Exhibit 10.42
WARRANTY ASSIGNMENT AGREEMENT AND CONSENT [N288SK]
THIS WARRANTY ASSIGNMENT AGREEMENT AND CONSENT [N288SK] (this "Assignment")
is dated as of the 29th day of June, 2001, and is among Solitair Corp., a
Delaware corporation ("Seller"), as assignor, ▇▇▇▇▇ Fargo Bank Northwest,
National Association, a United States national banking association ("WFB"), not
in its individual capacity but solely as Owner Trustee under a Trust Agreement
dated as of June 5, 2001 (the "Trust Agreement") between WFB and Mitsui & Co.
(U.S.A.), Inc. (the "Beneficiary") (in such capacity hereinafter referred to as
"Buyer"), as assignee, Chautauqua Airlines, Inc., a New York corporation, as
operator under the Lease Agreement as defined below ("Operator"), and
Rolls-Royce Corporation, a Delaware corporation ("Rolls-Royce"), as consenting
party.
W I T N E S S E T H:
WHEREAS, Seller, Operator, and Rolls-Royce have entered into that certain
Rolls-Royce AE3007A Series Engine Warranty Agreement ("Warranty Agreement")
dated as of April 30, 1999 pursuant to which Rolls-Royce granted to Seller and
Operator certain Warranties as defined therein for the Engines and Supplies; and
WHEREAS, Seller owns an Embraer model EMB-145LR aircraft, ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Registration Number N288SK (the "Aircraft") with
two (2) installed ▇▇▇▇▇▇▇ AE3007A1P engines bearing manufacturer's serial
numbers CAE311866 and CAE311867), manufactured by ▇▇▇▇▇▇▇ Engine Company, Inc.,
a subsidiary of Rolls-Royce, including Supplies as defined in the Warranty
Agreement (the "Engines"); and
WHEREAS, pursuant to that certain Aircraft Purchase Agreement [N288SK] (the
"Purchase Agreement") dated as of June 5, 2001 among Seller, Beneficiary, Buyer
and Lessee, Seller has agreed to sell, and Buyer has agreed to buy, the Aircraft
with the installed Engines; and
WHEREAS, the sale of the Aircraft to Buyer pursuant to the Purchase
Agreement is conditioned upon Seller assigning to Buyer (as consented to by
Rolls-Royce) all of the assignable warranties granted by Rolls-Royce to Seller
pursuant to the Warranty Agreement with respect to the Engines; and
WHEREAS, in accordance with the Warranty Agreement, Rolls-Royce must
consent to any assignment of the Warranties; and
WHEREAS, pursuant to that certain Aircraft Lease Agreement [N288K] dated as
of June 5, 2001 ("Lease Agreement", capitalized terms not defined herein being
assigned the meanings given therein) between Buyer and Operator, Buyer shall
lease the Aircraft and assign the Assigned Warranties (as that term is defined
herein) to Operator subject to conditions; and
WHEREAS, Seller and Buyer wish to accomplish such assignments pursuant to
the terms and conditions of this Assignment, and Rolls-Royce wishes to consent
to such assignments.
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NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Purchase Agreement and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
hereby agree (and Rolls-Royce hereby consents) as follows:
1. Seller hereby assigns and transfers to Buyer and Buyer hereby accepts
such assignments and transfer of, the Warranties and indemnitees under the
Warranty Agreement to the extent that they relate to the Engines described
above.
2. Rolls-Royce hereby consents to the assignment of the Warranties by
Seller to Buyer under and pursuant to the terms and conditions of this Agreement
and further consents to the assignment of the Warranties by Buyer to Operator.
Notwithstanding anything in this Assignment to the contrary, so long as no Event
of Default shall have occurred and the Lease Agreement shall not have been
terminated under Section 17.02 thereof, Operator may, to the exclusion of Buyer,
exercise in Operator's name the right to obtain any recovery or benefit
resulting from the enforcement of any of the Warranties under the Warranty
Agreement in respect of the Engines and may exercise all other rights and powers
of the Buyer with respect to the Warranties, and may without the consent of
Buyer, enter into amendments or modifications thereof or terminate some or all
of the Warranties and replace them with power by the hour agreements (which
agreements will not be assigned to the Buyer), provided that Rolls-Royce hereby
confirms to the Buyer that in the event that an Event of Default shall have
occurred and the Lease Agreement shall have been terminated under Section 17.02
thereof, Buyer shall be entitled to exercise all rights and powers of the Buyer
with respect to the Warranties notwithstanding that the Operator has entered
into such power by the hour agreements, to the same extent as if none of such
Warranties had been terminated or replaced by such power by the hour agreements.
Rolls-Royce shall not be deemed to have knowledge of, and need not recognize the
occurrence or discontinuance of, any Event of Default under, or termination of,
the Lease Agreement, unless and until Rolls-Royce has received written notice
thereof from Buyer (including by telex or telecopy) addressed to Rolls-Royce
Corporation at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President Commercial, and, in acting in accordance with the
terms and conditions of the Warranty Agreement and this Assignment, Rolls-Royce
may act with acquittance and conclusively rely upon any such notice. If
Rolls-Royce so receives notice from Buyer that an Event of Default shall have
occurred and the Lease Agreement shall have been terminated under Section 17.02
thereof, Rolls-Royce will have no further contractual obligation under the
Warranty Agreement or power by the hour agreements to the Operator, if
applicable, and will, to the extent not already provided to the Operator,
perform all the duties and obligations under the Warranty Agreement with respect
to the Warranties for the benefit of Buyer and, to the extent not already paid
to the Operator, will make any and all payments that it thereafter is required
to make in respect of the Warranties directly to Buyer at the account or
location as Buyer from time to time notifies Rolls-Royce in writing.
3. Anything herein contained to the contrary notwithstanding:
(a) Except with respect to the Engines specifically assigned hereunder,
Buyer and Beneficiary shall have no obligation or liability under the Warranty
Agreement by reason of, or arising out of, this Assignment, or be obligated to
perform any of Seller's duties or obligations
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under the Warranty Agreement, to make any payment, to present or file any
claim, or to take any other action to collect or enforce any claim for any
payment assigned hereunder;
(b) Buyer confirms, for Rolls-Royce's benefit, that in exercising any
rights under the Warranty Agreement or in making any claim with respect to the
Engines or other goods and services delivered or to be delivered pursuant to the
Warranty Agreement, the terms and conditions of the Warranty Agreement shall
apply to and bind Buyer (and any assignee of Buyer) to the same extent as
Seller; and
(c) Except as expressly stated herein, nothing contained herein shall
subject Rolls-Royce or Seller to any liability to which it, as the case may be,
would not otherwise be subject under the Warranty Agreement or modify in any
respect the rights of Rolls-Royce or Seller thereunder.
(d) Rolls-Royce shall have no obligation or liability to Seller with
respect to the Engines specifically assigned hereunder after the date of closing
and the transfer of title.
5. This Assignment (and the acknowledgement and consent to be signed by
Rolls-Royce) may be executed in separate counterparts, each of which when so
executed and delivered shall be an original and all such counterparts shall
together constitute one and the same instrument.
6. This Assignment shall be governed by and construed in accordance with the
laws of the State of New York without reference to any choice of law rules
thereof that would result in a choice of law other than that of New York.
7. WFB is entering into this Assignment solely as Owner Trustee under the
Trust Agreement and not in its individual capacity and neither WFB nor any
entity acting as successor Owner Trustee or additional Owner Trustee under the
Trust Agreement shall be personally liable for, or for any loss in respect of,
any of the statements, representations, warranties, agreements or obligations
stated to be those of the Buyer hereunder, as to which all interested parties
shall look solely to the Trust Estate, except to the extent expressly provided
otherwise in the other Operative Documents, PROVIDED HOWEVER, that nothing in
this paragraph 7 shall be construed to limit in scope or substance the liability
of WFB or any entity acting as successor Owner Trustee or additional Owner
Trustee under the Trust Agreement in its individual capacity for the
consequences of its own willful misconduct or gross negligence or (in receiving,
handling or remitting funds) its simple negligence, or the inaccuracy or breach
of its representations, warranties or covenants made in such capacity in any
other Operative Documents.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Warranty Assignment
Agreement and Consent [N288SK] to be duly executed as of the date and year first
above written.
SOLITAIR CORP.
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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NAME: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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TITLE: Vice President
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▇▇▇▇▇ FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee under the
Trust Agreement
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
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CHAUTAUQUA AIRLINES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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Consented to by ROLLS-ROYCE CORPORATION
By:
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Authorized Officer
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NOTE TO EXHIBIT 10.42
The two additional Warranty Assignment Agreements are substantially identical
in all material respects to the filed Warranty Assignment Agreement except as
follows:
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TAIL NUMBER CLOSING DATE OWNER-PARTICIPANT
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N286SK June, 2001 Mitsui & Co.
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N287SK June, 2001 Mitsui & Co.
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