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EXHIBIT 10.26
EXECUTION COPY
ADLT
AIRCRAFT DRY LEASE AGREEMENT
This AIRCRAFT DRY LEASE AGREEMENT (this "Agreement") entered into as of
the 27 day of May 1997, by and between LIGHTAIR, LTD. ("Owner") and ADVANCED
LIGHTING TECHNOLOGIES, INC. ("Company").
WITNESSETH:
WHEREAS, Owner is the registered owner of a 1993 Learjet Model 60, S/N:
60-004,N6U4K (the "Aircraft");
WHEREAS, Company will have "possession, control and command" of the
Aircraft, as that phrase is defined by the Internal Revenue Service in Revenue
Ruling 58-215; and
WHEREAS, Company desires to lease the Aircraft from Owner for a minimum of
260 flight hours per year, all in accordance with the terms and conditions
herein contained.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the parties
hereby agree as follows:
ARTICLE ONE
Lease of Aircraft
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Company agrees to lease the Aircraft from Owner for a minimum of 260
flight hours per year during the term of this Agreement.
ARTICLE TWO
Term
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The Agreement shall commence on the date hereof, and shall continue in
effect until April 30, 2007, unless earlier terminated under the provisions of
this Agreement.
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ARTICLE THREE
Rent and Security Deposit
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The rent payable by Company to Owner shall be calculated on a per-flight
hour basis at the rate of Two Thousand Five Hundred Dollars ($2,500.00) for
each flight hour, or any portion thereof, the Aircraft is utilized by Company.
In addition, Company shall make a security deposit of One Hundred Eighty
Thousand Dollars ($180,000) within 30 days of the commencement of this
Agreement, such amount to be held during the term hereof as security for this
Agreement and refunded upon termination, so long as Company has complied with
all of its obligations hereunder.
ARTICLE FOUR
Aircraft Rental to Other Parties
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Company acknowledges that Owner will rent the Aircraft to other parties
during the term of this Agreement, but Owner shall be required to provide
reasonable notice of such rental to Company so that Company and any other
corporations affiliated with Company shall always have first call on the use of
the Aircraft.
ARTICLE FIVE
Maintenance and Repair
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Owner shall perform or cause to be performed all maintenance, repair,
inspection and overhaul work necessary to maintain certification of the
Aircraft pursuant to Part 91 of the Federal Aviation Regulations and to
maintain such certification during the term of this Agreement. All such work
on the Aircraft shall be performed in accordance with the standards set by
regulations of the Federal Aviation Administration (the "FAA"). Owner will
coordinate maintenance and repair with Company and any other lessees of the
Aircraft.
ARTICLE SIX
Operating Costs
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Company shall be responsible for its proportionate share of the
following costs and expenses in operating the Aircraft during the term of
this Agreement:
A. Maintenance: All costs and expenses in performing or causing to be
performed all maintenance, repair, inspection and overhaul work on
the Aircraft.
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B. Insurance: All costs and expenses in maintaining in force such
passenger liability, public liability, property damage, baggage, and
cargo insurance in such form, for such amounts, and with such
insurers as shall be satisfactory to Owner and Company, protecting
Company and Owner as co-insured against claims for death of or
injury to persons, and loss of or damage to property, in connection
with the possession, maintenance, use and operation of the Aircraft.
C. Taxes: All taxes, fees, assessments, fines, and penalties due,
assessed or levied by any taxing authority which relate in any way to
the ownership, use or operation of the Aircraft, including, but
without limitation, all sales taxes and personal property taxes,
license and registration fees, and all use, excise, gross receipts,
franchise, stamp or other taxes, duties or charges, together with
any penalties, fines or interest thereon, imposed, or relating to
activities conducted, during the term of this Agreement.
D. Storage of the Aircraft: All costs and expenses in storing the
Aircraft.
ARTICLE SEVEN
Log Books and Records
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Owner shall maintain all log books and records pertaining to the
Aircraft in accordance with FAA regulations.
ARTICLE EIGHT
Default
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A. Owner shall be in breach of this Agreement if (1) Owner defaults in
the performance of any of its obligations under this Agreement
and such default shall continue for five (5) days after receipt by
Owner of written notice thereof from Company; or (2) Owner takes any
action to prevent or hinder the performance by Company of any of its
obligations under this Agreement. In the event of any breach by
Owner, Company shall have the right to terminate the Agreement
immediately and to pursue any other remedy available to Company in
law or equity. Notwithstanding the foregoing, so long as General
Electric Capital Corporation has a security interest in the Aircraft,
Company's obligation to make the minimum lease payments pursuant
to Article Nine, Section C shall continue.
B. Company shall be in breach of this Agreement if Company defaults in
the performance of any of its obligations under this Agreement and
such default shall continue for five (5) days after receipt by
Company of written notice thereof from
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Owner. In the event of any breach by Company, Owner shall have the
right to terminate the Agreement immediately and to pursue any other
remedy available to Owner in law or equity.
C. The failure of either party to enforce strictly any provision of this
Agreement shall not be construed as a waiver thereof and shall not
preclude such party from demanding performance in accordance with
the terms hereof.
ARTICLE NINE
Payments
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A. The lease, as specified in Article Three, for each flight shall be
due and payable to Owner within twenty (20) days after receipt
of invoices therefor.
B. Payments made and statements furnished to a party shall be directed
to the address specified in Paragraph C of Article Fifteen.
C. A minimum rent payment of Fifty-Four Thousand One Hundred Sixty-Six
Dollars and Sixty Seven Cents ($54,166.67) shall be due and payable
on the first day of each month during the term of this Agreement.
The minimum rent shall be credited against actual hours of usage
during the month, with the difference being a net charge or a net
credit (which would be carried to the next month).
ARTICLE TEN
Assignment
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A. Company shall not assign this Agreement or any interest in the
Aircraft without the prior written consent of Owner. Subject to the
foregoing, this Agreement inures to the benefit of, and is
binding on, the heirs, legal representatives, successors, and
assigns of the parties hereto.
B. Company is aware that Owner intends to assign this Agreement (the
"Assignment") as security to GE Capital Corporation (the "Lender")
in order to secure a loan from Lender to Owner. Lender's security
interest in the Aircraft and in this Agreement has priority over
Company's rights in the Aircraft. Company shall enter into a
Consent Agreement with Lender and such other documents in such form
as Lender shall require, so long as Company has the right to
quiet enjoyment of the Aircraft and otherwise complies with its
obligations under.
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ARTICLE ELEVEN
Accident and Claim
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Owner and Company each shall immediately notify the other of any accident
involving the Aircraft, which notification shall specify to the extent known by
the party, the time and place of the accident, the extent of the damage, the
names and addresses of the parties involved, persons injured, known witnesses,
and owners of properties damaged. Each party shall advise the other of any and
all correspondence, papers, notices, and documents received by Owner in
connection with any claim or demand involving or relating to the Aircraft or
its operation, and shall aid in any investigation instituted by such party and
in seeking the recovery of damages from third persons liable therefor.
ARTICLE TWELVE
Indemnification
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Company shall be liable to Owner for, and agrees to indemnify and hold
harmless Owner and its employees and agents from and against, any and all
suits, claims, liabilities, settlements, losses and expenses (the extent such
are not covered by the insurance policies held pursuant to Paragraph B of
Article Six above) arising out of or attributable to the operation of the
Aircraft hereunder, including but not limited to, injuries to third parties,
or employees of Company, damage to property (whether of Owner or any third
party) and any consequential or incidental damages.
ARTICLE THIRTEEN
Loss or Damage to Aircraft
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Risk of loss of or damage to the Aircraft shall be borne by Owner. If,
during the term of this Agreement, the Aircraft is destroyed, lost or
damaged beyond repair, this Agreement shall terminate immediately,
provided, however, that Company shall continue to be bound by all obligations
described in Articles Eleven and Twelve, and shall continue to owe any amounts
due under this Agreement that were due and owing prior to the time that the
Aircraft is destroyed, lost or damaged beyond repair.
ARTICLE FOURTEEN
Automatic Extension
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After the expiration of the original term of this Agreement as set forth
in Article Two, this Agreement shall be extended automatically on a
month-to-month basis until either party, with or without cause, gives at least
thirty (30) days' prior written notice to the other party that this Agreement
shall terminate as of the end of the next succeeding calendar month.
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ARTICLE FIFTEEN
Miscellaneous Provision
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A. This Agreement constitutes the entire understanding between the
parties, and as of its effective date supersedes all prior or
independent agreements between the parties covering the Aircraft. Any
change or modification hereof must be in writing signed by both
parties.
B. This Agreement is to be construed in accordance with the laws of the
State of Ohio.
C. Any notice given by one party to the other in connection with this
Agreement shall be in writing and shall be sent by certified or
registered mail, return receipt requested:
1. If Company, addressed to:
Advanced Lighting, Technologies, Inc.
0000 Xxxx Xxxxxx Xxxx, Xxxxx Xxx
Xxxxxxxxx, Xxxx 00000
2. If Owner, addressed to:
LightAir, Ltd.
0000 Xxxx Xxxxxx Xxxx, Xxxxx Xxx
Xxxxxxxxx, Xxxx 00000
Notices shall be deemed to have been received on the date of receipt
as shown on the return receipt.
D. Company shall have no right to consent, allow or permit any liens or
encumbrances on the Aircraft. Company shall immediately remove from
the Aircraft any lien or encumbrance arising or created by any act
or omission on the part of the Company.
E. The rights and remedies with respect to any of the terms and
conditions of the Agreement shall be cumulative and not exclusive,
and shall be in addition to all other rights and remedies.
F. If a provision hereof shall be finally declared void or illegal by
any court or administrative agency having jurisdiction over the
parties to this Agreement, the entire Agreement shall not be void,
but the remaining provisions shall continue in effect as nearly as
possible in accordance with the original intent of the parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
ATTEST: OWNER: LIGHTAIR, LTD.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
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Title: Xxxxx X. Xxxxxxx
Member
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COMPANY: ADVANCED LIGHTING
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxx
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Title: Xxxxx X. Xxxx
Executive Vice President
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TRUTH IN LEASING STATEMENT
THE AIRCRAFT, A 1993 LEARJET MODEL 60, MANUFACTURER'S SERIAL NO. 60-004,
CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N604K, HAS
BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERIOD
PRECEDING THE DATE OF THIS LEASE.
THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR
OPERATIONS TO BE CONDUCTED UNDER THIS LEASE. DURING THE DURATION OF THIS LEASE,
ADVANCED LIGHTING TECHNOLOGIES, INC., 0000 XXXX XXXXXX XXXX, XXXXX XXX,
XXXXXXXXX, XXXX 00000, IS CONSIDERED RESPONSIBLE FOR OPERATIONAL CONTROL OF THE
AIRCRAFT UNDER THIS LEASE.
AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT
FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT
STANDARDS DISTRICT OFFICE.
THE "INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS"
ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.
I, THE UNDERSIGNED _________________, AS ______________ OF ADVANCED
LIGHTING TECHNOLOGIES, INC., CERTIFY THAT IT IS RESPONSIBLE FOR OPERATIONAL
CONTROL OF THE AIRCRAFT AND THAT IT UNDERSTANDS ITS RESPONSIBILITIES
FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
IN WITNESS WHEREOF, the parties have executed this Lease.
LIGHTAIR, LTD.
/s/ Xxxxx X. Xxxxxxx 5/27/97
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Name and Title Xxxxx X. Xxxxxxx Date
Member
ADVANCED LIGHTING TECHNOLOGIES, INC.
/s/ Xxxxx X. Xxxx 5/27/97
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Name and Title Xxxxx X. Xxxx Date
Executive Vice President
