Exhibit 2.2
AGREEMENT
This Agreement is entered into on October 21, 2002, among UBICS
HOLDING COMPANY, a Delaware corporation ("UBICS"), UNITED BREWERIES HOLDINGS,
LTD, a North Carolina corporation ("UBNC") and UNITED BREWERIES (HOLDINGS)
LIMITED, an Indian corporation ("UBH").
PREAMBLE
On the date of this Agreement, UBICS, as trust beneficiary, has caused
Xxxxx Fargo Bank Northwest, National Association, as trustee (the "Trustee"), to
purchase the Boeing 727 aircraft described on Attachment A hereto (the
"Aircraft") from Xxxxx Oil Company (the "Seller") for a purchase price of
$3,350,000, all pursuant to an Aircraft Purchase Agreement dated October 10,
2002 between the Seller and UBICS (the "Purchase Agreement"). Further, at the
request of UBNC, UBICS will cause certain repairs and refurbishments
(collectively, the "Upgrades") to be made to the Aircraft pursuant to a contract
with Aero Sky.
UBICS would not be willing to either (i) cause the Trustee to purchase
the Aircraft or (ii) cause the Upgrades to be made, without (A) the agreement of
UBNC, an affiliate of UBH, to lease the Aircraft from the Trustee on a "dry
lease" basis, to pay the costs of the Upgrades in excess of $650,000, to pay all
of UBICS' out-of-pocket costs and expenses, including legal fees, incurred in
connection with the Purchase Agreement, the Upgrades and the lease of the
Aircraft to UBNC (other than purchase price of the Aircraft and the cost of the
Upgrades up to a maximum of $650,000), and to purchase the Aircraft upon 90 days
written notice from UBICS, and (B) the agreement of UBH to guarantee the payment
and performance of all obligations of UBNC.
Given the accelerated time schedule on which the parties have
proceeded to a closing on the purchase of the Aircraft, UBICS and UBNC have not
yet finalized the language of the definitive lease agreement for the Aircraft
(the "Definitive Lease Agreement"). In order to enable UBICS and the Trustee to
close on the purchase of the Aircraft and to begin the Upgrades, the parties
wish to enter into this binding agreement, setting forth their agreement on the
material terms of the lease of the Aircraft from the Trustee to UBNC , which
terms will form the basis of the Definitive Lease Agreement.
THEREFORE, the parties agree as follows, with the intent to be legally
bound:
1. UBNC will lease the Aircraft from the Trustee on a dry lease
basis for a term of five years commencing on the date of delivery of the
Aircraft to UBNC. UBNC shall pay rent for the Aircraft in the amount of $50,000
per month, plus applicable sales, lease or use tax. Rent will be paid monthly in
advance commencing on the delivery date, and UBNC will pay the first three
months rent on or before the delivery date.
2. UBICS will cause the Upgrades to be made to the Aircraft at its
cost and expense up to a maximum of $650,000. All charges for the Upgrades in
excess of $650,000 shall be paid directly by UBNC.
3. UBH will execute and deliver to UBICS and the Trustee a Guaranty
Agreement (the "Guaranty") in form and substance satisfactory to UBICS,
guaranteeing payment and performance of all of UBNC's obligations under the
Definitive Lease Agreement.
4. The Trustee shall have the right, exercisable at any time after
the date of this Agreement, upon not less than 90 days prior written notice to
UBNC, to require UBNC to purchase the Aircraft for the cash purchase price of
$4.0 million. The only condition to UBNC's obligation to purchase the Aircraft
will be that the Trustee deliver to UBNC good title to the Aircraft, free and
clear of all liens (other than any liens which may have attached as a result of
the actions of UBNC or UBH).
5. Being a dry lease, UBNC will pay all costs and expenses
associated with the operation and maintenance of the Aircraft, including,
without limitation all costs of insurance on the Aircraft, which insurance shall
name UBICS and the Trustee as additional insureds. UBICS will assist UBNC in
making arrangements for the payment of such expenses.
6. The parties will use their best efforts and will negotiate in
good faith to finalize and execute the Definitive Lease Agreement and the
Guaranty on the delivery date. The Definitive Lease Agreement will contain the
terms described herein and will be consistent with comparable, arm's-length, dry
lease agreements for similar aircraft. Both the Definitive Lease Agreement and
the Guaranty will be substantially the forms attached hereto as Exhibits A and B
and will otherwise be in form and substance satisfactory to UBICS. In the event
that either the Definitive Lease Agreement or the Guaranty is not executed
within such time period, UBICS will cause the Trustee to exercise its rights
under Paragraph 4 above.
7. This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of Delaware, without regard to
conflict of laws principles.
8. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of such counterparts together
shall constitute one and the same instrument.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth above.
UBICS HOLDING COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx, President
UNITED BREWERIES (HOLDINGS) LIMITED
By: /s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx, Chairman
UNITED BREWERIES HOLDINGS, LTD
By: /s/ Xxxxxxxx X. Xxxx
------------------------------
Xxxxxxxx X. Xxxx, President
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ATTACHMENT A
AIRCRAFT DESCRIPTION
Airframe:
Airframe Manufacturer and Model: Boeing VIP 727-44
Airframe Manufacturer's Serial Number: 19318
Year of Manufacture: 0000
Xxxxxx Xxxxxx Registration Xxxx: N44MD
ENGINES:
Engine Manufacturer and Model: Xxxxx & Whitney JT8D-9A
Engine Manufacturer's Serial Numbers: 665625, 665839 and 664474
Year(s) of Manufacture: 0000
XXX:
APU Manufacturer and Model: Xxxxxxx XX CP-85-98
APU Manufacturer's Serial Number P15377
PARTS:
Any part, component, appurtenance, appliance, module, accessory,
instrument (including avionics), communications equipment, furnishing, module,
SELLER-furnished equipment or other item of equipment (other than complete
Engines or engines) installed in or attached to the Airframe, any Engine or the
APU.
AIRCRAFT DOCUMENTS:
All technical data, manuals and log books, and all inspection,
modification and overhaul records and other service, repair, maintenance and
technical records that are required by the FAA or the Maintenance Program to be
maintained by the SELLER with respect to the Aircraft, Airframe, Engines or
Parts; and such term shall include all additions, renewals, revisions and
replacements of any such materials from time to time made or required to be made
by the SELLER in accordance with the Maintenance Program or the FAA Regulations,
and in
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each case in whatever form and by whatever means or medium (including, without
limitation, microfiche, microfilm, paper or computer disk).
OTHER INFORMATION:
Status of Airframe as of September ____, 2002:
Total hours 35,850 Total cycles 35,405
[______] hours/[______] cycles since last "A" check
Status of Engines:
Serial Total Total
Position No. Hrs. Cycles
-------- --- ---- ------
Right 665625 43997 36,819
Left 665839 34366 25,540
Center 664474 42,123 35405
A-2
Exhibit A
AIRCRAFT LEASE AGREEMENT
Dated _________, 2002
BETWEEN
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
as Lessor,
and
UNITED BREWERIES HOLDINGS, LTD.
as Lessee,
------------------------------------------------
Concerning: One B727-100 Aircraft, MSN 19318 and
Three JT8D-9A Turbofan Engines
------------------------------------------------
Table of Contents
1. DEFINITIONS, CONSTRUCTION AND INTERPRETATION ......................... 1
2. DELIVERY AND ACCEPTANCE .............................................. 1
3. TERM ................................................................. 2
4. RENT AND OTHER PAYMENTS .............................................. 2
5. REPRESENTATIONS AND WARRANTIES; COVENANTS OF THE PARTIES ............. 4
6. POSSESSION; USE; LAWFUL INSURED OPERATIONS; MAINTENANCE;
INSIGNIA ............................................................. 12
7. INSPECTION ........................................................... 16
8. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS
AND ADDITIONS ........................................................ 16
9. TAXES ................................................................ 18
10. EVENTS OF LOSS ....................................................... 20
11. INSURANCES ........................................................... 22
12. GENERAL INDEMNIFICATION .............................................. 26
13. LIENS ................................................................ 29
14. RETURN OF AIRCRAFT ................................................... 29
15. EVENTS OF DEFAULT .................................................... 29
16. RIGHTS AND REMEDIES .................................................. 32
17. MISCELLANEOUS ........................................................ 36
18. THE LESSOR ........................................................... 44
19. PUT RIGHT ............................................................ 44
Schedule 1 Definitions and Construction .................................... 46
1. Definitions .......................................................... 46
2. Construction ......................................................... 55
Schedule 2 Conditions Precedent ............................................ 57
Schedule 3 Rent and Other Amounts .......................................... 60
PART 1 PAYMENTS ...................................................... 60
1. BASIC RENT 60
2. SECURITY DEPOSIT ..................................................... 60
3. REIMBURSEMENT OF RENTAL .............................................. 61
PART 1 COMPUTATION OF BASIC RENT ........................................... 62
Schedule 4 Form of Certificate of Acceptance ............................... 63
1. Definitions .......................................................... 63
2. Delivery and Acceptance .............................................. 63
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3. Aircraft Records ..................................................... 64
4. Delivery Date ........................................................ 64
5. Fuel ................................................................. 65
6. Condition of Aircraft ................................................ 65
7. Governing Law ........................................................ 65
8. Representations and Warranties ....................................... 65
9. Technical Definition ................................................. 65
10. Basic Rent ........................................................... 65
APPENDIX I to Certificate of Acceptance .................................... 67
APPENDIX II to Certificate of Acceptance ................................... 68
APPENDIX III To Certificate of Acceptance .................................. 69
APPENDIX IV To Certificate of Acceptance ................................... 70
APPENDIX V To Certificate of Acceptance .................................... 71
Schedule 5 Insurances ...................................................... 72
1. Lessee is required to maintain the following Insurances with respect
to the Aircraft: ..................................................... 72
2. The hull and spares insurance relating to the Aircraft referred to
in paragraph 1 above will: ........................................... 72
3. The liability insurances referred to in paragraph 1 above will: ...... 73
4. All Insurances will: ................................................. 73
5. Where applicable, the Reinsurances will: ............................. 74
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. ............ 74
Schedule 6 Delivery Condition And Redelivery Condition ..................... 76
1. Location ............................................................. 76
2. General .............................................................. 76
3. Documentation ........................................................ 76
4. Service Bulletins .................................................... 76
5. Fuel ................................................................. 77
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1. Location ............................................................. 78
2. General .............................................................. 78
3. Documentation ........................................................ 79
4. Acceptance Flight .................................................... 79
5. General Return Conditions ............................................ 80
6. Specific Conditions .................................................. 82
7. Return of Essence .................................................... 84
8. Service Bulletins .................................................... 84
9. Fuel ................................................................. 85
10. Adjustment of Maintenance Reserve Amounts ....Error! Bookmark not defined.
Schedule 7 [Intentionally left blank] ...................................... 86
Schedule 8 [Intentionally left blank] ...................................... 87
Schedule 9 Aircraft Records Standard ....................................... 88
1. Language ............................................................. 88
2. Minimum Standard ..................................................... 88
3. Delivered Aircraft Records ........................................... 88
4. Manufacturer and Vendor Manuals ...................................... 88
5. Automated Aircraft Records ........................................... 88
6. Routine Maintenance .................................................. 89
7. Non-Routine Tasks .................................................... 89
8. Repairs .............................................................. 89
9. Alterations and Modifications ........................................ 89
10. Replacement Parts .................................................... 89
11. Life Limited Parts ................................................... 89
12. Flight Time and Cycles ............................................... 90
13. Airworthiness Directives ............................................. 90
14. ADs and Service Bulletins ............................................ 90
15. Records List at Aircraft Redelivery .................................. 90
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Attachment 1 to schedule 9 .................................................. 92
Schedule 10 [intentionally left blank] ...................................... 97
Schedule 11 [intentionally left blank] ....................................... 98
Schedule 12 Lease Information ................................................ 99
Schedule 13 Form Of Quarterly Operating Report ............................... 100
Schedule 14 Form Of Redelivery Certificate ................................... 102
1. Definitions .............................................................. 102
2. Redelivery and Acceptance ................................................ 102
APPENDIX I to Redelivery Certificate [Aircraft Model and Type] MSN [ ] ..... 105
STATUS OF TIME CONTROLLED COMPONENTS, ENGINES MODULES AND LLPS ........... 105
APPENDIX II to Redelivery Certificate ........................................ 106
APPENDIX III to Redelivery Certificate ....................................... 107
APPENDIX IV to Redelivery Certificate ........................................ 108
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LEASE SUMMARY
This Lease Summary is for convenience only and does not form part of the
agreement for the leasing of the aircraft referred to below. It is to be ignored
in construing the Lease. In the case of any conflict between the information
contained in this Lease Summary and the Lease, the Lease is to prevail.
1. Airframe: (a) Manufacturer: The Boeing Company
(b) Type and Model: B727-100
(c) Serial Number: 19318
(d) State of Registration: United States
(e) Registration Xxxx: N44MD
2. Engines: Manufacturer: Xxxxx & Whitney
Type and Model: JT8D-9A
Serial Numbers: Right 665625
Left 665839
Center 664474
3. Delivery Location: San Antonio, TX
4. Expiry Date: Fifth Anniversary of Delivery Date
5. Insurance: (a) Broker: _______________
(b) Insured Value: $__________
(c) Engine Agreed Value: $__________ (each
Engine)
(d) Liability Policy Limit: Not less than
$__________
6. Lessee: (a) UNITED BREWERIES
HOLDINGS, LTD.
(b) Contact: Xxxxxxxx X. Xxxx
(c) Telephone: 000.000.0000
(d) Facsimile: 415.289.1410
7. Lessee's Process Agent:
8. Lessor: (a) Xxxxx Fargo Bank Northwest, National
Association
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(b) Contact: Corporate Trust Department
(c) Telephone: 000.000.0000
(d) Facsimile: 801.246.5053
9. Lessor's Process Agent:
12. Payments: (a) First Rental Date: __________, 2002
(b) Rental Period: Monthly
(c) Basic Rental Amount: See Schedule 3
(d) Security Deposit: See Schedule 3
13. Latest Delivery Date:
14. Early Termination: None
15. Extension Option: None
16. Purchase Option: None
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THIS AIRCRAFT LEASE AGREEMENT, dated as of ___________, 2002, 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 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.
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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
Lessee shall also pay to Lessor or, at Lessor's direction to whomsoever
shall be entitled thereto, any and all Supplemental Rent (other than
Maintenance Reserve Amounts, which shall be paid to Lessor) 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 judgement), as Supplemental Rent, interest at the Incentive Rate on
any part of any instalment 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,
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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.
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 the Other Leases, 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, draw
on the Security Deposit Letter of Credit and/or 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 and the Other Leases, 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
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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 account specified in Schedule 12
hereto or to such other 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 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:
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(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,
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 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
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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 fulfil its obligations under
the Relevant Documents.
(vi) Financial Condition. The audited balance sheet of Lessee as at
December 31, 2001, and the audited statement of income and
statement of cash flows of Lessee for the year ended on that
date, each certified by the independent auditor of Lessee,
heretofore furnished to Lessor prior to execution of this
Lease, are complete and correct and have been prepared in
accordance with generally accepted accounting principles of the
United States of America and since such date there has been no
material adverse change in the financial condition of Lessee.
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(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 judgement 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 audited balance sheet and audited
statement of income and statement of cash flows 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 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
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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;
(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;
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(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 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 Authorised Maintenance Performer. The agreements
between Lessee and the Authorised Maintenance Performer (including
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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 authorise 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) Deregistration Power of Attorney. Lessee shall provide Lessor
and Mortgagee promptly following request made by Lessor from time to
time with a Deregistration Power of Attorney which has been
executed, notarized and legalized not earlier than 10 days prior to
the date of any such request.
(j) 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 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 endeavours 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.
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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: (a) 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; or (b) install an Engine on another
airframe of the same type and model as the Airframe, which other airframe
is owned or leased by Lessee, or hired or bailed or conditionally
purchased by Lessee subject to a hire purchase or conditional sale
agreement, provided that (i) such airframe is free and clear of all Liens
except the right of the parties to the lease, hire purchase or conditional
sale agreement or other security agreement covering such airframe, (ii)
the owner of such airframe expressly agrees in the lease, hire purchase or
conditional sale agreement or other security agreement that it will not
acquire or claim any right, title or interest in any Engine by reason of
such Engine being installed on such airframe at any time, (iii) no such
other airframe on which an Engine is installed by virtue of this Clause
6.1 may be subleased to any other entity and (iv) if Lessee installs an
Engine, or permits an Engine to remain installed, on another such airframe
during any period for which Basic Rent is payable by reference to Block
Hour utilisation, Lessee shall, without prejudice to its obligations under
paragraph 4 of Part 1 of Schedule 3 in relation to such Engine, pay to
Lessor rent for such Engine for each day during such period that the
Engine remains installed on another such airframe at a rate to be
determined by Lessor with reference to then current market engine lease
rates for the same type of engines as the Engines, payable on to Lessor on
demand. 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
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
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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. Subject to
Clause 6.5, this Clause 6.2 shall not prohibit Lessee from "wet leasing"
the Aircraft to any person approved by Lessor, Owner and Mortgagee (such
approval not to be unreasonably withheld) provided Lessee's flight crews
remain in full control of the Aircraft at all times during any such "wet
lease" and provided further that Lessee shall remain primarily liable in
respect of all of its obligations under this Lease and no such "wet lease"
shall materially adversely affect the rights and interests of Lessor and
Owner.
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 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 or wet leased 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
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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;
(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 Authorised Maintenance
Performer;
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(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
Authorised Maintenance Performer in accordance with the recommended
storage procedures of the Maintenance Manual and Lessee shall cause
hangarkeeper'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 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
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For the duration of the Term (unless an Event of Default has occurred
and is continuing) Lessor hereby authorises 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 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
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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 Pooling
Any Part removed from the Airframe or any Engine as provided in
Clause 8.1 may be subjected by Lessee to a normal pooling arrangement
that is customer in the airline industry entered into in the ordinary
course of Lessee's business with the Authorised Maintenance Provider;
provided that a part replacing such removed Part shall be
incorporated or installed in or attached to such Airframe or Engine
in accordance with Clauses 8.1 and 8.2 as promptly as possible after
the removal of such removed Part. Parts removed from the Airframe or
Engine may also be incorporated or installed in or attached to an
airframe or engine subject to any Other Lease provided that such Part
is replaced in accordance with the provisions of this Clause 8.
Any replacement part when incorporated or installed in or attached to
the Airframe or an Engine from time to time may be owned by another
air carrier, the Authorised Maintenance Performer or subject to a
normal pooling arrangement; provided that Lessee, at its expense, as
promptly thereafter as possible either (i) causes title to such
replacement part to vest in Owner in accordance with Clause 8.2 by
Lessee acquiring title thereto for the benefit of Owner, free and
clear of all Liens, or (ii) replaces such replacement part by
incorporating or installing in or attaching to the Airframe or an
Engine a further replacement part owned by Lessee free and clear of
all Liens which shall thereupon become subject to this Lease and any
Mortgage and be deemed to be a "Part" hereunder.
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 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
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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 wilful 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
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
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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 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
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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 fulfil 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 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
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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
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
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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 (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.
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(b) The Insurances will be effected either:
(i) on a direct basis with insurers of recognised 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 recognised 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.
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;
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(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 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;
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(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;
(i) "Computer System" means any computer hardware and software
or any equipment operated by electronic means; and
(ii) "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
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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 paid directly to the repairer or, with Lessor's
express authorisation, 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
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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 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 wilful 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, judgements 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 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
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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.
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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 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
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(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 disposes or threatens to dispose of all or a
substantial or material part of its assets, rights or revenues;
or
(f)
(i) an encumbrancer 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 a
liquidator or administrator is appointed in respect of
Lessee; 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 and is not
discharged within 30 days; or
(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 all or any material
part of its assets, rights or revenues;
(g) Lessee 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 Lessee 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 with a view to any other insolvency proceedings involving
Lessee; or
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(j) Lessee 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 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
(l) in relation to Lessee, 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 which would affect Lessee's ability to
perform any of its obligations under any of the Relevant
Documents; or
(o) Eurocontrol charges and other overflight and airport
fees or charges owed by Lessee 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 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 any other person claiming by or
through Lessee; or
(r) it becomes unlawful for Lessee 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 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 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 to authorize the execution, delivery,
validity or enforceability of any of the
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Relevant Documents or the performance by Lessee 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 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 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 shall fail 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
(iii) the Deregistration Power of Attorney is not in full
force and effect; or
(w) an Event of Default (as therein defined) shall occur
under any Other Lease; or
(x) any condition subsequent contained in Part C of Schedule
2 is not met as provided therein; or
(y) Lessee fails to appoint an alternative agent for service
of process pursuant to Clause 5.3(j); or
(z) any other event, circumstances or state of affairs
arises as a result of which Lessor reasonably determines that
the ability of Lessee 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
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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;
(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;
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(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;
(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:
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(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
(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
endeavours, in accordance with its standard business
procedures, to place the Aircraft
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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 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 favour 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
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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.
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 UBICS, Inc.
000 Xxxxxxxx Xxxxxx 000 Xxxxxxxxxx Xxxxx
Xxxxx 0000 Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxxx, XX 00000
Tel: 000.000.0000
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Fax: 000.000.0000
Attn: President
Xxxxxx Xxxxxxxx, LLP
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,
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transfer or grant any security interest over (i) any or all of
its rights and obligations under this Lease and the other
Relevant 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 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:
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(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 favour 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
judgement, other attachment, the obtaining of judgement,
execution or other enforcement) will be claimed by or on
behalf of itself or with respect to its assets; and
(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
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of Lessor, Xxxxx Fargo Bank Northwest, National Association at
its registered office from time to time (currently, 000 X. Xxxx
Xxxxxx, 00xx 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, judgement 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 authorised 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 judgement 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 judgement 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 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.
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(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 wilful 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.
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.
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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) Subject to this Clause 17.15 and to Clauses 9 and 12, a
person who is not a party to this Lease has no right under the
Third Parties Act to enforce any provision of this Lease but this
does not affect any right or remedy of a third party which exists
or is available apart from the Third Parties Act.
(b) 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.
(c) The parties to this Lease do not require the consent of any
Third Party Indemnitee to rescind or vary this Lease at any time.
(d) 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.
(e) 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 defence, set-off or counterclaim a matter that would
have been available by way of defence, set-off or counterclaim if
such Third Party Indemnitee had been a party to this Lease.
(f) 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
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 endeavours to obtain,
confidential treatment of that information.
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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 wilful 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.
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.
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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.
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:________________________________
Name:______________________________
Title:_____________________________
UNITED BREWERIES HOLDINGS, LTD.,
as Lessee
By:________________________________
Name:______________________________
Title:_____________________________
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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.
"Authorised Maintenance Performer" means, with respect to line maintenance
only, Lessee, _____________________________________________________ and
with respect to line and other maintenance, __________________________, or
such other maintenance provider or providers selected by Lessee and
certified by the JAA under JAR Part 145 or 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 Utilisation Rent Period, the tenth day of the month following the
Basic Rent Period in which the relevant utilisation 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
authorised 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.
"Deregistration Power of Attorney" means a power of attorney issued, or as
the context may require, to be issued by Lessee substantially in the form
set forth in Schedule 10.
"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 capitalised 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.
"Engine LLP Reserve" means the aggregate of all amounts received by Lessor
pursuant to paragraph 4.1.1 of Part 1 of Schedule 3 less the aggregate of
all amounts repaid to Lessee from such amounts.
"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
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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 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, organisation 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.
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"Habitual Base" of the Aircraft shall be Oakland, California.
"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, tyres and brakes.
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"Latest Delivery Date" is specified in Schedule 12.
"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
authorised 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, judgements, 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 capitalised 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.
"Other Leases" shall mean any other aircraft or engine lease agreement
(excluding this Lease) from time to time entered into between Lessor,
Owner,
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Beneficial Owner, or any affiliate or subsidiary of the foregoing, as
lessor, and Lessee, as lessee.
"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 licences), 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 licences,
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 realise the
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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 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 capitalised 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 Deregistration Power of Attorney 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 & Whitney" means Xxxxx & Xxxxxxx.
"Security Deposit" means, as the context shall require, the cash
amounts to be paid by Lessee to Lessor, or each letter of credit
delivered by Lessee to Lessor from time to time, 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.
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"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 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 Parties Act" means the Contracts (Rights of Third Parties) Xxx 0000
of Great Britain.
"Third Party Indemnitee" means any Indemnitee or Tax Indemnitee other than
Lessor.
"Utilisation 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, authorisation, exemption,
filing, licence, 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, judgement, 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,
judgement, 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, organisation, 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, reorganisation, 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) an opinion of independent counsel to Lessee addressed to Lessor
covering such matters as Lessor shall reasonably request; and
(iii) written evidence of appropriate corporate action, certified by a
duly authorised representative of Lessee, duly authorising 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.
(b) At least 15 days prior to the Anticipated Delivery Date, Lessee
shall provide Lessor with evidence, satisfactory to Lessor, that
Lessee has entered into an agreement with the Authorised 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) At least 15 days prior to the Anticipated Delivery Date, 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;
(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;
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(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 authorisation from Lessee to 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) a Deregistration Power of Attorney duly executed by Lessee;
(vii) satisfactory evidence that Lessee's agent for service of
process specified in Clause 17.6 has accepted such appointment;
(viii) satisfactory evidence that the Aeronautics Authority has
approved the Maintenance Program;
(ix) any necessary tax approvals or exemptions; and
(x) 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 authorised 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 and any Mortgage
has been duly filed with the Aeronautics Authority and any
other appropriate Government Entities in the State of
Registration or elsewhere;
(v) the written opinion of independent counsel to Lessee, addressed
to Lessor, dated the Delivery Date, confirming that
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its opinion delivered pursuant to subparagraph (a)(ii) above,
remains true and correct;
(vi) 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;
(vii) evidence satisfactory to Lessor that the Aircraft is subject to
the Maintenance Program;
(viii) 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
(ix) 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 authorised representative of Lessor, to the effect that
all appropriate action has been taken to authorise 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 authorised to execute and deliver said certification and
said documents on behalf of Lessor.
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Schedule 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 instalment of Basic Rent will be due and payable on
the first Basic Rent Payment Date.
1.1.3 Each subsequent instalment 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
Utilisation 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 Manufacturer's Total Engine Total Cycles
Location Serial Number Hours
1. Right 665625 43,997 36,819
2. Left 665839 34,366 25,540
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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 Cycles Since
Model Serial Number Hours Since 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.
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].
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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.
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
-68-
APPENDIX III
To Certificate of Acceptance
[Aircraft Model and Type] MSN [ ]
AIRCRAFT RECORDS
See attached pages.
See attached________________ pages.
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APPENDIX IV
To Certificate of Acceptance
[Aircraft Model and Type] MSN [ ]
OPEN/MISCELLANOUS 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 __________________ thousand Dollars ($___,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 _____________________ million Dollars ($___,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;
(iii) include a notice and/or acknowledgement of any assignment relating to
the Insurances in a form acceptable to Lessor;
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(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:
3.1 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);
3.2 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
3.3 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:
4.1 be in accordance with normal industry practice of persons operating
aircraft similar to the Aircraft in similar circumstances;
4.2 provide cover denominated in Dollars or any other currencies which Lessor
may reasonably require in relation to liability insurance;
4.3 operate on a world-wide basis subject to such limitations and exclusions as
Lessor may agree;
4.4 acknowledge that the Insurer is aware of the Lease;
4.5 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;
4.6 provide that upon payment of any loss or claim to or on behalf of any
additional insured:
4.6.1 the Insurers shall to the extent and in respect of such
payment be subrogated to all legal and equitable rights of that
additional insured (other than its rights against any of the other
additional insureds);
4.6.2 the Insurers shall not exercise such rights without the
consent of the relevant Indemnitee, such consent not to be
unreasonably withheld; and
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4.6.3 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;
4.7 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
4.8 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:
5.1 be on the same terms as the original Insurances and will include the
provisions of this Schedule;
5.2 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
5.3 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".
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
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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 aeronautics
authority of the United Kingdom and with applicable Type Certificate Data
Sheets. At delivery the Aircraft will be equipped for and the Aircraft
Records will be in a condition to allow operations under JAR OPS 1.
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. Lessor shall be responsible for the cost of translating any
documentation from English if required by the Aeronautics Authority for
registration of the Aircraft.
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.
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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. At redelivery the Aircraft will be equipped for and the Aircraft
Records will be in a condition to allow operations under JAR OPS 1.
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.
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3. Documentation
Lessee agrees to return the Aircraft with an Export 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 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.
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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 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
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Lessee shall 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 analyse 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 Repair
Manual will be completed in accordance with the
Manufacturer's and the Aeronautics Authority's
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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
6. Specific Conditions
The condition of the Aircraft installed systems upon return to Lessor
will be as follows:
6.1 The Aircraft will be free of fuel, oil, hydraulic and pneumatic
leaks. Any temporary leak repairs will have been replaced by permanent repairs.
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6.2 The interior configuration shall be the same as at the Delivery Date.
6.3 The Aircraft will have all signs and decals clean, secure and legible.
6.4 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.
6.5 Fuselage, windows and doors:
6.5.1 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.
6.5.2 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.
6.5.3 The doors will be free moving, correctly rigged and be
fitted with serviceable seals.
6.6 Wings and stabilizers:
6.6.1 The leading edges will be free from damage, numerous dings
and dents (e.g. no significant hail or other foreign object
damage).
6.6.2 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.
6.7 Horizontal stabilizer and empennage:
6.7.1 The leading edges will be free from damage, numerous dings
and dents (e.g. no significant hail or other foreign object
damage).
6.8 Galleys, lavatories and passenger cabin interior.
6.8.1 The floor coverings in galley area will be clean and in
good condition.
6.8.2 The galleys and lavatories will be clean and in good
condition.
6.8.3 The seats and seat covers will be deep cleaned and in good
condition.
6.8.4 The in-flight entertainment system will be inspected
operationally and functionally tested and repaired as necessary.
6.9 Cockpit:
6.9.1 The fairing panels will be free of stains and cracks, will
be clean, secure and repainted as necessary.
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6.9.2 The floor coverings will be clean and in good condition.
6.9.3 The seats and seat covers will be deep cleaned and in
good condition.
6.10 Cargo compartments:
6.10.1 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.
6.10.2 The cargo nets will be in good condition with no tears
or frayed areas.
6.11 Landing gear:
6.11.1 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
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
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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, initialled, 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 current copy of Lessee's automated Aircraft Records system
procedures and security control approved by the Aeronautic Authority.
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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,
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hours and cycles at each 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
1. Original Export Certificate of Airworthiness
2. Current Export Certificate of Airworthiness (as applicable)
3. Current Certificate of Airworthiness (photocopy; original shall be on board
aircraft)
4. Current Aircraft Registration Certificate (photocopy; original shall be on
board aircraft)
5. De-Registration (as applicable)
6. 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 Director of Quality Control as being a complete and
accurate description of aircraft status at return to Lessor.
1. Aircraft record of flight time and cycles (listing of accumulated hours and
cycles as of specific dates)
2. 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
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time (hours and cycles) of accomplishment, status (terminated, repetitive,
open), and next due.
3. 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.
4. 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.
5. 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.
6. List of Major Alterations - In addition to other pertinent data, this
document shall include description, STC number, and date incorporated.
7. 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.)
8. Check/Inspection History (record of scheduled checks accomplished during
lease term including date and time accomplished)
9. 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.
10. 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, manufacturer part number,
manufacturer serial number, date and aircraft time at installation, current
time since overhaul (hours and cycles), limit, and time remaining.)
11. 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.)
12. 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.)
13. List of Deferred Maintenance Items (If no DMI, XXX or CDL items are "open"
at transfer, a signed statement to that effect is required.)
14. 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
1. Aircraft Flight and Maintenance Log Sheets
2. 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
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required. In the event that check content varies by multiples of the check,
all multiples necessary to constitute a complete cycle are required.
3. 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.
4. Aircraft weight records (including weight change ledger)
AIRWORTHINESS DIRECTIVES, SERVICE BULLETINS AND MODIFICATIONS
1. 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.)
2. 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 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.)
3. 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
1. 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 or JAA Form 1, 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.)
2. Diagram (aka "map") showing general size and location of all external
structural repairs
3. 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 or JAA
Form 1, etc., as necessary to document work done, certification basis, and
approval authority. (Records
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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 or JAA Form One) 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
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 or JAA Form One) 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
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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)
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
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2. Automated Record System procedures and Security Control (as applicable to
Lessee's records keeping system)
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 10, 2002
Claims Limit: the amount of the first deductible under the
hull cover.
Delivery Location:
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:
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.
Insured Value: $__________
Engine Agreed Value: $__________ (each Engine)
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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: [.]
(x) Major component changes: [.]
2. APU
(xi) APU Hours completed during Period: [.]
(xii) Cycles completed during Period: [.]
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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 utilisation (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: [.]
.......................
Authorised 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.
2.
3.
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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 Model Manufacturer's Total APU Hours APU Hours since Total Cycles Cycles since
Serial Numbers 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 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.
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.
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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.
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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EXHIBIT B
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty"), dated as of
_______________, 2002, is made by UNITED BREWERIES (HOLDINGS) LIMITED, an Indian
company with offices at 0 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxx (the
"Guarantor"), in favor of XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a
national banking association with offices at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000 (the "Trustee") and UBICS HOLDING COMPANY, a Delaware
corporation with offices at 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx,
Xxxxxxxx 00000 ("UBICS").
W I T N E S S E T H :
WHEREAS, UBICS, as trustor, and the Trustee are parties to a Trust
Agreement dated as of October 21, 2002 (the "Trust Agreement"), pursuant to
which the Trustee has acquired title to a Boeing 727 aircraft more particularly
described in the Trust Agreement (the "Aircraft"); and
WHEREAS, the Trustee and United Breweries Holdings, Ltd., a North
Carolina corporation and controlled affiliate of the Guarantor (the "Lessee"),
entered into an Aircraft Lease Agreement dated as of ____________, 2002 (the
"Lease") pursuant to which the Trustee has leased the Aircraft to Lessee on a
dry lease basis; and
WHEREAS, as a condition to the Trustee's acquisition of the Aircraft
and its execution and delivery of the Lease, the Trustee and UBICS have required
that Guarantor execute and deliver this Guaranty.
NOW, THEREFORE, in order to induce the Trustee to acquire the
Aircraft and enter into the Lease, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, Guarantor does hereby covenant and agree with the
Trustee and UBICS as follows:
1. Definitions and Construction. Reference is hereby made to the
Lease for a statement of the terms thereof. All terms used in this Guaranty
which are defined in the Lease and not defined herein shall have the respective
meanings ascribed to such terms in the Lease.
2. Guaranty. Guarantor absolutely and unconditionally guarantees and
becomes surety for the full, prompt and punctual payment to the Trustee, as and
when due, and performance of any and all liabilities and obligations of the
Lessee to the Trustee under, or pursuant to the terms of the Lease, whether for
rent, fees, expenses or otherwise (all such liabilities and obligations being
herein called collectively the "Obligations"), together with any and all
reasonable expenses, including without limitation attorneys' fees and
disbursements, which may be incurred by the Trustee in collecting any or all of
the Obligations or enforcing any and all rights against Guarantor under this
Guaranty (herein the "Expenses"). Without limiting Guarantor's obligations
hereunder and notwithstanding any purported termination of this Guaranty, if any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation, dissolution, assignment for the benefit of creditors, or similar
event with respect to the Lessee or any co-guarantor or endorser of all or any
of the Obligations shall occur, and such occurrence shall result in the return
of (or in such event the Trustee shall be requested to return) any payment or
performance of any of the Obligations or Expenses, then (a) without further
notice, demand or other action, the obligations of Guarantor hereunder shall be
reinstated with respect to (i) such payment or performance returned (or
requested to be returned) and (ii) with respect to all further obligations
arising as
a result of such return or request, and (b) Guarantor shall thereupon be liable
therefor, without any obligation on the part of Lessee to contest or resist any
such return.
3. Nature and Term of Guaranty.
(a) The obligations and liability of Guarantor under this
Guaranty shall be independent, absolute, primary and direct, irrevocable and
unconditional, regardless of: any lack of validity or enforceability of the
Lease or any of the Obligations or Expenses; the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all, or substantially all
of the assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other similar
proceedings affecting the Lessee or Guarantor or any co-guarantor or endorser
of, any or all of the Obligations and Expenses or any of the assets of any of
them, or any contest of the validity of this Guaranty in any such proceeding; or
any law, regulation or decree now or hereafter in effect in any jurisdiction
which might in any manner affect any of such terms or provisions or any of the
rights of the Trustee with respect thereto or which might cause or permit the
Lessee or any co-guarantor or endorser of the Obligations and Expenses to invoke
any defense to, or any alteration in the time, amount or manner of payment of
any or all of the Obligations and Expenses or performance of this Guaranty.
(b) This Guaranty is a continuing guaranty and shall remain in
full force and effect until the Obligations, the Expenses and any and all other
amounts payable hereunder shall have been paid in full and the period during
which any payment by the Lessee or Guarantor is or may be subject to rescission,
avoidance or refund under the United States Bankruptcy Code (or any similar
state statute) shall have expired.
4. Payment in Accordance with Lease.
(a) Guarantor hereby guaranties that the Obligations and
Expenses shall be paid and performed strictly in accordance with the terms of
the Lease.
(b) If any Obligation or Expense is not paid or performed by the
Lessee punctually, subject to any applicable grace period, Guarantor will, upon
the Trustee's demand, immediately pay or perform such Obligation or Expense or
cause the same to be paid or performed. Guarantor will pay to the Trustee, upon
demand, all costs and expenses, including the Expenses, which may be incurred by
the Trustee in the collection or enforcement of Guarantor's obligations under
this Guaranty.
5. Rights and Remedies of the Trustee. The Trustee, in its sole
discretion, may proceed to exercise any right or remedy which it may have under
this Guaranty against Guarantor without first pursuing or exhausting any rights
or remedies which it may have against the Lessee or against any other person or
entity, and may proceed to exercise any right or remedy which it may have under
this Guaranty without regard to any actions or omissions of any other person or
entity, in any manner or order, without any obligation to marshal in favor of
Guarantor or other persons or entities and without releasing any of Guarantor's
obligations hereunder with respect to any unpaid Obligations and Expenses. No
remedy herein conferred upon or reserved to the Trustee is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
under this Guaranty or now or hereafter existing at law or in equity.
6. Actions by the Trustee Not Affecting Guaranty. The Trustee may,
at any time or from time to time, in such manner and upon such terms as it may
deem proper, extend or change the time of payment or the manner or place of
payment of, or otherwise modify or waive any of the terms of, or
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release, exchange, settle or compromise any or all of the Obligations and
Expenses, or subordinate payment of the same, or any part thereof, to the
payment of any other liabilities or obligations of the Lessee which may at any
time be due or owing to the Trustee or anyone, or elect not to enforce any of
the Trustee's rights with respect to any or all of the Obligations and Expenses
or any collateral security therefor, all without notice to, or further assent of
Guarantor and without releasing or affecting Guarantor's obligations hereunder.
7. Payments Under Guaranty. All payments by Guarantor
hereunder shall be made in immediately available funds and in lawful money of
the United States of America to the Trustee at its office at 00 Xxxxx Xxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 Attention: Corporate Trust Department MAC:
U1254-031 or at such other location as the Trustee shall specify by notice to
Guarantor. All payments by Guarantor under this Guaranty shall be made by
Guarantor solely from Guarantor's own funds and not from any funds of the
Lessee.
8. Modifications and Waivers. No failure or delay on the part
of the Trustee in exercising any power or right under this Guaranty shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power preclude any other or further exercise thereof or the
exercise of any other right or power under this Guaranty. No modification or
waiver of any provision of this Guaranty nor consent to any departure therefrom
shall, in any event, be effective unless the same is in writing signed by the
Trustee and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to, or demand on
Guarantor, in any case, shall entitle Guarantor to any other or further notice
or demand in similar or other circumstances.
9. Guarantor's Waiver. Guarantor hereby waives promptness,
diligence, presentment, demand, notice of acceptance and any other notice with
respect to any of the Obligations, the Expenses and this Guaranty. Guarantor
further irrevocably and unconditionally (i) agrees that if the Trustee or UBICS
brings legal proceedings against it or its assets in relation to this Guaranty,
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 (ii) waives any such right
of immunity which it or its assets now has or may in the future acquire.
10. Waiver of Subrogation. Guarantor hereby waives (a) any
right which Guarantor may now have or hereafter acquire by way of subrogation
under this Guaranty, by law or otherwise or by way of reimbursement, indemnity,
exoneration, or contribution; or (b) any right to assert defenses as the primary
obligor of the Obligations; or (c) any other claim which it now has or may
hereafter acquire against the Lessee or any other person or against or with
respect to the Lessee's property (including, without limitation, any property
which has been pledged to secure the Obligations); or (d) any right to enforce
any remedy which the Trustee may now have or hereafter acquire against the
Lessee or any other guarantor, maker or endorser; in any case, whether any of
the foregoing claims, remedies and rights may arise in equity, under contract,
by payment, statute, common law or otherwise. If in violation of the foregoing
any amount shall be paid to Guarantor on account of any such rights at any time,
such amount shall be held in trust for the benefit of the Trustee and shall
forthwith be paid to the Trustee to be credited and applied against the
Obligations and Expenses, whether matured or unmatured, in accordance with the
terms of the Lease.
11. No Setoff by Guarantor. No setoff, counterclaim,
deduction, reduction, or diminution of any obligation, or any defense of any
kind or nature which Guarantor has or may have against the Lessee, the Trustee
or UBICS shall be available hereunder to Guarantor.
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12. Representations and Warranties. Guarantor hereby
represents and warrants as follows:
(a) Guarantor is an Indian company duly organized,
validly existing and in good standing under the laws of India, and has full
right, power and authority to enter into, and perform this Guaranty.
(b) The execution, delivery and performance by Guarantor
of this Guaranty has been duly authorized by all necessary actions, and do not
and will not contravene any law or any contract binding on, or affecting
Guarantor.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by Guarantor of this
Guaranty.
(d) This Guaranty is a legal, valid and binding
obligation of Guarantor enforceable against the Guarantor in accordance with its
terms.
(e) There is no pending or threatened action or
proceeding affecting Guarantor before any court, governmental agency or
arbitrator which may materially adversely affect the financial condition of
Guarantor.
(f) Guarantor is subject to civil commercial law with
respect to its obligations under the Guaranty and neither Guarantor nor any of
its assets is entitled to any right of immunity and the entry into and
performance of the Guaranty by Guarantor constitutes private and commercial
acts.
13. Covenant. Guarantor covenants and agrees that, so long
as any part of the Obligations and Expenses shall remain unpaid, Guarantor shall
maintain its corporate existence and shall not dissolve or otherwise dispose of
all, or substantially all of its assets.
14. Appointment of Agent for Service of Process. If for any
reason Guarantor not be subject to service of process in the State of Delaware
during the term of this Guaranty, Guarantor hereby appoints, without power of
revocation, Xxxx X. Tauber, Coblentz, Patch, Xxxxx & Bass LLP, 000 Xxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, XX 00000 as the agent of Guarantor upon whom
may be served all process, pleadings, notices or other documents which may be
served upon Guarantor under this Guaranty.
15. Addresses for Notices. All requests, consents, notices
and other communications required or permitted hereunder or in connection
herewith shall be deemed satisfactorily given if in writing and delivered
personally or by registered or certified mail, postage pre-paid, by reliable
overnight courier, or by telecopier to the parties at their respective addresses
set forth below or at such other address as may be given by any party to the
other in writing in accordance with this Section 15:
If to Guarantor:
United Breweries (Holdings) Limited
0 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx 000000
Xxxxx
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If to the Lessee:
United Breweries Holdings, Ltd.
000 X. XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
and
United Breweries Holdings, Ltd.
0 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
If to the Trustee:
Xxxxx Fargo Bank Northwest, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Attn: Corporate Trust Department MA: U1254-031
If to UBICS:
UBICS Holding Company
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
With a copy to
UBICS, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxx 000, Xxxxxxxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
16. Continuing Guaranty; Transfer of Note. This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect until the
Obligations, the Expenses and all other amounts payable under this Guaranty
shall have been paid in full and the period during which any payment by the
Lessee or Guarantor is or may be subject to avoidance or refund under the United
States Bankruptcy Code (or any similar statute) shall have expired, (ii) be
binding upon Guarantor and the successors and assigns of Guarantor, and (iii)
inure to the benefit of, and be enforceable by the Trustee and UBICS and their
respective successors, transferees and assigns.
17. Entire Agreement. This Guaranty constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
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18. Severability. The invalidity or unenforceability of any one or
more portions of this Guaranty shall not affect the validity or enforceability
of the remaining portions of this Guaranty.
19. Governing Law. This Guaranty shall be deemed to be a contract
under the laws of the State of Delaware, without reference to conflicts-of-laws
principles and for all purposes shall be governed by and construed in accordance
with such laws.
20. Jurisdiction, Venue, Trial By Jury. Guarantor hereby (a) agrees
that any litigation, action or proceeding arising out of or relating to this
Guaranty shall be instituted in the courts of the State of Delaware or the
United States of America; (b) waives any objection which Guarantor might have
now or hereafter to the venue in such courts of any such litigation, action or
proceeding; (c) irrevocably submits to the venue and exclusive jurisdiction of
such courts in any such litigation, action or proceeding; (d) irrevocably
consents to personal jurisdiction in such courts and further agrees that service
of process upon Guarantor may be effected by certified mail to the address
provided in Section 15 of this Guaranty or by any other means permitted by law;
(e) waives any claim or defense of inconvenient forum; and (f) waives any right
to trial by jury. The foregoing shall not preclude the Trustee or UBICS from
seeking to enforce this Guaranty in any other court of competent jurisdiction.
IN WITNESS WHEREOF, for good and valuable consideration and
intending to be legally bound hereby, this Guaranty has been executed by
Guarantor as of the date hereof.
ATTEST: UNITED BREWERIES (HOLDINGS) LIMITED
By:__________________________ By:_________________________________
Name: Dr. Xxxxx Xxxxxx
Title: Chairman
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