EXHIBIT 10.14
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY [***]. THE
CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
F-100 LEASE #136
(TAIL # N133ML)
DUPLICATE ORIGINAL
THE SINGLE EXECUTED ORIGINAL OF THIS AGREEMENT MARKED "ORIGINAL" SHALL BE THE
"ORIGINAL" AND ALL OTHER COUNTERPARTS OF THIS AGREEMENT SHALL BE DUPLICATES AND
MARKED "DUPLICATE" OR "DUPLICATE ORIGINAL". TO THE EXTENT THAT THIS AGREEMENT
AND CERTIFICATE OF ACCEPTANCE RELATED THERETO CONSTITUTES CHATTEL PAPER, AS SUCH
TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION, NO SECURITY INTEREST MAY BE CREATED THROUGH TRANSFER OR POSSESSION
OF ANY COUNTERPART OTHER THAN THE "ORIGINAL".
AIRCRAFT OPERATING LEASE AGREEMENT
No. 136
Dated as of
December 15, 1995
between
FIRST SECURITY BANK OF UTAH, N.A.,
not in its individual
capacity but solely as trustee,
as
Lessor
and
MIDWAY AIRLINES CORPORATION
as
Lessee
Aircraft : Fokker 100
Serial No : 11330/N133ML
INDEX
ARTICLE PAGE
------- ----
1. Definitions.........................................................1
2. Agreement to Lease.................................................12
3. Term; Delivery; Acceptance; Delay..................................15
4. Registration and Title.............................................16
5. Possession and Use ................................................18
6. Charges, Method of Payment and Financial Information...............23
7. Maintenance........................................................25
8. Taxes, Duties and Expenses.........................................30
9. Liens..............................................................35
10. Indemnification....................................................35
11. Insurance..........................................................37
12. Assignment and Subletting..........................................44
13. Disclaimer, Representations and Warranties.........................47
14. Covenants of Lessee................................................52
15. Default by Lessee..................................................55
16. Return of Aircraft.................................................61
17. Casualty Occurrences...............................................63
18. Governing Law and Jurisdiction.....................................66
19. Miscellaneous......................................................67
i
APPENDICES PAGE
---------- ----
A. Description of Aircraft............................................72
B. Further Definitions and Values.....................................73
C. Certificate of Acceptance..........................................74
D. Charges............................................................76
E. Operating Condition at Re-Delivery.................................84
F. Aircraft Documents.................................................88
G. FAA Power of Attorney..............................................90
ii
AIRCRAFT OPERATING LEASE AGREEMENT
No. 136
THIS AIRCRAFT OPERATING LEASE AGREEMENT No. 136 is made as of the
15th day of December, 1995 between FIRST SECURITY BANK OF UTAH, N.A., a national
banking association existing pursuant to the laws of the United States, having
its principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, not in its individual capacity (except as expressly herein set
forth) but solely as Owner Trustee under the Trust Agreement (as defined in
Article 1 hereof) and its permitted successors and assigns (herein referred to
as "Lessor") and MIDWAY AIRLINES CORPORATION a company incorporated under the
laws of the State of Delaware, having its principal place of business at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and its permitted successors
and assigns (herein referred to as "Lessee").
WHEREAS, subject to fulfillment of the conditions precedent stated
in Article 2.2(viii), (ix) and (x), Lessor has the right to possess, use and
lease the Aircraft; and
WHEREAS Lessee desires to lease the Aircraft from Lessor; and
WHEREAS Lessor is willing to lease the Aircraft to Lessee upon the
terms and conditions set out herein.
NOW THEREFORE, in consideration of the mutual promises herein
contained, Lessor and Lessee agree as follows:
1. DEFINITIONS
The following terms shall have the following respective meanings for
all purposes of this Agreement:
1.1 Air Authority shall mean the Federal Aviation Administration of the
United States Department of Transportation and any successor.
1.2 Aircraft shall mean the aircraft identified and described in
Appendix A, including any Engine, Part, or component thereof, and/or
ancillary and loose equipment or devices installed in or on the
Aircraft at the Delivery Date (or which having been removed
therefrom remain the property of the Lessor pursuant to this
Agreement) and Aircraft Documents furnished therewith under this
Agreement, or any substitutions, renewals and replacements from time
to time made in or on the said Aircraft in accordance with this
Agreement, whether or not for the time being installed on or in the
said Aircraft or any other aircraft.
1.3 Aircraft Documents shall mean the items identified in Appendix F.
1.4 Aircraft Maintenance Agreement shall mean a Flight Hour Agreement
entered into between Lessee and an overhaul/repair agency relating
to the Engines and the landing gear and any modification, amendment
or substitution therefor consented to by Beneficiary.
The terms and conditions of such Aircraft Maintenance Agreement and
the overhaul/repair agency shall be subject to the prior written
consent of Beneficiary.
1.5 Airframe shall mean the Aircraft, excluding the Engines.
1.6 Appraisal Procedure shall mean the procedure for determining the FMV
of the Aircraft set forth Article 9 of Appendix D.
1.7 Approved Maintenance Program shall mean the Maintenance Program in
effect on the Delivery Date with respect to the aircraft which are
the subject of the Other Aircraft Agreements or such other
Maintenance Program as Lessor shall from time to time approve in
writing, such approval not to be unreasonably withheld.
1.8 Authorized Maintenance Performer shall mean Lessee, American
Airlines, Inc., U.S. Air, Aviall, Rolls Royce Canada or any Air
Authority approved provider.
1.9 Bank shall mean the financial institution(s) and/or other
provider(s) of finance from whom finance respecting the acquisition
or continued ownership of the Aircraft by Lessor is to be, or is for
the time being, obtained and/or in whose favor or for whose benefit
security over, or rights with respect to, the Aircraft is to be, or
is for the time being, granted by Lessor or at its request and shall
include any financial institution providing finance to the Head
Lessor in respect of Head Lessor's acquisition of the Aircraft by
whatever means, including without limitation by way of loan or by
way of non-recourse sale of lease receivables.
2
1.10 Beneficiary shall mean, Stockholm Aircraft Finance V, B.V., which is
(i) a company incorporated under the laws of the Netherlands, (ii)
wholly-owned by Fokker and (iii) the beneficiary under the Trust
Agreement, together with its successors and permitted assigns.
1.11 Business Day shall mean a day (other than a Saturday or Sunday) on
which banks are open for business in New York.
1.12 Casualty Occurrence shall have the meaning set forth in Article
17.1.
1.13 Certificate of Acceptance shall mean the Certificate of Acceptance
given in the form of Exhibit C.
1.14 Certificated Air Carrier means any person (except the United States
Government) that is a citizen of the United States of America (as
defined in Section 40102 of Title 49 of the United States Code)
holding an air carrier operating certificate issued by the Secretary
of Transportation pursuant to Chapter 447 of Title 49 of the United
States Code (or any predecessor thereof) for aircraft capable of
carrying ten or more individuals or 6,000 pounds or more cargo,
which is also certificated so as to entitle Lessor, as lessor, to
the benefits of Section 1110 of Title 11 of the United States Code
with respect to the Aircraft.
1.15 Credit and Security Agreement shall mean the Credit and Security
Agreement dated as of October 29, 1993 therein between FAUSA and
Lessee.
1.16 Cycle shall mean one take-off and landing of the Aircraft.
1.17 Default shall mean an Event of Default or any event which, with the
giving of notice and/or lapse of time and/or the making of any
relevant determination, would constitute an Event of Default.
1.18 Delivery Date shall mean the Midway Technical Acceptance Date as
such term is defined in the Tripartite Agreement which will be the
date on which the Aircraft is delivered to and accepted by the
Lessee for the purposes of this Agreement.
1.19 Delivery Location shall mean the location at which Transwede
delivers the Aircraft to Lessor and identified in the Certificate of
Acceptance.
1.20 Dollars and $ shall mean the lawful currency of the United States of
America and in respect of all payments to be made under this
Agreement in Dollars shall mean
3
funds which are for same day settlement in the New York Clearing
House Interbank Payments System (or such other US Dollar funds as
may at the relevant time be customary for the settlement of
international banking transactions denominated in United States
Dollars).
1.21 Engine shall mean (i) any engine installed on or furnished with the
Aircraft on the Delivery Date, such Engines being identified as to
manufacturer and type in Appendix A and as to serial numbers in the
Certificate of Acceptance executed by Lessee on the Delivery Date
and (ii) any substitute or replacement engine title to which has, or
should have, transferred to and vested in Lessor in accordance with
this Agreement, in each case including all modules or Parts from
time to time belonging to or installed in that engine and
irrespective of whether or not the same shall for the time being be
installed on the Aircraft or on any other aircraft. The term
"Engine" shall exclude any properly replaced engine title to which
has, or should have, passed to Lessee pursuant to this Agreement.
1.22 Equipment Change shall have the meaning set forth in Article
17.3(a).
1.23 Event of Default shall mean any of the events specified in Article
15.1.
1.24 Intentionally omitted..
1.25 Expiry Date shall mean May 3, 1999.
1.26 Fair Market Rental Value shall be equal in amount to the value that
would be obtained in an arms'-length transaction between an informed
and willing lessee under no compulsion to lease and an informed and
willing lessor under no compulsion to lease, in accordance with a
lease to a lessee similarly situated with Lessee, for a term equal
to the relevant period and on conditions as herein provided, any
such determination (made for purposes of Article 15.3(b)) to be made
on the basis of the then actual condition of the Aircraft, to be
determined pursuant to an Independent Appraisal and to be the
average of the two determinations obtained thereunder.
1.27 FAUSA shall mean Fokker Aircraft U.S.A., Inc., a company
incorporated under the laws of the State of Delaware, with its
principal office at Alexandria, Virginia.
1.28 First Rent Date shall mean the Delivery Date.
4
1.29 Flight Hour shall mean each hour or part thereof elapsing from the
moment at which the wheels of the Aircraft leave the ground on the
take off of the Aircraft until the wheels of the Aircraft touch the
ground on the landing of the Aircraft following such flight.
1.30 FMV shall have the meaning set forth in Appendix D.
1.31 Fokker shall mean Fokker Aircraft B.V., a Netherlands corporation
with its principal office at Amsterdam Zuid-Oost, The Netherlands,
together with its successors.
1.32 Intentionally omitted.
1.33 Governing Law shall mean the law of the state of New York.
1.34 Government Entity shall mean and include (i) any national or state
government, political subdivision thereof, or local jurisdiction
therein; (ii) any board, commission, department, division, organ,
instrumentality, court, or agency of any thereof, however
constituted; and (iii) any association, organization, or institution
of which any thereof is a member or to whose jurisdiction any
thereof is subject or in whose activities any thereof is a
participant.
1.35 Head Lessor shall mean any person or persons to whom title to the
Aircraft is vested or transferred in accordance with Article
12.3(e).
1.36 Indemnitees shall mean Lessor (in its trust and individual
capacities), the Voting Trustee (in its trust and individual
capacities), the Beneficiary, the Head Lessor, the Bank, Fokker,
FAUSA, including any of their respective successors and assigns and
their respective shareholders, subsidiaries, affiliates, directors,
officers, agents and employees.
1.37 Independent Appraisal shall mean a determination of Fair Market
Rental Value of the Aircraft by two independent aircraft appraisers,
selected by Lessor, the costs and expenses of the appraisal to be
paid by Lessee.
1.38 Law shall mean and include (i) any law, statute, decree,
constitution, regulation, order or any directive of any Government
Entity; (ii) any treaty, pact, compact or other agreement to which
any Government Entity is a signatory or party; (iii) any judicial or
administrative interpretation or
5
application of any thereof; and (iv) any amendment or revision of
any thereof.
1.39 Lessor or Lessee shall have the meanings respectively ascribed to
them in the first paragraph of this Agreement and shall include
their respective assignees or successors.
1.40 Lessor Liens shall mean:
(a) the Mortgage, the Security Assignment and any security
interest whatsoever from time to time created by or through
Lessor and/or Head Lessor in connection with the financing of
the Aircraft;
(b) any other security interest or other lien in respect of the
Aircraft or this Agreement, which results from acts of or
omissions to act or claims against Lessor and/or Head Lessor
or any of their respective affiliates not related to the
transactions contemplated by or permitted under this
Agreement; and
(c) liens in respect of the Aircraft for Lessor Taxes.
1.41 Lessor Taxes shall mean Taxes:
(a) imposed as a direct result of activities of a Tax Indemnitee
in any jurisdiction imposing a liability unrelated to that Tax
Indemnitee's dealings with Lessee, to the transactions
contemplated by this Agreement or the operation of the
Aircraft by Lessee; or
(b) imposed on or measured by net income, profits or gains, or
capital or net worth (excluding, however, in each case, Taxes
that are, or are in the nature of, license, sales, use,
rental, value-added, or property taxes) of a Tax Indemnitee,
by (A) any Governmental Entity by or in which that Tax
Indemnitee would be subject to tax without regard to the
transactions contemplated by this Lease, or (B) the Federal
Government of the United States of America (including, without
limitation, any withholding taxes imposed by such government);
or
(c) imposed with respect to any period or event occurring prior to
the date of this Agreement or after the Expiry Date or earlier
termination of this Agreement in accordance with the terms
hereof, provided that such Tax is unrelated to a Tax
Indemnitee's dealings with Lessee or to the transactions
contemplated by this Agreement; or
6
(d) for which Transwede is liable under the Tripartite Agreement.
(e) imposed as a result of any voluntary sale, assignment,
transfer or other disposition by the Lessor (including to the
Head Lessor) or any other Tax Indemnitee of any interest in
the Aircraft or any part thereof or this Agreement unless such
transfer or disposition occurs (1) in connection with a Tax
Indemnitee's pursuing its remedies while an Event of Default
by Lessee is continuing or otherwise resulting from an Event
of Default, or (2) pursuant to Lessee's exercise of its option
to purchase the Aircraft under Article 9 of Appendix D (it
being understood and agreed that Lessor and Lessee will
cooperate with each other to minimize any Taxes resulting from
any sale pursuant to this clause (2)).
1.42 LIBOR shall mean the rate of interest per cent per annum (rounded
upward, if not already such a multiple, to the nearest whole
multiple of 1/16th. of one per cent) at which, at or about 11.00
a.m. (London time) on the day two Business Days before the beginning
of the relevant period deposits in Dollars are offered for the
duration of such relevant period on the REUTERS "LIBO" page (or such
other page as may replace it from time to time).
1.43 Maintenance Program shall mean an Air Authority approved maintenance
program for the Aircraft encompassing scheduled maintenance
(including block maintenance), condition monitored maintenance, and
on-condition maintenance of Airframe, Engines and Parts, including
but not limited to, servicing, testing, preventive maintenance,
repairs, structural, inspections, system checks, overhauls, approved
modifications, service bulletins, engineering orders, airworthiness
directives, corrosion control, inspections and treatments.
1.44 Major Checks shall mean any 12,000 hours Check, 24,000 hours Check
or Intersupplementary Check or segment thereof or any equivalent
thereof with more or less hours, however denominated, to the extent
set out in the Approved Maintenance Program from time to time.
1.45 Manufacturer shall mean Fokker.
1.46 Mortgage shall mean such mortgage or other security as from time to
time may be created over the Aircraft in favor of the Bank or over
the Beneficiary's interest in the Trust Agreement, in favor of the
Bank.
7
1.47 Note shall mean the Secured Promissory Note executed and delivered
to FAUSA by the Lessee and secured by the Credit and Security
Agreement.
1.47A Operative Documents shall mean the Lease, the Certificate of
Acceptance, the Trust Agreement and the Voting Trust Agreement.
1.48 Other Aircraft Agreements shall mean Aircraft Operating Lease
Agreements relating to other Fokker 100 aircraft so long as leased
to Lessee by a lessor for the benefit of Fokker, FAUSA or any
affiliate thereof (including Wings Aircraft Finance, Inc.), as
Beneficiary and the Support Services Agreement, the Credit and
Security Agreement and the Note or any other agreement between
Lessee and Lessor for the benefit of Fokker, FAUSA or any affiliate
thereof, including Wings Aircraft Finance, Inc., provided that, for
the purpose of this definition, the word "affiliate" shall mean any
corporation or other entity that, directly or indirectly, controls,
is controlled by or is under common control with, Fokker.
1.49 Part shall mean, whether or not installed on the Aircraft:
(a) any component, furnishing or equipment (other than a complete
Engine) furnished with the Aircraft on the Delivery Date; and
(b) any other component, furnishing or equipment (other than a
complete Engine) title to which has, or should have, passed to
Lessor pursuant to this Agreement
but excludes any such items title to which has, or should have,
passed to (i) Lessee pursuant to this Agreement or (ii) any person
pursuant to any agreement relating to the financing of spare parts
for the Aircraft, including, but not limited to, FAUSA pursuant to
the Credit and Security Agreement and the Note.
1.50 Permitted Lien shall mean:
(a) liens of repairers, mechanics, material men, carriers,
hangarkeepers, employees or other similar liens arising in the
ordinary course of business by statute or by operation of law
in respect of obligations which are either not overdue or are
being contested in good faith by appropriate proceedings;
8
(b) any lien for Taxes of any kind either not assessed or, if
assessed, not yet due and payable or being contested in good
faith by appropriate proceedings, and
(c) any lien arising out of a judgment against Lessee with respect
to which at the time an appeal is being prosecuted in good
faith and with respect to which there shall have been secured
a stay of execution pending such appeal,
provided that in the case of these subclauses (a), (b) and (c):
(i) adequate reserves for the payment of such obligations
have been provided by Lessee;
(ii) such proceedings, or the continued existence of such
lien, do not give rise to any likelihood of the sale,
forfeiture or other loss of the Aircraft or any Engine
or any Part or any interest therein; and
(iii) any such lien does not arise as a result of any default
on the part of Lessee in respect of its obligations
under this Agreement;
(d) any Lessor Lien and the lien of this Agreement; and
(e) any lien for Lessor Taxes.
1.51 Redelivery Location shall mean Schiphol Airport, The Netherlands.
1.52 Rent Date shall mean the First Rent Date and the numerically
corresponding date of each and every subsequent month during the
Term, or (if there is no corresponding date in any month), the last
day of such month.
1.53 Rental Period shall mean the period from and including any Rent Date
to and including the day preceding the next Rent Date.
1.54 Security Assignment shall mean an assignment or pledge in favor of
the Head Lessor or the Bank of the benefit of all or any part of
Lessor's rights hereunder.
1.55 Security Interest shall mean any mortgage, charge, pledge, lien,
assignment, hypothecation, right of set-off or any agreement or
arrangement having the effect of creating a security interest.
9
1.56 State of Incorporation shall mean the State of Delaware.
1.57 State of Registration shall mean United States of America.
1.58 Supplemental Rent shall mean Agreed Value and any other amount which
by the terms of this Agreement is payable by Lessee to Lessor other
than Rent and the Reserve Rate.
1.59 Support Services Agreement shall mean the Aircraft Support Services
Agreement No. ASSAF-110 between FAUSA and Lessee.
1.60 Taxes shall mean any and all present and future sales, use,
property, customs, value-added, turnover, stamp, interest
equalization, income, gross or net receipts, franchise, excise, net
worth, capital or other taxes, fees, withholdings, imposts, duties,
levies, or other charges of any nature, together with any penalties,
fines, or interest thereon, imposed, levied, or assessed by, or
otherwise payable to, any Governmental Entity and "Tax" shall be
construed accordingly.
1.61 Tax Indemnitee shall mean each of the Lessor, Voting Trustee,
Beneficiary and the Head Lessor, including any of their respective
successors and assigns.
1.62 Term shall bear the meaning ascribed to it in Article 3.4.
1.63 Transwede shall mean Transwede Airways A.B., a corporation organized
under the laws of Sweden.
1.64 Transwede Lease shall mean Aircraft Operating Lease Agreement No.
AOLA 648.061 between Beneficiary, as lessor, and Transwede.
1.65 Tripartite Agreement means Tripartite Agreement No. TA-527, dated as
of July 26, 1995 among Transwede, Beneficiary and Lessee.
1.66 Trust Agreement shall mean the Trust Agreement dated as of December
15, 1995 between the Beneficiary and the Lessor in its individual
capacity, as the same may be amended from time to time.
1.67 Trust Estate shall mean the "Trust Estate" as defined in the Trust
Agreement.
10
1.68 Voting Trust Agreement shall mean the Voting Trust Agreement dated
as of December 15, 1995 between the Beneficiary and the Voting
Trustee, as the same may be amended from time to time.
1.69 Voting Trustee shall mean First Security Bank of Idaho, N.A., a
national banking association, and its permitted successors and
assigns.
1.70 The terms:
Agreed Value,
Deposit,
Partial Loss Amount,
Rent,
Reserve Rate,
shall have the meanings and values set forth in Appendix B.
1.71 References in this Agreement to:
(a) Articles or Appendices are, unless otherwise specified,
references to Articles of, and Appendices to, this Agreement
and references to this Agreement include its Appendices;
(b) any statute or other legislative provision shall be read to
include any statutory or legislative modification or
re-enactment thereof, or any substitution therefor;
(c) the Aircraft include any Part of the Aircraft, and, where the
context so admits, any of the Aircraft Documents and
references to any part of the Aircraft include any part of any
Engine;
(d) the word "person" or "persons" or to words importing persons
include, without limitation, individuals, firms, partnerships,
joint ventures, trusts, Government Entities, organizations,
associations, corporations, government agencies, committees,
departments, authorities and other bodies, corporate or
incorporate, whether having distinct legal personality or not,
or any member of any of the same;
(e) words importing the plural include the singular and vice
versa;
(f) any agreement or instrument include such agreement or
instrument as it may from time to time be amended or
supplemented; and
11
(g) headings in this Agreement are for ease of reference only.
2. AGREEMENT TO LEASE
2.1 Lessor will lease the Aircraft to Lessee and Lessee will take the
Aircraft on lease from Lessor in "AS-IS--WHERE-IS" condition, in
accordance with the terms and conditions of this Agreement.
2.2 Lessor's obligation to deliver the Aircraft on the Delivery Date to
Lessee shall be subject to:
(i) the receipt by Lessor from Lessee on or prior to the Delivery
Date of the following, all of which shall be in the English
language and be satisfactory in form and substance to Lessor:
(a) copies of Lessee's certificate of incorporation and/or
memorandum and articles of association and/or by-laws
and/or other constitutional documents, certified to be
true and up to date copies by a duly authorized officer
of Lessee;
(b) copies of resolutions of Lessee's board of directors
authorizing Lessee to enter into and perform this
Agreement and the transactions contemplated hereby,
certified to be true and in full force and effect by a
duly authorized officer of Lessee;
(c) evidence that each approval, license and consent which
may be required in relation to, or in connection with
the performance by Lessee of any of its obligations
hereunder has been granted by or obtained from the
applicable Government Entity in the State of
Registration;
(d) copies of Lessee's air transport license, certificate of
public convenience and necessity, and any other air
operator certificates and other licenses, certificates
and permits required by a Governmental Authority
enabling Lessee to operate as an air carrier, certified
to be true copies and to be in full force and effect by
a duly authorized officer of Lessee;
(e) evidence of appointment of Lessee's agent for service of
process in the State of New York;
12
(f) a power of attorney in the form of Appendix G
authorizing Lessor and/or the Head Lessor/and/or the
Bank to take action at the Air Authority and a certified
resolution authorizing same;
(g) such other documents as Lessor may reasonably request;
(ii) the receipt by Lessor from Lessee on or before the Delivery
Date of:
(a) opinion satisfactory in form and substance to Lessor of
counsel to Lessee, addressed to Lessor and Beneficiary;
(b) all sums due to Lessor pursuant to this Agreement;
(c) a certificate of insurance, a broker's letter of
undertaking and other evidence, all in form and
substance satisfactory to Lessor, that Lessee is taking
the required steps to ensure due compliance with the
provisions of this Agreement as to Insurances with
effect on and after the Delivery Date;
(d) evidence that the representations and warranties of
Lessee set forth in Article 13.4 are true and correct;
(iii) Intentionally omitted;
(iv) Intentionally omitted;
(v) evidence (including satisfactory opinions of ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
special Air Authority aviation counsel, as to Air Authority
registration and recordation matters) that on the Delivery
Date the Aircraft has been validly registered under the laws
of the State of Registration and that all filings,
registrations, recordings and other actions have been or will
be undertaken which are necessary or advisable to ensure the
validity, effectiveness and enforceability of this Agreement
and to protect the property rights of Lessor and Head Lessor
in the Aircraft or any Part and any Security Interest of the
Bank therein;
(vi) Lessor being satisfied that no default shall have occurred
under any Other Aircraft Agreement;
13
(vii) the Certificate of Acceptance shall have been duly authorized,
executed and delivered by Lessee, shall be satisfactory in
form and substance to Lessor, and shall be in full force and
effect;
(viii) all of Transwede's rights and interest in the Aircraft shall
have been terminated to the satisfaction of Beneficiary,
including the termination of the Transwede Lease and the
fulfillment of all conditions precedent and obligations of
Lessee and Transwede with respect to the Aircraft under the
Tripartite Agreement;
(ix) the Beneficiary shall have consented to the termination of the
Transwede Lease and its mortgage on the Aircraft under Swedish
law; and
(x) Lessee shall have accepted the Aircraft from Transwede in
accordance with the terms and conditions of the Tripartite
Agreement and simultaneously therewith Transwede has
redelivered the Aircraft to Lessor.
2.3 The conditions specified in Article 2.2 are inserted for the sole
benefit of Lessor and may be waived or deferred in whole or in part
and with or without conditions by Lessor. If any of the said
conditions are outstanding on the Delivery Date and Lessor (in its
absolute discretion) nonetheless agrees to deliver the Aircraft to
Lessee, Lessee shall ensure that such outstanding conditions are
fulfilled within fifteen (15) days after the Delivery Date and
Lessor shall be entitled to treat the failure of Lessee to perform
such outstanding conditions as an Event of Default.
2.4 The obligation of Lessee to accept delivery of the Aircraft from
Lessor is subject to the satisfaction of the following conditions
precedent on or before the Delivery Date:
(i) each of the Operative Documents to which Lessor is a party
shall have been duly authorized, executed and delivered by
Lessor and shall be in full force and effect, and executed
counterparts shall have been delivered to Lessee;
ii) Lessee shall have received the following:
14
(a) an incumbency certificate of each of Lessor as to the
persons authorized to execute and deliver the Operative
Documents to which Lessor is a party and each other
document to be executed on behalf of Lessor in
connection with the transactions contemplated by the
Operative Documents, including the signatures of such
persons; and
(b) such other documents and evidence with respect to Lessor
and the transactions contemplated by the Operative
Documents as Lessee may reasonably request in order to
establish the consummation of the transactions
contemplated by the Operative Documents to be performed
by Lessor, the taking of all corporate proceedings in
connection with such transactions and compliance with
the conditions set forth herein;
(iii) on the Delivery Date, the representations and warranties of
Lessor contained in Article 13.6 shall be true and accurate as
though made on and as of such date;
(iv) Lessee shall have received the favorable opinion, addressed to
it and reasonably satisfactory in form and substance to it,
from ▇▇▇▇▇ & ▇▇▇▇▇▇▇, special Air Authority aviation counsel;
and
(v) the Aircraft shall meet the delivery conditions specified in
Article 3.6.
3. TERM; DELIVERY; ACCEPTANCE; DELAY
3.1. Subject to Articles 2.1, 2.2 and 3.3, Lessor shall deliver the
Aircraft on the Delivery Date. Subject to Article 2.4 only, Lessee
shall accept the Aircraft and the delivery thereof on the Delivery
Date. Lessee acknowledges that Lessor's sole obligation with respect
to delivery of the Aircraft is (i) to deliver it to Lessee upon
acceptance of the Aircraft by Lessee from Transwede on the Midway
Technical Acceptance Date as such term is defined in the Tripartite
Agreement pursuant to the terms and conditions of the Tripartite
Agreement, and (ii) that Lessor is delivering the Aircraft to Lessee
"AS-IS--WHERE IS."
3.2 Intentionally Omitted.
15
3.3 If for any reason (including any failure of the conditions specified
in Article 2.2, Clauses (viii), (ix) and (x)), the Aircraft has not
been delivered by Lessor by January 15, 1996, (as such date may be
amended, pursuant to the provisions of the Tripartite Agreement),
either party may terminate this Agreement by written notice to the
other party. Upon any such termination by Lessee, if the Aircraft
has not been delivered by Lessor due to Lessee's breach of its
obligations hereunder or under the Tripartite Agreement, Lessor may
retain the Deposit. Otherwise, Lessor shall return the Deposit to
Lessee.
3.4 The term of the lease shall commence on the Delivery Date and shall
continue until the Expiry Date unless earlier terminated or extended
as herein provided (such period being herein referred to as the
"Term").
3.5 The Aircraft shall be delivered to and accepted by Lessee at the
Delivery Location or such other location as is mutually acceptable
to the parties.
3.6 Simultaneously with Lessee's technical acceptance of the Aircraft
from Transwede under the Tripartite Agreement, Lessee shall indicate
and confirm its acceptance of the Aircraft by the execution and
delivery to Lessor of the Certificate of Acceptance.
4. REGISTRATION AND TITLE
4.1 As from the Delivery Date Lessee shall cooperate with Lessor or Head
Lessor, to effect and maintain registration of the Aircraft in the
name of Lessor or Head Lessor, as the case may be, under the Laws of
the State of Registration during the Term, such registration to
reflect the interests of Lessor or Head Lessor as the case may be,
and to obtain and maintain all licenses, permits and approvals,
including, without limitation, a certificate of airworthiness from
the Air Authority, as may be requisite in connection with operation
of the Aircraft under this Agreement.
4.2 Lessee shall at its own expense and responsibility cause this
Agreement to be kept, filed and recorded at all times during the
Term, in such office or offices for the registration of the Aircraft
in the State of Registration and in such other offices (in the
United States but not in any jurisdiction outside of the United
States unless directly required due to Lessee's operation) as may be
necessary, to protect Lessor's,
16
Head Lessor's and the Bank's rights in any state in which the
Aircraft may operate including the State of Registration of the
Aircraft and the State of Incorporation or as Lessor may reasonably
request to protect and preserve Lessor's, Head Lessor's and the
Bank's rights hereunder, and shall on request furnish to Lessor an
opinion of counsel or other evidence satisfactory to Lessor of such
filing and recording.
4.3 Title to and ownership of the Aircraft as between Lessor, Head
Lessor and Lessee shall at all times remain in Lessor or Head
Lessor, as the case may be, and Lessee shall have no right, title or
interest in or to the Aircraft or any part thereof except as
expressly provided by this Agreement. Lessee shall identify and
specify the interest of Lessor, Head Lessor and the Bank and shall
affix or keep affixed (i) in a reasonably prominent position on the
flight-deck of the Aircraft and on each Engine a metal name plate
(having dimensions of not less than 10 cm x 7 cm) bearing the
inscription (in fireproof and legible characters) stating:
"NOTICE OF OWNERSHIP
THIS AIRCRAFT/ENGINE IS OWNED BY
FIRST SECURITY BANK OF UTAH, N.A."
The proper completion of the metal name plate shall be advised by
Lessor at its earliest convenience. Lessee shall not remove or
deface evidence of ownership of the Aircraft and shall not do or
permit to be done or omitted any act or thing which would jeopardize
the rights of Lessor, Head Lessor or the Bank in the Aircraft.
Lessee will on all occasions when the ownership of the Aircraft or
any Part is relevant make clear to third parties that title to the
same is held by Lessor, Head Lessor or the Bank as the case may be.
4.4 Lessee acknowledges that the Aircraft may from time to time be owned
by Head Lessor or the Bank and/or be subject to the Mortgage, which
shall be a first priority mortgage, and to the Security Assignment,
in favor of Head Lessor or the Bank. Lessee undertakes to Lessor
(both for itself and as agent for each of Head Lessor and the Bank)
at Lessee's expense (except for the expense of assignments pursuant
to Article 12 after the first refinancing and first assignment
described therein) to, from time to time, cooperate with Lessor or
Head Lessor to cause this Agreement, the Mortgage, the Security
Assignment and such other documents as may
17
be necessary or advisable to give effect to the transactions
contemplated hereby or thereby, to be kept, recorded or filed in
such office or offices in the State of Incorporation and in the
State of Registration as may be necessary or advisable to protect
and perfect the interests of Lessor, Head Lessor and the Bank in the
Aircraft, this Agreement, the Mortgage and the Security Assignment,
and to do, from time to time, all other things which the Bank, Head
Lessor and/or Lessor may reasonably require in order to protect and
perfect their rights.
5. POSSESSION AND USE
5.1 Lessee shall not transfer possession of the Aircraft, the Engines or
any Part to any person or any legal entity or remove any Engine or
Part from the Airframe other than in accordance with the provisions
of this Article 5 or of Article 12.1; provided, however, that so
long as no Default shall have occurred and be continuing, Lessee
may, without the prior written consent of Lessor deliver possession
of the Aircraft, the Engines or Parts to the manufacturer thereof
for testing or other similar purposes, or to an Authorized
Maintenance Performer for service, repair, maintenance or overhaul
work on the Aircraft, the Engines or Parts, or for alterations,
modifications, or additions thereto, to the extent required or
permitted by the terms of Article 7.3.
5.1.1 Lessee will ensure that no Engine or Part installed on the Aircraft
is at any time removed from the Aircraft other than:
(a) if replaced as expressly permitted by this Agreement; or
(b) if the removal is of an obsolete item and is in accordance
with the Approved Maintenance Program; or
(c) (i) during the course of maintaining, servicing, repairing,
overhauling or testing that Engine or Part or the
Aircraft, as the case may be; or
(ii) as part of a normal engine or part rotation program; or
18
(iii) for the purpose of making such modification to the
Engine or Part, or the Aircraft, as the case may be, as
are permitted under this Agreement,
and then in each case only if it is reinstalled or replaced by an
engine or part complying with Article 5.1.2(a) as soon as
practicable (or in the case of Article 5.1.1(c)(ii) in the ordinary
course of such program) and in any event no later than the Expiry
Date.
5.1.2 (a) Lessee will ensure that, except as permitted by this
Agreement, no engine or part is installed on the Aircraft
unless:
(i) in the case of an engine, it is an engine of the same
model as, or an improved or advanced version of the
Engine it replaces, which is in similar or better
operating condition, and in the case only of a Casualty
Occurrence, has substantially similar hours available
until the next scheduled checks, inspections, overhauls
and shop visits and has the same or greater value and
utility as the replaced Engine;
(ii) in the case of a part, it is in as good operating
condition, is of similar or a more advanced make and
model and is of the same interchangeable modification
status as the replaced Part;
(iii) in the case of any part, it has become and remains the
property of Lessor free from Security Interests and on
installation on the Aircraft will without further act be
subject to this Agreement and the Mortgage; and
(iv) in each case, Lessee has full details as to its source
and maintenance records.
(b) Provided no Default has occurred and is continuing, Lessee
shall be entitled to install any engine or part on the
Aircraft by way of replacement notwithstanding Article
5.1.2(a) if:
(i) there is not available to Lessee at the time and in the
place that engine or part is required to be installed on
the Aircraft, a replacement engine or, as the case may
be, part complying with the requirements of Article
5.1.2(a); and
19
(ii) it would result in an unreasonable disruption of the
operation of the Aircraft and/or the business of Lessee
to ground the Aircraft until an engine or part, as the
case may be, complying with Article 5.1.2(a) becomes
available for installation on the Aircraft; and
(iii) as soon as reasonably practicable after installation of
the same on the Aircraft, Lessee removes any such engine
or part and replaces it with the Engine or Part replaced
by it or by an engine or part, as the case may be,
complying with Article 5.1.2(a).
5.1.3 Lessee will:
(a) ensure that any Engine or Part which is not installed on the
Aircraft (or any other aircraft as permitted by this
Agreement) is, except as expressly permitted by this
Agreement, properly and safely stored, and kept free from
Security Interests;
(b) from time to time on request, notify Lessor in writing as to
the location of any Engine and on request shall use its
reasonable efforts to procure that any person to whom
possession of an Engine is given acknowledges in writing to
Lessor, in terms satisfactory to Lessor, that it will respect
the interest of the Bank as mortgagee and Lessor (or, as the
case may be, Head Lessor) as owner and lessor of the Engine
and will not seek to exercise any rights whatsoever in
relation to it;
(c) (notwithstanding the foregoing provisions of this Article
5.1.3), be permitted, if no Default has occurred and is
continuing, to install any Engine or Part on an aircraft, or
in the case of a Part, on an engine:
(i) owned and operated by Lessee free from Security
Interests; or
(ii) leased or hired to Lessee pursuant to a lease or
conditional sale agreement on a long-term basis and on
terms whereby Lessee has full operational control of
that aircraft or engine; or
20
(iii) acquired by Lessee and/or financed or refinanced, and
operated by Lessee, on terms that ownership of that
aircraft or engine, as the case may be, pursuant to a
lease or conditional sale agreement, or a Security
Interest therein, is vested in or held by any other
person; provided that in the case of (ii) and (iii):
(1) the terms of any such lease, conditional sale agreement or
Security Interest will not have the effect of prejudicing the
interests of the Bank as mortgagee or Lessor (or, as the case
may be, Head Lessor) as owner and lessor of that Engine or
Part; and
(2) the lessor under such lease, the seller under such conditional
sale agreement or the holder of such Security Interest, as the
case may be, has confirmed and acknowledged in writing to
Lessor, in form and substance satisfactory to Lessor, or has
otherwise agreed in writing that it will respect the interest
of Lessor (or, as the case may be, Head Lessor) or, generally
(without naming such parties) the owner and/or lessor as owner
and lessor and the Bank, or generally (without naming the
Bank) any mortgagee as mortgagee of that Engine or Part and
that it will not seek to exercise any rights whatsoever in
relation thereto; and, to the extent such an acknowledgment
has been given, Lessor hereby agrees, for the benefit of the
lessor, the seller, or secured party, as the case may be, of
any engine or part (other than an Engine or a Part) leased to
Lessee or owned by Lessee subject to a conditional sale or
other security agreement, that Lessor will not acquire or
claim, as against such lessor, seller or secured party, any
right, title or interest in any engine or engines owned by the
lessor under such lease or subject to a security interest in
favor of the seller or secured party under such conditional
sale or other security agreement as the result of such engine
or engines being installed on the Airframe at any time while
such engine or engines are subject to such lease or
conditional sale or other security agreement.
5.1.4 Lessee will not enter into nor permit any pooling agreement or
arrangement in respect of an Engine or Part without the prior
written consent of Lessor, which shall not be unreasonably withheld.
21
5.2 Lessee shall use the Aircraft solely in commercial or other
operations for which Lessee is duly authorized by the Laws of the
State of Registration and/or any jurisdiction to whose Laws Lessee's
operation of the Aircraft is subject and shall not use or permit the
Aircraft to be used for any purpose for which the Aircraft is not
designed or reasonably suitable.
Lessee shall not use the Aircraft for the carriage of (i) whole
animals living or dead except in the cargo compartments according to
the United States Department of Transportation ("DOT") (or for
international flights, International Civil Aviation Organization
("ICAO")) regulations, and except domestic pet animals carried in a
suitable container to prevent the escape of any liquid and to ensure
the welfare of the animal; (ii) acids, toxic chemicals, other
corrosive materials, explosives, nuclear fuels, wastes, or any
nuclear assemblies or components, except as permitted for passenger
aircraft under the "Restriction of Goods" schedule issued by the DOT
(or for international flights, ICAO) from time to time and provided
that all the requirements for packaging or otherwise contained
therein are fulfilled; or (iii) any other goods, materials or items
of cargo which could reasonably be expected to cause damage to the
Aircraft and which would not be adequately covered by the insurance
required by or obtained pursuant to Article 11.
5.3 Lessee shall not permit the Aircraft to be maintained, used, or
operated in violation of any Law of any Government Entity having
jurisdiction, or contrary to any manufacturer's operating manuals
and instructions, or in violation of any airworthiness certificate,
license or registration relating to the Aircraft issued by any such
Government Entity. In the event that such Laws require alteration of
the Aircraft during the Term, Lessee shall conform therewith at its
own expense and shall maintain the same in proper condition for
operation under such Laws. Lessee agrees not to operate the Aircraft
or to permit or suffer the Aircraft to be operated (i) contrary to
applicable Law, and/or (ii) within or into any geographic area
unless the Aircraft is covered by insurance as required by the
provisions of Article 11 or insurance or an indemnity in lieu of
such insurance from the United States government against the risks
and in the amounts required by Article 11 covering such area, and/or
(iii) contrary to the terms of such insurance as required by the
provisions of Article 11.
22
5.4 Throughout the Term and until re-delivery of the Aircraft to Lessor
in accordance with the provisions of this Agreement, the Aircraft
and every part thereof shall be in every respect at the sole risk of
Lessee, who shall bear all risks of loss, theft, damage or
destruction to the Aircraft from any cause whatsoever. Lessor shall
not be liable for any liability, claim, loss, damage or expense of
any kind or nature caused directly or indirectly by the Aircraft or
any part thereof by any inadequacy thereof for any purpose or any
deficiency or defect therein, by the use or performance thereof, by
any repairs or servicing thereto or any delay in providing or
failure to provide any thereof, by any interruption or loss of
service or use thereof, or by any loss of business or other
consequential damage or any damage whatsoever and howsoever caused
prior to re-delivery of the Aircraft to Lessor.
5.5 Lessee shall ensure that such crew and engineers as are employed by
it in connection with the operation and maintenance of the Aircraft
shall have such qualifications and hold such licenses as are
required by the Air Authority and by all applicable Laws and
regulations.
6. CHARGES, METHOD OF PAYMENT AND FINANCIAL INFORMATION
6.1 Lessee shall punctually pay to Lessor, when due, the Rent, Reserve
Rate and Supplemental Rent expressed to be payable by the Lessee to
the Lessor hereunder including the monies specified and calculated
in accordance with the provisions of Appendix D at the time and in
the manner therein specified, and shall punctually and duly observe
and perform Lessee's obligations under the said Appendix D which
forms an integral part of this Agreement. The time stipulated in
this Agreement for all payments payable by Lessee to Lessor and for
the performance of Lessee's other obligations under this Agreement
shall be of the essence of this Agreement.
6.2 Lessee shall not be entitled to any abatement, compensation,
reduction or set-off against any installment of Rent, the Reserve
Rate or Supplemental Rent, including but not limited to, abatements,
compensations, reductions or set offs, by reason of any past,
present or future claims of Lessee against Lessor or any other
person under this Agreement or otherwise.
23
6.3 Lessee's obligation to pay Rent and make other payments in
accordance with this Agreement, until Lessee shall have redelivered
the Aircraft to Lessor in accordance with Article 16 and shall have
complied with its other obligations hereunder, shall be absolute and
unconditional irrespective of any contingency whatsoever including
(but not limited to) (i) any right of set-off, counterclaim,
recoupment, defense or other right which either party may have
against the other, (ii) any unavailability of the Aircraft for any
reason, including, but not limited to, any defect in the
airworthiness, merchantability, fitness for any purpose, condition,
design, or operation of any kind or nature of the Aircraft, or the
ineligibility of the Aircraft for any particular use or trade, or
for registration or documentation under the laws of any relevant
jurisdiction, or (save as herein provided) any Casualty Occurrence
in respect of or any damage to the Aircraft, (iii) any insolvency,
bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceedings by or against Lessor
or Lessee, (iv) any invalidity or unenforceability or lack of due
authorization of, or other defect in this Agreement, (v) any failure
of Lessee to obtain any required license, certificate, authorization
or other approval of any Governmental Entity having jurisdiction
over the operation by Lessee of the Aircraft or the operation by
Lessee in any airport and (vi) any other cause which, but for this
provision, would or might have the effect of terminating,
frustrating or in any way affecting any obligation of Lessee
hereunder, it being the declared intention of the parties that the
provisions of this Article and the obligations of Lessee to pay the
Rent, the Reserve Rate and Supplemental Rent provided for by this
Agreement shall survive any frustration and that, save as expressly
provided in this Agreement, no monies payable hereunder by Lessee to
Lessor shall in any event or circumstance be repayable to Lessee.
6.4 Lessee agrees to furnish Lessor during the Term:
(i) Intentionally omitted;
(ii) upon Lessor requesting the same a quarterly unaudited balance
sheet of Lessee prepared by it as of the close of the most
recent previous financial quarter, together with the related
profit and loss statement for such period;
(iii) within ninety (90) days after the close of each financial year
of Lessee, an audited balance sheet and profit and loss
statement as of the close of such financial year;
24
(iv) from time to time such other non-confidential information as
Lessor may reasonably request; and
(v) copies of all notices sent by Lessee (A) to its shareholders
or creditors as a group in their respective capacities as such
relating to major business or financial developments of Lessee
or (B) to the Securities and Exchange Commission in connection
with or following a public offering of the equity shares of
Lessee.
7. MAINTENANCE
7.1 Lessee, during the Term, at its own cost and expense shall:
(a) service, repair, maintain, overhaul, test, or cause the same
to be done to the Aircraft in accordance with the Approved
Maintenance Program so as to keep the Aircraft in as good
operating condition as when delivered to Lessee on the
Delivery Date, ordinary wear and tear excepted, and such
operating condition as may be necessary to enable the
airworthiness certificate of the Aircraft to be maintained in
good standing at all times under applicable Law, and Lessee
shall at all times maintain current certificates of
airworthiness (except in each case if Fokker 100 aircraft with
similar engines are grounded by the Air authority other than
as a result of the acts and omissions of Lessee) and Air
Authority required records of maintenance in respect of the
Aircraft and produce copies thereof to Lessor upon request;
(b) maintain in the English language all Aircraft Documents,
records, logs, and other materials required by applicable Laws
and best airline practice to be maintained in respect of the
Aircraft including engine trend monitoring data;
(c) perform, or cause to be performed, all airworthiness
directives and mandatory notes and mandatory bulletins
affecting the Aircraft having a compliance date during the
Term and issued by (a) the Air Authority and/or (b) Fokker or
any other manufacturer of any part of the Aircraft (except
that, in the event of a conflict, those required by the Air
Authority shall prevail);
25
(d) maintain the Aircraft in conformity with Air Authority
Regulations and such other rules and regulations of the Air
Authority as may from time to time be applicable to passenger
category airline aircraft;
(e) provide Lessor by telex or fax message with a monthly
summation (which may utilize Air Authority forms) of Flight
Hours and Cycles accumulated on the Airframe, Engines, A.P.U.
and Landing Gear and details of all modifications and material
component changes within five (5) days after the end of each
month.
Such maintenance shall be performed by Lessee or by an Authorized
Maintenance Performer.
7.2 Except as otherwise provided herein, Lessee, at its own cost and
expense, shall promptly replace all Engines or Parts which may from
time to time become worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair, or unserviceable with an engine
or part meeting the requirements of Article 5.1.2(a).
7.3 (a) Save as expressly herein provided the Aircraft shall not be
modified, altered, converted or added to (each such action in
relation to the Aircraft being herein referred to as an
"Equipment Change"), provided that Lessee may, at its own
expense and subject to the prior written approval of Lessor
(such approval not to be unreasonably withheld), make such
Equipment Changes to the Aircraft as Lessee may deem desirable
in the proper conduct of its business, provided that no such
Equipment Change diminishes the value, utility, condition or
airworthiness of the Aircraft below the value, utility,
condition and airworthiness thereof immediately prior to such
Equipment Change, assuming the Aircraft was then in the
condition required to be maintained by the provisions of this
Agreement.
(b) Title to all Parts incorporated or installed in or attached or
added to the Aircraft as the result of such Equipment Change
shall, without further act, vest in Lessor free and clear of
all liens, charges and encumbrances. Lessee shall at its own
expense take all such steps and execute, and procure the
execution of, all such instruments as Lessor may require and
which are necessary to ensure that title to any such
replacement Part as aforesaid passes to Lessor according to
the Governing Law and the lex situs, provided, however, that
so long as a Default shall not have
26
occurred and be continuing, at any time during the Term,
Lessee may remove any such Part if (A) (i) such Part is in
addition to, and not in replacement of or in substitution for,
any Part originally incorporated or installed in or attached
to the Aircraft at the time of the delivery thereof hereunder,
(ii) such Part is not required to be incorporated or installed
in or attached or added to the Aircraft pursuant to the
provisions of Article 7.1 and (iii) such Part can be removed
from the Aircraft without diminishing or impairing the value,
utility or airworthiness which the Aircraft would have had at
such time, had such Equipment Change not occurred. Or (B) such
Part is deemed by Lessee to be obsolete or no longer suitable
or appropriate for use in the Airframe or Engines (an
"Obsolete Part") and its removal shall not materially decrease
the value or adversely affect the utility or remaining useful
life of the Airframe or Engines, or impair the condition or
airworthiness thereof below the value, utility or remaining
useful life, condition or airworthiness thereof immediately
prior to such removal (assuming the Aircraft was then in the
condition required to be maintained by the terms of the
Lease), except that the value (but not the utility, remaining
useful life, condition or airworthiness) of the Airframe or
the Engines may be reduced, to the extent resulting from the
removal of Obsolete Parts, if the aggregate original cost of
all Obsolete Parts removed from such Aircraft and not replaced
shall not exceed $70,000.
(c) Upon the removal by Lessee of any such Part as above provided,
title thereto shall, without further act, vest in Lessee and
such Part shall no longer be deemed a part of the Aircraft.
Any Part not removed by Lessee as above provided prior to the
return of the Aircraft to Lessor hereunder shall remain the
property of Lessor (save as the parties may otherwise agree in
writing) provided that Lessor may require Lessee, prior to the
end of the Term, to remove any Parts incorporated or installed
in the Aircraft as a result of an Equipment Change and to
restore the Aircraft to its condition prior to an Equipment
Change.
7.4.1 Upon submission by Lessee to Lessor of invoices or receipts
reasonably satisfactory to Lessor evidencing the performance in
accordance with the provisions of this Agreement by or at the
direction of Lessee of:
27
(a) with respect to the Airframe, the accomplishment of those
items of maintenance characterized as scheduled airframe heavy
maintenance as defined in the Approved Maintenance Program for
12,000 hours and 24,000 hours inspections or any equivalent
thereof with more or less hours ("Airframe Maintenance"), or
(b) with respect to any Engine, the performance of all scheduled
shop visit engine maintenance and repair, other than (i)
repairs arising as a result of foreign object damage or
operational mishandling and/or (ii) maintenance and repair of
QEC (Quick Engine Change) kits ("Engine Maintenance"), or
(c) with respect to any nose or main landing gear ("Landing
Gear"), the performance of all scheduled shop visit nose and
main landing gear maintenance and repair, other than repairs
arising as a result of foreign object damage or operational
mishandling ("Landing Gear Maintenance"),
Lessor shall, subject to Article 3.6 of Appendix D and provided that
a Default shall not have occurred and be continuing, release to
Lessee, from the relevant Maintenance Fund as defined in paragraph
3.2 of Appendix D, a sum equal to the aggregate amount evidenced by
such invoices or receipts for such relevant maintenance, to the
extent there are sufficient sums in the relevant Maintenance Fund at
the date of the start of the relevant maintenance. Lessee agrees to
use its reasonable efforts to ensure that the relevant invoices or
receipts are received by Lessor as promptly as possible after
completion of the relevant maintenance. All sums remaining in any
Maintenance Fund at the expiration or other termination of this
Agreement shall be retained by Lessor, except (i) upon payment in
full of Agreed Value and any other amounts due to Lessor or
otherwise hereunder after a Casualty Occurrence pursuant to Article
17.2(b), in which case all sums remaining in any Maintenance Fund
shall be paid to Lessee and (ii) under the circumstances and to the
extent described in Article 3.6 or 9 of Appendix D.
For the avoidance of doubt, Lessor shall not refuse to release
monies from the Maintenance Fund on the ground that maintenance was
required due to operational mishandling, provided that Lessee can
demonstrate that Lessee complied with the original equipment
manufacturer's written instructions.
28
7.4.2 Lessor shall be entitled to delay the release or payment of funds
from any Maintenance Fund (to the extent related to any disputed
amounts) to Lessee provided for by this Article 7 until such time as
it shall in its opinion be in a position to determine (which Lessor
agrees to use reasonable efforts to do as promptly as possible) the
amount to be released or paid, but in any event release all
undisputed amounts from the relevant Maintenance Fund (but where
insufficient funds are in such maintenance Fund the lesser pro rata
portion of such funds which corresponds to the undisputed amount)
upon request unless a Default shall have occurred and be continuing.
7.5.1 During the Term, Lessee shall furnish to Lessor such information
concerning the location, condition, use and operation of the
Aircraft as Lessor may reasonably request. The right of Lessor, or
its designated representatives, to inspect the Aircraft during any
Major Checks performed by or on behalf of Lessee during the Term,
shall be absolute and Lessee shall inform Lessor by providing sixty
(60) days' written notice as to time and location of all Major
Checks. During such Major Checks, Lessee agrees to provide
sufficient manpower to allow Lessor, or its authorized
representatives, to inspect any area of the Aircraft which Lessor
requests to inspect and which would normally be required during such
a Major Check, provided that such inspection is to be made only at
the time that Lessee opens up such area in accordance with the
Approved Maintenance Program.
Lessee also shall permit any persons designated by Lessor to visit
and inspect the Aircraft, its condition, use and operation, and the
records maintained in connection therewith.
7.5.2 Lessor shall have the right at any time on reasonable notice to
inspect or survey the Aircraft or any part thereof, or instruct a
duly authorized surveyor to carry out a survey on its behalf, to
ascertain the condition of the Aircraft or any part thereof and
satisfy itself that the Aircraft is being properly repaired and
maintained in accordance with the terms of this Agreement. The cost
of any such inspection or survey shall be borne by Lessor unless an
Event of Default has occurred and is continuing.
29
7.5.3 Lessor shall have no duty to make any such inspection as is referred
to in Article 7.5.1 and 7.5.2 and shall not incur any liability or
obligation by reason of not making any such inspection. Except in
connection with any Event of Default, no exercise of any inspection
right under Articles 7.5.1, 7.5.2 or any other provision of this
Agreement shall interfere with the normal operation or maintenance
of the Aircraft or the business of Lessee and shall be conducted
during normal maintenance or business hours. In connection with any
such inspection, Lessee shall allow Lessor or any persons designated
by Lessor to copy, at Lessor's cost and expense, any Aircraft
Documents or other records relating to maintenance and operation of
the Aircraft. Lessee shall not be liable for the use of any such
Aircraft Documents or other records by Lessor or any other person or
entity which use is unrelated to Lessee's compliance with the terms
of this Agreement.
8. TAXES, DUTIES AND EXPENSES
8.1 Lessee agrees promptly to pay and indemnify and hold Lessor and Head
Lessor harmless against all Taxes (other than Lessor Taxes) levied
or imposed against or upon or otherwise payable by any Tax
Indemnitee or Lessee and relating to or attributable to Lessee, this
Agreement, the Aircraft and/or the importation, exportation,
registration, ownership, leasing, subleasing, delivery, possession,
use, operation, reregistration, repair, maintenance, overhaul,
replacement, improvement, modification, alteration, transportation,
landing, storage, presence or re-delivery of or addition to, the
Aircraft or any Engine or any Part thereof or any rent, receipts,
insurance proceeds or income arising therefrom, or any sum payable
by Lessee to a Tax Indemnitee under this Agreement or any other
transactions or activities contemplated by this Agreement. If Lessee
is required by any applicable Law or regulation to deliver or
furnish any report or return in connection with any such Taxes,
Lessee shall complete the same in a manner satisfactory to the
relevant Tax Indemnitee and in particular shall state therein that
Lessor or Head Lessor, as the case may be, is the owner of the
Aircraft and that the Lessee is exclusively responsible for the use
and operation of the Aircraft and for any such Taxes and Lessee
shall supply a copy of such report or return to the relevant Tax
Indemnitee.
All payments by Lessee hereunder to Lessor shall be free of
withholdings of any nature whatsoever (and at the time Lessee is
required to make any payment upon which any withholding is required,
Lessee shall pay an
30
additional amount such that the net amount actually received by the
Lessor will, after such withholding, equal the full amount of the
payment then due) and shall be free of expense for collection or
other charges.
If Lessee shall have paid any additional amount pursuant to the
first sentence of this paragraph with respect to Taxes not subject
to indemnification pursuant to the provisions of this Section 8.1,
the Lessor for whose benefit such Taxes were paid shall reimburse
Lessee within 10 Business Days of written demand therefor for the
amount of such Taxes so paid by Lessee. For the purpose of Article
1.10 and Article 8, the terms, "Lessor" and "Head Lessor" shall
include each group of corporations (and each member thereof) that
includes Lessor or Head Lessor and for which consolidated, combined,
unitary or other group tax returns are filed.
8.2 Except as otherwise specifically provided herein, Lessee shall pay
to Lessor on or after Delivery Date (unless otherwise agreed to be
financed by Lessor or to be paid by Transwede pursuant to the
Tripartite Agreement) upon demand:
(a) all reasonable expenses paid to third parties (including
legal, printing and out-of-pocket expenses) incurred or
payable by Lessor (i) in connection with the negotiation,
preparation and execution of this Agreement and all related
documents, including reasonable out-of-pocket expenses in
connection with this Agreement and (ii) related to any
amendment to or extension of, or the granting of any waiver or
consent under, this Agreement, resulting from the first
refinancing of the Aircraft by the Bank or from a request of
Lessee; but in the case of such a refinancing, Lessee shall
not be liable for the payment of any legal fees (other than
those of its own counsel or those of Lessor's special Air
Authority counsel incurred in connection with the filing of
certain documents with the Air Authority or the issuance of an
opinion with respect thereto) or any loan or loan brokerage
fees;
(b) all reasonable expenses paid to third parties (including legal
fees and disbursements but excluding surveyor costs) payable
or incurred by Lessor in connection with, the enforcement of
or preservation of any rights of Lessor under this Agreement
or otherwise in respect of moneys owing under this Agreement
by Lessee or in respect of any breach of Lessee of any
representation,
31
warranty, covenant or undertaking herein contained; and
(c) the ongoing annual fees and reasonable out-of-pocket expenses
related to this Agreement of the Owner Trustee, the Voting
Trustee and any trustee on behalf of the Bank (other than
those incurred pursuant to a change in any of such trustees
which was not requested by Lessee);
8.3 Lessee shall pay all stamp, documentary, registration or other like
duties or taxes (including any such duties or taxes payable by a Tax
Indemnitee but excluding all Lessor Taxes) imposed on or in
connection with this Agreement and shall indemnify that Tax
Indemnitee against any liability arising by reason of any delay or
omission by Lessee to pay such duties or taxes.
8.4 If and to the extent that any sum (the "indemnity sum") constituting
(directly or indirectly) an indemnity to one or more Tax Indemnitees
paid by Lessee to any person other than that Tax Indemnitee shall be
treated as taxable in the hands of the relevant Tax Indemnitee,
Lessee shall pay to the relevant Tax Indemnitee a sum as (after
taking into account any taxation suffered by the relevant Tax
Indemnitee on the indemnity sum) shall reimburse the relevant Tax
Indemnitee for the net amount of any Taxes suffered by them in
respect of the indemnity sum (after taking into account any current
tax savings or other benefits to the relevant Tax Indemnitee
resulting from the payment or accrual of the indemnified expense).
8.5 If and to the extent that any sums payable to a Tax Indemnitee by
Lessee under this Agreement by way of indemnity are insufficient, by
reason of any Taxes payable in respect of those sums, for that Tax
Indemnitee to discharge the corresponding liability to the relevant
third party (including any taxation authority), or to reimburse that
Tax Indemnitee for the cost incurred by it to a third party
(including any taxation authority), Lessee will pay to that Tax
Indemnitee such sum as will after the tax liability has been fully
satisfied leave that Tax Indemnitee with the same net amount (after
taking into account any current tax savings or other benefits to the
that Tax Indemnitee resulting from the payment or accrual of the
indemnified expense) as it would have been entitled to receive in
the absence of that liability. For the purpose of computing the
amount of an indemnity payment pursuant to this Article 8.5 and the
amount of any payment to Lessee under Article 8, it shall be assumed
that the relevant Tax Indemnitee is subject to tax on
32
the amount of each indemnity it receives or accrues under this
Agreement and can use any tax savings to offset Taxes at the highest
marginal statutory rates of tax applicable to that Tax Indemnitee
(as certified to Lessee by an officer of that Tax Indemnitee) at the
time such indemnity or tax savings is received or accrued.
8.6 If, as a result of any indemnity paid by Lessee or any event giving
rise to an indemnity obligation of Lessee, a Tax Indemnitee at any
time realizes any tax savings, refunds or other reductions in taxes
not previously taken into account in computing the amount of the
indemnity, that Tax Indemnitee shall promptly pay to the Lessee the
amount of such tax savings, refunds or other reductions in taxes;
provided, however, that no Tax Indemnitee will be required to make
any payment to Lessee pursuant to this Article 8.6 so long as a
Default shall be continuing or if Lessee shall not have theretofore
made all payments due to all Tax Indemnitees under this Agreement,
or to the extent that the amount of such payment would exceed the
amount of all prior payments by Lessee to the relevant Tax
Indemnitee pursuant to this Article 8 less the amount of all prior
payments by the relevant Tax Indemnitee to Lessee pursuant to this
Article 8.6. The relevant Tax Indemnitee shall estimate the amount
of such tax savings, refunds and other reductions in Taxes and shall
use reasonable efforts to take such actions in filing its tax
returns and in dealing with taxing authorities to seek and claim
each such tax savings, refund and other reduction in Taxes, but
shall not be obligated to take any such action that it determines in
its sole discretion to involve the imposition or risk of any
material unindemnified cost or expense, and in no event will any
person have any right to inspect the books, records, tax returns or
other documents of any Tax Indemnitee, and the positions to be taken
by any Tax Indemnitee on or with respect to its tax returns and in
any tax proceedings shall be within their sole control.
8.7 Lessee's, and each Tax Indemnitee's obligations under this Article 8
shall continue in full force and effect, notwithstanding the
expiration or earlier termination of the Term hereunder.
8.8 If Lessee disputes the payment of any Taxes payable by a Tax
Indemnitee for which Lessee is responsible under this Agreement,
that Tax Indemnitee will take such action as Lessee may reasonably
request at Lessee's expense to contest that payment but that Tax
Indemnitee will not be obliged to take any such action:
33
(a) which that Tax Indemnitee considers in good faith may result
in the imposition or risks of any material liability cost, or
expense for which that Tax Indemnitee is not indemnified to
its satisfaction; or
(b) which that Tax Indemnitee considers not to have a reasonable
prospect of success; or
(c) for which Lessee has not made adequate provision to the
satisfaction of that Tax Indemnitee in respect of the expense
concerned.
8.9 Lessor covenants and agrees to deliver to Lessee, (a) within 30 days
prior to January 1, 1996 and each January 1 falling every three
years thereafter (or at such other date as prescribed by United
States Treasury Regulations) as long as this Agreement has not been
terminated, two accurate and complete original copies of Internal
Revenue Service Form 1001 (or any successor form), dated the date
hereof or January 1, 1996 (or such subsequent January 1 or other
date) signed by Beneficiary, as appropriate, and such other related
forms (including any certificate with respect thereto) as Lessee may
reasonably request, or (b) within 30 days of the signing of this
Agreement (but in all events prior to the date of the first payment
of Rent to Lessor under this Agreement) and within 30 days prior to
the beginning of each taxable year of Lessor beginning subsequent to
the date of this Agreement (or at such other date as prescribed by
United States Treasury Regulations), two accurate and complete
original copies of Internal Revenue Service Form 4224 (or any
successor form), signed by Beneficiary, dated as appropriate, and
such other related forms (including any certificate with respect
thereto) as Lessee may reasonably request. In addition, Lessor shall
deliver to Lessee two accurate and complete original copies of Form
1001 or Form 4224 signed by Beneficiary, at any time that a change
in circumstances renders the previous form inaccurate in any
material respect. Nothing in this Article 8.9 shall be construed as
imposing on the Lessee any obligation whatsoever, including, without
limitation, to indemnify Lessor or any other party for U.S.
withholding taxes.
34
9. LIENS
9.1 Lessee, during the Term, shall not create or suffer to exist any
lien, attachment, mortgage or other encumbrance upon or against the
Aircraft, or any of its rights under this Agreement, other than the
Mortgage, the Security Assignment and Permitted Liens. If at any
time a lien, attachment, mortgage, or other encumbrance except as
permitted above shall be created or suffered to exist by Lessee, or
be levied upon the Aircraft or any of its rights under this
Agreement, Lessee shall forthwith notify Lessor and cause the same
forthwith to be discharged by bond or otherwise. In the event Lessee
shall fail to discharge any such lien, attachment, mortgage or other
encumbrance, Lessor, Head Lessor or the Bank shall be entitled (but
not bound) to discharge the same, in which event Lessee shall pay to
Lessor, on demand, the amount paid by Lessor and/or Head Lessor
and/or the Bank, together with Lessor's and/or Head Lessor's and/or
the Bank's losses, costs and expenses, including reasonable legal
fees and expenses.
10. INDEMNIFICATION
10.1 LESSEE SHALL RELEASE AND DEFEND, HOLD HARMLESS AND INDEMNIFY ANY
AND/OR ALL OF THE INDEMNITEES, FROM AND AGAINST ANY AND ALL CLAIMS,
PROCEEDINGS, SUITS, JUDGMENTS, COSTS, EXPENSES, PENALTIES, FINES AND
LIABILITIES, DIRECT AND CONSEQUENTIAL DAMAGES AND LOSSES, INCLUDING
WITHOUT LIMITATION COSTS AND EXPENSES INCIDENTAL THERETO, OF
WHATSOEVER KIND AND NATURE, AND INCLUDING REASONABLE LEGAL FEES AND
EXPENSES BUT EXCLUDING ANY TAXES, INDEMNITY FOR WHICH IS ENCOMPASSED
SOLELY IN ARTICLE 4.1 AND ARTICLE 8 (EACH A "CLAIM"), ATTRIBUTABLE
TO ACTS OR OMISSIONS OCCURRING DURING THE TERM OF THIS AGREEMENT,
WHICH MAY BE SUFFERED BY, ASSERTED AGAINST, CHARGED TO OR
RECOVERABLE FROM, DIRECTLY OR INDIRECTLY, ANY AND/OR ALL OF THE
INDEMNITEES:
(A) RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE
POSSESSION, DELIVERY, PERFORMANCE, MANAGEMENT, OWNERSHIP,
REGISTRATION, CONTROL, MAINTENANCE, CONDITION, SERVICE,
REPAIR, OVERHAUL, LEASING, USE, OPERATION OR RETURN OF THE
AIRCRAFT, ANY ENGINE OR ANY PART, OR THE PERFORMANCE OR
NON-PERFORMANCE OF ANY AND/OR ALL OF THE INDEMNITEES OF
SERVICES OR DELIVERY OF ANY THINGS IN CONNECTION WITH THE
AIRCRAFT DURING THE TERM, OR OTHERWISE IN CONNECTION WITH THIS
AGREEMENT, WHETHER OR NOT ARISING IN TORT OR OCCASIONED IN
WHOLE OR IN PART BY THE FAULT OR NEGLIGENCE OF ANY AND/OR ALL
OF THE INDEMNITEES; OR
35
(B) AS A CONSEQUENCE OF ANY DESIGN, ARTICLE OR MATERIAL IN THE
AIRCRAFT, ANY ENGINE OR ANY PART OR ITS OPERATION OR USE
CONSTITUTING AN INFRINGEMENT OF PATENT (TO THE EXTENT AND
SCOPE AND SUBJECT TO THE LIMITATIONS SET FORTH IN PART C OF
EXHIBIT G OF THE SUPPORT SERVICES AGREEMENT), COPYRIGHT,
TRADEMARK, DESIGN OR OTHER PROPRIETARY RIGHT OR A BREACH BY
LESSEE OF ANY OBLIGATION OF CONFIDENTIALITY OWED TO ANY
PERSON;
EXCLUDING, HOWEVER, FROM THE FOREGOING ANY SUCH CLAIM TO THE
EXTENT THAT SUCH CLAIM RESULTS FROM (I) THE FAILURE OF
TRANSWEDE TO SATISFY ANY OF ITS OBLIGATIONS TOWARDS
BENEFICIARY AND/OR FOKKER UNDER THE TRIPARTITE AGREEMENT, OR
(II) THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE, OR (III) FROM ANY MISREPRESENTATION BY SUCH
INDEMNITEE CONTAINED IN THIS AGREEMENT OR ANY BREACH BY SUCH
INDEMNITEE OF ANY COVENANT SET FORTH IN THIS AGREEMENT.
10.2 The indemnities contained in this Article 10 shall continue in full
force and effect notwithstanding the expiration or other termination
of this Agreement or of the letting of the Aircraft hereunder.
10.3 The indemnities contained in this Article 10 are given to the Lessor
for itself and as agent and trustee on behalf of the other
Indemnitees
10.4 Notwithstanding anything to the contrary contained herein, Lessee
does not release and does not agree to defend, hold harmless or
indemnify under this Agreement (and without limiting any obligations
or indemnities contained in any other agreement with Lessee) Fokker
or any other Indemnitee in its capacity as manufacturer or seller of
the Aircraft from or against (i) claims of third parties made
directly against Fokker or such Indemnitee, based on its product
liability or its status as manufacturer or seller, or (ii) claims
made against Fokker or such Indemnitee based on the warranties or
indemnities contained in the Product Assurance Document which is
Exhibit G of the Support Services Agreement, or (iii) the matters
described in Article 10.1(B).
10.5 If any Indemnitee has knowledge of the occurrence of any Claim,
liability or other matter for which it is or may be entitled to be
indemnified hereunder, it shall give prompt written notice thereof
to the Lessee. Each Indemnitee shall cooperate in good faith with
Lessee and supply such information as may reasonably be requested by
Lessee to enable Lessee to investigate, defend or contest any Claim,
liability or other matter
36
for which Lessee may be required to indemnify an Indemnitee
hereunder. In the event that Lessee pays any amount to an Indemnitee
pursuant to this Article 10, Lessee shall be subrogated to all
rights of the Indemnitee in respect of the Claim, liability or other
matter indemnified against giving rise to such payment. Lessee or
its insurers shall have the right, unless an Event of Default shall
have occurred and be continuing and such matter is not covered by
insurance, to investigate or (provided that Lessee or its insurers
shall agree not to dispute liability hereunder or under any
insurance policies pursuant to which coverage is sought and provided
that Lessee shall have consulted with Lessor prior thereto), defend
or compromise any Claim, and Lessor shall cooperate with Lessee with
respect thereto.
11. INSURANCE
11.1 On or before the Expected Delivery Date of the Aircraft and
throughout the Term, Lessee shall carry and maintain in full force
and effect, at its own cost and expense, in such forms, on such
conditions and with such insurers and, if requested, reinsurers and
through such insurance and, if requested, reinsurance brokers as are
satisfactory to Lessor, the following insurances with respect to the
Aircraft, Engines and Parts (herein referred to as "the
Insurances"):
(a) All Risks Aircraft Hull insurance of the type usually insured
against by commercial airlines engaged in the same or similar
business and owning or operating similar aircraft (including
Engines and Parts while not installed on the Aircraft and
including Extended Coverage Endorsement (Aircraft Hull) AVN51
or equivalent on the Agreed Value. The insurance may be
subject to a deductible in respect of losses other than total
loss, arranged total loss or constructive total loss of not
more than $100,000.00 (Dollars One Hundred Thousand) for each
accident.
(b) If operated outside the United States and Canada, Aircraft
Hull War and Allied Perils insurance covering the risks
excluded from the All Risks Aircraft Hull insurance specified
in paragraph (a) above by the terms of the War, Hi-Jacking and
Other Perils Exclusion Clause AVN.48B except paragraph (b)
thereof and shall include cover in respect of confiscation,
nationalization, seizure, restraint, detention, appropriation
for title or use by or under the order of any Government
Entity of the State of Registration.
37
(c) Comprehensive Airline Liability insurance (including without
limitation aircraft Third Party Liability, Passenger and Crew
Liability (including Baggage and Personal Effects)), Cargo
Liability, Mail Liability, Personal Injury Liability,
Contractual Liability, Hangar Keeper's Liability, Aircraft
Products Liability and General Third Party Liability of the
types usually insured against by commercial airlines engaged
in the same or similar business and owning or operating
similar (but not necessarily Fokker-manufactured) aircraft in
an amount of not less than $500,000,000.00 (Dollars Five
Hundred Million) Combined Single Limit any one occurrence each
Aircraft but limited in respect of Personal Injury to the
equivalent of $25,000,000.00 (Dollars Twenty Five Million) any
one offense and in the aggregate.
Such insurance shall include cover in respect of the risks
excluded by War, Hi-Jacking and Other Perils Exclusion Clause
AVN.48B except paragraph (b) thereof.
This insurance may be subject to deductibles in respect of
passengers baggage and personal effects of not more than
$1,250.00 (Dollars One Thousand Two Hundred Fifty) any one
claim and in respect of cargo and mail of not more than
$5,000.00 (Dollars Five Thousand) any one claim. Such
deductibles shall not apply to claims arising from accidents
to the carrying aircraft.
(d) All Risks insurance on Engines and Parts while any such items
are not installed on the Aircraft and in respect of which
cover is not provided under the All Risks Aircraft Hull
insurance and/or Aircraft Hull War and Allied Perils insurance
(respectively specified in paragraphs (a) and (b) above) of
the type usually insured against by commercial airlines
engaged in the same or similar business and owning or
operating similar aircraft for not less than full replacement
value. If Engines and Parts are located outside the United
States and Canada, such insurance shall include War and Allied
Perils to the extent that such insurance is customarily
available in the international insurance market for this type
of insurance.
This insurance may be subject to a deductible of not more than
$10,000.00 (Dollars Ten Thousand).
38
The Lessor will accept a United States government indemnity
(as referred to in Article 5.3) in lieu of the foregoing or as
otherwise required under this Article 11. Lessor's current
requirements as at the date of this Agreement as to the
Insurances are as specified in this Article and in Appendices
H and I. Lessor reserves the right to amend, and will
cooperate with Lessee reasonably to amend, the insurance
requirements of this Article 11 to reflect changes in
insurance practice.
If required by the first paragraph of Article 11.1, the Lessee
shall procure that the insurers effect reinsurances in the
same form and conditions through such reinsurance brokers and
with such reinsurers and for such proportions as are
satisfactory to Lessor.
11.2 All Insurances to be carried in accordance with Article 11.1 above
shall:
(a) in respect of All Risks Aircraft Hull insurance, Aircraft Hull
War and Allied Perils insurance and All Risks insurance on
Engines and Parts:
(i) name the Lessor, Head Lessor and the Bank and their
respective successors and assigns as additional
assureds;
(ii) provide that all claims in respect of the Aircraft,
Engines and Parts shall be payable to Lessor or as it
may direct, such payee to be named Loss Payee; provided,
that partial loss amounts up to the Partial Loss Amount
set forth in Appendix B shall be payable to Lessee
unless the insurers have been given notice that a
Default has occurred; and
(iii) if applicable, provide in respect of Hull All Risks and
Hull War and Allied Perils for a 50/50 Claims Settlement
Clause in the form of AVS.103;
(b) in respect of Comprehensive Airline Liability insurance:
(i) name the Lessor, its successors and assigns and its
shareholders, subsidiaries, directors, officers, agents,
employees and the Indemnitees as additional assureds;
and
(ii) provide that the insurance shall operate in all respects
as if a separate policy had been issued covering each
party insured
39
thereunder, but this provision shall not operate to
include any claim howsoever arising in respect of loss
or damage to the Aircraft, Engines and Parts insured
under the All Risks Hull, Hull War and Allied Perils or
All Risks insurance of the assured. Notwithstanding the
foregoing the total liability of insurers in respect of
any and all assureds shall not exceed the limits of
liability stated in the policy;
(c) in respect of all Insurances:
(i) be effective worldwide except for territories approved
in writing by the Lessor;
(ii) provide that insurers waive all rights of subrogation
against the Lessor, its subcontractors, FAUSA, Fokker,
the Head Lessor, the Bank, and their respective
officers, directors, employees, servants, agents,
successors and assigns;
(iii) provide that in the event that the Insurances are
canceled (including cancellation for nonpayment of
premium) or are materially changed such cancellation or
change shall not be effective as to the interest of the
Lessor until thirty (30) days (but seven (7) days or
such lesser period as is customarily available in
accordance with policy conditions in respect of war and
allied perils) after confirmed receipt by Lessor of
written notice by insurers of such cancellation or
change;
(iv) provide that in respect of the interests of the
Additional Assureds, the Insurances shall not be
invalidated by any act, neglect, omission,
misrepresentation or non-disclosure on the part of the
Lessee or any other party other than the Additional
Assured seeking to make a claim thereunder, and shall
insure each Additional Assured regardless of any breach
or violation of any warranties, declarations or
conditions contained in such policies by the Lessee or
any other party other than the Additional Assured
seeking to make a claim thereunder;
(v) provide that the Additional Assureds shall have no
responsibility for premium and insurers shall waive any
right of set-off or counterclaim against the Additional
Assureds
40
except in respect of outstanding premium in respect of
the Aircraft, Engines and Parts subject of a claim;
(vi) not provide for any deductible or self insurance other
than the deductibles allowed under the terms of Article
11.1 above;
(vii) be primary without right of contribution from any other
insurance carried by Lessor, Lessee or any other person;
and
(viii) be denominated in Dollars.
11.3 If required by the first paragraph of Article 11.1, the re-insurance
policies shall:
(a) provide that cover shall be identical to the cover provided by
the original insurances and be subject to the same terms and
conditions as the original insurances;
(b) provide that so far as the respective interests of the
Additional Assureds are concerned the reinsurance shall not be
invalidated by any act, neglect, omission, misrepresentation
or non-disclosure on the part of the reinsured party;
(c) confirm the insurers' agreement to the provision of paragraph
(d) below;
(d) include a "cut-through" clause in the following terms or in
such other terms as may be satisfactory to Lessor:
"In respect of All Risks Aircraft Hull insurance, Aircraft
Hull War Risk and Allied Perils insurance as described in
Article 11.1(a) and (b) above and All Risks insurance on any
Engine and Parts as described in Article 11.1(d) above, the
reinsurers and the reassured hereby agree that in the event of
any claim arising under the relevant reinsurances the
reinsurers shall in lieu of payment to the reassured, its
successors in interest and assigns pay to the Loss Payee
specified in the primary insurances all sums payable under or
in connection with such reinsurances by virtue of any
reinsured loss of, or damage to, the Aircraft, Engines and
Parts, without any deduction or deductions whatsoever, other
than any outstanding premium in respect of
41
the Aircraft, Engines or Parts the subject of the claim, it
being understood and agreed that any such payment by the
reinsurers shall fully discharge and release the reinsurers
from any and all further liability in connection therewith.
In respect of Comprehensive Airline Liability insurance as
described in Article 11.1(c) above, the reinsurers and
reassured hereby agree that in the event of any claim arising
under the relevant reinsurances, the reinsurers shall in lieu
of payment to the reassured, its successors in interest and
assigns pay to the person or party who has sustained the
relevant loss (or as reimbursement of any payment made by any
Additional Assureds) all sums payable under such reinsurances
by virtue of such reinsured loss, without any deduction or
deductions whatsoever, it being understood and agreed that any
such payment by the reinsurers shall fully discharge and
release the reinsurers from any and all further liability in
connection therewith"; and
(e) provide that the reinsurers and reassured agree that in the
event that the reassured, its successors in interest and
assigns shall at any time be or become insolvent or suspend
business or file a petition in bankruptcy or be adjudicated
insolvent or bankrupt or admit in writing its inability to pay
its debts as they become due, or make a general assignment for
the benefit of creditors or that a receiver or liquidator or
assignee or trustee or state commissioner of insurance be
appointed in respect of the reassured its successors in
interest or assigns or any substantial part of its property
for the purpose of liquidation on account of insolvency, then
the reinsurers, in lieu of payment to the reassured, its
successors in interest or assigns, shall pay upon demand that
portion of any loss due to the party entitled thereto under
the terms of the original insurance for which such reinsurers
would under the terms of the reinsurance be liable to pay the
reassured, its successors in interest or assigns, less any
amounts already paid, it being understood and agreed that any
such direct payment by reinsurers shall fully discharge and
release the reinsurers from any and all further liability for
such payment made.
11.4 Prior to the Expected Delivery Date and thereafter during the Term,
at least five (5) Business Days prior to the renewal date of any
Insurance required or maintained by Lessee under Article 11.1 but in
no event
42
less than once in each 12 month period, Lessee shall furnish or
cause to be furnished to Lessor by the insurer or insurance broker
and the reinsurance broker
1) a certificate of insurance describing in detail the insurance
then carried and maintained, and certifying that such
insurance complies with the terms of this Agreement,
including:
(i) confirmation that the insurance/reinsurance has been
placed with the insurers/reinsurers required (giving the
name of such insurers reinsurers), the insured/reinsured
amount and the period of the policy and
(ii) confirmation that all premiums due to
insurers/reinsurers have been paid,
and
2) a letter of undertaking from Lessee's brokers and, if
required, from the reinsurance brokers.
Such certificate(s) of insurance and letter(s) of undertaking
shall be in form and substance satisfactory to Lessor.
In the event that Lessee shall fail to effect, maintain or cause to
be effected or maintained, insurance as required by this Article 11,
Lessor, Head Lessor or the Bank may at its option, but without any
obligation to do so, and without prejudice to Lessor's, Head
Lessor's and the Bank's other rights or remedies hereunder, maintain
such insurance or provide such or a similar insurance, and, in such
event, Lessee shall, upon demand, promptly reimburse to Lessor, Head
Lessor or the Bank the cost thereof, including interest thereon at
the rate referred to in paragraph 6 of Appendix D.
11.5 In the event of any damage to the Aircraft, Engines or Parts during
the Term not constituting a Casualty Occurrence, Lessee shall, if so
consented to by Lessor (such consent not to be unreasonably
withheld), repair, or cause the same to be repaired by an Authorized
Maintenance Performer at its sole cost and expense. Except as
otherwise provided in Section 11.2(a)(ii), Lessor and Lessee agree
that all insurance proceeds payable in connection with any such
damage shall be payable directly to Lessor. In such event any
insurance proceeds received by Lessor shall be applied to reimburse
Lessee for such cost and expense. Any excess remaining shall, unless
a Default shall have occurred and be continuing, be paid over to
Lessee.
43
11.6 Intentionally Omitted.
11.7 When used in this Article 11, the expression Additional Assured(s)
denotes:
(a) in relation to those insurances referred to in Article
11.2(a), those persons referred to in subparagraph (i) of
Article 11.2(a); and
(b) in relation to those insurances referred to in Article
11.2(b), those persons referred to in subparagraph (i) of
Article 11.2(b).
12. ASSIGNMENT AND SUBLETTING
12.1 Lessee shall not assign any of its rights or obligations or delegate
any of its duties under this Agreement and, except as permitted by
Article 5.1 above, Lessee shall not sublet or otherwise part with
possession of the Aircraft or any Part thereof unless previously
approved by Lessor in writing (such consent not to be unreasonably
withheld).
Lessee may wet lease the Aircraft whereby the term "wet lease" shall
mean an agreement whereby Lessee at all times retains operational
control of the cockpit and the Aircraft including all of its
maintenance.
12.2 This Agreement, the Aircraft and Lessor's interest in each thereof
is freely assignable and alienable by Lessor upon written notice to
Lessee in accordance with Article 12.3, provided, however, that so
long as the Aircraft shall be leased to Lessee under this Lease,
Lessor will not sell, assign, convey or otherwise transfer
absolutely (and not for security) any of its right, title, or
interest in and to this Agreement or the Aircraft to any person
unless Lessor and the proposed transferee (the "Transferee") have
complied with the following conditions:
(i) Lessor shall give Lessee written notice of such transfer
at least 3 Business Days before the date of such
transfer, specifying the name and address of the
proposed Transferee;
(ii) the Transferee shall not be an airline or a commercial
air carrier or person controlling, controlled by or
under common control with an airline or a commercial air
carrier which is in direct competition with Lessee in
the United States;
44
(iii) the Transferee shall qualify as a "citizen of the United
States" within the meaning of Section 40102(a)(15) of
Title 49 of the United States Code by a Voting Trust
Agreement or otherwise; and
(iv) on the transfer date the Lessor and the Transferee shall
enter into an agreement or agreements in which the
Transferee confirms that it shall be deemed a party to
this Lease and agrees to be bound by all the terms of,
and to undertake all of the obligations of, the Lessor
contained in this Agreement and shall deliver a
certificate of quiet enjoyment to Lessee in a form and
substance reasonably acceptable to it and Lessee shall
receive an opinion of counsel to the Transferee stating,
with the customary assumptions and exceptions, that such
agreement or agreements has been duly authorized,
executed and delivered and constitute the legal, valid
and binding obligations of the Transferee enforceable in
accordance with their terms and that the entry into such
agreement(s) does not violate any laws or agreements
applicable to such Transferee.
The agreements, covenants, obligations and liabilities contained
herein, including but not limited to all obligations to pay Rent and
indemnify Lessor, are made for the benefit of Lessor, Beneficiary,
any assignee including the Head Lessor and/or the Bank as security
assignee, and their respective successors and assigns,
notwithstanding the possibility that any such person was not
originally a party to this Agreement or may, at the time any
enforcement is sought, no longer be a party to this Agreement.
Lessee shall comply, at Lessor's cost and expense, with all
reasonable requests of Lessor, its successors and assigns respecting
the assignment and Lessee's acknowledgment of the assignee as
Lessor. Notwithstanding anything contained in this paragraph to the
contrary, no assignment of Lessor's interest in this Agreement or
the Aircraft or Beneficiary's interest in the Trust Estate shall
alter the terms of this Agreement in so far as the costs to Lessee
of the performance of its obligations to pay Rent, Reserve Rate, and
Deposits hereunder and, except as otherwise expressly provided in
this Agreement, the rights and liabilities of Lessee under this
Agreement are concerned. Lessee's rights under this Agreement shall
not be subject or subordinate to any Security Assignment or Mortgage
executed by Lessor or
45
Beneficiary (which Security Assignment or Mortgage shall be subject
to this Agreement).
12.3 It is acknowledged and agreed that:
(a) Lessor has the right to assign all of its right, title and
interest in and to this Agreement and the Aircraft to the Head
Lessor and/or the Bank. In order to comply with its
obligations in relation thereto, Lessor will, upon such
assignment, give Lessee a notice of assignment and it is
agreed that Lessee shall forthwith acknowledge the same by
executing and delivering to Lessor on behalf of Head Lessor
and/or the Bank a consent to assignment in form and substance
reasonably acceptable to Head Lessor and/or the Bank;
(b) Lessor may be required by Head Lessor and/or the Bank to
assign to Head Lessor and/or the Bank all of its rights, title
and interest in and to the Insurances (other than liability
insurances). In order to comply with its obligations in
relation thereto, Lessor, upon assignment of this Agreement
pursuant to Article 12.3(a), shall give the insurers a notice
of assignment of Insurances and the Lessee shall procure that
such insurers forthwith acknowledge the same by executing and
delivering to Lessor an acknowledgment in form and substance
acceptable to Head Lessor and/or the Bank;
(c) Lessor may from time to time require to amend, modify or
replace the security arrangements in respect of the financing
or refinancing of the Aircraft and Lessee agrees to cooperate
with Lessor in connection therewith and, in particular (but
without limiting the generality of the foregoing), to change
the plates provided for in Article 4.3 and to execute and
deliver such other or further acknowledgments of assignment or
other documents and to do such other things as Lessor may
reasonably require to be executed and delivered;
(d) Upon any financing or refinancing of the Aircraft as
contemplated by this Article 12.3, Lessee will promptly and
duly execute and deliver to Lessor, Head Lessor or the Bank
such other documents and assurances and take such further
action as may from time to time be reasonably requested in
order more effectively to carry out the intent and purpose of
this Agreement, the Mortgage and the Security Assignment.
Lessee will procure on
46
request of Lessor that the independent counsel will confirm to
the Head Lessor and the Bank that the Head Lessor and the Bank
may rely on the terms of the opinion provided pursuant to
Article 2.2 as if the Head Lessor and the Bank were each
addressees of such opinion;
(e) Title to the Aircraft may be transferred by Lessor to the Head
Lessor to be indicated by Lessor or Beneficiary's interest in
the Trust Estate may be transferred by Beneficiary, in either
case for the purpose of enabling Lessor to raise finance in
relation to the Aircraft. In such event either a lease
agreement shall be executed in respect of the Aircraft between
the Head Lessor and Lessor ("Head Lease") in order to enable
Lessor to continue to lease the Aircraft to Lessee in
accordance with this Agreement or Lessor may assign all or
part of its rights, title and interest in and to this
Agreement and the Aircraft to Head Lessor pursuant to Article
12.2 or Beneficiary may assign all of its right, title and
interest in and to the Trust Estate and Lessee agrees to
cooperate with Lessor in connection therewith and, in
particular (but without limiting the generality of the
foregoing), to cooperate in the execution of any documents,
agreements and amendments to this Agreement that are necessary
in connection with such Head Lease or such assignment and to
do such other things as Lessor may require to be executed and
delivered so long as any such amendments to this Agreement do
not adversely affect Lessee; and
(f) Lessee shall not be liable to (1) any Transferee or (2) any
assignee, purchaser, or transferee of the beneficial interest
of the Trust Estate (a "Beneficiary Transferee") for any
payment of Taxes pursuant to this Agreement in excess of the
amount that would have been payable to the Lessor or the
Beneficiary originally party hereto, as the case may be, if
that party had remained as the Lessor or the Beneficiary,
respectively.
13. DISCLAIMER, REPRESENTATIONS AND WARRANTIES
13.1 NEITHER LESSOR NOR BENEFICIARY IS A MANUFACTURER OF THE AIRCRAFT OR
OTHER AIRCRAFT OR A DEALER IN SIMILAR AIRCRAFT AND HAS NOT INSPECTED
THE AIRCRAFT PRIOR TO DELIVERY TO AND ACCEPTANCE BY LESSEE. LESSEE
(I) ACKNOWLEDGES AND AGREES THAT THE AIRCRAFT IS BEING DELIVERED BY
LESSOR TO LESSEE "AS IS" AND "WHERE
47
IS" AND THAT NO CONDITION, WARRANTY OR REPRESENTATION OF ANY KIND
WHATSOEVER HAS BEEN OR IS GIVEN BY OR IS TO BE IMPLIED ON THE PART
OF LESSOR OR BENEFICIARY IN RELATION TO THE AIRCRAFT, AND (II)
HEREBY WAIVES AS BETWEEN ITSELF AND LESSOR OR BENEFICIARY ALL ITS
RIGHTS, EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE), TO MAKE
CLAIMS IN RESPECT OF THE AIRCRAFT RELATING TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, CONFORMITY TO
SAMPLES OR MODELS, COMPLIANCE WITH SPECIFICATIONS, MERCHANTABILITY
OR FITNESS OR SUITABILITY FOR USE FOR A PARTICULAR PURPOSE OF THE
AIRCRAFT OR ANY PART THEREOF, QUALITY OF THE MATERIAL OR
WORKMANSHIP, ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, ABSENCE OR ANY INFRINGEMENT OF ANY PATENT, TRADEMARK
OR COPYRIGHT, REMEDY IN TORT, BASED ON STRICT LIABILITY OR
NEGLIGENCE, ACTUAL OR IMPUTED, AND LESSEE HEREBY WAIVES ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE AIRCRAFT, IT BEING UNDERSTOOD THAT ALL SUCH RISKS, AS
BETWEEN LESSEE AND LESSOR OR BENEFICIARY ARE TO BE BORNE BY LESSEE.
Nothing in this Agreement shall afford Lessor or any Indemnitee any
wider or greater exclusion of liability for death or bodily injury
than would be permitted by the Governing Law.
This paragraph shall not be modified except by a written agreement
signed on behalf of Lessor and Lessee by their respective duly
authorized representatives.
13.2 Lessor and Lessee agree that this Article 13 has been the subject of
discussion and negotiation and is fully understood by the parties,
and that the amount of the Rent and other mutual agreements of the
parties set forth in this Agreement were arrived at in consideration
of the provisions of this Article 13 specifically including the
waiver by Lessee set forth in Article 13.1.
13.3 So long as no Event of Default has occurred and is continuing Lessor
agrees to assign or otherwise make available to Lessee for the
duration of the Term such rights as Lessor may have under any
warranty, express or implied, with respect to the Aircraft made by
the Manufacturer of the Aircraft, any subcontractor or supplier
thereof, or any other seller thereof, to the extent that the same
may be assigned or otherwise made available to Lessee and without
warranty by Lessor as to enforceability of any of the rights so
assigned.
48
To the extent that the same may not be assigned or otherwise made
available to Lessee, Lessor agrees to exert its reasonable efforts,
at Lessee's expense, to enforce such rights as Lessor may have with
respect thereto for the benefit of Lessee; provided however, that
upon an Event of Default all such rights shall immediately revert to
Lessor including all claims thereunder, whether or not perfected,
unless such Event of Default has forthwith been remedied by Lessee.
13.4 Lessee represents and warrants that:
(a) Lessee is a corporation organized and existing in good
standing, in accordance with the Laws of the State of
Incorporation, and has the corporate power and authority to
carry on its business as presently conducted and to perform
its obligations under this Agreement, is a Certificated Air
Carrier operating under a certificate of public convenience
and necessity issued by the Secretary of Transportation and is
the holder of all necessary licenses issued by all Government
Entities having jurisdiction to authorize or permit Lessee to
engage in air transportation and to perform and comply with
its obligations hereunder;
(b) This Agreement has been duly authorized by all necessary
corporate action on the part of Lessee, and neither the
execution and delivery nor the consummation of the
transactions contemplated hereby nor compliance by Lessee with
the provisions of this Agreement will contravene any Law
applicable to Lessee or result in any breach of, or constitute
any default under, or result in the creation of any lien,
charge or encumbrance upon any property of Lessee under, any
indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement,
corporate charter, by-law, or other agreement or instrument to
which Lessee is a party or by which Lessee or its properties
or assets may be bound or affected;
(c) The execution and delivery by Lessee of this Agreement, and
all of the transactions by Lessee contemplated hereby, have
received, and Lessee has complied with, every necessary
consent, approval, order, or authorization of, or registration
with, or the giving of prior notice to, any Government Entity
having jurisdiction with respect to the execution and delivery
of this Agreement or the validity and enforceability of this
Agreement or
49
the satisfaction of all monetary and other obligations
hereunder;
(d) This Agreement has been duly entered into and delivered by
Lessee and constitutes the valid, legal and binding
obligations of Lessee, enforceable in accordance with their
terms subject to principles of equity, laws relating to
bankruptcy, insolvency or liquidation or any other laws or
legal procedures generally affecting the enforcement of
creditor's rights or the rights of contracting parties;
(e) Assuming the proper deregistration of the Aircraft and any
mortgage(s) placed thereon from the Swedish aircraft registry
it is not necessary or advisable under the Laws of the State
of Registration in order to ensure the validity, effectiveness
and enforceability of this Agreement, the Mortgage or the
Security Assignment or to protect the property rights of
Lessor, Beneficiary, Head Lessor or the Bank in the Aircraft
and under the Mortgage and Security Assignment that this
Agreement, the Mortgage, the Security Assignment or any other
instrument relating thereto be filed, registered or recorded
or that any other action be taken under the Laws of the State
of Incorporation and the State of Registration to perfect the
property rights of Lessor, Head Lessor and the Bank in the
Aircraft other than the filing of all such instruments with
the Air Authority, the filing of UCC-1 financing statements in
relevant jurisdictions, and the Mortgage and Security
Assignment will have priority in all respects over the claims
of all creditors of Lessee in or against the Aircraft, except
for Permitted Liens;
(f) Under the Laws of the State of Incorporation and the State of
Registration Lessee will not be required to make any deduction
or withholding from any payment it may make under this
Agreement. There is no withholding or other tax to be deducted
from any payment to be made by Lessee under this Agreement;
(g) There are no suits or legal proceedings (including any
administrative proceeding) pending or threatened before any
court or administrative agency against Lessee which, if
adversely determined, would have a material adverse effect
upon its financial condition or business or its ability to
perform its obligations hereunder;
50
(h) There has been no material adverse change in the financial
position of Lessee or in the consolidated financial position
of Lessee and its subsidiaries from that set forth in the
financial statements last furnished pursuant to Article 6.4
and neither Lessee nor any of its subsidiaries have any
significant liabilities (contingent or otherwise) which are
not disclosed by, or reserved against in such financial
statements; and
(i) The chief executive office (as such term is used in Sections
9-103 and 9-401 of the Uniform Commercial Code) of Lessee is
at the date hereof located in Durham, North Carolina and
Lessee agrees to give at least 30 days' prior notice to Lessor
of any relocation of said chief executive office or place
where such records are kept and of any change in its name.
13.5 The representations and warranties in Article 13.4 (other than in
clauses (f), (g) and (h)) shall be deemed to be repeated by Lessee
on and as of each Rent Date as if made with reference to the facts
and circumstances existing on each such date.
13.6 Lessor represents, warrants and covenants that:
(a) Lessor is a national banking association duly organized and
validly existing in good standing under the laws of the United
States of America, qualifies as a "citizen of the United
States" within the meaning of Section 40102(a)(15) of Title 49
of the United States Code and has the corporate power and
authority to carry on its business as presently conducted and
to perform its obligations under this Agreement; if at any
time Lessor shall have actual knowledge that it has ceased to
qualify as such a citizen, it will, if such citizenship is
then necessary to maintain the eligibility of the Aircraft for
United States registration, take such action as may be
necessary to maintain such United States registration;
(b) This Agreement has been duly authorized by all necessary
corporate action on the part of Lessor, has been duly entered
into and delivered by Lessor in accordance with the Trust
Agreement and constitutes the valid, legal and binding
obligations of Lessor, enforceable in accordance with their
respective terms subject to principles of equity, laws
relating to bankruptcy, insolvency or liquidation or any other
laws or legal procedures generally affecting the enforcement
of
51
creditor's rights or the rights of contracting parties;
(c) Neither the execution and delivery nor the consummation of the
transactions contemplated hereby nor compliance by Lessor with
the provisions of this Agreement will result in any breach of,
or constitute any default under, any indenture or any
corporate charter, by-law, or other agreement or instrument to
which Lessor is a party or by which Lessor or its properties
or assets may be bound; and
(d) Except for the registration of the Aircraft and the issuance
of the licenses described in Article 4.1, neither the
execution and delivery nor the consummation of the
transactions contemplated hereby nor compliance by Lessor with
the provisions of this Agreement requires the consent or
approval of, the giving of notice to, or the registration
with, or the taking of any other action in respect of any
Government Entity.
The representations and warranties contained in clauses (a), (b) and
(c) of this Article 13.6 are made by Lessor in its individual
capacity.
13.7 Lessor undertakes that, so long as no Event of Default shall have
occurred and be continuing, Lessor will not interfere with the
peaceful and quiet use and enjoyment of the Aircraft by Lessee in
accordance with the terms of this Agreement.
14. COVENANTS OF LESSEE
14.1 Lessee hereby covenants with Lessor that from the Delivery Date and
during the Term and until redelivery of the Aircraft to Lessor in
accordance with Article 16 it will:
(a) remain in and continue to operate as a Certificated Air
Carrier holding a valid certificate of public convenience and
necessity issued by the Secretary of Transportation, to
preserve its corporate existence and to satisfy its debts and
obligations as they fall due;
(b) comply with all Laws and regulations for the time being in
force in the State of Incorporation, the State of Registration
and in any country to, from, in or over which the Aircraft is
flown, the failure with which to comply is likely to have a
material adverse effect on Lessee; provided,
52
however, that such failure shall have no adverse effect on the
Aircraft or on the interests of Lessor, Head Lessor or the
Bank therein or in this Agreement or on the Insurances
required to be maintained pursuant to Article 11;
(c) (i) at its own expense from time to time do and perform such
other and further acts and execute and deliver any and all
further instruments as may be required by Law (in the United
States but not in any jurisdiction outside the United States
unless directly required due to Lessee's operation), and (ii)
at Lessor's expense (insofar as not covered in Article 8.2(a))
from time to time do and perform such other and further acts
and execute and deliver any and all further instruments as may
be reasonably requested by Lessor to establish, maintain and
protect the respective rights and remedies of Lessor, Head
Lessor and the Bank and to carry out and give effect to the
intents and purposes of this Agreement and the parties;
(d) notify Lessor immediately of the occurrence of any Default;
(e) obtain and maintain all necessary government and other
certificates, consents, licenses, permits and authorizations
and take all action which may be necessary for the continued
due performance of Lessee's obligations under this Agreement
and for the use and operation of the Aircraft;
(f) not do or permit to be done any act or thing which might
impair the respective interests of Lessor, Head Lessor and the
Bank in the Aircraft, or the registration of the Aircraft;
(g) notify Lessor as soon as practicable after becoming aware of
any loss, theft, damage or destruction of or to the Aircraft
or any part thereof if the potential cost of repair or
replacement is likely to exceed $100,000.00 (Dollars One
Hundred Thousand);
(h) not do anything which is likely to subject the Aircraft or any
part thereof to penalty, forfeiture, seizure, arrest,
impounding, detention, confiscation, taking in execution,
appropriation or destruction nor abandon the Aircraft or any
part thereof;
53
(i) not represent or hold out Lessor, Head Lessor or the Bank as
carrying goods or passengers on the Aircraft or as being in
any way connected or associated with any operation or carriage
(whether for hire or reward or gratuitously) which Lessee may
undertake;
(j) not pledge the credit of Lessor, Head Lessor or the Bank for
any maintenance, overhauls, replacements, repairs or
modifications to the Aircraft;
(k) keep Lessor and the insurers, as referred to in Article 11,
informed as to current serial numbers of the Engines and any
engine installed on the Aircraft in accordance with the
provisions of this Agreement, and the location of any Engine
for the time being not installed on the Aircraft; and shall
notify such insurers of any renewal, replacement or
substitution, or the location of any Engine not installed on
the Aircraft;
(l) discharge all fees, charges and expenses payable to any third
party in relation to the use or operation of the Aircraft or
any premises where the Aircraft is situated;
(m) in the event of any forfeiture, impounding or detention of the
Aircraft or any part thereof not constituting a Casualty
Occurrence, use all reasonable endeavors to procure the
immediate release therefrom of the same;
(n) keep accurate, complete and current records of all flights
made by the Aircraft. Such records shall be kept in such
manner as the Air Authority may from time to time require and
in accordance with the Approved Maintenance Program. Lessee
shall permit Lessor or its authorized representatives to
examine such records upon giving reasonable notice not
involving delay to the Aircraft and, subject to the terms of
Article 7.5.3, at the expense of Lessor or such person, to
copy such records;
(o) on request, provide Lessor with evidence satisfactory to
Lessor that all Taxes and charges incurred by Lessee with
respect to the Aircraft, including without limitation any
payments due to any relevant air traffic control authorities
and airport authorities, have been paid and discharged in full
or duly provided for; and
54
(p) not consolidate with, or merge into, any other corporation,
convey, transfer or lease substantially all of its assets as
an entirety to any person without the prior written consent of
Lessor (such consent not to be unreasonably withheld) and the
execution and delivery to Lessor of such agreements,
certificates and legal opinions as Lessor may request with
respect thereto.
15. DEFAULT BY LESSEE
15.1 Each of the following events shall constitute an "Event of Default":
(a) if default shall be made by Lessee in the making of any Rent,
Reserve Rate, or Supplemental Rent payment within five (5)
Business Days after the date when such payment is due and
payable under this Agreement; or
(b) (i) if default shall be made by Lessee at any time in the
procurement or maintenance of any insurance coverage
prescribed herein or (ii) any insurance which may be
maintained by Lessor, Head Lessor or the Bank under Article
11.4 is canceled or terminated or notice of cancellation is
given; or
(c) if default shall be made by Lessee in the observance or
performance of any of the other obligations of Lessee
contained in this Agreement and, if such default is in the
opinion of Lessor capable of remedy, such default shall
continue for a period of fifteen (15) Business Days after
notice from Lessor to Lessee specifying the default and
requiring that the same be remedied; or
(d) if any representation or warranty made (or deemed to be
repeated) by Lessee in or pursuant to this Agreement or in any
document or certificate or statement referred to in or
delivered under this Agreement is or proves to have been
incorrect in any material respect when made or deemed to be
repeated and such incorrectness, if capable of being cured,
shall continue for fifteen (15) Business Days after notice
from Lessor specifying such incorrectness; or
(e) if any borrowed money of Lessee or any of its subsidiaries
having an outstanding principal amount in excess of $4,000,000
(Dollars Four Million) is not paid when due, or by reason of
55
breach or default under the terms of any instrument evidencing
or guaranteeing the same on the part of Lessee or any of its
subsidiaries any such borrowed money having an outstanding
principal amount in excess of $4,000,000 of Lessee or any of
its subsidiaries becomes due or capable of being declared due
prior to the date when it would otherwise have become due, or
the security for any such borrowed money or any guarantee in
respect thereof becomes enforceable; or
(f) if an encumbrancer takes possession or a receiver,
administrator, administrative receiver, trustee, liquidator or
similar officer is appointed of the whole or any substantial
part of the assets, rights or revenues of Lessee or any of its
subsidiaries or a distress, execution, sequestration or other
process is levied or enforced upon or sued out against all or
a substantial part of the assets, rights or revenues of Lessee
or any of its subsidiaries and is not discharged within
fourteen days, or Lessee applies for or consents to the
appointment of a receiver, administrator, administrative
receiver, trustee, liquidator or similar officer for it or for
all or any part of its assets, rights or revenues; or
(g) if Lessee or any of its subsidiaries suspends payment of its
debts, or is unable or admits its inability to pay its debts
as they fall due, or shall be adjudicated or found, or
becomes, bankrupt or insolvent, or proposes or enters into any
composition or other arrangement for the benefit of its
creditors generally, or Lessee or any of its subsidiaries
shall, by voluntary petition, answer or consent, seek relief
under the provisions of any bankruptcy, insolvency or other
similar law providing for the reorganization, liquidation,
administration, dissolution or winding-up of corporations, or
providing for an agreement, composition, extension or
adjustment with its creditors; or
(h) if a petition against Lessee in a proceeding under applicable
bankruptcy or other insolvency laws shall be filed and shall
not be withdrawn or dismissed within 30 days thereafter, or if
any order shall be made by any competent court or resolution
passed by Lessee or any of its subsidiaries or their
respective board of management or supervisory board, whichever
is competent to pass such resolution for the winding-up or
dissolution of Lessee or any of its subsidiaries or for the
appointment of a liquidator,
56
trustee or conservator, save for winding-up or dissolution for
the purposes of amalgamation or reorganization (not involving
or arising out of insolvency) the terms of which shall have
received the prior written approval of Lessor; or
(i) if Lessee or any of its subsidiaries disposes of all or a
material part of its assets, whether by one or a series of
transactions, related or not, other than for the purpose of a
reconstruction or amalgamation the terms of which have
received the previous consent in writing of Lessor; or
(j) if any action shall be taken by Lessee which shall impair the
title or ownership of Lessor (or Head Lessor), or the Security
Interest of the Bank, in the Aircraft or this Agreement is or
becomes wholly or partly invalid, ineffective or unenforceable
by reason of any act or omission of Lessee; or
(k) if any consent, authorization, license, certificate or
approval of or registration with or declaration to any
Government Entity in connection with this Agreement including,
without limitation:
(i) any Certificate of Public Convenience and Necessity; or
(ii) required by Lessee or as a condition precedent required
by Lessor pursuant to Article 2.3 to authorize, or in
connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of this
Agreement or the performance by Lessee of its
obligations under this Agreement; or
(iii) the registration of the Aircraft; or
(iv) any airline license or air transport license;
is changed such that it materially impairs the ability of
Lessee to perform its obligations hereunder, or is withheld,
or is revoked, suspended, canceled, withdrawn, terminated or
not renewed, or otherwise ceases to be in full force; or
57
(m) if any circumstances analogous to any of the circumstances
described in paragraphs (f), (g) or (h) above arise under the
Law of any applicable jurisdiction; or
(n) if an event of default (however defined) occurs under any of
the Other Aircraft Agreements which event permits acceleration
or termination.
15.2 If one or more Events of Default shall have occurred and be
continuing, at Lessor's option and subject to any mandatory
requirement of Law:
(a) For Lessee's account Lessor may do anything that may
reasonably be required to cure any Event of Default and
recover from Lessee all costs including legal expenses
incurred in so doing, and/or
(b) Lessor may accept such Event of Default as a repudiation of
this Agreement and terminate the lease of the Aircraft to
Lessee hereunder by:
(i) serving notice of such termination on Lessee specifying
the occurrence giving rise to such Event of Default or
Events of Default, provided that such notice shall be
deemed to have been served without the necessity of
actual service upon the occurrence of any Event of
Default described in paragraphs (f), (g) and (h) of
Article 15.1.
Thereafter (if the Term shall have commenced) Lessee
shall redeliver possession of the Aircraft to Lessor at
Schiphol Airport, The Netherlands (or such other
location as Lessor may require); or (at Lessor's
election)
(ii) taking possession of the Aircraft for which purpose
Lessor by its servants or agents may enter upon Lessee's
premises where the Aircraft may be located, or cause the
same to be redelivered to Lessor at Schiphol Airport,
The Netherlands, (or such other location as Lessor may
require Lessee to assemble and deliver the Aircraft to
Lessor, and Lessor shall be entitled to act as attorney
for Lessee in causing such redelivery and shall have all
the powers and authorizations legally necessary for
taking such action. In the event of exercise by Lessor
of its powers
58
under this sub-paragraph (ii) such termination shall be
deemed to take effect on such taking of possession by
Lessor or such redelivery of the Aircraft to Lessor at
the said airport; and/or
(c) Lessor may proceed by appropriate court action or actions to
enforce performance of Article 15.2(b) or to recover damages
for the breach thereof; and/or
(d) all rights of Lessee hereunder shall, in the event the Term
shall be terminated pursuant to Article 15.2(b) henceforth
absolutely cease and terminate but without prejudice to
Lessee's obligations under this Agreement all of which shall
continue in full force and effect except for obligations to
pay Rent and Reserve Rate after the Aircraft is returned to
Lessor, and is in the condition required by Article 16; and
Lessee shall take all steps necessary to effect deregistration
of the Aircraft in the State of Registration and Lessor shall
be entitled to sell or otherwise deal with the Aircraft as if
this Agreement had never been made. Without prejudice to the
foregoing, Lessee hereby appoints Lessor as its attorney to do
any act or thing required in connection with such
deregistration of the Aircraft.
15.3 If an Event of Default occurs, Lessor shall have the right to demand
that:
(a) Lessee pay all amounts which may be then due and unpaid
hereunder, and
(b) at Lessor's option whether or not Lessor shall have exercised,
or shall thereafter at any time exercise, any of its rights
under Article 15.2, by thirty (30) days written notice to
Lessee from Lessor specifying a payment date, Lessee pay
Lessor, and Lessee shall pay Lessor, on the payment date
specified in such notice, as liquidated damages for loss of
bargain and not as a penalty (in lieu of the Rent due for the
Aircraft covered by such notice for the period commencing
after the date specified for payment in such notice), any
unpaid Rent for the Aircraft (prorated in the case of Rent on
a daily basis) to and including the payment date specified in
such notice, plus the amount, if any, by which the aggregate
Rent for the Aircraft for the remainder of the Term for the
Aircraft, discounted periodically (equal to installment
frequency) to present worth at the interest rate of six
percent
59
(6%) per annum, exceeds the Fair Market Rental Value of the
Aircraft for the remainder of the Term, after discounting such
Fair Market Rental Value periodically (equal to installment
frequency) to present worth as of the payment date specified
in such notice at the interest rate of six percent (6%) per
annum.
Lessee shall fully indemnify Lessor on its own behalf and on
behalf of the Head Lessor and the Bank on demand against any
loss (including loss of profit), damage, expense (including
without limitation attorneys' fees), cost or liability which
Lessor, Head Lessor or the Bank may sustain or incur as a
consequence of the occurrence of any Event of Default and/or
termination of the letting of the Aircraft pursuant to this
Agreement, including but not limited to (i) any loss of profit
suffered by Lessor and/or the Head Lessor because of Lessor's
inability to place the Aircraft on lease with another lessee
on terms as favorable to Lessor as the terms of this Agreement
or because whatever use, if any, to which Lessor is able to
put the Aircraft upon its return to Lessor, or the funds
arising upon a sale or other disposal thereof, is not as
profitable to Lessor as letting the Aircraft in accordance
with the terms of this Agreement would have been to the extent
the foregoing loss of profit shall not be recovered under
Article 15.3(b), (ii) any amount of interest, fees or other
sums whatsoever paid or payable on account of funds borrowed
in order to carry any unpaid amount, (iii) any loss, premium,
penalty or expense which may be incurred repaying funds raised
to finance the Aircraft or in unwinding any swap, forward
interest rate agreement or other financial instrument relating
in whole to Lessor's financing of the Aircraft and/or the
Aircraft under the Other Aircraft Agreement, and (iv) any
loss, cost, expense or liability sustained or incurred by
Lessor owing to Lessee's failure to re-deliver the Aircraft in
the condition required by this Agreement.
15.4 No remedy referred to in this Article 15 is exclusive, but each
remedy shall be cumulative and in addition to any other remedy
referred to herein or otherwise available to Lessor. The exercise by
Lessor of any of its remedies hereunder shall not preclude or estop
the exercise or beginning of exercise by Lessor of any or more of
such other remedies.
60
No express or implied waiver by Lessor of any Event of Default, or
failure or delay of Lessor in exercising any right hereunder shall
operate as waiver thereof unless an express waiver is executed and
delivered to Lessee.
15.5 Prior to the Expected Delivery Date Lessee shall deliver to Lessor a
duly authorized consent, undated and in form and substance
acceptable to Lessor, addressed to the Federal Aviation
Administration consenting to the release of this Agreement in
connection with the termination of this Agreement pursuant to the
terms hereof and, if so requested by Lessor, the deregistration of
the Aircraft from the register of civil aviation in the State of
Registration.
16. RETURN OF AIRCRAFT
16.1 On the Expiry Date or upon earlier termination of the Term (unless a
Casualty Occurrence shall have occurred with respect to the
Aircraft), Lessee shall, at its own expense, redeliver the Aircraft
to Lessor at the Re-Delivery Location or such other airport as is
mutually acceptable to the parties, in a condition complying with
the provisions of Appendix E, free and clear of all liens and
encumbrances (including Permitted Liens other than Lessor Liens) and
thereupon cause the Aircraft to be removed from the Register of
Civil Aircraft in the State of Registration and Lessee shall return
the Aircraft to Lessor together with the Aircraft Documents and all
equipment and records supplied pursuant to this Agreement when the
Aircraft was delivered to Lessee hereunder.
16.2 Immediately prior to such redelivery of the Aircraft, Lessee, at its
own expense, shall make the Aircraft, Aircraft Documents and other
records available to Lessor for inspection ("Final Inspection") in
order to verify that the condition of the Aircraft complies with the
provisions of this Agreement. Such inspection shall not unreasonably
interfere with the operation of the Aircraft. The period will be
long enough for the Final Inspection to permit the conduct by Lessor
of the following:
(a) Inspection of the Aircraft Documents;
(b) Inspection of the Aircraft structure and Parts;
61
(c) Inspection of the Engines and Auxiliary Power Unit ("A.P.U."),
including without limitation, a boroscope inspection or any
other equivalent inspection method supported by Rolls Royce,
inspection of the compressor and turbine area, and, if
reasonably requested based on evidence that it is required,
the Engine and A.P.U. condition runs confirming release of
each Engine and A.P.U for its remaining operational life;
(d) A one-hour to two-hour test flight with Lessor's
representatives on board as observers and, if any non-
compliance is found, a subsequent test flight to check
compliance after rectification.
16.3 To the extent that, upon such Final Inspection, the condition of the
Aircraft and Aircraft Documents does not comply with the provisions
of this Agreement, Lessee, at its own expense, shall cause such
non-compliance to be promptly rectified and to the extent such
rectification extends beyond the Expiry Date, the Term shall, at
Lessor's sole option, be deemed to be automatically extended and the
provisions of this Agreement shall remain in full force and effect
until such rectification has been accomplished. During such
extension of the Term the Lessee shall be liable to pay Rent at a
daily pro rata rate equal to the Rent payable during the last Rental
Period of the Term.
16.4 Upon redelivery Lessee shall provide to Lessor all necessary
assistance to enable Lessor to obtain any required documents in
relation to the export of the Aircraft from the State of
Registration, and if different, from the State of Incorporation
(including a valid and subsisting export license for the Aircraft),
and shall reassign to Lessor, at the expense of Lessee, the benefit
of any indemnity or warranty which has been assigned to Lessee
pursuant to Article 13.3 above to the extent such indemnity or
warranty is assignable.
16.5 Prior to the Expiry Date or upon any earlier termination of the Term
and upon Lessor's request, Lessee will provide Lessor or its agent
reasonable access to the Approved Maintenance Program and the
Aircraft Documents in order to facilitate the Aircraft's integration
into any subsequent operator's fleet.
Lessee will, if requested by Lessor to do so, upon return of the
Aircraft deliver to Lessor a certified true current and complete
copy of the Approved Maintenance Program. Lessor agrees that it will
not disclose the contents of the Approved Maintenance Program to any
person or entity except to the extent
62
necessary to monitor Lessee's compliance with this Agreement and/or
to bridge the maintenance program for the Aircraft from the Approved
Maintenance Program to another program.
16.6 Upon redelivery of the Aircraft to Lessor, an adjustment shall be
made in respect of fuel on board on the Delivery Date and on
redelivery at the price then prevailing at the Redelivery Location.
16.7 If Lessor shall request that Lessee paint the Aircraft any other
basic color as contemplated by Section 1(h) of Appendix E, Lessor
agrees that it shall bear the cost and expense of the difference
between white paint and such other basic color.
16.8 Upon written request of Lessor given to Lessee not later than thirty
(30) days prior to the Expiry Date or termination of the Lease,
Lessee, at the Expiry Date or upon termination of the Lease, will
provide, or will cause to be provided, up to thirty (30) days'
storage of the Aircraft at Lessee's premises, at Lessor's cost and
expense. During such period of storage, Lessee will arrange for
insurance and maintenance at Lessor's cost and expense. Lessee shall
allow Lessor or any representatives of any prospective purchaser or
user of the Aircraft to inspect the same at all reasonable times.
17. CASUALTY OCCURRENCES
17.1 In this Agreement "Casualty Occurrence" shall mean any of the
following events with respect to the Aircraft, the Airframe or an
Engine:
(a) the actual, agreed, constructive, arranged or compromised
total loss or destruction of the Aircraft, the Airframe or an
Engine, or damage to the Aircraft, Airframe or Engine
rendering repair impracticable or uneconomical, or the
Aircraft, Airframe or Engine being rendered permanently unfit
for normal use;
(b) requisition of title or other compulsory acquisition,
requisition, capture, seizure, deprivation, confiscation or
detention for any reason of the Aircraft, the Airframe or an
Engine by any Government Entity of the State of Registration
or by any other government or other competent authority,
whether de jure or de facto, but excluding requisition for use
or hire not involving requisition of title by any Governmental
Entity for a temporary period ending on the date
63
fifteen (15) days (or the Expiry Date) if the requisition for
use or hire is by the United States) after such requisition,
or the Expiry Date, whichever first occurs; and
(c) the hijacking, theft, disappearance, condemnation,
confiscation or seizure of the Aircraft, the Airframe or an
Engine other than in the circumstances referred to in (b)
above which deprives Lessee of the use thereof for more than
fifteen (15) consecutive days.
17.2 (a) In the event of a Casualty Occurrence with respect to the
Aircraft or Airframe prior to the Delivery Date, this
Agreement shall immediately terminate with respect to such
Aircraft and neither party shall have any further obligation
or liability hereunder, save that Lessor shall return to
Lessee the Deposit or such part thereof as Lessor shall have
received from Lessee and Lessee shall remain liable to
reimburse Lessor for any amounts specified in Article 8.2(a).
(b) In the event of a Casualty Occurrence with respect to the
Aircraft or Airframe after delivery to Lessee hereunder,
Lessee shall pay the Agreed Value to Lessor on or prior to the
earlier of (i) 45 days after the Casualty Occurrence and (ii)
the Business Day after the date of receipt of the insurance
proceeds in respect of the Casualty Occurrence and, provided
all other amounts which are then due and payable by Lessee
under this Agreement have been paid in full to Lessor,
Lessee's obligation hereunder for payment of Rent shall cease
as from the date on which Lessor receives payment in full of
the Agreed Value. Rent paid in advance for any days which
occur after such Agreed Value is paid shall be repaid to
Lessee, so long as no Default has occurred and is continuing,
on a pro rata basis for each day beyond such date of payment
of Agreed Value. Any excess insurance proceeds from the
insurance obtained by Lessee pursuant to Article 11 remaining
after payment of the foregoing amounts shall, unless a Default
shall have occurred and be continuing, be paid over to Lessee.
(c) Subject to the rights of any insurers and reinsurers or other
third party, upon irrevocable payment in full to Lessor of the
Agreed Value and all other amounts which may be or become
payable to Lessor under this Agreement, Lessor will without
recourse or warranty (except as to title and Lessor's Liens)
and without further act, be
64
deemed to have transferred to Lessee all of Lessor's rights to
any Engines and Parts not installed when the Casualty
Occurrence occurred, all on an as-is where-is basis, and will
at Lessee's expense, execute and deliver such bills of sale
and other documents and instruments as Lessee may reasonably
request to evidence (on the public record or otherwise) the
transfer and the vesting of Lessor's rights in such Engines
and Parts in Lessee, free and clear of all rights of Lessor
and Lessor Liens.
17.3 Upon the Casualty Occurrence with respect to any Engine not
involving a Casualty Occurrence of the Aircraft, Lessee shall give
Lessor prompt written notice thereof and Lessee shall replace such
Engine as soon as reasonably possible with a replacement Engine in
accordance with Article 5.1.2(a). Such replacement shall be deemed
an "Engine" as defined herein. Lessee agrees to take such action as
Lessor may reasonably request in order that any such replacement
Engine shall be duly and properly titled in Lessor or the Bank and
leased hereunder and subject to the Mortgage to the same extent as
the Engine replaced thereby. Lessee's obligation to pay the Rent
hereunder shall continue in full force and effect, but Lessee shall
be entitled to be reimbursed by Lessor the amount of insurance or
condemnation proceeds, if any, received by Lessor with respect to
such replaced Engine.
17.4 In the event of requisition for hire of the Aircraft or any part
thereof not constituting a Casualty Occurrence, then, subject to the
proviso herein contained, the Rent and other charges payable under
this Agreement shall not be suspended or abated either in whole or
in part, and Lessee shall not be released from any of its other
obligations (as to payment, indemnity or otherwise) hereunder (other
than operational obligations with which Lessee is unable to comply
solely by virtue of such confiscation or requisition).
If Lessee shall duly comply with all its obligations under this
Agreement, Lessee shall during the Term be entitled to any hire paid
by the requisitioning or confiscating authority and Lessee shall, as
soon as practicable after the end of any requisition or
confiscation, cause the Aircraft to be put into the condition
required by this Agreement. Lessor shall be entitled to all
compensation payable by the requisitioning or confiscating authority
in respect of any change in the structure, state or condition of the
Aircraft arising during the period of requisition or confiscation,
and Lessor shall apply such compensation
65
in reimbursing Lessee for the cost of complying with its obligations
as aforesaid, but so that, if any Default has occurred and is
continuing, Lessor shall be entitled to apply such compensation in
or towards settlement of any amounts owing by Lessee under this
Agreement PROVIDED ALWAYS that if following such requisition or
confiscation the Aircraft is treated as an agreed, constructive,
arranged or compromised total loss by the insurers, then the
provisions of Article 17.1 shall apply with effect from the date on
which the insurer so determines.
18. GOVERNING LAW AND JURISDICTION
18.1 This Agreement and further agreements resulting herefrom shall be
governed by and construed in accordance with the internal Laws of
the State of New York and without regard to any conflict of law
rules. This Agreement is being delivered in the State of New York.
18.2 Lessor and Lessee hereby irrevocably agree to submit to the
non-exclusive jurisdiction of, and to waive any objection to the
laying of venue in, the County of New York and that any suit, action
or proceedings (collectively, "Proceedings") may be brought by
Lessor in any court of the State of New York or any U.S. Federal
court located in New York County, New York.
18.3 Nothing contained in this Article 18 shall limit the right of either
party to this Agreement to take Proceedings against the other in any
other court of competent jurisdiction, nor shall the taking of
Proceedings in one or more jurisdictions preclude the taking of
Proceedings in any other jurisdiction, whether concurrently or not.
18.4 Promptly after service of any process the Lessor or Lessee shall
dispatch a copy thereof to Lessee or Lessor, as the case may be, by
registered mail, postage prepaid but failure of Lessee or Lessor, as
the case may be, to receive such copy shall not invalidate the
service of such process.
18.5 To the extent that the parties may in any jurisdiction claim for
their or their assets immunity from suit, execution, attachment
(whether in aid of execution, before judgment or otherwise) or other
legal process and to the extent that in any such jurisdiction there
may be attributed to themselves or their assets such immunity
(whether or not claimed) the parties hereby irrevocably agree not to
claim and hereby irrevocably waive any immunity to the fullest
extent permitted by
66
the laws of such jurisdiction with the intent, inter alia, that the
foregoing waiver shall have effect for the purposes of the Foreign
Sovereign Immunities Act of 1976 of the United States of America.
18.6 Lessee and Lessor shall each at all times maintain an agent for
service of process in the New York, New York. For Lessee, such agent
shall be Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. For Lessor, such agent
shall be Haight, Gardner, Poor & ▇▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇. Kwoh, ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. Any writ, judgment or other notice of
legal process shall be sufficiently served on Lessee or Lessor if
delivered to such agent at its address for the time being. Each of
Lessee and Lessor undertakes that if it shall revoke the authority
of its above agent or if for any reason any such agent no longer
serves as agent to receive service of process, Lessee or Lessor, as
the case may be, shall promptly appoint another such agent and
advise Lessor or Lessee, as the case may be, thereof.
19. MISCELLANEOUS
19.1 The rights of each of Lessor and Lessee under this Agreement are
cumulative, may be exercised as often as it considers appropriate
and are in addition to its rights under general law. The rights of
Lessor against the Lessee or in relation to the Aircraft (whether
arising under this Agreement or the general law) shall not, as
against or in favor of Lessor, be capable of being waived or varied
otherwise than by an express waiver or variation in writing; and in
particular any failure to exercise or delay in exercising any of
such rights shall not operate as a waiver or variation of any other
such right; and defective or partial exercise of any such rights
shall not preclude any other or further exercise of that or any
other such right; and no act or course of conduct or negotiation on
Lessor's part or on Lessor's behalf shall in any way preclude Lessor
from exercising any such right or constitute a suspension or any
variation of any such right.
19.2 Save where expressly provided in this Agreement, any certificate or
determination by Lessor as to any rate of interest or as to any
other amount payable under this Agreement shall, in the absence of
manifest error, be conclusive and binding on Lessee.
19.3 If any sum paid or recovered in respect of the liabilities of Lessee
under this Agreement is less than the amount then due, Lessor may
apply such sum to
67
rental, interest, fees or any other amount due under this Agreement
in such proportions and order and generally in such manner as Lessor
shall determine.
19.4 The terms and conditions of this Agreement shall not be varied
otherwise than by an instrument in writing executed by or on behalf
of Lessor and Lessee.
19.5 If any of the provisions of this Agreement becomes invalid, illegal
or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired.
19.6 Every notice, request, demand or other communication under this
Agreement shall:
(a) be in English;
(b) be in writing and made by mail or by fax or telex transmission
or by reputable courier service;
(c) be deemed to have been received, subject as otherwise provided
in this Agreement, in the case of a telex transmission, at the
time of dispatch with confirmed answerback of the addressee
appearing at the beginning and the end of the communication,
in the case of a fax transmission, at the time safe receipt is
confirmed by the addressee provided that if the date of
dispatch is not a business day in the country of the addressee
any telex or fax transmission shall be deemed to have been
received at the opening of business on the next such business
day, in the case of a letter five days after being deposited
in the mail first class postage prepaid and in the case of a
courier three days after being sent; and
(d) be sent:
(1) to Lessee at:
Midway Airlines Corporation
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
68
(2) to Lessor at:
First Security Bank of Utah, N.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
with a copy to FAUSA at:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: The President
with a copy to Beneficiary at:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
Post Office Box 12222
1100 AE Amsterdam Zuidoost
The Netherlands
Attention: Vice President-Contracts
Fax: ▇▇-▇▇-▇▇▇-▇▇▇▇.
or to such other address or telex or fax number as is notified by
either party to the other party to this Agreement.
19.7 This Agreement may be executed in any number of counterparts and all
of such counterparts taken together shall be deemed to constitute
one and the same instrument.
19.8 This Agreement is the sole and entire agreement between Lessor and
Lessee in relation to the leasing of the Aircraft, and supersedes
all previous agreements in relation to such leasing. Each of Lessee
and Lessor represents for itself that no broker has been retained by
it in connection with this Agreement.
19.9 This Agreement is intended by the parties to be a lease between
Lessor and Lessee. Any waivers, consents, deferrals of the payment
of Rent or Reserve Rates are not intended to be an agreement by
Lessor to make any capital contribution to the business of Lessee or
to share in or have liability for any of Lessee's losses, profits,
liabilities or obligations. Nothing contained in this Agreement or
performed by Lessor in connection herewith and any other agreement
between Lessor and Lessee whether now existing or entered into in
the
69
future shall make Lessor a partner or a joint venturer of Lessee and
shall not for any purpose be construed as a joint-venture between
the parties hereto.
19.10 Intentionally Omitted.
19.11 Section 1110: Lessee acknowledges that Lessor would not have entered
into this Agreement unless it had available to it the benefits of a
lessor under Section 1110 of Title 11 of the United States Code.
Lessee and Lessor hereby state that this Agreement is intended to be
a true lease for U.S. Internal Revenue Code purposes. Lessee
covenants and agrees with Lessor that to better ensure the
availability of such benefits, Lessee shall support any motion,
petition or application filed by Lessor with any bankruptcy court
having jurisdiction over Lessee, whereby Lessor seeks recovery of
possession of the Aircraft under said Section 1110 and shall not in
any way oppose such action by Lessor unless Lessee shall have
complied with the requirements of said Section 1110 to be fulfilled
in order to entitle Lessee to continued use and possession of the
Aircraft hereunder. In the event said Section 1110 is amended, or if
it is repealed and another statute is enacted in lieu thereof,
Lessor and Lessee agree to amend this Agreement and take such other
action not inconsistent with this Agreement as Lessor reasonably
deems necessary so as to afford to Lessor the rights and benefits as
such amended or substituted statute confers upon owners and lessors
of aircraft similarly situated to Lessor.
19.12 First Security Bank of Utah, N.A. ("FSBU") is entering into this
Agreement solely as trustee under the Trust Agreement and not in its
individual capacity and in no case whatsoever shall FSBU (or any
entity acting as successor trustee under the Trust Agreement) be
personally liable on, or for any loss in respect of, any of the
statements, representations, warranties, agreements or obligations
of Lessor hereunder as to all of which the other party hereto agrees
to look solely to the Trust Estate, except for any loss caused by
FSBU's own willful misconduct or gross negligence. FSBU warrants
that the Aircraft shall be free of liens attributable to FSBU in its
individual capacity which do not arise from its actions as lessor
under this Agreement and that it shall be personally liable to
Lessee for any Claim against Lessee in respect of any statements,
representations, warranties, agreements or obligations contained
herein which are expressly made in its individual capacity.
70
19.13 As between Lessor and Lessee, if Lessee fails to make any payment of
Rent or Reserve Rate required to be made by it hereunder or fails to
perform or comply with any of its agreements contained herein,
Lessor may itself make such payment or perform or comply with such
agreement, and the amount of such payment and the amount of the
reasonable and properly documented expenses of Lessor incurred in
connection with such payment or the performance of or compliance
with such agreement, as the case may be, together with interest
thereon at the interest rate defined in Appendix D, Article 6, shall
be deemed Supplemental Rent, payable by Lessee upon demand.
IN WITNESS whereof the parties have executed this Agreement the day and year
first herein written.
SIGNED on behalf of SIGNED on behalf of
FIRST SECURITY BANK OF UTAH, N.A. MIDWAY AIRLINES CORPORATION
not in its individual
capacity, except as
expressly set forth
herein, but solely
as owner trustee
By: /s/ [ILLEGIBLE] By:
------------------------------- -------------------------------
Its: Asst. Vice President Its:
------------------------------ ------------------------------
71
19.13 As between Lessor and Lessee, if Lessee fails to make any payment of
Rent or Reserve Rate required to be made by it hereunder or fails to
perform or comply with any of its agreements contained herein,
Lessor may itself make such payment or perform or comply with such
agreement, and the amount of such payment and the amount of the
reasonable and properly documented expenses of Lessor incurred in
connection with such payment or the performance of or compliance
with such agreement, as the case may be, together with interest
thereon at the interest rate defined in Appendix D, Article 6, shall
be deemed Supplemental Rent, payable by Lessee upon demand.
IN WITNESS whereof the parties have executed this Agreement the day and year
first herein written.
SIGNED on behalf of SIGNED on behalf of
FIRST SECURITY BANK OF UTAH, N.A. MIDWAY AIRLINES CORPORATION
not in its individual
capacity, except as
expressly set forth
herein, but solely
as owner trustee
By: By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------------------- -------------------------------
Its: Its: Senior Vice President
------------------------------ ------------------------------
71
APPENDIX A
DESCRIPTION OF AIRCRAFT
Manufacturer Model Serial No. Engines Number of
------------ ----- ---------- ------- ---------
Engines
-------
Fokker 100 11330 Rolls Royce Two
▇▇▇ ▇▇ 650-15
▇▇
▇▇▇▇▇▇▇▇ ▇
FURTHER DEFINITIONS AND VALUES
AGREED VALUE : [***], for the first year of the Term
through and including the first anniversary
date of the Delivery Date, and for each
subsequent year the Agreed Value shall be:
Second Year: [***]
Third Year: [***]
Fourth Year: [***]
provided that the Agreed Value for any of
the above years may be adjusted up to FMV
(but never in excess of [***] if Lessor
provides to Lessee an independent appraisal
(at Lessor'scost) prior to the beginning of
any such year. If Lessee does not agree to
such appraised value, Lessee may follow the
Appraisal Procedure by giving Lessor written
notice of election to so proceed within 20
days of receipt of Lessor's independent
appraisal.
DEPOSIT : [***].
PARTIAL LOSS AMOUNT : [***]
RENT : [***]
RESERVE RATE : [***] per flight hour plus $10.30 (Dollars
Ten 30/100) per Cycle, to be adjusted in
conformance to Appendix D, Article 3.
73
APPENDIX C
CERTIFICATE OF ACCEPTANCE
This Certificate of Acceptance is delivered, on and as of the date set forth
below, by Midway Airlines Corporation (herein referred to as "Lessee") to First
Security Bank of Utah, N.A., not in its individual capacity but solely as
trustee, (herein referred to as "Lessor") pursuant to that Aircraft Operating
Lease Agreement No. 136 dated as of December 15, 1995 between Lessor and Lessee
(herein referred to as the "Agreement"):
1. Details of Acceptance
Lessee hereby indicates and confirms to Lessor, its successors and
assigns, that the Lessee has at ______ o'clock on this _____ day of _____
1995 at _________ accepted the following from Transwede and concurrently
therewith from Lessor, in accordance with the provisions of the Agreement:
(a) Fokker 100 airframe, Manufacturer's serial Number 11330
(b) Rolls ▇▇▇▇▇ ▇▇▇ Mk 650-15 Engines (each of which engines has 750 or
more rated takeoff horsepower).
Engine Number Manufacturer's S/N
1. 17667
2. 17668
(c) Fuel Status: ______ kilos; ______ liters
(d) Loose Equipment Check List: as per list inserted or referred to, as
the case may, in Section 11 of Appendix E of the Agreement.
2. Confirmation of Undertakings
The terms used in this Certificate shall have the meanings given to such
terms in the Agreement.
The Lessee confirms that today being the Delivery Date as defined in the
Agreement:
(i) the Aircraft is duly accepted by the Lessee in accordance with and
subject to the provisions of the Agreement and the execution and
delivery of this Certificate constitutes the acceptance of the
Aircraft by the Lessee for all purposes of the Agreement.
74
DELIVERY BY LESSEE TO LESSOR OF THIS CERTIFICATE OF ACCEPTANCE SHALL
CONSTITUTE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT ON THE
DELIVERY DATE LESSEE'S TECHNICAL EXPERTS EXAMINED AND INVESTIGATED
THE AIRCRAFT AND EVERY PART THEREOF ARE AIRWORTHY AND IN GOOD
WORKING ORDER AND REPAIR, WITHOUT DEFECT WHETHER OR NOT DISCOVERABLE
AS AT THE DELIVERY DATE AND IN EVERY WAY SATISFACTORY TO LESSEE;
(ii) the Lessee is obliged to pay to the Lessor the amount provided for
in the Agreement with respect to the Aircraft;
(iii) the Aircraft is insured in accordance with the Agreement;
(iv) the representations and warranties contained in Article 13 of the
Agreement remain, and if made at the date of this Certificate of
Acceptance, would be, true and correct in all respects;
(v) there have been affixed to the Aircraft and the Engines the fire
resistant notices required by Article 4.3 of the Agreement;
(vi) the Lessee has no right of set-off, deduction, withholding or
counterclaim against the Lessor whatsoever; and
(vii) no Default is subsisting.
IN WITNESS WHEREOF, Lessee has caused this Certificate of Acceptance to be
executed in its name, by its duly authorized officer(s) or representative(s),
pursuant to due corporate authority, all as of the date written in Paragraph 1
above.
MIDWAY AIRLINES CORPORATION
By: ________________________
Title: _____________________
75
APPENDIX D
CHARGES
1. Deposit
Lessee shall pay to Lessor [***] as a Deposit for the Aircraft on or
prior to January 5, 1996 in the manner specified in Paragraph 4 of
this Appendix D.
The Deposit shall be held by Lessor during the Term as security for the
full and punctual performance of all of Lessee's obligations to Lessor
under this Agreement. Lessor may, but shall not be obliged to, apply the
Deposit in whole or in part for the payment of any rent, maintenance
accruals, indemnities, attorneys fees and other expenses, insurance and
other casualty payments and any other amount owing from time to time by
Lessee hereunder or any other Operative Document, between Beneficiary or
its affiliate companies, and Lessee, or for the payment of any loss or
damage suffered by Lessor as a result of any Event of Default or utilize
the Deposit in whole or in part to perform any of Lessee's obligations
under this Agreement or otherwise remedy any other Event of Default,
including, without limitation, in the redelivery condition for the
Aircraft without prejudice to any other remedy of Lessor. In any such
event Lessee shall on demand restore the Deposit to the full amount
provided for herein by payment to Lessor of an amount in cash equal to the
amount applied or utilized. Lessee shall not attempt to subject the
Deposit to any other lien, security interest, charge or other encumbrance
or assign any interest therein to any other person and, to the extent of
its interest therein, if any, Lessee hereby grants to Lessor a security
interest in the Deposit and assigns and transfers to Lessor any and all of
Lessee's right, title and interest therein, if any, as security as
provided above, and Lessor shall be entitled to the remedy of offset
against and application of the Deposit, without any notice to or demand
against Lessee, all of which are hereby waived. Lessee further agrees that
the Deposit may be, without derogating from the terms of this Agreement,
assigned as security to the Bank or transferred to any other transferee of
Lessor. Should any Event of Default hereunder occur, the Deposit shall
automatically be applied to any sum due to Lessor or as a prepayment of
any sum to become payable to Lessor, unless Lessor thereafter elects
otherwise by notice to Lessee.
Any remaining Deposit shall be repaid by Lessor to Lessee ten (10) days
following the Expiry Date or other date after redelivery of the Aircraft
in accordance with this Agreement. In the event there is a dispute as to
whether
76
Lessee is entitled to a return of any portion of the Deposit, Lessor shall
so return the undisputed amount of the Deposit. Upon a repayment of such
Deposit or portion thereof, Lessor's security interest in and assignment
of such Deposit or portion thereof being repaid shall be deemed released.
Lessor's obligations in respect of the return of the Deposit shall be
those of debtor of Lessee, not of a trustee or other fiduciary.
The Deposit shall bear interest on the amounts then held at a rate of
interest per annum yielding $10,500 (Dollars Ten Thousand Five Hundred)
per year payable annually commencing on the first anniversary of the
Delivery Date, and on each anniversary thereafter unless the Deposit and
interest thereon shall have been applied pursuant to this Agreement. Any
reference to the Deposit in this Agreement shall include the interest
accumulated thereon and not paid to Lessee.
2. Rent
2.1 Rent shall be due and payable on each Rent Date and, with respect to
the final Rent date, shall be prorated through and including the
Expiry Date based upon the actual number of days and a thirty-day
month. If such date is not a Business Day then Rent shall be due and
payable on the last Business Day preceding such date.
2.2 The monthly Rent shall be adjusted upward by an amount equal to $875
(Dollars Eight Hundred Seventy Five) per month which shall be
payable to Lessor by check annually commencing on the first
anniversary of the Delivery Date, and on each anniversary
thereafter, with the balance due at the Expiry Date. Lessee may
elect to authorize Lessor in writing to set-off amounts payable
pursuant to this Article against interest on the Deposit which is
payable by Lessor pursuant to Article 1 of this Appendix D
irrespective of whether or not an Event of Default shall have
occurred and be continuing.
2.3 Intentionally omitted.
2.4 Intentionally omitted.
2.5 Intentionally omitted.
2.6 Intentionally omitted.
77
2.7 Intentionally omitted.
3. Reserve Rate
3.1 In addition to installments of Rent, Lessee shall pay to Lessor the
Reserve Rate as follows:
(a) by way of an Airframe maintenance accrual, the sum of [***]
of which [***] shall be accrued for the 12,000 hour check and
[***] shall be accrued for the 24,000 hours check until the
12,000 hours check shall have been executed. After execution
of such check, 100% (one hundred percent) of the Airframe
Maintenance Accrual shall be accrued for the 24,000 hours
check for each Flight Hour the Aircraft is operated during the
Term ("Airframe Maintenance Accrual"); and
(b) by way of an Engine maintenance accrual, in respect of each
Engine the sum of [***] for each Flight Hour operated by each
Engine during the Term ("Engine Maintenance Accrual"). The
percentage of the various maintenance activities shall be
agreed between the parties after signing of this Agreement;
and
(c) by way of a landing gear maintenance accrual, the sum of
[***] for each Cycle operated by the landing gear during the
Term ("Landing Gear Maintenance Accrual").
The Airframe, Engine and Landing Gear Maintenance Accruals accruing
in any Rental Period shall be paid by Lessee to Lessor not later
than ten (10) days after the end of the calendar month in which such
Rental Period shall end; provided that Lessee shall be relieved of
its obligation to pay the Engine Maintenance Accrual or Landing Gear
Maintenance Accrual with respect to any Engine or Landing Gear, as
the case may be, during any period that an Aircraft Maintenance
Agreement is in effect with respect to such Engine or Landing Gear.
Concurrently with the payment thereof, Lessee shall report to Lessor
(in accordance with Article 7.1(e)) the number of Flight Hours and
Cycles accumulated in respect of the period for which payment is
being made.
78
The Reserve Rate will be subject to adjustment every six (6) months
during the Term by reference for 65% to the Employment and Earnings
Index for U.S.A. labor cost average hourly earnings of production
(Aircraft Equipment) SIC 3728, table C-2 and for 35% to the Producer
Price Index for U.S.A. material cost commodity groupings (Machinery
and Equipment) Code 11/table 6. In addition the Engine Maintenance
Accrual, if any, will be subject to adjustment every six (6) months
during the Term having regard to the Engine Manufacturer
recommendations, industry experience and any change in the
operational environment of the Aircraft.
Any Reserve Rate shall, if requested by either Lessor or (unless an
Event of Default shall have occurred and be continuing) Lessee, be
adjusted to take into account any changes in the maintenance
intervals upon which Reserve Rates are based.
3.2 Maintenance Accruals as defined in paragraph 3.1 above and received
by Lessor shall respectively be credited to funds (collectively
"Maintenance Funds") to be known as the "Airframe Maintenance Fund",
the "Engine Maintenance Fund" and the "Landing Gear Maintenance
Fund" which funds shall reduce as monies are released to Lessee
therefrom in accordance with Article 7.4.1.
3.3 The monies in the Maintenance Funds under the Transwede Lease held
by Beneficiary at the date of termination thereof shall be
transferred by Beneficiary to the respective Maintenance Funds under
this Agreement in accordance with the provisions of the Tripartite
Agreement.
3.4 The Reserve Rates shall accrue interest at a rate which will be 1%
(one percent) less than six (6) months LIBOR applicable to each six
(6) months over which the rate will be calculated. For the
determination of such rate of interest the first such 6 (Six) month
period shall start at the Delivery Date and subsequent 6 (Six) month
periods shall start at expiry of the previous 6 (Six) month period.
Such interest shall accrue in the relevant Maintenance Fund and
shall be paid to Lessee at the moment and to the extent any "Excess"
as described in Paragraph 3.6 of this Appendix D shall be paid out
to Lessee.
3.5 Intentionally deleted.
79
3.6 On the Expiry Date, if there is any Excess (as defined below) in any
Maintenance Fund, such Excess shall, unless a Default shall have
occurred and be continuing (in which case only after termination,
return of the Aircraft and payment of all amounts due following
exercise of remedies under Article 15), be paid to Lessee, and on
such date, if there is any Shortfall (as defined below) in any
Maintenance Fund, Lessee shall pay such Shortfall to Lessor.
"Excess" in any Maintenance Fund on the Expiry Date shall mean any
positive difference obtained by subtracting (x) from (y) for the
Airframe, Engines, Landing Gears or A.P.U., as the case may be;
(x) shall mean the product of (I) the then market cost from an
independent Authorized Maintenance Performer in the United States
and corrected for the experience of all United States based
operators of Fokker 100 aircraft for the relevant item:
with respect to the Aircraft, to perform a scheduled airframe
heavy maintenance as defined in the Maintenance Program for
12,000 hours and 24,000 hours inspections or any equivalent
thereof with more or less hours ("Airframe Maintenance"), or
with respect to any Engine, to perform a scheduled shop visit
engine maintenance and repair, other than (i) repairs arising
as a result of foreign object damage or operations mishandling
and/or (ii) maintenance and repair of QEC (Quick Engine
Change) kits ("Engine Maintenance"), or
with respect to any nose or main landing gear to perform a
schedule shop visit nose and main landing gear maintenance and
repair, other than repairs arising as a result of foreign
object damage or operational mishandling ("Landing Gear
Maintenance"), and
(II) a fraction of which (a) the numerator shall be the difference
between the actual number of hours or cycles (as to landing gear),
as the case may be, of operation remaining on the Airframe, Engine
or Landing Gear, as the case may be, to the next such Airframe
Maintenance, Engine Maintenance or Landing Gear Maintenance, as the
case may be, and the total number of hours or cycles, as the
80
case may be, of operation allowable between such Maintenance and (b)
the denominator shall be the total number of hours or cycles, as the
case may be, of operation allowable between such Maintenance.
(y) shall mean the actual dollar amount remaining in the respective
Maintenance Fund.
"Shortfall" in any Maintenance Fund on the Expiry Date shall mean
any negative difference obtained by subtracting (x) above from (y)
above and, for the avoidance of doubt, shall include any shortfall
created by Lessee having been relieved, by reason of an Aircraft
Maintenance Agreement pursuant to Article 3.1 of this Appendix D, of
its obligation to pay any element of the Maintenance Accrual.
4. Payments
All payments of Rent due hereunder shall be effected by Lessee to Lessor
by transfer to Chemical Bank in New York, New York, in favor of the
Beneficiary, account number ▇▇▇-▇-▇▇▇▇▇, Ref. Aircraft MSN 11330, LA136,
and all payments of Reserve Rate and Supplemental Rent due hereunder shall
be effected by Lessee to Lessor by transfer to Chemical Bank in New York,
New York, in favor of the Beneficiary, account number ▇▇▇-▇-▇▇▇▇▇, Ref.
Reserve Rate Aircraft MSN 11330, and all such payments shall be in Dollars
and in immediately available funds, and all such payments shall be
initiated adequately in advance of the due dates to ensure that Lessor
receives credit for the full amount of such payment on the due dates. All
such payments shall be made in full without any deduction or withholding
(whether in respect of set-off, counterclaim, duties, taxes, charges or
otherwise howsoever) unless Lessee is prohibited by Law from doing so, in
which event Lessee shall (a) ensure that the deduction or withholding does
not exceed the minimum amount legally required; (b) forthwith pay to
Lessor such additional amount as shall result in the net amount received
by Lessor being equal to the amount which would have been received by
Lessor had such a deduction or withholding not been made; (c) pay to the
relevant taxation or other authorities within the period for payment
permitted by applicable Law the full amount of the deduction or
withholding; and (d) upon request in writing from Lessor to Lessee furnish
to Lessor, within the period for payment permitted by applicable Law, an
official receipt of the relevant taxation or other authorities involved
for all amounts deducted or withheld as aforesaid.
81
5. Currencies
If under any applicable Law, whether as a result of judgment against
Lessee or the liquidation of Lessee or for any other reason, any payment
under or in connection with this Agreement is made or recovered in a
currency other than United States Dollars then, to the extent that the
payment (when converted to United States Dollars at the rate of exchange
on the date of payment or, in the case of the liquidation, the latest date
for the determination of liability permitted by the applicable Law) falls
short of the amount unpaid under this Agreement, Lessee shall, as a
separate and independent obligation, fully indemnify Lessor against the
amount of the short fall; for the purposes of this paragraph, "rate of
exchange" means the rate at which Lessor is able on the relevant date to
purchase United States Dollars in London with that other currency.
6. Default Interest
If any amount payable pursuant to this Agreement is not paid by Lessee on
the due date, Lessee shall pay to Lessor interest (after as well as before
judgment) on such amount, at the rate of 6-month LIBOR (as applicable two
Business Days before the date of Default)), plus four per cent (4%) per
annum from the due date to the date of payment in full by Lessee to
Lessor, but in the event such rate shall be in excess of the highest rate
permitted by applicable law, then it shall mean the highest rate allowed
by applicable law. All amounts of interest payable hereunder shall be
calculated on the basis of the actual number of days elapsed and a 360-day
year.
7. Set-off
At any time after an Event of Default shall have occurred and be
continuing, Lessor shall be entitled to set-off or withhold from any
amount due and payable to Lessee under this Agreement or any Other
Aircraft Agreement, or any amount standing to the credit of Lessee on any
account, in or towards the satisfaction of any amounts from time to time
due and payable by Lessee under this Agreement or any Other Aircraft
Agreement or any liability or obligation of Lessee under this Agreement or
any Other Aircraft Agreement, and shall be entitled to do so
notwithstanding that any such amount or amounts may not be expressed in
the same currency.
8. Time at which payments are due
Supplemental Rent shall be due and payable on demand unless otherwise
expressly stated herein.
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9. Purchase Option
Lessor grants to Lessee the right to purchase and to take delivery of the
Aircraft on the Expiry Date of this Agreement for a price equal to the
greater of the fair market value (as deferred to the penultimate sentence
of this paragraph, "FMV") of the Aircraft on the Expiry Date and
[***]; such price being the "Option Price"). If Lessee elects to exercise
its right to purchase the Aircraft, Lessee shall do so by giving to
Lessor written notice of such election at least two hundred seventy (270)
days prior to the Expiry Date. The FMV of the Aircraft on the Expiry Date
shall be established by an independent internationally reputed aircraft
appraiser appointed by mutual agreement of Lessor and Lessee within one
(1) month of the date of receipt by Lessor of Lessee's notice of election
to purchase. If Lessor and Lessee shall be unable to agree on such
aircraft appraiser, FMV shall be established by a mutually agreed
appraisal prepared and delivered by two independent internationally
reputed aircraft appraisers, one of which shall be chosen by Lessor and
one by Lessee. If such appraisers shall be unable to agree on FMV, FMV
shall be equal to the average of the fair market values established by
such appraisers. Any appraisal shall meet internationally accepted
standards and shall be binding upon Lessee and Lessor. The appraisal
procedure outlined in this Article 9 shall be referred to herein as the
"Appraisal Procedure". The FMV shall be equal in amount to the value that
would be obtained as of the Expiry Date in an arms'-length transaction
between an informed and willing purchaser under no compulsion to buy and
an informed and willing seller under no compulsion to sell with the
Aircraft assumed to be in the condition required upon the return thereof
at the end of the Term in accordance with Article 16 without considering
the encumbrance of this Agreement. All costs and expenses of the FMV
appraisal shall be shared equally by Lessor and Lessee. Upon receipt by
Lessor of the Option Price, Lessor will pay to Lessee any remaining
amounts in the Maintenance Funds and it will transfer to Lessee title to
the Aircraft on an "AS IS--WHERE IS" basis without any warranty or
recourse (except as to the absence of Lessor's Liens) and will also
transfer any surviving warranty given by Manufacturer. Lessor shall
execute and deliver to Lessee on such scheduled purchase date a ▇▇▇▇ of
sale to the Aircraft.
▇▇
▇▇▇▇▇▇▇▇ ▇
CONDITION AT RE-DELIVERY
Upon redelivery of the Aircraft to Lessor, the Aircraft shall, subject to
ordinary wear and tear generally:
1. General Condition
(a) Be clean by airline standards;
(b) Have installed the Engines, and other equipment, Parts and
accessories and loose equipment as would remain installed in such
Aircraft, and shall be in a condition suitable for operation in
commercial service;
(c) Have in existence a valid Certificate of Airworthiness with respect
to the Aircraft issued by the Air Authority of the State of
Registration with a validity of at least nine (9) months after the
date of redelivery of the Aircraft to Lessor;
(d) Comply with the manufacturer's original specifications therefor;
(e) Have undergone, immediately prior to redelivery, a 3000 Check or any
subsequent higher inspection, if due within 3000 hrs, in accordance
with the Approved Maintenance Program, shall be free of any waivers,
and all deferred maintenance, if any, shall have been accomplished;
each engine and A.P.U. shall have had an inspection in accordance
with Article 16 confirming release for its remaining operational
life;
(f) All outstanding airworthiness directives and mandatory orders
affecting such model of Aircraft issued by the Air Authority which
require compliance during the Term shall have been accomplished;
(g) Have installed all applicable vendors' and manufacturers' service
bulletin kits theretofore received by Lessee free of charge that are
appropriate for the Aircraft and to the extent not installed, such
kits shall be furnished free of charge to Lessor;
(h) Stripped of all Lessee's paint scheme and repainted through an
Authorized Maintenance Performer with Manufacturer approved paints
in white or any other basic color requested by Lessor; and
(i) Have been inspected and treated with respect to corrosion as defined
in the Approved Maintenance Program.
84
2. Airframe and major components
The Airframe and major components shall have not less than the following
hours/cycles/months expected life remaining to the next Major Check and/or
overhaul:
-Airframe : 3000 hours and 12 months to next
Major Check;
-Engine : half life on average to next Engine
shop visit but in no event less than
3000 hours;
-Main Landing Gear : 3000 cycles to next overhaul;
-Nose Landing Gear : 3000 cycles to next overhaul;
* The records as to remaining engine life shall be certified by Lessee in
writing to Lessor upon redelivery of the Aircraft to Lessor.
3. Components
(a) Each life-limited Part shall have not less than 3000 (Three
Thousand) flight hours or cycles of the total approved life
remaining to the scheduled replacement, in accordance with the
Approved Maintenance Program;
(b) Each hard-time controlled component shall have not less than 3000
(Three Thousand) Flight Hours or 3000 (Three Thousand) Cycles or 12
(twelve) months whatever is applicable, remaining to the next
scheduled overhaul/inspection, in accordance with the Approved
Maintenance Program;
(c) "On-condition" and "Condition Monitored" components shall be
serviceable;
(d) The A.P.U. shall be serviceable.
4. Fuselage, Windows and Doors
(a) Fuselage shall be free of major dents and abrasions, scab patches
and loose or pulled or missing rivets;
(b) Windows shall be free of delamination, blemishes, crazing and shall
be properly sealed;
(c) Doors shall be free moving, correctly rigged and be fitted with
serviceable seals.
5. Wings and Empennage
(a) All leading edges shall be free from damage;
85
(b) All unpainted cowlings, fairings and other surfaces shall be
polished;
(c) Wings shall be free of fuel leaks.
6. Interior
(a) Ceilings, sidewalls and bulkhead panels shall be clean and free of
cracks and stains;
(b) All carpets and seat covers shall be in good condition, clean and
stain free and meet Air Authority fire resistance regulations;
(c) All seats shall be serviceable, in good condition and repainted as
necessary;
(d) All signs and decals shall be clean and legible;
(e) All emergency equipment having a calendar life shall have a minimum
of one year or one hundred per cent of its total approved life,
whichever is less, remaining.
7. Cockpit
(a) All decals shall be clean, secure and legible;
(b) All fairing panels shall be free of stains and cracks, shall be
clean, secure and repainted as necessary;
(c) Floor coverings shall be clean and effectively sealed;
(d) Seat covers shall be in good condition, clean and shall conform to
Air Authority fire resistance regulations;
(e) Seats shall be fully serviceable and shall be repainted as
necessary.
8. Cargo Compartments
(a) All panels shall be in good condition;
(b) All nets shall be in good condition.
9. Landing Gear and Wheel ▇▇▇▇▇
(a) Shall be clean, free of leaks and repaired as necessary;
(b) All decals shall be clean, secure and legible.
86
10. Corrosion
(a) Entire fuselage shall be substantially free from corrosion and shall
be adequately treated and an approved corrosion prevention program
shall be in operation;
(b) Fuel tanks shall be free from contamination and corrosion and a tank
treatment program shall be in operation.
11. Specification
The Aircraft shall conform to its specification at the Delivery Date,
including the following:
1. The Aircraft Configuration as defined in Appendix A of the Transwede
Lease attached as Annex 1 to this Appendix E.
2. Specification changes performed by or on behalf of Transwede in
accordance with the provisions of the Tripartite Agreement as
follows:
a. Modification to install Flight Management System Airline
Option No. 5; Ref. Fokker SCN 34-62.S008.
b. Modification to change from CAA certification to FAA
Certification; Ref. Fokker SCN 02-20.C004.
C. Modification to change indicators from Kilograms to Pounds;
Ref. Fokker SCN 28-40.C003.
d. Modification to install TCAS; Ref. Fokker SCN 34-46.C004.
e. Modification of Pitot Heat System in accordance with Service
Bulletin F100-30-017.
f. Installation of Galley Door Viewer in accordance with Service
Bulletin F100-52-053.
g. Any and all modifications necessary to obtain a Swedish Export
Certificate of Airworthiness and the issuance of a Certificate
of Airworthiness by the FAA including completion of all
Airworthiness Directives required by the FAA, the BLA or other
relevant authority.
3. The Loose Equipment Checklist attached as Annex 2 to this Appendix
E.
87
ANNEX 1 TO APPENDIX E
FOKKER 100
AIRCRAFT CONFIGURATION
BETWEEN
STOCKHOLM AIRCRAFT FINANCE V B.V.
AND
TRANSWEDE AIRWAYS AB
AIRCRAFT CONFIGURATION
relating to
Fokker 100 aircraft
PART Page
---- ----
PART A: Type Specification 64
Attachment A to Part A 65
PART B: Installed additional equipment 66
PART C: Lessee's additional requirements 86
Emergency Equipment Lay-out 90
PART D: List of Mandatory Modifications 91
AIRCRAFT CONFIGURATION
relating to
Fokker 100 aircraft
PART A: TYPE SPECIFICATION
1) Type Specification as per printed copy supplied by Fokker Aircraft
B.V. to TRANSWEDE AIRWAYS A.B.
Document Reference: TD F.28:PL-004
Date of issue: February 01, 1983
Date of amendment: February 15, 1988
2) Engine Specification: Rolls ▇▇▇▇▇ ▇▇▇ Mk 650-15 as described in
the Rolls Royce Contract Specification 3004
issue 1, printed February 1986, including
the Design Change Orders as executed by
Rolls Royce.
ATTACHMENT A TO PART A
NUMBER DESCRIPTION
FO 02-52.80 Fokker Company Logo.
FO 03-10.80 Incorrect flying hours for the economic repair life Fokker 100.
FO 03-65.80 Correction to maximum design towing load given in the Type
Specification.
FO 03-70.80 Floor panel loading - Correction to baseline Type Specification.
FO 12-13.80 Update the approved lubrication oils info given in the baseline
Type Spec.
FO 14-00.81 Amendment to Chapter l4 of the baseline Type Spec.
FO 14-l3.80 Interchangeability - add "cable wheels and removable pulley
brackets".
FO 21-22.80 Introd. of larger ventilation louvres and extra adjustable air
outlets.
FO 21-26.80 Equipment cooling - additional fan assembly.
FO 22-10.80 Profile mode - certification.
FO 22-10.81 Speed protection for FMS profile mode.
FO 23-40.80 Amend the Fokker 100 baseline Type Spec. to reflect ATA 100
breakdown.
FO 23-51.80 ▇▇▇▇ panel location in the flight compartment.
FO 23-62.81 Electrostatic ▇▇▇▇ socket.
FO 25-50.80 Logitudinal track spacing incorrect in Type Spec.
FO 27-35.81 Stall protection - new PSRS control law.
FO 27-56.80 Flap indication availability.
FO 28-10.80 Fuel system - CWT usable capacity.
FO 28-10.81 Fuel system - main tank usable capacity.
FO 28-15.80 Fuel venting system water ingress.
FO 28-22.80 Engine fire shut-off valve - closed indication.
FO 29-12.80 Hydraulic fluid transfer.
FO 31-31.82 Relocation of Flight Data Recorder.
FO 31-41.80 Proximity switching system.
FO 32-10.80 Main Landing Gear - Torque link damper.
FO 32-10.81 Main Landing Gear - Water deflectors.
FO 33-41.80 Tires - Bias tires as standard.
FO 33-23.80 Toilet area lighting baseline Type Spec.
FO 34-43.80 GPWS - Glideslope warning inhibit annunciator.
FO 34-51.80 Type Spec. correction with respect to location of RDMI
desciption.
FO 38-10.80 Water tank installation.
FO 38-30.80 Electr. heated waste water drain masts and floor drain check
valves.
FO 49-00.80 APU "AVAIL" lamp function.
FO 49-50.80 APU - Fireproof inlet duct.
FO 49-60.80 APU automatic shutdown in flight.
FO 56-11.81 Windshield dry sealing.
FO 74-30.80 Ignition - Unit 1 deactivated, unit 2 activated.
FO 78-33.80 Thrust reverser - Electrical power supply.
FO 80-12.80 Engine starter circuit cutout.
INSTALLED ADDITIONAL EQUIPMENT OVER AND ABOVE THE
TYPE SPECIFICATION DOC.: TD F28:PL-004
FIRST ISSUE: FEB.01/83 AND AMENDED UP TO FEBRUARY 1988
--------------------------------------------------------------------------------
ATA 100 DESCRIPTION
CHAPTER
--------------------------------------------------------------------------------
02 MISCELLANEOUS
02-21 CAA Certification
The aircraft shall include all hardware modifications resulting from
the Special Conditions as applicable to the UK CAA Type
Certification of the Fokker 100 aircraft. Operational requirements
are not included
02-70 Pin Programmable Options
Flight Management System (FMS)
1. Units
a. weight related items kg
b. length distance meters
▇. ▇▇▇▇ correction mB
2. ATA/IATA departure profile ATA
3. Fuel option **) No. 1
4. Airline Type Option No. 2
Electronic Flight Instrument System (EFIS)
1. Bearing pointers on ND rose both ADF
2. ADF in ND MAP & ARC no ADF
3. Flap position on PFD disabled
4. Baro reference mB
5. FD presentation cross-bar
Multi Function Display System
1. Engine Oil Quantity liters
2. Temperature Reference (degrees) Celcius
3. Fuel Mass kg
4. Fuel Flow sec. page
5. WX Display on MFDS disabled
Automatic Flight Control & Augmentation
System (AFCAS)
1. C-chord disabled
Flight Warning Computer
1. C-chord disabled
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02-70 Pin Programmable Options (cont'd)
**) Buyer shall specify the following fuel options under option
No. 1 to its Navigation Base Vendor.
- Taxi fuel
- Route reserve
- Upper limit route reserve
- Lower limit route reserve
- Final/Time
03 STRUCTURAL DESIGN CRITERIA
03-20 Increase in MTOW
The aircraft shall be certified according to the following operating
weights:
Maximum Ramp Weight : 98.500 lbs
Maximum Take-Off Weight : 98.000 lbs
Maximum Zero Fuel Weight : 81.000 lbs
Maximum Landing Weight : 88.000 lbs
03-50 Design Speeds
Increase of Mmo to M077.
Introduction of this change is accomplished by software changes to
AFCAS, FMS and ADC.
The speed limitation placard on the main instrument panel shall be
changed to reflect the correct Vmo and Mmo. This change shall also
be reflected in all applicable manuals.
11 PLACARDS AND MARKINGS
11-10 Exterior Colour Schemes and Markings
Exterior placards and markings in English.
Placarding shall reflect the use of Mobil Jet Oil II for engine,
APU, IDG and cooling turbines.
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11-30 Interior Placards and Markings
Cabin placards and markings in English/Spanish.
Cockpit placards in English.
12 SERVICING
12-00 Servicing
Fuel contents table in kilograms (kg).
Oil : Mobil Jet Oil II
i.l.o. ESSO 2380
Fuel : JP1, JP4 and JP5
Hydr.Fluid : Skydrol 500 B4
22 AUTOFLIGHT
22-10 Extended Autoland (capability cat. 3B)
Installation of a fail-operational three channel Autoland, Automatic
Flight Control and Augmentation System suitable for automatic
landings down to 15 ft DH and 150 m RVR weather conditions.
During high speed roll-out after touch down the AFCAS provides
lateral control via the aircraft rudder.
Installation adds to the standard system: ▇▇▇ ▇, ▇▇▇ ▇ (▇▇▇. ▇▇-▇▇),
▇▇▇▇ 3 (ref. 34-42) and static inverter (ref. 24.26).
- (01) FCC 1000 ▇▇▇▇▇▇▇
23 COMMUNICATIONS
23-11 Single HF Communication System
The aircraft shall be provided with full provisions for a single
▇▇▇▇▇▇▇ HFS-700 HF communication system.
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To arrive at an operational system the following equipment is to be
supplied by Buyer.
- (01) Tranceiver, ▇▇▇▇▇▇▇ HFS-700
- (01) Antenna tuner, ▇▇▇▇▇▇▇ 4905-1
- (01) HF Control panel, Gables
23-12 VHF Communication
Installation of a Bendix VHF Communication system i.l.o. the
standard ▇▇▇▇▇▇▇ system.
The installation comprises the following Seller Furnished units,
- (02) Transceiver, Bendix RTA-44A
- (02) Antenna, Sensor
- (02) VHF Control panel, Gables
Third VHF Communications
Additionally the Aircraft shall be provided with full provisions for
a third VHF Communication system. This third VHF will be dedicated
to and fully interfaced with the provisions for the ACARS system.
To arrive at an operational system the following equipment is to be
supplied by Buyer.
- (01) Transceiver, Bendix RTA-44A
- (01) Antenna, Sensor
- (01) VHF Control panel, Gables
23-21 Selective Calling (Selcal) - ARINC 714
The Aircraft shall be provided with full provisions for a Selcal
system in acc. with ARINC 714.
The Selcal system shall be interfaced with VHF1, VHF2 and the
provisions for HF communication. The Selcal system shall be reset if
the approporiate VHF or HF system is keyed.
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To arrive at an operational system the following equipment is to be
supplied by Buyer.
- (01) Selcal unit, TEAM
23-22 ACARS
Installation of full provisions for ACARS in addition to the space
provisions provided in the baseline aircraft.
The ACARS shall provide OOOI information. The ACARS shall have a
dedicated VHF Comm system (ref. 23-12). The ACARS shall be hooked-up
to the DFDAU for report downlink purposes which are formed via the
standard parameter information connected to the DFDAU, when a second
CPU will be installed.
To arrive at an operational system the following equipment is to be
supplied by Buyer.
- (01) Management Unit (MU) with internal GMT clock, powered
from batteries, Teledyne
- (01) Interactive Display Unit (IDU) on the pedestal, Teledyne
Wiring provisions will be available for:
- (01) Cabin Management Terminal at Flight Attendant Panel,
Teledyne
- (01) Printer, to be installed in column of maintenance and
test panel, Datametric
- (01) Voice go-ahead to FWC from MU
- (01) Remote voice/data switch, on the pedestal
23-22 ACARS (cont'd)
The voice-mode shall be selectable via the IDU (pin programmable)
The OOOI information generated by the flight warning computer will
be transferred via a databus to ACARS Management Unit. In addition,
the OOOI and ground/flight info will be also hardwired.
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The aircraft ident. information will be provided via the ACARS - MU
hardwired.
The ACARS - IDU and MU shall be hardwired connected to the DFDAU.
Installation of the standard Flight Data Acquisition Unit DFDAU with
a single CPU.
23-32 Passenger Entertainment
Installation of a pre-recorded announcement and boarding music
system. The system comprises a Matsushita RDAX 7351 recorder system.
The recorder with build-in control panel shall be installed in
Galley 3.
The installation comprises the following Seller Furnished unit:
- (01) Recorder, Matsushita RD-AX7351
23-51 Audio Management
Audio control panels in the pedestal shall be relocated to the LH
and RH flightdeck side panels, as a result the ▇▇▇▇ box panels will
be installed in the sidewalls. Audio control panels will be with
provisions for VHF Com-3 and single HF Com facilities.
Because of the full provisions for VHF3 and HF, switches for these
functions are installed on the Audio Control Panels. As these
switches are not functional they must be provided with an "INOP"
sticker in accordance with JAR 25.1523.
24 ELECTRICAL POWER
24-26 Static Inverter
Installation of a single-phase autoland static inverter to provide a
source of AC power to the essential autoland 3 bus (350 VA).
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24-33 Batteries
Batteries with an increased Amp. hr. rating will be installed
resulting from CAA special conditions applicable to Fokker 100
aircraft.
25 EQUIPMENT AND FURNISHINGS
25-12 Sunvisors
Installation of two sunvisors and rail system in the flight
compartment. The visors can be locked at various angles.
25-20 Passenger Compartment
Interior lay-out is for 109 passengers in accordance with drawing
F100-01-088 sheet 1, issue -.
Accomodation shall be provided for 109 seats at 31 inch (787 mm)
pitch. Triple seats RH and double seats LH.
25-21 Passenger and Attendant seats
Installation of 109 passenger seats including covers, seatbelts,
tables etc. The fully dressed passenger seats are supplied by
Seller.
Double Cabin Attendant Seat
Installation of a rear facing double cabin attendants seat in
entrance against forward wardrobe/stowage wall on floor hardpoints
and a third top-point.
- (01) Double cabin attendant seat, Socea
Installation of a double cabin attendants seats i.l.o. a single at
the aft pressure bulkhead.
- (01) Double cabin attendant seat, Socea
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25-23 Sidewall Panels and Window Shades
Installation of a rolling blind in each window of the passenger
compartment.
- (66) Window blind, ▇▇▇▇▇
25-25 Floor Covering
Carpet material or the passenger's compartment shall be supplied by
Seller. Installation of protection covers below the floor over the
avionics rack.
25-26 Movable Cabin Divider
The aircraft shall be provided with full provisions for a movable
class divider, from approx. Sta. 6200 to Sta. 22320, which is
throughout the cabin.
Cabin backwall LH/RH incl. lintel.
25-26 Passenger Compartment Curtains
The Aircraft's passenger compartment shall be provided with curtains
and curtain rails in the following locations:
- between Galley 1 and Galley 2
- between Galley 2 and Galley 3
The required curtain material of Buyers choice shall be supplied by
Seller
25-27 Rail on Overhead Luggage Bins
Installation of a seat-placard rail on the luggage bins. An extruded
metal rail is fitted to the RH and LH luggage bins throughout the
cabin. The rail incorporates the facility to easily fit and remove
seat row placards.
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25-29 Stowage unit/Wardrobe
Deletion of the standard RH forward stowage unit behind Galley 2.
Deletion of the standard LH forward stowage unit aft of the LH
passenger door.
25-29 Trolley Stowage rear cabin
The standard wardrobes in the rear of the Aircraft's cabin (forward
of the lavatories) shall be made suitable for stowage of one half
size trolley (one at each side) and a standard unit. The stowage
shall be closed by means of a door. A folding panel shall allow the
use of the compartment as wardrobe. Trolleys and standard units are
Buyer Furnished Equipment.
25-31 Galleys
All galleys and galley inserts are supplied by Seller as Seller
Furnished Equipment.
25-31 Galley 1
Installation of Galley 1 (22" deep) of the standard location forward
of the RH S/E door.
- (01) Galley, ▇▇▇▇▇▇▇
System provisions for galley inserts:
- (03) Coffee makers, ▇▇▇▇▇▇▇
- (03) Half size trolley, ▇▇▇▇▇▇▇▇
- (01) Ice drawer, ▇▇▇▇▇▇▇
- (01) Standard unit, ▇▇▇▇▇▇▇
Ref. Fokker drawing F28-04-143 sheet 1, issue: A.1.
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25-32 Galley 2
Installation of a Galley 2 (35" deep) at the standard location aft
of the RH S/E door.
- (01) Galley, ▇▇▇▇▇▇▇
System provisions for galley inserts:
- (01) Large oven, ▇▇▇▇▇▇▇
- (04) Half size trolley, ▇▇▇▇▇▇▇▇
- (02) Oven control panel, ▇▇▇▇▇▇▇
- (01) Waste bin, ▇▇▇▇▇▇▇
Ref. Fokker drawing F28-04-143 sheet 2, issue: A proposal 1.
25-33 Galley 3
Installation of a Galley 3 (29" deep) on structural provisions
(hardpoints) on the floor and top for a galley.
Location aft of the LH passenger door, between Sta. 4875 and 5611.
- (01) Galley, ▇▇▇▇▇▇▇
System provisions for galley inserts:
- (02) Standard units, ▇▇▇▇▇▇▇▇
- (04) Half size trolley, ▇▇▇▇▇▇▇▇
The front wall shall be equipped with the cabin attendant control
panel, passenger entertainment panel and shall have wiring
provisions for an ACARS cabin management terminal (Ref. 23-22).
25-60 Emergency Equipment
The BCF fire-extinguisher, the megaphone aid oxygen bottle will be
installed as described in the type specification.
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26 FIRE PROTECTION
26-12 APU Fire Detection and Warning
Installation of a warning horn in the nosewheel bay to provide an
audible APU fire warning during APU ground operation.
The function of the warning horn will be inhibited during an APU
fire warning test.
31 INDICATING/RECORDING SYSTEMS
31-21 Flight Deck Clocks
Installation of alternate p/n clocks
- (02) Clock, Smiths Industries p/n 2610-07-1
31-31 Flight Data Recorder Alternate Source - ARINC 573
Installation of an alternate source FDR (Sundstrand) i.l.o. standard
unit (▇▇▇▇▇▇▇▇▇). The optional equipment shall be installed above
stowage unit section (in the position allocated to the standard
equipment).
- (01) FDR, Sundstrand
- (01) Accelerometer, Sundstrand
- (01) Mounting tray
32 LANDING GEAR
32-48 Autobrakes
Installation of an Automatic Braking System in addition of the
standard brake- and analog anti-skid system. The system provides
pilot selectable decelleration rates: low, med, max and RTO.
For take-off, use of the maximum setting shall result in maximum
braking if the take-off is required from a speed of 80 knots.
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33 LIGHTS
33-24 Illuminated Signs
Installation of a lintel in the forward passenger compartment with
legend EXIT in English/Spanish due to the installation of a curtain
between Galley 2 and Galley 3.
33-26 Entrance Lighting
Wiring provisions for a galley area light installed in Galley 3, to
be connected to the entrance light.
▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Lighting
Installation of a galley area light in the ceiling between Galley l
and 2. Switch will be installed on Galley 1.
33-46 Logo Lights
Installation of lighting fixtures in the LH and RH flap track
fairings for illumination of both sides of the vertical stabilizer.
Installation of a ON/OFF switch for NAV/LOGO light switching on the
external-light switch panel in the overhead panel of the flight
compartment.
33-47 Strobe Lights
Installation of high intensity strobe lights in each wingtip and one
in the tailcone. Control of the system is via a rotary switch panel
in the overhead panel of the flight compartment. Switch
identification is by STROBE, printed below the switch. Switch
operation designation are as follows:
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- OFF = strobe lights are off
- ON = strobe lights will be switched on by this selection.
- AUTO = strobe lights are activated to come on via the landing gear
switch at take-off.
34 NAVIGATION
34-13 Air Data Instruments
A combined standby altimeter and airspeed indicator i.l.o. the
standard separate standby altimeter and standby airspeed indicator.
The following Seller Furnished equipment shall be deleted from the
baseline configuration:
- (01) Standby altimeter, Smiths Industries
- (01) Standby airspeed indicator, Smiths Industries
The following unit shall be supplied as Seller Furnished Equipment:
- (01) Combined standby altimeter and airspeed indicator, Smiths
Industries
34-16 Windshear
Installation of a windshear detection, alerting and recovery
guidance system.
During flight near the ground (below 1500 A.G.L.) the system will:
- detect the presence of potentially hazardous windshear conditions.
- alert the flight crew when the airmass motions reach potentially
hazardous levels.
- provide flight director guidance to the crew to maximize the
probability of ground avoidance.
- provide automatic recovery guidance through the AFCAS when
selected.
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o Detection: implementation in FMC via software changes. All Sensor
data are available via existing interfaces, as are the
discrete outputs to the AFCAS/EFIS, GPWS and other
subsystems
o Guidance: implemented in AFCAS (FCC's) via software changes using
all existing interfaces
o Alerts: Aural alerts will be produced within the GPWS. Primary
display of detection alerts and guidance is on the PFD
of EFIS.
Wiring changes for the following functions:
- To add discrete for the following functions:
o TOGA/SPE
o Max. TLA/SPE
o FCC/GPWS
- Changes of speedbrake auto retract logic
- Change pin option FCC and FWC windshear enable
34-28 Inertial Reference System
Installation of a triple inertial reference system (IRS) i.l.o. the
std triple attitude and heading reference system (AHRS).
The following Seller Furnished Equipment shall be deleted from the
baseline configuration:
- (03) AHRS unit, ▇▇▇▇▇▇
- (02) Magnetic sensor unit, Sperry
- (02) Magnetic compensator, ▇▇▇▇▇▇
Structural provisions for the magnetic sensor units remain in the
Aircraft.
The installation comprises the following Seller Furnished units:
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- (03) IRS unit, Honeywell HG
- (03) Mode selector panel, Honeywell
- (01) Inertial system display unit, Honeywell CG
34-32 Instrument Landing System
Installation of a triple Bendix system i.l.o. the standard dual
▇▇▇▇▇▇▇ system (ARINC 710) as part of the three channel Autoland
AFCAS (Ref. ATA 22-10).
The installation comprises the following Seller Furnished units:
- (03) Receiver, Bendix RIA-35A
- (03) G/S Antenna, Sensor
34-41 Weather Radar (WXR)
Installation of a Bendix weather radar system i.l.o. the std ▇▇▇▇▇▇▇
system.
The installation comprises the following Seller Furnished units:
- (01) Tranceiver, Bendix RTA-4A
- (01) Control panel, Bendix CON-4A
- (01) Antenna pedestal, Bendix DAA-4A
- (01) Antenna, Bendix REA-4A
34-42 Radio Altimeter
Installation of a triple TRT AHV 530 LRRA system i.l.o. the standard
dual system (ARINC 707) as a part of the three channel Autoland
AFCAS (ref. ATA 22-10).
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The following Seller Furnished units are deleted:
- (04) Antenna, TRT AHV 5
The installation comprises the following Seller Furnished units:
- (03) Transceiver, TRT AHV 530
- (06) Antenna, Sensor
34-43 Ground Proximity Warning
The installation of a GPWS/GS annunciator on the main instrument
panel LH and RH.
34-51 VHF Omni Range (VOR) - ARINC 711
Installation of two Bendix VOR/M receivers i.l.o. the two standard
▇▇▇▇▇▇▇ receivers. The equipment shall be installed in the aft rack
of the avionics bay.
The installation comprises the following Seller Furnished units:
- (02) Transceiver, Bendix RVA-36A
34-52 Distance Measuring Equipment
Installation of two Bendix DME interrogators i.l.o. the two std
▇▇▇▇▇▇▇ interrogators. The equipment shall be installed in the aft
rack of the avionics bay (in the positions allocated for the
standard equipment).
The installation comprises the following Seller Furnished units:
- (02) DME Interrogators, Bendix DMA-37A
34-53 Automatic Direction Finding (ADF)
Installation of two Bendix ADF receivers i.l.o. the two std ▇▇▇▇▇▇▇
receivers. The equipment shall be installed in the aft rack of the
avionics bay (in the positions allocated for the standard
equipment).
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The installation comprises the following Seller Furnished units:
- (02) Receiver, Bendix DFA-75A
34-54 Air Traffic Control
Installation of a dual Bendix ATC system with S-mode i.l.o. the
standard, single, ▇▇▇▇▇▇▇ system with C-mode. The transponders shall
be installed in the aft rack of the avionics bay and the control
panel shall be installed in the center pedestal (replacing the
standard units).
Two mode S ATC antennae will be installed at bottom of fuselage and
2 antennae on top of the fuselage.
The following Seller Furnished Equipment shall be deleted from the
baseline configuration:
- (01) Control panel, Gables
The installation comprises the following Seller Furnished units:
- (02) ATC ▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇-▇▇▇
- (▇▇) Control panel, Bendix CNA-67A
- (04) ATC antenna, Sensor
34-61 Flight Management System
ATA departure profile i.l.o. IATA airline Type option no. 2 i.l.o.
European FMS.
35 OXYGEN
35-20 Passenger Oxygen System
The RH luggage bins shall be equipped with oxygen panels containing
four oxygen masks, the LH luggage bins shall be equipped with oxygen
panels containing three oxygen masks.
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The following units shall be deleted from the baseline aircraft:
- (43) 3 mask panels
The following units shall be installed:
- (22) 4 mask panels
- (22) 3 mask panels
▇▇ ▇▇▇▇▇/▇▇▇▇▇
▇▇-▇▇ ▇▇▇▇▇ heater in aft toilet compartments
Installation of a water heater and a dual timed faucet in both aft
toilet compartments.
The installation comprises the following Seller Furnished units:
- (02) Heater, Inventum
- (02) Faucet, ▇▇▇▇▇ Rite
38-30 Waste Disposal
To change the material of toilet waste ducts from titanium to
stainless steel to allow suction draining
52 DOORS
52-13 Forward Opening Passenger Door
Installation of a forward opening pax/crew door on the LH side of
the fuselage between Sta. 3845 and 4875. The door will allow
connecting the airplane to boarding bridges as presently in use and
will provide an available entry height of 1850 mm (73 inches).
Installation of the door will not comprise the installation of an
integral staircase.
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The door shall be outward and forward opening and shall be provided
with a locking mechanism comprising C-latches. An escape slide will
be mounted on the inboard side of the door.
(01) Escape slide, Air Cruisers Co
52-31 Enlarged Cargo Compartment Doors
Installation of upward opening, enlarged cargo doors, two in the
forward cargo compartment and one in the aft cargo compartment. The
door ▇▇▇▇▇ are flush mounted with the cargo compartment floor to
facilitate ease of loading.
52-70 Avionics Bay Access Hatch Warning
Installation of two micro switches on each of the two avionics
access doors to detect an unlocked condition. Separate warnings, on
each door, are fed to the Multifunction Display Units located on the
main instrument panel. The warnings is fed to the MFDS via the
flight warning computer.
The warning is a level 2 category warning which is also accompanied
by an aural single chime.
53 FUSELAGE
53-73 Door Protection Plates
Scuff plates made of corrosion resistant steel shall be provided on
the external fuselage at the ▇▇▇▇▇ of the passenger and
service/emergency doors.
56 WINDOWS
56-00 Windows
Due to Galley 3 installation the first cabin window on the LH side
will be blanked off.
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72 ENGINES
72-00 ▇▇▇ ▇▇ 650-15 i.l.o. Mk 620-15 engines
Changes to the airframe structure, airframe systems and system
software for the installation of Rolls-▇▇▇▇▇ ▇▇▇ Mk 650-15 engines.
(Exclusive engines).
1. Structural Hardware
o New nacelle inlet (fan diameter increased by 0.8"
o Increased anti-icing valve access doors
- LH fixed cowl
- RH cowl door
o Reinforced thrust strut bracked back-up structure.
72-00 ▇▇▇ ▇▇ 650-15 i.l.o. Mk 620-15 engines (cont'd)
System Hardware
o Throttle controls and fuel shut-off
o Control: geometry change
o New igniter lead cables. Penetration point on engine on
bottom dead center
o Engine ident plug (delivered C.W. engine)
o Inlet anti-icing: Goemetry changed
o Standby engine indicator (new p/n)
o Electrical harness
o Fuel lines: geometry change
o Hydraulic lines: geometry change
3. Avionics Software
o AFCAS : Installation of a new FCC (the FCC is pin
programmable)
o MFDS : Installation of a new MFDS
o FMC : Installation of a new FMC (the FMC is pin
programmable)
o FWC Installation of a new FWC (the FWC is pin programmable)
4. Performance
o Noise
o Handbooks (o.a. AFM)
(Standard Option SO 72-00.01)
LESSEE'S ADDITIONAL REQUIREMENTS
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02 MISCELLANEOUS
02-20 Certification
The aircraft shall be certified for operation on the Swedish
register.
11 PLACARDS AND MARKINGS
11-10 Exterior Colour Schemes
The outboard painting shall be as specified by customer.
11-20 Exterior Placards and Markings
Exterior placards and markings shall be in English, as specified by
customer.
11-30 Interior Placards and Markings
Interior placards and markings shall be in English/Swedish, as
specified by customer.
12 SERVICING
12-13 * Servicing
The oil for engine, IDG and APU shall be Mobil Jet Oil 254
25 EQUIPMENT AND FURNISHINGS
25-20 Passenger compartment.
Interior lay-out for 107 pax in accordance with drawing W98251.
Interior colors and materials as specified by customer.
▇▇-▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ parts that are now red shall be painted dark blue, as
specified by customer.
25-31 * Galley 1
Galley 1 shall be made suitable for KSSU trolleys, including
numbering
** Add:
(03) Trolley Halfsize ▇▇▇▇▇▇▇▇ DLH573-009
LESSEE'S ADDITIONAL REQUIREMENTS
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25-31 * Galley 2
Galley 2 shall be made suitable for KSSU trolleys. Deletion of frame
in order to have additional stowage of 1 full size trolley,
including numbering.
Provisions for installation of 3 ATLAS type ovens, p/n 62755.
Provisions for the attachment of a baby cradle.
Add:
* (03) ATLAS type ovens, p/n 67255.
** (03) Trolley Fullsize ▇▇▇▇▇▇▇▇ DLH621-029
(01) Magazine holder C15018-001-001
25-31 * Galley 3
Galley 3 shall be made suitable for KSSU trolleys, including
numbering.
Provisions for the attachment of a baby cradle. Installation of
compartment doors at positions 303 and 305.
Add:
** (04) Trolley Halfsize ▇▇▇▇▇▇▇▇ DLH573-009
25-31 * Galley 4
Installation of a seat rail mounted stowage for 4 half size
trolleys, at RH aft of the cabin, in stead of a double seat, and
including numbering, p/n C10119-001-004 (▇▇▇▇▇▇▇). Fokker will do
best effort to certify this at delivery date of first a/c.
Add:
** (04) Trolly Halfsize ▇▇▇▇▇▇▇▇ DLH573-009
25-31 ** Aft stowage
The aft stowages shall be modified to accept KSSU trolleys, the top
part of aft stowages shall be modified to accept a KSSU container.
** (02) Trolley Halfsize ▇▇▇▇▇▇▇▇ DLH573-009
25-61 * Emergency equipment
The following additional evacuation equipment shall be installed:
(02) Fire extinguishers, ▇▇▇▇▇▇ ▇▇▇▇▇ 892480MODX
(04) Smoke hoods, Puritan Bennet, 119003
(07) Life vests, orange, Svitlik S21850-7300
A complete lay out of the emergency equipment is attached to this
Part C
LESSEE'S ADDITIONAL REQUIREMENTS
--------------------------------------------------------------------------------
ATA 100 DESCRIPTION
CHAPTER
--------------------------------------------------------------------------------
25-63 * Emergency Locator Transmitter
An emergency locator transmitter shall be installed, comprising the
following components:
(01) Transmitter, Dorne & ▇▇▇▇▇▇▇▇ DMELT8-1
located in the ceiling at the rear of the
passenger compartment
(02) Antenna, Sensor S65-8280-7
mounted on the upper fuselage
(03) Test switch panel, Fokker A42730-403
located on the overhead panel in the flight compartment
33-24 Illuminated Signs
All signs shall be in english, as specified by customer.
Installation of white covers on overwing escape hatches.
34-26 * EFIS
ADF pointers shall be available in ARC/MAP mode.
(a) The price for the items marked with * totals an amount of $95,640;
(b) The price for the items marked with ** will be determined before delivery
of the Aircraft;
(c) The total of the prices mentioned in (a) and (b) above shall, at delivery
of the Aircraft, be deducted from the credit for start-up costs mentioned
in SL01 648.005 and SLO2 648.013 to the Aircraft Support Services
Agreement ASSA 648.004, concluded between Lessee and Fokker on even date
herewith.
EMERGENCY EQUIPMENT LAY-OUT
[GRAPHIC DESCRIPTION]
Layout of emergency equipment and locations.
LIST OF MANDATORY MODIFICATIONS TO BE
INSTALLED IN THE AIRCRAFT PRIOR TO DELIVERY
A (This list includes all mandatory service
bulletins issued at the time of delivery of the
Aircraft)
T
A SERV. PUBLIC. DESCRIPTION
22 SBF100-22-026 INTRODUCTION FAC V13R1
SBF100-22-029 INTRODUCTION FCC V13R1
SBF100-22-031 REPLACEMENT FLIGHT MODE PANEL
SBF100-22-032 INTRODUCTION FAC MOD 11
23 SBF100-23-017 THE MODIFICATION OF THE PASSENGER ADDRESS SYSTEM
24 SBf100-24-024 THE CHANGE OF THE LOCATION OF THE HP BLEED CIRCUIT
BREAKERS.
25 SBF100-25-064 MOD. OF THE COVER OF THE ESCAPE SLIDE ON THE PASS.
DOOR
26 SBF100-26-002 NEW SAFETY CATCH FOR HALON 1211 PORTABLE FIRE
EXTINGUISHERS
27 SBF100-27-032 MODIFICATION HORIZONTAL STABILIZER ACTUATOR
SBF100-27-041 INSPECTION RUDDER AUTOPILOT INPUT BRACKETS
SBF100-27-043 CONNECT OF A NUMB. OF SHIELDINGS WITHIN THE LIFTD.
SYS. TO GROUND
SBF100-27-047 ONE TIME INSPECTION OF THE RUDDER PEDAL ASSEMBLIES
SBF100-27-051 MOD. OF FLIGHT CONTROL LOCK HANDLE AND SWITCH.
SBF100-27-052 REPETITIVE CHECK ELEVATOR BOOSTER CONTROL UNIT
BACKLASH REMOVER
28 SBF100-28-022 ONE TIME INSP.: IF NECESSERY INSTAL. A NEW APU
FUEL SUP. TUBE ASSY
SBF100-28-026 ONE TIME INSP. LH AND RH ENGINE FUEL SUPPLY LINE
29 SBF100-29-021 REPL. OF SYSTEMS 1 & 2 RETURN FILTER BY-PASS
ASSY'S
SBF100-29-022 NEW HYDR. HOSE ASSEMBLIES IN SYS. 1 ENG. DRIVEN
PUMP
31 SBF100-31-020 INSTALLATION FWC V8
31 SBF100-31-036 A SOFTWARE MODIFICATION TO THE MFDU (DRAFT)
32 SBF100-32-044 INTRODUCTION OF IMPROVED MAIN WHEELS.
SBF100-32-058 INTRODUCTION OF AN IMPROVED MAIN LANDING GEAR DOOR
SEQUENCE VALVE
SBF100-32-061 INSPECT. OF THE BOLTS IN THE PRESSURE REDUCER
VALVE
SBF100-32-064 NLG RETRACTION TIME OUT OF TOLERANCE
SBF100-32-068 THE INTRODUCTION OF A LOWER AXLE NUT TORQUE
SBF100-32-070 INSPECTION AND SHOT PEENING OF THE MAIN WHEELS
SBF100-32-071 THE INSPECTION OF CORRECT GREASING OF THE TELEFLEX
SYSTEM (DRAFT)
SBF100-32-073 THE INSPECTION AND SHOT PEENING OF THE MAIN
WHEELS.
SBF100-32-074 THE REPLACEMENT OF THE MAIN LANDING GEAR DOWNLOCK
ACTUATOR.
35 SBF100-35-003 MODIF. OF THE OXYGEN DROP OUT PANELS
38 SBF100-38-024 MODIFICATION TO THE CHECK VALVE AND TUBE ASSEMBLY
49 SBF100-49-015 T2 BIAS SYSTEM IN THE ELECTRONIC CONTROL UNIT
SBF100-49-016 THE MODIFICATION OF THE WIRING OF THE T2 BIAS
SYSTEM
SBF100-49-022 ONE TIME INSPEC. FOR DRAIN HOLE IN APU MOUNT.
FRAME.
SBF100-49-023 INTRO. OF TWO ADD CLAMPS ON APU FUEL SUPPLY LINE
52 SBF100-52-039 REPL. OF NYLON BUSHES FOR THE C-LATCHES OF THE S/E
DOORS
SL123 THE REPLACEMENT OF GAS SPRINGS IN LARGE CARGO
DOORS
55 SBF100-55-018 MODIFACATION OF RIB 5.0
SBF100-55-019 INSPECTION OF RIB 5.0 FLANGES AND FINGER STRIPS.
SBF100-55-021REV1 STRUCTURAL MOD. HORIZONTAL STABILIZER. (INCL.
BRACKETS) (DRAFT)
57 SBF100-57-021REV1 REWORK OF THE SIDE STAY BRACKET AN THE UPLOCK
MECH. BRACKET (DRAFT)
SFB100-57-027 THE REPLACEMENT OF THE WING ACCESS PANELS (DRAFT)
71 SBF100-71-012 THE MODIF. OF THE ENGINEMOUNT SHEAR SHELF WEB
76 SFB100-76-011 ENG. CONTROL MOD. TO IMPLEMENT THE NEW 52 MAX.
SETTING (DRAFT)
78 SFB100-78-010 INTRODUCTION OF ENLARGED THRUST REVERSER DOOR
WEDGES (DRAFT)
The items marked with "Draft" will be installed by retrofit and free of charge
as soon as they will be available.
DESPATCH RELATED SERVICE BULLETINS TO BE INSTALLED
IN THE AIRCRAFT PRIOR TO DELIVERY
A
T
A SEV. PUBLIC. DESCRIPTION
21 SBF100-21-032 INTRODUCTION NEW SEALS MFDU TRAYS EQUIPMENT
SBF100-21-035REV1 INSTALLATION NEW FLEX PIPE EQUIPMENT COOLING
SBF100-21-038REV1 INSTALLATION STOP PLUGS NEAR CABIN TEMP SENSOR
SFB100-21-041 AIR CONDITIONING, IF THIRD COOLING FAN IS
INSTALLED
SBF100-21-056 AUGMENTATION OF THE FLOW THROUGH THE TURB. BYPASS
VALVES (DRAFT)
22 SBF100-22-037 INTROD. OF SOFTWARE VERSION V13a To AUTOFLIGHT
COMPUTERS (DRAFT)
27 SBF100-27-034 INTROD. IMPROVED FLAP CONTROL DATA UNIT
SBF100-27-038 INTROD. NEW PROXIMITY SENSOR BELL-CRANCK 2
SBF100-27-039 INTROD. NEW RUDDER LIMIT MONITOR UNIT (-413)
(DRAFT)
SBF100-27-046 INTROD. OF ROT LIM RING ON NEW MFDU
SBF100-27-048 THE MOD. OF THE FLEX DRIVE SHAFT OF THE LEFT FLAP
ACT.
SL 073 IMPROVED ADJUSTMENT OF LIFTDUMPER MECH. CONTROL
SYSTEM
28 SBF100-28-019 INTROD. OF VENTILATION-DRAIN FLOAT-VALVE WITH AN
IMPROVED HEAD
SL 119 INTRODUCTION OF SOFTWARE CHANGE TO COMB. PROC.
TOTALIZER
SL 105 RELACEMENT OF SYS 1 AND 2 HYDRAULIC TUBES
30 SBF100-30-013 MODIF. WINDOW TEMP. CONTR. UNIT FROM -407 INTO
-409 (DRAFT)
31 SL 057 INTRO SEVERAL MODS FOR EFIS AND MFDU DISPLAY UNITS
32 SBF100-32-050 INTROD. NEW SPRING & WIRING ROUTE TO IMPROVE
RELIAB. OF ANTI RETR. SOL.
SBF100-32-059 ENLARGED TARGETS ON MLG UP SENSORS
SBF100-32-065 REPLACEMENT OF THE PARKING BRAKE MECHANISM
SBF100-32-069 INTRO OF NEW PROXIMITY SWITCHES FOR MLG DOOR
UPLOCK MECHANISMS
36 SBF100-36-012 INTRO OF NEW APU INLET DUCT OVERHEAT S/W
SBF100-36-015 REV 1 INSTALLATION OF IMPROVED HEAT INSULATION BLANKETS
SBF100-36-018 A CHANGE TO THE BLEED AIR CONTROL CIRCUIT OF THE
TAY 650-15
SBF100-36-022 INSP. THE CHECK-VALVE ON PRES. SWITCH/AFT BLEED
AIR SENSE LINE (DRAFT)
38 SBF100-38-026 INTRO OF AN EXTENDED DUMP OUTLET FOR THE PRESSURE
REGULATOR
49 SBF100-49-017 A NEW RELAY TO PREVENT ELECTRO MAGNETIC
INTERFERENCE
SBF100-49-020 MOD FOR WIRING TO THE APU CONTROL BUS RELAY
VENDOR SB MODIFICATION OF THE APU INLET PLENUM
VENDOR SB T2 BIAS MODIFICATION
VENDOR SB INTRODUCTION OF AN FCU -04
77 SL 137 INTRODUCTION OF NEW EMUX
The items marked with "Draft" will be installed by retrofit and free of charge
as soon as they will be available.
ANNEX 2 TO APPENDIX E
[LOGO] FOKKER
AIRCRAFT Folio 3.5
SERVICES REPORT NR.
Woensdrecht-Holland FAS-Z067
BASIC CHECKLIST
-----------------------------------------------------------------------------------------------------------------------------------
Serialno.: 11330 NO TOTAL ARM INDEX RECORD OF CHECKING
REQ. WEIGHT CHANGE
Description kg mm dI 28-04
1994
-----------------------------------------------------------------------------------------------------------------------------------
Cockpit compartment
Escape rope (in ceiling) Fok.D86227-401 1 0.45 2750 -0.066 V
Life vest S21850-7300 1 0.62 2750 -0.090 V oper. item
Smoke goggle Eros MXP210-00 1 0.20 2743 -0.029 V
Fire extinguisher BCF FFE BA51015G3 1 2.07 2794 -0.301 V
Escape rope (in ceiling) Fok.D86227-401 1 0.45 2750 -0.066 V
Life vest S21850-7300 1 0.62 2750 -0.090 V oper. item
Life vest S21850-7300 1 0.62 2795 -0.090 V oper. item
Side panels (RH + LH)
Microphone handheld (RH+LH) Telex 63333-007 2 0.36 1762 -0.056 V
Smoke goggle (RH+LH) Eros MXP210-00 2 0.40 1762 -0.062 V
Oxygen mask (RH+LH) Eros MC10-04-109 2 0.23 1890 -0.036 V
Flashlight(c/w pwr.pack) DME EF-2C1 2 1.10 2285 -0.166 V
Boomtype headset(RH+LH) Telex 64300-005 2 0.23 2920 -0.033 V
Spare lamp box (LH) D48383-409 1 0.28 2850 -0.041 V
Sunvisor ▇▇▇▇▇ 141-31020 2 0.91 2900 -0.131 V
Pair of gloves (RH) ▇▇▇-▇▇▇-▇▇ 1 0.22 2850 -0.032 -
LH aft-wall
Boomtype headset Telex 64300-005 1 0.12 2970 -0.017 V
Flash light DME EF-1 1 0.38 2970 -0.055 V
V = IN AIRPLANE WHEN WEIGHED
- = NOT IN AIRPLANE WHEN WEIGHED
-----------------------------------------------------------------------------------------------------------------------------------
[LOGO] FOKKER
AIRCRAFT Folio 3.5
SERVICES REPORT NR.
Woensdrecht-Holland FAS-Z067
BASIC CHECKLIST
-----------------------------------------------------------------------------------------------------------------------------------
Serialno.: 11330 NO TOTAL ARM INDEX RECORD OF CHECKING
REQ. WEIGHT CHANGE
Description kg mm dI 28-04
1994
-----------------------------------------------------------------------------------------------------------------------------------
Cockpit compartment (cont'd):
▇▇ ▇▇▇ ▇▇▇▇
-▇▇▇▇▇▇ ▇▇▇▇▇▇(▇▇▇▇▇) ▇▇▇ ▇▇▇▇▇▇ 1 5.23 2903 -0.755 V
-Crash-axe Gemtor 42D8331 1 1.00 2952 -0.144 ▇
-▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇▇ 1 4.07 2882 -0.588 V
-Full face mask ▇▇▇▇▇ 10100C1A 1 0.97 2882 -0.140 V
-Pitot head covers FOK 28.0.2493 3 0.29 3000 -0.042 V
-Locking thrust reverser FOK 28.0.4591 2 0.13 3000 -0.019 V
-Groundlocks FOK 28.0.1233 3 0.76 3000 -0.109 -
-Groundlocks (installed) FOK 28.0.1233 3 0.76 13022 -0.033 V
-Folding observer seat FOK D86007 1 8.50 3180 -1.203 V
-Safety belt + sh harness 502422-403 1 1.20 2985 -0.172 V
-Oxygen mask(in gangway LH) ▇▇▇▇ ▇▇▇▇-▇▇-▇▇▇ ▇ ▇.▇▇ ▇▇▇▇ -▇.▇▇▇ -
▇▇▇▇▇▇▇▇ compartment
Microphone (pass.addr.) ▇▇▇▇ MD 430-16TAK 1 0.17 3937 -0.023 V
Flashlight DME EF-1 2 0.76 3937 -0.102 V
Handset incl. cradle AH 2542D 1 1.36 3937 -0.182 V
Life vest S21850-7300 2 1.24 3937 -0.166 V oper. item
V = IN AIRPLANE WHEN WEIGHED
- = NOT IN AIRPLANE WHEN WEIGHED
-----------------------------------------------------------------------------------------------------------------------------------
[LOGO] FOKKER
AIRCRAFT Folio 3.5
SERVICES REPORT NR.
Woensdrecht-Holland FAS-Z067
BASIC CHECKLIST
-----------------------------------------------------------------------------------------------------------------------------------
Serialno.: 11330 NO TOTAL ARM INDEX RECORD OF CHECKING
REQ. WEIGHT CHANGE
Description kg mm dI 28-04
1994
-----------------------------------------------------------------------------------------------------------------------------------
Entrance compartment continued
Curtain Galley 1 - 2 FOK D89285-403 1 4283 V
Escape slide (S/E door) FOK D31873-101 1 12.40 4240 -1.623 V
Escape slide cover FOK D15505-103 1 1.59 4240 -0.208 V
Lockpin S/E door FOK D87766-401 2 0.06 4240 -0.008 V
Escape slide (pax door) AC 60049-101 1 12.90 4355 -1.674 V
Escape slide cover AC 60750-101 1 1.1 4355 -0.008 V
In stowage of galley 3 at entrance side:
Fire extinguisher 892480 MODX 1 2.90 5125 -0.354 V
Pass. entert. recorder RDAX 7351 1 2.28 4925 -0.283 V
Curtain Galley 2 - 3 FOK D89285-429 1 5611 V
V = IN AIRPLANE WHEN WEIGHED
- = NOT IN AIRPLANE WHEN WEIGHED
-----------------------------------------------------------------------------------------------------------------------------------
[LOGO] FOKKER
AIRCRAFT Folio 3.5
SERVICES REPORT NR.
Woensdrecht-Holland FAS-Z067
BASIC CHECKLIST
-----------------------------------------------------------------------------------------------------------------------------------
Serialno.: 11330 NO TOTAL ARM INDEX RECORD OF CHECKING
REQ. WEIGHT CHANGE
Description kg mm dI 28-04
1994
-----------------------------------------------------------------------------------------------------------------------------------
Cabin compartment (cont'd)
In second LH luggage bin
Megaphone ACR EMIA2204 1 6531 V
Smoke hood PUR 119003 1 1.98 6711 +0.120 V
Fire extinguisher (BCF) FFE BA51015G3 1 2.07 6071 -0.233 V
Pair of gloves ▇▇▇-▇▇▇-▇▇ 1 0.22 6491 -0.024 V
Life vest enfant MK22 5 2.35 6661 -0.251 V oper. item
In second RH luggage bin
First aid kit MISC25-001 1 1.73 6481 -0.188 -
Oxygen bottle c/w mask ▇▇▇▇▇ 5500BF1UBF23A 1 3.73 6361 -0.409 V
Aft LH luggage bin:
Fire extinguisher (BCF) FFE BA51015G3 1 2.07 22796 +0.113 V
Pair of gloves ▇▇▇-▇▇▇-▇▇ 1 0.22 22936 +0.012 V
Megaphone ACR-EMIA2204 1 23076 -
Infant life vest MK22 5 2.35 22486 +0.121 V oper. item
Smoke hood 119003 1 1.98 22676 +0.106 V
Infant seat belt 502755-101-2258 2 0.22 23246 +0.013 V oper. item
Aft RH luggage bin:
First aid kit MISC25-001 1 1.73 23400 +0.105 -
Oxygen bottle c/w mask 5500BIUBF23A 2 6.74 23400 +0.409 V
V = IN AIRPLANE WHEN WEIGHED
- = NOT IN AIRPLANE WHEN WEIGHED
-----------------------------------------------------------------------------------------------------------------------------------
[LOGO] FOKKER
AIRCRAFT Folio 3.5
SERVICES REPORT NR.
Woensdrecht-Holland FAS-Z067
BASIC CHECKLIST
-----------------------------------------------------------------------------------------------------------------------------------
Serialno.: 11330 NO TOTAL ARM INDEX RECORD OF CHECKING
REQ. WEIGHT CHANGE
Description kg mm dI 28-04
1994
-----------------------------------------------------------------------------------------------------------------------------------
Rear cabin compartment
Handset incl. cradle AH2542D/B 1 1.36 24880 +0.103 V
Microphone (pass. addr.) ▇▇▇▇ MD430-16TAK 1 0.17 24880 +0.013 V
Flashlight DME EF-1 2 0.76 24880 +0.057 V
Life vest S21580-7300 2 1.24 24880 +0.094 V oper. item
[ILLEGIBLE] RH trolley stowage:
Flight data recorder SDC 980-4100-DXUS 1 12.70 23828 +0.825 V
Toilet compartments:
Toilet bucket 12201-404 (405) 2 25.60 24305 +1.785 V
Mirror FOK 2 2.98 25000 +0.229 V
Automatic toilet waste 30100022-20 2 0.72 24990 +0.057 V
[ILLEGIBLE] trolley stowage(RH+LH)
[ILLEGIBLE] trolley ▇▇▇▇▇▇▇▇ DLH573-009 2 23828 - oper. item
V = IN AIRPLANE WHEN WEIGHED
- = NOT IN AIRPLANE WHEN WEIGHED
-----------------------------------------------------------------------------------------------------------------------------------
APPENDIX F
AIRCRAFT DOCUMENTS
FOKKER 100 AIRCRAFT 11329
Aircraft Documents shall include the following documents:
Type Quantity/
---- ---------
Number
------
1. Airplane Flight Manual book
(volumes 1 & 2) 1
2. Aircraft Operating Manual book 1
3. Quick Reference Handbook book 2
4. Weight and Balance Manual book 1
5. Master Minimum Equipment List book 1
6. Aircraft Maintenance Manual film 1
7. Illustrated Parts Catalogue film 1
8. Wiring Diagram Manual film 1
(parts 1, 2 & 3)
9. Trouble Shooting Systems film 1
Manual
10. Aircraft Logbook book 1
11. Engine Logbooks book 2
12. APU logbook book 1
13. Delivery Document book 1
(at delivery to Transwede)
14. Certificate of Airworthiness 1
15. Certificate of Registration 1
16. Radio Station License 1
88
Aircraft Documents shall also include all logs, certificates and data, and
inspection, modification and overhaul records, relating to the Aircraft and
required to be maintained by the Air Authority and/or by the Approved
Maintenance Program.
Upon Expiry Date or upon earlier termination of the Agreement all Aircraft
Documents shall be redelivered by Lessee to Lessor complete and fully updated
simultaneously with the redelivery of the Aircraft.
89
APPENDIX G
FAA POWER OF ATTORNEY
Form used for Midway Closings to be Substituted
This POWER OF ATTORNEY in favor of LESSOR [HEAD LESSOR] ("Lessor")
dated _____________, 199__ from MIDWAY AIRLINES CORPORATION ("Lessee") [is
consented to by BANK ("Bank")].
RECITALS:
A. Lessor and Lessee have entered into an Aircraft Operating Lease
Agreement 135 dated as of ________, 1995 (the "Lease Agreement")
with respect to the Fokker 100 aircraft, serial no. ______, U.S.
registration no. ________ (the "Aircraft").
B. Capitalized terms used herein and not otherwise defined shall have
the respective meanings ascribed to such terms in the Lease
Agreement.
NOW, THEREFORE, for good and valuable consideration, the adequacy of
which is hereby acknowledged, it is hereby agreed as follows:
Lessee hereby irrevocably constitutes and appoints Lessor, with full
power of substitution, for and in the name and on behalf of Lessee, as the act
and deed or otherwise of Lessee:
to direct, authorize and instruct the insurer or insurance broker
with respect to the Aircraft, as if Lessor were policy holder,
pursuant to Article 11.6 of the Lease Agreement, in order to
initiate, process and settle any insurance claim with respect to the
Aircraft, Engines or Parts;
to execute, sign, deliver, authorize and file such instruments
legally necessary for any and all actions necessary to take
possession and effect redelivery of the Aircraft, Engines or Parts
upon termination of the Lease Agreement due to an Event of Default;
90
to execute, sign, deliver and file all such instruments requested by
Lessor [Head Lessor] that may be required to deregister the Aircraft
from the FAA, or to terminate the Lease for the Aircraft that is
recorded at the FAA, or that may be deemed proper in or in
connection with all or any of the purposes aforesaid, and to appoint
substitutes or agents to take any such action on its behalf;
provided, however, that such power shall not be exercisable by or on
behalf of the Lessor until an Event of Default shall have occurred
and is continuing.
Lessee hereby ratifies and confirms and agrees to ratify and confirm
any direction, authorization and instruction of Lessor [Head Lessor] taken
pursuant to this Power of Attorney.
This Power of Attorney shall expire the date one year following the
Expiry Date or earlier termination of the Lease.
IN WITNESS WHEREOF, Lessee has duly caused this Power of Attorney to
be executed on the date first set forth above.
MIDWAY AIRLINES CORPORATION
By: __________________________
Name:
Title:
Consented and Agreed:
[BANK]
By: __________________________
Name:
Title:
[CERTIFIED RESOLUTIONS OF LESSEE AUTHORIZING THIS
POWER OF ATTORNEY TO BE ATTACHED]
91
AMENDMENT NO. 1
dated as of April 15, 1996
to
AIRCRAFT OPERATING LEASE AGREEMENT
NO. 136
dated as of December 15, 1995
between
FIRST SECURITY BANK OF UTAH, N.A.,
not in its individual capacity
but solely as owner trustee, as
Lessor
and
MIDWAY AIRLINES CORPORATION
as
Lessee
Aircraft: Fokker 100
Serial No./RN: 11330/N133ML
THIS AMENDMENT No. 1 dated as of April 15, 1996 (this Amendment"), is
between FIRST SECURITY BANK OF UTAH, N.A., a national banking association
existing pursuant to the laws of the United States, having its principal place
of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, not in its
individual capacity (except as expressly set forth in the Agreement) but solely
as Owner Trustee under the Trust Agreement ("Lessor"), and MIDWAY AIRLINES
CORPORATION, a company incorporated under the laws of the State of Delaware,
having its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lessee").
WHEREAS, Lessor and Lessee are parties to that certain Aircraft Operating
Agreement No. 136, dated as of December 15, 1995, and recorded by the Federal
Aviation Administration on December 20, 1995, under conveyance number BB22901
(as amended hereby, the "Agreement"; capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement);
WHEREAS, Stockholm Aircraft Finance V, B.V. ("SAF") is the beneficial
owner of the Aircraft;
WHEREAS, Lessee is in default under the Agreement by reason of its failure
to make certain Rent and Deposit payments due thereunder in January 1996; and
WHEREAS, Lessor and Lessee desire to amend the Agreement as hereinafter
set forth.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1
1. Amendment.
1.1 Article 7 of the Agreement is hereby amended by adding a new Article
7.6 thereto as follows:
"7.6 "Without in any way limiting the rights contained elsewhere in
the Agreement, Lessor shall have the right to have observers
(who may or may not be employees of Lessor) on site at
Lessee's premises (provided such observers do not unreasonably
interfere with Lessee's business or operations) and, provided
the recipients of any financial and operational information of
Lessee (which recipients may include employees or other
representatives of Beneficiary or any of its affiliates, or
agents, attorneys or accountants of Beneficiary or any of its
affiliates) agree to keep strictly confidential any such
information, Lessor shall have the right to inspect and review
any internal financial and operational information of Lessee
as Lessor may reasonably request (provided such request is
made to Lessee's controller or to a vice president, senior
vice president or the president of Lessee), including, without
limitation, cash flow statements, financial books and records,
and any other records relating to the operation of Lessee's
fleet. Lessee covenants that it will fully cooperate with
Lessor regarding any inspection of Lessee's fleet and records
pursuant to this Agreement."
1.2. Article 15.1(n) of the Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:
"(n) if any event of default (however defined) occurs under (i) any
of the Other Aircraft Agreements, (ii) any other lease
agreements between Lessee and a lessor for the benefit,
directly or indirectly, of debis AirFinance B.V. or
Daimler-Benz Aerospace, A.G., relating to other aircraft
("DASA Aircraft Agreements"), or (iii) any Aircraft
Maintenance Agreement entered into by Lessee in lieu of
Reserve Rate payments relating to Engine Maintenance Accruals
or Landing Gear Maintenance Accruals, which event permits
acceleration or termination; or"
1.3 Article 15.1 of the Agreement is hereby amended by adding the following as
Article 15.1(o):
"(o) if Lessee's financial performance deviates in any material
adverse way (as determined by Lessor in its sole, but
reasonable, discretion) from the projections set forth on
Lessee's Business Plan for calendar year 1996 (attached hereto
as Exhibit A), taken as a
2
whole, and such deviation is not the result of a natural
disaster which effectively makes it impossible for Lessee to
meet such projections; or"
1.4 Article 15.1 of the Agreement is hereby amended by adding the following as
Article 15.1(p):
"(p) if, prior to satisfaction of Lessee's obligations to pay
Deferred Rent and Deferred Deposit (as defined in Section 2 of
this Amendment) Lessee shall make (i) any payment of principal
or interest on any amounts owed by Lessee to ▇▇▇▇/Chilmark
Fund, L.P. ("▇▇▇▇") or any affiliate of ▇▇▇▇, (ii) any
redemption of, or any dividend or distribution with respect
to, any shares of Lessee owned by ▇▇▇▇ or any affiliate of
▇▇▇▇, (iii) any prepayment of principal or interest with
respect to any other subordinated debt owed by Lessee or (iv)
any redemption of, or any dividend or other distribution with
respect to, any other shares of Lessee; or"
1.5 Article 15.1 of the Agreement is hereby amended by adding the following as
Article 15.1(q):
"(q) if Lessee shall fail to fulfill any of the obligations set
forth in paragraphs (c) or (d) of Section 2 of this
Amendment."
1.6 Article 15.2 of the Agreement is hereby amended by adding "(a), (n), (q)" to
clause (i) of paragraph (b) thereof following the word "paragraphs" and by
adding to such Article the following additional clause;
"provided, however, that such automatic termination shall not apply
with respect to defaults of the type referred to in Articles 15.1(a)
or (n) of the Agreement prior to the date hereof or for payment
defaults for Rent Dates occurring in February, March or April 1996,
for so long as Lessee makes the payments specified in paragraphs (c)
and (d) of Section 2 of this Amendment."
1.7 Article 16 of the Agreement is hereby amended by adding a new Article 16.9
thereto as follows:
"16.9 Notwithstanding anything to the contrary contained in this
Agreement, Lessee covenants that upon earlier termination of this
Agreement pursuant to Article 15, Lessee will not interpose any
defense to, or otherwise oppose, any action commenced by Lessor to
regain possession of the Aircraft and Lessee shall join in any
application by Lessor to regain possession of the Aircraft if so
requested by Lessor. This covenant shall apply whether or not
3
Lessee is or shall subsequently become a debtor in a case under
Title 11 of the United States Code."
2. Forbearance
Execution of this Amendment shall serve as Lessor's agreement to
forebear from exercising its rights (including, without limitation, its rights
under Article 15 of the Agreement) with respect to:
(a) Lessee's failure to make payments of Rent or Deposits due under the
Agreement in January 1996 and for Rent Dates occurring in February, March and,
with the exception of the initial payment specified in clause (c)(v) of this
Section 2, April 1996; and
(b) Lessee's failure to make payment of Reserve Rate constituting Engine
Maintenance Accruals due under the Agreement for the period prior to January 1,
1996;
provided, however, that Lessor's agreement to forbear shall be effective,
for so long, and only so long, as Lessee otherwise complies with all the terms
of the Agreement, as amended, and fulfills the obligations set forth in
paragraphs (c) and (d) of this Section 2, as follows:
(c) Lessee shall pay to Lessor the following amounts:
(i) [***] on the Rent Date occurring in February 1996;
(ii) [***] on the Rent Date occurring in March 1996;
(iii) [***] on the Rent Date occurring in April 1996;
(iv) [***] ("Deferred Rent") on May 20,1996 and on each Rent Date
thereafter throughout the Term (as specified on pages 1 and 2 of Exhibit B
hereto -- "Restructuring Rental Amortization Schedule") and shall pay the
balance of any amount outstanding on the Expiry Date with interest to such
Expiry Date,
(v) [***] ("Deferred Deposit") on April 19, 1996 and for the next
succeeding three (3) Rent Dates thereafter (as specified on page 3 of
Exhibit B hereto -- "Restructuring Deposit Amortization Schedule").
Each such Deferred Rent payment and Deferred Deposit payment on and after
the dates set forth in clauses (iv) and (v) above, as the case may be, (i)
shall constitute a portion of Rent and Deposit, as the case may be, (ii)
shall be made
4
together with such installment of Rent or Deposit or other amount as shall
be otherwise due on each such Rent Date as provided in Exhibit D of the
Agreement and (iii) shall be made in accordance with the terms and
conditions of the Agreement. Lessee may satisfy its obligations to pay the
Deferred Rent and Deferred Deposit at any time by paying the portion of
such Deferred Rent and Deferred Deposit which constitutes principal,
together with the portion of such Deferred Rent and Deferred Deposit which
constitutes interest accrued and unpaid as of the date of payment, all as
reflected on Exhibit B to this Amendment.
(d) Lessor hereby consents to the terms and conditions and Lessee's
execution of the Fleet Hour Agreement between Lessee and Rolls-Royce Aero
Engine Services, Ltd (Rolls-Royce Ref. G2273/13.03.96) ("Fleet Hour
Agreement") in respect of the engines originally installed on the ▇▇▇▇▇▇▇▇
(▇▇▇ ▇▇▇▇▇ and 17668) and acknowledges that the Fleet Hour Agreement
constitutes an Aircraft Maintenance Agreement as defined in the Agreement;
provided, however, that if the amounts required to be paid under the Fleet
Hour Agreement are less than the Engine Maintenance Accrual required under
the Agreement, Lessee shall pay the difference to Lessor as Reserve Rate
under the Agreement in accordance therewith.
Execution of this Amendment shall not constitute a waiver of any
Rent payment defaults or of any other defaults which may have occurred and be
continuing or which may occur in the future. Lessor's agreement to forbear shall
terminate automatically if Lessee fails to fulfill any of the obligations set
forth in paragraph (c) or (d) of this Section 2 or if any Event of Default
occurs under the Agreement (other than an Event of Default to which this
forbearance agreement applies). For so long, and only so long as Lessor's
agreement to forbear has not terminated, and provided that the obligation set
forth in paragraph (d) of this Section 2 has been fulfilled, (I) Lessee shall be
entitled to exercise its rights and privileges under Articles 5.1.2(b), 5.1.3,
7.4.1 and 13.3 of the Agreement and (ii) Lessor shall be deemed to have elected
not the apply the Deposit in accordance with Section 1 of Appendix D of the
Agreement to payments of Rent and Deposit that are subject to amortization
pursuant to Section 2(c) of this Amendment.
3. Governing Law
This Amendment shall be governed by and construed in accordance with
the internal laws of the State of New York and without regard to any conflict of
law rules. This Amendment is being delivered in the State of New York. The terms
and conditions of Article 18 of the Agreement are incorporated herein by
reference as applicable to this Amendment.
5
4. Miscellaneous
Except as specifically amended or supplemented by this Amendment,
the Agreement is hereby ratified, approved, confirmed and continued in all
respects and all provisions of the Agreement as heretofore amended shall remain
in full force and effect. This Amendment may be executed in any number of
counterparts, and all of such counterparts taken together shall be deemed and
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
SIGNED on behalf of
FIRST SECURITY BANK OF UTAH, N.A.,
not in its individual capacity but solely
as owner trustee
By:
-----------------------------------
Title:
SIGNED on behalf of
MIDWAY AIRLINES CORPORATION
By: /s/ ▇.▇ ▇▇▇▇▇▇
-----------------------------------
Title: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
SENIOR VICE PRESIDENT
GENERAL COUNSEL
6
4. Miscellaneous
Except as specifically amended or supplemented by this Amendment,
the Agreement is hereby ratified, approved, confirmed and continued in all
respects and all provisions of the Agreement as heretofore amended shall remain
in full force and effect. This Amendment may be executed in any number of
counterparts, and all of such counterparts taken together shall be deemed and
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
SIGNED on behalf of
FIRST SECURITY BANK OF UTAH, N.A.,
not in its individual capacity but solely
as owner trustee
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Vice President
SIGNED on behalf of
MIDWAY AIRLINES CORPORATION
By:
-----------------------------------
Title:
6
EXHIBIT A
MIDWAY 1996 BUSINESS PLAN
[***] (6 pages omitted)
[Letterhead of Fokker Aircraft U.S.A., Inc.]
May 31, 1996
Via Federal Express
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Midway Airlines Corporation
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, Esq.
First Security Bank of Utah N.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Jan Willem van Toulon van der Koog
Aircraft Financing & Trading B.V.
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
re: Amendment to Lease No. 136
Gentlemen:
I enclose the following counterparts of the above-referenced lease amendment:
- to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, one counterpart signed by FSBU;
- to ▇▇▇▇ ▇▇▇▇▇▇, one counterpart signed by ▇▇▇ ▇▇▇▇▇▇;
- to Jan Willem, two signed counterparts, one for AFT and one (that I ask
Jan Willem to forward) for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at DASA.
As always, best regards.
Very truly yours,
/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
AMENDMENT NO. 2
dated as of January 31, 1997
to
AIRCRAFT OPERATING LEASE AGREEMENT
NO. 136
dated as of December 15, 1995
between
FIRST SECURITY BANK, N.A., formerly known as
FIRST SECURITY BANK OF UTAH, N.A.,
not in its individual capacity
but solely as owner trustee, as
Lessor
and
MIDWAY AIRLINES CORPORATION, as
Lessee
Aircraft: Fokker 100
Serial No./RN: 11330/N133ML
THIS AMENDMENT NO.2 dated as of January 31, 1997 (this "Amendment"),
is between FIRST SECURITY BANK, N.A., formerly known as First Security Bank of
Utah, N.A., a national banking association existing pursuant to the laws of the
United States, having its principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, not in its individual capacity (except as
expressly set forth in the Lease) but solely as Owner Trustee under the Trust
Agreement ("Lessor"), and MIDWAY AIRLINES CORPORATION, a company incorporated
under the laws of the State of Delaware, having its principal place of business
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lessee").
WHEREAS, Lessor and Lessee are parties to that certain Aircraft
Operating Lease Agreement No. 136, dated as of December 15, 1995 (as amended
from time to time, the "Lease"; capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Lease);
WHEREAS, Lessor and Lessee entered into Amendment No. 1 to the
Lease, dated as of April 15,1996 ("Amendment No.1");
WHEREAS, debis AirFinance B.V. ("debis AF") is the beneficial owner
of the Aircraft;
WHEREAS, debis AF, Lessee, and Lessor entered into a Deferral
Agreement dated as of October 25, 1996 ("Deferral Agreement"), which provided
for the deferral of certain payments due under the Lease, and amended the Lease
in certain other respects;
WHEREAS, debis AF and Lessee entered into an Amendment to Deferral
Agreements dated as of December 30, 1996, which modified the Deferral Agreement
in certain respects (the "Amendment to Deferral Agreements");
WHEREAS, Lessee has entered into an Agreement and Plan of Merger
dated as of January 17, 1997 (as amended, the "Merger Agreement") with GoodAero,
Inc., a Delaware corporation ("GoodAero") and ▇▇▇▇/Chilmark Fund, L.P., a
Delaware limited partnership, whereby it is proposed that GoodAero will be
merged into Lessee to effect a recapitalization of Lessee (the "Merger"),
subject to certain conditions precedent having been satisfied; and
WHEREAS, Lessor and Lessee desire to amend the Lease to become
effective upon the consummation of the Merger and to enter into further
agreements as hereinafter set forth.
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Amendment of Lease. The Lease is hereby amended as follows:
(a) Section 1 of the Lease is amended by eliminating the
period at the end of Subsection 1.25 thereof, and by inserting in lieu thereof
the following clause:
"or such earlier date as may be specified by Lessor pursuant
to notice given in accordance with, and subject to the terms
of Section 16.10 hereof."
(b) Section 1.48 of the Lease is amended by deleting the
period at the end of the first sentence and by inserting the following in lieu
thereof: "or any successor or assign thereof."
(c) Section 6.4 of the Lease is amended as follows: (a) by
deleting subsection (i) thereof in its entirety and by inserting in lieu thereof
the following: "(i) any financial reports or projections supplied to the
majority shareholder of Lessee"; and (b) by deleting the words "upon Lessor
requesting the same" from subsection (ii) thereof.
(d) Section 11.1(a) of the Lease is amended by deleting the
period at the end thereof and by inserting the following clause:
provided, however, that the deductible may be $500,000 (Dollars Five
Hundred Thousand) for each accident, but only if Lessee procures and
maintains in favor of debis AirFinance B.V. for the benefit of the
Beneficiary and/or the Lessor under each of the Leases identified on
Schedule 16.10 hereof (as those terms are defined therein) an
irrevocable letter of credit (the "Letter of Credit") in the face
amount of $800,OOO (Dollars Eight Hundred Thousand) issued by
Wachovia Bank or another banking institution reasonably acceptable
to debis AirFinance B.V. and in a form reasonably acceptable to
debis AirFinance B.V. containing the terms set forth in Schedule
11.1(a).1 of this Lease; provided, however, that Lessee may reduce
the amount of the Letter of Credit to $400,000 in any year where
Lessee's audited financial statements for the prior year show that
Lessee had net income (as determined in accordance with generally
accepted accounting principles ("Net Income")) greater than the
amount for such prior year identified as "Net Income (1)" on
Schedule 11.1(a).2, but less than the amount for such prior year
identified as "Net Income (2)" on Schedule 11.1(a).2; and Lessee
shall not be required to maintain the Letter of Credit in any year
where Lessee's audited financial statements for the prior year show
that Lessee had Net Income for such prior year greater than the
amount for such prior year identified as "Net Income (2)" on
Schedule 11.1(a).2; and provided, further, that notwithstanding any
reduction or cancellation of the Letter of Credit in accordance with
the terms hereof, Lessee shall be required to restore the Letter of
Credit in any year where Lessee's audited financial statements for
the immediately preceding year show that Lessee's Net Income was
less than the threshold set by Schedule 11.1(a).2 for such prior
year for reduction of the Letter of Credit or in any year in which
audited financials for Lessee for the immediately preceding year
have not been certified on or before April 15 of that year. For
purposes of determining the amount required for the Letter of Credit
in any year, reductions, if any, shall not be permitted until 30
days after receipt by debis AirFinance B.V. of the audited financial
statements of Lessee for the
-2-
prior year and, in the event that the Letter of Credit is to be
reinstated or increased in any year as aforedescribed, such Letter
of Credit shall be required on or before April 15 of such year. Any
failure by Lessee to comply with the provisions of this Section
11.1(a) shall be an Event of Default under Section 15.1(b) of the
Lease.
(e) Intentionally Omitted.
(f) Section 14.1(p) is amended by deleting the same in its
entirety and by inserting in lieu thereof the following:
"not become the surviving corporation of a merger with any
other entity, or itself consolidate with, or merge into, any
other corporation, or convey, transfer or lease substantially
all of its assets as entirety to any person, without the prior
written consent of Lessor (such consent not to be unreasonably
withheld) and the execution and delivery to Lessor of such
agreements, certificates and legal opinions as Lessor may
reasonably request with respect thereto.
(g) Intentionally Omitted.
(h) Intentionally Omitted.
(i) Section 15.1(e) of the Lease is deleted in its entirety
and the following is inserted in lieu thereof:
"if (i) if Lessee or any of its subsidiaries is in default
under any lease, hire-purchase, conditional sale or credit
sale agreement for equipment having a casualty value in excess
of [***] and such default is not cured or waived within
the applicable grace period or five (5) Business Days
(whichever is greater); (ii) (regardless of the amount of
money involved), any event occurs which with or without notice
or lapse of time or both would constitute a default under any
agreement between Lessee and, or promissory note executed by
Lessee in favor of, (a) [***]; (b) ▇▇▇▇/Chilmark Fund, L.P.;
[***]; (e) any affiliate of any of the foregoing; unless such
default or event of default is cured or waived within the
applicable grace period or five (5) Business Days (whichever
is greater); or (iii) any indebtedness owed by Lessee or any
of its subsidiaries in an amount in excess of [***] is not
paid when due or becomes due or capable of being declared
due prior to the date when it would otherwise become due
provided, however, the failure of Lessee to pay amounts
approximating [***]
-3-
[***], shall not be deemed a Default or an Event of Default
hereunder."
(j) Section 15.1(n) is modified by inserting the following
clause after the words "Daimler-Benz Aerospace A.G.": "or any affiliate,
successor or assign of either of them"
(k) Sections 15.1(o), (p) and (q) are deleted in their
entirety and the following new Sections 15.1(o) and (p) are inserted in lieu
thereof:
"(o) if, an Event of Default shall occur under and as defined
in that certain Promissory Note dated as of January 31, 1997
from the Lessee to debis AirFinance B.V. or under, and as
defined in that certain Promissory Note dated as of January
31, 1997 from the Lessee to DASA Aircraft Finance XVI, B.V.
(each, a "Note" and collectively, the "Notes");
(p) if, prior to satisfaction of Lessee's obligations pursuant
to the Notes, Lessee shall make (i) any payment of principal
or interest on any debt owed by Lessee to ▇▇▇▇/Chilmark Fund,
L.P. or to any holder of equity in Lessee representing the
right to vote twenty percent (20%) or more of the stock in
Lessee on any matter presented for vote to the shareholders of
Lessee (an "Insider") or any affiliate of an Insider; or (ii)
any redemption of, or any dividend or distribution with
respect to, any shares of Lessee owned by an Insider or any
affiliate thereof."
(l) Section 15.2 is amended by deleting clause (i) of
paragraph (b) thereof in its entirety and inserting the following new clause (i)
in lieu thereof:
"(i) serving notice of such termination on Lessee specifying
the occurrence giving rise to such Event of Default or Events
of Default, provided that such notice shall be deemed to have
been served without the necessity of actual service and this
Lease shall terminate automatically without the necessity of
any service of notice thereof upon Lessee upon the occurrence
of any Event of Default described in paragraphs (a), (f), (g),
(h), (n) or (o) of Section 15.1 of this Lease; provided,
however, that actual service of notice of such termination on
Lessee shall be required where an Event of Default described
in paragraph (n) of Section 15.1 of the Lease has occurred
solely by reason of occurrence of an event of default under an
Other Aircraft Agreement or under a DASA Aircraft Agreement,
which event of default does not, under the terms of such Other
Aircraft Agreement or DASA Aircraft Agreement, result in
automatic termination of such Other Aircraft Agreement or such
DASA Aircraft Agreement."
-4-
(m) Article 16 of the Lease is amended by adding a new Section
16.10 as follows:
"(a) Notwithstanding anything to the contrary contained in
this Lease, Lessor may terminate this Lease by giving not less
than six (6) months' prior written notice of the termination
date to Lessee provided that in no event may Lessor choose a
termination date earlier than September 15, 1998 ("Lessor's
Termination Option") and the termination date specified in
such notice shall become the Expiry Date; provided, however,
that (subject to the following sentence) Lessor shall not be
entitled to exercise Lessor's Termination Option with respect
to this Lease where the same would result in the termination
of four (4) or more of the aircraft operating lease agreements
identified in Schedule 16.10 to the Lease in any twelve (12)
month period, taking into account the scheduled or actual
Expiry Date of each such aircraft operating lease agreement.
Nothing herein shall be construed to limit the Lessor's rights
upon the occurrence of any Default or Event of Default or upon
the termination of this Lease as a result thereof or upon the
expiration of any Lease in the absence of the exercise of
Lessor's Termination Option.
(b) Lessee shall in no event be liable for any costs,
expenses, liabilities, losses, damages or amounts incurred by
Lessor which arise solely from the Lessor exercising Lessor's
Termination Option hereunder such as the loss of any tax
benefit, or fees or penalties arising from the breakage of any
contract or agreement. Except as expressly provided in
subsection (c) below, Lessor shall in no event be liable for
any costs, expenses, liabilities, losses, damages or amounts
incurred by Lessee as a result of Lessor exercising Lessor's
Termination Option in accordance with this Section 16.10.
(c) Notwithstanding the terms of clause (b) above, if Lessor
exercises Lessor's Termination Option hereunder in accordance
with this Section 16.10, then Lessee shall be responsible for
performing all of its obligations under and in accordance with
the terms of this Article 16, subject to the following:
(i) the Lessor shall pay or cause to be paid to Lessee
for Lessee's application against the "C Check" completed
pursuant to Appendix E, Item 1(e), an amount equal to
the lesser of (x) $100,000 or (y) an amount equal to the
product of the full cost of the "C Check" completed by
Lessee pursuant to Appendix E, Item 1(e) on the Aircraft
multiplied by a fraction, the numerator of which is the
number of hours (including fractions of an hour)
remaining on the Aircraft until Lessee's next scheduled
"C Check" for the Aircraft (assuming
-5-
Lessor had not exercised Lessor's Termination Option
hereunder) and the denominator of which is 3000; and
(ii) for purposes of Section 7.4.1(b) and (c), any shop
visit required to meet the conditions of Appendix B
shall be deemed a "scheduled" shop visit."
(n) Section 18.6 of the Lease is amended by deleting the
firm of "Haight, Gardner, Poor & ▇▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇.▇. ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇" as agent for Lessor and by inserting in lieu thereof the new
agent for Lessor as follows: "▇▇▇▇▇▇▇, Calamari & ▇▇▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇".
(o) Appendix B to the Lease is hereby amended as
follows:
(i) The amount set forth as the "AGREED VALUE" is
deleted in its entirety and the amount of [***] is
substituted therefor.
(ii) The Amount set forth as "RENT" is deleted in its
entirety and the amount of [***] is substituted
therefor.
(p) Appendix D to the Lease is hereby amended by
deleting Sections 2.2 through 2.7 in their entirety and by deleting Section 1 in
its entirety and inserting the following in lieu thereof:
"1. Deposit. Lessee has paid to Lessor the amount set
forth on Schedule B.1 as a Deposit for the Aircraft prior to
January 31, 1997. Lessor has applied such Deposit (plus all
accrued interest thereon) to the Default Payments (as defined
in Section 6 of Amendment No. 1 to this Lease) and/or to
Default Payments (as defined in Section 6 of Amendment No. 1
to the Other Aircraft Agreements)."
(q) Schedule 16.10 attached to this Amendment is hereby
attached to the Lease as Schedule 16.10 thereto and is incorporated therein.
2. Waiver of Default. Lessor agrees that any Default or Event of
Default under Sections 15.1(a), 15.1(e), 15.1(g) or 15.1(o) of the Lease (prior
to the amendment of any such Sections hereunder) which occurred prior to the
date of this Amendment is hereby deemed to have been cured by Lessee and Lessor
waives any rights or remedies it may have had with respect to the occurrence of
any such Default or Event of Default.
-6-
3. Representations, Warranties and Covenants
The following shall be, as applicable, representations, warranties
or covenants of Lessee pursuant to Articles 13 and 14 of the Lease:
(a) Representations
(i) This Amendment and the Notes have been duly entered into
and delivered by Lessee, and each constitutes a valid, legal and binding
obligation of Lessee enforceable against Lessee in accordance with its terms.
(ii) As of the date of this Amendment, Lessee has entered,
or will contemporaneously herewith enter, into an agreement with [***] having
terms which are substantially in accordance with the terms set forth under
the heading [***] in Exhibit 6.02(k) to the Agreement and Plan of Merger
dated as of January 17, 1997 by and among GoodAero, Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇, Midway Airlines Corporation and ▇▇▇▇/Chilmark Fund, L.P., as
amended, except to the extent otherwise specifically set forth in the letter
dated as of February 10, 1997, from Lessee to Lessor.
(b) Covenants
Lessee covenants that it will not make any prepayment in
respect of the Promissory Note dated February 7, 1997 in the amount of [***],
or amend the [***] to provide for terms more favorable to the payee thereof
{including, without limitation, any increase in the interest rate or
acceleration of payment).
4. Deferral Agreement. Lessor and Lessee agree that the Deferral
Agreement and the Amendment to Deferral Agreements are hereby declared null and
void and shall have no further force or effect with respect to the Lease.
5. Merger. Lessor hereby consents to the Merger.
6. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws of the State of New York and without regard
to any conflict of law rules. This Amendment is being delivered in the State of
New York.
7. Miscellaneous. Except as specifically amended or supplemented by
this Amendment, the Lease is hereby ratified, approved, confirmed and continued
in all respects and all provisions of the Lease as heretofore amended shall
remain in full force and effect. The parties hereto acknowledge and confirm that
the Lease is intended to he a true lease and not a financing arrangement. This
Amendment may be executed in any number of counterparts, and all of such
counterparts taken together shall be deemed and constitute one and the same
instrument.
-7-
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
on the day and year first above written.
FIRST SECURITY BANK, N.A., formerly
known as First Security Bank of Utah, N.A.
not in its individual capacity but solely as
owner trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Vice President
--------------------------------------
MIDWAY AIRLINES CORPORATION
By: /s/ ▇.▇. ▇▇▇▇▇▇
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Schedule 11.1(a).1
The Letter of Credit shall contain the following terms:
debis AirFinance B.V. shall be entitled to draw amounts under the Letter of
Credit upon notice to the issuing bank signed by debis AirFinance B.V. stating
that amounts are due under one or more of the following, and that such amounts
remain unpaid:
Promissory Note dated as of January 31, 1997 executed by Midway
Airlines Corporation in favor of debis AirFinance B.V.
Promissory Note dated as of January 31, 1997 executed by Midway
Airlines Corporation in favor of Daimler-Benz Aerospace A.G.
Aircraft Operating Lease Agreement No. 111 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 112 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 113 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 114 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 135 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 136 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 524 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 525 between Midway Airlines
Corporation, as Lessee, and First Security Bank, N.A. (formerly
known as First Security Bank of Utah, N.A.), as Lessor
Aircraft Operating Lease Agreement No. 115-A between Midway Airlines
Corporation, as Lessee, and Wings Aircraft Finance, Inc., as Lessor
Aircraft Operating Lease Agreement No. 116-A between Midway Airlines
Corporation, as Lessee, and Wings Aircraft Finance, Inc., as Lessor
Aircraft Operating Lease Agreement No. 117-A between Midway Airlines
Corporation, as Lessee, and Wings Aircraft Finance, Inc., as Lessor
Aircraft Operating Lease Agreement No. 118-A between Midway Airlines
Corporation, as Lessee, and Wings Aircraft Finance, Inc., as Lessor
Schedule 11.1(a).2
Midway Airlines
Net Income Thresholds for Reduction in Amount of Letter of Credit Pursuant to
Section 11.1(a)
US$ millions
Year 1997 1998 1999 2000 2001
Net Income(2) 12.0 18.0 25.2 32.8 41.0
Net Income(1) 8.0 12.0 16.8 21.8 27.3
Year 2002 2003 2004 2005 2006
Net Income(2) 49.1 57.7 67.8 67.8 67.8
Net Income(1) 32.8 38.5 45.2 45.2 45.2
Year 2007 2008 2009 2010 2011
Net Income(2) 67.8 67.8 67.8 67.8 67.8
Net Income(1) 45.2 45.2 45.2 45.2 45.2
Year 2012 2013 2014
Net Income(2) 67.8 67.8 67.8
Net Income(1) 45.2 45.2 45.2
Amount of
Letter of Credit
$800,000 If actual Net Income is less than or equal to Net Income(1)
$400,000 If actual Net Income is greater than Net Income(1) but less
than or equal to Net Income(2)
0 If actual Net Income is greater than Net Income(2)
Schedule 16.10
1. Aircraft Operating Lease Agreement No. 111, dated as of November 11, 1993,
between First Security Bank, N.A. and Midway Airlines Corporation.
2. Aircraft Operating Lease Agreement No. 112, dated as of November 11, 1993,
between First Security Bank, N.A. and Midway Airlines Corporation.
3. Aircraft Operating Lease Agreement No. 113, dated as of November 11, 1993,
between First Security Bank, N.A. and Midway Airlines Corporation.
4. Aircraft Operating Lease Agreement No. 114, dated as of November 11, 1993,
between First Security Bank, N.A. and Midway Airlines Corporation.
5. Aircraft Operating Lease Agreement No. AOLAF-115-A, dated as of July 10,
1995, between Wings Aircraft Finance, Inc. and Midway Airlines
Corporation.
6. Aircraft Operating Lease Agreement No. AOLAF-116-A, dated as of July 10,
1995, between Wings Aircraft Finance, Inc. and Midway Airlines
Corporation.
7. Aircraft Operating Lease Agreement No. AOLAF-117-A, dated as of July 10,
1995, between Wings Aircraft Finance, Inc. and Midway Airlines
Corporation.
8. Aircraft Operating Lease Agreement No. AOLAF-118-A, dated as of July 10,
1995, between Wings Aircraft Finance, Inc. and Midway Airlines
Corporation.
9. Aircraft Operating Lease Agreement No. 135, dated as of July 20, 1995,
between First Security Bank, N.A. and Midway Airlines Corporation.
10. Aircraft Operating Lease Agreement No. 136, dated as of December 15, 1995,
between First Security Bank, N.A. and Midway Airlines Corporation.
11. Aircraft Operating Lease Agreement No. 524, dated as of August 1, 1995,
between First Security Bank, N.A. and Midway Airlines Corporation.
12. Aircraft Operating Lease Agreement No. 525, dated as of October 15, 1995,
between First Security Bank, N.A. and Midway Airlines Corporation.
Schedule B.1
Security Deposits Paid by Midway
Aircraft AOLAF Deposit
MSN No. Paid
-------- ----- -------
11321 525 [***]
11323 524 [***]
11329 135 [***]
11330 136 [***]
11444 111 [***]
11445 112 [***]
11475 113 [***]
11477 114 [***]
11450 115 [***]
11484 116 [***]
11485 117 [***]
11486 118 [***]