AIRCRAFT LEASE AGREEMENT
between
RNE SKYVIEW, LLC
and
INTEGRATED HEALTH SERVICES, INC.
AIRCRAFT LEASE AGREEMENT
This AIRCRAFT LEASE AGREEMENT (this "Lease") is made and entered into as of the
12th day of December, 1997, between RNE SKYVIEW, LLC, a Delaware limited
liability company ("Skyview"), with an address at 00000 Xxx Xxx Xxxxxxxxx,
Xxxxxx Xxxxx, Xxxxxxxx 00000, and INTEGRATED HEALTH SERVICES, INC., a Delaware
corporation ("IHS"), with an address at 00000 Xxx Xxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxxxx 00000.
In consideration of the mutual promises set forth herein and subject to all of
the terms and conditions of this Lease, Skyview and IHS agree as follows:
ARTICLE 1 SCOPE OF LEASE
A. Skyview is the owner of a 1992 British Aerospace BAe 125 Series 800A type
aircraft, bearing Manufacturer's Serial Number NA0474 and Federal Aviation
Administration ("FAA") Registration Number N622AD, and a total of two (2)
Xxxxxxx engines, bearing Manufacturer's Serial Numbers P91560 and P91561,
installed thereon, with the accessories and in the configuration as
described in Annex A hereto. The aircraft, engines and accessories are
hereinafter referred to, collectively, as the "Aircraft." Skyview hereby
leases to IHS and IHS hereby leases from Skyview the Aircraft during the
term and in accordance with the provisions of this Lease.
B. Any terms used in this Lease which are not defined herein to describe
services or materials shall have the meanings established by common usage
in the airline industry and in the course of dealing between Skyview and
IHS.
ARTICLE 2 LEASE REQUIREMENTS
A. The Aircraft will be leased by IHS for a minimum amount of five hundred
(500) block hours utilization each year during the term of this Lease. IHS
agrees to pay for a minimum amount of five hundred (500) block hours
utilization of the Aircraft each year during the term of this Lease,
whether or not IHS actually uses such minimum amount of hours each year.
The use of the Aircraft during any portion of an hour shall be deemed use
thereof for such entire hour. The hourly charges shall be calculated at the
time of takeoff from the departure of each leg of each trip and to landing
at the destination airport of each leg each trip. Both Skyview and IHS
shall have the right to confirm the flight hours by examination of
pertinent pilot and aircraft log books.
B. DELIVERY OF THE AIRCRAFT
1. The Aircraft will be delivered by Skyview and accepted by IHS in
Baltimore, Maryland with all maintenance and inspections up to date,
duly certified as an airworthy aircraft by the FAA repair facility,
which includes an unexpired airworthiness certificate, and shall have
all systems, equipment, radios, and appliances in working order.
2. Skyview shall permit IHS to make a ground inspection of the Aircraft
prior to acceptance of the Aircraft by IHS. Delivery and acceptance of
the Aircraft shall be evidenced by delivering to Skyview a signed
delivery receipt of IHS acknowledging delivery and acceptance of the
Aircraft.
C. RETURN OF THE AIRCRAFT
1. IHS shall return the Aircraft to Skyview at a location within the
Continental United States designated by Skyview on the date of
termination of this Lease and provide insured storage at such location
for a period not to exceed ninety (90) days. IHS agrees that it will
return the Aircraft to Skyview in the same and as good a condition as
when accepted by IHS, normal wear and tear excepted. In the event IHS
does not return the Aircraft in such condition, Skyview will provide
prompt written notice to IHS of reasonable repairs necessary to
restore the Aircraft to such condition, at IHS's sole cost and
expense, in accordance with Article 4 hereof.
2. The Aircraft's airframe shall have remaining to the next airframe
block overhaul, a hard time minimum of fifty percent (50%) time to the
next scheduled overhaul, as defined by the manufacturer or applicable
maintenance program. The Aircraft's landing gear components shall have
remaining to the next scheduled overhaul, a hard time minimum of fifty
percent (50%) time remaining to the next scheduled overhaul, as
defined by the manufacturer or applicable maintenance program.
3. IHS shall have all other hard-time limited components shall have the
equivalent of fifty percent (50%) time of operation remaining, as
defined by the manufacturer or applicable maintenance program.
4. Any shortfall in the MSP (as defined hereinafter) reserve balance that
is required to maintain the Aircraft's engines as required by the MSP,
shall be paid by IHS upon the expiration of the term of this Lease.
D. Title to the Aircraft shall remain with Skyview and the Aircraft shall
continue to be registered with the United States Registry of Aircraft
during the entire term of this Lease.
E. The Aircraft and any other equipment used hereunder shall be operated only
by FAA licensed and fully qualified pilots and be maintained in accordance
with applicable
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specifications and directives of the FAA, approved manufacturer's operating
standards and manuals, and Skyview's continuous maintenance program.
F. IHS will not use, operate, maintain, or store the Aircraft in violation of
this Lease, or any applicable FAA, federal or state law or regulation, or
any instructions furnished to IHS by Skyview. Furthermore, IHS shall not
operate the Aircraft in any manner which would contravene the uses and
purposes stipulated in the insurance policies described in Article 7
hereof.
G. Notwithstanding any other provision of this Lease, Xxxxxx X. Xxxxxx, M.D.,
Chairman of IHS, shall have the exclusive first use of the Aircraft at any
time throughout the term of this Lease. The right of exclusive first use of
the Aircraft by Xx. Xxxxxx shall also continue throughout the term of this
Lease if Xx. Xxxxxx is terminated as an employee of IHS for any reason,
including, but not limited to, as a result of a "Change of Control" at IHS,
as defined in IHS's senior secured credit facility. Nothing in this
paragraph G shall result in a reduction or termination of IHS's Base Rent
obligations or IHS's obligations to pay for all Aircraft use, operation and
maintenance expenses throughout the term of this Lease. However, if at any
time during the term of this Lease Xx. Xxxxxx uses the Aircraft for his own
personal use, then Xx. Xxxxxx shall be obligated to reimburse IHS for IHS's
out of pocket costs associated with such use of the Aircraft.
ARTICLE 3 TERM
A. The term of this Lease shall commence on December 12, 1997 (the
"Commencement Date") and shall continue until December 12, 2004 (the
"Initial Expiration Date"), and shall thereafter be extended without any
action by the parties hereto for additional one-year periods unless one of
the parties hereto shall notify the other in writing of its intention to
terminate this Lease at least six (6) months prior to the Initial
Expiration Date or any subsequent anniversary thereof. If the term hereof
is extended, the word "term" shall be deemed to refer to any extended term,
and all provisions of this Lease shall apply during any extended term,
except as may be otherwise specifically provided in writing.
B. Skyview shall have the right, but not the obligation, to terminate this
Lease at any time during the term hereof, after ninety (90) days prior
written notice to IHS, if the Aircraft is sold by Skyview. IHS shall not
have the right to terminate this Lease at any time during the term hereof,
except after the Initial Expiration Date as provided in paragraph A above.
ARTICLE 4 MAINTENANCE
A. IHS shall, at its sole cost and expense, maintain the Aircraft in good
operating order, repair, condition and appearance in accordance with
manufacturer's recommendations, normal wear and tear excepted. Any
alterations or modifications to the Aircraft that may, at any time during
the term of this Lease, be required to comply with any applicable law, rule
or regulation shall be made at the sole cost and expense of IHS. IHS agrees
that it has the obligation to maintain and repair the Aircraft and all of
its component parts
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throughout the term of this Lease. IHS agrees that it will provide line
maintenance services at Naples, Florida, at IHS's sole cost and expense.
IHS agrees that the maintenance personnel performing hereunder shall have
currently effective licenses and ratings and shall be qualified to perform
maintenance and repairs on the Aircraft and all such services shall be
consistent with IHS's current maintenance practices and approved
maintenance program. In this connection, IHS shall pay to Skyview (or its
designee) a monthly maintenance reserve of $250 per hour of usage
hereunder.
B. IHS shall, at its sole cost and expense, be responsible for all Aircraft
maintenance and operation expenses, including, but not limited to, the
following:
1. Fuel, oil and associated taxes;
2. Cockpit crew salaries, training, expenses and employee benefits;
3. Landing fees, customs, etc.;
4. Hanger rent at the Aircraft's home base and, whenever necessary,
on the road;
5. Any applicable excise, sales, use or property taxes levied on the
Aircraft as a result of IHS's use; and
6. Ferry flights necessary to perform routine maintenance.
C. IHS shall give Skyview notice as soon as possible of repairs which may be
required and should be performed on the Aircraft. IHS agrees at all times
to operate the Aircraft in a mechanical condition adequate to comply with
regulations as set forth by the FAA and any other regulations as set forth
by any federal, state or local governing body, domestic or foreign, having
power to regulate or supervise the Aircraft or the maintenance, use or
operation thereof. Skyview shall have the right at all reasonable times to
inspect the Aircraft for purposes of ascertaining compliance with this
Article 4.
D. The Aircraft at all times during the term of this Lease, shall be deemed
airworthy and eligible for an FAA airworthiness certificate.
E. The engines on the Aircraft shall, at all times during the term of this
Lease, be maintained by the Allied Signal/Xxxxxxx (or any successor to the
engine manufacturer thereof) Maintenance Service Plan ("MSP") or any
equivalent successor program thereof. The reserve account for the
maintenance program shall at all times during the term of this Lease, be
current and up to date, as required by the engine maintenance program.
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ARTICLE 5 FLIGHT OPERATIONS
A. IHS shall, at its sole cost and expense, provide a sufficient number of
cockpit crews necessary to operate the Aircraft throughout the term of this
Lease. Each cockpit crew shall consist of two (2) members, including a
captain and a co-pilot.
B. Subject to all applicable laws and regulations, consistent with the IHS's
use of the Aircraft as described in Article 2 hereof, the Aircraft shall at
all times be under the technical and operational control of IHS. IHS shall
have complete discretion concerning the load carried, its distribution, the
route to be flown, the time of departure from the original point and the
intermediate point(s), when and if the flight shall be undertaken, and
where landings shall be made.
C. At all times during the term of this Lease, the members of the cockpit crew
assigned by IHS shall be employees of IHS; provided, however, that
immediately upon any termination of Xx. Xxxxxx' employment by IHS,
including, but not limited to, as a result of a Change of Control at IHS,
the members of the cockpit crew shall become employees of Skyview; and,
provided, further, if they become employees of Skyview, the salaries,
expenses and employee benefits of the cockpit crew members shall be a cost
and expense obligation of IHS throughout the term of this Lease.
D. IHS shall not use or permit the Aircraft to be used in any manner or for
any purpose excepted from any insurance policy or policies it is required
to carry and to maintain as set forth in this Lease or for any purpose or
for the carriage of any goods of any description excepted or exempted from
such policies or do any other act or permit to be done anything which could
reasonably be expected to invalidate or limit any such insurance policy or
violate this Lease.
ARTICLE 6 RENT AND EXPENSES
A. During the term of this Lease, IHS shall pay to Skyview each month:
1. For the first twelve (12) months hereof, a commercially reasonable
base rent (the "Base Rent") for the Aircraft, but at a minimum amount
of $89,675.81 per month and $1,076,109.72 per year. Commencing one
year from the Commencement Date and during each year throughout the
remaining term of this Lease, IHS shall pay to Skyview, for each
month, a then current commercially reasonable Base Rent, but at a
minimum amount of $89,675.81 per month and $1,076,109.72 per year. IHS
will pay the Base Rent due to Skyview in monthly installments thirty
(30) days in advance of the first day of each month, with the first
such installment due on the Commencement Date.
2. In the event the number of block hours flown in any month is more than
forty-two (42) hours, the rent payable for each block hour flown in
excess of the minimum number of block hours shall be $2,150 per hour.
IHS shall pay Skyview the
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additional rent due for such additional block hours used by it by the
tenth day after the end of the month in which the additional number of
block hours was flown.
B. The amounts quoted in paragraph A above do not include (i) operating
expenses, including, but not limited to, take-off and landing fees, parking
and hangar fees, ground services and handling fees for the Aircraft,
airport taxes and excise taxes, if any, which amounts shall be at the sole
cost and expense of IHS and (ii) maintenance expenses, including, but not
limited to, the items described in Article 4 hereof which amounts shall be
the sole cost and expense of IHS.
C. IHS's obligation to pay Base Rent and any other amounts due hereunder shall
be absolute and unconditional. IHS shall not be entitled to any abatement
or reduction of, or set-offs against, any Base Rent or any other amounts
due to Skyview hereunder, including, without limitation, those arising or
allegedly arising out of claims (present or future, alleged or actual, and
including claims arising out of strict tort or negligence of Skyview) by
IHS against Skyview under this Lease or otherwise or unavailability of the
Aircraft. This Lease shall not terminate nor the obligations of IHS be
affected by reason or any defect in or damage to, or loss of possession,
use or destruction of, the Aircraft from whatsoever cause. It is the
intention of the parties that the Base Rent and any other amounts due to
Skyview hereunder shall continue to be payable in all events in the manner
and at the times set forth herein unless the obligation to do so shall have
been terminated in writing by the parties hereto.
D. Payment of the Base Rent and any other payments due Skyview under this
Lease shall be made by transfer of immediately available funds to Skyview
or its designee to such account or at such address as Skyview may specify
in writing; provided, however, that Skyview hereby directs IHS to pay the
monthly loan amount due from Skyview to BTM Capital Corporation ("BTM")
(except the final balloon payment or any pre-payment penalty due
thereunder) in accordance with the monthly invoices to be received by IHS
from BTM; and, provided, further, that any Base Rent in excess of the
amounts to be paid by IHS to BTM shall be transferred by IHS to Skyview.
Payment shall be made on the due date or the date prior thereto if the due
date is not a business day in the State of Delaware. If any amount due
hereunder is not paid within five (5) days of its due date, IHS agrees to
pay Skyview an additional late charge equivalent to the late charge due BTM
by Skyview, in addition to the amount due, but such late charge may not
exceed the maximum amount permitted by applicable law.
ARTICLE 7 INSURANCE
A. IHS shall, at its sole cost and expense, insure the Aircraft throughout the
term of this Lease for damage to or loss of the Aircraft and liability
coverage for personal injury, death or property damage, as follows:
1. Aircraft all-risk hull insurance in an amount not less than the then
current Casualty Loss Value (as described on Annex B hereto) of the
Aircraft (which all-risk hull
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insurance shall also include additional coverage for engines and all
other equipment while removed from the Aircraft in such amount as
shall be satisfactory to Skyview and any lender to Skyview) as well as
fire and extended coverage insurance on engines, parts and other
equipment while removed from the Aircraft and, when available from the
United States Government or an agency thereof, war risk insurance, in
such amount and of such type as shall be satisfactory to Skyview and
any lender to Skyview; and
2. Aircraft liability insurance, including contractual liability, public
liability, passenger legal liability, premises damage liability,
personal property liability, personal injury, death and property
damage liability, and covering any other risks which Skyview, IHS or
any lender to Skyview might incur by reason of the use or operation of
the Aircraft in or over any area, in an amount not less than
$100,000,000 per occurrence.
3. IHS agrees to include Skyview and any lender to Skyview as additional
insured as respects liability coverage and waiver of subrogation on
hull coverage.
B. Such insurance policy or policies will (i) so long as any lien on the
Aircraft shall be in effect, name any such lender to Skyview as sole loss
payee with respect to proceeds up to the amount of Casualty Loss Value of
the Aircraft, and following the discharge of such lien, name Skyview as
sole loss payee, on all insurance policies referred to in clause 1. above,
(ii) name Skyview and any lender to Skyview as additional insureds on all
insurance policies referred to in clause 2. above, (iii) provide that (A)
none of their respective interests in such policies shall be invalidated by
any act or omission of, or breach of warranty or condition contained in,
such policies by IHS; (B) no cancellation or lapse of coverage for
nonpayment of premium or otherwise, no reduction in coverage and no other
change of coverage which adversely affects the interest of any such
additional insured or loss payee, shall be effective as to any such
additional insured or loss payee until thirty (30) days (or such lesser
period as may be permitted in the case of any war risk coverage) after
receipt by such additional insured or loss payee of written notice from the
insurers of such cancellation, lapse, reduction or change; (C) they shall
have no liability for premiums, commissions, calls, assessments or advances
with respect to such policies; (D) the insurers waive any rights of
set-off, counterclaim, recoupment, deduction or subrogation against such
additional insureds or loss payee; (E) such policies will be primary
without any right of contribution from any other insurance carried by such
additional insureds or loss payee; and (F) in the case of war risk, a
standard 50/50 clause shall be in effect.
C. The policies of insurance required under this Article 7 shall be valid and
enforceable policies issued by insurers of recognized responsibility
acceptable to Skyview and any lender to Skyview. In the event that any of
such policies referred to in clause A.2. above shall now or hereafter
provide coverage on a "claims made" basis, IHS shall continue to maintain
such policies in effect for a period of not less than three (3) years after
the expiration of the term of this Lease. Upon the execution of this Lease
and thereafter not
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less than thirty (30) days prior to the expiration dates of any expiring
policies theretofore furnished under this Article 7, originals of the
policies of insurance and all endorsements required by this Article 7, as
certified by the insurer(s), shall be delivered by IHS to Skyview and any
lender to Skyview; provided, however, that Skyview and any lender to
Skyview may accept copies of the policies, certificates of insurance or
other satisfactory evidence in lieu of original policies. Not later than
the Commencement Date, and thereafter at intervals of not more than twelve
(12) months, IHS will furnish or cause to be furnished to Skyview and any
lender to Skyview a certificate or other evidence satisfactory to Skyview
and any lender to Skyview, signed by independent aircraft insurance
brokers, showing the insurance then carried and maintained on the Aircraft
and stating in the opinion of such firm that the insurance then maintained
complies with the terms of this Article 7. If IHS shall fail to cause the
insurance required under this Article 7 to be carried and maintained,
Skyview or any lender to Skyview may provide such insurance and IHS shall
reimburse Skyview or any lender to Skyview, as the case may be, upon demand
for the cost thereof as a supplemental payment hereunder.
ARTICLE 8 INDEMNITY
A. IHS agrees to defend, indemnify and hold harmless Skyview and any lender to
Skyview, their officers, agents, servants and employees from and against
all liability and losses, including, but not limited to, all reasonable
costs and expenses of defense and other costs and expenses, by reason of
claims and all recourse rights for loss of or damage to any cargo or
baggage, including, but not limited to, any claims for consequential
damages, arising out of or in any manner connected with the possession,
maintenance, use or operation of the Aircraft by IHS, including, but not
limited to, operation thereof by IHS's flight crews, occurring during the
term of this Lease, whether or not such loss or damage shall have occurred
during the carriage by air and whether or not caused by, or alleged to have
been caused by, the negligence (except willful misconduct or gross
negligence) of Skyview, its officers, agents, servants, or employees. IHS
hereby waives and renounces all claims and recourse rights against Skyview,
its officers, agents, servants and employees, and agrees not to claim
against or xxx Skyview and any lender to Skyview, their officers, agents,
servants, or employees, by reason of any claims, demands or causes of
action on the part of IHS or asserted against IHS by others for or arising
out of any such injury, death or damages. Notwithstanding the foregoing,
IHS agrees to defend, indemnify and hold harmless Skyview and any lender to
Skyview for injury to or death of any passengers caused by the negligence
of IHS's personnel, including its pilot and cabin attendants, and assuming
no negligence on the part of Skyview.
B. Skyview agrees to defend, indemnify and hold harmless IHS, its officers,
agents, servants and employees from and against all liability and losses,
including, but not limited to, all reasonable costs and expenses of defense
and other costs and expenses, by reason of claims and all recourse rights
for injury to or death of any person other than passengers and for loss of
or damage to any property other than cargo and baggage, arising out of or
in any manner connected with the willful misconduct or gross negligence of
Skyview, its officers, agents, servants, or employees. Skyview hereby
waives and renounces all claims
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and recourse rights against IHS, its officers, agents, servants and
employees, and agrees not to claim against or xxx IHS, its officers,
agents, servants or employees, by reason of any claims, demands or causes
of action on the part of Skyview or asserted against Skyview by others for
or arising out of any such injury, death or damages.
C. The parties hereby agree that the provisions contained in paragraphs A and
B above shall survive the termination of this Lease.
ARTICLE 9 DEFAULT
A. The occurrence of any of the following shall constitute a default under
this Lease:
1. The failure of IHS to make a payment of any Base Rent or any other
amount due by IHS hereunder in the manner provided herein within five
(5) business days of the date provided herein;
2. If any representation or warranty of IHS herein or in any document or
certificate furnished by IHS in connection with this Lease shall be
false or misleading in any material respect;
3. If IHS suspends or discontinues business or sells or otherwise
disposes of all or substantially all of its assets;
4. If IHS shall consent to the appointment of a receiver, trustee or
liquidator of itself or of a substantial part of its assets or
property, or shall admit in writing its insolvency, or bankruptcy or
its inability to pay its debts generally as they come due, or shall
make a general assignment for the benefit of creditors, or shall file
a petition in bankruptcy, or a petition or an answer seeking
reorganization in a proceeding under any bankruptcy law (as now or
hereafter in effect), or an answer admitting the material allegations
of a petition filed against it in any such proceedings, or shall by
petition, answer or consent, seek relief under the provisions of any
other now existing or future bankruptcy or other similar law providing
for the reorganization or winding up of a corporation, or an
agreement, composition, extension or adjustment with its creditors;
5. If an order, judgment or decree shall be entered by a court of
competent jurisdiction appointing, without the consent of IHS, a
receiver, trustee or liquidator of IHS or of any substantial part of
its property, or any substantial part of the property of IHS shall be
sequestered, and any such order, judgment or decree of appointment or
sequestration shall not have been dismissed, stayed or vacated within
sixty (60) days after the date of entry thereof;
6. If a petition against IHS in a proceeding under the bankruptcy laws or
other insolvency laws (as now or hereafter in effect) shall be filed,
and any decree or order adjudicating IHS as bankrupt or insolvent in
such proceeding shall not have been dismissed, stayed or vacated
within sixty (60) days after such adjudication or in case such
petition as filed or amended shall be approved by such court as
properly filed and shall not have been relinquished, stayed or
terminated for a period of sixty (60) days;
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7. If any indebtedness of IHS for an outstanding principal amount in
excess of $500,000 shall become due prior to the specified maturity
thereof by reason of default, acceleration or otherwise;
8. If any insurance required to be maintained hereunder is not in full
force and effect; or
9. If IHS fails to perform or observe any other material covenant,
condition or agreement to be performed or observed by it hereunder or
breaches any of its other obligations to Skyview hereunder or under
any instrument, document or agreement between Skyview and IHS and such
failure or breach is not cured within thirty (30) days after written
notice thereof.
B. IN THE EVENT OF ANY SUCH DEFAULT, and while a default continues, Skyview,
at its option, may terminate this Lease. In addition, Skyview (in addition
to such other rights and remedies which it may have), may return the
Aircraft to its own sole use and quiet enjoyment. As may be necessary,
Skyview is hereby authorized by IHS to enter, with or without legal
process, on any premises where the Aircraft may be located and to retake
possession and to remove the Aircraft from such premises without liability
of any kind on the part of Skyview. Termination and repossession shall not
relieve the party in default from its obligations under this Lease which
are then unsatisfied, and the additional Base Rent and other amounts and
damages thereafter due for the unexpired portion of the term of this Lease.
C. IN THE EVENT OF ANY SUCH DEFAULT, and while a default continues, IHS shall,
without further demand, forthwith pay to Skyview (i) as liquidated damages
for loss of a bargain and not as a penalty, the present worth of the amount
of all Base Rent due for the remainder of the term under this Lease
(calculated as of the rental next preceding the declaration of default),
and (ii) all other sums then due hereunder, Skyview may, but shall not be
required to, sell the Aircraft at private or public sale, with or without
notice, and without having the Aircraft present at the place of sale; or
Skyview may, but shall not be required to, lease, otherwise dispose of or
keep idle the Aircraft. The proceeds of sale, lease or other disposition,
if any, shall be applied in the following order of priorities: (i) to pay
all of Skyview's costs, charges and expenses incurred in taking, removing,
holding, repairing and selling, leasing or otherwise disposing of the
Aircraft; then (ii) to the extent not previously paid by IHS, to pay
Skyview all sums due from IHS hereunder; then (iii) to reimburse to IHS any
sums previously paid by IHS as liquidated damages; and (iv) any surplus
shall be retained by Skyview, IHS shall pay any deficiency in clauses (i)
and (ii) forthwith. The foregoing remedies are cumulative, and any or all
thereof may be exercised in lieu of or in addition to each other or any
remedies at law, in equity, or under statute. IHS waives notice of sale or
other disposition (and the time and place thereof), and the manner and
place of any advertising. IHS shall pay as reasonable attorney's fees
twenty percent (20%) of the sum of the Base Rent then remaining unpaid and
due upon default, or if prohibited by law, such lesser sum as may be
permitted. Waiver of any default shall not be waiver of any other or
subsequent default.
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D. Skyview may at its election waive any default and its consequences and
rescind and annul notice to IHS in writing to that effect and thereupon the
respective rights of the parties shall be as they would have been if no
default had occurred and no such notice had been given. Notwithstanding the
provisions of this Article, it is expressly understood and agreed that time
is of the essence with regard to all obligations to make payments under
this Lease and that no waiver, rescission or annulment shall extend to or
affect any other subsequent default or impair any rights or remedies
consequent thereon.
ARTICLE 10 REPRESENTATIONS AND WARRANTIES
A. Skyview represents and warrants as follows:
1. Skyview is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business and is in good standing in each
location where the nature of the properties used or business conducted
by it makes such qualification necessary.
2. Skyview has the full power, authority and legal right to execute,
deliver and perform its obligations under this Lease and all documents
executed and delivered in connection with the Lease. This Lease and
all documents executed and delivered in connection with the Lease have
been duly authorized by all necessary actions on its part and
constitutes a legal, valid and binding obligation of Skyview,
enforceable against Skyview in accordance with its terms.
3. The execution and delivery of this Lease and all documents executed
and delivered in connection with the Lease, the performance by Skyview
of its obligations hereunder and thereunder and compliance by it with
its covenants and warranties hereunder and thereunder will not
contravene nor violate any provision of any law, governmental rule or
regulation nor contravene the provisions of, constitute a default
under, or result in the creation of any lien, mortgage, charge or
encumbrance under its charter or by-laws or any contract, Lease,
indenture, or other document or instrument to which it or its
properties may be subject.
4. Skyview owns the Aircraft and has good and marketable title thereto.
5. Skyview will keep the Aircraft registered in accordance with all
applicable governmental rules and regulations.
B. IHS represents and warrants as follows:
1. It is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified
to do business and is in good standing in each location where the
nature of the properties used or business conducted by it makes such
qualification necessary.
2. It has the full power, authority and legal right to execute, deliver
and perform its obligations under this Lease and all documents
executed and delivered in connection with the Lease and this Lease and
all documents executed and delivered in connection with the Lease have
been duly authorized by all necessary
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actions on its part and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with the terms
thereof;
3. The execution and delivery of this Lease and all documents executed
and delivered in connection with the Lease, the performance by it of
its obligations hereunder and thereunder and the compliance by it with
its covenants and warranties hereunder and thereunder will not
contravene nor violate any provision of any law, governmental rule or
regulation nor will it contravene the provisions of, constitute a
default under, or result in the creation of any lien, mortgage, charge
or encumbrance under its charter or by-laws or any contract, Lease,
indenture, or other document or instrument to which it or its
properties may be subject.
4. There are no suits or proceedings, pending or threatened in any court
or before any commission, board or other administrative agency against
or affecting it which will have a material adverse effect on its
ability to fulfill its obligations under this Lease.
5. It is and will be at all times validly existing and in good standing
under the laws of the State of Delaware.
C. All representations and warranties contained herein and made by either
party to the other shall survive the execution of this Lease.
ARTICLE 11 REPORTS
IHS shall notify Skyview in writing, within ten (10) days after it learns of any
tax or other lien attaching to the Aircraft, of the full particulars thereof.
IHS shall within one hundred twenty (120) days of the close of each fiscal year
deliver to Skyview a balance sheet as of the end of such fiscal year and profit
and loss statement for the one-year period then ended, certified by a recognized
firm of independent certified public accountants. Upon request of Skyview, IHS
shall deliver to Skyview quarterly, within ninety (90) days of the close of each
fiscal quarter, in reasonable detail, copies of quarterly financial statements
certified by the chief financial officer of IHS. Within ten (10) days after any
reasonable request by Skyview, IHS will furnish a certificate of an authorized
officer stating that such officer has reviewed the activities of IHS and that
there exists no default (as described in Article 9 hereof) or event which with
notice or lapse of time or both would constitute such a default.
ARTICLE 12 GOVERNING LAW
This Lease shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to its conflicts of laws principles.
ARTICLE 13 NOTICES
Any notice required or permissible under this Lease shall be in writing and
shall be sent by telex, cable, facsimile transmission, by certified mail return
receipt requested, or by express courier (Fed Ex, etc.). If sent by telex, cable
or facsimile transmission, it will be confirmed by certified mail
-12-
return receipt requested or express courier, addressed to the parties at the
following addresses and shall be deemed received upon actual receipt of the
earliest notice thereof:
To Skyview:
RNE Skyview, LLC
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Copy to: Xxxxxxxx X. Xxxxxx
Fax: (000) 000-0000
To IHS:
Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
To Lender:
BTM Capital Corporation
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Senior Vice President
Administration
Fax: (000) 000-0000
ARTICLE 14 ASSIGNMENT
Skyview, in exercising its rights or performing any obligations under this
Lease, may utilize, wholly or partially, the services of third parties;
provided, however, such assignment of obligations will not relieve Skyview of
any liability to IHS under this Lease. Without the prior written consent of
Skyview, which consent may be unreasonably withheld or denied, IHS may not
assign this Lease or its interest or rights hereunder or enter into any lease or
sublease with respect to the Aircraft covered hereby. Skyview may, without the
consent of IHS, assign this Lease or its interests or rights hereunder. IHS
agrees that if it receives written notice of an assignment from Skyview, it will
pay all Base Rent and other amounts payable hereunder to such assignee under any
assignment or as instructed by Skyview. IHS further agrees to confirm in writing
receipt of a notice of assignment as may be reasonably requested by Skyview and
to execute and deliver any documents reasonably requested in furtherance of such
assignment. IHS hereby waives and agrees in the same manner and to the extent
provided in Article 6, paragraph C, not to assert against any such assignee any
defense, set-off, recoupment claim or counterclaim which IHS has or may at any
time have against Skyview for any reason whatsoever. This Lease shall inure to
the benefit of and be binding upon each of the parties hereto and their
respective successors and permitted assigns. Notwithstanding the foregoing, any
further lease or charter of the Aircraft by
-13-
Skyview during the term of this Lease shall be made subordinate to this Lease
and shall not limit the responsibilities of IHS for all payment and performance
obligations required in this Lease.
ARTICLE 15 WAIVER OF JURY TRIAL
IHS HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
LEASE, ANY DEALINGS BETWEEN IHS AND SKYVIEW RELATING TO THE SUBJECT MATTER
HEREOF OR ANY RELATED TRANSACTIONS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
(INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, BREACH OF DUTY CLAIMS AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT
IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS RELATING TO
THIS LEASE OR ANY OTHER DOCUMENTS OR LEASES RELATING TO THE TRANSACTIONS
CONTEMPLATED HEREBY.
ARTICLE 16 FORCE MAJEURE
None of the parties shall be liable for any delay or failure in the performance
of any obligation under this Lease due to any cause beyond its control,
including, without limitation, acts of God, act of government, fires, floods,
strikes, lock-outs or other labor disputes, embargoes, riots, insurrection, war
or acts of the public enemy.
ARTICLE 17 TAXES
During the term of this Lease, IHS shall be responsible for all taxes (except
those measured by the income of Skyview), excise taxes, fines, fees or penalties
arising out of this Lease or IHS's operation of the Aircraft. In the case of
personal property taxes, IHS will be responsible for taxes and assessments
levied against, and constituting a lien against, the Aircraft which arise during
the term of this Lease.
ARTICLE 18 ENTIRE AGREEMENT; AMENDMENT
This Lease contains the entire understanding of the parties regarding the
subject matter hereof and may not be amended, modified or waived except in
writing and signed by an authorized officer or representative of each party.
ARTICLE 19 RISK OF LOSS
A. Risk of Loss, Damage or Destruction. IHS hereby assumes all risk of loss,
damage, theft, taking, destruction, confiscation, requisition or
commandeering, partial or complete, of or to the Aircraft, ever caused or
occasioned, such risk to be borne by IHS from the
-14-
Commencement Date of this Lease, and continuing until the Aircraft has been
returned to Skyview in accordance with the terms of this Lease.
B. Event of Loss with Respect to the Aircraft. Upon the occurrence of an Event
of Loss (as hereinafter defined) with respect to the Aircraft, IHS shall,
within fifteen (15) days after such occurrence, give Skyview notice of such
Event of Loss. IHS shall pay, or cause to be paid , to Skyview in
immediately available funds on a date (which date shall be a Casualty Loss
Value Payment Date) not later than the Casualty Loss Value Payment Date
first occurring after one hundred eighty (180) days after the occurrence of
the Event of Loss, an amount equal to (1) all unpaid Base Rent due before
such Casualty Loss Value Payment Date and all unpaid supplemental payments
(other than Casualty Loss Value) due under this Lease on or before such
Casualty Loss Value Payment Date, plus (2) the Casualty Loss Value (as
described on Annex B hereto) for the Aircraft determined as of such
Casualty Loss Value Payment Date or, if such Casualty Loss Value Payment
Date is beyond the end of the term of this Lease, the Casualty Loss Value
as of the last Casualty Loss Value Payment Date during the term of this
Lease.
C. Effect of Casualty Loss Value Payment. Following the payment in full of the
Casualty Loss Value for the Aircraft and other amounts as provided in this
Article 19, (1) this Lease and the obligations of IHS to pay Base Rent
shall terminate and this Lease shall terminate, and (2) any remaining
insurance proceeds (other than those reserved to others), shall be promptly
paid over to or at the direction of IHS.
D. Substitution and Event of Loss with Respect to An Engine. IHS shall have
the right at its option at any time, on at least ten (10) days prior notice
to Skyview and any lender of Skyview, to substitute a replacement engine
for an Aircraft engine. If an Event of Loss shall have occurred with
respect to an Aircraft engine but not the Aircraft's airframe, within sixty
(60) days of the occurrence of such Event of Loss, IHS shall substitute a
replacement engine for the Aircraft's engine. Any such replacement engine
shall be free and clear of all liens. In connection with the substitution
of a replacement engine, the following conditions shall be satisfied in a
timely manner:
1. The following documents shall be duly authorized, executed and
delivered by the respective party or parties thereto, and an executed
counterpart of each shall be delivered to Skyview and any lender to
Skyview:
(A) a lease supplement covering the replacement engine, which shall
have been duly filed for recordation with the FAA;
(B) so long as any security agreement shall not have been satisfied
and discharged, a security agreement supplement covering the
replacement engine, which shall have been duly filed for
recordation with the FAA;
-15-
(C) an officer's certificate of IHS certifying that the replacement
engine is in as good operating condition and repair as the engine
it replaces assuming such engine had been maintained in the
operating condition and repair required hereunder; and
(D) such other documentation as Skyview or any lender of Skyview
shall reasonably request.
E. Application of Other Payments Upon Event of Loss. Any payments (including,
without limitation, insurance proceeds) received at any time by Skyview or
IHS from any insurer, governmental authority or other party or insurer
(except IHS) as a result of the occurrence of an Event of Loss will be
applied as follows: (1) any such payments received at any time by IHS or
Skyview shall be promptly paid to Skyview for application pursuant to the
following provisions: (2) so much of such payments as shall not exceed the
amount of the Casualty Loss Value required to be paid by IHS shall be
applied in reduction of IHS's obligation to pay such amount, if not already
paid by IHS, or, if already paid by IHS, shall be applied to reimburse IHS
for its payment of such amount, unless an Event of Default shall have
occurred and be continuing; (3) so much of such payments as shall not
exceed the cost of any replacement engine to be purchased pursuant hereto
shall be applied for payment of (or to reimburse IHS for its payment of)
such replacement engine, unless an Event of Default shall have occurred and
be continuing; and (4) the balance, if any, of such payments remaining
thereafter shall be retained by Skyview.
F. Application of Payments Not Relating to an Event of Loss. Any payments
(including, without limitation, insurance proceeds) received at any time by
IHS or Skyview from any insurer or other party with respect to any
condemnation, confiscation, theft or seizure of or loss or damage to, the
Aircraft or the Aircraft's airframe or any Aircraft engine not constituting
an Event of Loss, will be applied directly in payment of repairs or for
replacement of property in accordance with the provisions of this Lease, if
not already paid by IHS, or if already paid by IHS and no Event of Default
shall have occurred and be continuing, shall be applied to reimburse IHS
for such payment, and any balance remaining after compliance with the terms
hereof with respect to such loss or damage shall be retained by Skyview.
G. Definition of Event of Loss. As used in this Lease, the term Event of Loss
shall mean:
1. Destruction or damage which renders the Aircraft permanently unfit for
normal use by IHS;
2. Damage which results in an insurance settlement on the basis of a
total loss, or a constructive or compromised total loss;
3. Theft or disappearance for a period of thirty (30) days unless the
location of such property is known and IHS is diligently pursuing
recovery of such property but in any event for a period in excess of
ninety (90) days from such theft or
-16-
disappearance or for a period beyond the end of the term of this
Lease, whichever is shorter; and
4. With respect to the Aircraft's airframe or any engine, the requisition
or taking or use by any governmental authority for more than sixty
(60) days or for any period extending beyond the end of the term of
this Lease or by the United States or any agency thereof for a period
extending beyond the end of the term of this Lease.
An Event of Loss with respect to the Aircraft shall be deemed to have
occurred if an Event of Loss has occurred with respect to the
Aircraft's airframe.
ARTICLE 20 TRUTH IN LEASING
SKYVIEW CERTIFIES THAT THE VENDOR OF THIS AIRCRAFT HAS REPRESENTED TO SKYVIEW
THAT THE AIRCRAFT HAS BEEN MAINTAINED AND EFFECTED UNDER FAR 91 FROM THE DATE OF
MANUFACTURE, TO THE DATE HEREOF, AND THAT THE AIRCRAFT WILL BE MAINTAINED BY IHS
UNDER FAR 91 FOR THE OPERATIONS TO BE CONSTRUED UNDER THIS LEASE. IHS IS
CONSIDERED RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE.
FOR AN EXPLANATION OF THE FACTORS BEARING ON OPERATIONAL CONTROL, PERTINENT
FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FEDERAL AVIATION
ADMINISTRATION FLIGHT STANDARD DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE
OR AIR CARRIER DISTRICT OFFICE.
IHS CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT
DURING THE TERM OF THIS LEASE AND THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR
COMPLIANCE WITH APPLICABLE FEDERAL AVIATION ADMINISTRATION REGULATIONS.
SIGNATURE PAGE FOLLOWS
-17-
IN WITNESS WHEREOF, the parties have executed this Aircraft Lease Agreement as
of the day and year first set forth above.
RNE SKYVIEW, LLC
By: /s/ Xxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Managing Director
INTEGRATED HEALTH SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
-18-
ANNEX A
Aircraft Manufacturer and Model: 1992 British Aerospace BAe 125 Series 800A
Manufacturer's Serial Number: NA0474
FAA Registration Number: N622AD
Engine Manufacturer and Model: Xxxxxxx Air Research TFE 731-5R-1H
Manufacturer's Serial Numbers: P91560; P91561
AVIONICS:
HONEYWELL EDZ-817 5-TUBE EFIS W/MFD HONEYWELL EDZ-817 5-TUBE EFIS FLT. DIRECTOR
HONEYWELL DFZ-800 DIGITAL AUTOPILOT PRIMUS 870 RADAR W/DUAL CONTROLLERS DUAL
HONEYWELL PRIMUS II 850 COMMS DUAL HONEYWELL AHZ-600 AHRS COMPASS DUAL HONEYWELL
PRIMUS II 850 NAVS WULFSBERG FLIGHTPHONE VI HONEYWELL PRIMUS II DME DUAL KING
KHF-950 HF'S WITH SELCAL HONEYWELL PRIMUS II ADF TCAS-II DUAL ASZ-810 AIR DATA
SYSTEMS RADAR WITH LZ-850 LIGHTING DETECTOR GLOBL AFIS ELECTRONIC CHECKLIST
SUNDSTRAND XXXX VII GPWS WITH WINDSHEAR DUAL HONEYWELL FMZ-2000 FMS WITH
VOR/DME/VNAV/TACAN & DUAL GPS
ADDITIONAL EQUIPMENT:
THRUST REVERSERS BFGOODRICH WHEELS & BRAKES
LONG-RANGE OXYGEN AIRSHOW
TV/VCR LIGHTS: XXXXXX TEL-TAIL, PULSE, RS ICE
CD PLAYER W/INDIVIDUAL HEADSETS & CHANNEL SELECTORS
EXTERIOR:
OVERALL WHITE W/XXXX & XXXXX STRIPES
INTERIOR:
EIGHT PASSENGER, EXTERNAL SERVICE LAV. AIR-CONDITIONING, TAUPE LEATHER SEATS,
HARMONIZING FABRIC DIVAN, ADDITIONAL OBSERVER JUMPSEAT, IPECO CREW SEATS, TAUPE
& LIGHT XXXX CABINETRY, FORWARD GALLEY WITH MICROWAVE, OVEN, COFFEEMAKER &
ABUNDANT
STORAGE
ANNEX B
================================================================================
Print Casualty
Number Loss Values*
================================================================================
101.570000
1 101.220126
2 101.868091
3 100.513883
4 100.157486
5 99.798889
6 99.438076
7 99.075036
8 98.709753
9 98.342215
10 97.972406
11 97.600314
12 97.225923
13 96.849221
14 96.470192
15 96.088822
16 95.705096
17 95.319001
18 94.930522
19 94.539643
20 94.146350
21 93.750628
22 93.352462
23 92.951837
24 92.548738
25 92.143150
26 91.735056
27 91.324442
28 90.911293
29 90.495591
30 90.077323
31 89.656471
32 89.233020
33 88.806953
34 88.378256
35 87.946911
36 87.512902
37 87.076212
38 86.636825
39 86.194725
40 85.749895
41 85.302317
42 84.851975
43 84.398852
44 83.942930
45 83.484193
46 83.022622
Page 1
ANNEX B
================================================================================
Print Casualty
Number Loss Values*
================================================================================
47 82.558201
48 82.090911
49 81.620736
50 81.147657
51 80.671656
52 80.192715
53 79.710817
45 79.225942
55 78.738073
56 78.247191
57 77.753277
58 77.256312
59 76.756279
60 76.253157
61 75.746928
62 75.237573
63 74.725072
64 74.209405
65 73.690554
66 73.168499
67 72.643219
68 72.114696
69 71.582908
70 71.047836
71 70.509459
72 69.967758
73 69.422711
74 68.874297
75 68.322497
76 67.767289
77 67.208652
78 66.646565
79 66.081006
80 65.511955
81 64.939389
82 64.363287
83 63.783627
84 0.000000
* As a percentage of Acquisition Cost
Page 2
