1
EXHIBIT 10.4
AIRCRAFT DRY LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT (hereinafter "Lease") is made and entered
into as of February 6, 1998, by and between STAR FLIGHT, L.L.C., a Connecticut
limited liability company, having a mailing address of c/o Starwood Capital
Group, Three Pickwick Plaza, Greenwich CT 06830 (hereinafter "Lessor"), and ITT
FLIGHT OPERATIONS, INC., a Pennsylvania corporation, with its principal office
situated at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter "Lessee").
WITNESSETH:
WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease
and take possession of the aircraft described in Article I from Lessor, all upon
the terms and conditions of this Lease;
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
(hereinafter the "Parties"), intending to be legally bound, do hereby agree as
follows:
ARTICLE I
General
A. Subject Matter of Lease. Lessor hereby dry leases to Lessee
and Lessee hereby dry leases from Lessor one (1) Gulfstream III Aircraft,
Manufacturer's Serial Number 335, Registration ▇▇▇▇: N117MS, as more fully
described in Appendix A, "Description of Aircraft," and as equipped in all other
respects at the time of Lessee's acceptance (hereinafter the "Aircraft"),
together with all manuals, computerized maintenance programs, logs and similar
records pertaining to the use and operation of the Aircraft.
B. Effect of Lease. Title to the Aircraft shall be vested in
Lessor at all times during the Lease Term. Lessee shall have the right to
possession and quiet enjoyment of the Aircraft during the Lease Term so long as
Lessee is not in default under this Lease Agreement. Notwithstanding the
foregoing, Lessor shall have the right to interrupt Lessee's quiet enjoyment and
take temporary possession of the Aircraft during the Lease Term, at such times
and for such periods as Lessor shall require in order to perform (or have
performed) certain capital improvements, as agreed to by Lessor and Lessee, or
to inspect the condition of the aircraft, upon reasonable advance notice to
Lessee (hereinafter referred to as a "Period of Term Interruption"). During any
Period of Term Interruption, all of the terms and conditions of this Lease shall
remain in full force and effect, including the obligation of the Lessee to make
the minimum rental payment pursuant to Article IV of this Agreement. However, if
such Period of Term Interruption exceeds two (2) weeks, the rent due hereunder
shall ▇▇▇▇▇.
2
ARTICLE II
Term of Lease
The Lease Term shall be for the one-year period, commencing on February
6, 1998, and continuing through February 5, 1999, and shall thereafter be
automatically renewed for successive one year periods unless and until either
party provides the other party with thirty (30) days written notice of its
intention not to renew prior to the expiry of the then current term of the lease
or the lease is earlier terminated as otherwise provided herein.
ARTICLE III
Delivery
The Aircraft was delivered to the Lessee on February 6, 1998. Upon such
delivery, Lessee has inspected, and upon any subsequent delivery following a
Period of Term Interruption the Lessee shall inspect, the Aircraft and, if found
satisfactory in the reasonable opinion of Lessee, will accept the Aircraft by
signing and delivering to the Lessor the Acceptance Supplement to the Lease
Agreement, which is attached hereto as Appendix B, whereupon the Aircraft shall
become subject to and governed by all portions of the Lease Agreement. Delivery
of the Acceptance Supplement by the Lessee shall be deemed conclusive proof that
the Lessee has fully inspected the aircraft to its satisfaction and acknowledges
that the aircraft is in good condition and repair and that the Lessee is
satisfied with and has accepted the aircraft in such condition and repair.
ARTICLE IV
Rent and Use of Aircraft
A. Use Rent. Lessee agrees to pay Lessor a base use rent of 1.25%
of the Lessor's total costs, relating to the Aircraft per month (amounting to
$122,542.94 per month at the commencement of the Lease Term). However, the
monthly base rent lease payments shall increase by an additional 1.25% per month
of all additional costs incurred by Lessor, with respect to the Aircraft,
throughout the Lease Term. Such additional costs shall be subject to approval of
Lessee, which approval shall not be unreasonably withheld or delayed.
Additionally, Lessee shall pay three hundred dollars ($300.00) for each and
every hour that the Aircraft is in use. This base rent and the hourly use rent
shall be due and payable on the 15th of the calendar month following the month
of the use for which the rent is to be paid. The use rent shall be payable to
Lessor by check at its mailing address or at such other address as shall be
designated in writing by Lessor.
B. Taxes and Duties. Lessee agrees to pay all taxes and duties,
other than property taxes, including any sales or use tax or duties, tolls,
license fees or assessments, which may be levied or assessed by any government
against the Aircraft with respect to Lessee's use thereof during the Lease Term.
Lessee will reimburse Lessor for any such taxes or duties which Lessor shall be
required to pay (except for income taxes, if any, due on the rental payments);
- 2 -
3
however, Lessee may contest any assessment of tax or duty on Lessor and Lessor
shall provide Lessee with a timely opportunity to defend against such assessment
and cooperate in the defense. Any tax or duty levied with respect to a period of
time including but in excess of the Lease Term shall be prorated so that Lessee
shall bear only the portion thereof attributable to Lessee's use during the
Lease Term. Lessee shall keep the Aircraft free and clear of all liens and
encumbrances including any which may arising from the imposition of any tax or
duty as described in this Section B.
C. Out-of-Pocket Expenses. All out-of-pocket expenses incurred in
connection with the leasing of this Aircraft shall be borne by Lessee,
including, by way of example, fuel, pilot cost, food service, hangar and
tie-down charges, landing fees and custom fees.
ARTICLE V
Warranties
A. Lessor's Warranties. Lessor warrants and represents that:
(1) Lessor has duly authorized, executed and delivered the
Lease Agreement and has the lawful right to lease the Aircraft in accordance
with the terms and conditions hereof.
(2) To the best of Lessor's knowledge, the Aircraft has been
maintained in compliance with applicable Regulations under FAR Part 91 in an
airworthy condition.
(3) Lessor has no knowledge of undisclosed defects in the
Aircraft.
(4) ALL OTHER WARRANTIES WITH RESPECT TO THE AIRCRAFT, WHETHER
EXPRESS, IMPLIED, OR STATUTORY, SUCH AS WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE ARE HEREBY EXCLUDED AND DISCLAIMED TO THE EXTENT THEY
EXCEED THE FOREGOING WARRANTIES, WHICH WARRANTIES COMPRISE LESSOR'S ENTIRE
RESPONSIBILITY WITH RESPECT TO ANY FAILURE OR DEFECT TO THE EXCLUSION OF ALL
OTHER LIABILITY IN TORT (WHETHER FOR NEGLIGENCE OR OTHERWISE) OR IN CONTRACT,
INCLUDING ANY LIABILITY OF LESSOR WITH RESPECT TO INCIDENTAL OR CONSEQUENTIAL
DAMAGES OR LOSS OF USE.
B. Lessee's Warranties and Representations. Lessee warrants and
represents that:
(1) Lessee has full power, authority and legal right to
execute this Lease Agreement. This Lease Agreement has been duly authorized by
all necessary actions of Lessee and constitutes a valid and binding obligation
of Lessee, enforceable in accordance with its terms.
- 3 -
4
(2) No registration with, or approvals of, any
governmental agency is necessary for the performance by Lessee of its
enforceability hereof except for those which have been duly made or obtained.
(3) There is no action, litigation or other proceeding
pending or threatened against Lessee before any court or government agency which
might materially affect the business or operations of Lessee adversely or which
would jeopardize the ability of Lessee to perform its obligations under this
Lease Agreement.
ARTICLE VI
Use of the Aircraft
A. Use of Aircraft. Subject to the requirements of the U.S.
Federal Aviation Regulations (hereinafter "FAR"), the Aircraft shall be used
only for business uses of the Lessee including, without limitation,
transportation of personnel, business guests, and equipment of affiliate
companies for which compensation may be provided. The Aircraft shall not be
utilized in a business transporting persons or property for compensation or hire
pursuant to FAR Part 135 without the express written permission of the Lessor
and then only if the Lessee is certified by the Federal Aviation Administration
(hereinafter the "FAA") for such use of the aircraft, the aircraft has been
maintained and inspected to FAR Part 135 Standards and adequate insurance
coverage has been obtained for such operations from reputable insurers.
B. Lawful Operation. Lessee's use of the Aircraft under Section A
of this Article VI shall be in compliance with all laws of the jurisdictions in
which the Aircraft may be operated and in accordance with rules of the FAA. In
particular, the Aircraft shall at all times be operated within the limitations
specified in the flight and maintenance manuals assigned to the Aircraft, within
the normal operating limitations under which the Aircraft is certificated, as
well as within the requirements of all insurance policies relating to the
Aircraft.
ARTICLE VII
Records
A. Records. Lessee shall maintain the logs and records delivered
with the Aircraft under Section A of Article I in accordance with the
manufacturer's instructions and FAA rules and regulations. Such logs shall be
kept in the Aircraft and shall be available for inspection at all reasonable
times by Lessor or its representatives, without prior notice.
B. Filing of Lease with FAA -- Truth in Leasing. Lessee shall
file a signed copy of this Lease with the FAA, Aircraft Registration Branch,
Attention: Technical Section, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America 73125, within twenty-four (24) hours after the
execution of this Lease. Lessee shall keep a copy of the Lease in the Aircraft
at all times.
- 4 -
5
C. Filing of Lease with FAA Public Notice. If the Lease has been
filed for public notice with the FAA in addition to the Truth in Leasing filing
required under Section B of this Article VII, Lessee shall execute FAA AC Form
8050-26 and transmit to Lessor or file it with the FAA as Lessor instructs at
the end of the Lease Term or upon a Premature Termination of this Lease.
D. Notification to FAA of First Flight. At least forty-eight (48)
hours prior to takeoff of the first flight under this Lease, Lessee shall
notify, by telephone or in person, the FAA Flight Standards District Office,
General Aviation District Office, Air Carrier District Office, or International
Field Office nearest the airport where the first flight under the Lease will
originate, of (i) the location of the airport of departure; (ii) the departure
time; and (iii) the registration number of the Aircraft.
ARTICLE VIII
Maintenance of Aircraft
A. Maintenance. Subject to other provisions of this Lease
Agreement, Lessee shall keep the Aircraft in good operating condition and
completely airworthy during the Lease Term by performing the service and
maintenance recommended in the Gulfstream Factory Maintenance Program. The
performance of all maintenance and repair work shall be by or under the
supervision of properly qualified and trained personnel and in compliance with
FAA or other governmental requirements and shall be at the Lessee's expense.
B. Replacement of Certain Parts. In the event of failure of any
expendable or on-condition items during the Lease Term including, but not
limited to windshields, cabin pressure transducers, air data computer, relays
and aileron cables, Lessee shall repair or replace the failed unit with a
serviceable unit of comparable quality to the failed unit at Lessee's expense.
C. Required Service Changes. Lessee agrees to incorporate, or, at
its expense, arrange for the incorporation of, those mandatory service changes
(and other service changes necessary for the safety of the Aircraft) issued by
the FAA with respect to the Aircraft during the Lease Term and which Lessee
and/or Lessor deem necessary.
D. Time Between Overhaul Items. Except as expressly agreed,
Lessee agrees to perform at its expense any scheduled overhaul or replacement of
any component of the Aircraft with designated "time between overhaul" (TBO)
life, including, but not limited to hydraulic pumps and inverters, which have
become "time expired" or "run out" during the Lease Term. However, Lessor shall
pay for engine, APU and generator overhauls. In the event of the failure of any
TBO item, Lessee shall replace the failed item with a serviceable unit, provided
by Lessee, of comparable quality to the failed unit. The designation of an item
as either expendable or on-condition to which Section B of this Article VIII
applies, or as a TBO item to which this Section D of Article VIII applies, shall
be based upon Lessee's maintenance practices during the term of this Lease
Agreement.
- 5 -
6
E. Alterations. Lessee shall not make any changes in or
alterations of the Aircraft without the prior written consent of Lessor except
as necessary for compliance with the provisions of this Lease Agreement.
ARTICLE IX
Insurance
A. Third Party Liability Insurance. During the Lease Term, Lessor
shall at all times and at Lessor's sole expense carry in full force and effect
public liability and property damage insurance in respect of the Aircraft. All
policies of insurance carried in accordance with this Section A of Article IX
shall name Lessee and Business Aerotech East Corp. as additional insureds and
shall contain cross-liability endorsements. Lessee shall reimburse the expense
of such insurance to Lessor.
B. Amount of Coverage. Public liability and property damage
insurance in respect of the Aircraft covering possession, maintenance and
operation of the Aircraft shall be in minimum limits of Two Hundred Million
($200,000,000.00) Dollars combined single limit, including bodily injury,
property damage and passenger legal liability.
▇. ▇▇▇▇ Insurance. During, the Lease Term, Lessor shall at all
times and at Lessor's sole expense obtain and keep in full force and effect "All
Risk" type hull insurance on the Aircraft, including "in motion" and "not in
motion" coverage, in an amount not less than the Insured Value of the Aircraft.
Any and all policies under this Section C shall name Lessor solely as loss payee
and any recovery under the policies shall be made payable to Lessor to the
extent of the Insured Value. As used herein the term "Insurance Value" shall
mean full "replacement value".
D. War Risk Insurance. Lessor shall, before it permits and
authorizes the Lessee to operate the Aircraft in any area where the Aircraft may
be subject to war risk damage, or in any area of hostility as designated by
Lessor, at its own expense, obtain and keep in full force and effect War Risk
Insurance coverage applicable to such areas. Such insurance shall protect
against confiscation, seizure, detention and the like by any government, whether
de facto or de jure, other than the United States, in type, amount, coverage and
terms reasonably satisfactory to Lessee.
E. Substitute for War Risk Insurance. Lessor agrees to accept, in
lieu of the above described War Risk Insurance, indemnification from the United
States Government against war risks under the regular Military Airlift Command
program or the Civil Reserve Air Fleet Indemnification program for a carrier in
the event that a limited or national emergency is declared, if Lessor in its
sole discretion is reasonably satisfied with the sufficiency thereof in
complying with the same terms and conditions stated herein with regard to War
Risk Insurance.
F. Additional Terms and Conditions of Insurance. Lessee shall
provide Lessor with a copy of the certificate of insurance and policy for each
insurance obtained by Lessee
- 6 -
7
under this Article IX. Lessor will also provide same certificates to Lessee with
respect to insurance Lessor is required to obtain. Each policy shall contain an
agreement by the insurer that, notwithstanding the lapse of any such policy for
any reason or any right of cancellation by the insurer or the Lessee, or Lessor
(as the case may be) whether voluntary or involuntary, such policy shall
continue in force for the benefit of Lessor or Lessee (as the case may be) for
at least thirty (30) days (or such lesser time as may be permitted in the case
of War Risk Insurance, if such War Risk Insurance so requires) after written
notice of such lapse or cancellation shall have been given to Lessor and Lessee
and that no alteration whatsoever in any such policy which would have the effect
of reducing the coverage required pursuant to this Section F of Article IX shall
be made except on written approval of Lessor and Lessee.
▇. ▇▇▇▇▇▇ releases Lessee and its respective officers and
employees (hereinafter "Authorized Representative") from any claims for damage
to the Aircraft caused by or resulting from risks insured against under any
insurance policies carried by Lessor and in force at the time of any such
damage, including, without limitation the hull insurance referred to in Section
C, above. Lessor shall cause any such insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against Lessee and its Authorized Representatives in connection with any damage
covered by any such policy. Lessee and its Authorized Representative shall not
be liable to Lessor for any damage to the Aircraft caused by the risks insured
against under any such insurance policy.
ARTICLE X
Default and Remedies
A. Event of Default. Any of the following events shall constitute
an Event of Default under this Lease Agreement:
(1) Failure of Lessee to make any payment of rent to Lessor
when due and such failure shall continue for ten (10) days after Lessor gives
Lessee written notice of such failure.
(2) Failure of Lessee to procure or maintain any insurance
coverage required under Article IX and such failure shall continue for ten (10)
days after Lessor gives Lessee written notice of such failure.
(3) Failure of Lessee to observe or perform any other
covenant, condition, agreement or warranty contained in this Lease Agreement and
such failure shall continue for ten (10) days after Lessor gives Lessee written
notice of such failure, provided that if such failure is not reasonably
susceptible of being cured within said ten (10) day period, such additional
period of time shall be granted as may be reasonably necessary to cure same
provided that Lessee commences to cure within such ten (10) day period and
diligently prosecutes same.
(4) Inclusion of a material falsity by Lessee in any
representation or warranty of Lessee contained in this Lease Agreement or in any
documents executed and
- 7 -
8
delivered by Lessee to Lessor pursuant to the terms hereof and such failure
shall continue for ten (10) days after Lessor gives Lessee written notice of
such failure, provided that if such failure is not reasonably susceptible of
being cured within said ten (10) day period, such additional period of time
shall be granted as may be reasonably necessary to cure same provided that
Lessee commences to cure within such ten (10) day period and diligently
prosecutes same.
(5) Omission of a material fact by Lessee in any
representation or warranty of Lessee contained in this Lease Agreement or in any
documents executed and delivered by Lessee to Lessor pursuant to the terms
hereof and such failure shall continue for ten (10) days after Lessor gives
Lessee written notice of such failure, provided that if such failure is not
reasonably susceptible of being cured within said ten (10) day period, such
additional period of time shall be granted as may be reasonably necessary to
cure same provided that Lessee commences to cure within such ten (10) day period
and diligently prosecutes same.
(6) The insolvency of Lessee; the institution by or against
Lessee of any voluntary or involuntary proceedings under any bankruptcy law; the
adjudication of Lessee as a bankrupt or an insolvent; the appointment of a
receiver of Lessee's property; or any assignment by Lessee for the benefit of
its creditors.
B. Notice of Event of Default. Lessee shall give Lessor notice of
the occurrence of any Event of Default promptly upon obtaining knowledge
thereof.
▇. ▇▇▇▇▇▇'▇ Remedies. Upon the occurrence of any Event of
Default, Lessor shall be entitled to use one or more of the following remedies:
(1) Give Lessee notice which identifies the Event of Default
and states that this Lease Agreement shall terminate on the date specified
therein (hereinafter "Premature Termination"). Upon a Premature Termination, all
rights of Lessee under this Lease Agreement shall cease and Lessee shall
redeliver the Aircraft to Lessor in accordance with Article XI.
(2) Demand payment from Lessee of any and all amounts which
are due and are unpaid, or which may become due from Lessee under this Lease
Agreement plus any damages, to the extent not fully covered by insurance, in
addition thereto which Lessor shall have sustained by reason of the Event of
Default, but excluding consequential damages.
(3) Proceed by appropriate action in law or equity to enforce
performance by Lessee of the applicable covenants of this Lease Agreement or to
recover damages, to the extent not fully covered by insurance, resulting from
the Event of Default, but excluding consequential damages.
(4) Lessor agrees to take reasonable actions to mitigate
damages upon the occurrence of any Event of Default.
D. Waiver of Event of Default. Lessor may elect not to exercise
any one or all of its rights to seek a remedy for an Event of Default under
Section C of this Article XI. Lessor
- 8 -
9
may also rescind a Premature Termination of this Lease Agreement by giving
Lessee notice to this effect prior to the date of such Premature Termination.
However, no waiver of enforcement of any of its rights under this Lease
Agreement with respect to any Event of Default shall operate to affect or impair
unenforced rights with respect to that Event of Default or any right with
respect to another Event of Default whether past or future.
▇. ▇▇▇▇▇▇'▇ Costs of Enforcement. If Lessor brings an action to
enforce any of its rights under this Lease Agreement and is entitled to a
judgment, Lessor may recover reasonable expenses attendant to that action,
including reasonable attorney's fees, and the amount thereof shall be included
in such judgment.
ARTICLE XI
Return of Aircraft
A. Lessee's Obligation to Redeliver Aircraft. At the end of the
Lease Term, or upon the Premature Termination of the Lease Agreement, Lessee
shall redeliver the Aircraft at its own expense to any delivery point within the
continental United States specified by Lessor.
B. Condition of Aircraft. Except for any casualty losses for
which insurance proceeds have been received, or are receivable, by Lessor, upon
redelivery, the Aircraft:
(1) Shall be clean by the best commercial airline operating
standards;
(2) Subject to Section D of Article VIII, shall have installed
thereon the engines, equipment, accessories and parts as installed at the
commencement of the Lease Term or replacements made in accordance with Section B
of Article VIII; and
(3) Subject to Section D of Article VIII, shall be in the same
or better condition as when originally delivered to Lessee, ordinary wear and
tear excepted, and subject to changes or alterations properly made by Lessee as
permitted or required under this Lease Agreement.
C. Failure of Lessee to Redeliver Aircraft. If Lessee does not
redeliver the Aircraft as required under Section A of this Article XII, Lessor
may cause immediate possession of the Aircraft to be taken by its agent without
liability to return to Lessee any rent previously paid and free of any claims of
Lessee whatsoever. In taking possession under this Section C of Article XII,
Lessor may remove the Aircraft from the possession and use of Lessee and for
such purpose may enter upon Lessee's premises where the Aircraft may be located
and use and employ in connection with such removal any supplies, services, means
or other facilities of Lessee with or without process of law.
D. Return of Records. All records kept in the Aircraft pursuant
to Section A of Article VII shall be returned with the Aircraft upon its
redelivery to Lessor.
- 9 -
10
E. Risk of Loss. Lessor shall bear the risk of loss with respect
to the Aircraft at all times during the term of this Lease Agreement, except for
violation of law or regulation by Lessee with respect to which the hull
insurance policy referred to in Section C of Article IX hereof does not apply
and provide coverage.
F. Additional Costs. Any and all additional expenditures with
respect to the Aircraft, except for those set forth in Exhibits X and Y, and
future engine overhauls, APU overhauls and DC generator overhauls, shall be the
sole cost and expense of Lessee.
ARTICLE XII
Miscellaneous
A. Identification. The manufacturer's serial numbers affixed to
the Aircraft and the engines shall not be removed or defaced. In the event of
such removal or defacement, Lessee shall promptly cause the assigned serial
numbers to be restored.
B. Assignment by Lessee. Lessee shall not make any assignment or
sublease of this Lease Agreement nor of any rights and interest, or delegate any
obligations under this Lease Agreement without the prior written consent of
Lessor.
C. Assignment of Lease/Sale of Aircraft by Lessor. Lessor may not
assign its rights or obligations hereunder without the consent of Lessee.
However Lessor, at any time, in its sole discretion, can sell the Aircraft. In
the event of such a sale of Aircraft by Lessor, Lessor or Lessee, at either
parties' sole discretion, may terminate this Lease upon thirty (30) days written
notice. Notwithstanding anything contained herein, Lessor may assign its rights
and obligations hereunder to any entity or person controlled by Lessor, under
common control with Lessor, or which controls the Lessor (an "Affiliate"). Such
Affiliate shall agree to be bound by the terms of this Lease.
D. Notice. Any notice given under this Lease Agreement shall be
sent by registered mail, certified mail or telex to the recipient Party at its
mailing address. The date of delivery of the notice to the post office shall be
the date of the mailing.
E. Scope and Change of Lease. The terms and conditions contained
herein constitute the entire agreement of the Parties with respect to the use of
the Aircraft by Lessee. This Lease Agreement shall supersede all communications,
representations and agreements, either oral or written, between the Parties with
respect to the lease of the Aircraft. No agreement or understanding which
modifies the terms and conditions herein shall be binding upon either Party
unless reduced to writing and signed by a duly authorized representative of each
Party.
F. Liens and Encumbrances. Without the prior written consent of
Lessor, Lessee shall not create or incur any mortgage, lien, charge or
encumbrances of any kind on any of its rights under this Lease Agreement, on the
Aircraft or any part thereof. If such encumbrances come into existence, Lessee
at its sole expense shall promptly remove the same.
- 10 -
11
G. Successors and Assigns. This Lease Agreement shall be binding
on and shall inure to the benefit of Lessor and Lessee and their respective
successors and assigns, provided that any assignment or sublease shall be made
in accordance with the terms hereof and no other persons shall have or acquire
any rights under or by virtue of this Lease Agreement.
H. Survival of Lease Provisions. All provisions of this Lease
Agreement which must survive the Lease Term for their full observance and
performance shall survive the Lease Term.
I. Governing Law. This Lease Agreement shall be governed,
construed and interpreted in accordance with the laws of the Commonwealth of
Pennsylvania.
J. Arbitration. Any dispute arising out of, or relating to, this
Lease Agreement shall be submitted to arbitration by written notice to the other
party or parties within one (1) year of the event giving rise to the dispute.
The arbitration will be conducted in New York, NY in accordance with the
procedures in this document and the Arbitration Rules of the American
Arbitration Association then in effect ("AAA RULES").
The arbitration will be conducted before a panel of three arbitrators,
regardless of the size of the dispute, to be selected as provided in the AAA
Rules. Any issue concerning the extent to which any dispute is subject to
arbitration, or concerning the applicability, interpretation, or enforceability
of these procedures, including any contention that all or part of these
procedures are invalid or unenforceable, shall be governed by the Federal
Arbitration Act and resolved by the arbitrators. No potential arbitrator may
serve on the panel unless he or she has agreed in writing to abide and be bound
by these procedures.
The result of the arbitration will be binding on the parties, and
judgment on the arbitrators' award may be entered in any court having
jurisdiction.
K. Truth in Leasing. THE AIRCRAFT WILL BE MAINTAINED AND
INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE
DURING THE LEASE TERM. IN THE EVENT LESSEE DECIDES TO OPERATE THE AIRCRAFT UNDER
FAR PART 135, LESSEE AGREES THAT THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED
IN ACCORDANCE WITH FAR PART 135 REGULATIONS.
ITT FLIGHT OPERATIONS, INC., IS CONSIDERED RESPONSIBLE FOR OPERATIONAL
CONTROL OF THE AIRCRAFT IDENTIFIED AND TO BE OPERATED UNDER THIS LEASE AND FOR
COMPLIANCE WITH APPLICABLE FAR.
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, GENERAL AVIATION DISTRICT OFFICE OR AIR
CARRIER DISTRICT OFFICE.
- 11 -
12
I, ▇▇▇▇▇▇▇ ▇▇▇▇, CHIEF PILOT OF ITT FLIGHT OPERATIONS, INC., CERTIFY
THAT I AM RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT IDENTIFIED IN THIS
LEASE AGREEMENT AND I UNDERSTAND MY RESPONSIBILITIES FOR COMPLIANCE WITH
APPLICABLE FEDERAL AVIATION REGULATIONS. FURTHER, I CERTIFY THAT I AM FAMILIAR
WITH AND KNOWLEDGEABLE OF THE CONTENTS OF FAR 91.23,14 C.F.R.Section 91.23 AND
THE ADVISORY CIRCULARS THEREUNDER (TRUTH IN LEASING).
Signed /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------
IN WITNESS WHEREOF, each party has caused this Dry Lease Agreement to
be signed by its duly authorized representative on the date first above written.
STAR FLIGHT L.L.C. ITT FLIGHT OPERATIONS, INC.
(LESSOR) (LESSEE)
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- ---------------------------------
Title EXECUTIVE VICE PRESIDENT Title PRESIDENT
----------------------------- ------------------------------
Attest: Attest:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- ------------------------------------
APPENDIX A -- Description of Aircraft
APPENDIX B -- Acceptance Supplement
- 12 -
13
FIRST AMENDMENT TO THE
AIRCRAFT DRY LEASE AGREEMENT
This First Amendment to the Aircraft Dry Lease Agreement is entered
into as of the 25th day of August 1998 (this "Amendment") by and between the
Star Flight L.L.C. ("SF") and ITT Flight Operations, Inc. ("ITT")
WITNESSETH:
WHEREAS, SF and ITT entered into that certain Aircraft Dry Lease
Agreement dated as of February 6, 1998, (the "Lease Agreement"); and
WHEREAS, SF and ITT wish to make certain modifications to the Lease
Agreement to reflect more accurately the understandings and agreements among SF
and ITT.
NOW, THEREFORE, SF and ITT agree that the Lease Agreement is hereby
amended as follows:
1. Article II of the Lease Agreement is hereby deleted in its
entirety and replaced with the following:
"The Lease Term shall be for the one-year period, commencing
on February 6, 1998, and continuing through February 5, 1999, and shall
thereafter be automatically renewed for successive one year periods. After
February 5, 1999, either party hereto may terminate the Lease Agreement, with or
without cause, by providing the other party ninety (90) days prior written
notice to terminate the Lease Agreement."
This First Amendment may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document. Capitalized terms not
otherwise defined herein shall be defined as set forth in the Lease Agreement.
Except as modified herein, the Lease Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, this First Amendment has been executed by all of
the parties to the Lease Agreement as of August 25, 1998.
(SIGNATURES ON THE NEXT PAGE)
- 16 -
14
STAR FLIGHT L.L.C.,
a Connecticut limited liability company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
ITT FLIGHT OPERATIONS, INC.,
a Pennsylvania corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
- 17 -
