SYNTHETIC AIRCRAFT LEASE
(S/N 258753)
DATED AS OF DECEMBER, 2005
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BETWEEN
SUNTRUST LEASING CORPORATION
AS LESSOR
AND
POMEROY IT SOLUTIONS SALES COMPANY, INC. AND
XXXXXXX SELECT INTEGRATION SOLUTIONS, INC.
AS CO-LESSEES
THIS IS COUNTERPART NO. __ OF A TOTAL OF 4 COUNTERPARTS. ONLY COUNTERPART NO. 1
SHALL BE CONSIDERED CHATTEL PAPER FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE
AND A SECURITY INTEREST MAY BE PERFECTED ONLY BY POSSESSION OF COUNTERPART NO.
1.
SUNTRUST LEASING CORPORATION
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TABLE OF CONTENTS
PAGE
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Section 1. Lease of Aircraft . . . . . . . . . . . . . . . . . . 1
Section 2. Closing Conditions . . . . . . . . . . . . . . . . . 1
Section 3. Term and Rent . . . . . . . . . . . . . . . . . . . . 1
Section 4. Title; Quiet Enjoyment . . . . . . . . . . . . . . . . 2
Section 5. Disclaimer and Assignment of Warranties . . . . . . . 2
Section 6. Representations, Warranties and Agreements of Lessee . 2
Section 7. Net Lease . . . . . . . . . . . . . . . . . . . . . . 3
Section 8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9. Compliance, Use and Maintenance . . . . . . . . . . . 4
Section 10. Loss or Damage . . . . . . . . . . . . . . . . . . . 6
Section 11. Indemnification . . . . . . . . . . . . . . . . . . . 8
Section 12. Assignment and Sublease . . . . . . . . . . . . . . . 8
Section 13. Events Of Default and Remedies . . . . . . . . . . . 10
Section 14. Notices, Reports, Further Assurances and Inspections . 13
Section 15. Transaction Expenses. . . . . . . . . . . . . . . . . 14
Section 16. Miscellaneous . . . . . . . . . . . . . . . . . . . . 14
Section 17. Truth In Leasing . . . . . . . . . . . . . . . . . . 16
EXHIBIT A - Definitions
Insurance Addendum
Closing Terms Addendum
Option Addendum
Return Addendum
Lease Supplement
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AIRCRAFT LEASE (S/N 258753)
THIS AIRCRAFT LEASE (S/N 258753) (together with all Supplements, Exhibits,
Riders and Addenda hereto, the "Lease") is made and entered into as of December
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, 2005, by and between SUNTRUST LEASING CORPORATION, a Virginia corporation
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("Lessor"), and XXXXXXX IT SOLUTIONS SALES COMPANY, INC. a Delaware corporation
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("Sales"), and XXXXXXX SELECT INTEGRATION SOLUTIONS, INC., a Delaware
corporation ("Integration"), (Sales and Integration are jointly and severally
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liable hereunder as co-obligors, as more particularly provided in Section 17 of
this Lease, and are each referred to individually as a "Lessee" and
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collectively, the "Lessees"). Certain capitalized terms as used in this Lease
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are defined in Exhibit A hereto, and such definitions are incorporated herein
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and made a part hereof as though set forth in full herein.
SECTION 1. LEASE OF AIRCRAFT. Subject to the terms and conditions provided in
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this Lease, Lessor agrees to lease the Aircraft to Lessees, and Lessees agree to
lease the Aircraft from Lessor. Lessor hereby appoints Lessees as Lessor's
agent for the sole and limited purpose of accepting delivery of the Aircraft
from the Supplier. The execution by Lessees of the Lease Supplement will
evidence that the Aircraft is leased under, and is subject to all of the terms,
provisions and conditions of, this Lease and shall constitute each Lessee's
unconditional and irrevocable acceptance of the Aircraft for all purposes of
this Lease.
SECTION 2. CLOSING CONDITIONS. Lessor's obligations to purchase the Aircraft
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from the Supplier and to lease the Aircraft to Lessees shall be conditioned upon
the satisfaction of all of the following conditions:
(a) Lessor receives the Required Documents and Purchase Documents, in
form and substance satisfactory to Lessor, at least one (1) Business Day prior
to the anticipated closing date;
(b) all representations and warranties in this Lease, including the
Lease Supplement, are true and correct;
(c) Lessees accept the Aircraft from Supplier on Lessor's behalf, under
the Purchase Documents and under this Lease, on the Acceptance Date;
(d) FAA Counsel confirms to Lessor that (A) it has received in escrow
all of the FAA Documents, and (B) upon filing the FAA Documents, (1) the
Airframe will be registered in the name of Lessees, (2) the Aircraft (including
the Airframe and Engines) will be free and clear of all Liens, other than this
Lease, and (3) this Lease creates a duly perfected security interest in the
Aircraft in favor of Lessor; and
(e) each Lessee authorizes (A) the release from escrow of all Required
Documents and FAA Documents held by Lessor or its FAA Counsel or other counsel,
and (B) Lessor or FAA Counsel to file the FAA Documents and any other filings at
the FAA and any other applicable filing offices; provided, such authorization
shall be deemed to have been automatically made by Lessees (whether or not so
confirmed) immediately upon the confirmed receipt by each Lessee, Seller or any
other Person (as directed in the pay proceeds letter executed by either or both
of the Lessees on or before the date hereof) of the funds constituting the
Lessor's Cost.
Each Lessee acknowledges and agrees that (i) any advance of funds by Lessor
prior to the satisfaction of all of the preceding conditions shall not
constitute a waiver by Lessor of any such condition, and (ii) each Lessee shall
be irrevocably obligated to satisfy all of such conditions prior to the FAA
filing deadline on the day on which such funds are received.
SECTION 3. TERM AND RENT.
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(a) Term. The lease of the Aircraft to Lessees shall commence on the
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Acceptance Date and end on the Expiration Date, unless extended or earlier
terminated or cancelled pursuant to this Lease.
(b) Rent. Lessees shall pay to Lessor the following daily and periodic
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rent amounts ("Basic Rent") (i) on the First Basic Rent Date, an amount equal to
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the Lessor's Cost multiplied by the Daily Rent Percentage, for each day starting
with the Acceptance Date, to but excluding the Rent Commencement Date ("Daily
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Rent"), and (ii) on the First Basic Rent Date and on each Basic Rent Date
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following that date, an amount equal to the Lessor's Cost multiplied by the
applicable Basic Rent Percentage set forth on Schedule No. 2A for the
corresponding Basic Rent
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number corresponding to such Basic Rent Date. Lessees shall also pay the
following amounts as "Supplemental Rent" (together with all Basic Rent, the
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"Rent"): (i) as and when due, any other amount that any Lessee is obligated to
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pay under this Lease to Lessor or others (including, Casualty Value and/or any
amounts due pursuant to any Addendum), (ii) interest accruing at the Late
Payment Rate on any Rent not paid when due, until paid, and (iii) the
Administrative Charge with respect to any Rent not paid when due (as
compensation to Lessor for the expenses attributable to any Lessee's failure to
pay, and not as a penalty). Lessees' obligation to pay Supplemental Rent shall
survive the expiration, cancellation or other termination of this Lease. All
payments of Rent shall be made to Lessor, in United States Dollars ("U.S.
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Dollars"), in immediately available funds on the date payable hereunder at the
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address designated by Lessor for payment, or by wire transfer to an account
specified by Lessor, or at such other address or to such other Person as Lessor
may direct by notice in writing to Lessees.
SECTION 4. TITLE; QUIET ENJOYMENT. Each Lessee acknowledges and agrees that
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upon Lessor's acquiring the Aircraft on the Acceptance Date, and Lessees' and
Lessor's execution and delivery of the Lease Supplement, Lessor shall be deemed
to have a validly perfected, first priority security interest against the
Aircraft, and each Lessee's right, title or interest in or to the Aircraft shall
at all times be subject to the terms of this Lease, unless and until it is
terminated in accordance with the express provisions hereof. Lessor warrants
that during the Term, so long as no Event of Default has occurred, Lessees'
possession and use of the Aircraft shall not be interfered with by Lessor or
anyone rightfully claiming an interest through Lessor. The preceding warranty
is in lieu of all other warranties by Lessor, whether written, oral or implied,
with respect to this Lease or the Aircraft, and without limiting the provisions
of Section 7, any actual or purported breach of this warranty shall not give
rise to any Abatement, and Lessor shall not be deemed to have modified in any
respect the obligations of any Lessee pursuant to Section 7, which obligations
are and shall remain absolute, irrevocable and unconditional under all events
and circumstances whatsoever.
SECTION 5. DISCLAIMER AND ASSIGNMENT OF WARRANTIES.
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(a) LESSOR SHALL NOT BE DEEMED TO HAVE MADE, AND HEREBY DISCLAIMS, ANY
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE AIRCRAFT,
INCLUDING ANY ENGINE, PART OR RECORD, OR ANY MATTER WHATSOEVER, INCLUDING, THE
AIRCRAFT'S DESIGN, CONDITION, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE, TITLE, ABSENCE OF ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR
LATENT DEFECT (WHETHER OR NOT DISCOVERABLE BY ANY LESSEE), COMPLIANCE OF THE
AIRCRAFT WITH ANY APPLICABLE LAW, CONFORMITY OF THE AIRCRAFT TO THE PROVISIONS
AND SPECIFICATIONS OF ANY PURCHASE DOCUMENT OR TO THE DESCRIPTION SET FORTH IN
THIS LEASE, OR ANY INTERFERENCE OR INFRINGEMENT (EXCEPT AS EXPRESSLY PROVIDED IN
SECTION 4), OR ARISING FROM ANY DEFECTS OR FROM ANY COURSE OF DEALING, COURSE OF
PERFORMANCE, OR USAGE OF TRADE, NOR SHALL LESSOR BE LIABLE, FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY
IN TORT; AND EACH LESSEE HEREBY WAIVES ANY CLAIMS ARISING OUT OF ANY OF THE
FOREGOING. Without limiting the foregoing, Lessor will not be responsible to
any Lessee or any other Person with respect to, and each Lessee agrees to bear
sole responsibility for, any risk or other matter that is the subject of
Lessor's disclaimer.
(b) So long as no Event of Default has occurred, Lessees may exercise
Lessor's rights, if any, under any warranty of Manufacturer or Supplier with
respect to the Aircraft. Lessees' exercise of such rights shall be at its sole
cost and risk, shall not result in any prejudice to Lessor, and may be exercised
only during the Term. Lessees shall not attempt to enforce any such warranty by
legal proceeding without Lessor's prior written approval.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEES. Each Lessee
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represents, warrants, and agrees (for itself and as to the other Lessee) as
follows:
(a) Due Organization, Name, Organizational Number, Etc. Each Lessee
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is, and will remain, a corporation duly organized and existing in good standing
under the laws of the State of Delaware and is duly qualified to do business
wherever necessary to perform its obligations under this Lease, including the
jurisdiction of the Primary Hangar Location. Each Lessee's exact legal name is
as shown in the caption of this Lease; each Lessee's organizational
identification number and the address of such Lessee's mail, chief executive
offices and principal place of business are all as respectively set forth in
Schedule No. 2. Each Lessee agrees that it shall not change its name,
organizational number or any such address without prior written notice to
Lessor. Within the previous six (6) years
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neither Lessee has changed its name, done business under any other name, changed
its chief place of business from its present location, or merged or been the
surviving entity of any merger, except as disclosed to Lessor in writing.
(b) Due Authorization; No Violation. This Lease has been duly
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authorized by all necessary action on the part of each Lessee consistent with
its respective form of organization, does not require the approval of, or giving
notice to, any governmental authority and does not contravene or constitute a
default under any Applicable Law, certificate or articles of incorporation or
organization or by-laws or partnership certificate or agreement, or any
agreement, indenture, or other instrument to which such Lessee is a party or by
which it may be bound.
(c) Enforceability. This Lease has been duly executed and delivered by
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authorized representatives of each Lessee, respectively, and constitutes a
legal, valid and binding obligation of each Lessee enforceable against such
Lessee in accordance with its terms, except to the extent that the enforcement
of remedies may be limited under applicable bankruptcy and insolvency laws, and
the equitable discretion of any court of competent jurisdiction.
(d) Litigation. There are no proceedings pending or, so far as the
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officers, managers, or members of any Lessee know, threatened against or
affecting any Lessee or any of its property before any court, administrative
officer or administrative agency that could impair Lessor's title to the
Aircraft, or that, if decided adversely, could materially affect the financial
condition or operations of such Lessee or the ability of such Lessee to perform
its obligations under this Lease. Neither Lessee has pending claims or any
knowledge of any facts upon which a future claim may be based, against any prior
owner, the Manufacturer or Supplier of the Aircraft, or of any Engine or part
thereof for breach of warranty or otherwise.
(e) Good Title. At all times during the Term, the records of the FAA
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Aircraft Registry shall reflect that Lessees are the registered owner of the
Airframe and that Lessor has a duly perfected, first priority security interest
in the Aircraft.
(f) No Competing Lienholders. No Lien exists, or will hereafter
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attach, against the Aircraft, the Rent or any other rights under this Lease, or
any Collateral, or any interest of either Lessee or Lessor therein (other than
any Lessor's Liens), pursuant to any mortgage, conditional sale or security
agreement or other agreement to which either Lessee or any Person claiming
through such Lessee is a party, nor will any of the transactions contemplated
under this Lease constitute a breach of any provision of any such agreement.
SECTION 7. NET LEASE. This Lease is a net lease, and each Lessee acknowledges
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and agrees that (a) Lessees' joint and several obligation to pay, and Lessor's
right to receive, all Rent in accordance with this Lease shall be absolute,
irrevocable, independent and unconditional and shall not be subject to (and each
Lessee hereby waives and agrees not to assert) any abatement, reduction, setoff,
defense, counterclaim or recoupment (collectively, "Abatements") for any reason
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or under any circumstance whatsoever as to any such Rent, and without limiting
the foregoing, each Lessee also waives any and all existing and future claims to
any Abatement against or as to such Rent, (b) it will pay all such Rent
regardless of any Abatement, and (c) this Lease, and Lessees' joint and several
payment and other obligations hereunder, are non-cancelable and non-terminable
by any Lessee (except as expressly provided in any Addendum).
SECTION 8. TAXES.
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(a) Indemnity. Lessees agree to: (1) (i) if permitted by law, file in
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Lessees' own names or on Lessor's behalf, directly with all appropriate taxing
authorities all registrations, declarations, returns, inventories and other
documentation with respect to any personal property taxes (or any other taxes in
the nature of or imposed in lieu of property taxes) due or to become due with
respect to the Aircraft, and if not so permitted by law, to promptly notify
Lessor and provide it with all information required in order for Lessor to
timely file all such declarations, returns, inventories, or other documentation,
and (ii) pay on or before the date when due all such taxes assessed, billed or
otherwise payable with respect to the Aircraft directly to the appropriate
taxing authorities, (2) (i) pay when due, and (ii) defend and indemnify Lessor
on a net after-tax basis against liability for all license and/or registration
fees, assessments, and sales, use, property, excise, privilege, value added and
other taxes (including any related interest or penalties) or other charges or
fees now or hereafter imposed by any governmental body or agency upon the
Aircraft or with respect to landing, airport use, manufacturing, ordering,
shipment, purchase, ownership, delivery, installation, leasing (pursuant to this
Lease, any sublease, or otherwise), chartering, operation, possession, use,
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return, or other disposition thereof or the Rent or other rentals hereunder
(other than taxes on or measured solely by the net income of Lessor), and (3)
defend and indemnify Lessor against any penalties, charges, interest or costs
imposed with respect to any items referred to in (1) and (2) above (the items
referred to in (1), (2), and (3) above being referred to herein as
"Impositions"). Any Impositions that are not paid when due and which are paid
by Lessor shall, at Lessor's option, become immediately due from Lessees to
Lessor. Notwithstanding the foregoing, each Lessee shall pay, indemnify Lessor
for, and hold Lessor harmless on a net after-tax basis from and against, any
Imposition on or measured by the net income of Lessor imposed against Lessor by
any local or foreign government or other local or foreign taxing authority if
and to the extent that Lessor would not have incurred such Imposition but for
the operation or presence of the Aircraft within the jurisdiction imposing it.
(b) Survival. Lessees' obligations under this Section 8 shall survive
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any expiration, cancellation or other termination of this Lease.
(c) Tax Benefits. For income tax purposes, Lessor will treat Lessees
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as the owner of the Aircraft; however, Lessor shall in no event be liable to any
Lessee if any Lessee fails to secure any of the tax benefits available to such
Lessee as co-owner of the Aircraft for such income tax purposes.
SECTION 9. COMPLIANCE, USE AND MAINTENANCE.
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(a) Compliance and Use. On the Acceptance Date, and at all times
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thereafter until the Aircraft is returned to Lessor pursuant to this Lease,
Lessees shall cause the Aircraft to be and remain duly registered in Lessees'
names at the FAA, in accordance with the Transportation Code. Each Lessee
agrees to comply with all Applicable Law related to this Lease and/or the
Aircraft, including its operation, maintenance, airworthiness, safety and
security. Each Lessee will operate the Aircraft under and in compliance with
Part 91 of the FARs, for purposes that are incidental to such Lessee's business,
and in a manner that is consistent with the transactions hereunder being deemed
commercial (and not consumer) transactions under Applicable Law. Unless
otherwise expressly permitted hereunder, Lessees shall not operate or permit the
Aircraft to be operated for air taxi operations or otherwise under Part 135 of
the FARs. The Aircraft shall be used solely in a passenger configuration for
which Lessees are duly authorized by the FAA. Lessees will not operate or
permit the Aircraft to be operated in any manner at any time or in any
geographic area when or where insurance required by the provisions hereof shall
not be in effect. Unless otherwise expressly permitted by Section 12 of this
Lease, Lessees shall (i) retain operational control of the Aircraft at all times
from the Acceptance Date until returning the Aircraft in accordance with this
Lease; and (ii) shall base the Aircraft at the Primary Hangar Location set forth
in Schedule No. 2; provided, however, that the Primary Hangar Location may be
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changed to another location within the Continental United States upon at least
thirty (30) days' prior written notice to Lessor. The Aircraft will, at all
times be operated by duly qualified pilots having (a) the required FAA type
rating for the Aircraft, (b) the required FAA pilot certificates and ratings,
(c) a valid FAA Medical Certificate, (d) satisfied all security requirements
imposed by any governmental authority having jurisdiction and (e) met any and
all requirements established and specified by (i) the FAA, the Transportation
Security Administration and any other applicable governmental authority and (ii)
the insurance policies required under this Lease.
(b) Use Outside of U.S. The Aircraft shall not be operated, used or
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located outside the Continental U.S. except that it may be flown temporarily to
any country in the world for any purpose expressly permitted under this Lease.
Notwithstanding the foregoing, the Aircraft shall not be flown, operated, used
or located in, to or over any such country or area (temporarily or otherwise),
(i) which is excluded from the required insurance coverages, or would otherwise
cause any Lessee to be in breach of the insurance requirements or other
provisions of this Lease, (ii) with which the U.S. does not maintain favorable
diplomatic relations, (iii) in any area of recognized or threatened hostilities,
or (iv) in violation of any Applicable Law, including any U.S. law or United
Nations Security Council Directive.
(c) Maintenance and Operation. During the Term, Lessees shall (i)
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maintain, inspect, service, repair, overhaul and test the Airframe and each
Engine and any APU in accordance with all Maintenance Requirements, all
Applicable Law, and, if more stringent, prevailing industry standards, and (ii)
maintain (in the English language) all Records in accordance with the Applicable
Law and all Maintenance Requirements, and as required under this Lease. All
maintenance procedures shall be performed in accordance with all Applicable Law
and by properly trained, licensed, and certified maintenance sources and
maintenance personnel utilizing replacement parts approved by the FAA and the
Manufacturer, so as to keep the Airframe and each Engine, any APU and each Part
in good operating
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condition, ordinary wear and tear, from proper use alone, excepted, and to
enable the airworthiness certificate for the Aircraft to be continually
maintained. Without limiting the foregoing, Lessees shall comply with all
mandatory service bulletins and airworthiness directives by causing compliance
to such bulletins and/or directives to be completed through corrective
modification in lieu of operating manual restrictions.
(d) Loaner Engines. In the event any Engine is damaged, being
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inspected, repaired or overhauled and provided no Event of Default or Default
has occurred and is continuing, any Lessee, at its option, may temporarily
substitute another engine of the same make and model as the Engine being
repaired or overhauled (any such substitute engine being hereinafter referred to
as a "Loaner Engine") during the period of such repair or overhaul, and provided
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further (i) installation of the Loaner Engine is performed by a maintenance
facility certified by the FAA and manufacturer with respect to an aircraft of
this type, (ii) the Loaner Engine is removed and the repaired or overhauled
original Engine is reinstalled on the Airframe promptly upon completion of the
repair or overhaul but in no event later than the earlier of ninety (90) days
after removal, or the expiration, cancellation or earlier termination of this
Lease, and (iii) the Loaner Engine is free and clear of any Lien that might
impair Lessor's rights or interests in the Aircraft and is maintained in
accordance herewith.
(e) Additions, Alterations and Replacement Parts. Lessees may install
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on the Aircraft any additional accessory, device or equipment ("Additions") but
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only if such Additions (i) are ancillary to the Aircraft; (ii) are not required
to render the Aircraft complete for its intended use by Lessees; (iii) will not
impair the originally intended function or use of the Aircraft or diminish the
value of the same; and (iv) can be readily removed without causing material
damage to the Aircraft. Each Addition not removed prior to the return of the
Aircraft to Lessor shall, upon such return, immediately become a part of the
Aircraft for all purposes of this Lease, and subject to all of Lessor's rights
hereunder without any payment by, or any cost or expense to, Lessor. Lessees
shall make any alteration or modification ("Alterations") to the Aircraft that
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may at any time during the Term be required to comply with airworthiness
directives or other Applicable Law. Lessees will promptly replace all Parts
that become worn out, lost, stolen, taken, destroyed, damaged beyond repair or
permanently rendered or declared unfit for use for any reason whatsoever.
Lessees shall repair all damage to the Aircraft resulting from the installation
and removal of Additions and/or Alterations so as to restore the Aircraft to its
condition prior to installation. Alterations and/or replacement parts shall be
deemed accessions, and shall immediately become a part of the Aircraft for all
purposes of this Lease, and subject to all of Lessor's rights hereunder without
any payment by or any cost or expense to Lessor. Except as permitted under this
Section 9(e), Lessees will not modify the Aircraft (including any change in
configuration) or affix or remove any accessory to the Aircraft leased
hereunder.
(f) Aircraft Marking. Lessees agree to (i) prominently display on the
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Aircraft the FAA Registration number, specified in Schedule No. 1 or such other
"N" number as has been approved by and exclusively reserved to Lessor in its
name and duly recorded with the FAA; and (ii) notify Lessor in writing thirty
(30) days prior to making any change in the appearance or coloring of the
Aircraft.
(g) Security. Without limiting any Lessee's indemnities and other
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agreements under this Lease, Lessees hereby: (i) expressly assume sole
responsibility for the determination and implementation of all security measures
and systems necessary or appropriate for the proper protection of the Aircraft
(whether on the ground or in flight) against theft, vandalism, hijacking,
destruction, bombing, terrorism or similar acts directly or indirectly affecting
the Aircraft, any part thereof, or any persons who (whether or not on board the
Aircraft) may sustain any injury or damage as a result of any such acts, and
(ii) agree to provide to Lessor promptly upon request with evidence of Lessees'
compliance with its obligations under this Section 9(g) (but in no event shall
Lessor, in its capacity as lessor, owner or otherwise, be deemed to have any
duty with respect to any security measures imposed by this Lease or Applicable
Law, whether or not complied with by Lessees, as the full and exclusive
assumption of responsibility by Lessees of such responsibility is of the essence
of this Lease, and a condition to Lessor's participation in the transactions
contemplated herein).
SECTION 10. LOSS OR DAMAGE.
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(a) Event of Loss with Respect to the Aircraft. Upon the occurrence of
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any Event of Loss with respect to the Airframe and/or Aircraft, Lessees shall
notify Lessor within five (5) days of the date thereof. On (i) the next Basic
Rent Date following the date of such notice, or (ii) if such Event of Loss
occurs after the Last Basic Rent Date, within thirty (30) days after such notice
(any such date described in clause (i) or (ii) above, the "Casualty Payment
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Date"),
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Lessees shall pay to Lessor the Basic Rent payable as of the Casualty Payment
Date, any other Rent then due, plus the Casualty Value of the Aircraft
determined as of the Casualty Payment Date (but if the Casualty Payment Date is
after the last Basic Rent Date, the Casualty Value for such date shall be the
amount equal to the Lessor's Cost multiplied by the applicable percentage set
forth on Schedule No. 3 for the last Basic Rent Date or the corresponding Basic
Rent number), together with interest at the Late Payment Rate for the period (if
any) from the Casualty Payment Date through the date of payment. Upon making
the applicable payment required hereby, Lessees' obligation to pay further Basic
Rent for the Aircraft subsequent to such payment shall cease, but each Lessee
shall remain liable for, and pay as and when due, all Supplemental Rent. If
recoverable, as between Lessor and Lessees, Lessees shall be entitled to recover
possession of the Aircraft and to any salvage value in excess of the Casualty
Value paid to Lessor, but subject to the requirements of any third party
insurance carrier in order to settle an insurance claim. Lessor shall be
entitled to receive and retain all amounts payable by the Manufacturer with
respect to a Return to Manufacturer or by any governmental authority with
respect to any Requisition of Use, as the case may be, except that such amounts
received in good collected funds shall be applied against Lessees' obligation to
pay Casualty Value or, so long as no Event of Default has occurred, remitted to
either or both of the Lessees (up to the amount of the Casualty Value paid by
Lessees to Lessor in good and indefeasible funds). Lessor shall be under no
duty to Lessees to pursue any claim against any Person in connection with an
Event of Loss.
(b) Event of Loss with Respect to an Engine or an APU. Upon an Event
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of Loss with respect to any Engine or any APU, but not the Airframe on which it
was installed, Lessees shall (i) give Lessor prompt written notice thereof, (ii)
by the earlier of the ninetieth (90th) day after the occurrence of such Event of
Loss or the receipt of the applicable insurance proceeds, if any, cause to be
subject to the terms of this Lease for all purposes hereof an engine or APU (and
thereby duly convey to Lessor a perfected, first priority security interest in
and against such engine or APU), as applicable, of the same make and model
number as the Engine or any APU suffering the Event of Loss, and (iii) comply
with the other provisions of this Section 10(b). Such replacement engine or any
APU, as applicable, shall be free and clear of all Liens, have a value, utility,
and useful life at least equal to, and be in as good an operating condition as,
the Engine or any APU suffering the Event of Loss, assuming such Engine or any
APU was in the condition and repair required by the terms hereof immediately
prior to the occurrence of such Event of Loss. Lessees, at their own cost and
expense, shall furnish to Lessor such documents to evidence such conveyance, as
Lessor shall request. Upon full compliance by Lessees with the terms of this
paragraph, Lessor will transfer to Lessees all of Lessor's right, title and
interest, if any, in and to such Engine or any APU, which transfer shall be
"AS-IS, WHERE-IS" and release Lessor's security interest in such Engine or APU.
Each such replacement engine or APU, as applicable, shall, after such conveyance
to Lessor, be deemed an "Engine" or "APU", as applicable, as defined herein and
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shall be deemed part of the same Aircraft as was the Engine or any APU replaced
thereby.
(c) Risk of Loss. Lessees shall bear the risk of loss, theft,
--------------
confiscation, taking, unavailability, damage or partial destruction of the
Aircraft and shall not be released from its obligations hereunder in the event
of any damage or Event of Loss to the Aircraft or any part thereof. Without
limiting any other provision hereof, Lessees shall repair all damage to the
Aircraft from any and all causes, including as provided in Sections 9(c) and
(e), and shall provide written notice to Lessor of any Material Damage
concurrently with its report of same to the applicable governmental authority,
and if no such report is required, within ten (10) days of the occurrence of
such damage. The required notice must be provided together with any damage
reports provided to the FAA or any other governmental authority, the insurer or
Supplier, and any documents pertaining to the repair of such damage, including
copies of work orders, and all invoices for related charges.
(d) Credit for Insurance Payments. If Lessor receives a payment under
------------------------------
an insurance policy required under this Lease in connection with an Event of
Loss of an Airframe and/or an Engine or any APU, and such payment is both
unconditional and indefeasible, then provided no Default or Event of Default
shall have occurred and be continuing, and Lessees shall have complied with the
provisions of Section 10(a) or 10(b), Lessor shall either (i) remit such
proceeds to either or both of the Lessees up to an amount equal to (A) the
amount paid by Lessees to Lessor as the Casualty Value pursuant to Section
10(a), or (B) the amount of the replacement costs actually incurred by Lessees
with respect to the replacement of any Engine or APU pursuant to Section 10(b),
or (ii) credit such proceeds against any amounts owed by Lessees pursuant to
Section 10(a). Any excess insurance proceeds shall be retained by each Lessee.
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SECTION 11. INDEMNIFICATION.
---------------
(a) Each Lessee shall indemnify, protect, save, defend and keep
harmless Lessor, its agents, employees, officers, directors, shareholders,
subsidiaries, affiliates and Assignees (each an "Indemnitee"), on a net
----------
after-tax basis, from and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, demands, costs, expenses and
disbursements (including legal fees and expenses) of any kind and nature
whatsoever ("Claims") that may be imposed on, incurred by or asserted against
------
any Indemnitee, whether or not such Indemnitee shall also be indemnified as to
any such Claim by any other Person, in any way relating to or arising out of (a)
this Lease or any of the other Lease Documents, or the performance, breach
(including any Default or Event of Default) or enforcement of any of the terms
hereof or thereof, or (b) the Aircraft, including the assertion or enforcement
of any manufacturer's, vendor's, dealer's or other supplier's warranties on the
Aircraft or any part thereof, or the manufacture, inspection, construction,
purchase, pooling, interchange, acceptance, rejection, ownership, titling or
re-titling, delivery, lease, sublease, charter, possession, use, operation,
maintenance, management, security, condition, registration or re-registration,
sale, return, removal, repossession, storage or other disposition of the
Aircraft or any part thereof or any accident in connection therewith, including,
Claims involving or alleging environmental damage, criminal acts, hijacking,
acts of terrorism or similar acts, product liability or strict or absolute
liability in tort, latent and other defects (whether or not discoverable), for
patent, trademark or copyright infringement and for any other risk or matter,
the responsibility for which Lessees have agreed to bear in Section 5, including
any of the same that result in injuries, death, destruction, or other harm or
loss to Persons or property, without regard as to who may have operational
control of the Aircraft from time to time. Each Lessee's obligations under this
Section 11 shall survive any expiration, cancellation or other termination of
this Lease.
(b) Notwithstanding the foregoing, Lessees shall not be required to
indemnify an Indemnitee under this Section 11 for (i) any Claim caused solely
and directly by the gross negligence or willful misconduct of such Indemnitee
(except as imputed by law), (ii) any Impositions, or (iii) any Claim in respect
of the Aircraft arising from acts or events which occur after (A) the Aircraft
has been redelivered to such Indemnitee in accordance with this Lease, and (B)
any and all other obligations of any kind whatsoever of the Lessees under this
Lease have been fully paid or performed, as the case may be, unless any such
Claims were caused by any Lessee, or anyone claiming through any Lessee, or
resulted directly or indirectly, from any acts, events or omissions of any kind
whatsoever during the Term of this Lease.
(c) If any Claim is made against any Lessee or an Indemnitee, the party
receiving notice of such Claim shall promptly notify the other, but the failure
of the party receiving notice to so notify the other shall not relieve any
Lessee of any obligation hereunder.
SECTION 12. ASSIGNMENT AND SUBLEASE.
-------------------------
(a) Lessees' Conveyances; and Liens. Neither Lessee shall sell (or
----------------------------------
offer or advertise the sale of), assign, charter, sublease, timeshare, pool,
interchange, convey, mortgage or otherwise transfer or encumber this Lease, the
Aircraft, including any Engine, any APU or any Part or any Collateral, or its
interest with respect thereto, and any such transfer or encumbrance, whether by
operation of law or otherwise, shall be null and void in all respects. In
addition, neither Lessee shall relinquish possession of the Airframe, any APU,
or any Engine or Part or install any APU or any Engine or Part, or permit any
APU or any Engine or Part to be installed, on any Airframe other than the
Airframe leased hereunder except as expressly set forth herein. The foregoing
shall not be deemed to prohibit the delivery of possession of the Aircraft, any
APU, any Engine or Part to another Person for testing, service, repair,
maintenance, overhaul or, to the extent permitted hereby, for alteration or
modification. Neither Lessee shall create or suffer to exist any Liens on or
with respect to the Aircraft, any APU, any Engine or Part, any Collateral, or
any Lessee's interest therein other than Permitted Liens. Lessees will promptly
take such action as directed by Lessor to duly discharge any such Lien. If
Lessees fail to remove a Lien, Lessor may take such action as it deems
appropriate to remove such Lien, but without waiving its other rights hereunder.
Lessees shall reimburse Lessor on demand for any costs incurred by Lessor in
connection with such action, together with interest at the Late Payment Rate.
Notwithstanding the foregoing, provided that no Default or Event of Default
has occurred and is continuing,
(i) Lessees may enter into a management agreement with Manager (the
"Management Agreement"), pursuant to which Manager provide management services
---------------------
for Lessees' benefit with respect to the Aircraft, from
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time to time subject to the following terms and conditions: (1) Manager is and
remains a solvent, domestic organization; (2) the Management Agreement does not
(aa) grant a property interest to Manager with respect to the Aircraft, and
expressly, and at all times, Manager's rights with respect to the Aircraft shall
remain, subject and subordinate to this Lease and the rights of Lessor hereunder
and in and to the Aircraft (and shall terminate, or be canceled, at the option
of Lessor, upon the occurrence of an Event of Default), (bb) permit any further
disposition (other than any chartering permitted hereunder), (cc) contain any
provisions that are inconsistent with the provisions of this Lease or cause
Lessees to breach any of their representations, warranties or agreements under
this Lease, or (dd) otherwise fail to conform to any consent required by Lessor
pursuant hereto; and (3) and takes all actions reasonably requested by Lessor to
protect and give first priority to Lessor's interest therein, and any and all
proceeds thereof; and
(ii) Manager may make any Aircraft temporarily available to a charter
client (any such charterer, a "Permitted User") pursuant to a charter agreement
--------------
(the "Charter Agreement") subject to the following conditions: (A) the Charter
------------------
Agreement entered into with a Permitted User shall (1) have substantially the
same terms and conditions as the Charter Agreement then attached as Exhibit B,
---------
but in all cases, have terms and conditions consistent with the provisions of
this Lease, (2) not convey any property right, title or other interest in the
Aircraft, other than the right to have the Aircraft made available to such
Permitted User pursuant to the Charter Agreement, (3) preclude any further
disposition of the Aircraft and (4) provide that any such availability
(howsoever characterized under law), as the case may be, shall (aa) terminate,
or be canceled, at the option of Lessor, upon the expiration or earlier
cancellation or termination of this Lease and (bb) be expressly, and at all
times remain, subject and subordinate to this Lease and the rights of Lessor
hereunder and in and to the Aircraft; (B) Manager shall have and maintain a
current and valid Air Carrier Certificate issued by the FAA and shall at all
times be in full compliance with Part 135, Part 91K any and all other applicable
Federal Aviation Regulations and other applicable statutes, laws, rules and
regulations with respect to the Charter Agreement and/or the use and operation
of the Aircraft under the Charter Agreement; (C) Lessees shall provide Lessor
with a certified copy of the executed, completed originals of any Charter
Agreement relating to the Aircraft, if requested by Lessor after the occurrence
of an Event of Default; (D) Lessees shall cause a copy of the pertinent Charter
Agreement to be placed on board the Aircraft to the extent required by
applicable law; and (E) Lessees shall comply with and/or cause Manager or such
other Person to be in compliance with such other terms and conditions as Lessor
deems reasonable necessary and appropriate with respect to the dispositions
described in this sub-paragraph (ii).
In addition to the conditions set forth above, Lessees' right to enter
into, and to permit Manager to enter into, any such arrangement described in the
preceding sub-paragraphs (i) and (ii), is further conditioned upon, and Lessees
shall comply and shall cause Manager to comply with the following: (A) if Lessor
so requests, Lessees shall deliver to Lessor a consent, prepared by and in form
and substance satisfactory to Lessor, duly executed and delivered by Lessees and
Manager (upon execution and delivery thereof, the terms and conditions of such
consent shall be hereby incorporated herein by their reference without further
action), together with any other consents and/or acknowledgments duly executed
and in form and substance satisfactory to Lessor, along with such other
instruments (including, without limitation, recording documents appropriate for
recording with all applicable aviation registries, and UCC financing statements)
as Lessor may reasonably require and shall take such other actions as are deemed
reasonably necessary or desirable by Lessor to effect the terms and conditions
of this Section 12(a) and to protect its title to the Aircraft and maintain the
perfection and priority of Lessor's Lien on any Collateral; and (B) Lessees
reimburse Lessor for any and all costs incurred by it in connection therewith.
None of the arrangements permitted above will reduce any of the obligations of
Lessees hereunder or the rights of Lessor hereunder, or of either party under
any consent required pursuant hereto, and all of such obligations shall be and
remain primary and shall continue in full force and effect as the obligations of
a principal and not of a guarantor or surety.
(b) Lessor's Conveyances. Lessor, may at any time, with or without
---------------------
notice to either or both Lessees, grant a security interest in, sell, assign or
otherwise transfer (an "Assignment") all or any part of its interest in the
----------
Lease Documents or the Aircraft or any Rent due or to become due hereunder, and
each Lessee shall perform all of its obligations under the Lease Documents, to
the extent so transferred, for the benefit of the beneficiary of such Assignment
(such beneficiary, including any successors and assigns, an "Assignee") except
--------
that the interest of any such Assignee shall be subject to such Lessee's rights
to the extent provided in this Lease. Each Lessee waives any right and agrees
not to assert against any Assignee any defense, setoff, recoupment, claim,
counterclaim or any other Abatement that such Lessee may have against Lessor,
unless expressly assumed by such Assignee, in
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which case, Lessor shall be relieved of any such assumed obligations. The
foregoing waiver is not intended to contradict or otherwise limit or modify the
provisions of Section 7. If so directed in writing, Lessees shall pay all Rent
and all other sums due or to become due under the Lease Documents directly to
the Assignee or any other party designated in writing by Lessor. Each Lessee
acknowledges and agrees that Lessor's right to enter into an Assignment is
essential to Lessor, and, accordingly, waives any restrictions under Applicable
Law with respect to an Assignment and any related remedies. Upon the request of
Lessor or any Assignee, each Lessee also agrees (a) to promptly execute and
deliver to Lessor or to such Assignee an acknowledgment of assignment in form
and substance satisfactory to the requesting party, an insurance certificate and
such other documents and assurances reasonably requested by Lessor or Assignee,
and (b) to comply with the reasonable requirements of any such Assignee in order
to perfect any such assignment or transfer.
(c) Successors and Assigns. This Lease shall be binding upon and inure
----------------------
to the benefit of, and may be enforced by (i) Lessor and its successors and
other Assignees, or other express third party beneficiaries, and (ii) each
Lessee and its successors and assigns (subject to Section 12(a)).
SECTION 13. EVENTS OF DEFAULT AND REMEDIES.
----------------------------------
(a) Events of Default. The term "Event of Default" means:
------------------- ------------------
(i) non-payment of any Basic Rent, Supplemental Rent (including
Casualty Value, if applicable) and/or any other amount due pursuant to any
Rider, Addendum or Supplement hereto within ten (10) days after any or all of
the same shall become due and payable, or, upon demand, any other amount
required to be paid herein or under any other agreement with Lessor;
(ii) failure to maintain, use or operate the Aircraft in
compliance with Applicable Law;
(iii) any use of the Aircraft outside of the U.S. that is
prohibited by this Lease;
(iv) failure to obtain, maintain and/or comply with all of the
insurance coverages required under this Lease;
(v) any prohibited transfer or encumbrance, or the existence of
any unpermitted Lien, or any other action or circumstance that is prohibited by,
or any violation of, Section 12(a);
(vi) failure to return the Aircraft to Lessor on the date and in
the manner required by this Lease;
(vii) a default by any Lessee or Guarantor under any loan, note,
security agreement, lease, guaranty, conditional sale or other agreement with,
or other financial obligation to, Lessor or its Affiliates;
(viii) a default by any Lessee or Guarantor, after the expiration
of any applicable grace or cure period, in the payment or performance of any
indebtedness, liability or obligation for borrowed money to any Person other
than Lessor or its Affiliates;
(ix) a material inaccuracy in any representation or breach of
warranty by any Lessee or Guarantor (including any false or misleading
representation or warranty) in any financial statement or Lease Document;
(x) the commencement of any bankruptcy, insolvency, receivership
or similar proceeding by or against any Lessee or Guarantor (unless, if
involuntary, the proceeding is dismissed within sixty (60) days of the filing
thereof) or the rejection of this Lease or any other Lease Document in any such
proceeding;
(xi) the failure by any Lessee or Guarantor generally to pay its
debts as they become due or its admission in writing of such inability;
(xii) any Lessee or Guarantor ceases to do business as a going
concern, liquidates, dissolves or sells, transfers or otherwise disposes of all
or substantially all of its assets or property; or
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(xiii) the occurrence of any of the following events: (i) any Lessee
or Guarantor enters into any transaction of merger, consolidation or
reorganization; or (ii) any Lessee or Guarantor becomes the subject of, or
engages in, a leveraged buy-out; unless, in any such event, such Lessee or
Guarantor shall be the surviving entity; and the surviving entity is organized
and existing under the laws of the United States or any US state, and all costs
associated therewith are borne, and paid in full, by the surviving entity,
including, without limitation, all costs incurred by Lessor in connection
therewith, and not less than sixty (60) days prior to such event: (A) the
surviving entity executes and delivers to Lessor (1) an agreement satisfactory
to Lessor, in its reasonable discretion, containing such surviving entity's full
and total assumption, and its agreement to pay, perform, comply with and
otherwise be liable for, pursuant to the terms and conditions of this Agreement,
all of such Lessee's, or Guarantor's as the case may be, obligations having
previously arisen, or then or thereafter arising, under any and all of the Loan
Documents, and (2) any and all other documents, agreements, instruments,
certificates, opinions and filings requested by Lessor; and (B) Lessor, in its
reasonable discretion, is satisfied as to the creditworthiness of such surviving
entity, and as to such surviving entity's conformance to the other standard
criteria then used by Lessor when approving transactions similar to the
transactions contemplated in this Lease; or (iii) the parties that control any
Lessee or Guarantor as of the Closing Date no longer control such Lessee or
Guarantor; or
(xiv) a material adverse change in the business, operations,
financial reporting, or financial condition of any Lessee or Guarantor or in its
ability to comply with any Lease Documents since the date of this Lease as
determined by Lessor, in its sole discretion and in good faith;
(xv) failure by any Lessee or Guarantor to notify Lessor of any
Default or Event of Default within ten (10) business days of its occurrence;
(xvi) breach by any Lessee or Guarantor of any other covenant,
condition or agreement (other than those in items (i)-(xv)) under this Lease or
any of the other Lease Documents that continues for thirty (30) days after
Lessor's written notice to either or both of the Lessees (but such notice and
cure period will not be applicable unless such breach is curable by practical
means within such notice period); or
(xvii) a default by Guarantor under the Guaranty.
(b) Remedies. If an Event of Default occurs, Lessor may exercise any
--------
one or more of the following remedies (in its sole discretion):
(i) proceed at law or in equity, to enforce specifically any
Lessee's performance or to recover damages;
(ii) declare this Lease in default and/or cancel this Lease or
otherwise terminate either or both of the Lessees' right to use of the Aircraft
and either or both of the Lessees' other rights, but not its obligations under
this Lease, and Lessees shall immediately return the Aircraft to Lessor in
accordance with the terms of this Lease;
(iii) enter the premises where the Aircraft is located and take
immediate possession of and remove (or disable in place) the Aircraft (and/or
the APU, any Engines and Parts then unattached to the Aircraft) by self-help,
summary proceedings or otherwise without liability;
(iv) use either or both of the Lessees' premises for storage as
set forth in this Lease without liability;
(v) sell, re-lease or otherwise dispose of the Aircraft (or any
Engine or Part), whether or not in Lessor's possession, at public or private
sale, with or without notice to any Lessee, and apply or retain the net proceeds
of such disposition, with Lessees remaining jointly and severally liable for any
deficiency and with any excess being retained by Lessor, or keep the Aircraft
idle;
(vi) apply any deposit or other cash collateral, or any proceeds
of any Collateral, at any time to reduce any amounts due to Lessor;
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(vii) demand and recover from Lessees the Liquidated Damages and
other Rent whenever the same shall be due; and
(viii) terminate or cancel any sublease or management agreement,
without regard as to the existence of any event of default thereunder and
recover or cause each Lessee, and/or any sublessee or manager to relinquish
possession of and return the Aircraft, including the Engines and Parts, pursuant
to this Section 13, and/or exercise any and all other remedies under any consent
entered into by such party pursuant to Section 12 hereof, or in any Lessee's
stead, any remedies provided for under, or otherwise available to any Lessee in
connection with the applicable sublease and/or management agreement; and
(viii) exercise any and all other remedies allowed by Applicable
Law, including the UCC.
Without limiting the generality of the foregoing, (A) upon the occurrence
of an Event of Default, Lessor may, among other things, demand and recover from
Lessees the Casualty Value (calculated as contemplated in the definition of
Liquidated Damages) or other applicable Liquidated Damages (in lieu of future
Basic Rent, and not as a penalty) and other Rent then due, and/or demand that
Lessees return the Aircraft in accordance with this Lease; and (B) if Lessees
return the Aircraft, and after Lessor disposes of it, Lessor will determine the
amount, if any, of any credit or reimbursement or deficiency, as applicable,
with respect to Lessees' obligation to pay such Casualty Value or other
Liquidated Damages (all as contemplated in the definition of such term).
(c) Lessor's Performance. If either Lessee fails to perform any of its
--------------------
agreements contained in this Lease, including its obligations to keep the
Aircraft free of Liens, comply with Applicable Law, or obtain the requisite
insurance coverages, Lessor shall have the right, but shall not be obligated, to
effect such performance and any expenses incurred by Lessor in connection with
effecting such performance, together with interest thereon at the Late Payment
Rate, shall be payable by Lessees promptly upon demand. Any such action shall
not be a cure or waiver of any Default or Event of Default hereunder.
(d) Power-of-Attorney. Each Lessee irrevocably appoints Lessor as its
-----------------
attorney-in-fact to act in such Lessee's name and on its behalf to make,
execute, deliver and file any instruments or documents (including any filings at
the FAA), settle, adjust, receive payment, make claim or proof of loss, endorse
such Lessee's name on any checks received or drafts or other instruments of
payment specifically related to any insurance claims and to take any action as
Lessor deems necessary or appropriate to carry out the intent of this Lease;
provided, however, Lessor agrees that it will not exercise this power unless an
-------- -------
Event of Default has occurred and is continuing. This appointment is coupled
with an interest, is irrevocable and shall terminate only upon payment in full
of the obligations set forth in this Lease and/or any other Lease Documents.
(e) Enforcement Costs. Each Lessee shall be liable for, and pay to
------------------
Lessor upon demand, all costs, charges and expenses incurred by Lessor in
enforcing or protecting its rights under this Lease, whether by reason of any
Default or Event of Default, or otherwise, including, legal fees, disbursements,
insurance, expert witness fees, consultant fees, repossession, taxes, lien
removal, recovery, storage, inspection, appraisal, repair, costs of
transportation, refurbishing, advertising and brokers' fees, and other carrying
costs and costs of sale, re-lease or other disposition of the Aircraft.
(f) Cumulative Remedies, Etc. No right or remedy is exclusive. Each
--------------------------
may be used successively and cumulatively and in addition to any other right or
remedy referred to above or otherwise available to Lessor at law or in equity,
including, such rights and/or remedies as are provided for in the UCC, but in no
event shall Lessor be entitled to recover any amount in excess of the maximum
amount recoverable under applicable law with respect to any Event of Default.
No express or implied waiver by Lessor of any Default or Event of Default
hereunder shall in any way be, or be construed to be, a waiver of any future or
subsequent Default or Event of Default. The failure or delay of Lessor in
exercising any rights granted it hereunder upon the occurrence of any of the
contingencies set forth herein shall not constitute a waiver of any such right
upon the continuation or reoccurrence of any such contingencies or similar
contingencies, and any single or partial exercise of any particular right by
Lessor shall not exhaust the same or constitute a waiver of any other right
provided for or otherwise referred to herein. Each Lessee hereby waives any
rights under the UCC to cancel or repudiate this Lease or any of the other Lease
Documents, to reject or revoke acceptance of the Aircraft or any component
thereof, to suspend performance, and to recover from Lessor any general,
special, incidental or consequential damages, for any reason whatsoever. All
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remedies set forth herein shall survive the expiration, cancellation or other
termination of this Lease for any reason whatsoever.
SECTION 14. NOTICES, REPORTS, FURTHER ASSURANCES AND INSPECTIONS.
---------------------------------------------------------
(a) Notices. All communications and notices provided for herein shall
-------
be in writing and shall become effective (i) upon hand delivery, or (ii) upon
delivery by an overnight delivery service, or (iii) upon two (2) Business Days
after being deposited in the U.S. mail with proper postage for first-class mail
prepaid, sent by registered or certified mail, return receipt requested, and
addressed to Lessor or Lessees at their respective addresses set forth under the
signatures hereto or such other address as either party may hereafter designate
by written notice to the other, or (iv) when sent by telecopy (with customary
confirmation of receipt of such telecopy) on the Business Day when sent or upon
the next Business Day if sent on other than a Business Day.
(b) Reports. Each Lessee will provide Lessor with the following in
-------
writing within the time periods specified: (i) notice of any Lien which
attaches to the Aircraft, and the full particulars of the Lien, within ten (10)
days after such Lessee becomes aware of the Lien; (ii) (A) each Lessee's balance
sheet and statement of retained earnings, prepared in accordance with GAAP,
certified by a recognized firm of certified public accountants, within ninety
(90) days of the close of each fiscal year of such Lessee, (B) each Lessee's
quarterly financial report certified by the chief financial officer of such
Lessee, within ninety (90) days of the close of each fiscal quarter of such
Lessee, (C) all of each Lessee's Forms 10-K and 10-Q, if any, filed with the SEC
within thirty (30) days after the date on which they are filed (by furnishing
these SEC Forms, or making them publicly available in electronic form, such
Lessee shall be deemed to have satisfied the requirements of clauses (b)(ii)(A),
(B), or (C)); (iii) notice to Lessor of any change of the Primary Hangar
Location, ten (10) days prior to any such change; (iv) notice of any loss or
damage to the Aircraft in accordance with Section 10; (v) notice of any accident
involving the Aircraft causing bodily injury or property damage to third
parties, within five (5) days of such accident; and (vi) ten (10) days prior to
the policy expiration date for any insurance coverage required by this Lease,
evidence (having the form and substance consistent with Section 2(g) of the
Closing Terms Addendum) of the renewal or replacement of such coverage complying
with the terms hereof. Each Lessee will also provide Lessor with the following
in writing promptly upon Lessor's request: (i) a copy of any insurance policy
required by this Lease; (ii) notice to Lessor of the Aircraft's location, and
the location of all Records relating to the Aircraft and its use, maintenance
and/or condition; (iii) such information as may be necessary to enable Lessor to
file any reports required by any governmental authority due to Lessor's
ownership of the Aircraft; (iv) copies of any manufacturer's maintenance service
program contract for the Airframe or Engines; (v) copies of all Records
evidencing each Lessee's compliance with FAA airworthiness directives and
mandatory service bulletins and of compliance with the provisions of Section 9
hereof and of the Return Addendum, and any other requested Records; and (vi)
such other reports or information as Lessor may reasonably request.
(c) Further Assurances. Each Lessee will promptly execute or otherwise
------------------
authenticate any documents, filings and other records, including, amendments to
this Lease, UCC, FAA or other applicable filings and acknowledgments of
assignment, and will take such further action as Lessor may reasonably request
in order to carry out more effectively the intent and purposes of this Lease and
to establish and protect Lessor's rights and remedies under this Lease, or
otherwise with respect to the Aircraft and/or the Collateral. If and to the
extent that the Cape Town Convention on International Interests in Mobile
Equipment as respects the registration of interests in aircraft equipment is
ratified by the United States and made effective pursuant to its terms, each
Lessee shall take such further action at its own cost as Lessor may reasonably
request to establish and protect Lessor's rights and interests in the Aircraft
and this Lease thereunder. Each Lessee irrevocably authorizes Lessor to file
UCCs or other filings with respect to the Aircraft or Collateral. Each Lessee
agrees not to file any corrective or termination statements with respect to any
UCC or other filings relating to the Aircraft or any Collateral.
(d) Inspection. Lessor shall have the right, but not the duty, to
----------
inspect the Aircraft, any component thereof and/or the Records, at any
reasonable time and from time to time, wherever located, upon reasonable prior
written notice to either or both of the Lessees; except that no advance notice
shall be necessary prior to any inspection conducted, and such inspection may be
conducted at any time, after the occurrence of a Default or an Event of Default.
Upon request of Lessor, each Lessee promptly shall confirm to Lessor the
location of the Aircraft and the Records and shall, at any reasonable time and
from time to time, upon reasonable prior written notice to either or both of the
Lessees, make the Aircraft and/or the Records available to Lessor for
inspection. Lessees shall be responsible
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for the cost of any inspection conducted after the occurrence of a Default or an
Event of Default, and shall pay Lessor such amount as additional Rent within ten
(10) days of demand.
SECTION 15. TRANSACTION EXPENSES. Without limiting any other provision of this
--------------------
Lease, each Lessee shall perform and comply with all of its obligations, and
possess, use, operate, insure, maintain, and comply with Applicable Law,
service, return and/or store the Aircraft (or cause any or all of the same to be
done) and take all other actions contemplated in this Lease and the other Lease
Documents at its sole risk, cost and expense. Lessees shall pay all fees, costs
and expenses incurred by or on behalf of Lessor at any time in connection with
this Lease, whether or not the transactions contemplated hereby are consummated,
including, without limitation, appraisal and inspection fees, Lessor's counsel
and FAA Counsel's fees and expenses, UCC, FAA or other applicable title and lien
searches, reports, filing and recording fees, charges and taxes, and costs and
expenses incurred in connection with Lessees' exercise of any option or other
right granted under, or any amendment or other modification to any of, the Lease
Documents.
SECTION 16. MISCELLANEOUS.
-------------
(a) Interpretation. Time is of the essence in the payment and
--------------
performance of Lessees' obligations under this Lease. Any provision of this
Lease that may be determined to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective in such jurisdiction
to the extent thereof without invalidating the remaining provisions of this
Lease. The division of this Lease into sections, the provision of a table of
contents and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this Lease. The
execution hereof on behalf of Lessees and Lessor shall be deemed to constitute
the acceptance by Lessees and Lessor of the terms and conditions of each and
every addendum, rider, supplement, annex and exhibit hereto as if such document
was separately and individually executed on behalf of such party hereto and
shall constitute a part of this Lease. THIS LEASE MAY BE EXECUTED IN ANY NUMBER
OF COUNTERPARTS AND BY THE PARTIES HERETO ON SEPARATE COUNTERPARTS. ONLY
COUNTERPART NO. 1 OF THIS LEASE AND THE LEASE SUPPLEMENT SHALL BE CONSIDERED
"CHATTEL PAPER" FOR PURPOSES OF THE UCC.
(b) Granting Clause. In order to secure the prompt and full payment
----------------
and performance as and when due of any and all obligations and indebtedness of
each Lessee to Lessor, now existing or hereafter created of any kind whatsoever,
each Lessee hereby collaterally assigns, grants, and conveys to Lessor, a
security interest in and lien on all of such Lessee's right, title and interest
in and to all of the following (the "Collateral"): (i) this Lease and any
----------
present and future subleases, management agreements, interchange agreements,
charter agreements and any other present and future agreements of any kind
whatsoever relating to the Aircraft or any part thereof and all rent, charter
payments, reimbursements and other disbursements, remittances or other amounts
payable with respect thereto; (ii) the Aircraft and all present and future
parts, accessories, accessions and attachments thereto, and all present and
future replacements, substitutions and exchanges for such goods; and (iii)
proceeds of the foregoing, including all related goods, accounts, chattel paper,
documents, instruments, general intangibles, letters of credit, letters of
credit rights, investment property, deposit accounts, and supporting
obligations, insurance proceeds, warranty and requisition payments, and all
present and future books and records relating to any of the foregoing and/or the
Aircraft (including, without limitation, all tapes, cards, computer programs,
computer runs and computer data in the possession or control of such Lessee, any
computer service bureau, or other third party). The collateral assignment,
security interest and lien granted herein shall survive the termination,
cancellation or expiration of this Lease until such time as both Lessee's
obligations under this Lease are fully and indefeasibly discharged.
(c) Entire Agreement. This Lease, and each of the other Lease
-----------------
Documents, the Purchase Documents and Required Documents, collectively
constitute, and are intended to collectively constitute, the complete and
exclusive statement of the terms of the agreement between Lessor and Lessees
with respect to the purchase and leasing of the Aircraft. This Lease, the
Purchase Documents, and the other Required Documents cancel and supersede any
and all prior or contemporaneous oral or written understandings, memoranda,
negotiations, communications, agreements, and other records, with respect
thereto including, any proposal letter, commitment letter, and/or term sheet
delivered to either or both of the Lessees by Lessor. No term or provision of
this Lease may be amended, altered, waived, discharged or terminated, except in
a writing signed by a duly authorized officer of the party against whom the
enforcement of the amendment, alteration, waiver, discharge or termination is
sought.
13
SUNTRUST LEASING CORPORATION
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(d) Governing Law, Choice of Forum and Jury Trial Waiver. THIS LEASE
------------------------------------------------------
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF BOTH
PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF MARYLAND
(WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE. Each Lessee hereby
irrevocably consents and agrees that any legal action, suit, or proceeding
arising out of or in any way in connection with this Agreement may be instituted
or brought in the courts of the State of Maryland or any U.S. District Court for
Maryland, as Lessor may elect, and by execution and delivery of this Lease, each
Lessee hereby irrevocably accepts and submits to, for itself and in respect of
its property, generally and unconditionally, the non-exclusive jurisdiction of
any such court, and to all proceedings in such courts. EACH LESSEE ALSO HEREBY
KNOWINGLY AND FREELY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LITIGATION
ARISING HEREFROM OR IN RELATION HERETO.
SECTION 17. JOINT AND SEVERAL OBLIGATIONS.
(a) Joint and Several Obligations. The obligations of the Lessees (or
------------------------------
either of them) hereunder or under the other Lease Documents constitute the
joint and several obligations of each of the Lessees. Without limiting the
generality of the foregoing: (i) each reference in this Lease or in any of the
other Lease Documents to the term "Lessee" shall be deemed to refer to each of
------
Sales and Integration; (ii) each representation and warranty made by the Lessees
(or by either of them) shall be deemed to have been made jointly and severally;
(iii) each covenant and undertaking on the part of the Lessees (or by either of
them) shall be deemed to have been made jointly and severally; and (iv) each
event constituting an Event of Default under this Lease shall entitle Lessor to
all applicable remedies, including all remedies provided or referred to herein
or in the other Lease Documents, against Sales and Integration, jointly and
severally. A separate action or actions may be brought and prosecuted against
either such party whether an action is brought against the other party or
whether the other party is joined in any such action or actions. Each such
party waives any right to require Lessor to: (i) proceed against the other
party; (ii) proceed against or exhaust any security held from any other party;
or (iii) pursue any other remedy in Lessor's power whatsoever. Notices
hereunder required to be provided to the Lessees shall be effective if provided
to either such party. Any consent on the part of the Lessees hereunder shall be
effective when provided by either such party and Lessor shall be entitled to
rely upon any notice or consent given by either such party as being notice or
consent given by the Lessees hereunder.
(b) Suretyship Waivers. In the event any obligation of the Lessees
-------------------
under this Lease is deemed to be an agreement by any individual Lessee (i.e.,
Sales or Integration, as the case may be) to answer for the obligation or
default of the other Lessee (including each other) or as a hypothecation of
property as security therefor, each Lessee represents and warrants that: (i) no
representation has been made to it as to the creditworthiness of any other
obligor, and (ii) it has established adequate means of obtaining from each other
obligor on a continuing basis, financial or other information pertaining to each
other obligor's financial condition. Each Lessee expressly waives diligence,
demand, presentment, protest and notice of every kind and nature whatsoever,
consents to the taking by Lessor of any additional security for the obligations
secured hereby, or the alteration or release in any manner of any security now
or hereafter held in connection with any obligations now or hereafter secured by
this Lease, including the Collateral, and consents that Lessor and any obligor
may deal with each other in connection with said obligations or otherwise, or
alter any contracts now or hereafter existing between them, in any manner
whatsoever, including without limitation the renewal, extension, acceleration,
changes in time for payment, and increases or decreases in any principal, rate
of interest or other amounts owing, all without in any way altering the
liability of each Lessee, or affecting any security for such obligations. Should
any default be made in the payment of any such obligations or in the terms or
conditions of any security held, Lessor is hereby expressly given the right, at
its option, to proceed in the enforcement of this Lease independently of any
other remedy or security it may at any time hold in connection with such
obligations secured and it shall not be necessary for Lessor to proceed upon or
against and/or exhaust any other security or remedy before proceeding to enforce
its rights against any Lessee or other obligor. Each Lessee further waives (i)
any right of subrogation, reimbursement, exoneration, contribution,
indemnification, setoff or other recourse in respect of sums paid to Lessor by
either Lessee and (ii) any right or remedy, similar or dissimilar to any of the
foregoing available to a surety under applicable law. Without limiting the
foregoing, every maker, endorser, guarantor and surety hereof hereby waives
presentment, notice, protest and impairment of collateral, and consents to all
extensions, deferrals, partial payments and refinancings hereof before or after
maturity.
14
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
SECTION 18. TRUTH IN LEASING. THE AIRCRAFT, AS EQUIPMENT, BECAME SUBJECT TO
------------------
THE MAINTENANCE REQUIREMENTS OF PART 91 OF THE FEDERAL AVIATION REGULATIONS
("FARS") UPON THE REGISTRATION OF THE AIRCRAFT WITH THE FAA. EACH LESSEE
----
CERTIFIES THAT DURING THE TWELVE (12) MONTHS (OR PORTION THEREOF DURING WHICH
THE AIRCRAFT HAS BEEN SUBJECT TO U.S. REGISTRATION) PRECEDING THE EXECUTION OF
THIS LEASE, THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER PART 91 OF THE
FARS. EACH LESSEE CERTIFIES THAT THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED
UNDER PART 91 OF THE FARS FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE. UPON
EXECUTION OF THIS LEASE, AND DURING THE TERM HEREOF, EACH LESSEE, WHOSE NAME AND
ADDRESS ARE SET FORTH ON THE SIGNATURE PAGE HERETO, ACTING BY AND THROUGH THE
RESPECTIVE SIGNATORY THERETO, CERTIFIES THAT LESSEES SHALL BE RESPONSIBLE FOR
THE OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE (WHILE IN POSSESSION OF
THE AIRCRAFT), UNLESS OPERATIONAL CONTROL OF THE AIRCRAFT IS PROVIDED TO AN AIR
------
TAXI OPERATOR CERTIFICATED UNDER PART 135 OF THE FARS, IF AND TO THE EXTENT
PERMITTED HEREUNDER. EACH LESSEE FURTHER CERTIFIES THAT IT UNDERSTANDS ITS
RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FARS, PROVIDED HOWEVER, THAT THE
LESSEES SHALL NOT BE DEEMED TO BE RESPONSIBLE FOR THE OPERATIONAL CONTROL OF THE
AIRCRAFT FOR SO LONG AS THE AIRCRAFT IS IN POSSESSION OF ANY SUCH AIR TAXI
OPERATOR HAVING OPERATIONAL CONTROL TO THE EXTENT PERMITTED HEREUNDER. AN
EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FARS CAN BE
OBTAINED FROM THE NEAREST FEDERAL AVIATION FLIGHT STANDARD DISTRICT OFFICE,
GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE.
[SIGNATURES ON NEXT PAGE]
15
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be duly
executed as of the date first written above by their respective officers
thereunto duly authorized.
Lessor: Lessee:
SUNTRUST LEASING CORPORATION XXXXXXX IT SOLUTIONS SALES COMPANY, INC.
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
Address: 00 Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxxxx: 000 Xxxxxxxxx Xxxxxxxxx
0xx Xxxxx Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx, Xxxxxxxx 00000
Lessee:
XXXXXXX SELECT INTEGRATION COMPANY, INC.
By:
-------------------------------
Name:
Title:
Address: 000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
THIS IS COUNTERPART NO. __ OF A TOTAL OF 4 COUNTERPARTS. ONLY COUNTERPART NO. 1
SHALL BE CONSIDERED CHATTEL PAPER FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE
AND A SECURITY INTEREST MAY BE PERFECTED ONLY BY POSSESSION OF COUNTERPART NO.
1.
16
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
EXHIBIT A
DEFINITIONS
(a) All References in the Lease to designated Sections and other
subdivisions are to such designated Sections and other subdivisions only, and
the words "herein," "hereof" and "hereunder" and other words of similar import
------ ------ ---------
refer to the Lease as whole and not to any particular Section or other
subdivision.
(b) Except as otherwise indicated, all the agreements and instruments
defined herein or in the Lease shall mean such agreements and instruments as the
same may from time to time be supplemented or amended, or as the terms thereof
may be expressly waived or modified to the extent permitted by, and in
accordance with, the terms thereof.
(c) The word "including" means including without limitation.
(d) The terms defined herein and in the Lease shall, for purposes of
the Lease and the Lease Supplement, addenda, riders, annexes, schedules, and
exhibits thereto, have the meanings assigned to them and shall include the
plural as well as the singular as the context requires.
(e) The following terms shall have the following meanings for all
purposes of the Lease:
Basic Rent Date, Basic Rent Percentage, Basic Term, Renewal Term, Daily Rent
--------------------------------------------------------------------------------
Percentage, Expiration Date, First Basic Rent Date, Last Basic Rent Date,
--------------------------------------------------------------------------------
Lessor's Cost, Primary Hangar Location, and Rent Commencement Date shall have
---------------------------------------------------------------------
the meanings set forth in Schedules No. 2 and 2-A.
Abatements shall have the meaning set forth in Section 7 of the Lease.
----------
Acceptance Date shall mean the date on which Lessees irrevocably and
----------------
unconditionally accept the Aircraft for lease under the Lease as evidenced by
the execution and delivery of the Lease Supplement dated such date (and is set
forth in the Lease Supplement).
Additions shall have the meaning set forth in Section 9 of the Lease.
---------
Administrative Charge shall mean an amount equal to five percent (5%) of
----------------------
the amount payable to which such charge applies.
Affiliate shall mean any affiliated person, firm or entity controlling,
---------
controlled by or under common control with any Lessee or Lessor, as applicable.
Alterations shall have the meaning set forth in Section 9 of the Lease.
-----------
Aircraft shall mean (i) the Airframe, (ii) the Engines, (iii) any APU, and
--------
(iv) the Records.
Airframe shall mean (i) the Aircraft described in Schedule No. 1, and shall
--------
not include the Engines or any APU, and (ii) any and all Parts from time to time
incorporated in, installed on, or attached to such Aircraft and any and all
Parts removed therefrom so long as Lessor shall retain an interest therein in
accordance with the applicable terms of the Lease after removal from the
Aircraft.
Applicable Law shall mean all applicable laws including all statutes,
---------------
treaties, conventions, judgments, decrees, injunctions, writs and orders of any
court, governmental agency or authority and rules, regulations, orders,
directives, licenses and permits of any governmental body, instrumentality,
agency or authority as amended and revised, and any judicial or administrative
interpretation, of any of the same, including the airworthiness certificate
issued with respect to the Aircraft, all FARS, Supplemental FARS, airworthiness
directives, and/or any of the same relating to noise, the environment, national
security, public safety, exports or imports or contraband.
APU shall mean (i) any auxiliary power unit described and listed by
---
manufacturer's serial number in Schedule No. 1 and currently installed on the
Airframe whether or not thereafter installed on such Airframe or any
17
other airframe from time to time; (ii) any auxiliary power unit which may from
time to time be substituted, pursuant to the applicable terms of the Lease, for
any auxiliary power unit leased hereunder; and (iii) in each case set forth in
clauses (i) and (ii) hereof, with any and all Parts incorporated in or installed
on or attached to any such auxiliary power unit and any and all Parts removed
therefrom so long as Lessor shall retain an interest in such Parts in accordance
with the applicable terms of the Lease after removal from any such auxiliary
power unit. The term "APU" means, as of any date of determination, any
---
auxiliary power unit leased hereunder.
AS-IS, WHERE-IS shall mean "AS-IS WHERE-IS", AND "WITH ALL FAULTS", WITHOUT
---------------
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER, BY,
OR ANY RECOURSE OF ANY KIND WHATSOEVER TO, LESSOR.
Assignee shall have the meaning set forth in Section 12 of the Lease.
--------
Assignment shall have the meaning set forth in Section 12 of the Lease.
----------
Basic Rent shall have the meaning set forth in Section 3 of the Lease.
-----------
Business Day shall mean any day other than a Saturday, Sunday or other day
-------------
on which banks located in Baltimore, Maryland are closed or are authorized to
close.
Casualty Payment Date shall have the meaning set forth in Section 10(a) of
----------------------
the Lease.
Casualty Value for any Basic Rent Date shall be the amount equal to the
---------------
Lessor's Cost multiplied by the applicable percentage set forth on Schedule No.
3 for such Basic Rent Date (or the corresponding Basic Rent number), or if the
Casualty Payment Date is after the last Basic Rent Date, the Casualty Value for
such date shall be the amount equal to the Lessor's Cost multiplied by the
applicable percentage set forth on Schedule No. 3 for the last Basic Rent Date
(or the corresponding Basic Rent number).
Charter Agreement shall have the meaning set forth in Section 12(a).
-----------------
Claims shall have the meaning set forth in Section 11 of the Lease.
------
Collateral shall have the meaning set forth in Section 16(b) of the Lease.
----------
Code shall have the meaning set forth in the Special Tax Indemnity Rider.
----
Daily Rent shall have the meaning set forth in Section 3 of the Lease.
----------
Default shall mean an event or circumstance which, after the giving of
-------
notice or lapse of time, or both, would become an Event of Default.
Early Purchase Date shall have the meaning set forth on Schedule No. 2-A.
---------------------
Early Purchase Option Amount shall be the amount payable by Lessees in the
-----------------------------
event that Lessees exercise the option to purchase the Aircraft pursuant to
paragraph (e) of the Option Addendum to the Lease and shall be determined in
accordance with Schedule No. 2-A.
Engine shall mean (i) each of the engines described and listed by
------
manufacturer's serial numbers in Schedule No. 1 and currently installed on the
Airframe whether or not thereafter installed on such Airframe or any other
airframe from time to time; (ii) any engine which may from time to time be
substituted, pursuant to the applicable terms of the Lease, for an Engine leased
hereunder; and (iii) in each case set forth in clauses (i) and (ii) hereof, with
any and all Parts incorporated in or installed on or attached to such engine and
any and all Parts removed therefrom so long as Lessor shall retain an interest
in such Parts in accordance with the applicable terms of the Lease after removal
from any such engine. The term "Engines" means, as of any date of
-------
determination, all Engines leased hereunder.
18
Estimated Annual Hours shall mean the anticipated number of average annual
-----------------------
flight hours as shown on Schedule No. 2-A.
Event of Default shall have the meaning set forth in Section 13 of the
------------------
Lease.
Event of Loss with respect to the Aircraft, the Airframe or any Engine or
---------------
any APU, shall mean any of the following events with respect to such property
(i) loss of such property or the use thereof due to theft, disappearance,
destruction, damage beyond repair or rendition of such property permanently
unfit for normal use for any reason whatsoever; (ii) any damage to such property
that results in an insurance settlement with respect to such property on the
basis of a total loss or constructive total loss; (iii) the condemnation,
confiscation or seizure of, or requisition of title to or use of, such property
by the act of any government (foreign or domestic) or of any state or local
authority or any instrumentality or agency of the foregoing ("Requisition of
--------------
Use"); (iv) as a result of any rule, regulation, order or other action by any
---
government (foreign or domestic) or governmental body (including, without
limitation, the FAA or any similar foreign governmental body) having
jurisdiction, the use of such property shall have been prohibited, or such
property shall have been declared unfit for use, for a period of six (6)
consecutive months, unless Lessees, prior to the expiration of the six-month
period, shall have undertaken and, in the opinion of Lessor, shall be diligently
carrying forward all steps that are necessary or desirable to permit the normal
use of such property by Lessees or, in any event, if use shall have been
prohibited, or such property shall have been declared unfit for use, for a
period of twelve (12) consecutive months (unless waived by Lessor in its sole
and absolute discretion) or such prohibition shall exist on the expiration or
earlier cancellation or termination of the Lease; (v) with respect to an Engine
or any APU, the removal thereof from the Airframe for a period of six (6)
consecutive months or longer, whether or not such Engine or any APU, as the case
may be, is operational, or (unless waived by Lessor in its sole and absolute
discretion) such prohibition shall exist on the expiration or earlier
cancellation or termination of the Lease; (vi) an Engine or any APU is returned
to the Manufacturer, other than for modification in the event of patent
infringement or for repair or replacement (any such return being herein referred
to as a "Return to Manufacturer"); or (vii) (unless waived by Lessor in its sole
----------------------
and absolute discretion) the Aircraft is not returned to Lessor upon the
expiration or earlier termination or cancellation of the Lease, unless Lessees
or a third party purchaser purchases the Aircraft pursuant to Lessees' exercise
of an option contemplating such purchase under any applicable provision of the
Lease. The date of such Event of Loss shall be the date of such theft,
disappearance, destruction, damage, Requisition of Use, prohibition, unfitness
for use for the stated period, removal for the stated period or Return to
Manufacturer. An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if an Event of Loss occurs with respect to the Airframe. An Event
of Loss with respect to any Engine or any APU shall not, without loss of the
Airframe, be deemed an Event of Loss with respect to the Aircraft.
Excess Hours shall have the meaning set forth in the definition of Fair
-------------
Market Sales Value.
FAA shall mean the U.S. Federal Aviation Administration and/or the
---
Administrator of the Federal Aviation Administration and the Department of
Transportation, or any person, governmental department, bureau, authority,
commission or agency succeeding to the functions of any of the foregoing,
including, where applicable, the Transportation Security Administration.
FAA Counsel shall mean Daugherty, Fowler, Peregrin & Xxxxxx, 204 North
------------
Xxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxx 00000, or such other counsel as
Lessor may designate.
FAA Documents shall have the meaning set forth in the Closing Terms
--------------
Addendum.
Fair Market Sales Value and Fair Market Rental Value shall mean those
-------------------------- -------------------------
certain values determined on the following basis: (i) the subject value shall be
the amount which would be obtained in an arm's length transaction between an
informed and willing buyer or lessee (who is neither a lessee in possession nor
a used equipment dealer), and an informed and willing seller or lessor, as the
case may be, under no compulsion to sell or lease, as the case may be; (ii) the
costs of removal of the Aircraft from its then location shall not be a deduction
from such value; and (iii) in determining any such value, it shall be assumed
(whether or not the same be true) (A) that the Aircraft has been maintained by
Lessees and is in the condition in which it is required to be returned to
Lessor, in each case, in accordance with the Lease, (B) such value has not been
diminished due to the existence of any damage history, and (C) that the total
number of Airframe hours (including any component with hourly overhaul
schedules) accumulated from the Acceptance Date to the Expiration Date or other
date of termination or
19
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
cancellation do not exceed the product of Estimated Annual Hours times the
number of twelve month periods and any portion thereof, from the Acceptance Date
to such expiration, termination or cancellation date (any such excess, the
"Excess Hours").
-------------
FARs shall mean the Federal Aviation Regulations, any Supplemental Federal
----
Aviation Regulations and all successor regulations thereto.
GAAP shall mean generally accepted accounting principles consistently
----
applied.
Guarantor shall mean POMEROY IT SOLUTIONS, INC. a Delaware Corporation
---------
(File number 228064) having its principal office at 0000 Xxxxxxxxxx Xxxx Xxxxxx,
Xxxxxxxx 00000.
Impositions shall have the meaning set forth in Section 8 of the Lease.
-----------
Late Payment Rate shall mean the lesser of a rate equal to 1.5% per month
-------------------
or the highest rate permitted by Applicable Law. The Late Payment Rate shall be
computed on the basis of a 360-day year and a 30-day month.
Lease Documents shall mean the Lease (including the Lease Supplement), and
----------------
all documents, instruments and agreements entered into or provided by any
Lessee, any guarantors and or other third party pursuant to or in connection
with the Lease.
Lease Supplement shall mean a supplement to the Lease to be entered into as
----------------
of the Acceptance Date by Lessees, which supplement shall be substantially in
the form as attached to the Lease, and upon execution by Lessees shall
constitute a part of the Lease.
Lessor's Liens shall mean any Liens created or granted by Lessor resulting
---------------
from claims against Lessor not related to Lessor's ownership of the Aircraft or
otherwise contemplated under the Lease.
Liens shall mean all liens, charges, security interests, leaseholds, and
-----
encumbrances of every nature and description whatever, including, without
limitation, any of the same arising in connection with or created by any
Impositions, (other than Lessor's Liens) and rights and interests of third
parties under management, charter, pooling, interchange, sublease, timeshare,
overhaul, repair or other similar agreements or arrangements.
Liquidated Damages shall mean the liquidated damages (all of which, each
-------------------
Lessee hereby acknowledges and agrees, are damages to be paid in lieu of future
Basic Rent and are reasonable in light of the anticipated harm arising by reason
of an Event of Default, and are not a penalty) in an amount calculated as the
sum of (i) the Casualty Value of the Aircraft (determined as of the next Basic
Rent Date after the date of the occurrence of the subject Event of Default),
(ii) all costs, charges and expenses, payable pursuant to Section 13, (iii) the
Variable Rent Component through the date of payment and all other Rent due
hereunder as of such determination date, less (iv) a credit for any disposition
----
proceeds, if applicable pursuant to the application provisions in the next
sentence. If Lessor demands such liquidated damages and recovers and sells the
Aircraft, any proceeds of such disposition by Lessor, to the extent received by
Lessor in good and indefeasible funds, shall be applied by Lessor (a) first, to
-----
pay all costs, charges and expenses, payable pursuant to Section 13, (b) second,
------
to pay to Lessor an amount equal to the liquidated damage amounts specified
herein, to the extent not previously paid, together with any other unpaid Rent
due and payable, (c) third, to pay to Lessor any interest accruing on the
-----
amounts covered by the preceding clauses, at the Late Payment Rate, from and
after the date the same become due and payable pursuant to the terms hereof
through the date of payment, and (d) fourth, any surplus remaining thereafter
------
shall be remitted to Lessees. Notwithstanding the foregoing, Lessor shall have
no obligation to make any of the remittances to Lessees that are contemplated in
any part of this definition if Lessor has paid such amounts to any guarantor or
other Person having a right of subrogation with respect to such amounts, or such
guarantor or other Person has demanded the payment of such amount.
Loaner Engine shall have the meaning set forth in Section 9(d).
-------------
Maintenance Requirements shall mean, with respect to the Airframe, any
-------------------------
Engine, any APU or any Part, all compliance requirements set forth in or under
(i) all maintenance manuals initially furnished with respect thereto,
20
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
including any subsequent amendments or supplements to such manuals issued by the
Manufacturer or Supplier from time to time, (ii) all mandatory service bulletins
issued, supplied, or available by or through the Manufacturer and/or the
Manufacturer of any Engine, any APU or Part with respect thereto, (iii) all
applicable airworthiness directives issued by the FAA or similar regulatory
agency having jurisdictional authority, (iv) all conditions to the enforcement
of any warranties pertaining thereto, (v) any Lessee's FAA approved maintenance
program with respect thereto, and (vi) all additional requirements, if any, set
forth in the Supplemental Maintenance Addendum.
Manager shall mean Executive Jet Management, Inc. an Ohio Corporation
-------
(Charter Registration Number 501856) having its principal office at 0000 Xxxxxxx
Xxxx Xxxxxxxxxx, Xxxx 00000.
Manufacturer shall mean each manufacturer identified on Schedule No. 1 and
------------
its successors and assigns.
Material Damage shall mean any damage: (a) required to be reported pursuant
---------------
to any governmental reporting requirement, (b) with respect to which an
insurance claim is being made, or (c) requiring that the Aircraft or any Engine
be taken out of service for more than five (5) business days to repair.
Maximum Lessee Risk Amount shall mean that certain percentage of Lessor's
----------------------------
Cost set forth in Schedule No. 2-A.
Parts shall mean all appliances, avionics, parts, instruments,
-----
appurtenances, accessories, furnishings and other equipment or property of
whatever nature (other than Additions or Engines), which may from time to time
be incorporated or installed in or attached to the Airframe or any Engine or any
APU for so long as Lessor shall retain an interest in such Parts in accordance
with the applicable terms of the Lease.
Permitted Liens shall mean (a) the interests of each Lessee under the
----------------
Lease, (b) the respective rights of others under subleases, management
agreements, or charters, if any, to the extent expressly provided and permitted
by the terms of Section 12 of the Lease, (c) Lessor's Liens, and (d) Liens for
taxes either not yet due or being contested by Lessees in good faith and
inchoate materialmen's, mechanic's, workmen's, repairmen's, employee's, or other
like Liens arising in the ordinary course of business of either Lessee for sums
not yet delinquent or being contested in good faith (and for the payment of
which adequate assurances and/or security have, in Lessor's sole judgment, been
provided to Lessor) with due diligence and by appropriate proceedings, if Lessor
shall have determined in its sole judgment that the nonpayment of any such tax
or Lien or the contest of any such payment in such proceedings does not and will
not adversely affect the title, property or rights of Lessor.
Permitted User shall have the meaning set forth in Section 12(a).
--------------
Person shall mean any individual, partnership, corporation, limited
------
liability company, trust, association, joint venture, joint stock company, or
non-incorporated organization or government or any department or agency thereof,
or any other entity of any kind whatsoever.
Purchase Documents shall mean all fully executed purchase agreements in
-------------------
connection with the acquisition of the Aircraft, including the Engines,
assignments of any or all of the Purchase Documents, in form and substance
satisfactory to Lessor, invoices and bills of sale from Supplier, naming Lessor
as purchaser and any other documents required in Section A.1(a) of the Closing
Terms Addendum.
Purchase Option Price shall mean that certain percentage of Lessor's Cost
-----------------------
set forth in Schedule No. 2-A.
Records shall mean any and all logs, manuals, certificates and data and
-------
inspection, modification, maintenance, engineering, technical, and overhaul
records (whether in written or electronic form) with respect to the Aircraft
(whether in existence as of, or created at any time after, the Acceptance Date),
including, without limitation, all records required to be maintained by the FAA
or any other governmental agency or authority having jurisdiction with respect
to the Aircraft or any Manufacturer or Supplier of the Aircraft (or any part
thereof) with respect to the enforcement of warranties or otherwise, which
Records shall be at all times the property of Lessor after the Acceptance Date.
Rent shall have the meaning set forth in Section 3 of the Lease.
----
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SUNTRUST LEASING CORPORATION
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Required Documents shall have the meaning set forth in the Closing Terms
-------------------
Addendum.
Requisition of Use shall have the meaning set forth in the Event of Loss
--------------------
definition contained herein.
Return to Manufacturer shall have the meaning set forth in the Event of
------------------------
Loss definition contained herein.
Schedules Xx. 0, 0, 0-X, 0 or 4 shall mean any of Schedules No. 1, 2, 2-A,
--------------------------------
3 or 4, as applicable, to Lease Supplement No. 1 to the Lease.
SEC shall mean the Securities and Exchange Commission.
---
Supplemental Rent shall have the meaning set forth in Section 3 of the
------------------
Lease.
Supplier shall mean the "Supplier" or "Suppliers", as the case may be,
--------
identified as such on Schedule No. 1 and their respective successors and
assigns.
Term shall mean the Basic Term together with (i) the period, if any, from
----
and including the Acceptance Date through, but not including, the Rent
Commencement Date, and (ii) any Renewal Term or Renewal Terms, if any, entered
into pursuant to the Lease.
Transportation Code shall mean Title 49, Subtitle VII of the United States
--------------------
Code, as in effect from time to time.
UCC shall mean the Uniform Commercial Code as in effect in the applicable
---
jurisdiction.
Warranty Xxxx of Sale shall mean a warranty xxxx of sale in a form
------------------------
acceptable to Lessor.
22
SUNTRUST LEASING CORPORATION
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INSURANCE ADDENDUM ("Insurance Addendum") to Aircraft Lease (S/N 258753)
-------------------
dated as of DECEMBER , 2005 (the "Lease"), between SUNTRUST LEASING
---- -----
CORPORATION, as lessor ("Lessor"), XXXXXXX IT SOLUTIONS SALES COMPANY, INC., a
------
Delaware corporation ("Sales"), and POMEROY SELECT INTEGRATION COMPANY, INC., a
Delaware corporation ("Integration") (Sales and Integration are jointly and
severally liable hereunder as co-obligors, as more particularly provided in
Section 17 of this Lease, and are each referred to individually as a "Lessee"
------
and collectively, the "Lessees").
-------
All capitalized terms not defined in this Insurance Addendum are defined in
the Lease. Execution of the Lease by Lessees and Lessor shall be deemed to
constitute execution and acceptance of the terms and conditions of this
Insurance Addendum, and it shall supplement and be a part of the Lease.
(a) Liability Insurance. Lessees shall maintain at their sole cost and
-------------------
expense for the entire Term with insurers of recognized reputation and
responsibility satisfactory to Lessor (but in no event having an A.M. Best or
comparable agency rating of less than "A-") (i) comprehensive aircraft and
general liability insurance against bodily injury or property damage claims
including, without limitation, contractual liability, premises damage, public
liability, death and property damage liability, public and passenger legal
liability coverage, and sudden accident pollution coverage, in an amount not
less than $200,000,000.00 for each single occurrence, and (ii) personal injury
liability in an amount not less than $50,000,000.00.
(b) "All-Risk" Hull Insurance. Lessees shall maintain at their sole
---------------------------
cost and expense for the entire Term with insurers of recognized reputation and
responsibility satisfactory to Lessor (but in no event having an A.M. Best or
comparable agency rating of less than "A-"), "all-risk" ground, taxiing, and
flight hull insurance on an agreed-value basis, covering the Aircraft, provided
that such insurance shall at all times be in an amount not less than the
Casualty Value of the Aircraft (such amount determined at the Acceptance Date
and at each anniversary of the Rent Commencement Date for each succeeding year
throughout the Term).
(c) War Risk and Allied Perils. Lessees shall also maintain war risk
----------------------------
and allied perils (including confiscation, appropriation, expropriation,
terrorism and hijacking insurance) in an amount not less than $50,000,000.00.
(d) Additional Policy Requirements. Any policies of insurance carried
-------------------------------
in accordance with this Insurance Addendum and any policies taken out in
substitution or replacement of any such policies (i) shall be endorsed to name
Lessor as the owner of the Aircraft and as additional insured as its interests
may appear (but without responsibility for premiums), (ii) with respect to
insurance carried in accordance with paragraphs (b) or (c), as applicable, shall
provide that any amount payable thereunder shall be paid directly to Lessor as
sole loss payee and not to Lessor and Lessees jointly, (iii) shall provide for
thirty (30) days written notice by such insurer of cancellation, material
change, or non-renewal, (iv) include a severability of interest clause providing
that such policy shall operate in the same manner as if there were a separate
policy covering each insured, (v) waive any right of set-off against any Lessee
or Lessor, and any rights of subrogation against Lessor, (vi) shall provide that
in respect of the interests of Lessor in such policies, the insurance shall not
be invalidated by any action or inaction of any Lessee or any other Person
operating or in possession of the Aircraft regardless of any breach or violation
of any warranties, declarations or conditions contained in such policies by or
binding upon any Lessee or any other Person operating or in possession of the
Aircraft, and (vii) shall be primary, not subject to any co-insurance clause and
shall be without right of contribution from any other insurance.
Notwithstanding clause (ii) of the preceding sentence, so long as no
Default has occurred and is continuing, and no Event of Default or Event of Loss
with respect to the Aircraft has occurred, the amounts referred to in clause
(ii) may be paid, as applicable, either (A) if $100,000.00, or more, in the
aggregate, to Lessor and either or both of the Lessees, jointly, as their
interests may appear, and released by Lessor to either or both of the Lessees or
other appropriate Persons in payment of the costs actually incurred with respect
to repairs made to the Aircraft so as to restore it to the operating condition
required by the Return Addendum or any other applicable provision of the Lease,
or shall be disbursed by Lessor as otherwise required by the Lease, or (B) if
less than $100,000.00 in the aggregate, to either or both of the Lessees (and
such amounts shall be applied by the same to pay the costs of such repairs).
(e) World Wide Coverage. All of the coverages required in this
---------------------
Insurance Addendum shall be in full force and effect worldwide throughout any
geographical areas to, in, or over which the Aircraft is operated.
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SUNTRUST LEASING CORPORATION
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(f) No Right To Self-Insure. Neither Lessee shall self-insure (by
--------------------------
deductible, premium adjustment, or risk retention arrangement of any kind) the
insurance required to be maintained hereunder.
(g) U.S. Dollars. All insurance proceeds payable under the requisite
-------------
policies shall be payable in U.S. Dollars.
(h) Adjustments to Coverage. Lessees agree to obtain and maintain such
-----------------------
other insurance coverages, or cause adjustments to be made to the scope, amount
or other aspects of the existing insurance coverages, promptly upon Lessor's
request, as and when Lessor deems such additional insurance coverages or
modifications to be appropriate in light of any changes in Applicable Law,
prudent industry practices, the insurance market, any Lessee's anticipated use
of the Aircraft, or other pertinent circumstances.
24
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
CLOSING TERMS ADDENDUM ("Closing Terms Addendum") to Aircraft Lease (S/N
----------------------
258753) dated as of DECEMBER , 2005 (the "Lease"), between SUNTRUST LEASING
---- -----
CORPORATION, as lessor ("Lessor"), XXXXXXX IT SOLUTIONS SALES COMPANY, INC., a
------
Delaware corporation ("Sales"), and POMEROY SELECT INTEGRATION COMPANY, INC., a
Delaware corporation ("Integration") (Sales and Integration are jointly and
severally liable hereunder as co-obligors, as more particularly provided in
Section 17 of this Lease, and are each referred to individually as a "Lessee"
------
and collectively, the "Lessees").
-------
All capitalized terms not defined in this Closing Terms Addendum are
defined in the Lease. Execution of the Lease by Lessees and Lessor shall be
deemed to constitute execution and acceptance of the terms and conditions of
this Closing Terms Addendum, and it shall supplement and be a part of the Lease.
A. Purchase and Required Documents. On or prior to the Acceptance Date and
--------------------------------
at least one full Business Day prior to closing, Lessees shall have delivered or
caused to be delivered the following to Lessor, as applicable:
1. "Purchase Documents" including copies of the following: (a) All
--------------------
purchase and warranty agreements entered into by any Lessee or any predecessors
in connection with the acquisition of the Aircraft, including the assignment of
such purchase agreements to Lessor; (b) warranty bills of sale conveying title
to the Aircraft, including the Engines, from Supplier to Lessor; (c) invoices in
Lessor's name for the purchase of the Aircraft, including the Engines; and (d)
all exhibits, addenda, supplements and revisions, and such other documents
relating to the purchase or conveyance of title as Lessor may request.
2. "Required Documents" shall mean and include the following:
-------------------
(a) All Lease Documents, including four (4) executed counterparts
of the Lease, Lease Supplement and Schedules thereto.
(b) UCC assignments, releases and/or termination statements, where
needed, as to the Aircraft and the Collateral in all places which are, in
Lessor's opinion, necessary or appropriate to perfect Lessor's first priority
security interest in the Aircraft and any Collateral and to otherwise protect
Lessor's interest therein.
(c) An opinion of counsel for Lessees in form and substance
satisfactory to Lessor.
(d) Certificate(s) of good standing for each Lessee from the state
of its organization and the state(s) where the Primary Hangar Location and each
Lessee's chief executive offices and principal place of business are located.
(e) A certificate or certificates, executed by each Lessee's
secretary or other authorized representative certifying: (i) that execution,
delivery and performance of the Lease and the other Lease Documents and the
entrance by such Lessee into the transactions contemplated hereby and thereby
have been authorized, (ii) the name(s) of the person(s) authorized to execute
and deliver such documents on behalf of such Lessee together with specimen
signature(s) of such person; and (iii) such Lessee's articles of incorporation
and by-laws.
(f) Evidence in form and substance satisfactory to Lessor as to
the insurance coverage required under the Insurance Addendum, including, but not
limited to, a certificate of insurance, copies of endorsements (including a
Lessor endorsement), applicable policies and written confirmation from the
insurance underwriter or broker that the insurance coverage provided is in
compliance with the requirements of the Insurance Addendum of the Lease.
(g) If required by Lessor, an inspection report and/or appraisal
satisfactory to Lessor with respect to the Aircraft prepared by inspector(s) or
appraiser(s) acceptable to Lessor.
(h) Such other documents, certificates and opinions, and evidence
of such other matters, as Lessor, Lessor's counsel or FAA Counsel may reasonably
request.
B. FAA Documents. On or prior to the Acceptance Date and at least one full
--------------
Business Day prior to closing, Lessees shall have delivered to FAA counsel the
following "FAA Documents", as applicable:
--------------
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SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
1. Evidence of reservation of a FAA registration number for the
Aircraft and/or an Assignment of Special Registration Number (FAA AC Form
8050-64) assigning rights in such "N" number to Lessor with respect to the
Aircraft.
2. Evidence of the issuance by the FAA of a Standard Airworthiness
Certificate (FAA AC Form 8100-2) for the Aircraft.
3. (a) The executed FAA Aircraft Xxxx of Sale (FAA AC Form 8050-2) (the
"FAA Xxxx of Sale") in the name of Lessor; (b) the executed FAA Aircraft
-------------------
Registration Application (FAA AC Form 8050-1) (the "Registration Application")
------------------------
in the name of Lessees (except for the pink copy which shall be available to be
placed on the Aircraft upon acceptance thereof); (c) executed releases of any
Liens in form and substance satisfactory to FAA Counsel, Lessor's counsel and/or
Lessor; (d) one (1) fully executed counterpart of the Lease and the Lease
Supplement and Schedules thereto, all the foregoing being in proper form for
filing with the FAA; (e) such other documents as are necessary, in the opinion
of FAA Counsel, to evidence and perfect Lessor's first priority security
interest in and to the Aircraft; and (f) a Declaration of International
Operations if any Lessee will fly the Aircraft out of the continental U.S.
within thirty (30) days after Closing; and (g) if applicable, a LLC Application
or statement acceptable to the FAA
C. Conditions Subsequent.
---------------------
1. On or subsequent to the Acceptance Date, but not later than the date
of the Aircraft's first flight under the leasehold conveyed herein, Lessees
shall properly place on the Aircraft pertinent copies of the Registration
Application, Standard Airworthiness Certificate, and the Lease, including the
Lease Supplement. In addition, for all operations outside the continental U.S.,
Lessees shall maintain either a permanent Certificate of Registration or
"fly-time wire" (FAA Standard Form 14) on-board the Aircraft.
2. Lessees shall (a) within 24 hours following execution thereof, mail
a copy of the Lease to the Flight Standards Technical Division of the FAA; and
(b) notify the FAA (such notification to be given by facsimile transmission,
telephone, or in person to the FAA Flight Standards District Office, General
Aviation District Office nearest the airport where such flight will originate)
concerning the first flight of the Aircraft under the Lease at least forty-eight
(48) hours prior to takeoff.
3. Within five (5) business days after the closing, Lessor shall
receive an opinion of FAA Counsel satisfactory to Lessor that title to the
Airframe is vested in Lessees, that Lessor has a valid and perfected first
priority security interest in the Aircraft (including the Airframe and Engines),
and that the Aircraft (including the Airframe and Engines) is free and clear of
all other Liens of record.
26
SUNTRUST LEASING CORPORATION
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OPTION ADDENDUM ("Option Addendum") to Aircraft Lease (S/N 258753) dated as
---------------
of DECEMBER , 2005, (the "Lease"), by and between SUNTRUST LEASING
---- -----
CORPORATION, as lessor ("Lessor"), XXXXXXX IT SOLUTIONS SALES COMPANY, INC., a
------
Delaware corporation ("Sales"), and POMEROY SELECT INTEGRATION COMPANY, INC., a
Delaware corporation ("Integration") (Sales and Integration are jointly and
severally liable hereunder as co-obligors, as more particularly provided in
Section 17 of this Lease, and are each referred to individually as a "Lessee"
------
and collectively, the "Lessees").
-------
All capitalized terms not defined in this Option Addendum are defined
herein in the Lease. Execution of the Lease by Lessees and Lessor shall be
deemed to constitute execution and acceptance of the terms and conditions of
this Option Addendum, and it shall supplement and be a part of the Lease.
(a) End of Term Purchase Option. So long as (i) no Event of Default
------------------------------
shall have occurred, and (ii) Lessees shall not have exercised the renewal
option pursuant to paragraph (b) hereof, Lessees may, upon giving irrevocable
written notice to Lessor at least two hundred forty (240) days prior to the
Expiration Date, purchase the Aircraft at the expiration of the Basic Term for
an amount, payable in immediately available funds, for an amount (the "Purchase
--------
Price"), payable in immediately available funds, equal to the Purchase Option
-----
Price plus any applicable Impositions resulting from such sale, together with
----
any Basic Rent due and payable on or before the Expiration Date and all other
accrued and unpaid Rent. Lessor's sale of the Aircraft shall be on an "AS-IS
WHERE-IS" basis.
(b) Renewal Option. So long as (i) no Default or Event of Default
---------------
shall have occurred, and (ii) Lessees shall not have exercised the purchase
option pursuant to paragraph (a) hereof, Lessees may renew this Lease up to four
times for Renewal Terms having a term of the length referred to on Schedule 2,
commencing upon the expiration of the Basic Term or the then-expiring Renewal
Term. Lessees' option to renew the Lease for a Renewal Term shall be
exercisable by giving irrevocable written notice to Lessor at least two hundred
forty (240) days prior to the expiration of the Term. Except for during the
fourth Renewal Term in which there shall be no further Renewal Option, all of
the provisions of the Lease shall be applicable during a Renewal Term and Basic
Rent shall be payable in the same manner and frequency as the Basic Rent was
payable during the Basic Term, which payment dates shall be deemed "Basic Rent
----------
Dates" for purposes of the Lease.
-----
(c) Time to Exercise Option. Notwithstanding the provisions of
--------------------------
paragraphs (a) and (b) above, Lessees shall be deemed to have waived the
foregoing options unless Lessees provide Lessor with written notice of its
irrevocable election to exercise the applicable option within two hundred forty
(240) days prior to the expiration of the Basic Term.
(d) Return Option. If Lessees have elected to return the Aircraft,
--------------
then upon making such election, Lessees shall place and keep the Aircraft in the
condition required upon return by the Lease. During the period from the giving
of notice of Lessees' election to return the Aircraft until the date seven (7)
days prior to the Expiration Date, Lessees, as agent for Lessor, but at no risk,
expense or cost to Lessor of any kind whatsoever, shall use their best efforts
(but in no event less effort than used to sell aircraft or equipment any Lessee
owns itself) to sell the Aircraft in a commercially reasonable manner and to
secure the highest obtainable bids for the purchase of the Aircraft. Lessor
may, but shall be under no obligation to, solicit bids, inquire into the efforts
of Lessees to obtain bids or otherwise take any action in connection with any
such sale. In the event any Lessee receives any bid during such period, Lessees
shall promptly certify to Lessor in writing the amount and terms of each such
bid and the name and address of the Person submitting such bid. All of such
bids shall be subject to the prior written approval of Lessor, and Lessees shall
inform all bidders of this requirement when requesting any bids.
If Lessor receives the proceeds from such sale of the Aircraft, together
with the Return Amount (as defined below), in good collected funds on the
Expiration Date (such date, or any earlier date on which Lessor receives such
amounts in good collected funds, the "Sale Date"), then on the Sale Date Lessor
---------
shall sell the Aircraft for cash to the bidder, if any, that submitted the
highest bid prior to the Sale Date and which was approved by Lessor. Lessor
shall receive all proceeds of such sale. Lessees shall pay to Lessor an amount
(the "Return Amount"), payable in immediately available funds, equal to the sum
-------------
of: (i) any Basic Rent due and payable on or before the Sale Date; (ii) all
accrued and unpaid Rent then due and owing; and (iii) if the Net Sales Proceeds
are less than the Purchase Option Price, the amount by which the Purchase Option
Price exceeds the Net Sales Proceeds, but in no event more than the Maximum
Lessee Risk Amount. In the event the Net Sales Proceeds exceed the Purchase
27
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
Option Price, Lessor shall pay either or both of the Lessees the amount by which
the Net Sales Proceeds exceed the Purchase Option Price. For purposes hereof,
"Net Sales Proceeds" means the gross proceeds received by Lessor in good and
--------------------
indefeasible funds from the sale of the Aircraft pursuant to this paragraph
minus (A) all remarketing fees and all reasonable costs, expenses and fees
-----
incurred in removing, storing, maintaining, repairing and selling or otherwise
disposing of the Aircraft and (B) any sales, use, value added, goods and
services taxes, excise or other tax, assessment, charge or other Impositions
imposed as a result of the sale of the Aircraft (other than gross or net income
taxes attributable to the sale of the Aircraft).
On the Sale Date, Lessor shall convey to the purchaser thereof all of
Lessor's right, title and interest in and with respect to the Aircraft, to the
extent retained by Lessor after giving effect to the Lease, on an "AS-IS
WHERE-IS" BASIS, WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF
ANY KIND WHATSOEVER, BY, AND WITHOUT ANY RECOURSE TO, LESSOR, except as to
Lessor's Liens and will release its security interest in the Aircraft.
If the Aircraft is not sold pursuant to the exercise of Lessees' return
option on or before the Expiration Date, then, on such Expiration Date, Lessees
shall return the Aircraft to Lessor under the terms and in the condition
required by the Lease and shall pay to Lessor an amount (the "No Sale Amount"),
--------------
payable in immediately available funds, equal to the sum of: (a) any Basic Rent
due and payable on or before the Expiration Date; (b) all accrued and unpaid
Rent then due and owing; and (c) the Maximum Lessee Risk Amount. If Lessees
have so returned the Aircraft and has paid Lessor the No Sale Amount, Lessor
shall arrange for the commercially reasonable sale, scrap or other disposition
of the Aircraft. Upon such sale, scrap or other disposition of the Aircraft
(the "Disposition"), the proceeds received by Lessor in good and indefeasible
-----------
funds from the Disposition shall be allocated: first, to Lessor in an amount
-----
equal to the sum of: (i) all remarketing fees, costs, expenses and fees
incurred in removing, storing, maintaining, repairing, selling and otherwise
disposing of the Aircraft; (ii) the amount by which the Purchase Option Price
exceeds the Maximum Lessee Risk Amount; (iii) any sales, use, value added, goods
and services taxes, excise or other tax, assessment, charge or other Impositions
imposed as a result of the Disposition (other than gross or net income taxes
attributable to the Disposition); and (iv) additional Basic Rent calculated on a
per diem basis at the Daily Lease Rate for the period from the Expiration Date
through and including the date on which Lessor receives the net proceeds of the
Disposition in good collected funds; and second, the excess, if any, to either
------
or both of the Lessees.
28
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
RETURN ADDENDUM ("Return Addendum") to Aircraft Lease (S/N 258753) dated as
---------------
of DECEMBER , 2005 (the "Lease"), between SUNTRUST LEASING CORPORATION, as
---- -----
lessor ("Lessor"), XXXXXXX IT SOLUTIONS SALES COMPANY, INC., a Delaware
------
corporation ("Sales"), and POMEROY SELECT INTEGRATION COMPANY, INC., a Delaware
corporation ("Integration") (Sales and Integration are jointly and severally
liable hereunder as co-obligors, as more particularly provided in Section 17 of
this Lease, and are each referred to individually as a "Lessee" and
------
collectively, the "Lessees").
-------
All capitalized terms not defined in this Return Addendum are defined in
the Lease. Execution of the Lease by Lessees and Lessor shall be deemed to
constitute execution and acceptance of the terms and conditions of this Return
Addendum, and it shall supplement and be a part of the Lease.
The following provisions are hereby incorporated into the Lease:
(a) Condition Upon Return. Unless purchased by Lessees, upon the
-----------------------
expiration, cancellation, or other termination of the Lease, Lessees will return
the Aircraft (together with all Records) to Lessor at a location specified by
the Lessor within 500 miles of Baltimore, Maryland. The Aircraft shall be fully
equipped with the Engines or the same number, make, and model of engines as are
set forth on Schedule No. 1, which shall fully comply with the Lease, and shall
be, in the opinion of Lessor, in the same operating condition as the Engines had
on the Acceptance Date (normal wear and tear excepted) and within the
performance specifications of their manufacturer and that are suitable for use
on the Airframe and owned by Lessor and properly installed thereon. The
Aircraft, at Lessees' expense, upon redelivery pursuant hereto (i) shall have a
currently effective FAA airworthiness certificate; (ii) shall be free and clear
of all Liens other than the Lease and any Lessor's Liens; (iii) shall be in the
same configuration, coloring and appearance and, in the opinion of Lessor, in
the same operating condition as the Aircraft had on the Acceptance Date (normal
wear and tear excepted) and within the performance specifications of its
manufacturer, or, at Lessor's option, Lessees shall pay to Lessor an amount
equal to the actual cost of such restoration; (iv) shall be in good operating
condition, physical condition and appearance (ordinary wear and tear excepted),
with all systems operating normally; (v) shall have no damage history, unless
such damage has been repaired in accordance with the Lease; (vi) shall have no
open mandatory service bulletins or airworthiness directives, and if terminating
action is required within six (6) months of the date of return, Lessees shall
comply with each of the same by terminating action, and shall be in compliance
with all other Applicable Law and Maintenance Requirements; and (vii) shall be
otherwise in the condition and repair required under the Lease.
(b) Damage History and Excess Use Compensation.
-----------------------------------------------
(i) Damage History. If Lessor is of the opinion that the
---------------
Aircraft's fair market sales value is diminished due to the existence of any
damage history, Lessor and either or both of the Lessees shall consult for the
purpose of determining the Diminution Amount (as defined below), and any values
agreed upon in writing between Lessor and any such Lessee shall be binding on
both parties. The "Diminution Amount" shall mean the amount by which (A) the
------------------
Fair Market Sales Value of the Aircraft without such damage history exceeds (B)
the Fair Market Sales Value of the Aircraft with such damage history (and as to
this sub-clause (B), without making the assumption in clause (iii)(B) of the
definition of Fair Market Sales Value). If Lessees and Lessor fail to agree as
to the Diminution Amount within ten (10) days after the return of the Aircraft
to Lessor, then Lessor shall appoint an independent appraiser (reasonably
acceptable to Lessees) to determine the Diminution Amount. Lessees agree to pay
the costs and expenses of any such determination and appraisal. The mutually
agreed upon independent appraiser shall be required to complete such
determination as promptly as practicable, but in any event, not later than forty
(40) days after the date on which it is appointed. A final determination by the
independent appraiser regarding the extent of any Diminution Amount shall be
binding on each Lessee and Lessor. Lessees shall pay to Lessor within ten (10)
days after the independent appraiser's determination an amount equal to the
Diminution Amount, if any.
(ii) Excess Use. Upon the return of the Aircraft to Lessor,
-----------
Lessor and either or both of the Lessees shall consult for the purpose of
determining the Excess Use Amount (as defined below), if any. Any amount so
agreed upon in writing between Lessor and any such Lessee shall be binding on
both parties. The "Excess Use Amount" shall mean the amount, if any, by which
-----------------
(A) the Fair Market Sales Value of the Aircraft without such Excess Hours,
exceeds (B) the Fair Market Sales Value of the Aircraft with such Excess Hours
(and as to this subclause (B), without making the assumption in clause (iii)(C)
of the definition of Fair Market Sales Value). If Lessor and Lessees fail to
agree as to the Excess Use Amount within ten (10) days after the return of the
Aircraft to Lessor, then Lessor
29
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
shall appoint an independent appraiser (reasonably acceptable to Lessees) to
determine the Excess Use Amount. Lessees agree to pay the costs and expenses of
any such determination and appraisal. The independent appraiser shall be
required to complete such determination as promptly as practicable, but in any
event, not later than forty (40) days after the date on which it is appointed.
A final determination by the independent appraiser regarding the extent of the
Excess Use Amount, if any, shall be binding on Lessor and Lessees. Lessees
shall pay to Lessor within ten (10) days after the independent appraiser's
determination an amount equal to the Excess Use Amount.
(c) Mid-Life Condition. Upon return (i) each Engine and APU shall have
------------------
available operating hours or months until the next scheduled "hot section"
inspection, mid-life inspection or the next scheduled major overhaul of not less
than fifty percent (50%) of the total operating hours or months available
between such hot section inspection, mid-life inspection, or major overhaul, as
the case may be; (ii) the Airframe shall have remaining not less than (aa) fifty
percent (50%) of the available operating hours allowed between major airframe
inspections; and (bb) fifty percent (50%) of the number of available operating
months allowed between major airframe inspections until the next scheduled major
airframe inspection; and (iii) all life limited parts and components shall have
remaining not less than fifty percent (50%) of the available hours, cycles
and/or months, as the case may be, until the next scheduled replacement. In
addition to the requirements set forth in clauses (i), (ii), and (iii) above,
all inspections and scheduled maintenance required to be performed on the
Airframe, Engines and APU and all life limited parts and components within one
hundred twenty (120) days of the date of return and/or one hundred (100) hours
of additional operation shall have been performed by Lessees.
(d) Engines. If any Engine does not comply with paragraph (c)(i)
-------
above, for each such Engine, Lessees shall pay Lessor an amount equal to either
(i) the current estimated cost of the next scheduled "hot section" or mid-life
inspection, as the case may be (including in such estimated cost, all required
replacements of life limited parts) multiplied by the fraction wherein the
numerator shall be the greater of (A) zero, and (B) the difference between (x)
the actual number of operating hours or months since the previous hot section or
mid-life inspection, as the case may be, and (y) fifty percent (50%) of the
total operating hours or months allowable between hot section or mid-life
inspections, as the case may be, and the denominator shall be the total
operating hours or months allowable between hot section or mid-life inspection,
as the case may be, or (ii) for each such Engine, the product of the current
estimated cost of the next scheduled major overhaul (including in such estimated
cost, all required replacements of life limited parts) multiplied by the
fraction wherein the numerator shall be the greater of (A) zero, and (B) the
difference between (x) the actual number of hours of operation since the
previous major overhaul, and (y) fifty percent (50%) of the total operating
hours allowable between major overhauls, and the denominator shall be the total
operating hours allowable between major overhauls. Each Lessee shall,
immediately upon request, assign to Lessor its rights under any manufacturer's
maintenance service contract or extended warranty for the Aircraft, any engine,
any APU, or part.
(e) Airframe. If the Airframe does not comply with paragraph (c)(ii)
--------
above, Lessees shall pay to Lessor an amount equal to the sum of the product of
the current estimated cost of the next scheduled major airframe inspection
(including in such estimated cost, all required replacement of life limited
parts) multiplied by the fraction wherein the numerator shall be the greater of
(i) zero, and (ii) the difference between (x) the actual number of respective
operating hours or months of operation since previous major airframe inspection,
and (y) 50% of the respective total operating hours or months of operation
allowable between scheduled major airframe and pressure vessel inspections, and
the denominator shall be the respective total operating hours or months of
operation between scheduled major airframe inspections.
(f) Maintenance Contracts. Lessees need not compensate Lessor as
----------------------
contemplated in paragraphs (d) or (e) above, as the case may be, if at the time
of the return of the Aircraft to Lessor:
(i) in the case of paragraph (d) above,
(A) both of the Engines are covered by a service and
maintenance contract in form and substance satisfactory to Lessor which provides
for the maintenance and/or overhaul of such property,
(B) either (x) adequate reserves for future required
maintenance and/or overhaul shall have been provided for pursuant to such
maintenance contract, or (y) all amounts due and payable pursuant to such
maintenance contract shall have been paid in full through the date of return,
and
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SUNTRUST LEASING CORPORATION
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(C) the entity which provides the maintenance and/or overhaul
services under such maintenance contract shall either (x) recognize the transfer
by Lessees to Lessor of the rights and interests of Lessor (or its designee)
under such maintenance contract, or (y) acknowledge the rights and interests of
Lessor (or its designee) under such maintenance contract, and
(ii) in the case of paragraph (e) above,
(A) the Airframe is covered by a service and maintenance
contract in form and substance satisfactory to Lessor which provides for the
maintenance and/or overhaul of such property,
(B) either (x) adequate reserves for future required
maintenance and/or overhaul shall have been provided for pursuant to such
maintenance contract, or (y) all amounts due and payable pursuant to such
maintenance contract shall have been paid in full through the date of return,
and
(C) the entity which provides the maintenance and/or overhaul
services under such maintenance contract shall either (x) recognize the transfer
by Lessees to Lessor of the rights and interests of Lessor (or its designee)
under such maintenance contract, or (y) acknowledge the rights and interests of
Lessor (or its designee) under such maintenance contract.
(g) Parts and Components. If any life limited part or component does
----------------------
not comply with paragraph (c)(iii) above, Lessees shall pay to Lessor with
respect to each part or component for which said requirement is not met the
dollar amount obtained by multiplying (i) the ratio that the life expended in
excess of fifty percent (50%) of the available hours, cycles and/or months, as
the case may be, until the next scheduled replacement bears to the total
allowable life (measured in hours, cycles and/or months, as the case may be) for
such part or component by (ii) Lessor's cost of replacement of such part or
component. Lessor's cost of replacement of a part or component shall include
Lessor's then current cost of purchasing the part or component itself and all of
Lessor's then current costs associated with the replacement.
(h) Inspection Overhaul Charges. All restoration costs and prorated
-----------------------------
inspection and/or overhaul charges, if any, shall be due upon presentation to
either or both of the Lessees of an invoice setting forth in reasonable detail
the calculation of such amounts due, including the names of all sources used for
the required cost estimates. Unless both Lessor and Lessees agree to an
alternative source, or as provided herein, the Manufacturers of the Airframe and
Engines shall be used as the sources for all cost estimates.
(i) Fuel. Upon return, each fuel tank shall contain no less than fifty
----
percent (50%) of its full capacity, or in the case of differences in such
quantity, an appropriate adjustment will be made at the then current market
price of fuel.
(j) Records. Lessees shall deliver all Records to Lessor, including:
-------
(i) All of the following: (A) all records of maintenance,
preventative maintenance, alterations and major repairs, (B) all Airframe and
Engine logbooks endorsed for current total time and cycles for the airframe,
total time and cycles for each Engine and an entry for total time and cycles
since overhaul and hot section inspection for each Engine; and the Airframe
logbook must include all appropriate endorsements (i.e., maintenance releases)
verifying that the avionics have been periodically tested and inspected in
accordance with all applicable provisions of the FARS and the applicable
maintenance program, (C) a current written summary certified by a FAA-licensed
mechanic listing the status of all applicable airworthiness directive and
service bulletins for the Airframe, Engines, any APU, Parts and appliances, and
(D) a written summary certified by a FAA-licensed mechanic of the current status
of life limited and/or overhauled components for the Airframe, Engines (in
accordance with the Manufacturer's recommended intervals), Engine accessories,
any APU, Parts and appliances as defined in the most current revision(s) of all
Manufacturers' maintenance publications applicable to the Aircraft.
(ii) The following documentation and data for each component
having an overhaul or inspection requirement of life limit, which components are
identified in pertinent sections of the maintenance program applicable to the
Aircraft as follows: (A) an airworthiness release certificate or maintenance
release tag, (B) the Vendor work
31
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
order or copy thereof verifying the details of each component overhaul, and (C)
an appropriate record certifying the date and expended time status of the
component when installed (i.e., copy of log or inspection squawk card), all of
which must be properly organized and provided on board the Aircraft at the time
it is returned to Lessor.
(iii) To the extent not covered above, Lessees will also deliver
to Lessor all work cards, computerized maintenance history, component
serviceability tags, STCs, 337s, maintenance manuals, and structural repair
manuals.
All manuals or other documents delivered to Lessor which are subject to
periodic revision will be fully up-to-date and current to the latest revision
standard of any particular manual or document. If the Aircraft is on a
computerized maintenance program, such program will be up-to-date in accordance
with the Manufacturer's recommended maintenance schedule and fully assignable to
Lessor at redelivery. Lessees will provide all of the following Records to
Lessor upon return of the Aircraft to Lessor, regardless of whether any Lessee
has conducted its periodic inspections of the Aircraft pursuant to pertinent
sections of the Maintenance Program or in accordance with an inspection program
approved by the FAA. In the event any Records are missing or incomplete, Lessor
shall have the right to cause any such Records to be reconstructed at Lessees'
expense. All Records shall be in English.
(k) Storage. Upon the expiration, cancellation or other termination of
-------
the Lease, Lessees will, if requested by Lessor, permit Lessor to store the
Aircraft at the Primary Hangar Location for up to thirty (30) days. During such
storage period Lessees will, at their own expense, keep the Aircraft properly
hangared and will permit Lessor or any Person designated by Lessor, including
the authorized representatives of any prospective purchaser, lessee or user of
the Aircraft to inspect the same. Lessees shall bear the risk of loss and shall
pay any and all expenses connected with insuring and maintaining the Aircraft
during such storage period. Notwithstanding the foregoing, upon the
cancellation or termination of the Lease in connection with an Event of Default,
the storage period provided for in this paragraph and the obligation to hangar
and insure the Aircraft shall be unlimited.
(l) Replacement Engines. If any engine not owned by Lessor shall be
--------------------
installed on the returned Airframe as set forth in paragraph (a) hereof, then
Lessees will, concurrently with such delivery, at their own expense, furnish
Lessor with a full warranty xxxx of sale, in form and substance satisfactory to
Lessor with respect to each such engine and with a written opinion of FAA
Counsel to the effect that, upon such return, Lessor will acquire a valid and
perfected interest in such engine free and clear of all Liens (except Lessor's
Liens). Thereupon, unless a Default or Event of Default shall have occurred and
be continuing, Lessor will transfer to Lessees, on an "AS-IS, WHERE-IS" basis,
all of Lessor's right, title and interest in and to any Engine not installed on
the Airframe at the time of the return of such Airframe.
(m) Inspections. Not more than forty-five (45) days prior to the
-----------
expiration of the Lease, upon the written request of Lessor, Lessees shall
certify to Lessor that the Aircraft is in the condition required by this Return
Addendum, or indicate what maintenance or repair is needed to bring the Aircraft
to the specified condition. Without limiting the provisions of Section 14(d) of
the Lease, Lessor shall have the right, but not the duty, to inspect the
Aircraft, any component thereof and/or the Records, at any reasonable time and
from time to time, wherever located, upon reasonable prior written notice to any
Lessee, except that no advance notice shall be necessary prior to any inspection
conducted, and such inspection may be conducted at any time, after the
occurrence of a Default or an Event of Default. Upon request of Lessor, Lessees
shall promptly confirm to Lessor the location of the Aircraft and/or the Records
and shall, at any reasonable time and from time to time, upon reasonable prior
written notice to any Lessee, make the Aircraft and the Records available to
Lessor for inspection. Lessees shall be responsible for the cost of such
inspection and shall pay Lessor such amount as additional Rent within ten (10)
days of demand. If the results of such inspection indicate that the Aircraft,
any Engine, any APU or Part, has not been maintained or returned in accordance
with the provisions of the Lease, in addition to all other Rent due under the
Lease, Lessees shall pay to Lessor within ten (10) days of demand, as liquidated
damages, the estimated cost of servicing or repairing any such non-complying
item. Such amount shall be determined by Lessor by obtaining two quotes for
such service or repair work and taking their average. Lessees shall bear the
cost, if any, incurred by Lessor in obtaining such quotes.
(n) Holdover Rent. If Lessees fail to return the Aircraft (including
--------------
the Records) at the time, place and in the condition specified in this Return
Addendum, all of Lessees' obligations under the Lease shall continue until it is
so
32
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
returned to Lessor, as liquidated damages, and not as a penalty, and, in
addition to all other Rent due under the Lease, Lessees shall pay to Lessor an
amount equal to the greater of the fair market rent value (which for the
purposes of this Section shall be as determined by Lessor) or the Daily Rent for
each day after the end of the Term to, but excluding the day the Aircraft is
actually returned in accordance with this Return Addendum; provided, however,
-------- -------
that the obligation to pay any such holdover or additional rent shall neither
extend the time to return, nor constitute a waiver of any Default or Event of
Default arising by reason of such failure to return. Such amount shall be
payable upon the earlier of Lessor's demand or the return of the Aircraft in
accordance with the Lease.
(o) Lease Termination. Lessees agree to execute, if requested by
------------------
Lessor, a lease termination statement.
(p) Supplemental Rent. All of the amounts payable under this Return
------------------
Addendum shall constitute Supplemental Rent.
(q) Survival. The provisions of this Return Addendum shall survive the
--------
expiration, cancellation or other termination of the Lease and the return of the
Aircraft to Lessor for any reason whatsoever.
(r) Injunctive Relief. Without limiting any other terms or conditions
------------------
of the Lease, the provisions of this Return Addendum are of the essence of the
Lease, and upon application to any court of equity having jurisdiction, Lessor
shall be entitled to a decree against Lessees requiring specific performance of
the covenants of Lessees set forth herein.
33
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
LEASE SUPPLEMENT (ACCEPTANCE CERTIFICATE)
THIS LEASE SUPPLEMENT (this "Lease Supplement"), is being entered into as
----------------
of DECEMBER , 2005, by and between SUNTRUST LEASING CORPORATION, as lessor
----
("Lessor"), XXXXXXX IT SOLUTIONS SALES COMPANY, INC., a Delaware corporation
------
("Sales"), and POMEROY SELECT INTEGRATION COMPANY, INC., a Delaware corporation
("Integration") (Sales and Integration are jointly and severally liable
hereunder as co-obligors, as more particularly provided in Section 17 of this
Lease, and are each referred to individually as a "Lessee" and collectively, the
------
"Lessees"), pursuant to that certain Aircraft Lease (S/N 258753) dated as of the
-------
date hereof (the "Lease"), by and between Lessor and Lessees, and this Lease
-----
Supplement shall constitute a part of the Lease.
(a) Acceptance of Aircraft. Each Lessee hereby acknowledges, agrees,
------------------------
and certifies that the Aircraft described in Schedule No. 1 hereto: (1) is in
Lessees' possession, has been inspected by each Lessee to its complete
satisfaction, has been found to be in good working order, repair and condition
and fully equipped to operate under Applicable Law, (2) is of a size, design,
capacity and manufacture selected by each Lessee and suitable for each Lessee's
purposes, and (3) is as of the date hereof ("Acceptance Date"), unconditionally,
---------------
irrevocably and fully accepted by each Lessee for lease under the Lease. Each
Lessee hereby further unconditionally and irrevocably reaffirms its
acknowledgments and agreements in the Lease. All capitalized terms used herein
which are not otherwise defined herein shall have the meanings given to such
terms in the Lease.
(b) Acknowledgments and Representations by Lessee. Each Lessee hereby
----------------------------------------------
acknowledges, agrees, and certifies that:
(1) The representations and warranties of each Lessee set forth in
the Lease and all certificates and opinions delivered in connection with the
Lease were true and correct in all respects when made and are true and correct
as of the date hereof, with the same force and effect as if the same had been
made on this date.
(2) Lessees have obtained, and there are in full force and effect,
all insurance policies required under the Lease, and Lessees have caused
evidence of the required coverage to be provided to Lessor prior to the date
hereof. Lessees have also satisfied or complied with all of the other
conditions precedent set forth in the Lease, including those set forth in the
Closing Terms Addendum.
(3) No Default or Event of Default exists as of the date of this
Lease Supplement.
(4) Lessees have furnished no equipment for the Aircraft other
than (i) as stated on Schedule No. 1, or (ii) permitted as an Addition pursuant
to this Lease.
(5) The facts, terms, information, description, and costs set
forth in the attached Schedules Xx. 0, Xx. 0, Xx. 0-X, Xx. 0 and No. 4 are true,
complete, accurate, and correct.
(6) Each financial statement delivered to Lessor prior to the date
of this Lease Supplement was prepared in accordance with GAAP, and since the
date of the most recent financial statement (as specified on Schedule No. 2)
there has been no material adverse change in the financial condition of either
Lessees.
(7) LESSOR HAS NOT MANUFACTURED OR SUPPLIED THE AIRCRAFT, AND
LESSOR ACQUIRED THE AIRCRAFT IN CONNECTION WITH THE LEASE. EACH LESSEE HAS
SELECTED THE AIRCRAFT AND MAINTENANCE PROVIDERS WITHOUT ANY ASSISTANCE FROM
LESSOR, ITS AGENTS OR EMPLOYEES AND EACH LESSEE IS LEASING THE AIRCRAFT "AS-IS"
AND "WHERE-IS".
[SIGNATURE ON NEXT PAGE]
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, each Lessee has caused this Lease Supplement to be duly
executed by its officer thereunto duly authorized.
XXXXXXX IT SOLUTIONS SALES COMPANY, INC.
By:
--------------------------------
Name:
Title:
POMEROY SELECT INTEGRATION COMPANY, INC.
By:
--------------------------------
Name:
Title:
THIS IS COUNTERPART NO. __ OF A TOTAL OF 4 COUNTERPARTS. ONLY COUNTERPART NO. 1
SHALL BE CONSIDERED CHATTEL PAPER FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE
AND A SECURITY INTEREST MAY BE PERFECTED ONLY BY POSSESSION OF COUNTERPART NO.
1.
2
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
SCHEDULE NO. 1 TO LEASE SUPPLEMENT
DESCRIPTION OF AIRCRAFT
2006 RAYTHEON AIRCRAFT COMPANY HAWKER 800XPi aircraft that consists of the
following components:
(a) Airframe bearing FAA Registration Xxxx N805M and manufacturer's serial
number 258753.
(b) Two (2) Honeywell TFE731-5BR aircraft engines bearing manufacturer's
serial numbers P-129151 and P-129152 (each of which has 750 or more
rated takeoff horsepower or the equivalent of such horsepower).
(c) One (1) Honeywell model 36-150 (W) auxiliary power unit bearing
manufacturer's serial number 875.
(d) Standard avionics and equipment, all other accessories, additions,
modifications and attachments to, and all replacements and
substitutions for, any of the foregoing, all as more particularly
described on Schedule A attached hereto and made a part hereof.
-----------
(e) Those items of Lessee furnished equipment which are installed on the
aircraft and are as described in a xxxx of sale or bills of sale
therefor, delivered by Lessee to Lessor (copies of which may be
appended hereto).
3
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------
SCHEDULE A
AVIONICS AND EQUIPMENT
OPTIONAL AVIONICS AND EQUIPMENT:
-------------------------------
AV205 XxxXxxx XX0000 iridium phone w/ cordless cockpit and cabin handsets
AV320 World Wide Weather w/ACARS In-flight Communication Services
CE25 Airshow 410 system
CE30 Airshow briefer system
CE45 Cabin audio/video entertainment system with 15" LCD monitor
CE75 2nd 15" LCD monitor
CE90 Display computer on forward and aft cabin monitor
CE115 110 VAC power outlet in cockpit on copilot's side
OPTIONAL INTERIOR AND EXTERIOR:
------------------------------
MS20 Long range oxygen (2 x 750 ltr bottles)
MS40 Precise Flight Pulselite system
MS50 Dual panel cockpit doors
MS100 Additional stowage drawers under four forward seats
MS110 Five drop down inboard arms
MS150 Belted lavatory seat
NSO Move Rubber bumpers on card tables to outboard edge of outboard leaf
NSO Additional set of chair and divan arm cover
NSO Additional Jepp Book Box carpet (top only)
NSO Wine bottle holder in ice drawer (see design drawing for details
NSO Fold out table (center seat cushion) is to be easily removable via pit
pins.
CUSTOM PACKAGE:
--------------
GACS Galley in accordance with design DWG #8753 -87
MS80 Divan fold out table - center seat cushion
MS220 Flight crew name plates
4
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------------------------
SCHEDULE NO. 2 TO LEASE SUPPLEMENT - FINANCIAL TERMS
Rent Commencement Date: December 30, 2005
Basic Term: 36 months commencing with the Rent Commencement Date
through and including the Expiration Date
Renewal Term: 12 months commencing upon the expiration of the Basic Term or
the then-expiring Renewal Term not to exceed a total of 48 months
Basic Rent Dates: the 30th day of each and every calendar month from and including
the First Basic Rent Date through and including the Last Basic Rent
Date
First Basic Rent Date: December 30, 2005
Last Basic Rent Date: October 30, 2008
Expiration Date: December 30, 2008
Sales' Exact Legal Name: XXXXXXX IT SOLUTIONS SALES COMPANY, INC.
Sales' Form of Organization, Corporation
State of Organization and Delaware
Organizational Identification Number: 3104071
Sales' Chief Executive Offices 0000 Xxxxxxxxxx Xxxx
and Principal Place of Business: Xxxxxx, Xxxxxxxx 00000-0000
Sales' Mailing Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Integration's Exact Legal Name: POMEROY SELECT INTEGRATION SOLUTIONS, INC.
Integration's Form of Organization, Corporation
State of Organization and Delaware
Organizational Identification Number: 2978621
Integration's Chief Executive Offices 0000 Xxxxxxxxxx Xxxx
and Principal Place of Business: Xxxxxx, Xxxxxxxx 00000-0000
Integration's Mailing Address: 0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Primary Hangar Location: Executive Jet Management
Cincinnati Lunken Airport (KLUK)
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Acceptance Date: day of December, 2005
----
Dates of Last Financial Statements: Sales: December 31, 2004
Integration: December 31, 2004
5
SUNTRUST LEASING CORPORATION
--------------------------------------------------------------------------------------------------
SCHEDULE NO. 2-A TO LEASE SUPPLEMENT - FINANCIAL TERMS (continued)
Daily Rent Percentage: 0.02694% of Lessor's Cost
Basic Rent Percentage:
Basic Rent Number: Percentage of Lessor's Cost
----------------- ---------------------------
1-36 of the Basic Term; and
1-12 of any Renewal Term. 0.80831%
BASIC TERM:
----------
Maximum Lessee Risk Amount: 73.36% of Lessor's Cost
Maximum Lessor Risk Amount: 15.77% of Lessor's Cost
Purchase Option Price:
With Basic Rent Number 36 89.13% of Lessor's Cost
RENEWAL TERM 1:
---------------
Maximum Lessee Risk Amount: 72.66% of Lessor's Cost
Maximum Lessor Risk Amount: 12.36% of Lessor's Cost
Purchase Option Price:
With Basic Rent Number 12 85.02% of Lessor's Cost
RENEWAL TERM 2:
---------------
Maximum Lessee Risk Amount: 68.84% of Lessor's Cost
Maximum Lessor Risk Amount: 11.79% of Lessor's Cost
Purchase Option Price:
With Basic Rent Number 12 80.63% of Lessor's Cost
RENEWAL TERM 3:
---------------
Maximum Lessee Risk Amount: 64.77% of Lessor's Cost
Maximum Lessor Risk Amount: 11.18% of Lessor's Cost
Purchase Option Price:
With Basic Rent Number 12 75.95% of Lessor's Cost
RENEWAL TERM 4:
---------------
Maximum Lessee Risk Amount: 60.43% of Lessor's Cost
Maximum Lessor Risk Amount: 10.53% of Lessor's Cost
Purchase Option Price:
With Basic Rent Number 12 70.96% of Lessor's Cost
Estimated Annual Hours: 600
Lessor's Cost: $ 15,501,550.00
Initials:
Each
Lessee: / Lessor:
--------- ------------ ---------
6
SUNTRUST LEASING CORPORATION
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SCHEDULE NO. 3 TO LEASE SUPPLEMENT
CASUALTY VALUES
Subject to the terms of the Lease, the Casualty Value of the Aircraft due on any
Basic Rent Date shall be an amount equal to the Lessor's Cost multiplied by the
applicable percentage set forth opposite the Basic Rent number corresponding to
such Basic Rent Date. Upon the exercise of any option to renew the Term by
Lessees, Lessor shall provide to Lessees a new Schedule No. 3 setting forth the
Casualty Values for the Renewal Term.
BASIC RENT CASUALTY BASIC RENT CASUALTY BASIC RENT CASUALTY
NUMBER VALUE NUMBER VALUE NUMBER VALUE
----------------------------------------------------------------
1 101.73 13 98.32 25 94.68
----------------------------------------------------------------
2 101.45 14 98.02 26 94.37
----------------------------------------------------------------
3 101.17 15 97.73 27 94.05
----------------------------------------------------------------
4 100.89 16 97.43 28 93.73
----------------------------------------------------------------
5 100.61 17 97.13 29 93.41
----------------------------------------------------------------
6 100.33 18 96.83 30 93.09
----------------------------------------------------------------
7 100.05 19 96.53 31 92.77
----------------------------------------------------------------
8 99.76 20 96.22 32 92.45
----------------------------------------------------------------
9 99.48 21 95.92 33 92.12
----------------------------------------------------------------
10 99.19 22 95.61 34 91.79
----------------------------------------------------------------
11 98.90 23 95.30 35 91.47
----------------------------------------------------------------
12 98.61 24 94.99 36 91.13
----------------------------------------------------------------
Initials:
Lessee: /
--------- ---------
Lessor:
---------
7
