AIRCRAFT LEASE AGREEMENT
Dated as of April 25, 2000
between
C.I.T. LEASING CORPORATION
as Lessor
and
ARCH AIR MEDICAL SERVICE, INC.,
as Lessee
Air Methods 2000 Aircraft Lease Agreement
AIRCRAFT LEASE AGREEMENT
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THIS AIRCRAFT LEASE AGREEMENT dated as of April 25, 2000 (this "Lease"),
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between C.I.T. LEASING CORPORATION, a Delaware corporation, together with its
successors and permitted assigns ("Lessor"), and ARCH AIR MEDICAL SERVICE, INC.,
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a Missouri corporation, together with its successors and permitted assigns
("Lessee"), having its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Lessor desires to purchase from Area Rescue Consortium of
Hospitals, a Missouri corporation, five (5) helicopters described as follows:
one Messerschmitt model BK 117 B-1 aircraft bearing manufacturer's serial number
7201 and United States Registration No. N211SL, one Messerschmitt model BK 117
B-1 aircraft bearing manufacturer's serial number 7207 and United States
Registration No. N122SL, one Eurocopter Deutschland GMBH model MBB-BK 117-B2
aircraft bearing manufacturer's serial number 7139 and United States
Registration No. N550SL, one Messerschmitt model BK 117 B-1 aircraft bearing
manufacturer's serial number 7158 and United States Registration No. N440SL, and
one Messerschmitt model BK 117 B-1 aircraft bearing manufacturer's serial number
7216 and United States Registration No. N330SL; and
WHEREAS, Lessor also desires to purchase from SkyLife Aviation, L.L.C.
(Area Rescue Consortium of Hospitals and SkyLife Aviation, L.L.C. are referred
to herein collectively as "Seller"), two (2) aircraft described as follows: one
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Beech model B100 aircraft bearing manufacturer's serial number BE-27 and United
States Registration No. N87JE and one Beech model B100 aircraft bearing
manufacturer's serial number BE-64 and United States Registration No. N4490M
(collectively, together with the aircraft described in the preceding paragraph,
and as further defined below, the "Aircraft") and simultaneously with such
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purchase, Lessee desires to lease from Lessor and Lessor is willing to lease to
Lessee such Aircraft on the terms and conditions set forth in this Lease;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Lessor and Lessee hereby agree as follows:
1. DEFINITIONS. Unless the context otherwise requires, the following
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terms shall have the following meanings for all purposes of this Lease and shall
be equally applicable to both the singular and the plural forms of the terms
herein defined:
"Acceptance Date" shall mean any or all, as the context requires, of
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the Delivery Date or Delivery Dates on which all of the applicable conditions
precedent set forth in Section 21 hereof have been satisfied, or waived in
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writing by Lessor.
"Aeronautical ▇▇▇▇ of Sale" shall mean the ▇▇▇▇ of sale for the
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Aircraft on AC Form 8050-2 (for Aircraft registered in the United States) or
such other form as may be acceptable to the FAA for recordation of Lessor's
ownership interest in the Aircraft executed by Lessee in favor of Lessor and
dated the Delivery Date.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 1
"Aeronautics Authority" shall mean, as the context requires, the
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United States Department of Transportation, the FAA and/or the Administrator of
the FAA, or any person, governmental department, bureau, commission or agency
succeeding to the functions of any of the foregoing.
"Affiliate" with respect to a specified Person shall mean any other
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Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled by" have meanings correlative to the
foregoing.
"Aircraft" shall mean each and every Airframe and the "Aircraft"
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described in the recitals above together with (a) the Engine or Engines, whether
or not installed on such Aircraft, (b) all Parts thereof, (c) spare parts or
ancillary equipment or devices acquired pursuant to the Purchase Agreement and
furnished with the Aircraft under this Lease or otherwise not constituting
Parts, (d) all Aircraft Documents, (e) all substitutions, replacements and
renewals of any and all thereof, (f) all capital improvements which may be made
to, installed on or incorporated into the Aircraft, including but not limited to
those improvements required pursuant to any Airworthiness Directive.
"Aircraft Cost" shall mean the aggregate cost of the Aircraft not to
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exceed the amount set forth in the Lease Supplements executed and delivered
pursuant to this Lease and described therein as Aircraft Cost (not to exceed the
Maximum Aircraft Cost Amount).
"Aircraft Documents" shall mean the records and documentation
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pertaining to the Aircraft in Lessee's possession on each Delivery Date and all
other records and documentation pertaining to any Airframe, any Engines and any
Parts delivered with the Aircraft or created during the Lease Term in respect
thereof, all of which shall be maintained in the English language, including,
without limitation, all logs, manuals and data, and all inspection, modification
and overhaul records, and such other items which may be acquired or prepared by
Lessee relating to its use, operation and maintenance of the Aircraft during the
term of this Lease.
"Airframe" shall mean for each Aircraft, (a) the airframe described in
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Schedule A attached hereto and made a part hereof and any airframe which may
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from time to time be substituted or be a replacement for the airframe, and (b)
any and all Parts of whatever nature (except the Engines, propellers, rotors and
rotor hubs, as applicable) attached to or installed on such airframe for so long
as title thereto shall be vested in Lessor in accordance with this Lease.
"Airworthiness Directive" shall mean any Airworthiness Directive
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issued by the FAA and applicable to aircraft, engines and appliances and Parts
of the same type as the Aircraft, the Engines and the Parts.
"Basic Rent" shall have the meaning given to such term in Section 5(a)
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hereof and in the Lease Supplements executed and delivered pursuant to this
Lease.
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10679.108.107383.5
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"Basic Rent Factor" shall be the percentage (derived from the
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Reference Rate) set forth in the Lease Supplements executed and delivered
pursuant to this Lease which, when multiplied by the Aircraft Cost, result in
the Basic Rent.
"Basic Term" shall mean the number of monthly periods from and
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including the Delivery Date of each Aircraft to and including the day
immediately preceding the tenth anniversary date of the first Delivery Date as
set forth in the first Lease Supplement.
"Business Day" shall mean any day other than a Saturday, Sunday or a
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day on which banking institutions in New York, New York are authorized by law to
close.
"Casualty Loss Value" shall mean the amounts payable by Lessee in any
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Event of Loss and as otherwise provided in this Lease, which amounts are set
forth in the Lease Supplements executed and delivered pursuant to this Lease.
"Certificate of Acceptance" means the Certificate of Acceptance
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substantially in the form attached hereto as Exhibit A, to be executed by Lessee
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for the purpose of acknowledging acceptance of each Aircraft (as the foregoing
may be amended, modified or supplemented as of the date hereof and from time to
time).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Default" shall mean any event or condition which, with the lapse of
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time or the giving of notice or both, would constitute an Event of Default.
"Default Rate" shall mean interest at the rate per annum equal to
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eighteen percent (18%), subject to the maximum rate permitted by Law.
"Delivery Date" for any Aircraft shall mean the date, which day shall
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be a Business Day, specified in the Lease Supplement applicable to such Aircraft
to be executed pursuant to this Lease, on which (a) all applicable conditions
precedent set forth in Section 21 hereof have been satisfied or waived in
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writing by Lessor for the delivery and sale of such Aircraft by the Lessee to
Lessor, and (b) such Aircraft is actually delivered to, and accepted by, Lessee
under this Lease.
"Early Purchase Option" shall have the meaning set forth in Section 7
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hereof.
"Early Purchase Option Price" shall have the meaning set forth in
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Section 7 hereof.
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"Engine" shall mean with respect to any Aircraft, (a) the engine,
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engines or rotor hub installed on such Airframe on the Delivery Date as
described in Schedule A attached hereto and made a part hereof, whether or not
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from time to time thereafter no longer installed on such Airframe or installed
on any other airframe or any other aircraft; or (b) any other engine or Power
Components, including, without limitation, any spare engine, which may from time
to time be substituted or be a replacement for such engine or any Part thereof
(including any rotor or propeller) in accordance with this Lease.
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10679.108.107383.5
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"Event of Default" shall mean any of the events referred to in Section
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23 hereof.
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"Event of Loss" shall mean any of the following events with respect to
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the Aircraft, any Airframe or any Engine:
(a) loss of such property or the use thereof
(i) due to theft or disappearance of such property for a period in
excess of the earlier of
(A) the end of the prevailing Lease Term and
(B) forty-five (45) days (unless such loss constitutes an
Event of Loss under clause (b) below) or (ii) due to destruction, damage beyond
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repair or rendition of such property permanently unfit for normal use by Lessee
for any reason whatsoever;
(b) any loss or loss of use or damage to such property which results in an
insurance settlement with respect to such property on the basis of an actual or
constructive total loss;
(c) the condemnation, confiscation, conversion or seizure of, or
requisition of title to, such property, or requisition for use of such property
for a period in excess of the earlier of
(i) the end of the prevailing Lease Term, and
(ii) forty-five (45) days (or for such shorter period ending on the
date on which an insurance settlement with respect to such property on the basis
of an actual or constructive total loss shall occur);
(d) as a result of any rule, regulation, order or other action by the FAA
or other Governmental Authority having jurisdiction, the use of such property in
the normal course of air transportation of Persons shall have been prohibited
for a period of forty-five (45) days, unless Lessee, prior to the expiration of
such period, shall have undertaken or caused to be undertaken and shall
diligently carry forward or cause to be so carried forward all steps which are
necessary or desirable to permit the normal use of such property by Lessee or
any permitted assignee or sublessee, as the case may be, or, in any event, if
such use shall have been prohibited for a period of the earlier of (i) the end
of the prevailing Lease Term and (ii) three consecutive months.
"Expiration Date" shall mean the last day of the Lease Term or such
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other date on which the Lease Term of this Lease may be terminated pursuant to
the terms hereof.
Air Methods 2000 Aircraft Lease Agreement
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"FAA" shall mean, as the context requires, the United States Federal
---
Aviation Administration and/or the Administrator of the United States Federal
Aviation Administration, or any person, governmental department, bureau,
commission or agency succeeding to the functions of either of the foregoing.
"Fair Market Value" shall have the meaning set forth in Section 8(c)
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hereof.
"Fair Rental Value" shall have the meaning set forth in Section
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8(c)hereof.
"GAAP" shall mean generally accepted accounting principles
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consistently applied over the affected periods as in effect from time to time.
"Governmental Authority" shall mean and include (a) the FAA; (b) any
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national, state, local or foreign government, or political subdivision thereof
or local jurisdiction therein; (c) any board, commission, department, division,
organ, instrumentality, court or agency of any entity described in (b) above,
however constituted; and (d) any association, organization, or institution of
which any entity described in (b) or (c) above is a member or to whose
jurisdiction any such entity is subject or in whose activities any such entity
is a participant but only (except for purposes of defining Law below) to the
extent that any of the preceding clauses (a), (b), (c) and (d) hereof have
jurisdiction over the Aircraft or its operations.
"Guarantor(s)" shall mean, collectively or individually, as the
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context requires, each guarantor from time to time of the obligations of Lessee
under the Lease Documents, including, without limitation, Air Methods
Corporation, a Delaware corporation, and MASI (and their respective successors
and assigns).
"Guaranty" shall mean the Corporate Guaranty Agreement, dated as of
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the date hereof, between the Guarantors and Lessor (as the foregoing may be
amended, modified or supplemented as of the date hereof and from time to time).
"Improvement" shall have the meaning set forth in Section 11 hereof.
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"Indemnified Party" shall have the meaning set forth in Section 18
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hereof.
"Law" shall mean and include (a) any statute, decree, constitution,
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regulation, order, judgment or other directive of any Governmental Authority;
(b) any treaty, pact, compact or other agreement to which any Governmental
Authority is a party; (c) any judicial or administrative interpretation or
application of any Law described in (a) or (b) above; and (d) any amendment or
revision of any Law described in (a), (b) or (c) above.
"Lease Documents" means this Lease, each Lease Supplement, the
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Replacement Contract, the Purchase Agreement Assignments, the Guaranty, the Tax
Indemnity Agreement, any management and/or operating affecting the Aircraft, the
Purchase Documents, each and every sublease permitted by Lessor under this Lease
and all documents related to such subleases, and each other document executed by
Lessee hereunder or thereunder or in connection with the transactions
contemplated hereby or thereby (as any or all of the foregoing may be amended,
modified or supplemented as of the date hereof and from time to time).
Air Methods 2000 Aircraft Lease Agreement
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"Lease Supplement" shall mean each and every Lease Supplement,
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substantially in the form of Exhibit B hereto, which shall be entered into
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between Lessor and Lessee for the purposes of (a) leasing the Aircraft, and (b)
setting forth the applicable terms of the Lease in effect with respect to the
applicable Acceptance Date and Aircraft, pursuant to the provisions of this
Lease. Each Lease Supplement shall (i) be consecutively numbered to correspond
to each Acceptance Date, and (ii) incorporate by reference all of the provisions
of this Lease Agreement, including, without limitation, any amendment thereto
entered into subsequent to the applicable Acceptance Date.
"Lease Term" shall mean the Basic Term and the Renewal Term (if any).
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"Lessee Person" shall mean Lessee or other user or Person in
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possession of any Aircraft, any Airframe, or any Engine, and any Affiliate,
successor or assign of any of the foregoing (other than Lessor or any Affiliate,
successor or assign of Lessor).
"Lessor Lien" means any Lien on an Airframe, any Engine or any Part
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arising as a result of (a) claims against or affecting Lessor or any of its
Affiliates that are not related to the transactions contemplated by the Lease
Documents, (b) any act or omission of Lessor or any of its Affiliates that is
not related to the transactions contemplated by the Lease Documents or which is
in violation of the terms hereof or (c) Taxes (including claims therefor) or
other claims imposed on Lessor or any of its Affiliates (including the
consolidated group of taxpayers of which Lessor is part) for which Lessee is not
obligated to indemnify Lessor or such Affiliate hereunder.
"Lien" shall mean any lien, mortgage, encumbrance, pledge, charge or
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security interest of any kind.
"Life Limited Components" shall mean, with respect to any Part or
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Engine, any such item the maintenance of which is required under Applicable Law
or by the Manufacturer thereof or another manufacturer (if other than of any
Airframe) in its maintenance manuals or otherwise based on the hours, cycles or
calendar time since the last overhaul or inspection, as appropriate, or other
date of determination relating to the maintenance of the Aircraft or such Part
or Engine in accordance with this Lease.
"Maintenance Program" shall mean the applicable Manufacturer's
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approved maintenance program (as approved by the FAA and Lessor) as in effect
from time to time for the Aircraft encompassing scheduled maintenance,
conditioned monitored maintenance and on-condition maintenance of any Airframe,
any Engine and any Parts. Upon request by Lessor, a copy of such Maintenance
Program shall be provided to Lessor.
"Manufacturer" shall mean, with respect to any Aircraft, the
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manufacturer of such Aircraft, together with its successors and assigns,
including, Eurocopter Deutschland GMBH and Beechcraft.
"MASI" shall mean Mercy Air Service, Inc., a California corporation.
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10679.108.107383.5
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"Maximum Aircraft Cost Amount" shall mean an aggregate amount that
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Lessor shall advance to purchase the Aircraft as set forth in the Lease
Supplements.
"Notice of Proposed Acceptance Date" shall mean a notice from Lessee
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to Lessor of the date, which shall be a Business Day, on which Lessee proposes
that Lessor fund a portion of Aircraft Cost pursuant to this Lease.
"Operative Documents" shall mean the Lease Documents, the Aeronautical
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Bills of Sale, the Warranty Bills of Sale, the Purchase Documents and such other
documents delivered in connection with this Lease and the Purchase Documents and
the transactions contemplated hereby and thereby (as any or all of the foregoing
may be further amended, modified or supplemented as of the date hereof and from
time to time).
"Parts" means any and all Power Components, avionics, appliances,
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units, components, parts, devices, instruments, appurtenances, accessories,
furnishings, seats, and other equipment of whatever nature (other than Engine or
engine and landing gear and temporary replacement parts that are duly replaced
with permanent Parts as provided in Section 11 hereof), which may from time to
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time be incorporated or installed in or attached to any Airframe of any Aircraft
or the Engines and spare parts delivered pursuant to the Purchase Agreement.
"Permitted Lien" means a Lien permitted by the provisions of Section
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14 hereof.
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"Person" means any individual, corporation, partnership, joint
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venture, association, joint stock company, trust, trustee(s) of a trust,
unincorporated organization, or government or Governmental Authority, agency or
political subdivision thereof.
"Power Components" shall have the meaning set forth in Section
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4(c) hereof.
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"Prior Lease Documents" shall mean that certain Aircraft Lease
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Agreement, dated as of August 25, 1999, between Lessor and Air Methods
Corporation, together with each other Lease Document as therein defined (as any
or all of the foregoing may be further amended, modified or supplemented as of
the date hereof and from time to time).
"Process Agent" shall have the meaning set forth in Section 29 hereof.
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"Purchase Agreement" shall mean, individually or collectively, as the
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context requires, (i) the Asset Purchase Agreement, dated as of March 23, 2000,
among Seller, MASI and Lessee relating to certain the rotary wing Aircraft and
(ii) the Aircraft Purchase Agreement, dated as of April 25, 2000, between Sky
Life relating to the fixed wing Aircraft (as the same may hereafter be amended,
modified or supplemented from time to time expressly in relation to the Aircraft
to the extent permitted by the Purchase Agreement Assignment and this Lease).
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 7
"Purchase Agreement Assignment(s)" shall mean collectively or
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individually, as the context requires, (i) the Purchase Agreement Assignment of
even date herewith, between the Lessee, as assignor, and the Lessor, as
assignee, and consented to by MASI and Seller relating to the Asset Purchase
Agreement described therein and relating to the rotary wing Aircraft, and (ii)
the Purchase Agreement Assignment of even date herewith, between the Lessee, as
assignor, and the Lessor, as assignee, and consented to by Sky Life relating to
the Aircraft Purchase Agreement described therein and relating to the fix wing
Aircraft, (as either or both of the same may be amended, modified or
supplemented from time to time).
"Purchase Documents" shall mean the Purchase Agreements, the Purchase
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Agreement Assignments and consent related thereto, and each other document
executed by Seller, MASI or a Lessee Person pursuant to this Lease or such other
documents and the transactions contemplated hereby and thereby (as the same may
be amended, modified or supplemented from time to time) relating to the
purchase of the Aircraft .
"Purchase Option Price" shall have the meaning set forth in Section
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8(b) hereof.
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"Reference Rate" shall mean the relevant "Treasury Rate" as of the
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date of determination which is the rate per annum equal to the yield for each of
the U.S. Treasury Securities that matures nearest to the thirty-sixth (36th)
monthly anniversary of the applicable Delivery Date determined as at the close
of business on the first Business Day immediately preceding the date of
determination under this Lease, as reported in The Wall Street Journal under the
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heading "Treasury Bonds, Notes & Bills" (and the subheading of "Ask Yld." under
"Govt. Bonds & Notes") or if such report is unavailable, on page 119 ("U.S.
Treasury and Money Markets") of the information ordinarily provided by Telerate
Systems Incorporated. Such rate shall be set forth in each Lease Supplement as
applicable.
"Renewal Term" for the Aircraft shall mean twelve (12) monthly periods
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from and including the expiration date of the Basic Term to and including the
day immediately preceding the eleventh (11th) anniversary of the Delivery Date.
"Renewal Term Rent" shall mean the Rent determined under Section 8(b)
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hereof and payable during the Renewal Term.
"Rent" shall mean Basic Rent, Renewal Term Rent, if any, and
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Supplemental Payments.
"Rent Payment Date" shall mean the first day in each of the Rental
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Periods.
"Rental Period" shall mean each of the consecutive monthly periods
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throughout the Lease Term as in effect under this Lease, the first such period
commencing on and including the Delivery Date and ending on the date immediately
preceding the first monthly anniversary date of the Delivery Date thereafter,
and each of the remaining monthly periods commencing on and including each
monthly anniversary date of the Delivery Date and ending on the date immediately
preceding the next succeeding monthly anniversary date of the Delivery Date.
"Replacement" has the meaning set forth in Section 11 hereof.
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"Replacement Contract" shall mean that certain Assignment, Notice and
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Acceptance of Replacement Property Contract, of even date herewith, among
Lessor, Lessee and Bank One Exchange Corporation (as the same may be amended,
modified or supplemented from time to time).
"Required Alteration" has the meaning set forth in Section 11 hereof.
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"Sky Life" shall mean SkyLife Aviation, L.L.C., a Missouri limited
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liability company and an affiliate of Seller.
"Supplemental Payments" shall mean all amounts, liabilities and
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obligations which Lessee assumes or agrees to pay hereunder to Lessor or others,
including, without limitation, payments of Casualty Loss Value and indemnities,
but excluding Basic Rent or Renewal Term Rent.
"Tax" shall have the meaning set forth in Section 17 hereof.
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"Tax Indemnitee" shall mean and include Lessor and any Affiliate
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thereof and any of their respective officers, directors, successors, assigns,
agents and servants.
"Tax Indemnity Agreement" shall mean the Tax Indemnity Agreement of
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even date herewith, between Lessor and Lessee (as the same may be amended,
modified or supplemented from time to time).
"Taxing Authority" shall mean any federal, state or local government,
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political subdivision, or taxing authority in the United States of America, any
government or taxing authority of or in any country or other taxing jurisdiction
outside the United States of America, or any international taxing authority.
"Transaction Fee" shall mean an amount equal to the sum set forth in
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the first Lease Supplement which shall be paid by the Lessee to the Lessor on or
before the Delivery Date.
"Warranty ▇▇▇▇ of Sale" shall mean each Warranty ▇▇▇▇ of Sale,
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substantially in the form of Exhibit C hereto relating to each Aircraft dated
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each Acceptance Date by Seller in favor of Lessor.
2. AGREEMENT FOR PURCHASE AND LEASE OF AIRCRAFT; MAXIMUM FUNDING;
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FUNDING PROCEDURES.
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(a) Lessor shall, subject to the satisfaction or waiver of the
terms and conditions of this Lease and the other Lease Documents, advance funds
to Seller on account of Lessee as provided in this Lease, to pay Aircraft Cost
up to the Maximum Aircraft Cost Amount. Lessor shall have no obligation to
advance funds in respect of the Aircraft Cost under this Section 2 or otherwise
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in excess of the Maximum Aircraft Cost Amount.
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(b) Lessor, subject to satisfaction or waiver of the conditions
set forth in Section 21 hereof, including, without limitation, the satisfaction
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of the conditions in the Asset Purchase Agreement referred to in clause (i) of
the definition of Purchase Agreement, and the concurrent acceptance hereunder by
Lessee of the Aircraft, hereby agrees to accept delivery on the Delivery Date of
the Aircraft from the Lessee and to lease the Aircraft simultaneously back to
Lessee hereunder; and Lessee hereby agrees, expressly for the direct benefit of
Lessor to lease on such Delivery Date from Lessor hereunder, the Aircraft, which
shall have been accepted by Lessee hereunder as evidenced by the execution by
Lessor and Lessee of the Lease Supplement leasing the Aircraft hereunder;
provided, however, that Lessor and Lessee shall have no further obligation
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hereunder with respect to the Aircraft if the Delivery Date shall not have
occurred on or before the date hereof unless mutually agreed by Lessor and
Lessee in writing.
(c) Lessee agrees, on Lessor's request, to give a Notice of
Proposed Acceptance Date (which shall be a Business Day) of each Acceptance Date
three (3) Business Days prior to each proposed Acceptance Date.
(d) The Delivery Date shall not extend beyond the date hereof and
relating final funding under this Lease shall not extend beyond April 30, 2000,
unless mutually agreed to by Lessor and Lessee in writing.
3. TERM. The Basic Term for the Aircraft shall commence on the
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Delivery Date, and, unless sooner terminated in accordance with the provisions
of this Lease, shall end on the last day of the Basic Term. If Lessee elects to
renew this Lease pursuant to Section 8(b) hereof, the Renewal Term shall
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commence on the last day of the Basic Term and end on the last day of the
Renewal Term.
4. RETURN OF AIRCRAFT.
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(a) Return. If Lessor shall rightfully demand possession of the
------
Aircraft pursuant to the terms of this Lease or Lessee shall otherwise be
obligated hereunder to return the Aircraft to Lessor, Lessee shall, at its own
expense, return the Aircraft equipped with the Engine or Engines duly installed
thereon by delivering the same to Lessor at any airport in the continental
United States as designated by Lessor. At the time of such return (i) all
Airworthiness Directives and Manufacturer's mandatory service bulletins relating
to the Aircraft shall have been performed, (ii) the Aircraft shall be owned by
Lessor, free and clear of all Liens (other than any Lessor Lien), and shall be
duly registered with the FAA, (iii) each fuel and oil tank shall contain the
same quantity of fuel and oil as was contained in the fuel and oil tanks when
the Aircraft was delivered to Lessee on the Delivery Date, or in the case of any
differences in any such quantities, an appropriate adjustment shall be made by
payment at the then current market price of fuel or oil, as the case may be, and
(iv) the Aircraft shall be in the condition required by Section 4(c) hereof.
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Until the Aircraft is returned to Lessor as provided in this Section 4(a), all
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of the provisions of this Lease shall continue in full force and effect and
Lessee shall pay all the costs and expenses in connection with or incidental to
the return of the Aircraft, including without limitation, Rent for the Aircraft
as provided in Section 5 hereof.
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Air Methods 2000 Aircraft Lease Agreement
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(b) Manuals. Upon the return of the Aircraft, in accordance
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with this Section 4, Lessee shall deliver to Lessor all Aircraft Documents
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required to be maintained with respect thereto under applicable rules and
regulations of the FAA and any other Governmental Authority having jurisdiction.
In the event any Aircraft Documents are missing or incomplete for operations
during the Lease Term, Lessor shall have the right to cause such documents to be
reconstructed at the expense of Lessee.
(c) Condition. At the time of such return: (i) the Aircraft
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shall have had any distinctive marking of Lessee removed in a workmanlike manner
at the expense of Lessee; (ii) the Aircraft shall be fully equipped and have
installed thereon the Engine or Engines and any and all other Parts as were
installed or incorporated in or attached to the Aircraft as of the applicable
Acceptance Date (or such replacements therefor permitted by or required pursuant
to the terms hereof); (iii) the Aircraft shall be duly certified as an airworthy
aircraft by the FAA and shall be returned with a valid certificate of
airworthiness issued under 14 C.F.R. Part 91 (including 91.401 et. seq. and 14
C.F.R. Part 135 (including 135.411 et seq.), as applicable, or its equivalent;
(iv) the Aircraft shall be in the condition and repair required to be maintained
by Section 10 hereof, free of all corrosion and free and clear of all Liens and
----------
the rights of any third parties; and (v) Lessee shall return the aircraft on (A)
a Computerized Maintenance Program approved by Lessor (CMP) or (B) any other
standardized form of record keeping in accordance with accepted industry
standard approved by Lessor, the applicable manufacturer's guidelines, if any,
and regulations of applicable Governmental Authorities and of applicable Laws,
in each case fully paid up to the return date with all transfer fees, if any, to
be paid by the Lessee.
At the time of such return, (i) Lessee shall have completed within
thirty (30) days prior to the return, the next required inspection, or portion
thereof not previously completed, (A) on each Airframe if such inspection is due
within the next ninety (90) days, and if not in compliance with the recommended
maintenance program for the applicable Engine, the next anticipated periodic
inspection on such Engine and (B) on all power transmitting components then
recommended within the next ninety (90) days by the applicable manufacturers,
including, without limitation, on gear boxes, transmissions, propellers, drive
shafts, rotor shafts, rotor hubs and rotor blades (collectively, the "Power
-----
Components") and (ii) each Aircraft with all material component parts shall have
-----------
one half or more of the available operating hours and/or, as applicable, one
half or more of the stated calendar time and cycles remaining until the next
maintenance visit, overhaul or replacement (as applicable) as stated in the Code
of Federal Regulations applicable to the FAA, and Manufacturer approved
Maintenance Program under the auspices of 14 C.F.R. 91.409 et. seq. and
135.411 et. seq., as applicable, or its equivalent.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 11
In the event that any Engine, Power Components or Aircraft does not
meet the conditions set forth in the immediately preceding paragraph, Lessee
shall pay Lessor an amount equal to the sum of (i) for such Engine, the product
of: the then current estimated cost of the next mid-life inspection (including
in such estimated cost, all required replacement of the Life Limited Components)
multiplied by a fraction the numerator of which shall be the of (A) the actual
number of hours of operation since the previous mid-life inspection, minus (B)
fifty percent (50%) of total operating hours anticipated between mid-life
inspections, and the denominator of which shall be the total operating hours
anticipated between mid-life inspections, plus (ii) for such Engine, the product
of: the then current estimated cost of the next anticipated major overhaul
(including in such estimated cost, all required replacement of Life Limited
Components and as specified by the Manufacturer and the engine manufacturer for
such Engine and Power Components) multiplied by a fraction the numerator of
which shall be the remainder of (A) the actual number of hours of operation
since the previous major overhaul minus (B) fifty percent (50%) of the total
operating hours anticipated between major overhauls and the denominator of which
shall be the total operating hours anticipated between major overhauls, plus
(iii) the product of: the current estimated cost of the next scheduled major
Airframe inspection (including in such estimated cost, all required replacement
of Life Limited Components) multiplied by a fraction the numerator of which
shall be the remainder of (A) the actual number of respective operating hours or
months of operation since the previous major Airframe inspection, minus (B)
fifty percent (50%) of the respective total operating hours or months of
operation allowable between scheduled major Airframe inspection, and the
denominator of which shall be the respective total operating hours or months of
operation allowable between scheduled major Airframe inspections. All of the
foregoing shall be considered Supplemental Payments and shall be due upon
presentation to Lessee of an invoice setting forth in reasonable detail the
calculation of such amounts due including the names of all sources used for the
required cost estimates. Should the sum of amounts calculated under the
foregoing clauses (i), (ii) and (iii) result in an amount equal to or less than
$0.00, Lessee shall have no payment obligation under this Section 4(c). Unless
------------
both Lessor with Lessee agree to alternative source(s), the Manufacturer of any
Engine, as specified by Lessor, shall be used as the source for all cost and
Engine mid-life and overhaul estimates. Prior to the return of the Aircraft to
Lessor, a ground evaluation and acceptance flight shall, if requested by Lessor,
be conducted by Lessor or Lessor's designee with Lessee retaining operational
control of the Aircraft during the acceptance flight, in accordance with
procedures of the Manufacturer of the Aircraft designed for this purpose in
order to determine whether or not the Aircraft is in the condition required by
this Lease. All reasonable costs and expenses of any ground evaluation and
acceptance flight shall be borne solely by Lessee.
(d) Overhaul. Immediately prior to the return of the
--------
Aircraft at the expiration or termination of this Lease, Lessee, upon written
request of Lessor received at least thirty (30) days in advance of such
expiration or termination date, will arrange for each Airframe and Engine to be
inspected and/or overhauled. Such inspection and/or overhaul shall be of the
type customarily performed by a corporate operator similar to Lessee with
similar airframes and engines and, except to the extent such costs are the
responsibility of Lessee under paragraph (c)of this Section 4, Lessor shall pay
------------- ---------
the actual costs in connection with such inspections and/or overhaul.
(e) Condition of Interior and Airframe Exterior. Lessee
------------------------------------------------
agrees that on the return of the Aircraft, the interior and exterior shall be in
all respects clean and free of all items of personal property not belonging to
Lessor (subject to ordinary wear, tear and use of the Aircraft). Lessor shall
have the right to inspect the Aircraft upon or subsequent to the expiration of
the prevailing Lease Term, and to require that Lessee take, at Lessee's expense,
all steps necessary to comply with the requirements of this Section 4(e).
-------------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 12
(f) Injunctive Relief. The provisions of this Section 4 are
------------------ ---------
of the essence of this Lease, and upon application to any court of equity having
jurisdiction in the premises, Lessor shall be entitled to a decree against
Lessee requiring specific performance of the covenants of Lessee set forth in
this Section 4. For the avoidance of doubt, nothing in this Section 4(f)shall
---------- ------------
be deemed a waiver by Lessee of its right to defend or object to any claim.
(g) Survival. The provisions of Section 4(a) through
-------- -------------
(f)hereof and all of the obligations of Lessee thereunder shall survive the
expiration or earlier termination of this Lease, the prevailing Lease Term, and
the return of the Aircraft.
5. RENT.
----
(a) Rent. (i) Lessee covenants and agrees to pay to Lessor
----
the Rent as calculated under this Lease and as set forth in the Lease
Supplements or other agreement executed and delivered pursuant to this Lease
throughout the Lease Term, payable in consecutive installments, in advance, on
each Rent Payment Date during the Lease Term.
(i) With respect to the Basic Term, the Basic Rent
Factor shall be multiplied by the Aircraft Cost to determine the Basic Rent due
on the applicable Rent Payment Date, and such factor shall be adjusted upward or
downward and fixed on the applicable Acceptance Date as provided and evidenced
in the Lease Supplements. Such Aircraft Cost shall be determined in the
aggregate or with respect to each Aircraft in such manner as Lessor shall
determine appropriate in consultation with Lessee based on the actual Delivery
Dates of each Aircraft.
(ii) Renewal Rent (if applicable) shall be computed
pursuant to Section 8(b) hereof and paid in accordance with this Lease on the
-------------
applicable Rent Payment Dates.
(b) Supplemental Payments. (a) Lessee also agrees to pay to
----------------------
Lessor or to whosoever shall be entitled thereto all Supplemental Payments
promptly as the same shall become due and owing, and in the event of any failure
on the part of Lessee so to pay any such Supplemental Payment hereunder Lessor
shall have all rights, powers and remedies provided for herein or by law or
equity or otherwise in the case of nonpayment of Rent. Lessee also shall pay to
Lessor or to whosoever may be entitled thereto, on demand, as Supplemental
Payment to the extent permitted by applicable Law, interest at the Default Rate
as provided in Section 26 hereof.
-----------
(c) Method of Payment. If the date that any payment of Basic
-----------------
Rent is due is not a Business Day the payment of Basic Rent otherwise payable on
such date shall be payable on the next succeeding Business Day (unless that day
falls in the next calendar month, in which case such payment shall be made on
the first preceding Business Day). All payments of Rent required to be made by
Lessee to Lessor hereunder shall be made in same day funds in lawful money of
the United States, and shall be paid by Lessee by 12:00 noon (New York time) to
the account at the place of payment set forth on Schedule B attached hereto (or
----------
such other account at such other location as Lessor may designate in writing to
Lessee for such purpose). Time is of the essence in connection with the payment
of Rent
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 13
6. NET LEASE; LESSOR'S TITLE. (a) This Lease is a net lease and
--------------------------
Lessee acknowledges and agrees that Lessee's obligations hereunder, including,
without limitation, its obligations to pay all Rent payable hereunder, shall be
absolute and unconditional under any and all circumstances and shall be paid
without notice or demand and without any abatement, reduction, diminution,
setoff, withholding, defense, counterclaim or recoupment whatsoever, including,
without limitation, any of the foregoing due or alleged to be due to, or by
reason of, any past, present or future claims which Lessee may have against
Lessor, the Manufacturer or the manufacturer of any Engine or Part thereof, or
any other Person for any reason whatsoever; nor, except as otherwise expressly
provided herein, shall this Lease terminate, or the obligations of Lessee be
otherwise affected, by reason of any defect in the Aircraft or any such Part,
the condition, design, operation or fitness for use thereof, any damage to, or
any loss or destruction of, the Aircraft or any Part, unit or component thereof,
any Liens or rights of others with respect to the Aircraft or any such Part, any
prohibition or interruption of or other restriction against Lessee's use,
operation or possession of the Aircraft or any such Part, for any reason
whatsoever, or any interference with such use, operation or possession by any
Person or entity, or by reason of any failure by Lessor to perform any of its
obligations herein contained, or by reason of any other indebtedness or
liability, howsoever and whenever arising, of Lessor, or of Lessee to any other
Person, or by reason of any insolvency, bankruptcy or similar proceedings by or
against Lessor, or Lessee, or for any other reason whatsoever, whether similar
or dissimilar to any of the foregoing, any present or future law to the contrary
notwithstanding; it being the intention of the parties hereto that the Rent
payable by Lessee hereunder shall continue to be payable in all events and in
the manner and at the times herein provided, without notice or demand, unless
the obligation to pay the same shall be terminated pursuant to the express
provisions of this Lease. Lessee hereby waives, to the extent permitted by
applicable Law, any and all rights which it may now have or which at any time
hereafter may be conferred upon it, by statute or otherwise, to terminate,
cancel, quit or surrender this Lease except in accordance with the express terms
hereof. Without limiting any of Lessee's rights under the next sentence, each
payment of Rent made by Lessee to Lessor shall be final and Lessee will not seek
to recover any part of such payment from Lessor for any reason whatsoever,
except for gross negligence or manifest error. Nothing in this Section 6 shall
---------
be construed to prevent Lessee, after complying with the terms hereof, from
pursuing any claim it may have against Lessor or any other Person in such court
of law or otherwise as Lessee may deem appropriate.
(b) Title to the Aircraft shall at all times remain in Lessor and
at no time during the Lease Term shall title be vested in Lessee. Lessee shall
acquire no right, title or interest in or to the Aircraft, except the right to
use the same.
7. EARLY PURCHASE OPTIONS.
------------------------
Provided that this Lease has not been terminated and that no Default
or Event of Default shall have occurred and be continuing, Lessee shall have the
option (the "Early Purchase Option") on the Rent Payment Dates set forth in the
---------------------
Lease Supplements to purchase the Aircraft in accordance with this Section 7.
---------
If Lessee wishes to purchase all (but not less than all) of the Aircraft under
this Section 7, it shall deliver to Lessor written notice of its intent to
----------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 14
purchase the Aircraft (such purchase to be on an "as-is", "where-is" and "with
all faults" basis, without any warranty whatsoever except with respect to title
and freedom from Lessor Liens) not less than ninety (90) nor more than three
hundred and sixty (360) days prior to the Rent Payment Date on which Lessee
proposes to purchase the Aircraft. The purchase price (the "Early Purchase
--------------
Option Price") for the Aircraft shall be equal to the amount derived from the
--------------
percentages of Aircraft Cost set forth in the Lease Supplements (which shall in
all events be greater than 10% of Aircraft Cost). After delivery of such
notice, Lessee shall on or before the proposed purchase date deliver to Lessor,
in cash or other funds immediately available, the Early Purchase Option Price
plus applicable Taxes and other sums due under the Lease. If Lessee purchases
the Aircraft pursuant to the terms of this Section 7, upon receipt by Lessor of
---------
the Early Purchase Price and all other amounts owed by Lessee hereunder, Lessor
shall deliver to Lessee a ▇▇▇▇ of sale transferring title to the Aircraft from
Lessor to Lessee without representation or warranty (as contemplated above)
other than a warranty that since the Delivery Date, Lessor has not assigned,
sold or transferred in whole or in part its title to the Aircraft and that such
title is free and clear of all Lessor Liens. If Lessee fails or elects not to
deliver its notice to exercise its Early Purchase Option as required by this
Section 7(a), Lessee shall deemed to have waived such option and the Lease shall
------------
continue in full force and effect.
8. END OF LEASE RENEWAL ANDPURCHASE OPTION.
--------------------------------------------
(a) Purchase Option. Provided that this Lease has not been
----------------
terminated and that no Default or Event of Default shall have occurred and be
continuing, on the last day of the Basic Term, Lessee shall have the option to
purchase all (but not less than all) the Aircraft for a price (the "Purchase
--------
Option Price") equal to the Fair Market Value as determined in Section
-------------- -------
8(c)hereof. If Lessee wishes to purchase the Aircraft on the last day of the
----------
Basic Term, it shall deliver to Lessor written notice of its intent to purchase
the Aircraft (such purchase to be on an "as-is", "where-is" and "with all
faults" basis, without any warranty whatsoever except with respect to title and
freedom from Lessor Liens) not less than ninety (90) days, nor more than three
hundred sixty (360) days prior to the last day of the Basic Term. If Lessee
elects to purchase the Aircraft, Lessee shall deliver to Lessor the Purchase
Option Price, in cash (plus applicable Taxes and other sums due under the
Lease), on or before the last day of the Basic Term. Upon receipt of the
Purchase Option Price, Lessor shall deliver to Lessee a ▇▇▇▇ of sale
transferring title to the Aircraft from Lessor to Lessee without representation
or warranty (as contemplated above) other than a warranty that since the
Acceptance Date, Lessor has not assigned, sold or transfer-red in whole or in
part its title to the Aircraft, and that such title is free and clear of all
Lessor Liens. If Lessee fails to deliver the Purchase Option Price to Lessor on
the last day of the Basic Term, Lessee shall be deemed to have waived its right
to exercise this purchase option.
(b) Renewal Option. Provided that this Lease has not been
---------------
terminated and that no Default or Event of Default shall have occurred and be
continuing, on the last day of the Basic Term, Lessee shall have the option to
renew this Lease with respect to the Aircraft for the Renewal Term at a rent
equal to the "Fair Rental Value" determined under Section 8(c)hereof which rent
------------
shall be confirmed in writing in a Lease Supplement or an amendment to this
Lease executed and delivered by Lessor and Lessee on or before the last day of
the Basic Term. If Lessee wishes to renew this Lease on the last day of the
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 15
Basic Term, (i) Lessee shall deliver to Lessor written notice of its intent to
renew this Lease not less than one hundred eighty (180) days prior to the last
day of the Basic Term, and (ii) all terms of the Lease Documents shall continue
in effect without change except (A) Lessee shall pay the Renewal Rent, in
advance, commencing on the last day of the Basic Term and throughout the Renewal
Term and (B) the Casualty Loss Values shall be and remain equal to the Casualty
Loss Value in effect on and as of the last day of the Basic Term. If Lessee
fails to comply with the requirements of this Section 8(b), Lessee shall be
------------
deemed to have waived its right to exercise this renewal option.
(c) Determination of Fair Market Value and Fair Rental Value.
----------------------------------------------------------------
(i) "Fair Market Value" or "Fair Rental Value", as the case
------------------- -----------------
may be, shall be determined on the basis of and shall be equal in amount to the
value which would obtain in an arm's-length transaction between an informed and
willing buyer-user or lessee-user (other than a used aircraft dealer) and an
informed and willing seller or lessor under no compulsion to sell or lease, on
the assumptions that: the Aircraft (A) is being sold free and clear of all
Liens; (B) the Aircraft has been maintained in accordance with Section 10 of
----------
this Lease; and (C) the Aircraft is in the condition required upon the return of
the Aircraft under Section 4 of this Lease. In such determination, costs of
----------
return to the location designated by Lessor shall not be a deduction from such
value(s).
(ii) If the Lessor and Lessee have not agreed upon a
determination of the Fair Market Value or Fair Rental Value of the Aircraft
within thirty (30) days after one of the parties has requested such
determination, that determination shall be made by a certified independent
appraiser approved by both Lessor and Lessee, such approvals not to be
unreasonably withheld; and failing such approval in good faith within forty-five
(45) days, by Lessor alone may select such an appraiser. The appraiser shall be
furnished with a letter of instruction concerning the preparation of the
appraisal, together with a copy of this Lease and the Supplements hereto and, to
the extent available and relevant, related Lease Documents, purchase orders
and/or invoices. The appraiser shall be instructed to make such determination
within thirty (30) days following appointment. The determination made by the
appraiser shall be final and binding on both Lessor and Lessee. The Lessee
shall pay the fees and expenses of any appraisal.
9. USE OF AIRCRAFT; COMPLIANCE WITH LAWS. Lessee agrees that the
------------------------------------------
Aircraft will be used and operated only (a) in its original configuration set
forth in the Lease Supplements for which Lessee is duly authorized by the
Aeronautics Authority, (b) in the manner set forth in, and in accordance with,
the terms, conditions and provisions of the insurance policy or policies
providing the coverages specified in Section 16 hereof, (c) in the United States
----------
and (d) on Lessee's request, in other countries which are approved in writing by
Lessor prior to entry into such country. In no event shall Lessee use and
operate the Aircraft, or permit the Aircraft to be used and operated, for any
purpose for which the Aircraft is not designed or reasonably suitable, or in any
fashion that may subject the Aircraft to any Liens, other than Permitted Liens,
or in any area excluded from coverage by any such insurance policy or policies.
Lessee further agrees that, unless the Lessee shall have received the prior
written consent of the Lessor, the Aircraft will be used and operated solely in
the conduct of Lessee's and its Affiliates' business and in compliance with all
applicable Laws of any federal, state, local or foreign government or
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 16
Governmental Authority having jurisdiction with respect to the use, operation,
maintenance, condition, airworthiness and occupancy of the Aircraft, and the use
of any premises or facilities by the Aircraft, including without limitation,
those of the Aeronautics Authority. Lessee will not load, use, operate, hangar
or store the Aircraft, or permit the loading, using, operating, hangaring or
storing of the Aircraft, negligently, abusively, improperly or in violation of
this Lease or so as to void any of the insurance coverages respecting the
Aircraft. Lessee shall procure and maintain in effect all licenses,
certificates, permits, approvals and consents required by any Governmental
Authority (including, without limitation, the Aeronautics Authority) in
connection with the delivery, use, operation, maintenance, condition,
airworthiness and occupancy of the Aircraft, and the use of any premises or
facilities by the Aircraft. Except as otherwise expressly permitted by the
terms of this Lease, the Aircraft will at all times be and remain in the
possession and control of Lessee. Lessee will keep the Aircraft adequately
protected at all times when not in use, and Lessee will not remove or permit the
Aircraft to be removed from its home airport as specified in Schedule B attached
----------
hereto for periods in excess of thirty (30) days without first giving Lessor
written notice designating the contemplated location of the Aircraft and
obtaining Lessor's written approval thereof (which consent shall not be
unreasonably withheld or delayed) and Lessee will not permanently remove the
Aircraft, or permit the Aircraft to be permanently removed, from such home
airport without Lessor's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. The Aircraft shall be operated
only by duly licensed pilot operators currently certificated and qualified to
operate the Aircraft by the Aeronautics Authority and by any other authority
having jurisdiction therefor, and authorized by the terms of (in accordance with
the provisions and requirements of) the insurance policy or policies providing
the coverages specified in Section 16 hereof.
-----------
10. MAINTENANCE OF AIRCRAFT. Lessee, at its sole cost and expense,
-------------------------
shall cause the Aircraft to be maintained under the Maintenance Program, and
shall service, repair, maintain and overhaul the Aircraft so as to (a) keep the
Aircraft in as good operating condition as when inspected by Lessee on the
Delivery Date, ordinary wear and tear from proper use thereof excepted, and (b)
keep the Aircraft in such operating condition and state of maintenance as shall
be in accordance with prevailing industry standards for an aircraft of the same
type as the Aircraft and in accordance with the Aeronautics Authority and
Manufacturer approved maintenance program, but in no event less than such
operating condition and state of maintenance as may be necessary to satisfy the
safety, maintenance and airworthiness requirements of the Aeronautics Authority
and any other Governmental Authority, state or federal, foreign or domestic,
having jurisdiction with respect thereto. Lessee covenants that in no event
shall the Maintenance Program with respect to the Aircraft be inferior to, or of
less quality than, its maintenance program with respect to any other aircraft of
similar type owned or leased by Lessee. Lessee shall, at its cost and expense,
comply with all applicable service, maintenance, repair and overhaul
regulations, Airworthiness Directives and instructions of any Aeronautics
Authority and all appropriate maintenance, service, repair and overhaul manuals
and mandatory service bulletins published by the Manufacturer of the Airframes,
Engines, accessories, equipment and Parts installed on the Aircraft; provided
--------
that any mandatory service bulletins shall be performed at the next scheduled
inspection to be performed on the Aircraft (such scheduled inspection not to
exceed twelve (12) months from the previous scheduled inspection). All service,
inspection, overhauls, maintenance, directives, repairs and improvements with
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 17
respect to or affecting the Aircraft shall be made and performed only by
appropriately licensed, certificated and qualified personnel, in accordance with
applicable standards of any Aeronautics Authority or any other such Governmental
Authority having jurisdiction with respect thereto. At its own cost and
expense, Lessee shall maintain in English all Aircraft Documents and other
materials required by any Aeronautics Authority or by any other Governmental
Authority to be maintained in respect of the Aircraft. Lessee agrees that the
Aircraft will not be maintained, used or operated in violation of any applicable
Law of any government or Governmental Authority having jurisdiction or in
violation of any airworthiness certificate, license or regulations relating to
the Aircraft issued by any such authority.
11. REPLACEMENT OF PARTS; ALTERATIONS; MODIFICATIONS; AND ADDITIONS.
------------------------------------------------------------------
Lessee may, at its own cost and expense, remove in the ordinary course of
maintenance, service, repair, overhaul or testing, any Part or Engine, provided,
---------
however, that Lessee will, at its own cost and expense, replace such Part or
-------
Engine or cause such Part or Engine to be replaced, as promptly as practicable.
Lessee may, if essential to its operations, use or install temporary parts,
accessories, devices or other equipment on or in the Aircraft consistent with
its normal operations and applicable Law, provided that such temporary items
--------
shall be replaced with a Part or Engine in compliance with this Lease as soon as
possible. Any such Part, Engine, equipment or appliance shall immediately be
and become the property of Lessor and part of the Aircraft and subject to the
terms of this Lease. In case any part of the Aircraft is required to be altered
or modified, or any equipment or appliance is required to be altered, added,
replaced or modified on any Airframes or any Engine or in either case in order
to comply with the Laws or Governmental Authority having jurisdiction over the
Aircraft (a "Required Alteration") pursuant to Sections 9 or 10 hereof, Lessee
------------------- ----------------
agrees to make such Required Alteration at its own expense. Any such Required
Alteration shall immediately be and become the property of Lessor and part of
the Aircraft and subject to the terms of this Lease. All Parts or Engines
incorporated or installed in or attached to any Airframe or any Engine in
connection with servicing, repairing, maintaining and overhauling the Aircraft
pursuant to the requirements hereof (a "Replacement") shall be considered
-----------
accessions to such Airframe or the Engine or Enginess, as the case may be, and
shall immediately, without further act, be and become the property of Lessor and
part of the Aircraft and subject to the terms of this Lease. Lessee shall
purchase any Part or Engine to be replaced, altered or modified pursuant to this
Section 11 in the name of Lessor. Such Part or Engines shall have a value and
-----------
utility, useful life, maintenance status (assuming maintenance is then in
compliance with this Lease) and good operating condition at least equal to the
Parts or Engine(s) being replaced (without regard to temporary Parts or Engines
referred to above) and be free and clear of all Liens (other than Permitted
Liens). Lessee shall, upon the reasonable request by Lessor, deliver to Lessor
a legal opinion in form and substance satisfactory to Lessor stating that title
and ownership to such Required Alteration or Replacement have been duly conveyed
to Lessor under applicable Law and any security interest of Lessor therein has
been perfected under applicable Law. Lessee may, without the prior written
consent of Lessor, affix or install any Part on any Airframe or any Engine or
install any Engine on such Airframe, or make any improvement or addition thereto
other than a Required Alteration or Replacement (an "Improvement"); provided
----------- --------
that such Improvement is readily removable without causing material damage
(Lessee shall repair at its expense any damage caused by such removal) to such
Airframe or such Engine prior to the return of the Aircraft to Lessor or
impairing the value, utility or condition which such Airframe or Engine would
have had if such Improvement had not been so affixed or installed. Lessee may
at any time during the Lease Term remove such removable Improvement at its own
expense without causing at any time during the term material damage to any
Airframe or any Engine; provided that Lessee shall repair any damage caused by
--------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 18
such removal, and upon such removal title thereto shall, without further act,
vest in Lessee free and clear of all Lessor Liens. In addition, Lessee may,
without the prior written consent of Lessor, remove any Part that Lessee in the
proper conduct of its business determines to be obsolete or no longer suitable
or appropriate for use on any Airframe or any Engine; provided that no such
--------
removal materially impairs the value, utility, useful life or condition which
such Airframe or Engine would have had if such removal had not been made and
Lessee shall repair any damage caused by such removal. Lessee shall not modify
the Aircraft (including any Airframe and any Engine) without the prior written
consent of Lessor.
12. REGISTRATION; DELIVERY; RECORDATION; INSIGNIA AND INSPECTION.
-----------------------------------------------------------------
(a) Lessee shall cause the Aircraft to be registered and shall
maintain the registration of the Aircraft with the Aeronautics Authority
pursuant to all applicable Laws in the United States in the name of Lessor as
owner and shall not register or permit the registration of the Aircraft in any
other name or under the laws of any other country. Lessee shall promptly
provide Lessor with evidence of such registration, filing and recordation.
Lessee agrees promptly to furnish Lessor such information as may be required to
file any reports required to be filed by Lessor with any Governmental Authority
as a result of Lessor's ownership of the Aircraft.
(b) Upon the sale of the Aircraft to Lessor by Lessee, on or prior
to the Delivery Date, Lessor may accept title to the Aircraft and the ▇▇▇▇ of
Sale therefor from the Lessee. On the Delivery Date, Lessor and Lessee shall
inspect the Aircraft and Lessee shall execute the Certificate of Acceptance
evidencing Lessee's acceptance of the Aircraft and accept delivery of the
Aircraft at the location set forth in the Lease Supplement applicable to the
Delivery Date. On the Delivery Date, the Aircraft shall be registered with the
FAA in the name of Lessor, as owner.
(c) Lessee agrees, at its own cost and expense, to place such
insignia, plates or other identifications on any Airframe and, if practicable,
on any Engines indicating Lessor's title thereto and Lessor's interest therein,
as Lessor may from time to time reasonably request; and in any event Lessee will
cause to be affixed to and maintained on the Airframes, in a location adjacent
to and not less prominent than the airworthiness certificate for the Aircraft is
required to be displayed under FAA regulations, and on such Engine, a plate
bearing the following legend in English:
"PROPERTY OF AND LEASED FROM C.I.T. LEASING CORPORATION".
Except as above provided, Lessee will not allow the name of any Person to be
placed on any Airframe or on any Engine as a designation that might be
interpreted as a claim of ownership; provided, however, that the Lessee may
-------- -------
cause any Airframe to be lettered or otherwise marked in an appropriate manner
for convenience of identification of the interest of the Lessee therein.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 19
(d) At all reasonable times upon notice, Lessor shall, at Lessor's
cost, have the right to inspect the Aircraft and the Aircraft Documents of
Lessee pertaining thereto where located, which shall be at the home base airport
for the Aircraft. Lessor shall not however have any duty to make such
inspection and shall not incur any liability or obligation by reason of not
making any such inspection.
13. ASSIGNMENT AND SUBLEASING.
---------------------------
(a) By Lessee. Lessee shall not assign this Lease or any rights
----------
in or to the Aircraft or sublease or otherwise relinquish possession of any
Airframe or any Engine or install any Engine, or permit any Engine to be
installed, on any airframe other than such Airframe without the prior written
consent of Lessor, which consent shall not be unreasonably withheld, conditioned
or delayed; provided, however, that Lessee may, without the prior consent of
-------- -------
Lessor deliver any Airframe or any Engine to the Manufacturer or any other
applicable manufacturer thereof for testing or other similar purposes or to any
approved maintenance provider for service, repair, maintenance or overhaul work
on such Airframe or Engine or for alterations or modifications in or additions
to such Airframe or Engine to the extent required or permitted by the terms
hereof. Any attempted assignment or sublease not otherwise expressly permitted
hereby shall be void and of no effect, unless Lessor first shall have consented
thereto in writing. Lessor's consent to an assignment in any one or more
instances shall not impose any obligation upon Lessor to consent to any other or
further assignments. Lessor's consent to an assignment shall not release Lessee
from any obligations with respect to this Lease unless expressly so stated in
the written consent. Any sublease or assignment permitted by Lessor shall be
evidenced by documentation which shall be in form and substance reasonably
satisfactory to Lessor. Any administrative, credit, appraisal, legal or other
processing costs incurred by Lessor in connection with any sublease or
assignment or proposed sublease or assignment, including, without limitation,
costs to determine the creditworthiness and acceptability of any sublessee,
assignee and sublease or assignment, and legal fees and expenses incurred by
Lessor, shall be for the account of Lessee and payable on demand by Lessor as a
Supplemental Payment. Each such sublease and assignment and all rights and
benefits thereof, including, without limitation, any rents, casualty values and
other proceeds and products thereof, shall be fully assignable to Lessor without
consent of the sublessee or assignee.
(b) By Lessor. All rights of Lessor hereunder may be assigned,
----------
pledged, mortgaged, transferred or otherwise disposed of, either in whole or in
part (but subject always to the rights of Lessee under this Lease) to any
Person; provided that such assignment, pledge, mortgage, transfer or disposition
--------
shall in no way impair Lessee's rights and interests in the Aircraft and this
Lease. Lessor shall give Lessee notice of any such assignment, and Lessee shall
acknowledge receipt thereof in writing, and Lessee shall execute and deliver
such further documents and instruments in connection with such assignment as
shall be reasonably requested by Lessor.
14. LIENS. Lessee will not directly or indirectly create, incur,
-----
assume or suffer to exist any Lien on or with respect to the Aircraft, Airframe,
any Engine, or any Part thereof Lessor's title thereto, or any interest therein,
except (i) the respective rights of Lessor and Lessee as provided in this Lease,
(ii) the rights of Persons under agreements and arrangements to the extent
permitted by the terms of Sections 11 and 13, (iii) Lessor Liens, (iv) Liens for
------------------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 20
Taxes being contested by Lessee in good faith by appropriate proceedings in
accordance with Section 17(e) hereof, and (v) materialmen's, mechanics',
--------------
workmen's, repairmen's, employee's, storage or other like Liens arising in the
ordinary course of business, for amounts the payment of which is either not yet
delinquent or being contested by Lessee in good faith by appropriate proceedings
and where, in Lessor's opinion, there is no danger of the sale, forfeiture or
loss of the Aircraft, Airframe or any Engine or any Part, unit or component
thereof. Lessee, at its own expense, will promptly pay, satisfy and otherwise
take such actions as may be necessary to keep the Aircraft, all Airframes and
Engines free and clear of, and to duly discharge or eliminate or bond in a
manner satisfactory to Lessor, any such Lien not excepted above if the same
shall arise at any time. Lessee will notify Lessor in writing promptly upon
becoming aware of any tax or other Lien that shall attach to the Aircraft,
Airframe or any Engine, and of the full particulars thereof.
15. LOSS, DAMAGE OR DESTRUCTION.
------------------------------
(a) Risk of Loss, Damage or Destruction. Lessee hereby assumes
--------------------------------------
all risk of loss, damage, theft, taking, destruction, confiscation, requisition
or commandeering, partial or complete, of or to the Aircraft, however caused or
occasioned, such risk to be borne by Lessee with respect to the Aircraft from
and including the Delivery Date, and continuing until the Aircraft has been
returned to Lessor in accordance with the provisions of Section 4 hereof.
---------
Lessee agrees that no occurrence specified in the preceding sentence shall
impair, in whole or in part, any obligation of Lessee under this Lease,
including, without limitation, the obligation to pay Rent.
(b) Payment of Casualty Loss Value Upon an Event of Loss. If an
------------------------------------------------------
Event of Loss occurs with respect to the Aircraft or any Airframe at any time
after the date hereof and until the Aircraft shall have been returned to the
Lessor in accordance with Section 4 hereof, Lessee shall promptly give Lessor
---------
written notice thereof and shall, not later than the earlier of the date (a)
three (3) days following the date of receipt of proceeds of insurance with
respect to such Event of Loss and (b) on such date designated by Lessee
occurring on or before the date ninety (90) days after the date of such Event of
Loss, either (x) substitute an airframe for such Airframe in accordance with the
provisions of the succeeding paragraph of this Section 15(b)and substitute an
-------------
engine for the Engine, if any, with respect to which such Event of Loss occurred
on the date of substitution of said airframe pursuant to the terms of this
Lease, provided, that, notwithstanding anything herein to the contrary, Lessee
-------- ----
must either (A) substitute an airframe in accordance with this Section 15 for
----------
such Airframe on or prior to the last day of the calendar year on which such
Event of Loss occurs or (B) agree to indemnify Lessor for all costs, losses and
expenses (including but not limited to the loss of any tax benefits) incurred
directly or indirectly by Lessor in connection with the substitution of such
Airframe after the last day of the calendar year on which such Event of Loss
occurs, or (y) pay to Lessor on the Rent Payment Date next following the date of
such Event of Loss (i) all past-due Rent, and (ii) the Casualty Loss Value of
the Aircraft. Upon payment in full of the amount specified in Section 15(b)(y)
----------------
above, plus all Supplemental Payments then due and payable by Lessee hereunder,
(1) the obligation of Lessee to pay Basic Rent hereunder shall terminate, (2)
the prevailing Lease Term shall end, and (3) Lessor will transfer to Lessee,
without recourse, representation or warranty (except as set forth in Section 19
----------
hereof with respect to title and Lessor Liens), all of Lessor's right, title and
interest in and such Airframe and Engine (if any) with respect to which such
Event of Loss occurred, as well as all Lessor's right, title and interest in and
to any Engine constituting part of the Aircraft but not installed thereon when
such Event of Loss occurred.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 21
In the event of a substitution of an airframe pursuant to the preceding
paragraph, Lessee shall purchase in the name of Lessor or cause to be conveyed
to Lessor, as replacement for such Airframe, title to an identical type of
airframe, free and clear of all Liens other than any Permitted Liens and having
a value, utility and remaining useful life at least equal to, and being in as
good operating condition as, such Airframe, assuming that such Airframe was of
the value, utility and remaining useful life and in the condition and state of
repair required by the terms hereof immediately prior to the occurrence of such
Event of Loss, and if such Event of Loss also occurred with respect to any
Engine, Lessee shall duly convey or cause to be conveyed to Lessor, in
replacement for such Engine with respect to which such Event of Loss occurred,
title to one engine with respect to which such Event of Loss has occurred of the
same or an improved make, model and manufacturer suitable for installation and
use on the Airframe, free and clear of all Liens other than any Permitted Liens,
having a value and utility at least equal to, and being in as good operating
condition as, the Engine with respect to which such Event of Loss occurred,
assuming that the Engine was in the condition and state of repair required by
the terms hereof immediately prior to the occurrence of such Event of Loss. In
either case, as applicable, prior to or at the time of any such conveyance,
Lessee, at its own expense, will promptly (i) furnish Lessor with a ▇▇▇▇ of sale
in form and substance satisfactory to Lessor, with respect to such replacement
airframe or engine, as the case may be, (ii) cause supplements or amendments
hereto, in form and substance satisfactory to Lessor, subjecting such
replacement airframe or engine, as the case may be, to this Lease, to be duly
executed by Lessee, (iii) furnish Lessor with such evidence of the condition of
such replacement airframe or engine, as the case may be, and of compliance with
the insurance provisions of Section 16 hereof with respect to the replacement
----------
airframe or engine as Lessor may reasonably request, (iv) deliver to Lessor a
legal opinion in form and substance satisfactory to Lessor stating that the
title and ownership to such replacement airframe or engine have been conveyed to
Lessor under applicable Law and any security interest is protected under
applicable Law, and (v) take such other action as Lessor may reasonably request
in order that such replacement airframe or engine, as the case may be, be duly
and properly titled in Lessor and leased hereunder to the same extent as the
Airframe or the Engine replaced hereby. Upon full compliance by Lessee with the
terms of this paragraph, Lessor will transfer to Lessee without recourse,
representation or warranty, express or implied, of any nature whatsoever (except
as set forth in Section 19 hereof with respect to the title and Lessor Liens),
----------
and on an "as-is, where-is" basis, all of Lessor's right, title and interest in
and to the Airframe, Engine with respect to which such Event of Loss occurred,
and such Airframe or Engine shall thereafter no longer be an "Airframe" or an
"Engine" (as the case may be) as defined herein. Thenceforth, for all purposes
hereof, such replacement airframe or such replacement engine shall be deemed the
"Airframe" or an "Engine" (as the case may be) as defined herein and part of the
same Aircraft as was the Airframe or the Engine.
(c) Event of Loss with Respect to any Engine. Upon each
-----------------------------------------------
occurrence of an Event of Loss with respect to any Engine only and not to any
Airframe, Lessee shall give Lessor prompt written notice thereof and shall, as
promptly as possible and in any event within thirty (30) days after the
occurrence of such Event of Loss, duly convey or cause to be conveyed to Lessor,
as replacement for such Engine, title to another engine of the same or an
improved make, model and manufacture as the Engine with respect to which such
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 22
Event of Loss occurred, free and clear of all Liens other than any Permitted
Liens, and having a value and utility at least equal to, and being in as good
operating condition as the Engine with respect to which such Event of Loss
occurred, assuming that such Engine was in the condition and repair required by
the terms hereof immediately prior to the occurrence of such Event of Loss; and,
upon such conveyance, Lessee, at its own expense, will promptly (i) furnish
Lessor with a ▇▇▇▇ of sale, in form and substance satisfactory to Lessor, with
respect to such replacement engine, (ii) cause a supplement hereto, in form and
substance satisfactory to Lessor, subjecting such replacement engine to this
Lease, to be duly executed by Lessee, (iii) furnish Lessor with such evidence of
the condition of such replacement engine, and of compliance with the insurance
provisions of Section 16 hereof with respect to such replacement engine as
-----------
Lessor may reasonably request and, (iv) furnish Lessor with a legal opinion, in
form and substance satisfactory to Lessor, stating that title and ownership have
been duly conveyed to Lessor under applicable Law and as to such other matters
of applicable Law as Lessor may reasonably request, and (v) take such other
action as Lessor may reasonably request in order that title to such replacement
engine is duly conveyed to Lessor and that such replacement engine has been
validly subjected to this Lease to the same extent as the Engine replaced
thereby. Upon full compliance by Lessee with the terms of this paragraph (c),
Lessor will transfer to Lessee without recourse, representation or warranty,
express or implied, of any nature whatsoever (except as to title and freedom
from Lessor Liens) and on an "as-is, where-is" basis, Lessor's title to the
Engine with respect to which such Event of Loss occurred, and such Engine shall
thereafter no longer be an "Engine" as defined herein. Thenceforth, for all
purposes hereof, such replacement engine shall be deemed an "Engine" as defined
herein and part of the Aircraft.
(d) Application of Other Payments Upon Event of Loss. Any payments
------------------------------------------------
(including, without limitation, insurance proceeds) received at any time by
Lessor or by Lessee from any insurer, Governmental Authority or other party or
insurer (except Lessee) as a result of the occurrence of an Event of Loss will
be applied as follows: (i) (except as provided in Section 16 hereof) any such
----------
payments received at any time by Lessee shall be promptly paid to Lessor for
application pursuant to the following provisions of this Section 15(d); (ii) if
-------------
any such payments are received with respect to any Airframe (or the Airframe and
any Engine then installed thereon) that has been or is being replaced pursuant
to Section 15(b), so much of such payments as shall not exceed the cost of any
--------------
replacement Airframe, Engine to be purchased pursuant to Section 15(b)hereof
-------------
shall be applied for payment of (or to reimburse Lessee for its payment of) such
replacement Airframe, Engine; (iii) if any such payments are received with
respect to any Airframe (or the Airframe and any Engine then installed thereon)
that have not or are not being replaced pursuant to Section 15(b)so much of such
-------------
payments as shall not exceed the amount of the Casualty Loss Value required to
be paid by Lessee pursuant to Section 15(b)hereof shall be applied in reduction
-------------
of Lessee's obligation to pay such amounts, if not already paid by Lessee, or,
if already paid by Lessee, shall be applied to reimburse Lessee for its payment
of such amounts unless an Event of Default shall have occurred and be
continuing; (iv) if any such payments are received with respect to any Engine
that has been or is being replaced pursuant to Section 15(c), so much of such
payments as shall not exceed the cost of any replacement Engine or Engines to be
purchased pursuant to Section 15(c)hereof shall be applied for payment of (or to
-------------
Page 23
reimburse Lessee for its payment of) such replacement Engine or Engines, unless
an Event of Default shall have occurred and be continuing; and (v) the balance,
if any, of such payments remaining thereafter shall be paid to Lessee, unless an
Event of Default shall have occurred and be continuing.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 24
16. INSURANCE.
---------
(a) Public Liability and Property Damage Liability Insurance.
-------------------------------------------------------------
Lessee, at its own expense, shall maintain in effect comprehensive third party
aircraft liability insurance against bodily injury and property damage losses
arising from ground, flight and taxiing exposures, including, but not limited
to, passenger legal liability, cargo liability (with a sublimit of $300,000),
contractual liability and products liability insurance, during the Lease Term in
an amount not less than $30,000,000 for any one accident, or series of accidents
arising out of any one occurrence, with respect to the Aircraft and Items of
Equipment. Such policy shall include war and allied risks in accordance with
standard market practice. Any such liability insurance policy may be subject to
a deductible in an amount not to exceed the greater of $50,000 or five percent
(5%) of the insured hull value per occurrence or such lesser amount as shall be
equivalent to the industry standard for aircraft of the same type operated by
businesses similarly situated to Lessee. All such policies shall be maintained
in effect with insurers and/or reinsurers of recognized reputation and
responsibility, reasonably satisfactory to Lessor but in no event having a
rating in Best's Insurance Guide and Key Ratings of less than "A, VIII". Any
policies of insurance carried in accordance with this Section 16 and any
----------
policies taken out in substitution or replacement for any of such policies
shall: (i) name Lessor (including its successors, assigns, officers, directors,
agents and employees for purposes of this Section 16) and any other Indemnified
----------
Party (each sometimes called an "additional insured" in this Section 16),
------------------- ----------
together with any of their respective successors and assigns, as additional
insureds; (ii) provide that in respect of the interests of Lessor and any
Indemnified Party such policies of insurance shall insure Lessor and such
Indemnified Party regardless of any breach or violation of any warranty,
declarations or conditions contained in such policies by Lessee; (iii) provide
that if the insurers cancel such insurance for any reason whatever, or the same
is allowed to lapse for nonpayment of premium, or if there is any material
change in policy terms and conditions, such cancellation, lapse or change shall
not be effective until thirty (30) days after receipt by Lessor and any
Indemnified Parties of written notice from such insurers of such cancellation,
lapse or change (ten (10) days for non-payment of premiums and with respect to
war risk insurance, such shorter period of seven (7) days or as shall be
customary on the London market for such insurance in such area of the world);
(iv) provide that any additional insured, including Lessor nor any Indemnified
Party, shall have any responsibility for any premiums, commissions or calls in
connection with such insurance; (v) waive any right of the insurer to any
setoff, counterclaim or other deduction, whether by attachment or otherwise, in
respect of any liability of Lessor or any additional insured; (vi) provide that
the issuer shall waive any rights of subrogation against Lessor or any other
additional insured to the extent that Lessee has waived its rights in this
Agreement; (vii) include at a minimum the geographic limits, if any, of all
territories over which the Aircraft will be operated; (viii) provide that any
reinsurance policy required under this Agreement shall, to the extent
applicable, contain a standard "cut through clause" for the benefit of Lessor
and the other additional insureds; and (ix) provide that all payments shall be
made in United States Dollars. Each liability policy shall (A) be primary
without right of contribution from any other insurance which is carried by
Lessor and (B) expressly provide that all of the provisions thereof, except the
limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 25
(b) Insurance Against Loss or Damage to the Aircraft. Lessee, at
-------------------------------------------------
its own expense, shall maintain in effect with insurers and/or reinsurers of
recognized reputation and responsibility reasonably satisfactory to Lessor but
in no event having a rating in Best's Insurance Guide and Key Ratings of less
than "A, VIII": (i) all-risk ground and flight aircraft hull insurance covering
the Aircraft (including taxiing exposures); (ii) all-risk coverage with respect
to Engines (including any spare engine), Parts or Landing Gear while removed
from the Aircraft; and (iii) war risk and hijacking (including
political/non-political hijacking and acts of terrorism) coverages, including,
but not limited to, coverage against government confiscation, expropriations,
nationalization or seizure, including the government of registry (if other than
the United States). All such insurance shall be in full force and effect
throughout any geographical areas at any time over which the Aircraft will be
operated, shall be payable in Dollars in the United States and shall be in the
amount of the applicable Casualty Loss Value (based on the Aircraft Cost for
each set forth in the applicable Schedule to this Lease) which is the agreed
value between Lessor and Lessee. Any hull insurance carried in accordance with
this Section 16 shall not contain any provision for self-insured amounts or a
-----------
deductible, provided that such insurance may be subject to a deductible which
does not exceed $50,000 per occurrence. Each Engine, after removal, shall be
insured for not less than of the greater of (C) the applicable Casualty Loss
Value which is the agreed value between Lessor and Lessee and (D) the amount
necessary to obtain a replacement Engine meeting the requirement of Section
-------
15(c) hereof under a ground risks policy reasonably acceptable to Lessor. Any
----
policies carried in accordance with this Section 16: (1) shall be primary
----------
without right of contribution from any other insurance which is carried by each
additional insured, including Lessor or any Indemnified Party, with respect to
the Aircraft; (2) shall provide that if such insurance is canceled or materially
changed for any reason whatsoever, or the same is allowed to lapse for
non-payment of premium, such cancellation, change or lapse shall not be
effective as to each additional insured, including Lessor or any Indemnified
Party, for thirty (30) days (ten (10) days for non-payment of premiums and, with
respect to war risk insurance, seven (7) days or such shorter period as shall be
customary on the London market for such insurance in such area of the world)
after receipt by Lessor and any Indemnified Party of written notice from such
insurers of such cancellation or lapse or material change in policy terms and
conditions; (3) shall provide that partial losses of less than $50,000 shall be
adjusted by and payable to Lessee (so long as no Default or Event of Default has
occurred and is continuing hereunder), but that in the event of a greater loss
than $50,000 the entire insurance shall be adjusted by Lessee and Lessor and
payable as provided below; (4) shall provide that in respect of the interest of
each additional insured, including Lessor or any Indemnified Party, in such
policies the insurance shall insure Lessor or such Indemnified Party regardless
of any breach or violation of any warranties, declarations or conditions
contained in such policies by Lessee or any other Person; (5) shall waive any
rights of set off, counterclaim or deduction, whether by attachment or
otherwise, and all rights of subrogation against Lessor, and any Indemnified
Party, together with their respective successors, assignors, agents, officers,
employees and servants; (6) shall provide that neither Lessor nor any additional
insured or other Indemnified Party shall have any liability for any premiums,
commission or calls in connection with such insurance; (7) to the extent of
reinsurance, if applicable, includes a cut-through provision permitting
additional insured including Lessor and any Indemnified Party to file claims and
to obtain payment directly from the reinsurers under the reinsurance policies;
and (8) subject to clause (3) above, shall name Lessor as sole loss payee for
----------
the account of all interests with respect to all insurance proceeds up to the
amount of the Casualty Loss Value.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 26
Lessor is not under any duty or obligation to verify the existence or
adequacy of any insurance.
Lessee may obtain or maintain additional hull insurance on the
Aircraft, over and above the Casualty Loss Value hereunder, provided that it
does not adversely affect the coverage required to be maintained hereunder; and
Lessee shall be the sole loss payee with respect to such insurance.
(c) Application of Proceeds in an Event of Loss of Aircraft. All
--------------------------------------------------------
insurance payments received from policies maintained by Lessee as the result of
the occurrence of an Event of Loss shall be applied as follows: If such
payments are received with respect to any Airframe and the Engines installed
thereon, Lessor and Lessee shall proceed diligently and cooperate fully with
each other in the recovery of any and all proceeds of insurance applicable
thereto, and such insurance proceeds shall be paid to Lessor in an amount equal
to the Casualty Loss Value.
(d) Application of Proceeds in the Absence of an Event of Loss.
-------------------------------------------------------------
As between Lessor and Lessee, insurance payments with respect to any property
damage to the Aircraft or any Part thereof not constituting an Event of Loss
with respect thereto will be applied in payment repairs or for replacement
property in accordance with the terms of Sections 10 and 11 hereof, if not
------------------
already paid by Lessee (or to reimburse Lessee for such repairs or replacements
already paid by Lessee), and any balance remaining after compliance with such
Sections with respect to such loss shall be paid to Lessee or as otherwise
directed by Lessee. Any amount which is payable to Lessee under this Section 16
----------
shall not be paid to Lessee if at the time of such payment a Default or an Event
of Default shall have occurred and be continuing, but shall be held by Lessor as
security for the obligations of Lessee under this Lease and such amount shall be
paid to Lessee at such time as there no longer exists any Default or Event of
Default.
(e) Reports, Etc. Lessee's insurance underwriters shall be
--------------
required to advise Lessor in writing promptly of any default in the payment of
any premium and of any other act or omission on the part of Lessee which might
invalidate or render unenforceable, in whole or in part, any insurance on the
Aircraft. Not less than two (2) Business Days prior to the Delivery Date, and
thereafter on or prior to each renewal or replacement by Lessee of the insurance
required hereby, Lessee will furnish to Lessor one or more original certificates
each executed and delivered by an insurance underwriters appointed by Lessee and
approved by Lessor (which approval shall not be unreasonably withheld) and other
proper evidence of endorsement of Lessor on the insurance policies required to
be maintained under this Section 16, which together shall describe in reasonable
----------
detail insurance carried on the Aircraft and shall certify that the insurance
then maintained on the Aircraft complies with the terms of this Lease. Lessee
will cause each such approved insurance underwriters to agree to advise Lessor
in writing at least thirty (30) days (seven (7) days or such lesser period as
may from time to time be applicable in the case of any war risk and allied
perils coverage) prior to the non-renewal, termination or cancellation by the
underwriters for any reason (including, without limitation, failure to pay the
premium therefor) of any such insurance or as soon as possible in respect of
"non-renewal" or automatic termination for war risk. Not less than five (5)
Business Days before the expiration or termination date of any insurance
required hereunder, Lessee will provide Lessor with telexed or telecopied
confirmation from Lessee's insurance brokers certifying that renewal
certificates of insurance evidencing the renewal or replacement of such
insurance pursuant to the provisions of this Section 16 will be issued on the
----------
termination date of the prior certificate of insurance coverage. Within seven
(7) days after such renewal, Lessee will furnish to Lessor a certificate of such
insurance coverage from such insurance broker.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 27
(f) Lessor's Additional Insurance. Lessor, at its option and at
-------------------------------
its sole expense, may obtain insurance with respect to the Aircraft; provided,
--------
that no such insurance shall have the effect of suspending, impairing,
defeating, invalidating or rendering unenforceable or reducing, in whole or in
part, the coverage of or the proceeds payable under any insurance required to be
provided and maintained by Lessee pursuant to this Section 16. Lessee shall
----------
have no right to any proceeds of any insurance policies maintained by Lessor.
(g) Lessee's Additional Insurance. Lessee, at its option and at
-------------------------------
its sole expense, may obtain additional insurance with respect to the Aircraft;
provided, that no such insurance shall have the effect of suspending, impairing,
--------
defeating, invalidating or rendering unenforceable or reducing, in whole or in
part, the coverage of or the proceeds payable under any insurance required to be
provided and maintained pursuant to this Section 16. Lessor shall have no right
----------
to any proceeds of any insurance policies maintained by Lessee except as
provided in the Lease Documents.
17. GENERAL TAX INDEMNIFICATION.
-----------------------------
(a) Lessee agrees that all payments by Lessee in connection with
the transactions contemplated by this Lease shall be free of all withholdings of
any nature whatsoever (including, without limitation, withholding taxes,
monetary transfer fees, or similar taxes and charges), and in the event any
withholding is required, Lessee shall pay the same together with such additional
amount as is required so that each such payment shall be, under any
circumstances and in any event, in the amount as set forth or referred to
herein. Lessee shall pay, and shall hold each Tax Indemnitee harmless from
liability for, any and all sales, use, business, gross or net income, personal
property, license, documentation, transfer, fuel, leasing, occupational, value
added, excess profits, excise, gross or net receipts, franchise, stamp,
environmental and other taxes, levies, imposts, withholdings, charges, fees,
assessments or duties of any nature, together with any penalties, fines,
additions to tax or interest thereon imposed by any Federal, state or local
government or taxing authority in the United States, or by any foreign country
or any taxing authority or subdivision thereof ("Taxes"), upon or with respect
-----
to, based upon or measured by the Aircraft or any Part thereof or interest
therein, or the manufacture, purchase, financing, refinancing, ownership,
delivery, leasing, subleasing, registration, possession, use, location,
operation (including, without limitation, landing and take-off), return,
replacement, storage, transfer of title, acceptance or other disposition
thereof, or the rentals, receipts or earnings arising therefrom (including,
without limitation, the Rent) or otherwise with respect to or in connection with
the transactions contemplated by this Lease or the other Operative Documents,
and any out-of-pocket costs and expenses attributable to any of the foregoing
incurred by any Tax Indemnitee; provided, however, that Lessee shall have not
-------- -------
such obligation with respect to (i) Taxes (other than sales, use, rental, value
added and similar taxes) imposed by the Federal government of the United States
upon or with respect to, based on or measured by, the net income of any Tax
Indemnitee; (ii) Taxes which are net income, capital, net worth, franchise, or
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 28
similar conduct of business taxes which are imposed on any Tax Indemnitee by any
state or local taxing authority in the United States; (iii) Taxes imposed as a
result of a voluntary transfer or other disposition by Lessor of the Aircraft or
any Part thereof or interest therein, unless such transfer or other disposition
occurs by reason of exercise of Lessor's remedies under this Lease after
occurrence of a Default or an Event of Default; (iv) Taxes imposed as a direct
and primary result of any Tax Indemnitee's gross negligence or willful
misconduct; and (v) Taxes imposed as a result of Lessor's failure to file any
Tax report or return in a timely or proper manner (provided Lessee has complied
with Section 17(b)hereof).
--------------
(b) Reports. In case of any report or return to be made with
-------
respect to any obligation of Lessee under this Section 17 or arising out of this
----------
Section 17, Lessee will either (i) make such report or return in such manner as
-----------
will show the ownership in Lessor of the Aircraft, and send a copy of such
report or return to the relevant Tax Indemnitee or (ii) notify such Tax
Indemnitee of such requirement and make such report or return in such manner as
shall be satisfactory to such Tax Indemnitee. Lessee shall, at its expense,
duly file all required reports and returns respecting all Taxes paid or
indemnified against by Lessee pursuant to Section 17(a)to the extent Lessee is
-------------
permitted to do so; provided, however, that if the same must be filed by an Tax
-------- -------
Indemnitee, Lessee will advise such Tax Indemnitee of the necessity of filing
the same and, in sufficient time before the same are due, furnish such Tax
Indemnitee with a completed copy thereof and funds in the amount required to be
submitted, together with any additional information and records relating thereto
as such Tax Indemnitee may reasonably request. Lessee shall hold such Tax
Indemnitee harmless from and against any liabilities, obligations, losses,
damages, penalties, claims, actions, suits and costs arising out of any
insufficiency or inaccuracy in any information in such report or return filed or
supplied by Lessee. Lessee shall make available to such Tax Indemnitee such
other information and records as are maintained by Lessee regarding the
location, operation or use of the Aircraft. If any Tax Indemnitee reasonably
requests additional information relating to any Part or the operation, use or
location thereof, Lessee shall make available such other information and records
as it maintains in the course of its business.
(c) After-Tax Nature of Indemnity. (i) Lessee agrees that, with
------------------------------
respect to any indemnity payment under this Lease, including, without
limitation, this Section 18, such indemnity payment shall include any amount
-----------
necessary to hold each Tax Indemnitee harmless on an after-tax basis from all
Taxes required to be paid by such Tax Indemnitee with respect to such indemnity
payment under the laws of any Federal, state or local government or taxing
authority in the United States, or under the laws of any taxing authority or
subdivision of a foreign country.
(ii) For purposes of this Section 17(c), calculations made on
-------------
an after-tax basis shall be made assuming the maximum statutory rates applicable
to the recipient for the relevant year, after taking into account deductions
attributable to the imposition of other taxes (such as state and local taxes),
which would similarly be calculated on the basis of the maximum statutory rates
for which such deduction was available for the applicable year.
(d) Payment of Taxes and Indemnities. Lessee shall, to the extent
--------------------------------
permissible, pay all Taxes directly and shall reimburse each Tax Indemnitee for
all Taxes paid or payable by such Tax Indemnitee within ten (10) days of receipt
of written notice that reimbursement for such amount is due. Lessee shall pay
all indemnities and other amounts due hereunder within five (5) days of receipt
of written notice that reimbursement for such amount is due.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 29
(e) Contest. If a written claim is made against any Tax
-------
Indemnitee for any Taxes for which Lessee is responsible under Section
-------
17(a)hereof, such Tax Indemnitee shall promptly notify Lessee; provided, that,
---- --------
the failure to provide such notice shall not affect Lessee's obligations
hereunder to such Tax Indemnitee unless such failure shall preclude the contest
of such claim. If reasonably requested by Lessee in writing within 30 days
after such notification, and upon determination that the amount of the claim
exceeds $25,000 and that the action to be taken will not, in the sole opinion of
Lessor, result in any material danger of sale, forfeiture or loss of, or the
creation of any Lien on the Aircraft or any interest therein (or in the event of
such material danger of sale, forfeiture, loss or lien, Lessee shall have not
obtained a bond satisfactory to Lessor in Lessor's sole discretion), such Tax
Indemnitee shall upon receipt of an indemnity reasonably satisfactory to it at
the sole expense of Lessee (including, without limitation, all reasonable costs,
expenses, losses, legal and accountant's fees and disbursements, penalties and
interest) in good faith contest the validity, applicability or amount of such
Taxes by in such Tax Indemnitee's sole discretion (i) resisting payment thereof;
(ii) not paying the same except under protest, if protest is necessary and
proper; and (iii) if payment is made, using reasonable efforts to obtain a
refund thereof in appropriate administrative or judicial proceedings; provided,
--------
however, that such Tax Indemnitee shall not be required to take any action to
-------
contest a claim unless (x) Lessee provides an opinion of tax counsel of
nationally recognized standing selected by Lessee and reasonably satisfactory to
such Tax Indemnitee, to the effect that there is a reasonable basis under the
standard set forth in ABA Formal Opinion 85-352 or any successor thereto in law
and fact for contesting such proposed adjustment (which opinion shall be
obtained at Lessee's sole cost and expense), (y) in the event that the subject
matter of the contest is of a continuing nature and has previously been decided
adversely pursuant to the contest provisions of this Section 17(e)by the highest
-------------
court to which an appeal was taken, there has been a change in the law
(including, without limitation, amendments to statutes or regulations,
administrative rulings and court decisions) after such claim shall have been so
previously decided and such Tax Indemnitee shall have received an opinion of
independent tax counsel selected by such Tax Indemnitee, which opinion shall be
obtained at Lessee's sole expense, to the effect that, as a result of such
change it is (at least) as likely as not that the position which such Tax
Indemnitee or Lessee, as the case may be, will assert in any contest of such Tax
would prevail, and (z) prior to the commencement of any contest, Lessee shall
have delivered to such Tax Indemnitee a written acknowledgment of its obligation
to fully indemnify Lessor to the extent the contest is not successful. Any
contest required pursuant to the preceding sentence shall, at the option of such
Tax Indemnitee, be conducted by such Tax Indemnitee or Lessee in the name of
Lessee or such Tax Indemnitee. If any contest involves payment of the Tax in
question, Lessee shall either make such payment directly to the appropriate
authority or advance to such Tax Indemnitee sufficient funds (on an
interest-free basis) to make such payment.
If a Tax Indemnitee shall obtain an actual refund or credit of all or
any part of any Taxes paid by Lessee, such Tax Indemnitee shall pay to Lessee
the amount of such refund or credit (taking into account any tax savings
resulting therefrom), net of expenses not already paid or reimbursed by Lessee,
and any interest fairly attributable thereto plus an amount equal to the Tax
savings realized by such Tax Indemnitee as a result of any payment to Lessee
pursuant to this paragraph; provided, however, that such amount shall not be
-------- -------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 30
payable before Lessee makes all payments and indemnities to such Tax Indemnitee
then due hereunder; and, provided further, however, that the aggregate amount of
-------- ------- -------
all payments with respect to any Taxes made by such Tax Indemnitee pursuant to
this sentence shall not exceed the aggregate amount of all payments made by
Lessee to such Tax Indemnitee pursuant to this Section 17 with respect to such
----------
Taxes.
Notwithstanding anything to the contrary herein, (x) if a Default or
Event of Default shall have occurred and be continuing, Lessee shall not be
entitled, and no Tax Indemnitee shall be obligated, to commence or to continue
any contest hereunder and (y) in no event shall a Tax Indemnitee be required to
appeal an adverse judicial decision to the United States Supreme Court.
Lessee shall not be deemed to be in default under any of the
indemnification provisions of this Section 17 while it or a Tax Indemnitee
-----------
diligently prosecutes such contest pursuant to this Section 17(e).
--------------
Nothing contained in this Section 17(e)shall require any Tax
--------------
Indemnitee to contest or permit Lessee to contest a claim which it would
otherwise be required to contest pursuant to this Section 17(e) if such Tax
Indemnitee shall waive payment by Lessee of any amount that might otherwise be
payable by Lessee under Section 17(a)by way of indemnity in respect of such
--------------
claim.
(f) Affiliated Group. The terms "Lessor" and "Tax Indemnitee" for
----------------
purposes of this Section 17 shall include the affiliated group of corporations
----------
and each member thereof (within the meaning of Section 1504 of the Code) of
which Lessor or a Tax Indemnitee is or shall become a member if such group shall
file a consolidated United States Federal income tax return.
(g) Survival. The provisions of this Section 17 shall survive the
-------- ----------
expiration or termination of this Lease.
18. GENERAL INDEMNITIES. (a) Lessee hereby assumes liability for, and
-------------------
does hereby agree, whether or not any of the transactions contemplated hereby
are consummated, to indemnify, protect, save, defend, and hold harmless each of
Lessor and its respective officers, directors, stockholders, successors,
assigns, agents and servants (but excluding the Manufacturer), (each such party
being herein, for purposes of this Section 18, called an "Indemnified Party") on
-----------------
an after-tax basis from and against any and all obligations, fees, liabilities,
losses, damages, penalties, claims, demands, actions, suits, judgments, costs
and expenses, including legal expenses, of every kind and nature whatsoever
("Loss") imposed on, incurred by, or asserted against any Indemnified Party, in
------
any way relating to or arising out of (a) the manufacture, construction,
ordering, purchase, acceptance or rejection, ownership, titling or retitling,
registration or re-registration, delivery, leasing, releasing, possession, use,
operation, maintenance, storage, removal, return, sale or other disposition of
the Aircraft, or any portion thereof (including without limitation any Airframe
and any Engine) and, including, without limitation, any of such as may arise
from (i) loss or damage to any property or death or injury to any person, (ii)
patent or latent defects in the Aircraft (whether or not discoverable by Lessee
or any Indemnified Party), (iii) any claims based on strict liability in tort,
and (iv) any claims based on patent, trademark or copyright infringement, or (b)
this Lease, the Operative Documents or any failure on the part of Lessee to
perform or comply with any of the terms of this Lease or the other Operative
Documents to which it is a party.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 31
(b) Notwithstanding the preceding paragraph (a), Lessee shall not
be obligated to make any payment by way of indemnity to any Indemnified Party in
respect of (i) any Loss of such Indemnified Party which results from or arises
out of the gross negligence or willful misconduct of such Indemnified Party,
(ii) any Loss arising out of and relating to the period after the return of the
Aircraft in accordance with the terms of this Lease, (iii) any Loss which arises
from the creation or existence of Lessor Liens, (iv) any Loss which relates to
any sale, pledge, mortgage, assignment, transfer or other disposition (whether
voluntary or involuntary) by such Indemnified Party of any interest of such
Indemnified Party in the Aircraft, any Airframe, any Engine or any Part other
than a transfer or disposition in connection with an Event of Default under
Section 23 hereof, the exercise of remedies pursuant to Section 24 hereof or a
----------- ----------
transfer or disposition pursuant to Section 8 hereof effected solely by Lessor,
---------
(v) any Tax (it being understood that Section 17 hereof and the Tax Indemnity
Agreement provide for Lessee's liability with respect to Taxes), and (vi) any
Loss which constitutes expenses that such Indemnified Party shall have expressly
agreed in this Lease or any agreement relating hereto or thereto by which such
Indemnified Party is expressly bound to bear without right of reimbursement.
(c) Lessee shall give each Indemnified Party prompt notice of any
occurrence, event or condition known to Lessee as a consequence of which any
Indemnified Party may be entitled to indemnification hereunder. Lessee shall
forthwith upon demand of any such Indemnified Party reimburse such Indemnified
Party for amounts expended by it in connection with any of the foregoing or pay
such amounts directly. If any Indemnified Party shall obtain a repayment of any
indemnified amount paid by Lessee, such Indemnified Party shall promptly pay to
Lessee the amount of such repayment together with the amount of any interest
received by such Indemnified Party on account of such repayment.
(d) Subject to the provisions of Section 18(c)hereof, Lessee shall
-------------
pay directly to each Indemnified Party all amounts due under this Section 18
----------
within five (5) days of the receipt of written notice by Lessee from such
Indemnified Party that such payment is due.
(e) On the Expiration Date, Lessee shall be subrogated to an
Indemnified Party's rights in any matter with respect to which Lessee has
actually reimbursed such Indemnified Party for amounts expended by it or has
actually paid such amounts directly pursuant to this Section 18. In case any
----------
action, suit or proceeding is brought against any Indemnified Party in
connection with any claim indemnified against hereunder, such Indemnified Party
will, promptly after receipt of notice of the commencement of such action, suit
or proceeding, notify Lessee thereof, enclosing a copy of all papers served upon
such Indemnified Party. Lessee may, and upon such Indemnified Party's request
will, at Lessee's expense, resist and defend such action, suit or proceeding, or
cause the same to be resisted or defended by counsel selected by Lessee and
reasonably satisfactory to such Indemnified Party and in the event of any
failure by Lessee to do so, Lessee shall pay all costs and expenses (including,
without limitation, reasonable attorney's fees and expenses) incurred by such
Indemnified Party in connection with such action, suit or proceeding. Lessor
agrees that no claim which is indemnifiable hereunder shall be compromised or
settled without the prior written consent of Lessee, which consent shall not be
unreasonably withheld.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 32
(f) Lessee agrees that, with respect to any payment or indemnity
hereunder, such payment or indemnity shall include any amount necessary to hold
the Indemnitee harmless on an after-tax basis from all Taxes required to be paid
by such Indemnified Party with respect to such payment or indemnity under the
laws of any Federal, state or local government or Taxing Authority in the United
States, or under the laws of any Taxing Authority or governmental subdivision of
a foreign country. For purposes of this Section 18(f), calculations made on an
-------------
after-tax basis shall be made assuming the maximum statutory rates applicable to
the recipient for the relevant year, after taking into account deductions
attributable to the imposition of other taxes (such as state and local taxes),
which would similarly be calculated on the basis of the maximum statutory rates
for which such deduction was available for the applicable year.
(g) The indemnities contained in this Section 18 shall continue in
----------
full force and effect notwithstanding the expiration or other termination of
this Lease, and are expressly made for the benefit of and shall be enforceable
by each Indemnified Party.
19. NO WARRANTIES. LESSOR NOT BEING THE MANUFACTURER OR VENDOR OF THE
--------------
AIRCRAFT, ANY AIRFRAME OR ANY ENGINE OR ANY PART, MAKES NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING,
WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE AIRCRAFT, ANY AIRFRAME OR ANY
ENGINE, ITS MERCHANTABILITY, DURABILITY, SUITABILITY OR ITS FITNESS FOR ANY
PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT,
AIRFRAME OR ANY ENGINE, OR THE CONFORMITY OF THE AIRCRAFT, ANY AIRFRAME OR ANY
ENGINE TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE ORDER RELATING
THERETO, AND LESSOR HEREBY DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY (WHICH
DISCLAIMER LESSEE HEREBY ACKNOWLEDGES). WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, LESSOR SHALL NOT BE LIABLE OR RESPONSIBLE FOR ANY DEFECTS, EITHER
PATENT OR LATENT (WHETHER OR NOT DISCOVERABLE BY LESSEE), IN THE AIRCRAFT, ANY
AIRFRAME OR ANY ENGINE, OR FOR ANY DIRECT OR INDIRECT DAMAGE TO PERSONS OR
PROPERTY RESULTING THEREFROM, OR FOR LESSEE'S LOSS OF USE OF THE AIRCRAFT,
AIRFRAME OR ANY ENGINE OR FOR ANY INTERRUPTION IN LESSEE'S BUSINESS CAUSED BY
LESSEE'S INABILITY TO USE THE AIRCRAFT, AIRFRAME OR ANY ENGINE FOR ANY REASON
WHATSOEVER. NOTWITHSTANDING THE FOREGOING, Lessor represents, warrants and
covenants to Lessee that (i) it has full power and authority to enter into and
perform this Lease and the other Lease Documents to which it is a party, (ii)
the execution, delivery and performance of this Lease and the other Lease
Documents to which it is a party have been duly authorized by all necessary
action on the part of Lessor, do not require any stockholder approval or
approval or consent of any trustee or holders of any debt or other obligations
of Lessor, and do not contravene any provision of any applicable Law,
governmental rule, regulation or order, the by-laws or other constituent
documents of Lessor or any indenture, mortgage, contract or other material
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 33
agreement or instrument to which Lessor is a party or by which it or any of its
assets may be bound or affected, (iii) this Lease constitutes the valid and
legally binding obligation of Lessor enforceable against Lessor in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or in equity), (iv) on the Delivery Date it
will have such good and marketable title to the Aircraft as it receives from the
Manufacturer free and clear of all Lessor Liens and (v) so long as Lessee
performs each and every covenant to be performed by it hereunder, Lessor or
anyone claiming by or through Lessor shall not interfere with Lessee's quiet
enjoyment and use of the Aircraft. So long and only so long as no Event of
Default shall have occurred and be continuing, and so long and only so long as
the Aircraft shall be subject to this Lease and Lessee shall be entitled to
possession of the Aircraft hereunder, (i) Lessor authorizes Lessee, at Lessee's
expense, to assert for Lessor's account, all rights and powers of Lessor under
any manufacturer's, vendor's or dealer's warranty with respect to the Aircraft,
any Airframe, any Engine, and any part thereof, and (ii) Lessor hereby, to the
extent permitted by any such manufacturer's, vendor's or dealer's warranty,
assigns such warranty to Lessee, and Lessee may in its own name seek to enforce
the same against any manufacturer, vendor or dealer; provided, however, that
-------- -------
Lessee shall indemnify, protect, save, defend and hold harmless Lessor from and
against any and all claims, and all costs, expenses, damages, losses and
liabilities incurred or suffered by Lessor in connection therewith, as a result
of, or incident to, any action by Lessee pursuant to the foregoing authorization
or assignment.
20. FINANCIAL INFORMATION; NOTICE
----------------------- ------
(a) From the date of execution of this Lease and during the Lease
Term, Lessee agrees to furnish to Lessor such information as Lessor may
reasonably request at any time concerning the Lessee and its affairs, including,
without limitation, (i) all reports and filings made with any Governmental
Authority pursuant to the Securities Act of 1933, as amended, and the Securities
and Exchange Act of 1934, as amended, (ii) within ninety (90) days after the end
of each fiscal quarter, all consolidated quarterly unaudited financial
statements of Lessee and its subsidiaries (including balance sheets and
statements of cash flows) prepared by Lessee in accordance with GAAP and
certified by Lessee's chief financial officer as fairly presenting the financial
condition of Lessee and its subsidiaries as of the end of such quarterly period,
and (iii) all audited consolidated financial statements of Air Methods
Corporation ("Air Methods"), the ultimate parent of Lessee as at such end of
------------
each fiscal year certified by Air Methods' independent public accountants of
recognized standing (all of the foregoing to be in form, substance and scope,
and with satisfactory unqualified opinions of Air Methods' accountants, as
Lessor may reasonably require).
(b) Lessee shall promptly, and in any event within ten (10) days, give
Lessor notice of any Default or Event of Default and actions Lessee intends to
take in relation thereto.
21. CONDITIONS PRECEDENT. The obligation of Lessor to purchase from
---------------------
Lessee and lease the Aircraft to Lessee is subject to the following conditions
precedent having been complied with to the satisfaction of, or waived in writing
by, Lessor on or before the applicable Acceptance Date (each document,
instrument, certificate, opinion or other paper referred to below to be in form
and substance reasonably satisfactory to Lessor):
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 34
(a) The following documents set forth in this Section 21(a)shall
-------------
(x) have been duly authorized, executed and delivered by the respective party or
parties thereto on the Delivery Date; (y) an executed copy of each of the
following documents shall have been delivered to Lessor on the Delivery Date;
and (z) be in full force and effect on all Acceptance Dates:
(i) a certified copy of the Purchase Agreement and related
documents;
(ii) this Lease;
(iii)of the Assignment of Purchase Agreement together with the
related consent executed by the Seller and MASI;
(iv) a legal opinion of each of (A) special FAA counsel to
Lessor, and (B) counsel to Lessee;
(v) a Lease Supplement appropriately completed (and Lessor shall
possess the "original" thereof);
(vi) the Tax Indemnity Agreement;
(vii) Aeronautical Bills of Sale executed by the Lessee in favor
of Lessor with respect to each Aircraft;
(viii) FAA form Applications for Registration executed by Lessor
with respect to each Aircraft;
(ix) the Warranty ▇▇▇▇ of Sale executed by the Seller;
(x) the Certificate of Acceptance and all acceptance documents
relating to each Aircraft to be executed and delivered in connection with the
Purchase Agreement;
(xi) UCC-1 Financing Statements executed by Lessee in favor of
the Lessor and filed in the appropriate jurisdictions with appropriate agencies
in the State of Delaware, the State of Missouri, the State of Illinois, the
State of Colorado and other states reasonably requested by Lessor;
(xii) to the extent requested by Lessor, evidence of the
acceptance by CT Corporation, New York, New York, of its appointment as agent to
receive service of process in New York on behalf of Lessee;
(xiii) such agreements regarding the payment of proceeds
constituting the Aircraft Cost as Lessor may request;
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 35
(xiv) an amendment to the Prior Lease Documents providing for
cross defaults to the Lease Documents (as defined herein) and certain technical
corrections in form and substance satisfactory to Lessor and Lessee; and
(xv) such other documentation as Lessor may reasonably require.
(b) Lessor shall have received the following:
(i) on the Delivery Date, evidence satisfactory to Lessor
confirming that this Lease has been duly filed with the FAA;
(ii) on each Acceptance Date, copies of all necessary consents or
approvals from any Governmental Authority or such other Person as to the
transactions contemplated by this Lease;
(iii) on each Acceptance Date, evidence that Lessee has obtained
such licenses, operator's certificates or other documents from each appropriate
Governmental Authority as may be required to operate the Aircraft under
applicable Law, including, without limitation, approval by the FAA of Lessee's
Maintenance Program for the Aircraft;
(iv) on the Delivery Date, a copy of the Articles of
Incorporation of Lessee, Seller and MASI and a copy of resolutions of the Board
of Directors of Lessee, Seller and MASI duly authorizing the execution, delivery
and performance by Lessee, Seller and MASI of each of the Lease Documents, to
which it or they may be a party, and each other document required to be executed
and delivered by Lessee, in accordance with any provisions under the Lease
Documents;
(v) on the first Delivery Date, a certificate signed by a duly
authorized officer of Lessee certifying that (i) the copies of the Articles of
Incorporation of Lessee, and (ii) the resolutions of the Board of Directors of
Lessee, are true and correct as of the such date, and such certificate shall be
in form and substance acceptable to Lessor, executed by Lessee;
(vi) on each Acceptance Date, a certificate signed by a duly
authorized officer of Lessee, dated such Acceptance Date, to the effect that (i)
the representations and warranties of Lessee contained in Section 22 hereof are
----------
true and correct on and as of such date as though made on and as of such date,
and all authorizations and approvals of, giving of notice to, and filings and
recordings with, all Governmental Authorities and authorities which may be
conditions to the validity or enforceability of this Lease, or Lessee's
performance of the terms thereof have been duly accomplished; and (ii) no
Default or Event of Default has occurred and is continuing or would result from
the lease of the Aircraft hereunder;
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 36
(vii) on the first Delivery Date and each other Acceptance Date
as Lessor may request, a current certificate of existence of Lessee;
(viii) On each Acceptance Date, a Lease Supplement applicable to
such date (and Lessor shall possess the "original" thereof);
(ix) on each Acceptance Date, (A) the Basic Rent payable under
this Lease shall have been paid when due on the applicable Rent Payment Date and
(B) all transaction costs due and owing pursuant to Section 34 hereof shall have
----------
been paid in full; and
(x) on the first Delivery Date, the Transaction Fee (which fee
has been paid);
(xi) on each Acceptance Date, a Notice of Proposed Acceptance
Date appropriately completed;
(xii) on each Acceptance, such other documents and evidence with
respect to Lessee as Lessor or its counsel may request in order to establish the
consummation of the transactions contemplated by this Lease, the taking of all
corporate proceedings in connection therewith and compliance with the conditions
herein or therein set forth;
(c) On each Acceptance Date, the following statements shall be
correct, and Lessor shall have received evidence reasonable satisfactory to it
to the effect that:
(i) Lessor has good and legal title to the Aircraft free and
clear of all Liens other than Permitted Liens;
(ii) the Aircraft has been duly certified by the Aeronautics
Authority as to type and airworthiness;
(iii) the Aircraft has been duly registered with the FAA in the
name of Lessor as owner;
(iv) the representations and warranties of Lessee contained
herein shall be true and correct on and as of the Acceptance Date as though made
on and as of the Acceptance Date;
(v) all authorizations and approvals of, giving of notice to, and
filings and recordings with, all regulatory bodies and authorities which may be
conditions to the validity or enforceability of this Lease or Lessee's
performance of the terms hereof have been duly accomplished;
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 37
(vi) no event shall have occurred and be continuing which
constitutes a Default or an Event of Default under this Lease;
(vii) there shall not have occurred, on or after the date hereof
and on or prior to the Acceptance Date, any amendment or proposed amendment
having an effective date or proposed effective date on or prior to any
Acceptance Date to any Law which would cause Lessor to have tax liability
greater than assumed in any tax or other indemnity agreement between Lessor and
Lessee set forth in this Lease or otherwise;
(viii) there has not occurred in Lessor's reasonable judgment,
any material adverse change in the business, assets, property, prospects or
condition (financial or otherwise) of Lessee since the date of this Lease;
(ix) the Aircraft shall have both (x) a distress value on such
Acceptance Date, and (y) an anticipated residual value on the Expiration Date
satisfactory to Lessor in its sole discretion.
(d) On the Delivery Date, Lessor shall have received the following
items in a in form and substance reasonable satisfactory to it:
(i) An appraisal and other evidence of the fair market value or
the distress value with respect to the Aircraft, satisfactory to Lessor;
(ii) (A) A duly executed independent insurance and/or reinsurance
broker's report, together with (B) certificates of insurance and/or reinsurance
from such broker and (C) loss payable endorsements, each satisfactory to Lessor,
as to the due compliance with the terms of Section 16 hereof relating to
-----------
liability, hull all-risk and hull war insurance with respect to the Aircraft.
(iii) All approvals and consents of any trustee or holder of any
indebtedness or obligation of Lessee which are required in connection with any
of the transactions contemplated by the Operative Documents shall have been duly
obtained and evidence thereof shall have been delivered to Lessor; all
appropriate action, if any, required to have been taken in connection with any
of the transactions contemplated by the Operative Documents by the Aeronautics
Authority and each other Governmental Authority having jurisdiction shall have
been taken, and Lessee shall have furnished to Lessor copies of all governmental
approvals required for the execution, delivery and performance of this Lease,
any other Operative Documents to which Lessee is a party and the transactions
contemplated hereby and thereby;
(iv) Confirmation that no change shall have occurred after the
date of this Lease in applicable Law and no change in circumstances shall have
occurred and no fact or condition shall exist which, in the reasonable opinion
of Lessor, would make it illegal under applicable Law for Lessor to lease the
Aircraft to Lessee; and
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 38
(v) All closing conditions, if any, set forth in the other
Operative Documents shall have been satisfied.
(e) On each Acceptance Date, Lessor shall have received a fully
executed Warranty ▇▇▇▇ of Sale from Lessee, reasonably satisfactory to Lessor.
22. LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Lessee
------------------------------------------------------
covenants, agrees, represents, warrants and covenants to Lessor as of each
Acceptance Date and Rent Payment (except representations relating solely to an
earlier date) that:
(a) Lessee is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Missouri, and is registered,
licensed or otherwise certificated or duly authorized by all appropriate
authorities of the United States to engage in air transportation and is duly
qualified or otherwise authorized to do business in all jurisdictions in which
it intends to operate the Aircraft, except for jurisdictions where failure to so
qualify or obtain authorization would not in the aggregate have a material
adverse effect on the business of Lessee and would not involve any danger of the
sale, forfeiture or loss of the Aircraft or impairment of the value thereof.
Lessee also represents, warrants and covenants that as of the Delivery Date it
operates, and it will throughout the Lease Term continue to operate, the
Aircraft in accordance with the rules and regulations of the FAA.
(b) Lessee has full power and authority to enter into and perform
this Lease and the other Lease Documents to which it is a party, including the
documents executed or to be executed by Lessee in connection with the Purchase
Documents and the execution, delivery and performance of this Lease, the
Purchase Documents and the other Lease Documents (i) have been duly authorized
by all necessary action on the part of Lessee, (ii) do not require any
stockholder approval or approval or consent of any trustee or holders of any
debt or other obligations of Lessee except such as have been duly obtained and
(iii) do not contravene any provision of any Law, the by-laws or other
constituent documents of Lessee or any indenture, mortgage, contract or other
material agreement or instrument to which Lessee is a party or by which it or
any of its assets may be bound or affected.
(c) Neither the making nor performance by Lessee of this Lease and
each other Lease Document, including the documents executed or to be executed by
Lessee in connection with the Purchase Documents nor the consummation of any of
the transactions by Lessee contemplated hereby or thereby, requires the consent
or approval of, the giving of notice to, the registration or filing for
recordation with, or the taking of any other action in respect of, any
Governmental Authority.
(d) Each of this Lease, each Purchase Documents and each other
Lease Document, including the documents executed or to be executed by Lessee in
connection with the leasing of the Aircraft constitutes or, when so executed,
will constitute the valid and legally binding obligation of Lessee enforceable
against Lessee in accordance with the terms thereof, except as such
enforceability may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 39
(e) There are no suits or proceedings pending or, to the knowledge
of Lessee, threatened in any court or before any regulatory commission, board or
other administrative or governmental agency against or affecting Lessee which
relate to the transactions contemplated hereby and which, if adversely
determined, would have a material adverse effect on (i) the financial condition
or business of Lessee, (ii) its obligations under this Lease, or (iii) its
obligations under any of the Operative Documents. Neither Lessee nor any of its
Affiliates is in material default with respect to any order of any Governmental
Authority.
(f) In reliance upon the opinion of McAfee & ▇▇▇▇ delivered
pursuant to Section 21 hereof (such reliance limited solely to matters relating
----------
to filings and recordings with the Aeronautics Authority), except for the
registration of the Aircraft and the filing of this Lease with the FAA and the
filing of Uniform Commercial Code financing statements in Delaware, Illinois,
Missouri and Colorado, no further filing or recording of any document and no
other action is necessary or advisable, whether in the United States or
elsewhere, in order to establish and perfect under United States Federal and New
York State Law, Lessor's title to and interest in the Aircraft as against Lessee
and any third parties claiming against or through Lessee, including trustees,
custodians and other representatives or similar officials, under any bankruptcy
or liquidation law or regulations, or otherwise.
(g) The Aircraft (i) is not principally for use in any nation with
which under United States Law, regulation or stated policy Lessee is prohibited
from doing business, (ii) is not to be used principally in any nation which
engages in armed conflict, declared or otherwise, and (iii) is not currently,
and will not be in the future, used in violation of the organizational documents
of Lessee.
(h) The obligations of Lessee to pay Rent hereunder will be a
direct and unconditional general obligation of Lessee, and will rank in right of
payment at least pari passu with all unsecured and unsubordinated debt of
---- -----
Lessee, whether now or hereafter outstanding, subject to any bankruptcy,
insolvency, reorganization or similar law.
(i) On the Delivery Date, Lessee has, and on each other Acceptance
Date, Lessee will have, no material liabilities, contingent or otherwise,
including liabilities for taxes or any unusual forward or long-term commitments,
other than payments due to Lessor under this Lease, and there are no unrealized
or anticipated losses from any unfavorable commitments of Lessee which may
materially and adversely affect the financial condition of Lessee.
(j) There is no fact peculiar to Lessee which Lessee has not
disclosed to Lessor in writing which materially and adversely affects or, so far
as Lessee can reasonably foresee, would materially and adversely affect the
Aircraft or the property, business, prospects, corporate structure, ownership of
Lessee, profits or condition (financial or otherwise) of Lessee or would impair
the ability of Lessee to perform its obligations under this Lease and the other
Operative Documents.
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10679.108.107383.5
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(l) The Aircraft will on the Delivery Date and thereafter during
the Lease Term be covered by the insurance required by Section 16 hereof.
----------
(m) No Default or Event of Default under this Lease has occurred
and is continuing or will occur immediately after giving effect to the execution
and delivery of this Lease on the Delivery Date or any other Lease Document or
Purchase Document on any Acceptance Date. Lessee is not on the Delivery Date,
and will not on any other Acceptance Date be, in violation in any material
respect of any term of its organizational documents, or other material agreement
or instrument to which it is a party or by which it is bound. Lessee is on the
Delivery Date, and will be on each other Acceptance Date, in compliance with all
Laws to which it is subject, the failure to comply with which would have a
material and adverse effect on its operations or condition, financial or
otherwise, or would impair the ability of Lessee to perform its obligations
under this Lease or any other Operative Document to which Lessee is a party, and
has obtained all applicable licenses, permits, franchises and other governmental
authorizations material to the conduct of its business.
(n) On all Acceptance Dates, (i) withholding of any Tax will not
be required upon any payments by Lessee to Lessor hereunder, and (ii) there is
no Tax imposed by virtue of the execution or delivery of any of the Operative
Documents. On all Acceptance Dates, Lessor will not be obligated to collect
sales tax on any payments made by Lessee to Lessor hereunder.
(o) Lessee's chief executive office (as defined in the Uniform
Commercial Code as in effect in the applicable jurisdiction) and principal place
of business, and the place where its records concerning the Aircraft and its
interest therein and all documents relating thereto are kept is correctly set
forth in Schedule B hereto.
-----------
(p) All tax returns required to be filed by Lessee in any
jurisdiction have in fact been filed, and Lessee has paid or caused to be paid
all taxes, assessments, fees and other governmental charges which have become
due pursuant to such returns or pursuant to any assessment received by it, and
Lessee does not have any knowledge of any actual or proposed deficiency or
additional assessment in conjunction therewith which either in any case or in
the aggregate would be materially adverse to Lessee; and the charges, accruals
and reserves on the books of Lessee in respect of federal, state, local or
foreign taxes for all such years, and for the current fiscal year, make adequate
provision for all unpaid tax liabilities for such periods.
(q) Lessee has not, directly or indirectly, used the services of
any broker, agent or finder in regard to any of the transactions contemplated
hereby; and no broker's or finder's fees or commissions or management or
advisory fees are, will or may become payable arising out of any actions or
omissions to act on Lessee's part in connection with the transactions
contemplated by this Lease or any other Operative Document to which Lessee is a
party.
(r) The Maintenance Program maintained by Lessee for the Aircraft
and the Engines shall remain in full force and effect and complies with and
shall, at all times during the Lease Term, continue to comply with all
applicable Aeronautics Authority requirements applicable to the Aircraft.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 41
(s) Lessee is not in default in the performance of any of its
obligations (i) for the payment of indebtedness for borrowed money in a
principal amount in excess of One Hundred Thousand Dollars ($100,000) or of any
interest or premium thereon or (ii) for the payment of rent under any lease
agreement for the lease of real, personal or mixed property where the monthly
rental exceeds Ten Thousand Dollars ($10,000) or where the aggregate rentals
over the term thereof exceed One Hundred Thousand Dollars ($100,000) or (iii)
for any secured debt in excess of Two Hundred Fifty Thousand Dollars ($250,000)
in the aggregate.
(t) No indemnity claim affecting to the Aircraft or basis therefor
exists under the Purchase Agreement and each representation and warranty
thereunder is, to Lessee's knowledge, true and correct in all material respects.
23. EVENTS OF DEFAULT. Any of the following events shall constitute an
-----------------
Event of Default (whether any such event shall be voluntary or involuntary, or
come about or be effected by operation of Law or pursuant to or in compliance
with any judgment, decree or order of any Governmental Authority):
(a) Failure of Lessee to pay within ten (10) days of the due date
therefor, any sum, including installments of Rent, owed by Lessee at any time to
Lessor under this Lease; Lessor shall use reasonable efforts to give Lessee
written notice of any payments which may become past due; provided that, the
-------- ----
failure by Lessor to provide such notice to Lessee shall in no event be deemed a
waiver by Lessor of any of its rights hereunder; or
(b) Lessee shall fail to observe or perform any of the covenants
or agreements of Lessee set forth in Sections 12 or 13(a)hereof or under the
--------------------
Purchase Agreement, and such failure shall continue unremedied for ten (10) days
after the occurrence thereof; or
(c) Lessee shall fail to procure and maintain any insurance
required by Section 16 hereof or shall operate the Aircraft outside the scope of
----------
the insurance coverage maintained with respect to the Aircraft; or
(d) Lessee or either Guarantor shall fail to perform or observe
any other covenant, condition, or agreement to be performed or observed by it
under this Lease, the Lease Documents or in any agreement or certificate
furnished to Lessor or an other assignee or lender in connection herewith, and
such failure shall continue unremedied for thirty (30) days after written notice
by Lessor to Lessee, specifying such failure and demanding the same to be
remedied; or
(e) Lessee or either Guarantor shall become insolvent or bankrupt
or make a general assignment for the benefit of creditors or consent to the
appointment of a trustee or receiver; or a trustee or a receiver shall be
appointed for Lessee or for a substantial part of its property without its
consent and shall not be dismissed for a period of sixty (60) days; or any
petition for the relief, reorganization or arrangement of Lessee or either
Guarantor or any other petition in bankruptcy or for the liquidation, insolvency
or dissolution of Lessee shall be filed by or against Lessee and, if filed
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 42
against Lessee, shall be consented to or be pending and not dismissed for a
period of sixty (60) days; or an order for relief under any bankruptcy or
insolvency law shall be entered by any court or Governmental Authority of
competent jurisdiction with respect to Lessee or either Guarantor, as the case
may be; or any execution or writ or process shall be issued under any action or
proceeding against Lessee whereby the Aircraft, any Airframe or any Engine may
be taken or restrained; or
(f) Lessee's or either Guarantor's legal existence shall cease; or
Lessee shall, without Lessor's prior written consent, sell, transfer or dispose
of, or pledge or otherwise encumber, all or substantially all of its assets or
property, or Lessee or either Guarantor shall consolidate or merge with any
other entity, provided, however, that an Event of Default shall not have
-------- -------
occurred if (i) Lessee is the surviving corporation of any such consolidation or
merger or (ii) the parties to any such merger or consolidation include only
Lessee and its Affiliate(s); or
(g) any representation, warranty, statement or certification made
by Lessee or either Guarantor under any Purchase Document, Lease Document or in
the Certificate of Acceptance to which such Person is a party or in any document
or certificate furnished to Lessor, or any other assignee in connection herewith
or pursuant hereto, shall prove to be untrue or incorrect when made in any
material respect, or shall be breached in any material respect; or
(h) the Lease or the Guaranty shall cease to be a valid and
effective agreement enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or other
similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity); or
(i) (i) any material default or Event of Default shall have
occurred under any Prior Lease Document; or (ii) any default or event of default
shall occur pursuant to the terms of any lease or other financing arrangement
between (A) Lessor, any direct or indirect subsidiary of Lessor or any Affiliate
of Lessor and (B) Lessee or any direct or indirect subsidiary of Lessee; or
(j) Lessee shall be in default or breach of any obligation
described in Section 22(s) above and such default shall continue for ten (10)
--------------
days after the occurrence of such default or breach; or
(k) there shall be a Material Adverse Change in the business,
assets or prospects of Lessee or either Guarantor or any direct or indirect
Subsidiary of Lessee or either Guarantor after the date hereof. For purposes of
this section, "Material Adverse Change" means, in the sole and absolute
discretion of Lessor, which discretion shall be exercised in a reasonable
manner, a material adverse change in (i) the business, operations, prospects,
properties, assets or condition (financial or otherwise) of Lessee taken on an
individual basis or taken as a whole (together with its Subsidiaries) or (ii)
the ability of any Lessee Person to perform its obligations under any Lease
Document to which it is a party or of Lessor to enforce any obligation arising
pursuant to the Lease Documents.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 43
24. REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default
---------------------
and at any time thereafter so long as the same shall be continuing, Lessor may
exercise one or more of the following remedies with respect to the Aircraft or
any part thereof (including, without limitation, any Airframe or any Engine) as
Lessor in its sole discretion shall elect:
(a) Lessor, at its option, may cause Lessee, upon the written
demand of Lessor and at Lessee's expense, to return promptly, and Lessee shall
return promptly, the Aircraft to Lessor or at its direction in the manner and
condition required by, and otherwise in accordance with all the provisions of,
Section 4 hereof, as if such Aircraft were being returned at the end of the
---------
Lease Term or, if Lessee does not so deliver such Aircraft, Lessor may terminate
this Lease, without prejudice to any other remedies of Lessor hereunder.
Whether or not this Lease has been so terminated, Lessor at its option shall to
the fullest extent permitted by applicable Law, (i) have the right to enter the
premises of Lessee or any other party to take immediate possession of the
Aircraft or any part thereof and remove all or any part of the Aircraft or any
part thereof by summary proceedings or otherwise, (ii) not be liable, in
conversion or otherwise, for the taking of any personal property of Lessee which
is in or attached to the Aircraft, any Airframe, any Engine or Part which is
repossessed; provided, however, that Lessor shall return to Lessee all personal
-------- -------
property of Lessee or its passengers which was on the Aircraft at the time
Lessor re-takes possession of the Aircraft; (iii) not be liable or responsible,
in any manner, for any inadvertent damage injury to any of Lessee's property in
repossessing and holding the Aircraft, any Airframe, any Engine or Part, except
for that caused by or in connection with Lessor's gross negligence or willful
acts; (iv) have the right to maintain possession of and dispose of the Aircraft,
any Airframe, any Engine or Part on any premises owned by Lessee or under
Lessee's control; (v) have the right to obtain a key to any premises at which
the Aircraft, any Airframe, any Engine or Part may be located from the landlord
or owner thereof; or (vi) cause Lessee, at Lessee's expense, to store, maintain,
surrender and deliver possession of the Aircraft in the same manner as provided
in Section 4 hereof, all without liability to Lessee for or by reason of such
----------
entry or taking of possession, whether for the restoration of damage to property
caused by such taking or otherwise except damages caused by gross negligence or
willful misconduct of the Lessor or its agents;
(b) Lessor may sell the Aircraft or any Part thereof at public or
private sale, as Lessor may determine, free and clear of any rights of Lessee,
in which event Lessee's obligation to pay Basic Rent hereunder with respect to
the Aircraft for all Rental Periods commencing after the date of such sale shall
terminate and in the event that the net sales proceeds is less than the Casualty
Loss Value as of the next preceding Rent Payment Date and any Basic Rent due as
of the date of such sale, Lessee shall pay Lessor the difference;
(c) Lessor may hold, keep idle or lease to others the Aircraft or
any Part thereof, as Lessor in its sole discretion may determine, free and clear
of any rights of Lessee in which event Lessee's obligation to pay Basic Rent for
any Rental Periods commencing after Lessee shall have been deprived of
possession pursuant to this Section 24 shall be reduced by the net proceeds, if
----------
any, received by Lessor from leasing the Aircraft or any Part thereof to any
Person other than Lessee for the same Rental Periods or any portion thereof;
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 44
(d) If reasonably required by Lessor, Lessee, at its sole expense,
shall assemble and make the Aircraft, any Airframe, any Engine or Part available
at a place designated by Lessor in accordance with Section 4 hereof. Lessee
---------
hereby agrees that, in the event of the return to or repossession by Lessor of
the Aircraft, any Airframe, any Engine or Part, any rights in any warranty
(express or implied) heretofore assigned to Lessee or otherwise held by Lessee
shall without further act, notice or writing be assigned or reassigned to
Lessor, if assignable. Lessee shall be liable to Lessor for all reasonable
expenses, disbursements, costs and fees incurred in (i) repossessing, storing,
preserving, shipping, maintaining, repairing and refurbishing the Aircraft, any
Airframe, any Engine or Part to the condition required by Section 4 hereof and
---------
(ii) preparing the Aircraft, any Airframe, any Engine or Part for sale or lease,
advertising the sale or lease of the Aircraft, any Airframe, any Engine or Part
and selling or releasing the Aircraft, any Airframe, any Engine or Part. Lessor
is hereby authorized and instructed, at its option, to make reasonable
expenditures which Lessor considers advisable to repair and restore the
Aircraft, any Airframe, any Engine or Part to the condition required by Section
-------
4 hereof, all at Lessee's sole expense;
(e) Lessee shall be liable, except as otherwise provided above,
for any and all unpaid Rent and Casualty Loss Value hereunder before or during
the exercise of any of the foregoing remedies and for all legal and arbitration
fees (including reasonable attorneys' fees incurred in any and all judicial and
other governmental proceedings or arbitration proceedings, including appellate
proceedings, whether such proceedings arise before or after entry of final
judgment or arbitration award) and other reasonable costs and expenses incurred
by Lessor by reason of the occurrence of any Event of Default or the exercise of
Lessor's remedies with respect thereto, including all reasonable costs and
expenses incurred in connection with the return of the Aircraft in accordance
with Section 4 hereof or in placing the Aircraft in the condition required by
----------
said Section. At any sale pursuant to this Section 24, Lessee or any of its
----------
Affiliates may bid for and purchase the Aircraft. Except as otherwise expressly
provided above, no remedy referred to in this Section 24 is intended to be
exclusive, but each shall be cumulative (except that nothing hereunder shall
entitle Lessor to duplicative remedies) and in addition to any other remedy
referred to above or otherwise available to Lessor at law or in equity; and the
exercise or beginning of exercise by Lessor of any one or more of such remedies
shall not constitute the exclusive election of such remedies and shall not
preclude the simultaneous or later exercise by Lessor of any or all of such
other remedies. No express or implied waiver by Lessor of any Event of Default
shall in any way be, or be construed to be, a waiver of any future or subsequent
Event of Default.
(f) Lessor may exercise any other right or remedy which may be
available to it under any Operative Document or under the New York Uniform
Commercial Code or other applicable Law, or proceed by appropriate court action
to enforce the terms hereof to recover damages for the breach hereof.
25. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee at any time shall
-------------------------------------
fail to pay to any Person any sum which Lessee is required to pay hereunder or
shall fail to do or perform any other thing Lessee is required to do or perform
hereunder, Lessor at its option may pay such sum or do or perform such thing,
and Lessee shall reimburse Lessor on demand for the amount of such payment and
for the cost and expense which may be incurred by Lessor for such acts or
performance, together with interest from the date of demand until paid accrued
at the Default Rate.
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10679.108.107383.5
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26. LATE CHARGES. If any installment of Rent or other sum owing under
-------------
this Lease shall not be paid within ten (10) days of the date when due, Lessee
shall pay Lessor interest on such amount at the Default Rate. Such late charge
is in addition to and not in lieu of other rights and remedies of Lessor.
27. FURTHER ASSURANCES. Lessee will promptly and duly execute and
-------------------
deliver to Lessor such other documents and assurances, including, without
limitation, such amendments to this Lease as may be reasonably required by
Lessor, and Uniform Commercial Code financing statements and continuation
statements, and will take such further action as Lessor may from time to time
reasonably request in order to carry out more effectively the intent and
purposes of this Lease and to establish and protect the rights and remedies
created or intended to be created in favor of Lessor.
28. NOTICES. All notices provided for or required under the terms and
-------
provisions hereof shall be in writing, and any such notice shall be deemed given
when personally delivered or if deposited in the United States mails, with
proper postage prepaid, for first class registered mail, return receipt
requested, when received or when sent by telecopy with electronic confirmation,
addressed if to Lessor or Lessee, at their respective addresses as set forth on
Schedule B hereof or at such other address as either of them shall, from time to
----------
time, designate in writing to the other.
29. GOVERNING LAW AND CONSENT TO JURISDICTION. THIS LEASE SHALL IN ALL
-----------------------------------------
RESPECT BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, UNITED STATES OF AMERICA, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF. Lessee hereby irrevocably consents that any legal action or
proceeding against it or any of its assets with respect to this Lease may be
brought in any jurisdiction where Lessee or any of its assets may be found, or
in any court of the State of New York or any Federal court of the United States
of America located in New York, New York, United States of America, or both, as
Lessor may elect, and by execution and delivery of this Lease, Lessee hereby
irrevocably submits to and accepts with regard to any such action or proceeding,
for itself and in respect of its assets, generally and unconditionally, the
jurisdiction of the aforesaid courts. Lessee hereby designates, appoints and
empowers CT Corporation System at its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its authorized agent for service of process in the
State of New York in any suit or proceeding with respect to this Lease and the
other Operative Documents to which Lessee is a party (such agent being
hereinafter called the "Process Agent"); provided however, that if the Process
------------- -------- -------
Agent shall at any time cease to be the Process Agent, Lessee shall forthwith
designate a successor Process Agent and shall give prompt. notice of such
designation to Lessor. A copy of any such process served on such agent shall be
promptly forwarded by air courier by the person commencing such proceeding to
Lessee at its address set forth in Schedule B hereof, but the failure of Lessee
----------
to receive such copies shall not affect in any way the service of such process
as aforesaid. Lessee further irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified first class mail, postage
prepaid, to Lessee at its address set forth in Schedule B hereof. The
-----------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
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foregoing, however, shall not limit the rights of Lessor to serve process in any
other manner permitted by Law or to bring any legal action or proceeding or to
obtain execution of judgment in any jurisdiction. Lessee further agrees that
final judgment against Lessee in any action or proceeding in connection with
this Lease shall be conclusive and may be enforced in any other jurisdiction
within or outside the United States of America by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and the amount of Lessee's indebtedness. Lessee hereby irrevocably waives, to
the fullest extent permitted by Law, any objection which Lessee may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Lease brought in the State of New York, and hereby
further irrevocably waives any claim that any such suit, action or proceeding
brought in the State of New York has been brought in an inconvenient forum.
30. MISCELLANEOUS. Any provision of this Lease which is prohibited or
-------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating or
diminishing Lessor's rights under the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable Law, Lessee hereby waives any provision of law which
renders any provision of this Lease prohibited or unenforceable in any respect.
No term or provision of this Lease may be amended, altered, waived, discharged
or terminated orally, but only by an instrument in writing signed by a duly
authorized officer or the party against which the enforcement of the amendment,
alteration, waiver, discharge or termination is sought. A waiver on any one
occasion shall not be construed as a waiver on a future occasion. All of the
covenants, conditions and obligations contained in this Lease shall be binding
upon and shall inure to the benefit of the respective successors and assigns of
Lessor and (subject to the restrictions of Section 13(a)hereof) Lessee. This
-------------
Lease, each Lease Supplement, the Certificate of Acceptance, and each related
instrument, document, agreement and certificate collectively constitute the
entire agreement of Lessor and Lessee with respect to the acquisition and
leasing of the Aircraft, and cancel and supersede any and all prior oral or
written understandings with respect thereto. This Lease may be executed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto were upon the same instrument. To the extent, if
any, that this Lease or any Lease Supplement constitutes chattel paper (as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction) no security interest in this Lease or any Lease Supplement may be
created through the transfer of possession of any counterpart other than the
counterpart which has been marked "Original" on the face or signature page
--------
thereof.
31. EFFECT OF THIS LEASE. This Lease shall become binding and
-----------------------
effective when it shall have been executed by each of Lessor and Lessee.
32. SURVIVAL. The representations, warranties, covenants, agreements
--------
and indemnities of Lessee set forth in this Lease, and Lessee's obligations
hereunder, shall survive the expiration or other termination of this Lease to
the extent required for full performance and satisfaction thereof.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
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33. BROKERS. Each party agrees to indemnify and hold the other
-------
harmless from and against any and all claims, suits, damages, costs and expenses
(including, but not limited to reasonable attorney's fees) asserted by any
agent, broker or other third party for any commission or compensation of any
nature whatsoever based upon the lease of the Aircraft, if such claim, damage,
cost or expense arises out of any action or alleged action by the indemnifying
party, its employees or agents. It is understood and agreed between the parties
that this Lease has been concluded by direct negotiation without any
intermediaries or agents. Lessee hereby represents and warrants that he has not
been paid, agreed to pay or caused to be paid directly or indirectly in any
form, any commission, percentage, contingent fee, brokerage or other similar
payments of any kind, in connection with the establishment or operation of this
Lease, to any employee of Lessor or to any person or entity in the United States
or elsewhere.
34. TRANSACTION COSTS. (a) Whether or not the transactions
------------------
contemplated hereby are consummated, Lessee shall pay all costs and expenses
incurred in connection with the preparation, execution and delivery of this
Lease and any other documents delivered in connection herewith after the
Delivery Date, including without limitation, the reasonable fees, expenses and
disbursements of counsel, except as otherwise expressly set forth herein. In
addition, Lessee shall be solely responsible for all costs, including reasonable
attorneys' fees and expenses, incurred in registering an executed counterpart of
this Lease and other documents and instruments which are required by Lessor to
be filed with the FAA.
(b) Without limiting the provisions of Section 17 and 18 hereof,
-----------------
Lessee shall pay for all sales tax imposed upon or arising out of the sale or
delivery of the Aircraft under the Purchase Agreement, regardless of who is
responsible therefor at law; provided, however, Lessor will cooperate with any
-------- -------
requests made by Lessee that are not adverse to Lessor's interests to minimize
such sales tax.
(c) Each of Lessor and Lessee hereby agrees to pay the reasonable
costs and expenses of the other party incurred in connection with the entering
into or giving or withholding of any future waiver, supplement or amendment or
other action with respect to the Lease or any other document delivered in
connection herewith that it may request, except in the case of an Event of
Default in which case all of such costs shall be at the expense of Lessee.
35. INTENT.
------
(a) Lessor and Lessee intend that for United States Federal income
tax purposes (i) this Lease shall constitute a true lease and not a loan,
conditional sale agreement or financing agreement; and, (ii) Lessor shall be
considered the owner and Lessee shall be considered the lessee for all purposes.
Neither Lessor nor Lessee shall file any tax return, report or form with any
taxing authority that is inconsistent with the foregoing intent unless clearly
required to do so under Law.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 48
(b) The parties agree that this Lease is a "Finance Lease" as
defined in Uniform Commercial Code Article 2A -- Leases ("Article 2A"). Lessee
acknowledges: (a) that the Seller is the "Supplier" (as defined in Article 2A)
and the Lessee has selected the Aircraft and the Seller, as Supplier, without
any assistance from or consultation with Lessor; (b) that Lessee has been
informed in writing in this Lease, before signing this Lease, that Lessee is
entitled under Article 2A to the promises and warranties, including those of any
third party, provided to Lessor by the Lessee in connection with or as part of
the contract by which Lessor acquired the Aircraft. To the extent permitted by
applicable Law, Lessee hereby waives any and all rights and remedies conferred
upon a lessee under Article 2A and any rights now or hereafter conferred by
statute or otherwise which may limit or modify any of Lessor's rights or
remedies under Section 24 of this Lease; provided, however, that such waiver
----------- -------- -------
shall not preclude Lessee from asserting any claim of Lessee against Lessor in a
separate cause of action; and provided further, that such waiver shall not
-------- -------
affect Lessor's obligations of good faith, diligence, reasonableness and care.
(c) If, notwithstanding the express intent of the parties, a court of
competent jurisdiction determines that this Agreement is not a true lease, but
rather one intended as security, then solely in that event and for the expressly
limited purposes thereof, Lessee shall be deemed to have hereby granted Lessor a
first priority, perfected security interest in this Lease, the Aircraft and all
accessions thereto, substitutions and replacements therefor, and all products
and proceeds (including insurance proceeds) thereof; to secure the prompt
payment and performance as and when due of all obligations and indebtedness of
Lessee (or any Affiliate of Lessee) to Lessor, now existing or hereafter
created. For the purposes of this paragraph, this Lease or a photocopy hereof
may be filed as a financing statement under the Uniform Commercial Code.
36. TIME IS OF THE ESSENCE. Time and strict and punctual performance
------------------------
are of the essence with respect to each provision of this Lease.
37. DISCLAIMER OF CONSEQUENTIAL DAMAGES. LESSEE AGREES THAT IT SHALL
-------------------------------------
NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT
MAY OTHERWISE HAVE TO RECOVER, CONSEQUENTIAL DAMAGES AS A RESULT OF ANY BREACH
OR ALLEGED BREACH BY LESSOR OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR
WARRANTIES OF LESSOR CONTAINED IN THIS LEASE.
38. WAIVER OF JURY TRIAL. THE LESSEE AND THE LESSOR HEREBY WAIVE TRIAL
--------------------
BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LEASE
OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
39. TRUTH-IN-LEASING CLAUSE. (a) LESSEE HAS REVIEWED THE AIRCRAFT'S
------------------------
MAINTENANCE AND OPERATING LOGS SINCE ITS DATE OF MANUFACTURE AND HAS FOUND THAT
THE AIRCRAFT) HAS BEEN MAINTAINED AND INSPECTED UNDER PART 91 (AND PART 135 OF
THE FEDERAL AVIATION REGULATIONS SINCE INCEPTION OF OPERATIONS. LESSEE
CERTIFIES THAT THE AIRCRAFT PRESENTLY COMPLIES WITH THE APPLICABLE MAINTENANCE
AND INSPECTION REQUIREMENTS OF PART 91 (AND PART 135) OF THE FEDERAL AVIATION
REGULATIONS.
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 49
(b) LESSEE CERTIFIES THAT LESSEE, AND NOT LESSOR, IS RESPONSIBLE
FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS AGREEMENT DURING THE LEASE
TERM. LESSEE FURTHER CERTIFIES THAT LESSEE UNDERSTANDS ITS RESPONSIBILITY FOR
COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
(c) LESSEE CERTIFIES THAT THE AIRCRAFT WILL BE MAINTAINED AND
INSPECTED UNDER PART 91 (AND PART 135) OF THE FEDERAL AVIATION REGULATIONS FOR
OPERATIONS TO BE CONDUCTED UNDER THIS LEASE. LESSEE UNDERSTANDS THAT AN
EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL
AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS
DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT
OFFICE.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Page 50
IN WITNESS WHEREOF, the parties hereto have caused this Aircraft Lease
Agreement to be duly executed by their duly authorized representatives as of the
date first written above.
LESSOR:
C.I.T. LEASING CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
LESSEE:
ARCH AIR MEDICAL SERVICE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
SCHEDULE A
TO
AIRCRAFT LEASE AGREEMENT
DESCRIPTION OF AIRCRAFT
SEE ATTACHED ANNEXES I-1 THROUGH I-7 CORRESPONDING TO THE AIRCRAFT SUBJECT TO
------------------------
THE LEASE
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.3
SCHEDULE B
TO
AIRCRAFT LEASE AGREEMENT
ADDRESSES AND PAYMENT INFORMATION
Location of Payment of Rent:
-------------------------------
Bank of America
Remittance Banking
CIT Equipment Finance
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA Number: ▇▇▇▇▇▇▇▇▇
Account Number: ▇▇▇▇-▇-▇▇▇▇▇
For Credit to: C.I.T. Leasing Corporation
or at such other place as Lessor shall designate to
Lessee in writing
Home of Aircraft:
------------------
AIRCRAFT TYPE SERIAL NO. AIRCRAFT DELIVERY LOCATION BY AIRCRAFT
------------- ---------- --------------------------------------------------------
1. BK 117 B-1 7139 Joplin Medflight; St John's Hospital; ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇.; ▇▇▇▇▇▇, ▇▇ (non-airport location)
------------- ---------- --------------------------------------------------------
2. BK 117 B-1 7158 ARCH Air Medical Services; ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇;
Chesterfield, MO-Spirit of St. Louis Airport
------------- ---------- --------------------------------------------------------
3. BK 117 B-1 7201 ARCH Air Medical Services; ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.; Sparta
Airport; Sparta IL-Sparta Municipal Airport (non-airport
location)
------------- ---------- --------------------------------------------------------
4. BK 117 B-1 7207 ARCH Air Medical Services; ▇▇▇▇ ▇▇▇▇▇ ▇▇▇; ▇▇ ▇▇▇▇▇,
▇▇ (non-airport location)
------------- ---------- --------------------------------------------------------
5. BK 117 B-1 7216 ARCH Air Medical Services; ▇▇▇▇ ▇▇▇▇▇ ▇▇▇; ▇▇ ▇▇▇▇▇,
▇▇ (non-airport location)
------------- ---------- --------------------------------------------------------
6. B-100 64 ARCH Air Medical Services; ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇;
Chesterfield, MO-Spirit of St. Louis Airport
------------- ---------- --------------------------------------------------------
7. B-100 27 ARCH Air Medical Services; ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇;
Chesterfield, MO-Spirit of St. Louis Airport
------------- ---------- --------------------------------------------------------
Continue next page--
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
Notice Address of Lessor:
---------------------------
The C.I.T. Leasing Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Credit
---------
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
The CIT Group/Equipment Financing, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Credit Officer
---------
Telecopier: (▇▇▇)▇▇▇-▇▇▇▇
Address of Lessee:
-------------------
ARCH Air Medical Service, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
---------
Telecopier: 790-4780
Address of Agent for Service of
------------------------------------
Process for Lessee in New York:
-----------------------------------
CT CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.3
TABLE OF CONTENTS
Page
----
1. DEFINITIONS 1
-----------
2. AGREEMENT FOR PURCHASE AND LEASE OF AIRCRAFT; MAXIMUM FUNDING;
-----------------------------------------------------------------
FUNDING PROCEDURES 9
------------------
3. TERM 10
----
4. RETURN OF AIRCRAFT 10
--------------------
5. RENT 13
----
6. NET LEASE; LESSOR'S TITLE 14
----------------------------
7. EARLY BUYOUT OPTIONS 14
----------------------
8. END OF LEASE RENEWAL ANDPURCHASE OPTION 15
--------------------------------------------
9. USE OF AIRCRAFT; COMPLIANCE WITH LAWS 16
------------------------------------------
10. MAINTENANCE OF AIRCRAFT 17
-------------------------
11. REPLACEMENT OF PARTS; ALTERATIONS; MODIFICATIONS; AND ADDITIONS 18
----------------------------------------------------------------
12. REGISTRATION; DELIVERY; RECORDATION; INSIGNIA AND INSPECTION 19
----------------------------------------------------------------
13. ASSIGNMENT AND SUBLEASING 20
---------------------------
14. LIENS 21
-----
15. LOSS, DAMAGE OR DESTRUCTION 21
------------------------------
16. INSURANCE 24
---------
17. GENERAL TAX INDEMNIFICATION 27
-----------------------------
18. GENERAL INDEMNITIES 30
--------------------
19. NO WARRANTIES 32
--------------
20. FINANCIAL INFORMATION 33
----------------------
21. CONDITIONS PRECEDENT 34
---------------------
22. LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS 38
------------------------------------------------------
23. EVENTS OF DEFAULT 41
-------------------
24. REMEDIES UPON DEFAULT 43
-----------------------
25. LESSOR'S RIGHT TO PERFORM FOR LESSEE 45
-----------------------------------------
26. LATE CHARGES 45
-------------
27. FURTHER ASSURANCES 45
-------------------
28. NOTICES 45
-------
29. GOVERNING LAW AND CONSENT TO JURISDICT 45
-------------------------------------------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5
30. MISCELLANEOUS 46
-------------
31. EFFECT OF THIS LEASE 47
-----------------------
32. SURVIVAL 47
--------
33. BROKERS 47
-------
34. TRANSACTION COSTS 47
------------------
35. INTENT 48
------
36. TIME IS OF THE ESSENCE 48
--------------------------
37. DISCLAIMER OF CONSEQUENTIAL DAMAGES 48
--------------------------------------
38. WAIVER OF JURY TRIAL 49
-----------------------
39. TRUTH-IN-LEASING CLAUSE 49
------------------------
Air Methods 2000 Aircraft Lease Agreement
10679.108.107383.5