Exhibit 99.5
CESSNA CITATION AIRCRAFT LEASE AGREEMENT
THIS CESSNA CITATION AIRCRAFT LEASE AGREEMENT (the "Lease") is made
and entered into as of the 25th day of July 2001, by and between Betaco, Inc.,
a Delaware corporation whose mailing address is X.X. Xxx 00000, Xxxxxxxxxxxx,
Xxxxxxx 00000 (hereinafter referred to as "Lessor"), and American Trans Air
ExecuJet, Inc., an Indiana corporation with its office at 0000 Xxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter referred to as "Lessee").
WITNESSETH:
WHEREAS, Lessor desires to lease to Lessee a certain 1988 Cessna
Citation II, Serial No. 551-0591, Registration No. N1AT, including two (2)
engines and other appliances, communications equipment, accessories,
instruments, parts and other items of equipment installed therein and all logs
and records pertaining thereto (the "Aircraft"); and
WHEREAS, Lessee desires to lease the Aircraft from Lessor.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto do hereby agree as follows:
1. TERM. Lessor hereby leases the Aircraft to the Lessee commencing
on July 25, 2001, and said Lease shall continue through the 24th day of July
2004, unless sooner terminated or extended as herein provided.
2. RENTAL AND OTHER CHARGES.
A. The Lessee agrees to pay for the full term of this Lease a rental
in the sum of Thirty-Seven Thousand Five Hundred Dollars ($37,500.00) per
month in advance. Said rental shall be paid on or before the first
business day of each calendar month to Lessor at the above-stated
address, or as otherwise directed by Lessor.
B. In addition to the monthly payments set forth above, Lessee shall
tender to Lessor the sum of Seventy-Five Thousand Dollars ($75,000.00),
representing a security payment to be forfeited upon any breach of this
Agreement by Lessee.
3. TERMINATION. Upon termination of this Lease, Lessee shall return
the Aircraft to Lessor at Indianapolis, Indiana, or at some other point to be
mutually agreed. Upon such return, the Aircraft shall be in the same condition
(i.e., for the right engine (Serial No. 71514), 1,180 hours remaining until
hot section and 2,728 hours remaining until overhaul; for the left engine
(Serial No. 71510), 1,180 hours remaining until hot section and 2,788 hours
remaining until overhaul) as when delivered to Lessee and equipped with the
same or better equipment, except for reasonable wear and tear for ordinary
use, subject to the provisions herein; provided, however, that reasonable wear
and tear should not include the lowering of the number of engine and component
hours available. If, however, the number of engine and component hours
available until the next major overhaul at the time of redelivery of the
Aircraft by Lessee to Lessor is less than 5,456 hours in the aggregate, and/or
the number of engine hours available until the next hot section at the time of
redelivery is less than 2,360, Lessee shall reimburse the Lessor for the
difference at the industry standard hourly rate.
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Lessee shall, not less than one (1) day or more than four (4) days
prior to the termination of the Lease, make the Aircraft available to Lessor
at Indianapolis, Indiana, or at such other airport as shall be agreeable to
Lessor, for the purpose of permitting Lessor to make an inspection of the
Aircraft. At such inspection, Lessor shall be entitled to an acceptance flight
check of not more than one hour's duration, at Lessee's expense, and Lessee
will, at its own expense and at Lessor's request, correct any condition of
said Aircraft discovered on such acceptance check, which condition makes the
Aircraft unairworthy. In the event rehabilitation and repairs are necessary to
return the Aircraft in the prescribed condition, the terms of this Lease shall
be deemed extended for the period required to enable Lessee to make such
rehabilitation, repairs and correction (herein referred to as "Correction").
In the event the Lessee does not proceed promptly to make such Correction, the
Lessor may retake possession of the Aircraft and rental shall thereafter
continue to be payable to the Lessor for the period reasonably required for
the making of such Correction. Rent shall be paid by the Lessee to the Lessor
on a pro-rata basis per day for such additional periods.
In the event the Aircraft during the term of this Lease should be
lost or totally destroyed and Lessor shall have received payment in full for
all loss or damage sustained by Lessor by reason of said total destruction,
then this Lease shall automatically be cancelled and terminated as of the date
of such loss, and Lessee shall be obligated to pay only the pro-rata rental
due to the date of such loss. In the event of a partial loss, the rental shall
be unabated, and if the time necessary to repair the Aircraft goes beyond the
termination date of the Lease, this Lease shall be extended to provide
sufficient time to repair the Aircraft, and full rental shall be paid during
this extended period.
4. MAINTENANCE AND OTHER EXPENSES. Lessee shall be responsible for
all maintenance on the Aircraft. Lessor will not be responsible for any
maintenance, overhaul or work resulting from anything other than ordinary wear
and tear, and in any case shall have a right to reimbursement for all amounts
expended.
5. LOG BOOKS AND RECORDS. Lessee shall maintain all log books and
records pertaining to said Aircraft during the term of this Lease and will
return and deliver said log books and records to Lessor upon return of said
Aircraft to Lessor, and will during the term of this Lease, make them
available for inspection by Lessor or its duly authorized agents or
representatives.
6. COSTS OF INSPECTION, DIRECTIVES, ETC. Except as provided
elsewhere in this Lease, all inspections, repairs, modifications, directives
and overhaul work shall be accomplished by the Lessee and shall be performed
at Lessee's expense by personnel duly licensed to perform such work and shall
be in accordance with the standards of the manufacturer and with all
applicable governmental regulations.
7. ALTERATIONS AND MODIFICATIONS. Subject to the terms of this
Lease, Lessee shall have the right to alter, modify or make additions and
improvements to the Aircraft after having obtained the prior consent of
Lessor, provided that such alterations, modifications, additions or
improvements are at Lessee's cost and do not reduce the value of the Aircraft.
8. USE OF AIRCRAFT. Lessee may operate the Aircraft only by pilots
holding valid Federal Aviation licenses, certificates and qualifications, with
the exceptions as stated in the following paragraph; provided, however, that
it shall not use the Aircraft in violation of any foreign, federal, state,
territorial or municipal law or regulation and shall be solely responsible for
any fines, penalties or forfeitures and taxes occasioned by any violation
thereof, and if such fines or penalties are imposed upon Lessor and paid by
it, Lessee shall reimburse it therefor within ten (10) days after demand by
Lessor. Lessee agrees that in the event of seizure of the Aircraft under the
provisions of Title 49 of the United States Code, Section 1473, it will
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indemnify the Lessor for the payment of any civil penalty assessed under such
title and section and shall, in the event of such seizure, post bond in such
amount and with such terms as shall be required to cause the immediate release
of the Aircraft to Lessor.
9. NO LIENS OR ENCUMBRANCES. Lessee shall have no right to consent
to, allow or permit any liens or encumbrances on the Aircraft. Lessee shall
promptly pay and discharge all taxes, assessments and governmental charges or
levies imposed upon the Aircraft. Upon Lessee's default in the discharge of
any such taxes, assessment or encumbrances, Lessor may do so at Lessee's
expense and charge same to Lessee, and such cost and expense thereof shall
become due and payable on demand of Lessor.
Lessee shall have absolute control, direction and responsibility
for, and shall bear and pay all costs of operating and maintaining the
Aircraft, including excise taxes, gasoline taxes, licensing fees, landing fees
or any other airport fees, or any other operating expenses of whatever nature
and kind as set out herein. Lessee shall have responsibility for and shall
promptly, on a pro-rata basis, reimburse Lessor for Federal use taxes incurred
by the Aircraft during the term of this Lease. The taxes, levies and charges
which Lessee undertakes to pay under this paragraph are, except with respect
to the Federal use tax, limited to those arising out of Lessee's operation
only and shall exclude such costs which relate to Lessor's interest, ownership
or income from the Aircraft or from this Lease.
10. INDEMNIFICATION. Lessee agrees and covenants to indemnify, hold
harmless and defend Lessor, its directors, officers, agents and employees and
any mortgagees of the Aircraft against any and all expenses, loss or damages,
including reasonable attorneys' fees, caused by or arising out of, in whole or
in part, the possession, management or operation of the Aircraft by Lessee
and/or its sublessees, bailees, agents or representatives. The expenses, loss
or damages referred to in this paragraph do not include loss of earnings or
income of Lessor.
11. INSPECTION. Lessee agrees to permit Lessor or its duly
authorized agent to inspect the Aircraft at any reasonable time, and to
furnish to Lessor or its duly authorized agent any information in respect to
the Aircraft and its use that Lessor may reasonably request.
12. ASSIGNMENT. Lessee shall not assign its rights under this Lease
or delegate its duties under this Lease without the prior written consent of
the Lessor. Any sublease, if agreed to in writing by Lessor, shall contain the
same terms and conditions as this Lease, and nothing therein shall relieve
Lessee of its liability to Lessor hereunder.
13. INSURANCE. Lessee shall at all times during the term of this
Lease and any extensions thereof, carry and maintain insurance with such
insurers and brokers as shall be satisfactory to Lessor; and the Lessor,
Lessee and National City Bank, or any other lending institution designated by
Lessor, shall be named as loss payees as their interests may appear in the
following amounts:
A. General liability insurance of not less than One Hundred Million
Dollars ($100,000,000.00) per occurrence and hull insurance covering all
risks in an amount not less than $3,000,000.
B. Casualty insurance (including coverage for fire, theft and
weather damage) for not less than Five Hundred Thousand Dollars
($500,000.00), with Lessor, Lessee and National City Bank to be jointly
listed as loss payees, as their interests may appear.
C. Lessee shall provide Lessor with proof of the above insurance on
demand.
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D. In the event of the occurrence of any loss or accident affecting
the rights of either party under said insurance policies, Lessee and
Lessor, their agents or employees shall comply with all the terms and
conditions of said insurance policies and do all things necessary or
proper to protect and preserve the other party's rights as named insured
on said policies.
E. Lessee agrees to pay the cost of carrying and maintaining
insurance on the Aircraft.
14. NO WARRANTIES OR REPRESENTATIONS. LESSOR MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO THE CONDITION, MERCHANTABILITY OR FITNESS OF THE
AIRCRAFT FOR ANY PARTICULAR PURPOSE. LESSOR SHALL NOT BE LIABLE FOR ANY
DEFECTS, EITHER LATENT OR PATENT, IN SAID AIRCRAFT, OR FOR ANY CONSEQUENTIAL
DAMAGE THEREFROM, AND LESSEE WAIVES ALL WARRANTIES AND ALL OBLIGATIONS AND
LIABILITIES THEREUNDER, EXPRESS OR IMPLIED, AND ALL OTHER OBLIGATIONS AND
LIABILITIES OF LESSOR WITH RESPECT TO THE CONDITION OR AIRWORTHINESS OF SAID
AIRCRAFT OR FOR CONSEQUENTIAL DAMAGE RESULTING THEREFROM.
15. TITLE OF LESSOR. Lessor warrants that it has sufficient title to
said Aircraft and has the right and power to enter into this Lease.
16. NOTICES. Service of all notices under this Lease shall be
sufficient if given in writing and delivered personally to the parties
subscribing below or sent by certified mail to the parties at their addresses
herein above set forth, or at such addresses as the parties may provide for in
writing from time to time.
17. NO WAIVER OF BREACH. The failure of Lessor or Lessee in any one
or more instances to insist upon strict performance or observance of one or
more of the covenants or conditions hereof, or to exercise any remedy,
privilege or option herein conferred upon or reserved to Lessor or Lessee,
shall not be construed as a waiver of any future breach of any covenants or
conditions or of the right to enforce the same or to exercise such privilege,
option or remedy, but the same shall continue in full force and effect.
18. TIME IS OF THE ESSENCE. Time is of the essence of this Lease and
each and every of its provisions herein. This Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
19. GOVERNING LAWS. This Lease, regardless of where executed, shall
be construed and performance shall be determined in accordance with the laws
of the State of Indiana.
20. DEFAULT. If Lessee defaults in any terms, covenants and
conditions of this Lease, Lessor at its option, upon ten (10) days' prior
written notice to Lessee, may elect to terminate this Lease, and said Lease
shall be terminated at the end of said ten (10) day period unless Lessee shall
correct the default within said period. In the event of such termination,
Lessee shall return said Aircraft to Lessor at the place designated
hereinbefore for return at the end of said Lease term, and the Lessor shall
further have the right:
A. To declare the entire amount of rent hereunder immediately due
and payable without further notice or demand to Lessee.
B. To xxx for and recover all rents and other payments it has
accrued or will thereafter accrue with respect to the Aircraft.
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C. To take possession of the Aircraft without further demand or
notice wherever same may be located, without any Court Order or other
process of law, and Lessee hereby waives any and all damages occasioned
by said possession.
D. To pursue any other remedy either in law or equity.
21. INSOLVENCY OF LESSEE. In the event of any act of insolvency by
the Lessee, including the application for or consent to the appointment of a
receiver, trustee or liquidator for all or for a substantial part of its
assets; or if the Lessee shall be unable, or admit in writing its inability to
pay its debts as they mature; or make a general assignment for the benefit of
creditors; or be adjudicated as bankrupt or insolvent; or file a voluntary
petition in bankruptcy or a petition or answer seeking reorganization or an
arrangement with creditors or to take advantage of any insolvency law; or file
an answer admitting the material allegations of, or consent to, or default in
answering, a petition filed against it in any bankruptcy reorganization or
insolvency proceeding; or take any action under the laws of any applicable
jurisdiction analogous to any of the foregoing; or if corporate action shall
be taken by it for the purpose of effecting any of the foregoing, then and in
that event, Lessor shall have and may exercise any one or more of the remedies
set forth herein, and at the option of Lessor, this Lease may be terminated
without prior notice.
22. NOTICE TO LESSOR OF PROCEEDING. Lessee shall furnish promptly to
Lessor notice of any material litigation that may be brought, or to the
knowledge of Lessee, threatened against Lessee and will keep Lessor
continuously advised of any developments with respect thereto. Lessee shall
also give notice promptly to Lessor of all proceedings before any governmental
agency which, if adversely determined, would materially and adversely affect
Lessee's licenses and/or operations.
In the event the Lessor should be required to engage the services of
an attorney to collect any sums due to it by the Lessee hereunder, or to
enforce compliance by the Lessee with any of the terms of this Lease, or to
recover possession of the Aircraft, either from the Lessee or from some third
party, the Lessee shall pay to the Lessor all reasonable attorneys' fees so
incurred by the Lessor, together with any and all other reasonable costs
incurred by the Lessor in connection with such action.
23. USE BY LESSOR. Lessor, with Lessee's prior consent, may utilize
the Aircraft under the following conditions: (i) Lessee does not require use
of the Aircraft at the time use thereof is requested by Lessor; (ii) Lessor
shall reimburse Lessee for all actual costs of such usage, including but not
limited to fuel and landing fees; and (iii) for each Aircraft flight hour
flown by Lessor, Lessor shall provide Lessee with a "flight hours credit" or
an equivalent "dollar credit" (at the industry standard hourly rate) to be
utilized by Lessee pursuant to the Return Conditions section of this
Agreement.
IN WITNESS WHEREOF, the parties have authorized this Lease to be
executed by their respective officers as of the day and year first written
above.
LESSOR:
BETACO, INC.
By
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J. Xxxxxx Xxxxxxxxx, President
LESSEE:
AMERICAN TRANS AIR EXECUJET, INC.
By
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Xxxxxx X. Xxxxxxx, Secretary
