General Condition upon Return. Unless an Event of Loss with respect to ----------------------------- the Airframe shall have occurred, in which case Section 10.1 hereof shall apply, upon the expiration of the Term for the Aircraft or termination of this Lease with respect to the Aircraft, Lessee will return the Aircraft to Lessor by delivering the same to Lake City Airport, Florida, or such other site in the continental United States on Lessee's route system as shall be mutually agreed between Lessee and Lessor. All costs and expenses associated with the return of the Aircraft and compliance with this Section 5 shall be for the account of Lessee, except as otherwise expressly provided herein. At the time of such return, (i) Lessee will (unless Lessor at least 90 days prior to the return hereunder has requested that Lessee retain the existing registration of the Aircraft) cause the Aircraft, if it is not then so registered, to be registered under the laws of the United States with the FAA in the name of the Lessor or its designee; provided that Lessee shall be relieved of its obligations under this sentence if such registration is prohibited by reason of the failure of either Owner Participant, Lessor or Lessor's designee to be eligible on such date to own an aircraft registered with the FAA, and (ii) the Airframe will be fully equipped with the Engines (or Replacement Engines) installed thereon. Also, at the time of such return, such Airframe and Engines or Replacement Engines (A) shall be certified (or, if not then registered under the Act by reason of the proviso to clause (i) in the preceding paragraph or because Lessor has requested the retention of the existing registration of the Aircraft, shall be eligible for certification) as an air worthy aircraft by the FAA, (B) shall be free and clear of all Liens (other than Lessor Liens) and rights of third parties under any arrangement including, but not limited to, pooling, interchange, overhaul, repair or other similar agreements or arrangements, (C) shall be in a regular configuration used by Lessee and in as good an operating condition as when accepted by Lessee (as agent for the Lessor) under the Modification Contract, ordinary wear and tear excepted, and otherwise in the condition required to be maintained under Lessee's FAA-approved maintenance plan, irrespective of whether such Airframe or Engines have been under Sublease during the Term, and shall have had accomplished the ongoing corrosion prevention procedures set forth in such maintenance plan, (D) in the event that Lessee shall not then be using a Federal Express Boeing 727-2D4 N362PA continuous maintenance program with respect to the Airframe immediately prior to such return but instead shall have been using a block overhaul program with respect to the Airframe, then such block overhaul program shall have been approved by all necessary governmental approvals of the country under the laws of which the Aircraft shall then have been registered, (E) in the event that Lessee during the period of operation of the Aircraft immediately prior to such return shall not have been using an on condition maintenance program with respect to the Engines (or Replacement Engines), Lessee agrees that the average number of hours or cycles of operation (whichever shall be applicable under the maintenance program then in use with respect to such Engines (or Replacement Engines)), on such Engines (or Replacement Engines) remaining until the next scheduled engine heavy maintenance or refurbishment shall be at least 25% of the hours or cycles (whichever is applicable) between engine heavy maintenance or refurbishment allowed under the FAA-approved maintenance program then in use with respect to such engines (or Replacement Engines), (F) shall have all exterior markings removed or painted over with the areas thereof refinished to match adjacent areas, (G) shall be in a state of cleanliness suitable under Lessee's normal service standards for operation in Lessee's service and (H) shall at the time of such return have no deferred maintenance items and shall be in compliance (without regard to permitted compliance extensions) with all regulations, mandatory maintenance directives, Federal Air Regulations or other instructions of the FAA or other United States governmental authorities having jurisdiction in each case that are required with respect to the Aircraft prior to the date of return of the Aircraft under this Section 5 and shall have no airworthiness directives issued by the FAA requiring terminating action by the date of return; and in all such cases the Aircraft shall not have been discriminated against whether by reason of its leased status or otherwise in maintenance, use, operation or in any other manner whatsoever. If clause (E) above shall be applicable but the Engines (or Replacement Engines) do not meet the conditions specified in said clause (E) , Lessee shall pay or cause to be paid to Lessor a Dollar amount computed by multiplying (I) 125% of the direct cost to Lessee (based upon the direct cost to Lessee for similar aircraft in the fleet of Lessee) during the preceding 12 months of performing for an engine of the same model as the Engines (or Replacement Engines) the scheduled engine heavy maintenance or refurbishment under the FAA- Federal Express Boeing 727-2D4 N362PA approved maintenance program then used by Lessee for engines of the same model as the Engines (or Replacement Engines) (or in the event that Lessee has not performed such a scheduled engine heavy maintenance or refurbishment during the preceding 12 months, then the amount determined pursuant to this clause (I) shall be equal to the fair market cost of the performance of such scheduled engine heavy maintenance or refurbishment) by (II) a fraction of which (x) the numerator shall be the excess of 25% of the hours or cycles (whichever is applicable) of operation of one Engine between engine heavy maintenance or refurbishment allowable under the FAA-approved maintenance program then in use with respect to such Engines (or Replacement Engines) over the actual average number of hours or cycles of operation on such Engines (or Replacement Engines) remaining until the next such scheduled engine heavy maintenance or refurbishment and (y) the denominator shall be the number of hours or cycles allowable between the times permitted for such scheduled engine heavy maintenance or refurbishment by (III) three. During the last six months of the Term, with reasonable notice, Lessee will cooperate, and cause any Sublessee to cooperate, at Lessor's sole cost, in all reasonable respects with the efforts of Lessor to sell or lease the Aircraft, including, without limitation, permitting prospective purchasers or lessees to inspect the Aircraft and any records relating to the Aircraft then required to be retained by the FAA or by the comparable government agency of the country in which the Aircraft is registered, all in accordance with Section 12 hereof, provided that any such cooperation shall not interfere with the normal -------- operation of the Aircraft by, or the business of, Lessee or any Sublessee.
Appears in 1 contract
General Condition upon Return. Unless an Event of Loss with respect to ----------------------------- the Airframe shall have occurred, in which case Section 10.1 hereof shall apply, upon Upon the expiration of the Term for the Aircraft or termination of this Lease with respect to the AircraftLease, Lessee will return the Aircraft to Lessor or its designee at such location chosen by delivering the same to Lake City Airport, Florida, or such other site in the continental United States on Lessee's route system as shall be mutually agreed between Lessee and reasonably satisfactory to Lessor, and Lessee will give Lessor and, if the Aircraft is then subject to the Lien of the Trust Indenture, Mortgagee at least 15 days' prior written notice of the place of such return. All costs and expenses associated with At the time of return of the Aircraft to Lessor, Lessor and compliance with this Section 5 Lessee shall be for the account of Lessee, except as otherwise expressly provided hereinexecute a Return Acceptance Supplement. At the time of such return, (i) Lessee will (unless Lessor at least 90 days prior to the return hereunder has requested that Lessee retain the existing registration of the Aircraft) cause the Aircraft, if it is not then so registered, to Aircraft shall be registered under the laws of the United States with the FAA in the name of (except for a failure caused by the Lessor (or its designee; provided that Lessee shall be relieved of its obligations under this sentence if such registration is prohibited by reason of the failure of either Owner Participant, Lessor or Lessor's designee ) being ineligible to be eligible on such date to own the registered owner of an aircraft registered with the FAA), and (ii) the Airframe will Aircraft shall have and be fully equipped in compliance with the Engines (or Replacement Engines) installed thereon. Also, at the time a currently valid standard certificate of such return, such Airframe and Engines or Replacement Engines (A) shall be certified (or, if not then registered under the Act by reason of the proviso to clause (i) in the preceding paragraph or because Lessor has requested the retention of the existing registration of the Aircraft, shall be eligible for certification) as an air worthy aircraft airworthiness issued by the FAA, (Biii) the Aircraft shall be free and clear of all Liens (other than Lessor Liens) and rights of third parties persons not party to any Operative Agreement under any arrangement including, but not limited to, pooling, interchange, overhaul, repair or other similar agreements or arrangements, (Civ) the Aircraft shall be in a regular configuration used by Lessee and in as good an operating condition as when accepted by Lessee (as agent for the Lessor) under the Modification Contractoriginally delivered to Lessee, ordinary wear and tear excepted, and otherwise in be fully equipped with four Engines or other engines meeting the condition required to be maintained under Lessee's FAA-approved maintenance plan, irrespective requirements of whether such Airframe or Engines have been under Sublease during the Term, and shall have had accomplished the ongoing corrosion prevention procedures set forth in such maintenance planReplacement Engines, (Dv) in the event that Lessee shall not then be using a Federal Express Boeing 727-2D4 N362PA continuous maintenance program with respect to the Airframe immediately prior to such return but instead shall have been using a block overhaul program with respect to the Airframe, then such block overhaul program shall have been approved by all necessary governmental approvals of the country under the laws of which the Aircraft shall then have been registered, (E) in the event that Lessee during the period of operation of the Aircraft immediately prior to such return shall not have been using an on condition maintenance program with respect to the Engines (or Replacement Engines), Lessee agrees that the average number of hours or cycles of operation (whichever shall be applicable under the maintenance program then in use with respect to such Engines (or Replacement Engines)), on such Engines (or Replacement Engines) remaining until the next scheduled engine heavy maintenance or refurbishment shall be at least 25% of the hours or cycles (whichever is applicable) between engine heavy maintenance or refurbishment allowed under the FAA-approved maintenance program then in use with respect to such engines (or Replacement Engines), (F) shall have all exterior markings Lessee's logo removed or painted over with the areas thereof refinished to match adjacent areas, (G) shall be in a state of cleanliness suitable under Lessee's normal service standards for operation in Lessee's service and (H) shall at the time of such return have no deferred maintenance items and shall be clean by major United States commercial airline operating standards, (vi) the Aircraft will be in compliance with the maintenance provisions of the Lease, (without regard to permitted compliance extensionsvii) the Aircraft shall be returned in a cargo configuration with all regulations, mandatory maintenance directives, Federal Air Regulations or other instructions Parts installed therein as of the Delivery Date, excepting modifications, alterations, additions, replacements, substitutions and removals made in accordance with the terms of the Lease, (viii) the Aircraft shall have been maintained under the corrosion control program in accordance with the Maintenance Program and (ix) the Aircraft shall comply with all outstanding Airworthiness Directives issued by the FAA or other United States governmental authorities having jurisdiction in each case that are required with respect applicable to the Aircraft prior to that by their terms require compliance at or before the date time of return of the Aircraft under this Section 5 and shall have no airworthiness directives issued by the FAA requiring terminating action by the date of return; and in all such cases the Aircraft shall not have been discriminated against whether by reason of its leased status or otherwise in maintenance, use, operation or in any other manner whatsoever. If clause (E) above shall be applicable but the Engines (or Replacement Engines) do not meet the conditions specified in said clause (E) , Lessee shall pay or cause to be paid to Lessor a Dollar amount computed by multiplying (I) 125% of the direct cost to Lessee (based upon the direct cost to Lessee for similar aircraft in the fleet of Lessee) during the preceding 12 months of performing for an engine of the same model as the Engines (or Replacement Engines) the scheduled engine heavy maintenance or refurbishment under the FAA- Federal Express Boeing 727-2D4 N362PA approved maintenance program then used by Lessee for engines of the same model as the Engines (or Replacement Engines) (or in the event that Lessee has not performed such a scheduled engine heavy maintenance or refurbishment during the preceding 12 months, then the amount determined pursuant to this clause (I) shall be equal to the fair market cost of the performance of such scheduled engine heavy maintenance or refurbishment) by (II) a fraction of which (x) the numerator shall be the excess of 25% of the hours or cycles (whichever is applicable) of operation of one Engine between engine heavy maintenance or refurbishment allowable under the FAA-approved maintenance program then in use with respect to such Engines (or Replacement Engines) over the actual average number of hours or cycles of operation on such Engines (or Replacement Engines) remaining until the next such scheduled engine heavy maintenance or refurbishment and (y) the denominator shall be the number of hours or cycles allowable between the times permitted for such scheduled engine heavy maintenance or refurbishment by (III) three. During the last six months of the Term, with reasonable notice, Lessee will cooperate, and cause any Sublessee to cooperate, at Lessor's sole cost, in all reasonable respects with the efforts of Lessor to sell or lease the Aircraft, including, without limitation, permitting prospective purchasers or lessees to inspect the Aircraft and any records relating to the Aircraft then required to be retained by the FAA or by the comparable government agency of the country in which the Aircraft is registered, all in accordance with Section 12 hereof, provided that any such cooperation shall not interfere with the normal -------- operation of the Aircraft by, or the business of, Lessee or any Sublessee.
Appears in 1 contract
Sources: Lease Agreement (Atlas Air Inc)