SECOND AMENDMENT TO LEASE ASSUMPTION AND OPTION AGREEMENT AND EXERCISE OF LEASE OPTION
Exhibit 10.3
SECOND AMENDMENT TO LEASE ASSUMPTION
AND OPTION AGREEMENT AND EXERCISE OF LEASE OPTION
THIS SECOND AMENDMENT TO LEASE ASSUMPTION AND OPTION AGREEMENT (this “Amendment”), dated as of the day of March, 2010, is made by and between DHL NETWORK OPERATIONS (USA), INC., an Ohio corporation (“DHL”), and ABX AIR, INC., a Delaware corporation (“ABX”) (collectively, the “Parties”).
RECITALS:
WHEREAS, DHL and ABX are parties to that certain Lease Assumption and Option Agreement dated as of May 29, 2009, as amended by the First Amendment to Lease Assumption and Option Agreement dated February 12, 2010 between DHL and ABX (the “Existing Agreement”); and
WHEREAS, DHL and ABX wish to amend the Existing Agreement as set forth in this Amendment;
NOW, THEREFORE, in consideration of the mutual promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, DHL and ABX hereby agree as follows:
AGREEMENT:
1. Definitions.
(a) The definitions contained in the above Recitals are hereby incorporated into this Amendment as if repeated in full herein.
(b) Unless otherwise defined in this Amendment, all capitalized terms shall have the meaning as set forth in the Existing Agreement.
2. Excercise of Lease Option. DHL hereby absolutely, unconditionally and irrevocably exercises its Lease Option with respect to all four (4) of the Owned Aircraft pursuant to Section 4 of the Existing Agreement. ABX hereby waives the separate notice requirements set forth in Section 4(b) of the Existing Agreement.
3. Amendment of Form of New Leases. The form of each of the New Leases is hereby amended by replacing the form attached as Exhibit D to the Existing Agreement with the form attached as Exhibit D to this Amendment.
4. Survival; References in Existing Agreement.
(a) Except to the extent expressly amended by this Amendment, all representations, warranties and covenants contained in the Existing Agreement shall continue and survive the execution and delivery of this Amendment, and shall be binding upon the party making such representation, warranty or covenant.
(b) As referenced in the Existing Agreement, the terms “this Agreement,” “hereof,” “herein” and “hereunder” and the like shall mean the Existing Agreement, as amended by this Amendment.
5. Applicable Law. This Amendment shall be governed by and construed in accordance with the substantive laws of the State of New York (other than the laws of the State of New York relating to choice of law).
6. Execution in Counterparts. To facilitate execution, this Amendment may be executed in any number of counterparts (including by facsimile or e-mailed transmission), each of which shall be deemed to be an original, but all of which together shall constitute one binding agreement on the Parties, notwithstanding that the Parties are not signatories to the same counterpart.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have executed this Second Amendment to Lease Assumption and Option Agreement as of the day and year first herein written.
| ABX AIR, INC. | ||
| By: |
/s/ ▇▇▇▇▇▇ ▇. Hete | |
| Name: |
▇▇▇▇▇▇ ▇. Hete | |
| Title: |
CEO | |
| DHL NETWORK OPERATIONS (USA), INC. | ||
| By: |
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Name: |
▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Title: |
Senior VP | |
3
EXHIBIT D
TO
SECOND AMENDMENT TO LEASE ASSUMPTION
AND OPTION AGREEMENT
Attached Revised Form of New Lease
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
AIRCRAFT LEASE AGREEMENT
(MSN )
DATED AS OF APRIL 1, 2010
BETWEEN
CARGO AIRCRAFT MANAGEMENT, INC.,
AS LESSOR
AND
DHL NETWORK OPERATIONS (USA), INC.,
AS LESSEE
RELATING TO
ONE BOEING MODEL 767-2 AIRCRAFT
SERIAL NUMBER
U.S. REGISTRATION NO. N
This is Counterpart Number of four (4) serially numbered, manually executed counterparts of this Aircraft Lease Agreement. To the extent, if any, that this Aircraft Lease Agreement constitutes chattel paper under the Uniform Commercial Code in any jurisdiction, no security interest in this Agreement may be created through the transfer and possession of any counterpart of this Aircraft Lease Agreement other than the serially numbered counterpart thereof marked Counterpart Number 1.
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
AIRCRAFT LEASE AGREEMENT
(MSN )
THIS AIRCRAFT LEASE AGREEMENT (MSN ) (this “Agreement”), dated as of the 1st day of April, 2010, is between CARGO AIRCRAFT MANAGEMENT, INC., a Florida corporation (“Lessor”), and DHL NETWORK OPERATIONS (USA), INC., an Ohio corporation (“Lessee”).
RECITALS
WHEREAS, Lessee desires to lease the “Aircraft” (as defined below) from Lessor; and
WHEREAS, Lessor is agreeable to leasing the Aircraft to Lessee, upon and subject to the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth herein, the receipt and sufficiency of which are hereby acknowledged by Lessor and Lessee, Lessor and Lessee hereby agree as follows:
1. Definitions. The following terms shall, except where the context otherwise requires, have the following respective meanings for all purposes of this Agreement.
1.1. “ABX” shall mean ABX Air, Inc., a Delaware corporation.
1.2. “ABX Air Transportation Services Agreement” shall mean the Air Transportation Services Agreement between Lessee and ABX executed either prior to or contemporaneously with this Agreement.
1.3. “ABX Maintenance Program” shall mean the maintenance program in effect from time to time for the Aircraft developed by ABX and approved by the FAA.
1.4. “ABX Operating Agreement” shall mean any CMI agreement, operating agreement or similar agreement in effect at any time during the Term between Lessee and ABX, pursuant to which ABX agrees to operate the Aircraft, including, without limitation, the ABX Air Transportation Services Agreement.
1.5. “ABX Pilots’ Union” shall mean the labor union formed by the aircraft pilots employed by ABX and in effect from time to time during the Term of this Agreement.
1.6. “ABX/Pilots CBA” shall mean the collective bargaining agreement between ABX and the ABX Pilots’ Union in effect from time to time during the Term of this Agreement.
1.7. “ACMI Termination Agreement” shall mean the Mutual Termination Agreement and Release between Lessee, ABX, DPWN Holdings (USA), Inc., DHL Express (USA), Inc. and Air Transport Services Group, Inc. executed either prior to or contemporaneously with this Agreement and which, among other things, terminates the ACMI Service Agreement dated as of August 15, 2003, as amended, between Lessee and ABX.
| AIRCRAFT LEASE AGREEMENT | 1 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
1.8. “AD Term Date” shall mean the date which falls on the first day of the month immediately after the expiration of ninety-six (96) months after the Delivery Date.
1.9. “ADs” shall mean (a) any airworthiness directive or comparable document issued by the Aviation Authority, the FAA (if not the applicable Aviation Authority) or any other Governmental Entity exercising appropriate jurisdiction over the subject matter or parties affected thereby requiring compliance or (b) any mandatory service bulletin issued by a Manufacturer.
1.10. “Affiliate” shall mean any entity controlling, controlled by or under common control with a party hereto.
1.11. “Agreed Value” shall mean the value specified as such in Appendix B and shall have the meaning ascribed to it in the London insurance market in relation to aviation hull policies.
1.12. “Aircraft” shall mean, collectively, the Airframe, the Engines and the Aircraft Documents.
1.13. “Aircraft Documents” shall mean the documents listed in Appendix C hereto and all other records, documents, log books, manuals, drawings and data relating to the Aircraft and developed or caused to be developed by Lessee or required by the Aviation Authority, as updated and maintained through the Return Date.
1.14. “Aircraft Return Documents” shall have the meaning ascribed to such term in Section 18.2 hereof.
1.15. “Airframe” shall mean the Boeing model 767-2 airframe described in Appendix A hereto, together with all Parts, excluding, however, the Engines or any other engines from time to time installed thereon, but including each QEC.
1.16. “Anticipated Delivery Date” shall mean April 1, 2010, which is the date that the parties anticipate that the Aircraft will be Delivered to Lessee pursuant to the terms and conditions of this Agreement.
1.17. “APU” shall mean the auxiliary power unit installed on the Aircraft on the Delivery Date (or any substitution therefor made during the Term pursuant to this Agreement), together with all Parts installed thereon.
1.18. “APU Hours” shall mean the time as measured in hours and minutes during which the APU is operated.
1.19. “Aviation Authority” shall mean the FAA and any other Governmental Entity having jurisdiction over the Aircraft and this Agreement or Lessee’s operations, and any successors thereto, respectively (with the understanding that, should the Aircraft, with Lessor’s approval, be registered in a country other than the United States, this definition shall include all Governmental Entities outside of the United States with jurisdiction over the Aircraft).
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
1.20. “Authorized Maintenance Performer” shall mean any repair station licensed or certified by the Aviation Authority acting within the scope of its authorization, including, without limitation, the entity performing maintenance to (a) the Aircraft under the ABX Maintenance Program or (b) an Engine under the Delta Engine Program.
1.21. “Basic Rent” shall mean the amount specified as such in Appendix B and payable pursuant to Section 4.2 hereof.
1.22. “Basic Rent Credit” shall have the meaning ascribed to such term in Appendix B hereto.
1.23. “Basic Rent Date” shall mean the Delivery Date and the first day of each calendar month thereafter.
1.24. “Business Day” shall mean any day other than a Saturday, Sunday or other day on which banking institutions in Wilmington, Ohio are required or authorized by Law to close.
1.25. “Cape Town Convention” shall mean the Convention on International Interests in Mobile Equipment and its Protocol on Matters Specific to Aircraft Equipment, concluded in Cape Town, South Africa, on November 16, 2001.
1.26. “Claims” shall have the meaning ascribed to such term in Section 10.1 hereof.
1.27. “Cycle” shall mean one take-off and next subsequent landing of the Aircraft.
1.28. “Default” shall mean any event which, with the giving of notice, lapse of time, or both, would become an Event of Default.
1.29. “Delivery” shall have the meaning ascribed to such term in Section 3.5 hereof.
1.30. “Delivery Condition Requirements” shall have the meaning ascribed to such term in Section 3.6 hereof.
1.31. “Delivery Date” shall mean the date on which the Delivery occurs.
1.32. “Delivery Location” shall mean Wilmington Airpark, Wilmington, Ohio, or as otherwise mutually agreed by Lessor and Lessee.
1.33. “Delta” shall mean Delta Air Lines, Inc., a Delaware corporation.
1.34. “Delta Engine Program” shall mean the program in effect from time to time with respect to the Engines pursuant to a maintenance agreement between Lessor (or an Affiliate of Lessor) and Delta.
1.35. “Dollars” and “$” and “US$” shall mean the lawful currency of the United States of America.
| AIRCRAFT LEASE AGREEMENT | 3 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
1.36. “Engine” shall mean either of the two (2) engines identified as to manufacturer and type and by serial number on the Lease Supplement (each of which shall have more than 550 rated takeoff horsepower or the equivalent of such horsepower), together with all Parts installed thereon, and any engine substituted for an Engine pursuant to the terms hereof.
1.37. “Equipment Change” shall have the meaning ascribed to such term in Section 7.7 hereof.
1.38. “Event of Default” shall mean any one of the events specified in Section 16.1 hereof.
1.39. “Expiration” shall mean the end of the Term pursuant to this Agreement.
1.40. “Expiration Date” shall mean the day which is eighty-four (84) months after the Delivery Date (which shall be identified by actual date in the Lease Supplement).
1.41. “FAA” shall mean the Federal Aviation Administration of the United States of America and all successors thereto.
1.42. “FAR” shall mean the Federal Aviation Regulations issued by the FAA.
1.43. “Flight Hours” shall mean, with respect to the Aircraft, the time as measured in hours and minutes elapsing from the moment at which the wheels of the Aircraft leave the ground on a takeoff until the wheels of the Aircraft touch the ground on the next landing of the Aircraft.
1.44. “Governmental Entity” shall mean: (a) any national government, any political subdivision thereof, or local authority therein, (b) any agency, board, commission, department, division, organ, instrumentality, or court of any of the foregoing, however constituted, and (c) any organization, association, or institution, of which any of the foregoing is a member or to whose jurisdiction it is subject or in whose activities it is a participant.
1.45. “IAI” shall mean Israel Aerospace Industries, Ltd.
1.46. “Indemnified Parties” shall have the meaning ascribed to such term in Section 10.1 hereof.
1.47. “International Registry” shall mean the registry established and maintained pursuant to the Cape Town Convention.
1.48. “Law” shall mean: (a) any constitution, statute, decree, regulation, order, or other directive of the Governmental Entity of any location to, from, or within which the Aircraft shall operate; (b) any treaty, pact, compact, or other agreement to which any Governmental Entity is a signatory or party; (c) any judicial or administrative interpretation or application of any of the foregoing; and (d) any amendment or revision of any of the foregoing.
1.49. “Lease Supplement” shall mean the Lease Supplement No. 1, substantially in the form of Appendix E hereto, which, as of the Delivery Date, shall be executed by Lessor and Lessee and, together with this Agreement, filed with the FAA for recordation (assuming that the Aircraft is registered in the United States).
| AIRCRAFT LEASE AGREEMENT | 4 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
1.50. “Lease Termination Documents” shall have the meaning ascribed to such term in Section 3.10 hereof.
1.51. “Lessee Guarantor” shall mean Deutsche Post AG (or such other entity as Lessor accepts in its sole and absolute discretion).
1.52. “Lessee Guaranty” shall mean a guaranty agreement in the form attached as Appendix I hereto.
1.53. “Lessor Guarantor” shall mean Air Transport Services Group, Inc.
1.54. “Lessor Guaranty” shall mean a guaranty agreement in the form attached as Appendix J hereto.
1.55. “Lessor’s Lender” shall have the meaning ascribed to such term in Section 20.14 hereof.
1.56. “Lessor’s Liens” shall mean Liens on or relating to or affecting the Aircraft, the Airframe, the Engines or any part thereof arising as a result of (a) claims against Lessor not relating to this Agreement, (b) acts of Lessor neither permitted nor required to be taken by Lessor under this Agreement, (c) the transfer by Lessor of its interest or any part thereof in the Aircraft, (d) Taxes imposed against Lessor which Lessee has not agreed to indemnify against pursuant hereto or (e) any act, omission or circumstance occurring or omitted prior to the Delivery Date or after the Return of the Aircraft and the Aircraft Documents.
1.57. “Lien” shall mean any lien, mortgage, charge, deed of trust, encumbrance, pledge, hypothecation, attachment, license, assignment by way of security or security interest, including, without limitation: (a) any preferential arrangement resulting in a secured transaction or having the same economic or legal effect as a lien, mortgage, charge, deed of trust, encumbrance, pledge, hypothecation, attachment, license, assignment by way of security or security interest; (b) any agreement to give any lien, mortgage, charge, deed of trust, encumbrance, pledge, hypothecation, attachment, license, assignment by way of security or security interest; (c) the interest of a vendor or a lessor under any conditional sale agreement, lease, hire purchase agreement or other title retention arrangement; or (d) any statutory or other right of a Governmental Entity to detain, hold or seize an aircraft or any part thereof which is presently exercisable with respect to such aircraft.
1.58. “Maintenance Program” shall mean (a) with respect to the Aircraft, the ABX Maintenance Program or other maintenance program mutually approved by Lessor and Lessee in effect for the Aircraft, and (b) with respect to the Engines, the Delta Engine Program or other maintenance program under which the Engines are maintained, as such programs may be amended during the Term, all in accordance with the requirements of the Aviation Authority.
1.59. “Manufacturer” shall mean: (a) as to the Airframe, The Boeing Company; and (b) as to the Engines, General Electric Corporation.
| AIRCRAFT LEASE AGREEMENT | 5 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
1.60. “Minimum Liability Coverage” shall mean the amount specified as such in Appendix B, designating the minimum Combined Single Limit under the airline liability insurance required pursuant to this Agreement.
1.61. “Other Lease Agreements” shall mean, collectively, each aircraft lease agreement between Lessor (or an Affiliate of Lessor), as lessor, and Lessee (or an Affiliate of Lessee), as lessee, in effect from time to time relating to a Boeing model 767-200SF aircraft.
1.62. “Parts” shall mean any item, including, without limitation, materials, accessories, components, equipment, appliances, instruments, avionics, appurtenances, furnishings and any other equipment or components of whatever nature (other than the Engines), which are installed in or attached or appurtenant to the Aircraft or either of the Engines.
1.63. “Permitted Lien” shall have the meaning ascribed to such term in Section 9 hereof.
1.64. “QEC” shall mean all of the “quick engine change” components associated with each Engine.
1.65. “Rent” shall mean Basic Rent.
1.66. “Replacement Engine” shall have the meaning set forth in Section 6.2(c) hereof.
1.67. “Return” shall mean the return and redelivery of the Aircraft (including the Aircraft Documents) to Lessor in accordance with Sections 17 and 18 hereof.
1.68. “Return Condition Requirements” shall have the meaning ascribed to such term in Section 18.1 hereof.
1.69. “Return Date” shall mean the date at Expiration or upon earlier Termination when the Aircraft (including the Aircraft Documents) are actually returned to Lessor in conformity with the Return Condition Requirements.
1.70. “Return Location” shall mean Wilmington Airpark, Wilmington, Ohio, or as otherwise mutually agreed by Lessor and Lessee.
1.71. “Special FAA Counsel” shall mean McAfee & ▇▇▇▇, Oklahoma City, Oklahoma.
1.72. “Surviving Engine” shall have the meaning ascribed to such term in Section 19.3 hereof.
1.73. “Taxes” shall mean any and all taxes (including, but not limited to, withholding taxes, value added taxes, deductions, transaction privilege taxes, sales taxes or assessments of any kind or form), charges, fees, imposts, levies or other charges of any nature, together with any penalties, fines, or interest thereon or other additions thereto which are imposed, withheld, levied, or assessed by or on behalf of, or otherwise payable to, any Governmental Entity.
| AIRCRAFT LEASE AGREEMENT | 6 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
1.74. “Technical Acceptance Certificate” shall have the meaning ascribed to such term in Section 3.8 hereof.
1.75. “Term” shall mean the period commencing on the Delivery Date and ending on the Expiration Date or on any earlier Termination Date, as applicable.
1.76. “Termination” shall mean the termination of the lease of the Aircraft under this Agreement, which termination arises prior to the Expiration Date pursuant to Section 2.1, 2.2, 7.1(b)(3), 16.2, 19.1 or 20.15 hereof, or otherwise under this Agreement.
1.77. “Termination Date” shall mean the date on which a Termination is effective.
1.78. “Total Loss” shall mean any of the following events with respect to the Aircraft, the Airframe, an Engine or the Aircraft Documents: (a) the destruction, damage beyond economical repair, or such property becoming permanently unfit for normal use, for any reason whatsoever; (b) any event which results in an insurance settlement on the basis of actual or constructive or compromised or agreed or arranged total loss; (c) the disappearance of the Aircraft, if the Aircraft is unreported for a period of thirty (30) days after commencement of a flight; (d) loss of possession or loss of use by Lessee for a period of more than thirty (30) days due to hijacking, theft, or other criminal actions; (e) the condemnation, confiscation, appropriation, expropriation or seizure of, or requisition of title to or use of, the Aircraft or an Engine by any Governmental Entity, other than a requisition for use by any Governmental Entity of the United States or any political subdivision thereof, for a period of six (6) months or more; or (f) the operation or location of the Aircraft, while under requisition for use by any Governmental Entity, in any areas excluded from coverage by any insurance policy in effect with respect to such Aircraft required by the terms of this Agreement, unless Lessor and Lessee shall have obtained an indemnity in freely transferable Dollars from that Governmental Entity covering the risks excluded from coverage and satisfactory to both Lessor and Lessee.
1.79. “Written Summaries” shall have the meaning ascribed to such term in Section 7.8(a) hereof.
2. Conditions Precedent.
2.1. Lessor’s Conditions Precedent.
(a) Lessor’s obligation to deliver and to lease the Aircraft to Lessee hereunder shall be subject to satisfaction of each of the following conditions precedent.
(1) All of the representations and warranties of Lessee set forth in Section 14.1 hereof shall be true and correct in all material respects as of the date hereof and as of the Delivery Date.
(2) Lessor shall have received, on or before the Delivery Date, all of the following, all of which shall be in form and substance satisfactory to Lessor:
(A) The Lessee Guaranty, in the form attached as Appendix I, as executed by Lessee Guarantor;
| AIRCRAFT LEASE AGREEMENT | 7 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(B) a certificate of insurance issued by the insurer or broker for Lessee (or Lessee’s operator) evidencing compliance with the insurance provisions of Section 11 hereof;
(C) the Technical Acceptance Certificate in the form of Appendix D, executed and delivered by an authorized representative of Lessee; and
(D) the Lease Supplement, executed and delivered by an authorized representative of Lessee.
(3) No loss or destruction to the Aircraft shall have occurred, except to the extent covered by insurance with respect to the Aircraft.
(4) Lessee shall have made payment of the first installment of Basic Rent pursuant to Section 4.2 hereof.
(5) An Event of Default shall not have occurred and be continuing pursuant to (and as defined by) any of the Other Lease Agreements.
(6) Assuming that the Aircraft is registered in the United States, Lessee shall have (a) delivered to Special FAA Counsel its original signature for this Agreement and the Lease Supplement and (b) irrevocably authorized and instructed Special FAA Counsel to file original counterparts of this Agreement and the Lease Supplement with the FAA for recordation upon satisfaction of the conditions precedent set forth in Section 2.2 hereof. If the Aircraft is not registered in the United States, Lessee shall have taken all required steps to file or register this Agreement with the applicable Aviation Authority.
(7) Assuming that the Aircraft is registered in the United States, Lessee shall have (a) taken all required steps to appoint Special FAA Counsel as its Professional User Entity for purposes of registering its international interest under this Agreement with the International Registry and (b) irrevocably authorized and instructed Special FAA Counsel to register such international interest with the International Registry upon satisfaction of the conditions precedent set forth in Section 2.2 hereof. If the Aircraft is not registered in the United States, Lessee nevertheless shall have taken all required steps to register the international interest under this Agreement with the International Registry. Notwithstanding the foregoing, Lessee shall be required to satisfy the provisions of this Section 2.1(a)(7) only to the extent required by Lessor’s Lender or as required by applicable Law.
(8) Lessee shall have delivered to Lessor the Lease Termination Documents (unless Lessor elects to accept such documents after Delivery pursuant to Section 3.10 hereof).
(9) The Aircraft shall be ready for revenue service.
| AIRCRAFT LEASE AGREEMENT | 8 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(10) Lessee and ABX shall have executed the ABX Air Transportation Services Agreement.
(11) Lessee and ABX shall have executed the ACMI Termination Agreement.
(b) If due to Lessee’s failure to satisfy any of the above conditions precedent under this Section 2.1 (and expressly not including a failure of Lessor or the Aircraft to conform to the requirements of Section 2.2 hereof) the Aircraft shall not have been delivered to and accepted by Lessee within thirty (30) days after the Anticipated Delivery Date, then Lessor shall have the right (but not the obligation) to terminate this Agreement by giving notice to Lessee to that effect, with such notice of termination taking effect immediately. Upon such a termination occurring, Lessor shall be entitled to retain the amount of the Basic Rent Credit to compensate it for the loss of a bargain (and not as a penalty) and neither party hereto shall have any further obligation to the other with respect to the Aircraft.
2.2. Lessee’s Conditions Precedent.
(a) Lessee’s obligation to lease the Aircraft from Lessor hereunder shall be subject to satisfaction of each of the following conditions precedent:
(1) Lessee shall have (A) completed its inspection of the Aircraft (including the Aircraft Documents) pursuant to Section 3.7 hereof and (B) reasonably determined that the Aircraft complies with the Delivery Condition Requirements.
(2) The Aircraft shall not have suffered a Total Loss prior to the Delivery.
(3) The Aircraft shall be validly registered with the FAA in the name of Lessor (or shall be otherwise registered as approved by Lessor).
(4) Lessor shall have executed and delivered the Lease Supplement.
(5) Assuming that the Aircraft is registered in the United States, Lessor shall have (a) delivered to Special FAA Counsel its original signature for this Agreement and the Lease Supplement and (b) irrevocably authorized and instructed Special FAA Counsel to file original counterparts of this Agreement and the Lease Supplement with the FAA for recordation upon satisfaction of the conditions precedent set forth in Section 2.1 hereof. If the Aircraft is not registered in the United States, Lessor shall have taken all required steps to file or register this Agreement with the applicable Aviation Authority.
(6) Assuming that the Aircraft is registered in the United States, Lessor shall have (a) obtained an authorization code from the FAA for the international interest created by this Agreement with respect to the Airframe and Engines by filing with the FAA an AC Form 8050-135, (b) taken all required
| AIRCRAFT LEASE AGREEMENT | 9 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
steps to appoint Special FAA Counsel as its Professional User Entity for purposes of registering such international interest with the International Registry and (c) irrevocably authorized and instructed Special FAA Counsel to register such interest with the International Registry upon satisfaction of the conditions precedent set forth in Section 2.1 hereof. If the Aircraft is not registered in the United States, Lessor nevertheless shall have taken all required steps to register the international interest under this Agreement with the International Registry. Notwithstanding the foregoing, Lessor shall be required to satisfy the provisions of this Section 2.2(a)(6) only to the extent required by Lessor’s Lender or as required by applicable Law.
(7) Lessor shall have delivered the Aircraft ready for revenue service
(8) Lessee and ABX shall have executed the ABX Air Transportation Services Agreement.
(9) Lessee and ABX shall have executed the ACMI Termination Agreement.
(10) Lessee shall have received the Lessor Guaranty, in the form attached as Appendix J, as executed by Lessor Guarantor.
(b) In the event Lessor fails to tender the Aircraft for Delivery within thirty (30) days after the Anticipated Delivery Date, Lessee (conditioned upon Lessee satisfying its conditions precedent under Section 2.1 hereof) shall have the right (but not the obligation) to terminate this Agreement. Should Lessee desire to exercise its termination right under this Section 2.2(b), Lessee shall provide written notice to Lessor of its election to terminate not later than ten (10) days after the earlier: of (i) the date on which Lessor provides notice to Lessee that the Delivery will occur more than thirty (30) days after the Anticipated Delivery Date; or (b) the thirtieth (30th) day after the Anticipated Delivery Date. Any failure by Lessee to provide such a notice of termination to Lessor by such date will be deemed a waiver of the termination right provided under this Section 2.2(b). Upon a termination occurring under this Section 2.2(b), Lessee shall be entitled to (i) a refund of any Rent payments made pursuant to this Agreement, and (ii) a refund of the Basic Rent Credit and this Agreement shall be of no further force or effect.
3. Lease of Aircraft; Inspection; Technical Acceptance; Delivery.
3.1. Lease of the Aircraft. Commencing on the Delivery Date, Lessor shall lease the Aircraft to Lessee, and Lessee shall lease the Aircraft from Lessor, for the Term, and Lessee shall return the Aircraft to Lessor on the Expiration Date (or upon the earlier Termination of this Agreement as provided herein), upon and subject to the terms and conditions of this Agreement.
3.2. Term. The Term shall commence on the Delivery Date and continue until the Expiration Date, subject to earlier Termination as provided herein.
3.3. Anticipated Delivery Date. Lessor and Lessee (a) anticipate that the Aircraft will be available for delivery to Lessee on or about the Anticipated Delivery Date and (b) shall act in good faith at all times in an attempt to effect Delivery on or about the Anticipated Delivery Date.
| AIRCRAFT LEASE AGREEMENT | 10 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
3.4. A Lease Only. At all times during the Term, full legal title to the Aircraft (including the Aircraft Documents) shall remain vested in Lessor to the exclusion of Lessee, notwithstanding the delivery thereof to, and the use by, Lessee. Lessor and Lessee agree that this Agreement is intended to be a “lease” within the meaning of 11 U.S.C. Section 1110 and shall constitute a lease for tax purposes.
3.5. Delivery. On the Delivery Date, if all the conditions set forth in Sections 2.1 and 2.2 hereof have been satisfied or waived, the Aircraft shall be tendered for delivery to Lessee (which Lessee shall accept) pursuant to the procedure set forth herein by executing and delivering the Lease Supplement (the “Delivery”). The Delivery Date shall be the date of the Lease Supplement. The Aircraft and the Aircraft Documents will be tendered to Lessee for delivery at the Delivery Location.
3.6. Condition of the Aircraft; Modifications.
(a) Lessor, as a condition of Lessee’s obligation to accept the Aircraft, shall, at its sole cost and expense, cause the Aircraft, including the Aircraft Documents, to meet all requirements set forth in Appendix G hereto (the “Delivery Condition Requirements”) as of the Delivery.
(b) All unserviceable components and all discrepancies identified by Lessee during the ground or flight inspection conducted pursuant to Section 3.7 hereof shall be corrected by Lessor at Lessor’s expense prior to the technical acceptance of the Aircraft by Lessee (except such corrections as shall be deferred by mutual agreement of Lessee and Lessor, which corrections shall be performed at Lessor’s sole cost and expense thereafter).
(c) Except as otherwise expressly provided by this Agreement, all configuration modifications required to fulfill Lessee’s operational demands shall be performed by Lessee and at Lessee’s cost and expense. All such modifications shall be performed by an Authorized Maintenance Performer, and shall be subject to the prior approval of Lessor, which approval shall not be unreasonably withheld.
3.7. Inspection.
(a) Prior to the Anticipated Delivery Date, Lessor shall cause the Aircraft and the Aircraft Documents to be made available for a pre-delivery inspection by Lessee, at Lessee’s expense, by giving Lessee the opportunity to inspect the Aircraft, the Engines, all installed Parts and the Aircraft Documents, with such inspection or inspections taking place at the Delivery Location or at such other location as Lessor and Lessee may agree in writing.
(b) On or before the later of (i) ten (10) days following the execution of this Agreement by the parties or (ii) forty-five (45) days prior to the Anticipated Delivery Date, Lessor shall make available for Lessee’s inspection the Aircraft Documents which
| AIRCRAFT LEASE AGREEMENT | 11 |
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
are available at that time (the “Historic Documents”). On or before the earlier of (A) the thirtieth (30th) day following the date on which Lessor makes such Historic Documents available to Lessee or (B) the fifth (5th) day prior to the Anticipated Delivery Date, Lessee shall notify Lessor in writing of any non-conformities between such Historic Documents and the requirements of this Agreement. Lessee shall be deemed to have waived any non-conformities between the Historic Documents and this Agreement to the extent Lessee fails to identify such non-conformities to Lessor in writing on or before the date set forth in (A) or (B) above, as applicable.
(c) Any additional Aircraft Documents (“Additional Documents”) which are generated or otherwise become available from time to time after the date on which the Historic Documents are made available by Lessor for Lessee’s inspection shall be made available by Lessor for Lessee’s inspection within two (2) Business Days after they become available. Lessee shall notify Lessor in writing of any non-conformities between any such Additional Documents and the requirements of this Agreement on or before the second (2nd) Business Day following the date on which such documents are made available by Lessor for Lessee’s inspection.
(d) Immediately prior to delivery of the Aircraft, Lessor, at the request of Lessee, shall make the Aircraft available for a test flight (of no more than one hour in duration) based on the Manufacturer’s test flight program to demonstrate the satisfactory functioning of the Aircraft and all of its systems. If the Aircraft is determined to be not in conformity with the Delivery Condition Requirements, the test flight shall be repeated as necessary pursuant to the provisions of Section 3.7(e) below. Lessee’s representatives shall be allowed to attend such test flight on board the Aircraft (but shall be responsible for their own expenses). Lessor shall arrange for an experienced aircraft crew for the test flight (which crew, upon mutual agreement of Lessor and Lessee, may be Lessee’s crew), and Lessor shall bear the operating expense of such test flight (including the cost of the crew, fuel, and any airport fees). Lessor shall assume all risk of any loss or damage to the Aircraft in connection with such test flight except to the extent the same is caused by the gross negligence or willful misconduct of Lessee or its representatives.
(e) Promptly following the ground and flight inspection, but in no event more than 24 hours following such ground or flight inspection, Lessee shall notify Lessor of any defect or non-conformity with the Delivery Condition Requirements set forth in Appendix G, whereupon Lessor will advise Lessee of the estimated time required to effect correction of such defects or discrepancies. Upon the completion of any required corrections, Lessor will make the Aircraft available to Lessee for any further ground and/or flight reinspection as necessary (pursuant to Section 3.7(d) above) to verify compliance with the Delivery Condition Requirements.
3.8. Acceptance. Upon the completion of the ground and flight inspections conducted pursuant to Section 3.7 hereof, and the performance by Lessor of any corrections required to bring the aircraft into conformity with the Delivery Condition Requirements, Lessee shall execute and deliver to Lessor a Technical Acceptance Certificate substantially in the form of Appendix D hereto (the “Technical Acceptance Certificate”).
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
3.9. Modifications. Except as required to be performed by Lessor as part of the Delivery Condition Requirements, all work required to be performed on the Aircraft so as to satisfy Lessee’s operational requirements, to otherwise comply with the regulations of the Aviation Authority or for any other reason, shall be performed by an Authorized Maintenance Performer at Lessee’s cost and expense. Without limiting the generality of the foregoing, should Lessee (at any time during the Term of this Agreement) elect to make a change from the ABX Maintenance Program, Lessee shall be responsible for (a) creating the bridge package for such special program and (b) the cost of returning the Aircraft back to the ABX Maintenance Program upon the Return of the Aircraft at the end of the Term.
3.10. Lease Termination Documents. Prior to (and as a condition of) Delivery or, at Lessor’s sole option, after Delivery and within fifteen days after request of Lessor during the Term, Lessee shall execute and deliver to Lessor: (a) one or more executed lease termination agreements in a form or forms acceptable for filing with the Aviation Authority and each other relevant Governmental Entity; (b) any other documents required by the Aviation Authority and each other relevant Governmental Entity, as required in Lessor’s reasonable determination to effectuate the de-registration of the Aircraft (if determined appropriate by Lessor) and termination of the Lease; and (c) all documents required to effectuate a discharge at the International Registry of the international interest created by this Agreement in respect of the Airframe and Engines (with such lease termination agreement and other documents referred to, collectively, as the “Lease Termination Documents”). The Lease Termination Documents shall be filed by Lessor only upon the occurrence of an Event of Default by Lessee hereunder (including without limitation any failure by Lessee to provide documents requested by Lessor to evidence the Expiration or Termination of the Lease).
4. Guaranties; Payments; Method of Payment.
4.1. Guaranties.
(a) Lessee shall cause Lessee Guarantor to execute and deliver to Lessor the Lessee Guaranty. The Lessee Guaranty shall be executed and delivered to Lessor prior to Delivery, and shall provide for an irrevocable and unconditional guaranty of the performance of all of Lessee’s payment obligations to Lessor under this Agreement, which Lessee Guaranty shall be capped at an amount as set forth therein.
(b) Lessor shall cause the Lessor Guarantor to execute and deliver to Lessee the Lessor Guaranty. The Lessor Guaranty shall be executed and delivered to Lessee prior to Delivery, and shall provide for an irrevocable and unconditional guaranty of the performance of all of Lessor’s payment obligations to Lessee under this Agreement, which Lessor Guaranty shall be capped at an amount as set forth therein.
4.2. Basic Rent; Basic Rent Credit.
(a) Subject to the application of that portion of the Basic Rent Credit for each month pursuant to Appendix B, Lessee shall pay, in advance, the Basic Rent specified in Appendix B to Lessor on each and every Basic Rent Date until the earlier of the following:
(1) in the event of a Total Loss, the payment to Lessor of the Agreed Value in accordance with Section 19.1;
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(2) the Return; or
(3) in the event that the Aircraft and the Aircraft Documents are returned to Lessor under circumstances in which the Aircraft or the Aircraft Documents do not conform to the Return Condition Requirements, the date on which Lessor executes and delivers to Lessee a Return Receipt in the form attached hereto as Appendix F.
(b) The termination of Lessee’s obligation to pay Basic Rent pursuant to Section 4.2(a)(3) above shall not be in derogation of Lessor’s other rights and remedies against Lessee in the event of a return of the Aircraft and Aircraft Documents under circumstances in which the Aircraft and the Aircraft Documents as so returned do not conform to the Return Condition Requirements.
(c) Should this Agreement terminate (i) pursuant to Section 2.2(b) hereof (i.e., as the result of Lessor failing to satisfy its conditions precedent to Delivery), (ii) pursuant to Section 19.1 hereof (i.e., upon the occurrence of a Total Loss of the Aircraft prior to Delivery or during the Term), (iii) as a result of Lessor’s exercise of its rights under Section 7.1(b)(3) hereof or (iv) as the result of Lessor breaching its obligations under this Agreement, Lessor shall be required to make payment to Lessee in an amount equal to the unapplied portion of the Basic Rent Credit.
4.3. Basic Rent Date.
(a) The first payment of Basic Rent shall be made on or prior to the Delivery Date, as a condition of the Delivery, in an amount equal to the product of (i) the monthly Basic Rent multiplied by (ii) a fraction (A) whose numerator is the number of days from and after the Delivery Date remaining in the month which includes the Delivery Date and (B) whose denominator is the total number of days in such month.
(b) On each Basic Rent Date following the Delivery Date (through the time set forth in Section 4.2(a) hereof, Lessee shall pay the Basic Rent to Lessor as required by Section 4.2(a).
4.4. Engine Maintenance Program.
(a) Lessor and Lessee shall negotiate in good faith and shall cooperate in seeking to maintain the Engines under the Delta Engine Program throughout the Term.
(b) Lessor hereby represents to Lessee that, pursuant to the Delta Engine Program, should an Engine be removed from the Delta Engine Program after performance of a shop visit with respect to such Engine, Lessor (or an Affiliate of Lessor) shall be responsible for the payment of buy-out compensation (the “Buy-Out Compensation”) to Delta in an amount equal to the positive difference between (i) a reasonable time and material charge for the shop visit, as mutually determined by Delta
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
and Lessor (or an Affiliate of Lessor) and (ii) the amount of fees paid to Delta under the Engine Maintenance Program for the Engine prior to the removal of the Engine from the Delta Engine Program. As a result of such requirement, should Lessee elect to remove an Engine from the Delta Engine Program during the Term, Lessee shall be responsible for the payment of any such Buy-Out Compensation to Delta as required by the Delta Engine Program; provided that Lessee shall have the right to approve the determination of the reasonableness of the subject time and material charges, with such approval not to be unreasonably withheld or delayed.
4.5. Payments in Dollars to Designated Bank Account. All payments owing by Lessee to Lessor pursuant to this Agreement (including, without limitation, the payment of Basic Rent) shall be made in Dollars by the wire transfer of immediately available funds to the bank account designated in Appendix B or to such other bank account as Lessor may designate in writing to Lessee from time to time. Payments shall not be considered made by Lessee until the owner of such bank account has received full credit in its account. Lessee accepts all risks of delay or blockage of any transfer made in accordance with the terms of this Agreement.
4.6. Interest on Overdue Amounts. Any amount which is overdue pursuant to this Agreement shall bear interest at the rate indicated in Appendix B hereto calculated from the due date of such payment. The payment of such interest shall be made together with the payment of the overdue amount.
4.7. Due Date Not on Business Day. In the event any payment required hereunder is due on a day that is not a Business Day, then such payment shall be made on the next succeeding Business Day.
4.8. No Abatement. Lessee’s obligations to pay Rent hereunder shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right Lessee may have against Lessor. There shall be no abatement of Rent for any period when the Aircraft shall be rendered unfit for use, grounded, unserviceable for any reason whatsoever, hijacked, confiscated, seized, requisitioned, restrained or appropriated.
5. Registration; Nameplates; Filings.
5.1. Registration. Throughout the Term of this Agreement, the Aircraft shall remain registered in the United States or in such other jurisdiction as Lessor (and Lessor’s Lender) shall provide prior written approval, with such approval not being unreasonably withheld or delayed. At all times during the Term, the Aircraft shall be registered with the applicable Aviation Authority in the name of Lessor (or as otherwise registered with Lessor’s written consent). To the extent required by Lessor’s Lender or applicable Law, the international interest created by this Agreement in the Airframe and in the Engines shall be registered with the International Registry.
5.2. Nameplates. Lessee shall attach or cause to be attached to the Airframe in a location reasonably adjacent to and not less prominent than the airworthiness certificate for the Aircraft, and to each Engine, fireproof nameplates in a form reasonably specified by Lessor
| AIRCRAFT LEASE AGREEMENT | 15 |
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
which shall evidence the ownership interest of Lessor (and, as directed by Lessor, the security interest of Lessor’s Lender, as applicable). Lessee shall keep and maintain all such nameplates plainly, permanently and conspicuously on the Airframe and Engines throughout the Term.
5.3. Filings. At or before Delivery, this Agreement (absent the provisions of Appendix B) and such other documents as Lessor may direct shall be filed with the Aviation Authority and with any other Governmental Entity registrar or international registrar as provided herein, including, without limitation, the International Registry. All costs and expenses (including the legal fees charged by Special FAA Counsel but not including the legal fees charged by Lessor’s counsel) relating to each of such filings shall be paid as set forth in Section 20.8 of this Agreement.
6. Possession, Use and Operation of the Aircraft; Risk of Loss or Damage.
6.1. Possession of Aircraft; Wet-Lease.
(a) Lessee, during the Term, shall be entitled to the possession and use of the Aircraft. Lessee shall not sublease or otherwise transfer possession of the Aircraft to any person or entity; provided, however, that, so long as no Event of Default shall have occurred and be continuing:
(1) Lessee may deliver possession of the Aircraft to the Manufacturer or to any Authorized Maintenance Performer for testing, service, repair, maintenance or overhaul work thereon or on any Part thereof or for alterations or modifications in or additions thereto to the extent required or permitted by the terms of this Agreement; and
(2) Lessee may, with the prior written consent of Lessor, enter into a sublease with respect to the Aircraft. Lessor’s consent to a sublease by Lessee shall not be unreasonably withheld or delayed, provided that the failure of Lessor’s Lender to approve a sublease shall be considered good cause for Lessor to withhold its approval.
(b) Should Lessee not be an airline or other certificated operator of the Aircraft, Lessee shall have the right to enter into a sublease or operating agreement with a certificated operator, subject to the prior approval of Lessor, with such approval not being unreasonably withheld or delayed.
(c) During the Term, Lessee shall be entitled to enter into and carry out any charter, “wet-lease” or other agreement with respect to the Aircraft on terms whereby the Aircraft will at all times be operated by an aircrew employed by and subject to the operational control of Lessee; provided that any such charter or other agreement (i) shall be approved by Lessor, such approval not being unreasonably withheld or delayed, (ii) shall be subordinate in all respects to this Agreement, (iii) will not extend beyond the end of the Term, (iv) will not result in any transfer of possession or control of, or create any interest in, the Aircraft to or in favor of any person or entity, and such possession and control shall remain at all times exclusively with Lessee and (v) shall not be entered into or renewed beyond its current term in the event that at the time Lessee seeks to so enter into or renew such charter, there exists an Event of Default.
| AIRCRAFT LEASE AGREEMENT | 16 |
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
6.2. Possession of Engines.
(a) During the Term, Lessee shall be entitled to the possession and use of each of the Engines. Lessee shall not, without the prior written consent of Lessor, transfer possession of any of the Engines to any person or entity; provided, however, that, so long as no Event of Default shall have occurred and be continuing, Lessee may, without the prior written consent of Lessor, exercise the following rights.
(1) Maintenance Workshop. Lessee may deliver possession of any Engine to the Manufacturer or to an Authorized Maintenance Performer for testing, service, repair, maintenance or overhaul work on such Engine or any part thereof or for alterations or modifications in or additions to such Engine to the extent required or permitted by the terms of this Agreement.
(2) Engines on Airframe Owned by Lessee. Lessee may install any Engine on an airframe owned by Lessee free and clear of all Liens, except (A) Permitted Liens or those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe and (B) the Lien of any mortgage which expressly and effectively provides that such Engine leased to Lessee hereby shall not become subject to the Lien thereof, notwithstanding the installation of such Engine on any airframe subject to such Lien, unless and until Lessee shall become the owner of such Engine.
(3) Engine on Airframe Leased to Lessee. Lessee may install any Engine on an airframe leased to Lessee or purchased by Lessee subject to a hire purchase or conditional sale agreement; provided that (A) such airframe is free and clear of all Liens except (i) Permitted Liens or those which apply only to the engines (other than Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment (other than Parts) installed on such airframe, (ii) the Lien of any mortgage which expressly and effectively provides that such Engine leased to Lessee hereby shall not become subject to the Lien thereof, notwithstanding the installation of such Engine on any airframe subject to such Lien, unless and until Lessee shall become the owner of such Engine and (iii) the rights of the parties to the lease or hire purchase or conditional sale agreement covering such airframe and (B) there shall be in effect between Lessee and such lessor or hire vendor or conditional vendor of such airframe a written agreement (which may be the lease or hire purchase or conditional sale agreement covering such airframe) whereby such lessor or hire vendor or conditional vendor expressly and effectively agrees that neither it nor its successors and assigns will acquire or claim any right, title or interest in such Engine by reason of such Engine being installed on such airframe at any time while such Engine is subject to this Agreement; and provided further, that the rights of any transfer permitted by this Section 6.2 shall be subject and subordinate to all of the terms of this
| AIRCRAFT LEASE AGREEMENT | 17 |
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Agreement, including, without limitation, Lessee’s obligation to return the Engines at the end of the Term and Lessor’s right to repossession pursuant hereto, and Lessee shall remain primarily liable hereunder for the performance of all of the terms of this Agreement to the same extent as if such transfer had not occurred.
(b) In the event that Lessee shall have entered into a mortgage, lease or conditional sale agreement complying with the provisions of clause (2) or clause (3) of Section 6.2(a) hereof, Lessor hereby agrees, for the benefit of the mortgagee, lessor or conditional vendor under such agreement, that Lessor and its successors and assigns shall not acquire or claim, as against such mortgagee, lessor or conditional vendor, any right, title or interest in any engine owned by such person or entity or in which it has a security or ownership interest by reason of such engine’s being installed on the Airframe. Any Engine removed from the Aircraft shall be, during the period such Engine is so removed, either safely housed and sheltered or repaired or maintained in accordance with this Agreement, or installed on an aircraft pursuant to this Section 6.2; provided, further, that: (1) Lessee maintains or causes to be maintained insurance in accordance with Section 11 in respect of the removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which such removed Engine is installed); and (2) as soon as reasonably practicable and in any event on or before expiration of the Term or termination of this Agreement, such removed Engine is reinstalled on the Airframe.
(c) Notwithstanding anything to the contrary in this Section 6.2, Lessee shall return the Engines to Lessor at the end of the Term. Either of the Engines at Return may be a replacement Engine under one of two conditions: (i) upon the occurrence of a Total Loss with respect to an Engine during the Term (requiring an Engine replacement pursuant to Section 19.2 of this Agreement); or (ii) Lessor agreeing to accept an engine in substitution for an Engine upon Lessee’s request (which Lessor shall not unreasonably deny), subject to Lessee and such replacement Engine satisfying all of the requirements of Section 19.2 hereof (including, without limitation, the engine condition and title transfer requirements therein). Any replacement engine which satisfies this Section 6.2(c) (a “Replacement Engine”) thereafter shall be deemed an “Engine” for all purposes under this Agreement.
6.3. Pooling of Parts. Any Part removed from the Aircraft as provided in Section 7 hereof may be subjected by Lessee to normal interchange or pooling agreements or arrangements customary in the airline industry and entered into by Lessee with other licensed air carriers or aviation parts suppliers in the ordinary course of its business, provided that the part replacing such removed Part shall be incorporated or installed in or attached to the Aircraft in accordance with Section 7 promptly upon the removal of such removed Part. In addition, any replacement part, when incorporated or installed in or attached to the Aircraft in accordance with Section 7, may be owned by another such air carrier or aviation parts supplier subject to such pooling arrangement; provided, further, that the Part so removed remains the property of Lessor and subject to this Agreement and that Lessee, at its expense, promptly thereafter either (a) causes title to such replacement part to vest in Lessor free and clear of Liens other than Permitted Liens,
| AIRCRAFT LEASE AGREEMENT | 18 |
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
in accordance with Section 7.5, or (b) replaces such replacement part by incorporating or installing in or attaching to the Aircraft a further replacement part owned by Lessee free and clear of all Liens other than Permitted Liens, and causes title to such further replacement part to vest in Lessor and causes such replacement part to become subject to this Agreement.
6.4. Commercial Operations. Lessee shall not use or permit the Aircraft to be operated except (a) in commercial operation for which Lessee (or Lessee’s sublessee or operator) is duly authorized by the laws of the United States and any other jurisdiction(s) to whose laws the operation of the Aircraft is subject and (b) in jurisdictions which are not excluded from coverage by any insurance policy required by the terms of this Agreement in effect with respect to the Aircraft.
6.5. Lawful Use. Lessee shall not permit the Aircraft to be maintained, used, or operated in violation of any Law of any Governmental Entity having jurisdiction, or contrary to any Manufacturer’s operating manuals and instructions, or in violation of any airworthiness certificate, license, registration or AD relating to the Aircraft issued by any such Governmental Entity. Lessee shall not cause or permit the Aircraft to proceed to, or remain at, any location which is then the subject of a prohibition order (or any similar order or directive), sanctions or restrictions by or under any Governmental Entity having jurisdiction over Lessee or the Aircraft.
6.6. Freight Operations. Lessee shall not use or permit the use of the Aircraft for the carriage of (a) whole animals, living or dead, except in cargo compartments according to I.A.T.A. regulations and except domestic pet animals carried in suitable containers to prevent the escape of any fluids and to ensure the welfare of the animal or (b) acids, toxic chemicals, other corrosive materials, explosives, nuclear fuels, nuclear wastes or any nuclear assemblies except in full compliance with applicable Law.
6.7. Use Within Insurance Coverage. Lessee shall not operate the Aircraft or suffer the Aircraft to be operated: (a) within or into any geographic area unless the Aircraft is covered by insurance as required by the provisions of Section 11 during and with respect to its operations into that area; or (b) otherwise contrary to the terms or outside the coverage of such insurance as required by the provisions of Section 11.
6.8. Net Lease.
(a) During the Term, except as otherwise provided by the terms of this Agreement, Lessee shall bear all costs in connection with the possession, use, operation, maintenance, overhaul, repair and insurance of the Aircraft.
(b) During the Term, Lessee shall provide and pay for all crews and other personnel, fuel, lubricants, oil and electric power consumed by and required for the operation of the Aircraft.
(c) Lessee shall promptly pay (or cause to be paid) all import/export fees (as applicable), navigation charges, route charges and airport charges (including landing fees, departure fees, airport handling charges and taxes) the nonpayment of which could result in a Lien upon the Aircraft or in the Aircraft being held or seized pending payment of such charges.
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
6.9. Risk of Loss or Damage. Lessee shall bear all risks of loss or damage to the Aircraft, Engines, Parts and Aircraft Documents from any and all causes whatsoever from the Delivery Date until the re-delivery thereof to Lessor; provided that, in the event of a re-delivery of any one or more of the Aircraft, Engines, Parts and Aircraft Documents to Lessor, under circumstances which do not constitute a Return, then Lessee shall be responsible for the cost to Lessor to insure the Aircraft, Engines, Parts and Aircraft Documents during the period, following such re-delivery, for which Lessee continues to be obligated to pay Basic Rent pursuant to Section 4.2 hereof. If the Aircraft is requisitioned by any Governmental Entity during the Term, then, unless and until the Aircraft becomes a Total Loss, (a) the Term shall continue and Lessee shall continue to fulfill all its obligations under this Agreement and (b) Lessee shall, during the Term, be entitled to all requisition hire paid to Lessor or to Lessee on account of such requisition. For the avoidance of doubt, Lessor shall not be liable to supply an aircraft, an engine or any part, if the Aircraft, an Engine or a Part is lost or damaged or rendered unfit for use or grounded, hijacked, confiscated, seized, requisitioned, restrained or appropriated.
7. Maintenance and Modifications.
7.1. Maintenance of the Aircraft; ADs.
(a) General. From the Delivery until the Return of the Aircraft and the Aircraft Documents, Lessee, at its own expense, shall service, repair, maintain, overhaul, check or cause the same to be done to the Aircraft, in accordance with the Maintenance Program so as to keep the Aircraft eligible for FAR Part 121 operations, in the same condition as other Boeing 767 aircraft Lessee owns or operates, and in such operating condition as may be necessary to enable the airworthiness certification of the Aircraft to be maintained in good standing at all times pursuant to the requirements of the Aviation Authority and the FAA (if not the applicable Aviation Authority).
(b) AD Compliance.
(1) Lessee shall comply with all ADs issued during the Term affecting the Aircraft and requiring terminating action during the Term or within one year after the end of the Term (without regard to any deferrals which are or might be granted).
(2) If the cost of complying with an AD is less than or equal to [*] Dollars ($[*]), Lessee shall pay all of such cost. If the cost of such compliance is greater than [*] Dollars ($[*]) (but only to the extent that such cost relates to work required to comply with an AD on a terminating action basis, and excluding work performed for any other purpose, such as compliance with ADs by means of repetitive inspections, recording compliance work in the Aircraft Documents, and all other maintenance work), Lessee shall pay the first [*] Dollars ($[*]), and the balance (the “AD Shared Expenses”) shall be paid initially by Lessee to the applicable Authorized Maintenance Performer, with Lessee being entitled to reimbursement from Lessor in an amount equal to the product of (a) the amount of the AD Shared Expenses times (b) a fraction, the numerator of which is [*] minus the number of months (rounded to the nearest whole number of months) from the date of completion of the subject AD work to the AD Term Date, and the denominator of which is [*].
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(3) If the cost of compliance with an AD on a terminating action basis is equal to or greater than [*] Dollars ($[*]), Lessee shall not perform such terminating action unless Lessor consents in advance in writing; provided, however, that, should Lessee request such consent on the part of Lessor and Lessor fail or refuse to provide such consent, then either: (i) Lessor shall provide to Lessee an alternative, equivalent aircraft under the same terms and conditions as this Agreement for the remainder of the Term; or (ii) the Lease shall terminate and (A) Lessor shall pay to Lessee any prepaid Basic Rent, (B) Lessor shall pay to Lessee the balance of the Basic Rent Credit which has yet to be applied to the payment of Basic Rent; (C) Lessee shall be entitled to return the Aircraft to Lessor without complying with the Return Condition Requirements relating to (and only to) that portion of the Aircraft subject to the applicable AD (i.e., the Airframe, the applicable Engine or Engines, the Landing Gear or the APU) and (D) with respect to the portions of the Aircraft not subject to the AD, Lessor shall assist Lessee in complying with the applicable Return Condition Requirements by pro-rating the costs of such compliance based upon a comparison of (x) the number of months between Delivery and the effective date of the AD and (y) the number of months between the effective date of the AD and the Expiration Date.
(4) Lessor’s obligation to contribute toward the payment of AD costs pursuant to this Section 7.1(b) is subject to and contingent upon:
(A) Lessor shall have consented to the applicable terminating action, as required by Section 7.1(b)(3);
(B) No Event of Default shall have occurred and be continuing;
(C) Lessor shall have received evidence reasonably satisfactory to Lessor that the work contemplated by such AD has been completed; and
(D) Lessor shall have received true copies of the invoices and paid receipts supporting the reported cost of such AD work.
(5) Lessor shall make payment of its share of the AD Shared Expenses within thirty (30) days of its receipt of all of the documentation reasonably required by Lessor pursuant to Section 7.1(b)(4)(C) and (D) hereof. Lessee shall not offset the amount due from Lessor for its portion of the AD Shared Expenses against Rent or other amounts due to Lessor hereunder.
| AIRCRAFT LEASE AGREEMENT | 21 |
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Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
7.2. Maintenance of the Aircraft Documents.
(a) From the Delivery until the Return of the Aircraft, Lessee, at its own expense, shall maintain and update (or shall cause to be maintained and updated), in the English language, all Aircraft Documents as required by applicable Laws and by the regulations of the Aviation Authority and the FAA (if not the applicable Aviation Authority). Lessee shall at all times cause the Aircraft Documents to be stored (1) at a location disclosed to and accepted by Lessor and (2) in a complete and organized format.
(b) When incorporating ADs, service bulletins, modifications, repairs or any other engineering changes to the Aircraft, Lessee shall revise or cause to be revised the customized documentation for the Aircraft in order to incorporate and reflect such ADs, service bulletins, modifications or repairs, as applicable.
(c) Together with each transmission of the Written Summaries required under Section 7.8 hereof, Lessee shall provide to Lessor an electronically-scanned copy (in CD, DVD or electronic format reasonably acceptable to Lessor) of all Aircraft Documents changed or added since the scanned copy last provided to Lessor, so that the scanned copy in Lessor’s possession will be correct and complete as of the date of such Written Summaries.
7.3. Authorized Maintenance Performer. All maintenance on the Airframe, Engines and Parts shall be performed by an Authorized Maintenance Performer.
7.4. Replacement of Parts. Except as otherwise provided herein, Lessee, at its own expense, shall as soon as practicable replace (or cause to be replaced) all Parts that may from time to time be incorporated or installed in or attached to the Aircraft and that may become unserviceable, worn out, lost, stolen, destroyed, seized, confiscated or damaged beyond repair. In addition, in the ordinary course of maintenance, service, repair, overhaul, or testing, Lessee may remove (or caused to be removed) any Part, provided that Lessee shall replace (or cause to be replaced) such Part as promptly as practicable. All replacement parts shall be free and clear of all Liens, except for Permitted Liens, and shall be in good operating condition, shall be lawful for installation and use on the Aircraft under applicable Aviation Authority regulations and other applicable Law, and shall be certificated for use on a Boeing 767-200 aircraft.
7.5. Title to Parts. All Parts at any time removed from the Aircraft shall remain the property of Lessor, no matter where located, until such time as: (a) such Parts shall be replaced by parts that have been incorporated or reinstalled in or attached to the Aircraft and that meet the requirements for replacement parts specified above in Section 7.4, and (b) title thereto shall have passed to Lessor free and clear of all Liens other than Permitted Liens. Immediately upon the incorporation or installation in or attachment in or to the Aircraft of any replacement part as above provided, and without further act (c) title to the removed Part shall vest in Lessee, free and clear of all rights of Lessor and any Lessor’s Liens and (d) such replacement part shall be subject to this Agreement and shall be deemed a Part of the Aircraft for all purposes hereof to the same extent as the Parts originally incorporated and installed in or attached to the Aircraft.
| AIRCRAFT LEASE AGREEMENT | 22 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
7.6. Removal of Engines. Lessee shall be entitled, so long as no Event of Default shall have occurred and be continuing, to remove or permit the removal of any Engine from the Airframe and to install on the Airframe an engine, provided, that the removed Engine is, during the period of substitution, either being safely housed and sheltered or repaired or maintained in accordance with this Agreement, or is installed on an aircraft pursuant to Section 6.2 hereof (and the provisions of Sections 6.2(a)(2) or 6.2(a)(3), as applicable, concerning preservation of title shall apply to the removed Engine); provided, further, that:
(a) Lessee maintains or causes to be maintained insurance in accordance with Section 11 in respect of the removed Engine at all times while it is removed from the Airframe (and, if required by Lessor, Lessee shall furnish or cause to be furnished to Lessor waivers or acknowledgments by the insurers of the aircraft on which such removed Engine is installed); and
(b) as soon as reasonably practicable and in any event on or before end of the Term, such engine is removed from the Airframe and the removed Engine is reinstalled on the Airframe (subject to the Replacement Engine provisions of Section 6.2(c) of this Agreement).
7.7. Equipment Changes.
(a) Except as expressly provided herein or as a result of an AD or service bulletin or other requirement of the Aviation Authority or the Manufacturer, the Aircraft shall not be modified, altered, converted, or added to (an “Equipment Change”), provided that, subject to Lessor’s prior approval in writing, and in compliance with any conditions reasonably imposed by Lessor, Lessee may, at Lessee’s own expense, make (or cause to be made) such Equipment Changes to the Aircraft as Lessee may deem desirable, so long as such Equipment Change does not result in a diminution in the value or utility of the Aircraft. All such Equipment Changes shall be consistent with the rules and regulations of the Aviation Authority.
(b) Title to all Parts incorporated or installed in or attached or added to the Aircraft as the result of such Equipment Change shall, without further act, vest in Lessor and shall become subject to this Agreement, free of all Liens other than Permitted Liens; provided, however, that so long as no Event of Default shall be continuing, Lessee may remove (or cause to be removed) any such Part if: (1) such Part is in addition to, and not in replacement of or in substitution for, any Part originally incorporated or installed in or attached to the Aircraft at the time of Delivery or any part in replacement of or in substitution for any such original Part; (2) such Part is not required to be incorporated or installed in or attached or added to the Aircraft pursuant to the provisions of Sections 7.1 hereof; and (3) such Part can be removed from the Aircraft without diminishing or impairing the value or airworthiness which the Aircraft would have had such Equipment Change not occurred. Without limiting the generality of the immediately prior sentence, all loose equipment owned by Lessee which is placed on board the Aircraft (and remains loose equipment) shall remain owned by Lessee.
| AIRCRAFT LEASE AGREEMENT | 23 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(c) Upon the removal by Lessee of any such Part as above provided, title thereto shall, without further act, vest in Lessee free and clear of all Lessor’s Liens and rights of Lessor and such part shall no longer be deemed part of the Aircraft. Any Part not removed by Lessee as above provided prior to the Return of the Aircraft shall remain the property of Lessor; provided that Lessor may require Lessee, by notice to Lessee given not later than the 60th day prior to end of the Term (except during the continuance of an Event of Default), to remove any Parts incorporated or installed in the Aircraft as a result of an Equipment Change and to restore the Aircraft to its condition prior to such Equipment Change, prior to the end of the Term.
7.8. Summary of Flight Hours, Cycles; Technical Information.
(a) Lessee, at its own expense, shall, within ten (10) Business Days after the end of each calendar month of the Term and on the Return Date, provide (or cause to be provided) to Lessor written summaries (the “Written Summaries”) of the following events occurring during the previous calendar month: (1) Flight Hours and Cycles accrued on the Airframe and Engines, certified by an officer of Lessee; (2) all maintenance performed on the Airframe or Engines; and (3) any Engine changes.
(b) Lessee shall give Lessor not less than fifteen (15) days’ prior written notice of the anticipated time and location of all partial or complete C-Checks, Engine shop visits, and other major maintenance to be performed on the Aircraft.
(c) During the Term, Lessee shall furnish to Lessor such additional information concerning the location, condition, use and operation of the Aircraft as Lessor may reasonably request, including, without limitation, records reflecting the Airframe, Engine and APU service history.
(d) All information furnished by Lessee to Lessor concerning monetary amounts (whether in the Written Summaries or otherwise) shall be denominated in Dollars.
(e) Together with each transmission of Written Summaries, Lessee shall provide to Lessor the electronically-scanned copies of the Aircraft Documents required under Section 7.2(c) hereof.
7.9. Inspections.
(a) Lessor may, but shall not be obligated to, upon giving five (5) Business Days prior notice to Lessee of its intention to do so (or any other notice which is reasonable under the circumstances), inspect the Aircraft, the Aircraft Documents, and any maintenance performed by or on behalf of Lessee during normal business hours, provided that such inspection does not unreasonably interfere with Lessee’s operations. Lessor shall be entitled, as part of any such inspection, to open any of the panels, bays and doors of the Aircraft. All inspections performed by Lessor shall be at its cost (except that, during the continuance of an Event of Default, such inspection shall be at Lessee’s cost and may be conducted without prior notice to Lessee).
| AIRCRAFT LEASE AGREEMENT | 24 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(b) Lessee shall assist and not interfere with any person designated by Lessor to conduct any inspection pursuant to this Section 7.9. Lessor shall not incur any liability or obligation by reason of not making an inspection and no failure by Lessor to make such inspection shall lessen any obligation of Lessee under this Agreement, including but not limited to Lessee’s obligations under this Section 7. In addition, Lessee shall at all times permit Lessor’s technical representatives to be present at and inspect any maintenance being conducted on the Aircraft or any constituent thereof. Lessee shall, upon Lessor’s request, provide Lessor with letters to the Authorized Maintenance Performer allowing the disclosure to Lessor of all matters relating to the maintenance of the Aircraft.
(c) Lessor Not Obligated. Except as otherwise expressly provided in this Agreement, Lessor shall have no obligation whatsoever to service, repair, maintain, check or cause the same to be done to the Aircraft, or to keep the Aircraft in an airworthy condition.
8. Taxes.
8.1. General Tax Indemnity. Lessee agrees to timely pay, and to indemnify Lessor against, any and all Taxes, whether such Taxes are now existing or hereafter adopted, enacted or amended, that may be asserted, levied or imposed on or against Lessor upon or with respect to or measured by: (a) the Aircraft or any Part thereof or interest therein; (b) this Agreement, and the performance of any of the transactions contemplated hereby or the exercise of remedies under this Agreement with respect to an Event of Default; (c) the delivery, testing, transportation, rental, sale, replacement, substitution, repossession, abandonment, transfer, rebuilding, leasing, subleasing, possession, presence, use, operation, condition, storage, maintenance, modification, alteration, repair or return of the Aircraft or any Part thereof or interest therein occurring subsequent to the Delivery Date; and (d) Rent payable under this Agreement.
8.2. Certain Exceptions. The provisions of Section 8.1 hereof shall not apply to, and Lessee shall have no liability to Lessor thereunder with respect to, Taxes excluded under any of the following provisions or any combination thereof:
(a) Taxes which are not yet due;
(b) Taxes on, based on, measured by or with respect to the net or gross income, or net or gross receipts, capital, net worth, franchise, or conduct of business of Lessor (other than Taxes in the nature of sales, withholding, use or property Taxes) imposed by any federal, state or local government or taxing authority in the United States or any foreign government or foreign taxing authority, or by any possession or territory of the United States; and
(c) Taxes that would not have been imposed but for any failure of Lessor to (1) file proper and timely reports or returns or to pay any Taxes when due, or (2) comply with any certification, information, documentation, reporting or other similar requirements concerning the nationality, residence, identity or connection with the jurisdiction imposing such Taxes, if such compliance is required to obtain or establish relief or exemption from or reduction in such Taxes and Lessor was eligible to comply with such requirement.
| AIRCRAFT LEASE AGREEMENT | 25 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
8.3. Indemnities Payable on After-Tax Basis; Payments in Respect of Tax Benefits. Lessee agrees that, with respect to any payment or indemnity to Lessor under this Section 8, Lessee’s indemnity obligations shall include an amount necessary to hold Lessor harmless from all Taxes (other than Taxes described in Section 8.2) required to be paid by Lessor with respect to the receipt or accrual of such payment or indemnity (including any payment by Lessor of any Taxes in respect to any indemnity payments received or receivable under this Section 8).
8.4. Payment of Tax Indemnities. If (a) any Taxes are required to be deducted or withheld by Lessee from any payment of Rent or other amounts due to Lessor under this Agreement (“Withholding Taxes”) and (b) Lessee is required to indemnify Lessor against such Withholding Taxes pursuant to this Section 8 (“Indemnifiable Withholding Taxes”), then Lessee shall, at the time of paying such Rent, or other amount, pay to Lessor such additional amounts as may be necessary in order that the net amount of such payment of Rent or other amount, after deduction or withholding for Indemnifiable Withholding Taxes, will be equal to the amount Lessor would have received if such Indemnifiable Withholding Taxes had not been deducted or withheld. Any other amount payable to or on behalf of Lessor, pursuant to Section 8.1 hereof shall be paid to Lessor or, if so directed by Lessor, directly to the relevant taxing authority, within thirty (30) days after receipt by Lessee of a written demand therefor from Lessor accompanied by a written statement describing in reasonable detail the Taxes that are the subject of and basis for such payment or indemnity and the computation of the amount so payable.
9. Liens.
9.1 During the Term, Lessee shall not create or suffer to exist any Lien upon or against the Aircraft, the Aircraft Documents or any of its rights under this Agreement, other than the following (“Permitted Liens”):
(a) Lessor’s Liens;
(b) repairers’ or other like Liens arising in the ordinary course of business, in respect of obligations which are neither overdue nor deferred;
(c) the rights of others permitted under Sections 6 and 7 hereof;
(d) Liens for taxes of any kind not yet due and payable or being contested in good faith by appropriate proceedings that do not involve any material risk of the sale, forfeiture or loss of the Aircraft or the Aircraft Documents or any interest therein;
(e) Liens arising out of judgments or awards against Lessee with respect to which there shall have been procured a stay of execution;
(f) salvage rights of insurers under insurance policies maintained pursuant to Section 11; and
(g) the respective rights of Lessor and Lessee as provided herein.
| AIRCRAFT LEASE AGREEMENT | 26 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
9.2 All Liens excepted above under Section 9.1(b) shall be cleared by Lessee in the ordinary course of business, but not later than the end of the Term. If at any time during the Term a Lien (other than a Permitted Lien) shall be created or suffered to exist by Lessee, or be levied upon or asserted against the Aircraft or the Aircraft Documents, or if any person or entity should assert any Lien (other than a Permitted Lien) on any right of Lessee under this Agreement, Lessee shall notify Lessor and Lessee shall cause such Lien (other than Permitted Liens) forthwith to be discharged by bond or otherwise unless Lessor shall otherwise consent in writing. If Lessee shall fail to discharge any Lien (other than Permitted Liens), Lessor may do so, and Lessee shall pay to Lessor on demand the amount paid by Lessor together with Lessor’s losses, costs, and expenses, including reasonable legal fees and expenses. The obligations set forth in this Section 9 shall survive the Expiration or Termination of this Agreement.
| 10. | Indemnification. |
10.1. Indemnification and Holding Harmless. Lessee agrees to defend, indemnify, reimburse, and hold harmless Lessor, Lessor’s Lender, and their respective affiliates, subsidiaries, successors, assigns and subcontractors, together with each of such entities’ respective directors, officers, agents, shareholders and employees (hereinafter individually and collectively the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, penalties, fines, other sanctions and any costs and expenses in connection therewith, including but not limited to reasonable attorneys’ fees and expenses (any and all of which are hereafter referred to as “Claims”) that in any way result from or arise out of or in relation to: (a) the condition, manufacture, delivery under this Agreement, possession, return, disposition after an Event of Default, use or operation of the Aircraft either in the air or on the ground; (b) any defect in the Aircraft arising from the material or any article used therein or from the design, testing or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft, regardless of when such defect shall be discovered, and regardless of where the Aircraft may then be located; (c) any breach by, or noncompliance by Lessee with, any provision of this Agreement or any other agreement or document contemplated hereby or given or entered into by Lessee in connection herewith; or (d) any bodily injury suffered by any person, or any property damage suffered by any person or entity, in the course of or as a result of the use, operation, maintenance, service, repair, overhaul, testing, possession, delivery under this Agreement or return of the Aircraft. The foregoing indemnity shall not apply to (1) any Claim that constitutes a Permitted Lien, (2) Claims for Taxes, it being agreed that Section 8 represents Lessee’s entire obligation with respect to Taxes, (3) Claims attributable to the gross negligence or willful misconduct of any Indemnified Party, (4) Claims attributable to any misrepresentation by any Indemnified Party herein or in any agreement or document delivered by it in connection herewith or (5) with the exception of clause (c) above, Claims attributable to acts or events occurring before the Delivery Date or following Expiration or Termination of this Agreement and the Return of the Aircraft to Lessor.
10.2. Lessee’s Waiver and Release. Lessee hereby waives and releases any Claim now or hereafter existing against the Indemnified Parties on account of any Claim of or on account of or arising from or in any way connected with injury to or death of personnel of Lessee
| AIRCRAFT LEASE AGREEMENT | 27 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
or loss or damage to property of Lessee that may result from or arise in any manner out of or in relation to the condition, use or operation of the Aircraft, either in the air or on the ground, during the Term, or that may be caused during the Term by any defect in the Aircraft arising from the material or any article used therein or from the design, testing or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft, except to the extent that such claim arises out of the breach by any Indemnified Party of its obligations hereunder or under any agreement or document delivered in connection herewith, regardless of when such defect may be discovered, and regardless of the location of the Aircraft at any such time. The foregoing waiver and release shall not apply to any Claim arising out of the gross negligence or willful misconduct of any Indemnified Party.
10.3. Surviving Obligations. The indemnities and agreements contained in this Section 10 shall survive the end of the Term and the Return of the Aircraft. The indemnities contained in this Section 10 are expressly made for the benefit of and shall be enforceable by the Indemnified Parties.
10.4. Not an Indemnified Party. Notwithstanding anything to the contrary in this Section 10, no manufacturer, repairer, servicer, modifier or the like shall be considered an Indemnified Party unless expressly referenced herein, and the Lessee and their insurers retain full right of subrogation and recourse against all but the Indemnified Parties in accordance with this Section 10.
11. Insurance.
11.1 Aviation Third Party Legal Liability Insurance. As of the Delivery Date and continuing for a period of two years following the end of the Term or, if earlier, until the next major Aircraft maintenance check, Lessee shall carry at its expense (or shall cause to be carried) with insurers of internationally recognized standing, aviation legal liability insurance in respect of the Aircraft in amounts denominated in United States Dollars not less than the Minimum Liability Coverage amount designated in Appendix B hereto combined single limit for bodily injury and property damage each occurrence (and in the aggregate as respects aviation products/completed operations and third party liability war and allied perils), and subject to customary sub-limits for non-aviation coverages. Such insurance shall include third party legal liability including passenger liability, liability war and allied perils, property damage liability (including cargo, baggage (checked and unchecked) and mail liability), premises liability, products/completed operations liability, contractual liability and political risk (including expropriation) insurance in the amounts set forth in Appendix B. All such insurance shall be in form and substance reasonably satisfactory to Lessor. Lessee covenants that any insurance policies carried in accordance with this Section 11.1 and any policies taken out in substitution or replacement for any of such policies shall: (i) be endorsed to name Lessor, Lessor’s Lender, each of the other Indemnified Parties and such other parties as Lessor may from time to time reasonably designate by notice to Lessee as additional insureds for their respective interests with respect to the Aircraft (hereinafter each an “Additional Insured” and collectively the “Additional Insureds”); (ii) provide that in respect of the interests of any Additional Insured in such policies, the insurance shall not be invalidated by any act or omission (including misrepresentation and non-disclosure), provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the said act or omission; (iii) provide that insurers waive all rights of
| AIRCRAFT LEASE AGREEMENT | 28 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
subrogation against the Additional Insureds; (iv) provide that, if such insurance is canceled or allowed to lapse for any reason whatsoever, or if any material change is made in such insurance that adversely affects the interest of any Additional Insured, such cancellation, lapse or change shall not be effective as to any Additional Insured for thirty (30) days (seven (7) days, or such other period as is then customarily obtainable in the industry, in the case of any war and allied perils liability coverage) after the giving of written notice from such insurers or Lessee’s appointed insurance broker to Lessor and Lessor’s Lender; (v) be primary without right of contribution from any other insurance maintained by any Additional Insured; (vi) provide a severability of interests provision applicable to each insured and Additional Insured under the policy such that all of the provisions of the insurance required hereunder, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured and Additional Insured; (vii) waive any right of the insurers to any setoff, counterclaim or other deduction against the Additional Insureds, and; (viii) provide for worldwide coverage, subject to such limitations and exclusions as may be expressly set forth in the certificates of insurance delivered pursuant to Section 11.4 hereof provided such limitations and exclusions are not applicable to the territories where the Aircraft is operated by Lessee, or as Lessor may otherwise agree in writing.
11.2 Aircraft Hull Insurance.
(a) On or prior to the Delivery Date and throughout the Term, Lessee shall maintain (or cause to be maintained) in full force and effect, at its expense and on terms substantially similar to and no less favorable than insurance carried by Lessee on similar aircraft in its fleet, all-risk ground and flight aircraft hull insurance covering the Aircraft including coverage of the Engines and Parts while temporarily removed from or not installed on the Aircraft and not replaced with similar components in amounts denominated an payable in United States Dollars not less than, in respect of the Aircraft, the Agreed Value as set forth in Appendix B hereto, and with respect to any Engines or Parts while removed from the Aircraft on a replacement value basis. Lessee shall maintain such insurance covering any loss or damage arising from:
(i) war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power;
(ii) strikes, riots, civil commotions or labor disturbances;
(iii) any act of one or more persons, whether or not agents of a sovereign power, for political or terrorist purposes and whether the loss or damage resulting therefrom is accidental or intentional;
(iv) any malicious act or act of sabotage;
(v) confiscation, nationalization, seizure, restraint, detention, appropriation, requisition for title or use by or under the order of any government (whether civil, military or de facto) or public or local authority; and
| AIRCRAFT LEASE AGREEMENT | 29 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(vi) hijacking or any unlawful seizure or wrongful exercise of control of the Aircraft or any Engine or any airframe on which any Engine is installed or crew in flight (including any attempt at such seizure or control) made by any person or persons on board the Aircraft or such airframe acting without the consent of the insured.
(b) The hull war and allied perils insurances shall be in accordance with Lloyd’s Aviation Underwriters Association Standard Policy Form LSW 555D unless otherwise approved by Lessor in writing. Lessee covenants that all policies and subsequent policies taken out in accordance with this Section 11.2 shall: (A) be issued by insurance companies or underwriters of internationally recognized standing in the aviation industry; (B) be endorsed to name Lessor or (as directed by Lessor) Lessor’s Lender as the loss payee to the extent of its interests in respect of hull claims that become payable on the basis of a total loss and shall provide that any other loss shall be settled (net of any relevant policy deductible) with such party(ies) as may be necessary to repair the Aircraft unless otherwise agreed in writing after consultation among the insurers, Lessor and Lessor’s Lender (it being agreed that where the loss is not expected to exceed U.S.$500,000 and, unless Lessor has notified the insurers to the contrary, such loss will be settled with and paid to Lessee); (C) be amended to name the Additional Insureds as additional insureds for their respective interest with respect to the Aircraft; (D) provide that, in respect of the interest of any Additional Insureds in such policies, the insurance shall not be invalidated by any act or omission, provided that the Additional Insured so protected has not caused, contributed to or knowingly condoned the said act or omission; (E) provide that none of the Additional Insureds shall have responsibility for the payment of premiums or any other amount payable under such policies; (F) provide that insurers shall waive all rights of subrogation as against the Additional Insureds; (G) provide that, if such insurance is canceled or allowed to lapse for any reason whatsoever, or if any material change is made in such insurance which adversely affects the interest of an Additional Insured, such cancellation, lapse or change shall not be effective as to any Additional Insured for thirty (30) days (seven (7) days, or such other period as is then customarily obtainable in the industry, in the case of any hull war and allied perils coverage) after the giving of written notice from such insurers or Lessee’s appointed insurance broker to Lessor and Lessor’s Lender; (H) waive any right of the insurers to any setoff, counterclaim or other deduction against the Additional Insureds; (I) provide for worldwide coverage, subject to such limitations and exclusions as may be set forth in the certificates of insurance delivered pursuant to Section 11.4 hereof provided such limitations and exclusions are not applicable to the territories where the Aircraft is operated by Lessee, or as Lessor may otherwise agree in writing; (J) contain a 50/50 claims funding clause in the form of Lloyd’s standard provision AVS103 in the event of a dispute as to which policy in respect of the hull insurance set forth in this Section 11.2 shall pay in the event of a loss; and (K) have deductibles (not applicable in case of a total, constructive total and/or arranged total loss) standard in the industry which do not exceed, per occurrence, the lesser of (i) $500,000 and (ii) such amounts carried by Lessee with respect to other aircraft similar to the Aircraft and operated on similar routes or which are otherwise reasonably acceptable to, and approved in writing by Lessor, provided, however, any deductibles shall be assumed by and at the sole risk of Lessee and to the extent applicable shall be paid by Lessee.
(c) All insurance coverage shall be subject to Endorsement AVN67B (or a comparable endorsement).
| AIRCRAFT LEASE AGREEMENT | 30 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
11.3 Default. If Lessee shall default in effecting, keeping or maintaining any insurance or if any insurance shall for any reason become void, Lessor may (but without any obligation to do so and without prejudice to Lessor’s other rights and remedies hereunder) effect, keep up or maintain such insurance at the cost of Lessee and Lessee will forthwith upon demand repay or cause to be repaid to Lessor all premiums and other moneys from time to time paid or payable by Lessor in respect of such insurance.
11.4 Certificates. Not less than ten (10) business days before the Delivery Date, unless otherwise approved by Lessor in writing, and promptly upon each renewal thereafter, Lessee will furnish to Lessor certificates of insurance written in English from an authorized representative of the insurers providing the insurance required hereunder and certificates of reinsurance from reinsurance brokers (together with a letter of undertaking from each of such representative and such reinsurance brokers stating that such insurance and reinsurance complies with the terms hereof) describing in detail the insurance and reinsurance carried and maintained on the Aircraft. Such certificates of insurance shall be in form and substance reasonably satisfactory to Lessor and Lessor’s Lender. Failure of Lessee to furnish certificates of insurance or procure and maintain the insurance required herein or the failure of Lessor and Lessor’s Lender to request such certificates shall not constitute a waiver of Lessee’s obligations hereunder.
11.5 Premiums. Lessee agrees to pay the premiums (or installments thereof) as required by the terms of such policies.
11.6 Claims. After a Total Loss in relation to the Aircraft shall have occurred and so long as no Default or an Event of Default shall have occurred and be continuing, Lessee may pursue any and all claims against the insurers in respect of the insurance with respect to the Aircraft, subject to consultation with Lessor; provided that no settlement or compromise of any such claim may be made without the approval of Lessor (which approval shall not be unreasonably withheld or delayed). Should a Default or an Event of Default have occurred and be continuing and any claim be made under any of the insurance policies, Lessor shall have full power to make, enforce, settle or compromise all claims with the insurers in respect of the insurance (other than the liability insurance) or for compensation and to ▇▇▇ for, recover, receive and give discharge for all moneys payable by virtue thereof, to be held and applied in accordance with Section 11.2 hereof. Lessee shall irrevocably and unconditionally assign or cause to be assigned the insurance to Lessor (or, if requested by Lessor, to Lessor’s Lender) if such an assignment is advisable for the purpose of the preceding sentence. Lessee shall do or cause to be done all things necessary and provide or cause to be provided all documents, evidence and information to enable the assignee or loss payee referred to above to collect or recover any moneys due or to become due in respect of the insurance.
11.7 Self-Insurance. Except for the deductibles permitted by Section 11.2 hereof or otherwise permitted in writing by Lessor, Lessee shall not be permitted to self-insure against any of the risks required to be covered by the insurance described in this Section 11.
11.8 Application of Payments During Existence of Default or Event of Default. Any amount referred to in Section 11.2 hereof which is payable to or retainable by Lessee shall not be paid to or retained by Lessee if, at the time of such payment or retention, a Default or an
| AIRCRAFT LEASE AGREEMENT | 31 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Event of Default shall have occurred and be continuing, but shall be held by or paid over to Lessor (or, as directed by Lender, to Lessor’s Lender) as security for the obligations of Lessee under this Agreement. Upon the earlier of (i) such time as there shall not be continuing any such Default or Event of Default or (ii) the end of the Term, such amount shall be paid to Lessee to the extent not previously applied in accordance with the terms hereof.
12. Assignment.
12.1. Assignment by Lessee. Lessee shall not assign or transfer all or any of its rights or obligations under this Agreement without the prior written consent of Lessor; provided, however, that such consent shall not be required so long as (a) such assignment is to an Affiliate of Lessee, (b) the assignee assumes in writing all of the obligations of the “Lessee” under this Agreement for the benefit of Lessor and (c) Lessee provides written notice of such assignment to Lessor.
12.2. Assignment by Lessor.
(a) Lessor may, at its own expense and without the prior consent of Lessee, assign or transfer all of its rights and obligations under this Agreement to an Affiliate of Lessor upon providing prior written notice of such assignment to Lessee. Any other assignment by Lessor shall be subject to the prior consent of Lessee, which such consent shall not be unreasonably withheld or delayed. Any assignment by Lessor pursuant to this Section 12.2 shall include an express assignment of Lessor’s liability associated with the Basic Rent Credit to the assignee. Upon (1) any such assignment becoming effective and (2) the assignee assuming all of Lessor’s obligations under this Agreement, Lessor shall be released of any further obligations hereunder. Any assignment pursuant to this section 12.2(a) shall not affect the obligations of Lessor Guarantor.
(b) After notice from Lessor of any such sale or transfer of the Aircraft or any assignment or transfer of all or any of Lessor’s rights and obligations under this Agreement, upon request from Lessor and at Lessor’s expense, Lessee shall, as soon as practicable, execute any agreements or other instruments that may be necessary or reasonably requested by Lessor in order to allow, give effect to, or perfect any assignment or transfer of Lessor’s rights and obligations under this Agreement (including, without limitation, certificates confirming (to the extent that such matters are accurate) (1) the continuing truth and accuracy of Lessee’s representations as set forth herein, (2) the continuing viability of Lessee’s warranties, indemnities, covenants and other obligations set forth herein, (3) that no Event of Default has occurred and is continuing, (4) that no Total Loss has occurred, (5) that the Lease is in full force and effect, (6) that the insurance as required pursuant to this Agreement remains in full force and effect with the assignee named as sole loss payee and added as an additional insured to the existing additional insureds as of the assignment, and (7) such other matters as reasonably requested by Lessor).
(c) In any instance where a transfer or assignment effected by Lessor is to more than one person, such transferees or assignees shall select an agent who shall act on behalf of all such transferees or assignees and with whom Lessee may deal exclusively, and notify Lessee thereof.
| AIRCRAFT LEASE AGREEMENT | 32 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
12.3. Assignment of Warranties.
(a) As of the Delivery Date and unless a Default or Event of Default shall have occurred and be continuing, Lessor hereby assigns to Lessee, to the fullest extent permitted by law and contract: (a) all warranties (to the extent still existing) covering the Aircraft and all components, parts and accessories installed on, or delivered with the Aircraft; and (b) Lessor’s right to and possession of all manuals, diagrams and support materials and all records covering the Aircraft and related components, parts and accessories; in the case of the Airframe and the Engines. To the extent that such warranties are not assignable, Lessor shall cooperate with Lessee in enforcing all such warranties for the benefit of Lessee. Upon an Event of Default, the assignment hereunder shall automatically terminate and all rights assigned to Lessee pursuant to this Section 12.3 shall automatically revert back to Lessor.
(b) On the Return Date, Lessee shall be deemed to have assigned or reassigned to Lessor all warranties covering the Aircraft without further action on the part of Lessee; provided, that Lessee may retain the right to pursue remedies and to receive benefits with respect to claims of Lessee arising in respect of events prior to the Return Date; provided further, that, to the extent requested by Lessor, Lessee shall execute a separate assignment of warranties in favor of Lessor at the Return. To the extent that any of such warranties are not assignable, Lessee shall cooperate with Lessor in enforcing all such warranties for the benefit of Lessor.
13. “As-Is” Condition, Disclaimer and Release. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, FROM AND AFTER THE DELIVERY, THE AIRCRAFT AND OTHER ITEMS DELIVERED HEREUNDER ARE LEASED TO LESSEE IN THEIR “AS IS, WHERE IS” CONDITION, AND LESSEE HEREBY WAIVES, RELEASES AND RENOUNCES ANY AND ALL WARRANTIES, OBLIGATIONS AND LIABILITIES, EXPRESS OR IMPLIED, DIRECT OR INDIRECT, OF LESSOR, ITS SUCCESSORS AND ASSIGNS AND ALL OTHER INDEMNIFIED PARTIES, AND ANY AND ALL RIGHTS, CLAIMS, AND REMEDIES, EXPRESS OR IMPLIED, DIRECT OR INDIRECT, OF LESSEE AGAINST LESSOR, ITS SUCCESSORS AND ASSIGNS AND ALL OTHER INDEMNIFIED PARTIES, ARISING BY LAW OR OTHERWISE (EXCEPT ANY SUCH SET FORTH IN THIS AGREEMENT) WITH RESPECT TO THE AIRCRAFT OR ANY PARTS OR THE USE OR OPERATION THEREOF OR ANY NONCONFORMANCE OR DEFECT THEREIN, INCLUDING BUT NOT LIMITED TO: (a) ANY WARRANTY AS TO THE CONDITION OF THE AIRCRAFT; (b) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE; (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (d) ANY LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE STRICT LIABILITY OR THE ACTUAL OR IMPUTED NEGLIGENCE OF LESSOR AND ITS RESPECTIVE SUCCESSORS OR ASSIGNS OR ANY OTHER INDEMNIFIED PARTY; AND (e) ANY STATUTORY OR OTHER WARRANTY, CONDITION, DESCRIPTION OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE STATE, QUALITY, VALUE, CONDITION, DESIGN, OPERATION OR FITNESS OF THE AIRCRAFT. IN ADDITION TO ALL OTHER REQUIREMENTS OF THIS AGREEMENT, THIS SECTION 13 SHALL NOT BE MODIFIED EXCEPT BY WRITTEN AGREEMENT SIGNED ON BEHALF OF LESSOR BY ITS DULY AUTHORIZED REPRESENTATIVE.
| AIRCRAFT LEASE AGREEMENT | 33 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
14. Representations and Warranties.
14.1. Lessee’s Representations and Warranties. Lessee represents and warrants as follows, as of the date hereof and as of the Delivery Date.
(a) Legal Form and Qualification. Lessee is a corporation organized and existing in good standing under the laws of Ohio and has full power to conduct its operations as presently conducted.
(b) Authority. Lessee has full power, authority and legal right to enter into, deliver and perform this Agreement and all agreements or instruments required hereunder.
(c) Binding Obligations. This Agreement constitutes and any related documents, when entered into, will constitute, legal, valid and binding obligations of Lessee enforceable against Lessee in accordance with the terms hereof or thereof, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally as well as by general principles of equity.
(d) No Additional Consents or Approvals. Neither the execution and delivery by Lessee of this Agreement or any other document delivered by it in connection herewith nor the consummation of any of the transactions contemplated thereby requires the consent or approval of, the giving of notice to, or the registration with, any Governmental Entity.
(e) Registration, Filing of the Agreement. It is not necessary or advisable under any applicable Law in order to ensure the validity, effectiveness and enforceability of this Agreement that this Agreement or any other instrument relating hereto be filed, registered or notarized or that any other action be taken, other than those provided for in Section 5 hereof.
(f) No Violation. Neither the execution and delivery nor the performance by Lessee of this Agreement and any other document delivered by Lessee in connection herewith, nor consummation of any of the transactions as contemplated thereby, will result in any violation of, or be in conflict with, or constitute a default under, or result in the creation of any Lien upon any property of Lessee under any of the provisions of Lessee’s charter or by-laws, or of any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, note or bond purchase agreement, license, bank loan, credit agreement or other agreement to which Lessee is a party or by which Lessee is bound, or any law, judgment, governmental rule, regulation or order of any Governmental Entity.
(g) Protection of Ownership. Except for the registration and filings provided for in Section 5 hereof, no other filing or registration of any instrument or document is necessary in order to protect Lessor’s title to and ownership of the Aircraft.
| AIRCRAFT LEASE AGREEMENT | 34 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(h) No Default. No Default or Event of Default has occurred and is continuing under this Agreement (or under any of the Other Lease Agreements).
(i) No Litigation. There are no suits, litigation, arbitration or other proceedings pending or, to the knowledge of Lessee, threatened against or affecting Lessee that, if adversely determined, would have a material adverse effect upon Lessee’s financial condition or business or its ability to perform its obligations hereunder.
(j) Withholding Tax. Neither the payment of Rent nor the payment of any other amount required under this Agreement is subject to deduction or withholding taxes or the equivalent under the laws of any Governmental Entity.
(k) Pari Passu Ranking. The obligations of Lessee to make payments hereunder will rank at least pari passu in right of payment with all other unsecured, unsubordinated obligations of Lessee.
(l) Sovereign Immunity. Lessee does not enjoy or claim any sovereign or governmental immunity from suit or enforcement of private contracts.
14.2. Lessor’s Representations and Warranties. Lessor represents and warrants as follows, as of the date hereof and of the Delivery Date.
(a) Organization. Lessor is a corporation organized and existing in good standing under the laws of Florida, and has all requisite power, authority and legal right to enter into and perform its obligation under this Agreement and any other document delivered by Lessor in connection herewith.
(b) Authorization. Lessor has duly authorized, executed and delivered this Agreement and, assuming this Agreement has been duly authorized, executed and delivered by Lessee, this Agreement constitutes a legal, valid and binding obligation of Lessor enforceable against Lessor in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally as well as by general principles of equity.
(c) No Violation. Neither the execution and delivery or performance by Lessor of this Agreement and any other document delivered by Lessor in connection herewith, nor consummation of any of the transactions as contemplated thereby, will result in any violation of, or be in conflict with, or constitute a default under, or result in the creation of any Lien upon any property of Lessor under any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, lease, note or bond purchase agreement, license, bank loan, credit agreement or other agreement to which Lessor is a party or by which Lessor is bound, or any law, judgment, governmental rule, regulation or order of any Governmental Entity.
(d) No Consents or Approvals. Neither the execution and delivery by Lessor of this Agreement or any other document delivered by it in connection herewith nor the consummation of any of the transactions contemplated thereby requires the consent or approval of, the giving of notice to, or the registration with, any Governmental Entity located in the United States.
| AIRCRAFT LEASE AGREEMENT | 35 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(e) Citizenship. Lessor is (1) a “citizen of the United States” as that term is defined in Section 40102(a) (15) of Title 49 of the United States Code and (2) a “United States person” as that term is defined in Section 7701(a)(30) of Title 26 of the United States Code.
(f) No Litigation. There are no suits, litigation, arbitration or other proceedings pending or, to the knowledge of Lessor, threatened against or affecting Lessor that, if adversely determined, would have a material adverse effect upon Lessor’s financial condition or business or its ability to perform its obligations hereunder.
(g) Ownership. As of the Delivery, Lessor holds legal title to the Aircraft.
15. Covenants.
15.1. Lessee’s Covenants. Lessee hereby covenants with Lessor that during the Term, Lessee shall fully comply with and perform the following obligations.
(a) Lessee shall punctually pay to Lessor when due all the monies specified and calculated in accordance with the terms of this Agreement and at the time and in the manner herein specified and shall punctually and duly observe and perform Lessee’s obligations under this Agreement.
(b) Lessee shall maintain (or shall cause to be maintained) insurance in respect of the Aircraft, its liabilities and properties in accordance with good airline practice and the terms and conditions of this Agreement.
(c) Lessee shall preserve its existence and maintain all rights, privileges, licenses and franchises necessary to its business or material to its performance of its obligations under this Agreement.
(d) Lessee shall provide Lessor with notice of any change in its chief executive office prior to such change, provided that such notice shall not be required more than five (5) days prior to such change; and further provided that Lessor shall keep such information confidential until after the change occurs.
(e) To the extent that Lessee is a certified operator, Lessee shall keep in full force Lessee’s operator’s certificate(s) issued by the Aviation Authority and each other Governmental Entity, including all special conditions and obligations to be fulfilled by Lessee, and of all renewals, amendments and modifications thereto.
(f) Lessee shall promptly, upon becoming aware of the same, notify Lessor in writing of the occurrence of any Event of Default or of any event which with the giving of notice or passage of time could become an Event of Default.
| AIRCRAFT LEASE AGREEMENT | 36 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(g) Lessee shall not do or knowingly permit to be done or omit or knowingly permit to be omitted to be done any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner and lessor of the Aircraft and as an additional insured or loss payee under the insurance required under this Agreement.
(h) Lessee shall not, on any occasion when the ownership of the Aircraft, any Engine or any Part is relevant, claim any interest in the Aircraft other than as Lessee under this Agreement.
(i) Lessee shall not at any time (1) represent or hold out Lessor as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee or (2) pledge the credit of Lessor.
(j) Lessee shall not attempt, or hold itself out as having any power, to sell, lease or otherwise dispose of the Aircraft, the Aircraft Documents, any Engine or any Part, except as provided in Section 6 hereof.
(k) Lessee shall maintain (or cause to be maintained) in good standing a current certificate of airworthiness for cargo operations for the Aircraft issued by the Aviation Authority.
(l) Lessee shall maintain the Aircraft (or cause the Aircraft to be maintained) in all respects so as to be in compliance with FAR Part 121.
(m) Lessee shall not discriminate against the Aircraft (as compared to other aircraft owned or operated by Lessee in its commercial cargo fleet) in contemplation of the expiration or termination of this Agreement, with respect to Lessee’s use, operation or maintenance of the Aircraft or the performance by Lessee of ADs or service bulletins (other than withdrawal of the Aircraft from use and operation as is necessary to prepare the Aircraft for return to Lessor upon such termination or expiration).
(n) Lessee will take all steps reasonably requested by Lessor, required or necessary to cause: (i) this Agreement, and all supplements and all amendments thereto to be promptly filed and recorded, or filed for recording, to the extent permitted by the Aviation Authority or required under any other applicable Law; and (ii) as required by Lessor’s Lender or applicable Law, the international interests with respect to this Agreement to be registered with the International Registry.
15.2. Lessor’s Covenant of Quiet Enjoyment. Lessor hereby covenants with Lessee that, during the Term, so long as no Event of Default hereunder shall be continuing, neither Lessor, any person acting on its behalf or in its stead, any predecessor or successor in interest of Lessor, nor any person claiming an interest in the Aircraft by or through Lessor, shall interfere with Lessee’s rights hereunder or Lessee’s quiet and undisturbed use and enjoyment of the Aircraft; provided, however, that this Section 15.2 shall not limit Lessor’s right of inspection as set forth in this Agreement. Should such an interference occur, Lessor shall promptly eliminate the cause of such interference upon receipt of a notice thereof from Lessee.
| AIRCRAFT LEASE AGREEMENT | 37 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
16. Default by Lessee; Remedies.
16.1. Events of Default. An Event of Default shall mean the occurrence and continuance of any of the following events.
(a) Lessee shall fail to make any payment of Rent within ten (10) days of the relevant due date at the place and in the funds required under this Agreement.
(b) Lessee shall fail to make any other payment due hereunder within the later of thirty (30) days of the relevant due date at the place and in the funds required under this Agreement.
(c) Lessee shall fail to carry and maintain insurance on or in respect of the Aircraft (or to cause the effectiveness of such insurance) in accordance with the provisions of this Agreement or shall operate (or allow the operation of) the Aircraft without such insurance coverage being in full force and effect with regard to such operation.
(d) Any representation or warranty made, by Lessee herein shall have been incorrect in any material respect at the time made or deemed to be made.
(e) Lessee shall fail to return possession of the Aircraft and the Aircraft Documents to Lessor at the Return Location on the Return Date.
(f) Lessee shall:
(1) create or suffer to exist any Lien for taxes of any kind or arising out of a judgment or award against Lessee which Lien does not constitute a Permitted Lien;
(2) fail to perform or observe any of the covenants or agreements set forth in Sections 5.1, 6.1 or 9 hereof, and if such failure shall continue unremedied for a period of thirty (30) days after written notice thereof by Lessor; or
(3) fail to perform or observe any other covenant, condition or agreement to be performed or observed by it hereunder, and if such failure shall continue unremedied for a period of thirty (30) days after written notice thereof by Lessor; provided, however, that such failure shall not constitute an Event of Default hereunder if (A) such failure is not capable of being cured within the thirty-day period following such notice from Lessor and (B) a cure is diligently pursued by Lessee thereafter; provided, further, however, that in any event such failure shall constitute an Event of Default hereunder if it continues for more than 120 days following such notice from Lessor.
(g) Lessee shall (1) apply for or consent to the appointment of a receiver, trustee or liquidator for all or substantially all of its property, (2) cease to pay its debts generally as they become due or admit in writing its general inability to pay its debts as
| AIRCRAFT LEASE AGREEMENT | 38 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
they mature, (3) make a general assignment for the benefit of its creditors of all or substantially all of its property, (4) be adjudicated as bankrupt or insolvent, or (5) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an agreement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation, or similar law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or if corporate action shall be taken by Lessee for the purpose of effecting any of the foregoing.
(h) An order, judgment or decree shall be entered, without the application, approval or consent of Lessee, by any court of competent jurisdiction, approving a petition seeking reorganization of Lessee or appointing a receiver, trustee or liquidator of Lessee or for all or a substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for a period of ninety (90) consecutive days.
(i) An order shall be entered of any governmental authority or any court of competent jurisdiction which shall not be stayed or discharged within ninety (90) days from the date of entry thereof, preventing Lessee from carrying on its business as presently conducted on the date of execution of this Agreement.
(j) Lessee shall have created a default under the Delta Engine Program.
16.2. Remedies. If one or more Events of Default shall be continuing, Lessor may, at Lessor’s option, exercise any one or more of the following remedies, to the extent permitted by law.
(a) Lessor may exercise any right or take any action that may reasonably be required to cure any Event of Default (which shall be performed on Lessee’s account).
(b) Lessor may instruct Lessee to ferry the Aircraft (including the Aircraft Documents) to the Return Location or such other airport as the parties may mutually agree, and to ground the Aircraft at such airport until all Events of Default have been cured, whereupon Lessee shall immediately do so.
(c) Lessor may take any other remedial action available to Lessor under applicable Law.
(d) Lessor may terminate the lease of the Aircraft to Lessee under this Agreement by:
(1) serving notice of such termination on Lessee in writing in accordance with Section 20.11, specifying the occurrence giving rise to such Event of Default, which notice shall cause this Agreement to terminate immediately (without any further act, service, notification or proceeding being necessary), whereupon Lessee shall promptly return the Aircraft and the Aircraft Documents in compliance with the Return Condition Requirements to Lessor at the Return Location or at any airport in the continental United States specified by Lessor (and should Lessee fail to comply with the Return Condition Requirements, Lessor may do or cause to be done, at Lessee’s expense, whatever may be necessary to cause the Aircraft to so comply); or
| AIRCRAFT LEASE AGREEMENT | 39 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
(2) with or without notice to Lessee, taking possession of the Aircraft and the Aircraft Documents, for which purpose Lessor by its servants or agents may enter upon Lessee’s premises where the Aircraft and the Aircraft Documents may be located, or cause the same to be redelivered to Lessor at any airport in the continental United States specified by Lessor; and to effect the foregoing, Lessor may use self-help and any and all reasonable and lawful means necessary to take immediate possession of and remove (by summary proceedings or otherwise) the Aircraft and the Aircraft Documents from Lessee’s premises, or from Lessee’s possession wherever the same are located, all without liability accruing to Lessor; and upon exercise by Lessor of its powers under this Section 16.2(d)(2), such termination shall be deemed to take effect upon such taking of possession by Lessor or such re-delivery of the Aircraft and the Aircraft Documents to Lessor at said airport (without any further act, notification or proceeding being necessary).
(e) Whether or not Lessor shall have exercised, or shall thereafter at any time exercise, any of its rights described in this Section 16.2 with respect to the Aircraft, and regardless of whether Lessor shall have terminated this Agreement pursuant to Section 16.2(d) hereof, Lessor shall be entitled to (i) recover from Lessee all past due and unpaid Rent and all other amounts owing under this Agreement, (ii) declare as immediately due and payable all future Basic Rent owing under this Agreement and (iii) institute any and all legal and equitable actions required to recover such amounts and otherwise enforce its rights under this Agreement (subject to Lessor’s obligation to perform all acts reasonably required to mitigate its damages with respect to accelerated Basic Rent).
(f) In addition to the remedies hereinabove and without limiting any remedies Lessor may have at law or in equity, Lessor may lease, sell or otherwise dispose of the Aircraft as Lessor in its sole discretion may determine.
16.3. Interest on Overdue Amounts. Overdue amounts required to be paid pursuant to Section 4 hereof, this Section 16 or Appendix B hereto shall bear interest at the rate indicated in Appendix B.
16.4. No Waiver. No implied waiver by Lessor of any Event of Default or failure or delay of Lessor in exercising any right hereunder shall operate as a waiver thereof. The acceptance by Lessor of partial payments from Lessee or any third party, whether made before or after a termination pursuant to Section 16.2, shall not operate as waiver by Lessor of an Event of Default and shall not be construed as an intent to continue the contractual relationship or as a reinstatement of this Agreement. Nothing in this Section 16.4 shall be construed to permit Lessor to obtain a duplicate recovery of any element of damages to which Lessor is entitled. No express or implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default.
16.5. Costs and Expenses. Lessee agrees to pay to Lessor, upon demand, all reasonable costs, expenses and disbursements (including, without limitation, reasonable attorney’s fees, legal fees and expenses) incurred by Lessor in exercising its rights or remedies under this Agreement.
| AIRCRAFT LEASE AGREEMENT | 40 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
17. Return of Aircraft.
17.1. Return, Place and Time of Return. Lessee shall at its own expense return the Aircraft and the Aircraft Documents by delivering the same to Lessor at the Return Location on the Expiration Date or promptly upon the earlier Termination, except where Termination occurs pursuant to Section 19 as a result of a Total Loss.
17.2. Aircraft Return Condition Requirements. The Aircraft at the time of its return to Lessor shall satisfy all of the Return Condition Requirements described in Section 18 hereof.
17.3. Return Receipt. Upon return of the Aircraft and the Aircraft Documents in accordance with the terms of this Agreement, Lessor and Lessee shall execute a Return Receipt substantially in the form of Appendix F hereto. Lessee shall additionally execute such additional documents as Lessor may reasonably require to evidence the termination of this Agreement.
17.4. Specific Performance. Timely return of the Aircraft and the Aircraft Documents on the Return Date and at the Return Location is of the essence of this Agreement and if the Aircraft and the Aircraft Documents are not returned on the Return Date and at the Return Location, Lessor may obtain a court order requiring Lessee to immediately return the Aircraft and the Aircraft Documents at the Return Location.
17.5. Lessee’s Obligations Continue.
(a) In the event the Return of the Aircraft and the Aircraft Documents is not effected at the time and location specified herein for any cause, then the obligations of Lessee under this Agreement shall continue until the Aircraft and the Aircraft Documents are actually returned to Lessor. In particular (except to the extent that a delay in the Return of the Aircraft is attributable to acts or a failure to act on the part of Lessor), until Lessee has complied with the Return Condition Requirements, Lessee shall continue to pay Rent to Lessor, shall continue to insure the Aircraft pursuant to this Agreement and shall be responsible for all storage fees for the Aircraft (with such storage being effected pursuant to all requirements of the Aviation Authority and the Manufacturer).
(b) Neither the continued performance by Lessee of any of its obligations after the end of the Term nor the acceptance by Lessor of payments of Basic Rent or otherwise made by Lessee shall be considered a renewal of the terms of this Agreement or a waiver of any right of Lessor hereunder, and Lessee shall not be entitled to the quiet enjoyment of the Aircraft or any part thereof.
18. Return Condition Requirements.
18.1. Condition. On the Return Date, the Aircraft and the Aircraft Documents shall be in the condition required by Appendix H hereto (the “Return Condition Requirements”).
| AIRCRAFT LEASE AGREEMENT | 41 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
18.2. Aircraft Documents. At the time the Aircraft is returned to Lessor, Lessee shall deliver to Lessor all Aircraft Documents previously provided by Lessor to Lessee, updated and maintained through the Return Date in accordance with this Agreement and the rules and regulations of the Aviation Authority and the FAA (if not the applicable Aviation Authority), and in addition, all records, documents, manuals, drawings and data that were developed or caused to be developed by Lessee and/or required by the Aviation Authority and the FAA (if not the applicable Aviation Authority) (herein individually and collectively referred to as “Aircraft Return Documents”). All such Aircraft Return Documents shall be complete and accurate and in the English language. Any Aircraft Return Document not already owned by Lessor shall become the property of Lessor upon its delivery to Lessor.
18.3. Final Inspection. Prior to the Return Date, Lessee shall make the Aircraft and the Aircraft Documents available to Lessor for inspection in order to verify that the condition of the Aircraft complies with the requirements set forth in the Return Condition Requirements (the “Final Inspection”). Such Final Inspection will take place at the Return Location. Lessee, at its cost, shall promptly correct any discrepancies observed during the Final Inspection and communicated by Lessor to Lessee.
18.4. Test Flight. Promptly after completion of the corrections, if any, required under Section 18.3 hereof (relating to the Final Inspection), and at the option of Lessor, a test flight (of up to one (1) hour) based on Manufacturer’s test flight program shall be conducted by Lessee for the purpose of demonstrating to Lessor the compliance of the Aircraft with the provisions of this Section 18. All costs of such test flight shall be paid by Lessee, including without limitation the cost of fuel, flight crew and insurance. Lessor’s representatives may participate in the test flight as observers. All pilot-reported discrepancies and all discrepancies identified by Lessor during the test flight shall be corrected by Lessee at its Lessee’s expense. There shall be no deferred items on the Aircraft except as the parties may mutually agree.
18.5. Conditions Cumulative. None of the Return Condition Requirements is intended to be exclusive, but each shall be cumulative and in addition to any other condition and requirement.
18.6. Financial Adjustments. To the extent that either Lessee or Lessor is allowed or is required to make financial adjustment payments at Return in light of the Aircraft and its Engines either failing to satisfy or exceeding Return Condition Requirements, the amount of such payments shall be determined as specified in Appendix H hereto.
19. Total Loss.
19.1. Total Loss of the Aircraft.
(a) If the Aircraft shall become a Total Loss prior to the Return Date, Lessee (i) shall notify Lessor of such Total Loss within three (3) days after its occurrence and (ii) shall pay the Agreed Value to Lessor (or cause the insurers to make such payment, with any deductible being the responsibility of Lessee) within ninety (90) days after the occurrence of the Total Loss. The letting of the Aircraft shall terminate upon the earlier to occur of (1) receipt of the Agreed Value by Lessor and (2) the receipt by Lessor of
| AIRCRAFT LEASE AGREEMENT | 42 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
written confirmation from the insurer of the Aircraft to the effect that such insurer will pay to Lessor the Agreed Value of the Aircraft. Thereupon Lessor shall transfer title to the remains of the Aircraft to the insurers or to Lessee, as appropriate under the insurance policies.
(b) If the Aircraft shall become a Total Loss prior to Delivery to Lessee, this Agreement shall terminate immediately. Any termination under this Section 19.1(b) shall discharge all obligations and liabilities of the parties hereunder, except that Lessee shall be entitled to a return of any prepaid Rent and any other monies prepaid to Lessor pursuant hereto, including the Basic Rent Credit. All such returns shall be made by Lessor to Lessee within five (5) Business Days after Lessor’s receipt of a valid written determination of a Total Loss.
19.2. Engine Total Loss. Subject to any applicable requirements of the Delta Engine Program, upon a Total Loss of an Engine not then installed on the Aircraft or a Total Loss of an Engine installed on the Aircraft not involving a Total Loss of the Aircraft, Lessee shall give Lessor prompt notice thereof, and Lessee shall replace such Engine as soon as reasonably possible by duly conveying to Lessor and causing to become subject to this Agreement as a replacement for such Engine, title to another engine, which engine shall be free and clear of all Liens other than Permitted Liens, and shall be the same model as the Engines (or an improved model of the same manufacturer suitable for installation and use on the Airframe) and shall have a value and utility at least equal to, and be in at least as good operating condition as the Engine which sustained such Total Loss, assuming such Engine was in the condition and repair required by the terms hereof immediately prior to such Total Loss; provided that Lessor shall transfer to Lessee, free and clear of all rights of Lessor and all Lessor’s Liens (but otherwise without recourse or warranty), all of Lessor’s right, title and interest in such replaced Engine. Such replacement engine after approval and acceptance by Lessor, shall be deemed an “Engine” as defined in Section 1. Lessee agrees to take such action as Lessor may reasonably request in order that title to any such replacement Engine shall be duly and properly vested in Lessor and leased under this lease to the same extent as the Engine replaced thereby. Lessee’s obligation to pay Rent hereunder shall continue in full force and effect, but Lessee shall be entitled to retain or to be reimbursed by Lessor the amount of insurance or condemnation proceeds, if any, received by Lessor with respect to such replaced Engine.
19.3. Surviving Engine. If a Total Loss of the Airframe occurs and any Engine or Engines (a “Surviving Engine”) shall not have become a Total Loss, Lessor, at the request of Lessee, shall, subject to any applicable insurance policy which provides to the contrary, and further subject to any applicable requirements of the Delta Engine Program, transfer to Lessee free and clear of all rights of Lessor and all Lessor’s Liens (but otherwise without recourse or warranty), all of Lessor’s right, title and interest, if any, in and to any such Surviving Engine; provided, that prior to transferring such right, title and interest in such Surviving Engine, Lessor shall have received either (1) the Agreed Value of the Aircraft or (2) written confirmation from the insurer of the Aircraft to the effect that such insurer will pay to Lessor the Agreed Value of the Aircraft.
| AIRCRAFT LEASE AGREEMENT | 43 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
20. Miscellaneous.
20.1. Appendices Part of the Agreement. The Appendices of this Agreement form an integral part hereof. References in any of the Appendices to “the Lease” or “the Agreement” shall refer to this Agreement as may be supplemented or amended from time to time. Unless otherwise defined therein, all capitalized terms appearing in the Appendices shall have the meaning ascribed to such terms in this Agreement.
20.2. Headings for Convenience Only. The headings of clauses and the index are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
20.3. Entire Agreement. This Agreement constitutes the entire agreement between Lessor and Lessee with respect to the Aircraft and supersedes any and all previous understandings, commitments, agreements or representations whatsoever, whether oral or written, including without limitation any and all terms sheets, letters of intent or similar documents.
20.4. Modifications of the Agreement. This Agreement shall not be modified or amended except by an instrument in writing, signed by Lessor and Lessee.
20.5. Partial Invalidity. If any provision of this Agreement shall be invalid or unenforceable, the parties shall replace such provision with a valid and enforceable provision which to the nearest degree possible reflects the commercial intent and purpose of the invalid or unenforceable provision.
20.6. Applicable Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of New York, United States of America (other than the laws of the State of New York relating to choice of law).
20.7. Jurisdiction; Waiver of Jury Trial.
(a) LESSOR AND LESSEE AGREE THAT (i) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK CITY, NEW YORK OR (ii) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO OR THE COMMON PLEAS COURT FOR THE STATE OF OHIO LOCATED IN CINCINATTI, OHIO SHALL HAVE CO-EXCLUSIVE JURISDICTION OVER ANY DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH SUBMITS ITSELF AND ITS PROPERTY TO THE JURISDICTION OF ANY OF THE FOREGOING COURTS WITH RESPECT TO SUCH DISPUTES.
(b) EACH OF LESSOR AND LESSEE HEREBY (1) WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE COURTS REFERRED TO IN THIS SECTION 20.7 ON GROUNDS OF AN INCONVENIENT FORUM OR OTHERWISE AND (2) WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY
| AIRCRAFT LEASE AGREEMENT | 44 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN THIS SECTION 20.7.
(c) LESSOR AND LESSEE HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT, WHETHER SUCH ACTION IS BASED ON BREACH OF CONTRACT, TORT, OR ANY OTHER LEGAL OR EQUITABLE THEORY.
(d) Nothing in this Section 20.7 limits the right of Lessor to bring proceedings against Lessee in connection with this Agreement in any other court of competent jurisdiction or concurrently in more than one jurisdiction.
20.8. Legal Costs and Expenses.
(a) Lessor and Lessee each shall bear the cost of their own legal fees, inspection and appraisal fees, and related expenses associated with the negotiation, preparation and execution of this Agreement; provided, however, that Lessor and Lessee shall split evenly the fees and expenses charged by Special FAA Counsel (and otherwise incurred) in performing the filings and registrations required in Section 5 of this Agreement.
(b) Lessee shall pay all reasonable attorneys’ fees, costs and expenses (including costs and disbursements of counsel) incurred by Lessor after the date hereof arising out of or otherwise in connection with (i) any supplements or amendments of this Agreement (including, without limitation, any related recording and registration costs) requested by Lessee or made reasonably necessary as the result of the actions of Lessee, (ii) any Default by Lessee and any enforcement or collection proceedings resulting therefrom or in connection with the negotiation of any restructuring or “work-out” (whether or not consummated) and (iii) all other actions taken by Lessor to enforce its rights under this Agreement.
(c) Should Lessor or Lessee be required to take action to enforce the terms of this Agreement (such action including, without limitation, the preparing of demand and default notices and the filing and prosecution of litigation), the prevailing party shall be entitled to recover from the other party all associated reasonable costs and expenses, including reasonable attorneys’ fees and court costs.
20.9. DISCLAIMER OF DAMAGES. LESSOR AND LESSEE EACH AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES, ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER CONSEQUENTIAL, INDIRECT AND SPECIAL DAMAGES AS A RESULT OF ANY BREACH OR ALLEGED BREACH BY THE OTHER PARTY OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF THE OTHER PARTY CONTAINED IN THIS AGREEMENT.
| AIRCRAFT LEASE AGREEMENT | 45 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
20.10. Further Assurances. Lessee and Lessor shall, from time to time, do and perform such other-and further acts and execute and deliver any and all other and further instruments as may be required by law or reasonably requested by either party to establish, maintain and protect the respective rights and remedies of the other party and to carry out and effect the intent and purposes of this Agreement.
20.11. Demands, Notices; Language.
(a) All demands, notices, technical reports and other communications hereunder shall be given in English and in writing and shall be deemed to have been duly given when personally delivered, sent by facsimile or e-mail, or delivered by an internationally-recognized courier service to either party to the address of that party set forth below. A copy of any notice provided by facsimile or by e-mail shall also be provided by means of an internationally-recognized express courier service, sent on the same day as the transmission of the facsimile or e-mail copy of such notice, provided, however, that the date and time of the subject facsimile or e-mail delivery of that notice shall be controlling.
| (1) | If to Lessee: | |||
| DHL Network Operations (USA), Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇ ▇▇▇▇ – EVP, General Counsel & Secretary E-Mail: ▇▇▇.▇▇▇▇@▇▇▇.▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| With a copy to: | ||||
| DHL Network Operations (USA), Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇ – Senior Vice President E-Mail: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ | ||||
| AIRCRAFT LEASE AGREEMENT | 46 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
| (2) | If to Lessor: | |||
| Cargo Aircraft Management, Inc. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||||
| Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ | ||||
| Attention: Chief Financial Officer | ||||
| E-Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | ||||
| With a copy to: | ||||
| ABX Air, Inc. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ | ||||
| Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ | ||||
| Attention: W. ▇▇▇▇▇▇ ▇▇▇▇▇, Vice President, General Counsel and Secretary | ||||
| E-Mail: ▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ | ||||
(b) Either party, by notice to the other delivered in accordance with this Section 20.11, may designate another address as its address for notice under this Agreement.
20.12. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, and together shall have the same effect as if the signatures thereto were upon the same instrument.
20.13. Brokers. Each of the parties hereto represents and warrants to the other that it has not employed any brokers or sale agents in the creation of or the negotiations relating to this Agreement, nor has it given any brokers or sales agents such broad powers as to encompass the transactions described in this Agreement, and each party shall indemnify and hold harmless the other party by reason of any breach or alleged breach by such party of its representation and warranty under this Section 20.13.
20.14. Lessor’s Lender. Lessee understands and acknowledges that (a) the Aircraft may be subject to one or more security interests from time to time as the result of Lessor or an Affiliate of Lessor borrowing funds from one or more entities (collectively, “Lessor’s Lender”) and (b) as a result, Lessor may be required to collaterally assign part or all of its interest in the Aircraft and in and under this Agreement to secure the performance of its repayment and other obligations owing to Lessor’s Lender. Lessee agrees that, upon the written direction of Lessor, it shall consent to any such collateral assignment of Lessor’s rights under this Agreement; provided, however, that Lessor shall reimburse Lessee for any additional, out-of-pocket expenses (as reasonably supported by receipts and other documentation) associated with complying with this Section 20.14.
| AIRCRAFT LEASE AGREEMENT | 47 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
20.15. Lessee’s Early Termination Rights.
(a) General Right of Termination. Commencing twenty-four (24) months after Delivery (but not before), Lessee shall have the right to terminate this Agreement, in its sole and absolute discretion and with or without cause, by providing written notice of such intent to terminate (pursuant to the notice requirements of Section 20.11 hereof) to Lessor at least 180 days prior to the specified termination date (the “Discretionary Termination Effective Date”). As conditions precedent to the effectiveness of a Termination under this Section 20.15(a): (i) Lessee shall make a lump sum payment to Lessor in an amount equal to what would have been owing by Lessee in Basic Rent payments over the next six (6) months after the Discretionary Termination Effective Date; and (ii) Lessee shall Return the Aircraft to Lessor pursuant to the requirements of this Agreement, including, without limitation, Sections 17 and 18 hereof and Appendix H hereto. The parties shall execute and file any and all documentation required or allowed by the Aviation Authority evidencing such Termination.
(b) Right To Terminate Due to ABX Pilot Labor Restriction. Lessee shall have a separate right to terminate this Agreement by providing written notice of such intent to terminate (pursuant to the notice requirements of Section 20.11 hereof) to Lessor at least 180 days prior to the specified termination date in the event that Lessee desires to transfer operational control of the Aircraft but is restricted from doing so by the terms of the ABX/Pilots’ CBAwhich provides that members of the ABX Pilots’ Union have the right to follow the Aircraft to another operator; provided, however, that no such notice shall be given earlier than 180 days prior to the expiration of the initial five (5) year term of the ABX Air Transportation Services Agreement. As a condition precedent to the effectiveness of a Termination under this Section 20.15(b): (i) Lessee shall make a lump sum payment to Lessor in an amount equal to what would have been owing by Lessee in Basic Rent payments over the next two (2) months after the date of such Termination; and (ii) Lessee shall Return the Aircraft to Lessor pursuant to the requirements of this Agreement, including, without limitation, Sections 17 and 18 hereof and Appendix H hereto. The parties shall execute and file any and all documentation required or allowed by the Aviation Authority evidencing such Termination.
20.16 Various Agreements Regarding ABX Pilots’ Union.
(a) To the best of Lessor’s knowledge, Lessee has no relationship with, and owes no contractual or other obligations whatsoever to, the ABX Pilots’ Union under the ABX/Pilots CBA or any other agreement.
(b) This Agreement shall be considered a dry lease agreement.
(c) The ABX Pilots’ Union is not a third-party beneficiary (intended or otherwise) of or under this Agreement.
(d) Lessor agrees to defend, indemnify, reimburse and hold harmless Lessee and its Affiliates, and their respective subsidiaries, successors and assigns, together with each of such entities’ respective directors, officers, agents, shareholders and employees from and against any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, penalties, fines, other sanctions and any costs and expenses in connection therewith,
| AIRCRAFT LEASE AGREEMENT | 48 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
including but not limited to reasonable attorneys’ fees and expenses, that in any way result from or arise out of any allegation that (i) Lessee has a relationship with or owes a contractual or other obligation to the ABX Pilots’ Union under the ABX/Pilots CBA or any other agreement; or (ii) this Agreement is not a dry lease agreement; or (iii) the ABX/Pilots’ Union is a third party beneficiary (intended or otherwise) of or under this Agreement; or (iv) Lessee’s performance under this Agreement violates the ABX/Pilots CBA; provided, however, that this Section 20.16(d) shall not apply with respect to any claims made by the ABX Pilots’ Union that, in light of the percentage of ABX’s fleet transferred by Lessee to another operator, members of the ABX Pilots’ Union have the right under the terms of the ABX/Pilots CBA to follow the Aircraft to such other operator.
[Signature Page Follows]
| AIRCRAFT LEASE AGREEMENT | 49 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease Agreement (MSN ) as of the day and year first herein written.
| LESSOR: | ||
| CARGO AIRCRAFT MANAGEMENT, INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| LESSEE: | ||
| DHL NETWORK OPERATIONS (USA), INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| AIRCRAFT LEASE AGREEMENT | 55 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX A
to
AIRCRAFT LEASE AGREEMENT (MSN )
DESCRIPTION OF AIRFRAME AND ENGINES
1. Description Of Airframe.
| Manufacturer: | The Boeing Company | |||
| Model Number: | 767-2 | |||
| Serial Number: | ||||
| U.S. Registration No.: | N |
2. Description Of Engines.
| Manufacturer: | General Electric | |||
| Model Number: | CF6-80A2 | |||
| Serial Numbers: | As Identified on Lease Supplement | |||
| Each of the Engines has more than 550 rated takeoff horsepower or the equivalent of such horsepower. | ||||
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX B
to
AIRCRAFT LEASE AGREEMENT (MSN )
PARTICULAR COMMERCIAL CONDITIONS
(Following confidential financial terms redacted from Lease counterpart filed with FAA)
1. Basic Rent; Basic Rent Credit. Basic Rent shall be in the amount of [*] Dollars ($[*]) per month. The payment of Basic Rent shall be reduced by a credit of Twenty Nine Thousand Seven Hundred Sixty Two Dollars ($29,762) per month, which equals the total amount of Two Million Five Hundred Thousand Dollars ($2,500,000) (the “Basic Rent Credit”) amortized equally each month over the Term, leaving a cash payable amount of Two Hundred Thousand Dollars ($200,000) per month.
2. Interest Rate. Overdue amounts shall bear interest at a per annum rate (computed on the basis of a 360 day year and actual days elapsed) equal to [*] ([*]%).
3. Designated Bank Account. Unless Lessor otherwise directs in writing, all payments payable to Lessor hereunder shall be made by wire transfer of same-day federal funds to the following bank account:
| Bank: |
[*] | |||||||||||
| Account Name: |
[*] | |||||||||||
| Account No. |
[*] | |||||||||||
| ABA Routing No.: |
[*] |
4. Insurance.
4.1 Agreed Value: The Agreed Value of the Aircraft shall be in the following amount (with each “Year” equaling twelve (12) calendar months, commencing with Delivery Date):
| First Year of Term: | Twenty-Eight Million Dollars ($28,000,000) | |||||
| Second Year of Term: | Twenty-Seven Million Dollars ($27,000,000) | |||||
| Third Year of Term: | Twenty-Six Million Dollars ($26,000,000) | |||||
| Fourth Year of Term: | Twenty-Five Million Dollars ($25,000,000) | |||||
| Fifth Year of Term: | Twenty-Four Million Dollars ($24,000,000) | |||||
| Thereafter: | Twenty-Three Million Dollars ($23,000,000) | |||||
4.2 Deductibles: Not Greater than One Million Dollars ($1,000,000).
4.3 Minimum Aircraft Liability Coverage: One Billion Dollars ($1,000,000,000).
4.4 Political Risk Coverage: Amount reasonably acceptable to Lessor
| AIRCRAFT LEASE AGREEMENT |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX C
to
AIRCRAFT LEASE AGREEMENT (MSN )
LIST OF AIRCRAFT DOCUMENTS
TO BE DELIVERED WITH AIRCRAFT
[NOTE: SPECIMENT LIST ONLY – SUBJECT TO CONFIRMATION BY PARTIES]
1. Certificates.
| 1.1. | Certificate of Airworthiness (on board aircraft). |
| 1.2. | Current Aircraft Registration Certificate (on board aircraft). |
| 1.3. | Burn Certificates- Cabin Interiors. |
| 1.4. | Copy of all airworthiness documents in support of STC’s, including relevant MM, IPC, WDM, MMEL supplements. |
| 1.5. | Certified AD status for Airframe. |
| 1.6. | Certified AD status for Engines. |
| 1.7. | Certified AD status for APU. |
| 1.8. | Certified AD status for appliances. |
2. Aircraft Status Summaries.
| 2.1. | Supplemental Structural Inspection (SSID) Status (if applicable). |
| 2.2. | Corrosion Prevention and Control Program Task Status. |
| 2.3. | List of Major Repairs and Alterations. |
| 2.4. | List and Status of Life Limited Components. |
| 2.5. | Check/Inspection Status. |
| 2.6. | List and Current Status of Time-Controlled Components. |
| 2.7. | Reliability reports, including engine health monitoring data. |
3. Aircraft Maintenance Records. Airframe inspection, maintenance, modification and repair documents with maintenance and/or inspection signatures (as required) and description of work done.
| 3.1. | Last “A” , “B”, “C” and “D” checks (or equivalent). In the event that a check is performed in phases necessary to constitute a complete block check, records with respect to all phases are required. In the event that check content varies by multiples of the check, all multiples necessary to constitute a complete cycle are required. |
| 3.2. | AD and modification compliance documents including engineering orders, service bulletins, drawings, shop cards, etc., as necessary to establish method of compliance, quality control acceptance, and approval authority. |
| 3.3. | Documentation of major repairs and alterations including engineering order, drawings, Supplemental Type Certificates, List of any Alternative Methods of Compliance, Master Change Notice, etc., as necessary to define work done, certification basis, and approval authority. |
| AIRCRAFT LEASE AGREEMENT | 1 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
| 3.4. | Aircraft weighing records and last weighting report |
| 3.5 | Certified current times in service (hours and cycles) (as provided by prior operator. |
| 3.7. | Inventory (from prior operator) of OC/CM (components fitted list). |
| 3.8. | Damage Log and Time controlled repairs list. |
| 3.9. | Structural Repairs Mapping and damage (including Dent and Buckle Chart). |
| 3.11. | Last A, SA, C, and SC checks records and status. |
| 3.13 | Compass swing report. |
| 3.14 | Last Test Flight report. |
| 3.15 | Copy of manufacturer maintenance planning document (MPD) |
| 3.16 | Copy of operator aircraft maintenance program. |
| 3.17 | All historical tech log pages |
| 3.18 | All maintenance check pack records |
4. Aircraft History Details.
| 4.1. | Accident or Incident Reports. |
5. Engine Records. For each Engine:
| 5.1. | Engine Master Record (record of installation and removal and accumulated flight time and cycles). |
| 5.2. | AD Applicability and Compliance Report. |
| 5.3. | List of Operator Modifications Incorporated, if any. |
| 5.4. | List of Major Repairs and Alterations, if any. |
| 5.5. | List and Current Status of Life Limited Components. |
| 5.6. | Check/Inspection Status. |
| 5.7. | List and Status of Time Controlled Parts. |
| 5.8. | Repair, overhaul and inspection documents including FAA Forms 337. |
| 5.9. | Documents necessary to demonstrate installation and traceability to new for life limited components currently installed. |
| 5.10. | Test Cell Records for last test. |
| 5.11. | Certified Statement of status for each engine. |
| 5.12. | Last Boroscope Report including video. |
| 5.13. | Last On Wing ground run. |
| 5.14. | Certified Statement of Non Incident / Accident Report. |
6. APU Records.
| 6.1. | APU Master Record (record of installation and removal and accumulated time and cycles). |
| 6.2. | AD Applicability and Compliance Report. |
| 6.3. | Manufacturer Service Bulletin Compliance Report. |
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
| 6.4. | List of Operator Modifications Incorporated, if any. |
| 6.5. | List and Current Status of Life Limited Components, LLP status and full traceability to birth |
| 6.6. | List and Status of Time Controlled Components. |
| 6.7. | Repair, overhaul and inspection documents including FAA Forms 337. |
| 6.8. | Certified statement of status of APU. |
| 6.9. | Approved release to service certification for installed units. |
7. Component Record.
| 7.1. | Time Controlled Component Historical Record with installation and serviceability tags. |
| 7.2. | Documents necessary to demonstrate installation and traceability to new for life limited components currently installed. |
8. Manuals.*
| 8.1. | Prior Operator’s Airplane Flight Manual. |
| 8.2. | Weight and Balance Control and Loading Manual. |
| 8.3. | Maintenance Manual. |
| 8.4. | Wiring Diagram Manual. |
| 8.5. | Illustrated Parts Catalog. |
| 8.6. | S.R.M. |
| 8.7 | Airplane Operations Manual (FCOM) and Quick Ref Handbook (QRH). |
| 8.8 | Aircraft/engine/APU hookup charts, wiring lists, equipment lists. |
| 8.9 | Fault isolation manual (FIM). |
| 8.10 | Operators ▇▇▇. |
| 8.11 | Dispatch deviation procedures guide (DDPG) |
| 8.12 | Emergency equipment layout drawing. |
| 8.13 | Master MMEL. |
| * | All SB, ECO and STC modifications have been incorporated into manuals. |
9. Miscellaneous Technical Documents.
| 9.1. | Loose Equipment Inventory |
| 9.2. | Approved and certified cargo configuration drawings. |
| 9.3. | Inventory listing of avionics installed units. |
| 9.4. | Last FDR Readout and Correlation Check. |
| AIRCRAFT LEASE AGREEMENT | 3 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
10. Landing Gears
| 10.1. | Approved release to service certification for each landing gear. |
| 10.2. | Approved LLP listing for each gear with full traceability to birth. |
| 10.3. | Copy of last overhaul report. |
| AIRCRAFT LEASE AGREEMENT | 4 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX D
to
AIRCRAFT LEASE AGREEMENT (MSN )
ATTACHED FORM OF TECHNICAL ACCEPTANCE CERTIFICATE
(Executed as a Condition of Delivery)
| AIRCRAFT LEASE AGREEMENT |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
TECHNICAL ACCEPTANCE CERTIFICATE
Dated: , 2010
PURSUANT TO THE AIRCRAFT LEASE AGREEMENT (MSN ) (the “Lease”) dated as of April 1, 2010 between Cargo Aircraft Management, Inc. (“Lessor”), as lessor, and DHL Network Operations (USA), Inc. (“Lessee”), as lessee,
This TECHNICAL ACCEPTANCE CERTIFICATE (this “Technical Acceptance Certificate”) is executed by Lessee in regard to the Airframe, Engines, and Aircraft Documents listed below (collectively, the “Aircraft”). Unless otherwise defined, all capitalized terms set forth herein shall have the same meaning as set forth in the Lease.
Lessee hereby confirms that, as of this day of , 2010, at a.m./p.m. (Central Time):
| (a) The following described airframe (the “Airframe”): | ||||
| Manufacturer: | The Boeing Company | |||
| Model Number: | 767-2 | |||
| Manufacturer’s Serial Number: | ______________________ | |||
| U.S. Registration No.: | N | |||
| Total Time: | ______________________ | |||
| Total Cycles: | ______________________ | |||
| Time Since Major Check: | ______________________ | |||
| Cycles Since Major Check: | ______________________ | |||
| Type of Last Major Check | ______________________ | |||
| Time to Next Major Check | ______________________ | |||
| (b) together with the following described two (2) aircraft engines (the “Engines”): | ||||
| Manufacturer: | General Electric | |||
| Model Number: | CF6-80A2 | |||
| Serial Number: | ______________________ | |||
| Total Time: | ______________________ | |||
| Total Cycles: | ______________________ | |||
| Time Since Overhaul: | ______________________ | |||
| Cycles Since Overhaul: | ______________________ | |||
| Cycles Remaining Until Next Overhaul | ______________________ | |||
| Serial Number: | ______________________ | |||
| Total Time: | ______________________ | |||
| Total Cycles: | ______________________ | |||
| Time Since Overhaul: | ______________________ | |||
| Cycles Since Overhaul: | ______________________ | |||
| Cycles Remaining Until Next Overhaul | ______________________ | |||
| AIRCRAFT LEASE AGREEMENT | 1 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
| (c) together with the following described landing gears: | ||||
| Manufacturer: | ______________________ | |||
| Model Number(s): | ______________________ | |||
| Serial Number(s): | ______________________ | |||
| Time Since Overhaul: | ______________________ | |||
| Cycles Since Overhaul: | ______________________ | |||
| (d) together with the following auxiliary power unit (APU): | ||||
| Manufacturer: | ______________________ | |||
| Model Number: | ______________________ | |||
| Serial Number: | ______________________ | |||
| Time Since Overhaul: | ______________________ | |||
| Cycles Since Overhaul: | ______________________ | |||
| (e) together with the Aircraft Documents (as detailed in Attachment 1 hereto), | ||||
have been inspected to determine their compliance with the Delivery Condition Requirements of the Lease.
With the exception of any discrepancies agreed to by Lessor and Lessee on a signed listing attached hereto, Lessee hereby (a) certifies that it considers the Aircraft to comply with the Delivery Condition Requirements set forth in the Lease and (b) accepts the condition of the Aircraft in all respects. This Technical Acceptance Certificate constitutes the “Technical Acceptance Certificate” pursuant to the Lease.
[Signature Page Follows]
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
IN WITNESS WHEREOF, Lessee has caused this Technical Acceptance Certificate to be executed and delivered by its duly authorized representative as of the time, day and year above written.
| DHL NETWORK OPERATIONS (USA), INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| Attachment 1: Aircraft Documents | ||
| AIRCRAFT LEASE AGREEMENT | 3 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
ATTACHMENT 1
to
TECHNICAL ACCEPTANCE CERTIFICATE
LIST OF AIRCRAFT DOCUMENTS
[To Be Provided]
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX E to
AIRCRAFT LEASE AGREEMENT (MSN )
ATTACHED FORM OF LEASE SUPPLEMENT
(Executed Contemporaneously with Delivery)
| AIRCRAFT LEASE AGREEMENT |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
LEASE SUPPLEMENT NO. 1
(MSN )
Dated: , 2010
PURSUANT TO THE AIRCRAFT LEASE AGREEMENT (MSN ) (the “Lease”) dated as of April 1, 2010 between Cargo Aircraft Management, Inc. a Florida corporation (“Lessor”), as lessor, and DHL Network Operations (USA), Inc., an Ohio corporation (“Lessee”), as lessee, this Lease Supplement No. 1 is executed by the parties hereto to confirm that at a.m./p.m. Central Time on this day of , 2010:
| (a) the following described airframe: | ||||
| Manufacturer: | The Boeing Company | |||
| Model: | 767-2 | |||
| Manufacturer’s Serial No.: | ______________________ | |||
| U.S. Registration No.: | N | |||
| (b) together with the two (2) following described aircraft engines (each having more than 550 rated takeoff horsepower or the equivalent of such horsepower): | ||||
| Manufacturer: | General Electric | |||
| Model: | CF6-80A2 | |||
| Manufacturer’s Serial Nos.: | ______________________ | |||
| ______________________ | ||||
| (c) together with the “Aircraft Documents” (as listed in Attachment 1 to the “Technical Acceptance Certificate,” as defined in the Lease), | ||||
were delivered by Lessor to Lessee and were accepted by Lessee under and subject to the terms and conditions of the Lease. The parties hereto confirm that on the date hereof (i) the “Aircraft” (as defined by the Lease) was duly accepted by Lessee for leasing under the Lease, (ii) the Aircraft became subject to and governed by the provisions of the Lease, (iii) the Lease is in full force and effect, (iv) all the terms and provisions of the Lease are hereby fully incorporated herein, and (v) Lessee became obligated to make the payments provided for in the Lease.
Expiration Date. Lessor and Lessee further acknowledge and agree that the Expiration Date for purposes of the Lease is 20 .
[Signature Page Follows]
| AIRCRAFT LEASE AGREEMENT | 1 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
IN WITNESS WHEREOF, the parties hereto have caused this Lease Supplement No. 1 (MSN ) to be executed and delivered by their duly authorized representatives as of the day and year above written.
| LESSOR: | ||
| CARGO AIRCRAFT MANAGEMENT, INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| LESSEE: | ||
| DHL NETWORK OPERATIONS (USA), INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX F
to
AIRCRAFT LEASE AGREEMENT (MSN )
ATTACHED FORM OF RETURN RECEIPT
(Executed Contemporaneously with Return of Aircraft)
| AIRCRAFT LEASE AGREEMENT |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
RETURN RECEIPT
Dated:
PURSUANT TO THE AIRCRAFT LEASE AGREEMENT (MSN ) (the “Lease”) dated as of April 1, 2010 between Cargo Aircraft Management, Inc. (“Lessor”), as lessor, and DHL Network Operations (USA), Inc. (“Lessee”), as lessee, this Return Receipt is executed by the parties hereto to confirm that at a.m./p.m. (Central Time) on this day of , the following described aircraft (as defined more fully in the Lease, the “Aircraft”) was redelivered by Lessee to Lessor pursuant to the terms and conditions of the Lease:
| (a) |
The following described airframe (the “Airframe”): | |||
| Manufacturer: | The Boeing Company | |||
| Model Number: | 767-2 | |||
| Manufacturer’s Serial Number: | ______________________ | |||
| U.S. Registration No.: | N | |||
| Total Time: | ______________________ | |||
| Total Cycles: | ______________________ | |||
| Time Since Major Check: | ______________________ | |||
| Cycles Since Major Check: | ______________________ | |||
| Type of Last Major Check | ______________________ | |||
| Time to Next Major Check | ______________________ | |||
| (b) |
together with the following described two (2) aircraft engines (the “Engines”): | |||
| Manufacturer: | General Electric | |||
| Model Number: | CF6-80A2 | |||
| Serial Number: | ______________________ | |||
| Total Time: | ______________________ | |||
| Total Cycles: | ______________________ | |||
| Time Since Overhaul: | ______________________ | |||
| Cycles Since Overhaul: | ______________________ | |||
| Cycles Remaining Until Next Overhaul | ______________________ | |||
| Serial Number: | ______________________ | |||
| Total Time: | ______________________ | |||
| Total Cycles: | ______________________ | |||
| Time Since Overhaul: | ______________________ | |||
| Cycles Since Overhaul: | ______________________ | |||
| Cycles Remaining Until Next Overhaul | ______________________ | |||
| AIRCRAFT LEASE AGREEMENT | 1 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
| (c) | together with the following described landing gears: | |||||
| Manufacturer: | ______________________ | |||||
| Model Number(s): | ______________________ | |||||
| Serial Number(s): | ______________________ | |||||
| Time Since Overhaul: | ______________________ | |||||
| Cycles Since Overhaul: | ______________________ | |||||
| (d) | together with the following auxiliary power unit (APU): | |||||
| Manufacturer: | ______________________ | |||||
| Model Number: | ______________________ | |||||
| Serial Number: | ______________________ | |||||
| Time Since Overhaul: | ______________________ | |||||
| Cycles Since Overhaul: | ______________________ | |||||
| (e) | together with the Aircraft Documents (as detailed in Attachment 1 hereto). | |||||
Lessee hereby confirms that it shall reimburse Lessor for the correction of the deferred items, if any, listed in Attachment 2 hereto.
Lessor hereby confirms that it has accepted the return of the Aircraft and of the Aircraft Documents under the terms of the Lease.
[Signature Page Follows]
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
IN WITNESS WHEREOF, the parties hereto have caused this Return Receipt to be executed and delivered by their duly authorized representatives as of the day and year above written.
| LESSOR: | ||
| CARGO AIRCRAFT MANAGEMENT, INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| LESSEE: | ||
| DHL NETWORK OPERATIONS (USA), INC. | ||
| By: |
| |
| Name: |
| |
| Title: |
| |
| Attachment 1: | Aircraft Documents | |
| Attachment 2: | Deferred Items |
| AIRCRAFT LEASE AGREEMENT | 3 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
ATTACHMENT 1
to
RETURN RECEIPT
LIST OF AIRCRAFT DOCUMENTS
[To Be Provided]
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
ATTACHMENT 2
to
RETURN RECEIPT
DEFERRED ITEMS
[To Be Provided]
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX G
to
AIRCRAFT LEASE AGREEMENT (MSN )
DELIVERY CONDITIONS
1. General. On the Delivery Date, the Aircraft will be in an “AS IS, WHERE IS” condition, except that Lessee shall have the right to inspect the Aircraft to ensure that it complies with the conditions set forth below. Lessor and Lessee shall ensure that the Technical Acceptance Certificate reflects the status of the Aircraft at Delivery (for comparison purposes at the Return of the Aircraft pursuant to Appendix H to the foregoing Aircraft Lease Agreement).
2. Delivery Conditions; Equipment; Status.
2.1. At Delivery, the Aircraft shall be serviceable, certified for international cargo operations, with all systems functioning, and clean in accordance with international airline standards.
2.2. The Aircraft shall have been converted to a cargo configuration by IAI in accordance with the IAI FAA Approved Supplementary Type Certificate – 767-200 Passenger to Special Freighter Conversion Specification, with all related systems and components functioning. All maintenance requirements resulting from such conversion shall have been accomplished.
2.3. The Aircraft shall be delivered with a current FAA Certificate of Airworthiness.
2.4. The Aircraft shall have had all scheduled structural inspections completed and all Deferred Maintenance Items corrected prior to Delivery.
2.5. Lessor shall have complied with all ADs (and all service bulletins requiring compliance under the ABX Maintenance Program) issued prior to Delivery affecting the Aircraft and requiring terminating action prior to Delivery or within one year after Delivery (without regard to any deferrals which are or might be granted).
2.6. Between execution of the foregoing Aircraft Lease Agreement and Delivery, Lessor shall not have removed any of the Engines or modules from the Aircraft except due to operational necessity or as a result of a scheduled shop visit, and Lessor shall not discriminate against the Aircraft as compared to other comparable aircraft owned or operated by Lessor.
2.7. The Aircraft, at Lessee’s cost, shall be painted in the Lessee’s livery (or as otherwise directed by Lessee).
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
3. Lessee Inspection Prior to Final Delivery and Acceptance.
(a) Prior to Delivery, Lessee shall have the right to inspect the Aircraft, including without limitation the Airframe, the Engines and the Aircraft Documents.
(b) Lessee shall have the right to attend a demonstration/test flight conducted by Lessee of up to one (1) hour duration to confirm the condition of the Aircraft and the functioning of all systems.
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX H
to
AIRCRAFT LEASE AGREEMENT (MSN )
RETURN CONDITION REQUIREMENTS
1. General.
1.1. The Aircraft shall be serviceable, certified for international cargo operations, with all systems functioning, and clean in accordance with international airline standards.
1.2. The Aircraft shall be in compliance with then current FARs, including, without limitation, FAR Part 121, and shall be delivered with a current FAA Certificate of Airworthiness (or a certificate of airworthiness for export to the United States issued by the Aviation Authority, if not the FAA).
1.3. The Aircraft (including without limitation the Engines) shall be free and clear of liens, charges and encumbrances of any nature whatsoever not arising through Lessor.
2. Specific Aircraft Return Condition Requirements; Equipment; Status. In addition to the above general requirements, the Aircraft shall satisfy the following specific requirements upon its Return by Lessee:
2.1. The Aircraft shall have installed the full complement of Engines (including any Replacement Engines installed in accordance with the provisions of the foregoing Aircraft Lease Agreement) and other equipment, parts, accessories, furnishings and loose equipment as when originally delivered to Lessee or as may be agreed by Lessee and Lessor on the Return Date.
2.2. The Aircraft, at Lessee’s cost, shall be painted in white tail livery. Should Lessor request that the Aircraft be painted at Return in any other color scheme, Lessee shall cooperate in effecting such painting, but Lessee shall be financially responsible for only a white tail livery.
2.3. The Aircraft shall have had all scheduled structural inspections completed and all Deferred Maintenance Items (DMI’s) corrected prior to Return.
2.4. Lessee shall comply with all ADs issued during the Term affecting the Aircraft and requiring terminating action during the Term or within one year after the end of the Term (without regard to any deferrals which are or might be granted).
2.5. The Aircraft shall be serviceable and airworthy. If the Aircraft, at no cost to Lessee, was delivered by Lessor at Delivery with a fresh “C” Check pursuant to the ABX Maintenance Program (with no more than 50 hours since completion of such Check), the Aircraft at Return, at no cost to Lessor, shall have undergone the next scheduled “C” Check in accordance with the Maintenance Program and shall be redelivered to Lessor with no more than 50 hours since completion of such Check.
| AIRCRAFT LEASE AGREEMENT | 1 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
2.6. The Aircraft shall have been bridged back to the ABX Maintenance Program at Lessee’s cost.
2.7. If an Engine is subject to the Delta Engine Program at Return, such Engine need only be airworthy and be in a serviceable condition at Return, and there shall be no financial adjustments with respect to such Engine (subject to Lessee being in compliance with the Delta Engine Program with respect to such Engine).
2.8. If an Engine is not subject to the Delta Engine Program at Return:
(a) Such Engine: (i) shall be in a serviceable condition, as determined from a manufacturer’s on-wing power assurance run and borescope inspection (pursuant to the procedure set forth in Section 3.1, below); (ii) shall have been subject to a Maintenance Program equivalent to or better than the Manufacturer’s maintenance program for such Engine; (iii) shall have had incorporated all modifications contained in Delta’s Minimum Modification List (as set forth in Appendix H-1); and (iv) shall have at least 2,500 Cycles remaining until the next scheduled removal of such Engine from the Aircraft under the Engine’s Maintenance Program for (A) replacement of life-limited parts, (B) scheduled maintenance or (C) inspections or modifications required by any AD that cannot be performed on-wing (a “Scheduled Removal”).
(b) In lieu of satisfying the above requirement of having at least 2,500 Cycles remaining before the next Scheduled Removal, Lessee shall have the option of making a financial adjustment payment to Lessor in an amount equal to:
(2,500 - RC) x $[*] x 3
For purposes of this Section 2.8(b), “RC” shall mean the number of Cycles for such Engine at Return remaining until its next Scheduled Removal.
2.9. The Landing Gear shall be serviceable. In addition, the life limited Parts of the Landing Gear shall have the same average number of cycles remaining until the Landing Gear’s next scheduled removal (the “Landing Gear Remaining Life”) as they had at Delivery. Should the Landing Gear Remaining Life be less at Return than at Delivery, Lessee may cure any resulting shortfall by making a payment to Lessor at Return in an amount equal to [*] Dollars ($[*]) per each Flight Hour of such Landing Gear Remaining Life differential. Should the Landing Gear Remaining Life be more at Return than at Delivery, Lessor shall cure any resulting excess by making a payment to Lessee at Return in an amount equal to [*] Dollars ($[*]) per each Flight Hour of such Landing Gear Remaining Life differential.
2.10. The APU shall be serviceable. In addition, the APU shall have the same life remaining until the APU’s next scheduled overhaul (the “APU Remaining Life”) as it had at Delivery. Should the APU Remaining Life be less at Return than at Delivery, Lessee may cure any resulting shortfall by making a payment to Lessor at Return in an amount equal to [*] Dollars ($[*]) per each Flight Hour of such APU Remaining Life differential. Should the APU Remaining Life be more at Return than at Delivery, Lessor shall cure any resulting excess by making a payment to Lessee at Return in an amount equal to [*] Dollars ($[*]) per each Flight Hour of such APU Remaining Life differential.
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
2.11. All Aircraft Documents generated during the term of the Lease shall be in accordance with FAA standards and shall be returned to Lessor.
3. Lessor Final Inspection Prior to Return.
3.1. Prior to Return, Lessor shall have the right to conduct a Final Inspection of the Aircraft, including without limitation the Airframe and the Engines, and the Aircraft Documents, as set forth in Section 18.3 of the Agreement. Without limiting the foregoing:
(a) Lessor, at its cost, shall have the right to inspect the Engines, including, in the presence of Lessee’s representatives (i) a complete video borescope inspection of (A) the low pressure and high pressure compressors and (B) the turbine area and (ii) engine condition runs (including full take-off power engine run-up performed in accordance with the performance test in the Manufacturer’s maintenance manual, and the Engines shall not exceed corrected limits for all parameters using temperature corrected charts), and power assurance runs; and
(b) Lessor shall have the right to inspect the APU, including, in the presence of Lessee’s representatives, a complete video borescope and an electrical power output test in accordance with the manufacturer’s specifications.
3.2. Lessee shall provide a test flight of up to one (1) hour duration as provided in Section 18.4 of the Agreement.
| AIRCRAFT LEASE AGREEMENT | 3 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX H-1
to
AIRCRAFT LEASE AGREEMENT (MSN )
DELTA’S MINIMUM MODIFICATION LIST
[See Attached]
DELTA’S MINIMUM MODIFICATION LIST
| Type |
SB No. |
SB Title |
Original Issue Date |
Latest Rev. Date |
Engine Type |
OEM Cat. Level |
WPG High Priority (Y/N) |
WPG CI List (Y/N) |
Comments | |||||||||
1
| Min Mod | 72- 0549 R00 |
ENGINE- Combustion System - Adding Slots to the Inner Dome Plate |
21- Nov- 1989 |
CF6- 80A/A1/A2/A3 |
N/A | |||||||||||||
| Min Mod | 72- 0566 R02 |
ENGINE - High- Pressure Turbine - Stage 1 Stationary Seal Support Shop Inspection |
15- Aug- 1991 |
CF6- 80A/A1/A2/A3 |
campaign | |||||||||||||
| Min Mod | 72- 0568 R02 |
ENGINE - Fan Module - Stage 1 Fan Disk Rework for Fretting and Life Extension |
18- Apr- 1995 |
CF6- 80A/A1 /A2/A3 |
N/A | Y | N | |||||||||||
| Min Mod | 72- 0586 R00 |
ENGINE - Combustion Chamber Assembly - Rolled Lip Outer Cowl Inspection |
12- Apr- 1991 |
CF6- 80A/A1/A2/A3 |
campaign | Y | N | |||||||||||
| Min Mod | 72- 0594 R00 |
ENGINE - High Pressure Turbine Rotor - Stage 2 Blade Coating Improvement |
06- May- 1992 |
CF6- 80A/A1 /A2/A3 |
7 | |||||||||||||
| Min Mod | 72- 0595 R03 |
ENGINE - Low Pressure Turbine - Stator Inner Liner and Pressure Balance Seal |
30- Nov- 1998 |
CF6- 80A/A1/ A2/A3 |
N/A | |||||||||||||
| Min Mod | 72- 0614 |
ENGINE - LPT - Stage 1 Nozzle T800 Wear Coat |
26- Feb- 1992 |
CF6- 80A/A1/A2/A3 |
||||||||||||||
| Min Mod | 72- 0615 |
ENGINE - HPT Rotor - Diffuser Aft Seal Rework for Life Limit Extension |
17- Dec- 1998 |
CF6- 80A/A1/A2/A3 |
N/A | |||||||||||||
2
| Min Mod | 72- 0622 R0l |
ENGINE - High Pressure Turbine Stator - Stage 1 Stationary Seal Support Forward Flange and AFT Outer Flange Replacement |
06- Nov- 1992 |
CF6- 80A/A1/A2/A3 |
6 | Y | N | |||||||||||
| Min Mod | 72- 0634 R00 |
ENGINE - Fan- Inlet Gearbox Assembly Shims- Replacement |
15- Feb- 1993 |
CF6- 80A/A1/A2/A3 |
7 | |||||||||||||
| Min Mod | 72- 0635 R00 |
ENGINE - Accessory Drive - Inlet Gearbox- Main Housing Rework |
15- Nov- 1993 |
CF6- 80A/A1/A2/A3 |
5 | |||||||||||||
| Min Mod | 72- 0641 R0l |
ENGINE- Combustion Chamber - New Igniter Tube |
20- Mar- 1998 |
CF6- 80A/A1/A2/A3 |
6 | |||||||||||||
| Min Mod | 72- 0668 R02 |
ENGINE- General (72-00- 04) - Installation of Center Vent Tube Flame Arrestor |
29-Jun- 1995 |
09- Jul- 1997 |
CF6- 80A/A1/A2/A3 |
3 | Y | N | ||||||||||
| Min Mod | 72- 0675 R03 |
ENGINE - LPT Module (72-00- 04) - Center Vent Tube - New Flame Arrestor for Pre-S/B 72-084 Aft Sump |
16-Oct- 1995 |
25- Nov- 1997 |
CF6- 80A/A1/A2/A3 |
3 | Y | N | Ref. SB 72- 0668 | |||||||||
| Min Mod | 72- 0684 R02 |
ENGINE - Combustion Liner Assembly (72-41-00) - Outer Cowl Replacement |
19-Jul- 1996 |
14- Apr- 1998 |
CF6- 80A/A1/A2/A3 |
4 | N | N | ||||||||||
| Min Mod | 72- 0701 R00 |
ENGINE - High Pressure Turbine Rotor Assembly (72- 53-00) - New Stage 1 Blade |
30-Nov- 1998 |
30- Nov- 1998 |
CF6- 80A/A1/A2/A3 |
7 | N | N | Replaces Brazed tip cap design with Cast-in-tip cap design | |||||||||
| Min Mod | 72- 0722 R00 |
ENGINE - HPTR (72-53- 00) - Reworked Diffuser Aft Seal |
5- Jun- 2000 |
05- Jun- 2000 |
CF6- 80A/A1/A2/A3 |
4 | N | N | ||||||||||
3
| Min Mod | 72- 0730 R00 |
ENGINE - Compressor Rotor (72-31- 00) - Air Duct |
16-Jul- 1999 |
16- Jul- 1999 |
CF6- 80A/A1/A2/A3 |
6 | Y | N | ||||||||||
| Min Mod | 72- 0744 R00 |
ENGINE - HPCS (72-32- 00) - Actuating Ring Connecting Links |
▇▇-▇▇▇- ▇▇▇▇ |
▇▇- ▇▇▇- ▇▇▇▇ |
CF6- 80A/A1/A2/A3 |
5 | N | N | Ref. SB 72- 0539 | |||||||||
| Min Mod | 72- 0749 R00 |
ENGINE - LPT (72-56-00) - Stage 3 and 4 Nozzles - Replacement |
16-May- 2000 | 16- May- 2000 |
CF6- 80A/A1/A2/A3 |
5 | Y | Y | 3rd Stage required only | |||||||||
| Min Mod | 72- 0760 R01 |
ENGINE - High Pressure Turbine Rotor (72-53-00) - Stage 1 Blade Rework |
8-Mar- 2001 |
15- Aug- 2001 |
CE6- 80A/A1/A2/A3 |
7 | Y | N | Internal/External coated, LE cooling holes | |||||||||
| Min Mod | 72- 0794 R00 |
ENGINE - Fan Mid Shaft (72- 00-01)- Corrosion Protection |
20-Feb- 2004 |
20- Feb-2004 |
CF6- 80A/A1/A2/A3 |
5 | Y | N | ||||||||||
| Min Mod | 72- 0802 R00 |
ENGINE - HPTR (72-53- 00) - Stage 2 Disk - Rework |
9-Jun- 2004 |
09- Jun- 2004 |
CF6- 80A/A1/A2/A3 |
7 | N | N | ||||||||||
| Min Mod | 72- 0806 R00 |
ENGINE - Compressor Rear Frame Assembly (72- 34-00) - High Temperature Atlas 0-ring Seal for the B- Sump |
6-Apr- 2005 |
06- Apr- 2005 |
CF6- 80A/A1/A2/A3 |
5 | Y | N | ||||||||||
| Min Mod | 72- 0816 R0l |
ENGINE - HPT Rotor Assembly (72-53-00) - New Stage 1 Disk Air Baffle Ring for Erosion Protection |
19-Aug- 2005 |
16- Jun- 2006 |
CE6- 80A/A1/A2/A3 |
5 | N | N | ||||||||||
| Min Mod | 72- 0820 R00 |
ENGINE - HPC Stator Assembly (72-32-00) - New/Reworked Heat Treated High Pressure Compressor Case Vane Bore Repair Bushings |
24-Mar- 2006 |
24- Mar- 2006 |
CF6- 80A/A1/A2/A3 |
7 | N | N | ||||||||||
4
| Min Mod | 73- 0102 R01 |
ENGINE FUEL AND CONTROL - Fuel Nozzles (72-00-02) - Clip Configuration Replacement |
23-Jul- 1998 |
20- Jan- 1999 |
CF6- 80A/A1/A2/A3 |
3 | Y | N | ||||||||||
| Min Mod | 73- 0104 R01 |
ENGINE FUEL AND CONTROL - Non-Dribble Flow Fuel Nozzles (72-00- 00) - Improved Welded Heat ▇▇▇▇▇▇▇ |
10-May- 1999 |
19- Aug- 1999 |
CF6- 80A/A1/A2/A3 |
3 | Y | Y | ||||||||||
| Min Mod | 73- 0107 R00 |
ENGINE FUEL AND CONTROL - Fuel Manifold (72-00-02) - Improvements |
14-Nov- 2000 | 14- Nov- 2000 |
CF6-80A/A2 | 3 | Y | N | ||||||||||
| Min Mod | 73- 0111 R00 |
ENGINE FUEL AND CONTROL - Fuel Manifold (72-00-02) - Improved Brackets |
13-May- 2002 |
13- May- 2002 |
CF6-80/A2 | 0 | Y | N | ||||||||||
| Min Mod | 75- 0028 R01 |
AIR - Low Pressure Turbine Module (72-00-04) - Check Valve Flapper/Housing Redesign |
11-Jun- 1996 |
24- Apr- 1997 |
CF6- 80A/A1/A2/A3 |
7 | N | N | ||||||||||
5
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX I
to
AIRCRAFT LEASE AGREEMENT (MSN )
FORM OF LESSEE GUARANTY
[See Attached]
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
GUARANTY
This Guaranty (this “Guaranty”) is entered into as of , 2010 by Deutsche Post AG, a corporation formed under the laws of Germany (“Guarantor”), in favor of Cargo Aircraft Management, Inc., a Florida corporation (“Lessor”).
RECITALS
WHEREAS, Lessor, as lessor, and DHL Network Operations (USA), Inc. (“Lessee”), as lessee, have entered into (or contemplate entering into) four (4) separate lease agreements with respect to the lease of Boeing model 767-200SF aircraft bearing manufacturer’s serial numbers 23434, 23142, 23147 and 23431 (which, together with any additional lease agreements entered into between Lessor and Lessee for the lease of any other Boeing model 767-200SF aircraft, shall be collectively referred to herein as the “Leases”); and
WHEREAS, Guarantor owns (either directly or indirectly) all of the capital stock of Lessee: and
WHEREAS, in consideration for Lessor agreeing to grant to Lessee certain financial and other concessions in the Leases, Guarantor is willing to guarantee the performance of Lessee’s payment obligations under the Leases;
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:
Section 1. Definitions. The definitions set forth in the above Recitals are hereby incorporated as if fully set forth in this Section 1.
Section 2. Guaranty. Guarantor, as a primary obligor and not as surety, hereby guarantees, without any setoff or other deduction, to Lessor the due, punctual and full payment of all of Lessee’s payment obligations under each and all of the Leases when and as the same shall become due and payable by Lessee in accordance with the terms thereof, without regard to how such payment obligations are described or characterized in each of the Leases (with all of the obligations, covenants, terms, conditions, undertakings and liabilities described in this Section 2 collectively referred to as the “Guaranteed Obligations”).
This Guaranty is continuing, irrevocable, absolute and unconditional and a guaranty of payment and not of collectibility, and is in no way conditioned or contingent upon any attempt to collect from or enforce performance or compliance by Lessee or the exercise or assertion of any other right or remedy to which Lessor is or may be entitled under or in connection with the Leases. If for any reason whatsoever Lessee shall fail or be unable duly, punctually and fully to pay such amounts as and when the same shall become due and payable in accordance with the terms of any of the Leases, Guarantor will promptly pay or cause to be paid such amounts under the terms of such Leases.
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Notwithstanding anything to the contrary herein, the maximum amount recoverable under this Guaranty is limited to [*] United States Dollars (US$[*]) with respect to each of the Leases in effect from time to time per each such Lease, plus expenses as set forth in Section 9 hereof.
Section 3. Character of Obligations of Guarantor. Subject to the provisions of Section 8 hereof, the obligations of Guarantor set forth in this Guaranty shall remain in full force and effect until payment of the Guaranteed Obligations in full, and shall not be released, discharged or in any way affected by any of the following:
(a) any amendment, modification, addition, deletion or supplement to or of or other change in the Guaranteed Obligations or any of the Leases;
(b) any failure, omission or delay on the part of Lessee to conform or comply with any term of any of the Leases;
(c) any voluntary or involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation, dissolution, winding up or similar proceeding with respect to Lessee; or
(d) any merger or consolidation of Lessee or Guarantor into or with any other corporation, or any other corporate change in Lessee or Guarantor, or any sale, lease or transfer of any of the assets of Lessee or Guarantor to any other person, or any change in the ownership of any shares of capital stock of Lessee or Guarantor.
Section 4. Waiver and Agreement. Guarantor waives any and all notice of the creation, modification, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by Lessor upon this Guaranty or acceptance of this Guaranty, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guaranty. Guarantor unconditionally waives, to the extent permitted by applicable law:
(a) acceptance of this Guaranty and proof of reliance by Lessor hereon;
(b) notice of any of the matters referred to in Section 3 hereof, or any right to consent or assent to any thereof;
(c) any right to the enforcement, assertion or exercise by Lessor against Lessee of any right, power, privilege or remedy conferred upon Lessor in any of the Leases or otherwise;
(d) any requirement of diligence on the part of any person; and
(e) any requirement that Lessee or any other person be joined as a party to any proceeding for the enforcement of any term of any of the Leases.
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Section 5. Subrogation. Guarantor shall be subrogated to any rights of Lessor against Lessee in respect of which a payment shall be made by Guarantor hereunder; provided, however, that Guarantor shall not enforce or attempt to enforce such rights until such time as the Guaranteed Obligations at issue have been discharged in full.
Section 6. Lessor’s Remedies. Each and every remedy of Lessor under or with respect to this Guaranty shall, to the extent permitted by law, be cumulative and shall be in addition to any other remedy given hereunder, or under each of the Leases, or now or hereafter existing at law or in equity; provided, however, that Lessor shall not be entitled to any double recovery.
Section 7. Representations and Warranties. Guarantor hereby represents and warrants to Lessor that the following statements are true and correct as of the date of this Guaranty:
7.1. Guarantor is a corporation duly organized, validly existing and in good standing under the laws of Germany.
7.2. Guarantor has the corporate power and authority to enter into this Guaranty. The making, execution and performance of this Guaranty by Guarantor has been duly authorized by all necessary corporate action, this Guaranty has been duly executed and delivered by Guarantor and this Guaranty constitutes the valid and binding obligation of Guarantor, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors rights generally, including, without limitation, fraudulent conveyance laws, and by general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, whether considered in a proceeding in equity or at law.
7.3. The execution, delivery and performance of this Guaranty: (a) does not violate any provision of any existing law or regulation binding on Guarantor, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on Guarantor, or the charter or bylaws of, or any securities issued by Guarantor, or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which Guarantor is a party or by which Guarantor or any of its assets may be bound, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of Guarantor, and (b) will not result in the creation or imposition of any encumbrance on any of Guarantor’s property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking. No consent, license, approval, order or authorization of, or registration, filing, or declaration with, any governmental authority is required to be obtained by Guarantor, and no consent of any third party is required to be obtained by Guarantor, in connection with the execution, delivery and performance of this Guaranty or the taking of the actions contemplated hereby, except for consents, authorizations, filings and notices that have been obtained or made. There is no order or action pending or, to the knowledge of Guarantor, threatened against Guarantor, in either case as of the date of this Guaranty, that individually or when aggregated with one or more other actions has or would reasonably be expected to have a material adverse effect on Guarantor’s ability to perform this Guaranty.
| AIRCRAFT LEASE AGREEMENT | 3 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Section 8. Expiry. This Guaranty and all guaranties, covenants and agreements of Guarantor contained herein are valid and shall continue in full force and effect until such time as all of the Guaranteed Obligations, including expenses that the Guarantor is obligated to pay pursuant to Section 9 hereof, are paid finally and irrevocably in full. Notwithstanding the foregoing, all of the Guarantor’s obligations under this Guaranty shall terminate absolutely, whether or not this Guaranty has been returned to the Guarantor by the Lessor, to the extent that Lessor has not made a demand for payment under this Guaranty prior to six (6) months after the last Return (as defined in the Leases) of each of the aircraft under the Leases.
Section 9. Expenses. Guarantor shall pay to Lessor on demand each cost and expense (including, without limitation, attorneys’ fees) hereafter incurred by Lessor in endeavoring to enforce any obligation of Guarantor pursuant to this Guaranty or to preserve or exercise any right or remedy against Guarantor pursuant to this Guaranty or arising as a result of this Guaranty; provided, however, in connection with any legal action Lessor shall not be entitled to such costs or expenses if Lessor does not prevail.
Section 10. Amendments. The terms of this Guaranty may not be waived, altered, modified, amended, supplemented or terminated in any manner whatsoever except by written instrument signed by Guarantor and Lessor.
Section 11. Applicable Law. This Guaranty shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws.
Section 12. Section Headings. The section headings are inserted for convenience only and are not to be construed as part of this Guaranty.
Section 13. Notices. All notices and other communications to be made or given pursuant to this Guaranty shall be made or given in the manner provided in Section 20.11 of each of the Leases, if to Guarantor, to the following location:
Deutsche Post AG
Headquarters
▇▇▇▇▇▇▇ de ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attention: Head of Corporate Finance
Section 14. Assignment. Guarantor may not assign this Guaranty, and its rights and obligations hereunder, without the prior written consent of Lessor, which consent shall not be unreasonably withheld. This Guaranty may not be transferred or assigned by Lessor without the prior written consent of Guarantor; provided that Lessor may transfer and assign this Guaranty to any Affiliate (as defined in the Leases) of Lessor without Guarantor’s prior consent.
Section 15. Successor. This Guaranty is binding upon any successor to Guarantor.
| AIRCRAFT LEASE AGREEMENT | 4 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Section 16. No Other Writing. This writing is intended by the parties as the final expression of this Guaranty and is also intended as a complete and exclusive statement of the terms of their agreement with respect thereto.
| AIRCRAFT LEASE AGREEMENT | 5 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty by its duly authorized officer as of the date first above written.
| DEUTSCHE POST AG | ||
| By: |
| |
| Its: |
| |
| Title: |
| |
| DEUTSCHE POST AG | ||
| By: |
| |
| Its: |
| |
| Title: |
| |
| ACCEPTED AND AGREED: | ||
| CARGO AIRCRAFT MANAGEMENT, INC. | ||
| By: |
| |
| Its: |
| |
| Title: |
| |
| AIRCRAFT LEASE AGREEMENT | 6 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
APPENDIX J
to
AIRCRAFT LEASE AGREEMENT (MSN )
FORM OF LESSOR GUARANTY
[See Attached]
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
GUARANTY
This Guaranty (this “Guaranty”) is entered into as of March , 2010 by Air Transport Services Group, Inc., a Delaware corporation (“Guarantor”), in favor of DHL Network Operations (USA), Inc., an Ohio corporation (“Lessee”).
RECITALS
WHEREAS, Cargo Aircraft Management, Inc. (“Lessor”), as lessor, and Lessee, as lessee, have entered into (or contemplate entering into) four (4) separate lease agreements with respect to the lease of Boeing model 767-200SF aircraft bearing manufacturer’s serial numbers 23434, 23142, 23147 and 23431 (which, together with any additional lease agreements entered into between Lessor and Lessee for the lease of any other Boeing model 767-200SF aircraft, shall be collectively referred to herein as the “Leases”); and
WHEREAS, Guarantor owns (either directly or indirectly) all of the capital stock of Lessor: and
WHEREAS, in consideration for certain financial and other concessions in the Leases, Guarantor is willing to guarantee the performance of Lessor’s payment obligations under the Leases (to the extent that such payment obligations arise);
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:
Section 1. Definitions. The definitions set forth in the above Recitals are hereby incorporated as if fully set forth in this Section 1.
Section 2. Guaranty. Guarantor, as a primary obligor and not as surety, hereby guarantees, without any setoff or other deduction, to Lessee the due, punctual and full payment of all of Lessor’s payment obligations under each and all of the Leases when and as the same shall become due and payable by Lessor in accordance with the terms thereof, without regard to how such payment obligations are described or characterized in each of the Leases (with all of the obligations, covenants, terms, conditions, undertakings and liabilities described in this Section 2 collectively referred to as the “Guaranteed Obligations”).
This Guaranty is continuing, irrevocable, absolute and unconditional and a guaranty of payment and not of collectibility, and is in no way conditioned or contingent upon any attempt to collect from or enforce performance or compliance by Lessor or the exercise or assertion of any other right or remedy to which Lessee is or may be entitled under or in connection with the Leases. If for any reason whatsoever Lessor shall fail or be unable duly, punctually and fully to pay such amounts as and when the same shall become due and payable in accordance with the terms of any of the Leases, Guarantor will promptly pay or cause to be paid such amounts under the terms of such Leases.
| AIRCRAFT LEASE AGREEMENT | 2 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Notwithstanding anything to the contrary herein, the maximum amount recoverable under this Guaranty is limited to [*] United States Dollars (US$[*]) with respect to each of the Leases in effect from time to time per each such Lease, plus expenses as set forth in Section 9 hereof.
Section 3. Character of Obligations of Guarantor. Subject to the provisions of Section 8 hereof, the obligations of Guarantor set forth in this Guaranty shall remain in full force and effect until payment of the Guaranteed Obligations in full, and shall not be released, discharged or in any way affected by any of the following:
(a) any amendment, modification, addition, deletion or supplement to or of or other change in the Guaranteed Obligations or any of the Leases;
(b) any failure, omission or delay on the part of Lessor to conform or comply with any term of any of the Leases;
(c) any voluntary or involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation, dissolution, winding up or similar proceeding with respect to Lessor; or
(d) any merger or consolidation of Lessor or Guarantor into or with any other corporation, or any other corporate change in Lessor or Guarantor, or any sale, lease or transfer of any of the assets of Lessor or Guarantor to any other person, or any change in the ownership of any shares of capital stock of Lessor or Guarantor.
Section 4. Waiver and Agreement. Guarantor waives any and all notice of the creation, modification, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by Lessee upon this Guaranty or acceptance of this Guaranty, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guaranty. Guarantor unconditionally waives, to the extent permitted by applicable law:
(a) acceptance of this Guaranty and proof of reliance by Lessee hereon;
(b) notice of any of the matters referred to in Section 3 hereof, or any right to consent or assent to any thereof;
(c) any right to the enforcement, assertion or exercise by Lessee against Lessor of any right, power, privilege or remedy conferred upon Lessee in any of the Leases or otherwise;
(d) any requirement of diligence on the part of any person; and
(e) any requirement that Lessor or any other person be joined as a party to any proceeding for the enforcement of any term of any of the Leases.
| AIRCRAFT LEASE AGREEMENT | 3 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Section 5. Subrogation. Guarantor shall be subrogated to any rights of Lessee against Lessor in respect of which a payment shall be made by Guarantor hereunder; provided, however, that Guarantor shall not enforce or attempt to enforce such rights until such time as the Guaranteed Obligations at issue have been discharged in full.
Section 6. Lessee’s Remedies. Each and every remedy of Lessee under or with respect to this Guaranty shall, to the extent permitted by law, be cumulative and shall be in addition to any other remedy given hereunder, or under each of the Leases, or now or hereafter existing at law or in equity; provided, however, that Lessee shall not be entitled to any double recovery.
Section 7. Representations and Warranties. Guarantor hereby represents and warrants to Lessee that the following statements are true and correct as of the date of this Guaranty:
7.1. Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
7.2. Guarantor has the corporate power and authority to enter into this Guaranty. The making, execution and performance of this Guaranty by Guarantor has been duly authorized by all necessary corporate action, this Guaranty has been duly executed and delivered by Guarantor and this Guaranty constitutes the valid and binding obligation of Guarantor, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to creditors rights generally, including, without limitation, fraudulent conveyance laws, and by general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, whether considered in a proceeding in equity or at law.
7.3. The execution, delivery and performance of this Guaranty: (a) does not violate any provision of any existing law or regulation binding on Guarantor, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on Guarantor, or the charter or bylaws of, or any securities issued by Guarantor, or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which Guarantor is a party or by which Guarantor or any of its assets may be bound, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of Guarantor, and (b) will not result in the creation or imposition of any encumbrance on any of Guarantor’s property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking. No consent, license, approval, order or authorization of, or registration, filing, or declaration with, any governmental authority is required to be obtained by Guarantor, and no consent of any third party is required to be obtained by Guarantor, in connection with the execution, delivery and performance of this Guaranty or the taking of the actions contemplated hereby, except for consents, authorizations, filings and notices that have been obtained or made. There is no order or action pending or, to the knowledge of Guarantor, threatened against Guarantor, in either case as of the date of this Guaranty, that individually or when aggregated with one or more other actions has or would reasonably be expected to have a material adverse effect on Guarantor’s ability to perform this Guaranty.
| AIRCRAFT LEASE AGREEMENT | 4 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Section 8. Expiry. This Guaranty and all guaranties, covenants and agreements of Guarantor contained herein are valid and shall continue in full force and effect until such time as all of the Guaranteed Obligations, including expenses that the Guarantor is obligated to pay pursuant to Section 9 hereof, are paid finally and irrevocably in full. Notwithstanding the foregoing, all of the Guarantor’s obligations under this Guaranty shall terminate absolutely, whether or not this Guaranty has been returned to the Guarantor by Lessee, to the extent that Lessee has not made a demand for payment under this Guaranty prior to six (6) months after the last Return (as defined in the Leases) of each of the aircraft under the Leases.
Section 9. Expenses. Guarantor shall pay to Lessee on demand each cost and expense (including, without limitation, attorneys’ fees) hereafter incurred by Lessee in endeavoring to enforce any obligation of Guarantor pursuant to this Guaranty or to preserve or exercise any right or remedy against Guarantor pursuant to this Guaranty or arising as a result of this Guaranty; provided, however, in connection with any legal action Lessee shall not be entitled to such costs or expenses if Lessee does not prevail.
Section 10. Amendments. The terms of this Guaranty may not be waived, altered, modified, amended, supplemented or terminated in any manner whatsoever except by written instrument signed by Guarantor and Lessee.
Section 11. Applicable Law. This Guaranty shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to principles of conflicts of laws.
Section 12. Section Headings. The section headings are inserted for convenience only and are not to be construed as part of this Guaranty.
Section 13. Notices. All notices and other communications to be made or given pursuant to this Guaranty shall be made or given in the manner provided in Section 20.11 of each of the Leases, if to Guarantor, to the following location:
| Air Transport Services Group, Inc. | ||
| ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ | ||
| Facsimile: |
▇▇▇-▇▇▇-▇▇▇▇ | |
| Attention: |
▇▇▇▇▇▇ ▇▇▇▇▇, | |
| Senior Vice President, Corporate General Counsel and Secretary | ||
| E-Mail: |
▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ | |
Section 14. Assignment. Guarantor may not assign this Guaranty, and its rights and obligations hereunder, without the prior written consent of Lessee, which consent shall not be unreasonably withheld. This Guaranty may not be transferred or assigned by
| AIRCRAFT LEASE AGREEMENT | 5 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
Lessee without the prior written consent of Guarantor; provided that Lessee may transfer and assign this Guaranty to any Affiliate (as defined in the Leases) of Lessee without Guarantor’s prior consent.
Section 15. Successor. This Guaranty is binding upon any successor to Guarantor.
Section 16. No Other Writing. This writing is intended by the parties as the final expression of this Guaranty and is also intended as a complete and exclusive statement of the terms of their agreement with respect thereto.
| AIRCRAFT LEASE AGREEMENT | 6 |
MSN
Those portions of this Agreement marked with an [*] have been omitted pursuant to a request for confidential
treatment and have been filed separately with the SEC.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty by its duly authorized officer as of the date first above written.
| AIR TRANSPORT SERVICES GROUP, INC. | ||
| By: |
| |
| Its: |
| |
| Title: |
| |
| ACCEPTED AND AGREED: | ||
| DHL NETWORK OPERATIONS (USA), INC. | ||
| By: |
| |
| Its: |
| |
| Title: |
| |
| AIRCRAFT LEASE AGREEMENT | 7 |
MSN