EXHIBIT 10.27
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AIRCRAFT LEASE AGREEMENT
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between
CDT CORP.
("Lessor")
and
COLONIAL DATA TECHNOLOGIES CORP.
("Lessee")
Effective as of this 1st day of October, 1996
INDEX
ARTICLE PAGE
ARTICLE 1. LEASE OF AIRCRAFT AND AIRCRAFT USE................... 4
1.01. Lease of Aircraft........................... 4
1.02. Use of Aircraft............................. 4
1.03. Liens....................................... 5
1.04. Alteration to Aircraft...................... 5
ARTICLE 2. MAINTENANCE AND REPAIR............................... 5
ARTICLE 3. COMPENSATION......................................... 5
3.01. Payment for Lease of Aircraft............... 5
3.02. Time of Payment............................. 5
ARTICLE 4. EXPENSES, TAXES AND OTHER INCIDENTAL
COSTS.............................................. 6
ARTICLE 5. INSURANCE............................................ 6
5.01. Liability Insurance......................... 6
5.02. Hull Insurance.............................. 6
5.03. General Policy Provisions................... 6
(a) Primary Insurance................... 6
(b) Coverage of Each Insured............ 6
(c) Waiver of Certain Rights............ 7
(d) Breach of Warranty.................. 7
(e) Notice of Termination or Changes.... 7
(f) Nonliability for Premiums........... 7
(g) Identity of Insurers................ 7
5.04. Operation Under Insurance................... 7
ARTICLE 6. INDEMNIFICATION AND LIMITATION OF
LIABILITY.......................................... 7
6.01. Property Damage and Personal Injury......... 7
6.02. Governmental Penalties...................... 8
6.03. Limitation of Liability..................... 8
ARTICLE 7. TERM AND TERMINATION RIGHTS.......................... 8
7.01. Term........................................ 8
7.02. Termination Rights.......................... 8
7.03. Return of Aircraft.......................... 8
ARTICLE 8. LOSS OR DAMAGE TO AIRCRAFT........................... 9
ARTICLE 9. GENERAL.............................................. 9
9.01. Assignment.................................. 9
9.02. Notice...................................... 9
9.03. Force Majeure............................... 10
9.04. Governing Law............................... 10
9.05. Headings.................................... 10
9.06. Execution................................... 10
9.07. Invalidity, Illegality or Unenforceability.. 11
9.08. Entire Agreement............................ 11
AIRCRAFT LEASE AGREEMENT
THIS AGREEMENT, effective this 1st day of October, 1996, between CDT Corp.,
a corporation organized and existing under the laws of the State of Delaware,
U.S.A., with offices at c/o Colonial Data Technologies Corp., ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. (hereafter "Lessor"), and
Colonial Data Technologies Corp., a corporation organized and existing under the
laws of the State of Delaware, U.S.A., with offices at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereafter "Lessee").
W I T N E S S E T H:
WHEREAS, Lessor owns a Cessna 441 Aircraft, manufacturer's serial number
441-0221, FAA registration number N881CD, and all instruments, equipment, parts,
and accessories attached thereto (hereafter "Aircraft") which Lessor desires to
lease to Lessee; and
WHEREAS, Lessee desires to lease said Aircraft from Lessor to conduct
operations pursuant to Title 14 of the U.S. Code of Federal Regulations Part 91
(FAR Part 91) and other applicable laws and regulations;
NOW, THEREFORE, in consideration of the foregoing premises, which are
hereby incorporated and made part of the terms and conditions of this Agreement,
and the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE 1.
LEASE OF AIRCRAFT AND AIRCRAFT USE
1.01. Lease of Aircraft. Lessor shall lease to Lessee and Lessee shall
lease from Lessor the Aircraft during the term of this Agreement, subject to the
terms and conditions set forth herein. Lessor shall at all times retain title to
and ownership of the Aircraft, together with all replacement parts, additional
equipment, repairs and accessories affixed thereto at the beginning of and
during the lease period. At no time shall Lessee attempt to register the
Aircraft in any country. During the term of the lease hereunder, Lessee shall
have operational control of the Aircraft.
1.02. Use of Aircraft. Lessee agrees to use the Aircraft in a safe, careful
and prudent manner in full compliance with FAR Part 91 of the regulations of the
U.S. Federal Aviation Administration (FAA) and any other regulations, rules,
laws, decrees, or treaties applicable to the operation of the Aircraft
hereunder. Lessee shall allow the Aircraft to be operated only by duly licensed
and qualified pilot(s) who shall be employed directly by Lessee.
1.03. Liens. Lessee shall not pledge, loan, or mortgage the Aircraft, or
permit any liens or other encumbrance of any nature or description to be
incurred upon the Aircraft during the term of this Agreement. If, because of any
act or omission by Lessee, any lien is placed on the Aircraft, Lessee shall,
within five (5) days after receipt of notice of the filing of any lien, take all
action necessary to remove the lien.
1.04. Alteration to Aircraft. Lessee shall not alter, modify, remove,
improve, or install any equipment in or on the Aircraft without Lessor's prior
written consent except to the extent such alterations, modifications, or
improvements are required by the FAA, by the manufacturer of the Aircraft or by
the manufacturer of any of its component parts by way of airworthiness
directives, manufacturer's mandatory service bulletins, or similar publications.
Lessee shall advise Lessor and Lessor shall advise Lessee upon receipt of
manufacturer's optional service bulletins and Lessee and Lessor shall consult in
good faith with each other with respect to compliance with and payment for said
optional service bulletins.
ARTICLE 2.
MAINTENANCE AND REPAIR
All inspections, maintenance and repairs on the Aircraft, including but not
limited to maintenance, repairs and modifications required by the manufacturer
or by any governmental authority, shall be performed by Lessee at its sole cost
unless otherwise agreed to by the parties.
ARTICLE 3.
COMPENSATION
3.01. Payment for Lease of Aircraft. Lessee agrees to pay Lessor rental
payments of One Hundred Dollars (U.S. $100) per flight hour or fraction thereof.
For purposes hereof, a flight hour shall be measured from the time the Aircraft
takes off to the time the Aircraft lands. Lessee agrees to pay Lessor for a
minimum of three hundred (300) flight hours per year and One Hundred Dollars
($100.00) per flight hour in excess of 300 flight hours.
3.02. Time of Payment. Payments shall be made monthly in arrears by
Lessee. Payments shall be due within fifteen (15) days after the end of each
month, the first payment to be due November 15, 1996, and shall be sent to the
address set forth at Paragraph 9.02, unless otherwise directed by Lessor. Lessee
shall submit a copy of the flight logs for the previous month and shall pay any
additional rental payments due under Paragraph 3.01 along with each monthly
payment.
ARTICLE 4.
EXPENSES, TAXES AND OTHER INCIDENTAL COSTS
Lessee shall be responsible for all expenses incurred for use and operation
of the Aircraft during the term of this Agreement, including but not limited to
fuel, hangaring, storage, insurance, ground services, landing fees, property and
use taxes, and other governmental assessments or charges relating to the use and
operation of the Aircraft by Lessee. If any of such costs, expenses, fees, or
charges are billed to Lessor, Lessor shall immediately notify and provide such
bills, statements or invoices to Lessee which relate to such costs, expenses,
fees, or charges and Lessee shall take all reasonable steps to pay such bills in
a timely manner. In the event Lessor pays any such costs, expenses, fees, or
charges on behalf of Lessee, a written invoice showing such amounts shall be
submitted to Lessee for reimbursement in a timely manner.
ARTICLE 5.
INSURANCE
5.01. Liability Insurance. Lessor shall maintain in effect, during the term
of this Agreement, liability insurance, including war risk coverage, insuring
Lessor, including its employees, officers and directors, and naming Lessee and
its assignees, its employees, officers and directors as additional insureds,
against all liability for loss, injury, damages, or claims caused by or arising
out of or in connection with this Agreement, or with the possession, operation,
or control by Lessee of the Aircraft, including injuries to or death of
passengers, injuries to or deaths of third persons and damage to property up to
an aggregate limit of Seventy Million U.S. Dollars ($70,000,000.00) as a result
of any one occurrence.
5.02. Hull Insurance. Lessee shall maintain, during the term of this
Agreement, policies of all-risk aircraft flight and ground hull insurance on the
Aircraft against any and all loss of or damage to the Aircraft, including war
risk coverage.
5.03. General Policy Provisions. The insurance policies set forth in
Paragraphs 5.01 and 5.02 shall:
(a) Primary Insurance. Be primary and without right of contribution from
other insurance obtained by either Lessor or Lessee which may provide coverage
to Lessor or Lessee, or any other party indemnified under Article 6 hereof, with
respect to such person's interest in the Aircraft or with respect to or arising
out of the transactions contemplated by this Agreement.
(b) Coverage of Each Insured. Expressly provide that all the provisions
thereof, except the agreed values and the limits of the liability of the insurer
under such policy, shall operate in the same manner as if there were a separate
policy covering each insured.
(c) Waiver of Certain Rights. Waive any right of the insurers to any
subrogation, setoff, recoupment, counterclaim, or any other deduction, whether
by attachment or otherwise, in respect of any liability of Lessee or any
additional insured.
(d) Breach of Warranty. Provide that, in respect of Lessor and each
additional insured, such insurance shall not be invalidated by any action or
inaction by Lessor and shall inure the interests of Lessor and each additional
insured, regardless of any breach or violation by Lessor of any representation,
warranty, declaration or condition contained in such policy.
(e) Notice of Termination or Changes. Provide for not less than 30 days'
prior written notice to be received by Lessor or Lessee before any lapse,
alteration, termination, or cancellation of the insurance evidenced thereby
shall be effective as to Lessor or Lessee, except that war-risk and allied
perils policies may provide for not less than seven days' prior written notice
or such lesser or greater notice as shall at the time be customary in the
aviation insurance industry generally, and which are then customarily in effect.
(f) Nonliability for Premiums. Provide that neither Lessee nor any other
additional insured shall be liable for any insurance premium.
(g) Identity of Insurers. Be with insurance companies' underwriters or
funds of recognized responsibility.
5.04. Operation Under Insurance. Lessee will not take any action that would
cause the insurance set forth in this Article to be suspended, impaired or
cancelled.
ARTICLE 6.
INDEMNIFICATION AND LIMITATION OF LIABILITY
6.01. Property Damage and Personal Injury. Each party hereto shall defend,
indemnify, and hold harmless the other party, its officers, directors,
employees, assignees, and agents from and against any and all loss or damage,
including but not limited to attorneys' fees, arising from damage to or
destruction of property (except Lessee shall not indemnify Lessor with respect
to damage to or destruction of the Aircraft, Lessor bearing the risk of loss of
Aircraft) or injury or death of persons which are in any manner whatsoever
related to the obligations of that party under this Agreement, except where due
to the other party's breach of representation or covenant in this Agreement or
gross negligence of the other party, its directors, officers, employees, or
agents.
6.02. Governmental Penalties. Lessee agrees to indemnify, defend, and hold
harmless Lessor, its officers, directors, employees, and agents from and
against:
(a) any and all fines, forfeitures, lawful seizures, or confiscations by a
governmental authority, and (b) any and all penalties and related costs,
including but not limited to attorneys' fees, arising out of any violation of
FAR Part 91, or any other regulations, rules, laws, decrees or treaties
("Governmental Penalties"), provided such Governmental Penalties arise from
directions pertaining to operation of the Aircraft issued by Lessee or its
agents or from an act or omission of Lessee not pertaining to operation of the
Aircraft.
6.03. Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL LESSOR BE
LIABLE FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES WHETHER OR NOT CAUSED BY LESSOR'S
NEGLIGENCE.
ARTICLE 7.
TERM AND TERMINATION RIGHTS
7.01. Term. The term of this Agreement shall be for two (2) years,
commencing on the date first written above.
7.02. Termination Rights. Notwithstanding Paragraph 7.01 hereof, this
Agreement may be terminated.
(a) immediately, if the Aircraft should be lost or substantially damaged
and, as a result thereof, be declared a total or constructive loss, or if Lessor
shall determine repair of the Aircraft is not advisable; or
(b) immediately, if the other party becomes insolvent, commits an act of
bankruptcy or bankruptcy proceedings are begun by or against the other party; or
(c) by either party upon thirty (30) days' written notice to the other
party in the event the other party is in breach of a material term or condition
of this Agreement. In such event, termination shall be effective on the date
specified in said notice, unless the default, which must be specified in the
notice, has been corrected by the party to whom notice is given and such
correction has been communicated to the party giving notice of termination
before the expiration of the thirty (30) day period; or
(d) by Lessor in its sole discretion upon the giving of thirty (30) days'
written notice to Lessee.
7.03. Return of Aircraft. Upon termination of this Agreement, Lessee shall
return the Aircraft to Lessor at a mutually agreeable location and in the same
condition as originally existed at the beginning of the lease period, normal
wear and tear excepted. The Aircraft shall be clean by industry standards and
shall be in an airworthy condition. Lessee shall also deliver to Lessor all
documents required by the FAA to be maintained with respect to the Aircraft and
all such documents shall be in full compliance with FAA rules, regulations,
requirements, and guidance for FAR 91 operations. Lessee shall be responsible
for and shall cause to be performed prior to the return of the Aircraft all
Airworthiness Directives issued during the term of this Lease, whether or not
the terms of such Airworthiness Directives require compliance prior to the
expiration of the Lease. Lessee shall return the Aircraft with no fewer than
2500 hours and 2000 cycles remaining on the Aircraft until its next scheduled
shop visit. Upon termination of this Agreement, Lessor, at its option and in
addition to any other remedies, may take possession of and remove the Aircraft
with notice to Lessee and with or without legal proceedings.
ARTICLE 8.
LOSS OR DAMAGE TO AIRCRAFT
In the event of loss or damage to the Aircraft, Lessee shall immediately
report said loss or damage to Lessor and to any and all applicable governmental
agencies, and shall furnish such information and expeditiously execute or assist
Lessor in preparing and executing such documents as may be required and
necessary for Lessor to collect the proceeds from any insurance policies. Lessor
shall bear the risk of damage to, or destruction of, the Aircraft.
ARTICLE 9.
GENERAL
9.01. Assignment. Lessee may not sublease the Aircraft, except to a
wholly-owned subsidiary or affiliate of Lessee or assign this Agreement, in
whole or in part, without the prior written consent of Lessor. Lessor may not
assign this Agreement, in whole or in part, except to a wholly owned subsidiary
of Lessor in Lessor's sole discretion upon providing written notice to Lessee.
Upon providing such notice to Lessee of an assignment by Lessor to a
wholly-owned subsidiary, Lessor shall, if the subsidiary shall have a net worth
equal to or greater than that of Lessor,l be relieved of any obligations arising
thereafter under the terms of this Agreement to the extent of such assignment.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors or assigns.
9.02. Notice. Any notice required by this Agreement shall be considered as
having been duly given if such notice clearly identifies this Agreement and is
sent by telecopy, telefax, express or overnight courier service, or by certified
mail, postage prepaid, to the respective parties at the following addresses:
If to Lessor:
CDT Corp.
c/o Colonial Data Technologies Corp.
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lessee:
Colonial Data Technologies Corp.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the respective parties hereto shall from time
to time designate in writing to the other party.
9.03. Force Majeure. If, by reason of Force Majeure (as defined below), any
party is rendered unable, wholly or in part, to perform any of its obligations
hereunder, such obligation shall be suspended so far as it is affected by Force
Majeure during, but not longer, than the continuance thereof. As used herein,
Force Majeure shall mean acts of God; acts of public enemy; acts of any
sovereign national or any political subdivision of any department or regulatory
agency thereof or entity created thereby whether or not such acts prove valid;
severe weather conditions; acts of any person engaged in subversive activity or
sabotage; fires, explosions or other catastrophes; strikes, slowdowns, lockouts,
or other labor disputes; or any similar cause beyond the party's control.
9.04. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAS OF THE STATE OF CONNECTICUT.
9.05. Headings. Headings are included in this Agreement for convenience
only and are to be disregarded in any interpretation or construction of this
Agreement.
9.06. Execution. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one counterpart.
9.07. Invalidity, Illegality or Unenforceability. In case any provision
contained herein shall for any reason be invalid, illegal or unenforceable under
applicable law in any respect, such provision shall be ineffective to the extent
of such invalidity, illegality or unenforceability, without invalidating the
remainder of such provision or the remainder of this Agreement, which shall be
construed as if such provision had never been contained herein.
9.08. Entire Agreement. This Agreement constitutes the entire agreement
between the parties relating to the subject matter hereof and supersedes all
prior agreements and understandings, whether written or oral, between the
parties concerning the subject matter contained herein. This Agreement shall not
be varied except in writing signed by both of the parties.
THE AIRCRAFT, N881CD, HAS BEEN MAINTAINED AND INSPECTED UNDER FAR 91 FROM
AT LEAST ONE YEAR BEFORE EXECUTION OF THIS AGREEMENT THROUGH THE DATE OF THE
EXECUTION OF THIS AGREEMENT. IT WILL BE MAINTAINED AND INSPECTED UNDER FAR 91
FOR OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT FOR THE DURATION OF THIS
LEASE. LESSEE IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT IDENTIFIED
AND TO BE OPERATED UNDER THIS LEASE.
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 OR GENERAL AVIATION DISTRICT OFFICE.
I, THE UNDERSIGNED, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER OF COLONIAL DATA TECHNOLOGIES CORP., CERTIFY THAT COLONIAL DATA
TECHNOLOGIES CORP. IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT AND
THAT COLONIAL DATA TECHNOLOGIES CORP. UNDERSTANDS ITS RESPONSIBILITY FOR
COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed and delivered by a duly authorized officer on the date first set forth
above.
COLONIAL DATA TECHNOLOGIES CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and CFO
CDT Corp.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President