Exhibit 2.3
AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT, dated as of December 14, 2002 (the
"Effective Date"), between XXXXX FARGO BANK NORTHWEST, National Association, a
national banking association organized and existing under the laws of the United
States of America, with its principal place of business at 00 Xxxxx Xxxx Xxxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000, Xxxxxx Xxxxxx of America, not in its individual
capacity but solely as Owner Trustee ("Lessor") and UNITED BREWERIES HOLDINGS,
LTD., a North Carolina corporation, with its registered office at 000 X.
XxXxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("Lessee").
WITNESSETH:
WHEREAS, Lessee desires to lease from Lessor and Lessor is willing to
lease to Lessee the Aircraft upon the terms and conditions set forth in this
Lease.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, Lessor and Lessee hereby agree as follows:
1. DEFINITIONS, CONSTRUCTION AND INTERPRETATION
The capitalized terms used in this Lease (including in the paragraphs
above) shall have the meanings specified in Schedule 1. The rules of
construction and interpretation used in this Lease are also specified in
Schedule 1.
2. DELIVERY AND ACCEPTANCE
2.1. Time and Place
Subject to the satisfaction of the conditions set forth in
Clause 2.3, Lessor shall deliver the Aircraft to Lessee on
the Delivery Date at the Delivery Location or at such other
location as may be mutually agreed. Subject to satisfaction
of the conditions set forth in Clause 2.4, Lessee shall
accept the Aircraft by executing the Certificate of
Acceptance and delivering the same to Lessor and upon
Lessor's countersignature on the Certificate of Acceptance
the Aircraft shall become subject to this Lease. Execution
and delivery by Lessee of the Certificate of Acceptance
shall constitute conclusive proof of Lessee's unconditional
acceptance of the Aircraft for lease under this Lease
without any reservation whatsoever. The date of the
Certificate of Acceptance shall be the Delivery Date of the
Aircraft.
It is anticipated that the Delivery Date of the Aircraft
will be the Anticipated Delivery Date. Lessor agrees to
notify Lessee of any event of which it becomes aware which
would cause a change in the Delivery Date. Lessee
acknowledges and agrees that the Delivery Date may be
delayed and that Lessor shall not be responsible for any
losses, (including loss of profit) costs or
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expenses arising from any such delay which are suffered or
incurred by Lessee. Lessee shall not be entitled to
terminate this Lease, or to reject the Aircraft when
tendered for delivery on the grounds of any such delay,
unless the Delivery Date is delayed beyond the Latest
Delivery Date. If the Delivery Date is delayed beyond the
Latest Delivery Date, either party may give written notice
of termination to the other in which event Lessor shall
return the Security Deposit it has actually received from
Lessee promptly thereafter, and this Lease shall be without
further force or effect.
2.2. A Letting Only
At all times during the Term, full legal title to and
ownership of the Aircraft shall remain vested in Owner to
the exclusion of Lessee, notwithstanding the delivery of the
Aircraft to, and the possession and use thereof by, Lessee.
Lessee shall bear all risks of loss, theft, damage or
destruction of or to the Aircraft during the Term.
2.3. Lessor's Conditions to Delivery
Lessor's obligation to deliver and lease the Aircraft to
Lessee hereunder shall be subject to satisfaction of the
conditions precedent set forth in Part A of Schedule 2
(which Lessee shall procure at the times specified) unless
waived by Lessor.
2.4. Lessee's Conditions to Delivery
Lessee's obligation to accept and lease the Aircraft from
Lessor hereunder shall be subject to the satisfaction (or
waiver by Lessee) of the conditions precedent specified in
Part B of Schedule 2.
3. TERM
The Term shall commence on the Delivery Date and shall
continue, unless earlier terminated pursuant to any
provision hereof, until the Expiry Date.
4. RENT AND OTHER PAYMENTS
4.1. Basic Rent
Lessee shall pay Lessor rent for the Aircraft on each Basic
Rent Payment Date, each such payment to be in the amount
specified in Schedule 3 ("Basic Rent"). The Basic Rent
amounts are subject to adjustment as set forth in Schedule
3.
4.2. Supplemental Rent
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Lessee shall also pay to Lessor or, at Lessor's direction to
whomsoever shall be entitled thereto, any and all
Supplemental Rent on the due date specified in the invoice
from Lessor to Lessee for such Supplemental Rent. Lessee
shall pay to Lessor (as well after as before any judgment),
as Supplemental Rent, interest at the Incentive Rate on any
part of any installment of Rent not paid on the due date
therefor. All computations of interest under this Lease to
be made on the basis of a 360-day year and actual days
elapsed.
4.3. Prohibition Against Setoff, Counterclaim, Etc.
Lessee's obligation to pay Rent and make other payments in
accordance with this Lease shall be absolute and
unconditional irrespective of any contingency whatsoever
including (but not limited to) (i) any right of setoff,
counterclaim, recoupment, defense or other right which
either party hereto may have against the other, (ii) any
unavailability of the Aircraft or any part thereof for any
reason, including, but not limited to, any loss, theft,
damage or destruction of or to the Aircraft or any part
thereof, any requisition of the Aircraft or any prohibition
or interruption or interference with or other restriction
against Owner's or Lessor's or Lessee's use, operation or
possession of the Aircraft, or 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, or the
ineligibility 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 (subject
to the provision for cessation of Basic Rent as stated in
Clause 10.1) in respect of or any damage to the Aircraft or
any part thereof, (iii) any insolvency, bankruptcy,
reorganization, arrangement, readjustment of Indebtedness,
dissolution, liquidation or similar proceedings by or
against Owner, Beneficial Owner, Lessor, or Lessee, (iv) any
invalidity or unenforceability or lack of due authorization
of, or other defect in, any of the Relevant Documents, and
(v) any other cause which but for this provision would or
might have the effect of terminating or in any way affecting
any obligation of Lessee hereunder.
4.4. Security Deposit
The Security Deposit shall be paid to Lessor at the time(s)
and in the amount(s) specified in Schedule 3. No interest
will accrue or be paid on the Security Deposit. Subject to
Clause 2.1 and to the next succeeding paragraph of this
Clause 4.4, the Security Deposit (whether in cash or
evidenced by one or more letters of credit) shall only be
returnable to Lessee in accordance with either paragraph
2.1.2 or 3.5 of Part 1 of Schedule 3, as applicable.
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The Security Deposit shall be held by Lessor as security for
the timely and faithful performance by Lessee of Lessee's
obligations under the Relevant Documents, and Lessee hereby
grants Lessor a security interest in all sums deposited with
or otherwise held by Lessor under this Clause 4.4. Lessee
agrees to execute and file with the appropriate Government
Entities any and all documents necessary and reasonably
requested by Lessor to evidence and perfect such security
interest in favor of Lessor. If an Event of Default shall
have occurred and is continuing, in addition to all other
rights Lessor shall have under applicable law, Lessor may,
but shall not be obligated to use, apply, set-off or retain
all or any portion of the Security Deposit, in payment for
sums due by Lessee under the Relevant Documents, to
reimburse Lessor for any sums advanced as a result of such
Event of Default or to apply toward any losses or expenses
Lessor actually incurs as a result of such Event of Default.
If Lessor uses or applies all or any portion of such
Security Deposit as provided above, such use or application
shall not be deemed a cure of any Event of Default, and
Lessee shall within five (5) Business Days after such use or
application deposit with Lessor in cash an amount sufficient
to restore the Security Deposit to the aggregate amount of
such Security Deposit prior to Lessor's use or application.
An Event of Default shall continue until the Security
Deposit is restored and the failure of Lessee to do so
within this period shall be a second, independent Event of
Default. Provided that an Event of Default shall not have
occurred and then be continuing and provided that Lessee
shall have paid all amounts owing hereunder, the remaining
balance of the Security Deposit held by Lessor shall be
returned to Lessee in the form then being held by Lessor at
the end of the Term following Lessee's return of the
Aircraft in compliance with Clause 14, subject to Lessor
being satisfied that it is entitled to retain all sums
applied by it pursuant to this Clause 4.4 to sums due and
payable under the Relevant Documents or the Other Leases.
4.5. Manner and Place of Payments
All amounts to be paid by Lessee hereunder shall be paid to
the account of Lessor at the bank and to the party or
account as Lessor shall designate in writing for value on
the due date at the time and in such funds specified by
Lessor as being customary at the time for settlement of
transactions in Dollars in the place of payment. Subject to
Clause 4.2, if any such amount is due to be paid on a day
other than a Business Day, such amount shall be payable on
the next succeeding Business Day and the amount thereof, if
calculated by application of a per annum rate, shall be
adjusted accordingly. Any payment of Rent not received in
Lessor's bank account by 11:00 a.m. (at the place at which
payment is to be made
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in accordance with the foregoing) on the due date shall be
treated as having been received on the next succeeding
Business Day.
4.6. No Deductions or Withholdings
Rent and all other amounts payable by Lessee to Lessor
hereunder and under each of the Relevant Documents will be
made in full without any deduction or withholding (whether
in respect of set-off, counter-claim, duties, tax, charges
or otherwise) unless a deduction or withholding is required
by any applicable law, in which event Lessee will:
(a) ensure that the deduction or withholding does not exceed the
minimum amount legally required;
(b) pay to Lessor immediately the additional amount that will
result in the net amount received by Lessor being equal to
the amount which would have been received by Lessor had no
such deduction or withholding been made;
(c) pay to the relevant Government Entity within the period of
time for payment permitted by any applicable law the full
amount of the deduction or withholding (including the full
amount of any deduction or withholding on any additional
amount paid under this Clause 4.6); and
(d) when requested to do so by Lessor, furnish to Lessor, within
the period for payment permitted by any applicable law, an
official receipt (if available) of the relevant Government
Entity for all amounts deducted or withheld, or if such
receipts are not issued by the relevant Government Entity, a
certificate of deduction or any other evidence of the
relevant deduction or withholding reasonably required by
Lessor.
5. REPRESENTATIONS AND WARRANTIES; COVENANTS OF THE PARTIES
5.1. Lessor's Representations and Warranties and Disclaimer
Lessor represents and warrants that:
(a) on the Delivery Date Lessor shall have the right to lease
the Aircraft to Lessee hereunder. EXCEPT FOR THE FOREGOING
REPRESENTATION, AND THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS CLAUSE 5.1, NEITHER LESSOR NOR OWNER NOR
BENEFICIAL OWNER MAKES AND SHALL NOT BE DEEMED TO HAVE MADE
OR TO MAKE ANY WARRANTIES, REPRESENTATIONS,
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GUARANTEES OR UNDERTAKINGS OF ANY KIND, INCLUDING (I) AS TO
THE AIRWORTHINESS, VALUE, CONDITION, DESIGN OR OPERATION OF,
OR QUALITY OF THE MATERIAL OR WORKMANSHIP IN, OR THE ABSENCE
OF ANY DEFECT IN, THE AIRCRAFT, THE AIRFRAME, ANY ENGINE,
ANY PART, ANY DATA OR ANY OTHER THING DELIVERED, LEASED, OR
TRANSFERRED HEREUNDER, (II) ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR SUITABILITY OR FITNESS FOR USE OR FOR A
PARTICULAR PURPOSE, AGAINST INFRINGEMENT OF PATENTS OR TRADE
MARKS OR THE LIKE, OR ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE, (III) AS TO ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT WITH
RESPECT TO THE AIRCRAFT, THE AIRFRAME, ANY ENGINE, ANY PART,
ANY DATA OR ANY OTHER THING DELIVERED, LEASED, OR
TRANSFERRED HEREUNDER, WHETHER OR NOT IN STRICT OR ABSOLUTE
LIABILITY OR ARISING FROM THE ACTUAL OR IMPUTED NEGLIGENCE
OF OWNER OR LESSOR OR BENEFICIAL OWNER, OR (IV) AS TO ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF,
OR DAMAGE TO, THE AIRCRAFT, THE AIRFRAME, ANY ENGINE, ANY
PART, ANY DATA OR ANY OTHER THING, FOR ANY LOSS OF USE,
REVENUE OR PROFIT, OR ANY OTHER DIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
(b) Corporate Existence and Qualification. Lessor is a national
banking association duly organized and validly existing
under the laws of the United States of America.
(c) Authority. Lessor has full corporate power and authority to
enter into and perform its obligations under the Relevant
Documents to which Lessor is a party; and the execution,
delivery and performance of the Relevant Documents have been
duly authorized by all necessary corporate action on the
part of Lessor, do not require any stockholder or
shareholder approval or approval or consent of any trustee
or holders of any Indebtedness or other obligations of
Lessor except such as have been duly obtained and do not
contravene any provision of any law, governmental rule,
regulation or order binding on Lessor, or any applicable
interpretation or administration of any such law,
governmental rule, regulation or order, or contravene the
constitutional documents of Lessor or any Lien, contract or
other agreement or instrument to which Lessor is a party or
by which it or any of its assets may be bound or affected.
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(d) Binding Obligations. The Relevant Documents to which Lessor
is a party constitute or, when executed and delivered will
constitute, the legal, valid and binding obligations of
Lessor, enforceable against Lessor in accordance with their
terms except as any such enforcement may be affected by
bankruptcy, moratorium and similar laws affecting creditors
rights generally and by general equitable principles.
(e) Government Approval. The execution and delivery by Lessor of
the Relevant Documents to which Lessor is a party do not (or
when executed will not) require the consent or approval of,
the giving of notice to, the registration with or the taking
of any action in respect of or by, any Government Entity or
other person, except such as have been obtained, given or
accomplished.
(f) No Immunity. Lessor is subject to civil commercial law with
respect to its obligations under the Relevant Documents to
which Lessor is a party and neither Lessor nor any of its
assets is entitled to any right of immunity and the entry
into and performance of such Relevant Documents by Lessor
constitute private and commercial acts.
5.2. Lessee's Representations and Warranties
(a) Lessee represents and warrants that:
(i) Corporate Existence and Qualification. Lessee is a
corporation duly incorporated and validly existing under the
laws of its Home Jurisdiction and is or will be an air
carrier of persons and property, registered, licensed or
otherwise certificated or duly authorized under the laws of
the State of Registration and the regulations of the
Aeronautics Authority to engage in such air transportation
and is duly qualified or otherwise authorized to do business
in all jurisdictions in which it conducts business, except
for jurisdictions where failure to so qualify or obtain
authorization would not have a material adverse effect on
the business of Lessee and would not involve any danger of
the sale, forfeiture, detention or loss of the Aircraft or
any part thereof or impairment of the value thereof.
(ii) Authority. Lessee has full corporate power and
authority to enter into and perform its obligations under
the Relevant Documents; and the execution, delivery and
performance of the Relevant Documents have been duly
authorized by all necessary corporate action on the part of
Lessee, do not require any stockholder or shareholder
approval or approval or consent of any trustee or holders of
any Indebtedness or other obligations of
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Lessee except such as have been duly obtained and do not
contravene any provision of any law, governmental rule,
regulation or order binding on Lessee, or any applicable
interpretation or administration of any such law,
governmental rule, regulation or order, or contravene the
constitutional documents of Lessee or any Lien, contract or
other agreement or instrument to which Lessee is a party or
by which it or any of its assets may be bound or affected.
(iii) Governmental Approvals. None of the execution,
delivery or performance by Lessee of the Relevant Documents
or any other document to be executed by Lessee pursuant
thereto, or the consummation of any of the transactions by
Lessee contemplated thereby, nor the leasing by Lessee of
the Aircraft thereunder requires the consent or approval of,
the giving of notice to, the registration or filing for
recordation with, or the taking of any other action in
respect of, any Government Entity of the State of
Registration except for (i) the issuance of a certificate of
airworthiness and a certificate of registration with respect
to the Aircraft issued by the Aeronautics Authority naming
Owner as the owner of the Aircraft, (ii) the filing with the
Aeronautics Authority of the xxxx of sale conveying the
Aircraft to Owner, and (iii) such other filings or actions
as have either been made or taken or are not yet due or
required but will be made or taken prior to the date when
due or required.
(iv) Binding Obligations. The Relevant Documents and all
other documents executed by Lessee pursuant thereto
constitute or, when executed and delivered will constitute,
the legal, valid and binding obligations of Lessee,
enforceable against Lessee in accordance with their terms
except as any such enforcement may be affected by
bankruptcy, moratorium and similar laws affecting creditors
rights generally and by general equitable principles.
(v) Litigation. Except as otherwise disclosed to Lessor in
writing prior to the execution and delivery of this Lease,
there are no suits or proceedings taking place, pending or,
to the knowledge of Lessee, threatened in any court or
before any arbiters, regulatory commission, board or other
administrative or governmental agency in any jurisdiction
against or affecting Lessee which relate to the Aircraft or
the transactions contemplated by the Relevant Documents or
which, if adversely determined, could reasonably be expected
to have an adverse effect on the ability of Lessee to
fulfill its obligations under the Relevant Documents.
(vi) Financial Condition. The financial information with
respect to Lessee, heretofore furnished to Lessor prior to
execution of this Lease, are complete and correct and have
been prepared in
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accordance with generally accepted accounting principles of
the United States of America and since the date of such
information there has been no material adverse change in the
financial condition of Lessee.
(vii) Use of Aircraft. The Aircraft will be used
exclusively for the carriage of persons, property, cargo,
and mail as permitted under applicable law.
(viii) No Adverse Agreements. Lessee is not a party to any
agreement or instrument or subject to any restriction which
individually or in the aggregate is, in the reasonable
judgment of Lessee, likely to adversely affect in any
material respect its ability to perform its obligations
under this Lease.
(ix) No Default. No Default or Event of Default has
occurred and is continuing.
(x) No Immunity. Lessee is subject to civil commercial
law with respect to its obligations under the Relevant
Documents and neither Lessee nor any of its assets is
entitled to any right of immunity and the entry into and
performance of the Relevant Documents by Lessee constitute
private and commercial acts.
(b) Repetition. The representations and warranties contained in
Clause 5.2(a) are made by Lessee on the date of this Lease
and will be deemed to be repeated by Lessee on the Delivery
Date and on each Basic Rent Payment Date as if made with
reference to the facts and circumstances subsisting on each
such date provided that the reference to the financial
information of Lessee in Clause 5.2(a)(vi) shall for such
purposes be deemed to be a reference to the then latest
audited annual balance sheet and audited statement of income
and statement of cash flows of Lessee delivered to Lessor
pursuant to Clause 5.3(a)(i) and the words "Default or" in
Clause 5.2(a)(ix) shall for such purposes be deemed to be
omitted.
5.3. Covenants of Lessee
Throughout the Term Lessee agrees that:
(a) Financial Statements, Reports, etc. Lessee will furnish to
Lessor:
(i) as soon as available after the end of each fiscal
quarter and after the close of each fiscal year of Lessee,
the balance sheet of Lessee as at the end of such quarter or
year and the related statements of income for such quarter
or year, prepared in accordance with generally accepted
accounting principles in the United States of America and on
a basis consistent with that used
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in the preparation of the financial statements referred to
in Clause 5.2(a)(vi), except as noted in such balance sheet
and statements, and, in the case of year-end balance sheets
and statements, certified by Lessee's independent auditors
and including their certificate and accompanying comments if
any;
(ii) at the time of the delivery of the year-end financial
statements referred to in paragraph (i) above, a certificate
of Lessee, signed by the principal financial officer of
Lessee, stating that, based on an examination sufficient to
enable him to make an informed statement, no Default or
Event of Default has occurred or, if such is not the case,
specifying such Default or Event of Default and its nature,
when it occurred and what action Lessee has taken or is
taking or proposes to take with respect thereto;
(iii) promptly after Lessee shall have obtained knowledge
of the occurrence of any Default or Event of Default, a
written notice specifying the nature and period of existence
thereof and what action Lessee has taken or is taking or
proposes to take with respect thereto;
(iv) (A) promptly after entering into or becoming bound or
affected by any pooling or interchange agreement or
arrangement by which any Engine or Part may be affected and
promptly after each amendment or modification of any such
agreement or arrangement, a copy of such agreement,
arrangement, amendment or modification, duly certified by an
officer of Lessee as being a complete and correct copy, and
(B) prompt notice of any relinquishment of possession of any
Engine or Part permitted under Clause 6.1 and a copy of any
documents relating thereto duly certified by an officer of
Lessee as being a complete and correct copy;
(v) promptly notify Lessor of any arrest, hi-jacking,
seizure or detention of the Aircraft or of any accident
involving the Aircraft;
(vi) within 10 days after receiving service of process or
the equivalent written notice of any litigation, including
arbitration, involving any claim in excess of $50,000 or the
equivalent thereof in any other currency and of any
proceeding by or before any Government Entity which
litigation or proceeding is not frivolous in nature and
which, if adversely determined, could materially adversely
affect the properties, business, prospects or financial
condition of Lessee or its ability to meet its obligations
under the Relevant Documents;
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(vii) promptly provide Lessor with copies
of any changes to the Maintenance Program
and, at Lessor's request, cooperate with
Lessor to amend Clauses 6 and 14, as
appropriate, to reflect such changes;
(viii) from time to time such other
information as Lessor may reasonably
request, including reports as to maintenance
of the Aircraft and the Engines (including
total Flight Hours and Cycles and time
between overhauls) and including information
as to the financial condition and operations
of Lessee and Lessee's insurance
arrangements for the Aircraft;
(ix) on or before the 10/th/ day of each
month a report on the utilization and
operation of the Aircraft during the
immediately preceding calendar month in the
form of Schedule 13; and
(x) upon request of Lessor, copies of all
invoices received from Eurocontrol and other
air control and airport authorities showing
the status of Lessee's accounts.
(b) Authorizations. Lessee will obtain from time
to time any and all such consents,
approvals, licenses and authorizations and
make any and all such filings and
registrations as shall now or hereafter be
required under applicable law and
regulations (including foreign exchange
laws) for the execution, delivery and
performance by Lessee of the Relevant
Documents and will promptly furnish copies
thereof to Lessor.
(c) Recording. Lessee shall, at its sole cost
and expense, procure that at all times
during the Term the Aircraft is registered
in the State of Registration in the name of
Owner and that this Lease, any Mortgage and
such other instruments as are necessary or
reasonably requested by Lessor to protect
the right, title and interests of Lessor
and/or Owner with respect to the Aircraft
and the Relevant Documents are likewise at
all times registered with the Aeronautics
Authority and any other appropriate
Government Entities in the State of
Registration or elsewhere as may be
reasonably required by Lessor. Lessee will
not do anything or permit anything to be
done to prejudice any such registration or
such interests. At no time during the Term
will the Aircraft be registered other than
in the State of Registration.
(d) Corporate Existence, Mergers, etc. Lessee
will at all times maintain its existence as
a public or private corporation under the
law of its Home Jurisdiction. Lessee will
not consolidate with or merge with or into
any other person. Lessee will not sell,
lease, exchange, transfer or otherwise
dispose (whether in one transaction
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or in a series of related transactions) of
all or substantially all its property,
assets or revenues, whether now owned or
hereafter acquired. Lessee shall not change
its registered office without giving Lessor
at least 30 days' prior written notice.
(e) Aircraft Records. Lessee will at all times
maintain the originals of all Aircraft
Records, including the Maintenance Manual
and the Maintenance Program, at Lessee's
engineering facility with a full copy at the
facility of the Authorized Maintenance
Performer. The same shall be available for
inspection by Lessor during normal business
hours. Lessor shall give Lessee at least 5
days' prior notice of any such inspection
unless an Event of Default has occurred and
is continuing, in which case no prior notice
shall be required.
(f) Base of Aircraft. Lessee will procure that
the Aircraft will be based at its Habitual
Base (or such other airport as Lessor may
approve in writing).
(g) Agreement with Authorized Maintenance
Performer. The agreements between Lessee and
the Authorized Maintenance Performer
(including the agreement referred to in
paragraph (b) of Part A of Schedule 2) shall
not be amended or varied without Lessor's
prior written consent.
(h) Airports. Lessee will ensure that Lessor has
an up-to-date list of airports to which
Lessee operates the Aircraft and its other
aircraft and at least six (6) months prior
to the end of the Term and at other times at
Lessor's request, Lessee will authorize
Lessor to obtain direct from each airport a
general statement of account in relation to
the status of Lessee's payment of charges at
that airport.
(i) Lessee's Process Agent. Lessee shall appoint
an alternative agent for service of process
(as required pursuant to Clause 17.6(d))
having a registered office in India if for
any reason Lessee's Process Agent fails to
maintain its registration or registered
address for business in India, and Lessee
shall further provide evidence satisfactory
to Lessor that such alternative agent for
service of process has accepted such
appointment.
5.4. Covenants of Lessor
(a) Registration. Lessor will take such action
as may be reasonably necessary to assist
Lessee in fulfilling its obligations under
Clause 5.3(c) in relation to filing or
recording this Lease, any Mortgage and any
Financing Document and the registering of
the Aircraft with the Aeronautics Authority;
provided, however, that nothing
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herein shall require Lessor to qualify for
admission to do business under the laws of the
State of Registration or any subdivision thereof,
nor shall anything herein require Lessor to take
any other action which would (either alone or in
connection with any other related or unrelated
action) subject Lessor to any liability to or the
jurisdiction of taxing authorities in or for the
State of Registration or any subdivision thereof.
Lessor agrees to use reasonable endeavors to
deliver to Lessee and to any other person or
entity or entity specified by Lessee such
notifications, certifications, reports or other
documents as may be required by law as a condition
to exemption or other relief from (or reduction
of) any Taxes which otherwise would be imposed
with respect to any amount payable by Lessee under
this Lease.
(b) Quiet Enjoyment. So long as no Event of Default
shall have occurred and be continuing, Lessor
agrees that it will not, through its own actions
or through the actions of others lawfully claiming
through or under Lessor, except as specifically
provided herein, interfere or permit any other
person or authority to interfere with Lessee's
peaceful and quiet use of the Aircraft in
accordance with the terms of this Lease.
6. POSSESSION; USE; LAWFUL INSURED OPERATIONS; MAINTENANCE;
INSIGNIA
6.1. Possession
The Aircraft and the operations performed therewith, subject
to applicable law and the rules and regulations of the
Aeronautics Authority, shall be under the exclusive control of
Lessee until the Aircraft is returned pursuant to Clause 14.
Lessee shall not without Lessor's prior written consent
deliver, relinquish or transfer possession of the Aircraft or
any part thereof, except for transfer of possession and
replacement of Parts as provided in Clause 8; provided,
however, that, so long as no Default or Event of Default shall
have occurred and be continuing, Lessee may, subject to the
other provisions of this Clause 6: deliver possession of the
Aircraft or any part thereof to the Authorized Maintenance
Performer for service, repair, maintenance or overhaul work
required by the terms hereof, or for modifications,
alterations or additions permitted by the provisions of this
Lease. No agreement or arrangement described in (b) above
shall contemplate or require the transfer of title to any
Engine. The rights of any person who receives possession by
reason of a transfer permitted by this Clause 6.1 shall be
subject and subordinate to all the terms of this Lease, and
any Mortgage (including, without limitation, the restrictions
on the use of the Aircraft contained in Clause 6.3 and
Lessor's right to terminate the Term upon the occurrence of an
Event of Default which is continuing and to obtain possession
of the Aircraft and each part thereof without regard to any
such agreement and the rights of any person thereunder), and
Lessee shall remain primarily liable hereunder for the
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performance of all of the terms hereof to the same extent as
if such transfer had not occurred. Any transfer of any part of
the Aircraft pursuant to this Clause 6.1 which results in a
transfer of title to such part shall be an Event of Default.
6.2. Sublease; Assignment
Except as provided in Clause 6.1, Lessee will not sublease or
otherwise in any manner deliver, transfer or relinquish
possession of the Aircraft or any part thereof, or assign or
transfer any of its rights or obligations under any of the
Relevant Documents without the prior written consent of
Lessor. In no circumstances will Lessor give its approval to
any sublease to a national of a Prohibited Country. Any such
purported assignment shall be void ab initio. Lessee shall pay
Lessor all reasonable costs incurred by Lessor in assessing
any request for consent to any sub-lease. Any sublease to
which Lessor in its sole discretion may consent shall (a) be
subject and subordinate to this Lease and any Mortgage and
terminate automatically upon termination of the leasing of the
Aircraft hereunder, (b) require that the Aircraft be
maintained by the Authorized Maintenance Performer under the
approved Maintenance Program, and (c) require that the
Aircraft remain on the aircraft registry of the State of
Registration.
6.3. Use of Aircraft
Lessee shall permit the Aircraft to be used solely in
commercial operations for which Lessee is duly authorized.
Lessee shall not use, or permit the use of, the Aircraft or
any part thereof for any purpose for which it is not suitable.
Lessee shall comply with all regulations of the Aeronautics
Authority. Lessee shall not at any time (a) represent or hold
out Owner, Lessor or Beneficial Owner as carrying goods or
passengers on the Aircraft or as being in any way connected or
associated with any operation of the Aircraft or (b) pledge
the credit of Owner, Lessor, or Beneficial Owner.
6.4. Notice of Maintenance
Lessee shall notify Lessor, not less than 30 days prior to the
scheduled commencement thereof, of each upcoming "C" Check
(complete or partial) and of any other major check or
structural inspection to be performed on the Airframe and of
any Engine shop visit.
6.5. Lawful Insured Operations
Lessee will not cause or permit the Aircraft or any part
thereof to be maintained, used or operated in violation of any
law, treaty, statute, rule, regulation, or order of any
Government Entity or contrary to any manufacturer's operating
manuals and instructions, or in violation of any airworthiness
certificate or registration relating thereto. Lessee agrees
not to operate the Aircraft, or permit the same to be
operated, (a) unless the Aircraft is covered by insurance as
required by the provisions of Clause 11, or (b) contrary to
the terms of the insurance required by
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the provisions of Clause 11. If the Aircraft is taken into any
location or country in which the insurance required by Clause
11 is not in full force and effect, Lessee, in addition to its
liability under Clauses 15 and 16, shall be liable to Lessor
for loss or damage to the Aircraft up to the Insured Value.
The Aircraft shall not be subleased to (a) a national of any
Prohibited Country, (b) a national of any country as to which
the United States has imposed an embargo, (c) any entities or
nationals on the list of Specially Designated Nationals and
Blocked Persons listed on the website of the U.S. Department
of the Treasury, Office of Foreign Assets Control
(xxx.xxxxxxx.xxx/xxxx), or (d) entities or nationals as to
which exportation is prohibited by the U.S. Department of
Commerce pursuant to the Denied Persons List or the Entity
List posted on the website of the U.S. Department of Commerce,
Bureau of Export Administration (xxx.xxx.xxx.xxx). The
Aircraft shall not be used in, or with respect to travel to
and/or from any of the countries as to which the United States
has imposed an embargo, as listed on the website of the U.S.
Department of the Treasury, Office of Foreign Assets Control
(xxx.xxxxxxx.xxx/xxxx), provided however, the foregoing shall
not prohibit the use of the Aircraft for travel to any such
countries if (a) such use would be permitted as a temporary
sojourn under Part 740.15 of the Export Administration
Regulations of the United States, posted at (xxx.xxx.xxx.xxx),
(b) Lessee retains operational control of the Aircraft at all
times, as that term is defined in Part 740.15 of the Export
Administration Regulations, and (c) such use is not the
predominant route of the Aircraft.
6.6. Maintenance
Lessee, at its own cost and expense, shall:
(a) service, repair, maintain, overhaul and test, or
cause the same to be done to the Aircraft and each
part thereof, (i) so as to keep the Aircraft and
each part thereof in the same condition as when
delivered to Lessee hereunder, ordinary wear from
normal flight operations excepted, and in good
operating condition, (ii) so as to keep the Aircraft
in the condition necessary to enable the
airworthiness certificate of the Aircraft to be
maintained in good standing at all times under the
applicable laws and regulations of the Aeronautics
Authority and (iii) in strict compliance with the
Maintenance Program;
(b) cause the Aircraft Records and all other records,
logs and other materials required by the Aeronautics
Authority in respect of the Aircraft to be
maintained in the manner and with the content
specified in Schedule 9. All such other records,
logs and other materials shall be the property of
Owner and shall be deemed to be part of the Aircraft
Records;
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(c) promptly furnish to Lessor such information as may be
requested by Lessor to enable Lessor to file any reports
required to be filed with any Government Entity concerning
the Aircraft;
(d) cause the Airframe and all Engines and Parts to be
maintained, serviced, repaired and overhauled to comply with
all warranty requirements;
(e) cause all scheduled maintenance (other than line maintenance
which shall be performed by mechanics or maintenance
performers licensed by the Aeronautics Authority), service,
repair, overhaul and testing to be accomplished by the
Authorized Maintenance Performer;
(f) cause to be incorporated into the Aircraft all Alert,
Mandatory and Recommended Service Bulletins issued by the
Manufacturers or Suppliers in a timely and efficient manner
and on a basis that the Aircraft is not discriminated
against in comparison with other similar aircraft operated
by Lessee; and
(g) carry out, on the Aircraft, all Airworthiness Directives
which may be issued from time to time during the Term and
which have a compliance date falling within the Term or
within ninety (90) days after the end of the Term.
6.7. Insignia and Notices
Lessee will affix and maintain in the cockpit of the Aircraft adjacent
to and not less prominent than the airworthiness certificate therein
and on each Engine a nameplate satisfactory to Lessor bearing the
inscription set out in Schedule 12 or such other inscription as Lessor
from time to time directs in order to show Lessor's, Owner's and
Beneficial Owner's interests in the Aircraft. Except as otherwise
provided, Lessee will not allow the name of any person or entity to be
placed on the Airframe or any Engine or the APU as a designation that
might be interpreted as a claim of ownership, except that Lessee may
place its customary colors and insignia on the Airframe.
6.8. [Intentionally Left Blank]
6.9. Storage
If at any time Lessee is not using the Aircraft in regularly scheduled
service, Lessee shall store the Aircraft with the Authorized
Maintenance Performer in accordance with the recommended storage
procedures of the Maintenance Manual and Lessee shall cause hangar
keeper's legal liability and all risks hull insurance to be maintained
with respect to the Aircraft. Lessee shall notify Lessor at any time
when the Aircraft is in storage and shall specify in such notice to
Lessor the location at which the Aircraft is being stored. Lessor or
Lessor's agent or
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representative shall be entitled to inspect the Aircraft and the
Aircraft Records, at Lessor's own cost and expense, at any time while
the Aircraft is being stored.
6.10. Benefit of Warranties
Subject to Clause 6.11, as between Lessor and Lessee, Lessor will
remain entitled to the benefit of each warranty or guarantee
(including any performance guarantee), express or implied, given by
any Manufacturer or Supplier to Owner or Lessor in relation to the
Aircraft, any Engine or Part (a "Supplier Warranty"). Lessee will
procure that the benefit of any unexpired Supplier Warranty given in
relation to any Part or service supplied with respect to the Aircraft
during the Term will vest in Owner or Lessor, as Lessor shall require,
when given or, if not reasonably practicable at that time, will take
all steps necessary to ensure that the benefit of any such Supplier
Warranty vests in Owner or Lessor, as Lessor shall require, upon
termination or expiry of the Term.
6.11. Right to Enforce Warranties
For the duration of the Term (unless an Event of Default has occurred
and is continuing) Lessor hereby authorizes Lessee to take any action
that Lessee reasonably thinks fit to enforce Lessor's rights under a
Supplier Warranty and Lessor shall, at the cost and expense of Lessee,
render all assistance as may be reasonably required by Lessee in
connection therewith, provided that any such action will be taken at
Lessee's expense and any sums paid by the relevant Supplier under the
relevant Supplier Warranty shall be applied by Lessee to discharge the
cost of rectifying the defect for which the relevant claim was made.
7. INSPECTION
Lessee shall furnish to Lessor such information concerning the
location, condition, use and operation of the Aircraft as Lessor may
reasonably request. Lessee shall permit any person or entity
designated in writing as Lessor's agent or representative by Lessor to
visit and inspect (at any reasonable time, provided that such
inspection shall not interfere with Lessee's operational commitments)
the Aircraft, its condition, use and operation and the Aircraft
Records maintained in connection therewith and, at Lessee's expense,
to make copies of such records as Lessor or Lessor's agent or
representative may reasonably designate. Lessor shall have no duty to
make any such inspection and shall not incur any liability or
obligation by reason of not making any such inspection.
8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS AND
ADDITIONS
8.1. Replacement of Parts
Lessee, at its own cost and expense, shall, as soon as practicable but
in any event within 30 days, replace all Parts which may from time to
time become worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or permanently
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rendered unfit for use for any reason whatsoever. In addition, in the
ordinary course of maintenance, service, repair, overhaul or testing,
Lessee may remove any Part, whether or not worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use; provided that Lessee shall promptly replace
such Part. All replacement Parts shall be free and clear of all Liens
and shall be in as good operating condition as, and shall have a value
and utility at least equal to, the Parts replaced, assuming such
replaced Parts were in the condition and repair required to be
maintained by the terms hereof and shall be owned by Lessee and
capable of vesting in Owner free of all Liens.
8.2. Title to Replaced and Replacement Parts
All Parts removed from the Airframe and the Engines shall remain the
property of Owner and subject to this Lease and any Mortgage, no
matter where located, until such Parts are replaced by Parts to which
title shall have vested in Owner and which have been incorporated or
installed in or attached to the Airframe or an Engine and which meet
the requirements for replacement Parts specified above. Immediately
upon any replacement Part becoming incorporated, installed or attached
as provided above, without further act, (a) title to the replaced Part
shall thereupon vest in Lessee, free and clear of all Lessor Liens;
(b) subject to the provisions of Clause 8.5, such replaced Part shall
no longer be deemed a Part hereunder; (c) title to the replacement
Part shall thereupon vest in Owner; and (d) subject to the provisions
of Clause 8.5, such replacement Part shall become subject to this
Lease and any Mortgage and be deemed to be a Part hereunder to the
same extent as the Parts originally incorporated or installed in or
attached to the Airframe and the Engines.
8.3. [Intentionally Left Blank]
8.4. Alterations, Modifications and Additions
Except as provided in this Clause 8 and in Clause 6.6, Lessee shall
not make any alteration, modification or addition to the Airframe or
any of the Engines except such alterations, modifications or additions
the cost (including labor costs of installation) of which is less than
$50,000 and which can be removed from the Aircraft without diminishing
or impairing the value of the Aircraft.
8.5. Title to Parts
Subject to the provisions hereof, title to all Parts incorporated or
installed in or attached or added to the Aircraft or any part thereof
as the result of any alteration, modification or addition shall,
without further act, vest in Owner and become subject to this Lease
and any Mortgage; provided, however, that so long as no Default or
Event of Default shall have occurred and be continuing, at any time
during the Term, Lessee may remove any Part from the Aircraft or any
part thereof, provided that (a) such Part is in addition to, and not
in replacement of or in substitution for, any Part originally
incorporated or installed in or attached to
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the Aircraft or any part thereof at the time of delivery thereof
hereunder or any Part in replacement of, or substitution for, any such
original Part; (b) such Part is not required to be incorporated or
installed in or attached or added to the Aircraft or any part thereof
pursuant to the terms hereof; and (c) such Part can be removed from
the Aircraft or any part thereof without diminishing or impairing the
value, utility or airworthiness which the Aircraft or any part thereof
would have had at such time had such addition not occurred. Upon the
removal by Lessee of any such Part as above provided, title thereto
shall, without further act, vest in Lessee free and clear of all
Lessor Liens and such Part shall no longer be deemed a Part hereunder.
Title to any Part not removed by Lessee as above provided prior to the
return of the Aircraft to Lessor hereunder shall remain with Owner and
subject to this Lease and any Mortgage.
9. TAXES
9.1. General
Lessee shall pay, assume liability for and indemnify, protect, defend,
save and hold each Tax Indemnitee, harmless from and against, all
Taxes which are imposed by any government (or any political
subdivision or fiscal or taxing authority thereof) and are imposed on
or with respect to, or are measured by, (a) this Lease or any other
Relevant Document, (b) the Aircraft or any part thereof, (c) the
acceptance, rejection, delivery, possession, use, presence, storage,
registration, deregistration, modification, maintenance, operation,
sale in connection with the exercise of remedies under Clause 16,
return, import, export, subleasing, repair, overhaul, transportation,
landing, redelivery, leasing or other disposition of the Aircraft or
any part or portion thereof, or (d) the receipts, earnings, insurance
proceeds or other amounts arising from the Aircraft or any Part, or
the Relevant Documents, provided, however, the foregoing indemnity
shall not apply to: (i) Taxes imposed on or measured by the net income
of any Tax Indemnitee in the jurisdiction of incorporation or
principal place of business of such Tax Indemnitee unless such Taxes
result from the use or location of the Aircraft in such jurisdiction;
(ii) Taxes imposed with respect to any period prior to the Delivery
Date or after return of the Aircraft pursuant to Clause 14; (iii)
Taxes imposed on or with respect to a transfer by a Tax Indemnitee of
all or any part of its right, title and interest in, to or under the
Aircraft (or any Part thereof except the transfer of a Part pursuant
to Clause 8 or the transfer of any Engine pursuant to Clause 10.2) or
any of the Relevant Documents to any person or entity, unless any such
transfer occurs when an Event of Default has occurred and is
continuing; (iv) Taxes which the relevant Tax Indemnitee is subject to
as a result of business or transactions unrelated to the transactions
contemplated by the Relevant Documents; (v) Taxes caused by the gross
negligence or willful misconduct of the relevant Tax Indemnitee; or
(vi) any increase in Taxes imposed as a result of a transfer by a Tax
Indemnitee of its interest in Lessor or as a result of the change in
jurisdiction of incorporation of the relevant Tax Indemnitee.
9.2. Withholding Taxes
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Notwithstanding anything to the contrary contained in this Clause 9,
if Lessee is required by law to make any withholding from Rent or any
other amount payable by Lessee to an Indemnitee or Tax Indemnitee
under any of the Relevant Documents, Lessee shall pay to such
Indemnitee or Tax Indemnitee such additional amount as may be
necessary to enable such Indemnitee or Tax Indemnitee to receive
(after such withholding) and retain an amount equal to the full amount
then payable to such Indemnitee or Tax Indemnitee absent such
withholding. As soon as practicable after Lessee makes any withholding
from any amount payable to an Indemnitee or Tax Indemnitee under any
of the Relevant Documents, Lessee shall deliver to such Indemnitee or
Tax Indemnitee a receipt or other document, reasonably satisfactory to
such Indemnitee or Tax Indemnitee and reasonably obtainable by Lessee,
evidencing such withholding and the payment of the amount withheld to
the relevant governmental authority, for the purpose of enabling such
Indemnitee or Tax Indemnitee to substantiate a claim for credit or
deduction for income tax purposes of the amounts so withheld. Each
Indemnitee and each Tax Indemnitee shall cooperate with Lessee to
recover or reclaim any Tax paid by Lessee hereunder and any amount
recovered shall be repaid to Lessee. Lessee shall be responsible for
all costs and expenses incurred by any Indemnitee or Tax Indemnitee as
a result of such cooperation.
9.3. Amount of Indemnity
Each indemnity provided for in Clauses 9.1, 9.2 or Clause 12, shall be
in an amount which, after taking into account all Taxes, fees or other
charges payable or imposed with respect thereto or as a result of the
receipt thereof by any Indemnitee or Tax Indemnitee in any
jurisdiction (whether or not excepted above), shall be equal to the
amount of such indemnity otherwise payable under this Lease, taking
into account any deductions claimable by the Indemnitee or Tax
Indemnitee and the cash flow benefits, if any, of receipts and
payments. Any payment required to be made by Lessee under Clauses 9.1
or 9.2 shall be due and payable within 30 days following Lessee's
receipt of Lessor's written demand therefor (accompanied by an invoice
or a written statement of the Indemnitee or Tax Indemnitee describing
in reasonable detail the Taxes for which the relevant Indemnitee or
Tax Indemnitee is demanding an indemnity and the computation of the
amount of the indemnity being demanded), subject to the provisions of
Clause 9.4.
9.4. Contest
If a claim is made against any Tax Indemnitee for any Tax that is
subject to indemnification under this Clause 9, Lessor will give
Lessee written notice of such claim. If Lessee so requests in writing
within 30 days after receipt of such notice, the relevant Tax
Indemnitee shall permit Lessee to contest the claim in the name of the
Tax Indemnitee or in the name of Lessee, to the extent permitted by
law. However, if such claim together with other claims which could be
made with respect to other transactions to which the Tax Indemnitee is
then a party could (if sustained) have an adverse effect on the Tax
Indemnitee's business or financial
-20-
affairs (a "Special Claim"), or if Lessee shall not be permitted by
law to contest a claim (other than a Special Claim) on behalf of the
Tax Indemnitee, then the Tax Indemnitee shall contest such claim in
good faith. Notwithstanding the foregoing, no claim shall be contested
unless and until: (a) the Tax Indemnitee shall have received (i) an
indemnity reasonably satisfactory to it for all expenses reasonably
expected to be paid in contesting the claim (including attorneys' and
accountants' fees and disbursements) and (ii) written acknowledgement
by Lessee of its liability hereunder (if such contest is decided
adversely) in respect of such Taxes; (b) the action to be taken will
not involve any material risk of the sale, forfeiture, seizure or loss
of, or the creation of any Lien (except a Lien which Lessee shall have
bonded in an amount and manner reasonably satisfactory to Lessor) on,
the Aircraft or any part thereof or any interest therein; (c) if such
contest shall be conducted in a manner requiring the payment of the
claim, Lessee shall have advanced the amount required on an
interest-free after-tax basis; (d) no Event of Default shall have
occurred and be continuing and Lessor shall be receiving all amounts
of Rent when due, without reduction by reason of any Taxes; and (e) if
such claim is a Special Claim, the relevant Tax Indemnitee shall have
received a legal opinion (at the expense of Lessee) from counsel
satisfactory to the Tax Indemnitee indicating that a reasonable basis
for such contest exists. The relevant Tax Indemnitee and Lessee shall
in good faith consider the other party's views regarding the conduct
of the contest. The relevant Tax Indemnitee and Lessee shall provide
to each other, upon request, such reasonably obtainable information
and such other reasonable assistance as may be necessary or advisable
for the effective evaluation or conduct of such contest.
Notwithstanding the foregoing provisions of this Clause 9.4, if at any
time any Tax Indemnitee waives its right of indemnification under this
Clause 9 in respect of a claim, or if, after having received payment
of indemnification from Lessee hereunder in respect to such claim,
such Tax Indemnitee tenders such payment to Lessee, then Lessee shall
not be entitled to contest, or to continue to contest, any such claim.
9.5. Tax Returns
Lessee will provide such information as may be reasonably requested by
any Tax Indemnitee and reasonably obtainable by Lessee to enable any
Tax Indemnitee to fulfill its tax filing requirements with respect to
the transactions contemplated by the Relevant Documents. In the event
that any return, statement or report is required to be made or filed
by Lessee or, if Lessee has actual knowledge thereof, by any Tax
Indemnitee with respect to any Tax required to be indemnified against
by Lessee under this Clause 9, Lessee shall notify Lessor or the
relevant Tax Indemnitee of such requirement and (a) to the extent
permitted by law and requested by the relevant Tax Indemnitee or
required by law, make and file in its own name such return, statement
or report in such manner as will show the ownership of the Aircraft in
Owner and furnish Lessor with a copy of such return, statement or
report or (b) where such return, statement or report is required to be
in the name of or filed by any Tax Indemnitee, prepare and furnish
such return, statement or report for filing by the relevant Tax
Indemnitee in such manner as shall be satisfactory to the relevant Tax
Indemnitee and send the same to the
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relevant Tax Indemnitee for filing no later than 30 days prior to the
due date. Where a Tax Indemnitee is required to make or file a return,
statement or report reflecting items other than or in addition to
Taxes indemnified against by Lessee under this Clause 9, Lessee shall,
upon Lessor's request, provide the relevant Tax Indemnitee with
information, within a reasonable time, sufficient to permit such
return, statement or report to be properly made and timely filed.
10. EVENTS OF LOSS
10.1. With Respect to the Aircraft
Upon the occurrence of an Event of Loss with respect to the Aircraft,
Lessee shall forthwith (and in any event within one Business Day after
becoming aware of such occurrence) give Lessor written notice of such
Event of Loss, and Lessor and Lessee shall proceed diligently and
cooperate fully with each other in the recovery of any and all
proceeds of insurance applicable thereto. Basic Rent shall continue to
accrue and be paid hereunder until such time as Lessor has received
the full amount due under this Clause 10.1. On the earlier of the date
of receipt of the Event of Loss Proceeds or 90 days following the date
of occurrence of such Event of Loss (the "Event of Loss Payment
Date"), Lessee shall pay or procure the payment to Lessor of an amount
equal to the aggregate of:
(i) all arrears of Rent and other amounts due from Lessee
but unpaid under any Relevant Document together with
interest thereon from the due date thereof to the date of
actual payment at the Incentive Rate; and
(ii) the Insured Value; and
(iii) if Lessee has not paid any of the amounts referred to
in (i) or (ii) above on the Event of Loss Payment Date, an
amount equal to interest on such unpaid amount for each day
on which any of such amounts remain unpaid at the Incentive
Rate,
less an amount equal to (x) any Basic Rent already received by Lessor
with respect to the period commencing on (but excluding) the Event of
Loss Payment Date, and (y) any Event of Loss Proceeds already received
by Lessor, Owner or Beneficial Owner, as the case may be.
At such time as Lessor has received the entire amount set forth above,
including, without limitation, all accrued and unpaid Rent and any
other amounts due to Lessor under the Relevant Documents, Lessor,
subject to the rights of the insurers, shall return to Lessee the
Security Deposit and shall, subject to the rights of the insurers,
cause to be executed all necessary bills of sale and other documents
required to transfer to Lessee all Owner's right, title, and interest,
"as-is, where-is," without recourse or warranty, express or implied,
in and to (a) the Aircraft, (b) all claims for damage to the Aircraft,
if any, against third persons
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arising from the Event of Loss (unless any insurer requires that such
claims be assigned to it), and (c) all rights to any insurance claims
and proceeds under all insurance, except liability insurance,
maintained by Lessee hereunder, all without representation, recourse
or warranty of any kind whatsoever. Lessee shall be entitled to
receive all insurance proceeds applicable to the Aircraft over and
above the amount due to Lessor under the preceding paragraph, if any,
as compensation for the loss of Lessee's interest as Lessee in the
Aircraft.
10.2. With Respect to an Engine
Upon the occurrence of an Event of Loss with respect to an Engine
under circumstances in which there has not occurred an Event of Loss
with respect to the Aircraft, Lessee shall forthwith (and in any event
within two Business Days after such occurrence) give Lessor written
notice thereof and Lessee shall replace such Engine as soon as
reasonably possible (and, in any event, within 60 days following such
Event of Loss) by duly conveying to Owner, free and clear of all
Liens, title to another engine of the same or an improved model and
suitable for installation and use on the Airframe with the remaining
Engine, which engine shall have a value and utility at least equal to,
and be in as good operating condition as, the Engine with respect to
which such Event of Loss shall have occurred, assuming such Engine was
of the value and utility and in the condition and repair as required
by the terms hereof immediately prior to the occurrence of such Event
of Loss. Such replacement engine shall be deemed an "Engine" as
defined herein for all purposes hereunder. Lessee agrees promptly to
notify Lessor of any such substitution, provide Lessor with an
officer's certificate demonstrating full compliance with this Clause
10.2 and to take such action and execute such documents, including a
warranty xxxx of sale, as Lessor may reasonably request in order that
title to any such replacement Engine shall be duly and properly vested
in Owner, and to ensure that such replacement Engine is covered by any
Mortgage and that the rights of the Mortgagee in respect of such
replacement Engine are duly and properly perfected and protected, and
that any such replacement Engine shall be duly and properly leased
hereunder to the same extent as any Engine replaced thereby. Lessor
shall take such action, or shall cause such action to be taken, and
shall execute, or shall cause to be executed, such documents as are
reasonably necessary to transfer to Lessee, subject to the rights of
the insurers, all Owner's right, title and interest, "as-is, where
is", without recourse or warranty, express or implied in or to the
Engine replaced pursuant to the preceding sentence to Lessee or its
designee.
10.3. Application of Payments from Government Entities
Payments received by Lessor or Lessee from any Government Entity with
respect to an Event of Loss resulting from the condemnation,
confiscation or seizure of, or requisition of title to or use of the
Aircraft, the Airframe or any of the Engines, shall, as between Lessor
and Lessee, be retained by Lessor, if received by Lessor, or promptly
paid over to Lessor, if received by Lessee and shall be applied in
satisfaction of Lessee's payment obligations under the Relevant
Documents
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(including, without limitation, under Clause 10.1). If all amounts
payable by Lessee to Lessor, any Indemnitee and/or any Tax Indemnitee
pursuant to the Relevant Documents (including, without limitation,
under Clause 10.1) have been received by the relevant person in full,
Lessor shall promptly remit to Lessee any payments described at the
beginning of this Clause 10.3 exceeding such amounts payable to
Lessor, any Indemnitee and/or any Tax Indemnitee pursuant to the
Relevant Documents. Payments received by Lessor or Lessee from any
Government Entity with respect to a requisition of use not
constituting an Event of Loss during the Term of the Aircraft, the
Airframe or any of the Engines shall be paid to (or retained by)
Lessee, and Lessee's obligation to make all payments of Rent shall
continue undiminished. Payments received by Lessor or Lessee with
respect to periods after the end of the Term shall be paid to (or
retained by) Lessor; provided, however, that if an Event of Loss has
occurred with respect to the Aircraft and Lessor has received all
amounts payable by Lessee under the Relevant Documents (including the
amount referred to in the second sentence of Clause 10.1) all such
payments shall be retained by Lessee.
11. INSURANCES
11.1. Obligation to Insure
(a) Lessee will at all times during the Term at its own expense
maintain in full force and effect insurances with respect to
the Aircraft with insurers and through the intermediary of
the Broker and in form and substance reasonably satisfactory
to Lessor.
(b) The Insurances will be effected either:
(i) on a direct basis with insurers of recognized
standing who normally participate in aviation insurances in
the leading international insurance markets and led by
reputable underwriter(s) reasonably approved by Lessor; or
(ii) with a single insurer or group of insurers reasonably
approved by Lessor which does not retain the risk but which
effects substantial reinsurance (the "Reinsurances") with
reinsurers in the leading international insurance markets
and through brokers each of recognized standing and
reasonably acceptable to Lessor for a percentage acceptable
to Lessor of all risks insured.
11.2. Requirements
Lessor's current requirements for the Insurances are as specified in
this Clause 11 and in Schedule 5. Lessor may from time to time
stipulate other reasonable requirements for the Insurances so that the
scope and level of cover is maintained in line with best industry
practice and so that the interests of Lessor and the other Indemnitees
are protected.
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11.3. Changes
If at any time Lessor wishes to revoke its approval of any insurer,
reinsurer, insurance or reinsurance, Lessor and/or its insurance
adviser will consult with Lessee and the Broker as to whether that
approval should be revoked to protect the interests of the parties
insured. If, following that consultation, Lessor reasonably considers
that any change should be made, Lessee will promptly arrange or
procure the arrangement of alternative cover satisfactory to Lessor.
11.4. Insurance Covenants
Lessee will:
(a) ensure that all legal requirements relating to the insurance
of the Aircraft which may from time to time be imposed by
the laws of the State of Registration or any country to or
within which the Aircraft may be operated are complied with
and in particular those requirements compliance with which
is necessary to ensure that:
(i) the Aircraft is not in danger of detention or
forfeiture;
(ii) the Insurances remain valid and in full force and
effect;
(iii) the interests of the Indemnitees in the Insurances
and the Aircraft are not prejudiced;
(b) not permit the Aircraft to be used for any purpose or in any
manner inconsistent with or not fully covered by the
Insurances or outside any geographical limit imposed by the
Insurances;
(c) comply with the terms and conditions of each policy of the
Insurances and not do, consent or agree to any act or
omission which:
(i) invalidates or may invalidate the Insurances; or
(ii) renders or may render void or voidable the whole or
any part of any of the Insurances; or
(iii) brings any particular liability within the scope of
an exclusion or exception to the Insurances;
(d) not take out any insurance or reinsurance in respect of the
Aircraft other than that required under this Lease,
provided, however, Lessee may, without prior written
approval of, or notification to, Lessor, procure additional
insurance coverage, under the condition that no additional
insurance procured by Lessee shall have the effect of
suspending, impairing, defeating, invalidating or
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rendering unenforceable or reducing, in whole or in part, the
coverage of or the proceeds payable under any Insurance required
to be provided and maintained by Lessee under this Lease;
(e) commence renewal procedures at least thirty (30) days prior to
expiry of any of the Insurances and provide to Lessor:
(i) if requested by Lessor, a written status report of renewal
negotiations fourteen (14) days prior to each such expiry date;
(ii) written confirmation of completion of renewal prior to each
such expiry date; and
(iii) certificates of insurance (and where appropriate
certificates of reinsurance), and Broker's (and any reinsurance
brokers') letters of undertaking each in form and substance
reasonably satisfactory to Lessor within seven (7) days after each
renewal date;
(f) on request made from time to time, procure that copies of the
policies and endorsements (excluding premium information) with
respect to the Insurances required under this Clause 11 be made
available to Lessor on reasonable notice for inspection by its
representative during normal business hours at the principal place
of business of Lessee or the Broker;
(g) on request, provide to Lessor evidence that the Insurance premiums
have been paid;
(h) not make any material modification or alteration to the Insurances
which is adverse to the interests of any of the Indemnitees;
(i) be responsible for any deductible under the Insurances;
(j) provide any other insurance and reinsurance related information or
assistance in respect of the Insurances that Lessor may reasonably
require;
(k) effect and maintain, to the fullest extent customarily available
in the international aviation insurance markets, in respect of the
Aircraft at all times cover in respect of risks associated with
failure of any Computer System to be Year 2000 Compliant (so that
if at any time "clause AVN2000A Date Recognition Clause" or any
equivalent clause is endorsed on the Insurances, Lessee will
ensure that "Clause AVN2001A Date Recognition Limited Coverage
Clause" and "Clause AVN2002A Date Recognition Limited Coverage
Clause" or equivalent clauses are endorsed on the Insurances),
where;
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(l) "Computer System" means any computer hardware and software or
any equipment operated by electronic means; and
(i) "Year 2000 Compliant" means, in relation to any Computer
System, that any references to or use of a date before, on or
after 31 December, 1999 in the operation of the Computer
System will not have an adverse effect on the use of that
Computer System.
11.5. Failure to Insure
If Lessee fails to maintain the Insurances in compliance with this
Lease, Lessor, Owner and Beneficial Owner (or any of them) may, but
are not obliged to (without prior prejudice to any other rights of
Lessor under this Lease):
(a) effect and maintain Insurances satisfactory to it or
otherwise remedy Lessee's failure in such manner (including,
without limitation to effect and maintain a "Lessor's
interest" policy) as such person reasonably considers
appropriate. Any sums so expended by it will immediately
become due and payable by Lessee to Lessor together with
interest thereon at the Incentive Rate from the date of
expenditure by it up to the date of reimbursement by Lessee;
and
(b) at any time while such failure is continuing, 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 its satisfaction.
11.6. Settlement of Claims
Lessee will not settle any claims arising under any of the physical
loss or damage Insurances in excess of the Claims Limit or an
equivalent amount in another currency without the prior written
consent of Lessor, that consent not to be unreasonably withheld or
delayed.
11.7. Loss Adjustment
(a) In the event of damage to the Aircraft or any part thereof
not amounting to an Event of Loss, and provided that no
Default or Event of Default has occurred and is continuing,
Losses arising from the damage will be adjusted with Lessee
and:
(i) if the Loss does not exceed the Claims Limit or an
equivalent amount in another currency, the loss proceeds of
insurance will be paid directly to Lessee; and
(ii) if the Loss exceeds the Claims Limit or an equivalent
amount in another currency, the loss proceeds of insurance
will be
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paid directly to the repairer or, with Lessor's express
authorization, to Lessee or as Lessee may direct.
For the avoidance of doubt, if any Default or Event of Default has
occurred and is continuing, all Losses will be adjusted with
Lessor and all loss proceeds of insurance will be paid to Lessor
or as Lessor may direct.
(b) All insurance proceeds in respect of third party liability will,
except to the extent paid by the Insurers to the relevant third
party, be paid to Lessor to be paid directly in satisfaction of
the relevant liability or to Lessee in reimbursement of any
payment so made.
11.8. Continuance of Liability Cover
(a) From the date of expiration or termination of the Term, Lessee
will continue to maintain the liability insurance referred to in
Schedule 5 for the benefit of Lessor and the other Indemnitees
until the earlier of:
(i) three (3) years following the date the Aircraft is returned
to Lessor; and
(ii) the completion of the next succeeding major structural
inspection of the Aircraft, following the end of the Term.
(b) Lessee's obligation in Clause 11.8(a) will not be affected by
Lessee ceasing to be the lessee of the Aircraft and/or any of the
Indemnitees ceasing to have any interest in respect of the
Aircraft.
11.9. Lessor's Right to Insure
Lessee acknowledges that Lessor, Owner, and Beneficial Owner each have an
insurable interest in the Aircraft. Lessor, Owner and Beneficial Owner each
shall have the right to obtain at its own expense insurance or contingent
insurance in its own name with respect to such insurable interest. Lessee
will render to Lessor, Owner and Beneficial Owner all reasonable assistance
as from time to time requested by Lessor, Owner or Beneficial Owner, as the
case may be, in order that Lessor, Owner and Beneficial Owner each may
adequately protect such insurable interest. No insurance so obtained by
Lessor, Owner or Beneficial Owner shall prejudice the insurance maintained
by Lessee pursuant to this Lease.
12. GENERAL INDEMNIFICATION
12.1. Scope
Lessee shall indemnify each Indemnitee and hold each Indemnitee harmless
from any and all Losses which may result from or arise out of (a) the
condition, use or
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operation during the Term of the Aircraft or any part thereof
either in the air or on the ground, (b) any maintenance,
service, repair, overhaul, possession, delivery, performance
management, registration, control, return or testing of the
Aircraft or any part thereof during the Term, whether or not
the Aircraft or any part thereof is at the time in the
possession of Lessee, (c) any infringement or alleged
infringement of any patent or other intellectual property
rights as a result of any article, design or material in the
Aircraft, (d) any acceptance flight, demonstration flight or
inspection of the Aircraft prior to the commencement of the
Term, or (e) Lessee's failure to take delivery of the
Aircraft; provided, however, that Lessee shall not be required
to indemnify any Indemnitee for any Loss, (i) to the extent
that such Loss is caused by the acts or events which occur
after expiration or earlier termination of the leasing of the
Aircraft hereunder and return of the Aircraft to Lessor in
accordance with Clause 14, unless attributable to acts,
omissions, circumstances or events occurring prior thereto,
(ii) which is a Tax or a loss of tax benefit (it being
understood that Clause 9 provides for Lessee's liability with
respect to Taxes), or (iii) to the extent that such Loss
results from the gross negligence or willful misconduct of
such Indemnitee. Upon payment in full to any Indemnitee of any
indemnities contained in this Clause 12 by Lessee, Lessee, to
the extent permissible under applicable law, and provided no
Default or Event of Default has occurred which is continuing,
shall be subrogated to all rights and remedies which such
indemnified party has or may have against any Manufacturer,
Supplier or other person.
12.2. Lessee's Release
Lessee hereby waives and releases any claim now or hereafter
existing against any Indemnitee on account of any and all
claims, demands, suits, causes of action and all legal
proceedings, whether civil or criminal, damages, losses,
liabilities (including, but not limited to, strict liability
in tort), obligations, penalties, judgments or fines and other
sanctions, and any costs and expenses in connection therewith,
including reasonable legal fees and expenses of whatever kind
and nature, which may result from or arise out of injury to or
death of personnel of Lessee or its agents or contractors or
loss or damage to property of Lessee or the loss of use of any
property which may result from or arise out of (a) the
condition, use or operation during the Term of the Aircraft or
any part thereof, either in the air or on the ground, or (b)
any maintenance, service, repair, overhaul, possession,
delivery, performance management, registration, control,
return or testing of the Aircraft or any part thereof during
the Term, whether or not the Aircraft or any part thereof is
at the time in the possession of Lessee.
12.3. Contest
If Lessee is not permitted to contest in its own name and if
an Indemnitee is unable or unwilling to assign to Lessee
whatever right such Indemnitee may have to bring such an
action, then, if requested by Lessee in writing, the relevant
Indemnitee shall, upon receipt of an opinion of Lessee's
counsel stating that reasonable grounds exist to take the
action requested, in good faith contest the
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validity, applicability or amount of any liability or loss,
provided Lessee shall have first indemnified or provided
security to such Indemnitee against all expenses (including
attorneys' fees and expenses) which such Indemnitee may incur
as a result of its contesting an indemnified amount
(collectively an "Indemnified Amount") by (a) not paying the
same except under protest if protest is necessary and proper,
or (b) if payment is made, using reasonable efforts to obtain
a refund in appropriate administrative or judicial
proceedings; provided, however, that an Indemnitee need not
contest the applicability of any such Indemnified Amount, if
the matter in question is of a continuing nature and has
previously been resolved pursuant to the provisions of this
Clause 12.3.
12.4. Repayment
If an Indemnitee shall obtain a repayment of any Indemnified
Amount paid by Lessee, such Indemnitee shall, so long as there
exists no Default or Event of Default, promptly pay to Lessee
the amount of such repayment, together with the amount of any
interest received by such Indemnitee on account of such
repayment.
12.5. Payment
Subject to the provisions of Clause 12.3, Lessee shall pay
directly to the relevant Indemnitee all amounts due under this
Clause 12 within 30 days of the receipt of notice that such
payment is due. Such notice shall set forth the basis for the
claim for indemnification, a calculation of the amount stated
to be due and a certification that such computation is
accurate save for manifest error.
13. LIENS
Lessee shall not, directly or indirectly, create, incur,
assume or suffer to exist any Lien on or with respect to the
Aircraft or any part thereof or any interest therein, except
Permitted Liens. Lessee shall promptly, at its own expense,
take such action as may be necessary to duly discharge any
such Lien not excepted above if the same shall arise at any
time with respect to the Aircraft or any part thereof. As
Lessor may reasonably request from time to time Lessee shall
provide Lessor with the written opinion of independent counsel
reasonably satisfactory to Lessor or other written evidence
satisfactory to Lessor to the effect that, based upon an
examination of this Lease and the records of the Aeronautics
Authority and other documents deemed necessary, and subject to
the accuracy of such records, no Liens exist against the
Aircraft or any Engine except Permitted Liens (and specifying
which, if any, such Permitted Liens exist).
14. RETURN OF AIRCRAFT
This Clause 14 shall not limit any rights or remedies under
Clause 16. Upon the expiration or earlier termination of this
Lease, Lessee shall return the Aircraft to Lessor at the
Redelivery Location in the condition and in all respects in
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accordance with the provisions of Part B of Schedule 6. All
references in this Lease or elsewhere to this Clause 14 shall
be deemed to refer also to Part B of Schedule 6.
15. EVENTS OF DEFAULT
The following events shall constitute Events of Default and
shall be a material breach which Lessor is entitled to treat
as a repudiation of this Lease by Lessee:
(a) Lessee shall fail to make any payment of Basic Rent
within ten (10) days of the date the same is due and
payable hereunder or shall fail to make any payment of
Supplemental Rent within ten (10) days of the date when
the same is due and payable hereunder; or
(b) Lessee shall fail to procure and maintain all insurance
required by Clause 11 or Lessee shall operate or permit
the operation of the Aircraft at any time or in any
geographic area when the insurance required by Clause
11 shall not be fully in effect;
(c) Lessee shall fail to perform or observe any other of
the covenants, conditions, or agreements to be
performed or observed by it under the Relevant
Documents and such failure shall continue for a period
in excess of 30 days from the date written notice is
given by Lessor requiring the same to be remedied; or
(d) any representation or warranty made or deemed to be
repeated by Lessee under any of the Relevant Documents
or in any document or certificate furnished to Lessor
in connection therewith or pursuant thereto shall prove
to have been incorrect when made or deemed to be
repeated; or
(e) Lessee or Guarantee disposes or threatens to dispose of
all or a substantial or material part of its assets,
rights or revenues; or
(f)
(i) an encumbrance takes possession of, or an
administrative or other receiver or manager or trustee
or similar officer is appointed in respect of the whole
or any substantial part of the assets, rights or
revenues of Lessee or Guarantee or a liquidator or
administrator is appointed in respect of Lessee or
Guarantee; or
(ii) a distress, execution, attachment, sequestration
or other process is levied or enforced upon or sued out
against any of the assets, rights or revenues of Lessee
or Guarantee and is not discharged within 30 days; or
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(iii) a petition or application is presented for the
appointment of an administrator, receiver or manager or
trustee or liquidator in respect of Lessee or Guarantee
or all or any material part of its assets, rights or
revenues;
(g) Lessee or Guarantee is or becomes insolvent or is or
becomes unable or admits its inability to pay its
Indebtedness as they become due or suspends or ceases
or threatens to suspend or cease to carry on all or a
substantial part of its business; or
(h) a resolution is passed or an order is made for any
assignment, arrangement, rehabilitation,
administration, custodianship, liquidation, dissolution
or insolvency proceeding by, or in respect of Lessee or
Guarantee, or Lessee or Guarantee becomes subject to or
enters into any of the foregoing; or
(i) any step (including a petition, proposal or the
convening of a meeting) is taken with a view to a
composition, assignment or arrangement with any
creditors of, or the dissolution of, Lessee or
Guarantee, or with a view to any other insolvency
proceedings involving Lessee or Guarantee; or
(j) Lessee or Guarantee suspends payment of all or any
class of its Indebtedness, or announces an intention to
do so, or a moratorium is declared in respect of any of
its Indebtedness, or shall be adjudicated or found
insolvent, or proceedings are commenced by Lessee or
Guarantee under any law, regulation or procedure
relating to reconstruction or readjustment of
Indebtedness; or
(k) any steps are taken to enforce any Lien over any
material part of the assets of Lessee or Guarantee; or
(l) in relation to Lessee or Guarantee, there occurs any
event or any proceeding is taken, in any jurisdiction,
which is analogous to or has an effect equivalent or
similar to, any of those mentioned in Clause 15(f),
(g), (h), (i), (j) or (k); or
(m) the Aircraft or any part thereof shall be subleased or
possession thereof transferred and such sublease or
transfer does not comply with the provisions of Clause
6.2; or
(n) any material adverse change occurs in the financial
condition of Lessee or Guarantee which would affect
Lessee's or Guarantee's ability to perform any of its
obligations under any of the Relevant Documents; or
-32-
(o) Eurocontrol charges and other overflight and airport
fees or charges owed by Lessee or Guarantee or
otherwise owed in respect of the Aircraft shall not be
fully paid when due; or
(p) Lessee fails to accept delivery of the Aircraft when
validly tendered (assuming satisfaction or waiver of
the conditions set forth in Clause 2.4) to Lessee or
Guarantee pursuant to this Lease; or
(q) the existence, validity, enforceability or priority of
the rights of Owner, as owner, or Lessor, as lessor, or
the rights of Beneficial Owner in relation to the
Aircraft are challenged by Lessee or Guarantee or any
other person claiming by or through Lessee or
Guarantee; or
(r) it becomes unlawful for Lessee or Guarantee to perform
any of its obligations under any of the Relevant
Documents or any of the Relevant Documents ceases to be
in full force and effect or becomes wholly or partly
invalid or unenforceable or otherwise ceases to be the
legal, valid and binding obligation of Lessee or
Guarantee or the Assignment of Insurances should fail
or cease to create a valid and effective first priority
security interest in respect of the subject matter
thereof; or
(s) any Indebtedness of Lessee or Guarantee is not paid
when due or becomes due prior to the date when it would
otherwise have become due and has not been paid unless
the validity of the obligation is being contested by
appropriate proceedings; or
(t) any permits, licenses, consents, approvals and
authorizations of or registrations with any Government
Entity required by Lessee or Guarantee to authorize the
execution, delivery, validity or enforceability of any
of the Relevant Documents or the performance by Lessee
or Guarantee of its obligations thereunder is modified
or is not granted or is revoked, suspended, withdrawn
or not renewed and the effect thereof is, in the
opinion of Lessor, materially and adversely to affect
the ability of Lessee or Guarantee to perform any of
its obligations under any of the Relevant Documents; or
(u) the Aircraft or any part thereof is taken in execution,
impounded or otherwise taken from the possession of
Lessee or Guarantee by reason of any legal process or
any other legal process is levied upon the Aircraft or
any part thereof or the Aircraft or any part thereof is
arrested or detained in the exercise or purported
exercise of any Lien (other than a Lessor Lien) or
claim enforceable against the Aircraft or any part
thereof and Lessee or Guarantee shall fail
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to provide or to procure the release of the Aircraft
and each part thereof within a period of ten days; or
(v)
(i) any consent, authorization, license or approval
necessary to enable Lessor to repossess the Aircraft
upon expiration or termination of the leasing thereof
hereunder and/or to de-register and export the Aircraft
from the State of Registration thereupon, is modified
or is not granted or is revoked, suspended, withdrawn,
terminated or expires and is not renewed; or
(ii) the registration of the Aircraft with the
Aeronautics Authority is cancelled except as otherwise
provided under this Lease; or
(w) any condition subsequent contained in Part C of
Schedule 2 is not met as provided therein; or
(x) Lessee or Guarantee fails to appoint an alternative
agent for service of process pursuant to Clause 5.3(j);
or
(y) any other event, circumstances or state of affairs
arises as a result of which Lessor reasonably
determines that the ability of Lessee or Guarantee to
perform any of its obligations under any of the
Relevant Documents will be materially and adversely
affected.
16. RIGHTS AND REMEDIES
16.1. Remedies
16.1.1. An Event of Default shall constitute a material
breach and repudiation by Lessee of its obligations hereunder.
Upon the occurrence of any Event of Default and at any time
thereafter so long as the same shall be continuing, Lessor
may, at its option, declare this Lease to be in default and at
any time thereafter (without needing to comply with any
particular notice or grace period), so long as Lessee shall
not have remedied all outstanding Events of Default, Lessor
may exercise one or more of the following remedies with
respect to the Aircraft or any part thereof as Lessor, in its
sole discretion, shall elect, to the extent available and
permitted by, and subject to compliance with any mandatory
requirements of, applicable law then in effect (but, for the
avoidance of doubt, without needing to give formal notice of
default):
(a) pursuant to Clause 4.4, apply all or any portion of the
Security Deposit to sums due and payable by Lessee
under any of the Relevant Documents;
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(b) by notice in writing to Lessee, accept the relevant
repudiation and terminate the leasing of the Aircraft
hereunder and demand that Lessee return the Aircraft,
and Lessee shall upon written demand of Lessor and at
Lessee's expense, forthwith return the Aircraft to
Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of,
Clause 14 as if the Aircraft were being returned at the
end of the Term; or Lessor or Lessor's agent or
representative to the extent permitted by law may enter
upon the premises where the Aircraft or any part
thereof is located and take immediate possession of and
remove the same by summary proceedings or otherwise,
all without liability for or by reason of such entry or
taking of possession whether for the restoration of
damage to property caused by such taking or otherwise;
(c) proceed by appropriate court action or actions, either
at law or in equity, to enforce performance by Lessee
of the applicable covenants of this Lease and to
recover damages for the breach thereof;
(d) in addition to all other legal and equitable rights of
Lessor, upon notice to Lessee, following an Event of
Default, Lessor may lease the repossessed Aircraft or
any part thereof to any third party upon such terms and
conditions as Lessor may determine;
(e) if an Event of Default occurs or the Aircraft is not
tendered by Lessor or, upon valid tender by Lessor, is
not accepted by Lessee on the proposed delivery date,
in either case solely by reason of the failure of
Lessee to satisfy any conditions to that delivery,
Lessee will indemnify Lessor on demand against any Loss
(including loss of profit), which Lessor may sustain or
incur directly or indirectly as a result thereof
including but not limited to:
(i) any loss of profit suffered by Lessor because of
Lessor's inability to place or any delay in placing,
the Aircraft on lease with another lessee on terms as
favorable to Lessor as this Lease or because whatever
use, if any, to which Lessor is able to put the
Aircraft upon its return to Lessor, or the funds
arising upon a sale or other disposal of the Aircraft,
is not as profitable to Lessor as this Lease;
(ii) any loss, premium, penalty or expense which may
be incurred in repaying funds raised to finance the
Aircraft;
(iii) any loss, cost, expense or liability sustained or
incurred by Lessor owing to Lessee's failure to
redeliver the Aircraft on the date, at the place and in
the condition required by this Lease;
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(iv) without double-counting with paragraphs (i), (ii)
or (iii), any amount of interest, fees or other sums
whatsoever paid or payable on account of funds borrowed
in order to carry any unpaid amount.
16.1.2. Following the termination of the leasing of the
Aircraft during the Term in circumstances amounting to a
repudiatory breach of this Lease or an Event of Default,
Lessee will on written demand pay to Lessor as liquidated
damages or, as the case may be, a debt:
(a) each installment of Basic Rent that would have fallen
due after the Termination Date but for such termination
discounted at the Discount Rate over the period from
but excluding the Termination Date to and including the
Basic Rent Payment Date on which such payment would,
but for the occurrence of the Termination Date, have
been due, together with interest thereon at the
Incentive Rate from the Termination Date to the date of
receipt by Lessor;
(b) all arrears of Rent and all other amounts payable by
Lessee to Lessor under this Lease or any other Relevant
Documents to which Lessee is a party but unpaid at the
Termination Date, together with interest thereon at the
Incentive Rate from the date on which such Rent or
other sums fell due for payment to the date of their
receipt by Lessor;
(c) all Losses incurred by Lessor in connection with:
(i) recovering or having possession of the Aircraft;
(ii) recovering Rent or other amounts due hereunder;
(iii) returning the Aircraft to the condition required
hereunder and in accordance with the provisions of Part
B of Schedule 6; and
(iv) exercising or enforcing any of its rights under
any Relevant Documents to which Lessee is party,
together with interest thereon at the Incentive Rate from the
date that Lessor incurred such Losses to the date of their recovery by Lessor;
(d) any other properly evidenced Losses which Lessor may
sustain or incur as a consequence of the occurrence of
any Event of Default, including but not limited to:
(i) any amount of interest, fees or other sums
whatsoever paid or payable on account of funds borrowed
in order to carry any amount which Lessee has failed to
pay under this Lease or any other Relevant Document;
and
-36-
(ii) any loss, premium, penalty, fees, or expense which
may be incurred by Lessor in unwinding any financing of
the Aircraft or terminating any guarantee or similar
arrangement undertaken in connection with the leasing
of the Aircraft to Lessee or unwinding any swap,
forward interest rate agreement or other financial
instrument relating in whole or in part to that
financing,
together with interest thereon at the Incentive Rate from the date
that Lessor incurred such Losses to the date of their recovery by Lessor.
16.1.3. Lessee acknowledges that its obligation to pay
the amounts (the "Termination Rental") referred to in Clause 16.1.2
is by way of liquidated damages and Lessor agrees that, in the
event that it is able to place the Aircraft on lease (a "New
Lease") with another lessee (a "New Lessee") for any part of the
remainder of period prior to the originally scheduled Expiry Date,
Lessor will, subject to Clause 16.1.4, pay to Lessee once it has
received the same, an amount equal to each installment of rental
("New Rental") that it receives from the New Lessee in relation to
that part of such period, after deducting from such amount any
amount that may be necessary to compensate Lessor for:
(a) Tax suffered by it on such New Rental; and
(b) any costs and expenses incurred by Lessor in entering
into the New Lease.
16.1.4. Lessor shall only be obliged:
(a) to pay any amount under Clause 16.1.3 if it has
received all amounts that are due to it from Lessee
under this Lease and the other Relevant Documents; or
(b) to pay any amount under Clause 16.1.3 to the extent
that the aggregate of the amounts paid by it under
Clause 16.1.3 would not exceed the aggregate of amounts
received by it under 16.1.2; or
(c) to solicit offers to lease the Aircraft to any
potential New Lessee or to lease the Aircraft to any
person if to do so would not conflict with interests of
Lessor or of any affiliate of Lessor; or
(d) subject to paragraph (c) above, to use its reasonable
endeavors, in accordance with its standard business
procedures, to place the Aircraft on a New Lease with a
New Lessee for the remainder of the period prior to the
originally scheduled Expiry Date.
16.2. Further Rights
Lessee shall be liable for any and all unpaid Rent and for all
reasonable legal fees and other costs and expenses incurred by any Indemnitee by
reason of the occurrence of any
-37-
Event of Default or the exercise of Lessor's remedies with respect thereto,
including all costs and expenses incurred in connection with the return of the
Aircraft or any part thereof in accordance with the terms of Clause 14 or in
placing the Aircraft or any part thereof in the condition and with airworthiness
certificates as required hereunder. Lessor and Lessee hereby agree and
acknowledge that due to the inherent value of the Aircraft and the potential for
significant losses related to its non-operation or non-payment of Rent following
an Event of Default and the exercise of Lessor's rights pursuant to this Lease,
Lessor shall be unrestricted in its efforts to take immediate possession of the
Aircraft pursuant to the terms of this Lease for the purpose of leasing the
Aircraft to a new operator or delivering possession of the Aircraft to a
purchaser thereof identified by Lessor, in either case, as Lessor may choose in
its sole discretion.
16.3. Remedies Cumulative
The rights of Lessor under this Lease are cumulative, may be
exercised as often as Lessor considers appropriate and are in addition to its
rights under any applicable law. The rights of Lessor against Lessee or in
relation to the Aircraft shall not, as against or in favor of Lessee, be capable
of being waived or varied otherwise than by an express waiver or variation in
writing; and in particular any failure to exercise or any delay in exercising
any of such rights shall not operate as a waiver or variation of that or any
such other right; any defective or partial exercise of any of such rights shall
not preclude any other or further exercise of that or any other such right; and
no act or course of conduct or negotiation on its part or on its behalf shall in
any way preclude it from exercising any such other right or constitute a
suspension or any variation of any such right.
16.4. Further Assurances and Undertaking
Lessee shall do all such acts and execute all such agreements,
instruments and other documents as are necessary in order to give effect to the
rights and remedies of Lessor. Lessee hereby undertakes that, in the event
Lessor exercises its rights and remedies under Clause 16.1.1(b), Lessee shall
take all such actions as are required in order to effect the return of the
Aircraft and/or allow Lessor to take possession of the Aircraft and shall
refrain from taking action that may in any way hinder, restrain or interfere
with Lessor in so doing. Lessee expressly consents to the enforcement of the
preceding undertakings, by injunctive or other similar relief, in ex parte
proceedings or otherwise, in respect of Lessee or any of its employees or
agents, in any court with jurisdiction.
17. MISCELLANEOUS
17.1. Severability, Amendment, Construction and Applicable Law
Any provision of this Lease which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. No term or provision of this Lease may be changed, waived,
discharged or terminated orally, but only by a written instrument signed by the
party against which the enforcement of the change, waiver, discharge or
termination is sought.
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THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE UNITED STATES OF AMERICA INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
17.2. Notices
Each notice, request, direction or other communication under this
Lease shall:
(a) be in writing delivered personally or by first-class
prepaid letter (airmail if available) or facsimile;
(b) be deemed to have been given:
(i) in the case of a facsimile, on confirmation by the
recipient of actual receipt or, if earlier, on actual or
deemed receipt by the recipient of a confirmation letter;
and
(ii) in the case of a letter when delivered personally or
10 days after it has been put into the post; and
(c) be sent:
to Lessor:
Xxxxx Fargo Bank Northwest, National Association
000 X. Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Attn: Corporate Trust Department
United States of America
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
UBICS Holding Company
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Tel: 000.000.0000
Fax: 000.000.0000
Attn: President
UBICS, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Tel: 000.000.0000
Fax: 000-000-0000
-00-
Xxxxxx Xxxxxxxx, XXX
000 Xxxxx Xxxxxx
00/xx/ Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
to Lessee:
United Breweries Holdings, Ltd.
000 X. XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxx, President
with a copy to:
United Breweries (Holdings) Limited United Breweries Holdings, Ltd.
0 Xxxxxx Xxxxxx Xxxx 3 Harbor Drive, Suite 115
Xxxxxxxxx 00000 Xxxxx Xxxxxxxxx, XX 00000
Telephone: Telephone: 000.000.0000
Facsimile: Facsimile: 415.289.1410
or to such other address or facsimile number as is notified from
time to time by one party hereto to the other party hereto.
All communications and documents must be in English.
17.3. Lessor's Right to Perform
If Lessee fails to perform any of its obligations hereunder, Lessor
may discharge such obligation and shall notify Lessee of the same, and the
amount of the expenses of Lessor incurred in connection with such discharge
together with interest thereon at the Incentive Rate shall be deemed
Supplemental Rent, payable by Lessee upon demand.
17.4. Counterparts
At least four counterparts of this Lease have been executed by the
parties hereto, each of which shall be deemed to be an original but all of which
taken together shall constitute a single agreement.
17.5. Assignment, Transfer and Financing by Lessor
(a) Lessee acknowledges and agrees that Lessor, Owner or
Beneficial Owner, as the case may be, shall be entitled at
any time to assign, transfer or grant any security
interest over (i) any or all of its rights and obligations
under this Lease and the other Relevant
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Documents (including, without limitation, its rights to
receive the Security Deposit and any Rent) and/or (ii)
its right, title and interest in and to the Aircraft to
any person without the consent of Lessee. In the case
of any such transfer, Lessee hereby agrees and
undertakes that it will upon the request of Lessor
execute such further documents (including, without
limitation, a novation agreement) and give such notices
and take such action as Lessor may reasonably require
in order to effect such transfer provided that any
reasonable costs incurred by Lessee in connection
therewith shall be reimbursed by Lessor.
(b) Lessee acknowledges and agrees that if Lessor should
transfer to a third party all of Lessor's obligations
under this Lease, Lessor shall thereupon be relieved of
all of its obligations hereunder and Lessee shall
thereafter look only to Lessor's transferee as though
Lessor's transferee had been the initial lessor
hereunder.
(c) Subject to the foregoing, no assignment or transfer by
Lessor shall diminish any rights of Lessee under this
Lease on the basis of law and regulation in effect at
the time of such assignment or transfer. Without
derogating from the foregoing, Lessee agrees to
cooperate with Lessor in any such transfer.
(i) Lessor and/or Owner may at any time enter into any
financing arrangements in connection with the Aircraft
and in connection therewith, inter alia, Owner and/or
Lessor may assign as security their respective rights
under this Lease and the other Relevant Documents (or
any of them).
(d) Lessee agrees, at the reasonable cost of Lessor, that
it shall do such things and execute such documents and
make such filings and registrations in the State of
Registration as may be requested of it by Lessor.
(e) If as a consequence of any financing arrangements
Lessor requires Lessee to:
(i) amend the Insurances (including, for the avoidance
of doubt, increasing the Insured Value and/or Engine
Agreed Value and providing that the Mortgagee shall be
named as loss payee), Lessee will make such amendments
and, to the extent that those amendments result in an
increase in the cost to Lessee of effecting the
Insurances, Lessor will reimburse Lessee an amount
equal to the amount of that increased cost;
(ii) redeliver the Aircraft on the Expiry Date in a
condition (the "New Redelivery Condition") which
differs from the redelivery
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condition required pursuant to Clause 14, then provided
that Lessor has provided details of the New Redelivery
Condition to Lessee within six (6) months prior to the
Expiry Date:
(A) Lessee will redeliver the
Aircraft under Clause 14 in the New Redelivery Condition in place of
the redelivery condition required pursuant to Clause 14; and
(B) Lessor will pay Lessee on the
Expiry Date an amount equal to the amount by which the cost
reasonably incurred by Lessee in redelivering the Aircraft in that
New Redelivery Condition exceeds the cost that would have been
reasonably incurred by Lessee had it instead redelivered the Aircraft
in the redelivery condition required pursuant to Clause 14.
(f) If Lessor enters into any financing arrangement of the
nature contemplated by Clause 17.5(d), Lessee shall
take such steps as Lessor may reasonably request to
grant the Mortgagee designated by Lessor a Lien in the
Security Deposit, including, without limitation, the
issuance of a replacement letter of credit complying
with the provisions of Clause 4.4 and paragraph 3 of
Part 1 of Schedule 3, in favor of the Mortgagee
designated by Lessor.
17.6. Submission to Jurisdiction; Waiver of Immunities; Service of
Process
(a) For the exclusive benefit of Lessor, the parties agree
that the courts of the Untied States of America are to
have jurisdiction to settle any disputes (including
claims for set-off and counterclaims) which may arise
in connection with the legal relationships established
by this Lease or otherwise arising in connection with
this Lease. Lessor shall not be prevented from taking
proceedings relating to any dispute as aforesaid in any
other courts with jurisdiction. To the extent allowed
by law, Lessor may take concurrent proceedings in any
number of jurisdictions.
(b) Lessee irrevocably waives any objection on the grounds
of venue or forum non conveniens, lis alibi pendens or
similar grounds. Lessee agrees not to bring proceedings
against Lessor in any jurisdiction other than the
United States of America.
(c) Each party hereto irrevocably and unconditionally:
(i) agrees that if the other party brings legal
proceedings against it or its assets in relation to
this Lease, no immunity from such legal proceedings
(which will be deemed to include, without limitation,
suit, attachment prior to judgment, other attachment,
the obtaining of judgment, execution or other
enforcement) 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.
(d) Both parties shall at all times maintain an agent for
service of process in the United States of America.
Such agent shall be, in the case of Lessor, Xxxxx Fargo
Bank Northwest, National Association at its registered
office from time to time (currently, 000 X. Xxxx
Xxxxxx, 00/xx/ Xxxxx, Xxxx Xxxx Xxxx, XX 84111) and
shall be, in the case of Lessee, at its registered
office from time to time (currently 000 Xxxxx XxXxxxxx
Xx., Xxxxx 000, Xxxxxxxxx, XX 28204). Any claim form,
judgment or other notice of legal process shall be
sufficiently served on Lessor or, as the case may be,
Lessee if delivered to its agent specified above at its
address for the time being. Each party undertakes not
to revoke the authority of its agent specified above
and if for any reason such agent no longer serves as
its agent to receive service of process, that party
shall promptly appoint another such agent and advise
the other party thereof. If Lessee fails to appoint
another such agent after being required by Lessor so to
do, Lessor is irrevocably authorized to appoint any
person (including itself), on such person's standard or
usual terms for acceptance of appointment (if any), as
Lessee's agent.
17.7. Currency Indemnity
The obligations of each party payable under this Lease in one
currency (the "first currency") may be discharged by an amount paid pursuant to
any order or judgment of any court or other tribunal in another currency (a
"second currency"), but only to the extent that the amount so paid in a second
currency on prompt conversion to the first currency under normal banking
procedures yields the amount of the first currency due hereunder, and each party
shall indemnify the other party and any other person entitled to payments
hereunder against any such shortfall and the cost of such conversion. In the
event that any payment in a second currency by either party to any such person
or entity, whether pursuant to a judgment or otherwise, upon conversion and
transfer to the designated place of payment therefore does not result in payment
of such amount of the first currency, such person or entity shall have a
separate cause of action against such party for the additional amount necessary
to yield the amount due and owing to such person.
17.8. Costs and Expenses
(a) Lessee and Lessor shall be responsible for their own
internal costs and expenses in connection with the
documentation and negotiation of the transaction
contemplated by this Lease. Lessee shall be responsible
for all costs and expenses of external legal and tax
counsel for both Lessor and Lessee incurred in
connection with the documentation and negotiation of
the transaction contemplated by this Lease. All costs
and expenses of registering the Aircraft in
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the State of Registration and of perfecting the
interests of Lessor, Owner and Beneficial Owner in the
Aircraft and the Relevant Documents (but not including
the registration of any mortgage over the Aircraft
created by Owner), including reasonable fees and
expenses of counsel for Lessor, in the State of
Registration in connection with such registration or
perfection will be for Lessee's account. The cost and
expenses of placing any mortgage on the Aircraft
created by Owner will be for Lessor's account.
(b) Whether or not the Aircraft is delivered to Lessee
under this Lease, Lessee will pay to Lessor on demand:
(i) all reasonable costs and expenses (including
reasonable legal expenses) incurred by Lessor in
connection with any amendment to, or the granting of
any waiver or consent or the preservation of any rights
of Lessor under, any Relevant Document required in
writing by Lessee, or the occurrence of any damage to,
or loss of the Aircraft, any Engine or any Part.
(ii) all costs and expenses (including legal, survey
and other costs) incurred by Lessor in respect of the
breach by Lessee of any representation, warranty,
covenant, agreement, condition or stipulation contained
in this Lease or in the other Relevant Documents, the
occurrence of any Default or Event of Default, or
otherwise in connection with the enforcement of any of
the Relevant Documents or any rights of Lessor in the
Aircraft or as a consequence of the delivery of the
Aircraft by the Manufacturer, or the commencement of
the Term, not occurring on the Anticipated Delivery
Date as a consequence of any of the conditions
precedent set forth in Part A of Schedule 2 not being
satisfied other than as the direct result of any
negligence or willful default of or by Lessor.
17.9. Survival
The representations, warranties, covenants, agreements and
indemnities of Lessee set forth in this Lease, and Lessee's obligations
hereunder, shall survive the expiration or other termination of this Lease to
the extent required for full performance and satisfaction thereof.
17.10. Further Assurances
Each party hereto shall, at its respective expense, promptly and
duly execute and deliver to the other party such further documents and promptly
take such further action not inconsistent with the terms hereof as the other
party may from time to time reasonably request in order to more effectively
carry out the intent and purpose of this Lease or to perfect and protect the
rights and, with respect to Lessor, remedies created or intended to be created
hereunder.
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17.11. Successors and Assigns
This Lease shall be binding on and shall inure to the benefit of
Lessee and its successors and Lessor and its successors and assigns.
17.12. [Intentionally Left Blank]
17.13. Language
While the Relevant Documents may be translated into other languages,
in the event of any conflict between the English language version and a version
in another language, the English language version shall govern in all respects.
17.14. Performance of the Essence
Lessee acknowledges and agrees that punctual payment of all amounts
payable by Lessee under each of the Relevant Documents (whether such amount
relates to Rent or other amounts payable) and timely performance by Lessee of
each of its obligations under each of the Relevant Documents shall, subject to
applicable grace periods, be of the essence and shall be conditions of this
Lease.
17.15. Third Parties
(a) Each Third Party Indemnitee may enforce the terms of
Clauses 9 and 12, subject to and in accordance with this
Clause 17.15 and the provisions of the Third Parties Act.
(b) The parties to this Lease do not require the consent of any
Third Party Indemnitee to rescind or vary this Lease at any
time.
(c) Each Third Party Indemnitee must obtain the written consent
of Lessor (which Lessor may give or refuse in its absolute
discretion) before it may bring proceedings to enforce the
terms of Clause 9 and 12.
(d) If any Third Party Indemnitee brings proceedings to enforce
the terms of Clause 9 and 12, Lessee shall only have
available to it by way of defense, set-off or counterclaim
a matter that would have been available by way of defense,
set-off or counterclaim if such Third Party Indemnitee had
been a party to this Lease.
(e) If Lessee is in breach of any of its obligations under
Clause 9 and 12, the parties intend that Lessor may recover
from Lessee on behalf of any affected Indemnitee or Tax
Indemnitee any sum in respect of such Indemnitee's or Tax
Indemnitee's loss arising from that breach.
17.16. Confidentiality
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Each of Lessee and Lessor acknowledges that the terms and conditions of
this Lease and the other Relevant Documents and the commercial and financial
arrangements evidenced hereby and thereby are considered by the other party as
confidential information. Accordingly, each of Lessee and Lessor agrees that it
will treat that information as confidential and will not without the prior
written consent of the other party disclose that information to any person
except to its professional advisers, as may be required by any applicable law;
or in the case of disclosure by Lessor, to any affiliate of Lessor or investors
in the Aircraft; provided, however, in connection with any such disclosure, each
of Lessee and Lessor will request, and use reasonable endeavors to obtain,
confidential treatment of that information.
18. THE LESSOR
It is expressly understood and agreed by and among the parties hereto
that, except as otherwise provided herein: (a) Xxxxx Fargo Bank Northwest,
National Association ("Xxxxx Fargo") is entering into this Lease solely in its
capacity as Owner Trustee under the Trust Agreement dated October 18, 2002
between Xxxxx Fargo and UBICS Holding Company (the "Trust Agreement") and not in
its individual capacity; (b) each and all of the undertakings and agreements
herein made on the part of Lessee are all made and intended not as personal
undertakings and agreements by Xxxxx Fargo in its individual capacity, or for
the purpose or intention of binding Xxxxx Fargo in its individual capacity, but
are made and intended for the purpose of binding only the Trust Estate (as
defined in the Trust Agreement) unless expressly provided otherwise; (c) nothing
contained in the Lease shall be construed as creating any personal liability on
Xxxxx Fargo in its individual capacity to perform any covenants either express
or implied contained herein, all such liability, if any, being expressly waived
by the other parties hereto, and (e) so far as Xxxxx Fargo in its individual
capacity is concerned, the other parties hereto shall look solely to the Trust
(as defined in the Trust Agreement) and the Trust Estate for the performance of
any obligation under this Lease; provided, however, that nothing in this Clause
18 shall be construed to limit in scope or substance the general corporate
liability of Xxxxx Fargo in its individual capacity in respect of its gross
negligence or willful misconduct or those representations, warranties and
covenants of Xxxxx Fargo made in its individual capacity as contained herein.
19. PUT RIGHT
19.1. Put.
Lessor shall have the right and option, exercisable at any time during
the Term, to require Lessee to purchase the Aircraft (the "Put Right") and if
the Put Right is exercised by Lessor, Lessee shall have the absolute obligation
to purchase the Aircraft from Lessee.
19.2. Exercise of Put Right.
If Lessor desires to exercise the Put Right, it shall do so by
delivering to Lessee a written notice of such exercise not less than 90 days
prior to the date specified in such notice for closing on Lessee's purchase of
the Aircraft (the "Purchase Closing Date").
19.3. Purchase Price.
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The price to be paid by Lessee to Lessor for the Aircraft upon Lessor's
exercise of the Put Right shall be $4,000,000 U.S. Dollars, which shall be
payable in cash on the Purchase Closing Date by wire transfer or other
immediately available funds. In addition, on the Purchase Closing Date, Lessee
shall pay to Lessor all Rent up to and including the Purchase Closing Date and
all other amounts due and payable under the Lease.
19.4. Closing.
The closing of the purchase of the Aircraft pursuant to Lessor's
exercise of the Put Right shall take place at the office of Lessor or such other
place as may be mutually agreed.
19.5. Condition to Lessee's Obligation to Purchase.
The only condition to Lessee's obligation to purchase the Aircraft and
pay the Purchase Price to Lessor on the Closing Date shall be that Lessor will
have delivered and warranted to Lessee good and marketable title to the
Aircraft, free and clear of all liens, claims, charges and encumbrances
("Liens") whatsoever, except Liens, if any, which have attached or may have
attached as a result of actions caused or authorized by Lessee. Lessor will
deliver to Lessee an Aircraft Xxxx of Sale and FAA Xxxx of Sale evidencing this
transfer of such title, each in a form substantially similar to those received
by Lessor when it purchased the Aircraft.
19.6. Condition to Lessor's Obligation to Sell.
The condition precedent to Lessor's obligation to deliver the Aircraft
to Lessee is that Lessee (i) will have paid to Lessor the Purchase Price plus
all other amounts due and payable under this Lease through the Purchase Closing
Date in full and without reservation or offset and (ii) shall indemnify and hold
Lessor harmless from any claim or Lien which would otherwise attach to the
Aircraft as a result of actions caused or authorized by Lessee on or after the
Purchase Closing Date.
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IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease to be duly
executed by their authorized officers on the date first above written.
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION
not in its individual capacity but solely as Owner Trustee,
as Lessor
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxxx
------------------------------------------------
Title: Vice President
-----------------------------------------------
UNITED BREWERIES HOLDINGS, LTD.,
as Lessee
By: /s/ Xxxxxxxx X. Xxxx
--------------------------------------------------
Name: Xxxxxxxx X. Xxxx
------------------------------------------------
Title: President
-----------------------------------------------
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SCHEDULE 1
DEFINITIONS AND CONSTRUCTION
1. Definitions
Unless the context requires otherwise, the following terms have the
following meanings for all purposes of the Lease and such meanings shall be
equally applicable to both the singular and the plural forms of the terms
defined:
"Additional Insureds" means Owner, each Member of Owner, Lessor, each
Member of Lessor, Beneficial Owner, any Mortgagee and their respective officers,
directors, servants, agents and employees and the successors and assigns of each
of the foregoing.
"Aeronautics Authority" means, as the context requires, the
airworthiness authority in the State of Registration, or any person,
governmental department, bureau, commission or agency succeeding to the
functions of the foregoing and, if different, the civil aviation authority of
the State of Registration.
"Aircraft" means (i) the Airframe, together with, as the context
requires, (ii) the Engines whether or not installed thereon, (iii) all Parts
whether or not installed thereon and (iv) the Aircraft Records.
"Aircraft Records" means (i) the "Aircraft Records" as defined in the
Certificate of Acceptance and (ii) all records, logs and other materials
referred to in Clause 6.6(b).
"Airframe" means that certain B727-100 airframe bearing manufacturer's
serial number 19318 more particularly described in the Certificate of Acceptance
(except for any engines or Engines installed thereon), and (except as otherwise
provided in Clause 8.3) any and all Parts incorporated or installed therein or
attached thereto or, so long as title thereto remains vested in Owner in
accordance with the terms of Clause 8, removed therefrom.
"Airworthiness Directive" or "AD" means any airworthiness directive or
other comparable regulation issued by the aeronautics authority of the country
of manufacture or the Aeronautics Authority and applicable to aircraft, engines
and parts of the same type as the Aircraft, the Engines and the Parts.
"Alert Service Bulletin" whether or not capitalized, means a service
bulletin identified as an "alert" by the Manufacturer or any Supplier.
"Anticipated Delivery Date" is specified in Schedule 12.
"APU" means the auxiliary power unit installed on the Aircraft and
described in the Certificate of Acceptance and any replacement auxiliary power
unit installed on the Aircraft title to which is transferred to Owner.
"APU Hour" means, in relation to the APU, each hour or part of an hour
during which the APU is operated.
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"Assignment of Insurances" means the assignment of insurances dated or,
as the context may require, to be dated the Delivery Date between Lessee, as
assignor, and Lessor, as assignee, in the form set forth in Schedule 7.
"Authorized Maintenance Performer" means, with respect to line
maintenance only, Lessee and Aerosky, __________________________________________
and with respect to line and other maintenance, Aerosky, or such other
maintenance provider or providers selected by Lessee and approved by the FAA
under FAR Part 145 and accepted in writing by Lessor.
"Basic Rent" means the monthly rent payable pursuant to Clause 4.1.
"Basic Rent Payment Date" means (i) with respect to any Basic Rent
payable during a Utilization Rent Period, the tenth day of the month following
the Basic Rent Period in which the relevant utilization of the Aircraft has
occurred, and (ii) with respect to any Basic Rent payable during a Fixed Rent
Period, the first day of the relevant Basic Rent Period.
"Basic Rent Period" means a period from and including the Delivery Date
to and including the last day in the month in which the Delivery Date falls, and
each calendar month (or part thereof) thereafter during the Term.
"Beneficial Owner" means UBICS Holding Company, a Delaware corporation.
"Boeing" means The Boeing Company of Seattle, Washington.
"Block Hour" means each hour or portion thereof during each period
commencing with the removal of blocks from the wheels of the Airframe and
concluding when the wheels of the Airframe are blocked next following operation
of the Aircraft.
"Broker" means the insurance broker in relation to the Insurances
approved by Lessor from time to time, any such approval not to be unreasonably
withheld or delayed.
"Business Day" means any day other than a Saturday, Sunday or a day on
which commercial banking institutions in the city of New York, are authorized by
law to be closed.
"C-Check" means a block check performed on the Aircraft which includes
accomplishment of all tasks designated by the MPD Document with a "C" interval
and such other tasks designated by the MPD Document as having multiple "C",
hour-based, cycle-based or calendar-based intervals as may then be due and
sufficient to clear the Aircraft of scheduled tasks for the Manufacturer's
recommended block "C" check interval .
"Certificate of Acceptance" means an acceptance certificate in the form
of Schedule 4 to be executed by Lessee and Lessor on the Delivery Date to
evidence the delivery and acceptance of the Aircraft.
"Claims Limit" is specified in Schedule 12.
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"Cycle" means each combination of the take-off and landing of the
Airframe, or in the case of an Engine or any Part, the airframe on which such
Engine or Part is then installed.
"Default" means any event or condition which, with the lapse of
time or the giving of notice or both, would constitute an Event of Default.
"Delivery Date" means the date on which Lessee is obligated to
accept delivery of the Aircraft pursuant to Clause 2 and is the date set forth
in the Certificate of Acceptance.
"Delivery Location" is specified in Schedule 12.
"Discount Rate" means, in relation to any period for which the
same is to be calculated pursuant to Clause 16.1.2(a), the rate of interest
specified in the Federal Reserve Statistical Release H.15(519) Selected Interest
Rates for Treasury Bills having at the time of such calculation a maturity equal
to, or as close as possible to, such period.
"Dollars" and "$" means, whether capitalized or not, the lawful
currency of the United States of America.
"Engine" means: (a) each of the three Xxxxx & Xxxxxxx JT8D-9A
turbofan engines more particularly described in the Certificate of Acceptance,
whether or not from time to time installed on the Airframe; (b) any engine which
may from time to time be substituted or be a replacement for any such engine
pursuant to Clause 10.2; and (c) except as otherwise provided in Clause 8.3, any
and all Parts incorporated or installed in or attached thereto or, so long as
title thereto shall remain vested in Owner in accordance with the terms of
Clause 8, removed therefrom.
"Engine Agreed Value" is specified in Schedule 12.
"Engine Hour" means, in relation to any Engine, the period
measured by reference to each hour or part of an hour elapsing from the moment
the wheels of any airframe on which such Engine is installed leave the ground on
take off until the wheels of such airframe next touch the ground on landing.
"Event of Default" is, subject to the provisions of the Lease,
defined in Clause 15.
"Event of Loss" means, with respect to the Aircraft, the Airframe
or any Engine, any of the following: (a) the destruction, damage beyond repair
or rendition of the same permanently unfit for normal use for any reason
whatsoever; (b) any damage to the same which results in an insurance settlement
with respect to the same on the basis of a constructive, agreed or actual Event
of Loss; (c) the condemnation, confiscation, requisition of title,
sequestration, forfeiture or other loss of title to the same; (d) the
confiscation or seizure which deprives Lessee of the use or possession of, or
requisition of use of, the same for a period in excess of 30 consecutive days
or, if shorter, beyond the last day of the Term; (e) the loss of the same or the
use thereof due to theft, disappearance for a period of 30 consecutive days or
more or, if shorter, beyond the last day of the Term; or (f) as a result of any
rule, regulation, order or other action by the Aeronautics Authority or other
Government Entity having jurisdiction, the use of the same in
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the normal course of air transportation of persons shall have been prohibited
for a period of 90 days or more unless Lessee, prior to the expiration of such
period, shall have caused to be undertaken and diligently carried forward all
steps which are necessary or desirable to permit the use of such property in the
normal course of air transportation, or in any event, if such use shall have
been prohibited for a period of twelve consecutive months or beyond the last day
of the Term. An Event of Loss with respect to an Aircraft shall be deemed to
have occurred if an Event of Loss occurs with respect to the Airframe.
"Event of Loss Payment Date" has the meaning ascribed to such term
in Clause 10.1.
"Event of Loss Proceeds" means the proceeds of any Insurances
(other than amounts payable as a consequence of a claim under the liability
insurances) or any compensation or similar payment, arising in respect of an
Event of Loss in respect of the Aircraft.
"Expiry Date" is the fifth anniversary of the Delivery Date.
"FAA" means, as context requires, the United States Federal
Aviation Administration and/or the Administrator of the United States Federal
Aviation Administration, or any person, governmental department, bureau,
commission or agency succeeding to the functions of either of the foregoing.
"Fixed Rent Period" is defined in Part 2 of Schedule 3.
"Flight Hour" means each hour or portion thereof during each
period commencing with the lift off from the runway of the wheels of the
Airframe or an airframe to which an Engine is installed and concluding when the
wheels of the Airframe or such other airframe touch down upon landing.
"Government" means the government of the State of Registration or
any instrumentality or agency thereof (provided the credit of such
instrumentality or agency is backed by the full faith and credit of the State of
Registration).
"Government Entity" means and includes (i) any state or territory
or political sub-division of either thereof; (ii) any governmental authority,
board, commission, department, division, organ, instrument, court, tribunal or
agency of any of the persons specified in (i) above, however constituted and
(iii) any association, organization or institution of which any of the above
persons is a member or to whose jurisdiction any thereof is subject or in whose
activities any such person is a participant.
"Guarantor" means United Brewers (Holdings) Limited, a company
organized under the Laws of India and majority owner of Lessee.
"Guaranty" means the Guaranty and Suretyship Agreement of each
date herewith made by Guarantor in favor of Oakland, California.
"Habitual Base" of the Aircraft shall be such location as agreed
upon by Lessor and Lessee after the Effective Date.
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"Hereby", "herein", "hereof", "hereunder", and other like words
shall refer to the Lease as originally executed or as amended, modified or
supplemented pursuant to the applicable provisions hereof, including, without
limitation, as supplemented by the Certificate of Acceptance.
"Home Jurisdiction" is specified in Schedule 12.
"Incentive Rate" means a rate of interest equal to LIBOR in
respect of such periods as Lessor shall select from time to time, plus the
Margin, but in no event greater than the maximum rate permitted by applicable
law.
"Indebtedness" of any person means, on any date, all Indebtedness
of such person as of such date, and shall include the following: (i) all
Indebtedness of such person for monies borrowed or raised; (ii) all obligations
of such person evidenced by bonds, debentures, notes or other similar
instruments; (iii) all obligations of such person to pay the deferred purchase
price of property or services (other than trade liabilities due within 30 days);
(iv) all obligations of such person under leases; (v) all Indebtedness secured
by a Lien on any asset of such person, whether or not such person has assumed or
is otherwise liable for such Indebtedness; (vi) all Indebtedness of others
guaranteed in any manner, directly or indirectly, by such person (or in effect
guaranteed indirectly, by such person through an agreement intended to have the
effect of Indebtedness or to assure the holder of Indebtedness of such obligor
against loss, whether through an obligation of such person to purchase property
or services or to maintain such obligor's financial condition or otherwise);
(vii) all reimbursement obligations of such person in respect of letters of
credit, foreign currency sale agreements and bankers' acceptances, except such
as are obtained by such person to secure performance of obligations (other than
for monies borrowed or raised or similar obligations) incurred in the ordinary
course of such person's business; and (vii) all obligations of such person under
interest rate, currency, commodity or other swap or hedging transactions, marked
to market as if termination had occurred.
"Indemnitee" means together Lessor, each Member of Lessor, Owner,
each Member of Owner, and Beneficial Owner and their respective shareholders,
affiliates, directors, officers, employees, representatives, consultants,
servants, successors, assigns and transferees.
"Insurances" means any and all contracts and policies of insurance
required to be effected and maintained by Lessee under the Lease.
"Insured Value" with respect to the Aircraft means the amount
specified in Schedule 12.
"Insurers" means the insurers under the Insurances.
"JAA" means the European Joint Aviation Authorities.
"Landing Gear" means the nose gear and both left hand and right
hand main gear assemblies excluding the wheels, tires and brakes.
"Latest Delivery Date" is specified in Schedule 12.
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"Lease" means the Aircraft Lease Agreement dated October 18, 2002
between Lessor and Lessee, as the same may be amended or supplemented from time
to time, and, where appropriate, the Certificate of Acceptance.
"Lessee" is defined in the initial paragraph of the Lease and
shall include its successors and permitted assigns.
"Lessee's Process Agent" is specified in Schedule 12.
"Lessor" is defined in the initial paragraph of the Lease and
shall include its successors and assigns and transferees.
"Lessor Lien" means any Lien with respect to the Aircraft or any
part thereof which results from (a) non-payment by Lessor or Owner of any Taxes
imposed on such person (except Taxes as to which Lessee is obliged to provide
indemnification hereunder), (b) claims against Lessor or Owner not related to
the transactions described in the Lease or the ownership of the Aircraft, (c) an
affirmative act of Lessor or Owner not related to the transactions contemplated
by the Lease or (d) any Mortgage.
"Lessor's Bank Account" is specified in Schedule 12.
"LIBOR" means in relation to any period (a "reference period"):
(a) the British Bankers' Association Interest Settlement
Rate (as such rate appears on certain pages of the
Reuters or Telerate screens or such other page or
service as may replace it for the purpose of
displaying London inter-bank Dollar offered rates of
leading reference banks) which is quoted as of 11
a.m. (London time) on the day which is two (2)
London Business Days prior to the commencement of
the relevant reference period as being the interest
rate offered in the inter-bank Market for Dollar
deposits of a comparable amount to the amount in
question for the same or as close as possible to the
relevant reference period; or
(b) if Lessor notifies Lessee that, due to circumstances
affecting the London inter-bank market generally,
deposits in Dollars are not in the ordinary course
of business available in the London inter-bank
market for a period similar to the reference period,
Lessor will inform Lessee of the rate in place of
LIBOR that Lessor is able to obtain in the
international markets and which, in the reasonable
opinion of Lessor, most closely equates to LIBOR.
While the circumstances affecting the London
inter-bank market persist, that alternative rate
will apply as LIBOR for all purposes of the Lease.
"Lien" means any mortgage, pledge, lien, charge, encumbrance,
lease, exercise of rights, security interest or assignment by way of security.
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"London Business Day" means a day other than a Saturday, Sunday or
a day on which commercial banking institutions in the city of London are
authorized by law to be closed.
"Losses" includes all losses, payments, damages, liabilities,
claims, proceedings, actions, penalties, fines, duties, fees, rates, levies,
charges, demands, royalties or other sanctions of a monetary nature, fees,
insurance premiums, calls, judgments, costs and expenses, (other than (i) Taxes
and (ii) any of the foregoing items arising from any breach by any party to the
Relevant Documents other than Lessee).
"Maintenance Manual" means, as the context requires, either the
Aircraft Maintenance Manual issued by the Manufacturer or the Engine Maintenance
Manual issued by the relevant Manufacturer or other maintenance manuals issued
by Suppliers relating to Parts.
"Maintenance Program" means Lessee's overhaul and maintenance
program for aircraft of the same type as the Aircraft, as accepted by the
Aeronautics Authority and approved by Lessor and based on the MPD Document and
the MRB Document then in effect, and which includes (i) the inspection schedule
for the Aircraft (structure, components, systems and Engines), and (ii) the list
of controlled component items (Airframe and Engines).
"Mandatory Service Bulletins", whether capitalized or not, means
all Service Bulletins identified as "mandatory" by the issuing Manufacturer or
Supplier.
"Manufacturer" means (a) as to the Engines, Xxxxx & Xxxxxxx, and
(b) as to the Airframe, Boeing.
"Margin" is specified in Schedule 12.
"Members of Lessor" means (i) any person notified by Lessor to
Lessee as being the shareholder, shareholders or parent of Lessor, as the case
may be, or (ii) if Lessor has given no such notification, Lessor.
"Members of Owner" means (i) any person notified by Lessor to
Lessee as being the shareholder, shareholders or parent of Owner, as the case
may be, or (ii) if Lessor has given no such notification, Owner.
"Mortgage" means any security interest in the Aircraft granted by
Owner from time to time.
"Mortgagee" means any entity or entities to which Owner grants a
security interest in the Aircraft and such entity's or entities' successors and
assigns provided that Lessor or Owner has given Lessee notice of any such
assign.
"MPD Document" means the Manufacturer's approved maintenance
planning documents for aircraft of the same type as the Aircraft.
"MRB Document" means the Boeing 727-100 Maintenance Review Board
Document.
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"Owner" means (i) any person notified by Lessor to Lessee as being
the owner of the Aircraft or (ii) if Lessor has given no such notification,
Lessor.
"Parts" means any and all appliances, parts, instruments,
accessories, furnishings, seats and other equipment of whatever nature (other
than complete Engines or engines), which (a) are from time to time incorporated
or installed in or attached to the Airframe or an Engine, or (b) having been so
installed or attached, are later removed therefrom, so long as title thereto
remains vested in Owner in accordance with Clause 8.
"Permitted Liens" means, in connection with the Aircraft or any
part thereof, (a) the respective rights of the parties hereunder; (b) Liens for
taxes, assessments or other governmental charges either not yet due or being
contested in good faith (and for the payment of which adequate reserves have
been provided) by appropriate proceedings so long as such proceedings do not
involve any danger of the sale, forfeiture, loss or loss of use of the Aircraft,
the Airframe or any Engine or any interest therein; (c) materialmen's,
mechanics', workers', repairers', employees', or other like Liens arising in the
ordinary course of business for amounts the payment of which is either not yet
due or is being contested in good faith (and for the payment of which adequate
reserves have been provided) by appropriate proceedings so long as such
proceedings do not involve danger of the sale, forfeiture or loss of use of the
Aircraft, the Airframe or any Engine or any interest therein; (d) any other
Liens with respect to which Lessee shall have provided security in form and
amount acceptable to Lessor and (e) Lessor Liens.
"Previous Operator" means Xxxxx Oil Company.
"Prohibited Country" means:
(a) any state, country or jurisdiction which is
subject from time to time to any United Nations Sanctions Order,
European Union imposed sanction, US Export Controls (taking into
account the possibility of obtaining applicable consents or
licenses), the United Kingdom Export of Goods (Control) Order
1992, the Dual-Use and Related Goods (Export Control) (Amendment)
Regulations 1997 pursuant to the Xxxxxxxx Xxxxxxxxxxx Xxx 0000 or
any statutory modification or re-enactment thereof or successor or
similar or corresponding legislation then in effect in the United
Kingdom, France, Spain or Germany, the effect of which taking into
account the possibility of obtaining applicable consents or
licenses, prohibits the exporting of the Aircraft to and/or
consigning for use of the Aircraft in such state, country or
jurisdiction; and
(b) any country affected, after the date hereof,
by any political or other relevant national or international
circumstance or event (each a "Change in Circumstance") which
Lessor determines (and which Lessor notifies to Lessee) to be such
that (i) Lessor's interest in the Aircraft would be materially
prejudiced and/or the ability of Lessor to repossess the Aircraft
and/or the ability of any Mortgagee to enforce and realize the
Liens constituted by any Mortgage documents would be materially
prejudiced by the operation of the Aircraft by a person within or
from within such country or (ii) the operation of the Aircraft by
a person within or from within such country would result in Lessor
being in
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contravention of any applicable law to which such party is
subject, in each case so long as Lessor has not notified Lessee
that such country has ceased to be a Prohibited Country.
"Recommended Service Bulletin" whether capitalized or not, means a
Service Bulletin identified as "recommended" by the issuing Manufacturer or
Supplier.
"Redelivery Location" means a location designated by Lessor within
the United States of America.
"Reinsurances" is defined in Clause 11.1.
"Relevant Documents" means the Lease, the Certificate of
Acceptance, the Assignment of Insurances, the Guaranty and all other agreements,
documents or instruments which may be entered into, executed and/or delivered in
connection with or pursuant to any of the foregoing.
"Rent" means Basic Rent and Supplemental Rent, collectively.
"Xxxxx & Xxxxxxx" means Xxxxx & Whitney.
"Security Deposit" means the cash amounts to be paid by Lessee to
Lessor in accordance with Clause 4.4 and held as security by Lessor pursuant
thereto.
"Service Bulletin" means a service bulletin which is issued by a
Manufacturer or Supplier and is applicable to aircraft of the same type as the
Aircraft or engines of the same type as the Engines or items of equipment of the
same type as other parts of the Aircraft.
"State of Registration" is specified in Schedule 12.
"Supplemental Rent" means all amounts, liabilities and obligations
(other than Basic Rent) which Lessee assumes, agrees or is obligated to pay
under the Lease or any other Relevant Document.
"Supplier" means the manufacturer, vendor or supplier of any part
of the Aircraft other than a Manufacturer.
"Tax" includes any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called
(including stamp, documentary, registration or other like duty), together with
any penalties, fines or interest imposed thereon, imposed, levied, collected,
withheld or assessed by any person in any jurisdiction.
"Tax Indemnitee" means each of Lessor, Members of Lessor,
Beneficial Owner, Owner, Members of Owner, any Mortgagee and each person with
whom any of the foregoing files a consolidated tax return.
"Term" means the period for which the Aircraft is leased under the
Lease pursuant to Clause 3 of the Lease. If such period is shortened or
extended, the word "Term" shall
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be deemed to refer to such period as so shortened or extended, and all
provisions of the Lease shall apply until the expiration date of such extension
period, except as may be otherwise specifically provided herein.
"Termination Date" means the date upon which Lessor terminates the
leasing of the Aircraft under Clause 16 of the Lease.
"Third Party Indemnitee" means any Indemnitee or Tax Indemnitee
other than Lessor.
"Utilization Rent Period" is defined in Part 2 of Schedule 3.
2. Construction
Except to the extent that the context requires otherwise, any
reference in the Lease to
(a) a statutory or legislative provision, shall be
construed, at any particular time, as including a
reference to any modification, extension or
re-enactment thereof then in force and all
instruments, orders and regulations then in force and
made under or deriving validity from the relevant
provision;
(b) any other agreement or document shall be construed as
a reference to such other agreement or document as the
same may have been, or may from time to time be,
amended, varied, novated or supplemented;
(c) a "Clause" or "Schedule" is a reference to a Clause
of, or Schedule to, the Lease;
(d) a person being an "affiliate" of another means that
that person directly or indirectly controls, is
controlled by, or is under common control with, that
other person;
(e) "consent" also includes an approval, authorization,
exemption, filing, license, order, permission,
recording or registration (and references to obtaining
consents shall be construed accordingly);
(f) one person being "controlled" by another means that
that other (whether directly or indirectly and whether
by the ownership of share capital, the possession of
voting power, contract or otherwise) has the power to
appoint and/or remove all or the majority of the
members of the board of directors or other governing
body of that person or otherwise controls or has the
power to control the affairs and policies of that
person;
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(g) "law" includes common, customary or civil law and any
constitution, decree, judgment, legislation, order,
ordinance, regulation, statute, treaty or other
legislative measure in any jurisdiction or any present
or future directive, regulation, request or
requirement or any judicial or administrative
decision, ruling, judgment, order, (or interpretation
or application of any of the same) whether or not
having the force of law, but if not having the force
of law, only if compliance with that law is in
accordance with the general practice of persons to
whom it is intended to apply;
(h) a "month" is a reference to a period starting on one
day in a month of the year and ending on the
numerically corresponding day in the next succeeding
month, except that if there is no numerically
corresponding day in the next month of the year, that
period shall end on the last day of that next
succeeding month;
(i) a "person" includes any individual, company,
corporation, firm, partnership, joint venture,
association, organization, trust, state or agency of a
state (in each case, whether or not having separate
legal personality) and any assignee or successor in
title to that person;
(j) the "winding-up" of a person also includes the
amalgamation, reconstruction, reorganization,
administration, dissolution, liquidation, merger or
consolidation of that person, and any equivalent or
analogous procedure under the law of any jurisdiction
in which that person is incorporated, domiciled or
resident or carries on business or has assets;
(k) the Table of Contents, the Lease Summary and Clause
headings are for convenience only and are to be
ignored in construing the Lease; and
(l) where the context so admits, words importing the
singular number only shall include the plural and vice
versa.
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SCHEDULE 2
CONDITIONS PRECEDENT
Part A: Conditions Precedent to Lessor's obligation to lease the Aircraft to
Lessee:
(a) On the date of execution of the Lease by Lessee, Lessor
shall have received the following:
(i) the Security Deposit of $150,000.00 which is due in
accordance with Clause 4.4 and Schedule 3;
(ii) the Guaranty executed by the Guarantor; and
(iii) written evidence of appropriate corporate action, certified
by a duly authorized representative of each of Lessee and
Guarantor, duly authorizing the lease of the Aircraft hereunder
and the execution, delivery and performance of the Relevant
Documents, together with appropriate evidence as to the authority
of the person or persons executing and delivering the Relevant
Documents on behalf of Lessee, all such documents to be in form
and substance satisfactory to Lessor.
(iv) written evidence of appropriate corporate action, certified
by a duly authorized representative of Guarantor, duly authorizing
the execution, delivery and performance of the Guaranty, together
with appropriate evidence as to the authority of the person or
persons executing and delivering the Guaranty on behalf of
Guarantor, all such documents to be in form and substance
satisfactory to Lessor.
(b) Lessee shall provide Lessor with evidence, satisfactory to Lessor,
that Lessee has entered into an agreement with the Authorized
Maintenance Performer to provide maintenance, overhaul and repair
service for the Airframe and Engines and Lessee shall provide
Lessor with copies of both the agreement and the intended
Maintenance Program in form and substance satisfactory to Lessor.
(c) Lessor shall have received the following in form and substance
satisfactory to Lessor:
(i) the Assignment of Insurances duly executed by Lessee;
(ii) (A) satisfactory evidence that all notices of
assignment required to be given under the Assignment of Insurances have
been given, and (B) all acknowledgements from Lessee's insurers and brokers
contemplated by the Assignment of Insurances have been received;
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(iii) satisfactory evidence (including opinions of counsel)
that the Assignment of Insurances has been duly perfected in Lessee's Home
Jurisdiction and other appropriate jurisdictions including location of
insurers;
(iv) insurance certificates and a letter of undertaking
from independent aircraft insurance brokers evidencing Lessee's compliance
with the provisions of Clause 11;
(v) letters of authorization from Lessee to FAA,
Eurocontrol and other applicable air control authorities and the authority
at each airport at which Lessee currently operates granting Lessor the
authority to make inquiries concerning the status of Lessee's accounts with
such air control or airport authorities;
(vi) satisfactory evidence that the Aeronautics Authority
has approved the Maintenance Program;
(vii) any necessary tax approvals or exemptions; and
(viii) any necessary foreign exchange exemptions, approvals
or central bank filings.
(d) On or prior to the Delivery Date, Lessor shall have received the
following, each in form and substance satisfactory to Lessor:
(i) the Certificate of Acceptance, duly executed by Lessee, dated
the Delivery Date;
(ii) copies of all licenses required for the operation of the
Aircraft in the State of Registration;
(iii) a certificate signed by a duly authorized officer of Lessee,
dated the Delivery Date, to the effect that:
(A) the representations and warranties made by Lessee
in the Relevant Documents are true and correct on and as of the Delivery
Date as though made on and as of such date; and
(B) no Default or Event of Default has occurred and
is continuing, or would result from the lease of the Aircraft hereunder;
(iv) evidence satisfactory to Lessor confirming that (1) the
Aircraft has been registered with the Aeronautics Authority in the
name of Owner, as owner, (2) this Lease has been duly filed with
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the Aeronautics Authority and any other appropriate Government
Entities in the State of Registration or elsewhere;
(v) all authorizations and approvals of, and notices to, and
filings and recordings with, all regulatory bodies and authorities
which are conditions to the validity and/or enforceability of the
Lease or Lessee's performance thereunder have been accomplished;
(vi) evidence satisfactory to Lessor that the Aircraft is
subject to the Maintenance Program;
(vii) written evidence satisfactory to Lessor that the
Aeronautics Authority will register the Aircraft in the absence of
an Export Certificate of Airworthiness issued by the aeronautics
authority of the United States of America; and
(viii) such other documents as Lessor may reasonably request in
form and substance satisfactory to Lessor.
(e) No Default or Event of Default shall have occurred and be
continuing and no default or event of default shall have occurred
and be continuing under any Other Lease.
These conditions are included for the sole benefit of Lessor and may be
waived or deferred in whole or in part by Lessor who may attach to such waiver
or deferral such further or other conditions as it thinks fit.
Part B: Conditions Precedent to Lessee's Obligation to Accept the Aircraft on
Lease from Lessor:
(a) The Aircraft shall be in the condition and
configuration specified in Part A of Schedule 6, subject only to minor
discrepancies not affecting airworthiness or safety; and
(b) On or before the Delivery Date, Lessee shall have received a
certificate signed by a duly authorized representative of Lessor,
to the effect that all appropriate action has been taken to
authorize or ratify the lease by Lessor of the Aircraft hereunder
and the execution, delivery and performance by Lessor of the
Lease, together with a power of attorney naming the persons
authorized to execute and deliver said certification and said
documents on behalf of Lessor.
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SCHEDULED 3
RENT AND OTHER AMOUNTS
PART 1
PAYMENTS
1. BASIC RENT
1.1 Payment of Basic Rent
1.1.1 Lessee will pay to Lessor Basic Rent each month throughout the
Term.
1.1.2 The first installment of Basic Rent will be due and payable on
the first Basic Rent Payment Date.
1.1.3 Each subsequent installment of Basic Rent will be due and
payable on each subsequent Basic Rent Payment Date throughout the
Term.
1.2 Basic Rent Amounts
1.2.1 The Basic Rent in respect of each Basic Rent Period during the Term
will be calculated in accordance with Part 2 of this Schedule 3.
1.2.2 Promptly following Lessor's determination of the amount of any Basic
Rent payable in respect of any Basic Rent Period it will provide details of the
same to Lessee.
2. SECURITY DEPOSIT
2.1 Payment of Security Deposit
2.1.1 On the date of execution of the Lease, Lessee agrees to pay to
Lessor One Hundred Fifty Thousand Dollars ($150,000.00), which shall
be held by Lessor as security for Lessee's performance of its
obligations under the Lease, all other Relevant Documents and any
Other Lease.
2.1.2 Promptly following the earliest to occur:
(a) termination prior to the Delivery Date of the obligation of
Lessee to lease the Aircraft pursuant to the Lease;
(b) return of the Aircraft to Lessor in full compliance with the
Lease; and
(c) termination of the Term following an Event of Loss in relation
to the Aircraft or the Airframe,
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and after payment in full of all sums secured by the Security
Deposit, Lessor shall pay to Lessee an amount equal to the
remaining balance of the Security Deposit.
3. REIMBURSEMENT OF RENTAL
3.1 Payment on Event of Loss
Upon an Event of Loss Payment Date Lessor will, provided that it
has received the amount set out in Clause 10.1 of the Lease and
all other sums then deemed owing by Lessee to Lessor under any
Relevant Document, pay to Lessee by way of rebate of Basic Rents
an amount equal to the aggregate balance of all Maintenance
Reserve Amounts received by it and not repaid by it to Lessee
following receipt of a Reimbursement Claim in accordance with
paragraph 5.1 prior to the Event of Loss Payment Date following
which Lessee will have no obligation to make further payments
under paragraph 4.
3.2 Payment on Termination for Delay
Upon a termination of the Lease under Clause 2.1 thereof, Lessor
will, provided that it has received all amounts due to it under
the Lease or any other Relevant Document, pay to Lessee by way of
rebate of the Security Deposit, an amount equal to the outstanding
Security Deposit as of to the date of such termination.
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PART 1
COMPUTATION OF BASIC RENT
Utilization and Fixed Rental Program
The Basic Rent payable on each Basic Rent Payment Date shall be $50,000 per
month ("Fixed Rent").
Basic Rent during each Fixed Rent Period shall be paid in advance on the
relevant Basic Rent Payment Date. For example, for a Basic Rent Period
commencing on December 1, 2002 and ending on December 31, 2002, the applicable
Basic Rent Payment Date will be December 1, 2002.
Where any Basic Rent Period in which Fixed Rent is payable is more or less than
a full month, the Basic Rent payable on the applicable Basic Rent Payment Date
shall be prorated based on the actual number of days in such Basic Rent Period
and a month of thirty (30) days.
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SCHEDULE 4
FORM OF CERTIFICATE OF ACCEPTANCE
THIS CERTIFICATE OF ACCEPTANCE is dated [ ], 2002, (this
"Certificate of Acceptance"), between XXXXX FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION ("Lessor") and UNITED BREWERIES HOLDINGS, LTD. ("Lessee").
WITNESSETH:
WHEREAS, Lessor and Lessee have heretofore entered into that certain
Aircraft Lease Agreement dated ____________, 2002 (the "Lease"), which provides
for the execution and delivery of a Certificate of Acceptance in substantially
the form hereof for the purpose of leasing the Aircraft in accordance with the
terms thereof;
NOW, THEREFORE, in consideration of the premises, and pursuant to
Clause 2 of the Lease, Lessor and Lessee hereby agree as follows:
1. Definitions
Unless otherwise defined herein, all capitalized terms used herein shall have
the respective meanings given them in the Lease.
2. Delivery and Acceptance
Lessor hereby delivers and leases to Lessee, and Lessee hereby accepts and
leases from Lessor under the Lease, as hereby supplemented:
Aircraft: One Boeing 727-100 aircraft consisting of the following:
(a) Airframe: Registration Xxxx: N44MD
Manufacturer's Serial No. 19318
Total Flight Hours: 35,850
Total Cycles: 35405
(b) Engines: Three Xxxxx & Xxxxxxx JT8D-9A turbofan engines
installed on said Airframe, bearing, respectively,
Manufacturer's Serial Nos.:
Engine Location Manufacturer's Total Engine Total Cycles
Serial Number Hours
1. Right 665625 43,997 36,819
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2. Left 665839 34,366 25,540
3. Center 664474 42,123 35,405
The status of the time controlled components, engine modules and life
limited parts is set forth in Appendix I hereto.
(c) Auxiliary Power Unit
Make and Manufacturer's Total APU APU Hours Total Cycles Since
Model Serial Number Hours Since Cycles Overhaul or
Overhaul or Performance
Performance Restoration
Restoration
(d) Landing Gear
Position Date of Last Overhaul Hours and Cycles
Since Overhaul
Nose
Main - Left
Main - Right
(e) Brake Wear Pin Measurements
Position Measurement
(f) Lessor Furnished Equipment: The equipment furnished by Lessor
and installed in the Aircraft (including avionics, safety
equipment and galley equipment) is described in Appendix II
hereto.
Lessee confirms that the Aircraft has been examined by its duly appointed and
authorized representatives and such items conform to the information set forth
above.
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3. Aircraft Records
Lessor hereby delivers and Lessee hereby accepts the manuals, log books, records
and other documents relating to the Aircraft described in Appendix III hereto.
4. Delivery Date
The Delivery Date of the Aircraft is the date first set forth above, and the
Aircraft is hereby delivered and accepted on such date at , hours local time
at [location of delivery].
5. Fuel
At the time of delivery there were [ ] kg. of fuel in the
Aircraft and each oil tank was full.
6. Condition of Aircraft
The Aircraft is delivered in good working order and condition
except for the open/miscellaneous items specified in Appendix IV hereto and
Lessee and Lessor agree to the payments and commitments specified therein.
7. Governing Law
This Certificate of Acceptance shall in all respects be governed
by, and construed in accordance with, the laws of United States of America.
Subject to Clause 17.6 of the Lease, the parties hereto agree that the courts of
the United States of America are to have jurisdiction to settle any disputes
which may arise out of this Certificate of Acceptance
8. Representations and Warranties
(a) By Lessee
Lessee hereby confirms that the representations and
warranties of Lessee contained in Clause 5.2 of the Lease
are true and correct as of the date hereof as though set
forth herein in full. All authorizations and approvals
of, and notices to, and filings and recordings with, all
regulatory bodies and authorities which are conditions to
the validity and/or enforceability of the Lease or
Lessee's performance thereunder have been accomplished.
(b) By Lessor
Lessor hereby confirms that the representations and
warranties of Lessor contained in Clause 5.1 of the Lease
are true and correct as of the date hereof as though set
forth herein in full.
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9. Technical Definition
Lessee hereby confirms that the Aircraft complies with the
requirements for delivery specified in Section 2 of the Lease and Part A of
Schedule 6 thereto.
10. Basic Rent
Lessee hereby confirms that it has become obliged to pay to Lessor
Basic Rent in accordance with the provisions of the Lease [and Appendix [V]
hereto].
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IN WITNESS WHEREOF, Lessor and Lessee have each caused this
Certificate of Acceptance to be duly executed by their authorized officers on
the date first above written.
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
not in its individual capacity but solely as Owner Trustee
By: _______________________________
Name: _______________________________
Title: _______________________________
UNITED BREWERIES HOLDINGS, LTD.
By: _______________________________
Name: _______________________________
Title: _______________________________
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APPENDIX I
TO CERTIFICATE OF ACCEPTANCE
[Aircraft Model and Type] MSN [ ]
STATUS OF TIME CONTROLLED COMPONENTS, ENGINE MODULES AND LLPS.
Refer to [Manufacturer] Aircraft Inspection Record list of installed equipment
for time controlled components and the [Manufacturer] Engine Data Submittal
books for the Engine LLPs and Modules.
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APPENDIX II
TO CERTIFICATE OF ACCEPTANCE
[Aircraft Model and Type] MSN [ ]
LESSOR FURNISHED EQUIPMENT
See attached______ pages.
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APPENDIX III
TO CERTIFICATE OF ACCEPTANCE
[Aircraft Model and Type] MSN [ ]
AIRCRAFT RECORDS
See attached______ pages.
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APPENDIX IV
TO CERTIFICATE OF ACCEPTANCE
[Aircraft Model and Type] MSN [_]
OPEN/MISCELLANEOUS ITEMS
See attached______ pages.
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APPENDIX V
TO CERTIFICATE OF ACCEPTANCE
[Aircraft Model and Type] MSN [_]
BASIC RENT
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SCHEDULE 5
INSURANCES
1. Lessee is required to maintain the following Insurances with
respect to the Aircraft:
1.1. Hull All Risks of Loss or Damage whilst flying and on the
ground with respect to the Aircraft on an "agreed value" basis for the Insured
Value and with a deductible not exceeding Five Hundred Thousand Dollars
($500,000) or such other amount agreed by Lessor from time to time, and to
include deductible insurances, if necessary, to achieve that limit.
1.2. Hull War and Allied Perils, being such risks excluded from the
Hull All Risks Policy including confiscation and requisition by the State of
Registration and, if different, the state of the Habitual Base for the Insured
Value.
1.3. All Risks (Including War and Allied Risk) property insurance on
all Engines, Parts and spares when not installed on the Aircraft on an "agreed
value" basis for the Engine Agreed Value (in the case of any Engine) or the full
replacement value (in the case of any Part or spares) and including engine test
and running risks.
1.4. Aircraft Third Party (Bodily Injury and 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 Fifty Million Dollars
($50,000,000) any one occurrence (but in respect of products liability this
limit may be an aggregate limit for any and all losses occurring during the
currency of the policy and in the case of baggage will extend to Lessee's
liability solely in instances of loss or damage to the Aircraft). War and Allied
Risks are also to be covered under the Policy.
2. The hull and spares insurance relating to the Aircraft referred to in
paragraph 1 above will:
2.1. name the Lessor, Owner, Beneficial Owner and their successors
and assigns as additional insured for its respective rights and interests;
2.2. provide that any loss will be payable in Dollars and will:
(i) in respect of any claim that becomes payable on
the basis of an Event of Loss, provide that settlement
shall be made to or to the order of Lessor;
(ii) in respect of any other claim, provide that
settlement (net of any policy deductible) shall be made
with such persons as may be necessary to repair the
Aircraft, unless otherwise agreed after consultation
between the Insurers, Lessee and Lessor;
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(iii) include a notice and/or acknowledgement of any
assignment relating to the Insurances in a form
acceptable to Lessor;
(iv) if separate Hull "all risk" and "war risks"
insurances are arranged, include a 50/50 provision in
accordance with market practice (being AVS. 103 in the
current market language).
3. The liability insurances referred to in paragraph 1 above will:
include Lessor and each of the Indemnitees as additional insureds for their
respective rights and interests (excluding any claims arising solely out of any
capacity that Lessor or any other Indemnitee may have as manufacturer, repairer
or servicing agent of the Aircraft, any Engine or any Part);
operate in all respects as if a separate policy had been issued covering each
party insured, but shall not include any claim under the hull and spares
insurances referred to in paragraph 1 above, provided that the total liability
of the Insurers shall not exceed the limits of liability stated in the relevant
policy; and
3.1.
contain a provision confirming that the relevant policy is primary without right
of contribution from any other insurance available to any Additional Insureds or
Indemnitees.
4. All Insurances will:
be in accordance with normal industry practice of persons operating aircraft
similar to the Aircraft in similar circumstances;
provide cover denominated in Dollars or any other currencies which Lessor may
reasonably require in relation to liability insurance;
operate on a world-wide basis subject to such limitations and exclusions as
Lessor may agree;
acknowledge that the Insurer is aware of the Lease;
provide that, in relation to the interests of each of the additional insureds,
the Insurances will not be invalidated by any act or omission (including
misrepresentation and non-disclosure) of any other person which results in a
breach of any term, condition or warranty of the policy, provided that the
additional insured so protected has not caused, contributed to or knowingly
condoned the said act or omission;
provide that upon payment of any loss or claim to or on behalf of any additional
insured:
4.1.1. the Insurers shall to the extent and in respect of
such payment be subrogated to all legal and equitable
rights of that
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additional insured (other than its rights against any of
the other additional insureds);
4.1.2. the Insurers shall not exercise such rights
without the consent of the relevant Indemnitee, such
consent not to be unreasonably withheld; and
4.1.3. at the expense of the Insurers the relevant
additional insureds shall do all things reasonably
necessary to assist the Insurers to exercise the rights
referred to in this paragraph 4.6;
provide that the additional insureds will have no obligation or responsibility
for the payment of any premiums due and that the Insurers will not exercise any
right of set-off or counter-claim in respect of any premium due against the
respective interests of the additional insureds other than outstanding premiums
relating to the Aircraft which is the subject of the relevant claim; and
provide that, except in respect of any provision for cancellation or automatic
termination specified in the relevant policy or any endorsement thereof, cover
provided by the Insurances may only be cancelled or materially altered in a
manner adverse to the additional insureds by the giving of not less than thirty
(30) days (or such lesser period as is customarily available in respect of war
and allied risks) notice in writing to the Broker. Notice will be deemed to
commence from the date on which that notice is given by the Insurers.
5. Where applicable, the Reinsurances will:
be on the same terms as the original Insurances and will include the provisions
of this Schedule;
provide that, notwithstanding any bankruptcy, insolvency, liquidation,
dissolution or similar proceedings affecting the reinsured, the reinsurers'
liability will be to make such payments as would have fallen due under the
relevant policy of reinsurance if the reinsured had (immediately before such
bankruptcy, insolvency, liquidation, dissolution or similar proceedings)
discharged its obligations in full under the original insurance policies in
respect of which the then relevant policy of reinsurance has been effected; and
contain a "cut-through" clause in substantially the following form (or
otherwise, satisfactory to Lessor):
"The Reinsurers and the Reinsured hereby mutually agree that in the
event of any claim arising under the reinsurances in respect of a
total loss, such claim is to be paid to the person named as loss payee
under the primary insurances. The Reinsurers will in lieu of payment
to the Reinsured, its successors in interest and assigns pay to the
person named as loss payee under the primary insurances effected by
the Reinsured, that portion of any loss due for which the Reinsurers
would otherwise be liable to pay the original Reinsured (subject to
proof of loss), it being understood and agreed that any such payment
by the Reinsurers will (to the extent of such payment) fully discharge
and release the Reinsurers from any and all further liability in
connection therewith subject to such provisions not contravening any
applicable law".
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6. Lessee may maintain Insurances in respect of the Aircraft for the
purposes of this Lease which incorporate the terms and conditions of
Airline Finance/Lease Contract Xxxxxxxxxxx XXX00X. In that event, to the
extent that any provision of AVN67B conflicts or is otherwise inconsistent
with the requirements of the Lease relating to Insurances, then (so long as
it is general practice to insure aircraft financed or leased on the basis
of such endorsement) such conflicting or inconsistent provision of AVN67B
shall prevail and such endorsement shall be deemed to satisfy the
requirements of the Lease.
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SCHEDULE 6
DELIVERY CONDITION AND REDELIVERY CONDITION
PART A
DELIVERY CONDITION
1. Location
On the Delivery Date, the Aircraft shall be delivered to, and, subject
to the Aircraft being in the condition set out in this Part A, technically
accepted by Lessee at, the Delivery Location.
2. General
The Aircraft shall be in good working order, condition and appearance,
with all pilot discrepancies and deferred maintenance items cleared, clean and
ready for flight with all of the Aircraft equipment, components and systems
operating within limits specified in the Maintenance Manual and functioning in
accordance with their intended use. The Aircraft shall be in full compliance
with the rules and regulations of the FAA and with applicable Type Certificate
Data Sheets.
Lessor will deliver the Aircraft to Lessee with the equipment
specified in Appendix II to the Certificate of Acceptance.
3. Documentation
Lessor agrees to deliver the Aircraft in such condition as to be
immediately eligible for issuance of a Standard Certificate of Airworthiness
from the Aeronautics Authority. Lessor shall ensure the delivery of the Aircraft
Records as amended and supplemented through the Delivery Date. Maintenance and
operation records shall be in an up-to-date status.
4. Service Bulletins
All vendor and manufacturer's no-charge SB kits ordered and received
by Lessor for the Aircraft but not installed therein shall be delivered with the
Aircraft as part of the Aircraft at time of delivery, and shall be loaded on
board the Aircraft as cargo. Lessee shall have the option to purchase at
Lessor's cost any vendor and manufacturer's SB kits for which there has been
material ordered and received by Lessor for the Aircraft but not installed
therein.
5. Fuel
Upon delivery of the Aircraft, the amount of fuel in the fuel tank
shall be recorded. Each oil tank shall be full.
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PART B
REDELIVERY CONDITION
1. Location
On the expiration or earlier termination of the Term, the Aircraft
shall be redelivered to, and, subject to the Aircraft being in the condition set
out in this Part B, technically accepted by Lessor at, the Redelivery Location.
At the time of redelivery, the parties shall prepare and execute a Redelivery
Certificate in the form of Schedule 14 hereto.
2. General
The Aircraft shall be in the same working order, condition and
appearance as when received pursuant to the Lease (reasonable wear from normal
airline flight operations excepted), with all pilot discrepancies and deferred
maintenance items cleared, clean by international commercial airline standards
and ready for flight with all of the Aircraft equipment, components and systems
operating within limits specified in the Maintenance Manual and functioning in
accordance with their intended use. The Aircraft shall be in full compliance
with the rules and regulations of the Aeronautics Authority and with applicable
Type Certificate Data Sheets.
Lessee will return the Aircraft to Lessor with the same equipment
(including the Loose Equipment) as at the commencement of the Term, subject only
to those replacements, additions and modifications which may have been made and
properly documented pursuant to the Lease or as otherwise specifically approved
in writing by Lessor. Lessee shall, at least ninety (90) days prior to return of
the Aircraft, furnish Lessor with a listing of all such replacements, additions
or modifications made during the Term and shall deliver to Lessor a detailed
technical report regarding the Flight Hours and Cycles on the Aircraft and the
components and the maintenance status of each.
Lessor may, from time to time during the one hundred and eighty (180)
days prior to the return of the Aircraft, make the Aircraft and its records
available for inspection to the designated representatives or technical teams
evaluating the Aircraft for use after the end of the Term. Lessor agrees to give
Lessee not less than five (5) days' advance notice of such inspection and Lessee
agrees to co-operate fully with Lessor's requests in making the Aircraft and
records available to such authorized technical teams and Lessor agrees that such
requests will be reasonable and will be co-ordinated with Lessee so as to cause
minimal disturbance to Lessee's operation or its personnel.
3. Documentation
Lessee agrees to return the Aircraft with a Certificate of
Airworthiness issued by the Aeronautics Authority which is valid at the date of
return and for at least sixty (60) days thereafter. Lessee shall ensure the
return of the Aircraft Records in accordance with Schedule 9 as amended and
supplemented through the date of return. Maintenance and operation records
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shall be in an up-to-date status and shall include a certified true, current and
complete copy of the Maintenance Program. At least thirty (30) days prior to
return of the Aircraft, Lessee shall provide Lessor in up-to-date status, in
English, at least one complete set of the Aircraft Records. Such records shall
include, without limitation, traceability records for all LLPs contained in the
Engines, Landing Gear and APU and a "dirty finger-print" copy of the AD
compliance.
Not less than one hundred and eighty (180) days (nor more than three
hundred and sixty (360) days) prior to the end of the Term, Lessee and Lessor
shall confer to be certain that Lessor is in possession of a complete copy of
the then-current Maintenance Program. Within thirty (30) days after such
confirmation, Lessee shall specify to Lessor in writing those provisions in the
Maintenance Program which have changed from that version of the Maintenance
Program delivered to Lessor at or about the Delivery Date and which may have an
impact on the return conditions. Immediately thereafter Lessor and Lessee shall
negotiate in good faith with a view towards reaching agreement on which changes
to the Maintenance Program are adverse to Lessor and the adjustments to the
return conditions necessitated thereby.
On, or within the fourteen (14) days immediately following, the date
occurring nine (9) calendar months prior to the Expiry Date, Lessee shall
confirm to Lessor in writing the manufacturer's serial number and location of
each Engine.
4. Acceptance Flight
Prior to the return of the Aircraft and as part of the Final
Inspection referred to below, Lessee shall carry out for Lessor or Lessor's
representative a functional acceptance flight of the Aircraft based on a
mutually agreed flight profile following the Manufacturer's acceptance
procedures for used aircraft for a duration not to exceed (2) two hours. Flight
crews and fuel shall be furnished by and at the expense of Lessee. After such
flight and immediately prior to the redelivery of the Aircraft, Lessee will
allow and support Lessor in fully video borescoping each Engine (by an agency
selected and paid for by Lessor) and shall correct any deficiencies noted by
Lessor or such agency and those otherwise necessary for the return of the
Aircraft in the condition required herein. No components shall be changed
following such flight except as required by the Maintenance Manual to correct
deficiencies or as may be mutually agreed.
If Lessor and Lessee so agree the acceptance flight shall be effected
during the ferry to Lessor's selected location. In such event, Lessee will be
responsible for all costs during the first two (2) hours of the ferry flight.
5. General Return Conditions
Immediately prior to the return of the Aircraft to Lessor, at Lessee's
sole expense, the below minimum return conditions will be met:
(a) Lessee shall perform inspections and checks in accordance
with the Maintenance Program which shall be at least
equivalent in scope and content to a complete MPD block
"C" Check (as currently described in MPD Appendix "C"
Maintenance Block Check Program) and shall encompass all
Systems, Zonal and
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Structural (including CPCP) items listed in the MPD
having intervals equal to or less than the then current
MPD Block "C" Check interval. Each system, zonal and
structural inspection task having an interval greater
than the then current MPD Block "C" Check interval shall
have the equivalent of at least one MPD Block "C" Check
interval remaining to next accomplishment. Lessee shall
correct any deficiencies revealed during such checks and
inspections using Maintenance Manual limits. Lessee
agrees to perform, during such Check, providing such work
does not cause the planned grounding of the Aircraft to
be extended, any other work reasonably required by Lessor
to enable the Aircraft to be placed on another
maintenance schedule and Lessor shall reimburse Lessee
for the cost of such other work required by Lessor at
Lessee's best rate to third parties;
(b) Lessee shall make the Aircraft available to Lessor during
the check specified above and again after completion of
all work required herein, for the purpose of conducting a
detailed inspection in order to verify that the condition
of the Aircraft complies with the requirements set forth
herein (such inspection being hereinafter referred to as
the "Final Inspection"). Such Final Inspection shall be
scheduled at the Redelivery Location. Lessee shall
prepare a comparison of Lessee's Maintenance Program and
the MPD, and if the aeronautics authority of the next
country of registration requires performance of certain
bridging tasks to bridge the Aircraft from Lessee's
Maintenance Program to the MPD, Lessee shall be
responsible for the cost of such bridging tasks (both
routine and non-routine);
(c) The Aircraft shall have been inspected for corrosion in
accordance with the Manufacturer's recommendations or the
MRB Document then in effect. All mild and moderate
corrosion found shall be cleaned and treated and all
severe or exfoliated corrosion shall be repaired in
accordance with the Manufacturer's Structural Repair
Manual;
(d) Lessee shall carry out a maximum power assurance run of
each Engine in accordance with the Maintenance Manual.
The TGT of each Engine noted during the maximum power
assurance run, the number of Flight Hours on each module
since overhaul and performance restoration and the status
of the life limited parts in each module shall be
recorded. A full video borescope inspection (by an agency
selected and paid for by Lessor), including at least the
hot, cold and combustor sections of each Engine and an
inspection of each magnetic chip detector shall be
performed following the functional acceptance flight at
Lessor's expense with Lessor's representative entitled to
be present and Lessee shall
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provide evidence satisfactory to Lessor reflecting the
correction of any discrepancies from the guidelines set
out in the Maintenance Manual which may be discovered
during such maximum power assurance runs and borescope
inspections;
If Engine Trend Monitoring indicates a rate of acceleration in
performance deterioration of any Engine over at least the previous ninety (90)
days of operation, which is higher than normal based on the maintenance
experience of the Engine Manufacturer or the experience of Lessee in operating
the same type of engines, under similar conditions, Lessee shall, prior to
return, cause to be corrected such conditions which are determined to have
exceeded tolerances defined for such engines in the Maintenance Manual or are
otherwise determined to be causing such performance deterioration.
Each Engine will be returned with at least 3,000 Flight Hours or 12
months remaining before the next anticipated removal for performance restoration
or any repair based on the last ninety (90) days of engine trend monitoring,
video borescope results, a maximum power assurance run, LLP data and current
take off TGT margin. Xxxxx & Xxxxxxx will be used to analyze the foregoing data
and determine the anticipated engine time remaining on wing.
All repairs required as a result of such inspections shall be
certified by the Authorized Maintenance Performer. All repairs shall be made in
accordance with the Maintenance Manual. There will be no "on watch" conditions,
special repetitive inspections or special callouts on either Engine.
No LLP in any Engine shall have less than 1,750 Cycles remaining until
scheduled removal.
(e) The fuselage of the Aircraft shall be sanded or stripped
and freshly painted white in accordance with the
Manufacturer's then-applicable painting standards and
procedures. The wings and the empennage shall have been
touched up as necessary;
(f) The flight deck shall be clean, free of stains and cracks
and all systems shall function properly. All placards and
decals shall be clean, secure and legible. All seats
shall be fully serviceable and shall have been deep steam
cleaned. All carpets and seat covers shall have been deep
steam cleaned. The galleys and lavatories will be fully
serviceable and shall have been deep steam cleaned.
Overhead bins, sidewall panels and ceiling panels will be
freshly cleaned;
(g) Lessee will have permanently repaired (there shall be no
temporary repairs, time-limited repairs, or repairs
requiring repetitive inspections) all impact damage to
the Aircraft (regardless of cause) which exceeds the
relevant Maintenance Manual limits in accordance with the
Manufacturer's Structural Repair Manual. Structural
repairs not described in the Manufacturer's Structural
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Repair Manual will be completed in accordance with the
Manufacturer's and the Aeronautics Authority's approved
repair scheme. There will be no "scab" patches on the
Aircraft other than those existing on the Delivery Date
and noted in the Certificate of Acceptance. The records
of all repairs carried out on the Aircraft shall be
specified in a single document certified by the
Authorized Maintenance Performer. There will be no "on
watch" conditions, special callouts or special repetitive
inspections on the Aircraft;
(h) Lessee shall carry out on the Aircraft the final
terminating action on all deferred maintenance items,
pilot log book reports and Service Bulletins as required
in Clause 6.6(f) of the Lease and shall complete, on a
terminating action basis, all ADs which become effective
on or before the date of return of the Aircraft and which
require a terminating action within ninety (90) days
after the date of return of the Aircraft to Lessor if the
AD kit is available. For any AD where the terminating
option is not available, any required repetitive
inspections shall be cleared for ninety (90) days
following the date of redelivery, or if the interval is
less than ninety (90) days, it shall be zero time from
inspection. If an SB kit or AD kit is not available it
shall be supplied to Lessor without charge when it is
received. Lessee will pay Lessor the amount to accomplish
any AD due in ninety (90) days after redelivery but for
which the SB kit is not available on the redelivery date;
(i) On return of the Aircraft to Lessor, all installed
time-controlled components on the Aircraft will have not
less than 12 months remaining to overhaul, removal bench
check or inspection (as applicable). Any emergency
equipment that does not have an MPD interval of at least
12 months will be freshly overhauled or have the full
inspection interval remaining;
(j) The installed APU shall be serviceable with all air and
temperature outputs in the normal range. The number of
APU Hours since its last performance restoration and full
gas path overhaul shall not be any higher than recorded
on the Delivery Date;
(k) Landing Gear shall have not less than 6,000 Cycles
(whichever is the most limiting) remaining to the next
overhaul. Each life limited part within the landing gear
shall have at least 6,000 Cycles remaining to
replacement;
(l) If the Airframe inspections performed prior to the
Delivery Date have zero-timed each inspection interval,
the Airframe shall be redelivered with each inspection
interval zero-timed
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6. Specific Conditions
The condition of the Aircraft installed systems upon return to Lessor
will be as follows:
The Aircraft will be free of fuel, oil, hydraulic and pneumatic leaks. Any
temporary leak repairs will have been replaced by permanent repairs.
The interior configuration shall be the same as at the Delivery Date.
The Aircraft will have all signs and decals clean, secure and legible.
Each brake will be returned with at least the same time remaining to overhaul as
at delivery of the Aircraft based on brake wear pin measurement. Each tire shall
be returned with at least the same time remaining to replacement as at delivery
of the Aircraft.
Fuselage, windows and doors:
6.1.1. With the exception of those items noted in the
Certificate of Acceptance at delivery of the Aircraft, the fuselage
will be free of minor dents and abrasions, scab patches and loose or
pulled or missing rivets.
6.1.2. With the exception of those items noted in the
Certificate of Acceptance at delivery of the Aircraft, the windows
will be free from delamination, blemishes, crazing and will be
properly sealed.
6.1.3. The doors will be free moving, correctly rigged and
be fitted with serviceable seals.
Wings and stabilizers:
6.1.4. The leading edges will be free from damage, numerous
dings and dents (e.g. no significant hail or other foreign object
damage).
6.1.5. The wings will be free of fuel leaks as demonstrated
by filling the tanks and observing and inspecting for leaks after
twenty four (24) hours.
Horizontal stabilizer and empennage:
6.1.6. The leading edges will be free from damage, numerous
dings and dents (e.g. no significant hail or other foreign object
damage).
Galleys, lavatories and passenger cabin interior.
6.1.7. The floor coverings in galley area will be clean and
in good condition.
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6.1.8. The galleys and lavatories will be clean and in good
condition.
6.1.9. The seats and seat covers will be deep cleaned and
in good condition.
6.1.10. The in-flight entertainment system will be inspected
operationally and functionally tested and repaired as necessary.
Cockpit:
6.1.11. The fairing panels will be free of stains and
cracks, will be clean, secure and repainted as necessary.
6.1.12. The floor coverings will be clean and in good
condition.
6.1.13. The seats and seat covers will be deep cleaned and
in good condition.
Cargo compartments:
6.1.14. With the exception of those items noted in the
Certificate of Acceptance at delivery of the Aircraft, all cargo
compartment floor, sidewall and ceiling panels will be in good
condition, free of holes, cracks, temporary repairs, numerous dents
and dings.
6.1.15. The cargo nets will be in good condition with no
tears or frayed areas.
Landing gear:
6.1.16. The landing gear and wheel xxxxx will be clean, free
of leaks, stains and repaired as necessary.
7. Return of Essence
Return of the Aircraft in the condition set out in this Part B at the
Redelivery Location is of the essence of the Lease and if the Aircraft is not
returned as provided herein, Lessor may obtain a court order requiring Lessee to
return the Aircraft in accordance with the provisions hereof. In addition, and
without warning or limiting Lessor's right to obtain such court order, if Lessee
does not return the Aircraft to Lessor for any cause on the date of the
expiration or termination of the Term, or does not return the Aircraft to Lessor
in the condition set out in this Part B, then the obligations of Lessee under
this Lease shall continue and such continued use shall not be considered a
renewal of the terms of this Lease or a waiver of any right of Lessor hereunder
and Lessor may terminate Lessee's right to possess the Aircraft immediately on
written notice to Lessee; and Lessee shall fully indemnify Lessor on demand
against all losses, liabilities, actions, proceedings, costs and expenses
thereby suffered or incurred by Lessor. During such continued use, Basic Rent
shall continue to be paid by Lessee to
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Lessor on demand made by Lessor from time to time at the rate of one tenth
(1/10) of the last full payment of Basic Rent calculated in accordance with
Schedule 3 (for the winter period) for each day until the Aircraft is actually
delivered to Lessor in the required condition, and all other terms and
conditions of the Lease shall remain in full force and effect, provided that the
payment by Lessee of such amounts will not constitute a renewal of the terms of
the Lease or of the Term or a waiver of any of Lessor's rights under the Lease
and will not give Lessee any rights whatsoever in respect of the Aircraft or any
part thereof other than as may be required to enable Lessee to comply with its
obligations under Clause 14.
8. Service Bulletins
All vendor and manufacturer's no-charge SB kits ordered and received
by Lessee for the Aircraft but not installed therein shall be returned with the
Aircraft as part of the Aircraft at time of return, and shall be loaded by
Lessee on board the Aircraft as cargo. Lessor shall have the option to purchase
at Lessee's cost any vendor and manufacturer's SB kits for which there has been
material ordered and received by Lessee for the Aircraft but not installed
therein.
9. Fuel
Upon return of the Aircraft, the fuel tank shall contain the same
amount of fuel as was present on delivery to Lessee and each oil tank shall be
full.
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SCHEDULE 7
[Intentionally left blank]
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SCHEDULE 8
[Intentionally left blank]
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SCHEDULE 9
Aircraft Records Standard
1. Language
Records shall be maintained in the English language.
2. Minimum Standard
At a minimum, Lessee shall maintain Aircraft Records in accordance
with the requirements of the Aeronautics Authority in addition to the
requirements contained in this Lease.
3. Delivered Aircraft Records
Lessee shall maintain all Aircraft Records delivered with the Aircraft
without interruption. Lessee shall be responsible for return of the full content
of the delivery inventory at termination of the Lease.
4. Manufacturer and Vendor Manuals
During the Term, Lessee shall maintain at their own cost revision
service for all required Manufacturer and Supplier manuals which shall at all
times contain the latest issued revisions and reflect current configuration and
status of Aircraft, Airframe, Engines and Parts.
5. Automated Aircraft Records
Automated Aircraft Records produced by electronic data processing, or
other means of automation, are acceptable under one of the two following
conditions:
(a) As summary documents accompanied by original, or
manual, Aircraft Records.
(b) In automated format containing all pertinent data
contained in original, or manual, Aircraft
Records. In such case, each page of automated
Aircraft Records shall be signed, initialed, or
stamped in a manner to verify and authenticate its
origin and content.
Upon return, each page of all acceptable automated Aircraft Records shall be
verified and authenticated with a signature or stamp representing Lessee Quality
Assurance organization or other agreed to agent of Lessee, and dated. A letter
identifying Lessee's signatory agent shall accompany the Aircraft Records.
Lessee shall provide upon Aircraft return a complete and
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current copy of Lessee's automated Aircraft Records system procedures and
security control approved by the Aeronautic Authority.
6. Routine Maintenance
All unsuperseded scheduled and routine maintenance checks and
inspections accomplished during the Term shall be fully documented and
identified to originating requirement. Aircraft Records resulting from such
inspections shall be maintained until returned with the Aircraft.
7. Non-Routine Tasks
Non-routine tasks accomplished in conjunction with, or resulting from,
routine maintenance tasks shall be fully documented as to engineering
disposition and corrective action. Such documentation shall be maintained with
the Aircraft Records until superseded. In the case of repairs and alterations,
data shall be maintained until returned with the Aircraft.
8. Repairs
Lessee shall construct and maintain a detailed and accurate summary
list, complete with dates, references to pertinent documentation, affected
assembly or part numbers and method of acceptance, of all repairs performed upon
the Aircraft during the Term. All technical and engineering data, calculations,
drawings covering these repairs shall become a permanent part of the Aircraft
Records and shall be delivered to Lessor at redelivery of the Aircraft.
9. Alterations and Modifications
Lessee shall construct and maintain a detailed and accurate summary
list complete with dates, references to pertinent documentation, affected
assembly or part numbers, method of acceptance of all alterations, both major
and minor, performed upon the Aircraft during the Term. All technical and
engineering data, calculations and drawings covering those alterations that
remain incorporated, in whole or in part, on the Aircraft at the end of the Term
shall become a permanent part of Aircraft Records and shall be delivered to
Lessor at redelivery of the Aircraft.
10. Replacement Parts
Serialized Aircraft Records detailing shop action of all replacement
items, appliances, assemblies and component parts thereof which are installed on
the Aircraft during the Term of the Lease shall be maintained until returned
with the Aircraft.
11. Life Limited Parts
Life Limited Parts (LLPs) as specified by Aircraft, Airframe, Engine,
and Appliance Type Data Sheets and Time Controlled Components identified by MPD
shall possess all historic Aircraft Records necessary to establish origin, date,
hours and cycles at each
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installation and removal, last shop visit findings and Return to Service where
applicable, in addition to total service and authenticity.
12. Flight Time and Cycles
Lessee shall maintain accurate, complete, and current Aircraft Records
of all flights and cycles made by, and all maintenance and inspection performed
on the Aircraft Airframe, Engines, Appliances or component parts thereof.
13. Airworthiness Directives
All documentation necessary to assure and demonstrate method of
compliance with ADs (and any mandatory program which comes into effect during
the Term) shall become a permanent part of the Aircraft Records and shall be
returned with the Aircraft.
14. ADs and Service Bulletins
Listings provided by Lessee, which summarize compliance with Service
Bulletins and ADs, shall be returned with the Aircraft and verified in writing
by Lessee's quality assurance organization to be authentic and complete. In the
event that a particular Service Bulletin was accomplished only in part, or in
variance from Manufacturer's specific instructions, such deviation will be
plainly noted. In the event that a particular AD was accomplished in accordance
with an approved alternate means of compliance, it will be plainly noted.
15. Records List at Aircraft Redelivery
The content of the Aircraft Records at redelivery will be as provided
in Attachment 1 to this Schedule 9.
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Attachment 1 to schedule 9
Records list for aircraft redelivery
CONFIGURATION
Aircraft Description (technical description of aircraft, engines, configuration,
weights, etc.)
1. Manufacturer's Detail Specification
2. Interior Configuration Drawing aka "LOPA" (approved by applicable
regulatory authority)
3. Cockpit Installation Drawings (installation and location of
consoles, instruments, switches, circuit breakers, standard units of
measurement, etc.)
4. Emergency and Survival Equipment Installation Drawings
(description, part number, quantity and location)
5. Avionics Installation List (description, manufacturer, model
number, part number and quantity)
6. List of Supplemental Type Certificates (STC), or equivalent, issued
against the aircraft by any Aviation Authority
7. Manufacturer's Delivery Inventory (i.e. Boeing List of Equipment)
CERTIFICATES
Original Export Certificate of Airworthiness
Current Export Certificate of Airworthiness (as applicable)
Current Certificate of Airworthiness (photocopy; original shall be on board
aircraft)
Current Aircraft Registration Certificate (photocopy; original shall be on board
aircraft)
De-Registration (as applicable)
Noise Certificate
SUMMARY RECORDS
Lessee shall assure that each of the following documents are complete
including any update required to reflect work performed in preparation for
return to Lessor. Each summary report shall be certified by signature of
Lessee's Director of Quality Assurance or
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Director of Quality Control as being a complete and accurate description of
aircraft status at return to Lessor.
Aircraft record of flight time and cycles (listing of accumulated hours and
cycles as of specific dates)
Airworthiness Directive (AD) Applicability and Compliance Status - Lessee will
supply a separate listing for Airframe, Appliances, APU and each Engine.
Listings will include all AD's issued by the Aviation Authority of country of
manufacture against the model and series of equipment leased and will clearly
identify any exemptions, waivers, or alternate means of compliance granted by
the regulatory authority to the operator. In addition to other pertinent data,
the documents shall include manufacturer's Service Bulletin(s) reference, AD and
SB revision numbers, method of compliance, date and time (hours and cycles) of
accomplishment, status (terminated, repetitive, open), and next due.
Manufacturer Service Bulletin (SB) Compliance Summary - Lessee will supply a
separate listing from Airframe, Appliances, APU and each Engine. Summary will
clearly identify whether an SB was completed in full, in part or in variance to
manufacturer data and shall detail which portions were accomplished or the
nature of any variance.
List of Operator Modifications Incorporated (EO's, EA's, FCD's etc.) In addition
to other pertinent data, this document shall include operator document
reference, description, date and time of accomplishment.
List of Structural Repairs - In addition to other pertinent data, this document
shall include specific location, size, date repair made, specific authority for
repair (i.e. SRM reference, Aviation Authority approval, manufacturer telex,
etc.), and whether repair was classed as major or minor.
List of Major Alterations - In addition to other pertinent data, this document
shall include description, STC number, and date incorporated.
Life Limited Parts (LLP) Status Reports (Airframe, Landing Gear, Engines, APU)
(In addition to other pertinent information, this document shall include
description, location, manufacturer part number, manufacturer serial number,
total time (hours and cycles), life limit and time remaining.)
Check/Inspection History (record of scheduled checks accomplished during lease
term including date and time accomplished)
Complete Status Summary for each special maintenance, modification or inspection
program (Corrosion Prevention and Control, Supplemental Inspection, Aging
Aircraft, etc.) in affect at time of return.
Time-Controlled Components (TCC) Status Report (Shall address status of each TCC
identified in the manufacturer's MPD as well as each TCC listed in Lessee
Maintenance Program. In addition to other pertinent information, this document
shall include description, location,
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manufacturer part number, manufacturer serial number, date and aircraft time at
installation, current time since overhaul (hours and cycles), limit, and time
remaining.)
List of Currently Installed Components and Equipment (In addition to other
pertinent information, this document shall include description, location,
manufacturer part number, manufacturer serial number, date installed and
aircraft time at installation.)
Emergency and Survival Equipment Inspection Status (In addition to other
pertinent information, this document shall include description, location,
manufacturer part number, manufacturer serial number, date of last inspection
and when next due.)
List of Deferred Maintenance Items (If no DMI, XXX or CDL items are "open" at
transfer, a signed statement to that effect is required.)
List and Status of any out-of-phase checks, special inspection requirements,
time limited repairs, "watch" items, etc. (If none exist, then a signed
statement to that effect is required.)
MAINTENANCE AND CHECK ACCOMPLISHMENT RECORDS
Aircraft Flight and Maintenance Log Sheets
Complete accomplishment records (task card summaries, work instruction cards,
non-routines, etc.) for each unsuperseded scheduled check (i.e. "A", "B", "C"
(Zonal/Systems) and "Structural" Checks / Inspections). In the event that a
check is performed in phases, all phases necessary to constitute a complete
block check are required. In the event that check content varies by multiples of
the check, all multiples necessary to constitute a complete cycle are required.
Accomplishment records for each special maintenance, modification or inspection
programs (Corrosion Prevention and Control, Supplemental Inspection, Aging
Aircraft, etc.) in affect at time of return.
Aircraft weight records (including weight change ledger)
AIRWORTHINESS DIRECTIVES, SERVICE BULLETINS AND MODIFICATIONS
Airworthiness Directive Accomplishment Records for all Airworthiness Directives
accomplished including task cards, engineering orders, drawings, shop cards,
etc., as necessary to establish method of compliance, quality control
acceptance, and approval authority. (Records shall be returned in dedicated AD
files segregated by Airframe, Engine, APU and Appliances and shall be in AD
number order. Records for AD's requiring repetitive accomplishment of identical
action may be restricted to initial and most recent accomplishment.)
Service Bulletin Accomplishment Records for all Service Bulletins accomplished
on the Aircraft, Engines, APU and Appliances including task cards, engineering
orders, drawings, shop cards, etc., as necessary to establish method of
compliance, quality control acceptance, and approval authority. (Records shall
be returned in dedicated SB files segregated by Airframe, Engine, APU and
Appliances and shall be in SB number order. Records for SB's requiring
repetitive
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accomplishment of identical action may be restricted to initial and most recent
accomplishment. SB's carried out to satisfy AD requirements shall be returned
with AD records and need not be duplicated in SB files.)
Modification Accomplishment Records for all Modifications accomplished on the
Aircraft, Engines, APU and Appliances including task cards, engineering orders,
drawings, shop cards, etc., as necessary to establish method of compliance,
quality control acceptance, and approval authority. (Records shall be returned
in dedicated Modification files segregated by Airframe, Engine, APU and
Appliances and shall be organized in a fashion that allows documents for a
particular modification to be located quickly and efficiently. Modifications
carried out to satisfy AD requirements shall be returned with AD records and
need not be duplicated in Modification files.)
REPAIRS AND ALTERATIONS
Structural Repair Documents including task cards, engineering orders, drawings,
manufacturer telexes, manufacturer approval, Aviation Authority approval,
Supplemental Type Certificates, Master Change Notice, FAA Form 8130-3, etc., as
necessary to document work done, certification basis, and approval authority.
(Records shall be returned in dedicated repair files and shall be organized in a
fashion that allows documents for a particular repair to be located quickly and
efficiently.)
Diagram (aka "map") showing general size and location of all external structural
repairs
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1. Alteration Documents including task cards, engineering orders,
drawings, manufacturer telexes, manufacturer approval, Aviation Authority
approval, Supplemental Type Certificates, Master Change Notice, FAA Form
8130-3, etc., as necessary to document work done, certification basis, and
approval authority. (Records shall be returned in dedicated alteration
files and shall be organized in a fashion that allows documents for a
particular alteration to be located quickly and efficiently.)
ENGINE RECORDS
1. Certified statement as to time and cycles since overhaul on each
engine module
2. Engine Log Book (as applicable to Lessee's records keeping system)
3. Engine Master Record (record of installation and removal and
accumulated flight time and cycles)
4. Accessory Status (including description, part number, serial number,
date and time installed, and current time since overhaul)
5. Record of last overhaul (FAA Form 8130-3) for each of the accessory
rotables requiring overhaul on a time specified basis
6. Repair, overhaul and inspection records for each shop visit since and
including the last overhaul of each module
7. Documents demonstrating installation and full traceability to new for
each life limited part
8. Engine Condition Monitoring Report
9. Most recent engine borescope (if videotaped, include copy of video)
10. Most recent fuel, oil sampling, magnetic chip detector and vibration
survey results (as available)
11. Most recent on-wing ground performance run
12. Last certified Test Cell Run specifying engine OATL (outside air
temperature limit) at rated thrust
13. Manufacturer delivery documents i.e. PWA Industry Item List , GE Data
Submittal, etc.
14. Engine Oil used
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15. Any incidents during operation since last shop visit with action
taken i.e. IFSD/FOD/oil loss etc.
APU RECORDS
1. Certified statement as to hours and cycles since overhaul, hours
and cycles since hot section inspection and operator's method for APU
time accrual
2. APU Log Book (shall at a minimum contain a record of each
installation and removal with accumulated time and cycles, complete
and accurate Life Limited Parts History cards, maintenance release and
FAA Form 337 for each shop visit)
3. Accessory Status (including description, part number, serial
number, date and time installed, and current time since overhaul)
4. Record of last overhaul (FAA Form 8130-3) for each of the
accessory rotables requiring overhaul on a time specified basis
5. Repair, overhaul and inspection records for each shop visit since
and including the last overhaul
6. Documents demonstrating installation and full traceability to new
for each life limited part
7. Most recent certified APU borescope report
8. Most recent APU on-wing health check datasheets
9. Last certified test cell run
COMPONENT RECORDS
1. Documents demonstrating installation and full traceability to new
for each life limited part
2. Time Controlled Component (TCC) Installation records and certified
records of last overhaul (FAA Form 8130-3 or JAA Form One) for each
TCC listed in the manufacturer's MPD and/or Lessee's approved program
3. Installation records and serviceable tags (FAA Form 8130-3 or JAA
Form One) for Components and Equipment Fitted (minimum acceptable is
last twelve months)
4. Compass Swing (last recorded)
5. VOR Equipment Check (last recorded)
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6. Altimeter and Altitude Reporting Equipment Test and Inspection
(last recorded)
7. ATC Transponder Inspection (last recorded)
8. Emergency Locator Battery Status (battery life, replacement times,
etc.)
9. Control Surface Balance (last recorded)
10. Flight and Cockpit Voice Recorders (last bench test and
inspection)
MISCELLANEOUS
1. Aircraft Log Book (as applicable to Lessee's records keeping
system)
2. CAA Modification Log Book (as applicable to Lessee's records
keeping system)
3. Lessee's Minimum Equipment List (XXX)
4. Lessee's Minimum Equipment List (XXX) Procedures Manual
5. Lessee's Maintenance Program and copy of aviation authority
approval of same (Maintenance Program documentation shall include a
complete cross reference between Manufacturer's Maintenance Planning
Document task numbers and Lessee task numbers)
6. Operator vs. Manufacturer Part Number Cross-Reference and any
other reference material necessary for interpretation of status
summaries
7. List of Oils and Fluids used throughout the aircraft
8. Galley Drawings
9. Certificate of Conformity for all interior fabrics, carpets, wall
and ceiling panels and seat covers/cushions indicating compliance with
the relevant FAA Flammability requirements, including FAR 121.312
10. Certification records of galleys and seats
QUALITY ASSURANCE STATEMENTS
1. Statement of total hours and total cycles on the airframe,
engines, APU and landing gear at aircraft transfer
2. Automated Record System procedures and Security Control (as
applicable to Lessee's records keeping system)
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3. List of Repair Stations used by Lessee including Part 145 Certification and
Letter to Repair Stations authorizing release of records to Lessor upon request
4. Report detailing Incidents or Accidents (if none, signed statement to that
effect)
5. List of All Records and Documentation Transferred with Aircraft (inventory
of boxes and content)
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SCHEDULE 10
[intentionally left blank]
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SCHEDULE 11
[intentionally left blank]
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SCHEDULE 12
Lease Information
Aircraft:
Manufacturer: The Boeing Company
Type and Model: B727-100
Serial Number: 19318
Engines:
Manufacturer: Xxxxx & Whitney
Type and Model: JT8D-9A
Anticipated Delivery Date: December 14, 2002
Claims Limit: the amount of the first
deductible under the hull
cover.
Delivery Location: TBD
Expiry Date: The fifth anniversary of the
Delivery Date.
Lessee's Process Agent: United Breweries Holdings, Ltd.
000 X. XxXxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Latest Delivery Date: December 31, 2002
Home Jurisdiction: Lessor: Utah
Lessee: North Carolina
State of Registration: United States of America
Text of Fireproof Plate:
Notice of Ownership
This Aircraft is owned by XXXXX FARGO BANK NORTHWEST NATIONAL ASSOCIATION and is
leased to UNITED BREWERIES HOLDINGS, LTD.
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SCHEDULE 13
Form of Quarterly Operating Report
To: Name and address of Lessor
Attention: Technical Department
Date: [.]
Aircraft Lease Agreement (the "Lease Agreement") dated __________,
2002 between XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION as lessor, and
UNITED BREWERIES HOLDINGS, LTD., as lessee relating to one Boeing 727-100
Aircraft, MSN 19318 (the "Aircraft")
Terms used in this Report have the meanings given to them in the Lease
Agreement.
We confirm that during the period from . to . (the "Period") or, as
the context may require, as of the last day of the Period the following
information was true with respect to the Aircraft:
1. Engines
Engine (1):
(i) Whether removed from Airframe during Period: [.]
(ii) Location (i.e. aircraft on which installed if not the
Aircraft): [.]
(iii) Flight Hours completed during Period: [.]
(iv) Cycles completed during Period: [.]
(v) Major component changes: [.]
Engine (2):
(vi) Whether removed from Airframe during Period: [.]
(vii) Location (i.e. aircraft on which installed if not the
Aircraft): [.]
(viii) Flight Hours completed during Period: [.]
(ix) Cycles completed during Period: [.]
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(x) Major component changes: [.]
2. APU
(xi) APU Hours completed during Period: [.]
(xii) Cycles completed during Period: [.]
3. Landing Gear
(xiii) Flight Hours completed during Period: [.]
(xiv) Block Hours completed during Period: [.]
(xv) Cycles completed during Period: [.]
4. Airframe
(xvi) Flight Hours completed during Period: [.]
(xvii) Block Hours completed during Period: [.]
(xviii) Cycles completed during Period: [.]
(xix) Major component changes: [.]
(xx) Time to next Major Check: [.]
(xxi) Average daily utilization (in Hours) during Period: [.]
(xxii) Any specific information re: restriction of operating
location.
5. Any changes to Insurances over Period: [.]
6. Any notice of Mandatory Modifications received during Period: [.]
7. Routes (city pairs) flown during period: [.]
8. Engine derates used during Period: [.]
Authorized Signatory
for and on behalf of
United Breweries Holdings, Ltd.
cc:
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Schedule 14
Form Of Redelivery Certificate
THIS REDELIVERY CERTIFICATE is dated [ ], 20[ ], (this "Redelivery
Certificate"), between XXXXX FARGO BANK NORTHWEST, National Association, as
Owner Trustee ("Lessor") and UNITED BREWERIES HOLDINGS, LTD. ("Lessee").
WITNESSETH:
WHEREAS, Lessor and Lessee have heretofore entered into that certain
Aircraft Lease Agreement dated ______________, 2002 (the "Lease"), which
provides for the execution and delivery of a Redelivery Certificate in
substantially the form hereof for the purpose of acknowledging the return of the
Aircraft in accordance with the terms of the Lease;
NOW, THEREFORE, in consideration of the premises, and pursuant to
Clause 14 of the Lease, Lessor and Lessee hereby agree as follows:
1. Definitions
Unless otherwise defined herein, all capitalized terms used herein
shall have the respective meanings given them in the Lease.
2. Redelivery and Acceptance
Lessee hereby delivers and returns to Lessor, and Lessor hereby
accepts from Lessor under the provisions of the Lease:
Aircraft: One Boeing 727-100 aircraft consisting of the following:
(a) Airframe: Registration Xxxx: [_]
Manufacturer's Serial No. 19318
Total Flight Hours: [_]
Total Cycles: [_]
(b) Engines: Three [Engine model] turbofan engines installed on
said Airframe, bearing, respectively, Manufacturer's Serial Nos.:
Engine Manufacturer's Total Total
Number Serial Number Engine Hours Cycles
1.
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2.
3.
The status of the time controlled components, engine modules and life
limited parts is set forth in Appendix I hereto.
(c) Auxiliary Power Unit:
Make And Manufacturer's PU Hours since Total Cycles since
Model Serial Numbers Total APU Hours Overhaul or Cycles Overhaul or
Performance Performance
Restoration Restoration
(d) Landing Gear
Position Date of Last Hours and Cycles
Overhaul Since Overhaul
Nose
Main - Left
Main - Right
(e) Brake Wear Pin Measurements
Position Measurement
(f) Lessor Furnished Equipment: The equipment installed in the
Aircraft (including avionics, safety equipment and galley equipment) and being
returned to Lessor is described in Appendix II hereto.
Lessor confirms that the Aircraft has been examined by its duly
appointed and authorized representatives and such items conform to the
information set forth above.
3. Aircraft Records
Lessee hereby redelivers and Lessor hereby accepts the manuals, log
books, records and other documents relating to the Aircraft described in
Appendix III hereto.
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4. Redelivery Date
The redelivery date of the Aircraft is the date first set forth
above, and the Aircraft is hereby redelivered and accepted on such date at ,
hours local time at [location of redelivery].
5. Fuel
At the time of redelivery there were kg. of fuel in the
Aircraft and each oil tank was full.
6. Condition of Aircraft
The Aircraft is redelivered in good working order and condition
except for the exceptions specified in Appendix IV hereto and Lessee and Lessor
agree to the payments and commitments specified therein.
7. Governing Law
This Redelivery Certificate shall in all respects be governed
by, and construed in accordance with, the laws of United States of America.
Subject to Clause 17.6 of the Lease, the parties hereto agree that the courts of
United States of America are to have jurisdiction to settle any disputes which
may arise out of this Redelivery Certificate.
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IN WITNESS WHEREOF, Lessor and Lessee have each caused this
Redelivery Certificate to be duly executed by their authorized officers on the
date first above written.
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
not in its individual capacity but solely as Owner Trustee
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
UNITED BREWERIES HOLDINGS, LTD.
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
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APPENDIX I
TO REDELIVERY CERTIFICATE
[Aircraft Model and Type] MSN [ ]
STATUS OF TIME CONTROLLED COMPONENTS, ENGINES MODULES AND LLPS
See attached _______ pages.
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APPENDIX II TO REDELIVERY CERTIFICATE
[Aircraft Model and Type] MSN [_]
LESSOR FURNISHED EQUIPMENT
See attached _____ pages.
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APPENDIX III TO REDELIVERY CERTIFICATE
[Aircraft Model and Type] MSN [_]
AIRCRAFT RECORDS
See attached _____ pages.
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APPENDIX IV TO REDELIVERY CERTIFICATE
[Aircraft Model and Type] MSN [_]
OPEN/MISCELLANEOUS ITEMS
See attached ______ pages.
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