AIRCRAFT DRY LEASE AGREEMENT
Exhibit 10.3
THIS
AIRCRAFT DRY LEASE AGREEMENT is entered in effective as of July 9, 2010, by and between
NEW YORK AIRCAM CORP., a New York corporation with an address at 000 Xxxxxxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxx Xxxx 00000 (“Lessor”), and CSC TRANSPORT, INC., a Delaware corporation with an
address at 8000 Republic Airport, Xxxxxx 0, Xxxxxxxxxxx, Xxx Xxxx 00000 (“Lessee”).
W I T N E S S E T H:
WHEREAS, Lessor is the owner of a Cessna Model 501 aircraft, manufacturer’s serial number
501-0038, United States registration N501JG (the “Aircraft”); and
WHEREAS, the parties have agreed that Lessor shall lease the Aircraft to Lessee on a
non-exclusive basis for use by Lessee upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants,
agreements, representations and warranties set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, Lessor and Lessee,
intending to be legally bound, agree as follows:
1. Lease of Aircraft.
(a) This Lease sets forth the exclusive terms and conditions under which Lessee is entitled to
use the Aircraft, and Lessee shall have no right to use the Aircraft except as expressly set forth
herein. Lessor shall lease the Aircraft to Lessee, and Lessee shall lease the Aircraft from
Lessor, during all Lease Periods throughout the Term (as defined in Section 12) of this Lease as
provided hereunder. “Lease Periods” shall mean those times, if any, when the Aircraft is being
utilized by Lessee hereunder, with the consent of Lessor as provided in Section 1(e), for flight
operations conducted by Lessee under Part 91 of the Federal Aviation Regulations, including any
deadhead, ferry or repositioning flights to return the Aircraft to the airport at which the Lease
Period commenced or to pick up Lessee’s passengers at a remote location away from Republic Airport,
Farmingdale, New York (FRG), but excluding any deadhead, ferry and repositioning flights described
in Section 1(b) below (“Lessee Flights”). Lessee’s right to use the Aircraft hereunder during the
Term shall be non-exclusive and is subject in all respects to Lessor’s right to use the Aircraft at
all times during the Term other than during such Lease Periods under its exclusive operational
control and possession, command and control and Lessor’s right to permit other non-exclusive
lessees to use the Aircraft under their operational control and possession, command and control.
(b) Notwithstanding the foregoing, the parties agree that if a trip by Lessee causes or will
cause the Aircraft to be at a remote location away from FRG (“Lessee’s Location”), Lessee shall, at
Lessor’s request, permit the Aircraft to be relocated from Lessee’s Location to FRG or other
location designated by Lessor (and thereafter shall be returned to Lessee’s Location) if Lessor
requires use of the Aircraft for one of its affiliated non-exclusive lessees, but only if such
itinerary will not unreasonably delay or interfere with any scheduled flight by Lessee. In that
event, (i) Lessee’s then-current Lease Period shall terminate effective as of initial engine
start-up for the departure flight from Lessee’s Location; (ii) Lessor or its affiliated
non-exclusive lessee shall pay all costs incurred during the period in which the Aircraft is away
from Lessee’s Location, including all occupied and deadhead legs to ferry the Aircraft from
Lessee’s Location and back; and (iii) a new Lease Period shall begin effective as of final engine
shut-down upon return of the Aircraft to Lessee’s Location.
(c) Transfer of the Aircraft from Lessor to Lessee to commence a Lease Period hereunder, and
transfer of the Aircraft from Lessee to Lessor to terminate a Lease Period hereunder, shall be
evidenced by the entry of appropriate notations of such transfer on the Aircraft’s logs. Upon the
commencement or termination of any Lease Period hereunder, the party transferring possession of the
Aircraft shall deliver the Aircraft to the other party at FRG or such other location as the parties
may agree. In the case of a transfer of possession from Lessee to Lessor, the Aircraft shall be in
at least the same operating condition, order, repair and condition as when received by Lessee at
the commencement of the Lease Period, reasonable wear and tear excepted.
(d) Subject to Aircraft and crew availability, Lessor shall use its good faith efforts,
consistent with Lessor’s approved policies, in order to accommodate the needs of Lessee, to avoid
conflicts in scheduling with Lessor’s affiliated non-exclusive lessees’ use of the Aircraft, and to
enable Lessee to enjoy the benefits of this Agreement; however, Lessee acknowledges and agrees that
notwithstanding anything in this Agreement to the contrary, Lessor shall have sole and exclusive
final authority over the scheduling of the Aircraft and Lessor’s other affiliated non-exclusive
lessees’ needs for the Aircraft shall take precedence over Lessee’s rights and Lessor’s obligations
under this Agreement.
(e) Lessee shall use its best efforts to give Lessor as much notice as possible of Lessee’s
proposed utilization hereunder. If Lessee notifies Lessor pursuant to Section 14 of Lessee’s
proposed use of the Aircraft and Lessor consents thereto, the period described in such notice of
proposed use may be scheduled by Lessee (unless such intended use is cancelled by Lessee by like
notice to Lessor). Notwithstanding anything herein to the contrary, all Lessee Flights approved by
Lessor and scheduled by Lessee are subject to the absolute right of Lessor to revoke such approval
at any time prior to 24 hours before the scheduled departure of the initial flight of the approved
itinerary, without liability, upon notice to Lessee. Any notice under this Section 1(e) may be
either written or oral, but shall be given only to or by individuals designated by each party from
time to time as authorized to act on its behalf for purposes of this Section 1(e).
2. Rent.
(a) Lessee shall remit to Lessor the sum per block hour set forth on Schedule
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1 hereto from
time to time as rent for the use of the Aircraft by Lessee during each Lease Period hereunder. For
this purpose, a “block hour” shall be measured in hours and tenths of hours from the time the
Aircraft moves for purposes of flight at the departure airport to the time the Aircraft comes to
stop at the arrival airport. Lessee’s obligation to pay rent is limited to block hours during any
Lease Period.
(b) Not later than 30 days after the end of each calendar month during the Term, Lessee shall
provide to Lessor a statement showing all use of the Aircraft during Lease Periods during that
month, and a complete accounting detailing any rent due from Lessee for that month.
Notwithstanding anything in this Agreement to the contrary, Lessee shall have no obligation to
utilize the Aircraft hereunder, and there shall be no rent payable to Lessor hereunder with respect
to any calendar month if Lessee does not use the Aircraft hereunder during such month. All payments
of rent due for any month shall be made at Lessor’s address set forth above, or at such other place
as Lessor may designate to Lessee from time to time, not later than the 30th day of the
following month.
3. Expenses. Lessor shall pay the entire cost of insuring and maintaining the Aircraft
during the Term. Lessee shall pay all trip-specific costs of operating the Aircraft during Lease
Periods under this Lease, including, without limitation, fuel, landing fees, parking fees, crew
travel expenses, catering, remote hangarage and other similar trip-specific expenses.
4. Flight Crew.
(a) Lessee shall obtain at its sole cost and expense the services of fully qualified and
properly certificated flight crew to operate the Aircraft under this Lease. All flight crew
provided by Lessee to operate the Aircraft during any Lease Period hereunder shall be employees or
contractors of Lessee, and Lessee shall be solely responsible for their compensation. Lessor shall
have the right to review and approve the credentials and work experience of any flight crewmembers
selected by Lessee to operate the Aircraft hereunder. If any such crewmember’s credentials or work
experience are unsatisfactory to Lessor in its sole and absolute discretion, Lessee, upon notice to
that effect from Lessor, shall immediately replace such crew member with another flight crew member
acceptable to Lessor.
(b) Only fully-qualified and properly-credentialed flight crews who are included under the
insurance coverage required to be maintained hereunder shall be permitted to operate the Aircraft
during any Lease Period. All flight crew utilized by Lessee hereunder shall comply with all
applicable regulations, and the requirements of all applicable operations and maintenance manuals.
Lessee shall bear the cost of all initial and recurrent training of the flight crewmembers.
5. Operational Control; Operations.
(a) Lessor and Lessee intend that the lease of the Aircraft effected hereby shall
be treated as a “dry lease”. Notwithstanding anything in this Lease to the contrary, Lessee shall
have complete and exclusive operational control, and complete and exclusive possession, command and
control, of the Aircraft for all flights during each Lease Period under this Lease.
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Lessee shall
have complete and absolute control of the crewmembers in preparation for and in connection with the
operation of all flights during each Lease Period under this Lease. Lessee shall have complete and
exclusive responsibility for scheduling, dispatching and flight following of the Aircraft on all
flights conducted during Lease Periods under this Lease, which responsibility includes the sole and
exclusive right over initiating, conducting and terminating any such flights. Lessee shall have no
operational control over, nor any responsibility for scheduling, dispatching or flight following
of, any flights of the Aircraft not conducted during Lease Periods under this Lease, nor any right
over initiating, conducting or terminating any such flights.
(b) Lessee shall use and operate the Aircraft under this Lease only in accordance with
applicable manufacturers’ recommendations and airport and climatic conditions. Lessee shall not
permit the Aircraft to be maintained, used or operated in violation of any law, rule, regulation,
ordinance or order of any governmental authority having jurisdiction, or in violation of any
airworthiness certificate, license or registration relating to the Aircraft.
6. Regulatory. Lessee shall obtain and maintain in full force and effect any
necessary certificates, licenses, permits and authorizations required for its use and operation of
the Aircraft hereunder. Lessee agrees to conduct all operations contemplated by this Lease in
compliance with all applicable provisions of the Federal Aviation Regulations, including, but not
limited to, Part 91 thereof.
7. Records. Lessee shall maintain any records required by applicable laws, rules or
regulations in connection with the operation of the Aircraft during any Lease Period hereunder.
Without limiting the generality of the foregoing, Lessee shall maintain or cause to be maintained
flight log books showing the full flight time of the Aircraft during each Lease Period hereunder,
and shall keep such logs available for inspection by Lessor or its representatives at all
reasonable times. Lessor shall be entitled to access, upon reasonable notice to Lessee, to inspect
any books or records of Lessee that relate to the Aircraft.
8. Base; Hangarage. Lessor agrees to provide (or cause to be provided) hangar space
for the Aircraft at FRG during the Term. While the Aircraft is at its home base, the Aircraft
shall be kept in an enclosed hangar space at all times overnight, which hangar space shall be
heated as required during cold weather for the proper maintenance, security and appearance of the
Aircraft. Lessee shall pay the cost of hangaring the Aircraft at remote locations during any Lease
Periods hereunder.
9. Insurance. Lessor shall cause the Aircraft to be insured, at its sole cost and
expense, in accordance with the requirements of the Aircraft Management Agreement dated the date
hereof among Lessee, Lessor and the other parties specified therein (the “Aircraft Management
Agreement”). From time to time during the Term, Lessor shall, upon the request of Lessee, cause
its insurer to provide Lessee with certificates of insurance or other evidence reasonably
satisfactory to Lessee that the insurance coverage required to be furnished by Lessor
hereunder is in effect.
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10. Maintenance. Lessor shall, at its sole cost and expense, (i) enroll or cause the
Aircraft to be enrolled on an FAA-approved or manufacturer-approved maintenance and inspection
program under Part 91 of the FAR’s, and (ii) maintain or cause the Aircraft to be maintained in
accordance with the requirements of the approved maintenance and inspection
program and all applicable FAA regulations. Lessor represents and warrants that at all times
during the Term of this Agreement, the Aircraft will be in airworthy condition and current on the
approved maintenance program.
11. Default. In addition to the termination rights set forth in Section 12, the
non-defaulting party shall have the right to terminate this Lease immediately (without prejudice to
any other rights that such party may have) upon written notice to the defaulting party in the event
of any one or more of the following Events of Default:
(i) failure of the defaulting party to make payments due hereunder within ten days following
notice from the non-defaulting party that such payment was not timely made when due;
(ii) except as provided in Section 11(iii) — (vii), violation or default of any material term,
obligation or condition of a non-monetary nature set forth in this Lease, together with a failure
to cure within ten days after receipt of written notice of such violation;
(iii) if Lessee operates or maintains the Aircraft in violation of any law, regulation,
directive or order of any governmental authority or in violation of any provision of any insurance
policy contemplated by this Lease;
(iv) if any representation or warranty made in this Lease by Lessee is or becomes false,
misleading or incorrect in any material respect;
(v) lapse of insurance coverage required to be kept in force hereunder;
(vi) if Lessee or Lessor shall make a general assignment for the benefit of creditors, or be
declared insolvent or bankrupt under any bankruptcy, insolvency or other similar law, or commence a
voluntary proceeding seeking liquidation, reorganization or other relief under any such law or
seeking the appointment of a receiver or liquidator over any substantial portion of its respective
assets; or
(vii) assignment by Lessee of this Lease or any right or interest created hereunder without
the prior written consent of Lessor.
12. Term. The term of this Lease (the “Term”) shall commence on the date hereof and,
except as otherwise provided herein, shall remain in full force and effect for an initial term that
expires on July 8, 2011. Unless and until terminated in accordance with the provisions hereof, at
the expiration of the initial term or any renewal term, this Lease shall be extended for
an additional one-year renewal term upon the same terms and conditions as set forth herein.
Notwithstanding the foregoing, either party shall have the right to terminate this Lease at any
time for any reason or for no reason upon 30 days’ prior written notice to the other party.
Further, this Lease shall terminate upon the occurrence of a total loss or destruction of the
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Aircraft, damage to the Aircraft that causes it, in the opinion of Lessor, to be irreparable, or
theft of the Aircraft. Lessee shall promptly notify Lessor of any loss or damage to, or theft of,
the Aircraft during any Lease Period hereunder.
13. Remedies on Default or Termination. In the event of a termination of this Lease,
whether as a result of a default or the expiration of its term, Lessee shall immediately cease its
use of the Aircraft and return the Aircraft and all records pertaining thereto to the custody of
Lessor or its agents or representatives as set forth herein at such airport as Lessor and Lessee
may agree. Not later than 30 days after the termination, a full accounting shall be made between
Lessee and Lessor and all accounts settled between the parties. In no event shall any termination
affect the rights and obligations of the parties arising prior to the effective date of such
termination.
14. Cross Indemnities; LIMITATION ON LIABILITY.
(a) Without limiting their respective obligations hereunder, each party (in each case,
the “Indemnitor”) hereby indemnifies and holds harmless the other party and its affiliates
and their respective officers, directors, partners, employees, shareholders, members and
managers (in each case, collectively, the “Indemnitee”) for any claim, damage, loss, or
reasonable expense, including reasonable attorneys’ fees (an “Indemnified Loss”), resulting
from bodily injury or property damage arising out of the ownership, maintenance or use of
the Aircraft which results from the gross negligence or willful misconduct of such party;
provided, however, that neither party will be liable for any Indemnified Loss to the
extent:
| (i) | Such loss is covered by the insurance policies described in Section 9 (the “Policies”); | ||
| (ii) | Such loss is covered by the Policies but the amount of such loss exceeds the policy limits specified by Lessor; | ||
| (iii) | Such loss consists of expenses incurred in connection with any loss covered in whole or in part by the Policies but such expenses are not fully covered by the Policies; or | ||
| (iv) | Such loss is caused by the gross negligence or willful misconduct of the Indemnitee. |
| (b) | EACH PARTY ACKNOWLEDGES AND AGREES THAT: |
| (i) | THE PROCEEDS OF INSURANCE TO WHICH IT IS ENTITLED; | ||
| (ii) | ITS RIGHTS TO INDEMNIFICATION FROM THE OTHER PARTY UNDER THIS SECTION 14; AND | ||
| (iii) | ITS RIGHT TO DIRECT DAMAGES ARISING IN CONTRACT FROM A BREACH OF THE OTHER PARTY’S OBLIGATIONS UNDER THIS AGREEMENT |
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ARE THE SOLE REMEDIES FOR ANY DAMAGE, LOSS, OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 14, EACH PARTY WAIVES ANY RIGHT TO RECOVER
ANY DAMAGE, LOSS OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR OR HAVE ANY DUTY FOR INDEMNIFICATION
OR CONTRIBUTION TO THE OTHER PARTY FOR ANY CLAIMED INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL, OR PUNITIVE DAMAGES, OR FOR ANY DAMAGES CONSISTING OF DAMAGES FOR LOSS OF
USE, REVENUE, PROFIT, BUSINESS OPPORTUNITIES AND THE LIKE, OR DEPRECIATION OF VALUE OF THE
AIRCRAFT, OR INSURANCE DEDUCTIBLE, EVEN IF THE PARTY HAD BEEN ADVISED, OR KNEW OR SHOULD
HAVE KNOWN, OF THE POSSIBILITY OF SUCH DAMAGES.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL HAVE ANY
LIABILITY TO THE OTHER PARTY FOR ITS PERFORMANCE OR FAILURE TO PERFORM ANY OF ITS
OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, IN THE CASE OF ITS
NEGLIGENCE) EXCEPT IN THE CASE OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(d) The provisions of this Section 14 shall survive the termination or expiration of
this Agreement.
15. Notices. Unless otherwise expressly specified herein, all notices or other
communications delivered or given under this Lease shall be in writing and shall be deemed to have
been duly given if hand-delivered, sent by certified or registered mail, return receipt requested,
by nationally-utilized overnight delivery service, or by confirmed facsimile transmission. Such
notices shall be addressed to the parties at the addresses set forth above, or to such other
address as may be designated by any party in a writing delivered to the other in the manner set
forth in this Section 15. Notices shall be deemed to have been given and made on the date on which
hand-delivered or sent by confirmed facsimile, one business day following the date on which sent by
nationally-utilized overnight delivery service, or four days following the date on which sent by
certified or registered mail, return receipt requested.
16. Relationship of Parties. The relationship of the parties created by this Lease is
strictly that of lessor and lessee. Nothing in this Lease is intended, nor shall it be construed
so as, to constitute the parties as partners or joint venturers or as principal and agent.
17. Taxes. Lessor shall pay all taxes, assessments and charges imposed by any
Federal, state, municipal or other public authority upon or relating to the ownership of the
Aircraft during the Term of this Lease (other than any taxes, fines or penalties imposed upon
Lessor as a result of a breach of this Lease by Lessee). Lessee shall pay all taxes, assessments,
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and charges imposed by any Federal, state, municipal or other public authority upon or relating to
the rental, use or operation of the Aircraft by Lessee during the Term of this Lease (including any
sales or use tax imposed by the State of New York on any lease payment hereunder), other than
income taxes of Lessor. Lessee shall also be liable for any federal excise tax imposed under
Internal Revenue Code Section 4261 if such tax is applicable to any or all amounts paid (or deemed
to be paid) by Lessee to Lessor hereunder. Lessee shall pay such tax to Lessor within thirty (30)
days after receipt of Lessor’s written invoice therefor. Each party agrees to indemnify and hold
the other harmless against any and all liabilities, costs and expenses (including attorneys’ fees)
resulting from a breach of its respective undertaking hereunder.
18. Severability. Any provision of this Lease that is prohibited or unenforceable
shall be ineffective only to the extent of such prohibition or unenforceability. The invalidity or
unenforceability of any term or provision of this Lease shall not affect the validity or
enforceability of any other term or provision hereof.
19. Governing Law. This Lease shall be governed by and construed in accordance with
the law of the State of New York, without regard to its choice of law rules.
20. Amendment. This Lease may not be amended, supplemented, modified or terminated,
or any of its terms varied, except by an agreement in writing signed by each of the parties hereto.
21. Counterparts. This Lease may be executed in counterparts, each of which shall,
for all purposes, be deemed an original and all such counterparts, taken together, shall constitute
one and the same agreement, even though all parties may not have executed the same counterpart.
Each party may transmit its signature by fax to the other party, and any faxed signature and/or
faxed counterpart of this Lease shall have the same force and effect as an original.
22. Successors and Assigns; Third-Party Beneficiaries. This Lease shall be binding
upon the parties hereto, and their respective successors and assigns, and shall inure to the
benefit of the parties hereto and, except as otherwise provided herein, to their respective
successors and assigns. Lessee shall not sublease, assign, transfer, pledge or hypothecate the
Aircraft or any part thereof, or any of Lessee’s interest in this Lease or the Aircraft (including,
without limitation, any assignment or transfer pursuant to or as part of any merger, consolidation
or other transfer of assets), without the prior written consent of Lessor, which may be given or
withheld by Lessor in
its sole and absolute discretion. This Lease shall not be construed to create any third-party
beneficiary rights in any person not a party hereto (or a successor to or permitted assign of any
such party).
23. Integration. This Lease sets forth the entire agreement between the parties with
respect to the lease of the Aircraft and supersedes any and all other agreements, understandings,
representations, warranties or negotiations by or between the parties with respect thereto, all of
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which are hereby cancelled. There are no other agreements or representations, whether oral or
written, express or implied, with respect to the subject matter of this Lease that are not
expressly set forth in this Lease.
24. TRUTH IN LEASING. TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 OF THE FEDERAL
AVIATION REGULATIONS:
| (a) | NEW YORK AIRCAM CORP. HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12-MONTH PERIOD PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT. THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED DURING LEASE PERIODS UNDER THIS LEASE. | ||
| (b) | CSC TRANSPORT, INC., 0000 XXXXXXXX XXXXXXX, XXXXXX, XXXXXXXXXXX, XXX XXXX 00000, HEREBY CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT DURING ALL LEASE PERIODS UNDER THIS LEASE. | ||
| (c) | EACH OF LESSOR AND LESSEE CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS. | ||
| (d) | EACH OF LESSOR AND LESSEE UNDERSTANDS THAT AN EXPLANATION OF THE FACTORS BEARING ON OPERATIONAL CONTROL AND THE PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE. |
THE MAXIMUM TAKE-OFF GROSS WEIGHT OF THE AIRCRAFT IS LESS THAN OR EQUAL TO 12,500 LBS.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Dry Lease Agreement
this 13 day of July, 2010, effective as of the date first above written.
| LESSOR: NEW YORK AIRCAM CORP. |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | President | |||
| LESSEE: CSC TRANSPORT, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxx | |||
| Title: | Chief Operating Officer | |||
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SCHEDULE 1
RENT PER BLOCK HOUR
$650.00
S-1
