EXHIBIT 10.7(a)
SETTLEMENT AGREEMENT
BY AND BETWEEN
CCAIR, INC.,
AS LESSEE
AND
LYNRISE AIR LEASE, INC.,
AS LESSOR
Dated as of March 31, 1998
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................... 1
1.1. Definitions............................................... 1
SECTION 2. RETURN OF THE AIRCRAFT; BASIC RENT.............................. 4
2.1. Return.................................................... 4
2.2. Base Rent................................................. 4
SECTION 3. CONSIDERATION FOR SETTLEMENT.................................... 5
3.1. Notes; Option Agreement; Registration Rights Agreement.... 5
3.2. Engine Return Conditions.................................. 5
3.3. Records Credit............................................ 5
SECTION 4. [INTENTIONALLY OMITTED]......................................... 5
SECTION 5. REPRESENTATIONS AND WARRANTIES OF AIRLINE....................... 6
5.1. Incorporation; Power and Authority........................ 6
5.2. Due Execution; No Breach.................................. 6
5.3. Capitalization............................................ 6
5.4. Spare Parts............................................... 7
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE LESSOR
PARTIES............................................................ 7
6.1. Incorporation; Power and Authority........................ 7
6.2. Due Execution: No Breach.................................. 7
6.3. Securities Laws........................................... 8
SECTION 7. CONDITIONS TO THE OBLIGATIONS OF AIRLINE........................ 9
7.1. Authority for Action...................................... 9
7.2. Representations and Warranties True....................... 9
7.3. Covenants and Agreements Performed........................ 9
7.4. No Actions, Suits or Proceedings.......................... 9
7.5. Acknowledgment of Termination of Leases................... 9
7.6. Option Agreement.......................................... 9
7.7. Consent................................................... 9
7.8. Bankruptcy Note........................................... 9
SECTION 8. CONDITIONS TO THE OBLIGATIONS OF THE LESSOR..................... 9
8.1. Authority for Action...................................... 10
8.2. Representations and Warranties True....................... 10
8.3. Covenants and Agreements Performed........................ 10
8.4. No Actions, Suits or Proceedings.......................... 10
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TABLE OF CONTENTS
(Continued)
Page
8.5. Short Term Note........................................... 10
8.6. ▇▇▇▇ of Sale.............................................. 10
8.7. Consent................................................... 10
8.8. Release By Airline........................................ 10
8.9. Payment of Expenses of Trustees........................... 10
SECTION 9. SECURITIES LAW COMPLIANCE....................................... 10
SECTION 10. MISCELLANEOUS.................................................. 11
10.1. General Interpretive Rules................................ 11
10.2. Waiver.................................................... 11
10.3. Amendments................................................ 11
10.4. Governing Law............................................. 11
10.5. Severability.............................................. 11
10.6. Effect of Headings........................................ 11
10.7. Counterparts.............................................. 12
10.8. Notices................................................... 12
10.9. ENTIRE AGREEMENT.......................................... 12
10.10. Successors and Assigns.................................... 13
10.11. Further Assurances........................................ 13
EXHIBITS
Exhibit A - Form of Short Term Note
Exhibit B - Option Agreement
Exhibit C - Acknowledgment of Termination of Leases
Exhibit D - Consent of Trustees
Exhibit E - Release of Lessor
SCHEDULES
Schedule A - Listing of Leases
Schedule B - Selected Spare Parts, Engine and Landing Gear
Schedule C - Missing Records
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SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Agreement") is entered into as of March
31, 1998 by and between CCAIR, INC., a Delaware corporation ("Airline") and
LYNRISE AIR LEASE, INC., a Delaware corporation formerly known as Shorts Air
Lease, Inc. ("Lessor").
R E C I T A L S:
WHEREAS, Lessor previously leased to Airline nine SD3-60-300 series
aircraft bearing manufacturer's serial numbers SH3721, SH3722, SH3729, SH3731,
SH3742, SH3747, SH3748, SH3753 and SH3759 and FAA Registration Numbers N121PC,
N722PC, N729PC, N360PC, N742CC, N747HH, N748CC, N153CC and N159CC, respectively
(collectively, the "Aircraft"), pursuant to the separate leases listed on
Schedule A hereto (collectively, the "Leases"); and
WHEREAS, Airline and the Lessor have been participating in negotiations
regarding an agreement pursuant to which Airline would return the Aircraft to
the Lessor;
WHEREAS, pursuant to such negotiations, Airline has redelivered all of
the Aircraft to the Lessor; and
WHEREAS, the parties wish to set forth in this Agreement their
definitive understandings relating to the return of the Aircraft to the Lessor
and the Airline's obligations relating to the Aircraft.
NOW, THEREFORE, in consideration of the mutual promises herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound hereby, agree as
follows:
SECTION 1. DEFINITIONS
1.1. Definitions. For purposes of this Agreement, terms with initial
capital letters used herein without definition shall have the meanings given to
them in the Leases, except that the following terms shall have the meanings set
forth below:
"Accepted Aircraft" shall have the meaning set forth in
Section 2.1.
"Affiliate" means, in relation to a specified Person, a Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with such
specified Person; "control" when used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Bankruptcy Note" means, the promissory note executed by
Airline and payable to the order of Lessor in the principal amount of
$400,000.
SETTLEMENT AGREEMENT - Page 1
"▇▇▇▇ of Sale" means, the ▇▇▇▇ of sale executed by Airline
that transfers to Lessor all of Airline's right, title and interest in
and to the Engine, Landing Gear, Records and Selected Spare Parts.
"Business Day" means any day except a Saturday, Sunday or any
other day on which commercial banks in Charlotte, North Carolina or the
City of New York, New York are authorized or required by law to close.
"CCAIR Release" means a release agreement relating to the
Leases, dated the Closing Date and in substantially the form of Exhibit
E attached hereto.
"Claims" means all actions, causes of action, suits, debts,
dues, sums of money, accounts, bonds, bills, covenants, contracts,
controversies, agreements, promises, trespasses, Damages, judgments,
executions, claims, Liabilities, investigations, prosecutions and
demands whatsoever, in law or equity, regardless of when made or
asserted and regardless of whether fixed or contingent.
"Closing" means the closing of the transactions contemplated
by this Agreement, which shall occur upon the execution and delivery by
the parties of this Agreement.
"Closing Date" shall mean April 17, 1998.
"Common Stock" means the common stock, $.01 par value per
share, of Airline.
"Damages" means any and all costs, losses, claims,
Liabilities, fines, penalties, damages and expenses (including interest
which may be imposed in connection therewith), court costs, and
reasonable fees and disbursements of counsel, consultants and expert
witnesses incurred by a party hereto.
"Engine" means the aircraft engine manufactured by ▇▇▇▇▇ &
Whitney described on Schedule B attached hereto.
"Landing Gear" means the two nose landing gear described on
Schedule B attached hereto.
"Lease Obligations" means $9,785,012, which amount constitutes
any and all amounts that are now or may hereafter be owed by Airline to
Lessor under the Leases, including, without limitation, all rental
payments, maintenance and repair obligations and any and all other
obligations, less the aggregate fair market value of the Selected Spare
Parts, the Engine and the Landing Gear.
"Liabilities" means liabilities, debts or obligations, whether
accrued, absolute, fixed, contingent, liquidated, unliquidated, joint,
several or joint and several or otherwise, known or unknown.
SETTLEMENT AGREEMENT - Page 2
"Material Adverse Effect" means any action with respect to a
Person which has any material adverse effect on such Person's ability
to perform its obligations hereunder or pursuant to any agreement,
instrument or document delivered hereunder, or is likely to have any
material adverse effect on such Person's business or financial
condition considered as a whole.
"Missing Records" means the Records described on Schedule D
attached hereto.
"Note" means the 7% Convertible Subordinated Note due 2004 in
the original principal amount of Seven Million Nine Hundred Twenty
Thousand Dollars ($7,920,000), to be issued by Airline to Lessor.
"Option Agreement" means the option agreement between Airline
and Lessor in substantially the form of Exhibit B attached hereto.
"Option Exercise Closing Date" means the fifth business day
after (i) receipt by Lessor of written notice from the Airline of the
Airline's desire to purchase the Short Term Note in cash pursuant to
the Option Agreement, or (ii) receipt by Lessor of net cash proceeds of
Airline's common stock equal to the Purchase Price, issued to Lessor
pursuant to the Option Agreement.
"Person" means any individual, corporation, partnership,
trust, joint venture, estate, limited liability company, association,
unincorporated association, governmental entity or any other entity or
organization.
"Purchase Price" means (i) the payment of One Million Eight
Hundred Five Thousand Twelve Dollars ($1,805,012), less the amount, if
any, of the Records Credit, plus interest thereon from the Closing Date
until and including the Option Exercise Closing Date at a fixed rate of
interest equal to 7% per annum calculated based on a 360 day year and
the actual days elapsed, in cash or at Airline's option, by delivery to
Lessor of Airline's common stock, which shall be immediately salable in
the public market without restriction in quantities sufficient to
generate net cash proceeds to Lessor equal to such amount, and (ii) the
delivery by Airline to Lessor of the Note and the Registration Rights
Agreement.
"Records" means all logs, manuals, data, and inspection,
modification and overhaul records, maintenance and inspection programs
and other documentation required to be maintained under applicable
rules and regulations of the Federal Aviation Administration related to
the Aircraft.
"Records Credit" means an amount attributable to the aggregate
value of any Missing Records that may be located by Airline and
delivered to Lessor on or before May 31, 1998, not to exceed One
Hundred Twenty-Five Thousand Eight Hundred Eighty Dollars ($125,880).
For the purposes of determining the amount of the Records Credit, the
respective values assigned to the Missing Records are set forth on
Schedule D attached hereto.
SETTLEMENT AGREEMENT - Page 3
"Registration Rights Agreement" means the registration rights
agreement between Airline and the Lessor.
"Rent Deficiency Claim" shall mean the aggregate claim for
rents due under the Leases over and above the amount the parties agree
that Lessor reasonably should be able to recover from releasing the
Aircraft following their return by Airline. The Rent Deficiency Claim
shall be set by the parties at $7,920,000. Such number was calculated
based upon, among other things, the sum of (i) payment for certain
accrued rent due to Lessor under the Leases, (ii) amounts owing to
Lessor under the Bankruptcy Note, and (iii) the difference between (A)
the aggregate rental stream due under the Leases from August 1, 1997
through the remaining terms thereof and (B) the assumed then fair
market rental of each aircraft, which the parties have agreed solely
for purposes of this agreement is $20,000 per aircraft per month, with
such sum discounted to present value using a discount rate of 15% per
annum, which amount was reduced by $90,000 for three "C" checks and
$240,000 for four "D" checks.
"Securities Act" means the Securities Act of 1933, as amended.
"Short Term Note" means the promissory note, in substantially
the form of Exhibit A attached hereto, to be issued by Airline to
Lessor on the Closing Date.
"Selected Spare Parts" means the SD3-60-300 spares described
on Schedule B attached hereto.
"Spare Parts" means the SD3-60-300 spare parts owned by
Airline listed on Schedule C attached hereto.
SECTION 2. RETURN OF THE AIRCRAFT; BASIC RENT
2.1. Return. The Airline has redelivered all of the Aircraft to return
locations designated by Lessor. All deficiencies on the two Aircraft bearing FAA
Registration Nos. N121PC and N722PC (the "Accepted Aircraft") have been
corrected in accordance with the terms of the Leases and Lessor has accepted the
Accepted Aircraft for return. Lessor and Airline previously inspected each of
the seven remaining Aircraft and Lessor and Airline have agreed upon the items
that must be repaired on each Aircraft to satisfy the return conditions
specified in the Leases (the "Agreed Maintenance Items"). Lessor has taken
possession and control of the seven remaining Aircraft and Lessor and Airline
have agreed that Lessor shall be responsible for directing the repair and paying
the cost of repair for the Agreed Maintenance Items. Airline has satisfied all
Claims and all of its obligations to Lessor under the Leases through the
issuance to Lessor of the Short Term Note.
2.2. Base Rent. Airline paid to Lessor base rent for each Aircraft in
an amount equal to $20,000 per month per Aircraft for the period from August 1,
1997 through February 28, 1998. Any remaining obligation of Airline to pay base
rent under the Leases is evidenced by the Short Term Note.
SETTLEMENT AGREEMENT - Page 4
SECTION 3. CONSIDERATION FOR SETTLEMENT
3.1. Notes; Option Agreement; Registration Rights Agreement.
(a) Upon Closing, in full and final satisfaction of any and
all Claims of Lessor against Airline arising under or in connection
with the Leases, Airline shall (i) issue to Lessor the Short Term Note
and (ii) transfer to Lessor all of Airline's right, title and interest
in and to the Engine, Landing Gear, Records and Selected Spare Parts on
an "as is, where is, with all faults" basis and without representation
or warranty of any kind or nature, express or implied, pursuant to the
▇▇▇▇ of Sale. As soon as reasonably practicable after the Closing, (i)
in exchange for the Landing Gear, Airline will receive landing gear S/N
DRG8769/85 (which has a broken cuff and steering units) from Aircraft
SH3722 and a rental landing gear S/N DRG1464/86 from Aircraft SH3753,
(ii) in exchange for two engines (S/N 106104 and 106115) shipped by
Airline to Lessor, two rental engines (S/N 106210 and 106126) from
Aircraft SH3747 and SH3759 will be returned to the lessors thereof, and
(iii) propeller GP149 from Aircraft SH3747 will be returned to Airline
promptly after receipt by Lessor of an acceptable replacement
propeller.
(b) At Closing Airline and Lessor shall enter into the Option
Agreement pursuant to which Lessor shall grant to Airline the right to
purchase from Lessor the Short Term Note for the Purchase Price. In the
event that Airline timely exercises its option to purchase the Short
Term Note for the Purchase Price in accordance with the terms of the
Option Agreement, as consideration for the Lessor's acceptance of the
early return of the Aircraft and consummation of the other transactions
contemplated hereby and in full and final settlement of any and all
Claims of Lessor against Airline arising under or in connection with
the Leases, Airline shall pay to Lessor on the Option Exercise Closing
Date, the Purchase Price.
3.2. Engine Return Conditions. The Aircraft have been inspected by and
returned to the Lessor. Lessor hereby acknowledges and agrees that the Aircraft
engines, taken as a whole fleet, have an average of not less than 50% of the
number of hours then allowed between hard-time maintenance overhauls based upon
a 7,000 hour requirement and that Airline has fully satisfied by performance
and/or payment through issuance of the Short Term Note to Lessor, the return
conditions for the Aircraft engines set forth in the Leases.
3.3. Records Credit. In the event that Airline delivers to Lessor the
Missing Records or any part thereof, on or before May 31, 1998, Airline shall
receive a credit in the amount of the Records Credit for the Missing Records so
delivered.
SECTION 4. [INTENTIONALLY OMITTED].
SETTLEMENT AGREEMENT - Page 5
SECTION 5. REPRESENTATIONS AND WARRANTIES OF AIRLINE
Airline hereby represents and warrants to the Lessor that, as of the
date hereof:
5.1. Incorporation; Power and Authority. Airline is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all requisite corporate power and authority to enter into,
and be bound by the terms and conditions of, this Agreement and each other
agreement executed and delivered (and to be executed and delivered) by Airline
in connection with the transactions contemplated hereby.
5.2. Due Execution; No Breach.
(a) Due Execution. This Agreement is, and each other agreement
or instrument contemplated hereby, when executed and delivered by
Airline in accordance with the provisions hereof and thereof, will be
(assuming the due execution and delivery thereof by the other parties
thereto), a legal, valid and binding obligation of Airline, in each
case enforceable against Airline in accordance with its terms except as
such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws from time to
time in effect which affect the enforcement of creditors' rights
generally and by legal and equitable limitations on the availability of
specific performance and other equitable remedies against Airline.
(b) No Breach. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will (i) conflict with or result in any violation of or constitute a
breach of any of the terms or provisions of, or result in the
acceleration of any obligation under, or constitute a default under any
provision of any mortgage, bond, indenture, agreement or other
instrument or obligation to which Airline is a party or to which it is
subject or bound, which conflict, violation, breach, acceleration or
default will have a Material Adverse Effect; (ii) violate any judgment,
order, injunction, decree or award of any court, administrative agency,
arbitrator or governmental body against or affecting or binding upon,
Airline, which violation will have a Material Adverse Effect; or (iii)
constitute a violation by Airline of any law or regulation of any
jurisdiction as such law or regulation relates to Airline, or any of
its assets, which violation will have a Material Adverse Effect.
5.3. Capitalization. As of the Closing Date, the authorized capital
stock of Airline consists of 10,000,000 shares of common stock, $.01 par value
per share (the "Common Stock"), and no shares of preferred stock ("Preferred
Stock"). As of the date hereof, there are issued and outstanding (a) 8,365,695
shares of Common Stock, of which no shares are held as treasury stock, and (b)
no shares are Preferred Stock. All of the outstanding shares of capital stock of
the Airline have been validly issued, are fully paid and nonassessable. As of
the date hereof, there are no shares of Common Stock reserved for conversion of
the Note. There are no agreements restricting the transfer of, or affecting the
rights of any holder of, the Note or any other shares of Airline's capital
stock, and no preemptive rights on the part of any holder of any class of
securities of the Airline. Except for 778,243 options that have been granted and
that are outstanding and 41 warrants exercisable for the issuance of 451,250
shares of Common Stock, Airline does not have outstanding
SETTLEMENT AGREEMENT - Page 6
any options, warrants, rights, or other agreements or commitments of any kind
obligating the Airline, contingently or otherwise, to issue or sell any shares
of its capital stock or any securities or obligations convertible into, or
exchangeable for, any shares of its capital stock, and no authorization therefor
has been given. None of the outstanding shares of capital stock of the airline
was issued in violation of the Securities Act or the securities or blue sky laws
of any state or jurisdiction.
5.4. Spare Parts. Airline has good and marketable title to the Spare
Parts, free and clear of all mortgages, liens, pledges, charges or other
encumbrances. All SD3-6-300 parts owned by Airline as of March 12, 1998 and as
of the date hereof are listed on Schedule C hereto.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE LESSOR PARTIES
Lessor represents and warrants to Airline as follows:
6.1. Incorporation; Power and Authority. Lessor is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, and has all requisite corporate power and authority to enter into,
and be bound by the terms and conditions of, this Agreement and each other
agreement executed and delivered (and to be executed and delivered) by Lessor in
connection with the transactions contemplated hereby.
6.2. Due Execution: No Breach.
(a) Due Execution. This Agreement is, and each other agreement
or instrument contemplated hereby, when executed and delivered by
Lessor in accordance with the provisions hereof and thereof, will be
(assuming the due execution and delivery thereof by the other parties
thereto), a legal, valid and binding obligation of Lessor, in each case
enforceable against such Lessor in accordance with its terms except as
such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws from time to
time in effect which affect the enforcement of creditors' rights
generally and by legal and equitable limitations on the availability of
specific performance and other equitable remedies against such Lessor.
(b) No Breach. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will (i) conflict with or result in any violation of or constitute a
breach of any of the terms or provisions of, or result in the
acceleration of any obligation under, or constitute a default under any
provision of any mortgage, bond, indenture, agreement or other
instrument or obligation to which Lessor is a party or to which it is
subject or bound, which violation, breach or default will have a
Material Adverse Effect; (ii) violate any judgment, order, injunction,
decree or award of any court, administrative agency, arbitrator or
governmental body against or affecting or binding upon, Lessor or any
of its assets, which conflict, violation, breach, acceleration or
default will have a Material Adverse Effect; or (iii) constitute a
violation by such Lessor of any law or regulation of any jurisdiction
as such law or regulation relates to Lessor or any of its assets and in
any event which violation will have a Material Adverse Effect.
SETTLEMENT AGREEMENT - Page 7
6.3. Securities Laws.
(a) Investment Intent. In the event that Airline exercises the
Option, Lessor will be acquiring the Note, and any Common Stock issued
upon conversion, payment, redemption or repurchase thereof, for its own
account for investment, and not with the view to a sale of such
securities in connection with any distribution thereof, except in
compliance with the Securities Act and any applicable state "Blue Sky"
laws, and subject to the disposition of the Note being at all times
within its control, except as otherwise expressly provided herein.
(b) Accredited Investor; Qualified to Hold Common Stock.
Lessor is an "accredited investor" as such term is defined in
Regulation D promulgated under the Securities Act and is not precluded
from owning or holding Common Stock under applicable law or by United
States Department of Transportation regulations or rulings.
(c) Registration and Transfer. In the event that Airline
exercises the Option, Lessor understands that Airline shall, pursuant
to the Registration Rights Agreement, provide certain registration
rights under the Securities Act with respect to the registration of the
Common Stock which may be issued upon conversion, payment, redemption
or repurchase of the Note under the Securities Act. Nonetheless, Lessor
understands that there are legal and contractual restrictions on the
transferability of the Note and such Common Stock. Lessor understands
that prior to the effective date of any registration statement relating
to such securities there may be no public market for the Note and that
it is possible that no public market will exist at any time thereafter.
In addition, until such time as the offer and sale of the Note (and the
Common Stock which may be issued upon payment, redemption, repurchase
or conversion thereof) have been registered for sale or until such
securities otherwise may be sold without restriction in accordance with
the provisions of the Securities Act, legends will be placed on all
certificates or other instruments evidencing such securities with
respect to the restrictions on the assignment, resale or other
disposition of such securities and stop transfer restrictions may be
placed with the transfer agent with respect to such securities so as to
restrict the assignment, transfer or resale thereof.
(d) Advisors. Lessor has been afforded the opportunity to seek
and rely upon the advice of its own attorneys, accountants, or other
professional advisors in connection with an investment in Airline and
the execution of this Agreement.
(e) Access to Information. Lessor confirms that it has been
given an opportunity to make any inquiries of and receive answers from
Airline and its representatives with respect to the Note, the Common
Stock and Airline that Lessor wished to make, and to obtain any
additional information that Airline possesses, or can acquire without
unreasonable effort or expense, that is necessary to verify the
accuracy of the information furnished in response to such inquiries.
SETTLEMENT AGREEMENT - Page 8
SECTION 7. CONDITIONS TO THE OBLIGATIONS OF AIRLINE
The obligations of Airline to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, on or before the Closing Date,
of the following conditions (subject to the right of Airline to waive any such
condition or conditions):
7.1. Authority for Action. On the Closing Date, Lessor will have all
necessary power and authority to consummate the transactions contemplated hereby
and perform its obligations hereunder and under the other agreements and
instruments executed or to be executed in connection with the consummation of
such transactions.
7.2. Representations and Warranties True. All of the representations
and warranties of the Lessor contained in this Agreement or in any written
statement, certificate, schedule or other document delivered pursuant hereto or
in connection with the transactions contemplated hereby shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of the Closing Date.
7.3. Covenants and Agreements Performed. Lessor shall have performed or
complied with or delivered all covenants, agreements, conditions or documents
required by this Agreement to be performed, complied with or delivered by Lessor
prior to or on the Closing Date.
7.4. No Actions, Suits or Proceedings. No action, suit or proceeding
shall be pending or, to the knowledge of Lessor or Airline, threatened, before
any court or governmental body seeking to restrain or prohibit, or to obtain
damages in respect of, this Agreement or the consummation of the transactions
contemplated hereby.
7.5. Acknowledgment of Termination of Leases. Lessor shall,
concurrently with the Closing, have executed and delivered to Airline an
Acknowledgment of Termination of Leases in the form of Exhibit C, with only such
changes thereto as may be agreed by Airline.
7.6. Option Agreement. Lessor shall, concurrently with the Closing,
have executed and delivered to Airline the Option Agreement in the form of
Exhibit B, with only such changes as may have been agreed to by Airline.
7.7. Consent. The Trustees shall have executed and delivered to Airline
the Consent in the form of Exhibit D, with only such changes as may have been
agreed to by Airline.
7.8. Bankruptcy Note. The Bankruptcy Note shall have been returned to
Airline marked "cancelled."
SECTION 8. CONDITIONS TO THE OBLIGATIONS OF THE LESSOR
The obligations of Lessor to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, on or before the Closing Date,
of the following conditions (subject to the right of the Lessor to waive any
such condition or conditions):
SETTLEMENT AGREEMENT - Page 9
8.1. Authority for Action. On the Closing Date, Airline will have all
necessary power and authority to consummate the transactions contemplated hereby
and perform its obligations hereunder and under the other agreements and
instruments executed or to be executed in connection with the consummation of
such transactions.
8.2. Representations and Warranties True. All of the representations
and warranties of Airline contained in this Agreement or in any written
statement, certificate, schedule or other document delivered pursuant hereto or
in connection with the transactions contemplated hereby shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of the Closing Date.
8.3. Covenants and Agreements Performed. Airline shall have performed
or complied with or delivered all covenants, agreements, conditions or documents
required by this Agreement to be performed, complied with or delivered by
Airline prior to or on the Closing Date.
8.4. No Actions, Suits or Proceedings. No action, suit or proceeding
shall be pending or, to the knowledge of the Lessor or Airline, threatened,
before any court or governmental body seeking to restrain or prohibit, or to
obtain damages in respect of, this Agreement or the consummation of the
transactions contemplated hereby.
8.5. Short Term Note. Concurrently with the Closing, Airline shall have
executed and delivered the Short Term Note in the form of Exhibit A, with only
such changes as may have been agreed to by Lessor.
8.6. ▇▇▇▇ of Sale. Concurrently with the Closing, Airline shall have
executed and delivered to Lessor the ▇▇▇▇ of Sale transferring title to the
Engine, Landing Gear, Records and Selected Spare Parts to Lessor.
8.7. Consent. The Trustees shall have executed and delivered to Lessor
the consent in the form of Exhibit D, with only such changes as may have been
agreed to by Lessor.
8.8. Release By Airline. Airline shall have executed and delivered to
Lessor the CCAIR Release in the form of Exhibit F, with only such changes as may
have been agreed to by Lessor.
8.9. Payment of Expenses of Trustees. The Airline shall have paid the
reasonable expenses of the Trustees incurred in connection with this Settlement
Agreement and the Consent, including reasonable attorneys' fees and costs.
SECTION 9. SECURITIES LAW COMPLIANCE
Lessor covenants that, if Airline exercises the Option pursuant to the
Option Agreement and delivers the Note to Lessor, it will not sell the Note or
any portion thereof, or any other securities which it may be issued upon
conversion, payment, redemption, repurchase or other similar occurrence with
respect to the Note, in violation of the provisions of any applicable securities
laws, including, without limitation, the provisions of the Securities Act.
Lessor hereby agrees to
SETTLEMENT AGREEMENT - Page 10
indemnify and hold Airline harmless from and against all Damages which Airline
may suffer or incur as a consequence of any breach by it of the provisions of
this Section.
SECTION 10. MISCELLANEOUS
10.1. General Interpretive Rules. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(i) the terms defined in this Agreement include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
genders; (ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(iii) references herein to "Sections," "subsections" and other subdivisions, and
to "Schedules" and "Exhibits," without reference to a document, are to
designated Sections, subsections and other subdivisions of, and to Schedules and
Exhibits to, this Agreement; (iv) a reference to a subsection without further
reference to a Section is a reference to such subsection as contained in the
same Section in which the reference appears, and this rule shall also apply to
other subdivisions; (v) the use of the term "including" is intended to indicate
that the language following such term is illustrative but not exclusive; and
(vi) the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular provision.
10.2. Waiver. The waiver or failure of any party to exercise in any
respect any right provided for herein on a particular occasion shall not be
deemed a waiver of such right on any other occasion or a waiver of any other
right. To be effective, a waiver must be in writing and be signed by the party
that is entitled to the benefit of the right that is being waived.
10.3. Amendments. No amendment of this Agreement shall be made or
deemed effective unless in writing and executed and delivered by the party
against which enforcement of such amendment is sought.
10.4. Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the internal law of the State of New York,
without regard to its principles of conflicts of law, as to all matters
including validity, effect and performance.
10.5. Severability. If any one or more of the provisions herein, or
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect, and of the
remaining provisions, shall not be in any way impaired or affected, and in lieu
of each such illegal, invalid or unenforceable provision Airline and the Lessor
shall negotiate in good faith to add a provision that is legal, valid, and
enforceable and as similar in terms to such illegal, invalid or unenforceable
provision as may be possible while giving effect to the benefits and burdens for
which the parties have bargained hereunder.
10.6. Effect of Headings. The Recitals and Section and subsection
headings are for convenience only and shall not affect the construction.
SETTLEMENT AGREEMENT - Page 11
10.7. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
10.8. Notices.
(a) Form. All notices, claims, demands and other
communications hereunder ("Communications") shall be in writing and,
unless expressly provided otherwise herein, shall be made by hand
delivery, first class mail, telecopy or overnight air courier
guaranteeing next day delivery to a party at its address as set forth
below:
If to Airline: CCAIR, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
And with copies of all ▇▇▇▇▇▇ Management, Inc.
Communications (which ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
shall not constitute ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
notice) to: Attn.: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
5400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Lessor: Lynrise Air Lease, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn.: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
And with copies of all Ropes & ▇▇▇▇
Communications (which One International Place
shall not constitute Boston, Massachusetts 02110-2624
notice) to: Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
(b) Effectiveness. All Communications shall be deemed to have
been duly given (i) at the time delivered by hand, if personally
delivered; (ii) three Business Days after being deposited in the mail,
postage prepaid, if mailed; (iii) when receipt confirmed, if
telecopied; and (iv) the second Business Day after timely delivery to
the courier, if sent by overnight courier guaranteeing next day
delivery.
10.9. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER AGREEMENTS
AND INSTRUMENTS EXECUTED AND DELIVERED, AND TO BE EXECUTED AND
DELIVERED, IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY
SETTLEMENT AGREEMENT - Page 12
AND THEREBY ARE INTENDED BY THE PARTIES AS FINAL, COMPLETE AND EXCLUSIVE
STATEMENTS OF THEIR AGREEMENTS AND UNDERSTANDINGS WITH RESPECT TO THE SUBJECT
MATTERS HEREOF AND THEREOF.
10.10. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties.
10.11. Further Assurances. Each party agrees to perform all further
acts and to execute and deliver all instruments and documents reasonably
requested by the other party to be executed and delivered as necessary to carry
out the purposes of, and intent of the parties evidenced in, this Agreement and
the other documents executed and delivered in connection with the transactions
contemplated hereby.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed as of the first date written above.
CCAIR, INC.
By:____________________________________
Name:_____________________________
Title:____________________________
LYNRISE AIR LEASE, INC.
By:____________________________________
Name:_____________________________
Title:____________________________
SETTLEMENT AGREEMENT - Page 13
Exhibit A
Form of Short Term Note
Exhibit B
Option Agreement
Exhibit C
Acknowledgement of Termination of Leases
Exhibit D
Consent of Trustees
Exhibit E
Release of Lessor
Schedule A
Listing of Leases
Schedule B
Selected Spare Parts, Engine and Landing Gear
Schedule C
Missing Records