EXHIBIT 10.56
CERTIFIED COPY - TO BE RETURNED
RECORDED
Federal Aviation Administration
Date 12-4-95 Time 3:43 pm
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Conveyance Number YY013352
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By /s/ Xxxxxx Xxxxxx
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AIRCRAFT LEASE AGREEMENT
BETWEEN
BJET, INC.
(LESSOR)
AND
ALOHA AIRLINES, INC.
(LESSEE)
DATE: OCTOBER 23, 1995
This Aircraft Lease Agreement constitutes Chattel Paper, and the executed
counterpart containing an acknowledgement of receipt by FINOVA as assignee
thereof (which acknowledgement of assignment appears beneath the signatures
of Lessor and Xxxxxx on the signature page of the Aircraft Lease Agreement)
shall constitute the chattel paper counterpart.
LEASE AGREEMENT
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.
SECTION 2. LEASE AND DELIVERY OF THE AIRCRAFT: CERTAIN LESSEE EXPENSES.
(a) LEASE, OBLIGATIONS, AND CONDITIONS PRECEDENT.
(i) EXECUTION OF OPERATIVE DOCUMENTS.
(ii) EVIDENCE OF LEGAL AUTHORITY TO IMPORT, LEASE AND OPERATE THE
AIRCRAFT.
(iii) EVIDENCE OF LEGAL AUTHORITY TO PAY RENT.
(iv) EVIDENCE OF CORPORATE AUTHORITY.
(v) EVIDENCE OF INSURANCE.
(vi) EVIDENCE OF REGISTRATION OF THE AIRCRAFT AND PROTECTION OF LESSOR
OWNERSHIP.
(vii) OPINION OF COUNSEL.
(viii) EVIDENCE OF LESSOR'S AUTHORITY TO DEREGISTER AND EXPORT THE
AIRCRAFT.
(ix) EVIDENCE OF XXXXXX'S AUTHORITY TO INQUIRE AS TO FEE AND TAX
PAYMENTS.
(x) PAYMENT OF BASIC RENT AND SECURITY DEPOSIT.
(xi) OFFICER'S CERTIFICATE.
(b) INSPECTION PRIOR TO ACQUISITION: DELIVER CONDITION: DELIVERY
(c) LESSOR AUTHORITY.
(d) LESSEE OBLIGATIONS AFTER DELIVERY.
(e) CERTAIN LESSEE EXPENSES.
SECTION 3. TERM, RENT AND MAINTENANCE RESERVES.
(a) TERM.
(b) BASIC RENT.
(c) METHOD OF PAYMENT.
(d) SUPPLEMENTAL RENT.
(e) SECURITY DEPOSIT.
(f) MAINTENANCE RESERVES.
(g) USE OF MAINTENANCE RESERVES
(h) DRAWDOWN BY XXXXXX
(i) TITLE TO MAINTENANCE RESERVES
(j) ASSIGNMENT OF MAINTENANCE RESERVES
(k) AIRCRAFT INDUCTION ALLOWANCE
(l) LEASE RENEWAL OPTION
SECTION 4. REPRESENTATIONS, WARRANTIES AND MISCELLANEOUS COVENANTS.
(a) THE LESSEE'S REPRESENTATIONS AND WARRANTIES.
(i) ORGANIZATION AND QUALIFICATION.
(ii) AIR CARRIER.
(iii) CORPORATE AUTHORIZATION.
(iv) GOVERNMENT APPROVAL.
(v) VALID AND BINDING AGREEMENTS.
(vi) LITIGATION.
(vii) COMMERCIAL ACTIVITIES; NO IMMUNITY.
(viii) TAXES.
(ix) LESSOR'S QUALIFICATIONS; PROTECTION OF LESSOR'S OWNERSHIP OF THE
AIRCRAFT.
(x) FINANCIAL CONDITION.
(xi) ACCURACY AND DISCLOSURE OF INFORMATION.
(b) REPRESENTATIONS AND WARRANTIES OF THE LESSOR.
(i) DUE ORGANIZATION.
(ii) DUE AUTHORIZATION: ENFORCEABILITY.
(iii) NO VIOLATION.
(iv) OWNERSHIP OF AIRCRAFT.
(v) LITIGATION.
(vi) FINANCIAL CONDITION.
(vii) ACCURACY AND DISCLOSURE OF INFORMATION.
(viii) NO AIRCRAFT LIENS.
(ix) ENGINE SUBSTITUTION.
(c) DISCLAIMER AND ACKNOWLEDGEMENT OF DISCLAIMER; WAIVER OF CONSEQUENTIAL
DAMAGES.
(d) LESSEE'S MISCELLANEOUS COVENANTS.
(i) MAINTENANCE OF CORPORATE STATUS; NO MERGER OR CONSOLIDATION.
(ii) NOTICE OF DEFAULT OR ADVERSE OCCURRENCE.
(iii) MAINTENANCE OF CONSENTS AND APPROVALS.
(iv) CHANGE OF LOCALE.
(v) FINANCIAL INFORMATION AND REPORTS.
(e) LESSOR'S COVENANT OF QUIET ENJOYMENT.
SECTION 5. REGISTRATION, USE, OPERATION, MAINTENANCE, POSSESSION.
(a) TITLE AND REGISTRATION.
(b) GENERAL.
(c) USE.
(d) OPERATION.
(e) LESSEE TO PAY ALL COSTS.
(f) MAINTENANCE IN GENERAL.
(g) SPECIFIC ITEMS OF MAINTENANCE.
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(h) PARTS.
(i) AIRWORTHINESS DIRECTIVES.
(j) SERVICE BULLETINS.
(k) CORROSION CONTROL.
(l) MODIFICATIONS.
(m) REPORTS.
(n) RIGHT TO INSPECT.
(o) REPAIRS.
(p) AIRCRAFT DOCUMENTS.
(q) XXXXXX'S DISCLAIMER.
(r) POSSESSION.
(s) INSIGNIA.
(t) TEMPORARY SUBSTITUTIONS.
(u) STAGE III NOISE ATTENUATION MODIFICATION.
SECTION 6. RETURN OF THE AIRCRAFT.
(a) RETURN.
(b) LEASE CONTINUES.
(c) RETURN OF ENGINES.
(d) CONDITION OF AIRCRAFT.
(i) OPERATING CONDITION; MINIMUM LIFE REMAINING.
(ii) CLEANLINESS STANDARDS.
(iii) CERTIFICATE OF AIRWORTHINESS.
(iv) COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS.
(v) DEFERRED MAINTENANCE.
(vi) CORROSION TREATMENT.
(vii) CONFIGURATION AND CONDITION.
(e) CONDITION OF AIRFRAME.
(i) C CHECK.
(ii) D CHECK.
(iii) PARTS.
(iv) FUSELAGE, WINDOWS AND DOORS.
(v) WINGS AND EMPENNAGE.
(vi) INTERIOR.
(vii) COCKPIT.
(viii) CARGO COMPARTMENT.
(f) CONDITION OF LANDING GEAR.
(g) CONDITION OF AUXILIARY POWER UNIT ("APU").
(h) CONDITION OF ENGINES.
(i) HISTORICAL RECORDS: TREND MONITORING DATA.
(j) INSPECTIONS.
(k) ACCEPTANCE.
(l) DEFERRED DISCREPANCY CORRECTION.
(m) AIRCRAFT DOCUMENTS.
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(n) SERVICE BULLETIN KITS.
(o) LESSEE'S SPECIAL EXTERIOR MARKINGS.
(p) STORAGE OF AIRCRAFT UPON RETURN.
(q) ASSIGNMENT OF RIGHTS.
(r) FINANCIAL SETTLEMENT IN LIEU OF LIFE REMAINING; NO LESSOR OBLIGATIONS.
(s) OVERFLIGHT AND OTHER FEES.
SECTION 7. LIENS.
SECTION 8. TAXES
(a) TAX INDEMNITY.
(b) WITHHOLDING.
(c) AFTER-TAX PAYMENT.
(d) TAX SAVINGS.
(e) COOPERATION IN FILING TAX RETURNS.
SECTION 9. RISK OF LOSS; EVENT OF LOSS; REQUISITION FOR USE.
(a) RISK OF LOSS
(b) AIRFRAME EVENT OF LOSS
(c) ENGINE EVENT OF LOSS.
(d) REQUISITION.
SECTION 10. INSURANCE
(a) ALL-RISK INSURANCE.
(b) WAR RISK INSURANCE.
(c) LIABILITY INSURANCE.
(d) DEDUCTIBLES AND SELF INSURANCE.
(e) ADDITIONAL REQUIREMENTS: LOSS PAYMENT.
(f) NO SET-OFF
(g) NOTICE OF MATERIAL ALTERATION OR CANCELLATION.
(h) RENEWAL.
(i) APPLICATION OF HULL INSURANCE PROCEEDS.
(j) INSURANCE FOR OWN ACCOUNT.
(k) REPORTS; CERTIFICATES.
SECTION 11. THE LESSOR'S RIGHT TO PERFORM FOR THE LESSEE.
SECTION 12. FURTHER ASSURANCES.
SECTION 13. EVENTS OF DEFAULT.
(a) FAILURE TO PAY BASIC RENT.
(b) FAILURE TO PAY SUPPLEMENTAL RENT.
(c) FAILURE TO MAINTAIN INSURANCE.
(d) MISREPRESENTATION OR BREACH OF WARRANTY.
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(e) BANKRUPTCY, ETC.
(f) GENERAL DEFAULT.
(g) LOSS OF AIRLINE OR CORPORATE AUTHORITY.
(h) NON-PERMITTED TRANSFER.
(i) ABANDONMENT.
(j) UNLAWFUL ACT.
(k) FAILURE TO PERFORM COVENANTS.
(l) OTHER OBLIGATIONS.
SECTION 14. REMEDIES.
(a) RETURN AND REPOSSESSION.
(b) SALE, USE, ETC.
(c) LIQUIDATED DAMAGES; FAIR MARKET RENTAL.
(d) APPLICATION OF SECURITY DEPOSIT.
(e) CANCELLATION, TERMINATION, AND RESCISSION.
(f) OTHER REMEDIES.
(g) ATTORNEY-IN-FACT.
(h) CONTINUING OBLIGATIONS.
SECTION 15. GENERAL INDEMNITY AND EXPENSES.
(a) GENERAL INDEMNITY.
(b) LEGAL FEES AND EXPENSES.
SECTION 16. ASSIGNMENT AND ALIENATION.
SECTION 17. NOTICES.
SECTION 18. NO SET-OFF, COUNTERCLAIM, ETC.
SECTION 19. GOVERNING LAW
(a) WAIVER OF IMMUNITY, CONSENT TO JURISDICTION.
(b) GOVERNING LAW.
(c) SERVICE OF PROCESS.
(d) VENUE AND JURISDICTION.
(e) TRIAL BY JURY.
SECTION 20. MISCELLANEOUS.
EXHIBIT A: FORM OF LEASE SUPPLEMENT AND RECEIPT
EXHIBIT B: FORM OF OPINION OF COUNSEL
EXHIBIT C: FORM OF CERTIFICATE OF COMPLIANCE
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EXHIBIT D: APPOINTMENT AS ATTORNEY-IN-FACT
EXHIBIT E: DELIVERY RECEIPT
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(THIS PAGE INTENTIONALLY LEFT BLANK)
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AIRCRAFT LEASE AGREEMENT
This AIRCRAFT LEASE AGREEMENT dated as of October 23, 1995 between Bjet,
Inc., with its principal place of business at 0000 Xxxxxxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000 ("Lessor"), and Aloha Airlines, Inc., incorporated under
the laws of Hawaii as a Hawaii corporation and having its registered office at
P.O. Box 30028, Honolulu, Hawaii 96820 ("Lessee"),
WHEREAS, the Lessee desires to lease from the Lessor and the Lessor is
willing to lease to the Lessee the aircraft described and referred to herein
upon and subject to the terms and conditions of this Lease;
NOW, THEREFORE, in consideration of the mutual
promises herein contained, the Lessee and Lessor agree as
follows:
SECTION 1, DEFINITIONS. The following terms shall have the following
meanings for all purposes of this Lease:
"AIRCRAFT" means the Airframe, the Engines, and the Aircraft Documents.
Such Engines shall be deemed part of the "Aircraft" whether or not from time
to time attached to the Airframe or to another airframe or on the ground.
"AIRCRAFT DOCUMENTS" has the meaning given such term in Section 5(p)
hereof.
"AIRFRAME" means the Boeing model 737-2X6C airframe, manufacturer serial
number 23292, registration mark N674MA (to be changed to N817AL), together
with any and all Parts (including, but not limited to, landing gear and
auxiliary power units but excluding Engines or engines) so long as such Parts
shall be either incorporated or installed in or attached to the Airframe or
required to be subject to this Lease as provided in Section 5 hereof.
"AIRWORTHINESS DIRECTIVES" means (i) any airworthiness directive or other
mandatory regulation, directive or instruction that the Aviation Authority
may from time to time issue and that is required to be carried out on
airframes or engines of the same type as the Airframe or Engines; and (ii)
any service bulletin issued by the Airframe, Engine, or any Part manufacturer
that is deemed "alert' or "mandatory" by such manufacturer.
"APPLICABLE LAW" means, without limitation, all applicable laws,
treaties, international agreements, decisions and orders of any court,
arbitration or governmental agency or authority and rules, regulations,
orders, directives, licenses and permits of any governmental body,
instrumentality, agency or authority, including, without limitation, the
Uniform Commercial Code of New York, and such laws of the United States which
prohibit trade with enemies of the United States.
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"APPROVED MAINTENANCE PROGRAM" means a maintenance program applicable to
the Aircraft, approved by the Aviation Authority, encompassing scheduled
maintenance, condition monitored maintenance, and on-condition maintenance of
airframe. engines and components of the Aircraft, including, but not limited
to, servicing, testing, preventive maintenance, repairs, structural
inspections, systems checks, approved modifications, service bulletins,
engineering orders, Airworthiness Directives, corrosion control inspections
and treatments, and which meets the Aviation Law requirements for commercial
airline passenger operations and is approved by the appropriate Aviation
Authority officer having responsibility for Lessee's operations and
maintenance of the Aircraft.
"AVIATION AUTHORITY" means the Federal Aviation Administration or a
successor agency and the United States Department of Transportation or a
successor agency, and such other governmental authorities from time to time
vested with the control and supervision of the Aviation Law, or having
jurisdiction over the registration, airworthiness, operation of or other
matters relating to the Aircraft or civil aviation in the United States.
"AVIATION LAW" means 49 U.S.C. ss. 40101 ET SEQ (Title 49, subtitle
VII of the United States Code), as amended from time to time.
"BASIC RENT" means the rent payable for the Aircraft pursuant to Section
3(b) hereof.
"BUSINESS DAY" means a day of the year in which banks are not authorized or
required to close in Houston, Texas, New York, New York, or Honolulu, Hawaii.
"D CHECK" means the inspection, overhaul, repair, presentation and
replacement of Parts, including preventive maintenance, identified as a full
block D Check under Lessee's Approved Maintenance Program. Such full block D
Check shall include all structural inspections, corrosion control and other
work normally completed in conjunction with such block D Check.
"DEFAULT" means an event which with the passage of time or the giving of
notice, or both, would constitute an Event of Default.
"DELIVERY DATE" has the meaning given such term in Section 2(b) hereof,
except as set forth on the Rider attached hereto at page 9A.
"DELIVERY LOCATION" has the meaning given such term in Section 2(b)
hereof.
"ENGINE" or "Engines" means two Xxxxx & Xxxxxxx model JT8D-17A engines,
serial numbers 709481B and 7094181B, each of which is 750 or more rated
takeoff horsepower or the equivalent thereof, or any other engine which may
from time to time replace an Engine leased hereunder in accordance with the
terms hereof, together with, in the case
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RIDER
For purposes of Xxxxxx's obligations under Section 6 hereof, the Delivery
Date shall mean the date of completion, in accordance with the workscope of
Xxxxx's Maintenance Provider and any Lessor approved revisions thereto, of the
D Check to which the Induction Allowance, as defined herein, applies and the
certification of the Aircraft as airworthy by the Maintenance Provider.
9A
of each engine referred to above, any and all Parts so long as the same shall
be either incorporated or installed in or attached to such Engine or required
to be subject to this Lease as provided in Section 5 hereof. An Engine shall
remain leased hereunder whether or not from time to time attached to the
Airframe or attached to any other airframe or on the ground.
"EVENT OF DEFAULT" has the meaning given such term in Section 13
hereof.
"EVENT OF LOSS" shall mean any of the following events with respect to
any property:
(i) loss of such property due to theft, disappearance, destruction,
damage beyond economic repair or rendition of such property permanently unfit
for normal use for any reason;
(ii) any damage to such property which results in an insurance
settlement with respect to such property on the basis of a constructive,
agreed, arranged, or compromised total loss;
(iii) the condemnation, confiscation or seizure of, or requisition of
title to or use of, such property by private persons or by any governmental
or purported governmental authority (but excluding requisition for use or
hire not involving requisition of title, provided such requisition for use or
hire does not continue for more than 180 consecutive days); or
(iv) as a result of any rule, regulation, order, or other action by the
Aviation Authority, the use of such property in the normal course of air
transportation is prohibited for a period of six months.
"EXPIRY" shall mean any of the following: (i) expiration of the Term
through the passage of time in accordance with the terms of this Lease, or
(ii) termination, cancellation, or rescission of the Lease in accordance with
its terms and in accordance with Applicable Law.
"FAA" means the Federal Aviation Administration of the United States
Department of Transportation or any successor agency.
"INDEMNITEE" means (i) the Lessor, (ii) Jetlease, Inc. parent of Lessor
and its affiliates, (iii) Lender and its affiliates, and (iv) their
respective successors, assigns, representatives, employees, officers,
directors and agents, and each of them. Provided that any of the foregoing
persons or entities shall not be considered an Indemnitee hereunder for any
acts or omissions of such person in its capacity as (x) a manufacturer of the
Aircraft or any part thereof, (y) an operator of the Aircraft or (z) any
maintenance facility that performed maintenance on the Aircraft.
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"LEASE" SHALL mean this Aircraft Lease Agreement, as supplemented by the
Lease Supplement and Receipt, and as may be amended in accordance with Section
20 hereof.
"LEASE SUPPLEMENT AND RECEIPT" shall mean a Lease Supplement and
Receipt, substantially in the form of Exhibit A hereto.
"LENDER" shall mean FINOVA Capital Corporation, and its successors and
assigns.
"LESSOR LIENS" means Liens which result from claims against or affecting
the Lessor that are unrelated to the Operative Documents or the transactions
contemplated thereby.
"LIEN" means any mortgage, security interest, lease or other charge or
encumbrance or claim or right of others, including, without limitation, rights
of others under any airframe or engine interchange or pooling agreement.
"LIFE LIMITED COMPONENT" means any Part that is required either by the
Airframe, Engine, or Part manufacturer or by the Aviation Authority or by the
Approved Maintenance Program to be overhauled or replaced after a certain
number of hours, calendar time, cycles, or landings, including both rotable
and consumable Parts.
"MAINTENANCE PROVIDER, means Lessee or an internationally recognized
service, overhaul and repair agency authorized by the Aviation Authority and
fully qualified to service, repair and overhaul the Airframe and Engines and
Parts.
"OPERATIVE DOCUMENTS" means this Lease (including a Lease Supplement and
Receipt), and any ancillary documents executed in connection therewith.
"OVERDUE PAYMENT RATE" means Chemical Bank, New York, prime rate plus 3
per cent per annum.
"PARTS" means all appliances, components. parts, instruments,
appurtenances. accessories, furnishings or other equipment of whatever nature
(other than complete Engines or engines) which may from time to time be
incorporated or installed in or attached to the Airframe or any Engine and
includes replacement parts.
"PERMITTED LIENS" means, (i) Lessor Liens: (ii) Liens for Taxes; (iii)
materialmen's, mechanics', workmen's, repairmen's, employees' or other like
Liens arising in the ordinary course of business, including (without
limitation) Liens in respect of airport user and en route charges; and (iv)
Liens arising out of judgments or awards; and with respect to foregoing
clauses (ii), (iii), and (iv), the payments associated with the Liens
described therein are either not yet due or being contested in good faith
(and for the payment of which adequate reserves have been provided) by
appropriate proceedings and such proceedings in the reasonable opinion of the
Lessor do not involve any danger of the sale, forfeiture, confiscation,
seizure or loss of the Airframe or any Engine or interest
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therein.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a foreign state or political subdivision
thereof or any agency of such state or subdivision.
"RENT" means Basic Rent and Supplemental Rent.
"RENT COMMENCEMENT DATE" has the meaning given to such term in Section
3(a) hereof.
"RENT PAYMENT DATE" means the Delivery Date and the day of each calendar
month following the month in which the Rent Commencement Date occurs which
corresponds to the Rent Commencement Date (or, if any such month does not
have such a corresponding day then the last day of such month) during the
Term.
"RETURN DATE" has the meaning given to such term in Section 6(a) hereof.
"RETURN LOCATION" has the meaning given to such term in Section 6(a)
hereof.
"SECURITY DEPOSIT" has the meaning given to such term in Section 3(e)
hereof.
"STIPULATED LOSS VALUE" has the meaning given to such term in Section
10(a) hereof.
"SUPPLEMENTAL RENT" means all amounts, including Maintenance Reserves,
liabilities, indemnifications and obligations of any kind whatsoever (other
than Basic Rent but including any payment of Stipulated Loss Value or any
amount calculated by reference thereto) which the Lessee is obligated to pay
in accordance with the terms of this Lease.
"TAX" has the meaning given to such word in Section 8(a) hereof.
"TERM" has the meaning given to such word in Section 3(a) hereof.
"U.S.$ AND DOLLARS" means the lawful currency of the United States.
SECTION 2. LEASE AND DELIVERY OF THE AIRCRAFT: CERTAIN
LESSEE EXPENSES.
(a) LEASE, OBLIGATIONS, AND CONDITIONS PRECEDENT.
The Lessor agrees to lease to the Lessee and the Lessee agrees to lease from
the Lessor, the Aircraft, on the terms and conditions of this Lease. The
Lessor's obligation to lease the Aircraft shall be conditioned upon the
absence of any Default hereunder, the
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absence of any materially adverse change in the Lessee's financial condition
or prospects from June 31, 1995 to the Delivery Date, the acquisition of the
Aircraft by the Lessor on terms satisfactory to Lessor in its sole
discretion, and the performance by Lessee of each of the following
obligations on or before the Delivery Date (unless a sooner date is
specified), all in form and substance satisfactory to Lessor and its counsel;
(i) EXECUTION OF OPERATIVE DOCUMENTS. The Lessee shall have
executed and delivered this Lease, the Lease Supplement and Receipt (dated
the Delivery Date), and each other Operative Document to which it is a party.
(ii) EVIDENCE OF LEGAL AUTHORITY TO IMPORT. LEASE AND OPERATE THE
AIRCRAFT, [INTENTIONALLY OMITTED];
(iii) EVIDENCE OF LEGAL AUTHORITY TO PAY RENT.
[INTENTIONALLY OMITTED];
(iv) EVIDENCE OF CORPORATE AUTHORITY. The Lessee shall have
delivered to the Lessor certified resolutions of the board of directors of
the Lessee duly authorizing the execution, delivery and performance of this
Lease, the other Operative Documents to which the Lessee is a party, and
other satisfactory evidence as may be requested by Lessor that the Lessee has
taken all corporate action necessary to authorize the Operative Documents and
the transactions contemplated hereby, together with an incumbency certificate
as to the person or persons authorized to execute and deliver the same;
(v) EVIDENCE OF INSURANCE. The Lessee shall have delivered to the
Lessor and Lender reports and certificates of insurance in compliance with
the requirements of the Aviation Authority and Section 10 hereof-,
(vi) EVIDENCE OF REGISTRATION OF THE AIRCRAFT AND PROTECTION OF
LESSOR'S OWNERSHIP. The Lessor shall provide an application to the Aviation
Authority for a certificate of registration for the Aircraft in the name of
Lessor; and
(vii) OPINION OF COUNSEL. At Lessee's expense, the Lessor shall
receive a favorable opinion addressed to Xxxxxx from Char, Xxxxxxxx, Xxxxx &
Xxx, counsel to Lessee, substantially in the form attached hereto as Exhibit
B and otherwise satisfactory to the Lessor.
(viii) EVIDENCE OF LESSOR'S AUTHORITY TO DEREGISTER AND EXPORT THE
AIRCRAFT [INTENTIONALLY OMITTED];
(ix) EVIDENCE OF XXXXXX'S AUTHORITY TO INQUIRE AS TO FEE AND
PAYMENTS. Lessee shall, during the Lease Term, upon written request by
Xxxxxx, furnish to Lessor evidence satisfactory to Lessor that all charges
incurred by Xxxxxx with respect
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to the Aircraft, including without limitation all payments due to the
relevant air traffic control authorities, have been paid and discharged in
full (a certificate of Xxxxxx's Chief Financial Officer as to the payment of
such charge will suffice so long as no Event of Default has occurred and is
continuing). Upon written request by Xxxxxx, Xxxxxx also will provide a
letter from Xxxxxx addressed to any relevant air traffic control authority
pursuant to which Xxxxxx authorizes the addressee to issue to Lessor. a
statement of account reflecting all sums due by Xxxxxx to the authority in
respect of all aircraft (including without limitation, the Aircraft) operated
by Lessee.
(x) PAYMENT OF BASIC RENT AND SECURITY DEPOSIT. Lessor shall have
received the first payment of Basic Rent, and payment of the Security Deposit.
(xi) OFFICER'S CERTIFICATE. Lessee's representations and warranties
shall be true, and no Default or Event of Default shall exist, and the Lessor
shall receive an Officer's Certificate from the Lessee to that affect
(b) INSPECTION PRIOR TO ACQUISITION: DELIVERY CONDITION: DELIVERY. For
purposes of this Lease, Lessee shall inspect the Aircraft and approve of its
condition, as agent for Lessor, prior to Lessor's acquisition of it.
(i) The Lessee's obligation to accept delivery of the Aircraft shall
be subject to the following:
a. The Aircraft being in the condition set forth in Exhibit A.
b. A purchase agreement signed by the Lessor on or before September 19,
1995.
c. A loan commitment letter for the purchase of the Aircraft signed on
or before October 31, 1995.
d. Delivery of the Aircraft on or before October 31, 1995.
e. Receipt of the opinion of Xxxxxx's counsel as to the due
authorization of this Lease on or before the Delivery Date.
f. The Aircraft being on United States registry.
(ii) Lessee shall accept delivery of the Aircraft "AS IS," "WHERE
IS," AND SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION
AS SET FORTH IN SECTIONS 4(c) HEREOF, at the Evergreen Air Center, Marana,
Arizona, or such other place as may be mutually agreed upon in writing by the
Lessor and Lessee (the "Delivery Location") on or before October 31, 1995 but
no later than December 31, 1995, or such other date as may be mutually agreed
upon in
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writing by the Lessor and Lessee (the "Delivery Date", which date shall be
the date of the Lease Supplement and Receipt). Upon tender of delivery of the
Aircraft in the condition set forth in Exhibit A, Lessee shall immediately
accept delivery of the Aircraft. Upon acceptance of the Aircraft, the Lessee
shall execute and deliver the Lease Supplement and Receipt to the Lessor,
which shall constitute, without further act, unconditional and irrevocable
acceptance by the Lessee of the Aircraft under, and for all purposes of, this
Lease and as being airworthy, in accordance with specifications, in good
working order and repair. The provisions of this Section 2(b)(ii) and of the
Lease Supplement and Receipt shall not be construed to expand the Lessee's
obligations under Sections 5 and 6 hereof.
(c) LESSOR AUTHORITY. On the Delivery Date, and if requested by Xxxxxx,
the Lessor shall furnish to the Lessee satisfactory evidence that the Lessor
has taken all corporate action necessary to authorize this Lease and the
transactions contemplated hereby, together with an incumbency certificate as
to the person or persons authorized to execute and deliver the same, in each
case in form and substance satisfactory to the Lessee.
(d) LESSEE OBLIGATIONS AFTER DELIVERY.
(1) Following the Delivery Date, Lessee shall forthwith cause to
have performed upon the Aircraft, a full block D Check, in
accordance with Lessee's Approved Maintenance Program. Such full
block D Check shall include all structural inspections,
corrosion control and other work normally completed in
conjunction with such block D Check.
(e) CERTAIN LESSEE EXPENSES. INTENTIONALLY OMITTED.
SECTION 3. TERM AND RENT.
(a) TERM. The Delivery Date shall be the "Rent Commencement Date." The
term for which the Aircraft is leased hereunder (the "Term") shall begin on
the Delivery Date and end ninety-six (96) months from the Rent Commencement
Date unless Expiry occurs sooner pursuant to the express provisions of this
Lease.
(b) BASIC RENT. The Lessee shall pay to the Lessor monthly rental for the
Aircraft the ("Basic Rent"), payable in advance on each Rent Payment Date
during the Term, in accordance with Schedule 3, attached hereto.
(c) METHOD OF PAYMENT. All Rent hereunder shall be paid by the Lessee not
later than 2:00 P.M., New York City time, on the date due thereof in U.S.
Dollars and in immediately available funds to the Lessor by deposit to:
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Bank: Citibank, N.A.
New York, New York
ABA#: 021000089
Account name: FINOVA Capital Corporation
Acct.#: 4068-0522
Ref.: BJET
Other Banking information: ZQX 32348 ZQX
or to such other account as the Lessor shall specify to the Lessee in
writing. Any Rent due on a day which is not a Business Day shall be due on
the next Business Day.
(d) SUPPLEMENTAL RENT. The Lessee also agrees to pay to the Lessor any
and all Supplemental Rent promptly as the same shall become due and owing. In
the event of any failure on the part of the Lessee to pay any Supplemental
Rent, the Lessor shall have all rights, powers and remedies provided for
herein or by law or equity in the case of nonpayment of Basic Rent. The
Lessee will also pay, on demand, as Supplemental Rent, an amount equal to
interest at the Overdue Payment Rate on any part of any payment of Rent not
paid on the date it becomes due for any period for which the same shall be
overdue.
(e) SECURITY DEPOSIT. Upon the execution of this Lease, Lessee shall make
a deposit, in cash, with Lessor in the amount of Two Hundred Fifty Thousand
United States Dollars (US$ 250,000) to serve as security for Xxxxxx's full
and faithful performance of all of its obligations under this Lease (the
"Security Deposit").
(i) The Security Deposit shall remain in effect until the Aircraft
is returned in the condition required by this Lease. Lessee shall not be
entitled to off-set any Rent against the Security Deposit. After the return
of the Aircraft in the condition required by this Lease, Lessor shall return
the Security Deposit, without interest, provided that Xxxxxx has otherwise
fulfilled all its obligations hereunder.
(f) MAINTENANCE RESERVES. INTENTIONALLY OMITTED.
(g) USE OF MAINTENANCE RESERVES. INTENTIONALLY OMITTED.
(h) DRAWDOWN BY XXXXXX. INTENTIONALLY OMITTED.
(i) TITLE TO MAINTENANCE RESERVES. INTENTIONALLY OMITTED.
(j) ASSIGNMENT OF MAINTENANCE RESERVES. INTENTIONALLY OMITTED.
(k) AIRCRAFT INDUCTION ALLOWANCE. The Lessor will provide a $450,000
allowance to Lessee to be applied to the cost of a "D" check and other direct
costs of placing the Aircraft on Lessee's operating certificate.
16
(l) LEASE RENEWAL OPTION. Provided Lessee is not in default hereunder,
Lessee may extend the Term of this Agreement for up to two (2) Lease Renewal
Periods of twelve (12) months each by delivering written notice to Lessor at
least six (6) months prior to the Expiry of any term. During any Lease Renewal
Period, the rental rate shall be equal to the Basic Rent, Supplemental Rent and
other sums then payable under this Agreement. All other terms and conditions of
this Agreement shall remain in full force and effect during any and all Lease
Renewal Periods.
SECTION 4. REPRESENTATIONS, WARRANTIES & MISCELLANEOUS COVENANTS.
(a) THE LESSEE'S REPRESENTATIONS AND WARRANTIES. The Lessee represents and
warrants as follows:
(i) ORGANIZATION AND QUALIFICATION. The Lessee is duly incorporated
in and validly existing under the laws of the State of Hawaii, possessing
perpetual corporate existence, having the capacity to sue and be sued in its
own name, has full power, legal right and authority (corporate and otherwise)
to carry on its business as currently conducted, to own and hold under lease
its properties and to execute, deliver and perform and observe the provisions
of this Lease and other Operative Documents to which it is a party, and is
duly qualified to do business in good standing wherever the nature of its
business makes such qualification necessary.
(ii) AIR CARRIER. The Lessee is a citizen of the United States (as
defined in 49 U.S.C. ss.40102) holding an air carrier operating certificate
issued under 49 U.S.C. chapter 447 for aircraft capable of carrying 10 or
more individuals. Lessee is duly licensed by all Governmental authorities
whose license or approval may be required to conduct its operations and to
operate the Aircraft in air commerce under Part 121 of the Federal Aviation
Administration Air Regulations, 14 C.F.R. 121, and using an air carrier
aircraft radio station under Part 87 of the Federal Communications Commission
Aviation Services Regulations, 47 C.F.R. 87, and to the best of the knowledge
of Lessee there is no pending or threatened action or proceeding to revoke,
modify or suspend any such license.
(iii) CORPORATE AUTHORIZATION. The execution, delivery, and
performance by the Lessee of this Lease and each of the other Operative
Documents to which it is or will be a party (A) have been duly authorized by
all necessary corporate action on behalf of the Lessee, (B) do not require
the consent or approval of the Lessee's stockholders or of any trustee or the
holders of any indebtedness or obligations of the Lessee (except such as have
been obtained, and certified copies of which have been furnished to the
Lessor), (C) do not contravene any existing Applicable Law to which the
Lessee is subject, (D) do not conflict with or result in any breach of any of
the terms or constitute a default under any document, instrument, or
agreement to which the Lessee is a party or is subject or by which it or any
of its assets are bound, (E) do not contravene the
17
Lessee's charter or by-laws, or any other provisions of Xxxxxx's constitutive
documents. and (F) do not and will not result in the creation or imposition
of or oblige Lessee to create any Lien on or over the Aircraft other than any
Permitted Lien.
(iv) GOVERNMENT APPROVAL. Every consent, authorization, and approval
required by the Lessee to enable it to carry on its business or required by
it to authorize or in connection with the execution, delivery, legality.
validity, priority. enforceability, admissibility in evidence, or
effectiveness of this Lease and the other Operative Documents to which Lessee
is or will be a party or the performance by it of any of its obligations
under this Lease and each of the other Operative Documents to which it is or
will be a party has been duly obtained or made and is in full force and
effect and there has been no default in observance or performance of any of
the conditions, restrictions (if any), imposed on or in connection with any
such consent or approval or sanction. On the Delivery Date, the Lessee will
have and will thereafter maintain valid all necessary certificates and
licenses for the operation of (a) its business as an airline operating
scheduled and charter flights for the carriage of passengers and cargo and
(b) the Aircraft on such flights; the Lessee is not exempt from the obtaining
of any such certificates or licenses usually required by commercial airline
operators.
(V) VALID AND BINDING AGREEMENTS. This Lease constitutes the legal,
valid and binding obligations of the Lessee enforceable against the Lessee in
accordance with its terms, subject to bankruptcy, insolvency, moratorium and
similar laws affecting creditors generally and subject also to general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law). Without limitation of the foregoing, a court
in the State of Hawaii, given a proper presentation of evidence, would
recognize and give full force and effect to the Lessor's title to and
ownership of the Aircraft, to the rights of the Lessor under this Lease. and
to the terms of Section 19(b) hereof providing that this Lease will be
governed by the laws of the State of New York. Accordingly, to the extent
that the remedies provided for in Section 14 hereof are enforceable under New
York law, a court in the State of Hawaii will give effect to the terms of
said Section 14 and enable the Lessor to exercise the same remedies against
the Lessee and with respect to the Aircraft as if the Aircraft were then in
New York (including the right to repossess the Aircraft and to export such
Aircraft from the State of Hawaii without the necessity of obtaining an
export license and without the necessity of obtaining any other governmental
approval), irrespective of any bankruptcy, reorganization, insolvency or
similar proceeding then in effect in the State of Hawaii involving the
Lessee. Save as may be specified in the Lessor's legal opinion, there are no
laws in the State of Hawaii which will or may adversely affect or limit the
rights of the Lessor under the Lease or any Operative Document.
(vi) LITIGATION. There are no unsatisfied judgements against Xxxxxx,
and there is no pending or, to the best of the Lessee's knowledge, threatened
action or proceeding affecting the Lessee before any court, tribunal,
governmental agency or arbitrator which, if determined against the Lessee,
would materially adversely affect the
18
financial condition or operations of the Lessee or the ability of the Lessee
to perform its obligations under the Lease.
(vii) COMMERCIAL ACTIVITIES: NO IMMUNITY.
INTENTIONALLY OMITTED
(viii) TAXES. Under Applicable Law, no Taxes (other than Taxes to
which Xxxxxx's indemnity does not extend pursuant to the Provisions of
Section 8) will be imposed by the State of Hawaii or any taxing authority or
governmental subdivision thereof upon or with respect to (a) the ownership of
the Aircraft by the Lessor, or the delivery of the Aircraft by the Lessor to
the Lessee, or the possession, operation or return of the Aircraft to the
Lessor by the Lessee; (b) the payments of Rent or other amounts pursuant to
this Lease; (c) the occurrence of an Event of Loss, sale, or other
disposition of the Aircraft; or (d) the execution and delivery of the
Operative Documents. The Lessee has filed all material tax returns which are
required to be filed by it, and has paid all Taxes required to be shown to be
due or payable on said returns or any assessment received by the Lessee,
except any Taxes that are being contested diligently and in good faith by
appropriate proceedings and for which adequate provision for payment has been
made. The Lessee warrants (i) that, if the same is obtainable, Lessee shall
promptly apply for and obtain an exemption from any withholding taxes (other
than Taxes to which Xxxxxx's indemnity does not extend pursuant to the
provisions of Section 8) on Rent; (ii) that Lessor shall not be liable for
any unpaid withholding taxes (other than Taxes to which Lessee's indemnity
does not extend pursuant to the provisions of Section 8); and that any unpaid
withholding taxes (other than Taxes to which Xxxxxx's indemnity does not
extend pursuant to the provisions of Section 8) shall not, and under state
law could not, become a Lien on the Aircraft and that Lessee shall indemnify
and hold Lessor harmless from any such taxes which may be imposed by the
State of Hawaii or any taxing authority or governmental subdivision thereof.
(ix) LESSOR'S QUALIFICATIONS: PROTECTION OF LESSOR'S OWNERSHIP OF
THE AIRCRAFT. The qualification at any time of the Lessor to do business
under the laws of the State of Hawaii does not constitute a condition to, and
the failure to so qualify does not affect, the exercise by the Lessor of any
right, privilege or remedy accorded it in, under or in connection with this
Lease or the enforcement of such right, privilege or remedy; and the
performance by the Lessor of any action required under, or contemplated by,
this Lease or the exercise of the remedies hereunder will not violate any
Applicable Law of the State of Hawaii or any political subdivision thereof or
result in any liability for Tax (other than Taxes to which Xxxxxx's indemnity
does not extend pursuant to the provisions of Section 8) to the Lessor
pursuant to Applicable Law of the State of Hawaii. To ensure the legality,
validity and enforceability of this Lease, and/or to fully protect the
Lessor's title to, interest in and property rights with respect to the
Aircraft as against the Lessee or any third party, and/or to ensure that the
property rights of the Lessor therein will have priority in all respects over
all claims of all creditors of the Lessee, it is not necessary or advisable
that
19
this Lease or any other document be filed or recorded with any court or other
authority in the State of Hawaii or that any stamp or similar Tax be paid on
or in respect of the Lease, except for the registration of the Aircraft with
the F.A.A. in the name of the Lessor as owner.
(x) FINANCIAL CONDITION. The Lessee is not in default in the
performance of any of its obligations (A) for the payment of indebtedness for
borrowed money or any interest or premium thereon or (B) for the payment of
rent under any lease or agreement to lease real, personal or mixed property.
The Lessee has not taken nor proposes to take any corporate action nor have
any other steps or administrative or legal proceedings been taken or started
or threatened against it for the winding-up, dissolution, reorganization or
amalgamation of the Lessee or for the appointment of a liquidator,
administrator, receiver, administrative receiver, trustee or similar officer
of the Lessee or all or any of its revenues or assets nor has the Lessee
sought any other relief under any applicable insolvency or bankruptcy law.
(xi) ACCURACY AND DISCLOSURE OF INFORMATION. All information
furnished by the Lessee to the Lessor in connection with this Lease and the
Operative Documents and the transactions contemplated hereby and thereby, was
and remains true and correct in all respects and there are no other facts or
considerations the omission of which would render any such information
misleading. The Lessee has fully disclosed in writing to the Lessor all facts
relating to the Lessee which the Lessee knows or should reasonably know and
which might reasonably be expected to influence the Lessor in deciding
whether or not to enter into this Lease and to lease the Aircraft to the
Lessee hereunder.
(b) REPRESENTATIONS AND WARRANTIES OF THE LESSOR. The Lessor makes the
following representations and warranties:
(i) DUE ORGANIZATION. The Lessor is duly organized and validly
existing in good standing under the laws of the State of Delaware and has the
power and authority to enter into and perform its obligations under this
Lease and the Lease Supplement and Receipt.
(ii) DUE AUTHORIZATION: ENFORCEABILITY. This Lease has been, and the
Lease Supplement and Receipt to which the Lessor is a party will be, duly
authorized, executed and delivered by the Lessor, and, assuming due
authorization, execution and delivery thereof by the other parties hereto and
thereto, are, or in the case of the Lease Supplement and Receipt will be,
legal, valid and binding obligations of the Lessor, enforceable in accordance
with their respective terms.
(iii) NO VIOLATION. The execution and delivery by the Lessor of this
Lease are not, and the execution and delivery by the Lessor of the Lease
Supplement and Receipt will not be, and the performance by the Lessor of its
obligations under each of the foregoing documents will not be, inconsistent
with its Articles of Incorporation or by-laws,
20
do not and will not contravene any law, governmental rule or regulation,
judgment or order applicable to it, and do not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage,
contract or other instrument to which the Lessor is a party or by which it is
bound or require the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by, any
Federal, state or local governmental authority or agency or other Person,
except such as have been obtained, given or accomplished.
(iv) OWNERSHIP OF AIRCRAFT. On the Delivery Date, the Lessor shall
have full legal and beneficial title to the Aircraft, free and clear of all
Liens except any Lien which Lessor caused to be placed on the Aircraft as
permitted pursuant to Section 16 hereof and except for the interest of
Consolidated Freightways, Inc. (hereinafter ("CFI") in the Aircraft pursuant
to that certain Tax Benefit Transfer Agreement dated December 5, 1986 among
Freightways Terminal Company, Inc. (hereinafter "FTC"), MarkAir, Inc.
(hereinafter "MarkAir") and CFI (hereinafter "TBT Agreement").
(v) LITIGATION. There are no unsatisfied judgements against Lessor
or Jetlease, Inc. and there is no pending or, to the best of the Lessor's
knowledge, threatened action or proceeding affecting the Lessor before any
court, tribunal, governmental agency or arbitrator which, if determined
against the Lessor, would materially adversely affect the financial condition
or operations of the Lessor or the ability of the Lessor to perform its
obligations under the Lease.
(vi) FINANCIAL CONDITION. Neither the Lessor nor Jetlease, Inc- are
in default in the performance of any of its obligations for the payment of
indebtedness for borrowed money or any interest premium thereon. The Lessor
has not taken nor proposes to take any corporate action nor have any other
steps or administrative or legal proceedings been taken or started or
threatened against it for the winding-up, dissolution, reorganization or
amalgamation of the Lessor or for the appointment of a liquidator,
administrator, receiver, administrative receiver, trustee or similar officer
of the Lessor or all or any of its revenues or assets nor has the Lessor
sought any other relief under any applicable insolvency or bankruptcy law.
(vii) ACCURACY AND DISCLOSURE OF INFORMATION. All information
furnished by the Lessor to the Lessee in connection with this Lease and the
Operative Documents and the transactions contemplated hereby and thereby, was
and remains true and correct in all respects and there are no other facts or
considerations the omission of which would render any such information
misleading. The Lessor has fully disclosed in writing to the Lessee all facts
relating to the Lessor which the Lessor knows or should reasonably know and
which might reasonably be expected to influence the Lessee in deciding
whether or not to enter into this Lease and to lease the Aircraft from the
Lessor hereunder.
(viii) NO AIRCRAFT LIENS. On the Delivery Date, the Aircraft shall
be free and clear of all Liens, except for a lien in favor of FINOVA Capital
Corporation.
21
(ix) ENGINE SUBSTITUTION. As soon as reasonably practicable
following the Delivery Date but not more than ninety (90) days thereafter,
Lessor shall make available to Lessee for installation on the Aircraft, two
Xxxxx & Xxxxxxx Model JT8D-9A Engines ("Replacement Engines") in a condition
reasonably satisfactory to Lessee. Within a reasonable period of time
following delivery to Lessee of such Replacement Engines, Lessee shall return
to Lessor the two Xxxxx & Xxxxxxx Model JT8D-17A Engines, bearing Serial
Numbers 709481B, and 709418B ("Original Engines") which were installed on
the Aircraft on the Delivery Date. Following the return of the Original
Engines to Lessor, the Replacement Engines shall be deemed to be the Engines,
as that term is otherwise defined in this Lease.
(c) DISCLAIMER AND ACKNOWLEDGEMENT OF DISCLAIMER: WAIVER OF CONSEQUENTIAL
DAMAGES. The Aircraft is being leased by the Lessor to the Lessee hereunder
ON A COMPLETELY "AS IS," "WHERE IS," BASIS, WHICH IS ACKNOWLEDGED AND AGREED
TO BY THE LESSEE. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN (b) ABOVE
ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES
WHATSOEVER, EXPRESS OR IMPLIED, AND LESSOR HAS NOT MADE AND SHALL NOT BE
CONSIDERED OR DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF HAVING LEASED THE
AIRCRAFT UNDER THIS LEASE, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR
FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS
UNDER OR IN RELATION TO THIS LEASE OR OTHERWISE ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR TO
ANY PART THEREOF, AND SPECIFICALLY, WITHOUT LIMITATION, IN THIS RESPECT
DISCLAIMS AS TO THE AIRWORTHINESS, VALUE, CONDITION, DESIGN, MERCHANTABILITY,
COMPLIANCE WITH SPECIFICATIONS, CONSTRUCTION AND CONDITION OF THE AIRCRAFT,
OPERATION, OR FITNESS FOR A PARTICULAR USE OF THE AIRCRAFT AND AS TO THE
ABSENCE OF LATENT AND OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. AS TO THE
ABSENCE OF ANY INFRINGEMENT OR THE LIKE, HEREUNDER OF ANY PATENT, TRADEMARK
OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN
TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT OR
ANY PART THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS
OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF
PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT OR
ANY PART THEREOF.
THE LESSEE HEREBY WAIVES, RELEASES, DISCLAIMS AND RENOUNCES ALL
EXPECTATION OF OR RELIANCE UPON ANY SUCH AND OTHER WARRANTIES, OBLIGATIONS
AND LIABILITIES OF LESSOR (SAVE AS IS EXPRESSLY STATED IN THIS LEASE OR IN
ANY OTHER OPERATIVE DOCUMENT) AND RIGHTS, CLAIMS AND REMEDIES OF THE LESSEE
AGAINST LESSOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING
BUT NOT LIMITED TO (i) ANY IMPLIED WARRANTY OF MERCHANTABILITY OF FITNESS FOR
ANY PARTICULAR USE, (ii) ANY IMPLIED
22
WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF
TRADE, (iii) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT,
WHETHER OR NOT ARISING FROM NEGLIGENCE OF LESSOR, ACTUAL OR IMPUTED, AND (iv)
ANY OBLIGATION LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE
AIRCRAFT, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE AIRCRAFT, OR
FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
SAVE AS IS EXPRESSLY STATED IN THIS LEASE OR IN ANY OTHER OPERATIVE
DOCUMENT, THE LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY TO THE
LESSEE OR ANY OTHER PERSON WHETHER ARISING IN CONTRACT OR TORT, OUT OF ANY
NEGLIGENCE OR STRICT LIABILITY OF LESSOR OR OTHERWISE, AND LESSEE HEREBY
DISCLAIMS AND WAIVES ANY RIGHT IT WOULD OTHERWISE HAVE AGAINST LESSOR TO
RECOVER FOR
(i) ANY LIABILITY LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED
DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY
THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN
CONNECTION THEREWITH AND THIS LEASE,
(ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS
RELATING THERETO,
(iii) ANY CONSEQUENTIAL DAMAGES, INCLUDING THOSE FOR INTERRUPTION OF
SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS, HEREUNDER FOR CONSEQUENTIAL
DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE LESSOR OF ANY OF THE
AGREEMENTS, REPRESENTATION OR WARRANTIES OF THE LESSOR CONTAINED IN THIS LEASE,
OR
(iv) THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR
IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT.
(d) LESSEE'S MISCELLANEOUS COVENANTS.
(i) MAINTENANCE OF CORPORATE STATUS: NO MERGER OR CONSOLIDATION.
Lessee will preserve and maintain its corporate existence and such of its
rights, privileges, licenses and franchises in any jurisdiction where failure
to obtain such licensing or qualification would have a material adverse
effect upon Lessee. The Lessee shall not consolidate or merge with or into
any other corporation (without the prior written consent of the Lessor, which
consent shall not be unreasonably withheld) or sell, convey, transfer, lease
or otherwise dispose of, whether in one transaction or a series of related
transactions, any of its assets if the aggregate value thereof represents all
or substantially all of its assets to any Person. Lessee shall not (A)
voluntarily suspend its certificated
23
operations; or (B) voluntarily or involuntarily permit to be revoked canceled
or otherwise terminated all or substantially all of the franchises,
concessions, permits, rights or privileges required for the conduct of
business and operations of Lessee or the free and continued use and exercise
thereof; or (c) cease to have the status described in Section 4(a)(ii)
(ii) NOTICE OF DEFAULT OR ADVERSE OCCURRENCE. The Lessee shall
promptly inform the Lessor of any occurrence of which it becomes aware which
Lessee reasonably expects to adversely affect its ability to perform any of
its obligations under this Lease and the other Operative Documents to which
the Lessee is a party and, without prejudice to the generality of the
foregoing, it will inform the Lessor of the occurrence of or the existence of
a Default forthwith upon becoming aware of such Default.
(iii) MAINTENANCE OF CONSENTS AND APPROVALS. The Lessee shall obtain
or cause to be obtained, maintain in full force and effect and comply in all
material respects with the conditions and restrictions (if any) imposed on,
or in connection with, every consent, license, authorization, approval,
filing and registration obtained or effected in connection with this Lease
and the Operative Documents, including without limitation foreign exchange
and transfer permits regarding Dollar amounts due hereunder or thereunder, or
which may from time to time be necessary under Applicable Law for the
continued due performance of all obligations of the Lessee under this Lease,
including without limitation qualifications to operate the Aircraft in
accordance with Aviation Law, and under the other Operative Documents. Where
it is required under Applicable Law with respect to this Lease or under any
Operative Document, to obtain consent, approval, or sanction for, or to
stamp, file, register or attend to, any act, matter or thing, Lessee will do
so promptly and within any applicable prescribed time period in respect
thereof.
(iv) CHANGE OF LOCALE. Losses will not, without prior written notice
to Lessor, change its principal place of business or chief executive office.
(v) FINANCIAL INFORMATION AND REPORTS. The Lessee shall provide the
Lessor (1) as soon as available and in any event within 120 days after the
end of each fiscal year of the Lessee, its consolidated audited annual
financial statements prepared in accordance with generally accepted
accounting principles certified as being so prepared by a "Big 6" firm of
independent public auditors (or successor thereto), (ii) within sixty (60)
days after the end of each quarter, its quarterly consolidated financial
statements in a form consistent with generally accepted accounting
principles, certified as to their correctness by its duly authorized chief
financial officer, together with a certificate signed by its duly authorized
chief financial officer to the effect that, based upon due inquiry and
investigation, during such financial quarter no Default occurred, and (iii)
with such other information respecting the Lessee's financial condition or
operations as the Lessor may from time to time reasonably request. The
Lessee's fiscal year ends December 31 of each year.
24
(e) LESSOR'S COVENANT OF QUIET ENJOYMENT. The Lessor agrees that, so long
as no Event of Default shall have occurred and be continuing, neither the
Lessor, the Lessor's lender nor any person claiming by or through Lessor or
Lessor's lender will take (or fail to take) any action, the taking (or
failure to take) of which causes interference with the Lessee's peaceful and
quiet use, operation and possession of the Aircraft under this Lease.
SECTION 5. REGISTRATION, USE, OPERATION, MAINTENANCE, POSSESSION
(a) TITLE AND REGISTRATION. Lessee acknowledges that title to the
Aircraft shall remain vested in Lessor, and the Lessee undertakes, to the
extent permitted by Applicable Law, to do all such further acts, deeds,
assurances or things as may, in the reasonable opinion of the Lessor, be
necessary or desirable in order to protect or preserve Lessor's title to the
Aircraft against all claims arising by or through Lessee. As to any claims
arising by or through Lessor or Lender, Lessee shall reasonably cooperate
with Lessor in protecting and preserving Lessor's title to the Aircraft.
Throughout the Term, the Aircraft shall remain registered at the FAA, and the
Lessee shall use all reasonable efforts to ensure that no third party
claiming by or through Lessee does any act or thing which might prejudice
such registration. As to any act or thing done by any party claiming by or
through Lessor or Lender, Lessee shall reasonably cooperate with Lessor in
protecting such registration. Lessee shall promptly furnish the Lessor such
information as may be required to enable the Lessor to file any reports
required by any governmental authority as a result of Lessor's ownership of
the Aircraft.
(b) GENERAL. Unless otherwise provided herein, Lessee, at its own cost
and expense, shall (i) service, repair, maintain and overhaul the Airframe
and each Engine under the Approved Maintenance Program so as to keep the
Airframe and each Engine in as good operating condition as when delivered to
Lessee hereunder, ordinary wear and tear excepted, and in such operating
condition as may be necessary to enable the airworthiness certification of
the Aircraft and any aircraft on which any Engine might be installed to be
maintained in good standing at all times under Aviation Law, and (ii)
maintain the Aircraft Documents in the English language in accordance with
the Aviation Law and the Approved Maintenance Program; and (iii) at a
minimum, give the Aircraft the same level of attention and maintenance as the
Lessee affords to the other aircraft in its fleet, including improvements,
repairs, cleanliness, and correction of items of a cosmetic nature (such as
hail damage), except where the terms of this Lease dictate higher standards,
it being understood that this clause (iii) shall neither require Xxxxxx to
return the Aircraft in a condition in excess of the return conditions set
forth in Section 6 of this Lease or expand Lessee's obligations thereunder,
nor alter or expand any of Lessee's obligations under Section 5(l) hereof.
(c) USE. Lessee agrees not to operate or locate the Airframe or any
Engine, or permit the Airframe or any Engine to be operated or located, in
any area (i) excluded
25
from coverage by any insurance policy in effect or required to be maintained
hereunder with respect to the Airframe or Engines or (ii) in any war zone or
in any recognized or, in Lessor's reasonable judgment, threatened area of
hostilities unless fully covered by war risk insurance meeting the terms of
Section 10 hereof. Lessee agrees not to operate the Aircraft, or permit the
Aircraft to be operated during the Term (1) unless the Aircraft is covered by
insurance as required by the provisions of Section 10 hereof or (2) contrary
to the terms of such insurance as required by the provisions of Section 10
hereof.
(d) OPERATION. Lessee agrees not to (i) operate the Airframe or any
Engine or permit the Airframe or any Engine to be operated during the Term
except (in the case of the Airframe) in a passenger or cargo configuration,
in commercial or other operations for which Lessee is duly authorized by the
Aviation Authority; or (ii) use or permit the Aircraft to be used for a
purpose for which the Aircraft is not designed or reasonably suitable. Lessee
will not permit the Airframe or any Engine to be maintained, used or operated
during the Term in violation of any Applicable Law, or contrary to any
manufacturer's operating manuals or instructions.
(e) LESSEE TO PAY ALL COSTS. Save as expressly provided in this Lease,
Lessee shall pay all costs incurred in the operation of the Aircraft,
including but not limited to flight crews, cabin personnel, fuel, oil,
lubricants, maintenance, insurance, overflight landing and navigation fees,
airport charges, passenger service and any and all other expenses of any kind
or nature, arising directly or indirectly in connection with or related to
the use, movement and operation of the Aircraft by Lessee during the Term.
The obligations of Lessee under this provision shall survive the end of the
Term. The Lessee shall be under no obligation to pay (and the Lessor shall
indemnify the Lessee against) any such costs and expenses, including in
particular but without limitation, landing and navigation fees and airport
charges, unless such costs and expenses are incurred during the Term.
(f) MAINTENANCE IN GENERAL.
(i) Lessee shall maintain and repair the Airframe and the Engines so
as to keep them in good condition during the Term and until the Aircraft is
redelivered to Lessor, pursuant to Section 6 hereof, under the Approved
Maintenance Program. Lessee shall deliver to Lessor a technical summary of
such Approved Maintenance Program prior to the Delivery Date. At any time,
Lessor may request of Lessee and Lessee shall provide a listing of any
significant changes (including without limitation, time limit changes) which
may be made to such Approved Maintenance Program, and a copy of such proposed
changes shall be delivered to Lessor for its prior written approval (such
approval not to be unreasonably withheld) before such change is submitted to
the Aviation Authority for approval. If Lessor fails to object to such
proposed changes within fifteen days following written notification by
Xxxxxx, such proposed changes shall be deemed acceptable to Lessor. Included
within the obligation of maintenance and repair is the obligation and
affirmative undertaking by Lessee to timely replace all unserviceable or
defective Parts, to the extent required to cause the Aircraft to be in an
airworthy condition in all respects, and covered by an effective commercial
passenger transport category certificate of airworthiness at all times except
during those periods when the Aircraft is undergoing maintenance or repairs
as required by this Lease.
26
(ii) All maintenance (other than routine flight line maintenance)
shall be performed by the Maintenance Provider
(g) SPECIFIC ITEMS OF MAINTENANCE. Xxxxxx agrees that maintenance and
repairs shall include, but shall not be limited to, the following specific
items:
(i) to perform or have performed in accordance with manufacturer's
recommendations and the Approved Maintenance Program all routine maintenance
work, including on-line maintenance on the Aircraft, and to ensure that all
such maintenance shall be in accordance with the regulations and directives
of the Aviation Authority. Lessee shall have all maintenance and repairs
performed at repair facilities approved by the Aviation Authority;
(ii) to correct diligently deficiencies revealed at any time by any
inspection of Lessor which under the Approved Maintenance Program reasonably
require proper repair, replacement, overhaul and adjustment;
(iii) to notify the Airframe or Engine or any Part manufacturers
promptly (with a copy to Lessor) of any modifications or configuration
changes to the Aircraft which would have a material effect on or be a
material change to the detail specification and/or the manuals relating to
the Aircraft (such as flight, operations and maintenance);
(iv) upon Xxxxxx's written request, to furnish Lessor promptly, by
mail, with copies of any written communications with manufacturers with
respect to defects or malfunctions of the Aircraft or such other matters;
(v) upon Xxxxxx's written request, to furnish Lessor with a copy of
Xxxxxx's most recent Approved Maintenance Program summary, with copies of any
amendments or additions made thereto;
(vi) to ensure that a trend monitoring system complying with the
standards of the Approved Maintenance Program is implemented and followed
with respect to each Engine, and to furnish Lessor, upon its written request,
on the first day of each calendar quarter, with copies of the trend
monitoring log maintained with respect to each Engine; and
(vii) upon Lessor's written request, to furnish Lessor with a
complete and current Airframe manufacturer maintenance manual on microfilm;
provided however that Lessee shall not be required to provide revisions to
the airframe manufacturer's maintenance manual on microfilm.
(h) PARTS.
(i) Unless the Airframe or an Engine has suffered an Event of Loss,
Lessee, at its own cost and expense, will during the Term promptly replace
all Parts that may from time to time become unserviceable, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever.
27
In addition, in the ordinary course of maintenance, service, repair, overhaul
or testing, Lessee may remove any Parts, whether or not unserviceable, lost,
stolen, destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use, provided that Lessee shall replace such Parts as
promptly as practicable with replacement Parts owned by Lessee, All
replacement Parts shall be made by the same manufacturer and of the same
model number and modification status, shall be free and clear of all Liens
except Permitted Liens and shall be in as good operating condition as, and
shall have a value and utility at least equal to, the Parts replaced assuming
such replaced Parts were In the condition and repair required to be
maintained by the terms hereof.
(ii) All Parts at any time removed from the Airframe or any Engine
shall remain the property of Lessor and subject to this Lease, no matter
where located, until such time as such Parts shall be replaced by Parts that
have been incorporated or installed in or attached to such Airframe or Engine
and that meet the requirements for replacement Parts specified in this
Section 5. Immediately upon any replacement Part becoming incorporated or
installed in or attached to such Airframe or Engine, without further act, (i)
title to such replacement Part shall, to the fullest extent permitted by
Applicable Law, thereupon vest in Lessor; (ii) such replacement Part shall
become subject to this Lease and be deemed part of such Airframe or Engine,
as the case may be, for all purposes hereof to the same extent as the Parts
originally incorporated or installed in or attached to such Airframe or
Engine; and (iii) title to the replaced Part shall, to the fullest extent
permitted by Applicable Law, thereupon vest in Lessee, free and clear of all
rights of Lessor, including Lessor Liens, and shall no longer be deemed a
Part hereunder.
(iii) Title to all Parts incorporated or installed in or attached or
added to the Airframe or any Engine as the result of any alteration,
modification or addition effected by or on behalf of Lessee or any sublessee,
shall, without further act vest in Lessor and become subject to this Lease.
(i) AIRWORTHINESS DIRECTIVES.
The Lessee shall be solely responsible for the cost of complying with all
Airworthiness Directives mandated for the Aircraft for the first five years
of the Term. During the sixth, seventh and eighth years of the Term and any
extension thereof, Lessee shall be responsible for all Airworthiness
Directives costing less than $50,000. In the event an individual
Airworthiness Directive must be complied with after the fifth year of the
lease Term and Xxxxxx's actual cost of compliance exceeds $50,000, the cost
in excess of said sum shall be shared by the Lessor and Lessee in accordance
with the following table:
YEAR LESSOR LESSEE
---- ------ ------
6 30% 70%
7 40% 60%
8 50% 50%
28
All Airworthiness Directives shall be accomplished in strict compliance with
all issuing agency's specific instructions. Lessee shall Include within the
Aircraft Documents all documentation necessary to establish the source data,
method of compliance, verification of accomplishment, quality assurance, and
all schedules of recurring action of any Airworthiness Directive.
(j) SERVICE BULLETINS. Lessee shall, at its sole cost and expense,
incorporate into the Aircraft all those Airframe and Engine manufacturer and
other vendor service bulletins (other than "alert"- or "mandatory" service
bulletins, it being understood that "alert" or "Mandatory" service bulletins
are an Airworthiness Directive) which Lessee plans to adopt during the Term
for a minimum of one-third (1/3) of its Boeing 737 aircraft fleet. The
Aircraft, with respect to the rest of Lessee's fleet, shall not be
discriminated against in service bulletin compliance or other maintenance
matters, provided, however, that Lessee shall not be required to return the
Aircraft in a condition in excess of the return conditions set forth in
Section 6 of this Lease and Lessee's obligations under Section 5(l) hereof
shall not be altered or expanded hereby; provided further, however, that
notwithstanding the foregoing, all service bulletins incorporated in the
Aircraft shall remain a part of the Aircraft and shall not be removed by
Xxxxxx, unless directed to do so, in writing, by Xxxxxx.
(k) CORROSION CONTROL. Lessee shall adopt and incorporate in the
Approved Maintenance Program specific measures for the control of corrosion
in conformance with the Airframe manufacturer's corrosion prevention manual,
and shall carry out such work as may be required to comply therewith,
including without limitation, periodic inspections by penetration of fuel
tanks, periodic inspection and clean-up under galleys, forward and aft cargo
pit areas and lavatories, periodic treatment of all mild and moderate
corrosion and correcting of all severe or exfoliated corrosion in accordance
with the Approved Maintenance Program.
(l) MODIFICATIONS.
(i) Except for Stage III noise abatement requirements, Lessee at
its own expense, shall make such alterations and modifications in and
additions to the Airframe or any Engine as may be required to be made from
time to time by Aviation Law during the Term regardless upon whom such
requirements are, by their terms, nominally imposed, including, without
limitation, any modifications required to enable the Aircraft to comply with
environmental, noise, air pollution, and other standards ("Required
Modifications").
(ii) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NO
OPTIONAL MODIFICATION SHALL BE MADE WHICH HAS THE EFFECT OF DECREASING THE
UTILITY OR VALUE OR REMAINING USEFUL LIFE OF THE AIRCRAFT OR ADVERSELY
AFFECTS ITS AIRWORTHINESS OR USE FOR TRANSPORTING PASSENGERS OR CARGO IN
COMMERCIAL SERVICE.
(iii) Lessee shall not, without Lessor's prior written consent,
which shall not be unreasonably withheld, make any major modifications,
alterations, or additions
29
(collectively, "Optional Modifications") to the Aircraft. For purposes of
this Section 5, the term Optional Modifications shall include, but shall not
be limited to, (i) changes which materially affect the Aircraft structure or
performance, (ii) changes which could adversely affect spare parts,
interchangeability or replaceability, and shall exclude Required
Modifications. All Optional Modifications, except as otherwise provided
herein. shall be accomplished by Lessee at its own expense. Lessee shall
provide advance copies of all drawings and data to be used by Xxxxxx in
accomplishing such Optional Modifications for Lessor's approval prior to such
work. In the event Lessor does not consent to certain Optional Modifications
to the Aircraft desired by Lessee, Lessor may give its qualified consent in
writing to Lessee to accomplish such modifications which are unacceptable to
Lessor on the condition that Xxxxxx agrees to remove all such unacceptable
modifications accomplished by Lessee and to reconstruct the modified areas to
their original configuration in a good and workmanlike manner prior to return
of the Aircraft to Lessor. In the event of Xxxxxx's granting such qualified
consent in writing, Lessee shall, at Xxxxxx's sole expense, accomplish all
such Optional Modifications, removal of such modifications and required
reconstruction necessary to return the Aircraft to Lessor in its original
configuration at the end of the Term. At the end of the Term and any
extensions thereof, all Optional Modifications shall be the property of
Xxxxxx, provided that Xxxxxx is not in default hereunder. Lessee shall be
permitted to remove such Optional Modifications provided Lessee restores the
Aircraft to its condition prior to the installation of any such modification.
(iv) During the period six (6) months prior to the end of the Term,
upon written request by Xxxxxx, Lessee shall make the changes to the Aircraft
desired by Lessor during Xxxxxx's lay-up of the Aircraft for maintenance
under the Approved Maintenance Program in those circumstances where such
changes are not otherwise required hereunder; provided always, that the
change can be accomplished without increasing the out-of-service time of the
Aircraft and provided also that the change does not adversely affect the
Lessee's subsequent utilization of the Aircraft in any way. Lessor, at its
expense, shall provide retrofit kits of Parts and installation instructions to
Lessee and Lessee, at Lessor's expense, shall install such kits in the
Aircraft to accomplish the changes desired by Lessor. Lessor shall reimburse
Lessee at Xxxxxx's cost for accomplishment of such changes requested by
Xxxxxx,
(m) REPORTS. In addition to the reports required by Section 5(g)(iii),
(iv), and (v), Lessee shall furnish to Lessor, upon written request, the
following reports on a monthly basis: (i) the hours and cycles operated by
the Airframe; (ii) the hours and cycles operated by each of the Engines
(noting their location); (iii) scheduled and unscheduled Engine changes; (iv)
monthly aircraft maintenance planning sheet; (v) monthly deferred items
carried forward; (vi) damage reports; (vii) a list of those service
bulletins, Airworthiness Directives and engineering modifications issued
during such month and applicable to the Aircraft, whether or not incorporated
on the Aircraft; (viii) C Check, D Check, and Engine shop visit scheduled
dates. In addition, Lessee shall notify Lessor of all accidents, cases of
significant theft or vandalism, extended periods of Aircraft grounding for
cause, and insured occurrences as promptly as practicable; and (ix) on a
semi-annual basis only, Lessee shall furnish to Lessor, upon written request,
a report on whether the FAA has during the preceding six (6) months conducted
any inspection of any facility or records of Lessee or taken any action with
respect to any facility, records or procedure of Lessee, which inspection
resulted in the threat by the FAA of disciplinary or other material adverse
action against Lessee, or which action consisted of disciplinary or other
material adverse action against Lessee, and, if so, the nature and results
and resolution of such threat or action (including, without limitation, any
fines and settlements in connection therewith).
(n) RIGHT TO INSPECT. Lessor and its agents shall have the right to
inspect the
30
Aircraft or the Aircraft Documents at any reasonable time, and so as not to
disrupt the commercial operation of the Aircraft, upon giving Lessee
reasonable written notice, to ascertain the condition of the Aircraft and to
satisfy Lessor that the Aircraft is being properly repaired and maintained in
accordance with the requirements of this Lease. The cost of the inspection or
survey shall be paid by Lessee if the Aircraft, or any part thereof, is not
substantially in the condition required by this Lease but shall otherwise be
paid by the Lessor. All repairs which shall be shown by the inspection or
survey to be required shall be made at Lessee's expense in accordance with
the Approved Maintenance Program. All required repairs shall be performed as
soon as practicable after such inspection. In the event of a dispute between
Xxxxxx and Xxxxxx as to the proper performance by Xxxxxx of the repairs
required hereunder, the decision of the manufacturer of the Airframe, Engines
or Part(s) (as applicable) shall control. Lessee shall be responsible for
payment of all expenses of the manufacturer incurred in connection with the
rendering of its decision if the manufacturer determines in favor of the
Lessor, but not otherwise. Lessor shall have no duty to make any such
inspection and shall not incur any liability or obligation by reason of not
making such inspection.
(o) REPAIRS. Any repair to the Aircraft accomplished during the Term
shall be accomplished pursuant to the applicable manufacturer's repair manual
instructions and (where applicable) the Approved Maintenance Program. Such
repairs shall be permanent, if the manufacturer's repair manual so requires,
and shall be made to a standard so as to keep the Aircraft at all times in
the condition required by the Approved Maintenance Program. For example,
repairs to the skin of the Aircraft shall be flush and not merely patched,
unless otherwise permitted in the Airframe manufacturer structural manual or
the Engine manufacturer maintenance manual. To ensure compliance with this
standard, Lessee shall notify Lessor and the manufacturer of any repair to
the structure or skin of the Aircraft or any other repair costing in excess
of Two Hundred Fifty Thousand Dollars (US$250,000) promptly after its being
made (but in any event no later than fifteen (15) calendar days thereafter);
provided, however, that Lessor shall have no liability to Lessee or third
parties with regard to such repair or the quality thereof and Lessee shall
indemnify and hold Lessor harmless with regard thereto. All technical and
engineering data, calculations, drawings, and documentation covering major
repairs shall become a permanent part of the Aircraft Documents. Any
disagreement between Lessor and Lessee as to what constitutes a "major"
repair or a "permanent" repair shall be referred to the applicable
manufacturer and the Aviation Authority.
(p) AIRCRAFT DOCUMENTS. Lessee, at its expense, will at all times
maintain and preserve, in the English language, all flight records,
maintenance records, historical records, modification records, overhaul
records, manuals, logbooks, authorizations, drawings and data required or
recommended by the Airframe, Engine, or any Part manufacturer, or required
from time to time by the Aviation Authority with respect to the Aircraft,
including without limitation shop records detailing service checks,
inspections, tests, repairs, or overhauls, which are accepted by the Lessee
at delivery (as evidenced by Schedule 2 to the Lease Supplement and Receipt),
and during the Term Lessee shall produce and maintain the Aircraft Documents
required by the Aviation Authority. All documentation of any type referred to
in the preceding sentence is herein individually and collectively referred to
as the "Aircraft Documents." All other aircraft documents shall be retained
by the Lessor. Records produced by electronic data processing or other
31
automated means are not acceptable, except as summary documents accompanied
by original, or manual, records, unless specifically approved by the Lessor
in writing. Aircraft Documents pertaining to maintenance shall contain
verification of accomplishment and quality assurance by actual identifiable
signature. Except as expressly provided in Section 6(m) hereof, Aircraft
Documents for Life Limited Components shall establish total service, origin,
and authenticity "back-to-birth." All Aircraft Documents shall be the
property of the Lessor. All Aircraft Documents shall be stored by Lessee
during the Term at a secure facility, and Lessee shall notify Lessor in
writing of the location of such facility. All Aircraft Documents will be at
all times kept current and up to date in order to facilitate Xxxxxx's ability
to inspect periodically the Aircraft, monitor the maintenance of the Aircraft
during the Term and to facilitate the sale or re-lease of the Aircraft to a
third party at the end of the Term. The Lessee shall retain a revision
service for all Airframe, Engine. and Part manufacturer's manuals and
documentation, and the Aircraft Documents shall at all times contain the
latest issued revisions and reflect the current configuration and status of
the Airframe, Engines, and Parts.
(q) XXXXXX'S DISCLAIMER. Notwithstanding the rights of Lessor to inspect
the Aircraft and receive reports on its condition and maintenance contained
in this Section 5 and elsewhere in this Lease, Lessor shall have no
obligation to third parties or to any Person to ensure that Lessee maintains
the Aircraft in an airworthy condition or otherwise in accordance with the
terms hereof.
(r) POSSESSION. The Losses will not, without the prior written consent
of the Lessor, which may be withheld in the reasonable discretion of Lessor,
assign any of its rights or obligations under this Lease or sublease or
otherwise in any manner deliver, transfer or relinquish possession or control
of, or transfer any right, title or interest in, the Airframe or any Engine
or Part (whether through pooling or interchange agreements or otherwise) or
install any Engine, or permit any Engine to be installed, on any airframe
other than the Airframe or permit any Part to be installed on an airframe or
engine other than the Airframe or an Engine, provided that the Lessee may,
without the prior written consent of the Lessor:
(i) deliver temporary possession and control of the Airframe or any
Engine or Part to the manufacturer thereof or any Maintenance Provider for
testing. service, maintenance, overhaul or repair or, to the extent permitted
by this Section 5, for modifications or additions;
(ii) install an Engine on an airframe owned by the Lessee free and
clear of all Liens except Permitted Liens;
(iii) install an Engine on an airframe leased to the Lessee or owned
by the Lessee and subject to a security agreement under which the Lessee is
the debtor, or acquired by the Lessee pursuant to a conditional sales
agreement, PROVIDED THAT (A) such airframe is free and clear of all Liens
except the rights of the parties to such lease or security agreement, except
Permitted Liens, and (B) such lessor or secured party agrees in writing that
it shall not acquire any right, title or interest in such Engine;
(iv) in the ordinary course of testing, servicing, maintenance,
repair or
32
overhaul, remove any Part from the Airframe or any Engine, PROVIDED that the
Lessee replaces such Part as promptly as possible with a Part which has a
value and utility at least equal to the Part being replaced and is owned by
the Lessee free and clear of all Liens except Permitted Liens; and any such
replacement Part shall thereby become subject to this Lease without necessity
of further act; PROVIDED, however, that any Part removed from the Airframe or
any Engine for such purpose shall remain subject to this Lease until replaced
by a replacement Part as provided above in this clause (iv); and
(v) enter into a wet lease or charter (defined as a lease of the
Aircraft and flight crew, during which Lessee maintains exclusive operational
control of the aircraft and during which lease or charter Lessee continues to
maintain the Aircraft in accordance with Lessee's Approved Maintenance
Program) for the Airframe and the Engines or engines then installed thereon
or for any Engine installed on any other airframe owned or operated by Lessee
with any third party PROVIDED, however, that the term of such wet lease or
charter shall not extend beyond the end of the Term.
No transfer of possession or control or other right afforded the Lessee
pursuant to this Section 5 shall in any manner affect any of the obligations
of the Lessee under this Lease or under the other Operative Documents, which
obligations shall remain primary and shall continue to the same extent as in
the absence of such transfer or other right. In the event that the Lessor
shall have received a written agreement or existing security agreement,
conditional sales agreement or lease complying with the terms of clause (iii)
of this Section 5(r), the Lessor hereby agrees for the benefit of the lessor
or secured party furnishing such agreement that the Lessor and Xxxxxx's
lender will not acquire or claim, as against such lessor or secured party,
any right, title or interest in any engine owned by such lessor or in which
such secured party has a security interest by reason of such engine being
installed on the Airframe.
(s) INSIGNIA. The Lessee agrees, at its own cost and expense, to (i)
cause the Airframe and each Engine to be kept numbered with the manufacturer
serial number therefor: (ii) affix and maintain on the Airframe and each
Engine a metal nameplate bearing the manufacturer serial number, stating that
such Airframe or Engine is leased from Bjet, Inc. and financed by FINOVA
Capital Corporation and bearing such other information as from time to time
may be required by law or otherwise necessary in order to protect the title
of the Lessor to such Airframe or Engine and the rights of the Lessor under
this Lease. The Lessee will not place the Aircraft in operation or exercise
any control or dominion over the same until such nameplate has been placed
thereon. The Lessee will replace promptly any such nameplate which may be
removed, defaced or destroyed.
(t) TEMPORARY SUBSTITUTIONS. Provided that no Default shall have
occurred and be continuing, the Lessee shall be entitled to install an engine
or part on the Aircraft by way of replacement, notwithstanding that it does
not comply with the foregoing provisions of this Section 5 if: (i) there is
not available to the Lessee at the time and in the place that engine or part
is required to be installed on the Aircraft, a replacement Engine or, as the
33
case may be, Part complying with the requirements of this Section 5; and (ii)
it would constitute an unreasonable disruption of the operation of the
Aircraft and/or the business of the Lessee to ground the Aircraft until an
Engine or Part, as the case may be, complying with this Section 5 becomes
available for installation on the Aircraft; and (iii) as soon as practicable
after installation of the same on the Aircraft but, in any event, no later
than whichever is the earlier of (aa) sixty days after such installation and
(bb) Expiry, the Lessee removes any such engine or part and replaces it with
the Engine or Part replaced by it or by an Engine or Part, complying with
this Section 5.
(u) STAGE III NOISE ATTENUATION MODIFICATION. If Lessee is required by
law to meet Stage III noise requirements, then with at least nine months'
written notice from Xxxxxx, Lessor will finance the cost of purchasing one
ship set of Hush Kits to be installed on the Aircraft.
The Basic Rent thereafter shall be increased by an amount required to
fully amortize the cost of the modification in equal monthly installments
over the greater of (a) forty-eight months or (b) the remaining term of the
Lease (as it may be extended) up to a maximum term of sixty months. In the
event the remaining term of the Lease is less than forty-eight months, Lessee
(at its sole option) may extend the Lease term for up to one year. If at any
time during the Lease term, the installation of Hush Kits is required by law,
Lessee (at its sole option) may terminate the Lease upon payment of the
present value of the remaining lease payments (to which a discount rate of 6%
shall apply) and compliance with all Return Conditions set forth in Section 6
hereof.
Upon the termination of the Lease, Lessee may at Lessee's option remove
and retain the Hush Kits. In the event Xxxxxx has not fully amortized the
cost of the Hush Kits. as set forth above, upon the termination of the Lease,
Lessee will pay to Lessor the remaining unamortized cost of the Hush Kits.
SECTION 6. RETURN OF THE AIRCRAFT.
(a) RETURN. On the last day of the Term or earlier Expiry (the "Return
Date"), all of the terms of this Section 6 shall apply and the Lessee shall
return the Aircraft to the Lessor by delivering the same, at a location in
the Western United States designated by Lessor, or such other place as may be
mutually agreed upon in writing by the Lessor and Lessee (the "Return
Location"), fully equipped with all Engines installed thereon. The Aircraft
at the time of its return shall be in the condition set forth in this Section
6 and shall be free and clear of all Liens other than Lessor Liens. The
provisions of this Section 6 may be altered only in writing duly executed by
both parties and incorporated into the Lease Supplement and Receipt. At the
time of acceptance of return of the Aircraft to Lessor, Lessor and Lessee
shall execute an Aircraft Return Receipt and Lease Termination in the form
attached hereto as Exhibit C.
(b) LEASE CONTINUES. In the event, for any cause. Lessee does not return
the Aircraft or any part thereof to Lessor on the last day of the Term or
earlier Expiry in the condition required hereunder, unless due to force
majeure, unreasonable delay by Xxxxxx
34
in inspecting the Aircraft or a request by Lessor that Xxxxxx perform work on
the Aircraft unrelated to Lessee's obligations under this Lease, then all of
the obligations of Lessee under this Lease shall continue and such continued
use shall not be considered a renewal of the Term of this Lease or a waiver
of any right of Lessee hereunder. During such continued use, Rent shall
continue to be paid by Lessee to Lessor and the other performance and
obligations of Lessee to Lessor shall continue hereunder and the same shall
be prorated at the rate OF 150% of the monthly installment of Basic Rent for
each day until the Aircraft is actually delivered to Lessor, and all other
terms and conditions of this Lease shall remain in full force and effect.
Payment shall be made upon presentation of Xxxxxx's invoice and any failure
to pay shall constitute an Event of Default of Lessee. Any discrepancies
found during the inspections hereinafter described that were not corrected by
Xxxxxx prior to return of this Aircraft to Lessor may be corrected by Lessor
or its designee after return of the Aircraft and Xxxxxx shall reimburse
Lessor for expenses incurred by Lessor or its designee for accomplishing such
discrepancy corrections. Lessee shall pay Lessor for such expenses incurred
upon presentation of Xxxxxx's invoice therefor. Any late payments shall be
subject to interest at the Overdue Payment Rate.
(c) RETURN OF ENGINES. Lessee may return the Aircraft with a substitute
engine or engines, provided that such engine conforms to all applicable
requirements set forth in this Section 6. In the event any engine not owned
by Lessor shall be returned with the Airframe, Lessee will, at its own
expense and concurrently with such return, furnish Lessor with a full
warranty bill of sale, free and clear of all liens, claims and encumbrances,
in form and substance satisfactory to Lessor, with respect to each such
replacement engine and shall take such other action as Lessor may reasonably
request in order that such replacement engine shall be duly and properly
titled in Lessor. Upon passage of title to Lessor such replacement engine
shall be deemed to be an Engine for all purposes hereof and thereupon Lessor
will transfer to Lessee, without recourse or warranty except a warranty as to
Lessor's title and the absence of Lessor's Liens, all of Lessor's right,
title and interest in and to an Engine not installed on such Airframe at the
time of the return thereof.
(d) CONDITION OF AIRCRAFT. The Aircraft at the time of its return to
Lessor shall have been maintained and repaired in accordance with the
Approved Maintenance Program and this Lease with the same care and
consideration for the technical condition of the Aircraft as if it were to
have been kept in continued regular service by the Lessee, (it being
expressly understood that this clause does not expand Lessee's obligation to
return the Aircraft in a condition in excess of the specific requirements set
forth below or as otherwise required by this Lease), and shall meet the
following requirements:
(i) OPERATING CONDITION: MINIMUM LIFE REMAINING. The Aircraft shall
be in as good operating condition as on the Delivery Date, ordinary wear and
tear from normal airline passenger or cargo operations excepted, with all of
the Aircraft equipment, components and systems functioning in accordance with
their intended use irrespective of deviations or variations authorized by the
manufacturer's minimum equipment list or configuration deviation list.
Notwithstanding any provision herein allowing a financial settlement in lieu
of return conditions, in any event all Aircraft equipment, components, and
systems shall be fully airworthy and serviceable for no less than the lesser
of (1)
35
3,000 hours, 3,000 cycles, or one calendar year, whichever is the more limiting
factor; or (2) the hours. cycles or calendar time on the Delivery Date.
whichever is the more limiting factor.
(ii) CLEANLINESS STANDARDS. The Aircraft shall be clean by commercial
airline standards. The carpets shall have been shampooed, the seat covers
washed, all interior surfaces wiped down and paint touch up carried out as
necessary. The exterior shall have received a full wash and lubrication.
(iii) CERTIFICATE OF AIRWORTHINESS. The Aircraft shall have, and be
in compliance with, a current valid transport-category certificate of
airworthiness for commercial passenger operations, and shall be airworthy
according to manufacturer's specifications and Aviation Authority
regulations. If required by Lessor, Lessee, at its cost and expense, shall do
the necessary paperwork to request in the name of Lessor a certificate of
airworthiness for export so as to allow Lessor to place the Aircraft on a
foreign registry. At Lessor's request, the Aircraft may be deregistered from
the Aviation Authority aircraft registry and shall have the necessary
governmental approvals, permits and licenses, if any, required for export of
the Aircraft.
(iv) COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. The Aircraft shall
be in compliance with all Airworthiness Directives affecting the Aircraft
which have an effective date for compliance during the Term. In the event
Lessee has obtained a waiver or deviation from the Aviation Authority from
having to comply with any such Airworthiness Directives, Lessee shall,
irrespective of such waiver or deviation, fully comply with all such
Airworthiness Directives covered by such waiver or deviation prior to the
return of the Aircraft to Lessor as if such waiver or deviation did not exist.
(v) DEFERRED MAINTENANCE. The Aircraft shall have had accomplished
thereon all outstanding deferred maintenance items, carry-over items,
configuration deviation list items and flight discrepancies. Items deferred
because of maintenance concessions (i.e., an exemption to operate beyond the
normal limits by monitoring) shall be brought up-to-date as if such
maintenance concessions or exemptions did not exist. Components whose time
status exceeds the conditions or requirements imposed by this Lease shall be
brought into compliance with such conditions or requirements.
(vi) CORROSION TREATMENT. The Aircraft shall have been maintained
by clearing and treating of all mild corrosion and correcting of all moderate
and severe or exfoliated corrosion in accordance with the manufacturer's
recommended corrosion prevention and control procedures and the Approved
Maintenance Program. Fuel tanks shall be free from contamination and
corrosion and in compliance with an approved tank treatment program.
(vii) CONFIGURATION AND CONDITION. The Aircraft shall be returned
in the same configuration and condition, ordinary wear and tear from normal
airline passenger or cargo operations excepted, with all Parts installed
therein as on the Delivery Date, excepting only modifications, additions,
replacements and substitution of Parts as may have been properly made by
Lessee pursuant to Section 5. Lessee shall, prior to such return of the
Aircraft, furnish Lessor a listing of all such modifications, additions, or
36
replacements made during the Term. Lessee shall provide Lessor with all
supporting paperwork, drawings, calculations and approvals associated with
all repairs and modifications to the Aircraft. Lessee shall provide Lessor
with the last six (6) reliability reports for the Aircraft as provided to the
Aviation Authority and a list of all Parts installed on the Aircraft during
the last six (6) months of the Term and of all Parts replaced during said
last six (6) months. Lessee shall not replace Parts with parts having an
operating record indicating a higher failure rate than the Parts replaced.
(e) CONDITION OF AIRFRAME. The Airframe at the time of its return to
Lessor shall meet the requirements as set forth below, all at Lessee's
expense, except as otherwise provided herein:
(i) C CHECK. The Aircraft shall have no more than fifty (50) flight
hours since its last C check. in the event that the time since C Check on the
Return Date is more than set forth above, Lessee shall pay Lessor a financial
settlement to account for the difference in accordance with the following
formula:
Average Industry Cost of C Check
-------------------------------- x Time since C Check on Return Date - 50 hours
Life of C Check
(ii) D CHECK. The Aircraft shall have no more than fifty (50)
flight hours since the last D Check. In the event that the time since D Check
on the Return Date is more than set forth above, Lessee shall pay Lessor a
financial settlement to account for the difference in accordance with the
following formula:
Average Industry Cost of D Check
incl. Non-Routine Items,
but exc. C Check Items
-------------------------------- x Time since D Check on Return Date - 50 hours
Life of D Check
(iii) PARTS. All Parts installed in the Aircraft shall be
serviceable in accordance with Aviation Authority standards and have a value,
modification status and condition equivalent to the Parts in the Aircraft on
the Delivery Date, ordinary wear and tear excepted. Anything to the contrary
contained in this Lease notwithstanding, Lessee may return the Aircraft
(including the Engines) with a substitute part or parts. In the event that
the Aircraft is returned with such substitute part or parts, Lessee will, at
its own expenses and concurrently with such return, ensure that title to such
substitute part or parts properly vest in Lessor free and clear of all liens.
If applicable and in keeping with standard industry practice, Lessee will
furnish Lessor with a full warranty bill of sale in form and substance
satisfactory to Lessor, for such substitute part or parts. All such
substitute parts shall comply with all applicable provisions contained in
this Section 6. Upon passage of title to Lessor, such replacement part or
parts shall be deemed Parts for the purposes of this Lease. Lessor will
transfer to Lessee, without recourse or warranty except as to title and the
absence of Xxxxxx's Liens, all of Lessor's right, title and interest in and
to all parts that have been removed from the Aircraft and replaced by such
substitute parts.
(iv) FUSELAGE. WINDOWS AND DOORS. The fuselage shall be free of
major
37
dents and abrasions, and loose or pulled or missing rivets. The fuselage will
be freshly painted in white. Windows shall be free of delamination,
blemishes, cracking and shall be properly sealed. Doors shall be free moving,
correctly rigged and be fitted with serviceable seals.
(v) WINGS AND EMPENNAGE. All leading edges shall be free from
damage. All painted areas shall be freshly painted in white. All unpainted
cowlings and fairings shall be polished. Wings shall be free of fuel leaks.
(vi) INTERIOR. Ceilings, sidewalls and bulkhead panels shall be
clean and free of cracks and stains. All floor panels shall be firm. All
window shades shall operate properly and be undamaged. All carpets and seat
covers shall be in good condition, clean and stain free and meet all
international fire resistance regulations. All seats shall be serviceable, in
good condition and repainted as necessary. Recline mechanism and table
operation shall be satisfactory, and table condition level, tight, and
undamaged. All signs and decals shall be in the English language, clean and
legible. All emergency equipment having a calendar life shall have a minimum
of one year or one hundred percent of its total approved life, whichever is
less, remaining.
(vii) COCKPIT. All decals shall be in the English language, clean,
secure and legible. All fairing panels shall be free of stains and cracks,
shall be clean, secure and repainted as necessary. Floor coverings shall be
clean and effectively sealed, and painted as necessary. Seat covers shall be
in good condition, clean and shall conform to all international fire
resistance regulations. Seats shall be fully serviceable and shall be
repainted as necessary. Wear areas will be painted or refurbished as
necessary.
(viii) CARGO COMPARTMENT. All panels and nets shall be in good
condition.
(f) CONDITION OF LANDING GEAR. Notwithstanding the definition of
Delivery Date, as set forth in this Agreement, each main and nose landing
gear component and each associated actuator and Part (a "Landing Gear") shall
have at least the same number of hours of its then authorized life since
overhaul as was the case on October 23, 1995. In the event that the time
since Landing Gear overhaul on the Return Date is more than set forth above,
Lessee shall pay Lessor a financial settlement to account for the difference
in accordance with the following formula:
Average Industry Cost of Overhaul x (Time since overhaul on Return Date -
--------------------------------- Time since overhaul on Delivery Date)
Life of Overhaul
Each Landing Gear shall be clean, free of leaks and repaired as necessary.
All decals shall be in the English language, clean, secure, and legible.
(g) CONDITION OF AUXILIARY POWER UNIT ("APU"). Lessee will return the
Aircraft installed APU in serviceable condition, in accordance with the
manufacturer's specifications and Aviation Authority parameters, ordinary
wear and tear excepted. and with no less than (i) the time or cycles
remaining to replacement of the most limiting Life Limited Component, (ii)
the aggregate life remaining on all Life Limited Components, and (iii) the
time since hot section inspection as the APU had on the Delivery Date, as
38
specified on the Lease Supplement and Receipt. Any operational discrepancies
of the APU shall be corrected at Xxxxxx's expense prior to the return of the
Aircraft to Lessor. In the event that the APU time on the Return Date is less
than set forth above, Lessee shall pay Lessor a financial settlement to
account for the difference at the rate of US$10.00 per each operating hour by
which the APU time on the Return Date exceeds the APU time on the Delivery
Date. This hourly rate shall be adjusted annually in accordance with
increases in the Consumer Price Index published by the U.S. Department of
Labor, Bureau of Labor Statistics ("CH").
(h) CONDITION OF ENGINES. Each Engine shall have at least the same
average number of cycles for Life Limited Components as was the case on the
Delivery Date, as specified on the Lease Supplement and Receipt. In addition,
upon return of the Aircraft to Lessor, each Life Limited Component of each
Engine shall have no less than the greater of 3,000 hours or 3,000 cycles
remaining until replacement of its most limiting Life Limited Component as
was the case on the Delivery Date. Each Engine shall meet both the Engine
manufacturer specifications and the Approved Maintenance Program parameters
for acceptable exhaust gas temperature margin at rated thrust, engine
pressure ratio, and fuel flow. In the event that the average number of cycles
on the Return Date does not meet the conditions set forth above, Lessee shall
pay Lessor a financial settlement to account for the difference at the rate
of US$54.00 per cycle in accordance with paragraph (r), below. This hourly
rate shall be adjusted annually in accordance with increases in the Consumer
Price Index published by the U.S. Department of Labor, Bureau of Labor
Statistics ("CPI").
(i) HISTORICAL RECORDS: TREND MONITORING DATA. If the Engine historical
and maintenance records and/or trend monitoring data indicate a rate of
acceleration in performance deterioration of any installed Engine which is
higher than normal based on Lessee's maintenance experience in operating such
Engines, or if an Engine is "on watch," Lessee shall, prior to the Aircraft's
return, correct or cause to be corrected such conditions which are determined
to exceed the Engine manufacturer's maintenance manual tolerances or
otherwise be causing such performance deteriorations or "on watch" condition.
(j) INSPECTIONS. The following Inspections shall occur at Lessee's
facilities or at the location where the final C and D checks on the Aircraft
are being performed, pursuant to this Section 6:
(i) The Aircraft (including the Aircraft Documents) shall be made
available to Lessor for ground Inspection by Lessor during the carrying out
of scheduled maintenance. Lessee shall open the Inspection plates of the
Aircraft as determined by Lessor, and shall allow Lessor to accomplish its
inspection in order to determine that the Aircraft (including the Aircraft
Documents) is in the condition required by the provisions of this Section 6,
provided that the Lessor shall use all reasonable endeavors to accomplish its
inspection during the period in which the Aircraft is out of service for the
purposes of the scheduled maintenance. Lessee shall promptly correct any
discrepancies from the condition required by the provisions of this Section 6
which are observed during such inspection.
39
(ii) A full, videotaped borescope inspection of all Engine and APU
sections and isotope inspection shall be performed under the surveillance of
Lessor at Lessee's expense at the time of the Aircraft's return to Lessor and
Lessee shall provide evidence satisfactory to Lessor reflecting the
correction of any discrepancies found during such inspection and determined
to have exceeded the Engine or APU manufacturer's maintenance manual limits.
(iii) Lessee shall conduct an operational ground check in
accordance with the requirements of the Approved Maintenance Program and
Shall correct any discrepancies disclosed by such check.
(iv) The Aircraft shall be check flown by Lessee at Lessee's
expense, using qualified flight personnel, for not more than one and one-half
(1-1/2) hours on a noncommercial flight, for the purpose of demonstrating to
Lessor the satisfactory operation of the Aircraft and its equipment and
systems. Two (2) of Lessor's employees or representatives (or more if
consented to by Xxxxxx) may participate in such flight as observers, Xxxxxx's
pilot shall be in command of the Aircraft. Such flight shall be flown using
standard operational check flight procedures as specified by the Airframe
manufacturer's flight functional acceptance procedure or operational test
flight procedures. Upon completion of such operational check flight, the
representatives of Xxxxxx and Lessor participating in such flight shall agree
in writing upon any discrepancies in such Aircraft required be corrected by
Lessee in order to comply with the provisions of this Section 6 and Lessee
shall promptly correct or cause to be corrected at Xxxxxx's expense any such
discrepancies. If any discrepancies continue to persist, Lessor may (but
shall not be obligated to) accept delivery of the Aircraft and apply the
procedure set forth in Section 6(l) for such discrepancies.
(k) ACCEPTANCE. After Completion of the foregoing inspections at
Lessee's facilities and the correction of any discrepancies discovered during
such inspections as required to comply with this Section 6, Lessee shall
ferry the Aircraft to the Return Location and Lessee shall be liable only for
discrepancies manifested during such ferry flight and duly noted in the
technical log (the Lessee shall instruct the captain of such ferry flight to
duly note discrepancies manifested during such ferry flight), Lessee shall
not be obligated to correct discrepancies which were reasonable discernible
an inspection prior to the commencement of the ferry flight. The Lessor may
have an observer on such ferry flight. Lessor shall accept return of the
Aircraft at the Return Location. At the time of acceptance of return of the
Aircraft to Lessor, Lessor and Lessee shall execute an Aircraft Return
Receipt and Lease Termination in the form attached hereto as Exhibit C.
(l) DEFERRED DISCREPANCY CORRECTION. Any discrepancies found during the
inspections set forth in Section 6(j) or (k) above which are not corrected by
Lessee prior to return of the Aircraft to Lessor may be corrected by Lessor
or its designee after return of the Aircraft and Lessee shall reimburse
Lessor for all costs and expenses reasonably incurred by Lessor or its
designee for accomplishing such discrepancy corrections. Lessee shall pay
Lessor for all such costs and expenses incurred within ten (10) days of the
date on which Lessor submits its invoice and supporting documentation. Any
late payments shall be subject to interest at the Overdue Payment Rate.
40
(m) AIRCRAFT DOCUMENTS. Lessee shall return to Lessor, at the time the
Aircraft is returned to Lessor, all of the Aircraft Documents, updated and
maintained by Lessee through the date of return of the Aircraft. In the event
of missing, incomplete, mutilated, or otherwise unacceptable Aircraft
Documents, the Lessee shall, at its sole cost and expense, re-accomplish the
tasks necessary to produce such Aircraft Documents in accordance with the
provisions of Section 5(p). On the Return Date, Aircraft Documents for any
Life Limited Component shall establish total service, origin, and
authenticity "back-to-birth" only if either (i) on the Delivery Date Aircraft
Documents for such Life Limited Component established total service, origin,
and authenticity "back-to-birth"; or (ii) Lessee replaced such Life Limited
Component during the Term.
(n) SERVICE BULLETIN KITS. All vendors' and manufacturers' service
bulletin kits ordered for the Aircraft and costing $5,000 or less, but not
installed therein shall be returned with the Aircraft, as part of the
Aircraft at the time of return, and shall be loaded by Lessee on board the
Aircraft as cargo. Service bulletin kits ordered for the Aircraft and costing
more than $5,000 but not installed therein may be purchased by Lessor at
Lessee's actual cost.
(o) LESSEE'S SPECIAL EXTERIOR MARKINGS. At the time of the return of the
Aircraft, Lessee shall, at Lessor's election, either remove or paint over
exterior markings painted on such Aircraft by Lessee and the area where such
markings were removed or painted over shall be refurbished by Lessee as
necessary to blend in with the surrounding surface. In the event that,
notwithstanding Xxxxxx's obligation to do so, Lessee does not remove such
markings, Lessor shall have no obligation to remove such markings prior to
the sale, lease, or other disposition of the Aircraft by Lessor after its
return: however, if Lessor elects to remove such markings, Lessee shall pay
Lessor's costs and expenses for such removal within ten (10) days of the date
of Lessor's invoice therefor. Any late payments shall be subject to interest
at the Overdue Payment Rate.
(p) STORAGE OF AIRCRAFT UPON RETURN. [INTENTIONALLY OMITTED]
(q) ASSIGNMENT OF RIGHTS. Upon return of the Aircraft to the Lessor, the
Lessor may assign its rights under Section 5 and Section 6 hereof with
respect to the Aircraft to a third party purchaser or lessee of the Aircraft.
(r) FINANCIAL SETTLEMENT IN LIEU OF LIFE REMAINING: NO LESSOR
OBLIGATIONS. To the extent that on the Return Date the life remaining of the
Airframe (with respect to D Check time), the Landing Gear, the APU, or any
Engine is better than what is required by Sections 6(e)(ii), 6(f), 6(g), or
6(h), there shall be no obligation for Lessor to make any financial
settlement in favor of Lessee. Provided that Lessee is not in default and it
is otherwise commercially reasonable to do so, Lessee may substitute engines
and other components which comply fully with this Section 6, for those
installed on the Aircraft at the end of the Term, or any extension thereof.
(s) OVERFLIGHT AND OTHER FEES, Upon return of the Aircraft to the
Lessor, Lessee shall have paid all overflight, landing fees, and handling
charges relating to the Aircraft and shall provide evidence of payment to
Lessor if requested.
41
SECTION 7. LIENS.
The Lessee will not create or suffer to exist any Lien upon or with
respect to the Aircraft, the Airframe or any Engine, except for the rights of
the Lessor and the Lessee hereunder and Permitted Liens, and save as
otherwise expressly allowed herein.
SECTION 8. TAXES.
(a) TAX INDEMNITY. The Lessee agrees to pay, and to indemnify each
Indemnitee for all taxes, fees, levies, imposts, duties, charges and
withholdings of any nature (together with any and all fines, penalties,
additions to tax and/or interest thereon or computed by reference thereto)
(individually, a "Tax" and collectively, "Taxes") which are imposed by any
government, governmental subdivision or other taxing authority of or in any
jurisdiction, or by any international organization, and which are imposed
with respect to or in connection with any transaction or activity described
in or resulting from this Lease or any other Operative Document, including
(without limitation) Taxes imposed on or with respect to, or measured by, any
of the following:
(i) The Aircraft or any part thereof or any interest therein;
(ii) The import, export, acceptance, possession, ownership,
delivery, use, operation, location, leasing, subleasing, condition,
maintenance, repair, modification, overhaul, testing, storage, abandonment,
repossession, return, sale, replacement, or other disposition of the
Aircraft, or any part thereof or any interest therein;
(iii) The rentals, receipts, income, or earnings arising from the
Aircraft or any part thereof or any interest therein;
(iv) This Lease or any other Operative Document; any agreement or
instrument executed in connection with or pursuant to any of the foregoing;
any future amendment, supplement, waiver or consent requested by Lessee with
respect to any thereof, or the execution, delivery, recording or performance
of any thereof; or
(v) Any payment made pursuant to this Lease or any other Operative
Document;
PROVIDED, HOWEVER, that the Lessee shall not be required by paragraph (a) to
indemnify an Indemnitee for any of the following:
(aa) Taxes in respect of net income, net profits, capital gains or
any Tax which is enacted by a taxing jurisdiction as a replacement
or, substitute as a revenue source, in part or in whole, for a Tax
on not income, net profits or capital gain.
(bb) Penalties, Taxes, additions to Taxes, fines or interest on
Taxes which would not have arisen but for delay or failure (which
constitutes gross negligence) by the Lessor, or any Indemnitee, in
notifying the Lessee or in
42
the filing of Tax Returns or Payment of Taxes assessed on the
Lessor, which delay or failure shall not have been consented to,
caused by or requested by the Lessee;
(cc) Any Tax which results solely from any act or Omission on the
part of the Lessor which constitutes a breach by the Lessor of its
express obligations to the Lessee under this Lease or Operative
Document or otherwise constitutes wilful misconduct or gross
negligence on the part of the Lessor;
(dd) Any Taxes to the extent properly attributable to any time or
period prior to the date of this Lease or after its Expiry;
(ee) In the event that the Lessor assigns or transfers its interest
in the Aircraft subject to and with the benefit of this Lease, any
Taxes if and to the extent that such Taxes exceed those which would
have been imposed and in respect of which the Lessee would have
been liable to indemnify the Lessor under this Lease had the Lessor
not so assigned or transferred its interest; provided, that this
exclusion shall not apply to any assignment or transfer pursuant to
an exercise of remedies under Section 14;
(ff) Any Taxes which are caused by or arise out of or as a
consequence of a Lessor Lien or any debt of Lessor with respect to
the Aircraft or any interest therein;
(gg) Any Taxes (including, without limitation, sales, value added
or other transfer Taxes) which arise upon any sale, assignment,
transfer or other disposition (whether voluntary or involuntary) of
the Aircraft or any interest therein by the Lessor or any other
Indemnitee (or any sale, assignment, transfer or other disposition
by an Indemnitee of any interest in another Indemnitee), save where
such sale, assignment, transfer or other disposition occurs
pursuant to an exercise of remedies under Section 14.
(hh) Any Taxes imposed in any taxing jurisdiction except to the
extent such Taxes are imposed as a result of the location or
operation of the Aircraft or any part thereof in that jurisdiction,
the location or operation of the user of the Aircraft or any part
thereof in that jurisdiction, or the transmittal of payments to the
Lessor from that jurisdiction ("Use Jurisdiction Taxes"); provided,
however, Lessee shall be liable for any non-Use Jurisdiction Taxes
to the extent they reduce, offset or eliminate any Use Jurisdiction
Taxes in respect of which the Lessee otherwise may be required to
make an indemnity or other payment pursuant to this Section 8(a).
43
If the Lessor or any Indemnitee becomes aware of any Taxes in respect of
which the Lessee may be required to make an indemnity or other payment
pursuant to this Section 8(a), the Lessor shall, or shall cause the
Indemnitee to, promptly notify the Lessee in writing accordingly. If
reasonably requested by the Lessee in writing, the Lessor shall, or shall
cause the Indemnitee to, in good faith, diligently contest (including
pursuing all administrative appeals or actions) in the name of the Lessor,
and/or Indemnitee as appropriate, or, if appropriate and requested by the
Lessee, in the name of the Lessee (and will permit, and/or cause the
Indemnitee to permit, the Lessee, if requested by the Lessee, to contest in
the name of the Lessee, the Indemnitee or the Lessor) the validity,
applicability or amount of such Taxes and shall, and/or cause the Indemnitee
to (i) resist payment thereof if reasonably practicable; (ii) pay the same
only under protest, if protest is necessary or proper; and (iii) if payment
is made, seek a refund thereof in appropriate administrative or judicial
proceedings provided that (aa) prior to any such action the Lessee shall have
agreed that it is liable for such Taxes to the extent that such contest is
unsuccessful and that the Lessee will indemnify the Lessor and the Indemnitee
to the Lessor's reasonable satisfaction for all costs and expenses which the
Lessor and/or the Indemnitee may incur in connection with such contest,
including (without limitation) all reasonable legal and accountants' fees and
disbursements, and the amount of any interest or penalties which may be
payable as a result of the contest; and (bb) if the Lessor determines in its
reasonable discretion that such contest is to be initiated by the payment of
(and the claiming of a refund for) such Taxes, the Lessee shall have advanced
to the Lessor and/or the Indemnitee sufficient funds (on an interest-free
basis and, if such advance constitutes taxable income in the hands of the
Lessor and/or the Indemnitee, on an after-tax basis) to make such payment. In
any such contest in which Lessor or an Indemnitee, and not the Lessee, is the
party defending or making the claim against the taxing authority, the Lessor
shall, and shall cause the Indemnitee to, follow the reasonable instructions
of the Lessee as to the manner in which such contest shall be defended or
prosecuted by the Lessor and/or the Indemnitee as the case may be, provided,
however, that Lessor or the Indemnitee, as the case may be, need not follow
such Instructions if it reasonably determines and advises Lessee of the basis
of such determination that compliance with Xxxxxx's instructions would
generate an adverse consequence to Lessor or the Indemnitee, as the case may
be.
If the Lessor and/or Indemnitee shall obtain a refund, rebate, credit or
other relief in respect of all or any part of any Taxes or expenses (such as,
without limitation, attorneys fees) with respect to such Taxes in respect of
which the Lessee shall have made payment pursuant to this Section 8(a), the
Lessor shall, or shall cause the Indemnitee to, provided no Event of Default
shall have occurred and be continuing, promptly pay to the Lessee an amount
which is equal to the amount of the refund, rebate, credit or other relief,
plus any interest or other addition received on any refund, provided always
that any such payment by the Lessor or Indemnitee shall leave the Lessor
and/or the Indemnitee in no more and no less favorable a position that
they/it would have been in had the Lessee not been required to make any
payment in respect of such Taxes.
44
Lessee will pay all Taxes payable by it under this Section 8, prior to the
date on which penalties attach thereto and prior to the date on which any
lawful claim, if not paid, would become a Lien upon any of the material
property of Lessee; and Lessee will pay all amounts indemnifiable by it under
this Section 8, to the extent not previously paid or payable, on written
demand by the appropriate Indemnitee; in each case subject to Xxxxxx's
contest rights under this Section 8(a). Except as otherwise provided in this
Lease, the Expiry of this Lease shall not limit or modify the obligations of
the Lessee or the Lessor with respect to any indemnities or agreements
contained in this Section.
(b) WITHHOLDING. If the Lessee is required by Applicable Law to make any
withholding (other than Taxes for which the Indemnitee is not entitled to be
indemnified under Section 8(a)) from any amount payable by the Lessee to or
for the benefit indemnified Indemnitee pursuant to this Lease or any related
agreement, the Lessee shall (i) fit of any additional amount as may be
necessary to make the net amount actually received by the person entitled to
receive the payment, after all withholdings (other than Taxes for which the
Indemnitee is not entitled to be indemnified under Section 8(a)), equal to
the amount such person would have received if no withholding (other than
Taxes for which the Indemnitee is not entitled to be indemnified under
Section 8(a)) had been required, and (ii) as soon as practicable thereafter,
deliver to the Indemnitee a receipt or other document reasonably satisfactory
to the Indemnitee evidencing the withholding and the payment of the amount
withheld to the relevant governmental authority.
If the Lessor receives the benefit of a Tax repayment, set-off, credit,
allowance or deduction resulting from a payment which includes an additional
amount paid by the Lessee under this Section 8(b) (or the Taxes deducted or
withheld from such payment) it shall pay to the Lessee a sum equal to the
value to the Lessor of such benefit (account being taken also of the value to
the Lessor of any tax benefit arising by reason of such payment) as in the
opinion of the Lessor's auditors will leave the Lessor (after such payment)
in no more and no less favorable a position than it would have been if no
additional amount had been required to be paid provided always that:
(aa) The Lessor's auditors shall determine in their sole discretion
(acting in good faith) the amount of any such benefit and the date
on which it is received; but further provided that an independent
auditor approved by Lessor (which approval shall not be
unreasonably withheld), at Xxxxxx's request and expense, may review
the opinion and determination of Lessor's auditors to determine the
propriety thereof and the opinion of such independent auditor shall
prevail for purposes of this Section;
(bb) In determining the amount of any such benefit by applying tax
credits, allowances, benefits and deductions available to it
pursuant to this Lease and the transactions hereunder to the Taxes,
income and other Tax or taxable items arising in connection
herewith and to the extent that any tax credits, allowances,
benefits and deductions remain after such application, the Lessor
shall use
45
reasonable efforts to reduce its Tax liability; and
(cc) The Lessor shall not be obliged to disclose to the Lessee any
information regarding its Tax affairs or Tax computations, but,
shall be obliged to disclose to the independent auditor described
above any and all reasonable information relating to its review,
but, the Independent auditor shall not be obliged to disclose any
such information to Lessee.
If and to the extent that the Lessor makes a payment to the Lessee on account
of a tax benefit and it subsequently transpires that the Lessor did not
receive such benefit, the Lessee shall pay to the Lessor such sum as the
Lessor's auditors may certify as being appropriate to restore the after-tax
position of the Lessor to that which it would have been if such tax benefit
had been received, provided that an independent auditor approved by Lessor
(which approval shall not be unreasonably withheld), at Xxxxxx's request and
expense, may review the certification and determination of Lessor's auditors
to determine the propriety thereof and the opinion of such independent
auditor shall prevail for purposes of this Section, and, further provided
that Lessor shall be obliged to disclose to the independent auditor described
above any and all reasonable information relating to its review, but, the
independent auditor shall not be obliged to disclose any such Information to
Lessee.
(c) AFTER-TAX PAYMENT. Each indemnity payment Pursuant to Section 15 or
this Section 8 shall be in an amount which, after taking into account all
Taxes required to be paid by the Indemnitee entitled to the indemnity payment
as a result of the receipt or accrual of the indemnity payment and any
additional payment hereunder, shall be equal to the total amount of the
indemnity payment that the Lessee would be required to pay if the Indemnitee
were not subject to Taxes as a result of the receipt or accrual of the
indemnity payment.
(d) TAX SAVINGS. If as a result of the payment or accrual of Taxes paid
or indemnified by the Lessee an Indemnitee shall realize and recognize any
savings with respect to Taxes, such Indemnitee shall, and Lessor shall cause
such Indemnitee to, promptly notify the Lessee that it has realized and
recognized such savings and pay to the promptly notify he Lessee within
thirty (30) days of the realization of such savings an amount equal to (i)
the net reduction in Taxes realized and recognized by such Indemnitee and
(ii) the amount of any further net reduction in Taxes realized and recognized
under such laws as a result of payments pursuant to this sentence, in each
case as determined by such Indemnitee; provided that an independent auditor
approved by the Indemnitee (which approval shall not be unreasonably
withheld), at Xxxxxx's request and expense, may review the determination of
such Indemnitee to determine the propriety thereof and the opinion of such
independent auditor shall prevail for purposes of this Section, and, further
provided that such Indemnitee shall be obliged, and Lessor shall cause such
Indemnitee, to disclose to the independent auditor described above any and
all reasonable information relating to its review, but, the independent
auditor shall not disclose any such information to Lessee.
(e) COOPERATION IN FILING TAX RETURNS. Lessee and Lessor will, and
Lessor shall cause each Indemnitee to, cooperate with one another in
providing information which may be reasonably required to fulfill each
Party's tax filing requirements and any audit information request arising
from such filing.
SECTION 9. RISK OF LOSS, EVENT OF LOSS; REQUISITION FOR USE
(a) RISK OF LOSS. The Lessee will bear the entire risk of destruction,
loss, theft, requisition of title, or use, confiscation, taking or damage of
or to the Aircraft from any cause during the period commencing when the Lease
Supplement and Receipt is executed and delivered by Xxxxxx and ending when
the Aircraft Return Receipt and
46
Lease Termination is executed and delivered by Xxxxxx, provided, that Lessor
shall be responsible to Lessee to the extent that such destruction, loss,
theft, requisition of title or use, confiscation, taking or damage of or to
the Aircraft is the direct result of a breach by the Lessor of any of its
express obligations under this Lease.
(b) AIRFRAME EVENT OF LOSS. If an Event of Loss shall occur with respect
to the Airframe, the Lessee will forthwith notify the Lessor thereof in
writing and will pay to the Lessor, in U.S. Dollars and in immediately
available funds (i) 60 days after the date of the occurrence of such Event of
Loss (and Lessor and Lender shall timely execute and return documents
reasonably requested by Lessee or its insurer), or (ii) the date of receipt
of insurance proceeds, whichever is earlier, an amount equal to the
Stipulated Loss Value of the Aircraft; PROVIDED, however, that if the date
such payment is made by the Lessee is not a Rent Payment Date, there shall be
deducted from the amount payable by the Lessee an amount equal to a pro rata
portion of the Basic Rent for the Aircraft computed on a daily basis from and
including the date such payment is made by the Lessee to but not including
the Rent Payment Date immediately following the date such payment is made by
the Lessee. In addition, the Lessee will pay in full when due, but without
duplication, the Basic Rent for the Aircraft payable on each Rent Payment
Date occurring prior to the date payment is made by the Lessee pursuant to
the immediately preceding sentence hereof. Upon payment in full by the Lessee
of all amounts referred to above in this Section 9(b), (i) the Lessee shall
have no further obligation to pay Basic Rent for such Aircraft due
thereafter, (ii) upon payment in full of any Supplemental Rent then owing
this Lease shall terminate with respect to the Aircraft and (iii) the Lessor
will transfer to Lessee title to the Airframe and each Engine, without any
recourse, representation or warranty on the part of the Lessor except that
the Airframe and Engines are free and clear of Lessor Liens and title is held
by Lessor. If, following the occurrence of such Event of Loss as theft,
disappearance, confiscation, seizure, or requisition, the Aircraft is
subsequently returned to the possession of the Lessor or the Lessee within
the foregoing 60-day period and prior to the receipt of insurance proceeds,
this the provisions of this Section 9(b) shall cease to apply to such Event
of Loss. In the event that such 60-day period expires prior to the receipt of
the insurance proceeds, so that Xxxxxx has to pay and has paid the Stipulated
Loss Value, then, upon receipt of the insurance proceeds, the Lessor shall,
within 5 days after receipt of the same, pay the same to Lessee.
(c) ENGINE EVENT OF LOSS. If an Event of Loss shall occur with respect
to an Engine but not the Airframe, the Lessee will forthwith notify the
Lessor thereof in writing and will, not later than 60 days after the
occurrence of such Event of Loss, duly convey to the Lessor (or cause to be
conveyed to the Lessor), as replacement for such Engine, title to another
engine of the same make and model which shall be owned by the Lessee free of
all Liens other than Permitted Liens and shall, in the opinion of the Lessor,
have a value and utility at least equal to (and be in as good operating
condition as) such Engine immediately prior to such Event of Loss, assuming
compliance by the Lessee with all of the terms of this Lease with respect to
such Engine. At the time of such conveyance the Lessee will (i) cause to be
delivered to the Lessor a written warranty reasonably acceptable to the
Lessor to the effect that the Lessor has acquired full title to such
replacement engine free and clear of all Liens except for Permitted Liens and
that such
47
replacement engine is duly subjected to this Lease; (ii) cause a lease
supplement and receipt for such replacement engine to be duly executed by
Xxxxxx and to be filed for recording pursuant to the Aviation Law and (iii)
cause to be delivered to the Lessor evidence satisfactory to the Lessor as to
the due compliance by the Lessee with the insurance provisions of Section 10
hereof with respect to such replacement engine. Upon compliance by the Lessee
with the foregoing terms of this subsection (b) within the 60-day period
referred to above, the Lessor will (A) upon request by the insurers of such
Engine transfer title to Lessee of the Engine so replaced without any
recourse, representation or warranty on the part of the Lessor except that
such Engine is free and clear of any Lessor Liens and (B) execute and deliver
to the Lessee a partial release, in recordable form, releasing such Engine
from this Lease. Such replacement engine shall thereupon constitute an
"Engine" for all purposes hereof. Lessor shall make insurance proceeds
available to accomplish for foregoing.
(d) REQUISITION. In the event of the requisition for use by the
government of the United States of the Airframe or any Engine during the
Term, Lessee shall promptly notify Lessor of such requisition and all
Lessee's obligations under this Lease with respect to the Airframe or such
Engine shall continue to the same extent as if such requisition had not
occurred. If the Airframe or such Engine shall not be returned by the United
States government prior to the end of the Term, Lessee obligations under this
Lease shall continue until the end of such requisition, including without
limitation the obligations to pay Rent and to return the Airframe or such
Engine to Lessor in accordance with the provisions of Section 6 promptly upon
its return by the United States government. Provided no Default has occurred
and is continuing, all payments received by Lessor or Lessee from the
government of the United States for the use of the Airframe or such Engine
during such requisition shall be paid over to, or retained by, Lessee. Lessor
shall accept the insurance provided BY the U.S. Government under the Civil
Reserve Air Fleet Program in lieu of the insurance required under Section 10
hereof in the event of requisition for use by the U.S. Government.
SECTION 10. INSURANCE.
The Lessee represents, warrants and agrees to allow the Aircraft to be
operated only in areas and only in a manner for which each policy of
insurance required by the provisions of this Section 10 shall be in full
force and effect. On or before the Delivery Date and through out the Term,
Lessee shall without cost or expense to Lessor or Lender obtain, maintain and
keep in full force and effect the following insurance with respect to the
Aircraft, carried with insurers satisfactory to Lessor and Lender:
(a) ALL-RISK INSURANCE. All-risk hull insurance on the Aircraft (with
flight, ground, taxiing and ingestion coverages) in an amount not less than
Nine Million Dollars (US$9,000,000) (the "Stipulated Loss Value") at Lease
inception. Such hull insurance shall cover Engines or engines and Parts
temporarily removed from the Airframe in an
48
aggregate amount not less than their replacement cost.
The Stipulated Loss Value shall be adjusted annually to an amount equal to
the greater of the fair market value of the Aircraft, not to exceed
$9,000,000, or the following sums:
In year two: $8,100,000
In year three: 7,200,000
In year four: 6,300,000
In year five: 5,400,000
In year six: 4,500,000
In year seven: 3,600,000
In year eight: 2,700,000
If, at any time, Lessor or Lessee are unable to agree upon the fair market
value of the Aircraft, Lessor and Lessee shall appoint a mutually acceptable
appraiser whose determination of fair market value shall be final and binding
on Lessor and Lessee. In the event Lessor and Xxxxxx are unable to agree upon
an appraiser, Lessor and Lessee each shall select one appraiser and the two
appraisers so selected shall select the third appraiser. The determination of
fair market value made by the panel of appraisers shall be final and binding
on Lessor and Lessee. All such appraiser expenses shall be paid for by Xxxxxx.
(b) WAR RISK INSURANCE. War risk and allied perils hull and liability
insurance on the Aircraft to the broadest extent available in the market in
an amount not less than the Stipulated Loss Value or the liability amount set
forth below. respectively, and covering the perils of:
(i) war, invasion, acts of foreign enemies, hostilities (whether
war be declared or not), civil war, rebellion, revolution, insurrection,
martial law, military or usurped power, or attempts at usurpation of power:
(ii) strikes, riots, civil commotions or labor disturbances;
(iii) any act of one or more persons, whether or not agents of a
sovereign power, for political or terrorist purposes and whether the loss or
damage therefrom is accidental or intentional;
(iv) any malicious act or act of sabotage;
(v) confiscation, nationalization, seizure, restraint, detention,
49
expropriation, appropriation, requisition for title or use by or under the
order of any government (whether civil, military or de facto) or public or
local authority expressly including without limitation the government or any
public or local authority of the country of registration; and
(vi) hijacking or any unlawful seizure or wrongful seizure or
wrongful exercise of control of the Aircraft or crew in flight (including any
attempt at such seizure or control) made by any person or persons on board
the Aircraft acting without the consent of Lessee.
(c) LIABILITY INSURANCE. Throughout the Term, Lessee shall also, without
cost or expense to the Lessor or Lender, obtain, maintain and keep in full
force and affect liability insurance with respect to the Aircraft carried
with insurers satisfactory to Lessor and Lender for a combined single limit
of not less than Three Hundred Million Dollars (US$300,000,000), with
sublimits as standard in this industry, per occurrence as respects cargo
legal liability, a limit of One Million Dollars (US$1,000,000) per
occurrence, which shall:
(i) include comprehensive aircraft liability insurance, passenger
liability insurance, property damage liability, cargo, contractual liability
and products liability insurance (other than manufacturer's products
liability); and
(ii) provide that all the provisions thereof, except the limits of
liability, shall operate in the same manner as if there were a separate
policy covering each such insured.
In relation to product liability, the combined single limit may be an
aggregate limit for any and all losses occurring during the currency of the
policy. Lloyd's endorsement AVN60 may apply to reduce such limit for certain
offenses defined therein.
(d) DEDUCTIBLES AND SELF INSURANCE. Lessee may from time to time
self-insure, by way of deductible or premium adjustment provisions in
insurance policies, the risks required to be insured against pursuant to
Section 10(a) or (b), but in no case shall such self-insurance exceed the
following:
(i) the amount of self-insurance applicable to any owned or leased
aircraft similar to the Aircraft in Lessee's fleet; and
(ii) for hull insurance, Lessee may self-insure for events that are
not an Event of Loss in amounts not more than US$500,000, unless Xxxxxx's
self-insured retention on other similar aircraft in its fleet is of a lesser
amount, in which event the lesser amount shall apply to the Aircraft. No
deductible shall apply in the event of an Event of Loss.
50
(e) ADDITIONAL REQUIREMENTS; LOSS PAYMENT. The hull insurance shall be
provided on an agreed value basis, and all policies shall:
(i) name the Indemnitees as additional insured as their respective
interests may appear;
(ii) provide that the insurance shall not be invalidated by any
action or inaction by Lessee or any other Person and insure the interest of
the Indemnities regardless of any breach or violation by Lessee or any other
named insured of any warranty, declaration or condition contained in such
policies;
(iii) provide that the insurers shall waive any right of
subrogation to any right of any Indemnitee or against any Indemnitee to the
same extent that Lessee has waived its rights;
(iv) provide that in the event of separate insurance being arranged
to cover the all-risk hull insurance and the war risk and allied perils
insurance, the underwriters subscribing to such insurance agree to a 50/50
claim funding arrangement in the event of any dispute as to which insurance
is applicable;
(v) provide that the liability of the insurers shall not be
affected by any other insurance which may be available to any Indemnitee so
as to reduce the amount payable to any Indemnitee;
(vi) be of the type usually carried by corporations engaged in the
same or a similar business, similarly situated with Lessee and owning and
operating similar aircraft and engines, and covering risks of the kind
customarily insured against by such corporations;
(vii) be primary without right of contribution from other
insurance which may be available to any Indemnitee;
(viii) provide that the Indemnitee shall have no liability for
premiums, commissions, calls, assessments, representations or warranties to
insurers with respect to such policies; and
(ix) provide in the case of the hull insurance that, so long as the
insurers shall not have received written notice that a Default or an Event of
Default has occurred and is continuing, any proceeds of less than US$250,000
shall be payable to Lessee; and any proceeds in excess of US$250,000 shall be
payable to Lessee and Lender, and any proceeds in respect of an Event of
Loss, or if the insurers shall have received written notice that a Default or
an Event of Default has occurred and is continuing, any single loss
regardless of the amount, shall be payable to Lender.
(f) NO SET-OFF. Each insurance policy shall contain a waiver of any
right of the Insurers to any set-off or counter-claim or any other deduction
against any Indemnitee.
51
(g) NOTICE OF MATERIAL ALTERATION OR CANCELLATION. Each insurance policy
shall provide that no cancellation or lapse of coverage for nonpayment of
premium or otherwise, and no substantial change of coverage which adversely
affects the Indemnitee shall be effective as to the Indemnities until not
less than 30 days (7 days in the case of war risk policies, subject to
exceptions uniformly applied in war risk policies then available in
commercially reasonable terms) after receipt by Lessor and Lender of written
notice from the insurers of such cancellation, lapse or change.
(h) RENEWAL. Each insurance policy shall provide that the insurers or
Xxxxxx's insurance broker shall promptly notify Lessor and Lender if any
insurance is not renewed.
(i) APPLICATION OF HULL INSURANCE PROCEEDS. As between Lessor and
Lessee, any payments received under policies of insurance shall be applied as
follows:
(i) If such payments are received with respect to loss or damage
(including an Event of Loss with respect to an Engine) not constituting an
Event of Loss with respect to the Airframe, such payments shall be paid over
to or retained by Lessee upon Xxxxxx's performance of its repair or
replacement obligations under this Lease pursuant to 5 hereof; and
(ii) if such payments are received with respect to an Event of Loss
with respect to the Airframe, so much of such payments as shall not exceed
the amount required to be paid by Lessee pursuant to Section 9 hereof shall
be applied in reduction of Xxxxxx's obligation to pay such amount if not
already paid by Xxxxxx, and to reimburse Lessee if it shall have paid all or
part of such amount, and the balance, if any, of such payments shall be paid
over to or retained by Lessee.
(j) INSURANCE FOR OWN ACCOUNT. Nothing in this Section 10 shall prohibit
any Indemnitee or Lessee from obtaining insurance for its own account and any
proceeds payable thereunder shall be payable as provided in the insurance
policy relating thereto, provided that no such insurance may be obtained
which would limited or otherwise adversely affect the coverage or payment of
any insurance. The insurance Lessee is required to maintain pursuant to this
Lease will not be affected by any insurance which may be maintained by any
Indemnitee.
(k) REPORTS; CERTIFICATES. Lessee shall furnish to Lessor and Lender not
later than five (5) Business Days prior to the Delivery Date a report signed
by a firm of independent insurance brokers satisfactory to Lessor and Xxxxxx
stating the opinion of such firm that the insurance then carried and
maintained on the Aircraft complies with the terms hereof. Lessee will during
the Term furnish to Lessor and Lender evidence of renewal of the insurance
policies required pursuant to this Section 10 prior to the cancellation,
lapse or expiration of such insurance policies and, on the renewal dates of
thereof, a report signed by a firm of independent aircraft insurance brokers,
satisfactory to Lessor and Xxxxxx stating the opinion of such firm that the
insurance then carried and maintained on the
52
Aircraft complies with the terms hereof. Lessee will cause such firm to
advise Lessor and Lender in writing promptly of any default in the payment of
any premium and of any other act of omission on the part of Lessee of which
they have knowledge and which would in such firm's opinion invalidate or
render unenforceable, in whole or in any material part, any insurance on the
Aircraft. Lessee will also cause such firm to advise Lessor and Lender in
writing at least 30 days (or 7 days or such other period as is or may be
customarily available, in the case of war risk coverage) prior to the
termination or cancellation of, or material adverse change in such insurance
carried and maintained on the Aircraft.
SECTION 11. THE LESSOR'S RIGHT TO PERFORM FOR THE LESSEE.
If the Lessee fails to make any payment required hereunder or fails to
perform or comply with any of its agreements contained herein, the Lessor may
make such payment or perform or comply with such agreement, including, but
not limited to, the placement of insurance required by this Lease, and the
amount of such payment and the amount of its out-of-pocket costs and expenses
incurred in connection with the performance of or compliance with such
agreement (together with interest thereon at the Overdue Payment Rate) shall
be payable by the Lessee on demand as Supplemental Rent.
SECTION 12. FURTHER ASSURANCES.
(a) The Lessee will promptly and duly execute and deliver such documents
and assurances and take such action as may be necessary or desirable, or as
the Lessor may from time to time reasonably request, in writing, in order to
more effectively carry out the intent and purpose of this Lease and the other
Operative Documents and to establish and protect the Lessor's title to the
Aircraft and its rights and remedies created or intended to be created under
this Lease and the other Operative Documents, in form and substance
satisfactory to the Lessor, in Hawaii and other jurisdictions where the
Lessee operates the Aircraft. Such further assurances shall be at Xxxxxx's
expense if occasioned by changes in law or if occasioned by Xxxxxx's Default,
and otherwise shall be at Lessor's expense.
(b) Lessee shall not operate or locate the Aircraft, Airframe or any
Engine (collectively "Item of Equipment") or permit any Item of Equipment to
be used, operated or located (1) in any area excluded from coverage by any
insurance required hereunder, including but not limited to Libya, Iran, Iraq,
North Korea; (2) in any area outside the territorial limits of the United
States of America with respect to which there are recognized hostilities in
the nature of a general armed conflict or rebellion or there is a recognized
threat thereof, unless adequate war risk insurance is in full force and
effect; or (3) outside the territorial limits of the United States of America
for a period of more than five (5) months in any one calendar year.
(c) Lessee shall not operate or locate any Item of Equipment or permit
any Item of Equipment to be transferred to, used, operated, or otherwise
disposed of by (1) an organization which is exempt from the tax imposed by
Chapter I of Subtitle A of the Internal Revenue Code; (2) the United States,
any state or political subdivision thereof, any international organization,
or any agency or instrumentality of any of the foregoing; or (3) in any
manner which, upon written notification from Lessor, shall cause any such
Item of Equipment to cease to be treated as "section 38 property" under the
Internal Revenue Code of 1954, as amended, as in effect immediately prior to
the Tax Reform Act of 1986 (Pub. L. No. 99-514) (the "1954 Code").
(d) Lessee shall not use or permit the use of any Item of Equipment (1)
in such a manner so as to cause any item of Lessor's expenses with respect
thereto to be allocable to income from sources without the United States of
America, or (2) in any manner which, upon written notification from Lessor,
shall cause any such Item of Equipment to cease to be treated as "section 38
property" under the 1954 Code.
(e) It is understood and agreed by Xxxxxx and Xxxxxx that upon the
consummation of the engine substitution contemplated by Section 4(b)(ix) of
this Agreement, Lessee shall be relieved of the restrictions imposed by
subparagraphs (b)(3), (c) and (d) above, with respect to the Original
Engines. It is further understood and agreed by Xxxxxx and Xxxxxx that the
Replacement Engines shall be subject to the restrictions set forth in
subparagraphs, (b)(3), (c) and (d) above, to the extent permitted by law.
SECTION 13. EVENTS OF DEFAULT.
The following events shall constitute Events of Default (whether any
such event shall be voluntary or involuntary or arise by operation of law or
pursuant to or in compliance with any judgment, decree, order, rule or
regulation of any court or any administrative or governmental body):
53
(a) FAILURE TO PAY BASIC RENT. The Lessee shall fail to make any payment
of Basic Rent within one day after Rent Payment Date; or
(b) FAILURE TO PAY SUPPLEMENTAL RENT. The Lessee shall fail to make any
other payment of Rent of any kind or Stipulated Loss Value and such failure
shall continue unremedied for a period of five (5) days after written demand
therefor by the Lessor to the Lessee; or
(c) FAILURE TO MAINTAIN INSURANCE. The Lessee shall fail to maintain
insurance in accordance with Section 10 hereof; or
(d) MISREPRESENTATION OR BREACH OF WARRANTY. Any representation or
warranty made by the Lessee in this Lease or in any other Operative Document
or in any document or certificate furnished by the Lessee in connection
herewith or therewith shall have been incorrect in any material respect at
the time made; or
(e) BANKRUPTCY ETC. The Lessee shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against the Lessee under the laws
of any country seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law of any country
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property and either such proceeding shall remain undismissed and unstayed for
a period of 30 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against it
or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall occur; or
the Lessee shall take any corporate action to authorize any of the actions
set forth above in this subsection (e); or
(f) GENERAL DEFAULT. The Lessee fails to duly observe or perform any of
its other obligations under this Lease and such failure shall not have been
remedied within a period of twenty (20) calendar days after delivery of
written notice specifying the same from Lessor, including without limitation
failure to maintain the Aircraft as required by this Lease or the Aviation
Authority or failure to protect or preserve Lessor's title to the Aircraft; or
(g) LOSS OF AIRLINE OR CORPORATE AUTHORITY. Lessee shall cease to be a
commercial airline, or the franchises, concessions, permits, rights or
privileges required for the conduct of the business and operations of Lessee
shall be revoked, canceled or otherwise terminated or the free and continued
use and exercise thereof curtailed or prevented, and as a result thereof the
preponderant business activity of Lessee shall
54
cease to be that of a commercial airline: or shall in any respect violate
Section 4(d) hereof; or
(h) NON-PERMITTED TRANSFER. The Lessee (except as expressly permitted by
the provisions of this Lease or as may be expressly consented to in writing
by the Lessor) attempts to sell, transfer, encumber, part with possession of,
assign or lease the Aircraft, the Airframe, any Engines or any part thereof;
or
(i) ABANDONMENT. The Aircraft is (a) abandoned by Lessee or (b) is
arrested, confiscated, seized, taken in execution, impounded, forfeited,
detained, acquired, or otherwise for any reason ceases to be in the
unencumbered possession and control of Lessee otherwise than due to any act
of Lessor, or as permitted in this Lease, and Lessee fails to obtain the
release of the Aircraft within 30 days of such date unless Lessor in the
reasonable exercise of its opinion shall determine (a) Lessee is pursuing a
course of action which if successful will result in the return of
unencumbered possession to Lessee within 60 days; (b) such course of action
is likely to succeed; (c) the Aircraft is fully insured; and (d) no Event of
Default has otherwise occurred; or
(j) UNLAWFUL ACT. It becomes unlawful for Lessee to perform any of its
obligations under this Agreement or any of such obligations cease to be
legal, valid and enforceable in accordance with the terms of this Agreement
by reason of any act or omission of Lessee; or
(k) FAILURE TO PERFORM COVENANTS. The Lessee fails to perform or observe
any other term, covenants, condition or agreement to be performed or observed
by it hereunder, under the Lease (other than a covenant, condition or
agreement failure in the performance or observance of which is elsewhere in
this Section specifically dealt with), and such failure shall continue
unremedied for a period of 15 days after written notice thereof shall have
been given to the Lessee by the Lender, specifying such failure and requiring
it to be remedied; or
(l) OTHER OBLIGATIONS. A material event of default shall have occurred
and been declared and not waived under any agreement wherein Lessee is a
debtor or a lessee with respect to aircraft or aircraft engines; or a
judgment or judgments for the payment of money shall be rendered against
Lessee and such judgment shall not be effectively stayed; or Lessee shall
fail to pay any portion of any indebtedness or other obligation of Lessee in
excess of the value of $500,000, or there shall occur a declaration of
default, an acceleration or any exercise of remedies with respect to any
obligation or Liability of Lessee in or relating to an amount in excess of
the value of $500,000, PROVIDED ALWAYS that it shall only constitute an Event
of Default under this subsection if:
(i) The indebtedness or other obligation or liability relates to
borrowed monies or to a lease,
55
(ii) Any applicable grace period shall have expired;
(iii) Any such acceleration is caused by an actual default on the
part of the Lessee and not by an event or act outside its reasonable control;
and
(iv) The declaration of default, acceleration or exercise of any
other remedy is not being disputed by the Lessee in good faith and on
reasonable grounds.
SECTION 14. REMEDIES.
Upon the occurrence of any Event of Default and at any time thereafter
so long as the same shall be continuing, the Lessor may, at its option,
declare in writing to the Lessee that this Lease is in default; and at any
time thereafter, so long as the Lessee shall not have remedied all
outstanding Events of Default, the Lessor may do one or more of the following
with respect to the Airframe or any Engine, as the Lessor in its sole
discretion shall elect, to the extent permitted by Applicable Law then in
effect:
(a) RETURN AND REPOSSESSION. Lessor may in writing demand the prompt
return, and the Lessee hereby agrees that it shall return promptly, the
Aircraft to the Lessor in the manner and condition required by, and otherwise
in accordance with all the provisions of, Section 6 as if the Aircraft were
being returned at the end of the Term, or the Lessor or the Lessor's agent,
at its option, may, but shall be under no obligation to, enter upon the
premises where all or any part of the Airframe or any Engine is believed to
be located and take immediate possession of and remove the same by summary
proceedings self help or otherwise, all without liability accruing to the
Lessor or the Lessor's agent for or by reason of such entry, or taking of
possession or removal whether for the restoration of damage to property
caused by such action or otherwise.
(b) SALE, USE, ETC. Lessor may sell the Airframe or any Engine at public
or private sale, as the Lessor may determine, or otherwise dispose of, hold,
use, operate, lease to others or keep idle the Airframe or any Engine as the
Lessor may determine, all free and clear of any rights or claims of the
Lessee and without any duty to account to the Lessee with respect to such
action or inaction or for any proceeds with respect thereto. The Lessor shall
act in good faith.
(c) LIQUIDATED DAMAGES; FAIR MARKET RENTAL. The Lessor, by written
notice to the Lessee specifying a payment date which shall be a Rent Payment
Date not earlier than ten days from the date of such notice, may cause the
Lessee to pay to the Lessor, and the Lessee shall pay to the Lessor, on the
payment date specified in such notice, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the Basic Rent for the Aircraft due
on Rent Payment Dates occurring on and after the payment date specified for
payment in such notice), any unpaid Basic Rent for the Aircraft due (or which
would have been due in the absence of the Expiry) prior to the payment date
56
specified in such notice, plus an amount equal to the present value (computed
as of the payment date specified in such notice and using an interest
discount rate of 6% per annum) of the total Basic Rents due for what would
have been the remainder of the Term in the absence of the Expiry ("Liquidated
Rental") (together with interest on all amounts payable by the Lessee under
this subsection (c) at the Overdue Payment Rate from such specified payment
date until the date of actual payment); and upon such payment of Liquidated
Rental and the payment of all other Rent then due hereunder, Lessor shall
proceed to exercise commercially reasonable efforts to sell or lease the
Aircraft and shall pay over to Lessee, as, if, and when received, (i) in the
case of a re-lease, an amount equal to the net rents (after expenses)
received under the re-lease for the remainder of the original Term hereof up
to the amount of Liquidated Rental actually paid, or (ii) in the case of a
sale, the value of the leasehold (determined by Lessor in its sole but good
faith discretion), from the date of sale through the original Term hereof,
had this Lease not been cancelled.
(d) APPLICATION OF SECURITY DEPOSIT. Apply all or any portion of the
Security Deposit to Xxxxxx's damages attributable to such Event of Default or
to the costs of curing such Event of Default. In such event, the Event of
Default shall continue until the Security Deposit is restored to its original
amount.
(e) CANCELLATION, TERMINATION, AND RESCISSION. The Lessor may cancel,
terminate, or rescind this Lease, or may exercise any other right or remedy
which may be available to it under Applicable Law or proceed by court action
to enforce the terms hereof or to recover damage for the breach hereof,
including without limitation Lessee's agreement to lease the Aircraft for the
Term and to pay Rent.
(f) OTHER REMEDIES. In addition, the Lessee shall be liable, except as
otherwise provided above, for any and all unpaid Rent due hereunder before,
after or during the exercise of any of the foregoing remedies and for all
legal fees and other costs and expenses incurred by reason of the occurrence
of any Event of Default or the exercise of remedies with respect thereto,
including all costs and expenses incurred in connection with any retaking of
the Airframe or any Engine or in placing the Airframe or any Engine in the
condition and airworthiness required by Sections 5 and 6. At any sale of the
Airframe or any Engine pursuant to this Section 14 the Lessee may bid for and
purchase such property. No remedy referred to in this Section 14 is intended
to be exclusive, but each shall be cumulative and in addition to any other
remedy referred to above or otherwise available to the Lessor at law or in
equity, including without limitation the Uniform Commercial Code of New York;
and the exercise or beginning of exercise by the Lessor of any one or more of
such remedies shall not preclude the simultaneous or later exercise by the
Lessor of any or all of such other remedies. No express or implied waiver by
the Lessor of any Event of Default or Default shall in any way be, or be
construed to be, a waiver of any future or subsequent Event of Default or
Default. To the extent permitted by Applicable Law, the Lessee hereby waives
any rights now or hereafter conferred by statute or otherwise which may
require the Lessor to sell, lease or otherwise
57
use the Airframe or any Engine in mitigation of the Lessor's damages except
as set forth in this Section 14 or which may otherwise limit or modify any of
the Lessor's rights or remedies under this Section 14.
(g) ATTORNEY-IN-FACT. Upon the occurrence of an Event of Default, Lessee
shall be deemed to have appointed, and does hereby appoint, Lessor as its
attorney-in-fact, which power is hereby deemed to be coupled with an
interest, with the full power and authority at Lessee's expense to act, do,
or take any action with regard to the Aircraft that Lessee itself could do or
authorize, including but not limited to, removal of the Aircraft from
Lessee's operating certificate, demand of payment from any third party for
sums due for the use of the Aircraft, and cancelling any sublease. Lessee
shall execute a separate document in the form attached hereto as Exhibit "D",
evidencing this authority to be held by Lessor until redelivery of the
Aircraft to Lessor and Lessee's compliance with all of the terms and
conditions of this Lease.
(h) CONTINUING OBLIGATION. Except as otherwise may be provided herein,
Lessee shall be liable for any and all unpaid Rent and for reasonable legal
fees and other costs and expenses incurred by reason of the occurrence of any
Event of Default or the exercise of Lessor's remedies with respect thereto,
including all costs and expenses including maintenance reserves, payments
heretofore due and those which are incurred in connection with the return of
the Aircraft in the Return Condition or in placing the Aircraft in the Return
Condition.
SECTION 15. GENERAL INDEMNITY AND EXPENSES.
(a) GENERAL INDEMNITY. The Lessee agrees to indemnity, reimburse, and
hold harmless each Indemnitee from and against all claims, damages, losses,
liabilities, demands, suits, judgments, causes of action, civil and criminal
legal proceedings, penalties, fines, and other sanctions, and any attorney
fees and other reasonable costs and expenses, arising or imposed with or
without the Lessor's fault or negligence or under the doctrine of strict
liability (collectively, "Claims"), relating to or arising in any manner out
of:
(i) This Lease or the breach of any representation, warranty, or
covenant made by the Lessee under this Lease;
(ii) Manufacture, lease, redelivery, acceptance, rejection,
ownership, possession, use, operation, or return, of the Aircraft: provided
however that Lessee shall have no obligation hereunder to defend or indemnity
any manufacturer, operator or maintenance facility;
(iii) The Aircraft's condition or any discoverable or
nondiscoverable defect in it arising from its design, testing, or
construction; any article used in the Aircraft; or any
58
maintenance, service or repair, whether or not the Aircraft is in the
Lessee's possession and regardless of where the Aircraft is located; or
(iv) Any transaction (exclusive of Lessor's purchase financing),
approval, or document contemplated by this Lease.
The Lessee waives and releases each Indemnitee from any existing or
future Claims in any way connected with injury to or death of the Lessee's
personnel, loss or damage of the Lessee's property, or loss of use of any
property, which may:
(v) Result from or arise in any manner out of the interference
with ownership, leasing, condition, use or operation of the Aircraft; or
(vi) Be caused by any defect in the Aircraft; its design, testing,
or construction; any article used in the Aircraft; or any maintenance,
service, or repair, whether or not the Aircraft is in the Lessee's possession
and regardless of where the Aircraft is located.
The Lessee shall have no liability to indemnify the Lessor under this
Section 15(a) with respect to any Claim:
(aa) to the extent that it BOTH is caused by the wilful misconduct
or gross negligence of the Indemnitee AND is not insured by
insurance in compliance with Section 10;
(bb) to the extent that such Claim is the result of any failure on
the part of the Lessor to comply with any of the express terms of
this Lease or any representation or any warranty given by the
Lessor in this Lease not being true and correct at the date when,
or when deemed to have been, given or made;
(cc) to the extent that such Claim represents a Tax or a loss of
Tax benefits (the Lessee's liabilities for which, to the extent
thereof, are set forth in Section 8);
(dd) which represents ordinary and usual operating or overhead
expenses of the Lessor except to the extent that the same arise on
the occurrence of an Event of Default;
(ee) which is required to be borne by the Lessor in
accordance with any other provision of this Lease;
(ff) which results from, or represents, any decline in the
market value of the Aircraft (unless such decline arises out
of any Default); or
(gg) to the extent that such Claim arises in connection with the
Aircraft in respect
59
of an event or circumstance which occurs or exists prior to the
Delivery Date or after the Expiry Date and is not proximately
caused by to any act or omission on the part of the Lessee.
The Lessor agrees that it shall, promptly after it becomes aware of any
circumstances which shall, or would reasonably be expected to, become the
subject of a claim by the Lessor for indemnification pursuant to this Section
15(a), notify the Lessee in writing accordingly as soon as reasonably
practicable. The Lessor and the Lessee shall then consult with one another in
good faith in order to determine what action (if any) may reasonably be taken
to avoid or mitigate such Claim. The Lessee shall have the right to take all
reasonable action (on behalf, and, if necessary, in the name, of the Lessor)
in order to resist, defend or compromise (provided such compromise is
accompanied by payment) any claims by third parties in respect of such Claim,
PROVIDED always that the Lessee shall not be entitled to take any such action
unless adequate provision, reasonably satisfactory to the Lessor, shall have
been made in respect of the third party claim and the costs thereof. The
Lessee shall be entitled to select any counsel to represent it and/or the
Lessor in connection with any such action, subject to the approval of the
Lessor (such approval not to be unreasonably withheld) and any action taken
by the Lessee shall be on a basis that will fully indemnity each Indemnitee.
The indemnities described in this Section will continue in full force
and effect notwithstanding the expiration or other termination of this Lease
and are expressly made for the benefit of and will be enforceable by each
Indemnitee.
(b) LEGAL FEES AND EXPENSES. The Lessee agrees to pay to Lessor all
reasonable costs and expenses, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement of
this Lease, any other Operative Document and the other documents to be
delivered hereunder or thereunder.
SECTION 16. ASSIGNMENT AND ALIENATION.
Lessor shall have the right to assign, sell or encumber any interest of
Lessor in the Aircraft or this Lease and/or the proceeds hereof subject to
the rights of Lessee under the provisions of this Lease. To effect or
facilitate any such assignment, sale or encumbrance, Lessee agrees to
provide, at Lessor's cost, such agreements, consents, conveyances or
documents as may be reasonably requested by Lessor, which shall include,
without limitation, a commercially standard estoppel certificate and an
unrestricted release of Lessor from its obligations under this Lease, save as
to antecedent liabilities. The agreements, covenants, obligations and
liabilities contained herein including, but not limited to, all obligations
to pay Rent and indemnify each Indemnitee are made for the benefit of each
Indemnitee and their respective successors and assigns; provided, however,
that, unless consented to by Xxxxxx, no assignment, sale or encumbrance shall
increase the aggregate financial exposure under the indemnity
60
obligations or otherwise of Lessee under this Lease as compared to what such
obligations would have been had such assignment, sale or encumbrance not
occurred. In the event this Lease is assigned, sold or encumbered by Xxxxxx,
any assignee, transferee or mortgagee shall agree as a condition precedent
thereto not to disturb or otherwise interfere with the quiet enjoyment of
Lessee of the Aircraft so long as no Event or Default shall have occurred and
be continuing,
SECTION 17. NOTICES.
All notices required under the terms and provisions hereof shall be in
writing in the English language, and any such notice shall become effective
when received by the other party, by hand, by registered mail with proper
postage for airmail prepaid, by overnight courier service, or, if in the form
of a telecopy, upon confirmation of receipt thereof, in each case addressed
(i) if to the Lessee:
ALOHA AIRLINES, INC.
P.O. Box 30028
Honolulu, Hawaii 96820
Attention: CHIEF FINANCIAL OFFICER
Telecopier: (000) 000-0000
or to such other address as the Lessee shall from time to time designate in
writing to the Lessor and Lender, or (ii) if to the Lessor:
BJET, INC.
c/o Prentice Hall
00 Xxxxxxxxxx Xx., Xxxxx X-000
Xxxxx, Xxxxxxxx 00000
with a copy to:
JETLEASE, INC.
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: PRESIDENT
Telecopier: (000) 000-0000
with a further copy to:
61
XXXXXX, XXXXXXXXXXX & XXXXXXXXX
International Place, Xxxxx 0000
000 X.X. Second Street
Miami, Florida 33131
Attention: XXXXXXX X. XXXXXX, ESQ.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or to such other address as the Lessor shall from time to time designate in
writing to Xxxxxx and Lender, or (iii) if to Lender:
FINOVA CAPITAL CORPORATION
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: VICE PRESIDENT-LAW
and
FINOVA CAPITAL CORPORATION
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: VICE PRESIDENT-OPERATIONS MANAGEMENT
or to such other address as Lender shall from time to time designate in
writing to Xxxxxx and Lessor.
SECTION 18. NO SET-OFF. COUNTERCLAIM. ETC,
The Lessee's obligation to pay all Rent payable hereunder shall be
absolute and unconditional and shall not be affected by any circumstance
(except to the extent the Lessee is required by a court of competent
jurisdiction to pay Basic Rent to a Person other than the Lessor), including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or
other right which the Lessee may have against the Lessor, any partner
comprising the Lessor, the manufacturer of the Airframe or of any Engine or
anyone else for any reason whatsoever (whether in connection with the
transactions contemplated hereby or in connection with any unrelated
transaction), (ii) any defect in the title, airworthiness, eligibility for
registration under the laws of the United States, condition, design,
operation, or fitness for use of, or any damage to or loss or destruction of,
or any Lien upon, the Airframe or any Engine, or any interruption or
cessation in the use or possession thereof by the Lessee for any reason
whatsoever, whether arising out of or related to an act or omission of the
Lessor or any other Person, (iii) any insolvency,
62
bankruptcy, reorganization or similar proceedings by or against the Lessee,
the Lessor or any other Person, (iv) the invalidity or unenforceability of
this Lease or any absence of right, power, or authority of the Lessor or
Lessee to enter into this Lease, or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing. The Lessee
hereby waives, to the extent permitted by Applicable Law, any and all rights
which it may now have or which at any time hereafter may be conferred upon
it, by Applicable Law or otherwise, to terminate, cancel, quit or surrender
this Lease, or any obligation imposed on the Lessee by this Lease. Nothing in
this Section 18 shall be construed to preclude the Lessee from bringing any
suit at law or in equity against any Person that it would otherwise be
entitled to bring for breach of any representation, warranty, covenant or
duty hereunder.
SECTION 19. GOVERNING LAW.
(a) WAIVER OF IMMUNITY, CONSENT TO JURISDICTION. Each of the Lessor and
the Lessee hereby irrevocably agrees that, to the extent that it or any of
its assets has or hereafter may acquire any right of immunity, as against the
other party hereto or its respective successors and assigns, whether
characterized as sovereign immunity or otherwise, from any legal proceedings,
in the United States of America including, without limitation, immunity from
service of process, immunity from jurisdiction or judgment of any court or
tribunal, immunity from execution of a judgment, and immunity of any of its
property from attachment prior to any entry of judgment or from attachment in
aid of execution upon a judgment, it hereby expressly and irrevocably waives
any such immunity. Each of the Lessor and the Lessee irrevocably agrees that
any legal suit, action or proceeding arising out of or relating solely to
this Lease or any other Operative Document, or any of the transactions
contemplated hereby or thereby or any document referred to herein or therein,
may be instituted in the State or Federal courts in the State of Florida or
any other jurisdictions authorized under this Section 19, and it hereby
irrevocably waives, to the fullest extent permitted by law, any objection
which it may have now or hereafter to the laying of the venue or the
jurisdiction or the convenience of the forum of any such legal suit,
action or proceeding and irrevocably submits generally and unconditionally to
the jurisdiction of any such court but only in any such suit, action or
proceeding. Final judgment against the Lessee or the Lessor in any suit shall
be conclusive, and may be enforced in other jurisdictions by suit on the
judgment, a certified or true copy of which shall be conclusive evidence of
the fact and of the amount of any indebtedness or liability of the Lessee or
the Lessor, as the case may be, therein described; provided always that the
plaintiff may at its option bring auk, or institute other judicial
proceedings, against the Lessee or the Lessor, as the case may be, or any of
its assets in the courts of any country or place where the Lessee or the
Lessor, as the case may be, or such assets may be found.
(b) GOVERNING LAW. This Lease is being delivered in the State of New
York, and shall be governed and controlled as to validity, enforcement,
interpretation, construction,
63
effect and in all other respects by the federal law and statutes, and laws
and decisions of the State of New York.
(c) SERVICE OF PROCESS. In the event of any legal proceedings arising
out of or relating to this Lease, the parties agree and consent to service
of process by any means allowed by law, including but not limited to
Certified Mail. Return Receipt Requested, hand delivery, facsimile
transmission, Federal Express or other express courier service, any other
manner which provides actual notice and/or any other method or procedure
allowed by law. Process may be served upon any officer, director, employee or
agent of the parties, or any other individual authorized by law. Service of
process shall be complete upon delivery unless delivery is refused, in which
event service of process shall be deemed complete upon such refusal.
(d) VENUE AND JURISDICTION. Venue of any actions arising out of or
relating to this Lease shall lie exclusively in Dade County, Florida, New
York, New York, or Honolulu, Hawaii and the parties expressly agree to submit
themselves to the IN PERSONAM jurisdiction of the Dade County, Florida
courts, the New York County, New York courts. and the Honolulu, Hawaii courts.
(e) TRIAL BY JURY. Xxxxxx and Xxxxxx, to the extent permissible by law,
do each waive their right to trial by jury.
SECTION 20. MISCELLANEOUS.
This Lease constitutes the entire agreement of the parties. Any
provision of this Lease which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibitions or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by applicable law, each of
Lessor and the Lessee hereby waives any provision of Applicable Law which
renders any provision hereof prohibited or unenforceable in any respect.
This Lease shall constitute an agreement of lease, and nothing herein
shall be construed as conveying to the Lessee any right, title or interest in
the Aircraft except as a lessee only.
This Lease, including all agreements, covenants, representations and
warranties, shall be binding upon and inure to the benefit of, and may be
enforced by, (1) Lessor and its agents, servants and personal representatives
and, to the extent permitted hereby, assigns and (2) Lessee and its
successors and, to the extent permitted hereby, assigns.
64
The section and subsection headings in this Lease are for convenience of
reference only and shall not modify, define, expand or limit any of the terms
or provisions hereof. This Lease may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and
the same instrument.
No term or provision of this Lease may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination
is sought and by Lender.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this Lease
to be duly executed as of the date and year first above written.
ALOHA AIRLINES, INC., the Lessee
By: /s/ XXXXXX X. XXXXXXXXX
-----------------------------------
Title: SR. VICE PRESIDENT FINANCE &
PLANNING AND CFO
-----------------------------------
By: /s/ XXXXX X. XXXX
-----------------------------------
Title: Vice President -
Planning and Development
-----------------------------------
BJET, INC. the Lessor
By:
-----------------------------------
Title:
-----------------------------------
Counterpart no. 4 of 4 fully executed counterparts. Only counterpart no. 1
shall constitute the chattel paper counterpart.
FINOVA Capital Corporation has caused counterpart no. 1 to be duly executed
this * day of October, 1995, thereby acknowledging (a) receipt of such
counterpart and (b) that such counterpart shall constitute the chattel paper
counterpart of this
Aircraft Lease Agreement.
FINOVA CAPITAL CORPORATION*
By: /s/ authorized signatory
-----------------------------------
Title:
-----------------------------------
* Signature not required for FAA filing counterpart
65
The section and subsection headings in this Lease are for convenience of
reference only and shall not modify, define, expand or limit any of the terms
or provisions hereof. This Lease may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and
the same instrument.
No term or provision of this Lease may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination
is sought and by Lender.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this Lease
to be duly executed as of the date and year first above written.
ALOHA AIRLINES, INC., the Lessee
By:
-----------------------------------
Title:
-----------------------------------
By:
-----------------------------------
Title:
-----------------------------------
BJET, INC. the Lessor
By: /s/ XXXXX XXXXXX
-----------------------------------
Title: PRESIDENT
-----------------------------------
Counterpart no. 4 of 4 fully executed counterparts. Only counterpart no. 1
shall constitute the chattel paper counterpart.
FINOVA Capital Corporation has caused counterpart no. 1 to be duly executed
this * day of October, 1995, thereby acknowledging (a) receipt of such
counterpart and (b) that such counterpart shall constitute the chattel paper
counterpart of this
Aircraft Lease Agreement.
FINOVA CAPITAL CORPORATION*
By: /s/ authorized signatory
-----------------------------------
Title:
-----------------------------------
* Signature not required for FAA filing purposes
65
EXHIBIT A: FORM OF LEASE SUPPLEMENT AND RECEIPT
LEASE SUPPLEMENT AND RECEIPT dated October __, 1995 between Bjet, Inc.
(the "Lessor"), and Aloha Airlines, Inc. (the "Lessee").
The Lessor and the Lessee have heretofore entered into that certain
Aircraft Lease Agreement, dated as of October __, 1995 (herein called the
"Lease" and the defined terms therein being hereinafter used with the same
meanings), relating to one Boeing model 737-2X6C aircraft, manufacturer
serial number 23292. The Lease provides for the execution and delivery of a
Lease Supplement and Receipt.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, the Lessor and the Lessee hereby agree as follows:
A. THE LEASE. All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement and Receipt to the same
extent as if fully set forth herein. The parties confirm that the Delivery
Date is the date of this Lease Supplement and Receipt.
B. THE AIRCRAFT. The Lessee hereby certifies that the Aircraft described
Schedule 1 hereto, consisting of 6 pages and made a part hereof, and the
Aircraft Documents described in Schedule 2 hereto, consisting of 1 page and
made a part hereof, have been delivered to the Lessee, inspected by the
Lessee, found to be in good order and accepted under, and for all purposes
of, the Lease, all on the date hereof. Xxxxxx accepts delivery of the
Aircraft "AS IS," "WHERE IS," AND SUBJECT TO EACH AND EVERY DISCLAIMER OF
WARRANTY AND REPRESENTATION AS SET FORTH IN SECTIONS 4(c) OF THE LEASE. For
the avoidance of doubt, the Lessee's obligations to return the Aircraft in
the conditions set forth in Section 6 of the Lease may be amended as
expressly set forth in Schedules 1 and 2 hereto.
C. REPRESENTATIONS BY THE LESSEE. The Lessee hereby represents warrants
to the Lessor that on the date hereof:
1. The representations and warranties of the Lessee set forth in the
Lease are true and correct in all material respects as though made on and as
of the date hereof.
2. The Lessee has satisfied or complied with all requirements set forth
in the Lease to be satisfied or complied with on or prior to the date thereof.
3. No default or Event of Default under the Lease has occurred and is
continuing on the date hereof.
4. The Lessee has obtained, and there are in full force and effect, such
insurance policies with respect to the Aircraft as are required to be
obtained under the
66
terms of the Lease.
5. The balance sheet and statement of income of the Lessee or any
consolidated group of companies of which the Lessee is a member, heretofore
delivered to the Lessor, have been prepared in accordance with generally
accepted accounting principles, and fairly represent the financial position
of the Lessee or any consolidated group of companies of which the Lessee is a
member, on and as of the date thereof and the results of its or their
operations for the period or periods covered thereby. Since the date of such
balance sheet, there has been no material adverse change in the financial or
operating condition of the Lessee, or any consolidated group of companies of
which Lessee is a member.
This Lease Supplement and Receipt may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute but one
and the same instrument.
This Lease Supplement and Receipt is being delivered in the State of New
York, and shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
Supplement and Receipt to be duly executed as of the date and year first
above written.
ALOHA AIRLINES, INC., the Lessee
By:
-----------------------------------
Title:
-----------------------------------
By:
-----------------------------------
Title:
-----------------------------------
BJET, INC. the Lessor
By:
-----------------------------------
Title:
-----------------------------------
67
TECHNICAL SPECIFICATIONS
AIRCRAFT: N674MA
------------
DATE: 03/31/95
------------
TAT: 28,345:56
------------
TAC: 28,213
------------
CHAPTER 1: GENERAL DESCRIPTION
-------------------------------------------------------------------------------
Manufacturer: Boeing Co.
Model Designation: 737-2X6C
Date of Manufacture: July 5, 1985
Registration Number: N674MA
Serial Number: 23292
Production/Line Number: PY595 / 1113
Crew/Passenger Accommodation: 2 Crew / 2 Obs / 4 Cabin
0 Pallet / 109 Pax
2 Pallet / 70 Pax; 3 Pallet / 54 Pax;
4 Pallet / 34 Pax; 4 Pallet / 30 Pax;
5 Pallet / 24 Pax; 6 Pallet / 6 Pax;
7 Pallet / 0 Pax
Aircraft Anti-ice: Engine Bleed Air
Selcal Code: XX-XX
CHAPTER 2: DESIGN WEIGHTS
-------------------------------------------------------------------------------
Maximum Taxi Gross Weight: 123,600 lbs
Maximum Take-off Weight: 123,200 lbs
Maximum Landing Weight: 107,000 lbs
Maximum Zero Fuel Weight: 99,000 lbs
Basic Empty Weight: 62,600 lbs
CHAPTER 5: MAINTENANCE SCHEDULE AND STATUS
-------------------------------------------------------------------------------
INTERVAL HRS TO NEXT CK
-------- --------------
A-1 Check 125 hrs 102
B Check 750 hrs 183
C Check 3500 hrs 178
D Structural: *
*REMARKS: Continuous Maintenance Program consists of "C" maintenance
checks at 3500 hour intervals with "D" structural integrated
into (7) progressive visits.
SPECS.674/MAINT
SCHEDULE 1
N674NA / Page 2 of 4
CHAPTER 22: AUTOMATIC FLIGHT CONTROLS
-------------------------------------------------------------------------------
A.F.C.S Sperry SP77 n/a n/a
CHAPTER 23: COMMUNICATIONS
-------------------------------------------------------------------------------
HF Transceiver Xxxxxxx 628T-1 000-0000-000 (1)
VHF Transceiver Xxxxxxx 618M-3 000-0000-000 (2)
SELCAL Decoder Motorola NA134D2 n/a (1)
C.V.R. Xxxxxxxxx A100A 93A100-80 (1)
CHAPTER 25: EQUIPMENT & FURNISHINGS
-------------------------------------------------------------------------------
First Class Seats n/a
Business Class Seats n/a
Coach Class Seats Combi Aircraft / Seats-PTC Aerospace (UOP)
QC Seat Pallets / Pemco & Tramco
Cargo Handling System QC Pemco Locks/Ancra Ballmat
Overhead Storage Bin Type Boeing "Wide Body Look" Interior
Lavatories / Locations (1) Fwd / (1) Aft
Lift Rafts n/a
Life Jackets (Crew) EAM / Air Cruisers
Life Jackets (Pax) Flotation Cushions
Hand Megaphone ACR/EM-1
Escape Path Lighting Intervalve System
Escape Slides Air Cruisers (3 ea) - (2) Fwd (1) Aft
P.B.E. Dupont
Galley / Locations Xxxxxxxx (3 ea) - #1 Fwd / #3 Aux / #4 Aft
Ovens Xxxxxxxx Model 5316E (#1 & #4 Galley only)
Beverage Carts Xxxxxxxx (2 ea)
SPECS.674/MAINT
N674MA / Page 3 of 4
CHAPTER 28: FUEL SYSTEMS
-------------------------------------------------------------------------------
Tank Capacity *5173 USG
Fuel Quantity Indication Lbs
Fuel Qty Dripstick Calibration Inches
*PAT'S Aux Fuel Tanks Installation Plumbing installed
CHAPTER 31: INDICATION & RECORDING
-------------------------------------------------------------------------------
Flight Recorder Xxxxxxxxx F800 17M600-00A (1)
CHAPTER 32: LANDING GEAR
-------------------------------------------------------------------------------
Left Main Gear Boeing 00-00000-00 (1)
Right Main Gear Boeing 00-00000-00 (1)
Nose Gear Boeing SS-4620C-55 (1)
Brakes XX Xxxxxxxx 2-1444 (4)
Wheels/Tires XX Xxxxxxxx 3-1398 (4)
Aircraft equipped with Boeing Gravel Protection Kits.
CHAPTER 34: NAVIGATION
-------------------------------------------------------------------------------
Dig Air Data Comp Honeywell n/a HG480B13 (2)
Flight Director Xxxxxxx 329B-8J 000-0000-000 (2)
Marker Beacon Xxxxxxx 51Z-4 000-0000-000 (1)
Weather Radar Honeywell Primus 90 MI585161 (1)
Radio Altimeter Xxxxxxx 860F-4 000-0000-000 (1)
G.P.W.S. Sundstrand MKVII 000-0000-000 (1)
VOR/ILS Nav Xxxxxxx 51RV-4 000-0000-000 (2)
D.M.E. Xxxxxxx 860E-5 000-0000-000 (2)
A.D.F. Xxxxxxx 51Y-7 000-0000-000 (2)
ATC Xponder (Mode S) Xxxxxxx TPR-720 000-0000-000 (2)
XXXXX "C" (Dual) ONI 7000 n/a (2)
Xxxxxxxxx Xxxxxxxxxx MRKVII
TCAS Xxxxxxx TCAS II
OMEGA Navigation n/a
SPECS.674/MAINT
N674MA / Page 4 of 4
CHAPTER 35: OXYGEN SYSTEM
-------------------------------------------------------------------------------
Supplemental crew/passenger oxygen system installed
CHAPTER 49: AIRBORNE AUXILIARY POWER
-------------------------------------------------------------------------------
Xxxxxxx / Model 85-129D / Ground and inflight operational
CHAPTER 52: DOORS
-------------------------------------------------------------------------------
Integral Aft Airstair Door
Boeing Installed Main Cabin Cargo Door (134" x 84.5")
CHAPTER 72: ENGINES
-------------------------------------------------------------------------------
Manufacturer: Xxxxx & Xxxxxxx
Model: JTSD-17A
ENG #1 ENG #2
------ ------
Serial Number: P709481B** P709418B**
TSN: 21,079 23,911
TSLV: 3792 0
CSN: 21,851 14,994
CSLV: 3273 0
Cycles to First Limiter: 11,179 (C01) 4006 (C09/13)
Cycles to Second Limiter: 11,416 (C07) 5006 ( * )
*Multiple Limiters: More than (3) discs are at this limit
** Each of which engines has 750 or more
rated takeoff horsepower or the equivalent
thereof.
SPECS.674/MAINT
Attach to AMMARK/MARKAIR LEASE REPORT
MAJOR MAINTENANCE
Month Ending: March 31, 1995
----------------
Aircraft: N674MA
----------------
Maintenance Check Date Accomplished
-----------------
A-1 Check ( 125 Hr) (3) 03/04 03/15 03/27
---------------------------------------
B Check ( 750 Hr)
---------------------------------------
C Check (3500 Hr)
---------------------------------------
Engines Removed for Cause
---------------------------------------
Engines Removed for Co. Conv. #1 and #2 eng removed to reinstall orig
---------------------------------------
Major Structural Repairs
---------------------------------------
Major Modifications/A.D. Notes
---------------------------------------
*Remarks:
---------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AMMARK/MAINT
STATEMENT OF AIRCRAFT STATUS
IN FULFILLMENT OF LEASE CONTRACTS BETWEEN
AM-MARK ASSOCIATES AND MARKAIR, INC.
For Month Ending March 31, 1995
----------------
Aircraft Registration Number: N674MA
---------------
Airframe Make and Model: Boeing 737-2X6C
Total Time on Airframe Since New: 28,346:15
------------
Total Cycles on Airframe Since New: 28,214
------------
Since Airframe "C"
Check or Engine/
For Month APU Shop Visit
--------------- ------------------ Data
Flight Flight Installed
Serial No. Hours Cycles Hours Cycles Location (Removed)
---------- ------ ------ ------ ------ -------- ---------
Airframe 23292 295.9 199 3321.4 2522 ANC
---------- ------ ------ ------ ------ ----------
Engines & APU's
Subject to Lease:
Engine #1 P709418B 0.3 1 0.3 1 N674MA #2 I-3/29/95
---------- ------ ------ ------ ------ ---------- ---------
Engine #2 P709481B 0.3 1 0.3 1 N674MA #1 I-3/29/95
---------- ------ ------ ------ ------ ---------- ---------
P709481B 261.3 217 3792.4 3273 N674MA #1 R-3/29/95
APU P50189 Returned with N672MA to AM-MARK
---------- -------------------------------------------------
Other Engines & APU's
installed on airframe:
[The following three entries are struck out in the original document]
Engine #1 P709490B 295.9 199 2766.1 2059 R-3/29/95
---------- ------ ------ ------ ------ ---------
Engine #2 P709487B 295.9 199 4657.5 3521 R-3/29/95
---------- ------ ------ ------ ------ ---------
APU P35606 295.9 199 3321.4 I-6/23/93
---------- ------ ------ ------ ------ ---------
Engines & APU's Permanently
Removed from Service During Month:
P709418B Replaced P709480B Destroyed with N670MA
-------------------------------------------------
APU and engine data represent the times and cycles of the airframes each is
installed on.
The aircraft, engines, modules and APU subject to the lease contract for this
aircraft have have been kept in good order and repair, or are being restored to
the condition required by the lease.
MARKAIR, INC.
By: [ILLEGIBLE]
------------------------------
Title: Director of Quality Control
---------------------------
AMMARK/MAINT
SCHEDULE 2
SEE ATTACHED TECHNICAL SPECIFICATIONS
[ILLEGIBLE LOGO]
HISTORICAL RECORDS: BOEING B737-226C, [ILLEGIBLE]
BOX #1: Flight Logs 7/85 through 12/86
BOX #2: Flight Logs 1/87 through 12/88
BOX #3: Flight Logs 1/89 through 12/90
BOX #4: Flight Logs 1/91 through 12/92
"B" Checks - 1991, 1992
BOX #5: Flight Logs 1/93 through 12/93
"B" Checks - 1992, 1993
"C6" Checks 3/92
BOX #6: "B" & "C" Checks 1986 - 1991
BOX #7: Kardex / NOS Tags
"B" Checks 1993 - 1995
"C7" Check 1993 / "C8" Check 1994
BOX #8: Flight Logs 1/94 through 4/95
Master Log 1985 - 1995
BOX #9: Aircraft Historical Records:
Deferred Maint Aircraft Readiness Log
Cert/Permits Component Change Records
[ILLEGIBLE] Maint. Eng. Orders
[ILLEGIBLE] Fleet Campaigns/Eng. Orders
[ILLEGIBLE] Old Historical Documents
Structural Repairs Weight & Balance
Rigging Brochure Misc. Brochure
Detail Specs
BOX #10: Engine Repair Records (OTC)
Airframe Airworthiness Directives
Appliance Airworthiness Directives
Records Accepted by: April 10, 1995
------------------------
(for) Ammark
[ILLEGIBLE LETTERHEAD]
SCHEDULE 2
EXHIBIT "B"
October 9, 1995
Bjet, Inc.
c/o Prentice Hall
00 Xxxxxxxxxx Xx., Xxxxx X-000
Xxxxx, Xxxxxxxx 00000
Gentlemen:
We are counsel to Aloha Airlines, Inc. ("Aloha") and have acted as such
in connection with the
Aircraft Lease Agreement dated as of October ___, 1995
between Bjet, Inc., as Lessor ("Bjet"), and Aloha, as Lessee, (the "Lease
Agreement"), relating to one Boeing 737-2X6C aircraft, bearing m.s.n. 23292,
and two Xxxxx & Xxxxxxx JT8D-17A engines, bearing m.s.n.'s 709481B and
709418B (the "Aircraft").
In so acting, we have examined the Lease Agreement referred to above, and
the originals and copies, certified to our satisfaction, of such records,
documents, certificates and other instruments as, in our judgment, are
necessary or appropriate to enable me to render the opinion expressed below.
For the purposes of this opinion, we have assumed the due execution of
all documents by parties other than Xxxxx.
Based on the above, and subject to the qualifications set
forth below, we are of the opinion that:
1. Aloha is (a) duly formed, validly existing and in good standing as a
Hawaii corporation qualified to do business in all jurisdictions where it
does business, (b) maintains its principal place of business and chief
executive office in Honolulu, Hawaii, (c) has full power to carry on its
business as it is now being conducted and to enter into, legally bind itself
by, and perform its obligations under the Lease Agreement, and all
transactions contemplated thereunder and has complied with all material
statutory and other requirements relative to the business carried on by it.
2. All necessary consents, resolutions and authorizations for Aloha to enter
into the Lease Agreement have been obtained, and no further consents or
authorizations are necessary for the performance by Aloha of all its
obligations pursuant to the
Bjet, Inc.
October 9, 1995
Page 2
provisions of the Lease Agreement and all other documents executed in
connection with the foregoing or contemplated thereby.
3. The Lease Agreement constitutes a valid and binding obligation of Aloha,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, or other similar laws affecting the enforcement of
creditors' rights generally, and to the extent that certain remedies require
or may require enforcement by a court of equity, by such principles of
equity as a court having jurisdiction may impose and by laws which may
affect some of such remedies, but which do not make available remedies
inadequate for substantial realization of the benefits provided therein.
4. The execution and delivery of, and the performance of the provisions of
the Lease Agreement, and of the transactions contemplated thereby, do not
and will not contravene the Articles of Incorporation or Bylaws of Aloha,
and will not contravene any applicable law, regulation, decrees, order,
permit, mortgage, indenture, deed of trust, loan or credit or contractual or
other restriction now existing and binding on Aloha or on any of its
properties.
5. There are no outstanding judgments against Aloha and there is no suit
pending or threatened against Aloha which would have a material adverse
effect on their ability to enter into and perform its obligations under the
Lease Agreement.
6. The Lease Agreement and any filing required or permitted thereunder is
not subject to any registration tax, a stamp duty or similar tax.
We are members of the Bar of the State of Hawaii and do not hold ourselves
out as being conversant with, and express no opinion as to, the laws of any
jurisdiction other than those of the United States of America and the State of
Hawaii.
The opinions expressed herein are solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person.
Xxxx Xxxxxxxx Xxxxx & Xxx
FAA:jam
EXHIBIT "C"
CERTIFICATE OF COMPLIANCE
This Certificate of Compliance is delivered, on and as of the date set
forth below by ALOHA AIRLINES, INC. ("LESSEE") to BJET, INC., ("LESSOR")
relating to one (1) Boeing 737-2X6C Aircraft, Serial Number 23292,
Registration No. N674MA (to be changed to N817AL), together with two (2)
Xxxxx & Xxxxxxx JT8D-9A Engines, (collectively referred to as the "Aircraft")
as more fully described in that certain Aircraft Lease Agreement between
Lessor and Lessee, dated as of October ______, 1995 ("Lease Agreement"). In
respect thereof, XXXXXX who hereby certifies as follows:
1. The Aircraft is ready for re-delivery to LESSOR, in accordance with the
terms and conditions of the Lease Agreement.
2. The Aircraft conforms to the terms and conditions of the Lease
Agreement, including but not limited to Section 6 thereto;
3. The Aircraft is in a condition ready for issuance of an FAA Standard
Certificate of Airworthiness for an aircraft type certificated in the
transport category for operation in scheduled airline service under United
States Federal Aviation Regulations, Part 121, ("FAR Part 121") and is
eligible for inclusion on the United States Federal Aviation Administration
operations specifications of a United States air carrier authorized to
provide such service under FAR Part 121.
4. All Aircraft systems are functioning within manufacturer's limits.
5. The Aircraft is being re-delivered with the same equipment installed
thereon at the commencement of the Lease Agreement, subject only to
replacements, additions and modifications which may have been made pursuant
to the Lease Agreement.
LESSEE hereby acknowledges and confirms that XXXXXX is entitled to rely
upon such representations as proof that the Aircraft fully meets the
requirements for return of the Aircraft in accordance with the provisions of
the Lease Agreement.
IN WITNESS WHEREOF, XXXXXX has caused this Certificate of Compliance to
be executed in its name, by its duly authorized officer or representative,
pursuant to due corporate authority, this ______ day of _______________________.
LESSEE: ALOHA AIRLINES, INC.
By: _______________________________ By: _______________________________
Title: ____________________________ Title: ____________________________
Date: _____________________________ Date: _____________________________
EXHIBIT "D"
APPOINTMENT AS ATTORNEY-IN-FACT
ALOHA AIRLINES, INC. hereby irrevocably appoints BJET, INC., and
___________________________, and the successors and assigns of each, as its true
and lawful attorneys-in-fact, jointly and severally, to act in all respects
and do such actions as ALOHA AIRLINES, INC. could do or authorized others to
do under that certain Aircraft Lease Agreement between BJET, INC. and ALOHA
AIRLINES, INC. dated October ____, 1995, with respect to the use or loss of
use, recovery of insurance proceeds, operation, maintenance, repair and
possession of that certain Boeing 737-2X6C Aircraft, Serial Number 23292,
(Aircraft) which BJET, INC. has leased to ALOHA AIRLINES, INC. This
appointment is made as part of and in consideration of the leasing of the
Aircraft to ALOHA AIRLINES, INC. by BJET, INC. and shall remain in full force
and effect until all obligations of ALOHA AIRLINES, INC. under the referenced
Lease shall be fully discharged or satisfied.
Executed this _____ day of ________________________.
ALOHA AIRLINES, INC.
By: _______________________________
Title: ____________________________
Date: _____________________________
By: _______________________________
Title: ____________________________
Date: _____________________________
EXHIBIT "E"
DELIVERY RECEIPT
THE UNDERSIGNED hereby acknowledges that on the _____ day of October,
1995, BJET, INC. ("BJET"), presented for delivery and acceptance at Marana,
Arizona, U.S.A. to ALOHA AIRLINES, INC. ("ALOHA") and ALOHA's authorized
representative ___________________, one (1) used The Boeing Company Model
737-2X6C aircraft bearing Manufacturer's Serial Number 23292, bearing Federal
Aviation Administration Registration Number N674MA (to be changed to N817AL),
together with two (2) used Xxxxx & Xxxxxxx Model JT8D-17A engines installed
thereon bearing Manufacturer's Serial Numbers 709481B and 709418B, and
together with all fixed equipment, parts, components and accessories
installed thereon (collectively the "Aircraft") and all Aircraft documents as
attached hereto as Schedule A and incorporated herein by reference, pursuant
to that certain Aircraft Lease Agreement dated as of October _____, 1995 between
BJET and ALOHA ("Lease").
The undersigned further acknowledges that such Aircraft is acceptable to
it and is in the condition contemplated for delivery at Marana, Arizona,
U.S.A.
The undersigned further acknowledges that BJET has in all respects
complied with the terms of the Lease as they relate to delivery of the
Aircraft, and that ALOHA accepts delivery of the Aircraft "AS IS, WHERE
IS" in Marana, Arizona, U.S.A.
EXECUTED THIS ______ day of October, 1995.
ALOHA AIRLINES, INC.
By: __________________________________
__________________________________
Its Authorized Representative
SCHEDULE 3
BASIC RENT
----------
The Lessee shall Pay to the Lessor monthly rental for the Aircraft the
("Basic Rent"), payable in advance on each Rent Payment Date during the Term,
in the amount One Hundred Twenty-Five Thousand United States Dollars
(US$125,000).
LEASE SUPPLEMENT AND RECEIPT
LEASE SUPPLEMENT AND RECEIPT dated October 23, 1995 between Bjet, Inc.
(the "Lessor"), and Aloha Airlines, Inc. (the "Lessee").
The Lessor and the Lessee have heretofore entered into that certain
Aircraft Lease Agreement, dated as of October 23, 1995 (herein called the
"Lease" and the defined terms therein being hereinafter used with the same
meanings), relating to one Boeing model 737-2X6C aircraft, manufacturer
serial number 23292. The Lease provides for the execution and delivery of a
Lease Supplement and Receipt.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, the Lessor and the Lessee hereby agree as follows:
A. THE LEASE. All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement and Receipt to the same
extent as if fully set forth herein. The parties confirm that the Delivery
Date is the date of this Lease Supplement and Receipt.
B. THE AIRCRAFT. The Lessee hereby certifies that the Aircraft described
Schedule 1 hereto, consisting of 6 pages and made a part hereof, and the
Aircraft Documents described in Schedule 2 hereto, consisting of 1 page and
made a part hereof, have been delivered to the Lessee, inspected by the
Lessee, found to be in good order and accepted under, and for all purposes
of, the Lease, all on the date hereof. Xxxxxx accepts delivery of the
Aircraft "AS IS," "WHERE IS," AND SUBJECT TO EACH AND EVERY DISCLAIMER OF
WARRANTY AND REPRESENTATION AS SET FORTH IN SECTIONS 4(c) OF THE LEASE. For
the avoidance of doubt, the Lessee's obligations to return the Aircraft in
the conditions set forth in Section 6 of the Lease may be amended as
expressly set forth in Schedules 1 and 2 hereto.
C. REPRESENTATIONS BY THE LESSEE. The Lessee hereby represents warrants
to the Lessor that on the date hereof:
1. The representations and warranties of the Lessee set forth in the
Lease are true and correct in all material respects as though made on and as
of the date hereof.
2. The Lessee has satisfied or complied with all requirements set forth
in the Lease to be satisfied or complied with on or prior to the date thereof.
3. No default or Event of Default under the Lease has occurred and is
continuing on the date hereof.
4. The Lessee has obtained, and there are in full force and effect, such
insurance policies with respect to the Aircraft as are required to be
obtained under the
66
terms of the Lease.
5. The balance sheet and statement of income of the Lessee or any
consolidated group of companies of which the Lessee is a member, heretofore
delivered to the Lessor, have been prepared in accordance with generally
accepted accounting principles, and fairly represent the financial position
of the Lessee or any consolidated group of companies of which the Lessee is a
member, on and as of the date thereof and the results of its or their
operations for the period or periods covered thereby. Since the date of such
balance sheet, there has been no material adverse change in the financial or
operating condition of the Lessee, or any consolidated group of companies of
which Lessee is a member.
This Lease Supplement and Receipt may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute but one
and the same instrument.
This Lease Supplement and Receipt is being delivered in the State of New
York, and shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
Supplement and Receipt to be duly executed as of the date and year first above
written.
ALOHA AIRLINES, INC., the Lessee
By: __________________________________
Title: __________________________________
By: __________________________________
Title: __________________________________
BJET, INC., the Lessor
By: /s/ XXXXX XXXXXX
__________________________________
Title: PRESIDENT
__________________________________
terms of the Lease.
5. The balance sheet and statement of income of the Lessee or any
consolidated group of companies of which the Lessee is a member, heretofore
delivered to the Lessor, have been prepared in accordance with generally
accepted accounting principles, and fairly represent the financial position of
the Lessee or any consolidated group of companies of which the Lessee is a
member, on and as of the date thereof and the results of its or their
operations for the period or periods covered thereby. Since the date of such
balance sheet, there has been no material adverse change in the financial or
operating condition of the Lessee, or any consolidated group of companies of
which Lessee is a member.
This Lease Supplement and Receipt may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute but one
and the same instrument.
This Lease Supplement and Receipt is being delivered in the State of New
York, and shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
Supplement and Receipt to be duly executed as of the date and year first
above written.
ALOHA AIRLINES, INC., the Lessee
By: /s/ XXXXXX X. XXXXXXXXX
__________________________________
Title: SR. VICE PRESIDENT FINANCE &
PLANNING AND CFO
__________________________________
By: /s/ XXXXX X. XXXX
__________________________________
Title: Vice President - Planning and
Development
__________________________________
BJET, INC., the Lessor
By: __________________________________
Title: __________________________________
TECHNICAL SPECIFICATIONS
AIRCRAFT: N674MA
------------
DATE: 03/31/95
------------
TAT: 28,345:56
------------
TAC: 28,213
------------
CHAPTER 1: GENERAL DESCRIPTION
-------------------------------------------------------------------------------
Manufacturer: Boeing Co.
Model Designation: 737-2X6C
Date of Manufacture: July 5, 1985
Registration Number: N674MA
Serial Number: 23292
Production/Line Number: PY595 / 1113
Crew/Passenger Accommodation: 2 Crew / 2 Obs / 4 Cabin
0 Pallet / 109 Pax
2 Pallet / 70 Pax; 3 Pallet / 54 Pax;
4 Pallet / 34 Pax; 4 Pallet / 30 Pax;
5 Pallet / 24 Pax; 6 Pallet / 6 Pax;
7 Pallet / 0 Pax
Aircraft Anti-ice: Engine Bleed Air
Selcal Code: XX-XX
CHAPTER 2: DESIGN WEIGHTS
-------------------------------------------------------------------------------
Maximum Taxi Gross Weight: 123,600 lbs
Maximum Take-off Weight: 123,200 lbs
Maximum Landing Weight: 107,000 lbs
Maximum Zero Fuel Weight: 99,000 lbs
Basic Empty Weight: 62,600 lbs
CHAPTER 5: MAINTENANCE SCHEDULE AND STATUS
-------------------------------------------------------------------------------
INTERVAL HRS TO NEXT CK
-------- --------------
A-1 Check 125 hrs 102
B Check 750 hrs 183
C Check 3500 hrs 178
D Structural: *
*REMARKS: Continuous Maintenance Program consists of "C" maintenance
checks at 3500 hour intervals with "D" structural integrated
into (7) progressive visits.
SPECS.674/MAINT
SCHEDULE 1
N674NA / Page 2 of 4
CHAPTER 22: AUTOMATIC FLIGHT CONTROLS
-------------------------------------------------------------------------------
A.F.C.S Sperry SP77 n/a n/a
CHAPTER 23: COMMUNICATIONS
-------------------------------------------------------------------------------
HF Transceiver Xxxxxxx 628T-1 000-0000-000 (1)
VHF Transceiver Xxxxxxx 618M-3 000-0000-000 (2)
SELCAL Decoder Motorola NA134D2 n/a (1)
C.V.R. Xxxxxxxxx A100A 93A100-80 (1)
CHAPTER 25: EQUIPMENT & FURNISHINGS
-------------------------------------------------------------------------------
First Class Seats n/a
Business Class Seats n/a
Coach Class Seats Combi Aircraft / Seats-PTC Aerospace (UOP)
QC Seat Pallets / Pemco & Tramco
Cargo Handling System QC Pemco Locks/Ancra Ballmat
Overhead Storage Bin Type Boeing "Wide Body Look" Interior
Lavatories / Locations (1) Fwd / (1) Aft
Lift Rafts n/a
Life Jackets (Crew) EAM / Air Cruisers
Life Jackets (Pax) Flotation Cushions
Hand Megaphone ACR/EM-1
Escape Path Lighting Intervalve System
Escape Slides Air Cruisers (3 ea) - (2) Fwd (1) Aft
P.B.E. Dupont
Galley / Locations Xxxxxxxx (3 ea) - #1 Fwd / #3 Aux / #4 Aft
Ovens Xxxxxxxx Model 5316E (#1 & #4 Galley only)
Beverage Carts Xxxxxxxx (2 ea)
SPECS.674/MAINT
N674MA / Page 3 of 4
CHAPTER 28: FUEL SYSTEMS
-------------------------------------------------------------------------------
Tank Capacity *5173 USG
Fuel Quantity Indication Lbs
Fuel Qty Dripstick Calibration Inches
*PAT'S Aux Fuel Tanks Installation Plumbing installed
CHAPTER 31: INDICATION & RECORDING
-------------------------------------------------------------------------------
Flight Recorder Xxxxxxxxx F800 17M600-00A (1)
CHAPTER 32: LANDING GEAR
-------------------------------------------------------------------------------
Left Main Gear Boeing 00-00000-00 (1)
Right Main Gear Boeing 00-00000-00 (1)
Nose Gear Boeing SS-4620C-55 (1)
Brakes XX Xxxxxxxx 2-1444 (4)
Wheels/Tires XX Xxxxxxxx 3-1398 (4)
Aircraft equipped with Boeing Gravel Protection Kits.
CHAPTER 34: NAVIGATION
-------------------------------------------------------------------------------
Dig Air Data Comp Honeywell n/a HG480B13 (2)
Flight Director Xxxxxxx 329B-8J 000-0000-000 (2)
Marker Beacon Xxxxxxx 51Z-4 000-0000-000 (1)
Weather Radar Honeywell Primus 90 MI585161 (1)
Radio Altimeter Xxxxxxx 860F-4 000-0000-000 (1)
G.P.W.S. Sundstrand MKVII 000-0000-000 (1)
VOR/ILS Nav Xxxxxxx 51RV-4 000-0000-000 (2)
D.M.E. Xxxxxxx 860E-5 000-0000-000 (2)
A.D.F. Xxxxxxx 51Y-7 000-0000-000 (2)
ATC Xponder (Mode S) Xxxxxxx TPR-720 000-0000-000 (2)
XXXXX "C" (Dual) ONI 7000 n/a (2)
Xxxxxxxxx Xxxxxxxxxx MRKVII
TCAS Xxxxxxx TCAS II
OMEGA Navigation n/a
SPECS.674/MAINT
N674MA / Page 4 of 4
CHAPTER 35: OXYGEN SYSTEM
-------------------------------------------------------------------------------
Supplemental crew/passenger oxygen system installed
CHAPTER 49: AIRBORNE AUXILIARY POWER
-------------------------------------------------------------------------------
Xxxxxxx / Model 85-129D / Ground and inflight operational
CHAPTER 52: DOORS
-------------------------------------------------------------------------------
Integral Aft Airstair Door
Boeing Installed Main Cabin Cargo Door (134" x 84.5")
CHAPTER 72: ENGINES
-------------------------------------------------------------------------------
Manufacturer: Xxxxx & Xxxxxxx
Model: JTSD-17A
ENG #1 ENG #2
------ ------
Serial Number: P709481B** P709418B**
TSN: 21,079 23,911
TSLV: 3792 0
CSN: 21,851 14,994
CSLV: 3273 0
Cycles to First Limiter: 11,179 (C01) 4006 (C09/13)
Cycles to Second Limiter: 11,416 (C07) 5006 ( * )
*Multiple Limiters: More than (3) discs are at this limit
** Each of which engines has 750 or more
rated takeoff horsepower or the equivalent
thereof.
SPECS.674/MAINT
Attach to AMMARK/MARKAIR LEASE REPORT
MAJOR MAINTENANCE
Month Ending: March 31, 1995
----------------
Aircraft: N674MA
----------------
Maintenance Check Date Accomplished
-----------------
A-1 Check ( 125 Hr) (3) 03/04 03/15 03/27
---------------------------------------
B Check ( 750 Hr)
---------------------------------------
C Check (3500 Hr)
---------------------------------------
Engines Removed for Cause
---------------------------------------
Engines Removed for Co. Conv. #1 and #2 eng removed to reinstall orig
---------------------------------------
Major Structural Repairs
---------------------------------------
Major Modifications/A.D. Notes
---------------------------------------
*Remarks:
---------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AMMARK/MAINT
STATEMENT OF AIRCRAFT STATUS
IN FULFILLMENT OF LEASE CONTRACTS BETWEEN
AM-MARK ASSOCIATES AND MARKAIR, INC.
For Month Ending March 31, 1995
----------------
Aircraft Registration Number: N674MA
---------------
Airframe Make and Model: Boeing 737-2X6C
Total Time on Airframe Since New: 28,346:15
------------
Total Cycles on Airframe Since New: 28,214
------------
Since Airframe "C"
Check or Engine/
For Month APU Shop Visit
--------------- ------------------ Data
Flight Flight Installed
Serial No. Hours Cycles Hours Cycles Location (Removed)
---------- ------ ------ ------ ------ -------- ---------
Airframe 23292 295.9 199 3321.4 2522 ANC
---------- ------ ------ ------ ------ ----------
Engines & APU's
Subject to Lease:
Engine #1 P709418B 0.3 1 0.3 1 N674MA #2 I-3/29/95
---------- ------ ------ ------ ------ ---------- ---------
Engine #2 P709481B 0.3 1 0.3 1 N674MA #1 I-3/29/95
---------- ------ ------ ------ ------ ---------- ---------
P709481B 261.3 217 3792.4 3273 N674MA #1 R-3/29/95
APU P50189 Returned with N672MA to AM-MARK
---------- -------------------------------------------------
Other Engines & APU's
installed on airframe:
[The following three entries are struck out in the original document]
Engine #1 P709490B 295.9 199 2766.1 2059 R-3/29/95
---------- ------ ------ ------ ------ ---------
Engine #2 P709487B 295.9 199 4657.5 3521 R-3/29/95
---------- ------ ------ ------ ------ ---------
APU P35606 295.9 199 3321.4 I-6/23/93
---------- ------ ------ ------ ------ ---------
Engines & APU's Permanently
Removed from Service During Month:
P709418B Replaced P709480B Destroyed with N670MA
-------------------------------------------------
APU and engine data represent the times and cycles of the airframes each is
installed on.
The aircraft, engines, modules and APU subject to the lease contract for this
aircraft have have been kept in good order and repair, or are being restored to
the condition required by the lease.
MARKAIR, INC.
By: [ILLEGIBLE]
------------------------------
Title: Director of Quality Control
---------------------------
AMMARK/MAINT
SCHEDULE 2
SEE ATTACHED TECHNICAL SPECIFICATIONS
[ILLEGIBLE LOGO]
HISTORICAL RECORDS: BOEING B737-226C, [ILLEGIBLE]
BOX #1: Flight Logs 7/85 through 12/86
BOX #2: Flight Logs 1/87 through 12/88
BOX #3: Flight Logs 1/89 through 12/90
BOX #4: Flight Logs 1/91 through 12/92
"B" Checks - 1991, 1992
BOX #5: Flight Logs 1/93 through 12/93
"B" Checks - 1992, 1993
"C6" Checks 3/92
BOX #6: "B" & "C" Checks 1986 - 1991
BOX #7: Kardex / NOS Tags
"B" Checks 1993 - 1995
"C7" Check 1993 / "C8" Check 1994
BOX #8: Flight Logs 1/94 through 4/95
Master Log 1985 - 1995
BOX #9: Aircraft Historical Records:
Deferred Maint Aircraft Readiness Log
Cert/Permits Component Change Records
[ILLEGIBLE] Maint. Eng. Orders
[ILLEGIBLE] Fleet Campaigns/Eng. Orders
[ILLEGIBLE] Old Historical Documents
Structural Repairs Weight & Balance
Rigging Brochure Misc. Brochure
Detail Specs
BOX #10: Engine Repair Records (OTC)
Airframe Airworthiness Directives
Appliance Airworthiness Directives
Records Accepted by: April 10, 1995
------------------------
(for) Ammark
[ILLEGIBLE LETTERHEAD]
SCHEDULE 2
ASSIGNMENT OF LEASE
(N674MA)
THIS ASSIGNMENT OF LEASE (hereinafter referred to as the "Agreement"),
dated as of October 23, 1995 by and between BJET, INC., a Delaware
corporation ("Lessor"), and FINOVA CAPITAL CORPORATION, a Delaware
corporation ("Lender"),
WITNESSETH:
WHEREAS, pursuant to that certain Aircraft Lease Agreement dated as of
October 23, 1995 between Lessor and Lessee (as hereinafter defined) (the
"Lease"), Lessor has agreed to lease to Lessee, among other things, one
Boeing 737-2X6C aircraft, together with two (2) Xxxxx & Xxxxxxx JT8D-17A jet
aircraft engines installed thereon, more particularly described in EXHIBIT A
attached hereto (the "Flight Equipment"); and
WHEREAS, Lessor has obtained or will obtain financing from Lender in order
to finance the acquisition of the Flight Equipment, and in order to fund
certain maintenance and modifications of the Flight Equipment; and
WHEREAS, in order to secure the performance by Lessor of its obligations
under that certain Secured Loan Agreement dated as of October 23, 1995
between Lessor, as borrower, and Lender, as lender (the "Loan Agreement") as
the same may hereafter be amended, restated or otherwise modified, and the
other Loan Documents (as defined in the Loan Agreement), Lessor has agreed
to, among other things, assign to Lender all of Lessor's right, title and
interest (but none of its obligations) in and to the Lease, including, but
not limited to, all amounts payable by Lessee to Lessor under the Lease,
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Xxxxxx and Xxxxxx hereby agree
as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. In this Agreement terms and expressions defined in the
foregoing recitals shall have effect as therein defined, and the following
terms and expressions shall have the meanings ascribed to such terms below.
"AIRCRAFT" shall mean, collectively, the Airframe and the Engines.
"AIRFRAME" shall mean the airframe described in EXHIBIT A hereto,
any and all equipment furnished by Lessee and incorporated therein in
accordance with the terms of the Lease, and any and all parts (except
Engines) relating thereto.
"ASSIGNED PROPERTY" shall mean, collectively, the Lease and the
Earnings.
"BANKING DAY" shall mean a day on which federally chartered banking
institutions in New York City, New York, and Phoenix, Arizona are open for the
transaction of business of the nature required by this Agreement.
"AGREEMENT" shall mean this agreement as from time to time amended
and supplemented in accordance with the terms hereof.
"CLOSING DATE" shall mean the date on which the first Advance is
made to Lessor pursuant to the Loan Agreement.
"DEFAULT" shall mean an event which, with the passage of time, or
giving of notice, or both, would constitute an Event of Default.
"EARNINGS" shall mean all moneys whatsoever from time to time due
or payable to Lessor arising out of the use or operation of the Aircraft (a)
including (but without limiting the generality of the foregoing) all rental
payments, insurance proceeds, maintenance reserves and other monies due to
Lessor under the Lease or any other document relating thereto, including
compensation payable to Lessor in the event the Aircraft is requisitioned for
hire, damages for breach of any contract for the employment of the Aircraft
or any documents relating thereto, any amounts payable in consideration of
the termination or variation of any lease or charter or other such contract
and any other earnings whatsoever due or to become due to Lessor and any
proceeds of the foregoing but (b) excluding (i) in all cases Excluded Amounts
and (ii) amounts paid to Lessor under the Lease in reimbursement of
attorneys' fees and disbursements incurred by Lessor in connection with the
enforcement of the provisions of the Lease.
"ENGINES" shall mean, collectively, each of the engines (having 750
or more rated take off horsepower or the equivalent thereof) described in
EXHIBIT A attached hereto and originally installed on the Airframe, whether
or not from time to time hereafter installed on the Airframe or installed on
other aircraft, (ii) any Replacement Engine and (iii) any and all parts,
accessories and accessions to any of the foregoing.
"EVENT OF DEFAULT" shall mean the occurrence of any of the
following:
(a) Failure of Borrower to pay when due and payable any
principal of or interest on or other sum with respect to the Loan,
the Note or other sums which may become due hereunder or under any
Loan Document, whether by reason of stared maturity or due date,
notice of prepayment, cancellation, acceleration or otherwise, and
such sum is not fully paid within five (5) Banking Days after the
due date thereof;
-2-
(b) Any failure by Borrower to fulfill any covenant or to
perform any obligation on its part to be performed under this
Agreement and such failure is not cured within fifteen (15) days
after the earlier of actual knowledge thereof on the part of
Borrower or receipt of notice thereof by Borrower;
(c) If any representation or warranty made by Borrower in
this Agreement shall prove to have been untrue, inaccurate or
incomplete in any material respect at the time when made or when
effective and Borrower fails to do that which shall be necessary in
order that said representation or warranty shall be true, accurate
or complete within thirty (30) days after the earlier of actual
knowledge thereof on the part of Borrower or of receipt of notice
thereof by Borrower, or any covenant or undertaking of Borrower
hereunder is not complied with (regardless of whether Borrower is
at fault in connection with such failure of compliance) and such
non-compliance continues for thirty (30) days following the date
that such non-compliance first occurred; or
(d) Any "Event of Default" under, and as defined in, anyone
or more of the Loan Documents, shall occur.
"EVENT OF LOSS" shall mean, with respect to any item of the Flight
Equipment or any part thereof: (a) the actual, constructive, compromised,
arranged or agreed total loss thereof; (b) the destruction or damage beyond
repair of such Flight Equipment or part thereof, or such Flight Equipment or
part thereof being rendered or becoming permanently unfit for normal use for
any reason whatever; (c) the requisition for title, confiscation, restraint,
detention, forfeiture or any compulsory acquisition or seizure or requisition
for hire of such Flight Equipment or part thereof (other than a requisition
for hire for a temporary period not exceeding one hundred and eighty (180)
days) by or under the order of any Government (whether civil, military or DE
FACTO) or public or local authority; or (d) the high-jacking, theft or
disappearance, resulting in loss of possession by Lessor or Lessee for a
period of thirty (30) consecutive days or longer, of such Flight Equipment or
part thereof.
"EXCLUDED AMOUNTS" shall mean (a) proceeds of public liability
insurance in respect of the Flight Equipment payable as a result of insurance
claims made, or losses suffered, by Lessor, any affiliate of Lessor or any
director, officer, employee, representative or agent of Lessor or any such
affiliate to the extent that such insurance claims made, or losses suffered,
do not apply to Lender, as assignee of Lessor, or to the Flight Equipment,
(b) proceeds of insurance which is maintained with respect to the Flight
Equipment by Lessor or any such affiliate and which insurance is not required
under the Loan Documents, (c) any interest paid or payable on any amounts
described in clauses (a) or (b) of this definition, (d) the proceeds from the
enforcement of the payment of any amount described in clauses
-3-
(a) through (c) of this definition and (c) proceeds of insurance used for
repair of the Aircraft in accordance with Section 2.4 of that certain First
Priority Purchase Money Aircraft Chattel Mortgage and Security Agreement
(N674MA) of even date herewith between Lessor and Lender.
"FEDERAL AVIATION ACT" shall mean the Federal Aviation Act of 1958,
as amended and recodified, and the rules and regulations promulgated
thereunder, as in effect on the date of this Agreement, and as modified or
amended hereafter or any successor or substituted legislation at the time in
effect and applicable.
"FAA" shall mean the Federal Aviation Administration provided for
in the Department of Transportation Act of 1966, as in effect on the date of
this Agreement and as modified or amended hereafter, or any successor or
substituted governmental authority at the time having jurisdiction over the
Flight Equipment.
"GOVERNMENT" shall mean any governmental body, or a political
subdivision thereof.
"LESSEE" shall mean Aloha Airlines, Inc., an Hawaiian corporation.
"LIEN" shall mean any mortgage, pledge, lien, charge, encumbrance,
option, security interest or lease (including any conditional sale agreement,
equipment trust agreement, or other title retention agreement) or right or
claim of any person, whether voluntary or involuntary in nature.
"LOAN" shall mean the principal amount outstanding from time to
time and due Lender pursuant to the Loan Agreement and the other Loan
Documents, including, without limitation, all amounts from time to time
outstanding under the Note.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the Loan
Agreement, the Note and all other documents executed in connection with any
of the foregoing agreements or contemplated thereby or the transactions
related hereto or thereto.
"NOTE" shall mean, collectively (a) the Promissory Note dated as of
even date herewith, executed by Xxxxxxxx, as maker, in favor of Xxxxxx, as
holder, in accordance with the terms of the Loan Agreement, in the original
principal amount of $7,250,000 and (b) the Promissory Note dated as of even
date herewith, executed by Xxxxxxxx, as maker, in favor of Xxxxxx, as holder,
in accordance with the terms of the Loan Agreement, in the original principal
amount of $1,203,430.
"REPLACEMENT ENGINE" shall mean an engine on the Aircraft on the
date of return of the Aircraft to Lessor pursuant to the Lease, or an engine
replacing
-4-
an Engine in the event of an Event of Loss with respect to such Engine, which
engine shall be (a) the same model, or an improved model, as the Engine
originally leased hereunder and (b) suitable for installation and use on the
Airframe without materially impairing the value or utility of the Airframe
and having a time to overhaul, time to next shop visit, time to hot section,
modification status, value, condition and utility at least equal to the
Engine it replaces (assuming the Engine so replaced had the time to overhaul,
time to next shop visit, time to hot section, modification status, value,
condition and utility required by the terms hereof immediately prior to being
replaced) and which is free of all encumbrances other than Permitted Liens.
"SECURED OBLIGATIONS" shall mean the "Obligations" under, and as
defined in, the Loan Agreement.
"TAXES" shall mean all present and future taxes whatever, and
value-added levies, imposts, duties or charges of any nature wherever imposed,
including, without limitation, value added taxes or similar taxes and any
franchise, transfer, sales, use, business, occupation, excise, personal
property, real property, stamp or other tax imposed by any national or local
taxing or fiscal authority or agency, together with any penalties, additions
to tax, fines or interest thereon.
1.2 TERMS DEFINED IN UNIFORM COMMERCIAL CODE. All terms used herein
which are defined in the Arizona Uniform Commercial Code (the "Code") shall
have the meanings ascribed to such terms in the Code unless the context in
which such terms are used herein indicates otherwise.
1.3 TERMS DEFINED IN LOAN AGREEMENT. All capitalized terms used in this
Agreement which are defined in the Loan Agreement shall, unless otherwise
defined herein, have the respective meanings ascribed to such terms in the
Loan Agreement, the applicable provisions of which Loan Agreement are
incorporated herein.
2. ASSIGNMENT.
To secure the payment and performance by Lessor of the Secured
Obligations Lessor hereby assigns, transfers, conveys and sets over to
Lender, and grants to Lender a security interest in (a) all of Lessor's
right, title and interest in, to and under the Lease (but none of its
obligations thereunder), including, without limitation, the right to collect
all rental payments, income, proceeds (including, but not limited to,
insurance proceeds), awards, revenues and other sums payable by Lessee to
Lessor pursuant to the Lease, (b) all of Lessor's rights, if any, under
ss.1110 of the Bankruptcy Code of the United States or any subsequently
enacted statutes of similar import (or any laws of similar import applicable
to the Lease of any other jurisdiction), with respect to the Flight Equipment
(c) all right, title and interest of Lessor to collect, hold and apply all
security deposits, maintenance reserves and similar amounts, as provided
pursuant to the terms of the Lease, and (d) all rights of Lessor to enforce
Lessor's rights and remedies under the Lease. Xxxxxx agrees
-5-
that it shall not exercise any rights of Lender to enforce Xxxxxx's rights
and remedies under the Lease unless and until an Event of Default (as
hereinafter defined) has occurred
3. ACKNOWLEDGMENT OF ASSIGNMENT.
On or prior to the Closing Date, Lessor shall have delivered to Lessee
an Acknowledgment of Assignment of Lease in the form attached hereto as
EXHIBIT B, and Lessor and Lessee shall each have executed such Acknowledgment
of Assignment of Lease and returned same to Lender. In the event that the
Aircraft is subject to any sublease or other transfer of possession by Xxxxxx
(subject to the provisions of the Lease governing same), Lessor shall, prior
to such sublease becoming effective, have delivered to the sublessee under
such sublease an Acknowledgment of Assignment of Lease in substantially the
form attached hereto as EXHIBIT B and Lessor and such sublessee shall each
have executed such Notice of Assignment of Lease and returned same to Lender.
4. APPLICATION OF EARNINGS.
The Earnings shall be applied and credited in favor of Lessor in
accordance with the repayment provisions of the Loan Agreement; PROVIDED,
however, that Lender shall remit to Borrower that portion of the Earnings
which are to be remitted to Borrower pursuant to Section 7.3 of the Loan
Agreement.
5. UNDERTAKINGS.
Lessor hereby covenants and agrees with Xxxxxx as follows:
5.1 DURATION. The undertakings and obligations of Lessor under this
Agreement shall continue in full force and effect from and after the date
hereof and until the payment and performance in full of the Secured
Obligations.
5.2 PERFORMANCE OF OBLIGATIONS. Lessor shall:
(a) perform its obligations under the Lease and each other agreement
made between Lessor and Lessee in respect of the Aircraft and will not
without the prior written consent of Lender rescind, cancel or otherwise
terminate the Lease or any of such other agreements other than as permitted
by the Loan Agreement;
(b) promptly notify Lender (i) of any default of which it has knowledge
by Lessor or Lessee under the Lease or any other agreement made in respect of
the Aircraft, and (ii) of the Lease or such other agreement being frustrated
or the performance thereof becoming impossible or substantially different
from that contemplated originally by the parties thereto;
-6-
(c) institute and maintain all such proceedings as may be necessary to
preserve or protect this Agreement as a valid grant of a security interest in
Xxxxxx's rights in the Assigned Property and each other agreement made in
respect of the Aircraft;
(d) not, without the prior written consent of Lender, take or omit to
take any action the taking or omission of which might result in any material
adverse alteration of any of the Lease or any other agreement made in respect
of the Aircraft;
(e) not, without the prior written consent of Lender, agree to any
variation, modification or amendment in the terms of any of the Lease or any
other agreement made in respect of the Aircraft, or release any party thereto
from any of its obligations thereunder, or waive any breach of the
obligations of such party, or consent to any such act or omission of any such
party as would otherwise constitute such breach;
(f) not permit any sublease by Lessee of its interest in the Aircraft,
except as expressly permitted under the terms of the Lease as in effect on
the Closing Date;
(g) provide written notice to Lender of any sublease or purported
sublease of the Aircraft by Xxxxxx, designating the name and address of such
sublessee and such other information as Lender may reasonably request; and
(h) cause the chattel paper counterpart of the Lease to be delivered to
Lender on the Closing Date.
6. EXERCISE OF REMEDIES.
6.1 REMEDIES. Following the occurrence and continuation of an Event of
Default under the Loan Agreement and at all times thereafter, Lender shall be
entitled:
(a) to exercise any and all rights of Lessor under or in connection
with the Lease or otherwise in respect of the Assigned Property, including
without limitation, any and all rights of Lessor to demand or otherwise
require payment of any amount under, or performance of, any provision of the
Lease;
(b) on 10 days' prior written notice to Lessor of any public sale or the
date after which any private sale may occur, to sell to any person all or any
part of Lessor's right, title and interest in and to the Assigned Property upon
such terms as Lender shall determine;
(c) collect, receive or compromise and give a good discharge for any
and all monies and claims for monies due and to become due in respect of or
under the Lease; and
-7-
(d) otherwise put into force and effect all rights, powers and remedies
available to it, at law or otherwise, as assignee of, and holder of a
security interest in, the Assigned Property.
6.2 NO LIABILITY FOR EXERCISE. To the extent permitted by applicable
law Lender may exercise its power of sale hereunder in such a way as it in
its absolute discretion may determine and, to the extent permitted by
applicable law, Lessor hereby agrees that Xxxxxx shall not in any
circumstances be answerable for any loss occasioned by any such sale or
resulting from any postponement thereof.
6.3 NO LIABILITY AS ASSIGNEE. To the extent permitted by applicable law
Lender shall not be liable as assignee in respect of the Assigned Property to
account or be liable for any loss upon the realization thereof or for any
neglect or default of any nature whatsoever in connection therewith for which
an assignee of the Assigned Property may otherwise be liable as such.
6.4 LENDER'S AUTHORITY. Upon any sale by Lender of Lessor's right,
title and interest in and to the Assigned Property, or any part thereof, the
purchaser shall not be bound to see or inquire whether the power of sale of
Lender has arisen, the sale shall be deemed for all purposes hereof to be
within the power of Lender and the receipt of Lender for the purchase money
shall effectively discharge the purchaser who shall not be concerned with the
manner of application of the proceeds of sale or be in any way answerable
therefore.
7. POWER OF ATTORNEY.
Lessor hereby irrevocably appoints and constitutes Lender as its true
and lawful attorney-in-fact with full power (in the name of and on behalf of
Lessor or otherwise) following the occurrence and continuation of an Event of
Default, to demand, compound and give acquittance for any monies or claims
for monies due or to become due, to endorse any check or other instrument or
order in connection therewith and to file any claims or take any action or
institute any proceedings which may seem to Lender to be necessary or
advisable and otherwise to do any and all things which Lessor itself could do
in relation to the Assigned Property. The exercise of such power by Xxxxxx
shall not put any person dealing with Xxxxxx on inquiry as to whether any
such event has happened nor shall any person be in any way affected by notice
that no such event has happened and the exercise by Lender of such power
shall be conclusive evidence of its right to exercise it.
8. LIABILITY UNAFFECTED BY ASSIGNMENT.
Xxxxxx agrees, to the extent permitted by law, that, notwithstanding the
assignment to Lender of, and the grant to Lender of a security interest in,
the Assigned Property, (a) Lender shall not be obliged to make any inquiries
as to the nature or sufficiency of any payment received by Lender under the
Assigned Property or to make any claim or take any other action to collect
any moneys or to
-8-
enforce any rights and benefits assigned to Lender or to which Lender may at
any time be entitled thereunder, and (b) Lessor shall remain liable to
perform all the obligations of Lessor under the Lease and Lender shall be
under no obligation of any kind whatsoever in respect thereof, and Lender
shall have no liability whatsoever in the event of any failure by Lessor to
perform its obligations thereunder.
9. CONTINUING SECURITY.
This Agreement and the assignment and security interest granted herein
shall continue in full force and effect until performance in full of the
Secured Obligations.
10. FURTHER ASSURANCES.
Lessor undertakes that it will, from time to time on being required to
do so by Xxxxxx, at the cost and expense of Lessor, do, and cause to be done,
all such further acts and/or execute or procure the execution of all, such
further documents in a form satisfactory to Lender as Lender may reasonably
consider necessary for giving full effect to this Agreement or securing to
Lender the full benefit of the rights, powers and remedies conferred upon
Lender in this Agreement.
11. FEES AND EXPENSES.
Lessor shall upon Xxxxxx's demand, pay to or reimburse Lender for all
out-of-pocket expenses of Lender incurred in connection with any enforcement
of this Agreement and the transactions contemplated hereby (including,
without limitation, all expert witness and legal fees and disbursements of
Lender's counsel, including special FAA counsel), and in connection with any
actual or proposed amendments hereof and in connection with the preservation
and/or enforcement of any Lender's rights and interest in the Assigned
Property and in any rights granted to Lender hereunder.
12. NOTICES.
Every notice or demand under this Agreement shall be (a) in writing and
may be given or made by registered mail, return receipt requested or by
internationally recognized overnight courier service, (b) deemed to have been
received in the case of an internationally recognized overnight courier
service or registered mail, upon acknowledgment of receipt or as of the date
on which receipt of such notice delivered by overnight courier or registered
mail is refused or such courier or the U.S. Postal Service advises that such
letter is not deliverable at the address designated in this Section, and (c)
sent, in the case of overnight courier or registered mail, to Lender or to
Lessor, as applicable, at the following addresses, or to such other address
as Lessor or Lender may designate for itself by notice to the other
conforming to the requirements for notice set forth in this Section:
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If to Lessor: Bjet, Inc.
0000 Xxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, xxxxx 00000
Attention: President
and
If to Lender: FINOVA Capital Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President-Law
and
FINOVA Capital Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President-Operations
Management
A copy of all notices sent to Lender shall be sent to Xxxxxxx, Xxxx & Xxxxxx,
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention:
Xxxx X. Xxxxxxx, Esq., telefax number 602/222-9725 and a copy of all notices
sent to Lessor shall be sent to Xxxxxx, Bandklayer & Xxxxxxxxx, 100 S.E. 0xx
Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx,
Esq., telefax number 000-000-0000.
13. ENTIRE AGREEMENT; AMENDMENTS.
This Agreement (including all Exhibits hereto) embodies the entire
agreement and understanding between Lessor and Lender relating to the subject
matter hereof and supersedes all prior agreements and understandings relating
hereto and none of the parties hereto shall be bound by or charged with any
oral or written agreements, representations, warranties, statements, promises
or understandings not specifically set forth herein or therein. This
Agreement may not be changed and no right granted or obligation imposed
hereunder may be waived, except pursuant to an instrument in writing signed
by the party against whom enforcement of any waiver, change, modification or
discharge is sought.
14. GOVERNING LAW: JURISDICTION AND VENUE.
(A) THE OBLIGATIONS OF LESSOR HEREUNDER ARE TO BE PERFORMED IN, AND
THIS AGREEMENT IS EXECUTED, DELIVERED AND ACCEPTED IN, AND THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY, THE LAWS AND DECISIONS
OF THE STATE OF ARIZONA, AND BY EXECUTION HEREOF LESSOR, AND BY ACCEPTANCE
HEREOF XXXXXX, EACH AGREES THAT SUCH LAWS AND DECISIONS OF THE STATE OF
ARIZONA SHALL GOVERN THIS AGREEMENT NOTWITHSTANDING THE FACT THAT THERE MAY
BE OTHER JURISDICTIONS WHICH MAY BEAR
-10-
A REASONABLE RELATIONSHIP TO THE TRANSACTIONS CONTEMPLATED HEREBY.
(B) XXXXXX AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY XXXXXX
AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS SHALL BE LITIGATED IN THE SUPERIOR COURT OF ARIZONA, MARICOPA
COUNTY DIVISION, OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
ARIZONA OR, IF LENDER INITIATES SUCH ACTION, IN ADDITION TO THE FOREGOING
COURTS, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION, TO THE EXTENT
SUCH COURT HAS JURISDICTION. XXXXXX HEREBY EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER
IN ANY OF SUCH COURTS, AND XXXXXX AGREES THAT SERVICE OF SUCH SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO XXXXXX AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT
PURSUANT TO THE FURTHER PROVISIONS OF THIS AGREEMENT. LESSOR WAIVES ANY CLAIM
THAT PHOENIX, ARIZONA OR THE DISTRICT OF ARIZONA IS AN INCONVENIENT FORUM OR
AN IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD XXXXXX, AFTER BEING SO
SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS
SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING
THEREOF, THEN LESSOR SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT
MAYBE ENTERED BY LENDER AGAINST XXXXXX AS DEMANDED OR PRAYED FOR IN SUCH
SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR
LESSOR SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT, BY XXXXXX, OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE
TAKING, BY XXXXXX, OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
JURISDICTION, AND LESSOR HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY
SUCH JUDGMENT OR ACTION.
15. WAIVER OF JURY.
XXXXXX AND XXXXXX IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE ANY PROVISION OF THIS
AGREEMENT.
16. ASSIGNMENT, SUCCESSORS AND ASSIGNS.
Lender may assign or obtain participations with other Lenders in regard
to its rights hereunder and under the Note and any other Loan Document and in
respect of the Loan, PROVIDED only that no such assignment or participation
shall impose any greater obligation on Lessor than set forth herein or
therein. Lessor shall not assign any rights under this Agreement nor shall
any of Xxxxxx's duties hereunder be assigned or delegable without the prior
written consent of Lender.
-11-
Nothing contained in this Agreement, express or implied, is intended to
confer upon any person or entity, other than the parties hereto and their
permitted successors in interest and permitted assigns, any rights or
remedies under or by reason of this Agreement unless expressly herein stated
to the contrary. All covenants, representations, warranties and agreements of
the parties contained herein shall, subject to the provisions of the
preceding sentence, be binding upon and inure to the benefit of their
respective successors and permitted assigns.
17. CAPTIONS AND SECTION HEADINGS: CONSTRUCTION.
Captions and paragraph headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it. This
Agreement and all documents executed in connection herewith shall be
construed without regard to the identity of the parry which prepared the
same, and no presumption shall arise as a result thereof.
18. SEVERABILITY.
In the event that any one or more of the provisions of this Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
19. TIME OF THE ESSENCE.
Time is of the essence with respect to all of the payment and
performance obligations of Lessor hereunder. Time is of the essence with
respect to all of the performance obligations of Xxxxxx xxxxxxxxx.
20. COUNTERPARTS.
This is Agreement may be executed in one or more counterparts, each of
which shall constitute an original and, when taken together, all of which
shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
LENDER:
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY: [Illegible]
----------------------------------
ITS: Vice-President-Credit
LESSOR:
BJET, INC., a Delaware corporation
BY:
----------------------------------
ITS:
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
LENDER:
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY:
----------------------------------
ITS:
LESSOR:
BJET, INC., a Delaware corporation
BY: /s/ Xxxxx Xxxxxx
----------------------------------
ITS: PRESIDENT
EXHIBIT A
TO
ASSIGNMENT OF LEASE
______________________________________________________________________________
DESCRIPTION OF AIRFRAME AND ENGINES
______________________________________________________________________________
The "Flight Equipment" as described in the foregoing Assignment of
Lease shall consist of the following:
(a) One (1) Airframe, identified as follows:
Manufacturer: The Boeing Company
FAA Registration Number: N674MA
Manufacturer's Model Number: 737-2X6C
Manufacturer's Serial Number: 23292
together with all parts, equipment and accessories thereto
belonging, by whomsoever manufactured, now owned by BJET,
Inc. or hereinafter acquired by BJET, Inc. and installed in
or appurtenant TO said airframe; and
(b) Two (2) Xxxxx & Xxxxxxx JT8D-17A jet aircraft engines,
identified by manufacturer's serial numbers P709481B and
709418, each such engine having 750 or more rated take-off
horsepower or the equivalent thereof, together with all
parts, equipment and accessories thereto belonging, by
whomsoever manufactured, now owned by BJET, Inc. or
hereinafter acquired by BJET, Inc. and installed in or
appurtenant to any one or more of said engines.
EXHIBIT B
TO
ASSIGNMENT OF LEASE
______________________________________________________________________________
FORM OF ACKNOWLEDGMENT OF ASSIGNMENT OF LEASE
______________________________________________________________________________
NOTICE OF ASSIGNMENT OF LEASE
(N674MA)
THIS NOTICE OF ASSIGNMENT OF LEASE ("Agreement"), dated as of October
23, 1995 by and among FINOVA CAPITAL CORPORATION, a Delaware corporation
("FINOVA"), ALOHA AIRLINES, Inc., an Hawaiian corporation ("Lessee") and
BJET, INC. a Delaware corporation ("Lessor").
WITNESSETH:
WHEREAS, pursuant to that certain Aircraft Lease Agreement dated as of
October 23, 1995 between Lessor and Lessee (the "Lease"), Lessor has agreed
to lease to Lessee One (1) Boeing 737-2X6C aircraft, together with two (2)
Xxxxx & Xxxxxxx JT8D-17A engines installed thereon, all as more particularly
described in ANNEX I attached hereto (the "Right Equipment"); and
WHEREAS, Lessor has obtained or will obtain financing from FINOVA in
order to finance the acquisition of the Flight Equipment, and in order to
fund certain maintenance and modifications of the Flight Equipment; and
WHEREAS, in order to secure the performance by Lessor of its
"Obligations" as defined in that certain Secured Loan Agreement dated as of
even date herewith between Lessor, as Borrower, and FINOVA, as Lender (the
"Loan Agreement") as the same may hereafter be amended restated or otherwise
modified, and the other "Loan Documents" (as defined in the Loan Agreement),
Lessor has assigned to FINOVA and granted to FINOVA a security interest in,
all of Lessor's right, title and interest (but none of its, obligations in
and to the Lease, including, but not limited to, all amounts payable by
Lessee to Lessor under the Lease, pursuant to that certain Assignment of
Lease dated as of even date herewith between Lessor and FINOVA (the
"Assignment of Lease"),
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, FINOVA, Lessor and Lessee
hereby agree as follows:
1. ACKNOWLEDGMENT OF LESSEE. Xxxxxx hereby acknowledges and consents
to the assignment, pursuant to the Assignment of Lease, of Xxxxxx's rights
under the Lease to FINOVA, and agrees that such assignment shall not
constitute a default under, or breach of, the Lease.
2. PAYMENTS UNDER LEASE. Until FINOVA otherwise directs in writing,
pay to FINOVA, as the same shall become due under the Lease, all amounts from
time to time payable by Lessee under the Lease, including, without
limitation, all "Basic Rent" and all "Supplemental Rent" as each such term is
defined in the Lease. All amounts payable by Lessee shall be paid to the
account Citibank, N.A., described below:
Bank: Citibank, N.A.
New York, New York
Account Of: FINOVA Capital Corporation
Account No: 4068-0522
ABA No.: 09-1000089
Reference: BJET
Other Banking Information: ZQX 32348 ZQX
All such payments shall be made to the appropriate account by wire transfer
of same day funds.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE. Lessee hereby
represents and warrants to FINOVA, and covenants with FINOVA, as follows:
(a) (i) A true, complete and correct copy of the Lease is attached
hereto as Annex II, (ii) the Lease is the entire agreement of lease with
respect to the Flight Equipment and the Lease has not been amended, modified
or supplemented, (iii) the "Delivery Date" under the Lease has occurred, the
Least is in full force and effect and Lessee's obligation to pay rent under
the Lease has commenced in accordance with the terms thereof (iv) there is no
event which has occurred which constitutes or with the giving of notice or
passage of time or both would constitute a default by either party under
the Lease, and (v) there has been no prepayment of any rent or other
sums payable under the Lease;
(b) In the event that FINOVA, or any successor to the interest of
FINOVA in the Lease, shall succeed to the rights of Lessor under the Lease by
reason of FINOVA's (or such successor's) exercise of its rights and remedies
with respect to the Lease (FINOVA and such successors, as applicable, being
included within the meaning of the term "Lessor" hereunder), the Lease shall
continue in full force and effect, and Lessee shall perform its obligations
under the Lease for the benefit of FINOVA or such other successor, as
applicable, PROVIDED, however, that nothing herein contained shall impose any
greater or different obligation upon Lessee than set forth in the Lease, and
PROVIDED, FURTHER, that in the event that FINOVA or any successor to the
interest of FINOVA in the Lease shall succeed to the rights of Lessor under
the Lease
-2-
by reason of FINOVA's (or such successor's) exercise of its rights and
remedies with respect to the Lease:
(i) notwithstanding anything to the contrary set forth in Section
5(u) of the Lease, FINOVA shall have no obligation to provide financing
for the acquisition by Lessee of hush-kits for the Aircraft (although
FINOVA reserves the right, in its sole and absolute discretion, to
provide such financing, in accordance with the terms of the Lease, to
the extent specified therein, and on such other terms and conditions as
may be satisfactory to FINOVA in its sole and absolute discretion), it
being understood and agreed that in the event that Lessee is required by
law to cause the Aircraft to meet Stage III noise requirements and
FINOVA does not provide such financing, Lessee may terminate the Lease,
in accordance with the provisions of Section 5(u) thereof (PROVIDED,
HOWEVER, that Lessee shall have no obligation under said Section 5(u) to
pay to Lender the present value of lease payments which are payable
following the date of such termination) upon payment of all "Basic
Rent" and "Supplemental Rent" (as such terms are defined in the Lease)
which is due and payable through the date of such termination and
compliance with all return conditions set forth in Section 6 of the
Lease, and
(ii) notwithstanding anything to the contrary set forth in Section
5(i) of the Lease, FINOVA shall have no obligation to share the cost of
compliance with any "Airworthiness Directives," as such term is defined
in the Lease (although FINOVA reserves the right, in its sole and
absolute discretion, to share such cost in accordance with Section 5(i)
of the Lease), it being understood and agreed that an individual
Airworthiness Directive must be complied with the fifth year
of the lease "Term" (as defined in the Lease) and Lessee's cost of
compliance with such Airworthiness Directive exceeds $50,000 and FINOVA
elects not to share the cost of complying with such Airworthiness
Directive, then Lessee may terminate the Lease, upon payment all "Basic
Rent" and "Supplemental Rent" (as such terms are defined in the lease)
which is due and payable through the date of such termination and
compliance with all return conditions set forth in Section 6 of the
Lease; PROVIDED, HOWEVER, that Lessee need not comply with the return
condition set forth in Section 6 to the extent that such conditions
would require the Aircraft to comply with the Airworthiness Directive
with respect to which Lessee terminates the Lease pursuant to this
Section.
(c) Lessee acknowledges that FINOVA has not made any representations or
warranties of any kind, nature or description in respect of the Flight
Equipment and that FINOVA has not assumed any of Lessor's duties or
obligations under the Lease and Lessee shall continue to look solely to
Lessor for the performance and
-3-
fulfillment of the terms, covenants and conditions on Xxxxxx's part past to
be performed under the Lease;
(d) In the event of any default by Lessor under the Lease or any
provision thereof, Xxxxxx agrees that, notwithstanding any provision of the
Lease to the contrary, Lessee shall take no action to effect a termination
of the Lease by reason of such default without first giving FINOVA at least
thirty (30) days' written notice of such default and such proposed
termination, which thirty day period shall commence on the date of receipt by
FINOVA of such notice, during which thirty day period, FINOVA may cure such
default.
(e) Lessee shall not amend, or execute any document purporting to
amend, the Lease in any manner without the prior written consent of FINOVA.
With respect to any proposed amendment of the Lease which would (i) reduce
the remaining term of the Lease, (ii) reduce the Basic Rent payable by Lessee
thereunder, (iii) reduce the insurance coverage under the Lease or the
deductible amounts with respect to such insurance, (iv) permit the Aircraft
to be registered under the laws of any jurisdiction other than the United
States of America, (v) expand the rights of Lessee to transfer rights to
possession, custody, control or operation of the Aircraft, (vi) reduce
Lessee's obligations with respect to the maintenance of the Aircraft or (vii)
reduce Lessee's obligations with respect to the condition of the Aircraft upon
termination or expiration of the Lease, FINOVA shall have the right to
provide or withhold such consent in its discretion. With respect to any
proposed amendment of the Lease which is not described in the preceding
sentence, FINOVA shall not unreasonably withhold its consent to such
amendment.
(f) Each notice provided by Lessee to Lessor under the Lease
(including, without limitation, pursuant to Section 4(d) of the Lease), shall
be simultaneously forwarded to FINOVA by Xxxxxx.
(g) FINOVA shall have the right to inspect the Aircraft and the
Aircraft Documents in accordance with the provisions of Section 5(n) of the
Lease, as fully and effectually as if each reference to "Lessor" in such
Section were a reference to FINOVA. Such right of FINOVA to inspect the
Aircraft and the Aircraft Documents is without derogation of the right of
Lessor to inspect the Aircraft and the AIRCRAFT Documents in accordance with
Section 5(n) of the Lease.
-4-
4. NOTICES. All notices (a) to be directed to FINOVA pursuant hereto
shall be directed to FINOVA at the following address, or at such other
address as FINOVA shall specify to Lessee by notice provided in accordance
with this Section:
FINOVA Capital Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 XXX
Attention: Vice President-Law
and
FINOVA Capital Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 XXX
Attention: Vice-President-
Operations Management
and (h) to be directed to Lessee pursuant hereto shall be directed to Xxxxxx
at the following address, or at such other address as Lessee shall specify to
FINOVA by notice provided in accordance with this Section:
Aloha Airlines, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
5. QUIET ENJOYMENT BY XXXXXX. By acceptance hereof, XXXXXX agrees that,
provided that Xxxxxx is not in default under the Lease or hereunder. FINOVA
will not disturb Lessee in the quiet enjoyment of the Flight Equipment.
6. GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED IN, AND SHALL BE
DEEMED TO HAVE BEEN NEGOTIATED AND MADE IN, AND SHALL BE GOVERNED AND
INTERPRETED UNDER THE LAWS OF, THE STATE Of NEW YORK, UNITED STATES OF
AMERICA, APPLICABLE TO AGREEMENTS THEREOF TO BE WHOLLY PERFORMED THEREIN.
7. VALIDITY OF AGREEMENT NOT IMPAIRED. Xxxxxx acknowledges and agrees
that FINOVA or its assigns, without affecting the validity of this Agreement
or the rights and obligations of the parties hereunder, may extend the time
of payment of the indebtedness of Lessor to FINOVA, or modify the terms of
such indebtedness or take or release any collateral securing such
indebtedness, without the consent of or notice to Lessee.
-5-
IN WITNESS WHEREOF, Xxxxxx and FINOVA have executed this Agreement as of
the date first above written.
ALOHA AIRLINES, INC., an Hawaiian
corporation
BY: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
ITS: SR. VICE PRESIDENT FINANCE &
PLANNING AND CFO
BY: /s/ Xxxxx X. Xxxx
------------------------------
ITS: Vice President Planning and
Development
FINOVA CAPITAL CORPORATION, a
Delaware corporation
BY:
------------------------------
ITS:
ACKNOWLEDGMENT AND AGREEMENT OF LESSOR
THE UNDERSIGNED BJET, INC., a Delaware corporation, the "Lessor"
referred to in the foregoing Notice of Assignment Of Lease, hereby
acknowledge the terms thereof and agrees that (a) to the extent the terms of
such Notice of Assignment of Lease are applicable to Lessor, Lessor shall be
bound thereby, and (b) Lessor shall not take any action inconsistent with the
provision of such Notice of Assignment of Lease.
IN WITNESS WHEREOF, Xxxxxx has hereunto set its hand.
BJET, INC., a Delaware corporation
BY:
------------------------------
ITS:
IN WITNESS WHEREOF, Xxxxxx and FINOVA have executed this Agreement as of
the date first above written.
ALOHA AIRLINES, INC., an Hawaiian
corporation
BY:
------------------------------
ITS:
BY:
------------------------------
ITS:
FINOVA CAPITAL CORPORATION, a
Delaware corporation
BY: [Illegible]
------------------------------
ITS: Vice President-Credit
ACKNOWLEDGMENT AND AGREEMENT OF LESSOR
THE UNDERSIGNED BJET, INC., a Delaware corporation, the "Lessor"
referred to in the foregoing Notice of Assignment Of Lease, hereby
acknowledge the terms thereof and agrees that (a) to the extent the terms of
such Notice of Assignment of Lease are applicable to Lessor, Lessor shall be
bound thereby, and (b) Lessor shall not take any action inconsistent with the
provision of such Notice of Assignment of Lease.
IN WITNESS WHEREOF, Xxxxxx has hereunto set its hand.
BJET, INC., a Delaware corporation
BY:
------------------------------
ITS:
IN WITNESS WHEREOF, Xxxxxx and FINOVA have executed this Agreement as of
the date first above written.
ALOHA AIRLINES, INC., an Hawaiian
corporation
BY:
------------------------------
ITS:
FINOVA CAPITAL CORPORATION, a
Delaware corporation
BY:
------------------------------
ITS:
ACKNOWLEDGMENT AND AGREEMENT OF LESSOR
THE UNDERSIGNED BJET, INC., a Delaware corporation, the "Lessor"
referred to in the foregoing Notice of Assignment Of Lease, hereby
acknowledge the terms thereof and agrees that (a) to the extent the terms of
such Notice of Assignment of Lease are applicable to Lessor, Lessor shall be
bound thereby, and (b) Lessor shall not take any action inconsistent with the
provision of such Notice of Assignment of Lease.
IN WITNESS WHEREOF, Xxxxxx has hereunto set its hand.
BJET, INC., a Delaware corporation
BY: /s/ Xxxxx Xxxxxx
------------------------------
ITS: PRESIDENT
ANNEX I
TO
NOTICE OF ASSIGNMENT OF LEASE
The "Flight Equipment" as described in the foregoing Notice of
Assignment of Lease shall consist of the following:
(a) One (1) Airframe, identified as follows:
Manufacturer: The Boeing Company
FAA Registration Number: N674MA
Manufacturer's Model Number: 737-2X6C
Manufacturer's Serial Number: 23292
together with all parts, equipment and accessories thereto
belonging, by whomsoever manufactured, now owned by BJET, Inc. or
hereinafter acquired by BJET, Inc. and installed in or appurtenant
to said airframe; and
(b) Two (2) Xxxxx & Xxxxxxx JT8D-17A jet aircraft engines,
identified by manufacturer's is serial numbers P709481B and
709418, each such engine having 750 or more rated take-off
horsepower or the equivalent thereof, together with all parts,
equipment and accessories thereto belonging, by whomsoever
manufactured, now owned by BJET, Inc. and installed in or
appurtenant to any one or more of said engines.
ANNEX II
TO
NOTICE OF ASSIGNMENT OF LEASE
_____________________________________________________________________________
LEASE
_____________________________________________________________________________
*intentionally omitted From FAA Filing counterpart
The section and subsection headings in this Lease are for convenience of
reference only and shall not modify, define, expand or limit any of the terms
or provisions hereof. This Lease may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and
the same instrument.
No term or provision of this Lease may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which the enforcement of the change, waiver, discharge or termination
is sought and by Xxxxxx,
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Lease to be duly executed as of the date and year first above written.
ALOHA AIRLINES, INC., the Lessee
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Title: SR. VICE PRESIDENT FINANCE &
PLANNING AND CEO
By: /s/ Xxxxx X. Xxxx
--------------------------------
Title: VICE PRESIDENT-
PLANNING AND DEVELOPMENT
BJET, INC., the Lessor
By: /s/ Authorized Signatory
--------------------------------
Title: _____________________________
Counterpart no. _____ of _____ fully executed counterparts. Only counterpart
no. 1 shall constitute the chattel paper counterpart.
FINOVA Capital Corporation has caused counterpart no. 1 to be duly executed
this ______ day of October, 1995, thereby acknowledging (a) receipt of such
counterpart and (b) that such counterpart shall constitute the chattel paper
counterpart of this Aircraft Lease Agreement.
FINOVA CAPITAL CORPORATION
By: /s/ Authorized Signatory
--------------------------------
Title: _____________________________
65
EXHIBIT A: FORM OF LEASE SUPPLEMENT AND RECEIPT
LEASE SUPPLEMENT AND RECEIPT dated October 23, 1995 between Bjet, Inc. (the
"Lessor"), and Aloha Airlines, Inc. (the "Lessee").
The Lessor and the Lessee have heretofore entered into that certain
Aircraft Lease Agreement, dated as of October 23, 1995 (herein called the
"Lease" and the defined terms therein being hereinafter used with the same
meanings), relating to one Boeing model 737-2X6C aircraft, manufacturer serial
number 23292. The Lease provides for the execution and delivery of a Lease
Supplement and Receipt.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, the Lessor and the Lessee hereby agree as follows:
A. THE LEASE. All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement and Receipt to the same
extent as if fully set forth herein. The parties confirm that the Delivery Date
is the date of this Lease Supplement and Receipt.
B. THE AIRCRAFT. The Lessee hereby certifies that the Aircraft described
Schedule 1 hereto, consisting of 6 pages and made a part hereof, and the
Aircraft Documents described in Schedule 2 hereto, consisting of 1 page and made
a part hereof, have been delivered to the Lessee, inspected by the Lessee, found
to be in good order and accepted under, and for all purposes of, the Lease, all
on the date hereof. Xxxxxx accepts delivery of the Aircraft "AS IS," "WHERE IS,"
AND SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION AS SET
FORTH IN SECTIONS 4(c) OF THE LEASE. For the avoidance of doubt, the Lessee's
obligations to return the Aircraft in the conditions set forth in Section 6 of
the Lease may be amended as expressly set forth in Schedules 1 and 2 hereto.
C. REPRESENTATIONS BY THE LESSEE. The Lessee hereby represents warrants to
the Lessor that on the date hereof:
1. The representations and warranties of the Lessee set forth in the Lease
are true and correct in all material respects as though made on and as of the
date hereof.
2. The Lessee has satisfied or complied with all requirements set forth in
the Lease to be satisfied or complied with on or prior to the date thereof.
3. No default or Event of Default under the Lease has occurred and is
continuing on the date hereof.
4. The Lessee has obtained, and there are in full force and effect, such
insurance policies with respect to the Aircraft as are required to be obtained
under the
66
terms of the Lease.
5. The balance sheet and statement of income of the Lessee or any
consolidated group of companies of which the Lessee is a member, heretofore
delivered to the Lessor, have been prepared in accordance with generally
accepted accounting principles, and fairly represent the financial position of
the Lessee or any consolidated group of companies of which the Lessee is a
member, on and as of the date thereof and the results of its or their operations
for the period or periods covered thereby. Since the date of such balance sheet,
there has been no material adverse change in the financial or operating
condition of the Lessee, or any consolidated group of companies of which Lessee
is a member.
This Lease Supplement and Receipt may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
This Lease Supplement and Receipt is being delivered in the State of New
York, and shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
Supplement and Receipt to be duly executed as of the date and year first above
written.
ALOHA AIRLINES, INC., the Lessee
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------
Title: SR. VICE PRESIDENT FINANCE &
--------------------------------
PLANNING AND CFO
--------------------------------
By: /s/ XXXXX X. XXXX
--------------------------------
Title: VICE PRESIDENT -
--------------------------------
PLANNING AND DEVELOPMENT
--------------------------------
BJET, INC., the Lessor
By:
--------------------------------
Title:
--------------------------------
67
terms of the Lease.
5. The balance sheet and statement of income of the Lessee or any
consolidated group of companies of which the Lessee is a member, heretofore
delivered to the Lessor, have been prepared in accordance with generally
accepted accounting principles, and fairly represent the financial position of
the Lessee or any consolidated group of companies of which the Lessee is a
member, on and as of the date thereof and the results of its or their operations
for the period or periods covered thereby. Since the date of such balance sheet,
there has been no material adverse change in the financial or operating
condition of the Lessee, or any consolidated group of companies of which Lessee
is a member.
This Lease Supplement and Receipt may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute but one
and the same instrument.
This Lease Supplement and Receipt is being delivered in the State of New
York, and shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease
Supplement and Receipt to be duly executed as of the date and year first above
written.
ALOHA AIRLINES, INC., the Lessee
By:
--------------------------------
Title:
--------------------------------
By:
--------------------------------
Title:
--------------------------------
BJET, INC., the Lessor
By: /s/ XXXXX XXXXXX
--------------------------------
Title: PRESIDENT
--------------------------------
67
ASSIGNMENT, ASSUMPTION, AMENDMENT AND CONSENT
---------------------------------------------
THIS ASSIGNMENT, ASSUMPTION, AMENDMENT AND CONSENT ("Assignment"), dated as
of December 26, 1996 is between BJET, INC. ("Lessor"), ALOHA AIRLINES, INC., a
Hawaii Corporation ("Assignor"), ALOHA AIRLINES, INC., a Delaware corporation
("Assignee") and FINOVA Capital Corporation ("FINOVA").
RECITALS
--------
WHEREAS, Lessor and Assignor entered into that certain Aircraft Lease
Agreement dated as of October 23, 1995, as it may be supplemented or amended
from time to time (the "Lease"), pursuant to which Assignor leased from Lessor
one (1) Boeing model 737-2X6C aircraft bearing manufacturer's serial number
23292 and registration mark N817AL (the "Aircraft");
WHEREAS, Lessor and FINOVA entered into that certain First Priority
Purchase Money Aircraft Chattel Mortgage and Security Agreement dated as of
October 23, 1995, as it may be supplemented or amended from time to time (the
"Chattel Mortgage") pursuant to which Xxxxxx transferred and assigned to FINOVA,
and granted FINOVA a first security interest in, all of Lessor's present and
future right, title, and interest in, to, and under the Lease.
WHEREAS, Lessor, Assignor and FINOVA entered into that certain Notice of
Assignment of Agreement dated as of October 23, 1995 ("Notice of Assignment")
pursuant to which Assignor consented to the Chattel Mortgage.
WHEREAS, effective December 26, 1996, Assignor merged with Assignee, and
Assignee emerged as the surviving entity and the successor in interest to
Xxxxxx.
AGREEMENT
---------
NOW, THEREFORE, in consideration of these presents and for other valuable
consideration, the parties agree as follows.
1. CERTAIN DEFINED TERMS. Unless otherwise defined herein or the context
otherwise requires, all capitalized terms used in this Assignment shall have the
respective meanings assigned to them in the Lease.
2. ASSIGNMENT. As of December 26, 1996 (the "Effective Date"), the Assignor
hereby sells, assigns, transfers and conveys to Assignee all of the Assignor's
right, title and interest in and to the Lease, as if Assignee were the original
party to the Lease.
3. ASSUMPTION BY ASSIGNEE. Assignee hereby accepts the foregoing sale,
assignment, transfer and conveyance of all of the Assignor's right, title,
interest, obligations and liabilities in, to and under the Lease to the Assignee
and, as of the Effective Date, agrees to assume and to be bound by all the terms
of, and to undertake all of the obligations of the Assignor contained in, the
Lease, including without limitation, all such obligations existing at or prior
to, or attributable to acts or events occurring prior to the Effective Date.
4. LESSOR AND LENDER CONSENT.
(a) Pursuant to Section 4(d)(i) of the Lease and Section 1 of the Notice of
Assignment, Lessor and FINOVA acknowledge and consent to the foregoing sale,
assignment, transfer and conveyance of all of the Assignor's right, title,
interest, obligations and liabilities in, to and under the Lease to the Assignee
under this Assignment, and acknowledge the rights and obligations of the
Assignee described in this Assignment.
(b) Lessor and FINOVA further acknowledge and agree that from and after the
Effective Date Assignee shall be deemed the "Lessee" for all purposes of the
Lease and each reference in the Lease to the Assignor as "Lessee" shall be
deemed after the Effective Date for all purposes to refer to the Assignee and
that, from and after the Effective Date Lessor will perform its obligations
under the Lease, in all respects as if Assignee were the original party to the
Lease as "Lessee" thereunder.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNEE. Assignee
represents and warrants as follows:
(a) ORGANIZATION AND QUALIFICATION. The Assignee is duly incorporated in
and validly existing under the laws of the state of Delaware, possessing
perpetual corporate existence, having the capacity to sue and be sued in its own
name, has full power, legal right and authority (corporate and otherwise) to
carry on its business as currently conducted, to own and hold under lease its
properties and to execute, deliver and perform and observe the provisions of
this Assignment and is duly qualified to do business in good standing wherever
the nature of its business makes such qualification necessary.
(b) AIR CARRIER. The Assignee is a citizen of the United States (as defined
in 49 U.S.C. ss.40102) holding an air carrier operating certificate issued under
49 U.S.C. chapter 447 for aircraft capable of carrying 10 or more individuals.
Assignee is duly licensed by all Governmental authorities whose license or
approval may be required to conduct its operations and to operate the Aircraft
in air commerce under Part 121 of the
Federal Aviation Administration Air Regulations, 14 C.F.R. 121, and to use an
air carrier aircraft radio station under Part 87 of the Federal Communications
Commission Aviation Services Regulations, 47 C.F.R. 87, and to the best of the
knowledge of Assignee there is no pending or threatened action or proceeding to
revoke, modify or suspend any such license.
(c) CORPORATE AUTHORIZATION. The execution, delivery, and performance by
the Assignee of this Assignment (A) has been duly authorized by all necessary
corporate action on behalf of the Assignee, (B) does not require the consent or
approval of the Assignee's stockholders or of any trustee or the holders of any
indebtedness or obligations of the Assignee (except such as have been obtained,
and certified copies of which have been furnished to the Lessor), (C) does not
contravene any existing Applicable Law to which the Lessee is subject, (D) does
not conflict with or result in any breach of any of the terms or constitute a
default under any document, instrument, or agreement to which the Assignee is a
party or is subject or by which it or any of its assets are bound, (E) does not
contravene the Assignee's charter or by-laws, or any other provisions of
Assignee's constitutive documents, and (F) does not and will not result in the
creation or imposition of or obligate Assignee to create any Lien on or over the
Aircraft other than any Permitted Lien.
(d) GOVERNMENTAL APPROVAL. Every consent, authorization, and approval
required by the Assignee to enable it to carry on its business or required by it
to authorize or in connection with the execution, delivery, legality, validity,
priority, enforceability, admissibility in evidence, or effectiveness of this
Assignment or performance by it of any of its obligations under this Assignment
has been duly obtained or made and is in full force and effect and there has
been no default in observance or performance of any of the conditions,
restrictions (if any), imposed on or in connection with any such consent or
approval or sanction. On the Effective Date, Assignee will have and will
thereafter maintain valid all necessary certificates and licenses for the
operation of (a) its business as an airline operating scheduled and charter
flights for the carriage of passengers and cargo and (b) the Aircraft on such
flights; the Assignee is not exempt from the obtaining of any such certificates
or licenses usually required by commercial airline operators.
(e) VALID AND BINDING AGREEMENTS. This Assignment constitutes the legal,
valid and binding obligations of the Assignee enforceable against the Assignee
in accordance with its terms, subject to bankruptcy, insolvency, moratorium and
similar laws affecting creditors generally and subject also to general equitable
principles (regardless or whether enforcement is sought
in a proceeding in equity or at law). This Assignment shall governed by the laws
of the State of New York.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the undersigned parties have caused this Assignment,
Assumption, Amendment and Consent to be duly executed and delivered by their
duly authorized officers as of the date first written above.
ASSIGNOR: ALOHA AIRLINES, INC., a Hawaii
Corporation
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------------
Name: XXXXXX X. XXXXXXXXX
-------------------------------
Title: SR. VICE PRESIDENT FINANCE &
-------------------------------
PLANNING AND CFO
-------------------------------
By: /s/ XXXXX X. XXXX
-------------------------------
Name: XXXXX X. XXXX
-------------------------------
Title: VICE PRESIDENT PLANNING &
-------------------------------
DEVELOPMENT
-------------------------------
ASSIGNEE: ALOHA AIRLINES, INC., a
Delaware Corporation
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------------
Name: XXXXXX X. XXXXXXXXX
-------------------------------
Title: SR. VICE PRESIDENT FINANCE &
-------------------------------
PLANNING AND CFO
-------------------------------
By: /s/ XXXXX X. XXXX
-------------------------------
Name: XXXXX X. XXXX
-------------------------------
Title: VICE PRESIDENT PLANNING &
-------------------------------
DEVELOPMENT
-------------------------------
LESSOR: BJET, INC.
By: /s/ XXXXX XXXXXX
-------------------------------
Name: XXXXX XXXXXX
-------------------------------
Title: PRESIDENT
-------------------------------
LENDER: FINOVA CAPITAL CORPORATION
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
IN WITNESS WHEREOF, the undersigned parties have caused this Assignment,
Assumption, Amendment and Consent to be duly executed and delivered by their
duly authorized officers as of the date first written above.
ASSIGNOR: ALOHA AIRLINES, INC., a Hawaii
Corporation
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
ASSIGNEE: ALOHA AIRLINES, INC., a
Delaware Corporation
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
LESSOR: BJET, INC.
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
LENDER: FINOVA CAPITAL CORPORATION
By: /s/ XXXXXX X. XXXXXXXXX
-------------------------------
Name: XXXXXX X. XXXXXXXXX
-------------------------------
Title: VICE PRESIDENT
-------------------------------
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 6 1
31-9
CERTIFIED COPY
TO BE RECORDED BY FAA
FIRST AMENDMENT
TO
AIRCRAFT LEASE AGREEMENT
AND
SUPPLEMENTAL AGREEMENT
TO
ASSIGNMENT OF LEASE
THIS FIRST AMENDMENT TO AIRCRAFT LEASE AGREEMENT AND SUPPLEMENTAL
AGREEMENT TO ASSIGNMENT OF LEASE ("Agreement"), dated as of March 13, 1996 by
and among BJET, INC., a Delaware corporation ("Lessor"), ALOHA AIRLINES,
INC., an Hawaiian corporation ("Lessee") and FINOVA CAPITAL CORPORATION, a
Delaware corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Xxxxxx and Lessor are parties to a certain Aircraft Lease
Agreement dated as of October 23, 1995 (the "Lease"); and
WHEREAS, the rights of Lessor under the Lease have been collaterally
assigned to Lender pursuant to an Assignment of Lease dated as of October 23,
1995 between Xxxxxx and Lender (the "Assignment"); and
WHEREAS, the Lease and the Assignment have been recorded as one
instrument in the civil aircraft registry maintained by the Federal Aviation
Administration of the United States of America (the "FAA") on December 4,
1995 as Conveyance Number YY013352; and
WHEREAS, Lessor has acquired two (2) Xxxxx & Xxxxxxx model number
JT8D-9A jet aircraft engines, each such engine having 750 or more rated
take-off horsepower, or the equivalent thereof, identified by manufacturer's
serial numbers 674319 and 648923, respectively (collectively, the "New
Engines"); and
WHEREAS, Xxxxxx and Lessee desire to amend the Lease in order to subject
the New Engines to the terms of the Lease in place of the "Engines" referred
to in the Lease as currently in effect (the "Old Engines"); and
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 6 2
31-7
WHEREAS, Xxxxxx and Lender desire to supplement the Assignment in order
to cause the Lease, as amended hereby, to remain subject to the terms of the
Assignment,
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lessee, Lessor and Lender hereby agree as follows:
1. AMENDMENT OF LEASE. (a) Lessor hereby leases to Lessee, and Lessee
hereby leases from Lessor, the New Engines, pursuant to the terms of the
Lease, in the place and stead of the Old Engines. Each reference in the Lease
to the "Engines" shall refer, collectively, to the New Engines, and each
reference in the Lease to an "Engine" shall refer to either of the New
Engines.
(b) Lessor, Xxxxxx and Xxxxxx have, contemporaneously herewith
executed and delivered a Partial Release of Aircraft Lease Agreement and
Assignment of Lease, dated as of even date herewith (the "Release"), pursuant
to which the Old Engines are released from the terms of the Lease and the
Assignment.
(c) Except as expressly amended hereby, the Lease shall remain in
full force and effect from and after the effectiveness hereof.
2. SUPPLEMENT TO ASSIGNMENT. (a) To secure the payment and performance
by Lessor of the "Secured Obligations" (as defined in the Assignment),
Lessor hereby assigns, transfers, conveys and sets over to Lender, and grants
to Lender a security interest in, all of Lessor's right, title and interest
in, to and under the Lease, as modified hereby. Each reference in the
Assignment to the "Engines" shall refer, collectively, to the New Engines,
and each reference in the Assignment to an "Engine" shall refer to either of
the New Engines.
(b) Except as expressly amended hereby, the Assignment shall
remain in full force and effect, and the priority thereof shall remain
undisturbed, from and after the effectiveness hereof.
3. EFFECTIVENESS. This Agreement shall be effective upon, and not
before (a) the due execution by Xxxxxx, Xxxxxx and Lender hereof, (b) the
presentation of this Agreement to and filing of this Agreement with the FAA
for recordation in the civil aircraft registry maintained by the FAA and (c)
the presentation of the Release to, and filing of the Release with the FAA
for recordation in the civil aircraft registry maintained by the FAA.
-2-
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 6 3
31-5
IN WITNESS WHEREOF, Xxxxxx, Xxxxxx and Xxxxxx have executed this
Agreement as of the date first above written.
"Lessor"
BJET, INC., a Delaware corporation
BY: /s/ Xxxxx Xxxxxx
-------------------------------
ITS: PRESIDENT
-------------------------------
"Lessee"
ALOHA AIRLINES, INC., a Hawaiian corporation
BY:
-------------------------------
ITS:
--------------------------------
BY:
-------------------------------
ITS:
--------------------------------
"Lender"
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY:
-------------------------------
ITS:
--------------------------------
-3-
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 6 4
31-3
IN WITNESS WHEREOF, Xxxxxx, Xxxxxx and Xxxxxx have executed this
Agreement as of the date first above written.
"Lessor"
BJET, INC., a Delaware corporation
BY:
-------------------------------
ITS:
-------------------------------
"Lessee"
ALOHA AIRLINES, INC., a Hawaiian corporation
BY: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
ITS: SR. VICE-PRESIDENT FINANCE &
PLANNING AND CF0
--------------------------------
BY: /s/ Xxxx Xxxxxxxx
-------------------------------
ITS: STAFF VICE-PRESIDENT FINANCE &
CONTROLLER
--------------------------------
"Lender"
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY:
-------------------------------
ITS:
--------------------------------
-4-
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 6 5
31-1
IN WITNESS WHEREOF, Xxxxxx, Xxxxxx and Xxxxxx have executed this
Agreement as of the date first above written.
"Lessor"
BJET, INC., a Delaware corporation
BY:
-------------------------------
ITS:
-------------------------------
"Lessee"
ALOHA AIRLINES, INC., a Hawaiian corporation
BY:
-------------------------------
ITS:
--------------------------------
BY:
-------------------------------
ITS:
--------------------------------
"Lender"
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------
ITS: Vice President
--------------------------------
-5-
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 5 6
0 6 0 0 7 6 9 1
CERTIFIED COPY
TO BE RECORDED BY FAA [Illegible stamp]
'96 MAY 21 AM 8 18
[Illegible]
PARTIAL RELEASE
OF
AIRCRAFT LEASE AGREEMENT
AND
ASSIGNMENT OF LEASE
THIS PARTIAL RELEASE OF AIRCRAFT LEASE AGREEMENT AND ASSIGNMENT OF LEASE
("Release"), dated as of March 13, 1996 by and among BJET, INC., a Delaware
corporation ("Lessor"), ALOHA AIRLINES, INC., an Hawaiian corporation
("Lessee") and FINOVA CAPITAL CORPORATION, a Delaware corporation ("Lender").
W I T N E S S E T H :
WHEREAS, Lessee and Lessor are parties to a certain Aircraft Lease
Agreement dated as of October 23, 1995 (the "Lease") pursuant to which Lessee
has leased from Lessor, among other things, two (2) Xxxxx & Xxxxxxx model
number JT8D-17A jet aircraft engines, each such engine having 750 or more
rated take-off horsepower or the equivalent thereof, identified by
manufacturer's serial numbers P709461B and 709418, respectively
(collectively, the "Engines"); and
WHEREAS, the rights of Lessor under the Lease have been collaterally
assigned to Lender pursuant to an Assignment of Lease dated as of October 23,
1995 between Xxxxxx and Lender (the "Assignment"); and
WHEREAS, the Lease and the Assignment have been recorded as one
instrument in the civil aircraft registry maintained by the Federal Aviation
Administration of the United States of America (the "FAA") on December 4,
1995 as Conveyance Number YY013352; and
WHEREAS, Lessor and Lessee wish to release the Engines from the
provisions of the Lease, and Lessor and Lender wish to release the Engines
from the provisions of the Assignment,
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lessee, Lessor and Lender hereby agree as follows:
SEE RECORDED
CONVEYANCE
NUMBER YY013352
------------
FICHE # 8 PAGE # 24-249
--- --------
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 5 7
1. RELEASE OF ENGINES FROM TERMS OF LEASE. Lessor and Lessee hereby
release the Engines from the terms of the Lease.
2. RELEASE OF ENGINES FROM TERMS OF ASSIGNMENT. Lessor and Lessee
hereby release the Engines from the terms of the Assignment.
3. EFFECTIVENESS. This Release shall be effective on, and not before,
its due execution by Xxxxxx, Xxxxxx and Lender and its presentation to and
filing with the FAA for recordation in the civil aircraft registry maintained
by the FAA.
-2-
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 5 8
IN WITNESS WHEREOF, Xxxxxx, Xxxxxx and Xxxxxx have executed this Release
as of the date first above written.
"Lessor"
BJET, INC., a Delaware corporation
BY: /s/ Xxxxx Xxxxxx
-------------------------------
ITS: PRESIDENT
-------------------------------
"Lessee"
ALOHA AIRLINES, INC., a Hawaiian corporation
BY:
-------------------------------
ITS:
-------------------------------
BY:
-------------------------------
ITS:
-------------------------------
"Lender"
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY:
-------------------------------
ITS:
-------------------------------
-3-
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 5 9
IN WITNESS WHEREOF, Xxxxxx, Xxxxxx and Xxxxxx have executed this Release
as of the date first above written.
"Lessor"
BJET, INC., a Delaware corporation
BY:
-------------------------------
ITS:
-------------------------------
"Lessee"
ALOHA AIRLINES, INC., a Hawaiian corporation
BY: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
ITS: SR. VICE PRESIDENT FINANCE &
PLANNING AND CFO
-------------------------------
BY: /s/ Xxxx Xxxxxx
-------------------------------
ITS: STAFF VICE PRESIDENT - FINANCE
& CONTROLLER
-------------------------------
"Lender"
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY:
-------------------------------
ITS:
-------------------------------
-3-
FAA AIRCRAFT REGISTRY
CAMERA NO. 1N DATE: 5-30-96
0 0 0 0 0 0 0 0 9 6 0
IN WITNESS WHEREOF, Xxxxxx, Xxxxxx and Xxxxxx have executed this Release
as of the date first above written.
"Lessor"
BJET, INC., a Delaware corporation
BY:
-------------------------------
ITS:
-------------------------------
"Lessee"
ALOHA AIRLINES, INC., a Hawaiian corporation
BY:
-------------------------------
ITS:
-------------------------------
BY:
-------------------------------
ITS:
-------------------------------
"Lender"
FINOVA CAPITAL CORPORATION, a Delaware
corporation
BY: /s/ Xxxxxx X. XxXxxxxxx
-------------------------------
ITS: Vice-President
-------------------------------
-3-
