Lessee and return
to Lessee or cancel any Letter of Credit.
(b) If an Event of Loss occurs after Delivery, Lessee will pay the
Agreed Value to Lessor on or prior to the earlier of (i) sixty
(60) days after the Event of Loss and (ii) the date of receipt of
insurance proceeds in respect of that Event of Loss.
(c) Subject to the rights of any insurers and reinsurers or other
third party, upon irrevocable payment in full to Lessor of the
Agreed Value and all other amounts which may be or become payable
to Lessor under the Lease, and if Lessee requests such transfer,
Lessor will, or will procure that Owner will, without recourse or
warranty (except as to the absence of Lessor's Liens) transfer to
Lessee or will procure that Owner transfers to Lessee or to
Lessee's designee legal and beneficial title, subject to no
Lessor's Liens (but otherwise without warranty), to the Aircraft,
on an AS IS, WHERE IS basis, and will at Lessee's expense,
execute and deliver or will procure that Owner executes and
delivers
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such bills of sale and other documents and instruments as Lessee
may reasonably request to evidence (on the public record or
otherwise) such transfer, free and clear of all rights of Lessor
and Owner and Lessor Liens. Lessee shall indemnify, on an
After-Tax Basis, Lessor, Owner and each other Tax Indemnitee for
all fees, expenses and Taxes incurred by Lessor, Owner or any
other Tax Indemnitee in connection with any such transfer.
11.2 Requisition
During any requisition for use or hire of the Aircraft, any Engine
or Part which does not constitute an Event of Loss:
(a) the Rent and other charges payable under the Lease will not be
suspended or abated either in whole or in part, and Lessee will
not be released from any of its other obligations (other than
operational obligations with which Lessee is unable to comply
solely by virtue of the requisition); and
(b) so long as no Default has occurred and is continuing, Lessee will
be entitled to any compensation paid by the requisitioning
authority in respect of such authority's use of the Aircraft,
such Engine or such Part during the Term. Lessee will, as soon as
practicable after the end of any such requisition, cause the
Aircraft to be put into the condition required by the Lease.
Lessor will be entitled to all compensation payable by the
requisitioning authority in respect of any change in the
structure, state or condition of the Aircraft arising during the
period of requisition, and Lessor will apply such compensation in
reimbursing Lessee for the cost of complying with its obligations
under the Lease in respect of any such change, but, if any
Default has occurred and is continuing, Lessor may apply the
compensation in or towards settlement of any amounts owing by
Lessee under the Lease and/or under any Other Agreement.
12. RETURN OF AIRCRAFT
12.1 Return
On the Expiry Date or redelivery of the Aircraft pursuant to Section
13.2 or termination of the leasing of the Aircraft under the Lease,
Lessee will, unless an Event of Loss has occurred, redeliver the
Aircraft and the Aircraft Documents and Records at Lessee's expense to
Lessor at the Redelivery Location, in accordance with the procedures
and in compliance with the conditions set forth in the Aircraft Lease
Agreement, free and clear of all Security Interests (other than Lessor
Liens) and in a condition qualifying for and having a valid and fully
effective certification of airworthiness under FAR Part 121. Lessor
shall commence the Final Inspection in accordance with the Aircraft
Lease Agreement promptly upon Lessee making the Aircraft and the
Aircraft Documents and Records available for the Final Inspection
provided that Lessee gives
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Lessor no less than thirty (30) days prior written notice of the
availability of the Aircraft and the Aircraft Documents and Records
for such inspection.
12.2 Non-Compliance
If at the time of Final Inspection Lessee has not FULLY complied with
any of its obligations under the Lease (including, without limitation,
Part III of Schedule A to the Aircraft Lease Agreement), or Lessee
fails to make the Aircraft available to Lessor on a timely basis for
inspection and redelivery pursuant to Section 12.1 and Part III of
Schedule A to the Aircraft Lease Agreement (whether such failure is
due to any act or omission of Lessee or any other circumstance
whatsoever), the Term shall be extended until the time when the
Aircraft has been redelivered to Lessor in full compliance with the
Lease, for the sole purpose of enabling such non-compliance or failure
to be promptly rectified, and during such extension period:
(a) Lessee shall not use the Aircraft in flight operations except
those related directly to the redelivery of the Aircraft to
Lessor;
(b) all Lessee's obligations and covenants under the Lease will
remain in full force until Lessee so redelivers the Aircraft; and
(c) Lessee shall pay Rent to Lessor at a rate per month equal to the
amount of Rent payable in respect of the last scheduled Rental
Period plus 50 per cent thereof, calculated on a per diem basis;
provided, however, with respect to the portion of such extension,
if any, attributable solely to a good faith dispute between
Lessor and Lessee as to the meaning of some particular language
in the Lease applicable to the return of the Aircraft, whether
set forth in Part III of Schedule A to the Aircraft Lease
Agreement or elsewhere (but not, for the avoidance of doubt, in
respect of any dispute as to the result or outcome of any
inspection or check required in connection with the Final
Inspection under the Lease), Lessee shall pay to Lessor Rent,
calculated on a per diem basis, at 50% of the rate otherwise
applicable, which rate shall be equal to (i) 50% of the rate
applicable to the last scheduled Rental Period, without giving
effect to the 50% premium required in the introductory clause of
this paragraph (c), if as of the Scheduled Expiry Date the
Aircraft is in full compliance with the requirements of the Lease
for return to Lessor (other than the item in dispute), and (ii)
50% of the rate specified in the introductory clause of this
paragraph (c), or 75% of the rate applicable to the last
scheduled Rental Period, if the rate specified in the
introductory clause of this paragraph (c) becomes applicable as
of the Scheduled Expiry Date due to Lessee's failure to comply
with its obligations in respect of the Final Inspection in a
timely manner or the Aircraft otherwise fails to comply as of the
Scheduled Delivery Date with the requirements of the Lease for
return to Lessor in any respect other than in reference to the
disputed language. For so long as the Aircraft remains
non-compliant with any requirements of the Lease other than those
that are the
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subject of the disputed language, Lessee shall pay to Lessor
Rent in the amount specified in the introductory clause of
this paragraph (c), and the Rent rate specified in this clause
(ii) shall become applicable, if at all, only from and after
such time as the Aircraft is brought into compliance with all
requirements of the Lease for return to Lessor (including, but
not limited to, Part III of Schedule A to the Aircraft Lease
Agreement) other than the with respect to the items that are
the subject of the disputed language, such that the disputed
language remains as the sole cause in the delay in the return
of the Aircraft to Lessor.
Any such extension shall not prejudice Lessor's right to treat such
non-compliance or failure as an Event of Default at any time, and to
enforce such rights and remedies as may be available to Lessor in
respect thereof under the terms of the Lease or applicable Law.
Without limiting the generality of the foregoing, Lessee's Rent
obligation under paragraph (c) above shall be without prejudice to
Lessor's rights to terminate the letting of the Aircraft and to
indemnification pursuant to Section 13.3.
Lessor may elect (either on first tender of the Aircraft by Lessee or
at any time during the said extension period) to accept redelivery of
the Aircraft notwithstanding non-compliance with Section 12.1 or Part
III of Schedule A to the Aircraft lease Agreement, in which case
Lessee will indemnify Lessor on an After-Tax Basis, and provide cash
to Lessor (in an amount satisfactory to Lessor) as security for that
indemnity, in respect of the cost to Lessor of putting the Aircraft
into the condition required by the Lease.
12.3 Redelivery
Upon redelivery Lessee will provide to Lessor, upon Lessor's request,
all documents necessary to export the Aircraft from the United States
(including a valid and subsisting export certificate of airworthiness
for the Aircraft) or required in relation to the deregistration of the
Aircraft with the Air Authority.
12.4 Acknowledgement
Provided Lessee has complied with its obligations under Section 12
hereof and Part III of Schedule A to the Aircraft Lease Agreement,
following redelivery of the Aircraft by Lessee to Lessor at the
Redelivery Location, Lessor will deliver to Lessee an acknowledgement
confirming that Lessee has redelivered the Aircraft to Lessor in
accordance with the Lease which acknowledgement shall be without
prejudice to Lessor's accrued and continuing rights under the Lease or
any Other Agreement.
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13. DEFAULT
13.1 Events
The occurrence of any of the Events of Default will constitute a
repudiation (but not a termination) of the Lease by Lessee (whether
the occurrence of any such Event of Default is voluntary or
involuntary or occurs by operation of Law or pursuant to or in
compliance with any judgement, decree or order of any court or any
order, rule or regulation of any Government Entity).
13.2 Rights and Remedies
If an Event of Default occurs, Lessor may at its option (and without
prejudice to any of its other rights under the Lease), at any time
thereafter (without notice to Lessee except as required under
applicable Law):
(a) accept such repudiation and by notice to Lessee and with
immediate effect cancel the leasing of the Aircraft (but without
prejudice to the continuing obligations of Lessee under the
Lease), whereupon all rights of Lessee under the Lease shall
cease; and/or
(b) proceed by appropriate court action or actions to enforce
performance of the Lease including the payment of all Rent and
all other amounts payable to Lessor or any Indemnitee pursuant to
the terms of the Lease; and/or
(c) proceed by appropriate court action or actions to recover damages
for the breach of the Lease which shall include:
(i) all Rent and other amounts which are or become due and
payable hereunder prior to the earlier to occur of the date
Lessor sells or re-leases the Aircraft or receives payment
of the amount calculated pursuant to clause (ii) below;
(ii) an amount equal to the aggregate Rent for the remainder of
the Term (determined without reference to any right of
Lessor to cancel the leasing of the Aircraft, whether or not
such right is exercised), discounted periodically (equal to
installment frequency) to present worth at the Discount Rate
to the date of payment by Lessee to Lessor, less the
applicable amount set forth below:
A. in the event that Lessor has re-let the Aircraft on
terms (other than rental payment terms) which, taken as
a whole, Lessor reasonably regards as being
substantially similar to the material economic terms of
the Lease (taking into account factors affecting the
degree of risk associated with such re-lease and/or the
residual value of the Aircraft thereunder, but
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excluding the rental payment terms), an amount equal to
the aggregate basic rental payments to become due under
such re-lease for the period coinciding with the
remainder of the Term (determined without reference to
any right of Lessor to cancel the leasing of the
Aircraft, whether or not such right is exercised),
discounted periodically (equal to installment
frequency) to present worth at the Discount Rate to the
date of payment by Lessee; or
B. in the event that Lessor has not re-let the Aircraft or
has sold the Aircraft or has re-let the Aircraft on
terms which, taken as a whole, Lessor does not
reasonably regard as being substantially similar to the
material economic terms of the Lease (taking into
account factors affecting the degree of risk associated
with such re-lease and/or the residual value of the
Aircraft thereunder, but excluding the rental payment
terms), an amount equal to the fair market rental value
(determined pursuant to the Appraisal Procedure) of the
Aircraft for the period commencing with the date that
Lessor reasonably anticipates that the Aircraft could
be re-let at such rental rate and ending with the date
that the Tenn was scheduled to expire (determined
without reference to any right of Lessor to cancel the
leasing of the Aircraft, whether or not such right is
exercised), discounted periodically (equal to
installment frequency) to present worth at the Discount
Rate to the date of payment by Lessee.
(iii) all costs and other incidental damages associated with
Lessor's exercise of its remedies hereunder or otherwise
incurred by Lessor as a result of an Event of Default,
including repossession costs, legal fees, Aircraft storage,
maintenance and insurance costs, Aircraft re-lease or sale
costs (including, in the case of a release, any costs
incurred to transition the Aircraft to the next operator's
maintenance program) and Lessor's internal costs and
expenses (including the cost of personnel time calculated
based upon the compensation paid to the individuals involved
on an annual basis and a general Lessor overhead
allocation), all such costs and incidental damages being
referred to herein collectively as "Enforcement and
Remarketing Costs";
(iv) any loss, premium, penalty or expense which may be incurred
in repaying funds raised to finance the Aircraft or in
unwinding any financial instrument relating in whole or in
part to Lessor's financing of the Aircraft, all such amounts
being referred to herein collectively as "Unwind Expenses";
(v) any loss, cost, expense or liability, or damage to Lessor's
residual interest in the Aircraft, sustained by Lessor due
to Lessee's failure to maintain the Aircraft in
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accordance with the terms of this Agreement or Lessee's
failure to redeliver the Aircraft in the condition required
by this Agreement, including any consequential loss of
revenues or profits, all such amounts being referred to
herein collectively as "Aircraft Condition Damages"; and
(vi) such additional amount, if any, as may be necessary to place
Lessor in the same economic position, on an After-Tax Basis,
as Lessor would have been in if Lessee had timely performed
each of its obligations under this Agreement; and/or
(d) either:
(i) enter upon the premises where all or any part of the
Aircraft is located and take immediate possession of and, at
Lessor's sole option, remove the same (and/or any engine
which is not an Engine but which is installed on the
Airframe, subject to the rights of the lessor or secured
party thereof), all without liability accruing to Lessor for
or by reason of such entry or taking of possession whether
for the restoration of damage to property, conversion or
otherwise, caused by such entry or taking, except damages
caused by gross negligence or willful misconduct; or
(ii) by delivering notice to Lessee, require Lessee to redeliver
the Aircraft to Lessor at Phoenix Sky Harbor International
Airport in Phoenix, Arizona (or such other location as
Lessor may require) on the date specified in such notice and
in all respects in the condition required by the Lease upon
the Return Occasion (it being understood that Lessee shall
not delay any such return for the purpose of placing the
Aircraft in such condition, but shall nevertheless be liable
to Lessor for the failure of the Aircraft to be in such
condition); and/or
(e) sell at private or public sale, as Lessor may determine, or hold,
use, operate or lease to others the Aircraft as Lessor in its
sole discretion may determine, all free and clear of any rights
of Lessee; and/or
(f) by written notice to Lessee specifying a payment date (which
shall be a date not earlier than five (5) Business Days following
the date of such notice), Lessor may demand that Lessee pay to
Lessor, and Lessee shall pay to Lessor on the payment date
specified in such notice (in lieu of the Rent due for the period
commencing after the date specified for payment in such notice)
the sum of the following amounts:
(i) all Rent and other amounts which are or are expected to
become due and payable hereunder prior to the payment date
specified by Lessor;
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(ii) an amount equaling the aggregate Rent for, the remainder of
the Term (determined without reference to any right of
Lessor to cancel the leasing of the Aircraft, whether or not
such right is exercised), discounted periodically (equal to
installment frequency) to present worth at the Discount Rate
to the payment date specified by Lessee to Lessor, less the
applicable amount set forth below:
A. in the event that Lessor has re-let the Aircraft on
terms (other than rental payment terms) which, taken as
a whole, Lessor reasonably regards as being
substantially similar to the material economic terms of
the Lease (taking into account factors affecting the
degree of risk associated with such re-lease and/or the
residual value of the Aircraft thereunder, but
excluding the rental payment terms), an amount equal to
the aggregate basic rental payments to become due under
such re-lease for the period coinciding with the
remainder of the Term (determined without reference to
any right of Lessor to cancel the leasing of the
Aircraft, whether or not such right is exercised),
discounted periodically (equal to installment
frequency) to present worth at the Discount Rate to the
date of payment by Lessee; or
B. in the event that Lessor has not re-let the Aircraft or
has sold the Aircraft or has re-let the Aircraft on
terms which, taken as a whole, Lessor does not
reasonably regard as being substantially similar to the
material economic terms of the Lease (taking into
account factors affecting the degree of risk associated
with such release and/or the residual value of the
Aircraft thereunder, but excluding the rental payment
terms) an amount equal to the fair market rental value
(determined pursuant to the Appraisal Procedure) of the
Aircraft for the period commencing with the date that
Lessor reasonably anticipates that the Aircraft could
be re-let at such rental rate and ending with the date
that the Term was scheduled to expire (determined
without reference to any right of Lessor to cancel the
leasing of the Aircraft, whether or not such right is
exercised), discounted periodically (equal to
installment frequency) to present worth at the Discount
Rate to the date of payment by Lessee;
(iii) an amount equal to Lessor's reasonably anticipated
Enforcement and Remarketing Costs, Unwind Expenses and
Aircraft Condition Damages; and
(iv) such additional amount, if any, as may be necessary to place
Lessor in the same economic position, on an After-Tax Basis,
as Lessor would have been in if Lessee had timely performed
each of its obligations under this Agreement;
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(v) it being understood that, to the extent that any of the
foregoing amounts represents an estimate by Lessor of
losses, damages, costs or expenses which Lessor expects to
incur, (y) Lessor shall adjust the amount thereof as needed
to reflect the actual amount of such losses, damages, costs
or expenses incurred by Lessor when substantially all of
such amounts become known to Lessor, but Lessee shall
nevertheless be obligated to pay the amount demanded by
Lessor (subject to such subsequent adjustment in which (i)
amounts, if any, actually paid by Lessee to Lessor upon such
demand as may exceed the actual amount of losses, damages,
costs or expenses incurred by Lessor as finally determined
by Lessor are refunded to Lessee or otherwise credited to
the account of Lessee and (ii) additional amounts, if any,
as may be required to cure any shortfall between the
estimated amounts paid by Lessee and the actual amount of
losses, damages, costs or expenses incurred by Lessor as
finally determined by Lessor are paid by Lessee to Lessor),
and (z) notwithstanding the amount specified in such demand,
Lessor shall be entitled to claim such other (and greater)
amount in any action against Lessee hereunder; and/or
(g) draw upon the Deposit or the Letter of Credit and apply such
amounts to any amounts owing to Lessor hereunder and/or make
demand against any Guarantor for any or all of the foregoing.
In addition to the foregoing, Lessor shall be entitled to exercise
such other rights and remedies as may be available under applicable
Law and Lessee shall be liable on an After-Tax Basis for, and shall
pay Lessor on demand: (i) interest on all unpaid amounts at the
Interest Rate, from the due date until the date of payment in full;
(ii) all reasonable legal fees and other reasonable costs 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; and (iii)
all reasonable expenses, disbursements, costs and fees incurred in (A)
repossessing, storing, preserving, shipping, maintaining, repairing
and refurbishing the Aircraft, the Airframe, any Engine or Part to the
condition required by Section 12 hereof and (B) preparing the
Aircraft, the Airframe, an Engine or Part for sale or lease,
advertising the sale or lease of the Aircraft, the Airframe, an Engine
or Part and selling or releasing the Aircraft, the Airframe, an Engine
or Part.
Lessor is hereby authorized and instructed, but shall have no
obligation, to make any expenditures which Lessor, in its sole
discretion, considers advisable to repair and restore the Aircraft,
the Airframe, an Engine or Part to the condition required by Section
12 hereof (it being understood that Lessee shall be liable for all
such expenditures).
Lessee hereby agrees that, in the event of the return to or
repossession by Lessor of the Aircraft, the Airframe, an Engine or
Part, any rights in any warranty (express or implied) previously
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assigned to Lessee or otherwise held by Lessee shall without further
act, notice or writing be assigned or reassigned to Lessor, if
assignable.
No remedy referred to in this Section 13 is intended to be exclusive,
but, to the extent permissible under the Lease or under applicable
Law, each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Lessor at Law or in
equity; and the exercise or beginning of exercise by Lessor of any one
or more of such remedies shall not preclude the simultaneous or later
exercise by Lessor of any or all of such other remedies; provided,
however, that nothing in this Section 13 shall be construed to permit
Lessor to obtain a duplicate recovery of any element of damages to
which Lessor is entitled. No express or implied waiver by Lessor of
any Default or Event of Default shall in any way be, or be construed
to be, a waiver of any future or subsequent Default or Event of
Default.
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13.3 Power of Attorney: Lessee hereby appoints Lessor as the
attorney-in-fact of Lessee, with full authority in the place and stead
of Lessee and in the name of Lessee or otherwise, for the purpose of
carrying out the provisions of the Lease and taking any action and
executing any instrument that Lessor may deem necessary or advisable
to accomplish the purposes hereof; provided, however, that Lessor may
only take action or execute instruments under this Section 13 after an
Event of Default has occurred and is continuing. Lessee hereby
declares that the foregoing powers are granted for valuable
consideration, constitute powers granted as security for the
performance of the obligations of Lessee hereunder and are coupled
with an interest and shall be irrevocable. Without limiting the
generality of the foregoing or any other rights of Lessor under the
Lease, upon the occurrence and during the continuation of an Event of
Default, Lessor shall have the sole and exclusive right and power to
(i) settle, compromise, adjust or defend any actions, suits or
proceedings relating to or pertaining to the Aircraft, Airframe or any
Engine, or the Lease and (ii) make proof of loss, appear in and
prosecute any action arising from any policy or policies of insurance
maintained pursuant to the Lease, and settle, adjust or compromise any
claims for loss, damage or destruction under, or take any other action
in respect of, any such policy or policies.
13.4 Sale or Re-Lease
If an Event of Default occurs, Lessor may sell or re-lease or
otherwise deal with the Aircraft at such time and in such manner and
on such terms as Lessor considers appropriate in its absolute
discretion, free and clear of any interest of Lessee, as if the Lease
had never been entered into. Lessor shall have no duty or obligation
to sell the Aircraft, and Lessor shall be obligated to attempt to
re-lease the Aircraft only to the extent, if any, that it is required
to do so under Article 2A of the UCC, and Lessee hereby disclaims any
right to compel Lessor to sell or otherwise release the Aircraft.
13.5 Removal of Lease from FAA Registry
If an Event of Default occurs, Lessee will at the request of Lessor
immediately take all steps necessary to enable the Aircraft to be
redelivered to Lessor in accordance with and free and clear of the
Lease and Lessee hereby irrevocably and by way of security for its
obligations under the Lease appoints (which appointment is coupled
with an interest) Lessor as its attorney-in-fact to execute and
deliver any documentation and to do any act or thing not prohibited by
Law required in connection with the foregoing during the continuance
of an Event of Default. Without limiting the foregoing, Lessor may
file with the FAA the Lease Termination Certificate provided to Lessor
under the Lease.
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14. TRANSFER
14.1 Lessee
LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY,
INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS OR
OBLIGATIONS UNDER THE LEASE (INCLUDING THE AIRCRAFT LEASE AGREEMENT OR
THIS CTA), OR CREATE OR PERMIT TO EXIST ANY SECURITY INTEREST OVER ANY
OF ITS RIGHTS UNDER THE LEASE (INCLUDING THE AIRCRAFT LEASE AGREEMENT
OR THIS CTA), AND ANY ATTEMPT TO DO SO SHALL BE NULL AND VOID.
The foregoing shall not be construed to prohibit a Permitted
Sub-Lease.
14.2 Lessor
Lessee acknowledges and agrees that Lessor will, if applicable under
the Financing Documents, assign as security Lessor's interest in the
Lease as described in the Acknowledgement and Agreement referred to in
Schedule 3.
In addition insofar as Lessee is concerned, Lessor may, without the
consent of Lessee, further transfer all or any of its rights or
obligations under the Lease or all or any of its right, title or
interest in and to the Aircraft, including pursuant to:
(a) a sale and leaseback; or
(b) a novation or assignment of the Lease and/or a sale of the
Aircraft (including to a special purpose or securitization or
monetization trust, fund, limited liability company, corporation,
partnership or other vehicle or in connection with any other
direct or indirect raising of capital); or
(c) a secured loan financing.
Lessor will promptly notify Lessee of any transfer and Lessee agrees
promptly to execute and deliver in connection with any transfer such
documents and assurances (including an acknowledgement of the transfer
and a certificate as to the absence of any Default under the Lease)
and to take such further action as Lessor may reasonably request to
establish or protect the rights and remedies created or intended to be
created in favor of the transferee in connection with any transfer.
After any transfer, the transferee shall be entitled to be an
Indemnitee and to such other rights under the Lease as Lessor shall
specify. Upon an assignment or novation described in clause (b),
Lessor shall be released from all obligations and liabilities under
the Lease to the extent such obligations and liabilities are assumed
by such transferee, and the Lease, including this CTA as in effect at
that time and as incorporated in the Aircraft Lease Agreement, shall
be
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deemed applicable as between Lessee and the transferee of the Lease
and may be amended, supplemented or otherwise modified without the
consent of the transferor (if this CTA is applicable to the Other
Agreements not so transferred, it shall remain in full force and
effect and may be amended, supplemented or otherwise modified without
the consent of the transferee). Notwithstanding any such assignment or
novation, Lessor, Owner, Financing Parties' Representative and each
other Indemnitee shall continue to be entitled to indemnification
under Section 10, and shall continue to be named as an additional
insured under all Insurances referred to in Section 9 for a period of
not less than two years after such transfer. The agreements,
covenants, obligations and liabilities contained in the Lease,
including all obligations to pay Rent and indemnify each Indemnitee,
are made for the benefit of Lessor (and, in the case of Section 10,
each other Indemnitee) and its or their respective successors and
assigns, notwithstanding the possibility that any such Person was not
originally a party to the Lease or may, at the time such enforcement
is sought, not be a party to the Lease.
14.3 Conditions
In connection with any such transfer by Lessor:
(a) QUIET ENJOYMENT: as a condition precedent to such transfer
becoming effective, Lessor will procure that the transferee or
any new owner of the Aircraft or any new holder of a Security
Interest in the Aircraft or any holder of an interest in the
Aircraft or the Lease (by way of security or otherwise), as the
case may be, shall in the case of a transferee that is the
"Lessor" acknowledge Lessor's obligation under Section 7.1 or, if
not the Lessor, execute and deliver to Lessee a letter of quiet
enjoyment in respect of Lessee's use and possession of the
Aircraft in a form substantially similar to Section 7.1 hereof,
(b) COSTS: Lessor shall reimburse to Lessee its reasonable
out-of-pocket expenses (including reasonable legal fees and
expenses) actually incurred in connection with co-operating with
Lessor in relation to any such transfer referred to in this
Section 14, provided that such expenses are substantiated to
Lessor's reasonable satisfaction;
(c) RIGHTS OF LESSEE: as a condition precedent to any transfer
becoming effective, such transfer shall not, at the time of the
transfer, materially expand Lessee's obligations under the Lease
or materially reduce Lessee's rights under the Lease, in each
case as compared to what such obligations and rights would have
been in the absence of such transfer; provided, however, that no
transfer to any Person that meets the requirements of a "citizen
of the United States" under 49 U.S.C. Section 40102(a)(15) shall
be deemed to materially expand Lessee's obligations or materially
restrict Lessee's rights under the Lease.
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15. MISCELLANEOUS
15.1 Survival
Lessee's obligations under Section 3 of Schedule 4, under Sections
5.6, 5.7, 5.10, 5.21, 9.5, 10, 12, and 13.2 and under any other
provision of the Lease providing for an obligation on the part of the
Lessee to indemnify Lessor or any other Indemnitee shall survive the
expiration or any termination of the Lease and continue in full force
and effect.
15.2 Waivers, Remedies Cumulative
The rights of Lessor under the Lease may be exercised as often as
necessary, are cumulative and not exclusive of its rights under any
Law; and may be waived only in writing and specifically. Delay by
Lessor in exercising, or non-exercise of, any such right will not
constitute a waiver of that right.
15.3 Delegation
Lessor may delegate to any Person all or any of the rights, powers or
discretion vested in it by the Lease, and any such delegation may be
made upon such terms and conditions and subject to such regulations
(including power to sub-delegate) as Lessor in its absolute discretion
thinks fit.
15.4 Severability
If a provision of the Lease is or becomes illegal, invalid or
unenforceable in any jurisdiction, that will not affect:
(a) the legality, validity or enforceability in that jurisdiction of
any other provision of the Lease; or
(b) the legality, validity or enforceability in any other
jurisdiction of that or any other provision of the Lease.
15.5 Remedy
If Lessee fails to comply with any provision of the Lease, Lessor may,
without being in any way obliged to do so or responsible for so doing
and without prejudice to the ability of Lessor to treat such
non-compliance as a Default, effect compliance on behalf of Lessee,
whereupon Lessee shall become liable to pay immediately any sums
expended by Lessor together with all costs and expenses (including
legal fees and expenses) in connection with the non-compliance.
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15.6 Time of Essence
The time stipulated in the Lease for all payments payable by Lessee
and the prompt, punctual performance of Lessee's other obligations
under the Lease are of the essence of the Lease.
15.7 Notices
All notices under, or in connection with, the Lease will, unless
otherwise stated, be given in writing by means of a overnight courier
service or facsimile. Any such notice is deemed effectively to be
given when received by the recipient (or if receipt is refused by the
intended recipient, when so refused).
The addresses and facsimile and telephone numbers of Lessee and Lessor
are as set forth in the Aircraft Lease Agreement.
15.8 Governing Law; Jurisdiction; WAIVER OF JURY TRIAL
(a) PURSUANT TO AND IN ACCORDANCE WITH SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW, THE PARTIES HERETO AGREE THAT THE LEASE
IN ALL RESPECTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS XX XXX XXXXX XX XXX XXXX, XXXXXX XXXXXX, AS
APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE OF
NEW YORK (EXCLUSIVE OF SECTION 7-101 OF THE NEW YORK GENERAL
OBLIGATIONS LAW WHICH IS INAPPLICABLE TO THE LEASE). THE PARTIES
AGREE THAT THE LEASE WAS EXECUTED AND DELIVERED IN THE STATE OF
NEW YORK.
(b) Pursuant to and in accordance with Section 5-1402 of the New York
General Obligations Law, Lessee and Lessor each agree that the
United States District Court for the Southern District of New
York and any New York state court sitting in the County of New
York, New York, and all related appellate courts, are to have
non-exclusive jurisdiction to settle any disputes arising out of
or relating to the Lease and submits itself and its property to
the non-exclusive jurisdiction of the foregoing courts with
respect to such disputes.
(c) Without prejudice to any other mode of service, Lessee:
(i) appoints CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, as its agent for service of process relating to
any proceedings before the New York courts in connection
with the Lease and agrees to maintain the process agent in
New York notified to Lessor;
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(ii) agrees that failure by a process agent to notify Lessee of
the process shall not invalidate the proceedings concerned;
(iii) consents to the service of process relating to any such
proceedings by prepaid mailing of a copy of the process to
Lessee's agent at the address identified in paragraph (i) or
by prepaid mailing by air mail, certified or registered mail
of a copy of the process to Lessee at the address set forth
in Section 15.7.
(d) [NOT APPLICABLE.]
(e) Each of Lessor and Lessee:
(i) waives to the fullest extent permitted by Law any objection
which it may now or hereafter have to the courts referred to
in Section 15.8(b) above on grounds of inconvenient forum or
otherwise as regards proceedings in connection with the
Lease;
(ii) waives to the fullest extent permitted by Law any objection
which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to
the Lease brought in the courts referred to in Section
15.8(b); and
(iii) agrees that a judgement or order of any court referred to
in Section 15.8(b) in connection with the Lease is
conclusive and binding on it and may be enforced against it
in the courts of any other jurisdiction.
(f) Nothing in this Section 15.8 limits the right of either party to
bring proceedings against the other in connection with the Lease:
(i) in any other court of competent jurisdiction; or
(ii) concurrently in more than one jurisdiction.
(g) Each of Lessee and Lessor irrevocably and unconditionally:
(i) agrees that if the other brings legal proceedings against it
or its assets in relation to the Lease no sovereign or other
immunity from such legal proceedings (which will be deemed
to include suit, court jurisdiction, attachment prior to
judgement, attachment in aid of execution of a judgement,
other attachment, the obtaining of judgement, execution of a
judgement or other enforcement or legal process or remedy)
will be claimed by or on behalf of itself or with respect to
its assets; and
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(ii) waives any such right of immunity which it or its assets now
has or may in the future acquire and agrees that the
foregoing waiver shall have the fullest extent permitted
under the Foreign Sovereign Immunities Act of 1976 of the
United States and is intended to be irrevocable for the
purposes of such Act.
(h) EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THE LEASE OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE LESSOR/LESSEE
RELATIONSHIP BEING ESTABLISHED, including, without limitation,
contract claims, tort claims, breach of duty claims and other
common law and statutory claims. Each of Lessor and Lessee
represents and warrants that each has reviewed and voluntarily
waives its jury trial rights following consultation with its
legal counsel. THIS WAIVER IS IRREVOCABLE, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THE LEASE. In the event of litigation, this
Section may be filed as a written consent to a trial by the
court.
15.9 Sole and Entire Agreement; True Lease; Section 1110
(a) ENTIRE AGREEMENT: The Lease is the sole and entire agreement
between Lessor and Lessee in relation to the leasing of the
Aircraft, and supersedes all previous agreements in relation to
that leasing. Any amendments to the Lease must be made in writing
and signed on behalf of Lessor and Lessee.
(b) TRUE LEASE: The parties intend and agree that the Lease:
(i) constitutes a "true lease", and not a "security interest" as
defined in Section 1-201(37) of the UCC;
(ii) constitutes a "true lease" for United States Federal income
tax purposes; and
(iii) confers only a leasehold interest on Lessee in and to
the Aircraft on and subject to the terms of the Lease,
and no ownership or other interest with respect to the
Aircraft is provided to Lessee under the Lease.
Lessee shall not file a tax return that is inconsistent with the
provisions of this Section 15.9(b).
(c) SECTION 1110: Lessee acknowledges that Lessor would not have
entered into the Lease unless it had available to it the benefits
of a lessor under Section 1110 of Title 11 of the
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U.S.C. Lessee covenants and agrees with Lessor that to better
ensure the availability of such benefits, Lessee shall not oppose
any motion, petition or application filed by Lessor with any
bankruptcy court having jurisdiction over Lessee whereby Lessor
seeks recovery of possession of the Aircraft under said Section
1110, except in a situation in which Lessee shall have complied
with the requirements of said Section 1110 to be fulfilled in
order to entitle Lessee to continued use and possession of the
Aircraft hereunder. In the event said Section 1110 is amended, or
if it is repealed and another statute is enacted in lieu thereof,
Lessor and Lessee agree to amend the Lease and take such other
action not inconsistent with the Lease as Lessor reasonably
requests so as to afford to Lessor the rights and benefits as
such amended or substituted statute confers upon owners and
lessors of aircraft similarly situated to Lessor.
15.10 Indemnitees
All rights expressed to be granted to each Indemnitee (other than
Lessor) under the Lease are given to Lessor on behalf of that
Indemnitee, and each Indemnitee is an express third party beneficiary
thereof.
15.11 Counterparts
The Lease (including the Aircraft Lease Agreement and this CTA) may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. To the extent, if any, that the Lease constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction), no security interest in the
Lease may be created through the transfer or possession of any
counterpart other than the original counterpart, which shall be
identified as the counterpart designated as the "original" on the
signature page of the Aircraft Lease Agreement by Financing Parties'
Representative, Owner or Lessor, as the case may be.
15.12 Language
All notices to be given under the Lease will be in English. All
documents delivered to Lessor pursuant to the Lease (including any
documents to be delivered pursuant to the Conditions Precedent) will
be in English.
16. DISCLAIMERS AND WAIVERS
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND
CONFIRMATIONS SET FORTH IN CLAUSES 16.1 TO 16.4 BELOW SHALL APPLY AT
ALL TIMES DURING THE TERM. LESSEE'S ACCEPTANCE OF THE AIRCRAFT IN
ACCORDANCE WITH SECTION 4.3 SHALL BE CONCLUSIVE EVIDENCE THAT
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LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY PART THEREOF AND
THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE AIRCRAFT DOCUMENTS
AND RECORDS ARE TECHNICALLY ACCEPTABLE TO LESSEE AND SATISFY THE
DELIVERY CONDITION REQUIREMENTS AND ARE IN SUITABLE CONDITION FOR
DELIVERY TO AND ACCEPTANCE BY LESSEE.
16.1 Exclusion
THE AIRCRAFT IS LEASED AND DELIVERED UNDER THE LEASE "AS IS, WHERE
IS," AND LESSEE AGREES AND ACKNOWLEDGES THAT:
(a) LESSOR WILL HAVE NO LIABILITY IN RELATION TO, AND LESSOR HAS NOT
AND WILL NOT BE DEEMED TO HAVE ACCEPTED, MADE OR GIVEN (WHETHER
BY VIRTUE OF HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING
ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO
THE LEASE OR OTHERWISE), ANY GUARANTEES, COVENANTS, WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO, THE
AIRCRAFT OR ANY ENGINE OR PART OR ANY SERVICES PROVIDED BY LESSOR
UNDER THE LEASE, INCLUDING (BUT NOT LIMITED TO) THE TITLE (EXCEPT
AS AND TO THE EXTENT EXPRESSLY PROVIDED IN SECTION 7.1),
DESCRIPTION, AIRWORTHINESS, COMPLIANCE WITH SPECIFICATIONS,
OPERATION, MERCHANTABILITY, QUALITY, FREEDOM FROM INFRINGEMENT OF
PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY RIGHTS, FITNESS
FOR ANY PARTICULAR USE OR PURPOSE, VALUE, DURABILITY, DATE
PROCESSING, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE
MATERIAL OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS,
WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER MATTER
WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY
ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF
TRADE) WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART OR
ANY SERVICES PROVIDED BY LESSOR UNDER THE LEASE; AND
(b) LESSOR SHALL NOT HAVE ANY OBLIGATION OR LIABILITY WHATSOEVER TO
LESSEE (WHETHER ARISING IN CONTRACT OR IN TORT, AND WHETHER
ARISING BY REFERENCE TO NEGLIGENCE, MISREPRESENTATION OR STRICT
LIABILITY OF LESSOR OR OTHERWISE) FOR:
(i) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED
DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY
ANY INADEQUACY THEREOF OR DEFICIENCY OR
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DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION
THEREWITH (EXCEPT FOR DIRECT DAMAGES DUE TO LESSOR'S BREACH
AS AND TO THE EXTENT EXPRESSLY PROVIDED IN SECTION 4.4 OR
7.1 HEREOF);
(ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY
RISKS RELATING THERETO;
(iii) ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR
ANTICIPATED PROFITS OR ANY OTHER DIRECT (EXCEPT FOR DIRECT
DAMAGES DUE TO LESSOR'S BREACH AS PROVIDED IN SECTION 4.4 or
7.1), INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGE; OR
(iv) THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR,
IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT, ANY ENGINE OR
ANY PART.
16.2 Waiver
LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND LESSOR, ALL ITS RIGHTS IN
RESPECT OF ANY CONDITION, WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, ON THE PART OF LESSOR AND ALL CLAIMS AGAINST LESSOR HOWSOEVER
AND WHENEVER ARISING AT ANY TIME IN RESPECT OF OR OUT OF ANY OF THE
MATTERS REFERRED TO IN SECTION 16.1.
16.3 Disclaimer Of Consequential Damages
LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY
DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER,
FOR INTERRUPTION OF SERVICE, LOSS OF BUSINESS, LOST PROFITS OR
REVENUES OR CONSEQUENTIAL DAMAGES (AS DEFINED IN SECTION 2A-520 OF THE
UCC OR OTHERWISE) AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY
LESSOR OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF
LESSOR CONTAINED IN THE LEASE (INCLUDING A BREACH BY LESSOR UNDER
SECTION 4.4 OR 7.1).
16.4 Confirmation
LESSEE CONFIRMS THAT IT IS FULLY AWARE OF THE PROVISIONS OF THIS
SECTION 16 AND ACKNOWLEDGES THAT RENT AND OTHER AMOUNTS PAYABLE UNDER
THE LEASE HAVE BEEN CALCULATED BASED ON ITS PROVISIONS.
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16.5 Limitation
LESSOR HEREBY EXPRESSLY AGREES AND ACKNOWLEDGES THAT NOTHING IN THIS
SECTION 16 SHALL DEROGATE FROM LESSOR'S OBLIGATIONS UNDER, OR
OTHERWISE LIMIT LESSOR'S LIABILITY IN RESPECT OF, SECTIONS 2.2,
4.4(c), 7.1, 7.2, 14.2 or 14.3 HEREOF OR SECTION 2(c) OF SCHEDULE 4
HERETO.
17. BROKERS AND OTHER THIRD PARTIES
17.1 No Brokers
Each of the parties hereby represents and warrants to the other that
it has not paid, agreed to pay or caused to be paid directly or
indirectly in any form, any commission, percentage, contingent fee,
brokerage or other similar payments of any kind, in connection with
the establishment or operation of the Lease, to any Person (other than
fees payable to legal advisers or portfolio services).
17.2 Indemnity
Each party agrees to indemnify and hold the other harmless from and
against any and all claims, suits, damages, costs and expenses
(including, reasonable legal fees and expenses) asserted by any agent,
broker or other third party for any commission or compensation of any
nature whatsoever based upon the Lease or the Aircraft, if such claim,
suit, damage, cost or expense arises out of any breach by the
indemnifying party, its employees or agents of Section 17.1.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
THE SIGNATURE PAGE FOLLOWS.
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IN WITNESS WHEREOF the parties hereto have executed the Common Terms Agreement
on the date shown at the beginning of the document.
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ [illegible]
--------------------------
Name: Xxxx Xxx
--------------------------
Title: Vice President
--------------------------
ALOHA AIRLINES, INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
By: ___________________________
Name: ___________________________
Title: ___________________________
IN WITNESS WHEREOF the parties hereto have executed the Common Terms Agreement
on the date shown at the beginning of the document.
GENERAL ELECTRIC CAPITAL CORPORATION
By: ___________________________
Name: ___________________________
Title: ___________________________
ALOHA AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------
Title: Exec. Vice President & CFO
----------------------------
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
----------------------------
Title: VP Planning & Development
----------------------------
SCHEDULE 1
DEFINITIONS
The following words and expressions have the respective meanings set forth
below:
ACT means the Federal Aviation Act of 1958, as amended, and as recodified in
Title 49 U.S.C. pursuant to Public Law 103-272, or any similar legislation of
the United States enacted in substitution or replacement thereof.
AFFILIATE means as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 50% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
AFTER-TAX BASIS means in the case of any amount payable on an "After-Tax Basis"
to or for the benefit of any Person (including any amount payable pursuant to
this definition) that the total amount paid shall be such that the Person
actually realizes the amount payable, after deduction from the total amount
paid of the net amount of all Taxes required to be paid by such Person with
respect to the receipt or accrual by it of such amount.
AGREED VALUE has the meaning given in the Aircraft Lease Agreement.
AIR AUTHORITY means the FAA.
AIRCRAFT has the meaning given in the Aircraft Lease Agreement.
AIRCRAFT DOCUMENTS AND RECORDS means the documents, data and records identified
in the list attached to the Certificate of Technical Acceptance, and any other
documents and records Lessee is required to maintain under Section 8.8, and all
additions, renewals, revisions and replacements from time to time made to any
of the foregoing in accordance with the Lease.
AIRCRAFT LEASE AGREEMENT means the specific aircraft lease agreement for the
Aircraft entered or to be entered into between the parties hereto or Affiliates
thereof.
AIRFRAME means the Aircraft, excluding the Engines and Aircraft Documents and
Records.
AIRFRAME STRUCTURAL CHECK has the meaning given in the Aircraft Lease
Agreement.
AIRFRAME SUPPLEMENTAL RENT has the meaning given in the Aircraft Lease
Agreement.
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AIRWORTHINESS DIRECTIVE means an airworthiness directive issued by the State of
Design or the State of Registry.
ANNUAL SUPPLEMENTAL RENT ADJUSTMENT has the meaning given in the Aircraft Lease
Agreement.
APPRAISAL PROCEDURE means the following procedure for determining the "fair
market rental value" of the Aircraft pursuant to Sections 13.2 and 13.4 of the
CTA: (a) Lessor shall select an independent aircraft appraiser in its sole and
absolute discretion who shall make a determination of "fair market rental
value" of the Aircraft; and (b) the fees and expenses of the appraiser shall be
paid by Lessee. "Fair market rental value" shall mean the value determined by
an appraisal completed on an "as-is" and "where-is" basis.
APU means the auxiliary power unit installed on the Aircraft on the Delivery
Date and any replacement auxiliary power unit installed on the Aircraft and
title to which is transferred to Owner in accordance with the Lease.
APU SUPPLEMENTAL RENT has the meaning given in the Aircraft Lease Agreement.
ASSUMED UTILIZATION has the meaning given in the Aircraft Lease Agreement.
ASSUMED RATIO has the meaning given in the Aircraft Lease Agreement.
BUSINESS DAY means any day other than a Saturday, Sunday or other day on which
banking institutions in New York New York or Honolulu, Hawaii are authorized or
required by Law to be closed.
"C" CHECK means a block "C" check in accordance with Lessee's Maintenance
Program or, if the Lessee's Maintenance Program is not based on the
Manufacturer's Maintenance Planning Document on a block basis, in accordance
with the Manufacturer's Maintenance Planning Document.
CERTIFICATE OF TECHNICAL ACCEPTANCE means a certificate of technical acceptance
in the form of Part 1 or Part 2, as applicable, of Schedule 5.
CERTIFICATED AIR CARRIER means any Person (except the United States Government)
that is a "citizen of the United States of America" (as defined in Section
40102 of Title 49 of the U.S.C.) and holding a Certificate of Public
Convenience and Necessity issued under Section 41102 of Title 49 of U.S.C. by
the Department of Transportation or any predecessor or successor agency
thereto, and an air carrier operating certificate issued pursuant to Chapter
447 of Title 49 of U.S.C. or, in the event such certificates shall no longer be
applicable, any Person (except the United States Government) that is a citizen
of the United States (as defined in Section 40102 of Title 49 of the U.S.C.)
and legally engaged in the business of transporting for hire passengers or
cargo by air predominantly to, from or between points within the United States
of America, and, in either event, operating commercial jet aircraft capable of
carrying ten or more individuals or 6,000 pounds or more of cargo, which also
is certificated so as to entitle Lessor, as a lessor, to the benefits of
Section 1110 of Title 11 of U.S.C. with respect to the Aircraft.
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CONDITIONS PRECEDENT means Lessee Conditions Precedent and Lessor's Conditions
Precedent, collectively, or any of them, as the context may require.
CYCLE means one take-off and landing of the Aircraft.
DAMAGE NOTIFICATION THRESHOLD has the meaning given in the Aircraft Lease
Agreement.
DEDUCTIBLE AMOUNT has the meaning given in the Aircraft Lease Agreement.
DEFAULT means any Event of Default or any event or circumstance which, with the
giving of notice and/or lapse of time and/or determination of materiality
and/or fulfillment of any other condition, would constitute an Event of
Default.
DEFECT means any defect or non-conformity with the Delivery Condition
Requirements notified by Lessee to Lessor during the Pre-Delivery Procedure.
DELIVERY means delivery of the Aircraft by Lessor to Lessee under the Lease.
DELIVERY CONDITION REQUIREMENTS has the meaning given in the Aircraft Lease
Agreement.
DELIVERY DATE means the date on which Delivery occurs.
DELIVERY LOCATION has the meaning given in the Aircraft Lease Agreement.
DEPOSIT has the meaning given in the Aircraft Lease Agreement.
DISCOUNT RATE has the meaning given in the Aircraft Lease Agreement.
DOLLARS AND $ means the lawful currency of the United States.
ENGINE means, whether or not installed on the Aircraft:
(a) each engine of the manufacture and model specified in the Aircraft
Lease Agreement for the Aircraft which Lessor offers to Lessee for
delivery with the Airframe on the Delivery Date, such engines being
described as to serial numbers on the Certificate of Technical
Acceptance; and
(b) any Replacement Engine, with effect from the time when title thereto
has passed to Owner in accordance with the Lease;
and in each case includes all modules and Parts from time to time belonging to
or installed in that engine but excludes any properly replaced engine title to
which has passed to Lessee pursuant to the Lease.
ENGINE CYCLE means operation of an engine on an aircraft from and including a
take-off to and including the landing of that aircraft.
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ENGINE EVENT OF LOSS means the occurrence, with respect to the Engine only,
whether or not installed on the Airframe, of any of those events described in
the definition of Event of Loss.
ENGINE FLIGHT HOUR means each hour or part thereof an Engine is operated,
elapsing from the moment the wheels of an aircraft on which such Engine is
installed leave the ground until the wheels of such aircraft next touch the
ground.
ENGINE LLP REPLACEMENT has the meaning given in Section 7.2(ii);
ENGINE LLP SUPPLEMENTAL RENT has the meaning given in the Aircraft Lease
Agreement.
ENGINE REFURBISHMENT means all scheduled and unscheduled off the wing Engine
maintenance and repair accomplished for each module in accordance with the
performance restoration or full overhaul sections of the Manufacturer's
workscope planning guide.
ENGINE SUPPLEMENTAL RENT has the meaning given in the Aircraft Lease Agreement.
EQUIPMENT CHANGE has the meaning given in Section 8.12.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
EVENT OF DEFAULT means any event or condition specified in Schedule 9.
EVENT OF LOSS means with respect to the Aircraft (including for the purposes of
this definition the Airframe):
(a) the actual or constructive, compromised, arranged or agreed total loss
of the Aircraft; or
(b) the Aircraft being destroyed, damaged beyond reasonable economic
repair as determined by Lessor or permanently rendered unfit for
normal use for any reason whatsoever; or
(c) the Aircraft being condemned, confiscated or requisitioned for title,
or title to the Aircraft being otherwise compulsorily acquired by the
government of the State of Registry or any other Government Entity; or
(d) the Aircraft being hijacked, stolen, confiscated, detained, seized,
condemned or requisitioned for use or hire for the lesser of (i) a
period of more than 30 days (or 60 days in the case of requisition for
use or hire by the government of the State of Registry) or (ii) a
period equal to or exceeding the remaining balance of the Term; or
(e) as a result of any rule, regulation, order or other action by the FAA
the use of the Aircraft by Lessee or any Permitted Sub Lessee shall
have been prohibited for a period of twelve (12) consecutive months.
1-4
EXPIRY DATE means the Scheduled Expiry Date or, if earlier (i) the date when
Lessor acting in accordance with the provisions of the Lease, terminates the
leasing of the Aircraft to Lessee under the Lease, or (ii) subject to the
provisions of Section 11.1 and 11.2, the date when Lessor receives the Agreed
Value together with any other amounts then due and unpaid under the Lease and
the Other Agreements following an Event of Loss; provided, that if the Term is
extended pursuant to Section 12.2, the Expiry Date shall be extended to the
date to which the Term is extended pursuant to Section 12.2.
FAA means the Federal Aviation Administration of the United States and any
successor thereof.
FAR means the Federal Aviation Regulations set forth in Title 14 of the United
States Code of Federal Regulations, as amended and modified from time to time.
FINAL DELIVERY DATE has the meaning given in the Aircraft Lease Agreement.
FINAL INSPECTION has the meaning given in Section 1.1 of Part III of Schedule A
to the Aircraft Lease Agreement.
FINANCIAL INDEBTEDNESS means any indebtedness in respect of:
(a) moneys borrowed or raised;
(b) any liability under any debenture, bond, note, loan stock, acceptance,
documentary credit or other security;
(c) the acquisition cost of any asset to the extent payable before or
after the time of acquisition or possession (exclusive of trade
payables); or
(d) any guarantee, indemnity or similar assurance against financial loss
of any person in respect of the above.
FINANCIAL INFORMATION means:
(a) as soon as available but not in any event later than 60 days after the
last day of each fiscal quarter of Lessee, the consolidated financial
statements of Aloha Airgroup, Inc. (consisting of a balance sheet and
statements of operations and of retained earnings and cash flows)
prepared for the most recent previous fiscal quarter certified by a
qualified financial officer of Aloha Airgroup, Inc. as being true and
correct and fairly presenting its financial condition and results of
operation in accordance with GAAP (subject to year-end adjustments);
and
(b) as soon as available but not in any event later than 120 days after
the last day of each fiscal year of Lessee, the audited combined
financial statements of Aloha Airgroup, Inc. (consisting of a balance
sheet and statements of operations and of retained earnings and cash
flows), prepared for the fiscal year then most recently ended
certified by the independent auditors of Aloha Airgroup, Inc. without
qualification.
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FINANCING DOCUMENTS (if applicable) has the meaning given in the Aircraft Lease
Agreement.
FINANCING DOCUMENTS CONTEST RIGHTS (if applicable) has the meaning given in the
Aircraft Lease Agreement.
FINANCING DOCUMENTS INDEMNITY AMOUNTS (if applicable) has the meaning given in
the Aircraft Lease Agreement.
FINANCING DOCUMENTS TAX AMOUNTS (if applicable) has the meaning given in the
Aircraft Lease Agreement.
FINANCING PARTIES (if applicable) has the meaning given in the Aircraft Lease
Agreement.
FINANCING PARTIES' REPRESENTATIVE (if applicable) has the meaning given in the
Aircraft Lease Agreement.
FINANCING STATEMENTS means Uniform Commercial Code Financing Statements in
respect of the Lease and the Aircraft and Engines leased thereunder prepared in
a form acceptable for filing with the applicable Government Entities in the
state in which Lessee's chief executive office is located (as the term "chief
executive office" is defined in Article 9 of the Uniform Commercial Code as in
effect in such state) and such other jurisdictions as Lessor shall reasonably
require.
FLIGHT HOUR means each hour or part thereof elapsing from the moment the wheels
of the Aircraft leave the ground on take off until the wheels of the Aircraft
next touch the ground.
GAAP means generally accepted accounting principles in the United States.
GE CAPITAL means General Electric Capital Corporation.
GECAS means either or both of GE Capital Aviation Services, Limited and GE
Capital Aviation Services, Inc.
GOVERNMENT ENTITY means:
(a) national government, political subdivision thereof, or local
jurisdiction therein;
(b) any instrumentality, board, commission, court, or agency of any of the
above, however constituted; and
(c) any association, organization, or institution of which any of the
above is a member or to whose jurisdiction any thereof is subject or
in whose activities any of the above is a participant.
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GUARANTEE means, if applicable, a guarantee by the Guarantor in form and
substance reasonably acceptable to Lessor and references to the Guarantee
include reference to any replacement or re-issued guarantee.
GUARANTOR (if applicable) has the meaning given in the Aircraft Lease
Agreement.
HABITUAL BASE means the jurisdiction in which the Aircraft's primary aircraft
operations center is located.
INDEMNITEE has the meaning given in the Aircraft Lease Agreement.
INTEREST RATE has the meaning given in the Aircraft Lease Agreement.
INSURANCE means the insurance in respect of the Aircraft in form and substance
satisfactory to Lessor, and includes any insurance and reinsurance required by
Section 9 and Schedule 7.
LANDING GEAR means the landing gear assembly of the Aircraft excluding any
rotable components.
LANDING GEAR SUPPLEMENTAL RENT has the meaning given in the Aircraft Lease
Agreement.
LAW means and includes (a) any statute, decree, constitution, regulation,
order, judgement or other directive of any Government Entity; (b) any treaty,
pact, compact or other agreement to which any Government Entity is a signatory
or party; (c) any judicial or administrative interpretation or application of
any Law described in (a) or (b) above; and (d) any amendment or revision of
any Law described in (a), (b) or (c) above.
LC AMOUNT has the meaning given in the Aircraft Lease Agreement.
LEASE means the Aircraft Lease Agreement for the Aircraft (of which this CTA
forms a part), any schedules or documents executed pursuant to the Schedules
hereto or pursuant to the Aircraft Lease Agreement, any Lease Supplement to
the Lease (including Lease Supplement No. 1), and any side letters related to
the Lease.
LEASE SUPPLEMENT means any Lease Supplement executed and delivered with
respect to the Lease.
LEASE SUPPLEMENT NO. 1 means a Lease Supplement No. 1 substantially in
the form of Schedule 12.
LEASE TERMINATION CERTIFICATE means a Lease Termination Certificate
substantially in the form of Schedule 11 in respect of the Lease.
LESSEE means the Person named as Lessee in the Aircraft Lease Agreement.
LESSEE AFFILIATE means any Subsidiary or other Affiliate for the time being of
Lessee.
LESSEE CONDITIONS PRECEDENT means the conditions specified in Part B of
Schedule 3.
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LESSEE'S MAINTENANCE PROGRAM means the Maintenance Program specifically
approved by the Air Authority for maintenance of the Aircraft by Lessee, or at
any time that a Permitted Sub-Lease approved by Lessor and meeting the
requirements of Section 8.4(b) is in effect, by the Permitted Sub-Lessee under
such Permitted Sub-Lease.
LESSOR means the Person named as Lessor in the Aircraft Lease Agreement.
LESSOR CONDITIONS PRECEDENT means the conditions specified in Part A of
Schedule 3.
LESSOR LIEN means (i) any Security Interest whatsoever from time to time
created by Lessor or Owner in connection with the financing of the Aircraft,
including the Financing Documents, and (ii) any other Security Interest in the
Aircraft which (a) results from acts of or claims against Lessor or Owner or
any affiliate of Lessor or Owner that do not relate to the transactions
contemplated by the Lease or by any other contract or agreement between Lessee
or any affiliate of Lessee and Lessor or Owner or any affiliate of Lessor or
Owner and (b) is not attributable to Lessee or Lessee's use or possession of
the Aircraft.
LESSOR/OWNER TAX JURISDICTION has the meaning given in the Aircraft Lease
Agreement.
LESSOR TAXES means Taxes for which Lessee is not obligated to indemnify Lessor
and/or Owner and/or a Financing Party as provided in Section 5.7(c).
LETTER OF CREDIT means any letter of credit issued in relation to the Lease
pursuant to Section 5.14 and any replacement or renewal of that letter of
credit.
LOSSES means any and all cost, expense (including any and all reasonable legal
fees and expenses and the fees and expenses of other professional advisers),
claims, proceedings, losses, liabilities, obligations, damages (whether direct,
indirect, special, incidental or consequential), suits, judgements, fees,
penalties or fines (whether criminal or civil) of any kind or nature
whatsoever, including any of the foregoing arising or imposed with or without
any Indemnitee's fault or negligence, whether passive or active or under the
doctrine of strict liability.
MAINTENANCE CONTRIBUTIONS means, as and if applicable, all amounts payable by
Lessor pursuant to Section 7.2.
MAINTENANCE PERFORMER means (i) any of the Persons identified on Schedule 14
hereto (until such time as Lessor delivers written notice to Lessee of the
removal of any such Person from the list of Maintenance Performers), or (ii)
such other mutually acceptable Persons as may be added to Schedule 14 hereto
from time to time (Lessee shall advise Lessor in writing of any request to add
a Person to Schedule 14 and Lessor shall respond in writing).
MAINTENANCE PROGRAM means an Air Authority approved maintenance program for the
Aircraft and encompassing scheduled maintenance, condition-monitored
maintenance, and/or on-condition
1-8
maintenance of Airframe, Engines and Parts, including servicing, testing,
preventive maintenance, repairs, structural inspections, system checks,
overhauls, approved modifications, engineering orders, airworthiness
directives, corrosion control, inspections and treatments.
MAJOR CHECKS means any C-check, multiple C-check or heavier check (including
structural inspections and CPCP) suggested for commercial aircraft of the same
model as the Aircraft by its manufacturer (however denominated) as set out in
the Lessee's Maintenance Program.
MANUFACTURER has the meaning given in the Aircraft Lease Agreement.
MANUFACTURER'S MAINTENANCE PLANNING DOCUMENT means the recommended maintenance
program for the Aircraft issued by the Manufacturer as in effect at the time of
any applicable determination.
MINIMUM AIRFRAME LIFE LIMITED COMPONENT CYCLES has the meaning given in the
Aircraft Lease Agreement.
MINIMUM AIRFRAME LIFE LIMITED COMPONENT FLIGHT HOURS has the meaning given in
the Aircraft Lease Agreement.
MINIMUM APU LIMIT has the meaning given in the Aircraft Lease Agreement.
MINIMUM APU LLP LIMIT has the meaning given in the Aircraft Lease Agreement.
MINIMUM COMPONENT CALENDAR LIFE has the meaning given in the Aircraft Lease
Agreement.
MINIMUM COMPONENT CYCLES has the meaning given in the Aircraft Lease Agreement.
MINIMUM COMPONENT FLIGHT HOURS has the meaning given in the Aircraft Lease
Agreement.
MINIMUM ENGINE CYCLES has the meaning given in the Aircraft Lease Agreement.
MINIMUM ENGINE FLIGHT HOURS has the meaning given in the Aircraft Lease
Agreement.
MINIMUM LANDING GEAR CALENDAR TIME has the meaning given in the Aircraft Lease
Agreement.
MINIMUM LANDING GEAR CYCLES has the meaning given in the Aircraft Lease
Agreement.
MINIMUM LANDING GEAR FLIGHT HOURS has the meaning given in the Aircraft Lease
Agreement.
MINIMUM LIABILITY COVERAGE has the meaning given in the Aircraft Lease
Agreement.
MINIMUM MEASURABLE FUEL REQUIREMENT has the meaning given in the Aircraft Lease
Agreement.
NAMEPLATE INSCRIPTION means the inscription to be included on the Nameplates as
reasonably requested by Lessor from time to time.
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NAMEPLATES means the fireproof plates to be installed on the Aircraft in
accordance with Section 8.6(a).
OTHER AGREEMENTS means any aircraft, engine or spare parts related lease or
financing agreement (including an aircraft, engine or spare parts related loan,
hire purchase, conditional sale, credit sale or security agreement) from time
to time entered into between Lessor (or any Subsidiary or Affiliate of Lessor),
on the one hand, and Lessee (or any Subsidiary or Affiliate of Lessee), on the
other hand.
OWNER has the meaning given in the Aircraft Lease Agreement.
PART means, whether or not installed on the Aircraft:
(a) any component, furnishing or equipment (other than a complete Engine
or engine) incorporated or installed in or attached to or furnished
with the Aircraft on the Delivery Date or thereafter if paid for or
otherwise provided by or on behalf of Lessor; and
(b) any other component, furnishing or equipment (other than a complete
Engine or engine), with effect from the time when title thereto has
passed to Owner pursuant to the Lease;
(c) but excludes any such items title to which has passed to Lessee
pursuant to the Lease.
PART 36 OR FAR PART 36 means Part 36 of the FAR, as amended or modified from
time to time.
PART 121 OR FAR PART 121 means Part 121 of the FAR, as amended or modified from
time to time.
PERMITTED LIEN means:
(a) any lien for Taxes not assessed or, if assessed, not yet due and
payable, or being diligently contested in good faith by appropriate
proceedings;
(b) any lien of a repairer, mechanic, hangar-keeper or other similar lien
arising in the ordinary course of business by operation of Law in
respect of obligations which are not overdue or are being diligently
contested in good faith by appropriate proceedings;
(c) any Lessor Lien; and
(d) rights of others under any sub-lease or other arrangements to the
extent expressly permitted under Section 8.4;
but only if (in the case of both (a) and (b)) (i) adequate reserves have been
provided by Lessee for the payment of such Taxes or obligations; and (ii) such
proceedings, or the continued existence of the lien, do not give rise to any
risk of the sale, forfeiture or other loss of the Aircraft or any interest
therein or of criminal liability on the part of Lessor or Owner.
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PERMITTED SUB-LEASE means any sub-lease of the Aircraft to a Permitted
Sub-Lessee to which Lessor has consented as provided for in Section 8.4(a).
PERMITTED SUB-LESSEE means any sub-lessee of the Aircraft to which Lessor has
consented as provided in Section 8.4(a).
PERSON means any individual person, any form of corporate or business
association, trust, Government Entity, or organization or association of which
any of the above is a member or a participant.
PRE-APPROVED BANK has the meaning given in the Aircraft Lease Agreement.
PRE-DELIVERY PROCEDURE means the procedure leading to Delivery as specified in
Schedule 4.
REDELIVERY LOCATION has the meaning given in the Aircraft Lease Agreement.
REGULATIONS means any Law or regulation, official directive or recommendation,
mandatory requirement, or contractual undertaking, or airworthiness
requirements or limitations, which applies to Lessee or the Aircraft and any
Law or regulation, official directive or recommendation or mandatory
requirement which applies to Lessor, Owner, Financing Parties' Representative
or GECAS.
RENT means the basic monthly "Rent", as defined in Schedule B of the Aircraft
Lease Agreement, and payable pursuant to Section 5.3.
RENT COMMENCEMENT DATE has the meaning given in the Aircraft Lease Agreement.
RENTAL PERIOD means each period ascertained in accordance with Section 5.2.
RENT DATE means the first day of each Rental Period.
REPLACEMENT APU means an "APU" that has duly replaced the APU in accordance
with the requirements of Section 8.11(b).
REPLACEMENT ENGINE means an "Engine" that has duly replaced an "Engine" in
accordance with the requirements of Section 8.11(b).
REQUIRED LC EXPIRY DATE means the date being 91 days after the Expiry Date.
RETURN OCCASION means the date on which the Aircraft is redelivered to Lessor
in accordance with Section 12.
SCHEDULED DELIVERY DATE has the meaning given in the Aircraft Lease Agreement.
SCHEDULED DELIVERY MONTH has the meaning given in the Aircraft Lease Agreement.
SCHEDULED DELIVERY WEEK has the meaning given in the Aircraft Lease Agreement.
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SCHEDULED EXPIRY DATE has the meaning given in the Aircraft Lease Agreement.
SECURITY INTEREST means any mortgage, chattel mortgage, security interest,
charge, pledge, lien, conditional sale agreement, title retention agreement,
equipment trust agreement, encumbrance, assignment, hypothecation, right of
detention, right of set-off or any other agreement or arrangement having the
effect of conferring security.
STATE OF DESIGN has the meaning specified in the Aircraft Lease Agreement.
STATE OF INCORPORATION means the United States and the state of organization of
the applicable Person as identified in the heading of the Aircraft Lease
Agreement.
STATE OF REGISTRY means the United States.
SUBSIDIARY means:
(a) in relation to any reference to financial statements, any Person whose
financial statements are consolidated with the accounts of Lessee in
accordance with GAAP; and
(b) for any other purpose, an entity from time to time of which another
has direct or indirect control or owns directly or indirectly more
than 50 percent of the voting share capital or similar equity
interests.
SUPPLEMENTAL RENT means, as and if applicable, all amounts payable under the
Lease in respect of each of Airframe Supplemental Rent, Engine Supplemental
Rent, Engine LLP Supplemental Rent, APU Supplemental Rent and Landing Gear
Supplemental Rent.
TAXES means any and all present and future taxes, duties, withholdings, levies,
assessments, imposts, fees and other governmental charges of all kinds
(including any value added or similar tax and any stamp, documentary, license,
registration or similar fees or tax) imposed by a Government Entity, together
with any penalties, fines, surcharges and interest thereon and any additions
thereto.
TAX INDEMNITEE has the meaning given in the Aircraft Lease Agreement.
TECHNICAL REPORT means a monthly report of the Flight Hours, Cycles, Engine
Flight Hours and Engine Cycles operated by the Airframe and Engines in respect
of each calendar month substantially in the form attached as Schedule 15.
TERM means the period commencing on the Delivery Date and ending on the Expiry
Date.
UCC means the Uniform Commercial Code as in effect in the State of New York.
UNFORESEEN EVENT means:
1-12
(a) civil disturbance or act of any Government Entity;
(b) natural disaster or any other act of God;
(c) Law of, or any allocation or other action by, a Government Entity or
any unexpected shortage of labor, materials or facilities affecting
the Aircraft;
(d) any damage or Defect;
(e) labor disputes;
(f) breach of contract by any Person (other than Lessor), or other failure
to deliver or redeliver the Aircraft by any Person (whether or not a
breach) with possession or control of the Aircraft (other than by
Lessor, if it has possession and control of the Aircraft), including
any failure to deliver or delay in delivery by any prior lessee, any
seller of the Aircraft or any Person performing modifications or
maintenance to the Aircraft and any breach by any prior lessee, seller
or modification or maintenance performer or failure to cooperate by
any prior lessee, seller or modification or maintenance performer, or
any "excusable" or "inexcusable" delay under any previous lease,
purchase or modification or maintenance agreement for the Aircraft, or
any purchase or modification or maintenance agreement for the Aircraft
terminating prior to Delivery (including due to Lessor or an Affiliate
of Lessor voluntarily terminating such agreement);
(g) delays in obtaining the Aircraft or any equipment or services for the
Aircraft;
(h) any delay due to Air Authority certifications; or
(i) any other cause beyond the control of Lessor or not occasioned by
Lessor's gross negligence or willful misconduct.
UNITED STATES means the United States of America.
U.S.C. means the United States Code.
1-13
SCHEDULE 2
REPRESENTATIONS AND WARRANTIES
1.1 LESSEE'S REPRESENTATIONS AND WARRANTIES
Lessee's representations and warranties to Lessor as of the date of execution
of the Lease and the Delivery Date are as follows:
(a) STATUS: It is duly organized, validly existing and in good
standing in its State of Incorporation.
(b) NON-CONFLICT: Execution, delivery and performance of the Lease do
not contravene or breach any Regulation applicable to Lessee.
(c) POWER AND AUTHORITY: It has all corporate and other power and
authority to execute, deliver and perform the Lease, and the
Lease has been duly authorized, executed and delivered by Lessee.
(d) LEGAL VALIDITY: The Lease is its legal, valid and binding
obligation, enforceable against Lessee in accordance with its
terms.
(e) NO EVENT OF DEFAULT: No Event of Default has occurred and is
continuing or would occur because of Delivery.
(f) LITIGATION: It is not involved in any litigation or other dispute
which could materially and adversely affect its financial
condition or its ability to perform its obligations under the
Lease.
(g) FINANCIAL INFORMATION: Its audited financial statements most
recently delivered to Lessor:
(i) have been prepared in accordance with GAAP; and
(ii) are true and correct and present fairly the financial
condition and results of operations of Lessee as at the date
thereof and for the period then ending.
(h) FULL DISCLOSURE: Neither the audited financial statements
referred to in paragraph (g) nor any other financial, operational
or credit related information provided to Lessor by Lessee for
the purposes of the Lease contains as of the date thereof any
untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein
not misleading in the light of the circumstances under which they
were made.
2-1
(i) LOCATION: Lessee's chief executive office (as that term is
defined in Article 9 of the UCC) is located at the address set
forth in the heading of the Aircraft Lease Agreement; and the
records of the Lessee concerning the Aircraft are maintained at
such chief executive office or at the Habitual Base of the
Aircraft.
(j) CERTIFICATED AIR CARRIER: Lessee is a Certificated Air Carrier
and Lessor, as lessor of the Aircraft to Lessee, is entitled to
the benefits of Section 1110 of Title 11 of the U.S.C. with
respect to the Aircraft.
(k) CITIZEN OF THE UNITED STATES: Lessee is a "citizen of the United
States" as defined in Section 40102 of Title 49 of the U.S.C.
(1) ERISA: Lessee is not engaged in any transaction in connection
with which it could be subjected to either a civil penalty
assessed pursuant to Section 502 of ERISA or any tax imposed by
Section 4975 of the Internal Revenue Code; no material liability
to the Pension Benefit Guaranty Corporation has been or is
expected by Lessee to be incurred with respect to any employee
pension benefit plan (as defined in Section 3 of ERISA)
maintained by Lessee or by any trade or business (whether or not
incorporated) which together with Lessee would be treated as a
single employer under Section 4001 of ERISA and Section 414 of
the Internal Revenue Code; there has been no reportable event (as
defined in Section 4043(b) of ERISA) with respect to any such
employee pension benefit plan; no notice of intent to terminate
any such employee pension benefit plan has been filed or is
expected to be filed, nor has any such employee pension benefit
been terminated; no circumstance exists or is anticipated that
constitutes or would constitute grounds under Section 4042 of
ERISA for the Pension Benefit Guaranty Corporation to institute
proceedings to terminate, or to appoint a trustee to manage the
administration of, such an employee pension benefit plan; and no
accumulated funding deficiency (as defined in Section 302 of
ERISA or Section 412 of the Internal Revenue Code), whether or
not waived, exists with respect to any such employee pension
benefit plan.
(m) MATERIAL ADVERSE CHANGE: there has been no material adverse
change in the financial condition or operations of Lessee and
Lessee Affiliates or in the ability of Lessee to comply with its
obligations under the Lease since the date of the financial
statements most recently provided to Lessor on or prior to the
date of the Aircraft Lease Agreement.
1.2 LESSOR'S REPRESENTATIONS AND WARRANTIES
Lessor's representations and warranties to Lessee as of the date of execution
of the Lease and the Delivery Date are as follows:
(a) STATUS: It is duly organized, validly existing and in good
standing in its State of Incorporation.
2-2
(b) NON-CONFLICT: Execution, delivery and performance of the Lease do
not contravene or breach any Regulation applicable to Lessor.
(c) POWER AND AUTHORITY: It has all corporate and other power and
authority to execute, deliver and perform the Lease, and the
Lease has been duly authorized, executed and delivered by Lessor.
(d) LEGAL VALIDITY: The Lease is its legal, valid and binding
obligation, enforceable against Lessor in accordance with its
terms.
(e) CITIZEN OF THE UNITED STATES: Lessor is a "citizen of the United
States" as defined in Section 40102 of Title 49 of the U.S.C. and
the FAR.
2-3
SCHEDULE 3
CONDITIONS PRECEDENT
PART A - LESSOR CONDITIONS PRECEDENT
The conditions precedent to Lessor's obligation to deliver and to commence the
leasing of the Aircraft are as follows. All documents delivered to Lessor
pursuant to this Schedule 3 will be in English:
1.1 PRELIMINARY CONDITIONS
Lessor will receive from Lessee, not later than two Business Days prior to the
Scheduled Delivery Date, each of the following, satisfactory in form and
substance to Lessor:
(a) OPINION(S): forms of the opinion(s) substantially in the form of
Schedule 8 that will be issued on the Delivery Date by legal
counsel(s) reasonably acceptable to Lessor with respect to the
laws of the State of New York the state of the location of
Lessee's chief executive offices and the general corporate laws
of the State of Incorporation;
(b) APPROVALS: evidence of the issue of each approval, license and
consent, if any, which is required in relation to, or in
connection with the performance by Lessee of any of its
obligations under the Lease;
(c) IMPORT: evidence that any required license, and all customs
formalities, relating to the import of the Aircraft into the
Habitual Base have been obtained or complied with, and that the
import of the Aircraft into the Habitual Base is exempt from
Taxes;
(d) PROCESS AGENT: a letter from the process agent appointed by
Lessee in the Lease accepting that appointment;
(e) LICENSES: copies of Lessee's air transport license, air carrier
operating certificate, air operator's certificates, including
authority to operate the Aircraft under FAR Part 121, and a
Certificate of Public Convenience and Necessity issued under
Section 40102 of Title 49 of U.S.C.;
(f) UCC: Financing Statements with respect to the Lease and the
Aircraft in a form reasonably acceptable to Lessor shall have
been executed and delivered by Lessee to Lessor and duly filed
in each jurisdiction reasonably requested by Lessor;
(g) LETTER OF CREDIT (if applicable): the form of the Letter of
Credit;
(h) GENERAL: such other documents as Lessor may reasonably request.
3-1
1.2 FINAL CONDITIONS
(a) Final Documents: Lessor shall receive on or before the Delivery
Date each of the following:
(i) CERTIFICATE OF TECHNICAL ACCEPTANCE AND LEASE SUPPLEMENT NO.
1: each of the Certificate of Technical Acceptance and Lease
Supplement No. 1, dated and fully completed, and executed by
Lessee, and, in the case of Lease Supplement No. 1, filed
for recording at the FAA (together with the CTA);
(ii) OPINIONS: a signed original (or facsimile transmission
thereof) of each of the opinions referred to in Section
1.1(a) of this Schedule, dated the Delivery Date;
(iii) PAYMENTS: all sums due to Lessor under the Lease on or
before the Delivery Date, including the first payment of
Rent and, if applicable, the balance of the Deposit;
(iv) INSURANCE: certificates of insurance, an opinion and
undertaking from Lessee's insurance broker and other
evidence reasonably satisfactory to Lessor that Lessee is
taking the required steps to ensure due compliance with the
provisions of the Agreement as to Insurance with effect on
and after the Delivery Date;
(v) FINANCIAL INFORMATION: the latest Financial Information of
Lessee requested by Lessor;
(vi) LETTER OF CREDIT (if applicable): the Letter of Credit;
(vii) GUARANTEE (if applicable): the Guarantee, duly executed and
delivered by the Guarantor, and an opinion of legal counsel
acceptable to Lessor in respect of the Guarantee in form and
substance acceptable to Lessor and its legal counsel;
(viii) LESSEE'S MAINTENANCE PROGRAM: such information and
documents relating to the Lessee's Maintenance Program as
Lessor may reasonably require;
(ix) FILINGS: evidence that on the Delivery Date all filings,
registrations, recordings and other actions have been or
will be taken which are necessary or advisable to ensure the
validity, effectiveness and enforceability of the Lease and
to protect the interests of Owner and, if applicable, the
Financing Parties in the Aircraft, any Engine or any Part
and in the Lease;
(x) FAA OPINION: evidence that there will be issued an
opinion of _______ or other counsel reasonably acceptable
to Lessor who are recognized specialists with regard to
FAA registration matters in a form reasonably acceptable
to Lessor as
3-2
to the due filing for recordation of the Lease and, if
applicable, the Financing Documents, (the costs for which
shall be paid by Lessee);
(xi) CERTIFICATE OF LEASE TERMINATION: a certificate of lease
termination executed by a duly authorized officer of Lessee
substantially in the form of Schedule 11 acknowledging that
the Lease is no longer in effect with respect to the
Aircraft and Engines, which certificate Lessor will hold in
escrow to be filed at the FAA upon the expiration or other
termination of the Lease;
(xii) ACKNOWLEDGEMENT AND AGREEMENT RE ASSIGNMENT (if
applicable): an acknowledgement of and certain agreements
with respect to the assignment by Lessor of this Lease to
Owner and Financing Parties' Representative in the form
previously provided to Lessee or as Owner or Financing
Parties' Representative may otherwise reasonably request;
and
(xiii) GENERAL: such other documents as Lessor may reasonably
request;
(c) REPRESENTATIONS/WARRANTIES: the representations and warranties of
Lessee in Schedule 2 shall be true and correct in all material
respects, and would be true and correct in all material respects
if repeated on Delivery; and
(d) NO DEFAULT: no Default shall have occurred and be continuing on
Delivery or could reasonably be expected to result from the
leasing of the Aircraft to Lessee under the Lease.
PART B - LESSEE CONDITIONS PRECEDENT
The conditions precedent to Lessee's obligation to accept and to commence the
leasing of the Aircraft are as follows. All documents delivered to Lessee
pursuant to this Schedule 3 will be in English.
(a) FINAL DOCUMENTS: Lessee shall receive on or before the Delivery
Date for the Aircraft each of the following:
(i) LEASE SUPPLEMENT NO. 1: Lease Supplement No. 1, dated and
executed by Lessor and filed for recording at the FAA
(together with the CTA); and
(ii) ACKNOWLEDGEMENT RE QUIET ENJOYMENT: if Lessee is required to
deliver an acknowledgement of or agreement with respect to
the assignment by Lessor of the Lease to Owner or Financing
Parties' Representative, an agreement by each such Person
(Owner, Financing Parties' Representative or both, as the
case may be) as to itself to the effect set forth in Section
7.1;
3-3
(iii) REPRESENTATIONS/WARRANTIES: the representations and
warranties of Lessor in Schedule 2 shall be true and correct
in all material respects, and would be true and correct in
all material respects if repeated on Delivery; and
(iv) DELIVERY CONDITION REQUIREMENTS: tender by Lessor of
delivery of the Aircraft in compliance with the Delivery
Condition Requirements.
3-4
SCHEDULE 4
PRE-DELIVERY PROCEDURES AND DELIVERY CONDITION
REQUIREMENTS - PART 1 (NEW AIRCRAFT)
1. LICENSES
(a) It is the responsibility of Lessee to obtain all licenses,
permits or approvals necessary to export or transport the
Aircraft from the Delivery Location.
(b) Lessor will provide Lessee with any required data and information
for the purposes of obtaining any such licenses, permits or
approvals.
2. INSPECTION
Except as otherwise provided in the Aircraft Lease Agreement:
(a) Subject to any applicable purchase agreement, Lessee may inspect
the Aircraft (including such rights as Lessor has to be present
and inspect, on an ongoing basis, the manufacture of the Aircraft
and including a demonstration flight at no expense to Lessee with
up to two (2) representatives of Lessee on the Aircraft as
observers) to ensure that the Aircraft fulfils the Delivery
Condition Requirements.
(b) If Lessee's inspection of the Aircraft shows that the Aircraft
does not fulfil the Delivery Condition Requirements, Lessor will
correct any defects and make the Aircraft available for
re-inspection by Lessee provided that, in Lessor's reasonable
opinion, it is not impracticable or prohibitively expensive to
correct the defect.
(c) If Lessor notifies Lessee that it does not intend to correct the
defect, either party may terminate the Lease, and upon such
termination neither party shall have any further liability to any
party under this Lease, except that Lessor shall promptly return
to Lessee the Deposit and/or the Letter of Credit, if any, to
Lessor.
3. INDEMNITY
Lessee is responsible for and will indemnify each Indeninitee against
all Losses arising from death or injury to any observer or any
employee of Lessee in connection with the inspection of the Aircraft.
4-1
SCHEDULE 4
PRE-DELIVERY PROCEDURES AND DELIVERY CONDITION
REQUIREMENTS - PART 2 (USED AIRCRAFT)
1. LICENSES
(a) It is the responsibility of Lessee to obtain all licenses,
permits or approvals necessary to export or transport the
Aircraft from the Delivery Location.
(b) Lessor will provide Lessee with any required data and information
for the purposes of obtaining any such licenses, permits or
approvals.
2. INSPECTION
Except as otherwise provided in the Aircraft Lease Agreement:
(a) Subject to any applicable purchase agreement or prior lease,
Lessee may inspect the Aircraft (including a demonstration flight
at no expense to Lessee with up to two (2) representatives of
Lessee on the Aircraft as observers) to ensure that the Aircraft
fulfils the Delivery Condition Requirements.
(b) If Lessee's inspection of the Aircraft shows that the Aircraft
does not fulfil the Delivery Condition Requirements, Lessor will
correct any defects and make the Aircraft available for
re-inspection by Lessee provided that, in Lessor's reasonable
opinion, it is not impracticable or prohibitively expensive to
correct the defect.
(c) If Lessor notifies Lessee that it does not intend to correct the
defect, either party may terminate the Lease, and upon such
termination neither party shall have any further liability to any
party under this Lease, except that Lessor shall promptly return
to Lessee the Deposit and/or the Letter of Credit, if any, to
Lessor.
3. INDEMNITY
Lessee is responsible for and will indemnify each Indemnitee against
all Losses arising from death or injury to any observer or any
employee of Lessee in connection with the inspection of the Aircraft.
4-2
SCHEDULE 5
CERTIFICATE OF TECHNICAL ACCEPTANCE - PART 1 (NEW AIRCRAFT)
This Certificate of Technical Acceptance is delivered, on the date set out
below by _______________ ("Lessee") to _________________ ("Lessor") pursuant
to the Aircraft Lease Agreement dated _______________ between Lessor and
Lessee (the "Lease"). The capitalized terms used in this Certificate shall
have the meaning given to such terms in the Lease.
DETAILS OF ACCEPTANCE
Lessee hereby confirms to Lessor that Lessee has at [ ] o'clock on this
_______________ day of _______________, at _______________, technically
accepted the following, in accordance with the provisions of the Lease:
___________ Aircraft, Manufacturer's Serial Number ___________;
___________ Engines:
Engine Number Manufacturer's Serial Number
[To be completed at Delivery]
(each of which has 750 or more rated take off horsepower or the equivalent of
such horsepower)
Fuel Status: Kilos/lbs ___________; and
Loose Equipment Check List: in accordance with the list signed by Lessor and
Lessee and attached hereto.
Aircraft Documents and Records: in accordance with the list signed by Lessor
and Lessee and attached hereto.
LOPA drawing attached.
HOURS AND CYCLES DATA (AS OF DELIVERY DATE)
Airframe:
Time Since New: --------------- Cycles Since New: ---------
Landing Gear (Main and Nose)
Time Since New: [, Center] Cycles Since New: ----------
Engines
Position: Time Since New: ------------
Cycles Since New: ----------
-----------------------------------
Auxiliary Power Unit:
Number of Flight Hours/APU Hours
(as applicable) since New: -----------------
5-1
ACCEPTANCE:
Lessee hereby confirms that the Aircraft, Engines, Parts and Aircraft
Documents and Records are technically acceptable to it, satisfy all of the
Delivery Condition Requirements and are in the condition for delivery and
acceptance as required under the Lease.
IN WITNESS WHEREOF, Lessee and Lessor have, by their duly authorized
representative, executed this Certificate of Technical Acceptance on the date
in paragraph 1 above.
LESSEE:______________________
By:__________________________
Title:_______________________
LESSOR:______________________
By:__________________________
Title:_______________________
5-2
SCHEDULE 5
CERTIFICATE OF TECHNICAL ACCEPTANCE - PART 2 (USED AIRCRAFT)
This Certificate of Technical Acceptance is delivered, on the date set out
below by _________________ ("Lessee") to ______________ ("Lessor") pursuant
to the Aircraft Lease Agreement dated _____________________ between Lessor
and Lessee (the "Lease"). The capitalized terms used in this Certificate
shall have the meaning given to such terms in the Lease.
DETAILS OF ACCEPTANCE
Lessee hereby confirms to Lessor that Lessee has at [ ] o'clock on this _____
day of ___________, at ________________, technically accepted the following,
in accordance with the provisions of the Lease:
_______________ Aircraft, Manufacturer's Serial Number _________;
_______________ Engines:
Engine Number _____________ Manufacturer's Serial Number ____________________
[to be completed at Delivery]
(each of which has 750 or more rated take off horsepower or the equivalent of
such horsepower)
Fuel Status: Kilos/lbs ___________; and
Loose Equipment Check List: in accordance with the list signed by Lessor and
Lessee and attached hereto.
Aircraft Documents and Records: in accordance with the list signed by Lessor
and Lessee and attached hereto.
HOURS AND CYCLES DATA (as of Delivery Date)
Airframe:
Number of Hours since last Airframe Structural Check: ________ hours
"C" Check (or Equivalent)
Interval:_____________________
Time Since:___________________
Landing Gear Overhaul:
Number of Cycles Since Last Overhaul:
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[___] Gear ___________________ cycles
Interval:_____________________
Engines:
Number of Hours Since Last Engine Refurbishment:
S/N ________: ________ hours
Hot Section Inspection:
Interval:_____________________
Time Since (S/N________):______________
Time Remaining to First Restriction:
Engine S/N:
Hours:________________________ Restriction:______________
Cycles:_______________________ Restriction:______________
Average Cycles in Life Limited Parts (see attached Schedule):______________
Auxiliary Power Unit:
Number of APU Hours since Last Heavy Shop Visit:
______________ hours Date accomplished ______________
Hot Section Inspection:
Interval:_____________________
Time Since:___________________
Interior Equipment:
LOPA - attached ___________________________
Emergency drawing - attached ______________
Galley Equipment __________________________
5-4
ACCEPTANCE:
Lessee hereby confirms that the Aircraft, Engines, Parts and Aircraft
Documents and Records are technically acceptable to it, satisfy all of the
Delivery Condition Requirements and are in the condition for delivery and
acceptance as required under the Lease.
IN WITNESS WHEREOF, Lessee and Lessor have, by their duly authorized
representative, executed this Certificate of Technical Acceptance on the date
in paragraph 1 above.
LESSEE:
By:__________________________
Title:_______________________
LESSOR:
By:__________________________
Title:_______________________
By:__________________________
Title:_______________________
5-5
SCHEDULE 6
[NOT APPLICABLE]
6-1
SCHEDULE 7
INSURANCE REQUIREMENTS
1.1 TYPES OF INSURANCE
The Insurances required to be maintained are as follows:
(a) HULL ALL RISKS of loss or damage while flying, taxiing and on the
ground with respect to the Aircraft on an agreed value basis for
not less than the Agreed Value and not more than 110% of the
Agreed Value and with a deductible not exceeding the Deductible
Amount;
(b) HULL WAR AND ALLIED PERILS, being such risks excluded from the
Hull All Risks Policy, to the fullest extent available from the
leading international insurance markets for the Agreed Value;
provided that, when the Aircraft is being operated in or over the
United States or Canada, coverage may be limited to such coverage
as is usual and customary for comparable airlines, operating
similar equipment in similar circumstances, namely subject to the
North American buy-back;
(c) ALL RISKS (including War and Allied Risk except when on the
ground or in transit other than by air) property insurance on all
Engines and Parts when not installed on the Aircraft for like
kind and quality value and including engine test and running
risks; and
(d) COMPREHENSIVE AIRCRAFT THIRD PARTY, PROPERTY DAMAGE, PASSENGER,
BAGGAGE, CARGO AND MAIL AND AIRLINE GENERAL THIRD PARTY
(INCLUDING PRODUCTS) LEGAL LIABILITY for a combined single limit
(bodily injury/property damage) of an amount not less than the
Minimum Liability Coverage for the time being for any one
occurrence (but in respect of products and personal injury
liability, this limit may be an aggregate limit for any and all
losses occurring during the currency of the policy). War and
Allied Risks are also to be covered under the policy in line with
prudent market practice for comparable airlines, operating
similar equipment in similar circumstances.
1.2 TERMS OF HULL AND SPARES INSURANCE
All required hull and spares insurance, so far as it relates to the Aircraft,
will:
(a) LOSS PAYEE: name Lessor, as loss payee (without imposing on
Lessor any obligation imposed on the insured, including the
liability to pay any calls, commissions or premiums);
(b) PAYMENT OF LOSSES: Losses will be payable in Dollars to Lessor
for all amounts up to the Agreed Value and to Lessee for any
excess above the Agreed Value (which excess shall not exceed 10%
of the Agreed Value), except where the insurance payment does not
7-1
exceed the Damage Notification Threshold, and no Default is in
existence, in which case the loss will be settled with and paid
to Lessee;
(c) 50/50 PROVISION: if separate Hull "all risks" and "war risks"
insurances are arranged, include a 50/50 provision in accordance
with market practice (AVS. 103 is the current London market
language); and
(d) NO OPTION TO REPLACE: confirm that the insurers are not entitled
to replace the Aircraft in the event of an insured Event of Loss
and are not entitled to replace any Engine in the event of an
Engine Event of Loss with respect to such Engine.
1.3 TERMS OF LIABILITY INSURANCE
All required liability insurances will:
(a) ADDITIONAL INSUREDS: include each Indemnitee, as additional
insureds for its respective rights and interests, warranted, each
as to itself only, no operational interest (without imposing on
any such Person any obligation imposed on the insured, including
the liability to pay any calls, commissions or premiums);
(b) SEVERABILITY: include a severability of interests clause which
provides that the insurance, except for the limit of liability,
will operate to give each insured the same protection as if there
were a separate policy issued to each insured; and
(c) PRIMARY POLICY: contain a provision confirming that the policy is
primary without right of contribution and the liability of the
insurers will not be affected by any other insurance of which
Lessor, any Indemnitee or Lessee has the benefit so as to reduce
the amount payable to the additional insureds under such
policies.
1.4 TERMS OF ALL INSURANCES
All Insurances will:
(a) INDUSTRY PRACTICE: be in accordance with standard industry
practice for airlines operating similar aircraft in similar
circumstances;
(b) DOLLARS: provide cover denominated in Dollars;
(c) WORLDWIDE: operate on a worldwide basis subject to such
limitations and exclusions as are in line with industry practice
obtained by prudent United States-based international air
carriers;
(d) BREACH OF WARRANTY: provide that, in relation to the interests of
each of the additional assureds, the Insurances will not be
invalidated by any act or omission by Lessee, or any other Person
other than the respective additional assureds seeking protection
and shall
7-2
insure the interests of each of the additional assureds
regardless of any breach or violation by Lessee, or any other
Person other than the respective additional assured seeking
protection of any warranty, declaration or condition, contained
in such Insurances;
(e) SUBROGATION: provide that the insurers will hold harmless and
waive any rights of recourse or subrogation against the
additional insureds to the extent Lessee has waived its rights
against the additional insureds in the Lease;
(f) PREMIUMS: provide that the additional insureds will have no
obligation or responsibility for the payment of any premiums due
(but reserve the right to pay the same should any of them elect
so to do) and that the insurers will not exercise any right of
set-off, counter claim or other deduction, by attachment or
otherwise, in respect of any premium due against the respective
interests of the additional insureds other than outstanding
premiums relating to the Aircraft, any Engine or Part the subject
of the relevant claim;
(g) CANCELLATION/CHANGE: provide that the Insurances will continue
unaltered for the benefit of the additional insureds for at least
30 days after written notice by registered mail or telex of any
cancellation, change, event of non-payment of premium or
installment thereof has been sent by insurer(s) to Lessor, or
where an insurance broker is appointed to the insurance broker
who shall promptly send on such notice to Lessor, except in the
case of war risks for which 7 days (or such lesser period as is
or may be customarily available in respect of war risks or allied
perils) will be given, or in the case of war between the 5 great
powers or nuclear peril for which termination is automatic; and
(h) [NOT APPLICABLE)
(i) [INTENTIONALLY OMITTED.]
(j) INDEMNITIES: accept and insure the indemnity provisions of the
Lease to the extent of the risks covered by the policies.
1.5 DEDUCTIBLES
Lessee shall be responsible for any and all deductibles under the Insurances.
1.6 APPLICATION OF INSURANCE PROCEEDS
The Insurances will be endorsed to provide for payment of proceeds as follows:
(a) EVENT OF LOSS: all insurance payments up to the Agreed Value
received as the result of an Event of Loss occurring during the
Term will be paid to Lessor as loss payee and any amount in
excess of the Agreed Value (which excess shall not exceed 10% of
the Agreed Value) shall be paid to Lessee;
7-3
(b) EXCEEDING DAMAGE NOTIFICATION THRESHOLD: all insurance proceeds
of any damage or loss to the Aircraft, any Engine or any Part
occurring during the Term not constituting an Event of Loss and
in excess of the Damage Notification Threshold will be paid to
the appropriate repair facility, and applied in payment (or paid
to Lessee and/or Lessor as reimbursement) for repairs or
replacement property upon Lessor being satisfied that the repairs
or replacement have been effected in accordance with the Lease.
(c) BELOW DAMAGE NOTIFICATION THRESHOLD: insurance proceeds in
amounts below the Damage Notification Threshold shall be paid by
the insurer directly to Lessee;
(d) LIABILITY PROCEEDS: all insurance proceeds in respect of third
party liability will be paid by the insurers to the relevant
third party in satisfaction of the relevant liability or to
Owner, Lessor, Financing Partners' Representative or Lessee, as
the case may be, in reimbursement of any payment so made;
(e) DEFAULT: notwithstanding any of the foregoing paragraphs, if at
the time of the payment of any such insurance proceeds a Default
has occurred and is continuing, all such proceeds will be paid to
Lessor, Owner or Financing Parties' Representative, as the case
may be, or retained to be applied toward payment of any amounts
which may be or become payable by Lessee in such order as Lessor
or Owner, as the case may be, may elect until such time as no
Default is continuing and then applied as described above; and to
the extent that insurance proceeds are paid to Lessee, Lessee
agrees to hold such proceeds in trust and comply with the
foregoing provisions and apply or pay over such proceeds as so
required.
1.7 UNITED STATES GOVERNMENTAL INDEMNITY
Notwithstanding any of the foregoing paragraphs, in the event of a Permitted
Sub-Lease to, or a requisition of use by, the United States or any
Governmental Entity whose obligations have the full faith and credit of the
federal Government of the United States, Lessor agrees to accept in lieu of
insurance required hereunder indemnification or insurance from the United
States or such a Governmental Entity in a form reasonably acceptable to
Lessor and Owner and against such risks and in such amounts and on such terms
such that when added to the Insurance maintained by Lessee, Lessee is in full
compliance with the requirements of Section 9 and this Schedule.
7-4
SCHEDULE 8
FORM OF LESSEE'S AND GUARANTOR'S LEGAL OPINION
[Lessor]
[Owner]
[Financing Parties' Representative]
Ladies and Gentlemen:
1. You have asked us to render an opinion in connection with the transaction
governed by or subject to, inter alia, the following documents.
(a) the Lease as defined below;
(b) the [Articles/Certificate of Incorporation and By-laws]* of Lessee;
and
[*Counsel should amend this reference as necessary to describe the
actual constitutional documents of Lessee].
(c) all other documents, approvals and consents of whatever nature and
wherever kept which it was, in our judgement and to our knowledge,
necessary or appropriate to examine to enable us to give the opinion
expressed below.
Words and expressions used and not otherwise defined herein will
bear the same meanings as defined in an Aircraft Lease Agreement
dated __, _________ between ______________ ("Lessor") and
______________ ("Lessee") in respect of one ___________________
aircraft with manufacturer's serial number __________ together with
the _______ installed _______ engines (the "Aircraft"). As used
herein the term "Lease" means and includes the Aircraft Lease
Agreement which incorporates the Common Terms Agreement (as defined
therein) and Lease Supplement No.____. Also, for the purposes of
this opinion, the term "Lease" includes the Acknowledgment and
Agreement dated as of the date hereof executed by Lessee in favor
of Owner and Financing Parties' Representative.
2. Having considered the documents listed in paragraph 1 above, and having
regard to the relevant laws of __________ we are pleased to advise that in
our opinion: -
(a) Lessee is a company duly incorporated and in good standing under the
laws of _______________, and is qualified to do business as a foreign
corporation in each jurisdiction where failure to so qualify would
have a materially adverse effect on Lessee's business or its ability
to perform its obligations under the Lease;
(b) Lessee has the corporate power to enter into and perform, and has
taken all necessary corporate action to authorize the entry into, and
the execution, delivery and performance by it of, the Lease and the
transactions contemplated by the Lease;
8-1
(c) the entry into and performance by Lessee of, and the transactions
contemplated by, the Lease do not and will not (x) conflict with any
laws binding on Lessee, (y) conflict with the [Articles/Certificate of
Incorporation or By-laws] of Lessee; or (z) conflict with or result in
default under any agreement or instrument which is binding upon Lessee
or any of its assets or result in the creation of any Security
Interest on any of its assets;
(d) no authorizations, consents, licenses, approvals and registrations
(other than those which have been obtained and of which copies are
attached hereto) are necessary or desirable to be obtained from any
governmental or other regulatory authorities in the United States or
any other jurisdiction having jurisdiction over Lessee, its operations
or its properties to enable Lessee (x) to enter into and perform the
transactions contemplated by the Lease, (y) to operate the Aircraft in
the United States and on international flights for the transport of
fare-paying passengers, or (z) to make the payments provided for in
the Lease;
(e) except for the filing and recordation of [a xxxx of sale in favor of
the Owner] the Financing Documents and the Lease with the FAA (which
filing has been duly made on or before this date) and the filing
of Financing Statements in________________, it is not necessary or
desirable, to ensure the priority, validity and enforceability of
all the obligations of Lessee under the Lease, as against Lessee
and all third parties, or to perfect the interests of Lessor,
Owner or Financing Parties' Representative in and to the Aircraft
or the Lease, that the Lease be filed, registered, recorded or
notarized in any public office or elsewhere or that any other
instrument be signed, delivered, filed, registered or recorded,
that any tax or duty be paid or that any other action whatsoever
be taken;
(f) the Lease has been duly executed and delivered on
behalf of Lessee and constitutes the legal, valid and binding
obligation of Lessee, enforceable against Lessee in accordance
with its terms;
(g) [NOT APPLICABLE];
(h) there is no applicable usury or interest limitation law in
___________ applicable to payments in accordance with the Lease;
(i) there are no registration, stamp or other taxes or duties of any kind
payable in ___________________ in connection with the execution,
performance or enforcement by legal proceedings of the Lease or the
Guaranty;
(j) the choice of New York law to govern the Lease will be upheld as a
valid choice of law in any action in the courts of _________________;
(k) the consent to the jurisdiction by Lessee contained in the Lease is
valid and binding on Lessee;
8-2
(l) Lessee is a Certificated Air Carrier;
(m) Lessee is a "citizen of the United States" as defined in 49 U.S.C.
Section 40102(a)(15);
(n) Lessee's "chief executive office" (as referenced in the Uniform
Commercial Code adopted in the State of _______________________)
is __________________________;
(o) Lessor will not violate any law or regulation of the States of ______
or New York or any federal laws or regulations of the United States
of America and Lessor will not become liable to income tax in the
State of _______________ solely by reason of Lessor entering into the
Lease with Lessee or performing its obligations thereunder or
enforcement of its rights thereunder;
(p) It is not necessary for Lessor to establish a place of business or be
licensed or qualified to do business in the State of _____________ or
New York in order for Lessor to enforce any provisions of the Lease;
and
(q) Lessor is entitled to the benefits of Section 1110 of Title 11 of the
U.S.C. with respect to the Aircraft and the Lease.
Very truly yours,
[If there is a Guarantor/Guarantee the opinion must also include paragraphs (a),
(b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (o) and (p) revised to be
applicable to the Guarantor/Guarantee]
8-3
SCHEDULE 9
EVENTS OF DEFAULT
Each of the following events or conditions constitutes an Event of Default:
(a) NON-PAYMENT: Lessee fails to make any payment of Rent, Supplemental
Rent or any other amount payable under the Lease on the due date and
such failure continues for three (3) Business Days or more; or
(b) INSURANCE: Lessee fails to comply with any provision of Section 9
(other than the requirement to provide Lessor with evidence of renewal
of any policy on or before the renewal date where the policy has
actually been renewed on or prior to such date) or Schedule 7, or any
insurance required to be maintained under the Lease is cancelled or
terminated, or a notice of cancellation is given in respect of any
such insurance; or
(c) BREACH: (i) Lessee fails to provide Lessor with evidence of renewal of
any insurance policy on or before the renewal date for that policy
where the policy has actually been renewed on or prior to such date
and such failure continues for 24 hours after notice from Lessor to
Lessee of such failure to comply; or (ii) Lessee fails to comply with
any other provision of the Lease not referenced in this Schedule 9
and, if such failure is in the opinion of Lessor capable of remedy,
such failure continues for 30 days after notice from Lessor to Lessee;
or
(d) REPRESENTATION: any representation or warranty made (or deemed to be
repeated) by Lessee in or pursuant to the Lease or in any document
executed by Lessee in connection with or pursuant to the Lease or in
any document or in any certificate is or proves to have been incorrect
in any material respect when made or deemed to be repeated; or
(e) CROSS-DEFAULT:
(i) any amount in respect of Financial Indebtedness of Lessee or any
Lessee Affiliate having a principal amount in excess of Five
Hundred Thousand Dollars ($500,000) is not paid when due;
(ii) any such Financial Indebtedness becomes due or capable of being
declared due prior to the date when it would otherwise have
become due; or becomes due as a result of an event of default or
termination event, howsoever described, on the part of Lessee or
any other Person prior to the date when it would otherwise have
become due; or
(iii) the security for any such Financial Indebtedness becomes
enforceable; or
9-1
(iv) any event of default or termination event, howsoever described,
occurs under any Other Agreement, or any other lease, hire
purchase, conditional sale or credit sale agreement of Lessee or
any Lessee Affiliate; or
(f) APPROVALS: any consent, authorization, license, certificate or
approval of or registration with or declaration to any Government
Entity required to be obtained or maintained by Lessee in connection
with the Lease and/or the operation of the Aircraft (including any
airline license or air transport license including authority to
operate the Aircraft under Part 121 of the FARs, a Certificate of
Convenience and Necessity issued under the Act and any air carrier
operating certificate issued under the Act) is modified in a
materially prejudicial manner or is withheld, or is revoked,
suspended, cancelled, withdrawn, terminated or not renewed, or
otherwise ceases to be in full force; or
(g) BANKRUPTCY, ETC:
(i) Lessee or any Lessee Affiliate consents to the appointment of a
custodian, receiver, trustee or liquidator of itself or all or a
material part of its property or its consolidated property, or
Lessee or any Lessee Affiliate admits in writing its inability
to, or is unable to, or does not, pay its debts generally as they
come due, or makes a general assignment for the benefit of
creditors, or Lessee or any Lessee Affiliate files a voluntary
petition in bankruptcy or voluntary petition seeking
reorganization in a proceeding under any bankruptcy or insolvency
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 or any Lessee Affiliate by voluntary
petition, answer or consent seeks relief under the provisions of
any other bankruptcy, insolvency or other similar law providing
for the reorganization or winding-up of debtors, or provides for
an agreement, composition, extension or adjustment with its
creditors, or any board of directors or shareholder action is
taken by Lessee or any Lessee Affiliate in furtherance of any of
the foregoing, whether or not the same is fully effected or
accomplished; or
(ii) An order, judgement or decree is entered by any court appointing,
without the consent of Lessee or any Lessee Affiliate, a
custodian, receiver, trustee or liquidator of or sequestering any
of Lessee's or any Lessee Affiliate's property, and any such
order, judgement or decree of appointment or sequestration
remains in effect, undismissed, unstayed or unvacated for a
period of 30 days after the date of entry thereof or at any time
an order for relief is granted; or
(iii) An involuntary petition against Lessee or any Lessee Affiliate
or other proceeding under the United States Federal Bankruptcy
laws or other insolvency laws (as now or hereafter in effect) is
filed and is not withdrawn or dismissed
9-2
within 30 days thereafter or at any time an order for relief is
granted in such proceeding, or if, under the provisions of any
law providing for reorganization or winding-up of debtors which
may apply to Lessee or any Lessee Affiliate, any court of
competent jurisdiction assumes jurisdiction over, or custody or
control of, Lessee or any Lessee Affiliate or of all or any
material part of Lessee's or Lessee Affiliates' property, and
such jurisdiction, custody or control remains in effect,
unrelinquished, unstayed or unterminated for a period of 30 days
or at any time an order for relief is granted in such proceeding;
or
(h) SUSPENSION OF BUSINESS: Lessee suspends or ceases or takes
substantive steps to suspend or cease to carry on all or a
material part of its business as a Certificated Air Carrier
(other than as a result of a labor dispute with Lessee's
employees); or
(i) RIGHTS AND REMEDIES: Lessee or any other Person claiming by or
through Lessee challenges the existence, validity, enforceability
or priority of the Lease or the rights of Lessor as lessor or of
Owner as owner in respect of the Aircraft or Financing Parties'
Representative as holder of a first priority Security Interest in
the Aircraft and the Lease; or
(j) CHANGE OF CONTROL: any single person or group of persons acquire
control of Lessee or Guarantor without the previous consent in
writing of Lessor; or
(k) DELIVERY: Lessee fails to comply with its obligation under
Section 4 to accept delivery of the Aircraft or Lessee fails to
comply with its obligations under Section 2 of Part III of
Schedule A to the Aircraft Lease Agreement; or
(l) ADVERSE CHANGE: any event or series of events occurs which, in
the reasonable opinion of Lessor, could be expected to have a
material adverse effect on the financial condition or operations
of Lessee or Guarantor or on the ability of Lessee to comply with
its obligations under the Lease or on the ability of Guarantor to
comply with its obligations under the Guarantee; or
(m) LETTER OF CREDIT:
(i) the issuer of the Letter of Credit (if any) fails to make
any payment under that Letter of Credit when due; or
(ii) any such Letter of Credit is not in full force or, for any
reason ceases to constitute the legal, valid and binding
obligation of the issuer; or
(iii) any of the events listed in paragraph (g) above applies to
such issuer (references in those sub-paragraphs to Lessee
being deemed to be to the issuer); or
9-3
(iv) where applicable, any Letter of Credit is not renewed,
extended or reissued within the time, or replaced when,
required by Section 5.14; or
(v) any consent, authorization, license, certificate or approval
of or registration with or declaration to any Governmental
Entity required to be obtained or maintained by the issuer
of the Letter of Credit in connection with the Letter of
Credit is modified in a materially prejudicial manner or is
withheld, revoked, suspended, cancelled, withdrawn,
terminated or not renewed, or otherwise ceases to be in full
force; or
(vi) and each reference in this paragraph (m) to "the issuer"
shall include a reference to any confirming bank for the
Letter of Credit
(n) REDELIVERY: Lessee fails to return the Aircraft to Lessor on the
Expiry Date in accordance with Section 12; or
(o) LITIGATION: a judgement for the payment of money not covered by
insurance in excess of Six Hundred Fifty Thousand Dollars
($650,000) (or the equivalent thereof in other currencies) shall
be rendered against Lessee or any Lessee Affiliate and the same
shall remain undischarged for a period of 30 days, unless during
such period, execution of such judgement shall have been
effectively stayed by agreement of the parties involved or by
court order or such judgement shall have been adequately bonded;
or
(p) GUARANTEE:
(i) any representation or warranty made by Guarantor is or
proves to have been incorrect in any material respect when
made or deemed to be repeated or Guarantor fails to make any
payment or comply with any other obligation under the
Guarantee when due; or
(ii) the Guarantor repudiates, revokes or claims that it has no
further obligations under the Guarantee or the Guarantee
ceases to be in full force or, for any reason, ceases to be
the legal, valid and binding obligation of Guarantor; or
(iii) any of the events listed in paragraph (f)(i) or (g) above
occurs in respect of Guarantor (and for purposes of this
paragraph(s), references in those paragraphs to Lessee shall
be deemed to be references to Guarantor); OR
(q) UNLAWFUL: it becomes unlawful for Lessee to perform any of its
obligations under the Lease or the Lease becomes wholly or partly
invalid or unenforceable; or
(r) TRANSFER/LESSEE REQUIREMENTS: Lessee makes or permits any
assignment or transfer of the Lease, or any interest herein, or
of the right to possession of the Aircraft, the
9-4
Airframe, or any Engine, or any obligations under the Lease, or
Lessee subleases the Aircraft, in any case except as expressly
permitted in the Lease; or Lessee breaches any provision of
Section 8.7; or
(s) ENGINE LOSS: Lessee fails to timely comply with its obligations
under Sections 8.11(a) and 8.11(b) with respect to an Engine
Event of Loss.
(t) OTHER: Such other events, if any, as may be specified in the
Aircraft Lease Agreement.
9-5
SCHEDULE 10
[NOT APPLICABLE]
10-1
SCHEDULE 11
FORM OF LEASE TERMINATION CERTIFICATE
The undersigned hereby certify that the Aircraft Lease Agreement dated as of
____________________, _________ between the undersigned Lessor and undersigned
Lessee, and as further described in the Appendix attached hereto, has
terminated (except as described in Section 15.1 of the Common Terms Agreement
incorporated therein) and the aircraft and aircraft engines covered thereby
are no longer subject to the terms thereof. This certificate may be executed
in one or more counterparts each of which when taken together shall constitute
one and the same instrument.
DATED this ____________ day of __________________, ___________
LESSOR LESSEE
[INSERT LESSOR'S NAME] [INSERT LESSEE'S NAME]
By: _____________________________ By: ______________________________
Title: __________________________ Title: ___________________________
11-1
SCHEDULE 12
FORM OF LEASE SUPPLEMENT NO. 1
LEASE SUPPLEMENT NO. 1, dated ________________, ______,
between _______________, [a corporation organized under the laws
of ______________] [, not in its individual capacity, but solely as
owner trustee] ("Lessor"), and __________________________, a corporation
organized under the laws of the ___________________("Lessee").
Lessor and Lessee have previously entered into that certain
Aircraft Lease Agreement dated as of __________________, including the
Common Terms Agreement as defined therein (collectively, herein referred
to as the "Agreement" and the defined terms therein being hereinafter
used with the same meaning). The Agreement provides for the execution and
delivery from time to time of a Lease Supplement substantially in the
form hereof for the purpose of leasing the aircraft described below under
the Agreement as and when delivered by Lessor to Lessee in accordance with
the terms thereof.
The Agreement and this Lease Supplement relate to the Aircraft,
Engines and Parts as more precisely described below and in the Certificate
of Technical Acceptance. A counterpart of the Agreement is attached hereto
and this Lease Supplement and the Agreement shall form one document.
In consideration of the premises and other good and sufficient
consideration, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee under and pursuant to the
Agreement and Lessee hereby accepts, acknowledges receipt of possession
and leases from Lessor under and pursuant to the Agreement, that certain
___________ aircraft, and the ___________ (___) ________________________
Engines (each of which Engines has 750 or more rated takeoff horsepower
or the equivalent of such horsepower) described in Schedule 1 hereto,
together with the Aircraft Documents and Records described in the
Agreement (the "Delivered Aircraft").
2. The Delivery Date of the Delivered Aircraft is the date of this Lease
Supplement set forth in the opening paragraph hereof.
3. The Term for the Delivered Aircraft shall commence on the Delivery
Date and shall end on the Expiry Date, with respect to which the
Scheduled Expiry Date shall be [insert date].
4. The amount of Rent for the Delivered Aircraft is set forth in
Schedule B to the Agreement.
12-1
5. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and
each delivered Engine have been duly marked in accordance with the terms
of Section 8.6(a) of the Agreement, (ii) the Aircraft is insured as
required by the Agreement, (iii) the representations and warranties of
Lessee referred to in Section 2.1 of the Agreement are hereby repeated
with effect as of the date first above written, (iv) having inspected the
Delivered Aircraft, Lessee acknowledges that the Delivered Aircraft
satisfies all conditions required for Lessee's acceptance of delivery as
set forth in the Agreement, and (v) the execution and delivery of this
Lease Supplement signifies absolute and irrevocable acceptance by Lessee
of the Delivered Aircraft for all purposes hereof and of the Agreement.
6. All of the terms and provisions of the Agreement are hereby
incorporated by reference in this Lease Supplement to the same extent as
if fully set forth herein.
7. This Lease Supplement may be executed in any number of counterparts;
each of such counterparts, shall for all purposes be deemed to be an
original; and all such counterparts shall together constitute but one and
the same Lease Supplement.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease
Supplement No. 1 to be duly executed as of the day and year first above
written.
LESSOR, LESSEE,
[INSERT LESSOR'S NAME] [INSERT LESSEE'S NAME]
By:_______________________ By: _______________________
Name: ____________________ Name: _____________________
Title: ___________________ Title:_____________________
12-2
SCHEDULE 13
FORM OF LETTER OF CREDIT
IRREVOCABLE STANDBY LETTER OF CREDIT
BENEFICIARY:
Aviation Financial Services, Inc.
Attention: _______________
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Gentlemen:
We hereby establish our irrevocable Standby Letter of Credit No.
S/B dated __________________ dated February ___, 2000 (this "Letter of
Credit") in your favor in connection with the leasing of one Boeing
737-700 aircraft by Aviation Financial Services Inc. ("Beneficiary") to
Aloha Airlines, Inc. ("Customer"). All bank charges relating to this
Letter of Credit are for the account of Customer.
At the request of Customer for account of same, we hereby
establish this Irrevocable Standby Letter of Credit No. S/B ______ (this
"Letter of Credit") to authorise you to draw on First Hawaiian Bank,
Honolulu, Hawaii an amount or amounts not exceeding in aggregate
US$___________ (__________ United States Dollars) upon receipt by us of
the following demand certificate from Beneficiary, accompanied by a copy
of this Letter of Credit (which certificate and copy may be presented to
us by telecopy at telecopy no. __________________):
"The undersigned are two authorised signatories of Aviation Financial
Services Inc ("Beneficiary"). Beneficiary hereby draws upon the
Irrevocable Standby Letter of Credit No. S/B ____________ of first
Hawaiian Bank, Honolulu, Hawaii dated ________________. Beneficiary
hereby instructs you to transfer US$_______ (_____ United States
Dollars) to Bankers Trust Company, New York, ABA 021 001 033, For
the account of: Aviation Financial Services Inc., Account Number:
00-000-000, immediately, with telex confirmation to us of such
payment."
We hereby agree with you that drawings drawn under and in
compliance with the terms of this Letter of Credit received on or prior to
the first anniversary of the date of this Letter of Credit (as the same
may be extended pursuant to the terms hereof, the "Expiration Date") will
be duly honoured upon receipt by us of such a demand certificate. Partial
drawings are permitted. This Letter of Credit shall be automatically
renewed for successive one year periods until at least ________________,
unless at least thirty (30) business days prior to the then current
Expiration Date, we notify you in writing by certified mail, return
receipt requested, at the address set forth above or such other address
as Beneficiary may have notified to us in writing, of our election not to
renew this Letter of Credit beyond the then current Expiration Date. In
the event of such non-
13-1
renewal, the full amount of this Letter of Credit may be drawn down upon
presentation of a demand certificate as provided above.
If a drawing by you hereunder does not, in any instance, conform
to the provisions of this Letter of Credit, we shall give you prompt
notice that the purported drawing was not effected in accordance with such
provisions, stating the reasons therefor, and that we are holding any
documents presented in connection therewith at your disposal or are
returning the same to you, as we may elect.
This Letter of Credit is transferable and constitutes an
obligation to make payment against documents. Except to the extent the
express provisions hereof conflict, this Letter of Credit is issued
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision) International Chamber of Commerce Publication No. 500 ("Uniform
Customs").
Sincerely,
FIRST HAWAIIAN BANK
_____________________________ _________________________________
Authorised Signature Authorised Signature
00-0
XXXXXXXX 00
XXXXXXXXXXX XXXXXXXXXX
Xxx Xxx Xxxxxxx Limited
Repair Station #ANZZ188C
Christchurch
Aviation Management Systems
Repair Station #ZM7R567Y
Sky Harbor Int'l Airport
Aviation Management Systems
Repair Station #D8LR566Y
Goodyear, AZ
BFGoodrich Aerospace MRO
Repair Xxxxxxx #XX0X000X
Xxxxxxx, XX
Conair Aviation Ltd.
Repair Station #AMO 10-75
Abbotsford, B.C.
Spar Aerospace Limited
Repair Station #AMO 03-57
Canada
14-1
SCHEDULE 15
FORM OF TECHNICAL REPORT
AIRCRAFT SPECIFICATIONS
WORKSHEET
GENERAL WEIGHTS
Registration: __________ Max. Taxi Weight: __________
Manufacturer: __________ Max. Take Off Weight: __________
Aircraft Type: __________ Max. Landing Weight: __________
Serial Number: __________ Max. Zero Fuel Weight: __________
Line Number: __________ Operating Empty Weight: __________
Date of Manufacture: __________ Fuel Capacity: __________
Aircraft TT: __________ __________
Aircraft TC: __________ UTILIZATION __________
Data as of: __________ Hours: __________
Cycles: __________
INSPECTIONS
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TYPE OF CHECK LAST ACCOMPLISHED TIME
DATE TIME CYCLE INTERVAL REMAINING
-------------------------------------------------------------------------------
C
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__ Any major checks coming due in the next 3 months.
ENGINES MFG: ___________
TYPE: ___________
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POSITION S/N TT XX XXX ICO
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15-1
AIRCRAFT SPECIFICATIONS
WORKSHEET
REGISTRATION: _________________
AUXILIARY POWER UNIT
MFG: ___________
TYPE: ___________
S/N TT XX XXX
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LANDING GEAR
OVERHAUL INTERVAL
MAIN: ___________
NOSE: ___________
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S/N TT XX XXX CSO TIME CYCLES
REMAINING REMAINING
TO O/H TO LIFE
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NLG
-----------------------------------------------------------------------
LMG
-----------------------------------------------------------------------
RMG
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INTERIOR EQUIPMENT
QTY LOCATION & TYPE
-----------------------------------------------
GALLEYS:
-----------------------------------------------
LAVATORIES:
-----------------------------------------------
AIR STAIRS:
-----------------------------------------------
PSGR. SEATS:
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15-2
AIRCRAFT LEASE NOVATION
AND AMENDMENT AGREEMENT
DATED AS OF FEBRUARY 28, 2001
AVIATION FINANCIAL SERVICES INC.
AS EXISTING LESSOR
ALOHA AIRLINES, INC.
AS LESSEE
CASTLE HARBOUR LEASING INC.
AS NEW LESSOR
IN RESPECT OF
AIRCRAFT LEASE AGREEMENT DATED AS OF MAY 12, 2000
RELATING TO BOEING 737-700 AIRCRAFT BEARING MSN 28640
EXECUTION VERSION
THIS AGREEMENT is made as of February 28, 2001
BETWEEN:
AVIATION FINANCIAL SERVICES INC., a corporation incorporated under the laws
of the State of Delaware having its principal place of business and chief
executive office at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
("EXISTING LESSOR");
ALOHA AIRLINES, INC., a corporation incorporated under the laws of the State
of Delaware with its principal place of business at 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxx 00000 and its chief executive office at 500 Ala Moana Blvd.,
Two Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000 ("LESSEE"); and
CASTLE HARBOUR LEASING INC., a corporation incorporated under the laws of the
State of Delaware and having its principal office at c/o GE Capital Aviation
Services, Inc., 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000, X.X.X. ("NEW
LESSOR").
WHEREAS:
(A) By Aircraft Lease Agreement, dated as of May 12, 2000, between
Lessee and Existing Lessor which incorporates by reference that
certain Aircraft Lease Common Terms Agreement dated as of May 12,
2000 executed by General Electric Capital Corporation and Lessee, as
the same has been amended by that certain letter agreement dated May
12, 2000 entered into between Existing Lessor and Lessee
(collectively, and as amended, the "LEASE"), Existing Lessor has
agreed to lease to Lessee and Lessee has agreed to take on lease one
Boeing Model 737-700 aircraft identified in such Lease as having
manufacturer's serial number 28640 (the "AIRCRAFT") on the terms and
subject to the conditions contained in the Lease.
(B) The parties have agreed that New Lessor should assume the rights,
liabilities and obligations of Existing Lessor under the Lease, and
that Existing Lessor should be released from its liabilities and
obligations under the Lease on the terms and conditions set out
herein.
NOW THEREFORE in consideration of the provisions and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS: In this Agreement, the following expressions shall have
the following meanings:
"EFFECTIVE TIME" bears the meaning ascribed to it in Clause 5; and
"NOVATED LEASE" means an agreement between New Lessor and Lessee on
the same terms as the Lease, subject to the amendments specified in
this Agreement.
1.2 DEFINED TERMS IN LEASE: Capitalised terms used, but not defined, in
this Agreement shall have the respective meanings assigned to them
in the Lease.
1.3 INTERPRETATION: In this Agreement, unless the context otherwise
requires:
(a) a reference to a Clause or a Schedule is a reference to a
clause of or schedule to this Agreement;
(b) a reference to a person includes its successors and
permitted assigns;
(c) words importing the plural shall include the singular,
and vice versa; and
(d) headings are to be ignored in construing this Agreement.
2. NOVATION
2.1 RELEASES, ASSIGNMENTS AND ASSUMPTIONS: As of and with effect from
the Effective Time, and subject to the provisions of Clauses 2.2 and
2.3:
(a) Existing Lessor releases Lessee from Lessee's obligations,
duties and liabilities under the Lease, and Lessee agrees
that it has no further rights against Existing Lessor under
the Lease;
(b) Lessee releases Existing Lessor from Existing Lessor's
obligations, duties and liabilities under the Lease, and
Existing Lessor agrees that it has no farther rights
against Lessee under the Lease;
(c) Existing Lessor assigns to New Lessor, and New Lessor
assumes, the rights and obligations, duties and liabilities
of Existing Lessor under the Lease, and New Lessor agrees
to perform the obligations of the Lessor under the Novated
Lease;
(d) Lessee consents to and accepts the assumption by New Lessor
of Existing Lessor's rights and obligations, duties and
liabilities under the Lease and New Lessor's agreement to
perform the obligations of the Lessor under the Novated
Lease;
(e) Lessee agrees that it will not assert against New Lessor
any claim or defence which it may have or have had against
Existing Lessor under the Lease prior to the Effective
Time; and
(f) Lessee acknowledges that its obligations, duties and
liabilities under the Novated Lease are to New Lessor, and
agrees with New Lessor to perform the obligations of Lessee
under the Novated Lease.
Each of the foregoing events and agreements is conditional upon the
happening of the others and shall occur simultaneously.
2.2 EFFECT: Existing Lessor, New Lessor and Lessee accordingly agree
that, as and with effect from the Effective Time, the Lease is
novated and constitutes an agreement between New Lessor as lessor
and Lessee as lessee on the terms and conditions of the Novated
Lease.
2.3 PRE-EFFECTIVE TIME RIGHTS AND REMEDIES: Without prejudice to the
rights of New Lessor under the Novated Lease and in consideration
of the payment by Existing Lessor to Lessee of US$5 (receipt and
sufficiency of which are hereby acknowledged), New Lessor, Lessee
and Existing Lessor agree that Existing Lessor and Lessee shall
have the same rights and remedies against each other pursuant to
this Clause 2.3 as each would have had under the Lease in respect
of any losses, liabilities or claims suffered or incurred or
brought against or payments due to each other in respect of or
attributable to the period of the Term prior to the Effective Time
as if Existing Lessor had remained the Lessor under the Lease, and
New Lessor shall not be responsible to Lessee in respect of any
such losses, liabilities or claims, nor shall Lessee exercise any
set-off or counterclaim in respect of any such losses, liabilities
or claims against New Lessor.
3. LEASE AMENDMENTS
3.1 AMENDMENTS: As of, and with effect from, the Effective Time the
Lease shall be (and it is hereby) amended as follows:
(a) the expressions THIS LEASE and THE LEASE shall be
construed, wherever they appear in the Lease and wherever
the context so permits, as if they referred to the Novated
Lease;
(b) the expression LESSOR shall be construed, wherever it
appears in the Lease, as if it referred to New Lessor in
place of Existing Lessor (other than Recital B to the
Aircraft Lease Agreement, in which case the expression
LESSOR shall be construed to mean General Electric Capital
Corporation, a New York corporation);
(c) Clause 3.4 of the Aircraft Lease Agreement shall be amended
and restated in its entirety as follows:
LESSOR'S BANK ACCOUNT: For the purposes of Clause 5.5 of the Common
Terms Agreement, Lessor's bank account and wire transfer
particulars, to which all payments to Lessor shall be made, are at
the date hereof:
Bankers Trust Company
New York
ABA 000000000
For the account of:
Castle Harbour Leasing Inc
Account Number: 00-000-000
3.2 REFERENCES IN OTHER DOCUMENTS: With effect from the Effective Time,
all references to the Lease contained in any documents delivered
under or pursuant to the Lease shall be construed as references to
the Novated Lease (as it may be further amended from time to time).
3
4. DEPOSIT
As of the Effective Time the portion of the Deposit actually paid by
Lessee as of the date hereof ($286,400) shall be transferred by
Existing Lessor to New Lessor, and:
(a) New Lessor acknowledges and agrees with Lessee, with effect
from the Effective Time, that such moneys have been paid by
Lessee in accordance with the Novated Lease and further
acknowledges and agrees that Lessee shall have no further
obligation to make any payment in respect of the Deposit
which have become due and payable before the Effective Time
and in respect of which Lessee has made payment in favour
of Existing Lessor;
(b) each of New Lessor, Lessee and Existing Lessor agrees that
any amounts in respect of the Deposit which become due and
payable at or after the Effective Time shall be payable by
Lessee to New Lessor in accordance with the Novated Lease;
(c) Existing Lessor acknowledges that it has released and has
no continuing security or other interest in the moneys and
amounts transferred to New Lessor under this clause.
5. EFFECTIVE TIME
This Agreement shall become effective at the time (the "EFFECTIVE
TIME") at which this Agreement shall have been executed by all of
the parties hereto and such signatures shall have been delivered to
New Lessor. New Lessor shall notify each of Existing Lessor and
Lessee in writing of the Effective Time promptly upon its
determination of the same. Filing of this Agreement with the FAA
shall evidence that the Effective Time has occurred.
6. MISCELLANEOUS
6.1 CONTINUING EFFECT: Save as provided for herein, the Novated Lease
and all provisions thereof shall continue in full force and effect
as the legal, valid and binding rights and obligations of each of
New Lessor and Lessee enforceable in accordance with their
respective terms. All representations, warranties and agreements
contained in this Agreement shall continue in full force and effect
after the Effective Time.
6.2 VARIATION: The provisions of this Agreement shall not be varied
otherwise than by an instrument in writing executed by or on behalf
of all the parties; provided that New Lessor and Lessee shall be
entitled to amend, modify or vary the terms of the Novated Lease
after the Effective Time without reference to Existing Lessor.
6.3 NOTICES: Every notice, request, demand or other communication under
this Agreement shall be made in accordance with Clause 15.7 of the
Novated Lease and shall be sent to Existing Lessor and Lessee to
the addresses for notices set forth in Clause 6 of the Aircraft
Lease Agreement and every notice, request, demand or other
communication to New Lessor under this Agreement and the Novated
Lease shall be sent to:
c/o GE Capital Aviation Services, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Contracts Leader
Facsimile: 000-000-0000
Telephone: 000-000-0000
6.4 COUNTERPARTS: This Agreement may be executed in any number of
counterparts and by any party hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all
of which, when taken together, shall constitute one and the same
agreement.
6.5 LEASE PROVISIONS: The provisions of Clauses 14 (Assignment), 15.2
(Waivers, Remedies Cumulative), 15.4 (Severability), and 15.8
(Governing Law; Jurisdiction; WAIVER OF JURY TRIAL) of the Lease
shall apply to this Agreement as if set out in full herein.
6.6 NAMEPLATES: New Lessor hereby advises Lessee that the Nameplate
Inscription on the Nameplates installed on the Aircraft in
accordance with the requirements of Clause 8.6(a) shall read as
follows:
"This Aircraft/Engine is owned by Castle Harbour Leasing Inc.,
and is leased to Aloha Airlines, Inc. and may not be operated by
any other person without the prior written consent of Castle
Harbour Leasing Inc."
6.7 EXPENSES: New Lessor hereby agrees that it will, upon written
request from Lessee accompanied by written evidence as to the
amount of such fees and expenses reasonably satisfactory to New
Lessor, reimburse Lessee, or cause Lessee to be reimbursed, for the
reasonable fees and disbursements of Lessee's outside legal counsel
relating to the review, negotiation and execution of this
Agreement.
6.8 ENTIRE AGREEMENT: The Novated Lease and this Agreement together
constitute the sole and entire agreement between Lessee and New
Lessor in relation to the leasing of the Aircraft, and supersede
all previous agreements in relation to that leasing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first herein written.
SIGNED for and on behalf of AVIATION FINANCIAL SERVICES INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
-------------------------------------
Title: Vice President
-------------------------------------
SIGNED for and on behalf of ALOHA AIRLINES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
SIGNED for and on behalf of CASTLE HARBOUR LEASING INC..
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
-------------------------------------
Title: Vice President
-------------------------------------
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first herein written.
SIGNED for and on behalf of AVIATION FINANCIAL SERVICES INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
SIGNED for and on behalf of ALOHA AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------------
Title: Executive Vice President & CFO
-------------------------------------
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Name: XXXXX X. XXXX
-------------------------------------
Title: Sr. V.P. Planning & Business Development
--------------------------------------
SIGNED for and on behalf of CASTLE HARBOUR LEASING INC,
By:
---------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
EXECUTION VERSION
March 20, 2001
Aloha Airlines, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Executive Vice President and Chief Financial Officer
Re: Aircraft Lease Agreement dated as of May 12, 2000 between
Aviation Financial Services Inc. ("AFSI"), as lessor, and
Aloha Airlines, Inc., as Lessee ("LESSEE"), in respect of
One Boeing 737-700 Aircraft Bearing MSN 28640
and U.S. Reg. No. N740AL, which incorporates the terms of
that certain Common Terms Agreement dated as of May 12, 2000
between General Electric Capital Corporation and Aloha
Airlines, Inc. (i) as modified by that certain Letter
Agreement dated May 12, 2000 between AFSI and Lessee, and
(ii) as assigned and novated by that certain Aircraft Lease
Novation and Amendment Agreement among AFSI, as existing
lessor, Castle Harbour Leasing Inc., as new lessor
("Lessor"), and Lessee (collectively, and as amended or
supplemented from time to time, the "LEASE")
Ladies and Gentlemen:
We refer to the Lease, as defined above, and capitalized terms used
without definition herein have the meanings assigned to them in the Lease.
Lessor and Lessee desire to enter into this Letter Agreement in order to
document their mutual understanding in respect of certain additional changes
in the specifications for the Aircraft to be completed prior to Delivery.
1. SCOPE OF CHANGES TO DELIVERY CONDITIONS. Lessor and Lessee hereby
acknowledge and agree that, notwithstanding anything to the contrary set forth
in the Lease, at Delivery under the Lease, (i) the engine thrust capacity of
the Aircraft shall have been modified from the level currently specified in
the GECAS Detail Specification D6-38808-34 (Revision D) as incorporated in the
Purchase Agreement No. 1905 dated as of April 1996 (the "PURCHASE AGREEMENT")
between General Electric Capital Corporation, as buyer, and The Boeing
Company, as seller, to include 26,000 lbs. Engine thrust bump option (the
"ENGINE THRUST BUMP UPGRADE"), and (ii) the Aircraft shall be modified to
include partial provisions for the installation of the Honeywell SATCOM system
(the "SATCOM PROVISIONS"). Completion of the Engine Thrust Bump Upgrade and
the installation of the
SATCOM Provisions shall each be deemed one of the "Delivery Condition
Requirements" for all purposes of the Lease.
2. COST OF CHANGES AND EFFECT ON RENT.
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
3. LIMITATION ON AMENDMENT. Except as expressly modified by this
Letter Agreement, all of the terms and provisions of the Lease remain in full
force and effect and are hereby ratified and confirmed by the parties.
Please indicate your acceptance of and agreement with the terms set
forth in this Letter Agreement by signing in the space provided below and
return one fully-executed counterpart of this Letter Agreement to Lessor.
Very truly yours,
CASTLE HARBOUR LEASING INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
-----------------------
Title: Vice President
-----------------------
ACKNOWLEDGED AND AGREED.
ALOHA AIRLINES, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Please indicate your acceptance of and agreement with the terms set
forth in this Letter Agreement by signing in the space provided below and
return one fully-executed counterpart of this Letter Agreement to Lessor.
Very truly yours,
CASTLE HARBOUR LEASING INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
ACKNOWLEDGED AND AGREED.
ALOHA AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
--------------------------
Title: Exec. VP & CFO
--------------------------
By: /s/ Xxxxx X. Xxxx
--------------------------
Name: Xxxxx X. Xxxx
--------------------------
Title: Sr. VP Planning &
Business Development
--------------------------
March 23, 2001
Aloha Airlines, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Executive Vice President and Chief Financial Officer
Re: Aircraft Lease Agreement dated as of May 12, 2000 between
Aviation Financial Services Inc. ("AFSI"), as lessor, and
Aloha Airlines, Inc., as Lessee ("LESSEE"), in respect
of One Boeing 737-700 Aircraft Bearing MSN 28640 and
U.S. Reg. No. N740AL, which incorporates the terms of
that certain Common Terms Agreement dated as of May 12, 2000
between General Electric Capital Corporation and Aloha
Airlines, Inc. (i) as modified by that certain Letter
Agreemnet dated May 12, 2000 between AFSI and Lessee, (ii)
as assigned and novated by that certain Aircraft Lease
Novation and Amendment Agreement among AFSI, as existing
lessor, Castle Harbour Leasing Inc., as new lessor
("Lessor"), and Lessee, and (iii) as modified by that
certain Letter Agreement dated March 20, 2001 (collectively,
and as amended or supplemented from time to time, the
"LEASE")
Ladies and Gentlemen:
We refer to the Lease, as defined above, and capitalized terms used
without definition herein have the meanings assigned to them in the Lease.
Lessor and Lessee desire to enter into this Letter Agreement in order to
document their mutual understanding in respect of the determination of the
actual amount of Rent pursuant to Part III of Schedule B to the Lease as well
as in respect of an undertaking by Lessee with respect to a legal opinion.
1. RENT. [This provision has been omitted as confidential
information, and is separately filed with the Commission.]
2. UNDERTAKING BY LESSEE. Lessee hereby covenants and undertakes to
obtain, and to deliver to Lessor within thirty (30) days following the
Delivery Date an updated legal opinion from Xxxxxxx, Xxxxxxx & Xxxxxxx,
Lessee's regulatory counsel, which shall be in form and substance reasonably
satisfactory to Lessor, as to (i) Lessee's possession of an air carrier
operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49 of the United
States Code for aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo and (ii) Lessee's possession of a Certificate of
Public Convenience and Necessity issued by the U.S. Department of
Transportation authorizing Lessee to engage in both interstate and foreign
carriage of passengers and cargo. Lessee and Lessor mutually agree and
acknowledge that, if Lessee fails to deliver the foregoing updated legal
opinion to Lessor within the period specified in the preceding sentence, such
failure shall constitute an "Event of Default" for all purposes of the Lease
and Lessor shall be entitled to any and all rights and remedies available to
Lessor under the Lease and applicable Law.
3. LIMITATION ON AMENDMENT. Except as expressly modified by this
Letter Agreement, all of the terms and provisions of the Lease remain in full
force and effect and are hereby ratified and confirmed by the parties.
Please indicate your acceptance of and agreement with the terms set
forth in this Letter Agreement by signing in the space provided below and
return one fully-executed counterpart of this Letter Agreement to Lessor.
Very truly yours,
CASTLE HARBOUR LEASING INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
------------------------
Title: Vice President
------------------------
ACKNOWLEDGED AND AGREED.
ALOHA AIRLINES, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Please indicate your acceptance of and agreement with the terms set
forth in this Letter Agreement by signing in the space provided below and
return one fully-executed counterpart of this Letter Agreement to Lessor.
Very truly yours,
CASTLE HARBOUR LEASING INC.
By:
------------------------
Name:
------------------------
Title:
------------------------
ACKNOWLEDGED AND AGREED.
ALOHA AIRLINES, INC.
By: /s/ X. X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
----------------------------
Title: President & CEO
----------------------------
By: /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
----------------------------
Title: Sr. VP Planning &
Business Development
----------------------------
LEASE SUPPLEMENT NO. 1
LEASE SUPPLEMENT NO. 1, dated March 23, 2001 between Castle Harbour
Leasing Inc., a corporation organized under the laws of the State of Delaware
("Lessor"), and Aloha Airlines, Inc., a corporation organized under the laws of
the State of Delaware ("Lessee").
Lessor and Lessee have previously entered into that certain Aircraft
Lease Agreement dated as of May 12, 2000, including the Common Terms Agreement
as defined therein (collectively, herein referred to as the "Agreement" and the
defined terms therein being hereinafter used with the same meaning). The
Agreement provides for the execution and delivery from time to time of a Lease
Supplement substantially in the form hereof for the purpose of leasing the
aircraft described below under the Agreement as and when delivered by Lessor to
Lessee in accordance with the terms thereof.
The Agreement and this Lease Supplement relate to the Aircraft,
Engines and Parts as more precisely described below and in the Certificate of
Technical Acceptance. A counterpart of the Agreement is attached hereto and
this Lease Supplement and the Agreement shall form one document.
In consideration of the premises and other good and sufficient
consideration, Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee under and pursuant to
the Agreement and Lessee hereby accepts, acknowledges receipt of possession and
leases from Lessor under and pursuant to the Agreement, that certain Boeing
737-76N aircraft, and the two (2) CFM56-7B26 Engines (each of which Engines has
750 or more rated takeoff horsepower or the equivalent of such horsepower)
described in Schedule 1 hereto, together with the Aircraft Documents and
Records described in the Agreement (the "Delivered Aircraft").
2. The Delivery Date of the Delivered Aircraft is the date of this
Lease Supplement set forth in the opening paragraph hereof.
3. The Term for the Delivered Aircraft shall commence on the Delivery
Date and shall end on the Expiry Date, with respect to which the Scheduled
Expiry Date shall be March 22, 2016.
4. The amount of Rent for the Delivered Aircraft is set forth in
Schedule B to the Agreement.
5. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft
and each delivered Engine have been duly marked in accordance with the terms of
Section 8.6(a) of the Agreement, (ii) the Aircraft is insured as required by
the Agreement, (iii) the representations and warranties of Lessee referred to
in Section 2.1 of the Agreement are hereby repeated with effect as of the date
first above written, (iv) having inspected the Delivered Aircraft, Lessee
acknowledges that the Delivered Aircraft satisfies all conditions required for
Lessee's acceptance of delivery as set forth
in the Agreement, and (v) the execution and delivery of this Lease Supplement
signifies absolute and irrevocable acceptance by Lessee of the Delivered
Aircraft for all purposes hereof and of the Agreement.
6. All of the terms and provisions of the Agreement are hereby
incorporated by reference in this Lease Supplement to the same extent as if
fully set forth herein.
7. This Lease Supplement may be executed in any number of
counterparts; each of such counterparts, shall for all purposes be deemed to
be an original; and all such counterparts shall together constitute but one
and the same Lease Supplement.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease
Supplement No. 1 to be duly executed as of the day and year first above
written.
LESSOR, LESSEE,
CASTLE HARBOUR LEASING INC. ALOHA AIRLINES, INC.
By: /s/ Xxxxxxx X. Xxxxx By:
---------------------------- ---------------------------
Name: Xxxxxxx X. Xxxxx Name:
---------------------------- ---------------------------
Title: Vice President Title:
---------------------------- ---------------------------
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease
Supplement No. 1 to be duly executed as of the day and year first above
written.
LESSOR, LESSEE,
CASTLE HARBOUR LEASING INC. ALOHA AIRLINES, INC.
By: By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------- ---------------------------------
Name: Name: XXXXXX X. XXXXXXXXX
-------------------------- ---------------------------------
Title: Title: EXEC. V.P. & C.F.O.
-------------------------- ---------------------------------
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: XXXXX X. XXXX
---------------------------------
Title: SENIOR V.P. PLANNING &
BUS. DEV.
---------------------------------
SCHEDULE 1
Airframe Manufacturer: Boeing
Aircraft Model and Series: 737-76N
Registration Xxxx: N740L
Manufacturer's Serial Number: 28640
Engine Manufacturer and Model: CFMI Model CFM56-7B26
Engine Serial Numbers: 888263 and 888259
EXECUTION VERSION
AGREEMENT AND AMENDMENT TO AIRCRAFT LEASE AGREEMENT
DATED DECEMBER 14, 0000
XXXXXXX
XXXXXX XXXXXXX LEASING INC.
AS LESSOR
AND
ALOHA AIRLINES, INC.
AS LESSEE
AGREEMENT AND AMENDMENT TO AIRCRAFT LEASE AGREEMENT
IN RESPECT OF
AIRCRAFT LEASE AGREEMENT DATED AS OF MAY 12,
2000 RELATING TO BOEING MODEL 737-700 AIRCRAFT
MANUFACTURER'S SERIAL NUMBER 28640
THIS AGREEMENT is made on December 14, 2001 ("AGREEMENT")
BETWEEN:
CASTLE HARBOUR LEASING INC., a company incorporated under the laws of Delaware
whose principal office is at c/o GE Capital Aviation Services, Inc., 000 Xxxx
Xxxxx Xxxx, Xxxxxxxx, XX 00000, X.X.X. ("LESSOR"); and
ALOHA AIRLINES, INC., a company incorporated under the laws of Delaware whose
principal place of business is at 000 Xxxxx Xxxxxx, Xxxxxxxx, XX 00000, X.X.X.
and its chief executive office at 500 Ala Moana Blvd., Two Xxxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000, X.X.X. ("LESSEE").
WHEREAS:
(A) By an Aircraft Lease Agreement dated as of May 12, 2000 ("ORIGINAL
LEASE") between Lessee, as lessee, and Aviation Financial Services
Inc. ("AFSI"), as lessor, which incorporates by reference that
certain Aircraft Lease Common Terms Agreement dated as of May 12,
2000 executed by General Electric Capital Corporation and Lessee (the
"CTA"), as the same has been amended by (i) that certain letter
agreement dated May 12, 2000 entered into between AFSI and Lessee,
(ii) that certain Aircraft Lease Novation and Amendment Agreement
dated as of February 28, 2001 (the "NOVATION AGREEMENT") among AFSI
as existing lessor, Lessor, as new lessor and Lessee, (iii) that
certain letter agreement dated March 20, 2001 entered into between
Lessor and Lessee, (iv) that certain letter agreement dated March 23,
2001 entered into between Lessor and Lessee, and (v) Lease Supplement
No. 1 dated March 23, 2001 entered into between Lessor and Lessee
(collectively, and as amended or supplemented from time to time, the
"LEASE") Lessor leased to Lessee and Lessee took on lease one Boeing
model 737-700 aircraft with manufacturer's serial number 28640 (the
"AIRCRAFT") on the terms and subject to the conditions contained
therein.
(B) The Original Lease, together with the Novation Agreement and Lease
Supplement No. 1 thereto, have been recorded by the FAA and assigned
conveyance numbers by the FAA as set forth on Schedule 1 hereto.
(C) Lessee has requested Lessor to permit Lessee to defer the payment of
a portion of the Rent and to amend the Lease to change certain
provisions therein subject to the terms and conditions of this
Agreement.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS: Capitalised terms used herein but not defined shall have
the respective meanings ascribed to such terms in the Lease.
1.2 CONSTRUCTION: The provisions of Clause 1.2 (Construction) of the CTA
shall apply to this Agreement as if the same were set out in full
herein. From and after the effective date of this Agreement (as
notified to Lessee pursuant to the Notice), all references in the
Lease to "the Lease," the "Aircraft Lease Agreement," "hereunder" or
the like shall mean the Lease as amended by this Agreement.
1
2. REPRESENTATIONS AND WARRANTIES
Lessee hereby repeats the representations and warranties in Clause 2.1
of the CTA as if made with reference to the facts and circumstances
existing as at the date hereof and as if the references in such
representations and warranties to the "Lease" referred to the Lease as
amended by this Agreement.
3. DEFERRAL OF RENT
3.1 DEFINITION OF DEFERRED AMOUNT: The term "Deferred Amount" is defined
in Clause 2 of Schedule 2 hereto.
3.2 TERMS OF RENT DEFERRAL: Each Deferred Amount shall be deferred as set
forth in Clause 3 of Schedule 2 hereto.
4. LETTER OF CREDIT
4.1 DEFINITION OF LETTER OF CREDIT PROCEEDS: The term "Letter of Credit
Proceeds" is defined in Clause 2 of Schedule 2 hereto.
4.2 APPLICATION OF LETTER OF CREDIT PROCEEDS: The Letter of Credit
Proceeds shall be applied as set forth in Clause 4.1 of Schedule 2
hereto.
4.3 RESTORATION OF LETTER OF CREDIT: The Letter of Credit shall be
restored by Lessee as set forth in Clause 4.2 of Schedule 2 hereto.
4.4 REMAINING AMOUNTS AVAILABLE UNDER LETTER OF CREDIT: Lessor shall
continue to hold the Letter of Credit and shall be entitled to draw
the remaining amounts available for drawing in accordance with the
Lease, and Lessee shall ensure that the Letter of Credit complies with
all requirements of Section 5.14 of the CTA and Section 3.1 of the
Lease, except as set forth in Clause 4.2 of Schedule 2 hereto.
5. AMENDMENTS TO LEASE
5.1 AMENDMENT TO CLAUSE 1.1: The following new definition is hereby added
to Clause 1.1 of the Lease:
DEFERRED AMOUNT has the meaning assigned to it in the Agreement and
Amendment to Aircraft Lease Agreement dated December 14, 2001 between
Lessor and Lessee.
5.2 EVENTS OF DEFAULT:
(a) In lieu of paragraph (a) (NON-PAYMENT) of Schedule 9 to the
CTA, the following shall constitute an Event of Default:
NON-PAYMENT: Lessee fails to make any payment of
Rent, Supplemental Rent or any other amount payable
under the Lease (including, without limitation, any
repayment of a Deferred Amount due under the
Agreement and Amendment to Aircraft Lease Agreement
dated December 14, 2001 between Lessor and Lessee)
on the due date and such failure continues for three
(3) Business Days or more.
2
(b) In addition to the Events of Default set forth in paragraph
(m) of Schedule 9 to the CTA, the following shall constitute
an Event of Default:
the Letter of Credit is not restored as set forth in
Clause 4.3 of the Agreement and Amendment to Aircraft
Lease Agreement dated December 14, 2001 between
Lessor and Lessee.
5.3 RIGHTS AND REMEDIES ON DEFAULT: In addition to the rights and
remedies set forth in Clause 13.2 of the CTA, the following shall be
an additional right of Lessor:
Upon the occurrence of an Event of Default, the entire
outstanding Deferred Amounts, together with interest thereon
at the Interest Rate, shall become immediately due and
payable by Lessee.
5.4 AMENDMENT TO THE CTA. Lessor and Lessee hereby acknowledge and agree
that (i) the Amendment of Aircraft Lease Common Terms Agreement
attached hereto as Schedule 3 is hereby incorporated by this reference
and made an integral part of the Lease, and (ii) all references in the
Lease to the "CTA" or "Common Terms Agreement" shall mean the CTA as
amended by such amendment.
6. CONDITIONS PRECEDENT
6.1 CONDITIONS: This Agreement shall take effect upon issuance by Lessor
of a notice to Lessee (the "NOTICE") confirming the satisfaction of
each of the following conditions and receipt of the following
documents by Lessor on or prior to December 31, 2001:
(a) RESOLUTIONS: a copy of a resolution of the board of directors
of Lessee approving the terms of, and transactions
contemplated by, this Agreement, resolving that it enter
into this Agreement, and authorising a specified person or
persons to execute this Agreement;
(b) LEGAL OPINION: a legal opinion from Lessee's counsel in a
form reasonably satisfactory to Lessor; and
(c) OTHER: such other documents as Lessor may reasonably
request.
6.2 FURTHER CONDITIONS PRECEDENT: Lessor's obligations under this
Agreement are subject to the further conditions precedent that as of
the date of issuance of the Notice:
(a) the representations and warranties of Lessee under Clause 2
of this Agreement and under Clause 2.1 of the CTA shall be
true and correct; and
(b) no Default shall have occurred and be continuing or might
result from the leasing of the Aircraft to Lessee under
the Lease as amended hereby.
6.3 WAIVER: The conditions specified in Clauses 6.1 and 6.2 are for the
sole benefit of Lessor and may be waived or deferred (in whole or in
part and with or without conditions) by Lessor.
7. MISCELLANEOUS
7.1 FURTHER ASSURANCES: Lessee agrees from time to time to do and perform
such other and further acts and execute and deliver any and all such
other instruments as may be required by law or
3
reasonably requested by Lessor to establish, maintain and protect the
rights and remedies of Lessor and to carry out and effect the intent
and purpose of this Agreement.
7.2 COUNTERPARTS: This Agreement may be executed in any number of separate
counterparts, and each counterpart shall when executed and delivered
be an original document, but all counterparts shall together
constitute one and the same instrument.
7.3 GOVERNING LAW: The provisions of Clause 15.8 (Governing Law;
jurisdiction; WAIVER OF JURY TRIAL) of the CTA shall apply to this
Agreement as if the same were set out in full herein.
7.4 VARIATION: The provisions of this Agreement shall not be varied
otherwise than by an instrument in writing executed by or on behalf of
Lessor and Lessee.
7.5 INVALIDITY OF ANY PROVISION: If any provision of this Agreement
becomes invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired.
7.6 COSTS AND EXPENSES: Whether or not the conditions specified in Clause
6 are fulfilled, Lessee shall pay to Lessor on demand all fees, costs
and expenses incurred or payable by Lessor in connection with the
preparation, negotiation and completion of this Agreement and
performance of the transactions contemplated hereby.
8. CONTINUATION OF LEASE
Save as expressly amended by this Agreement, the Lease shall continue
in full and unvaried force and effect as the legal, valid and binding
rights and obligations of each of Lessor and Lessee enforceable in
accordance with their respective terms.
4
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first above written.
Signed for and on behalf of
CASTLE HARBOUR SING INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------
Title: Vice President
---------------------------
Signed for and on behalf of
ALOHA AIRLINES, INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
By: ___________________________
Name: ___________________________
Title: ___________________________
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first above written.
Signed for and on behalf of
CASTLE HARBOUR LEASING INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
Signed for and on behalf of
ALOHA AIRLINES INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------
Title: Exec. Vice President & CFO
-----------------------------
By: /s/ Xxxxx X. Xxxx
---------------------------
Name: Xxxxx X. Xxxx
---------------------------
SENIOR VICE PRESIDENT
Title: PLANNING & BUSINESS DEVELOPMENT
----------------------------------
SCHEDULE 1
Aircraft Lease Agreement dated as of May 12, 2000 between Aviation
Financial Services Inc., as lessor, and Aloha Airlines, Inc., as lessee, which
was recorded by the Federal Aviation Administration on March 26, 2001 and
assigned Conveyance No. H101572, as assigned and supplemented by the following
described instruments:
DOCUMENT FAA RECORDING DATE FAA CONVEYANCE NO.
-------- ------------------ ------------------
Aircraft Lease Novation and 03/26/01 H101572
Amendment Agreement among
Aviation Financial Services Inc.,
as existing lessor, Aloha Airlines,
Inc., as lessee, and Castle Harbour
Leasing Inc., as new lessor
Lease Supplement No. 1 03/26/01 H101572
Schedule 1-1
SCHEDULE 2
CERTAIN FINANCIAL TERMS
1. CONFIDENTIALITY
Lessor and Lessee understand that the commercial and financial information
contained in this Schedule 2 to this Agreement are considered by Lessor and
Lessee as proprietary and confidential. Lessor and Lessee each hereby agree,
and any of their assignees, upon becoming such shall agree that it will treat
this Schedule 2 as proprietary and confidential and win not without the prior
written consent of the other, disclose or cause to be disclosed, the terms
hereof to any person or entity, except to its employees, counsel, underwriters
and auditors as necessary or appropriate for the leasing transaction which is
the subject hereof, or except (a) as may be required by applicable law or
pursuant to an order, or a valid and binding request, issued by any court or
other Government Entity having jurisdiction over Lessor, Lessee or the
assignee of either of them, as the case may be, or (b) as necessary to enable
Lessor or its assignee to make transfers, assignments or other dispositions to
potential transferees, assignees or participants of its interest in and to the
Lease and this Agreement. In connection with any such disclosure or any filing
of the information contained herein pursuant to any such applicable law,
Lessor, Lessee or the assignee of either of them, as the case may be, shall
request and use its best reasonable efforts to obtain confidential treatment
of this Schedule 2 and the other party will cooperate in making and supporting
any such request for confidential treatment.
2. DEFINITIONS OF CERTAIN TERMS
DEFERRED AMOUNT: [This provision has been omitted as
confidential information, and is
separately filed with the Commission.]
3. TERMS OF RENT DEFERRAL
Provided that each of the conditions precedent set forth in Section 6 of this
Agreement are satisfied and that no Event of Default has occurred and is
continuing under the Lease on any Rent Date, Lessee and Lessor agree that
effective as of the Rent Date on which each Deferred Amount would otherwise be
due under the Lease, each Deferred Amount shall be deferred as follows:
[This provision has been omitted as confidential information, and is
separately filed with the Commission.]
Schedule 2-1
4. LETTER OF CREDIT
4.1 APPLICATION OF LETTER OF CREDIT PROCEEDS: The Letter of Credit
Proceeds shall be applied by Lessor towards Lessee's Rent payment
obligation due on the Rent Dates occurring in the months of September
2001 and October 2001 under the Lease.
4.2 RESTORATION OF LETTER OF CREDIT: On or prior to the Rent Date
occurring in the month of March 2002, Lessee shall cause the maximum
amount available for drawing under the Letter of Credit to be
restored to the level at which it stood immediately prior to Lessor's
October 31, 2001 drawing under the Letter of Credit.
Schedule 2-2
SCHEDULE 3
AMENDMENT TO
AIRCRAFT LEASE COMMON TERMS AGREEMENT
Schedule 2-4
EXECUTION VERSION
AMENDMENT TO
AIRCRAFT LEASE COMMON TERMS AGREEMENT
DATED DECEMBER 14, 2001
BETWEEN
GENERAL ELECTRIC CAPITAL CORPORATION
AS LESSOR
AND
ALOHA AIRLINES, INC.
AS LESSEE
THIS AMENDMENT TO AIRCRAFT LEASE COMMON TERMS AGREEMENT is made on December
14, 2001 (this "AGREEMENT')
BETWEEN:
GENERAL ELECTRIC CAPITAL CORPORATION, a company incorporated under the laws of
Delaware whose principal office is at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000,
X.X.X. ("GE CAPITAL"); and
ALOHA AIRLINES, INC., a company incorporated under the laws of Delaware whose
principal place of business is at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xx 00000, X.X.X.
and its chief executive office at 500 Ala Moana Blvd., Two Xxxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000, X.X.X. ("ALOHA").
WHEREAS:
(A) GE Capital and Aloha have previously entered into that certain
Aircraft Lease Common Terms Agreement dated as of May 12, 2000 (the
"CTA");
(B) GE Capital and Aloha desire to amend the CTA on the terms set forth
in this Agreement.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS: From and after the effective date of this Agreement
(as notified to Lessee pursuant to the Notice), all references
herein to the "Lease" mean the integrated agreement consisting of
the various documents comprising the Lease as defined in Schedule 1
to the CTA as the same is amended by this Agreement and all
references in the Lease to "the Lease," the "Aircraft, Lease
Agreement," "hereunder" or the like shall mean the Lease as amended
by this Agreement. Capitalized terms. used herein but not defined
shall have the respective meanings ascribed to such terms in the
Lease.
1.2 CONSTRUCTION: The provisions of Clause 1.2 (Construction) of the CTA
shall apply to this Agreement as if the same were set out in full
herein.
2. AMENDMENT TO CTA
2.1 Schedule 7 to the CTA is hereby amended to read in its entirety as set
forth on Schedule 7 attached to this Agreement.
3. MISCELLANEOUS
3.1 FURTHER ASSURANCES: Aloha agrees from time to time to do and perform
such other and further acts and execute and deliver any and all such
other instruments as may be required by law or reasonably requested by
GE Capital to establish, maintain and protect the rights and remedies
of GE Capital and to carry out and effect the intent and purpose of
this Agreement and of any Lease in which the CTA as amended by this
Agreement may be incorporated.
1
3.2 COUNTERPARTS: This Agreement may be executed in any number of separate
counterparts, and each counterpart shall when executed and delivered
be an original document, but all counterparts shall together
constitute one and the same instrument.
3.3 GOVERNING LAW: The provisions of Clause 15.8 (Governing Law;
Jurisdiction; WAIVER OF JURY TRIAL) of the CTA shall apply to this
Agreement as if the same were set out in full herein.
3.4 VARIATION: The provisions of this Agreement shall not be varied
otherwise than by an instrument in writing executed by or on behalf of
GE Capital, and Aloha.
3.5 INVALIDITY OF ANY PROVISION: If any provision of this Agreement
becomes invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired.
3.6 COSTS AND EXPENSES: Aloha shall pay to GE Capital on demand all fees,
costs and expenses incurred or payable by GE Capital in connection
with the preparation, negotiation and completion of this Agreement and
performance of the transactions contemplated hereby.
4. CONTINUATION OF COMMON TERMS AGREEMENT
Save as expressly amended by this Agreement, the CTA shall continue in
full and unvaried force and effect as the legal, valid and binding
rights and obligations of each of GE Capital and Aloha enforceable in
accordance with their respective terms.
2
IN WITNESS WHEREOF the parties hereto have executed this Agreement the
day and year first above written.
Signed for and on behalf of
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxx Xxx
-----------------------------
Name: Xxxxxx Xxx
-----------------------------
Title: Vice President
-----------------------------
Signed for and on behalf of
ALOHA AIRLINES, INC.
By: ____________________________
Name: ____________________________
Title: ____________________________
By: ____________________________
Name: ____________________________
Title: ____________________________
IN WITNESS WHEREOF the parties hereto have executed this Agreement the
day and year first above written.
Signed for and on behalf of
GENERAL ELECTRIC CAPITAL CORPORATION
By: ____________________________
Name: ____________________________
Title: ____________________________
Signed for and on behalf of
ALOHA AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
------------------------------
Title: Exec. Vice President & CFO
------------------------------
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: XXXXX X. XXXX
------------------------------
SENIOR VICE PRESIDENT
Title: PLANNING & BUSINESS DEVELOPMENT
------------------------------
SCHEDULE 7
INSURANCE REQUIREMENTS
1.1 TYPES OF INSURANCE
The Insurances required to be maintained are as follows:
(a) HULL ALL RISKS of loss or damage while flying, taxiing and on the
ground with respect to the Aircraft on an agreed value basis for not
less than the Agreed Value and not more than 110% of the Agreed
Value and with a deductible not exceeding the Deductible Amount;
(b) HULL WAR Risks AND ALLIED PERILS in accordance with LSW555B or its
equivalent form reasonably acceptable to Lessor (or an agreement of
the United States Government to insure against or indemnify for
substantially the same risks) in an amount not less than the Agreed
Value;
(c) All RISKS (including War and Allied Risk except when on the ground
or in transit other than by air) property insurance on all Engines
and Parts when not installed on the Aircraft for like kind and
quality value and including engine test and running risks; and
(d) COMPREHENSIVE AIRCRAFT THIRD PARTY, PROPERTY DAMAGE, PASSENGER,
BAGGAGE, CARGO AND MAIL AND AIRLINE GENERAL THIRD PARTY (INCLUDING
PRODUCTS) LEGAL LIABILITY for a combined single limit (bodily
injury/property damage) of an amount not less than the Minimum
Liability Coverage for the time being for any one occurrence (but in
respect of products and personal injury liability, this limit may be
an aggregate limit for any and all losses occurring during the
currency of the policy). War and Allied Risks are also to be covered
under the policy in line with prudent market practice for comparable
airlines, operating similar equipment in similar circumstances. In
addition, without limitation of the requirements of the preceding
sentence (and notwithstanding anything to the contrary contained in
the preceding sentence), the Lessee shall in all events maintain war
risk and allied perils liability insurance in accordance with London
form AVN52C (as in effect on September 1, 2001) or its equivalent
form reaonsably acceptable to Lessor (or an agreement of the United
States Government to insure against or indemnify for substantially
the same risks), from time to time, with respect to the Aircraft in
an amount not less than the Minimum Liability Coverage.
1.2 TERMS OF HULL AND SPARES INSURANCE
All required hull and spares insurance, so far as it relates to the Aircraft,
will:
(a) LOSS PAYEE: name Lessor, as loss payee (without imposing on Lessor
any obligation imposed on the insured, including the liability to
pay any calls, commissions or premiums);
(b) PAYMENT OF LOSSES: Losses will be payable in Dollars to Lessor for
all amounts up to the Agreed Value and to Lessee for any excess
above the Agreed Value
4
(which excess shall not exceed 10% of the Agreed Value), except
where the insurance payment does not exceed the Damage Notification
Threshold, and no Default is in existence, in which case the loss
will be settled with and paid to Lessee;
(c) 50/50 PROVISION: if separate Hull "all risks" and "war risks"
insurances are arranged, include a 50/50 provision in accordance
with market practice (AVS. 103 is the current London market
language); and
(d) NO OPTION TO REPLACE: confirm that the insurers are not entitled to
replace the Aircraft in the event of an insured Event of Loss and
are not entitled to replace any Engine in the event of an Engine
Event of Loss with respect to such Engine.
1.3 TERMS OF LIABILITY INSURANCE
All required liability insurances will:
(a) ADDITIONAL INSUREDS: include each Indemnitee, as additional insureds
for its respective rights and interests, warranted, each as to
itself only, no operational interest (without imposing on any such
Person any obligation imposed on the insured, including the
liability to pay any calls, commissions or premiums);
(b) SEVERABILITY: include a severability of interests clause which
provides that the insurance, except for the limit of liability, will
operate to give each insured the same protection as if there were a
separate policy issued to each insured; and
(c) PRIMARY POLICY: contain a provision confirming that the policy is
primary without right of contribution and the liability of the
insurers will not be affected by any other insurance of which
Lessor, any Indemnitee or Lessee has the benefit so as to reduce the
amount payable to the additional insureds under such policies.
1.4 TERMS OF ALL INSURANCES
All Insurances will:
(a) INDUSTRY PRACTICE: be in accordance with standard industry practice
for airlines operating similar aircraft in similar circumstances;
(b) DOLLARS: provide cover denominated in Dollars;
(c) WORLDWIDE: operate on a worldwide basis subject to such limitations
and exclusions as are in line with industry practice obtained by
prudent United States based international air carriers;
(d) BREACH OF WARRANTY: provide that, in relation to the interests of
each of the additional assureds, the Insurances will not be
invalidated by any act or omission by Lessee, or any other Person
other than the respective additional assureds seeking protection and
shall insure the interests of each of the additional assureds
regardless of any breach or violation by Lessee, or any other Person
other than the respective additional assured seeking protection of
any warranty, declaration or condition, contained in such
Insurances;
5
(e) SUBROGATION: provide that the insurers will hold harmless and waive
any rights of recourse or subrogation against the additional
insureds to the extent Lessee has waived its rights against the
additional insureds in the Lease;
(f) PREMIUMS: provide that the additional insureds will have no
obligation or responsibility for the payment of any premiums due
(but reserve the right to pay the same should any of them elect so
to do) and that the insurers will not exercise any right of set-off,
counter-claim or other deduction, by attachment or otherwise, in
respect of any premium due against the respective interests of the
additional insureds other than outstanding premiums relating to the
Aircraft, any Engine or Part the subject of the relevant claim;
(g) Cancellation/Change: provide that the Insurances will continue
unaltered for the benefit of the additional insureds for at least 30
days after written notice by registered mail or telex of any
cancellation, change, event of non-payment of premium or installment
thereof has been sent by insurer(s) to Lessor, or where an insurance
broker is appointed to the insurance broker who shall promptly send
on such notice. to Lessor, except in the case of war risks for which
7 days (or such lesser period as is or may be customarily available
in respect of war risks or allied perils) will be given, or in the
case of war between the 5 great powers or nuclear peril for which
termination is automatic; and
(h) [NOT APPLICABLE]
(i) [INTENTIONALLY OMITTED.]
(j) INDEMNITIES: accept and insure the indemnity provisions of the Lease
to the extent of the risks covered by the policies.
1.5 DEDUCTIBLES
Lessee shall be responsible for any and all deductibles under the Insurances.
1.6 APPLICATION OF INSURANCE PROCEEDS
The Insurances will be endorsed to provide for payment of proceeds as follows:
(a) EVENT OF LOSS: all insurance payments up to the Agreed Value
received as the result of an Event of Loss occurring during the Term
will be paid to Lessor as loss payee and any amount in excess of the
Agreed Value (which excess shall not exceed 10% of the Agreed Value)
shall be paid to Lessee;
(b) EXCEEDING DAMAGE NOTIFICATION THRESHOLD: all insurance proceeds of
any damage or loss to the Aircraft, any Engine or any Part occurring
during the Term not constituting an Event of Loss and in excess of
the Damage Notification Threshold will be paid to the appropriate
repair facility, and applied in payment (or paid to Lessee and/or
Lessor as reimbursement) for repairs or replacement property upon
Lessor being satisfied that the repairs or replacement have been
effected in accordance with the Lease.
(c) BELOW DAMAGE NOTIFICATION THRESHOLD: insurance proceeds in amounts
below
6
the Damage Notification Threshold shall be paid by the insurer
directly to Lessee;
(d) LIABILITY PROCEEDS: all insurance proceeds in respect of third party
liability will be paid by the insurers to the relevant third party
in satisfaction of the relevant liability or to Owner, Lessor,
Financing Partners' Representative or Lessee, as the case may be, in
reimbursement of any payment so made;
(e) DEFAULT: notwithstanding any of the foregoing paragraphs, if at the
time of the payment of any such insurance proceeds a Default has
occurred and is continuing, all such proceeds will be paid to
Lessor, Owner or Financing Parties' Representative, as the case may
be, or retained to be applied toward payment of any amounts which
may be or become payable by Lessee in such order as Lessor or Owner,
as the case may be, may elect until such time as no Default is
continuing and then applied as described above; and to the extent
that insurance proceeds are paid to Lessee, Lessee agrees to hold
such proceeds in trust and comply with the foregoing provisions and
apply or pay over such proceeds as so required.
1.7 UNITED STATES GOVERNMENTAL INDEMNITY
Notwithstanding any of the foregoing paragraphs, in the event of a Permitted
Sub-Lease to, or a requisition of use by, the United States or any Governmental
Entity whose obligations have the full faith and credit of the federal
Government of the United States, Lessor agrees to accept in lieu of insurance
required hereunder indemnification or insurance from the United States or such
a Governmental Entity in a form reasonably acceptable to Lessor and Owner and
against such risks and in such amounts and on such terms such that when added
to the Insurance maintained by Lessee, Lessee is in full compliance with the
requirements of Section 9 and this Schedule.
7
EXECUTION VERSION
-----------------
AMENDMENT TO
AIRCRAFT LEASE COMMON TERMS AGREEMENT
DATED DECEMBER 14, 2001
BETWEEN
GENERAL ELECTRIC CAPITAL CORPORATION
AS LESSOR
AND
ALOHA AIRLINES, INC.
AS LESSEE
THIS AMENDMENT TO AIRCRAFT LEASE COMMON TERMS AGREEMENT is made on December
14, 2001 (this "AGREEMENT")
BETWEEN:
GENERAL ELECTRIC CAPITAL CORPORATION, a company incorporated under the laws of
Delaware whose principal office is at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000,
X.X.X. ("GE CAPITAL"); and
ALOHA AIRLINES, INC., a company incorporated under the laws of Delaware whose
principal place of business is at 000 Xxxxx Xxxxxx, Xxxxxxxx, XX 00000, X.X.X.
and its chief executive office at 500 Ala Moana Blvd., Two Xxxxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000, X.X.X. ("ALOHA").
WHEREAS:
(A) GE Capital and Aloha have previously entered into that certain
Aircraft Lease Common Terms Agreement dated as of May 12, 2000 (the
"CTA");
(B) GE Capital and Aloha desire to amend the CTA on the terms set forth
in this Agreement.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS: From and after the effective date of this Agreement (as
notified to Lessee pursuant to the Notice), all references herein to
the "Lease" mean the integrated agreement consisting of the various
documents comprising the Lease as defined in Schedule 1 to the CTA as
the same is amended by this Agreement and all references in the Lease
to "the Lease," the "Aircraft Lease Agreement," "hereunder" or the
like shall mean the Lease as amended by this Agreement. Capitalized
terms used herein but not defined shall have the respective meanings
ascribed to such terms in the Lease.
1.2 CONSTRUCTION: The provisions of Clause 1.2 (Construction) of the CTA
shall 11 apply to this Agreement as if the same were set out in full
herein.
2. AMENDMENT TO CTA
2.1 Schedule 7 to the CTA is hereby amended to read in its entirety as set
forth on Schedule 7 attached to this Agreement.
3. MISCELLANEOUS
3.1 FURTHER ASSURANCES: Aloha agrees from time to time to do and perform
such other and further acts and execute and deliver any and all such
other instruments as may be required by law or reasonably requested by
GE Capital to establish, maintain and protect the rights and remedies
of GE Capital and to carry out and effect the intent and purpose of
this Agreement and of any Lease in which the CTA as amended by this
Agreement may be incorporated.
1
3.2 COUNTERPARTS: This Agreement may be executed in any number of
separate counterparts, and each counterpart shall when executed and
delivered be an original document, but all counterparts shall
together constitute one and the same instrument.
3.3 GOVERNING LAW: The provisions of Clause 15.8 (Governing Law;
Jurisdiction; WAIVER OF JURY TRIAL) of the CTA shall apply to this
Agreement as if the same were set out in full herein.
3.4 VARIATION: The provisions of this Agreement shall not be varied
otherwise than by an instrument in writing executed by or on behalf
of GE Capital and Aloha.
3.5 INVALIDITY OF ANY PROVISION: If any provision of this Agreement
becomes invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired.
3.6 COSTS AND EXPENSES: Aloha shall pay to GE Capital on demand all fees,
costs and expenses incurred or payable by GE Capital in connection
with the preparation, negotiation and completion of this Agreement
and performance of the transactions contemplated hereby.
4. CONTINUATION OF COMMON TERMS AGREEMENT
Save as expressly amended by this Agreement, the CTA shall continue
in full and unvaried force and effect as the legal, valid and binding
rights and obligations of each of GE Capital and Aloha enforceable in
accordance with their respective terms.
2
[missing page 3]
SCHEDULE 7
INSURANCE REQUIREMENTS
1.1 TYPES OF INSURANCE
The Insurances required to be maintained are as follows:
(a) HULL ALL RISKS of loss or damage while flying, taxiing and
on the ground with respect to the Aircraft on an agreed
value basis for not less than the Agreed Value and not more
than 110% of the Agreed Value and with a deductible not
exceeding the Deductible Amount;
(b) HULL WAR Risks AND ALLIED PERILS in accordance with LSW555B
or its equivalent form reasonably acceptable to Lessor (or
an agreement of the United States Government to insure
against or indemnify for substantially the same risks) in
an amount not less than the Agreed Value;
(c) ALL RISKS (including War and Allied Risk except when on the
ground or in transit other than by air) property insurance
on all Engines and Parts when not installed on the Aircraft
for like kind and quality value and including engine test
and running risks; and
(d) COMPREHENSIVE AIRCRAFT THIRD PARTY, PROPERTY DAMAGE,
PASSENGER, BAGGAGE, CARGO AND MAIL AND AIRLINE GENERAL
THIRD PARTY (INCLUDING PRODUCTS) LEGAL LIABILITY for a
combined single limit (bodily injury/property damage) of an
amount not less than the Minimum Liability Coverage for the
time being for any one occurrence (but in respect of
products and personal injury liability, this limit may be
an aggregate limit for any and all losses occurring during
the currency of the policy). War and Allied Risks are also
to be covered under the policy in line with prudent market
practice for comparable airlines, operating similar
equipment in similar circumstances. In addition, without
limitation of the requirements of the preceding sentence
(and notwithstanding anything to the contrary contained in
the preceding sentence), the Lessee shall in all events
maintain war risk and allied perils liability insurance in
accordance with London form AVN52C (as in effect on
September 1, 2001) or its equivalent form reasonably
acceptable to Lessor (or an agreement of the United States
Government to insure against or indemnify for substantially
the same risks), from time to time, with respect to the
Aircraft in an amount not less than the Minimum Liability
Coverage.
1.2 TERMS OF HULL AND SPARES INSURANCE
All required hull and spares insurance, so far as it relates to the Aircraft,
will:
(a) LOSS PAYEE: name Lessor, as loss payee (without imposing on
Lessor any obligation imposed on the insured, including the
liability to pay any calls, commissions or premiums);
(b) PAYMENT OF LOSSES: Losses will be payable in Dollars to
Lessor for all amounts up to the Agreed Value and to Lessee
for any excess above the Agreed Value
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(which excess shall not exceed 10% of the Agreed Value),
except where the insurance payment does not exceed the
Damage Notification Threshold, and no Default is in
existence, in which case the loss will be settled with and
paid to Lessee;
(c) 50/50 PROVISION: if separate Hull "all risks" and "war
risks" insurances are arranged, include a 50/50 provision in
accordance with market practice (AVS. 103 is the current
London market language); and
(d) NO OPTION TO REPLACE: confirm that the insurers are not
entitled to replace the Aircraft in the event of an insured
Event of Loss and are not entitled to replace any Engine in
the event of an Engine Event of Loss with respect to such
Engine.
1.3 TERMS OF LIABILITY INSURANCE
All required liability insurances will:
(a) ADDITIONAL INSUREDS: include each Indemnitee, as -additional
insureds for its respective rights and interests, warranted,
each as to itself only, no operational interest (without
imposing on any such Person any obligation imposed on the
insured, including the liability to pay any calls,
commissions or premiums);
(b) SEVERABILITY: include a severability of interests clause
which provides that the insurance, except for the limit of
liability, will operate to give each insured the same
protection as if there were a separate policy issued to each
insured; and
(c) PRIMARY POLICY: contain a provision confirming that the
policy is primary without right of contribution and the
liability of the insurers will not be affected by any other
insurance of which Lessor, any Indemnitee or Lessee has the
benefit so as to reduce the amount payable to the additional
insureds under such policies.
1.4 TERMS OF ALL INSURANCES
All Insurances will:
(a) INDUSTRY PRACTICE: be in accordance with standard industry
practice for airlines operating similar aircraft in similar
circumstances;
(b) DOLLARS: provide cover denominated in Dollars;
(c) WORLDWIDE: operate on a worldwide basis subject to such
limitations and exclusions as are in line with industry
practice obtained by prudent United States based
international air carriers;
(d) BREACH OF WARRANTY: provide that, in relation to the
interests of each of the additional assureds, the Insurances
will not be invalidated by any act or omission by Lessee, or
any other Person other than the respective additional
assureds seeking protection and shall insure the interests
of each of the additional assureds regardless of any breach
or violation by Lessee, or any other Person other than the
respective additional assured seeking protection of any
warranty, declaration or condition, contained in such
Insurances;
5
(e) SUBROGATION: provide that the insurers will hold harmless
and waive any rights of recourse or subrogation against the
additional insureds to the extent Lessee has waived its
rights against the additional insureds in the Lease;
(f) PREMIUMS: provide that the additional insureds will have no
obligation or responsibility for the payment of any premiums
due (but reserve the right to pay the same should any of
them elect so to do) and that the insurers will not exercise
any right of set-off, counter-claim or other deduction, by
attachment or otherwise, in respect of any premium due
against the respective interests of the additional insureds
other than outstanding premiums relating to the Aircraft,
any Engine or Part the subject of the relevant claim;
(g) Cancellation/Change: provide that the Insurances will
continue unaltered for the benefit of the additional
insureds for at least 30 days after written notice by
registered mail or telex of any cancellation, change, event
of non-payment of premium or installment thereof has been
sent by insurer(s) to Lessor, or where an insurance broker
is appointed to the insurance broker who shall promptly send
on such notice to Lessor, except in the case of war risks
for which 7 days (or such lesser period as is or may be
customarily available in respect of war risks or allied
perils) will be given, or in the case of war between the 5
great powers or nuclear peril for which termination is
automatic; and
(h) [NOT APPLICABLE]
(i) [INTENTIONALLY OMITTED.]
(j) INDEMNITIES: accept and insure the indemnity provisions of
the Lease to the extent of the risks covered by the
policies.
1.5 DEDUCTIBLES
Lessee shall be responsible for any and all deductibles under the Insurances.
1.6 APPLICATION OF INSURANCE PROCEEDS
The Insurances will be endorsed to provide for payment of proceeds as follows:
(a) EVENT OF LOSS: all insurance payments up to the Agreed Value
received as the result of an Event of Loss occurring during
the Term will be paid to Lessor as loss payee and any amount
in excess of the Agreed Value (which excess shall not exceed
10% of the Agreed Value) shall be paid to Lessee;
(b) EXCEEDING DAMAGE NOTIFICATION THRESHOLD: all insurance
proceeds of any damage or loss to the Aircraft, any Engine
or any Part occurring during the Term not constituting an
Event of Loss and in excess of the Damage Notification
Threshold will be paid to the appropriate repair facility,
and applied in payment (or paid to Lessee and/or Lessor as
reimbursement) for repairs or replacement property upon
Lessor being satisfied that the repairs or replacement have
been effected in accordance with the Lease.
(c) BELOW DAMAGE NOTIFICATION THRESHOLD: insurance proceeds in
amounts below
6
the Damage Notification Threshold shall be paid by the
insurer directly to Lessee;
(d) LIABILITY PROCEEDS: all insurance proceeds in respect of
third party liability will be paid by the insurers to the
relevant third party in satisfaction of the relevant
liability or to Owner, Lessor, Financing Partners'
Representative or Lessee, as the case may be, in
reimbursement of any payment so made;
(e) DEFAULT: notwithstanding any of the foregoing paragraphs, if
at the time of the payment of any such insurance proceeds a
Default has occurred and is continuing, all such proceeds
will be paid to Lessor, Owner or Financing Parties'
Representative, as the case may be, or retained to be
applied toward payment of any amounts which may be or become
payable by Lessee in such order as Lessor or Owner, as the
case may be, may elect until such time as no Default is
continuing and then applied as described above; and to the
extent that insurance proceeds are paid to Lessee, Lessee
agrees to hold such proceeds in trust and comply with the
foregoing provisions and apply or pay over such proceeds as
so required.
1.7 UNITED STATES GOVERNMENTAL INDEMNITY
Notwithstanding any of the foregoing paragraphs, in the event of a Permitted
Sub-Lease to, or a requisition of use by, the United States or any
Governmental Entity whose obligations have the full faith and credit of the
federal Government of the United States, Lessor agrees to accept in lieu of
insurance required hereunder indemnification or insurance from the United
States or such a Governmental Entity in a form reasonably acceptable to Lessor
and Owner and against such risks and in such amounts and on such terms such
that when added to the Insurance maintained by Lessee, Lessee is in full
compliance with the requirements of Section 9 and this Schedule.
7
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first above written.
Signed for and on behalf of
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxx Xxx
-----------------------------
Name: Xxxxxx Xxx
---------------------------
Title: Vice-President
---------------------------
Signed for and on behalf of
ALOHA AIRLINES, INC.
By: -----------------------------
Name: ---------------------------
Title: --------------------------
By: -----------------------------
Name: ---------------------------
Title: --------------------------
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first above written.
Signed for and on behalf of
GENERAL ELECTRIC CAPITAL CORPORATION
By: -----------------------------
Name: ---------------------------
Title: --------------------------
Signed for and on behalf of
ALOHA AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------
Title: Exec. Vice President & CFO
---------------------------
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: XXXXX X. XXXX
---------------------------
Title: SENIOR VICE PRESIDENT
PLANNING & BUSINESS DEVELOPMENT
---------------------------
May 12, 2000
Aloha Airlines, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attn: Executive Vice President and Chief Financial Officer
Re: Aircraft Lease Agreement dated as of May 12, 2000 between Aviation
Financial Services, Inc., as Lessor, and Aloha Airlines, Inc., as
Lessee, in respect of One Boeing 737-700 Aircraft Bearing MSN 28640,
incorporating the terms of that certain Common Terms Agreement dated
as of May 12, 2000 (the "CTA") between General Electric Capital
Corporation and Aloha Airlines, Inc. (collectively, the "Lease")
Ladies and Gentlemen:
We refer to the Lease, as defined above, and capitalized terms used without
definition herein have the meanings assigned to them in the Lease. This letter
will serve as the acknowledgment of Aviation Financial Services, Inc., as lessor
("Lessor") under the Lease, that neither of the following situations shall
constitute an "Event of Default" under the Lease pursuant to Section (h) of
Schedule 9 to the CTA:
1. Cessation or temporary suspension of Lessee's trans-Pacific route
between Hawaii and California (or any other location within the
continental United States); or
2. Cessation or temporary suspension of any segment of Lessee's
business which accounted for ten percent (10%) or less of the
gross revenues of Lessee over the last three fiscal years
immediately preceding the date of suspension or cessation (which
calculation shall be made on a cumulative basis taking into
account any and all segments of Lessee's business suspended or
ceased within such three-year period).
For the avoidance of doubt, Lessor and Lessee expressly acknowledge and agree
that nothing in this letter agreement shall be deemed to derogate from or modify
any other provisions of the Lease. Without limiting the foregoing, Lessee
expressly acknowledges and agrees that, in the event that Lessee's utilization
of the Aircraft results in an operational ratio of less than one Flight Hour per
Cycle for a period of twelve (12) consecutive months, an "Event of Default"
shall arise pursuant to Part VIII of Schedule B to the Lease, regardless of
whether or not such operation arises out of or as a result of any suspension of
Lessee's trans-Pacific route.
Please indicate your acceptance of and agreement with the terms set forth in
this letter by signing in the space provided below and return one fully-executed
counterpart of this letter to Lessor.
Very truly yours,
AVIATION FINANCIAL SERVICES, INC.
By: /s/ Xxxx Xxx
-----------------------------------
Name: Xxxx Xxx
---------------------------------
Title: Vice President
--------------------------------
ACKNOWLEDGED AND AGREED.
ALOHA AIRLINES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Please indicate your acceptance of and agreement with the terms set forth in
this letter by signing in the space provided below and return one fully-executed
counterpart of this letter to Lessor.
Very truly yours,
AVIATION FINANCIAL SERVICES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ACKNOWLEDGED AND AGREED.
ALOHA AIRLINES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: Executive Vice President & CFO
--------------------------------
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
---------------------------------
Title: VP Planning & Development
--------------------------------
