1
EXHIBIT 10.25
AIRCRAFT SALE AGREEMENT
dated as of November 17, 1997
- between -
FINOVA CAPITAL CORPORATION,
Seller,
- and -
XXXXXX LEASE FINANCE CORPORATION,
Buyer.
-----------------
Three (3) de Havilland DHC-8-102 Aircraft
six (6) Xxxxx & Whitney PW120A Engines
and three (3) Xxxxx & Xxxxxxx PW120A Spare Engines
AIRCRAFT SALE AGREEMENT
-----------------------
2
THIS AIRCRAFT SALE AGREEMENT, dated as of November17, 1997 (this
"Agreement"), between FINOVA CAPITAL CORPORATION, a Delaware corporation
("Seller"), and XXXXXX LEASE FINANCE CORPORATION, a California corporation
("Buyer").
W I T N E S S E T H:
WHEREAS, Seller owns (i) three de Havilland DHC-8-102 airframes (as more
fully identified on Schedule A hereto and in the Leases (as defined below), the
"Airframes"), together with six Xxxxx & Xxxxxxx PW120A engines (as more fully
identified on Schedule A hereto and in the Leases, the "Engines") and six
Xxxxxxxx Standard 14SF four blade propellers (as more fully identified on
Schedule A hereto and in the Leases, the" Propellers", and, together with the
Airframes and the Engines, collectively, the "Aircraft"); and (ii) three Xxxxx &
Xxxxxxx 120A engines (as more fully identified on Schedule A hereto and in the
Leases, the "Spare Engines", and the Spare Engines, together with the Aircraft,
collectively the "Equipment");
WHEREAS, the Equipment is leased by Seller to Horizon Air Industries,
Inc., a
3
Washington corporation ("Lessee") pursuant to four Lease Agreements (as more
fully described in Schedule B hereto, the "Leases"); and
WHEREAS, Seller wishes to sell the Equipment to Buyer and Buyer wishes
to purchase the Equipment from Seller, and simultaneously therewith Seller
wishes to assign to Buyer all right, title and interest of Seller under the
Leases and Buyer wishes to assume all of the obligations of Seller under the
Leases in accordance with the terms and conditions of this Agreement and the
Assignments.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
Section 1. Definitions. The following terms, when capitalized, shall
have the following meanings for all purposes of this Agreement, except where the
context otherwise requires:
"811 Aircraft" shall mean the de Havilland DHC-8-102 turboprop
passenger aircraft bearing U.S. Registration N811PH and Manufacturer's Serial
No. 023.
"812 Aircraft" shall mean the de Havilland DHC-8-102 turboprop
passenger
4
aircraft bearing U.S. Registration N812PH and Manufacturer's Serial No. 026.
"813 Aircraft" shall mean the de Havilland DHC-8-102 turboprop
passenger aircraft bearing U.S. Registration N813PH and Manufacturer's Serial
No. 032.
"Agreed Aircraft Value" shall mean, for the 811 Aircraft, $3,500.000.00,
for the 812 Aircraft, $3,850,000.00, and for the 813 Aircraft, $3,850,000.00.
"Aircraft" shall have the meaning set forth in the first recital hereto.
"Airframe" shall have the meaning set forth in the first recital hereto.
"Acknowledgments of Delivery and Sale" shall mean the four
acknowledgments of sale, each in the form attached hereto as Exhibit "A."
"Assignments" means the four Assignment and Assumption Agreements
between Buyer and Seller each in the form attached hereto as Exhibit "C."
"Bills of Sale" shall mean the four AC Form 8050-2 Bills of Sale (the
"FAA Bills of Sale") and the long form Warranty Bills of Sale, each in the form
attached hereto as Exhibit "B."
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which commercial banking institutions are required or authorized by law to
close in New York City, New York, or Phoenix, Arizona or San Francisco,
California.
"Certificates and Agreements" means the Four Certificates and Agreements
executed and delivered by Lessee, Seller and Buyer, each in the form attached
hereto as Exhibit "D".
5
"Certificates of Loss and Indemnity Agreements" means the two
Certificates of Loss and Indemnity Agreements executed and delivered by Seller,
each in the form attached hereto as Exhibit "E".
"Closing Date" shall have the meaning set forth in Section 2 hereof.
"Consents and Acknowledgments" means the four Consents and
Acknowledgments, executed and delivered by Lessee, each in the form attached
hereto as Exhibit "F".
"Engines" shall have the meaning set forth in the first recital hereto.
"Equipment" shall have the meaning set forth in the first recital
hereto.
"FAA" shall mean the Federal Aviation Administration of the Department
of Transportation of the United States and any successor agencies and
authorities.
"Leases" shall have the meaning set forth in the second recital hereto.
"Lease Documents" means the Leases, together with each document listed
on Schedule II to the Assignments, in each case as amended and supplemented
through the date hereof, but only as applicable to the Leases.
"Manuals" shall mean the logs, manuals and data, and inspection,
modification and overhaul required to be maintained and actually maintained by
Lessee under the Leases.
"Operative Documents" shall mean this Agreement, the Bills of Sale, the
Acknowledgments of Delivery and Sale, the Assignments, the Consents and
6
Acknowledgments, the Certificates and Agreements and the Certificates of Loss
and Indemnity Agreements.
"Propellers" shall have the meaning set forth in the first recital
hereto.
"Purchase Price" shall have the meaning set forth in Section 2 hereof.
"140 Spare Engine" shall mean the Xxxxx & Whitney Model PW 120A aircraft
engine bearing Manufacturer's Serial No. PC-E120140.
"141 Spare Engine" shall mean the Xxxxx & Xxxxxxx Model PW 120A aircraft
engine bearing Manufacturer's Serial No. PC-E120141.
"142 Spare Engine" shall mean the Xxxxx & Whitney Model PW 120A aircraft
engine bearing Manufacturer's Serial No. PC-E120142.
"Spare Engine Agreed Value" shall mean, for the 140 Spare Engine,
$366,666.67, for the 141 Spare Engine, $366,666.67, for the 142 Spare Engine,
$366,666.67.
"Spare Engines" shall have the meaning set forth in the first recital
hereto.
Terms defined in the Leases, unless otherwise defined herein, shall be
used herein as therein defined.
Section 2. Sale of Equipment; Purchase Price; Inspection and Deposit.
(a) Sale of Equipment. Subject to the terms of this Agreement, in no
event later than November 25, 1997 (the "Closing Date"), Seller shall sell the
Equipment and
7
Manuals to Buyer, and Buyer hereby shall purchase the Equipment and Manuals from
Seller; provided, however, that in the event that the closing of the sale of any
Aircraft or the Spare Engines on the scheduled date could, due to the location
of such Aircraft and Spare Engines on such date, impose on the Buyer liability
for Taxes pursuant to Section 6 or for any other reason mutually agreeable to
the parties hereto, Buyer may by notice given to Seller before the scheduled
closing for any Aircraft and Spare Engines, reschedule the Closing Date for such
Aircraft and Spare Engines to the next Business Days on which the subject
Aircraft or Spare Engine shall be in a location which does not impose on the
Buyer liability for Taxes pursuant to Section 6 or are otherwise mutually
agreeable to Buyer and Seller. The obligation of Seller and Buyer to effect such
sale and purchase shall be subject only to the compliance or waiver of their
respective conditions precedent set forth in Section 3 hereof. Time is of the
essence concerning the Closing Date. In no event shall the Closing Date be
rescheduled beyond December 8, 1997. The Spare Engines shall be sold by the
Seller to the Buyer at one Closing.
(b) Purchase Price. The purchase price for the Equipment and Manuals
shall be $12,300,000.00 (the "Purchase Price"). The Purchase Price or the Agreed
Aircraft Value or Spare Engine Agreed Value, if less than all of the Equipment
is sold on the Closing Date, less the Deposit required to be paid as described
in Section 2(d) hereof, shall be paid by Buyer to the Seller on the Closing Date
for such Aircraft and Spare
8
Engines in immediately available funds by wire or intrabank transfer for deposit
to the account specified by Seller in writing. The Purchase Price or the Agreed
Aircraft Value or Spare Engine Agreed Value shall be paid simultaneously with
compliance with the other conditions precedent set forth in Section 3 hereof. If
the Closing Date with respect to any Aircraft or Spare Engine is rescheduled in
accordance with the proviso of the first sentence of Section 2(a) hereof, then
the Purchase Price to be paid for such Aircraft or Spare Engine shall be
respectively, the Agreed Aircraft Value and the Spare Engine Agreed Value.
(c) Inspection. Seller has contacted Lessee and arranged for the
Equipment and the manuals to be made available to Buyer, and/or Buyer's
representatives in order for the Buyer to inspect the Equipment and the Manuals.
The inspection has been completed, and Buyer has notified Seller that
the Equipment is in satisfactory condition and that the Buyer's Board of
Directors has approved this transaction.
(d) Deposit. Buyer has previously furnished to the Seller a deposit in
the sum of $100,000.00 (the "Deposit"). The Deposit shall be refundable only if
the conditions precedent set forth in Section 3(b) below have not been satisfied
or waived by the Buyer on or before the Closing Date. The Deposit shall be
applied by the Seller towards the payment of the Purchase Price or Agreed
Aircraft Value and Spare Engine Agreed Values as set forth in Section 2(b) above
or, if the Buyer fails to
9
perform its obligations to purchase the Equipment in accordance with this
Agreement, retained by Seller.
Section 3. Conditions Precedent.
(a) The obligation of the Seller to sell each respective Aircraft or the
Spare Engines on each respective Closing Date therefor, pursuant to Section 2
hereof shall be subject only to the following conditions precedent, unless, in
any case, waived by the Seller in its sole discretion.
(i) Buyer shall have paid in full the Purchase Price or the
respective Aircraft Agreed Value and the respective Spare Engine Agreed
Value in the manner provided in Section 2 hereof.
(ii) Buyer shall have executed and delivered the Assignments.
(iii) Lessee shall have executed and delivered the Consents and
Acknowledgments.
(iv) No Event of Loss, or event which, with the passing of time
would become an Event of Loss under the Leases shall have occurred and
be continuing.
(v) The representations and warranties of Buyer contained in
Section 5 hereof shall be true and accurate in all material respects on
and as of the respective Closing Date.
(vi) Buyer shall have executed and delivered the
10
Acknowledgments of Delivery and Sale.
(vii) Buyer shall have delivered to Seller a certificate of its
Secretary or Assistant Secretary with respect to the incumbency of the
officers who executed the Operative Documents and any other document
required to be executed on behalf of it pursuant to this Agreement.
(viii) Buyer shall have delivered to Seller evidence of due
authorization for the purchase of the Equipment by the Board of
Directors of the Buyer.
(ix) Seller shall have received a Certificate of Insurance in
accordance with Section 11 hereof and in accordance with the Consents
and Acknowledgments.
(x) Seller shall have received the consents of DeHavilland, .
Inc. and Xxxxx & Xxxxxxx Canada, Inc. in substantially the forms
attached hereto as Exhibit "G."
(b) The obligation of Buyer to purchase each respective Aircraft
and the Spare Engines and to pay the respective Aircraft Agreed Value and Spare
Engine Agreed Value thereof on the respective Closing Date therefor, pursuant to
Section 2 hereof, shall be subject only to the following conditions precedent
unless, in any case, waived by Buyer in its sole discretion:
11
(i) Seller shall have executed and tendered to Buyer the Bills
of Sale.
(ii) No Event of Loss, or event which, with the passing of time
would become an Event of Loss shall have occurred and be continuing
under the Leases.
(iii) Lessee shall have executed and delivered the Consents and
Acknowledgments.
(iv) Seller shall have executed and delivered the Assignments.
(v) The representations and warranties of the Seller contained
in Section 5 hereof shall be true and accurate in all material respects
on and as of the respective Closing Date.
(vi) Buyer shall have received evidence of all necessary
approvals of the FAA and any other governmental or nongovernmental
consents, approvals, permits or licenses of any nature whatsoever
necessary for the consummation of the transaction contemplated hereby.
(vii) Seller shall have executed and delivered the
Acknowledgments of Delivery and Sale.
(viii) Lessee shall not on the respective Closing Date be in
default in making any payment under the Leases and no Event of Default,
or event which, with the giving of notice or the passage of time would
12
become an Event of Default, under the Leases shall have occurred and be
continuing.
(ix) Buyer shall have received a report of the Lessee's
independent insurance brokers or other evidence reasonably satisfactory
to Buyer that Buyer and its Lender are, or effective upon the respective
Closing Date will become, additional insureds and to the extent provided
for in the Leases, the Lender and the Buyer shall be named as loss
payee, as their interests may appear, on the public liability and
property damage insurance maintained by Lessee in accordance with
Section 11 of the Leases.
(x) Buyer shall have received Form UCC-3s executed by Seller
assigning the precautionary UCC-1 financing statements filed in
Washington with respect to the Equipment.
(xi) Buyer shall have received an opinion from Xxxxxxxxx, Xxxxxx
& Peregrin, special aviation counsel to Seller and Buyer, addressed to
Buyer.
(xii) Buyer shall have received an original executed copy of the
Leases, except for the Lease for the 811 Aircraft, and the 813 Aircraft,
as to which Seller will have provided a Certificate of Loss and
Indemnity Agreement.
13
(xiii) Buyer shall have received a Certificate and Agreement in
respect of the respective Leases.
(xiv) Seller shall have delivered to Buyer a certificate of its
Assistant Secretary with respect to the incumbency of the officers who
executed the Operative Documents and any other document required to be
executed on behalf of it pursuant to this Agreement.
(xv) Seller shall have delivered to Buyer evidence of due
authorization for the sale of the Equipment by the Board of Directors of
the Buyer.
(xvi) Buyer shall have obtained a certificate of total loss
insurance for the Equipment in form and substance satisfactory to the
Buyer. (xvii) Buyer shall have received the consents of DeHavilland,
Inc. and Xxxxx & Xxxxxxx Canada, Inc. in substantially the forms
attached hereto as Exhibit "G".
Section 4. Allocation of Payments. Following each Closing Date, upon the
consummation of the transactions contemplated hereby the Buyer shall be entitled
to all of the benefits to which the Seller would have otherwise been entitled as
the owner of the Equipment being sold and as lessor under the Leases being
assigned, on
14
such Closing Date in connection with any payment of Basic Rent or Supplemental
Rent which shall be paid under the Leases; provided, however, that Buyer shall,
on the Closing Date, be entitled to a pro rata portion of the Basic Rent payable
by Lessee for the Basic Rent paid on November 1, 1997, in advance for the month
of November, 1997. The Buyer acknowledges that under the Assignments, the Seller
excluded from the rights assigned thereunder, and retained, rights to any
liability insurance proceeds or indemnification under any Lease Document to
which Seller is entitled with respect to claims or matters occurring prior to
each Closing Date, and the Seller acknowledges that except for such specifically
retained rights, upon the consummation of the transactions contemplated hereby
it will have transferred to the Buyer all of its right, title and interest with
respect to the Equipment and the Leases, as more fully set forth in the
Assignments. Accordingly, to the extent that any party hereto shall receive any
payment arising in connection with the Equipment or the Leases to which any
other party hereto is entitled (in whole or in part) because of such allocation
of rights, such payments (or portion thereof) shall be held in trust for the
benefit of, and promptly delivered to, the party entitled thereto.
Section 5. Representations and Warranties.
(a) Representations and Warranties of Seller. Seller hereby represents
and warrants to Buyer that:
15
(i) Seller is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware and has the
full power and authority to enter into, legally bind itself by, and
perform its obligations under, each Operative Document to which it is a
party;
(ii) each Operative Document to which it is a party has been
duly authorized by Seller;
(iii) this Agreement has been duly executed and delivered by
Seller and constitutes, and each other Operative Document to which it is
a party when executed and delivered by Seller will constitute, the
legal, valid and binding obligation of Seller, enforceable in accordance
with their respective terms, subject only to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general equitable principles;
(iv) the execution, delivery and performance by Seller of each
Operative Document to which it is a party are not in violation of its
certificate of incorporation or by-laws or of any indenture, mortgage,
contract or other agreement to which Seller is a party or by which it is
bound or of any order or judgment applicable to Seller or any law,
government rule or regulation of the United States or any state thereof
applicable to its business generally and, except for the filing for
16
recordation of the FAA Bills of Sale and the Assignments, do not require
the consent or approval of, or the giving of notice to, the registration
with, or the taking of any other action in respect of, any governmental
authority;
(v) as of each Closing Date, Seller will be the legal and
beneficial owner of the Equipment being sold on such date and will
transfer to Buyer good and marketable title to such Equipment, free and
clear of all Liens other than the Lien of the Leases and Liens permitted
under Section 6 thereof (other than Lessor Liens);
(vi) Seller has delivered to Buyer complete and correct
originals, original counterparts of the Leases, except of the Lease for
the 811 Aircraft and the 813 Aircraft, as to which Seller will have
provided a Certificate of Loss and Indemnity Agreement, and no other
agreements, instruments or documents exist between Seller and the Lessee
relating to the Equipment and the Leases that are in force and effect.
The Leases constitute the entire agreements between the Lessee and the
Seller with respect to the Equipment and no other assignments,
amendments, modifications, waivers or consents have been entered into
with respect to the Leases and Seller is not, and on each Closing Date
will not be, in default of any provisions binding on it contained in the
Lease being
17
assigned on such date.
(viii) Seller has delivered to Buyer a Certificate and Agreement
with respect to the respective Leases.
(vii) To the best knowledge of Seller, no Event of Loss has
occurred with respect to the Equipment, and no Event of Default has
occurred and is continuing under the Leases.
(viii) Seller has not previously sold, assigned, pledged or
otherwise transferred, or purported to sell, assign, pledge or otherwise
transfer, any of its right, title and interest in the Equipment or the
Leases.
(ix) No suits or proceedings are pending or, to the knowledge of
Seller, threatened against or affecting Seller or the Equipment in any
court that might have a material adverse effect on the Equipment or on
the ability of Seller to perform its obligations hereunder.
(x) The Seller has not registered in Canada for goods and sales
tax purposes.
(b) Representations and Warranties of Buyer. Buyer hereby represents and
warrants to Seller that:
(i) Buyer is a corporation duly organized and validly existing
in good standing under the laws of the State of California and has full
18
power and authority to enter into, legally bind itself by, and perform
its obligations under, each Operative Document to which it is a party;
(ii) each Operative Document to which it is a party has been
duly authorized by Buyer;
(iii) this Agreement has been duly executed and delivered by
Buyer and constitutes, and each other Operative Document to which it is
a party when executed and delivered by Buyer will constitute, the legal,
valid and binding obligation of Buyer, enforceable in accordance with
their respective terms, subject only to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and to general equitable principles; and
(iv) the execution, delivery and performance by Buyer of each
Operative Document to which it is a party are not in violation of its
certificate of incorporation or by-laws or of any indenture, mortgage,
contract or other agreement to which Buyer is a party or by which it is
bound or of any order or judgment applicable to Buyer or any law,
government rule or regulation of the United States or any state thereof
applicable to its business generally and do not require the consent or
approval of, or the giving of notice to, the registration with or the
taking of any other action in respect of any governmental authority.
19
(v) Buyer is a "citizen of the United States" within the meaning
of 49 U.S.C.Section 40102 (a)(15).
(vi) No suits or proceedings are pending or, to the knowledge of
Buyer, threatened against or affecting Buyer in any court that might
have a material adverse effect on the ability of Buyer to perform its
obligations hereunder.
(c) Seller confirms that acceptance by it of payment of the Purchase
Price or the Aircraft Agreed Value for each such Aircraft or the Spare Engine
Agreed Value for the Spare Engines pursuant to Section 2 hereof on the Closing
Date, will constitute a certification by Seller that its representations and
warranties contained in this Section 5 are true and accurate on and as of the
Closing Date for each such Aircraft and the Spare Engines. Buyer confirms that
payment by it of such Purchase Price or the respective Agreed Aircraft Value and
Spare Engine Agreed Value on such Closing Date will constitute a certification
by Buyer that its representations and warranties contained in this Section 5 are
true and accurate on and as of the Closing Date for each such Aircraft and the
Spare Engines.
(d) The representations and warranties contained in this Section 5 shall
survive the sale of the Equipment hereunder and the execution and delivery of
the agreements contemplated hereby.
20
(e) Disclaimer. Other than the express representations and warranties of
Seller set forth above in this Section 5 and in the Bills of Sale, the Equipment
and the Manuals are sold, "AS IS, WHERE IS" and "WITH ALL FAULTS," AND BUYER
WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, CONDITIONS, OBLIGATIONS AND
LIABILITIES OF SELLER AND ALL RIGHTS, CLAIMS AND REMEDIES OF BUYER AGAINST
SELLER, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO ANY
NON-CONFORMANCE, OR DEFECT IN THE EQUIPMENT INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
AIRWORTHINESS OR CONDITION OF THE EQUIPMENT OR THE SUITABILITY OF THE EQUIPMENT
FOR USE OR FOR A SPECIFIC PURPOSE, OPERATION OR PERFORMANCE, OR ANY LIABILITY,
RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE ACTIVE, PASSIVE
OR IMPUTED NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF SELLER, WHETHER ARISING BY
OPERATION OF LAW, COURSE OF DEALING OR USAGE OF TRADE OR OTHERWISE.
Section 6. Taxes. (a) Buyer and Seller shall endeavor to complete this
21
transaction in a manner to avoid or minimize any transaction taxes. However, if
such taxes are unavoidable Buyer shall be responsible for the payment of any and
all sales, use, excise, transfer, gross receipts or any other similar taxes,
fees or charges (individually a "Tax", and collectively called "Taxes"), imposed
by any taxing jurisdiction or authority arising out of the sale and delivery of
the Equipment hereunder. Notwithstanding anything herein to the contrary, Buyer
shall not be responsible for the payment of: (i) taxes based upon, measured by
or with respect to the net or gross income, items of tax preference or minimum
tax or excess profits, receipts, capital, franchise, net worth or conduct of
business or other similarly-based Taxes of Seller; (ii) taxes resulting from any
act or omission of Seller prohibited by or constituting a default under the
Operative Documents, and (iii) taxes resulting from the willful misconduct or
gross negligence of Seller.
Section 7. Assignment of Manufacturer's Warranties. On each Closing
Date, pursuant to the terms of this Agreement, Seller irrevocably assigns to
Buyer all of Seller's rights under any warranty, express or implied, service
policy or product agreement of any manufacturer, of any maintenance and overhaul
agency or of any subcontractor, supplier or vendor of any item of the Equipment
being sold on such date to the extent that such rights relate to any time period
after such Closing Date, are assignable and are not extinguished as a result of
this Agreement or such
22
assignment. From time to time upon the reasonable request of Buyer, Seller shall
give notice to any such manufacturer, maintenance and overhaul agency,
subcontractor, supplier or vendor of the assignment of such warranties to Buyer.
Seller shall enforce on Buyer's behalf all such rights that are not assignable
or would be extinguished as a result of this Agreement or such assignment,
provided that Buyer shall pay in advance any third party costs and expenses
incurred by Seller in rendering such assistance.
Section 8. Indemnification. (i) Seller shall indemnify, defend and hold
the Buyer, its successors and assigns, and its and their respective directors,
officers and employees, harmless from and against the payment of any and all
liabilities, obligations, claims, demands, judgments, penalties, causes of
action, damages, costs, losses and expenses (including, but not limited to,
attorneys' fees and court costs) (collectively, "Losses") arising out of or
pertaining to (a) the failure of Seller to perform or observe any of its
obligations as Lessor under any of the Leases at any time before any Closing
Date on which such lease is being assigned hereunder, or under any other
agreement entered into by Seller in connection with the transactions
contemplated hereby or (b) the breach of any representation or warranty of
Seller set forth in or incorporated by reference in any Operative Document. (ii)
The Buyer shall indemnify, defend and hold Seller, its successors and assigns,
and its and their respective directors, officers, and employees harmless from
and against the payment of
23
any and all Losses arising out of or pertaining to (a) the failure of the Buyer
to perform or observe any of its obligations as Lessor under any of the Leases
at any time after any Closing Date on which such lease is being assigned
hereunder, or under any other agreement entered into by the Buyer in connection
with the transactions contemplated hereby or (b) the breach of any
representations or warranty of Buyer set forth in or incorporated by reference
in any Operative Document.
Section 9. Broker's Commissions. Seller and Buyer each represent that,
it has not directly or indirectly employed or otherwise procured any broker in
connection with the sale of the Equipment hereunder. Accordingly, each party
hereto agrees that should any claim be made for commissions or other amounts by
any other broker or brokers by or through or on account of actions of that
party, that party shall hold the other party free and harmless from any and all
claims and liabilities and expenses in connection therewith.
Section 10. Expenses. Except as provided in Section 8 of this Agreement,
each party hereto will bear and be responsible for all costs and expenses
incurred or to be incurred by it in connection with this Agreement and the
transactions contemplated hereby, including but not limited to outside legal
counsel, accounting advisors, equipment appraisers and employee incurred
expenses, if any, associated with
24
consummating the purchase contemplated herein. Buyer agrees with Seller that as
between Seller and Buyer, fees and expenses of FAA Counsel shall be shared
equally.
Section 11. Insurance. Buyer shall use reasonable efforts to cause
Lessee and any other operator of the Aircraft to continue, at no cost to Seller
or Buyer, to name Seller as an additional named insured under the liability
insurance policy or policies required to be maintained by Lessee in accordance
with the terms of the Leases provided that Seller shall not be required to be
named as an additional named insured after the later of (i) two years and three
months after the respective Closing Date or (ii) completion of the most
comprehensive scheduled airframe overhaul or "D" check of the Aircraft under
Lessee's maintenance program next occurring after the Closing Date.
Section 12. Miscellaneous.
(a) Notice. All notices required or permitted hereunder shall be in
writing and may be sent either by personal delivery or internationally
recognized overnight courier service, addressed as follows:
If to Buyer:
Xxxxxx Lease Finance Corporation
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
25
If to Seller:
FINOVA Capital Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President of Operations, Transportation Finance
or to such other address as either party advises the other from time to time
through a notice given in accordance with the provisions of this Section 12(a).
Any such notice shall be effective and shall be deemed to have been given when
received at the address as set forth above, or as such address is modified by
notice given as set forth above.
(b) Counterparts. This Agreement may be executed in counterparts, and
each counterpart shall be an original, and all counterparts together shall be
but one and the same Agreement.
(c) Applicable Law; Jurisdiction. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN NEGOTIATED AND MADE IN, AND SHALL BE GOVERNED AND INTERPRETED UNDER THE
LAWS OF, THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE BY RESIDENTS
THEREOF TO BE ENTIRELY PERFORMED THEREIN. The parties hereto hereby agree that
all actions or proceedings arising directly or indirectly out of this Agreement
may be litigated in any of the United States District Court for the Southern
District of New York, or the Supreme Court of the Xxxxx xx Xxx Xxxx,
00
Xxx Xxxx Xxxxxx. The parties hereto hereby expressly submit and consent in
advance to any of such jurisdictions and venue in any action or proceeding
commenced by either party in any of such courts, agree that jurisdiction and
venue is proper in such courts, and hereby waive personal service of the summons
and complaint, or other process or papers issued therein, and agree that such
service of the summons and complaint may be made by registered mail, return
receipt requested, addressed to either party, at the address set forth in
Section 12(a) hereof. Each party waives any claim that any such jurisdiction, is
an inconvenient forum or an improper forum based on lack of venue. Should either
party, after being so served, fail to appear or answer any summons, complaint,
process or paper so served within 30 days after the mailing thereof, such party
acknowledges that, as a result thereof, an order and/or judgment may be entered
by the other party against it as demanded or pleaded for in such summons,
complaint, process or papers. The choice of forum set forth herein shall not be
deemed to preclude the enforcement by either party of any judgment in any other
appropriate jurisdiction or the bringing of an action in any other appropriate
jurisdiction.
(d) Waiver of Trial by Jury. BUYER AND SELLER IRREVOCABLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE ANY
PROVISION OF THIS AGREEMENT, ANY OPERATIVE DOCUMENT OR ANY
27
AGREEMENT EXECUTED IN CONNECTION HEREWITH.
(e) Captions and Paragraph Headings. Captions and paragraph headings
used herein are for convenience only and are not a part of this Agreement and
shall not be used in construing it.
(f) Severability. In the event that any one or more of the provisions of
this Agreement shall be invalid, illegal or unenforceable in any respect or in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions contained herein or of the same provisions in any other jurisdiction
shall not, in any way, be affected or impaired thereby.
(g) Further Assurances. Seller and Buyer will promptly, at any time and
from time to time, execute and deliver to each other such further instruments
and documents and take such further action as may be required by law or as they
may each reasonably request to establish, maintain and protect their respective
rights and remedies and to carry out the intent of the parties under this
Agreement.
(h) Written Changes Only. No term or provision of this Agreement may be
changed or waived orally, but only by an instrument in writing signed by the
parties hereto.
(i) Exclusiveness. This Agreement and the Operative Documents are the
complete and exclusive statement of the parties hereto with respect to the
subject matter hereof and supersede all prior oral and written communications,
proposals,
28
agreements, representations, statements, negotiations and undertakings, whether
express or implied, between the parties hereto with respect to the subject
matter hereof.
(j) Terms and Definitions. The terms and definitions, as herein
contained, shall include the singular and/or plural, masculine, feminine and/or
neuter, successors and/or permitted assigns wherever the context so requires or
admits.
29
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement through their respective duly authorized officers, all as of the day
and year first above written.
FINOVA CAPITAL CORPORATION
By: ______________________________________
Title: ___________________________________
XXXXXX LEASE FINANCE CORPORATION
By: ______________________________________
Title: ___________________________________
30
SCHEDULE A
Description of Aircraft
Airframes: Three (3) de Havilland DHC-8-102 turboprop passenger aircraft
bearing U.S. Registration Nos. N811PH, N812PH and N813PH,
respectively, and Manufacturer's Serial Nos. 023, 026, and
032, respectively.
Engines: Six (6) Xxxxx & Xxxxxxx Model PW120A aircraft engines bearing
Manufacturer's Serial No. PC-E120077, PC-E120096, PC-E120086,
PC-120088, PC-E120102 and PC-E120107.
Propellers: Six (6) Xxxxxxxx Standard Model 14SF four-Blade propellers
bearing Manufacturer's Serial Nos. 861016, 850911, 890711,
851114, 860201 and 860202.
Spare Engines: Three (3) Xxxxx & Xxxxxxx Model PW120A aircraft engines
bearing Manufacturer's Serial Nos. PC-E120140, PC-E120141 and
PC-E120142.
31
SCHEDULE B
Description of Lease Agreements set forth on Annex 1 hereto
32
EXHIBIT A
ACKNOWLEDGMENT OF DELIVERY AND SALE
By this Acknowledgment FINOVA Capital Corporation, a Delaware
corporation ("Seller"), and Xxxxxx Lease Finance Corporation, a California
corporation ("Buyer"), acknowledge that pursuant to the Aircraft Sale Agreement
dated as of November ___, 1997 between Seller and Buyer (the "Sale Agreement"),
Seller did on November __, 1997 deliver to Buyer and Buyer did accept and make
payment for the [Aircraft and Spare Engines] (capitalized terms not defined
herein shall have the meanings specified therefore in the Sale Agreement) and
that accordingly as of the date hereof Seller's title to such property has by
delivery passed from Seller to Buyer and that the Closing Date as defined and
set forth in the Sale Agreement has occurred.
This Acknowledgment of Delivery and Sale may be signed in one or more
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument. All counterparts shall be considered an original.
IN WITNESS WHEREOF, the undersigned have duly executed this
Acknowledgment of Delivery and Sale as of this ___, day of November, 1997.
XXXXXX LEASE FINANCE FINOVA CAPITAL CORPORATION
CORPORATION
By: ________________________ By: __________________________
Title: _____________________ Title: _______________________
33
EXHIBIT B
WARRANTY XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS:
THAT FINOVA CAPITAL CORPORATION ("Seller"), a Delaware corporation, is the owner
of the full legal and beneficial title to the equipment (the "Assets") described
on Annex I hereto:
THAT Seller, in consideration of the sum of $10.00 and other good and valuable
consideration in hand paid by Xxxxxx Lease Finance Corporation, a California
corporation ("Buyer"), the receipt and sufficiency of which are hereby
acknowledged, hereby grants, bargains, sells, conveys, transfers and sets over
unto said Buyer pursuant to the Aircraft Sale Agreement dated as of November __,
1997, between Seller and Buyer, all of the Seller's right, title and interest in
the Assets with all rights and privileges of ownership thereof.
THAT Seller hereby warrants to Buyer, its successors and assigns, that there is
hereby conveyed to Buyer on the date hereof good and marketable title to the
Assets, free and clear from all liens, charges and encumbrances of any nature
whatsoever, other than the Lease and Liens permitted under Section 6 of the
Lease (other than Lessor Liens). Seller agrees with Buyer and its successors and
assigns that it will warrant and defend such title forever against all claims
and demands whatsoever.
This Xxxx of Sale shall be governed by the laws of the State of New York
(without regard to any conflicts of law rules which might result in the
application of the laws of any other jurisdiction).
34
IN WITNESS WHEREOF, this Xxxx of Sale has been duly executed this day of
November, 1997.
FINOVA CAPITAL CORPORATION
By: __________________________________
Title: _______________________________
35
ANNEX I TO XXXX OF SALE
THE EQUIPMENT
I. AIRCRAFT
--------
Description: DHC-8-102
Serial No.: 023
Registration No.: N811PH
Engine Description: PW120A
Engine Serial Nos.: PC-E120077
PC-E120096
Propeller Description: 14SF-7
Propellers Serial Nos.: 861016
850911
36
ANNEX I TO XXXX OF SALE
THE EQUIPMENT
I. AIRCRAFT
--------
Description: DHC-8-102
Serial No.: 026
Registration No.: N812PH
Engine Description: PW120A
Engine Serial Nos.: PC-E120086
PC-E120088
Propeller Description: 14SF-7
Propellers Serial Nos.: 851114
890711
37
ANNEX I TO XXXX OF SALE
THE EQUIPMENT
I. AIRCRAFT
--------
Description: DHC-8-102
Serial No.: 032
Registration No.: N813PH
Engine Description: PW120A
Engine Serial Nos.: PC-E120102
PC-E120107
Propeller Description: 14SF-7
Propellers Serial Nos.: 860202
860201
38
ANNEX I TO XXXX OF SALE
THE EQUIPMENT
I. SPARE ENGINES
-------------
Description: Xxxxx & Whitney Model PW120A
Serial No.: PC-E120140
Description: Xxxxx & Xxxxxxx Model PW120A
Serial No.: PC-E120141
Description: Xxxxx & Whitney Model PW120A
Serial No.: PC-E120142
39
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment Agreement"), dated
as of November , 1997, by FINOVA CAPITAL CORPORATION, a Delaware corporation
("Assignor"), and XXXXXX LEASE FINANCE CORPORATION, a California Corporation
("Assignee").
WHEREAS, Assignor and Assignee are parties to an Aircraft Sale
Agreement, dated as of November , 1997 (the "Aircraft Sale Agreement"),
providing for the purchase and sale of certain assets described therein; and
WHEREAS, the Aircraft Sale Agreement provides, among other things, for
the execution and delivery of an assignment and assumption to effect the sale by
Assignor to Assignee of the right, title and interest of Assignor in and to, and
the assumption by Assignee of the obligations of Assignor under the Lease and
other Lease Documents;
NOW, THEREFORE, in consideration of the promises herein made and subject
to the terms and conditions herein set forth, the parties hereto agree as
follows:
1. Definitions Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Aircraft Sale Agreement. The following
terms, as used herein, have the following respective meanings:
"Aircraft Sale Agreement" shall have the meaning ascribed thereto in the
first "WHEREAS" clause to this Agreement.
"Lease" means each Lease described on Schedule 1 hereto.
"Lease Documents" means the Lease, together with each document listed on
Schedule II hereto, in each case as amended and supplemented through the date
hereof, but only as applicable to the Lease.
"Lessee" means Horizon Air Industries, Inc., a Washington corporation.
"Lessor's Liens" shall have the meaning ascribed thereto in the Leases.
"Transaction" means, collectively, the transactions contemplated by the
Lease Documents.
40
"Transferred Rights" means all of Assignor's right, title and interest
in and to the following: (i) Assignor's interest in the Lease, (ii) Assignor's
interest in the other Lease Documents, and (iii) Assignor's interest in the
Transaction, but excluding any rights of Assignor to any liability insurance
proceeds or indemnification under any Lease Document to which Assignor is
entitled with respect to claims or matters occurring prior to the Closing Date.
2. Assignment As of the date hereof, Assignor irrevocably hereby sells,
assigns, transfers and conveys to Assignee all of Assignor's right, title and
interest in and to the Transferred Rights free and clear of liens other than the
Leases and Liens permitted under Section 6 of the Leases (other than Lessor
Liens).
3. Assumption As of the date hereof, Assignee hereby accepts the
foregoing assignment and, on and after such date, agrees: (a) to assume and be
bound by all of the terms of, and to undertake all of the obligations and
liabilities of a Lessor arising on or after the date hereof which are expressly
set forth in, the respective Lease Documents to which the Lessor is a party to
the same extent as if Assignee were a party to such Lease Documents, and (b)
that is shall be deemed to be a party to the Lease Documents to which the Lessor
is a party, and all references to the Lessor in the Lease Documents shall be
deemed to include Assignee. Assignor shall not be responsible to any person for
the discharge or performance of any duties or obligations to be performed or
discharged by Assignor pursuant to or in connection with the Lease Documents on
or after the date hereof except as otherwise specified in the Aircraft Sale
Agreement. Assignee shall not be responsible to any person for the discharge or
performance of any duties or obligations to be performed or discharged by
Assignor pursuant to or in connection with the Lease Documents prior to the date
hereof.
4. Counterparts This Agreement may be executed in or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
5. Successor and Assigns The terms of this Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successor and assign.
6. Governing Law This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
7. Amendment No waiver, modification or amendment of any provision of
this Agreement shall be effective unless it is in writing and signed by the
party against which it is sought to be enforced.
8. Further Assurances Each party agrees that from time to time after the
41
date hereof, it shall execute and deliver or cause to be executed and delivered
such instruments, documents and papers, and take all such further action as may
be reasonably required in order to consummate fully the purposes of the
Agreement and to implement the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.
ASSIGNOR: FINOVA CAPITAL CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
ASSIGNEE: XXXXXX LEASE FINANCE CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
42
SCHEDULE I
Description of Lease Agreements set forth on Annex 1 hereto
43
SCHEDULE II
1. Acquisition Agreement, dated as of December 26, 1985, between UTFS and
Horizon (N811PH).
2. Purchase Agreement Assignment, dated as of December 26, 1985, between UTFS
and Lessee, with the Consent and Agreement of The de Havilland Aircraft of
Canada, Limited ("de Havilland") in respect thereof attached thereto
(N811PH) (Spare Engines).
3. Acquisition Agreement, dated as of February 10, 1986, between UTFS and
Horizon (N812PH).
4. Purchase Agreement Assignment, dated as of February 10, 1986, between UTFS
and Lessee, with Consent and Agreement of de Havilland in respect thereof
attached thereto (N812PH).
5. Acquisition Agreement, dated as of March 27, 1986, between UTFS and
Horizon (N813PH)
6. Purchase Agreement Assignment, dated as of March 27, 1986, between UTFS
and Lessee, with the Consent and Agreement of de Havilland in respect
thereof attached thereto (N813PH)
7. Acquisition Agreement, dated as of December 26, 1985, between UTFS and
Horizon (Spare Engines)
8. Engine Purchase Agreement Assignment, dated as of December 27, 1985,
between UTFS and Lessee, with the Consent and Agreement of xx Xxxxx &
Whitney Canada Inc. in respect thereof attached thereto (Spare Engines)
9. Purchase Agreement consisting of that certain telex order dated December
19, 1985 from Horizon Air Industries, Inc. ("Horizon") to the Manufacturer
and that certain Acknowledgment of Order Xx. X00000 dated December 20,
1985 from the Manufacturer to Horizon as amended modified or supplemented
("Spare Engines")
10. Assignment and Assumption Agreement dated as of September 15, 1988 between
Xxxxxx Financial Services, Inc. and Citicorp North America, Inc. with the
Consent and Acknowledgment of the Manufacturer (the "Xxxxxx Assignment"),
as it relates to the Lease being assigned on the date hereof.
11. Assignment and Assumption Agreement dated as of November 20, 1992 by and
between Citicorp North America Inc. and CLI Financial Services Inc. with
the Consent and Acknowledgment of the Manufacturer
44
(the "Citicorp Assignment"), as it relates to the Lease being assigned on
the date hereof.
12. Assignment and Assumption Agreement dated as of November 20, 1992 by and
between CLI Financial Services Inc. and Greyhound Financial Corporation
with the Consent and Acknowledgment of the Manufacturer (the "CLI
Assignment"), as it relates to the Lease being assigned on the date
hereof.
13. Purchase Contract No. 8-10DSM-0057 dated August 30, 1985 between the De
Havilland Aircraft of Canada, Limited ("DHC") and Horizon Air Industries,
Inc. ("Horizon"), as amended, modified or supplemented, as it relates to
the Aircraft being sold on the date hereof.
