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agreement_1.md | EX-10.23 2 d272839dex1023.htm AIRCRAFT LEASE AGREEMENT Aircraft Lease
Agreement
**Exhibit 10.23**
AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT ( **Agreement** ) is entered into as of the
16th day of November, 2011 ( **Effective Date** ), by and between Yet Again
Inc., a corporation organized and existing under the laws of Delaware (
**Lessor** ) and Clear Channel Broadcasting, Inc., a corporation organized
and existing under the laws of Nevada ( **Lessee** ).
WITNESSETH:
WHEREAS, Lessor is the rightful owner of the Aircraft as more specifically
described below;
WHEREAS, Lessee desires to lease such aircraft from Lessor, and Lessor is
willing to lease such aircraft to Lessee on the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the
parties agree as follows:
1\. _Dry Lease of Aircraft_.
Lessor hereby leases to Lessee, and Lessee leases from Lessor on an exclusive
basis, subject to the terms and conditions of this Agreement, one (1)
Dassault-Breguet Mystere Falcon 900 aircraft which consists of an airframe
bearing Manufacturers Serial No. 27 and FAA registration number N5VJ,
together with its three (3) installed Garrett TFE-731 series engines bearing
manufacturers serial numbers P-97154, P-97152 and P-97318, its installed
avionics and parts and all original and complete logbooks, documents and
records related thereto (collectively referred as the **Aircraft** ). | 0 |
agreement_1.md | 2\. _Term_.
The term of this Agreement shall commence on the Delivery Date and shall
continue for a period of seventy-two (72) months therefrom ( **Term** )
except as may be terminated in accordance with Section 10\.
3\. _Rental; Taxes_.
(a) Lessee shall pay to Lessor a one-time rent payment in the amount of Three
Million US Dollars (US$3,000,000) ( **Rent** ) on the Delivery Date. In the
event the Lease is terminated by either party for any reason prior to the
expiration of the Term, Lessor shall refund to Lessee pre-paid Rent on a pro-
rated basis based on the actual number of calendar days remaining in the Term
from and after the effective date of termination. Rent, which does not include
the taxes or fees described in Section 3(b), below, shall be paid by Lessee to
Lessor in immediately available U.S. funds to an account to be specified by
Lessor. | 1 |
agreement_1.md | (b) In addition to the Rent, Lessee shall timely pay the amount of any sales,
use, retailer, withholding, VAT, duties, fees or other taxes or fees which may
be assessed or levied by any taxing jurisdiction (whether foreign or domestic)
directly as a result of the leasing or operation of the Aircraft by Lessee or
the payment of any Rent hereunder by Lessee ( **Tax** or **Taxes** ).
Lessor shall be responsible for any and all Taxes related to the operation or
ownership of the Aircraft prior to the Delivery Date. Lessee shall be
responsible for the timely payment of any Taxes levied by any taxing
jurisdiction solely due to Lessees operation of the Aircraft outside the
State of New Jersey during the Term and that Lessor would not have otherwise
been subject to
* * * | 2 |
agreement_1.md | * * *
absent Lessees operation of the Aircraft. Notwithstanding anything to the
contrary herein, in no event shall either Lessee or Lessor be responsible to
the other for any Taxes based on the income of the other party nor shall
Lessee be responsible for (1) any governmental fines or penalties which are
imposed directly as a result of the willful misconduct or negligence of
Lessor, or (2) any fines or penalties which arose or arise prior to or
following the Term, respectively. Lessee shall have the right to contest in
good faith by appropriate proceedings any Taxes for which it is liable and
shall not be obligated to pay such Taxes pending the final outcome of such
contest, provided such contest and non-payment is not reasonably likely to
result in a forfeiture of the Aircraft. The obligations of this Section 3(b)
shall survive the expiration or other termination of this Agreement. In the
event the Lease is terminated by either party for any reason prior to the
expiration of the Term, Lessor shall refund to Lessee such portion of the
Taxes paid by Lessee as relate to the portion of the Rent that is refunded.
4\. _Delivery; Condition of Aircraft_.
(a) Lessor shall deliver the Aircraft to Lessee at Teterboro Airport (TEB) in
Teterboro, New Jersey on a date that is mutually agreeable to the parties (
**Delivery Date** ).
(b) Lessor shall deliver the Aircraft to Lessee on the Delivery Date in the
following condition:
(i) current on and in compliance with manufacturers recommended inspection
and maintenance program, with all calendar and hourly inspections that must be
completed on or before the Delivery Date completed without deferment or
extension; | 3 |
agreement_1.md | (ii) operational and in an airworthy condition with a current and valid FAA
Standard Airworthiness Certificate and registered on the FAA Civil Aircraft
Registry;
(iii) with all systems functioning normally in accordance with manufacturers
specifications and in compliance with all applicable FAA Airworthiness
Directives and all applicable manufacturer mandatory service bulletins with
compliance dates on or prior to the Delivery Date;
(iv) the engines shall be enrolled on Honeywell MSP Gold service program, the
Rockwell Collins avionics shall be enrolled on the Rockwell Collins Avionics
service program and the Honeywell avionics shall be enrolled on Honeywells
HAPP service program (collectively, **MSP** ), which shall be fully paid
through the Delivery Date; and
(v) all Aircraft logbooks shall be legible, complete, continuous in the
English language and shall comply in all respects with applicable FARs.
(c) Upon delivery of the Aircraft in accordance with the terms of this
Agreement, Lessee will execute and deliver the Delivery and Acceptance
Certificate in the form attached hereto as _Exhibit A_.
5\. _Operations_.
(a) During the Term, Lessee shall be solely and exclusively responsible for
the use, operation and control of the Aircraft and Lessee shall use and
operate the Aircraft in a careful manner and in conformity with the Federal
Aviation Regulations ( **FARs** ), and applicable laws of any
2
* * * | 4 |
agreement_1.md | 2
* * *
government authority having jurisdiction over the operation of the Aircraft (
**Applicable Law** ), and in accordance with the Aircraft operating manual.
Lessee shall not fly, operate, use or locate the Aircraft in, to or over any
such country or area (temporarily or otherwise) (i) which is excluded from the
required insurance coverages, or would otherwise cause Lessee to be in breach
of the insurance requirements or other provisions of this Agreement; or (ii)
in which there are recognized or threatened hostilities.
(b) All operations of the Aircraft during the Term shall be under Lessees
operational control (as defined in § 1.1 of the FARs) and Lessee shall be
solely responsible for its possession and use; and (ii) Lessee shall not sell,
transfer, assign, encumber, sublet or part with possession of the Aircraft or
any of its rights under the Agreement except for the performance of
maintenance on the Aircraft, or unless the parties otherwise agree in writing.
(d) Lessee shall bear all costs of operating the Aircraft, except the cost of
certain Maintenance which shall be shared by the parties in accordance with
Section 6 below.
(e) Lessee shall not permit any liens to be placed on the Aircraft, other than
those liens (i) in favor of or created by or through Lessor or Lessors
lender, if any; or (ii) Permitted Liens (as defined in Section 12 (b) below).
6\. _Maintenance_. | 5 |
agreement_1.md | 6\. _Maintenance_.
(a) Lessee shall, during the Term, at its own cost and expense, maintain,
inspect, service, repair, overhaul and test or cause the Aircraft to be
maintained, inspected, serviced, repaired, overhauled and tested so as to keep
the Aircraft in good operating condition as delivered to Lessee on the
Delivery Date, ordinary wear and tear excepted, and in compliance with all
Applicable Law, including applicable provisions of the FARs and the
manufacturers recommended inspection and maintenance program (
**Maintenance** ). For the avoidance of doubt, the Maintenance costs and
expenses to be borne by Lessee shall include, but not be limited to, the cost
of all parts and consumables used in the maintenance process that are not
covered under or specifically addressed in Section 6(c).
(b) Lessee shall perform or cause to be performed all Maintenance by persons
and agencies approved by the FAA and the applicable manufacturer. Lessee shall
ensure that the Maintenance is conducted in a manner that does not modify or
impair any existing warranties or service maintenance plans and agreements
covering the Aircraft or any part thereof. All logbooks, records and documents
(including any computerized maintenance records) pertaining to the Aircraft
and its engines and their maintenance during the Term shall be maintained in
English and in accordance with the FARs, and returned to Lessor upon
termination of this Agreement with all entries duly completed and properly
signed off. | 6 |
agreement_1.md | (c) Lessee shall pay to Lessor the hourly rate specified in the Honeywell MSP
Gold program agreements covering the engines and APU as and when due under
such agreements and provide such information and documentation required
thereunder. Lessor shall timely remit such payments and provide such
documentation and information to Honeywell in order to keep the engines and
APU current on the program. Lessee shall pay to Lessor the hourly rate
specified in the Rockwell Collins Avionics Program and the Honeywell HAPP
Program agreements covering the respective avionics as and when due under such
agreements and provide such information and documentation
3
* * *
required thereunder. Lessor shall timely remit such payments and provide such
documentation and information to Honeywell in order to keep the avionics
current on such programs and to ensure coverage under the agreements. Upon
execution of this Agreement, Lessor shall provide to Lessee complete and
current copies of such agreements and shall provide to Lessee any and all
amendments, extensions, notices or other documentation relating to such
programs and the engines, APU and or avionics. Lessor shall not reduce the
coverage under such programs without the prior written consent of Lessee.
(d) Lessee shall be entitled during the Term to acquire and install at its own
cost and expense, any additional accessories, devices or equipment as it
desires (the **Additions** ) but only so long as such Additions (i) are
approved in writing by Lessor; (ii) are ancillary to the Aircraft; (iii) are
not required to render the Aircraft complete for its intended use by Lessee;
(iv) will not impair the originally intended function or use of the Aircraft
or diminish the value of the same; and (v) can be readily removed without
causing material damage to the Aircraft. | 7 |
agreement_1.md | (e) Unless otherwise agreed to in advance by the parties, Lessor shall bear
the full cost of any discretionary Aircraft upgrades, capital improvements or
major refurbishment made during the Term. In the event the Lease is terminated
by either party for any reason prior to the expiration of the Term, Lessor
shall refund to Lessee the amount paid by Lessee for upgrades, improvements
and refurbishment of the Aircraft paid for by Lessee under this Section 6(e)
on a pro-rated basis based on the actual number of calendar days remaining in
the Term from and after the effective date of termination.
7\. _Insurance_.
(a) During the Term, Lessor shall cause to be provided and maintained in full
force and effect, at Lessees sole cost and expense, a policy or policies of
insurance providing the coverage described in this Section 7 covering all
operations of the Aircraft ( **Insurance Policies** ).
(i) Aircraft liability insurance covering all operations of the Aircraft,
which coverage shall:
(A) include a territory provision sufficient to cover all Aircraft operations
permitted by this Agreement, with limits of not less than Two Hundred Million
US Dollars (US $200,000,000) per occurrence on a combined single limit basis,
covering claims for death, bodily injury and property damage,
(B) list Lessor and Lessee as named insureds and list as additional named
insureds each of Lessees and Lessors affiliates and their respective
directors, officers, managers, employees and agents and Gama Aviation, Inc.;
(C) be endorsed so that it is primary and non-contributing to any other
insurance that is available to any of the insureds. | 8 |
agreement_1.md | (C) be endorsed so that it is primary and non-contributing to any other
insurance that is available to any of the insureds.
(ii) All-risk ground and flight physical damage and hull war and allied perils
insurance (Hull Coverage) on the Aircraft for the agreed value of Eighteen
Million US Dollars (US$18,000,000) (Casualty Value). Such Hull Coverage
shall name Lessor and Lessee as loss payees as their interests shall appear,
shall specify any deductibles applicable to each and every loss.
4
* * *
(b) The Insurance Policies maintained under this Agreement shall:
(i) Be placed with insurance companies that (A) are qualified to do business
in the United States, (B) will submit to the jurisdiction of any competent
state or federal court in the United States with regard to any dispute arising
out of the policy of insurance or concerning the parties herein; (C) will
respond to any claim or judgment against Lessee and Lessor in any competent
court; and (D) are reasonably satisfactory to both Lessor and Lessee, such
approval not to be unreasonably withheld, delayed or conditioned. | 9 |
agreement_1.md | (ii) Provide for not less than thirty (30) days (no less than ten (10) days in
the case of any nonpayment of premium and such lesser period as is standard in
the industry for war risk insurance) advance written notice to be received by
each of the insured parties prior to any adverse material change, deletion or
cancellation in the Insurance Policies, any of the coverages thereunder, or
any required policy provisions set forth in this Section 7 that reduces
coverage available; provided, however, that war risk and allied perils policy
coverages may provide for not less than seven (7) days or such lesser period
prior written notice as shall be customary in the aviation insurance industry
for prior written notice of cancellation.
(iii) The Insurance Policies shall contain an endorsement providing that
coverages under such Insurance Policies shall not be voided by any act or
negligence of any person, including another insured under the policies;
provided that there is neither consent nor actual knowledge by the insured
party that such action would void coverage under the policy and shall include
a waiver of subrogation in favor of Lessee and its officers, directors,
managers, employees and agents and Gama Aviation. Inc. All Insurance Policies
shall provide for a severability of interest/cross liability endorsement, so
as to ensure that the insurance shall operate in all respects as if a separate
policy has been issued covering each party insured, although underwriters
overall limit of liability will not increase.
(c) Promptly following the execution of this Agreement and annually
thereafter, Lessor shall provide Lessee with certificates of insurance and
endorsements evidencing the effectiveness (and renewal, as applicable) of such
Insurance Policies in compliance with the insurance requirements specified in
this Section 7\.
8\. _Limitation of Liability_. | 10 |
agreement_1.md | 8\. _Limitation of Liability_.
LESSOR UNDERSTANDS AND AGREES THAT THE INSURANCE POLICIES ARE LESSORS SOLE
REMEDY AGAINST LESSEE FOR ANY AND ALL LOSS OR DAMAGE TO THE AIRCRAFT AND/OR
INJURY OR DEATH OF ANY PASSENGER AND/OR FOR ANY AND ALL CLAIMS, DAMAGES,
LOSSES, EXPENSES AND LIABILITIES INCLUDING, BUT NOT LIMITED TO, DIRECT OR
INDIRECT LOSS OR DAMAGE TO THE AIRCRAFT, DIMINUTION IN VALUE OF THE AIRCRAFT,
LOSS OF INCOME, REVENUES, PROFITS OR BUSINESS OPPORTUNITIES OR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT OR IN ANY
WAY CONNECTED WITH THE AIRCRAFT UNDER THIS AGREEMENT, WHETHER ON THE GROUND OR
IN THE AIR, AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY, UNLESS SUCH
CLAIMS, DAMAGES, LOSSES, EXPENSES OR LIABILITIES
5
* * * | 11 |
agreement_1.md | 5
* * *
ARE SOLELY THE RESULT OF LESSEES GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR
LESSORS FAILURE TO MAINTAIN THE INSURANCE POLICIES REQUIRED HEREUNDER. Lessor
understands that Lessee and each of the other insureds have no liability for
any event or occurrence not covered by the foregoing insurance, unless such
event or occurrence is solely the result of the gross negligence or willful
misconduct of Lessee or one of the other insureds or Lessors failure to
maintain the insurance policies required hereunder. Lessor hereby waives any
claim for damage, loss or expense arising out of the operation, use or
maintenance of the Aircraft or of other services relating to the Aircraft
hereunder and the covenants not to assert any claim against Lessee or its
affiliates or their respective officers, directors, managers, employees and
agents in respect thereof, unless such claim for damage, loss or expense is
attributable to Lessees gross negligence or willful misconduct. Lessee shall
not be limited in the manners set forth in this Section 8 for any damages,
losses or expenses arising from Lessors failure to maintain the insurance
required herein. This Section 8 shall survive any termination of this
Agreement.
9\. _Risk of Loss; Loss or Damage_. | 12 |
agreement_1.md | 9\. _Risk of Loss; Loss or Damage_.
(a) Subject to Section 8, Lessee shall bear the risk of loss, damage or
destruction of the Aircraft from the time of delivery until the Aircraft is
returned to Lessor pursuant to this Agreement. Lessee shall provide written
notice to Lessor of any material damage concurrently with its report of same
to the applicable governmental authority, and if no such report is required,
such written report shall be delivered to Lessor within thirty (30) calendar
days of the occurrence of such damage. The required notice must be provided
together with any damage reports provided to the FAA or any other governmental
authority or the insurer, and any documents pertaining to the repair of such
damage, including copies of work orders, and all invoices for related charges.
(b) Except as hereafter provided, in the event of damage to the Aircraft
during the Term which is not an Event of Loss, Lessee will, subject to
Section 8 and prior written approval from Lessor, repair or cause to be
repaired, any such damage at its expense, and the insurance proceeds shall be
paid to the repair facility or to reimburse Lessee (to the extent Lessee paid
such expenses) upon submission of an invoice issued by the repair facility.
(c) Upon the occurrence of an Event of Loss of the Aircraft, Lessor shall be
entitled to the proceeds of the Hull Coverage. Upon receipt of the full
Casualty Value by Lessor, this Agreement shall terminate as set forth in
Section 10\. Lessor shall have no obligation to replace the Aircraft with any
other aircraft and Lessee shall have no obligation to make future payments of
Rent to Lessor hereunder. | 13 |
agreement_1.md | (d) An **Event of Loss** with respect to the Aircraft shall mean any of
the following events with respect to such property (i) loss of the Aircraft
due to destruction, damage beyond repair or rendition of such property
permanently unfit for normal use; (ii) any damage to such property which
results in an insurance settlement with respect to such property on the basis
of a total loss or constructive total loss; or (iii) the condemnation,
confiscation or seizure of, or requisition of title to or use of, such
property by the act of any government (foreign or domestic) or of any state or
local authority or any instrumentality or agency of the foregoing for a period
in excess of sixty (60) consecutive days ( **Requisition of Use** ). The
date of such Event of Loss shall be the date on which the sixty (60)
consecutive day period ends in the case of Requisition of Use, the date of
such destruction or damage or the date on which the Aircraft is declared a
constructive total loss. An Event of Loss with respect to any engine or APU
shall not, without loss of the airframe, be deemed an Event of Loss with
respect to the Aircraft.
6
* * * | 14 |
agreement_1.md | 6
* * *
10\. _Termination_. This Agreement may be terminated: (i) immediately upon the
mutual consent of all parties; (ii) by either party immediately upon the
termination of Robert Pittmans employment with Lessee for any reason; (iii)
by the non-breaching party if an Event of Default has occurred and the
breaching party has not cured within the applicable cure period (if any)
provided for in Section 14 of this Agreement; (iv) automatically upon receipt
by Lessor of the Casualty Value following an Event of Loss; or (v) either
party following a determination by a mutually agreeable Dassault-authorized
service facility that the Aircraft is damaged to the extent that it is
improbable that it can be made operative within sixty (60) days. All amounts
payable by one party to another in the event of a termination of this
Agreement prior to the expiration of the Term shall be paid to the other party
within thirty (30) days of the date of termination, and this obligation shall
survive the termination of this Agreement.
11\. _Representations, Warranties and Agreements_. Lessee and Lessor each
represent, warrant and agree as follows:
(a) _Due Organization_. It is duly organized and validly existing under the
laws of the jurisdiction of its organization and will remain duly organized
and existing in good standing and is duly qualified to do business wherever
necessary to perform its obligations under this Agreement.
(b) _Due Authorization_. This Agreement has been duly authorized by all
necessary action on its part consistent with its form of organization, does
not require the approval of, or giving notice to, any governmental authority. | 15 |
agreement_1.md | (c) _Enforceability_. This Agreement has been duly executed and delivered by
its authorized representative and constitutes its legal, valid and binding
obligation enforceable in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting creditors rights generally and subject to general principles of
equity.
12\. _Title; No Liens; Quiet Enjoyment_.
(a) Title to the Aircraft shall remain vested in Lessor during the Term and
the Aircraft shall be registered at the FAA in the name of Lessor. Lessee
shall have no right, title or interest in or to the Aircraft except as
expressly provided herein and shall take no action or fail to take any action
reasonably requested by Lessor that would impair the continued registration of
the Aircraft at the FAA in the name of Lessor.
(b) Lessee shall ensure that no liens or encumbrances of any nature or
description whatever ( **Liens** ) are created or placed against the
Aircraft, (including the engines, parts and components and all associated
rights and the related international interests) or this Agreement as a result
of Lessees acts or omissions except (i) for inchoate materielmens,
mechanics, workmens, repairmens, employees, or other like Liens arising in
Lessees ordinary course of business for sums not yet due or delinquent or
being contested in good faith with due diligence and by appropriate proceeding
and (ii) liens relating to taxes (the payment of which is Lessees obligation)
that are being contested in good faith by appropriate proceedings (
**Permitted Lien** ). This Section 12(b) shall survive any termination of
this Agreement.
7 | 16 |
agreement_1.md | 7
* * *
(c) As long as Lessee pays Rent and other amounts payable hereunder and
performs and complies with all of the other terms and conditions hereof,
neither Lessor nor any person acting through or on behalf of Lessor or in its
stead, nor any person with rights granted by Lessor will interfere with the
peaceful and quiet use and enjoyment of the Aircraft by Lessee, which use and
enjoyment shall be without hindrance.
13\. _Redelivery of the Aircraft_
(a) Upon termination of this Agreement by expiration of the Term or otherwise,
Lessee shall deliver to Lessor (or its designated representative) custody and
possession of the Aircraft and all Aircraft documentation at Teterboro Airport
(TEB) in Teterboro, New Jersey or such other mutually agreed location as may
be specified by Lessor (Redelivery).
(b) Upon Redelivery, the Aircraft shall be in the following condition unless
waived by Lessor:
(i) current on and in compliance with manufacturers recommended inspection
and maintenance program, with all calendar and hourly inspections that must be
completed on or before the Redelivery date completed;
(ii) operational and in an airworthy condition with a current and valid FAA
Standard Airworthiness Certificate and registered on the FAA Civil Aircraft
Registry;
(iii) with all systems functioning normally in accordance with manufacturers
specifications and in compliance with all applicable FAA Airworthiness
Directives, and all applicable manufacturer mandatory service bulletins with
compliance dates on or prior to the Redelivery date; | 17 |
agreement_1.md | (iv) Lessee shall have paid Lessor all amounts due for hours operated by
Lessee during the Term for (A) the engines under the applicable Honeywell MSP
Gold service program, (B) the Rockwell Collins avionics under the Rockwell
Collins Avionics service program and (C) the Honeywell avionics under the
Honeywells HAPP service program, and Lessee shall have provided to Lessor all
documentation required under the applicable programs with respect to such use;
(v) all Aircraft logbooks shall be legible, complete, continuous in the
English language and shall comply in all respects with applicable FARs; and
(vi) clear of all Liens to the extent created by or through Lessee.
(c) Upon return of the Aircraft in accordance with the terms of this
Agreement, Lessor will execute and deliver to Lessee the Redelivery
Certificate in the form attached hereto as _Exhibit B_.
(d) Notwithstanding anything in the Agreement to the contrary, in the event
Lessor shall have failed to pay its portion of the Maintenance cost as
required under Section 6(d), Lessee shall have no liability for the failure of
the Aircraft to meet the condition required herein to the extent that such
failure relates to the Maintenance for which Lessor was financially
responsible.
8
* * *
14\. _Events Of Default And Remedies ****._ | 18 |
agreement_1.md | 8
* * *
14\. _Events Of Default And Remedies ****._
(a) _Events of Default_. The term **Event of Default** means: (i) non-
payment by a party of any Rent and/or any other amount due pursuant to this
Agreement within thirty (30) days after receipt of notice from the other party
of failure to pay any or all of the same on the due date; (ii) failure by
Lessee to maintain, use, or operate the Aircraft in compliance with Applicable
Law; (iii) failure by Lessee to comply with all of the insurance coverages
required under this Agreement; (iv) the creation by Lessee of any Lien other
than a Permitted Lien; (v) failure to return the Aircraft to Lessor on the
date and in the manner required by this Agreement; (vi) the commencement of
any bankruptcy, insolvency, receivership or similar proceeding by or against
Lessee or Lessor or any of its properties or business (unless, if involuntary,
the proceeding is dismissed within sixty (60) days of the filing thereof) or
the rejection of this Agreement; (vii) breach by a party of any other
covenant, condition or agreement (other than those in subsections (i)-(vi) of
this Section 14(a)) under this Agreement that continues for thirty (30) days
after written notice by the non-defaulting party to the defaulting party (but
such notice and cure period will not be required if Lessee operates the
Aircraft when the insurance required hereunder is not in full force and effect
or if such breach cannot be cured by practical means within such notice
period). | 19 |
agreement_1.md | (b) _Remedies_. Upon the occurrence and during the continuation of an Event of
Default, the non-breaching party may exercise any one or more of the following
remedies (in its sole discretion): (i) terminate this Agreement; (ii) to the
extent permitted by Applicable Law, enter the premises where the Aircraft is
located and take immediate possession of and remove (or disable in place) the
Aircraft by self-help, summary proceedings or otherwise without liability;
(iii) apply any deposit or other cash collateral, or collect and apply any
proceeds of insurance or otherwise, at any time to reduce any amounts due to
Lessor; and (iv) demand and recover from the defaulting party the unpaid
amount due.
(c) _Lessors Performance_. Upon the occurrence and during the continuation of
an Event of Default, Lessor shall have the right upon notice to Lessee, but
shall not be obligated, to effect such performance and any reasonable and
documented expenses incurred by Lessor in connection with effecting such
performance shall be payable by Lessee promptly upon demand. Any such action
shall not be a cure or waiver of any Default or Event of Default hereunder.
15\. _Notices_
All notices and other communications under this Agreement shall be in writing
and shall be sent by personal delivery, telefax or nationally recognized
courier for overnight delivery to the address set forth below (or to such
other address as may be designated by a party in writing):
9
* * *
| |
---|---|---
**If to Lessor:**
Yet Again Inc.
| |
**If to Lessee**
Clear Channel Broadcasting, Inc.
c/o TAG Associates, LLC
75 Rockefeller Plaza, 9th Floor
New York, NY 10019-6999 | 20 |
agreement_1.md | 75 Rockefeller Plaza, 9th Floor
New York, NY 10019-6999
Attn: Phil Krevitsky
Fax: (212) 275-1510
| |
200 E. Basse Road
San Antonio, TX 78209
Attn: General Counsel
Fax: (210) 832-3129
Such notice or other communication shall be deemed to have been received in
the case of personal delivery, upon actual delivery or the intended
recipients refusal to accept delivery; in the case of nationally recognized
courier, the next business day; and in the case of a telefax, on the date of
transmission if sent during normal business hours of the receiving party with
electronic confirmation of transmission and if sent after normal business
hours of the recipient or on a date that is not a business day for the
recipient it shall be deemed to have been received at the opening of business
on the next such business day). Each party is required to notify the other
party in the above manner of any change of address. Neither party may object
to the method of notice for any notice actually received by such party.
16\. _Miscellaneous_
(a) _Assignment_. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns. This
Agreement may not be assigned by any party without the consent of the other
party hereto, such consent not to be unreasonably withheld or delayed, except
that Lessee may assign this Agreement to its parent, a majority owned and
controlled subsidiary or a company under common ownership or control with
Lessee, upon written notice to Lessor. | 21 |
agreement_1.md | (b) _Severability_. The provisions of this Agreement shall be deemed
independent and severable and the invalidity, partial invalidity or
unenforceability of any one provision or portion of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability and any
prohibition or unenforceability in any particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
(c) _Headings_. The headings herein are inserted only for convenience and
shall not affect the interpretation of this Agreement.
(d) _Entire Agreement_. This Agreement constitutes the entire agreement, both
written and oral, between the parties or their respective representatives with
respect to the subject matter hereof and is not intended to confer upon any
other person any rights or remedies hereunder not expressly granted thereto.
This Agreement shall not be further amended or modified unless in writing duly
signed by the parties hereto.
**__**(e) _Governing Law_. THIS AGREEMENT SHALL BE GOVERNED BY AND BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE WITHIN SUCH STATE, EXCLUDING CONFLICT OF LAWS PRINCIPLES (OTHER
THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
**__**
10
* * * | 22 |
agreement_1.md | 10
* * *
(f) _Counterparts_. This Agreement may be executed in one or more counterparts
each of which shall be deemed an original, all of which together shall
constitute one and the same agreement. A facsimile or electronically
transmitted copy of an original signature to this Agreement shall be
considered the same and as effective as an executed original.
(g) _Failure or Delay in Performance_. Neither Lessor nor Lessee shall be
liable for any failure or default hereunder if such failure or default is due
to Acts of God or the public enemy, civil war or insurrection or riots, strike
or lockout or other labor dispute, act of the public enemy, act of terrorism,
war (declared or undeclared), blockade, revolution, civil commotion,
lightning, fire, storm, flood, earthquake, explosion, governmental restraint,
embargo, sudden or unexpected aircraft mechanical failure, inability to obtain
or delay in obtaining equipment or transport, inability to obtain or delay in
obtaining governmental approvals, permits, licenses or allocations, serious
accidents and any other cause whether of the kind specifically enumerated
above or otherwise beyond the affected partys reasonable control.
(h) TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 OF THE FARs:
(i) LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN INSPECTED AND
MAINTAINED WITHIN THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT IN
ACCORDANCE WITH THE PROVISIONS OF FAR PART 91 AND ALL APPLICABLE REQUIREMENTS
FOR THE MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN MET. | 23 |
agreement_1.md | (ii) OPERATOR AGREES, CERTIFIES AND KNOWINGLY ACKNOWLEDGES AS EVIDENCED BY ITS
SIGNATURE BELOW THAT, OPERATOR WILL BE KNOWN AS, CONSIDERED, AND WILL IN FACT
BE THE OPERATOR OF THE AIRCRAFT.
CLEAR CHANNEL BROADCASTING, INC.
By: _ _
Title:
(c) THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS AND PERTINENT
FEDERAL AVIATION REGULATIONS BEARING ON OPERATIONAL CONTROL CAN BE OBTAINED
FROM THE LOCAL FAA FLIGHT STANDARDS DISTRICT OFFICE. OPERATOR FURTHER
CERTIFIES THAT IT WILL SEND A TRUE COPY OF THIS EXECUTED AGREEMENT TO AIRCRAFT
REGISTRATION BRANCH, ATTN: TECHNICAL SECTION, P.O. BOX 25724, OKLAHOMA CITY,
OKLAHOMA, 73125 WITHIN 24 HOURS OF ITS EXECUTION, AS PROVIDED BY FAR
91.23(c)(1).
[ _Signatures on following page_ ]
11
* * *
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above and verify that they have read the Agreement, understand
its contents, and have full authority to bind and hereby do bind their
respective parties.
| | | | | | | |
---|---|---|---|---|---|---|---|---
LESSOR:
YET AGAIN INC.
| | | |
LESSEE: | 24 |
agreement_1.md | YET AGAIN INC.
| | | |
LESSEE:
CLEAR CHANNEL BROADCASTING, INC.
| | | |
By: | | /s/ Robert W. Pittman | | | | By: | | /s/ Hamlet T. Newsom,
Jr.
Name: | | Robert W. Pittman | | | | Name: | | Hamlet T. Newsom, Jr.
Title: | | | | | | Title: | | VP, Assistant Secretary
_Aircraft Lease Agreement Signature Page_
* * *
**Exhibit A**
**_DELIVERY AND ACCEPTANCE CERTIFICATE_**
DATE: , 20
PLACE: ,
CLEAR CHANNEL BROADCASTING, INC. does hereby accept delivery of one (1)
Dassault-Breguet Mystere Falcon 900 aircraft which consists of an airframe
bearing FAA Registration Number N5VJ and Manufacturers Serial No. 27 together
with its three (3) installed Garrett TFE-731 series engines bearing
manufacturers serial numbers P-97154, P-97152 and P-97318, its installed
avionics and parts and all logbooks, documents and records related thereto in
accordance with the Aircraft Lease Agreement between Clear Channel
Broadcasting, Inc., as Lessee, and Yet Again Inc., as Lessor, dated the
day of 2011\.
| |
---|---|---
CLEAR CHANNEL BROADCASTING, INC.
as Lessee
|
By: | |
|
Name: | |
|
Title: | |
_Exhibit A Delivery and Acceptance Certificate_
* * *
**Exhibit B** | 25 |
agreement_1.md | * * *
**Exhibit B**
**_REDELIVERY CERTIFICATE_**
DATE: , 20
PLACE: ,
YET AGAIN INC. does hereby accept redelivery of one (1) Dassault-Breguet
Mystere Falcon 900 aircraft which consists of an airframe bearing FAA
Registration Number N5VJ and Manufacturers Serial No. 27 together with its
three (3) installed Garrett TFE-731 series engines bearing manufacturers
serial numbers P-97154, P-97152 and P-97318, its installed avionics and parts
and all logbooks, documents and records related thereto in accordance with the
Aircraft Lease Agreement between Clear Channel Broadcasting, Inc., as Lessee,
and Yet Again Inc. as Lessor, dated the day of 2011\.
| |
---|---|---
YET AGAIN INC.
as Lessor
|
By: | |
|
Name: | |
|
Title: | |
_Exhibit B Redelivery Certificate_
 | 26 |
agreement_3.md | EX-10.1 2 dex101.htm AIRCRAFT LEASE AGREEMENT Aircraft Lease Agreement
**Exhibit 10.1**
**AIRCRAFT LEASE AGREEMENT**
**AIRCRAFT LEASE AGREEMENT** (Agreement or Lease) made and dated for
reference as of the 17th day of January 2007, at Carlsbad, California.
| | | |
---|---|---|---|---
BETWEEN: | | Heckmann Enterprises, Inc. | | LESSOR
AND: | | K2 Inc. | | LESSEE
**W I T N E S S E T H:**
Lessee has requested Lessor to provide, and Lessor is willing to provide the
aircraft described in Appendix A annexed hereto for the purpose of leasing the
same to Lessee for the Term identified in Section 1\.
Lessee shall lease the described aircraft from Lessor pursuant to and upon the
terms, conditions and provisions of this Agreement.
The parties hereto covenant and agree as follows:
The following terms, whenever used in this Agreement will have the following
meanings, unless otherwise required by context:
_AIRCRAFT_ means the one (1) Canadair Ltd. Challenger CL600-2B16 Airframe,
bearing manufacturer serial number 5111 and FAA Registration Number N502HE, as
more fully described in _Appendix A_ , along with the Engines, the Manuals and
Technical Records, and the Parts, or one or more of the above as required by
context.
_ENGINES_ means two (2) General Electric CF 34 Engines, bearing
manufacturer serial number 350421 on the left engine and 350402 on the right
engine. | 27 |
agreement_3.md | _FLIGHT HOUR_ shall mean each hour elapsing from the moment the wheels of
the Aircraft leave the ground on take off to the moment when the wheels of the
Aircraft touch ground on landing. For the purposes of all calculations under
this Agreement measured in Flight Hours, such hours including fractions
thereof shall be measured in tenths of an hour.
_HANGAR_ means the aircraft hangar owned by Lessor and located at Palm
Springs International Airport, Palm Springs, California, subject to change if
approved in writing by Lessee.
_MANUALS AND TECHNICAL RECORDS_ means all records, manuals, technical
data, logs and other materials and documents in relation to the Aircraft, as
shall be required by the Aviation Authority or by applicable law to be kept or
maintained in relation to the Aircraft.
1
* * *
_PARTS_ means all components, Engines, instruments, accessories,
furnishings, and other equipment of whatever nature.
_RENT COMMENCEMENT DATE_ means the date rent initially starts on the
Aircraft, as identified in Lease Payments, Section 4\.
_TOTAL LOSS_ with respect to the Aircraft, Airframe or any Engine shall
mean any of the following events with respect to such property:
| (a) | an actual or constructive total loss of such property;
---|---|---
| (b) | destruction or damage beyond repair, or rendition permanently unfit
for normal use for any reason whatsoever;
---|---|--- | 28 |
agreement_3.md | | (c) | hijacking or theft thereof or disappearance thereof for a period in
excess of ninety (90) consecutive days;
---|---|---
| (d) | the condemnation, confiscation, compulsory acquisition, seizure,
requisition of title or taking of title to the Aircraft or Airframe or any
Engine by any governmental entity; or
---|---|---
| (e) | the deprivation, requisition or taking for use of the Aircraft or
Airframe or any Engine by any Governmental Entity or instrumentality or agency
thereof for a period greater than ninety (90) consecutive days.
---|---|---
A Total Loss with respect to the Aircraft shall be deemed to have occurred if
a Total Loss has occurred with respect to the Airframe.
1\. **_TERM OF LEASE_**.
This Agreement is for both the Aircraft and the Hangar. Subject to Lessees
execution and delivery of the Acceptance Certificate attached hereto as
Exhibit B, this Agreement will commence immediately on delivery of the
Aircraft to Lessee by Lessor on January 22, 2007. The Agreement will remain in
effect until the 31st day of December, 2011, unless otherwise terminated under
the terms of this Agreement (the Term). Either Lessor or Lessee shall have
the right to terminate this Agreement at any time upon not less than ninety
(90) days prior written notice; provided that such termination shall not
affect either partys obligations hereunder for any period prior to such
termination including, without limitation, any partys maintenance obligations
set forth in Section 7\.
2
* * *
2\. **_NATURE OF LEASE_**. | 29 |
agreement_3.md | 2
* * *
2\. **_NATURE OF LEASE_**.
The parties acknowledge and agree that it is their intent that this Lease be
treated as a true lease for Federal income tax purposes.
3\. **_LESSORS WARRANTIES_**.
a. Except as otherwise provided herein, the Aircraft is leased to Lessee
hereunder AS IS, WHERE IS and Lessor does not make or give any warranties as
to the Aircraft, its airworthiness, design, fitness or condition, or as to any
other matter or thing whatsoever except for warranty of right of quiet
enjoyment, and all warranties are, to the extent permitted by law or otherwise
provided herein, hereby expressly excluded, except Lessor represents and
warrants that it has the legal right to lease the Aircraft hereunder, that the
entering into and performance of this Agreement by Lessor do not conflict with
any contract or agreement to which Lessor is a party or by which it or its
properties are bound or affected, and that this Agreement is in compliance
with all applicable federal and state laws with respect to the status of
Lessor in its capacity as owner/lessor of the Aircraft and in its status as
operator of the Aircraft when the Aircraft is in the operational control of
Lessor, its affiliates or agents as contemplated in Section 4(d).
b. Except as otherwise expressly provided in this Agreement, Lessor shall not
be liable to Lessee for any loss, cost, damage, or expense of any kind or
nature, caused directly or indirectly, by the Aircraft or the use or
maintenance thereof, or by any interruption of service of whatsoever and
howsoever caused, other than interruption of right of quiet enjoyment. | 30 |
agreement_3.md | LESSOR LEASES THE AIRCRAFT TO LESSEE HEREUNDER AS IS AND WHERE IS, AND
NEITHER LESSOR NOR ANY SUCCESSOR IN INTEREST THERETO, BY ASSIGNMENT OR
OTHERWISE, SHALL BE DEEMED TO HAVE MADE OR TO MAKE AND BY ACCEPTING THE
AIRCRAFT HEREUNDER LESSEE HEREBY WAIVES, RELEASES AND RENOUNCES ANY RIGHTS
PREMISED UPON OR ANY RELIANCE UPON ANY REPRESENTATIONS, WARRANTIES,
LIABILITIES OR GUARANTEES OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR
OTHERWISE WITH RESPECT TO THE AIRCRAFT, AIRFRAME, ANY ENGINE, PART OR OTHER
THING DELIVERED, LEASED, OR TRANSFERRED HEREUNDER, INCLUDING BUT NOT LIMITED
TO: (A) AIRWORTHINESS, CONDITION, VALUE, TITLE, DESIGN, OPERATION,
MERCHANTABILITY, COMPLIANCE WITH SPECIFICATION, CONSTRUCTION, PERFORMANCE OR
FITNESS FOR USE; (B) THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE; (C) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT; (D) THE QUALITY OF THE MATERIAL OR WORKMANSHIP; OR (E) (i) ANY
LIABILITY ARISING IN TORT OR CONTRACT, EXPRESS OR IMPLIED; (ii) ANY OBLIGATION
OR LIABILITY ARISING FROM NEGLIGENCE, STRICT LIABILITY, OR PRODUCTS LIABILITY;
(iii) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE; OR (iv) ANY LOSS FROM INTERRUPTION OF USE, LOST
PROFITS, LOST BUSINESS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES. LESSOR
HEREBY WAIVES, RELEASES AND RENOUNCES ANY CLAIMS FOR LOSS FROM INTERRUPTION OF | 31 |
agreement_3.md | HEREBY WAIVES, RELEASES AND RENOUNCES ANY CLAIMS FOR LOSS FROM INTERRUPTION OF
USE, LOST PROFITS, LOST BUSINESS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES
ARISING OUT OF LESSORS RIGHTS TO USE THE AIRCRAFT DURING THE TERM OF THIS
AGREEMENT. | 32 |
agreement_3.md | 3
* * *
4\. **_LEASE PAYMENTS_**.
a. Lessee shall pay Lessor rent in the amount of $30,000, such first payment
being due on January 22, 2007 and subsequent rent payments being due on the
equivalent day of each succeeding month until the end of the Term.
b. On or before the 10th day of each calendar month, Lessee shall provide
Lessor with a written statement setting forth the number of Flight Hours for
which the Aircraft has been used by Lessee and Lessor, respectively, during
the immediately preceding calendar month.
c. All Rent payable under this Lease shall be paid in the full amount required
to be paid hereunder without regard to any Tax, fines, levies or charges
whatsoever and paid in U.S. dollar funds consisting of lawful currency of the
United States of America that shall be immediately available at Lessors U.S.
bank account. | 33 |
agreement_3.md | d. As additional Rent hereunder, subject always to Lessees prior right to use
of the Aircraft, Lessor shall be entitled to use the Aircraft for Lessors
purposes during the Term of this Agreement. If Lessor desires to use the
Aircraft, it shall give Lessee as much advance notice of such usage as is
practicable. Provided that Lessee is not using the Aircraft for its purposes,
Lessee shall make the Aircraft available for Lessors use. Lessor and Lessee
acknowledge, agree and understand that when Lessor is using the Aircraft for
Lessors purposes, Lessor shall be completely responsible for and in control
of the Aircraft and Lessee shall not be responsible for and not in control of
the Aircraft. To the extent that Lessor chooses to use flight crews employed
by Lessee when Lessor is using the Aircraft, the flight crews will report to
and take directions exclusively from Lessor and, in all events, shall comply
with the applicable Federal Aviation Regulations. At such times as Lessor uses
the Aircraft, Lessor shall comply with the provisions of Sections 6(d) and
6(e) as if it were the Lessee and shall comply with the provisions of all
insurance policies maintained by Lessee pursuant to Section 8\. At such times
as Lessor uses the Aircraft, Lessor shall be responsible for all variable
costs in connection with the operation of the Aircraft, including, but not
limited to, fuel, landing fees, Smart Parts fees, maintenance service plan
fees, hangaring fees, catering, crew travel and quartering, flight telephone
and expendable supplies. The Lessor and Lessee will execute a delivery receipt
in the form attached hereto as Appendix C when Lessor uses the Aircraft and | 34 |
agreement_3.md | in the form attached hereto as Appendix C when Lessor uses the Aircraft and
returns the Aircraft to Lessee. With respect to operation of the Aircraft by
Lessor, its affiliates or agents, if the Lessee, its officers, directors,
shareholders, employees, agents or representatives (Lessee Parties) shall
suffer any Claims (as defined in Section 6(m)) that are not covered by
insurance or warranty or are not attributable to normal or customary operation
of the Aircraft or which are attributable to Lessors breach of its
obligations under this Lease, Lessor shall hold the Lessee Parties harmless
with respect to such Claims. | 35 |
agreement_3.md | 4
* * * | 36 |
agreement_3.md | e. Lessees and Lessors obligations hereunder shall be absolute and
unconditional and shall not be affected or reduced by any circumstances
including, without limitation: (i) any set-off, counterclaim, recoupment,
defense, or other right that Lessee may have against Lessor or any person for
any reason whatsoever except for breach of warranty to include but not limited
to Lessees right of quiet enjoyment; (ii) any defect in the airworthiness,
condition, design, operation, or fitness for use of, or any damage to or loss
or destruction of, the Aircraft, unless such defect in title actually or
effectively prevents Lessees viable and efficient commercial use of the
aircraft; (iii) any interruption or cessation in the use or possession of the
Aircraft by Lessee or Lessor or availability thereof to Lessee or Lessor for
any reason arising out of or related to an act or omission of Lessee, or any
person other than Lessor or entities acting through Lessor; (iv) any
insolvency, bankruptcy, reorganization, or similar proceedings by or against
Lessor or Lessee; (v) any other circumstances or happening of any nature
whatsoever, similar to any of the foregoing; or (vi) any Taxes, it being the
express intention of Lessor and Lessee that amounts payable hereunder shall be
payable hereunder in all events unless the obligation to pay the same is
terminated pursuant to the express provisions of this Lease. To the extent
permitted by applicable law, Lessee hereby waives any rights it may now have
or that may be conferred upon it, by statute or otherwise, to terminate,
cancel, quit or surrender this Lease except in accordance with the terms
hereof. Notwithstanding the provisions of this Section 4(e), Lessee shall | 37 |
agreement_3.md | hereof. Notwithstanding the provisions of this Section 4(e), Lessee shall
otherwise have the rights and remedies provided for in this Lease against
Lessor, _provided_ that said rights shall not be asserted in an action to
enforce this Lease in violation of the terms of this Lease. | 38 |
agreement_3.md | f. Lessee and Lessor acknowledge that the rentals payable pursuant to Section
4(a) were determined based upon an assumed average annual usage by Lessee of
300 Flight Hours. Lessee and Lessor agree to negotiate in good faith an
adjustment to such rentals in the event that Lessees aggregate usage from the
commencement of this Agreement through the end of any calendar year exceeds
120% of the product of 300 Flight Hours times the number of years elapsed
since the commencement of this Agreement.
5\. **_RETURN OF AIRCRAFT_**.
Upon the termination of this Agreement, Lessee shall return the Aircraft to
Lessor at such location in the continental United States as may be mutually
agreed upon by Lessor and Lessee, in the condition described in Appendix D.
The Aircraft shall be equipped and in the same configuration as it was on
delivery. All Manuals, Logs and Technical Records will be current and accurate
with respect to the period of this Agreement. All modifications, alterations,
and additions made to the aircraft during the Lease will be removed at
Lessees expense, except for those made pursuant to an Airworthiness Directive
or service letter or bulletin issued by the Airframe or Engine manufacturer,
and except for those designated by Lessor, with agreement of Lessee, to remain
as part of the Aircraft.
5
* * *
Lessor will issue a certificate of acceptance once the conditions of this
section have been complied with to the reasonable satisfaction of Lessor.
6\. **_LESSEES COVENANTS_**.
Lessee covenants with Lessor:
a. That the Aircraft was selected by Lessee and that it is of a make, size,
design and capacity desired by Lessee for the purposes intended by Lessee. | 39 |
agreement_3.md | b. To keep and maintain the Aircraft in a fully operative and airworthy
condition in conformity with any requirements or airworthiness directives
which may from time to time be made by the manufacturers of the Aircraft, and
in conformity with all applicable laws, orders, rules, regulations, and
directives of governmental departments, boards or authorities, relating to the
maintenance or storage of the Aircraft. Maintenance costs and costs of
complying with any airworthiness directives shall be borne by Lessee and
Lessor as provided in Section 7 hereof.
c. That, at Lessors risk and expense, Lessor or its agent shall have the
right at all reasonable times and on reasonable notice to fully inspect the
Aircraft and any parts thereof, and any documents relating thereto to
determine the condition of the Aircraft, and to further determine whether or
not Lessee is performing according to the covenants and conditions herein
contained.
d. To operate the Aircraft at all times in conformity with all the applicable
laws, orders, rules, regulations, and authorities, domestic or foreign, and in
conformity with any limitations or restrictions of performance which may from
time to time be recommended by the manufacturers of the Aircraft, and within
the geographical limitations on operations of the Aircraft pursuant to
applicable policies of insurance maintained by Lessee.
e. To permit the Aircraft to be operated only by certified pilots employed by
Lessee or contracted by Lessee and who hold valid and subsisting licenses or
permits appropriate to their duties, and who have at least the minimum total
pilot hours required by any policies of insurance on the Aircraft. | 40 |
agreement_3.md | f. Not to use or operate the Aircraft or permit it to be used or operated
illegally or contrary to any applicable laws, regulations, orders, rules or
directives of any power or government or agency thereof having jurisdiction,
and to indemnify and hold Lessor, harmless from and against any and all
actions, precautions, administrative proceedings or similar assertions or
threats in any way arising out of the custody, use or operation of the
Aircraft during the Term of this Agreement and, subject to Lessees reasonable
contest rights, to assume liability and pay for any and all transgressions,
defaults, fines, penalties or forfeiture incurred, suffered or assessed
against Lessor or the Aircraft during the Term of this Agreement together with
all legal fees, costs and expenses incidental to the foregoing to the complete
exoneration of Lessor.
6
* * *
g. Not to sublease or otherwise transfer possession of the Aircraft or any
Engine to any Person, _provided_ that, so long as no Event of Default shall
have occurred and be continuing, Lessee may, upon notice to Lessor deliver
possession of the Airframe or any Engine to the manufacturer thereof for
testing or other similar purposes or to any FAA-approved repair facility
reasonably acceptable to Lessor for service, repair, maintenance or overhaul
work of the Airframe or any Engine or any part thereof or for alterations or
modifications in or additions to the Airframe or any Engine to the extent
required or permitted by the terms of this Lease.
h. To keep the Aircraft free and clear of all seizures, security interests,
forfeitures, liens, claims, privileges, debts, taxes, charges, pledges or
encumbrances of any nature whatsoever applicable to any occurrence during the
Term of this Agreement. | 41 |
agreement_3.md | i. That if for any reason any part of the Aircraft is replaced with a similar
part, or any part or attachment is added thereto, no matter by whom
manufactured, the part so replaced or added shall at once become the property
of Lessor, to the same extent as all the original parts of the Aircraft, and
with the same rights and powers of Lessor in all respects as if such part had
been one of the original parts thereof, and any such part added will be
supported by complete records back to the original manufacture date. Any new
part placed on the Aircraft shall be free of liens and shall be of same value
and utility as the part being replaced.
j. Subject to Lessees reasonable contest rights, to pay, when due, all
license fees and other fees and assessments necessary for the securing of
licenses, certificates of registration and certificates of airworthiness and
other similar permits for the operation of the Aircraft during the Term of
this Agreement, and further, to pay, when due, all taxes, fees, assessments or
other levies now and hereafter imposed by any provincial, federal or local
government upon the Aircraft, or upon the leasing, use or operation thereof
(but not on the income of Lessor), whether assessed to Lessor, or to Lessee;
provided that upon payment of such fees, assessments, taxes or levies, Lessee
will promptly deliver the receipts for such payments to Lessor, and that if
Lessor pays any sum or sums constituting an obligation of Lessee under this
Agreement, then the amount of such payments shall be reimbursed on demand. | 42 |
agreement_3.md | k. Subject to Sections 4(d) and 7 hereof, to furnish at its own cost and
expense all fuel, lubricants, and other material necessary for the operation
of the Aircraft, pay all maintenance, storage, hangar (other than home base
hangaring), landing, airport and customs charges and fees and all other
charges of operation, maintenance (except as otherwise provided herein), or
storage of the Aircraft.
l. To assume custody of the Aircraft and full responsibility for its operation
and maintenance during the Term. In the event of a failure of any component
(to include but not limited to any Engine), it is the responsibility of Lessee
to remove, repair and re-install such item. Subject to Section 7 hereof, if
any Engine or other major component becomes non-repairable for any cause, it
will be replaced with a replacement of equal value and utility with the same
or improved performance ability the original, all with records traceable back
to manufacture, with clear warranty title in Lessor.
7
* * * | 43 |
agreement_3.md | m. Subject to Section 4(d), Lessee agrees to indemnify, reimburse, and hold
harmless Lessor and its successors, assigns, agents, employees, officers,
directors, shareholders, servants and representatives (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 reasonable attorneys fees and expenses (any and all of which are
hereafter referred to as Claims) arising from or relating to death or
injuries to any Persons whomsoever (including without limitation Lessees
employees) and for loss of or damage to any property whatsoever that in any
way arises during the Term or which may result from or arise out of or in
relation to (i) the ownership, manufacture, purchase, delivery, redelivery,
lease, possession, return, import, export, disposition, use, maintenance or
operation of the Aircraft either in the air or on the ground; or (ii) any
defect in the Aircraft arising from the material of, 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; or (iii) any
infringement of any patent; or (iv) this Lease or any other transaction,
approval or document contemplated hereby or given or entered into in
connection herewith; _provided, however_ , that upon payment in full to any
party indemnified hereunder of any indemnities contained in this Section 6(m)
by Lessee, Lessee shall be subrogated to all rights and remedies that such
indemnified party may have against any manufacturers, suppliers, overhaul | 44 |
agreement_3.md | indemnified party may have against any manufacturers, suppliers, overhaul
agencies, sellers and/or prior lessees (and similar parties) of the Aircraft
and _provided, further_ , that Lessee shall not be required to indemnify any
of the Indemnified Parties against Claims arising out of such Indemnified
Partys willful misconduct or gross negligence or arising out of operational
control of the Aircraft by Lessor, its affiliates or agents pursuant to
Section 4(d). Notwithstanding the preceding sentence, nothing contained herein
is intended to invalidate, prejudice or otherwise compromise, Lessors rights
and benefits under the insurance required in this Lease or affect Lessors
ability to obtain the benefits of such insurance. Lessee shall have the right
to control the defense of any claims, subject to indemnification hereunder so
long as no Event of Default is continuing. No settlement of a Claim shall be
made or be binding upon any party unless both Lessor and Lessee approve such
settlement in writing, such consent not to be unreasonably withheld or
delayed. Lessor shall notify Lessee of any such Claim promptly after becoming
aware thereof. | 45 |
agreement_3.md | Lessee hereby waives, and releases the Indemnified Parties from, any Claims of
Lessee now or hereafter existing for or on account of or arising out of or in
any way connected with injury to or death of personnel of Lessee, or loss or
damage to property of Lessee, or the loss of use of any property, in each case
that, after the delivery of the Aircraft to Lessee, may result from or arise
in any manner out of or in relation to the ownership, leasing, use, or
operation of the Aircraft (other than operational control of the Aircraft by
Lessor, its affiliates or agents), either in the air or on the ground, or
which may be caused by any defect in the Aircraft from the material of, or any
article used therein or from the testing of the Aircraft regardless of when
such defect may be discovered, whether or not the Aircraft is at the time in
the possession of Lessee, and regardless of such location of the Aircraft at
any such time.
The indemnities contained in this Section 6(m) shall continue in full force
and effect notwithstanding the expiration of the Term with respect to the
Aircraft or other termination of this Lease and are expressly made for the
benefit of the Indemnified Parties and shall be enforceable by the Indemnified
Parties directly.
8
* * *
n. To make rental and any other payments required by this Agreement when due.
o. To keep complete, accurate, and current technical records of all flights
and maintenance of the Aircraft in English in accordance with applicable rules
and regulations of the FAA. The records shall be available for inspection by
Lessor at any reasonable time, and become the property of Lessor upon return
of the Aircraft. | 46 |
agreement_3.md | p. To maintain all insurance required by this Agreement, and notify Lessor of
any lapse, cancellation, or material adverse change in the insurance coverage.
q. Lessee shall not knowingly use or permit the use of the Aircraft for the
carriage of any goods, materials or items of cargo that could reasonably be
expected to cause damage to the Aircraft or that would not be adequately
covered by the insurance required by this Agreement.
| 7. | **_ROUTINE MAINTENANCE, HEAVY MAINTENANCE, UNSCHEDULED MAINTENANCE
AND AIRWORTHINESS DIRECTIVES_.**
---|---|---
a. With respect to all routine maintenance, based on an annual accounting of
routine maintenance costs incurred during each calendar year, Lessee and
Lessor shall proportionately share the costs of such maintenance based upon
the number of Flight Hours that each has used the Aircraft during such
calendar year.
b. With respect to all scheduled heavy maintenance (including 60 month
inspections and 6,000 hour overhaul of the Engines), Lessee and Lessor shall
proportionately share the costs of such maintenance based upon the number of
Flight Hours that each has used the Aircraft since the last corresponding
heavy maintenance visit (including for the purposes of this Section 7(b) any
Flight Hours flown by Lessor and Lessee prior to the commencement of this
Agreement).
c. Except as provided in Section 4(d), with respect to unscheduled
maintenance, the costs of which are not covered by warranty or insurance,
Lessee and Lessor shall proportionately share the costs of such maintenance
based upon the number of Flight Hours that each has used the Aircraft
(including for the purposes of this Section 7(c) any Flight Hours flown by
Lessor and Lessee prior to the commencement of this Agreement). | 47 |
agreement_3.md | d. With respect to the costs of compliance with any airworthiness directive
applicable to the Aircraft, Lessee shall bear the costs of such compliance if
the cost of such compliance does not exceed $50,000. If the cost of such
compliance exceeds $50,000, Lessee and Lessor shall each bear 50% of the total
cost of the compliance with such airworthiness directive.
9
* * *
| 8. | **_INSURANCE_**.
---|---|---
a. The Aircraft shall be at Lessees risk throughout this Agreement; provided,
however, that Lessee shall secure and maintain in effect, at Lessees expense
throughout the Term, insurance policies reasonably acceptable to Lessor
covering the Aircraft as follows:
| (1) | Hull coverage in the name of Lessee including all risks, both in
flight and not in flight, with a loss payable clause and a breach of
warranty endorsement and a waiver of subrogation, to the extent that Lessee
has waived its rights of subrogation under this Agreement, in favor of Lessor
and other customary endorsements reasonably requested by Lessor including
coverage during the periods of time when Lessor is using the Aircraft;
provided that if repairs of damage are made, Lessee agrees to pay the
deductible amount as provided in the policy covering the Aircraft; and
---|---|--- | 48 |
agreement_3.md | | (2) | Liability insurance including passenger liability written in the
name of Lessee and naming Lessor as an additional insured, including coverage
for Lessor during the periods of time where Lessor is using the Aircraft.
---|---|---
b. Lessee shall deliver certificates of insurance to Lessor specifying all
coverage required herein, in form and substance reasonably satisfactory to
Lessor. Lessee shall cause certificates of insurance to be issued which list
Lessor, its officers, directors, employees and agents as additional insureds,
and agrees to cause to be issued such additional certificates of insurance
from time to time as may reasonably be required by Lessor to name other
parties as may be identified by Lessor as additional insureds.
c. Minimum required coverage effective with acceptance of delivery by Lessee:
Hull All Risks $$11,000,000 (the Insured Value); Lessee and Lessor agree to
negotiate in good faith to periodically adjust the Insured Value to reflect
the current fair market value of the Aircraft;
Public Liability Insurance, including third-party liability $ 200,000,000; and
Deductible $500,000.
d. In the event of any insurance claims, all deductible amounts are to be paid
by Lessee.
e. Lessees broker will notify Lessor and Lessors Lender no less than thirty
(30) days in advance of any lapse in coverage (ten days for nonpayment of
premium), however caused, or any material adverse change in coverage. Further,
in the event of non-payment of premiums, Lessor may make any premium payments
required to ensure that coverage is not interrupted, and any payments so made
hereunder shall be payable forthwith by Lessee to Lessor.
10
* * *
9\. **_ASSIGNMENT_.** | 49 |
agreement_3.md | 10
* * *
9\. **_ASSIGNMENT_.**
This Lease shall not be assigned, sold or sublet by either party without the
prior written consent of the other party which shall not be unreasonably
withheld.
10\. **_DEFAULT_.**
If Lessee defaults in payment of rent or in performance or observance of any
of the covenants, terms, provisions, or conditions herein contained, and if
such defaults shall not have been remedied within the grace periods identified
in the following paragraphs, or if Lessee files for bankruptcy under Chapter
11, or becomes insolvent, or in the event of cancellation of any insurance
required to be maintained hereunder without replacement to insure no lapse in
coverage exists, Lessor may, at its option, terminate this Lease by written
notice and take immediate possession of the Aircraft, all at the cost of
Lessee.
The following events shall constitute Events of Default:
a. Lessee shall fail to make any payment of Rent to Lessor within ten (10)
days of when due under this Lease;
b. there shall occur any termination of, material alteration in the scope of
the coverage of, or material reduction in the maximum amounts payable under
any insurance maintained by Lessee pursuant hereto, or a change in coverage
from an approved insurer to an unapproved insurer, or Lessee shall operate the
Aircraft after having received notice that the insurance required hereby has
lapsed or has been cancelled;
c. Lessee shall fail to perform or observe any covenant, condition or
agreement to be performed by it hereunder and such failure shall continue for
a period of thirty (30) days after written notice thereof from Lessor to
Lessee; | 50 |
agreement_3.md | d. Lessee shall consent to the appointment of or taking possession by a
receiver, assignee, custodian, sequestrator, trustee or liquidator or other
similar official of itself or of a substantial part of its property, or Lessee
shall fail to pay its debts generally as they come due or shall make a general
assignment for the benefit of creditors, or Lessee shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy laws, as now or
hereafter constituted or any other applicable federal or state bankruptcy,
insolvency or other similar law or shall consent to the entry of an order for
relief in an involuntary case under any such law or Lessee shall file an
answer admitting the material allegations of a petition in any such
proceeding, or otherwise seek relief under the provisions of any now existing
or future federal or state bankruptcy, insolvency or other similar law
providing for the reorganization or winding-up of corporations, or providing
for an agreement, composition, extension or adjustment with its creditors;
e. any order, judgment, or decree shall be entered in any proceedings by any
court of competent jurisdiction appointing, without the consent of Lessee, a
receiver, trustee or liquidator of Lessee or of any substantial part of its
property, or any substantial part of the property of Lessee shall be
sequestered, and any such order, judgment, decree, appointment, or
sequestration shall remain in force, undismissed, unstayed, or unvacated for a
period of sixty (60) days after the date of entry thereof;
11
* * * | 51 |
agreement_3.md | 11
* * *
f. a petition in a proceeding or case under the bankruptcy laws or other
insolvency laws (as now or hereafter in effect) shall be filed and shall not
be withdrawn or dismissed within sixty (60) days thereafter, or, in case the
approval of such petition by a court of competent jurisdiction is required,
the petition as filed or amended shall be approved by such a court as properly
filed and such approval shall not be withdrawn or the proceeding dismissed
within sixty (60) days thereafter, or a decree or order for relief in respect
of Lessee shall be entered by a court of competent jurisdiction in an
involuntary case under the federal bankruptcy laws, as now or hereafter
constituted, and such decree or order shall remain unstayed in effect for a
period of sixty (60) days, or if, under the provisions of any law providing
for reorganization or winding-up of corporations that may apply to Lessee, any
court of competent jurisdiction shall assume jurisdiction, custody or control
of Lessee or of any substantial part of its property and such jurisdiction,
custody or control shall remain in force, unrelinquished, unstayed or
unterminated for a period of sixty (60) days.
For the avoidance of doubt, no Event of Default shall occur if such status
arises out of the operational control of the Aircraft by Lessor, its
affiliates or agents pursuant to Section 4(d). | 52 |
agreement_3.md | Upon the occurrence of any Event of Default and any time thereafter so long as
the same shall be continuing, Lessor may, at its option, declare this Lease to
be in default and at any time thereafter, so long as Lessee shall not have
cured all outstanding Events of Default, Lessor may exercise one or more of
the following remedies with respect to the Aircraft as Lessor in its sole
discretion shall elect (and Lessee shall comply with any such election of
remedies by Lessor), to the extent available and permitted by, and subject to
compliance with any mandatory requirements of applicable law then in effect: | 53 |
agreement_3.md | | (i) | cause Lessee, upon the written demand of Lessor and at Lessees
expense to, and Lessee shall, promptly return the Aircraft to Lessor at such
location in the continental United States as Lessor may reasonably specify in
the manner and condition required by, and otherwise in accordance with all of
the provisions of, Section 5 as if such Airframe or such Engines were being
returned at the end of the Term relating thereto; or Lessor, at its option,
may take immediate possession of and remove the Aircraft, all without
liability of Lessor for or by reason of such entry or taking possession,
whether for the restoration of damage to property caused by such taking or
otherwise. Lessee shall promptly execute and deliver to Lessor such
instruments of title or other documents as Lessor may deem necessary or
advisable to enable Lessor or its agent to obtain possession of the Airframes
or the Engines, _provided_ that if Lessee shall for any reason fail to execute
and deliver such instruments and documents after such request, Lessor shall be
entitled to a judgment for specific performance, conferring the right to
immediate possession upon Lessor and requiring Lessee to execute and deliver
such instruments and documents to Lessor;
---|---|---
12
* * *
| (ii) | sell or otherwise dispose of the Aircraft, at a commercially
reasonable and reasonably prompt public sale and with notice to Lessee or
advertisement, as Lessor may reasonably determine, or use, operate, lease to
others the Aircraft as Lessor, may reasonably determine, in any such case free
and clear of any rights of Lessee except as hereinafter set forth in this
Section 10\.
---|---|--- | 54 |
agreement_3.md | | (iii) | whether or not Lessor shall have exercised, or shall thereafter at
any time exercise, any of its rights under paragraph (i) or paragraph (ii)
above with respect to the Aircraft, Lessor, by written notice to Lessee
specifying a payment date not earlier than ten (10) business days from the
date of such notice, may cause Lessee to pay to Lessor, and Lessee shall pay
to Lessor, on the payment date specified in such notice, all installments of
Rent then due (iii) rescind this Lease or exercise any other right or remedy
which may be available under applicable law or proceed by appropriate court
action to enforce the terms hereof or to recover damages for the breach
hereof.
---|---|---
In addition, Lessee shall be liable for all amounts due hereunder before any
termination hereof, including all costs and expenses (including reasonable
attorneys fees and disbursements) incurred by reason of the occurrence of any
Event of Default or the exercise of Lessors remedies with respect thereto
including all costs and expenses incurred in connection with the return of the
Aircraft (or any damages suffered as a result thereof) in accordance with the
terms of Section 5\. No express or implied waiver by Lessor of any Event of
Default hereunder shall in any way be, or be construed to be, a waiver of any
future or subsequent Event of Default. | 55 |
agreement_3.md | | 11. | _**LOSS OR DAMAGE TO AIRCRAFT AND INJURY OR DAMAGE TO THE PERSON OR
PROPERTY OF THIRD PARTIES INCLUDING PASSENGERS**_
---|---|---
In the event of loss or damage to or requisition of the Aircraft, or in the
event of injury or damage being caused by the Aircraft to persons (including
passengers) or to property, Lessee shall immediately report said loss, injury
or damage to Lessor, the insurance company or companies, and to any and all
applicable governmental agencies, both federal and state, and shall furnish
such information and execute such documents as may be required and necessary
to collect the proceeds under any insurance policy or to obtain the protection
of any liability insurance policies. In this event, the rights, liabilities,
and obligations of the parties hereto shall be as follows:
If the Aircraft is partially damaged (and is not subject to a Total Loss),
then this Agreement shall remain in full force and effect with respect
thereto. Lessee shall, at its own expense, fully repair the Aircraft in order
that the Aircraft shall be placed in as good and the same condition as it was
before the damage assuming it was in the condition required hereby;
13
* * * | 56 |
agreement_3.md | 13
* * *
provided, that if the Aircraft is partially damaged while it is in the
operational control of Lessor, its affiliates or agents, Lessee shall only be
responsible for the repair of the Aircraft to the extent that insurance or
warranty proceeds are available for such repair. Upon the damage being
repaired and the Aircraft being in the same condition as before the damage,
Lessor shall so long as no Event of Default is continuing, reimburse Lessee to
the extent, but not in excess of, the proceeds of insurance covering such
damage received by Lessor, this payment to be contingent upon Lessee
furnishing to Lessor the necessary information and documents required for the
recovery of the said insurance proceeds. Payment of this amount is further
contingent upon the approval by Lessor of the repairs made by Lessee including
the cost thereof and the Aircraft having been returned, as nearly as possible,
in the same condition as before said damage occurred assuming it was in the
condition required hereby. Except when the Aircraft is in the operational
control of Lessor, it affiliates or agents, any and all risk of loss or damage
shall be borne by Lessee. During any such period encompassed by repairs, all
lease payments shall be made in full without offset or abatement. | 57 |
agreement_3.md | In the event that the Aircraft shall suffer a Total Loss, Lessee shall pay the
Insured Value (as set forth in Section 8(c)) to Lessor upon the earlier to
occur of the date on which insurance proceeds with respect thereto are
received by either Lessor or Lessee and the date that is 120 days following
such Total Loss; provided, that if the Aircraft shall suffer a Total Loss
while it is in the operational control of Lessor, its affiliates or agents,
Lessee shall only be responsible for the payment of Insured Value to the
extent that insurance proceeds are available for such payment.
12\. **_STATEMENTS AND REPRESENTATIONS_ :**
Lessee and Lessor hereby agree that no representations, statement or
agreement, other than as set forth herein, shall be binding upon the parties
hereto unless expressed in writing signed by each party hereto and purporting
to be an expressed modification of this Agreement.
13\. **_[INTENTIONALLY OMITTED]_**
14\. **_NOTICES_**.
Any notice hereunder shall be sufficiently given by personal delivery or by
telegram or by registered letter postage prepaid and mailed addressed to the
party to receive such notice at the address first above set forth or to such
other address as may be designated in writing by either of the parties and the
date or receipt of any notice by mailing as aforesaid shall be deemed
conclusively to be the second business day after such mailing. Notices shall
be as follows:
14
* * *
Heckmann Enterprises, Inc.
Rancho Mirage, CA 92270
Attention: Richard Heckmann
K2 Inc.
5818 El Camino Real
Carlsbad, CA 92008
Attention: General Counsel
Telephone: (760) 494-1000
Fax: (760) 494-1099 | 58 |
agreement_3.md | Attention: General Counsel
Telephone: (760) 494-1000
Fax: (760) 494-1099
15\. **_FURTHER ASSURANCES_.**
Lessee and Lessor will each promptly and duly execute and deliver to the other
such further documents and assurances and take such further action as may from
time to time be reasonably requested by any of them in order to more
effectively carry out the intent and purpose of this Lease and to establish
and protect the rights and remedies created or intended to be created, or
otherwise arising, in favor of Lessor and Lessee hereunder.
16\. **_AMENDMENTS_.**
No term or provision of this Lease may be changed, waived, discharged or
terminated orally, but only by an instrument in writing expressed to be a
supplement or amendment to this Lease duly signed by the party against which
the enforcement of the change, waiver, discharge or termination is sought.
17\. **_COUNTERPARTS_.**
This Lease may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall constitute one and the same
agreement, which shall be sufficiently evidenced by any one of such original
counterparts. To the extent that this Lease constitutes chattel paper (as
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest herein may be created through the transfer
or possession of any counterpart other than the original counterpart, which
shall be identified as the counterpart containing the receipt therefor
executed by Lessor on the signature page thereof.
18\. **_BINDING EFFECT_.**
Subject to the terms hereof, the covenants and conditions of this Agreement
shall inure to the benefit of and be binding upon the executors, successors,
administrators and assigns of the parties hereto.
15
* * * | 59 |
agreement_3.md | 15
* * *
| 19. | **_GOVERNING LAW_.**
---|---|---
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE UNITED STATES OF AMERICA, STATE OF CALIFORNIA AND LESSOR AND LESSEE
AGREE TO EXCLUSIVE VENUE AND JURISDICTION OF THE UNITED STATES FEDERAL COURTS
AND STATE COURTS OF CALIFORNIA IN THE EVENT ANY DISPUTE ARISES WHICH RESULTS
IN LITIGATION. | 60 |
agreement_3.md | | 20. | **_TAXES_.**
---|---|---
Lessee agrees to pay, and to indemnify and hold Lessor and its successors and
assigns harmless from any and all Taxes (other than taxes payable with respect
to the rent or earnings arising out of this Agreement and income taxes as a
result of the use of the Aircraft by Lessor or its affiliates) imposed, levied
or withheld against, upon or from Lessor, Lessee, the Airframe, any Engine or
any Part thereof arising out of or in any manner connected with the Airframe,
any Engine, or any Part thereof, or upon the leasing, possession,
repossession, use, operation, repair, maintenance, overhaul, or return of any
thereof, or upon or with respect to this Lease imposed by any government
entity in any country, state or political subdivision thereof in which Lessee
operates the Aircraft or any other aircraft, or otherwise carries on any
business activity, unless, and to the extent only that, any such Taxes are
being contested by Lessee in good faith and by appropriate proceedings and
only so long as such proceedings do not involve any danger of the sale,
forfeiture, or loss of all or any portion of the Airframe, any Engine or any
Part. In case any report or return is required to be made with respect to any
obligation of Lessee under or arising out of this Section 20, Lessee shall
make such report or return in a timely fashion and in such manner as will show
the title of the Aircraft to be in Lessor, and send a copy of such report or
return to Lessor. Lessor shall, at Lessees expense, take such action as
Lessee may reasonably request in writing with respect to such asserted | 61 |
agreement_3.md | Lessee may reasonably request in writing with respect to such asserted
liability, and if requested by Lessee and upon the prior payment to Lessor by
Lessee of an amount equal to such Tax, shall make payment of such Tax under
protest, if payment under protest is necessary in order to contest the claim
for Taxes. If contest is made, Lessor shall, at Lessees expense, take such
action as Lessee may reasonably request to contest the claim for Taxes and
shall, if requested, permit Lessee, in Lessors name, to file a claim or
prosecute an action to contest the claim for Taxes and to recover any payment
made under protest. Any amount paid by Lessee pursuant to this Section 20
shall be in an amount which, after deduction of all Taxes required to be paid
by Lessee hereunder, shall equal the amount of payment otherwise required
hereunder. All of the obligations of Lessee in this Section 20 with respect to
Taxes imposed or accrued before the expiration or other termination of this
Lease shall continue in full force and effect notwithstanding such expiration
or other termination hereof and are expressly made for the benefit of, and
shall be enforceable by, Lessor and its successors and assigns. | 62 |
agreement_3.md | Lessees obligations under this Section 20 shall not extend to any liability
resulting from any fact, occurrence, event or condition occurring prior to the
commencement of the Term, or, so long as no Event of Default is continuing,
after the date on which the Aircraft has been returned to Lessor in accordance
with the provisions of this Lease.
16
* * *
21\. **_OTHER CONDITIONS_**.
a. Lessee does not obtain any property interest in the Aircraft, nor will
Lessee acquire any property rights in the Aircraft except to use the Aircraft
as a Lessee during the Term of this Agreement, or any extension thereto.
b. Any delay or omission, by either party, in exercising the rights or powers
granted by this Agreement will not affect either partys ability to enforce
those rights or powers at a later date.
c. No director, officer, employee or stockholder, as such, of Lessor shall
have any liability for any obligations of Lessor under this Agreement or for
any claim based on, in respect of or by reason of such obligations or their
creation. Lessee, by accepting the Aircraft hereunder, waives and releases all
such liability. The waiver and release are part of the consideration for the
lease of the Aircraft to Lessee hereunder.
22\. _**TRUTH IN LEASING**_
a. Within 24 hours of the execution of this Lease, Lessor will mail a copy of
this Lease to the Aircraft Registration Branch, Attention: Technical Section,
P.O. Box 25724, Oklahoma City, OK 73125.
b. A copy of this Lease must be carried in the Aircraft and shall be made
available for review upon request by the Administrator (as such term is used
in 14 C.F.R. Section 91.23(c)(2)). | 63 |
agreement_3.md | c. Lessee will notify by telephone the FAA Flight Standards district office
nearest the airport where the first flight of the Aircraft will originate
under this Lease. Unless otherwise authorized by that office, the notification
shall be given at least 48 hours before takeoff and Lessee shall inform the
FAA of the location of the airport of departure, the departure time and the
registration number of the Aircraft.
d. LESSEE AND LESSOR HAVE REVIEWED OR CAUSED TO BE REVIEWED THE AIRCRAFT
MAINTENANCE AND OPERATING LOGS SINCE THE LATER OF THE 12-MONTH PERIOD
PRECEDING THE DATE OF THIS AGREEMENT AND THE DATE OF MANUFACTURE OF THE
AIRCRAFT AND HAVE FOUND THAT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED
UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS DURING SUCH PERIOD. LESSEE
CERTIFIES THAT THE AIRCRAFT PRESENTLY COMPLIES WITH THE APPLICABLE MAINTENANCE
AND INSPECTION REQUIREMENTS OF PART 91 OF THE FEDERAL AVIATION REGULATIONS.
LESSEE CERTIFIES THAT THE AIRCRAFT PRESENTLY COMPLIES WITH THE APPLICABLE
MAINTENANCE AND INSPECTION REQUIREMENTS OF PART 91 OF THE FEDERAL AVIATION
REGULATIONS.
17
* * *
e. LESSEE CERTIFIES THAT LESSEE WILL BE RESPONSIBLE FOR OPERATIONAL CONTROL OF
THE AIRCRAFT UNDER THIS LEASE DURING THE PERIODS OF LESSEES POSSESSION AND
USE OF THE AIRCRAFT DURING THE TERM HEREOF. LESSEE FURTHER CERTIFIES THAT
LESSEE UNDERSTANDS ITS RESPONSIBILITY FOR COMPLIANCE WITH APPLICABLE FEDERAL
AVIATION REGULATIONS. | 64 |
agreement_3.md | f. LESSEE CERTIFIES THAT THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER
PART 91 OF THE FEDERAL AVIATION REGULATIONS FOR OPERATIONS TO BE CONDUCTED
UNDER THIS LEASE. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON
OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED
FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION
DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
* * *
**IN WITNESS WHEREOF** , Lessor and Lessee have executed this Lease the day
and year first above written.
| |
---|---|---
**HECKMANN ENTERPRISES, INC.**
**LESSOR**
|
By:
| |
/s/ RICHARD J. HECKMANN
Title:
| |
President
**K2 INC.**
**LESSEE**
|
By:
| |
/s/ J. WAYNE MERCK
Title:
| |
President & COO
19 | 65 |
agreement_5.md | EX-10.6 9 dex106.htm AIRCRAFT LEASE COMMON TERMS AGREEMENT Aircraft Lease
Common Terms Agreement
**EXHIBIT 10.6**
**DATED AS OF AUGUST 15, 2003**
**BETWEEN**
AVIATION FINANCIAL SERVICES INC. ****
**and**
AIRTRAN AIRWAYS, INC.
* * *
**AIRCRAFT LEASE**
**COMMON TERMS AGREEMENT**
* * *
* * *
CONTENTS
**SECTION**
* * *
| | **PAGE**
* * *
---|---|---
1. INTERPRETATION
| | 1
1.1
| |
Definitions
| | 1
1.2
| |
Construction
| | 1
2. REPRESENTATIONS AND WARRANTIES
| | 2
2.1
| |
Lessees Representations and Warranties
| | 2
2.2
| |
Lessors Representations and Warranties
| | 2
3. CONDITIONS PRECEDENT
| | 2
3.1
| |
Conditions Precedent
| | 2
3.2
| |
Waiver
| | 2
4. COMMENCEMENT
| | 3
4.1
| |
Leasing
| | 3
4.2
| |
Procedure Before Delivery
| | 4
4.3
| |
Delivery and Acceptance
| | 4
4.4
| |
Delayed Delivery
| | 4
5. PAYMENTS | 66 |
agreement_5.md | | | 4
4.4
| |
Delayed Delivery
| | 4
5. PAYMENTS
| | 5
5.1
| |
Deposit
| | 5
5.2
| |
Rental Periods
| | 5
5.3
| |
Rent
| | 5
5.4
| |
Supplemental Rent
| | 6
5.5
| |
Payments
| | 7
5.6
| |
Withholding and Tax Credit
| | 8
5.7
| |
Tax Indemnity
| | 9
5.8
| |
[Intentionally Omitted]
| | 13
5.9
| |
Tax Contest and Mitigation
| | 13
5.10
| |
Indemnity Payments - After-Tax Basis
| | 17
5.11
| |
Lessor Obligations Following Expiry Date
| | 17
5.12
| |
Net Lease
| | 18
5.13
| |
Further Provisions Regarding Deposit
| | 19
5.14
| |
Letter of Credit
| | 20
5.15
| |
Guarantee
| | 21
5.16
| |
Late Payment Interest
| | 21
5.17
| |
Currency
| | 21
5.18
| |
Certificates
| | 22
5.19
| |
Appropriation
| | 22
5.20
| | | 67 |
agreement_5.md | | |
Appropriation
| | 22
5.20
| |
Set-off
| | 22
5.21
| |
Expenses
| | 22
5.22
| |
Other Outgoings
| | 23
6. MANUFACTURERS WARRANTIES
| | 23
7. LESSORS COVENANTS
| | 24
7.1
| |
Quiet Enjoyment
| | 24
7.2
| |
Maintenance Contributions
| | 24
* * *
7.3
| |
Confidentiality
| | 26
---|---|---|---|---
8. LESSEES COVENANTS
| | 28
8.1
| |
Duration
| | 28
8.2
| |
Information
| | 28
8.3
| |
Lawful and Safe Operation
| | 29
8.4
| |
Subleasing
| | 30
8.5
| |
Inspection
| | 34
8.6
| |
Ownership; Property Interests; Related Matters
| | 35
8.7
| |
General
| | 36
8.8
| |
Records
| | 38
8.9
| |
Protection
| | 38
8.10
| |
Maintenance and Repair
| | 39
8.11
| |
Removal of Engines and Parts
| | 39
8.12
| |
Equipment Changes | 68 |
agreement_5.md | | |
Removal of Engines and Parts
| | 39
8.12
| |
Equipment Changes
| | 42
8.13
| |
Title
| | 43
9. INSURANCE
| | 44
9.1
| |
Insurance
| | 44
9.2
| |
[Intentionally Omitted]
| | 44
9.3
| |
Insurance Undertakings and Information
| | 44
9.4
| |
Failure to Insure
| | 45
9.5
| |
Continuing Insurance
| | 45
10. INDEMNITY
| | 45
10.1
| |
General
| | 45
10.2
| |
Contest
| | 48
10.3
| |
Duration:
| | 50
11. EVENTS OF LOSS
| | 50
11.1
| |
Events of Loss
| | 50
11.2
| |
Requisition
| | 51
12. RETURN OF AIRCRAFT
| | 51
12.1
| |
Return
| | 51
12.2
| |
Non-Compliance
| | 52
12.3
| |
Redelivery
| | 52
12.4
| |
Acknowledgement
| | 53
12.5
| |
Storage
| | 53
13. DEFAULT
| | 53
13.1
| |
Events
| | 53
13.2 | 69 |
agreement_5.md | | | 53
13.1
| |
Events
| | 53
13.2
| |
Rights and Remedies
| | 53
13.3
| |
[Intentionally Omitted]
| | 57
13.4
| |
[Intentionally Omitted]
| | 57
13.5
| |
Power of Attorney
| | 57
14. ASSIGNMENT
| | 57
14.1
| |
Lessee
| | 57
14.2
| |
Lessor
| | 58
14.3
| |
Conditions
| | 59
15. MISCELLANEOUS
| | 60
15.1
| |
Illegality
| | 60
* * *
15.2
| |
Waivers, Remedies Cumulative
| | 60
---|---|---|---|---
15.3
| |
Delegation
| | 61
15.4
| |
Severability
| | 61
15.5
| |
Remedy
| | 61
15.6
| |
Time of Essence
| | 61
15.7
| |
Notices
| | 61
15.8
| |
Governing Law; Jurisdiction; WAIVER OF JURY TRIAL
| | 62
15.9
| |
Sole and Entire Agreement; True Lease; Section 1110
| | 63
15.10
| |
Beneficiaries
| | 64
15.11 | 70 |
agreement_5.md | | | 63
15.10
| |
Beneficiaries
| | 64
15.11
| |
Counterparts
| | 64
15.12
| |
Language
| | 64
15.13
| |
Survival
| | 65
16. DISCLAIMERS AND WAIVERS
| | 65
16.1
| |
Exclusion
| | 65
16.2
| |
Waiver
| | 66
16.3
| |
Disclaimer of Consequential Damages
| | 67
16.4
| |
Confirmation
| | 67
17. BROKERS AND OTHER THIRD PARTIES
| | 67
17.1
| |
No Brokers
| | 67
17.2
| |
Indemnity
| | 67
Schedule 1
| |
Definitions
---|---|---
Schedule 2
| |
Representations and Warranties
Schedule 3
| |
Conditions Precedent
Schedule 4
| |
Pre-Delivery Procedures and Delivery Condition Requirements
Schedule 5
| |
Certificate of Acceptance
Schedule 6
| |
Procedures and Operating Condition at Redelivery
Schedule 7
| |
Insurance Requirements
Schedule 8A, Part 1
| |
Form of Lessee Legal Opinion (In-House)
Schedule 8A, Part 2
| |
Form Legal Opinion of Lessees Counsel
Schedule 8B, Part 1
| | | 71 |
agreement_5.md | | |
Form Legal Opinion of Lessees Counsel
Schedule 8B, Part 1
| |
Form of Lessor Legal Opinion (In-House)
Schedule 8B, Part 2
| |
Form Legal Opinion of Lessors Counsel
Schedule 9
| |
Events of Default
Schedule 10
| |
Form of Guarantee
Schedule 11
| |
[Intentionally Omitted]
Schedule 12
| |
[Intentionally Omitted]
Schedule 13
| |
Form of Assignment, Assumption and Release Agreement
Schedule 14
| |
Form of Lease Supplement No. 1
Schedule 15
| |
[Intentionally Omitted]
Schedule 16
| |
Form of Letter of Credit
* * *
**COMMON TERMS AGREEMENT**
**THIS COMMON TERMS AGREEMENT** (this CTA) is made as of August 15, 2003
**BETWEEN:**
| (1) | AVIATION FINANCIAL SERVICES INC. (AFSI); and
---|---|---
| (2) | AIRTRAN AIRWAYS, INC. (AIRTRAN).
---|---|---
WHEREAS: | 72 |
agreement_5.md | WHEREAS:
| (A) | Pursuant to a Lease Transaction Agreement dated as of July 1, 2003
between AFSI and AIRTRAN, AIRTRAN or one of its Affiliates has agreed to lease
certain Boeing 737-700 or 737-800, as applicable, series aircraft from AFSI or
one of its Affiliates and AFSI or one of its Affiliates has agreed to lease
certain Boeing 737-700 or 737-800, as applicable, series aircraft to AIRTRAN
or one of its Affiliates;
---|---|---
| (B) | Each party hereto wishes to provide in one document for certain
common terms and conditions, as hereinafter provided in this CTA, that will be
applicable, unless otherwise stated, to each such lease referred to in Recital
(C); and
---|---|---
| (C) | Each such lease transaction will be concluded only on the terms of
an agreement entitled Aircraft Lease Agreement, which together with this CTA
(which will, except to the extent otherwise stated, be incorporated into and
become part of such Aircraft Lease Agreement) will constitute the lease for
the applicable aircraft as identified therein;
---|---|---
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. | INTERPRETATION
---|---
1.1 | **Definitions**
---|--- | 73 |
agreement_5.md | 1. | INTERPRETATION
---|---
1.1 | **Definitions**
---|---
All references herein to Lease mean the various documents comprising the
Lease. In the Lease, capitalized words and expressions not otherwise defined
have the meanings set out for them in Schedule 1 or in the Aircraft Lease
Agreement.
1.2 | **Construction**
---|---
| (a) | In the Lease, unless otherwise stated, a reference to:
---|---|---
| (i) | Lessor, Lessee, GECAS, Owner or any other Person includes
any of their successors and assignees;
---|---|---
| (ii) | plural concepts shall include the singular and vice versa;
---|---|---
| (iii) | any document, excluding the Common Terms Agreement, shall include
any changes to that document and any replacement for it;
---|---|---
\- 1 -
* * *
| (iv) | a Section or a Schedule is a reference to a section of or a
schedule to this CTA or the Aircraft Lease Agreement as so indicated;
---|---|---
| (v) | any Regulation shall include any changes to that Regulation and any
replacement for it;
---|---|---
| (vi) | an obligation of a Person refers to any obligation that Person has
under or in relation to the Lease; and
---|---|--- | 74 |
agreement_5.md | | (vii) | includes, including, include or similar terms shall not be
construed as limiting and shall mean including, without limitation.
---|---|---
| (b) | Headings and Subheadings to Sections and Schedules in the Lease are
not intended to affect their meaning.
---|---|---
2. | REPRESENTATIONS AND WARRANTIES
---|---
2.1 | **Lessees Representations and Warranties**
---|---
Lessee hereby makes the representations and warranties set out in Section 1.1
of Schedule 2 as of the date of execution of the Aircraft Lease Agreement and
as of the Delivery Date, and Lessee understands that these statements must be
true, both when the Aircraft Lease Agreement is executed and on the Delivery
Date.
2.2 | **Lessors Representations and Warranties**
---|---
Lessor hereby makes the representations and warranties set out in Section 1.2
of Schedule 2 as of the date of execution of the Aircraft Lease Agreement and
as of the Delivery Date, and Lessor understands that these statements must be
true, both when the Aircraft Lease Agreement is executed and on the Delivery
Date.
3. | CONDITIONS PRECEDENT
---|---
3.1 | **Conditions Precedent**
---|--- | 75 |
agreement_5.md | 3.1 | **Conditions Precedent**
---|---
Lessor need not deliver and start the leasing of the Aircraft under the Lease
unless each of the Lessor Conditions Precedent is satisfied or waived in
writing by Lessor. Lessee need not accept and start the leasing of the
Aircraft under the Lease unless each of the Lessee Conditions Precedent is
satisfied or waived in writing by Lessee.
3.2 | **Waiver**
---|---
| (a) | If any Lessor Condition Precedent is not satisfied on or before the
Delivery Date, Lessor (in its absolute discretion) may nonetheless deliver the
Aircraft to Lessee and start the leasing of the Aircraft provided Lessor
either waives such Lessor Condition Precedent or Lessor and Lessee agree in
writing upon the terms and timing for fulfillment of such Lessor Condition
Precedent to be fulfilled after the Delivery Date,
---|---|---
\- 2 -
* * *
|
and, in the event of such agreement, Lessor may treat as an Event of Default
any subsequent failure of Lessee to fulfill such Lessor Condition Precedent in
accordance with such agreement.
---|--- | 76 |
agreement_5.md | | (b) | If any Lessee Condition Precedent is not satisfied on or before the
Delivery Date, Lessee may (in its absolute discretion) nonetheless accept
delivery of the Aircraft from Lessor and start the leasing of the Aircraft,
provided Lessee either waives the Lessee Conditions Precedent or Lessee and
Lessor agree in writing upon the terms and timing for fulfillment of such
Lessee Condition Precedent after the Delivery Date, and, in such event, Lessee
may treat any subsequent failure by Lessor to do so in accordance with such
agreement as a breach of the Lease.
---|---|---
4. | COMMENCEMENT
---|---
4.1 | **Leasing**
---|---
| (a) | Unless a specific Scheduled Delivery Date has been agreed in the
Aircraft Lease Agreement, Lessor shall notify in writing Lessee of the
Scheduled Delivery Date as soon as possible, but no later than at least thirty
(30) days prior to the anticipated Delivery Date. Subject to Section 4.4,
Lessor will lease the Aircraft to Lessee and Lessee, subject to compliance of
the Aircraft with the Delivery Condition Requirements and satisfaction of the
other Lessee Conditions Precedent, will take the Aircraft on lease for the
Term, which shall be evidenced by Lessees execution of Lease Supplement No.
1.
---|---|--- | 77 |
agreement_5.md | | (b) | If (i) Lessee is unwilling or unable to accept delivery of the
Aircraft on the date on which Lessor tenders the Aircraft for Delivery to
Lessee in compliance with the Delivery Condition Requirements and under and in
accordance with Section 4.3(a), or Lessee fails to fulfill any Lessor
Condition Precedent on or before such date or fails to perform any of its
obligations under the Lease which are required to be performed by Lessee, and
(ii) the Lessee Conditions Precedent have been satisfied (or could reasonably
be expected to be satisfied if Delivery were occurring), then the Rent
Commencement Date for the Aircraft shall be deemed to have occurred on the
date on which the Aircraft is tendered by Lessor for Delivery in accordance
with subsection (ii) of this Section 4.1(b), and Lessee shall be obligated to
pay Rent for the Aircraft on and from such date regardless of whether the
Delivery Date occurs or whether Lessee executes Lease Supplement No. 1, but
Lessor shall have no obligation to deliver the Aircraft unless and until all
Lessor Conditions Precedent have been satisfied (or could reasonably be
expected to be satisfied if Delivery were occurring). In no event shall Lessee
have or be deemed to have a lease interest or other possessory right in or to
the Aircraft until Lessor tenders and Lessee accepts delivery of the Aircraft
as evidenced by their execution of Lease Supplement No. 1.
---|---|---
| (c) | Lessee will be responsible for all risks associated with (i) the use
and operation of the Aircraft and (ii) any loss of or damage to the Aircraft
from the Delivery Date until possession of the Aircraft is returned to Lessor
on the Return Occasion. __
---|---|--- | 78 |
agreement_5.md | \- 3 -
* * *
4.2 | **Procedure Before Delivery**
---|---
Lessor and Lessee will follow the Pre-Delivery Procedure.
4.3 | **Delivery and Acceptance**
---|---
After the Pre-Delivery Procedure has been carried out:
| (a) | Subject to Section 3.1, Lessor will tender delivery of the Aircraft
to Lessee at the Delivery Location and shall simultaneously therewith execute
and deliver to Lessee Lease Supplement No. 1.
---|---|---
| (b) | Subject to Section 3.1, Lessee will accept the Aircraft. Lessee
shall also provide evidence of its acceptance by signing Lease Supplement No.
1 and delivering it to Lessor.
---|---|---
| (c) | Once accepted, Lessees acceptance of the Aircraft shall be regarded
as absolute, unconditional and irrevocable, but such acceptance shall be
without prejudice to Lessees right to enforce Lessors performance of any
written undertaking that Lessor may make contemporaneously with such
acceptance or any right Lessee may have to pursue against any third party any
claim Lessee may have with respect to the condition of the Aircraft.
---|---|---
4.4 | **Delayed Delivery**
---|---
If, as a result of an Unforeseen Event or any other reason (other than
Lessors willful misconduct or intentional breach in the performance of its
obligations to deliver the Aircraft under and subject to the conditions in the
Lease), Delivery takes place after the Scheduled Delivery Date or does not
happen: | 79 |
agreement_5.md | | (a) | Lessor will not be responsible for any Losses that Lessee suffers
resulting from the delay or from the non-delivery of the Aircraft;
---|---|---
| (b) | Lessee will not, except in the circumstances described in Sections
4.4(c) and 4.4(d), be entitled to terminate the Lease or to reject the
Aircraft when it is offered for Delivery because of the delay.
---|---|---
| (c) | If the Aircraft has not been tendered for Delivery, in accordance
with Section 4.3, by the Final Delivery Date, either party may terminate the
Lease by delivering notice to the other party within ten (10) days following
such Final Delivery Date. Upon the delivery of any such notice, all
obligations of each party under the Lease will end on the date of such notice,
except that, Lessor will (i) repay to Lessee the Deposit, (ii) return to
Lessee or cancel any Letter of Credit, (iii) pay to Lessee such additional
amounts (if any) as may be provided for in the Aircraft Lease Agreement and
(iv) release and return any Guarantee, if applicable, and Lessee will remain
obligated solely in respect of any indemnity obligation arising as set forth
in Section 3 of Schedule 4.
---|---|---
\- 4 -
* * * | 80 |
agreement_5.md | \- 4 -
* * *
| (d) | If the Manufacturer shall have notified Lessor (in which case Lessor
shall promptly inform Lessee of such notice) that the Delivery will be delayed
beyond the Final Delivery Date or that the Aircraft will not be delivered,
either party may terminate the Lease by delivering notice to the other within
thirty (30) days following receipt of such notice from the Manufacturer. Upon
the delivery of any such notice, all obligations of each party under the Lease
will end on the date of such notice, except that, Lessor will (i) repay to
Lessee the Deposit, (ii) return to Lessee or cancel any Letter of Credit,
(iii) pay to Lessee such additional amounts (if any) as may be provided in the
Aircraft Lease Agreement and (iv) release and return any Guarantee, if
applicable, and Lessee will remain obligated solely in respect of any
indemnity obligation arising as set forth in Section 3 of Schedule 4.
---|---|---
| (e) | Lessee hereby agrees that its only right or remedy for a delay in
delivery of, or Lessors failure to deliver, the Aircraft due to an Unforeseen
Event or any other reason (except to the extent of Lessors willful misconduct
in the performance of, or the intentional breach of, its obligation to deliver
the Aircraft under and subject to the conditions in the Lease) is the remedy
set forth in Sections 4.4(c) and (d) above, and any remedy set forth in the
Aircraft Lease Agreement, and Lessee hereby waives any rights or remedies it
may have pursuant to Section 2A-406 of the UCC or otherwise for any such delay
in or any such failure of delivery.
---|---|--- | 81 |
agreement_5.md | 5. | PAYMENTS
---|---
5.1 | **Deposit**
---|---
Lessee shall pay Lessor any Deposit as specified in Section 3 of the Aircraft
Lease Agreement.
5.2 | **Rental Periods**
---|---
The first Rental Period will start on the Rent Commencement Date and each
subsequent Rental Period will start on the date immediately following the last
day of the previous Rental Period. Each Rental Period will end on the date
immediately before the numerically corresponding day in the next calendar
month, except that:
| (a) | if there is no numerically corresponding day in that month, it will
end on the last day of that month; and
---|---|---
| (b) | if a Rental Period would otherwise overrun the Expiry Date, it will
end on the Expiry Date.
---|---|---
5.3 | **Rent**
---|---
| (a) | Time of Payment: Lessee will pay to Lessor or its order Rent in
advance, as specified in the Aircraft Lease Agreement, on each Rent Date.
Lessor must receive value for the payment on each Rent Date. If a Rental
Period begins on a day that is not a Business Day, the Rent payable in respect
of that Rental Period shall be paid on the Business Day immediately following
that day.
---|---|---
\- 5 -
* * *
| (b) | Amount: The Rent payable during the Term shall be calculated in
accordance with Schedule B of the Aircraft Lease Agreement.
---|---|---
5.4 | **Supplemental Rent**
---|--- | 82 |
agreement_5.md | 5.4 | **Supplemental Rent**
---|---
| (a) | Amount: If, under the Aircraft Lease Agreement, Lessee is required
to pay Supplemental Rent, Lessee will pay that Supplemental Rent, at the rates
referred to in Section 3 of the Aircraft Lease Agreement, to Lessor in
relation to each calendar month (or part of a month) of the Term, on the
fifteenth (15th) day following the end of that calendar month (except that the
last payment of Supplemental Rent during the Term shall be paid on the Expiry
Date).
---|---|---
| (b) | Adjustment: The Supplemental Rent rates shall be adjusted not more
frequently than annually based on the following:
---|---|---
| (i) | Annual Supplemental Rent Adjustment: by the Annual Supplemental Rent
Adjustment, compounded annually commencing on the date specified in the
Aircraft Lease Agreement.
---|---|--- | 83 |
agreement_5.md | | (ii) | Hour to Cycle Ratio Adjustment: Lessor and Lessee acknowledge that
the Engine Supplemental Rent rate and the Engine LLP Supplemental Rent rate
are based upon the assumption that the Aircraft will operate on an Assumed
Ratio. If that assumption proves to be incorrect at any time during the Term
based upon Lessees actual operating experience during the most recently
preceding twelve (12) months that data is available at the time of
determination, and the hour to cycle ratio differs from the Assumed Ratio by
more than 0.25 during such twelve (12) month period, Lessor shall have the
right, upon written notice to Lessee, to adjust the Engine Supplemental Rent
rate and the Engine LLP Supplemental Rent rate (in the case of a decrease in
the ratio below the Assumed Ratio) and Lessor, upon written request from
Lessee, will make that adjustment (in the case of an increase in the ratio
above the Assumed Ratio). Any adjustment shall be based on a table contained
in the Aircraft Lease Agreement. Actual hour to cycle ratios may fall outside
the ratios identified in that table. In that case, the actual values shall be
determined by extrapolating the closest observed intervals in the table.
---|---|---
| (iii) | Assumed Utilization Adjustment: Lessor and Lessee acknowledge that
any amounts of Airframe Supplemental Rent, APU Supplemental Rent and Landing
Gear Supplemental Rent payable by Lessee are based upon the assumption that
the Aircraft will operate on an Assumed Utilization. If that assumption proves
to be incorrect at any time during the Term based upon Lessees actual
operating experience during the most recently preceding twenty-four (24)
months that data is available at the time of determination,
---|---|---
\- 6 - | 84 |
agreement_5.md | \- 6 -
* * *
| | calculated as an annual average, such that (A) Lessees actual
utilization of the Aircraft is 110% or greater than the Assumed Utilization,
upon written notice from Lessee to Lessor , the rates of Airframe Supplemental
Rent and Landing Gear Supplemental Rent shall be adjusted downwards to rates
based on a table contained in the Aircraft Lease Agreement, or (B) Lessees
actual utilization is below the Assumed Utilization Adjustment Threshold, upon
written notice from Lessor to Lessee, the rates of Airframe Supplemental Rent
and Landing Gear Supplemental Rent shall be adjusted upwards to rates based on
a table contained in the Aircraft Lease Agreement.
---|---|--- | 85 |
agreement_5.md | | (iv) | Major Maintenance Program Revision: If the Lessee adopts a Major
Maintenance Program Revision, either Lessor or Lessee may notify the other
that it believes adjustment is necessary to maintain the Supplemental Rent at
levels which accurately reflect the costs associated with obtaining relevant
maintenance services (at Lessees prevailing costs for the most recent twenty-
four (24) months escalated to the relevant rate of determination at the rate
specified for the Annual Supplemental Rent Adjustment). In such event, Lessor
and Lessee shall mutually agree upon the amount of any adjustment to the rate
otherwise specified herein to reflect such costs associated with obtaining the
relevant maintenance services. Should Lessor and Lessee fail to agree upon the
amount of any adjustment to the rate, the matter shall be referred to the
Manufacturer, whose decision in the matter shall be binding on the parties.
Upon agreement of Lessor and Lessee or the decision of the Manufacturer, as
the case may be, Lessor shall thereupon give notice to Lessee specifying the
revised Supplemental Rent rates and the effective date of such revision and
Lessee and Lessor shall be bound by it.
---|---|---
| (v) | Notice: Lessee agrees to advise Lessor, in writing, promptly
following any occurrence, which would result in the assumptions mentioned in
paragraph (ii) or in Clause (B) of paragraph (iii) above becoming incorrect at
any time during the Term.
---|---|--- | 86 |
agreement_5.md | | (c) | Lessors Property Rights: Lessee acknowledges and agrees that
Supplemental Rent is additional rent for the leasing of the Aircraft and not
cash collateral or other collateral security for Lessees maintenance
obligations under the Lease. Once paid, all Supplemental Rent is the property
of Lessor, it is not refundable to Lessee under any circumstances whatsoever
(except to the extent provided in the Lease and that following the receipt by
Lessor of insurance or condemnation proceeds or other payment from Lessee in
an amount equal to the Agreed Value following an Event of Loss, Lessor shall
return to Lessee all Supplemental Rent paid to Lessor by Lessee less the
amount theretofore paid to Lessee by Lessor pursuant to Section 7.2) and
Lessee otherwise has no interest therein whatsoever.
---|---|---
5.5 | **Payments**
---|---
All payments by Lessee to Lessor under the Lease will be made for value on the
due date in Dollars and in immediately available funds by wire transfer to the
Lessors Account as specified in the Aircraft Lease Agreement. If any such due
date is not a Business Day, such payment shall be due on the Business Day
immediately following such due date.
\- 7 -
* * *
5.6 | **Withholding and Tax Credit**
---|--- | 87 |
agreement_5.md | \- 7 -
* * *
5.6 | **Withholding and Tax Credit**
---|---
| (a) | Withholding: Lessee must not deduct any amount from any of its
payments under the Lease for or on account of any Taxes (other than US
withholding taxes), unless it is required by Law to do so, in which case,
except with respect to withholding taxes imposed or required by the laws of
the United States or any jurisdiction therein, Lessee must:
---|---|---
| (i) | deduct the minimum amount necessary to comply with the Law;
---|---|---
| (ii) | pay Lessor an extra amount so that Lessor receives a net amount on
the relevant payment date that is equal to the amount that it would have
received if the deduction had not been made. The amount of any such payment to
Lessor shall be made taking into account the principles of Section 5.10 such
that Lessor shall be in no worse position than it would have been if the
deduction had not applied in the first place;
---|---|---
| (iii) | pay the Tax to the relevant taxing authority according to the
relevant Law; and
---|---|---
| (iv) | obtain a receipt (if one is available) from the relevant taxing
authority and give it to Lessor.
---|---|--- | 88 |
agreement_5.md | | (b) | Tax Credit: If Lessor, in good faith, determines that it has
realized a tax benefit (by way of deduction, credit or otherwise) as a result
of any payment for which Lessee is liable under Section 5.6(a), Lessor shall
pay to Lessee as soon as practicable after the tax benefit has been realized
(but not before Lessee has made all payments and indemnities to Lessor
required under this Section that are then due and owing) an amount which will
ensure that (after taking into account the payment itself) Lessor is in no
better and no worse position than it would have been if the deduction had not
applied.
---|---|---
Nothing in this Section 5.6(b) shall:
| (i) | interfere with the right of Lessor to arrange its tax affairs in
whatever manner it thinks fit; or
---|---|---
| (ii) | except as otherwise provided in Section 5.7(a)(iv), oblige Lessor
to disclose any information relating to its Tax affairs or any Tax
computations.
---|---|---
\- 8 -
* * *
5.7 | **Tax Indemnity**
---|---
| (a) | General:
---|---|--- | 89 |
agreement_5.md | | (a) | General:
---|---|---
| (i) | Except as provided in Section 5.7(c), Lessee will on demand pay and
indemnify each Tax Indemnitee against any and all Taxes levied or imposed
against or upon or payable by such Tax Indemnitee or Lessee and arising from,
with respect to or in connection with the transactions pursuant to the Lease,
including all Taxes relating or attributable to Lessee, the Lease or the
Aircraft, directly or indirectly, in connection with the importation,
exportation, registration, ownership (but only to the extent relating to or
attributable to or arising as a result of the possession, operation, use or
maintenance of the Aircraft by Lessee), leasing, sub-leasing, purchase,
delivery, possession, use, operation, repair, maintenance, modification,
overhaul, transportation, landing, storage, presence, sale or other transfer
or redelivery of the Aircraft or any part thereof or any rent, receipts,
insurance proceeds, income, indemnification payment or other amounts arising
therefrom, or the making of any Equipment Change or the permanent replacement
of any Engine.
---|---|--- | 90 |
agreement_5.md | | (ii) | Each Tax Indemnitee shall promptly forward to Lessee any written
notice, bill, or advice that such Tax Indemnitee receives from any taxing
authority concerning any Tax for which it seeks indemnification under this
Section 5.7. All Taxes indemnified pursuant to this Section 5.7(a) shall be
paid by Lessee directly to the appropriate taxing authority (to the extent
permitted by applicable Law) at or before the time prescribed by applicable
Law or if not so permitted, to the applicable Tax Indemnitee. After any
payment by Lessee of any Tax directly to a taxing authority, Lessee shall
furnish to Lessor, on request, a certified copy of a receipt for Lessees
payment of such Tax (to the extent reasonably obtainable) or such other
evidence of payment of such Tax as is reasonably obtainable by Lessee and
reasonably acceptable to Lessor.
---|---|--- | 91 |
agreement_5.md | | (iii) | Any amount payable by Lessee directly to a Tax Indemnitee pursuant
to this Section 5.7(a) shall be paid within fifteen (15) Business Days after
receipt of a written demand therefor from the relevant Tax Indemnitee
(provided that in no event shall Lessee be required to pay any such amount
earlier than five (5) days prior to the date the applicable Tax is due and
payable by such Tax Indemnitee) accompanied by a written statement describing
in reasonable detail the basis for such indemnity and the computation of the
amount so payable, provided that if the contest of any indemnified Tax has
been requested by Lessee in accordance with Section 5.9 and Lessee shall have
duly performed (and shall continue to perform) all its obligations under
Section 5.9 with respect to such contest, then payment of the indemnity with
respect to such Tax under this Section 5.7(a) shall, at Lessees election, be
deferred until the date fifteen (15) Business Days after the contest has been
completed.
---|---|---
| (iv) | At Lessees request, the computation of the amount of any indemnity
payment owed by Lessee pursuant to this Section 5.7 or any amount owed by a
Tax Indemnitee to Lessee pursuant to Section 5.6(b) or Section 5.9 shall be
verified and certified by an independent public accounting firm selected by
---|---|---
\- 9 -
* * * | 92 |
agreement_5.md | \- 9 -
* * *
| | such Tax Indemnitee and reasonably satisfactory to Lessee. Such
verification shall be binding. Lessee and each Tax Indemnitee agree to provide
to such public accounting firm any information within its possession or
control that is reasonably necessary for such public accounting firm to
perform such verification. The costs of such verification (including the fee
of such public accounting firm) shall be borne by Lessee unless such
verification results in an adjustment in Lessees favor of 5% or more of the
net present value of the payment (discounted at the Discount Rate) as computed
by such Tax Indemnitee, in which case such Tax Indemnitee shall pay those
costs.
---|---|---
| (v) | Each Tax Indemnitee shall provide Lessee with such certifications
that the Tax Indemnitee is factually and legally eligible to give (and
provided that giving such certification will not materially prejudice the Tax
Indemnitee unless Lessee has agreed to indemnify the Tax Indemnitee therefor
to the reasonable satisfaction of the Tax Indemnitee), and such information
and documentation in such Tax Indemnitees possession required as a condition
to the allowance of a reduction in Taxes indemnified under this Common Terms
Agreement.
---|---|---
| (b) | Sales and Use Taxes:
---|---|---
| (i) | Without limiting Section 5.7(a) above, Lessee shall pay to Lessor
(or, if permitted by applicable Law and if requested by Lessor, Lessee shall
pay to the relevant tax authority for the account of Lessor):
---|---|--- | 93 |
agreement_5.md | | (A) | all sales, use, rental, excise, value added (other than value added
taxes that are imposed in direct substitution for an income tax), turnover,
goods and services and similar taxes or taxes in the nature of any of the
foregoing ( **Sales Taxes** ) required to be paid to the tax authority of
the jurisdiction in which the Delivery Location is situated or to the
jurisdiction of the Habitual Base or the State of Incorporation with respect
to the lease of the Aircraft to Lessee pursuant to the Lease except for any
Sales Tax with respect to which Lessee delivers to Lessor on or prior to the
date such Sales Tax is due and payable such exemption certificate or other
document as may be required by applicable Law to evidence Lessees entitlement
to exemption from such Sales Tax imposed by the applicable jurisdiction with
respect to the lease of the Aircraft pursuant to the Lease (but Lessees
delivery of such exemption certificate or other document shall not relieve
Lessee from its indemnity obligations under Section 5.7(a) or this Section
5.7(b) in the event that such exemption certificate or other document is
ineffective (provided that Lessor presents such certificate or other document
to the applicable taxing authority if and when required or requested by such
taxing authority to do so) or liability for such Tax is otherwise asserted by
the applicable taxing authority); and
---|---|---
\- 10 -
* * * | 94 |
agreement_5.md | \- 10 -
* * *
| (B) | all Sales Taxes required to be paid to the tax authority of any
jurisdiction (other than a jurisdiction described in Clause (A) above) in
which the Aircraft may be used, operated or otherwise located from time to
time except for any Sales Tax with respect to which Lessee delivers to Lessor
such exemption certificate or other document as may be required by applicable
Law to evidence Lessees entitlement to exemption from such Sales Tax imposed
by the applicable jurisdiction with respect to the lease of the Aircraft
pursuant to the Lease (but Lessees delivery of such exemption certificate or
other document shall not relieve Lessee from its indemnity obligations under
Section 5.7(a) or this Section 5.7(b) in the event that such exemption
certificate or other document is ineffective (provided that Lessor presents
such certificate or other document to the applicable taxing authority if and
when required or requested by such taxing authority to do so) or liability for
such Tax is otherwise asserted by the applicable taxing authority).
---|---|---
| (ii) | Lessee and Lessor will each cooperate with the other in connection
with the preparation and filing of any exemption application or similar
document that is reasonably necessary or desirable under applicable Law to
avoid the imposition of any Sales Taxes with respect to the transactions
contemplated by the Lease.
---|---|--- | 95 |
agreement_5.md | | (iii) | The specific obligations with respect to sales and use taxes set
forth in this Section 5.7(b) are in addition to, and are not in substitution
for, Lessees obligation to indemnify for sales and use taxes pursuant to
Section 5.7(a); provided that in no event shall Lessee be obligated to pay any
amount as indemnification under both Section 5.7(a) and Section 5.7(b) with
respect to the same Tax.
---|---|---
| (c) | Lessee is not required to indemnify any Tax Indemnitee under Section
5.7(a) or Section 5.7(b) with respect to:
---|---|---
| (i) | Taxes attributable to the willful misconduct or gross negligence of
such Tax Indemnitee, except to the extent that such willful misconduct or
gross negligence is imputed to such Tax Indemnitee by reason of any action or
inaction of Lessee or any sublessee;
---|---|---
| (ii) | income Taxes imposed on a Tax Indemnitee as a result of the Tax
Indemnitees (A) being organized in the jurisdiction imposing such Taxes or
(B) conducting business that is unrelated to the transactions contemplated in
the Lease and the Other Agreements in the jurisdiction imposing such Taxes;
---|---|---
| (iii) | a Tax imposed on the net income, profits, gains or gross receipts
of any Tax Indemnitee by the United States or any Government Entity in the
United States; provided that the exclusion in this clause (ii) shall not apply
to any
---|---|---
\- 11 -
* * * | 96 |
agreement_5.md | \- 11 -
* * *
| | sales, use, excise, value added or property Taxes (other than any
value added tax that is imposed in direct substitution for an income tax) or
any Taxes in the nature of sales, use, excise, value added or property Taxes
(other than any value added tax that is imposed in direct substitution for an
income tax);
---|---|---
| (iv) | a Tax imposed with respect to the period, or an event occurring,
(x) prior to the Delivery Date or (y) after the expiration or termination of
the Lease (other than a termination by exercise of remedies in accordance with
Section 13.2 after the occurrence of an Event of Default), the return or
purchase of the Aircraft by Lessee and the payment by Lessee of all amounts
payable by it under the Lease, except, in any case, to the extent such Tax
arises from an event occurring or circumstance existing during the Term or is
otherwise imposed with respect to the Term;
---|---|---
| (v) | a Tax imposed on any sale, assignment, transfer or other disposition
by or to a Tax Indemnitee of its interest in the Aircraft or the Lease unless
such sale, assignment, transfer or other disposition occurs (x) in order to
effect the transactions or transfers contemplated on the Delivery Date, (y) by
Lessee or a Lessee Affiliate required or permitted under the Lease (including
as a result of an Event of Loss), or (z) in connection with, or as a result
of, the exercise of remedies in connection with an Event of Default;
---|---|---
| (vi) | any US withholding tax;
---|---|--- | 97 |
agreement_5.md | | (vi) | any US withholding tax;
---|---|---
| (vii) | a Tax that would not have been imposed but for a Lessor Lien;
---|---|---
| (viii) | a Tax on any item of tax preference or a minimum tax or
alternative minimum tax;
---|---|---
| (ix) | any Tax imposed on (A) a transferee of the interests held by a Tax
Indemnitee in the Aircraft or the Lease or (B) a transferee of the shares of
stock or other interests in a Tax Indemnitee, in each case to the extent that
(X) such Tax would not have been imposed on the original Tax Indemnitee or (Y)
such Tax exceeds the amount of the Tax that would have been imposed on the
original Tax Indemnitee; provided, however, that this exception shall not
apply to any transferee where the transfer shall have occurred in connection
with, or as a result of, the exercise of remedies in connection with an Event
of Default;
---|---|---
| (x) | any Tax that would not have been imposed but for the existence or
status of any trust used to hold title to the Aircraft; or
---|---|---
| (xi) | any Tax imposed on a Tax Indemnitee in respect of a prohibited
transaction within the meaning of Section 4975 of the Internal Revenue Code
of 1986, as amended, or the regulations issued thereunder, or Section 406 of
ERISA or the regulations of the US Department of Labor implementing Section
406 of ERISA.
---|---|---
\- 12 -
* * * | 98 |
agreement_5.md | \- 12 -
* * *
| (d) | Lessee will also indemnify the Special Tax Indemnitee (as defined
in Part IV of Schedule B of the Aircraft Lease Agreement for the purposes
thereof) as and to the extent set forth in Part IV of Schedule B of the
Aircraft Lease Agreement, and the provisions of Section 5.9 shall apply
thereto.
---|---|---
5.8 | **[Intentionally Omitted]**
---|---
5.9 | **Tax Contest and Mitigation**
---|--- | 99 |
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