ASSIGNMENT OF RIGHTS AGREEMENT
between
DOLPHIN TRADE & FINANCE, LTD.
Assignor
and
MIDWEST EXPRESS AIRLINES, INC.,
Assignee
dated November 14, 1997
Eight ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Model DC-9-81 Aircraft
Manufacturer's Serial Nos. 48029, 48030,
48031, 48032, 48033, 48070, 48071 and 48072
Feltman, Karesh, Major & ▇▇▇▇▇▇▇,
Limited Liability Partnership
Carnegie Hall Tower
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
TABLE OF CONTENTS
Page
SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . . . . .
1
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Interpretation . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2. Transfer of Purchase Rights . . . . . . . . . . . . . . . 8
2.1. Transfer of Purchase Rights . . . . . . . . . . . . . . . 8
2.2. Down Payments; Initial Payment . . . . . . . . . . . . . . 8
2.3. Designation of Aircraft; Change in Scheduled Delivery Date 9
2.4. Purchase Price and Title Transfer . . . . . . . . . . . . 9
2.5. Account; Nature of Payments . . . . . . . . . . . . . . 10
2.6. Condition Upon Delivery . . . . . . . . . . . . . . . . 10
2.7. Inspection . . . . . . . . . . . . . . . . . . . . . . . 11
2.8. Alternate Delivery Mechanism . . . . . . . . . . . . . . 11
2.9. Binding Obligations . . . . . . . . . . . . . . . . . . 13
2.10. Correction of Certain Post-Stripping Discrepancies . . . 13
2.11. Delivery of Upgrade Kits . . . . . . . . . . . . . . . . 14
2.12. Delivery Condition Financial Adjustments . . . . . . . . 14
SECTION 3. Conditions to Agreement and Closing . . . . . . . . . . 15
3.1. Conditions to Effectiveness of this Agreement Against
Assignee . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2. Conditions to Effectiveness of this Agreement Against
Assignor . . . . . . . . . . . . . . . . . . . . . . . . 15
3.3. Assignee's Delivery Date Conditions . . . . . . . . . . 16
3.4. Assignor's Delivery Date Conditions . . . . . . . . . . 17
3.5. Additional Delivery Date Conditions . . . . . . . . . . 18
SECTION 4. Sales Taxes . . . . . . . . . . . . . . . . . . . . . . 19
4.1. Sales Taxes . . . . . . . . . . . . . . . . . . . . . . 19
4.2. Assignor Liable for Sales Taxes Generally . . . . . . . 19
4.3. Assignee Liable for Sales Taxes on Resale Aircraft . . . 19
4.4. Cooperation . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5. Representations, Warranties and Covenants of Assignor . 20
5.1. Organization, Power and Authority . . . . . . . . . . . 20
5.2. Non-Contravention . . . . . . . . . . . . . . . . . . . 20
5.3. Enforceability . . . . . . . . . . . . . . . . . . . . . 20
5.4. No Consent . . . . . . . . . . . . . . . . . . . . . . . 20
5.5. Copies of JFS Documents . . . . . . . . . . . . . . . . 21
SECTION 6. Representations, Warranties and Covenants of Assignee . 21
6.1. Organization, Power and Authority . . . . . . . . . . . 21
6.2. Non-Contravention . . . . . . . . . . . . . . . . . . . 21
6.3. Enforceability . . . . . . . . . . . . . . . . . . . . . 21
6.4. No Consent . . . . . . . . . . . . . . . . . . . . . . . 22
6.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. Disclaimer of Additional Warranties . . . . . . . . . . 22
SECTION 8. Release . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9. Termination Upon Total Loss . . . . . . . . . . . . . . 23
SECTION 10. Termination Events, Remedies and Damages . . . . . . . . 23
10.1. Assignee Termination Events . . . . . . . . . . . . . . 23
10.2. Assignor Termination Events . . . . . . . . . . . . . . 24
10.3. Termination, Damages and Remedies . . . . . . . . . . . 25
SECTION 11. Applicable Law . . . . . . . . . . . . . . . . . . . . . 27
11.1. Construction . . . . . . . . . . . . . . . . . . . . . . 27
11.2. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . 27
11.3. Waiver of Objection to Venue . . . . . . . . . . . . . . 27
11.4. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 27
11.5. Service of Process by Mail . . . . . . . . . . . . . . . 27
SECTION 12. Additional Provisions . . . . . . . . . . . . . . . . . 28
12.1. Successors and Assigns . . . . . . . . . . . . . . . . . 28
12.2. Entire Agreement . . . . . . . . . . . . . . . . . . . . 28
12.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . 28
12.4. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 29
12.5. Survival . . . . . . . . . . . . . . . . . . . . . . . . 30
12.6. No Brokers . . . . . . . . . . . . . . . . . . . . . . . 30
12.7. No Waiver of Enforcement . . . . . . . . . . . . . . . . 30
12.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . 30
12.9. Further Assurances . . . . . . . . . . . . . . . . . . . 30
SCHEDULE 1 -- DELIVERY DATES AND PURCHASE PRICE . . . . . . . . . . . . 32
SCHEDULE 2 -- INSURANCE REQUIREMENTS . . . . . . . . . . . . . . . . . 33
SCHEDULE 3 -- LIST OF TECHNICAL RECORDS . . . . . . . . . . . . . . . . 37
EXHIBIT A -- FORM OF ACCEPTANCE CERTIFICATE . . . . . . . . . . . . . . 44
EXHIBIT B -- FORM OF ASSIGNMENT AGREEMENT . . . . . . . . . . . . . . . 45
EXHIBIT C -- CONSENT AND AGREEMENT . . . . . . . . . . . . . . . . . . 47
EXHIBIT D -- FORM OF TECHNICAL ACCEPTANCE CERTIFICATE . . . . . . . . . 49
EXHIBIT E -- FORM OF DOLPHIN TRUSTEE'S ▇▇▇▇ OF SALE . . . . . . . . . . 50
ASSIGNMENT OF RIGHTS AGREEMENT
This ASSIGNMENT OF RIGHTS AGREEMENT, dated November 14, 1997
(this "Agreement"), is between Dolphin Trade & Finance, Ltd., a British
Virgin Islands corporation (the "Assignor"), and Midwest Express Airlines,
Inc., a Wisconsin corporation (the "Assignee").
RECITALS:
(A) Pursuant to the Forward Purchase Agreement, Assignor has
the right to purchase from JFS Aircraft Holdings Co., Ltd. ("JFS") the
airframe, engines, parts, documentation and data described in this
Agreement, all of which are currently on lease to Japan Air Systems Co.,
Ltd. ("▇▇▇").
(B) Assignor desires to assign to Assignee as of each Delivery
Date for each Aircraft all of its right, title and interest under the
Forward Purchase Agreement related to such Aircraft and its obligation
under the Forward Purchase Agreement to pay the purchase price for such
Aircraft, and Assignee desires to assume such right, title, interest and
obligation to purchase the Aircraft from JFS.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration whose receipt and sufficiency are
acknowledged, Assignor and Assignee agree as follows:
SECTION 1. DEFINITIONS
1.1. Definitions. In addition to the terms and expressions
defined elsewhere in this Agreement, the following terms and expressions
shall have the following meanings:
"Acceptance Certificate" means, with respect to each Aircraft,
the Acceptance Certificate signed by Assignee on the relevant Delivery
Date for such Aircraft substantially in the form attached as Exhibit A.
"Actual Cost" means actual cost of replacement parts plus the
cost of the associated labor at Assignee's lowest labor rates charged to
third parties (if the work is performed by Assignee) or at third party
costs charged to Assignee (if the work is performed by third parties) and
shall in no event include late charges, interest or other similar amounts.
"Additional Insured" means (i) the Indemnitees, (ii) JFS, (iii)
Credit Lyonnais, Tokyo Branch, Nippon Aircraft Leasing, Inc., Ryoshin
Leasing Corporation and The Toyo Trust & Banking Co., Ltd., as lenders to
JFS (the "Lenders"), (iv) Credit Lyonnais, Tokyo Branch as agent for the
Lenders, (v) the Mortgagee, and (vi) Credit Lyonnais/PK AIRFINANCE.
"Affiliate" means, in relation to any Person, any other Person
controlled directly or indirectly by that Person, any other Person that
controls directly or indirectly that Person or any other Person under
common control with that Person. For purposes of this definition,
"control" of any Person means ownership of a majority of the voting power
of such Person.
"Aircraft" means, collectively, each of the Airframes and its
related Engines and Technical Records and, individually, any of such
Airframes and its related Engines and Technical Records.
"Airframe" means each of eight ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Model DC-9-81
airframes bearing manufacturer's serial nos. 48029, 48030, 48031, 48032,
48033, 48070, 48071 and 48072, excluding the Engines related to such
airframe or any engine from time to time installed on such airframe and
including any and all Parts attached to, incorporated in, installed on or
appurtenant to such airframe.
"Applicable Law" means all applicable (i) laws, treaties and
international agreements of any national government, (ii) laws of any
state, province, territory, locality or other political subdivision of a
national government, and (iii) rules, regulations, judgments, decrees,
orders, injunctions, writs, directives, licenses and permits of any
Governmental Body or arbitration authority.
"Assignee Potential Termination Event" means an Assignee
Termination Event or an event that, with the giving of notice, the passage
of time, or both, would constitute an Assignee Termination Event.
"Assignee Termination Event" has the meaning given such term in
Section 10.1.
"Assignee's Counsel" means ▇▇▇▇▇ & Lardner with offices at
Firstar Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ 53202-
5367.
"Assignment Agreement" means, for each Aircraft, an Assignment
Agreement in the form attached as Exhibit B pursuant to which, on the
Delivery Date for such Aircraft, Assignor shall assign to Assignee all
right, title and interest of Assignor under the Forward Purchase Agreement
relating to such Aircraft and the obligation to pay the JFS Purchase Price
for such Aircraft on such Delivery Date.
"Assignor Potential Termination Event" means an Assignor
Termination Event or an event that, with the giving of notice, the passage
of time or both, would constitute an Assignor Termination Event.
"Assignor Termination Event" has the meaning given such term in
Section 10.2.
"Assignor's Counsel" means Feltman, Karesh, Major & ▇▇▇▇▇▇▇,
Limited Liability Partnership with offices at Carnegie Hall Tower, ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Bills of Sale" means, with respect to each Aircraft, the FAA
▇▇▇▇ of Sale covering such Airframe and the Warranty ▇▇▇▇ of Sale covering
such Aircraft.
"Business Day" means any day other than a Saturday, a Sunday or
a day on which commercial banking institutions in New York, New York and
Tokyo, Japan are authorized or required to be closed.
"Consent and Agreement" means a Consent and Agreement, dated the
date of this Agreement, by JFS in the form attached as Exhibit C pursuant
to which, among other things, JFS consents to the assignment of Assignor's
rights to purchase each Aircraft on its respective Delivery Date pursuant
to the Assignment Agreement for such Aircraft.
"Delivery" means, with respect to each Aircraft, the transfer to
Assignee of title to such Aircraft in accordance with this Agreement by
the delivery to Assignee of the applicable Warranty ▇▇▇▇ of Sale covering
such Aircraft.
"Delivery Date" means for each Aircraft the date on which the
Delivery of such Aircraft occurs.
"Delivery Location" means (i) for each Aircraft other than a
Resale Aircraft, the location for delivery of such Aircraft determined
pursuant to Section 2.2 of the Forward Purchase Agreement, and (ii) for
each Resale Aircraft, the location determined pursuant to Section 2.8(b).
"Dollars" or "$" means the legal currency of the United States
of America.
"Dolphin Trustee" means First Security Bank, National
Association or another commercial bank or trust company reasonably
selected by Assignor, acting as owner trustee pursuant to a trust
agreement that qualifies such trustee as a "citizen of the United States"
for purposes of 11 U.S.C. Section 40102(a)(15).
"Down Payments" means, collectively, the First Down Payment and
the Second Down Payment.
"Engines" means the 16 ▇▇▇▇▇ & Whitney Model JT8D-217C aircraft
engines meeting the requirements set forth in Article 17.2(3) of the Lease
and any and all Parts attached to, incorporated in, installed on or
appurtenant to any such engine and, with respect to any Airframe, the two
Engines specifically identified in the Acceptance Certificate and Warranty
▇▇▇▇ of Sale with respect to such Airframe.
"FAA" means the U.S. Federal Aviation Administration or any
successor agency administering Subtitle VII of Title 49 of the United
States Code.
"FAA ▇▇▇▇ of Sale" means (i) with respect to each Aircraft other
than a Resale Aircraft, the FAA form ▇▇▇▇ of sale (AC Form 8050-2)
transferring title to the Airframe from JFS to Assignee, and (ii) with
respect to each Resale Aircraft, the FAA form ▇▇▇▇ of sale (AC Form 8050-
2) transferring title to the Airframe from the Dolphin Trustee to
Assignee.
"First Down Payment" means the amount of $ * .
___________
* Indicates that material has been omitted and confidential treatment
has been requested therefor. All such omitted material has been
filed separately with the SEC pursuant to Rule 24b-2.
"Forward Purchase Agreement" means the Forward Purchase
Agreement dated as of December 15, 1995 between JFS, as seller, and
Assignor, as buyer, as amended by Amendment No. 1 to Forward Purchase
Agreement, dated as of September 30, 1997, between JFS and Assignor, and
as supplemented by the letter agreement, dated November 13, 1997, between
JFS and Assignor.
"Governmental Body" means any department, commission, board,
bureau, court, legislature, agency, instrumentality or authority of any
national government or any political subdivision thereof.
"Indemnitees" means Assignor and its shareholders, Affiliates,
subsidiaries, directors, officers, agents and employees and, with respect
to any Resale Aircraft, the Dolphin Trustee and its shareholders,
Affiliates, subsidiaries, directors, officers, agents and employees.
"Initial Payment" means, with respect to each Aircraft, the
amount of $ * due to be paid by Assignee to Assignor 90 days before
the Scheduled Delivery Date for such Aircraft.
___________
* Indicates that material has been omitted and confidential treatment
has been requested therefor. All such omitted material has been
filed separately with the SEC pursuant to Rule 24b-2.
"JAA" means from time to time the Governmental Body of Japan
that has jurisdiction over the registration, airworthiness and operation
of the Aircraft.
"JFS Purchase Price" means the "Purchase Price" as such term is
defined in the Forward Purchase Agreement.
"Lease" means, collectively, (i) the Aircraft Lease Agreement,
dated as of December 15, 1995, between JFS and ▇▇▇ with respect to the
Aircraft , (ii) the Aircraft Lease Agreement, dated September 30, 1997,
between JFS and Lessee with respect to the Aircraft bearing manufacturer's
serial no. 48031, (iii) the Aircraft Lease Agreement, dated September 30,
1997, between JFS and Lessee with respect to the Aircraft bearing
manufacturer's serial no. 48033, and (iv) the Memorandum of Understanding
for Lease Extension, dated 28 March 1997, between Lessee, JFS and
Assignor.
"LIBOR" means for each Monthly Period the USD-LIBOR-BBA rate for
one-month periods that appears on Telerate Page 3750 at or about 11:00
a.m. London time on the second London Banking Day before the first day of
such Monthly Period. If no quotation appears on Telerate Page 3750,
"LIBOR" shall be the rate per annum determined by the Paying Agent to be
the average (rounded to the nearest hundredth of one percent) of the rates
at which Dollar deposits are offered for one-months periods by leading
reference banks to banks in the London Interbank Market at or about 11:00
a.m. London time on the second London Banking Day before the first day of
such Monthly Period. If fewer than two quotations are provided by such
reference banks, the applicable rate will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the Paying
Agent, at approximately 11:00 a.m. New York City time on the Business Day
which is two Business Days before the first day of such Monthly Period for
loans in Dollars to leading European banks for the one-month period during
the applicable Monthly Period and in an amount equal to the amount of the
aggregate Down Payments and Initial Payments then held by Paying Agent.
"Lien" means any mortgage, chattel mortgage, pledge, lien,
charge, encumbrance, lease, exercise of rights, security interest or lease
in the nature thereof (including any conditional sales agreement,
equipment trust agreement or other title retention agreement), statutory
rights in rem or claim of any kind whatsoever.
"London Banking Day" means a day on which foreign exchange
markets in London, England and in New York City, New York are open for the
transaction of the business required for the Paying Agent to determine
LIBOR.
"Manufacturer" means The Boeing Company, as successor by merger
to the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation.
"Monthly Period" means the period beginning on the 5th day of
any calendar month (commencing September 5, 1997) and ending on the 4th
day of the next succeeding calendar month.
"Mortgagee" means Credit Lyonnais, Tokyo Branch, as security
agent for the Lenders.
"Operative Documents" means this Agreement, the Assignment
Agreement for each Aircraft, the Consent and Agreement, the Acceptance
Certificate for each Aircraft, the Technical Acceptance Certificate for
each Resale Aircraft, the Bills of Sale for each Aircraft, the Releases of
Mortgage for each Aircraft and the Paying Agency Agreement.
"Parts" means any and all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment or components
of whatever nature (other than complete Engines or engines) incorporated
in, installed in, attached to or appurtenant to the Aircraft.
"Paying Agent" means Credit Lyonnais/PK AIRFINANCE, a
corporation organized and existing under the laws of the Grand Duchy of
Luxembourg.
"Paying Agency Agreement" means the Paying Agency Agreement,
dated the date of this Agreement, between Assignee, Assignor and the
Paying Agent pursuant to which the Paying Agent will receive and disburse
the JFS Purchase Price and the Purchase Price for each Aircraft on the
Delivery Date.
"Person" means any individual, corporation, partnership, limited
liability company, limited liability partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
Governmental Body.
"Post-Stripping Discrepancies" means discrepancies found to the
Aircraft following the stripping of paint from the Airframe as a result of
(i) lightning strikes to the Airframe not having been repaired or treated
in accordance with the SRM, and (ii) damage caused by sanding of paint
during previous painting of the Airframe not repaired in accordance with
the SRM, but excluding in each case any discrepancy that was discovered
before return of the Aircraft under the Lease and that ▇▇▇ was required to
correct in accordance with the terms of the Lease.
"Purchase Price" means, with respect to each Aircraft, the
amount set forth on Schedule 1 for such Aircraft.
"Resale Aircraft" has the meaning set forth in Section 2.8.
"Releases of Mortgage" means, with respect to each Aircraft, (i)
the release to be executed by Mortgagee extinguishing the Liens of the
security agreements in favor of the Mortgagee in such Aircraft and in the
Forward Purchase Agreement with respect to such Aircraft, and (ii) the
release to be executed by Assignor extinguishing the Liens of the security
agreements in favor of Assignor in such Aircraft and in the Forward
Purchase Agreement with respect to such Aircraft, in each case in scope
and form reasonably acceptable to Assignee.
"Second Down Payment" means the amount of $ * .
__________
* Indicates that material has been omitted and confidential treatment
has been requested therefor. All such omitted material has been
filed separately with the SEC pursuant to Rule 24b-2.
"Scheduled Delivery Date" means for a particular Aircraft one of
the dates set forth on Schedule 1.
"Special FAA Counsel" means Fellers, Snider, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ with offices at Bank One Tower, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"SRM" means the Structural Repair Manual as promulgated from
time to time by the Manufacturer.
"Technical Acceptance Certificate" means, with respect to a
Resale Aircraft, an acceptance certificate in the form attached as Exhibit
D.
"Technical Records" means, with respect to each Aircraft, the
records, logs, manuals and other documentation and data that ▇▇▇ has
maintained with respect to the Aircraft and is obligated to transfer to
JFS pursuant to the Lease.
"Telerate Page 3750" means the display page so designated on the
Dow ▇▇▇▇▇ Telerate Service (or such other page as may replace that page on
that service, or such other service as Assignor, Assignee and the Paying
Agent may agree to be nominated as the information vendor) for the purpose
of displaying London Interbank Offered Rates of leading reference banks.
"Total Purchase Price" means $ * .
___________
* Indicates that material has been omitted and confidential treatment
has been requested therefor. All such omitted material has been
filed separately with the SEC pursuant to Rule 24b-2.
"Upgrade Kits" means the parts and documentation set forth in
the Manufacturer's Kit Configuration Notices K699, K691, K620 and K507 to
convert three ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Model DC-9-81 aircraft to ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Model DC-9-82 aircraft, as purchased by Assignor from the
Manufacturer pursuant to Letter C1-L44-97-P1574C, dated February 13, 1997.
"Warranty ▇▇▇▇ of Sale" means (i) with respect to each Aircraft
other than a Resale Aircraft, a Full Warranty ▇▇▇▇ of Sale substantially
in the form attached as Exhibit A to the Forward Purchase Agreement, as
amended pursuant to the Consent and Agreement, and (ii) with respect to
each Resale Aircraft, a ▇▇▇▇ of sale in the form attached as Exhibit E.
1.2. Interpretation. This Agreement shall be governed by and
interpreted in accordance with the following provisions:
(a) Headings and divisions in this Agreement are made and
employed for convenience and reference only and are not intended to affect
the interpretation of this Agreement.
(b) References in this Agreement to a "Section", "Schedule" or
"Exhibit", unless otherwise indicated, shall refer to a Section, Schedule
or Exhibit of or to this Agreement.
(c) Unless otherwise indicated, any law, statute, treaty or
ordinance defined or referred to in this Agreement means or refers to such
law, statute, treaty or ordinance as amended from time to time, any
successor or replacement law, statute, treaty or ordinance as amended from
time to time, and the rules and regulations promulgated from time to time
under such law, statute, treaty or ordinance.
(d) Unless otherwise indicated, any agreement defined or
referred to in this Agreement means or refers to such agreement as
amended, modified or supplemented from time to time or as the terms of
such agreement are waived or modified, in each case in accordance with its
terms and as permitted under this Agreement.
(e) Terms defined in this Agreement in the singular include the
plural of such terms, and terms defined in this Agreement in the plural
include the singular of such terms.
(f) The term "including", when used in this Agreement, means
"including without limitation" and "including but not limited to".
SECTION 2. TRANSFER OF PURCHASE RIGHTS
2.1. Transfer of Purchase Rights. Subject to the satisfaction
of the conditions set forth in Section 3, on the Delivery Date for each
Aircraft (except as provided in Section 2.8), Assignor shall assign to
Assignee (a) all of Assignor's right, title and interest under the Forward
Purchase Agreement with respect to such Aircraft and (b) Assignor's
obligation under the Forward Purchase Agreement to pay the JFS Purchase
Price for such Aircraft, and Assignee shall accept such assignment and
shall purchase such Aircraft from JFS pursuant to the Forward Purchase
Agreement, except that the Assignor hereby reserves and does not transfer
its right, title and interest in any indemnities, insurance proceeds or
other payments under the Forward Purchase Agreement in favor of the
Assignor relating to any Aircraft to the extent that such indemnities,
insurance proceeds or payments were paid, accrued in favor of or became
payable to Assignor prior to the Delivery Date for such Aircraft
(collectively, and individually for each Aircraft, the "Reserved Rights").
In consideration for the assignment to Assignee of such rights, title,
interest and obligation for all Aircraft other than Aircraft sold pursuant
to Section 2.8, and in consideration for the sale by Assignor of the
Aircraft covered by Section 2.8, Assignee shall pay the Total Purchase
Price in accordance with the terms of this Agreement. Except for the
obligation to pay the JFS Purchase Price, Assignee shall not be liable for
any of the obligations or duties of Assignor under the Forward Purchase
Agreement, all of which obligations (including the obligations pursuant to
Section 12(b) of the Forward Purchase Agreement) shall be retained by
Assignor. Assignor and Assignee expressly acknowledge and agree for the
benefit of JFS that Assignor shall remain fully liable to perform all of
the duties and to fulfill all of the obligations of Assignor under the
Forward Purchase Agreement (i) to the extent Assignee is relieved of its
obligations hereunder by virtue of a default by Assignor to perform its
obligations hereunder or (ii) that have not been expressly assigned to
Assignee hereunder or expressly assumed by JFS in the Consent and
Agreement.
2.2. Down Payments; Initial Payment. (a) On July 9, 1997,
Assignee paid the First Down Payment to the Paying Agent on behalf of
Assignor, receipt of which is acknowledged by Assignor. On September 5,
1997, Assignee paid the Second Down Payment to the Paying Agent on behalf
of Assignor, receipt of which is acknowledged by Assignor. On September
22, 1997, Assignee paid the Initial Payment with respect to the first
Aircraft to be delivered to the Paying Agent on behalf of the Assignor,
receipt of which is acknowledged by Assignor.
(b) On or before the date that is 90 days before each Scheduled
Delivery Date, Assignee shall make an Initial Payment to Assignor that,
upon identification pursuant to Section 2.3 of the Aircraft to be
delivered on or about such Scheduled Delivery Date, will become the
Initial Payment with respect to such Aircraft. So long as no Assignee
Termination Event has occurred and is continuing, (i) at the time the
Initial Payment is due for each of the third through seventh Aircraft to
be Delivered to Assignee pursuant to this Agreement and the Forward
Purchase Agreement, Assignor shall apply $ * from the aggregate
amount of Down Payments to such Initial Payment so that the payment to be
made by Assignee in each case shall be $ * and (ii) at the time the
Initial Payment is due for the eighth Aircraft to be Delivered to Assignee
pursuant to this Agreement and the Forward Purchase Agreement, Assignor
shall apply the remaining amount of the Down Payments then held by the
Paying Agent to such Initial Payment so that the payment to be made by
Assignee shall be $ * minus the amount of the Down Payments then
held by Paying Agent.
___________
* Indicates that material has been omitted and confidential treatment
has been requested therefor. All such omitted material has been
filed separately with the SEC pursuant to Rule 24b-2.
(c) Pursuant to the Paying Agency Agreement, interest on all
Down Payments and Initial Payments held by the Paying Agent shall accrue
beginning and with effect from September 5, 1997 until the Down Payments
and Initial Payments are applied pursuant to this Agreement. Interest
shall accrue during each Monthly Period on the Down Payments and any
Initial Payments held by the Paying Agent from time to time during such
Monthly Period at an interest rate per annum equal to LIBOR minus 0.25%,
and so long as no Assignee Potential Termination Event has occurred and is
continuing, all interest accrued on the Down Payments and the Initial
Payments shall be paid to Assignee on the 15th day of January, April, July
and October, beginning January 15, 1998, and promptly following the
Delivery of the eighth Aircraft to Assignee pursuant to this Agreement and
the Forward Purchase Agreement.
2.3. Designation of Aircraft; Change in Scheduled Delivery Date.
(a) At least 60 days before each of the Scheduled Delivery Dates listed
in Schedule 1, Assignor shall specify by written notice to Assignee the
Aircraft to be delivered on such Scheduled Delivery Date. Assignor shall
not amend any Scheduled Delivery Date with JFS to either postpone or
accelerate such Scheduled Delivery Date in an amount greater than 15 days
without the prior written consent of Assignee, but this sentence shall not
affect the provisions of Section 3.3 of the Forward Purchase Agreement.
Any amendment to the Scheduled Delivery Date of any Aircraft shall be
promptly reflected in an amendment to Schedule 1 to this Agreement.
(b) In the event that Assignor is required to purchase one or
more Aircraft before the remaining Scheduled Delivery Dates pursuant to
the provisions of Section 3.3 of the Forward Purchase Agreement, Assignor
shall be obligated to sell to Assignee and Assignee shall be obligated to
purchase from Assignor such Aircraft on the Scheduled Delivery Dates (and
not earlier unless Assignee otherwise agrees), for the Purchase Price, in
the delivery condition required pursuant to Section 2.6 and giving
Assignee inspection rights at least equal to those it would have enjoyed
pursuant to Section 2.7.
2.4. Purchase Price and Title Transfer. (a) At least two
Business Days in advance of the Scheduled Delivery Date for each Aircraft,
Assignee shall deposit the Purchase Price for such Aircraft, less the
Initial Payment for such Aircraft, with the Paying Agent pursuant to the
Paying Agency Agreement. If the Purchase Price for such Aircraft is less
than the JFS Purchase Price for such Aircraft, at least two Business Days
in advance of the Scheduled Delivery Date for such Aircraft, Assignor
shall deposit the balance of the JFS Purchase Price for such Aircraft with
the Paying Agent pursuant to the Paying Agency Agreement.
(b) On the Delivery Date for each Aircraft (other than a Resale
Aircraft), Assignor shall assign to Assignee and Assignee shall assume all
of Assignor's right, title and interest with respect to such Aircraft
under the Forward Purchase Agreement, including Assignor's right to
purchase such Aircraft from JFS, and Assignor shall assign to Assignee and
Assignee shall assume Assignor's obligation to pay the JFS Purchase Price
for such Aircraft to JFS on the Delivery Date, subject to the Reserved
Rights. On the Delivery Date for each such Aircraft, Assignor and
Assignee shall execute and deliver to each other an Assignment Agreement
for such Aircraft. Immediately thereafter, Assignee shall purchase such
Aircraft from JFS pursuant to and in accordance with the Forward Purchase
Agreement.
(c) On the Delivery Date for each Aircraft (other than a Resale
Aircraft) and in consideration for the assignment to Assignee of
Assignor's right to purchase such Aircraft from JFS and Assignee's
purchase of such Aircraft from JFS pursuant to the Forward Purchase
Agreement, Assignee hereby directs the Paying Agent to apply the Purchase
Price for such Aircraft and any other amounts for such Aircraft deposited
pursuant to Sections 2.2(b) and 2.4(a) with respect to such Aircraft as
follows:
(i) to pay the JFS Purchase Price to JFS in accordance
with the Forward Purchase Agreement; and
(ii) to pay the balance of the Purchase Price, if any, to
Assignor by wire transfer in immediately available funds to the
account of Assignor designated in the Paying Agency Agreement.
(d) Concurrent with Delivery of each Aircraft (other than a
Resale Aircraft) by JFS to Assignee, title to and risk of loss and damage
to or destruction of such Aircraft shall forthwith transfer from JFS to
Assignee. In addition, concurrent with the delivery of the Warranty ▇▇▇▇
of Sale for such Aircraft by JFS to Assignee and delivery of the
Acceptance Certificate for such Aircraft by Assignee to Assignor and JFS,
Assignor and Assignee shall deliver the documents provided in Sections 3.3
and 3.4, respectively.
2.5. Account; Nature of Payments. (a) All Down Payments,
Initial Payments and payments of the Purchase Price shall be paid to the
Paying Agent on behalf of Assignor pursuant to the Paying Agency Agreement
by wire transfer to the following account:
Credit Lyonnais, New York
ABA No. ▇▇▇▇▇▇▇▇▇
Account No. 01-19991-0001-00
In favor of: CL/PK AIRFINANCE
CHIPS UID No. 351877
Reference: MEH71
(b) All payments of the Down Payments, the Initial Payments and
the Purchase Price and all other payments under this Agreement shall be
made in Dollars and in immediately available funds for full credit on the
date payment is due under this Agreement, except that payments of the JFS
Purchase Price to JFS shall be made by the Paying Agent on behalf of
Assignee in accordance with the Forward Purchase Agreement. All such
payments shall be made in full (i) without any deduction for offset or
counterclaim and (ii) without any withholding in respect of any duties or
taxes imposed by any jurisdiction that would not have been imposed but for
the presence of the Assignee or a principal of the Assignee in such
jurisdiction.
2.6. Condition Upon Delivery. On the Delivery Date for each
Aircraft, such Aircraft shall comply with the delivery conditions set
forth in Article 17 of the Lease and shall be accompanied by the Technical
Records and other aircraft documents listed in Schedule 3; provided, that
Assignee acknowledges JFS is not obligated under the Forward Purchase
Agreement to deliver any aircraft documents other than the Technical
Records, as listed in Appendix Five of the Lease, and Assignor confirms
that the obligation to deliver any aircraft documents listed in Schedule 3
that do not constitute "Technical Records" is Assignor's alone. Except as
provided in Section 2.8, on the later of the Scheduled Delivery Date for
an Aircraft or the date on which the inspection set forth in Section 2.7
for such Aircraft has been completed and such Aircraft meets the delivery
conditions set forth in Article 17 of the Lease, Assignee shall accept
such Aircraft at the Delivery Location "AS IS, WHERE IS WITH ALL FAULTS"
AND SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION
SET FORTH IN SECTION 7. Assignee acknowledges that it has reviewed the
Forward Purchase Agreement and Article 17 of the Lease and accepts and
agrees to the sufficiency of the provisions regarding the condition for
return of the Aircraft to JFS as lessor under the Lease and delivery of
the Aircraft to Assignor as buyer under the Forward Purchase Agreement.
Assignee shall be deemed to have unconditionally accepted each item of an
Aircraft for all purposes of this Agreement upon Assignee's acceptance
from JFS of the Warranty ▇▇▇▇ of Sale for such Aircraft. Such acceptance
shall be evidenced by the delivery to Assignor and JFS of the Acceptance
Certificate with respect to such Aircraft on the Delivery Date for such
Aircraft.
2.7. Inspection. The Assignor hereby appoints Assignee as the
Assignor's attorney-in-fact and agent (such appointment being coupled with
an interest and immediately and without further notice or action
effective) to inspect and conduct the test flights with respect to the
Aircraft in accordance with Sections 8.2 and 9.2 of the Forward Purchase
Agreement. The foregoing agency shall immediately be revoked on the
occurrence and during the continuation of an Assignee Termination Event or
any other termination of this Agreement. Assignee hereby assumes all
responsibility for confirming that all Aircraft returned to JFS as lessor
under Article 17 of the Lease shall satisfy the return conditions set
forth in Article 17 of the Lease on the Delivery Date and at the delivery
location specified in accordance with Section 2.2 of the Forward Purchase
Agreement, and satisfaction of such return conditions shall be deemed
satisfaction of all delivery conditions of such Aircraft under this
Agreement.
2.8. Alternate Delivery Mechanism. At the option of Assignee,
for the first Aircraft to be delivered under the Forward Purchase
Agreement, such option to be exercised before December 14, 1997, and for
any subsequent Aircraft agreed by Assignor and Assignee at least 15 days
before the Scheduled Delivery Date for such Aircraft (each, a "Resale
Aircraft"), the following alternative delivery mechanism shall apply:
(a) On the Scheduled Delivery Date for a Resale Aircraft, or on
such later date as JFS meets the delivery conditions set forth in the
Forward Purchase Agreement for such Resale Aircraft, (i) Assignee shall
sign a Technical Acceptance Certificate for such Resale Aircraft
unconditionally accepting such Resale Aircraft for all purposes of this
Agreement, and (ii) Assignor shall purchase such Resale Aircraft pursuant
to and in accordance with the provisions of the Forward Purchase Agreement
and, as soon thereafter as possible, contribute such Resale Aircraft to
the trust estate held by the Dolphin Trustee and cause the Dolphin Trustee
to register such Resale Aircraft with the FAA. The execution by Assignee
of the Technical Acceptance Certificate constitutes unconditional and
irrevocable acceptance and agreement to the sufficiency of the condition
of such Resale Aircraft for all purposes of this Agreement.
(b) At least 15 days before the Scheduled Delivery Date for any
Resale Aircraft, Assignee shall notify Assignor of a proposed storage
location for such Resale Aircraft in the United States of America, which
shall be in a jurisdiction that will not impose any sales, use, transfer
or similar taxes on the sale of such Resale Aircraft by the Dolphin
Trustee to Assignee. If Assignor accepts the proposed location, such
proposed location shall become the "Delivery Location" for such Resale
Aircraft. If the proposed location might, in the reasonable opinion of
Assignor and Assignor's Counsel, impose a sales, use, transfer or similar
tax on the sale of such Resale Aircraft by the Dolphin Trustee to
Assignee, then Assignor shall so advise Assignee in writing and, at least
five days before the Scheduled Delivery Date for such Resale Aircraft,
Assignor and Assignee shall agree on an alternative location within the
United States of America that will not impose any sales, use, transfer or
similar taxes on the sale of such Resale Aircraft by the Dolphin Trustee
to Assignee and that shall be the "Delivery Location" for such Resale
Aircraft.
(c) Following purchase of a Resale Aircraft by the Dolphin
Trustee and upon registration of such Resale Aircraft with the FAA,
Assignee shall cause such Resale Aircraft to be ferried as soon as
possible to the Delivery Location for such Resale Aircraft, and thereafter
the "Delivery Date" for such Resale Aircraft shall be the earlier of (i) a
Business Day specified by written notice from Assignee to Assignor given
at least three Business Days before the specified date and (ii) the 20th
day after the purchase of such Resale Aircraft by the Dolphin Trustee from
JFS (or, if such 20th day is not a Business Day, the immediately preceding
Business Day). The Assignee shall be responsible for all costs and
arrangements in connection with the ferry of such Resale Aircraft from the
delivery location specified in Section 2.2 of the Forward Purchase
Agreement to the Delivery Location, including insurance complying with the
provisions of Schedule 2 and applying for an Export Certificate of
Airworthiness for such Resale Aircraft from the JAA, and such ferry shall
be accomplished in accordance with all Applicable Law, including all
applicable JAA and FAA regulations. The Assignee shall also be
responsible for all costs and arrangements in connection with the storage
of such Resale Aircraft at the Delivery Location, including insurance
complying with the provisions of Schedule 2, and such storage shall be
accomplished in accordance with all Applicable Law, including an
FAA-approved maintenance or storage program. Before the Scheduled
Delivery Date of such Resale Aircraft, Assignee shall deliver to Assignor
and the Dolphin Trustee a certificate of insurance and a letter of
undertaking from independent insurance brokers reasonably acceptable to
Assignor and the Dolphin Trustee evidencing that for such ferry flight and
thereafter such Resale Aircraft is covered by insurance policies in
accordance with Schedule 2. Assignor shall, and shall cause the Dolphin
Trustee to, cooperate with all reasonable requests and take all actions
reasonably requested by Assignee in connection with the removal of a
Resale Aircraft from Japan and the ferry and storage of a Resale Aircraft
as contemplated by this Agreement, including applying to the JAA for the
issuance of an Export Certificate of Airworthiness for each Resale
Aircraft.
(d) On the Delivery Date for such Resale Aircraft, Assignor
shall cause the Dolphin Trustee to sell and deliver to Assignee, and
Assignee shall purchase and accept from the Dolphin Trustee, such Resale
Aircraft for the Purchase Price. At the Delivery, Assignor shall deliver,
and shall cause the Dolphin Trustee to deliver, to Assignee the Warranty
▇▇▇▇ of Sale and the FAA ▇▇▇▇ of Sale for such Resale Aircraft, and in
consideration Assignee hereby directs the Paying Agent to pay the Purchase
Price for such Resale Aircraft to Assignor by wire transfer in immediately
available funds to the account of Assignor designated in the Paying Agency
Agreement. Concurrent with Delivery of each such Resale Aircraft by the
Dolphin Trustee to Assignee, title to and risk of loss and damage to or
destruction of such Resale Aircraft shall forthwith transfer from the
Dolphin Trustee to Assignee, and Assignor and Assignee shall deliver the
documents provided in Sections 3.3 and 3.4, respectively.
(e) Assignee indemnifies Assignor and the Dolphin Trustee and
agrees to hold Assignor and the Dolphin Trustee harmless against any and
all reasonable liabilities, damages, claims, costs and expenses, and to
reimburse Assignor and the Dolphin Trustee for any reasonable legal or
other fees or expenses, incurred by either of them in connection with,
arising out of or resulting from the creation and maintenance of the
Dolphin Trustee, the purchase of any Resale Aircraft by Assignor and the
sale of any Resale Aircraft to Assignee as contemplated by this
Section 2.8; provided, that Assignee shall have no obligation to indemnify
or hold harmless Assignor or the Dolphin Trustee for any liabilities,
damages, claims, costs or expenses (i) that would have been incurred by
Assignor pursuant to the Forward Purchase Agreement or this Agreement in
connection with any Resale Aircraft if the alternative delivery mechanism
set forth in this Section 2.8 had not been used, or (ii) that result from
Assignor's or the Dolphin Trustee's gross negligence or wilful misconduct.
(f) Except as set forth in this Section 2.8, none of the
obligations of Assignee or Assignor in this Agreement shall be limited or
waived, specifically including the obligation of Assignee set forth in
Section 2.4(a) to pay the balance of the Purchase Price for each Aircraft
(whether or not a Resale Aircraft) to the Paying Agent.
2.9. Binding Obligations. This Agreement is intended to set
forth the binding obligation of Assignor to assign to Assignee Assignor's
rights under the Forward Purchase Agreement to purchase the Aircraft and
Assignor's obligation to pay the JFS Purchase Price for the Aircraft and
the binding obligation of Assignee to assume and perform such rights and
obligation, subject to the Reserved Rights. On or prior to each Delivery
Date (a) Assignor shall cause each of the conditions set forth in Section
3.3 to be satisfied and shall take all other actions necessary to perform
its obligations under the Operative Documents, and (b) Assignee shall
cause each of the conditions set forth in Section 3.4 to be satisfied and
shall take all other actions necessary to perform its obligations under
the Operative Documents.
2.10. Correction of Certain Post-Stripping Discrepancies.
(a) Assignor and Assignee agree that following Delivery of an Aircraft to
Assignee pursuant to this Agreement, Assignee intends to strip the
existing paint from the Aircraft. Assignor agrees to reimburse Assignee
in accordance with this Section 2.10 for the Actual Cost to Assignee of
repairing any Post-Stripping Discrepancies, up to an aggregate of $280,000
for all Aircraft.
(b) Assignee shall notify Assignor as soon as reasonably
practicable before stripping an Aircraft of paint following Delivery to
Assignee, and Assignee shall permit any representatives designated by
Assignor to be present at the stripping of such Aircraft and the
inspection of the Aircraft immediately following such stripping. The
stripping of the Aircraft shall be performed in accordance with the SRM
and Assignee's FAA-approved maintenance program. Upon completion of such
stripping and inspection, the representatives of Assignor and Assignee
shall agree in writing upon any Post-Stripping Discrepancies that exist,
and if any such Post-Stripping Discrepancies exist, Assignee shall
promptly correct (or cause to be corrected) such Post-Stripping
Discrepancies.
(c) Within one month after completion of the correction of all
Post-Stripping Discrepancies with respect to an Aircraft, Assignee shall
submit to Assignor (i) an invoice evidencing the correction of such
Post-Stripping Discrepancies, (ii) a written request for the payment of an
amount equal to the lesser of (1) the Actual Costs of such correction and
(2) $280,000 less all amounts previously paid by Assignor pursuant to this
Section 2.10, and (iii) documentation relating to the amount of such
Actual Costs, including invoices for all third party charges and
substantiating data from Assignee or other maintenance providers that
performed the correction, together with any documentation reasonably
requested by Assignor. Assignor shall be obligated to pay the Actual Cost
of correcting all Post-Stripping Discrepancies, up to $280,000, within 10
Business Days after submission by Assignee to Assignor of such invoice and
supporting documentation.
2.11. Delivery of Upgrade Kits. On or within 30 days before
the Delivery Date for each of the Aircraft bearing manufacturer's serial
nos. 48070, 48071 and 48072, Assignor shall deliver to Assignee, at
Assignee's address set forth in Section 12.3(b) or at such other location
in the continental United States as Assignee shall designate, an Upgrade
Kit for such Aircraft. On delivery of each Upgrade Kit, pursuant to the
terms of this Agreement, Assignor irrevocably assigns to Assignee all of
Assignor's rights under any warranty, express or implied, service policy
or product agreement of the Manufacturer with respect to such Upgrade Kit
to the extent that such rights are assignable and are not extinguished as
a result of this Agreement or such assignment. From time to time upon the
reasonable request of Assignee, Assignor shall give notice to the
Manufacturer of the assignment of such warranties to Assignee. Assignor
shall enforce on Assignee's behalf and at Assignor's time and expense all
such rights that are not assignable or would be extinguished as a result
of this Agreement or such assignment, provided that Assignee shall pay in
advance or reimburse Assignor for any reasonable out-of-pocket costs and
expenses incurred by Assignor in rendering such assistance.
2.12. Delivery Condition Financial Adjustments. Pursuant to
the letter agreement, dated November 13, 1997, between JFS and Dolphin
constituting a part of the Forward Purchase Agreement (the "FPA Side
Letter"), in connection with each Aircraft delivered by JFS pursuant to
the Forward Purchase Agreement, JFS has agreed to pay to Dolphin any and
all "Lessee Payments" (as defined in the FPA Side Letter) paid by or on
behalf of ▇▇▇ to JFS under the Lease, and Dolphin has agreed to pay to ▇▇▇
on behalf of JFS any and all "Lessor Maintenance Payments" (as defined in
the FPA Side Letter) required to be paid under the Lease. In connection
with the Delivery of each Aircraft to Assignee under this Agreement, on
the Delivery Date for each Aircraft (a) Assignor shall pay to Assignee any
and all "Lessee Payments" paid by JFS to Assignor pursuant to the FPA Side
Letter, and (b) Assignee shall pay to Assignor any and all "Lessor
Maintenance Payments" (as defined in the FPA Side Letter) required to be
paid by Assignor to ▇▇▇ under the FPA Side Letter.
SECTION 3. CONDITIONS TO AGREEMENT AND CLOSING
3.1. Conditions to Effectiveness of this Agreement Against
Assignee. Before or concurrent with the execution and delivery of this
Agreement by Assignee, Assignor shall perform or satisfy each of the
following conditions precedent:
(a) Assignor shall obtain all approvals and consents of any
trustees or holders of any indebtedness or obligations of Assignor that
are required in connection with any transaction contemplated by the
Operative Documents.
(b) This Agreement, the Consent and Agreement and the Paying
Agency Agreement shall have been duly authorized, executed and delivered
by Assignor, the Consent and Agreement and the Paying Agency Agreement
shall have been duly authorized, executed and delivered by JFS and the
Paying Agency Agreement shall have been duly authorized, executed and
delivered by the Paying Agent, and executed counterparts of such documents
shall have been delivered to Assignee.
(c) Assignee shall have received a copy of the Memorandum and
Articles of Association of Assignor and resolutions of the Board of
Directors of Assignor, duly authorizing the assignment of its rights in
the Forward Purchase Agreement with respect to each Aircraft under this
Agreement and the execution, delivery and performance by Assignor of the
Operative Documents to which it is or is to be a party and each other
document required to be executed and delivered by Assignor in accordance
with the provisions of the Operative Documents for the Delivery of the
Aircraft, in each case certified by a Director of Assignor.
(d) Assignee shall have received an incumbency certificate of
Assignor as to the individuals authorized to execute and deliver the
Operative Documents to which it is or is to be a party and each other
document to be executed on behalf of Assignor in connection with the
transactions contemplated by the Operative Documents for the Delivery of
the Aircraft, including the signatures of such individuals.
(e) Assignee shall have received an opinion of Assignor's
Counsel, dated the date of this Agreement.
(f) Assignee shall have received true, complete and correct
copies of originals of the following: (i) the JFS ▇▇▇▇ of Sale; (ii) the
▇▇▇ ▇▇▇▇ of Sale; and (iii) the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ of Sale (each as
defined in the Forward Purchase Agreement).
3.2. Conditions to Effectiveness of this Agreement Against
Assignor. Before or concurrent with the execution and delivery of this
Agreement by Assignor, Assignee shall perform or satisfy each of the
following conditions precedent:
(a) Assignee shall obtain all approvals and consents of any
trustees or holders of any indebtedness or obligations of Assignee that
are required in connection with any transaction contemplated by the
Operative Documents.
(b) This Agreement, the Consent and Agreement and the Paying
Agency Agreement shall have been duly authorized, executed and delivered
by Assignee, the Consent and Agreement and the Paying Agency Agreement
shall have been duly authorized, executed and delivered by JFS and the
Paying Agency Agreement shall have been duly authorized, executed and
delivered by the Paying Agent, and executed counterparts of such documents
shall have been delivered to Assignor.
(c) Assignor shall have received a copy of the Articles of
Incorporation and By-Laws of Assignee and resolutions of the Board of
Directors of Assignee, duly authorizing the assumption of rights and
obligations under the Forward Purchase Agreement with respect to each
Aircraft under this Agreement and the execution, delivery and performance
by Assignee of the Operative Documents to which it is or is to be a party
and each other document required to be executed and delivered by Assignee
in accordance with the provisions of the Operative Documents for the
Delivery of the Aircraft, in each case certified by the Secretary or an
Assistant Secretary of Assignee.
(d) Assignor shall have received an incumbency certificate of
Assignee as to the individuals authorized to execute and deliver the
Operative Documents to which it is or is to be a party and each other
document to be executed on behalf of Assignee in connection with the
transactions contemplated by the Operative Documents for the Delivery of
the Aircraft, including the signatures of such individuals.
(e) Assignor shall have received an opinion of Assignee's
Counsel, dated the date of this Agreement.
3.3. Assignee's Delivery Date Conditions. The obligation of
Assignee to pay the Purchase Price for any Aircraft and, with respect to
any Aircraft which is not a Resale Aircraft, to acquire the rights to
purchase such Aircraft from JFS on the Delivery Date for such Aircraft is
subject to the satisfaction (or waiver by Assignee) of each of the
following conditions precedent:
(a) All approvals and consents of any trustees or holders of
any indebtedness or obligations of Assignor that are required in
connection with any transaction contemplated by the Operative Documents
shall be in full force and effect.
(b) Each of the Operative Documents to which Assignor or JFS is
a party shall have been duly authorized, executed and delivered by
Assignor or JFS, respectively, and shall be in full force and effect with
respect to Assignor or JFS, respectively, and executed counterparts shall
be delivered to Assignee.
(c) Assignee shall have received an Assignment of Warranties,
together with the Consent of the Manufacturer, and shall have received a
copy of the relevant ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Detail Specification in respect of
such Aircraft, all in accordance with (and as such terms are defined in)
the provisions of the Forward Purchase Agreement.
(d) On such Delivery Date, the representations and warranties
of Assignor contained in Section 5 shall be true and accurate as though
made on and as of such date.
(e) Assignee shall have received a certificate, dated such
Delivery Date, signed by a Director of Assignor, addressed to Assignee and
certifying (i) that the certificates delivered by Assignor pursuant to
Sections 3.1(c) and (d) are still true and correct and (ii) as to each of
the matters stated in Sections 3.3(a) and (d).
(f) Such Aircraft shall meet the delivery conditions set forth
in Article 17 of the Lease.
(g) Assignor shall have caused JFS to perform its obligations
under Section 8.3 of the Forward Purchase Agreement with respect to such
Aircraft.
(h) JFS shall have satisfied all of the conditions precedent
set forth in Section 9.1 of the Forward Purchase Agreement (or Assignor
and Assignee shall have agreed to waive any such conditions precedent not
satisfied).
(i) Assignee shall have received a "bring-down" letter from
Assignor's Counsel, dated such Delivery Date, confirming that the opinion
furnished by Assignor's Counsel pursuant to Section 3.1(e) is true and
correct on such Delivery Date with respect to all Operative Documents to
which Assignor is a party.
3.4. Assignor's Delivery Date Conditions. The obligation of
Assignor to sell and deliver any Resale Aircraft to Assignee and to assign
its rights in the Forward Purchase Agreement with respect to any Aircraft
other than a Resale Aircraft to Assignee on the Delivery Date for such
Aircraft is subject to the satisfaction (or waiver by Assignor) of each of
the following conditions precedent:
(a) All approvals and consents of any trustees or holders of
any indebtedness or obligations of Assignee that are required in
connection with any transaction contemplated by the Operative Documents
shall be in full force and effect.
(b) Each of the Operative Documents to which Assignee is a
party shall have been duly authorized, executed and delivered by Assignee
and shall be in full force and effect with respect to Assignee, and
executed counterparts shall have been delivered to Assignor.
(c) Assignee shall have paid the Purchase Price for such
Aircraft in accordance with Sections 2.2 and 2.4.
(d) On such Delivery Date, the representations and warranties
of Assignee contained in Section 6 shall be true and accurate as though
made on and as of such date.
(e) Assignor shall have received a certificate, dated such
Delivery Date, signed by a duly authorized executive officer of Assignee,
addressed to Assignor and certifying (i) that the certificates delivered
by Assignee pursuant to Sections 3.2(c) and (d) are still true and correct
and (ii) as to each of the matters stated in Sections 3.4(a) and (d).
(f) Assignor shall have received a certificate, dated such
Delivery Date, from Assignee's independent insurance brokers certifying
that the insurance required pursuant to Section 6.5 is in effect for such
Aircraft, and a letter of undertaking from such brokers certifying that
such insurance complies with the requirements of Section 6.5 and Schedule
2 and as to such additional matters as Assignor may reasonably request.
(g) Assignor shall have received a "bring-down" letter from
Assignee's Counsel, dated such Delivery Date, confirming that the opinion
furnished by Assignee's Counsel pursuant to Section 3.2(e) is true and
correct on such Delivery Date with respect to all Operative Documents to
which Assignee is a party.
3.5. Additional Delivery Date Conditions. The obligation of
Assignee to pay the Purchase Price for any Aircraft and the obligation of
Assignor to sell and deliver any Resale Aircraft to Assignee and to assign
its rights in the Forward Purchase Agreement with respect to any Aircraft
other than a Resale Aircraft to Assignee are further subject to the
satisfaction of the following additional conditions precedent on the
Delivery Date for such Aircraft:
(a) No order, judgment or decree shall have been issued by any
Governmental Body to set aside, restrain, enjoin or prevent the execution,
delivery or performance of the Operative Documents or the consummation of
the transactions contemplated by the Operative Documents with respect to
such Aircraft.
(b) The Paying Agency Agreement shall be in full force and
effect with respect to the Paying Agent.
(c) Such Aircraft shall have been deregistered by the JAA, and
Assignor and Assignee shall have used their reasonable best efforts to
make application to the JAA for the deregistration of such Aircraft, and
cause such Aircraft to be deregistered by the JAA.
(d) Assignor and Assignee shall have received an opinion from
Special FAA Counsel to the effect either that such Aircraft has been
registered with the Aircraft Registry of the FAA in the name of Assignee
or, upon the filing by Assignee of the FAA ▇▇▇▇ of Sale (AC Form 8050-2)
with respect to such Aircraft with the FAA, such Aircraft will be
registered with the Aircraft Registry of the FAA in the name of Assignee.
SECTION 4. TAXES
4.1. Sales Taxes. The Purchase Price does not include the
amount of any sales, use, consumption, excise, transfer, gross receipts or
other similar taxes, fees or charges ("Sales Taxes") that may be imposed
by any Governmental Body in any jurisdiction as a result of the sale and
delivery of any Resale Aircraft to Assignee or the assignment by Assignor
to Assignee of Assignor's right to purchase any Aircraft other than a
Resale Aircraft under the Forward Purchase Agreement.
4.2. Assignor Liable for Sales Taxes Generally. Without
limiting the obligations of JFS under the Forward Purchase Agreement
(including Section 4.11 of the Forward Purchase Agreement), Assignor shall
indemnify Assignee and hold Assignee harmless from the payment of any and
all Sales Taxes arising under the laws of Japan or the British Virgin
Islands as a result of (a) the assignment by Assignor to Assignee of
Assignor's right to purchase any Aircraft other than a Resale Aircraft
under the Forward Purchase Agreement and the purchase of such Aircraft by
Assignee and (b) the sale of any Resale Aircraft by JFS to Assignor
pursuant to the Forward Purchase Agreement, excluding (i) Sales Taxes
resulting from any act or omission of Assignee prohibited by or
constituting an Assignee Potential Termination Event or a default under
the Operative Documents, and (ii) Sales Taxes resulting from the willful
misconduct or gross negligence of Assignee. Upon demand of any
Governmental Body in Japan or the British Virgin Islands for payment of
any Sales Taxes indemnified by Assignor pursuant to this Section 4.2,
Assignee shall immediately notify Assignor and Assignor shall pay such
Sales Taxes; provided, however, that in the event that Assignee is
required to pay any such Sales Taxes, Assignee shall invoice Assignor for
the amount of such Sales Taxes paid by it and Assignor shall promptly
reimburse Assignee for such amount.
4.3. Assignee Liable for Sales Taxes on Resale Aircraft.
Assignee shall indemnify Assignor and hold Assignor harmless from the
payment of any and all Sales Taxes arising under the laws of the United
States of America or any jurisdiction thereof as a result of the purchase
of any Resale Aircraft by Assignee from the Dolphin Trustee pursuant to
this Agreement, excluding (i) Sales Taxes resulting from any act or
omission of Assignor prohibited by or constituting an Assignor Potential
Termination Event or a default under the Operative Documents, and (ii)
Sales Taxes resulting from the willful misconduct or gross negligence of
Assignor. Upon demand of any Governmental Body in the United States of
America for payment of any Sales Taxes indemnified by Assignee pursuant to
this Section 4.3, Assignor shall immediately notify Assignee and Assignee
shall pay such Sales Taxes; provided, however, that in the event that
Assignor is required to pay any such Sales Taxes, Assignor shall invoice
Assignee for the amount of such Sales Taxes paid by it and Assignee shall
promptly reimburse Assignor for such amount.
4.4. Excise Tax on Foreign Parts. Assignor and Assignee believe
that the importation of the Aircraft into the United States of America
will not cause any excise tax to be levied on the foreign-made Parts of
the Aircraft. However, if the importation of the Aircraft is subject to
the imposition of such an excise tax, Assignor and Assignee agree that (a)
Assignor shall bear and be responsible for, and shall indemnify and hold
harmless Assignee from, such excise tax up to $5,000 for each Aircraft,
and (b) Assignor and Assignee shall each bear and be responsible for
one-half of any such excise tax in excess of $5,000 for each Aircraft.
4.5. Cooperation. Assignor and Assignee shall cooperate and
take all actions reasonably requested by the other that are not in
contravention of any provision of the Operative Documents or Applicable
Law to minimize the amount of any Sales Taxes or other taxes applicable to
this Agreement or the consummation of the transactions contemplated by
this Agreement.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR
Assignor represents, warrants and covenants to Assignee as of
the date of this Agreement and as of each Delivery Date as follows:
5.1. Organization, Power and Authority. Assignor is and shall
remain a duly organized and validly existing corporation in good standing
under the laws of the British Virgin Islands and has and will continue to
have the corporate power and authority to carry on its business as
presently conducted and to execute, deliver and perform its obligations
under each of the Operative Documents to which it is a party, and each of
such Operative Documents has been duly authorized by all necessary
corporate action on its part and does not require any approval of the
stockholder of Assignor that has not been obtained.
5.2. Non-Contravention. The execution, delivery and performance
of the Operative Documents to which Assignor is a party and the
consummation of the transactions contemplated by the Operative Documents
do not and will not contravene any law binding on Assignor or result in
any breach of, or constitute any default 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 Assignor is a party or by which Assignor or its
properties may be bound or affected.
5.3. Enforceability. Each of the Operative Documents to which
Assignor is a party has been duly executed and delivered by Assignor and,
upon the due authorization, execution and delivery of such Operative
Documents by the other parties to such Operative Documents, will
constitute the legal, valid and binding agreement of Assignor, enforceable
against Assignor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally, or by equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
5.4. No Consent. The execution, delivery and performance by
Assignor of the Operative Documents to which it is a party do not require
the consent, approval, order or authorization of, the giving of notice to,
the registration with or the taking of any other action by or in respect
of any Governmental Body or any other Person, except (i) the application
by JFS to the JAA for the deregistration of each Aircraft, (ii) the
deregistration of such Aircraft by the JAA, (iii) the relinquishment by
JFS of the Certificate of Airworthiness of such Aircraft, (iv) the
application by Assignee for an Export Certificate of Airworthiness for
such Aircraft, (v) the issuance by JAA of an Export Certificate of
Airworthiness for such Aircraft, (vi) the performance by ▇▇▇ of its
obligations under Article 17 of the Lease, (vii) the performance by JFS of
its obligations under the Forward Purchase Agreement, and (viii) the
filing for recordation by JFS and/or Assignor, as the case may be, of an
FAA ▇▇▇▇ of Sale covering such Aircraft with the FAA's Aircraft Registry.
5.5. Copies of JFS Documents. Assignor has delivered to
Assignee complete and correct (other than as to pricing information)
photocopies of original counterparts of the Forward Purchase Agreement and
complete and correct photocopies of Article 17 of the Lease (collectively,
the "JFS Documents"). Until termination of this Agreement with respect to
any Aircraft, Assignor shall not (a) assign its rights, title and interest
in the Forward Purchase Agreement to any other Person, other than the
existing assignment for security purposes of such rights to the Mortgagee,
(b) amend, modify or waive any provision of the JFS Documents without the
Assignee's prior written consent, which consent shall not be unreasonably
withheld so long as the interests of Assignee are not adversely affected,
and (c) agree to any delivery location pursuant to Section 2.2 of the
Forward Purchase Agreement other than Haneda Airport without Assignee's
prior written consent.
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNEE
Assignee represents, warrants and covenants to Assignor as of
the date of this Agreement and as of each Delivery Date as follows:
6.1. Organization, Power and Authority. Assignee is and shall
remain a duly organized and validly existing corporation in good standing
under the laws of the State of Wisconsin or of another State of the United
States of America, and has and will continue to have the corporate power
and authority to carry on its business as presently conducted and to
execute, deliver and perform its obligations under the Operative Documents
to which it is a party, and each of such Operative Documents has been duly
authorized by all necessary corporate action on its part and does not
require any approval of any stockholder of Assignee that has not been
obtained.
6.2. Non-Contravention. The execution, delivery and performance
of the Operative Documents to which Assignee is a party and the
consummation of the transactions contemplated by the Operative Documents
do not and will not contravene any law binding on Assignee or result in
any breach of, or constitute any default 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 Assignee is a party or by which Assignee or its
properties may be bound or affected.
6.3. Enforceability. Each of the Operative Documents to which
Assignee is a party has been duly authorized, executed and delivered by
Assignee and, upon the due authorization, execution and delivery of such
Operative Documents by the other parties to such Operative Documents, will
constitute the legal, valid and binding agreement of Assignee, enforceable
against Assignee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally, or by equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
6.4. No Consent. The execution, delivery and performance by
Assignee of the Operative Documents to which it is a party do not require
the consent or approval of, the giving of notice to, the registration with
or the taking of any other action by or in respect of any Governmental
Body or any other Person, except the actions listed in clauses (i) through
(vii) of Section 5.4.
6.5. Insurance. For a period of two years from the Delivery
Date of each Aircraft or, if earlier, until the date of the next "D" Check
with respect to such Aircraft, Assignee shall maintain or cause to be
maintained in full force and effect comprehensive aviation legal liability
insurance on such Aircraft (including engines installed from time to time
on the Airframe) complying with Paragraph 2 of Schedule 2.
SECTION 7. DISCLAIMER OF ADDITIONAL WARRANTIES
THE WARRANTIES OF ASSIGNOR SET FORTH IN THIS AGREEMENT ARE
EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES OF ASSIGNOR, WHETHER
WRITTEN, ORAL OR IMPLIED. ASSIGNEE ACKNOWLEDGES AND AGREES THAT ASSIGNOR
SHALL NOT, BY VIRTUE OF HAVING OWNED AND SOLD THE RIGHTS TO PURCHASE THE
AIRCRAFT OR OTHERWISE, BE DEEMED TO HAVE MADE ANY REPRESENTATION OR
WARRANTY AS TO THE MERCHANTABILITY, FITNESS, DESIGN OR CONDITION OF, OR AS
TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP IN, THE AIRCRAFT, OR TO HAVE
MADE ANY OTHER REPRESENTATIONS OR WARRANTIES (EXCEPT THE EXPRESS
WARRANTIES SET FORTH IN THIS AGREEMENT). ASSIGNOR DISCLAIMS AND ASSIGNEE
WAIVES ALL WARRANTIES AND LIABILITIES, EXPRESS OR IMPLIED, ARISING BY LAW
OR OTHERWISE (INCLUDING STRICT LIABILITY IN TORT), WITH RESPECT TO THE
MERCHANTABILITY, FITNESS, DESIGN OR CONDITION OF, OR AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP IN, THE AIRCRAFT, WHETHER OR NOT OCCASIONED BY
ASSIGNOR'S NEGLIGENCE. The foregoing disclaimer of warranty shall not be
construed to be a waiver by Assignee of claims of Assignee against
Assignor arising from Assignor's breach of the terms, covenants,
conditions, representations and warranties of Assignor set forth in any
Operative Document.
SECTION 8. RELEASE
Assignee hereby releases Assignor, its stockholders,
subsidiaries and other Affiliates and any of the directors, servants,
agents, employees, successors and assigns of such Persons from all claims
by Assignee or any successor or assign of Assignee for injury to or for
death of any individual or damage to property (including personnel and
property of Assignee or Assignor) directly or indirectly arising out of
the use, operation, control, storage or condition of any Aircraft and for
any defects (latent or patent) in the Aircraft arising from any
maintenance, service, repair or testing of any Aircraft; provided, that
the foregoing release shall not apply to claims of Assignee against
Assignor arising from Assignor's breach of the terms, covenants,
conditions, representations and warranties of Assignor set forth in any
Operative Document.
SECTION 9. TERMINATION UPON TOTAL LOSS
If any Aircraft suffers a "Total Loss" (as defined in Section
9.1 of the Lease) before the Delivery of such Aircraft to Assignee,
neither Assignor nor Assignee shall have any further obligation or
liability to the other under the Operative Documents with respect to such
Aircraft only, except that if Assignee has made an Initial Payment with
respect to such Aircraft (a) so long as no Assignee Potential Termination
Event has occurred and is continuing Assignor shall promptly instruct the
Paying Agent to return the Initial Payment with respect to such Aircraft
to Assignee, including the amounts, if any, applied from the Down Payments
to such Initial Payment in accordance with Section 2.2(b), plus interest
on all such amounts, or (b) so long as an Assignee Potential Termination
Event has occurred and is continuing, Assignor may instruct the Paying
Agent to retain the Initial Payment with respect to such Aircraft pending
application pursuant to Section 10.3 or, upon cure of all Assignee
Potential Termination Events, the payment to Assignee in accordance with
the preceding clause (a).
SECTION 10. TERMINATION EVENTS, REMEDIES AND DAMAGES
10.1. Assignee Termination Events. The occurrence of any of
the following events, whether voluntary or involuntary, arising or
effected by operation of law or pursuant to or in compliance with any
judgment, decree, order, rule or regulation of any Governmental Body, not
cured within the applicable cure period, if any, shall constitute an
"Assignee Termination Event":
(a) the failure of Assignee to pay when due and payable any
payment of the Purchase Price relating to an Aircraft pursuant to Section
2.4(a);
(b) the failure of Assignee to pay when due and payable any
Initial Payment for an Aircraft, and such failure continues for three
Business Days;
(c) the failure of Assignee to pay when due and payable any
amount, other than Initial Payments or Purchase Price, that may become due
under any of the Operative Documents and such failure continues for ten
days after the giving of written notice to Assignee by Assignor of such
failure;
(d) any lapse of or failure by Assignee to preserve and
maintain its corporate existence as required by Section 6.1 and Assignee
does not cure such failure or lapse within five Business Days after the
earlier of actual knowledge thereof by Assignee or the giving of written
notice thereof by Assignor;
(e) any failure by Assignee to fulfill any covenant or to
perform any obligation under any Operative Document other than as set
forth in Sections 10.1(a) through (d) above, and such failure is not cured
within 30 days after the giving of written notice thereof by Assignor;
(f) if any representation or warranty made by Assignee in any
Operative Document proves to have been untrue, inaccurate or incomplete in
any material respect at the time when made or when effective and Assignee
fails to do that which shall be necessary in order that said
representation or warranty shall be true, accurate or complete within 30
days after the earlier of actual knowledge thereof by Assignee or the
giving of written notice thereof by Assignor;
(g) if Assignee is in default of any covenant or agreement
relating to any obligation of Assignee for borrowed money in excess of
$1,000,000 or for the deferred purchase price or the rental of property
with an original cost in excess of $1,000,000;
(h) if one or more final, nonappealable judgments or decrees
(not paid or fully covered by insurance) are entered against Assignee
involving individually or in the aggregate a liability in excess of
$1,000,000 and all such judgments or decrees shall remain undischarged for
a period of 30 days during which execution shall not be effectively
stayed;
(i) if Assignee (i) applies for or consents to the appointment
of a custodian, receiver, trustee, liquidator or similar officer for it or
for all or any substantial part of its property, (ii) makes a general
assignment for the benefit of its creditors, (iii) admits in writing its
inability to pay its debts generally as they become due, (iv) generally
does not pay its debts as they become due, (v) files a voluntary petition
under 11 U.S.C. Section Section 101 et seq., (vi) files a voluntary
petition or an answer seeking reorganization in a proceeding under any
bankruptcy law or an answer admitting the material allegations of a
petition filed against Assignee in any such proceeding, (vii) by voluntary
petition, application or answer, consents or otherwise institutes any
proceeding or seeks relief under the provisions of any law relating to
bankruptcy, insolvency, reorganization, arrangement, readjustment of
debts, dissolution, liquidation or the like in respect of the
reorganization or winding-up of corporations, or providing for an
agreement, composition, extension or adjustment with its creditors, or
(viii) takes corporate action for the purpose of any of the foregoing; and
(j) if an involuntary petition under 11 U.S.C. Section Section
101 et seq. or seeking readjustment of Assignee's debts or for any other
relief under any bankruptcy, insolvency, or other similar act or law of
any jurisdiction, domestic or foreign, now or hereafter existing, is filed
against Assignee, or if an order, judgment or decree is entered by any
Governmental Body of competent jurisdiction appointing, without the
application or consent of Assignee, a custodian, receiver, trustee,
liquidator, sequestrator or similar officer for Assignee or for all or any
substantial part of its property, or if a substantial part of the property
of Assignee is sequestered, and any of such events continues for 60 days
undismissed, unbonded or undischarged.
10.2. Assignor Termination Events. The occurrence of any of
the following events, whether voluntary or involuntary, arising or
effected by operation of law or pursuant to or in compliance with any
judgment, decree, order, rule or regulation of any Governmental Body, not
cured within the applicable cure period, if any, shall constitute an
"Assignor Termination Event":
(a) the failure of Assignor to pay when due and payable any
balance of the JFS Purchase Price for an Aircraft pursuant to Section
2.4(a);
(b) any lapse of or failure by Assignor to preserve and
maintain its corporate existence as required by Section 5.1 and Assignor
does not cure such failure or lapse within five Business Days after the
earlier of actual knowledge thereof by Assignor or the giving of written
notice thereof by Assignee;
(c) any failure by Assignor to fulfill any covenant or to
perform any obligation under any Operative Document other than as set
forth in Sections 10.2(a) and (b) above, and such failure is not cured
within 30 days after the giving of written notice thereof by Assignee;
(d) if any representation or warranty made by Assignor in any
Operative Document proves to have been untrue, inaccurate or incomplete in
any material respect at the time when made or when effective and Assignor
fails to do that which shall be necessary in order that said
representation or warranty shall be true, accurate or complete within 30
days after the earlier of actual knowledge thereof by Assignor or the
giving of written notice thereof by Assignee;
(e) if Assignor (i) applies for or consents to the appointment
of a custodian, receiver, trustee, liquidator or similar officer for it or
for all or any substantial part of its property, (ii) makes a general
assignment for the benefit of its creditors, (iii) admits in writing its
inability to pay its debts generally as they become due, (iv) generally
does not pay its debts as they become due, (v) files a voluntary petition
or an answer seeking reorganization in a proceeding under any bankruptcy
law or an answer admitting the material allegations of a petition filed
against Assignor in any such proceeding, (vi) by voluntary petition,
application or answer, consents or otherwise institutes any proceeding or
seeks relief under the provisions of any law relating to bankruptcy,
insolvency, reorganization, arrangement, readjustment of debts,
dissolution, liquidation or the like in respect of the reorganization or
winding-up of corporations, or providing for an agreement, composition,
extension or adjustment with its creditors, or (vii) takes corporate
action for the purpose of any of the foregoing; and
(f) if an involuntary petition or action seeking readjustment
of Assignor's debts or for any other relief under any bankruptcy,
insolvency, or other similar act or law of any jurisdiction, domestic or
foreign, now or hereafter existing, is filed against Assignor, or if an
order, judgment or decree is entered by any Governmental Body of competent
jurisdiction appointing, without the application or consent of Assignor, a
custodian, receiver, trustee, liquidator, sequestrator or similar officer
for Assignor or for all or any substantial part of its property, or if a
substantial part of the property of Assignor is sequestered, and any of
such events continues for 60 days undismissed, unbonded or undischarged.
10.3. Termination, Damages and Remedies. (a) If the
Delivery of an Aircraft does not occur on the Scheduled Delivery Date for
such Aircraft as a result of the failure of Assignor to cause each of the
conditions set forth in Section 3.3 to be satisfied or if an Assignor
Termination Event has occurred and is continuing other than as a result of
the failure of either ▇▇▇ or JFS to fulfill its obligations under the
Lease or the Forward Purchase Agreement, respectively, and such failure by
Assignor continues for 30 days, then Assignee may by written notice to
Assignor terminate its obligations to acquire the rights from Assignor to
purchase such Aircraft and related Technical Records from JFS and any
other Aircraft and their related Technical Records not previously
Delivered to Assignee pursuant to this Agreement. Upon termination of its
obligations to acquire the rights to purchase any such Aircraft, Assignee
shall be entitled (i) if Assignee has made an Initial Payment with respect
to such Aircraft, to the return of such Initial Payment, together with all
interest earned thereon, (ii) if Assignee terminates its obligations to
acquire the rights to purchase all Aircraft not previously Delivered to
Assignee, to the return of the Down Payments then held by the Paying Agent
pursuant to the Paying Agency Agreement together with all interest earned
thereon, plus the payment of an additional amount equal to such Down
Payments, and (iii) to exercise any and all rights and remedies, and
recover all additional damages, available at law or in equity, excluding
consequential damages and loss of profit, for Assignor's failure to
perform its obligations with respect to such Aircraft.
(b) If the Delivery of an Aircraft does not occur on the
Scheduled Delivery Date for such Aircraft as a result of the failure of
either ▇▇▇ or JFS to fulfill its obligations under the Lease or the
Forward Purchase Agreement, respectively, and such failure continues for
60 days, then Assignee may by written notice to Assignor terminate its
obligations to acquire the rights to purchase such Aircraft and related
Technical Records from Assignor; provided, however, that Assignee shall
remain obligated to acquire the rights to purchase the other Aircraft.
Upon termination of its obligations to purchase such Aircraft, Assignee
shall be entitled, if Assignee has made an Initial Payment with respect to
such Aircraft, to the return of such Initial Payment, together with all
interest earned thereon, but shall otherwise not be entitled to any
further damages, at law or in equity, as a result of Assignor's failure to
perform its obligations with respect to such Aircraft.
(c) If the Delivery of an Aircraft does not occur on the
Scheduled Delivery Date for such Aircraft as a result of the failure of
Assignee to cause each of the conditions set forth in Section 3.4 to be
satisfied, or if an Assignee Termination Event has occurred and is
continuing, then Assignor may by written notice to Assignee terminate its
obligations to assign to Assignee the rights to acquire such Aircraft and
related Technical Records as well as any other Aircraft and their related
Technical Records not previously Delivered to Assignee pursuant to this
Agreement. Upon termination of its obligations to assign the rights to
purchase any Aircraft, Assignor shall be entitled (i) to retain any
Initial Payment made by Assignee for such Aircraft, (ii) if Assignor
terminates its obligations to assign the rights to purchase all Aircraft
not previously Delivered to Assignee, to retain and have paid to it the
Down Payments then held by the Paying Agent pursuant to the Paying Agency
Agreement together with all interest earned thereon, and (iii) to exercise
any and all rights and remedies, and recover all additional damages,
available at law or in equity, excluding consequential damages and loss of
profit, for Assignee's failure to perform its obligations with respect to
such Aircraft.
(d) Assignee and Assignor agree that the determination of
damages upon a default by Assignor in the performance of its obligations
hereunder or by Assignee in the performance of its obligations hereunder
will be subjective and difficult, given the economic effect of non-
monetary terms in aircraft sale transactions, the time to negotiate and
consummate aircraft sale and purchase transactions and other factors, and
therefore the liquidated damages set forth in Section 10.3(a)(ii) and in
Sections 10.3(c)(i) and (ii) represent the good faith agreement of
Assignor and Assignee to estimate the damages to Assignee or Assignor,
respectively, for loss of a bargain from the defaults described in Section
10.3(a) and Section 10.3(c), respectively, and are not intended to be a
penalty.
SECTION 11. APPLICABLE LAW
11.1. Construction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable
to contracts entered into and to be performed entirely within the State of
New York by residents of such State, without giving effect to any choice
or conflict of law provision which would cause the application of the laws
of any jurisdiction other than the State of New York.
11.2. Jurisdiction. Each of Assignor and Assignee
irrevocably submits to the non-exclusive jurisdiction of the United States
District Court for the Southern District of New York and of the New York
Supreme Court located in the Borough of Manhattan, County of New York (the
"Agreed Courts"). Such submission to jurisdiction shall not limit the
right of either Assignor or Assignee to bring suit or institute other
judicial proceedings against the other party or any of the other party's
assets in the courts of any country, state or place where such other party
or such assets may be found, nor shall the bringing of suits in the Agreed
Courts or the courts of any jurisdiction preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not. Final
judgment against Assignor or Assignee rendered by any Agreed Court in any
suit shall be conclusive and may be enforced in any other jurisdiction by
suit on a judgment, a certified or true copy of which shall be conclusive
evidence of the facts and of the amount of any indebtedness or liability
of such party.
11.3. Waiver of Objection to Venue. Each of Assignor and
Assignee irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding brought in
any Agreed Court and further irrevocably waives any claim that any such
suit, action or proceeding brought in any Agreed Court has been brought in
an inconvenient forum.
11.4. Waiver of Jury Trial. Each of Assignor and Assignee
hereby waive trial by jury in any judicial proceeding to which they are
parties involving, directly or indirectly, any matter arising out of or
relating to the Operative Documents.
11.5. Service of Process by Mail. Without prejudice to any
other mode of service, each of Assignor and Assignee consents to the
service of process relating to any proceedings involving, directly or
indirectly, any matter arising out of or relating to the Operative
Documents by U.S. Postal Service registered mail (prepaid, return receipt
requested) of a copy of the process to the address for Assignor or
Assignee, as the case may be, set forth in Section 12.3.
SECTION 12. ADDITIONAL PROVISIONS
12.1. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of Assignor and Assignee and
their respective successors and permitted assigns. Assignor may not
assign its rights or obligations under the Operative Documents in whole or
in part without the prior written consent of Assignee, which consent shall
not be unreasonably withheld. Assignee may assign all of its rights and
obligations under this Agreement, but only to a Person reasonably
acceptable to Assignor and JFS and provided such assignment will not
result in any adverse tax or other consequences to Assignor or JFS. Any
such assignment by Assignee will not release Assignee from any obligations
under the Operative Documents.
12.2. Entire Agreement. The Operative Documents and their
schedules and exhibits embody the entire agreement and understanding
between Assignor and Assignee with respect to the subject matter thereof.
None of the Operative Documents may be modified or amended except in
writing signed by Assignor, Assignee and any other Person party to such
Operative Document. This Agreement terminates and supersedes all prior or
independent agreements and understandings between Assignor and Assignee
covering the same subject matter.
12.3. Notices. (a) Every notice or other communication
under this Agreement shall be in writing and in English and may be given
or made by telefax or recognized overnight international courier.
(b) Every notice or communication under this Agreement shall be
sent to Assignor or Assignee at their respective addresses and telefax
numbers as follows:
(i) to Assignor: Dolphin Trade & Finance, Ltd.
▇/▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇-▇▇▇-▇▇▇▇
Telefax: ▇▇▇-▇▇-▇▇▇-▇▇▇▇
(ii) to Assignee: Midwest Express Airlines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President-Chief Financial
Officer
Telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Telefax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
(c) Every notice or demand shall be deemed to have been
received (i) in the case of a notice sent by recognized overnight
international courier, when actually delivered to Assignor or Assignee at
its address set out in Section 12.3(b) or as of the date on which receipt
of such notice is refused or the courier advises that such notice is not
deliverable at the address set out in Section 12.3(b) with respect to
Assignor or Assignee, as the case may be, and (ii) in the case of a
telefax, at the time of receipt by the sender of a transmission report
indicating that all pages of the telefax transmission were properly
transmitted (unless the recipient notifies the sender promptly, or if
received after 5:30 p.m. local time, by no later than 10:00 a.m. local
time the following Business Day, that the transmission was incomplete or
illegible, in which case the telefax shall be deemed to have been received
at the time of receipt by the sender of a further clear transmission
report on retransmitting the telefax) so long as the relevant telefax
transmission (or retransmission, as the case may be) was transmitted to
the receiver between 9:00 a.m. and 5:30 p.m. local time at the place of
receipt, and if it was transmitted other than between 9:00 a.m. and 5:30
p.m. local time then it shall be deemed to have been received at 9:00 a.m.
local time on the succeeding Business Day.
(d) A copy of all notices or other communications sent to
Assignor shall be sent to Feltman, Karesh, Major & ▇▇▇▇▇▇▇, Limited
Liability Partnership, Carnegie Hall Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., telephone:
▇▇-▇▇▇-▇▇▇-▇▇▇▇, telefax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇. Copies of all notices or other
communications sent to Assignor shall be sent to the aforesaid party in
accordance with this Section 12.3.
(e) A copy of all notices or other communications sent to
Assignee shall be sent to ▇▇▇▇▇ & Lardner, Firstar Center, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ III, telephone: ▇▇-▇▇▇-▇▇▇-▇▇▇▇, telefax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇. Copies
of all notices or other communications sent to Assignee shall be sent to
the aforesaid party in accordance with this Section 12.3.
(f) Assignor or Assignee may change its address, telefax number
or the address or party to whom copies of notices shall be sent by giving
notice to the other in accordance with this Section 12.3.
12.4. Expenses. Except as otherwise set forth in this
Agreement, Assignor and Assignee shall bear the expenses of the
transactions contemplated by the Operative Documents as follows:
(a) Assignor shall bear its own expenses incurred in
connection with the Operative Documents and the transactions
contemplated by the Operative Documents, including the fees and
disbursements of Assignor's Counsel;
(b) Assignee shall bear its own expenses incurred in
connection with the Operative Documents and the transactions
contemplated by the Operative Documents, including the fees and
disbursements of Assignee's Counsel and all expenses related to its
inspection of the Aircraft;
(c) without limiting the obligations of ▇▇▇ and JFS under
the Lease and Forward Purchase Agreement, Assignor shall indemnify
and hold Assignee harmless from any expenses incurred by ▇▇▇, JFS or
their respective counsel;
(d) Assignee shall bear the fees and disbursements of
Special FAA Counsel; and
(e) Assignor and Assignee shall bear the fees and expenses
of the Paying Agent as set forth in Section 5(c) of the Paying Agency
Agreement.
12.5. Survival. All representations, warranties and
agreements of Assignor and Assignee under the Operative Documents shall
survive the sale of the Aircraft.
12.6. No Brokers. Each of Assignor and Assignee represents
and warrants that it has retained no brokers or finders with respect to
the transactions contemplated by this Agreement and that it has no
liability for any broker's or finder's fees, costs or expenses relating to
this Agreement, except that Assignor represents that it has retained
Credit Lyonnais/PK AIRFINANCE as its broker and agent in connection with
the transactions contemplated by the Forward Purchase Agreement and this
Agreement. In the event that a claim is made by a broker or finder, the
party responsible for the breach of this Section 12.6 shall indemnify the
other for any damages, including reasonable attorneys' fees and expenses,
arising from such claim.
12.7. No Waiver of Enforcement. Any failure at any time of
Assignor or Assignee to enforce any provision of this Agreement shall not
constitute a waiver of such provision or prejudice the right of either
party to enforce such provision at any subsequent time.
12.8. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original document.
12.9. Further Assurances. Each of Assignor and Assignee
shall promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or that the other party
may reasonably request in order to carry out the purposes and intent of
this Agreement, so long as such instruments or documents do not adversely
affect the rights or obligations of Assignor or Assignee under this
Agreement.
[signature page follows]
IN WITNESS WHEREOF, Assignor and Assignee have caused this
Assignment of Rights Agreement to be executed by their duly authorized
officers as of the date first above written.
DOLPHIN TRADE & FINANCE, LTD.,
as Assignor
By:/s/ ▇.▇. ▇▇▇▇▇
Name: ▇.▇. ▇▇▇▇▇
Title: Director
MIDWEST EXPRESS AIRLINES, INC., as Assignee
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
SCHEDULE 1 -- DELIVERY DATES AND PURCHASE PRICE
1. Scheduled Delivery Dates.
(a) The Aircraft bearing manufacturer's serial nos. 48070, 48071 and
48072 and their respective related Technical Records are
scheduled for Delivery as follows:
(i) one on December 22, 1997;
(ii) one on April 30, 1998; and
(iii) one on June 30, 1998.
(b) The other five Aircraft and their respective related Technical
Records are scheduled for Delivery as follows:
(i) one on September 30, 1998,
(ii) two on December 31, 1998; and
(iii) two on September 30, 1999;
provided, that ▇▇▇ has an option, exercisable not later than December
31, 1998, to extend for up to six months the term of the Lease
relating to the two Aircraft scheduled to be returned on September
30, 1999. If ▇▇▇ exercises its option to extend the term of the Lease
relating to either or both of such Aircraft, promptly upon notice
from JFS Assignor shall advise Assignee of the expiration date of the
Lease for such Aircraft, which date shall become the "Scheduled
Delivery Date" for such Aircraft.
2. Purchase Price.
(a) The Purchase Price for each of the Aircraft bearing
manufacturer's serial nos. 48070, 48071 and 48072, including
their Upgrade Kits and related Technical Records, is $ * .
(b) The Purchase Price for each of the next three Aircraft to be
delivered, including their related Technical Records, is $ * .
(c) The Purchase Price for each of the last two Aircraft to be
delivered, including their related Technical Records, is $ * .
_________
* Indicates that material has been omitted and confidential treatment
has been requested therefor. All such omitted material has been
filed separately with the SEC pursuant to Rule 24b-2.
SCHEDULE 2 -- INSURANCE REQUIREMENTS
1. (a) Hull and War Risks Insurance. At all times after the purchase
by the Dolphin Trustee of a Resale Aircraft and until delivery
of such Resale Aircraft to Assignee, Assignee shall maintain in
full force and effect the following insurance coverages in
respect of such Resale Aircraft and its related Technical
Records (including engines installed from time to time on the
Airframe of such Resale Aircraft):
(i) Hull "All Risks" insurance against loss or damage while
flying and on the ground with respect to any Resale
Aircraft for an agreed value equal to 105% of the Purchase
Price for such Resale Aircraft and with a deductible not
exceeding $750,000;
(ii) Hull "War and Allied Perils" insurance covering those risks
excluded from the Hull "All Risks" insurance policy to the
extent such coverage is available from the leading
international insurance markets, including confiscation and
requisition by the state of registration, for an agreed
value equal to 105% of the Purchase Price for such Resale
Aircraft; and
(iii) "All Risks" property insurance (including war and allied
risk except when on the ground or in transit other than by
air or sea) on all Engines and Parts when not installed on
the Resale Aircraft (to the extent not covered under the
hull insurances described in Paragraphs 1(a)(i) and (ii)
above), including Engine test and running risks, in an
amount equal to replacement value in the case of the
Engines.
(b) Policy Terms. All required hull, war risk and spares insurance
specified in Paragraph 1(a) above, so far as it relates to a
Resale Aircraft, shall be in form and substance reasonably
acceptable to Assignor and any financing party designated by
Assignor (the "Bridge Lender") and shall:
(i) include Assignor, the Dolphin Trustee, the Bridge Lender
and their respective successors and assigns as additional
assureds (warranted no operational interest);
(ii) provide that any loss will be settled jointly with
Assignor, Assignee and the Bridge Lender, and any claim
that becomes payable on the basis of a total loss shall be
paid in Dollars to Assignor (or, if designated by Assignor,
the Bridge Lender) as sole loss payee, with any other claim
being payable as may be necessary for the repair of the
damage to which it relates;
(iii) if separate Hull "All Risks" and "War Risks" insurances
are arranged, include a 50/50 provision in the terms of
Lloyd's endorsement AVN103; and
(iv) confirm that the insurers are not entitled to replace the
Resale Aircraft in the event of a total loss.
2. (a) Legal Liability Insurance. At all times after the purchase of
an Aircraft by Assignee (and at all times after the purchase by
the Dolphin Trustee of a Resale Aircraft) and so long as
required pursuant to Section 6.5, Assignee shall procure and
maintain in full force and effect comprehensive aviation legal
liability insurance in respect of the Aircraft (including
engines installed from time to time on the Airframe) against
public liability risks (including contractual liability, bodily
injury and property damage coverage inclusive of liability to
third parties and passengers and coverage for baggage, cargo and
mail), including war and related perils to the fullest extent
available in the principal insurance markets from time to time,
in all cases with respect to or arising out of the servicing,
maintenance, use, operation, ownership or leasing of the
Aircraft (and any engines from time to time affixed to the
Airframe), including any part attached to the Aircraft and any
Engines when not installed on the Airframe. All such insurance
shall be:
(i) in amounts which are not less than the public liability and
property damage insurance maintained from time to time for
similar aircraft and engines in Assignee's fleet, but in no
event less than a single limit of $350,000,000 per
occurrence;
(ii) of the types and in the form usually carried by
certificated air carriers engaged in the same or similar
business as Assignee, similarly situated as Assignee and
owning or operating similar aircraft and engines and that
cover risks of the kind customarily insured against by such
Persons; and
(iii) carried with reputable insurers of internationally
recognized standing.
(b) Policy Terms. Each policy of insurance carried in accordance
with Paragraph 2(a):
(i) shall name each Additional Insured as an additional
insured, but without the Additional Insureds being liable
for premiums in respect of such insurance (but reserving
the right to pay the same should any of them elect to do
so);
(ii) shall be payable in Dollars;
(iii) shall provide that the insurers shall waive any right to
any setoff or counterclaim or any other deduction, by
attachment or otherwise, with respect to any liability of
the Additional Insureds;
(iv) shall not permit any aviation legal liability insurance
deductible or self-insurance provision other than the
aviation insurance industry standard deductibles for
baggage, hangarkeepers and cargo legal liability;
(v) shall provide that no amount due from Assignee or any other
person to any insurer or broker shall be deducted from any
amount payable to an Additional Insured under such
insurance policy;
(vi) shall provide that in respect of the interest of the
Additional Insureds in such policies such insurance shall
not be invalidated by any action or inaction of the
Assignee or any other insured and shall insure the
Additional Insureds regardless of any breach or violation
of any warranty, declaration or condition contained in such
policies by Assignee or any other insured, assuming no
operation of the Aircraft by such Additional Insured;
(vii) shall provide that if such insurance is canceled for any
reason, any material adverse change is made in policy terms
or conditions or such insurance is allowed to lapse for
nonpayment of premium, such cancellation, change or lapse
shall not be effective as to any Additional Insured for 30
days (seven days or such lesser period as may be provided
in the policy from time to time with respect to war risk
and allied perils coverage) after receipt by such
Additional Insured of written notice from such insurers of
such cancellation, change or lapse;
(viii)shall provide that such insurers shall hold harmless and
waive any rights of subrogation against any Additional
Insured;
(ix) shall be primary without right of contribution from any
other insurance which is carried by any Additional Insured;
(x) shall expressly provide that all the provisions of such
policy, except the limits of liability, shall operate in
the same manner as if there were a separate policy with and
covering each insured; and
(xi) if the lead insurance provider is not a U.S. insurer, a
U.S. service of suit clause.
3. Insurance Reports.
(a) On or before the Scheduled Delivery Date for each Resale
Aircraft and on or before the Delivery Date for each other
Aircraft, Assignee shall cause its independent insurance
brokers, who shall be of recognized international standing, to
furnish to Assignor and, with respect to a Resale Aircraft, to
the Dolphin Trustee and any Bridge Lender (i) a certificate of
insurance describing in reasonable detail the insurance carried
on or with respect to such Aircraft, and (ii) a report stating
that in the opinion of such broker such insurance complies with
the terms of this Schedule 2 and confirming that all premiums
due in respect of such insurance have been paid.
(b) Before the renewal date of any insurance required under this
Agreement, Assignee shall cause its independent insurance
brokers to furnish to Assignor (i) a certificate of insurance
describing in reasonable detail the insurance carried on or with
respect to all Aircraft Delivered to Assignee, and (ii) a report
stating that in the opinion of such broker such insurance
complies with the terms of this Schedule 2.
(c) At the time of each of the reports furnished pursuant to
Paragraphs 3(a) and 3(b) of this Schedule 2, Assignee shall
cause its independent insurance brokers to advise Assignor in
writing (i) promptly of any defaults in the payment of any
premium and of any other act or omission on the part of Assignee
or of any event of which they have knowledge that might
invalidate or render unenforceable in whole or in part any
insurance on the Aircraft, and (ii) of any expiration or
termination of such insurance at least 30 days prior to such
expiration or termination or if any insurer cancels or gives
notice of cancellation of such insurance. The reports and
certifications to be given under this Paragraph 3 shall confirm
that the insurance extends to any Engine or Part while removed
from the Airframe or any Engine.
SCHEDULE 3 -- LIST OF TECHNICAL RECORDS
GENERAL
Requirement
ME/FAA Current carryovers, consolation items, and ▇▇▇ deferred items on
the airframe and engines and components
FAA The original paperwork of the most recent repetitive maintenance
tasks, inspections and overhaul teardowns performed on the
aircraft, engines and components as required by the inspection
program the aircraft is presently operated under, if the
aircraft is between operators then the last program it was
operated under.
ME All computer runs must be signed by the head of Quality Control
attesting to their accuracy and completeness.
FAA The aircraft must meet Type Certificate as originally exported.
FAA The aircraft must be in a condition to be ferried IAW FAA DAR
requirements
ME All aircraft engineering data in paper and electronic format
will be included.
ME Photocopy of the Certificate of Airworthiness, current or last
ME Photocopy of the aircraft registration current or last.
ME Photocopy of the aircraft radio license, current or last.
FDA Photocopy of the aircraft Certificate of Sanitary Construction.
FAA A history of the incident or accidents the aircraft has been
involved in.
FAA A list of all operator produced parts used in the repair or
alteration of the aircraft.
ME A list of all airframe component vendors.
ME A letter from Quality Control allowing vendors to release data
of work performed by them to Midwest Express for components that
Midwest will be the operator of.
FAA A list of components that the operator has performed maintenance
on off the aircraft and returned to service.
FAA List of vendors who perform substantial maintenance for the
operator.
POWERPLANT
FAA Engine/Trend Monitoring ECM data for the most recent 12 month
period. Identify the program used by Title and Vendor. Include
Training records of those individuals performing these
functions, if available.
FAA A listing of all service bulletins which have been complied with
on the engines.
FAA Copies of all repairs accomplished to the engines that were not
IAW the Manufacturers Manual or manufacturer instructions and
that do not show FAA approval on them.
FAA Engine O/H and repair data back to the last equivalent engine
overhaul to include all 337's and/or FAA Form 8130-3s.
FAA Statement from the engine shop performing the work to confirm
that the engine maintenance performed in the shop was done IAW
the Manufacturers Manuals.
FAA LIFE LIMITED PARTS:
The current status of each life limited part including--
a. A record of the total time-in-service of the part, expressed by
each applicable standard ( i.e. Hours, Cycles, Years ).
b. The specified life limit, as expressed by each applicable
standard.
c. A record of each removal and installation back to manufacture of
each life-limited part as expressed in each applicable standard.
d. A record of any action that has altered the part's life limit or
has changed the parameters of the life limit.
FAA AIRWORTHINESS DIRECTIVES:
The current status of applicable airworthiness directives, for each
airframe, aircraft engine, appliance, component, or part
including--
a. The identification of the particular airframe, aircraft engine,
appliance, component or part to which the airworthiness
directive applies.
b. The airworthiness directive number and, if applicable , its
revision number, revision date, or amendment number.
c. The date on which the required action was last accomplished.
d. The total-time-in-service, as expressed by the applicable
standard, as required by the AD.
e. The method of compliance, by reference to a specific action
described in the airworthiness directive, a specific description
of the work performed, or a description of an alternative method
of compliance with a copy of the FAA or JAA approval.
f. If recurring action is required by the airworthiness directive the
interval to the next required action as express by the
applicable standard.
g. Dirty fingerprint compliance for repetitive and terminated
Airworthiness Directives
ME Copy of all FAA equivalent CAA Airworthiness Directives.
FAA Statement confirming that all engine parts were ▇▇▇▇▇ and Whitney
authorized and no parts were manufactured by the owner,
operator, or engine repair shop for the installed engines.
FAA APU log books
FAA Engine log books
ME A list of all engine, and engine component vendors
FAA Engine oil analysis reports for the last 2,000 operating hours, if
available
AIRFRAME
FAA AIRWORTHINESS DIRECTIVES:
The current status of applicable airworthiness directives, for each
airframe, aircraft engine, appliance, component, or part
including--
a. the identification of the particular airframe, aircraft engine,
appliance, component or part to which the airworthiness
directive applies.
b. The airworthiness directive number and, if applicable , its
revision number, revision date, or amendment number.
c. The date on which the required action was last accomplished.
d. The total-time-in-service, as expressed by the applicable
standard, as required by the AD.
e. The method of compliance, by reference to a specific action
described in the airworthiness directive, a specific description
of the work performed, or a description of an alternative method
of compliance with a copy of the FAA approval.
f. If recurring action is required by the airworthiness directive the
interval to the next required action as expressed by the
applicable standard.
g. The actual signed off methods of compliance for repetitive and
terminated AD's
ME Copy of foreign equivalent Airworthiness Directives referenced in
documentation.
FAA LIFE LIMITED PARTS:
The current status of each life limited part by part number and
serial number including--
a. A record of the total time-in-service of the part, expressed by
each applicable standard (i.e. Hours, Cycles, Years ).
b. The specified life limit, as expressed by each applicable
standard.
c. A record of each removal and installation back to manufacture of
each life-limited part as expressed in each applicable standard.
d. A record of any action that has altered the part's life limit or
has changed the parameters of the life limit.
FAA ALTERATIONS:
Records for each major alteration to each airframe, engine,
appliance, component, or part since manufacture including--
a. the identification of the particular airframe, engine, appliance,
component, or part to which the major alteration applies.
b. The date on which the alteration was accomplished
c. The method of accomplishment.
d. References to approved/accepted technical data.
e. Actual signed off accomplishment paperwork.
Copies of all applicable modifications which have been incorporated
since manufacture.
List and copy of previous operators Modifications.
Supplements of Maintenance Manuals, Illustrated Parts Catalogs and
Wiring Diagram Manuals affected by modification.
FAA REPAIRS:
Records for each major repair to each airframe, engine, appliance,
component, or part since manufacture including--
a. The identification of the particular airframe, engine, appliance
component, or part to which the major repair applies.
b. The date on which the repair was accomplished.
c. The method of accomplishment.
d. References to the FAA approved/accepted technical data
e. Dirty fingerprint compliance.
FAA Copies of all applicable repairs which have been incorporated since
manufacture.
FAA All repairs accomplished IAW the SRM meet the latest revision of the
SRM.
FAA Copy of the last Compass swing
FAA Aircraft Maintenance and Flight Logbooks, current and past.
FAA Passenger cabin drawings (LOPA).
FAA Export Certificate of Airworthiness (from departing country)
FAA Company part number to vendor cross reference document.
INSPECTION PROGRAM
ME Major checks (those which are accomplished at 2,000 hour intervals or
greater) will have more than 1/2 life left.
ME Summary of routine Maintenance record which shows each major check
accomplishment.
FAA All most recent Major inspection job cards and squawks cards.
FAA Component time status list.
FAA All Aircraft flight and maintenance log books.
FAA Data to determine TAT/TAC on individual days.
ME All CPCP reports for the aircraft.
ME All SID inspection results.
FAA Aging Aircraft S/B requirement status.
FAA X-ray pictures, current and last.
MANUALS
FAA 1.Current FAA Approved Flight Manual
FAA 2.Current Manufacturer and Operator Crew Operating Manual
FAA 3.Aircraft Weight and Balance Manual, and current operator weight and
balance data
FAA 4.Current Wiring Diagram Manual, Item Lists and Supplements
FAA 5.Current Manufacturer Maintenance Manuals - Aircraft, Engine and APU
- Manufacturer and Operator and Supplements
FAA ▇.▇▇ and IPC for post production installed equipment
FAA 7.Current Illustrated Parts Catalogs - Aircraft, Engine, and APU and
Supplements
FAA 8.Current Structural Repair Manual
FAA 9.Last flight test report
FAA 10.Original Export Certificate of Airworthiness issued by FAA
ME/FAA 11.If available, the operator will provide a copy of their
equivalent of:
General Maintenance Manual
Time Limits Manual
Inspection Procedures
Reliability Manual.
Last 12 months of Reliability reports
ME 12.▇▇▇▇ Schematics
EXHIBIT A -- FORM OF ACCEPTANCE CERTIFICATE
ACCEPTANCE CERTIFICATE [___]
Midwest Express Airlines, Inc., a Wisconsin corporation
("Assignee"), acknowledges receipt of the delivery to it by [JFS Aircraft
Holdings Co., Ltd. ("JFS")]* at ____ hours on this date at
_______________, _____ of the following described property, together with
all parts, components and other equipment attached to and included with
such property, in accordance with the terms of the [Forward Purchase
Agreement, dated as of December 15, 1995, between JFS, as seller, and
Dolphin Trade & Finance, Ltd., as buyer ("Assignor"), as assigned by
Assignor to Assignee pursuant to the]** Assignment of Rights Agreement,
dated November 14, 1997, between Assignor and Assignee (the "Assignment of
Rights Agreement"):
(1) one ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DC-9-81 airframe bearing
manufacturer's serial no. ______, together with all parts,
appliances, equipment, instruments, components and accessories
attached to, installed in, incorporated in or appurtenant to such
airframe;
(2) two ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Model JT8D-217C aircraft engines
bearing manufacturer's serial nos. ______ and ______, together with
all parts, appliances, equipment, instruments, components and
accessories attached to, installed in, incorporated in or appurtenant
to such engines; and
(3) all Technical Records (as such term is defined in the
Assignment of Rights Agreement), including without limitation, the
documents and records set forth on Schedule 1 attached hereto
[Schedule 3 to be attached].
IN WITNESS WHEREOF, the Assignee has duly executed this
Acceptance Certificate [___] this ____ day of _______, ____.
MIDWEST EXPRESS AIRLINES, INC.
By:_______________________________
Name:
Title:
* Delete if the Aircraft is a Resale Aircraft and insert names of
Dolphin and Dolphin Trustee.
** Delete if the Aircraft is a Resale Aircraft.
EXHIBIT B -- FORM OF ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT [___]
This ASSIGNMENT AGREEMENT [___], dated _________, ____ (the
"Assignment"), is between Dolphin Trade & Finance, Ltd. (the "Assignor")
and Midwest Express Airlines, Inc. (the "Assignee").
RECITALS:
(A) The Assignor and Assignee have entered into that certain
Assignment of Rights Agreement, dated November 14, 1997 ( the "Assignment
of Rights Agreement").
(B) Pursuant to the Assignment of Rights Agreement, Assignor
has agreed to assign to Assignee on their respective Delivery Date all of
its rights under the Forward Purchase Agreement with respect to the
Aircraft (other than the Resale Aircraft) to be delivered on such Delivery
Date and its obligation to pay the purchase price with respect to such
Aircraft in the amount set forth in the Assignment of Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the Assignor and Assignee agree as follows:
1. Definitions. Capitalized terms used but not defined in
this Assignment shall have the meanings given such terms in the Assignment
of Rights Agreement.
2. Assignment. The Assignor hereby sells, assigns, transfers
and conveys to the Assignee (a) all of the Assignor's right, title and
interest in and to the Forward Purchase Agreement with respect to the
aircraft and engines set forth on the attached Annex 1 (the "Aircraft")
and its related Technical Records, and (b) the Assignor's obligation to
pay the JFS Purchase Price (the "Payment Obligation") with respect to the
Aircraft, except that the Assignor hereby reserves and does not transfer
the Reserved Rights with respect to the Aircraft.
3. Assumption by Assignee. The Assignee hereby accepts the
foregoing sale, assignment, transfer and conveyance of, and assumes, all
of the Assignor's right, title and interest in the Forward Purchase
Agreement, subject to the Reserved Rights, and of the Payment Obligation
with respect to the Aircraft.
4. Obligations of Assignor. Assignor acknowledges and
confirms for the benefit of JFS that, without limiting the Payment
Obligation of Assignee, nothing set forth in the Assignment of Rights
Agreement or this Assignment shall relieve or release Assignor from its
liability for the full and punctual performance of all obligations of
"Forward Purchaser" under the Forward Purchase Agreement.
5. Governing Law. This Assignment shall be governed by and
construed in accordance with the laws of the State of New York applicable
to contracts executed in the State of New York by residents of such State
and to be performed entirely within such State, without giving effect to
any choice or conflict of law provision which would cause the application
of the laws of any jurisdiction other than the State of New York.
6. Counterparts. This Assignment may be executed in one or
more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same Assignment.
IN WITNESS WHEREOF, Assignor and Assignee have caused this
Assignment Agreement [___] to be executed by their duly authorized
officers as of the date first above written.
DOLPHIN TRADE & FINANCE, MIDWEST EXPRESS AIRLINES, INC., as
LTD., as Assignor Assignee
By:_______________________________ By:_______________________________
Name: Name:
Title: Title:
EXHIBIT C -- CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT, dated November 14, 1997 (this
"Consent"), is issued by JFS Aircraft Holdings Co., Ltd., a Japanese
corporation ("JFS"), for the benefit of Dolphin Trade & Finance, Ltd.,
("Assignor") and Midwest Express Airlines, Inc., a Wisconsin corporation
("Assignee").
In consideration of Ten Dollars and for other good and valuable
consideration whose receipt and sufficiency JFS hereby acknowledges, JFS
agrees as follows:
1. Capitalized terms used but not defined in this Consent
shall have the meaning given such terms in the Assignment of Rights
Agreement, dated November 14, 1997, between Assignor and Assignee (the
"Assignment of Rights Agreement").
2. JFS acknowledges and consents to all of the terms of the
Assignment of Rights Agreement, including (a) the assignment by Assignor
to Assignee and the assumption by Assignee on each Delivery Date of (i)
all of Assignor's right, title and interest in the Aircraft to be
Delivered on such Delivery Date, subject to Assignor's retention of the
Reserved Rights, and (ii) the Payment Obligation with respect to such
Aircraft, in each case as set forth in the Assignment Agreement for each
Aircraft to be executed and delivered on the Delivery Date for such
Aircraft, and (b) the appointment set forth in Section 2.7 of the
Assignment of Rights Agreement of Assignee as Assignor's agent for
purposes of inspecting the Aircraft under the Forward Purchase Agreement
and for conducting the test flights for such Aircraft.
3. Except for the Payment Obligation, Assignee shall not be
liable for any of the obligations or duties of Assignor under the Forward
Purchase Agreement, nor shall any of the Operative Documents give rise to
any duties or obligations on the part of Assignee to JFS, including
without limitation, under Section 3.3 of the Forward Purchase Agreement;
provided, however, that it is expressly understood that Assignor shall
remain responsible with respect to each of such duties and obligations.
4. JFS acknowledges and agrees that Assignee shall be
designated by JFS as an AInspector@ pursuant to Article 18 of the Lease
and shall cooperate with Assignee to ensure compliance by Lessee with the
terms thereof.
5. Upon confirmation by the Paying Agent to JFS before each
Delivery Date that the Paying Agent is holding the JFS Purchase Price for
the Aircraft to be delivered on such Delivery Date, JFS shall perform its
obligations under the Forward Purchase Agreement with respect to such
Aircraft for the benefit of Assignee as well as Assignor, including the
following agreements supplementing the agreements of JFS set forth in the
Forward Purchase Agreement:
(a) JFS shall cooperate with Assignor and Assignee by
taking all actions reasonably necessary to enable Assignor and
Assignee to (i) cause the issuance by the JAA of an Export
Certificate of Airworthiness for such Aircraft; (ii) make application
to the JAA for the deregistration of such Aircraft, and (iii) cause
such Aircraft to be deregistered by the JAA, and in connection with
the Assignor and Assignee taking such actions JFS shall relinquish
the Certificate of Airworthiness of such Aircraft;
(b) on each Delivery Date with respect to each Aircraft
(other than a Resale Aircraft), JFS shall deliver to Special FAA
Counsel on behalf of Assignee (i) an FAA ▇▇▇▇ of Sale on AC Form
8050-2 covering the Aircraft to be Delivered to Assignee on such
Delivery Date, and (ii) a Full Warranty ▇▇▇▇ of Sale in the form
attached as Exhibit A to the Forward Purchase Agreement covering such
Aircraft (except that references in such Warranty ▇▇▇▇ of Sale to
Assignor and the registered address of Assignor shall be amended to
refer to Assignee and to the address of Assignee set forth in Section
12.3(b) of the Assignment of Rights Agreement); and
(c) on each Delivery Date with respect to each Resale
Aircraft, JFS shall deliver to Special FAA Counsel on behalf of
Assignee (i) an FAA ▇▇▇▇ of Sale on AC Form 8050-2 covering the
Resale Aircraft to be Delivered to Assignor on such Delivery Date,
and (ii) a Full Warranty ▇▇▇▇ of Sale in the form attached as Exhibit
A to the Forward Purchase Agreement covering such Resale Aircraft.
6. From and after the Delivery Date of an Aircraft pursuant to
the Forward Purchase Agreement and the receipt of payment in full for such
Aircraft, JFS will not assert any lien or claim against such Aircraft or
any part thereof, or against Assignee relating to such Aircraft or any
part thereof, arising prior to the time of such Delivery or in respect of
any work or services performed on such Aircraft prior to the time of
Delivery.
7. This Consent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
executed in the State of New York by residents of such State and to be
performed entirely within such State, without giving effect to any choice
or conflict of law provision which would cause the application of the laws
of any jurisdiction other than the State of New York.
IN WITNESS WHEREOF, JFS has caused this Consent and Agreement to
be executed by its duly authorized officer as of the date first above
written.
JFS AIRCRAFT HOLDINGS CO., LTD.
By:____________________________
Name:
Title:
EXHIBIT D -- FORM OF TECHNICAL ACCEPTANCE CERTIFICATE
TECHNICAL ACCEPTANCE CERTIFICATE [___]
Midwest Express Airlines, Inc., a Wisconsin corporation
("Assignee"), hereby acknowledges delivery to Dolphin Trade & Finance,
Ltd. ("Assignor") by JFS Aircraft Holdings Co., Ltd. ("JFS") on this date
of the following described property, together with all parts, components
and other equipment attached to and included with such property
(collectively, the "Resale Aircraft"), in accordance with the terms of the
Forward Purchase Agreement, dated as of December 15, 1995, between JFS, as
seller, and Assignor, as buyer:
(1) one ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DC-9-81 airframe bearing
manufacturer's serial no. ______, together with all parts,
appliances, equipment, instruments, components and accessories
attached to, installed in, incorporated in or appurtenant to
such airframe;
(2) two ▇▇▇▇▇ & Whitney Model JT8D-217C aircraft
engines bearing manufacturer's serial nos. ______ and ______,
together with all parts, appliances, equipment, instruments,
components and accessories attached to, installed in,
incorporated in or appurtenant to such engines; and
(3) all Technical Records (as such term is defined in
the Assignment of Rights Agreement), including without
limitation, the documents and records set forth on Schedule 1
attached hereto [Schedule 3 to be attached].
Assignee hereby unconditionally and irrevocably accepts and
agrees to the sufficiency of the condition of such Resale Aircraft for all
purposes of the Assignment of Rights Agreement, dated November 14, 1997,
between Assignor and Assignee (the "Assignment of Rights Agreement"),
including for purposes of the Delivery of such Resale Aircraft from
Assignor or the "Dolphin Trustee" (as such term is defined in the
Assignment of Rights Agreement) to Assignee.
IN WITNESS WHEREOF, the Assignee has duly executed this
Technical Acceptance Certificate [___] this ____ day of _______, ____.
MIDWEST EXPRESS AIRLINES, INC.
By:_______________________________
Name:
Title:
EXHIBIT E -- FORM OF DOLPHIN TRUSTEE'S ▇▇▇▇ OF SALE
▇▇▇▇ of Sale
DOLPHIN TRADE & FINANCE, LTD., a British Virgin Islands company
("Dolphin") and [NAME OF DOLPHIN TRUSTEE], not in its individual capacity
but solely as owner trustee f/b/o Dolphin (the "Dolphin Trustee"), hereby
certify jointly and severally that they are the owners of a certain
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DC-9-81 aircraft bearing manufacturer's serial number
_____ and the registration ▇▇▇▇ N_____, and equipped with the engines
bearing serial numbers ______ and ______, together with all appliances,
parts, instruments, appurtenances, accessories, furnishings, modules,
radar, radio and other equipment and property installed on or attached to
said aircraft and said engines or destined for use with respect to the
same (the "Aircraft") and all technical data, manuals, log books and other
records relating to each Aircraft or any part thereof (the "Technical
Records"), free and clear from all liens, claims, mortgages, charges,
pledges, leases or other rights or encumbrances of any nature created by,
or arising out of, Dolphin or the Dolphin Trustee.
In consideration of the receipt of the sum of US$1.00 and other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Dolphin and the Dolphin Trustee do hereby grant,
convey, transfer, bargain and sell, deliver and set over to Midwest
Express Airlines, Inc., a Wisconsin corporation (the "Buyer"), all of
Dolphin's and Dolphin Trustee's right, title and interest in and to the
Aircraft and the Technical Records.
Dolphin and the Dolphin Trustee hereby warrant jointly and
severally to the Buyer and its successors and assigns that there is hereby
transferred to Buyer all right, title and interest in and to the Aircraft
and the Technical Records transferred to Dolphin and the Dolphin Trustee
by JFS Aircraft Holdings Co., Ltd. pursuant to the Full Warranty ▇▇▇▇ of
Sale, dated ___________, ____, an original of which is attached, free and
clear of all liens, claims, mortgages, charges, pledges, leases or other
rights or encumbrances of any nature whatsoever created by arising out of
Dolphin or the Dolphin Trustee, and Dolphin and Dolphin Trustee hereby
agree jointly and severally with Buyer and its successors and assigns that
Dolphin and Dolphin Trustee will warrant and defend such title hereunder
forever against all claims and demands whatsoever.
This ▇▇▇▇ of Sale shall in all respects be governed by and
construed in accordance with the internal laws of New York (but without
regard to any conflicts of laws rule which might result in the application
of the laws of any other jurisdiction).
Made and delivered in on this day of
, 19 .
For and on behalf of DOLPHIN TRADE &
FINANCE, LTD.
By
Name:
Title:
For and on behalf of [NAME OF DOLPHIN
TRUSTEE], not in its individual capacity but
solely as Owner Trustee f/b/o Dolphin
By
Name:
Title:
Read and agreed
For and on behalf of
MIDWEST EXPRESS AIRLINES, INC.
as Buyer
By
Name:
Title: