Exhibit 99(n)
Side Letter to Lease Agreement
Air Slovakia / Wells Fargo
Boeing 737-200A / MSN 21722 / OM-ERA
Page
Slovakia Lease.doc
SIDE LETTER TO LEASE AGREEMENT
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THIS SIDE LETTER TO LEASE AGREEMENT (this "SIDE LETTER") is made as of
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January 6, 2002 by and between WELLS FARGO BANK NORTHWEST, N.A. (formerly known
as First Security Bank, National Association), not in its individual capacity
except as expressly set forth herein, but solely as trustee for the benefit of
the Beneficiaries pursuant to the Trust Agreement (in such capacity, the
"LESSOR", and in its individual capacity, "WELLS FARGO") and AIR SLOVAKIA BWJ,
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LTD, a corporation incorporated pursuant to the laws of The Slovak Republic
("LESSEE").
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RECITALS
Side Letter to Lease Agreement
Air Slovakia / Wells Fargo
Boeing 737-200A / MSN 21722 / OM-ERA
Page
Slovakia Lease.doc
A. Lessee and Lessor have previously entered into that certain Lease
Agreement 21722 dated August 31, 2000, as supplemented by that certain
Certificate of Acceptance dated September 6, 2000, that certain Certificate of
Delivery Condition, dated September 6, 2000, that certain Letter Agreement dated
January 4, 2001, and that certain Letter Agreement dated June 6, 2001
(collectively, the "LEASE").
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B. Pursuant to the Lease, Lessee is currently leasing from Lessor one (1)
used Boeing model 737-200A aircraft bearing manufacturer's serial number 21722
and Slovakian registration mark OM-ERA, together with two (2) installed Pratt &
Whitney JT8D-9A engines bearing manufacturer's serial number 707430 and 665325
(collectively, the "AIRCRAFT").
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C. Lessor and Lessee now desire to record certain agreements with
respect to the Lease and the contemplated transfer of title of the Aircraft by
Lessor to Lessee.
AGREEMENT
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have
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the meanings given to them in the Lease.
2. TERM-OUT PERIOD. Subject to the terms and conditions of this Side
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Letter, Lessee and Lessor have agreed to abate the Basic Rent due from Lessee to
Lessor for the period commencing on January 6, 2002 and ending August 6,
2002 ("TERM-OUT PERIOD"), and in its place, Lessee will pay the following
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amounts to Lessor (collectively, the "TERM-OUT PAYMENTS"):
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DUE DATE TERM-OUT PAYMENT
======================== ================
January 6, 2002 US$25,000
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February 6, 2002 US$30,000
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March 6, 2002 US$35,000
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April 6, 2002 US$70,000
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May 6, 2002 US$75,000
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June 6, 2002 US$93,000
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July 6, 2002 US$93,000
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August 6, 2002 US$94,417
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TOTAL TERM-OUT PAYMENTS: US$515,417
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3. ADDITIONAL RENT. Lessor and Lessee agree that throughout the Term-Out
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Period, Lessee shall continue to pay Additional Rent in accordance with the
terms of the Lease. Notwithstanding the foregoing, Lessee and Lessor both
acknowledge and agree that Lessee shall not be entitled to any reimbursement of
any Additional Rent previously paid by Lessee during the Term of the Lease or
paid by Lessee during the Term-Out Period, as the case may be.
4. LEASE TERMINATION AND TRANSFER OF TITLE. So long as Lessor has received
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all of the Term-Out Payments on the respective due date as set forth in Section
2 hereof (or as a result of Lessee exercising its Prepayment Option as
contemplated in Section 5 hereof) and so long as all of the other conditions of
this Side Letter have been met, Lessor shall transfer title of the Aircraft to
Lessee subject to the following:
a. Closing. On the date of title transfer (the "CLOSING DATE") Lessor and
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Lessee agree to terminate the Lease by executing the Lease Termination Agreement
in the form set forth as Exhibit A hereto (the "LEASE TERMINATION
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AGREEMENT"), and Lessor will convey to Lessee by Bill of Sale, in the form set
forth as Exhibit B hereto (the "BILL OF SALE"), all of Lessor's right, title and
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interest in the Aircraft to Lessee, in accordance with the terms of this Side
Letter.
b. ClosingProcedures. On or prior to the Closing Date:
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(i) Lessee shall deliver to Lessor the documents listed in Section 8(b)
hereof;
(ii) Lessor shall deliver to Lessee the documents listed in Section 8(a)
hereof;
(iii) Lessor shall have received all of the Term-Out Payments from Lessee;
and
(iv) Lessee shall have directed Lessor to retain, and shall have released
all of Lessee's right, title and interest in and to, (a) all Security Deposit
amounts held by Lessor as of the Closing Date; (b) all Additional Rent held by
Lessor as of December 31, 2001 (total of US$206,906); and (c) up to US$75,000 of
the Additional Rent paid by Lessee to Lessor during the Term-Out Period, with
any Additional Rent in excess of US$75,000 to be returned to Lessee following
the transfer of title as contemplated herein.
5. PREPAYMENT OPTION. During the Term-Out Period and subject to the terms
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hereof, Lessee, at its option, shall have the right to prepay the then remaining
Term-Out Payments and thus accelerate the Closing Date to the date that
such prepayment is made (the "Prepayment Option"). Lessor and Lessee
acknowledge that a 10% interest factor was used to calculate the specific
Term-Out Payment amounts set forth in Section 2 hereof, and further agree that
should Lessee elect to exercise this Prepayment Option, Lessee and Lessor shall
recalculate the final amount due by adding together the remaining Term-Out
Payment amounts and deducting therefrom the appropriate interest amount based
upon the actual Closing Date. In order to exercise this Prepayment Option,
Lessee must:
a. provide Lessor with no less than thirty (30) Business Days' notice of its
intention to prepay any remaining Term-Out Payments; and
b. not be in default under any of the terms of the Lease or this Side
Letter, including but not limited to Lessee having paid to Lessor all of the
Additional Rent payments due to Lessor during the Term-Out Period.
Lessee and Lessor further acknowledge and agree that this Prepayment Option
shall become null and void in the event Lessor shall terminate this Side Letter
in accordance with Section 9 hereof.
6. POSSESSION OF AIRCRAFT ANDCONDITION. Lessee acknowledges that it is the
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current operator of the Aircraft and currently has possession of the Aircraft
and the Aircraft Documents. Lessee accepts in all respects the condition of the
Aircraft and Aircraft Documents. Risk of loss and damage to or destruction
of the Aircraft and Aircraft Documents shall remain with the Lessee from and
after the Closing Date.
On the Closing Date, the Aircraft shall be transferred to Lessee, "AS IS, WHERE
IS", and LESSOR HEREBY DISCLAIMS AND LESSEE HEREBY WAIVES ANY AND ALL
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, AND ANY
WARRANTY ARISING FROM COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE, AND
ALL OBLIGATION AND LIABILITY IN TORT, NEGLIGENCE AND STRICT LIABILITY, AND AS TO
THE AIRWORTHINESS, CONDITION, DESIGN OR OPERATION OF THE AIRCRAFT OR ANY PART
THEREOF OR THE CONDITION AND THE COMPLETENESS OF THE AIRCRAFT DOCUMENTS AND
RECORDS, AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION
OF OR RELIANCE UPON ANY SUCH WARRANTY, OBLIGATION OR LIABILITY. IN NO EVENT
WILL LESSOR BE LIABLE HEREUNDER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
INCIDENTAL DAMAGES, INCLUDING BUT NOT LIMITED TO THOSE FOR LOSS OR INTERRUPTION
OF USE, REVENUE, PROFIT OR BUSINESS.
7. REPRESENTATIONS AND WARRANTIES.
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a. Representations and Warranties of Wells Fargo/Lessor. Wells Fargo
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represents and warrants with respect to Sections 7(a)(i), (iii) and (iv) and
Lessor represents and warrants that:
(i) Wells Fargo is duly organized and validly existing national banking
association under the federal banking laws of the United States of America and
has the power and authority to carry on its trust business as presently
conducted and to perform its obligations under the Trust Agreement, and this
Side Letter has been duly authorized by all necessary trust action on the part
of Lessor and does not require any approval of the Lessor that has not bee
obtained;
(ii) Lessor has full trust power and authority to carry on its business as
presently conducted and to execute, deliver and perform its obligations under
each of (a) this Side Letter; (b) the Lease Termination Agreement; and (c) the
Bill of Sale (collectively, the "TRANSACTION DOCUMENTS") and each of such
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Transaction Documents has been duly authorized by all necessary action under the
Trust Agreement;
(iii) the execution, delivery and performance of the Transaction Documents
to which it is a party and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary trust action of Lessor;
(iv) assuming the validity of execution and delivery by any other parties
thereto, the Transaction Documents executed and delivered by each of Lessor and
Wells Fargo constitute legal, valid and binding obligations of Lessor and Wells
Fargo enforceable in accordance with their respective terms except to the extent
that such enforceability may be limited by bankruptcy, insolvency or similar
laws respecting creditors' rights generally and general principles of equity;
(v) the execution and delivery of, the performance of its obligations under,
and compliance with the provisions of, the Transaction Documents by Lessor and
Wells Fargo will in no way exceed the powers granted to Lessor and Wells Fargo
by or violate in any respect any provision of, or cause a breach or default of:
(1) law or regulation or any order or decree of any governmental authority,
agency or court or generally accepted interpretation thereof or any judgment,
decree or permit to which Lessor or Wells Fargo is subject; or
(2) the Articles of Association or by-laws of Wells Fargo or the Trust
Agreement; or
(3) any material mortgage, contract or agreement to which Lessor or Wells
Fargo is a party;
(vi) there are no pending or, to the knowledge of Lessor, threatened actions
or proceedings against Lessor before any court, arbitrator or administrative
agency which, if adversely determined would materially adversely affect the
ability of Lessor to perform its obligations under this Side Letter or any other
Transaction Documents to which it is a party.
b. Representations andWarranties of Lessee. Lessee represents and warrants
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that:
(i) it is a duly organized and a validly existing corporation under the laws
of the Republic of Slovakia and it has the power and authority to execute and
deliver the Transaction Documents to which it is a party and perform its
obligations thereunder;
(ii) the execution, delivery and performance of the Transaction Documents to
which it is a party and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary corporate and other action of
Lessee;
(iii) assuming the validity of execution and delivery by any other parties
thereof, the Transaction Documents executed and delivered by Lessee constitute
legal, valid and binding obligations of Lessee enforceable in accordance with
their respective terms except to the extent that such enforceability may be
limited by bankruptcy, insolvency or similar laws respecting creditors' rights
generally and general principles of equity;
(iv) the execution and delivery of, the performance of its obligations
under, and compliance with the provisions of, the Transaction Documents by
Lessee will in no way exceed the powers granted to Lessee by, or violate in any
respect any provision of, or cause a breach or default of:
(1) any law or regulation or any order or decree of any governmental
authority, agency or court or generally accepted interpretation thereof or any
judgment, decree or permit to which Lessee is subject; or
(2) the Certificate of Incorporation or by-laws of Lessee or any resolution
of the directors or shareholder of Lessee; or
(3) any material mortgage, contract or other agreements to which Lessee is a
party;
(v) there are no pending or, to the knowledge of Lessee, threatened actions
or proceedings against Lessee before any court, arbitrator or administrative
agency which, if adversely determined, would materially adversely affect the
ability of Lessee to perform its obligation under this Side Letter or any of the
other Transaction Documents to which it is a party;
(vi) the execution, delivery and performance by Lessee of the Transaction
Documents to which it is a party do not require the consent, approval, order or
authorization of, the giving of notice to, the registration with or the taking
of any other action in respect of any governmental body; and
(vii) Lessee has independently and without reliance on Lessor (other than
any representations and warranties expressly made by Lessor in this Side Letter
or any other Transaction Document) and based upon such information and materials
as it deems appropriate, made its own appraisal of and investigation into the
condition and value of the Aircraft and Aircraft Documents.
8. CONDITIONS TO CLOSING.
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a. Lessee's Closing Conditions. The obligation of Lessee to make all of the
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Term-Out Payments and terminate the Lease on the Closing Date is subject to
the satisfaction (or waiver by Lessee) of each of the following conditions
precedent:
(i) All approvals and consents of any trustees or holders of any
indebtedness or obligations of Lessor that are required in connection with any
transaction contemplated by the Transaction Documents shall have been duly
obtained.
(ii) Each of the Transaction Documents to which Lessor is a party shall have
been duly authorized, executed and delivered by Lessor and shall be in full
force and effect with respect to the Lessor and executed counterparts shall have
been delivered by Lessee.
(iii) On the Closing Date (i) the representations and warranties of Lessor
contained in Section 7(a) shall be true and accurate in all material respects as
though made on and as of such date, and (ii) nothing shall have occurred that
will prevent Lessor from performing its obligations under the Transaction
Documents.
(iv) Lessee shall have received the following documents:
(1) an incumbency certificate of Lessor as to the persons authorized to
execute and deliver the Transaction Documents to which it is a party and each
other document to be executed on behalf of Lessor in connection with the
transactions contemplated by the Transaction Documents, including the signatures
of such persons; and
(2) a certificate, dated the Closing Date, signed by an officer of Lessor,
addressed to Lessee and certifying as to each of the matters stated in Sections
7(a)(i) and (iii) hereof.
b. Lessor's Closing Conditions. The obligation of Lessor to terminate the
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Lease and transfer title to the Aircraft to Lessee on the Closing Date is
subject to the satisfaction (or waiver by Lessor) of each of the following
conditions precedent:
(i) All approvals and consents of any trustees or holders of any
indebtedness or obligations of Lessee that are required in connection with any
transaction contemplated by the Transaction Documents shall have been duly
obtained.
(ii) Each of the Transaction Documents to which Lessee is a party shall have
been duly authorized, executed and delivered by Lessee and shall be in full
force and effect with respect to the Lessee and executed counterparts shall have
been delivered by Lessor.
(iii) On the Closing Date (i) the representations and warranties of Lessee
contained in Section 7(b) shall be true and accurate as though made on and as of
such date, and (ii) nothing shall have occurred that will prevent Lessee from
performing its obligations under the Transaction Documents.
(iv) Lessor shall have received the following documents:
(1) an incumbency certificate of Lessee as to the persons authorized to
execute and deliver the Transaction Documents to which it is a party and each
other document to be executed on behalf of Lessee in connection with the
transactions contemplated by the Transaction Documents, including the signatures
of such persons;
(2) a certificate, dated the Closing Date, signed by a Director of Lessee,
addressed to Lessor and certifying as to each of the matters stated in Sections
7b(i) and (iii); and
(3) a broker's letter of undertaking and insurance certificate complying
with the provisions of Section 13 hereof.
(v) Lessor shall have received all of the Term-Out Payments, and Lessee
shall have instructed Lessor to retain the Security Deposit and Additional Rent
held by Lessor as per Section 4b(iv) hereof.
9. NO DEFAULT / TERMINATION OF SIDE LETTER. Lessor's obligation to transfer
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title to the Aircraft to Lessee in accordance with the terms hereof is
subject to there being no Default or Event of Default hereunder or under the
Lease relating to Lessee's non-payment of the Term-Out Payments or Additional
Rent. For purposes of clarification, Lessee and Lessor both acknowledge and
agree that in the event Lessee should fail to make any of the Term-Out Payments
as set forth herein or fail to pay the Additional Rent in accordance with the
terms of the Lease, such payment failures shall constitute an Event of Default
and Lessor shall, at its sole option, be entitled to terminate this Side Letter.
In the event Lessor terminates this Side Letter in accordance with the preceding
sentence, all terms and provisions of the Lease shall remain in full force and
effect and all obligations of the Lessor, as lessor, and Lessee, as lessee
thereunder, shall continue to the same extent as if this Side Letter had not
been executed, and Lessor shall be entitled to exercise all of its rights and
remedies under this Side Letter and under the Lease. Notwithstanding the
foregoing, each party covenants to the other to use its best commercial efforts
to fulfill the conditions necessary to effectuate the closing of the
transactions contemplated hereby.
10. PAST DUE BASIC RENT AMOUNTS. Lessee and Lessor acknowledge and agree
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that Lessee has failed to make previous Basic Rent payments to Lessor in
accordance with terms of the Lease. In the event this Side Letter is terminated
by Lessor in accordance with the terms of Section 9 hereof, it is
understood and agreed that Lessor shall not be deemed in any way to have waived
the obligation of Lessee to pay these past due Basic Rent amounts, and Lessee
shall be obligated to pay all such past due Basic Rent amounts and shall also be
obligated to pay to Lessor the difference between (i) any Basic Rent amounts
which were abated during the Term-Out Period in accordance with this Side Letter
and (ii) the actual amount of the Term-Out Payments paid by Lessee to Lessor in
accordance with the terms of this Side Letter. In addition to paying such past
due Basic Rent amounts, Lessee shall pay to Lessor interest at the Default Rate
on such amount(s) accruing from the original due date of such amount(s) to the
date of actual payment of such amount(s).
Notwithstanding the foregoing, Lessor agrees that so long as Lessee is in
compliance with all of the conditions set forth in this Side Letter,
specifically including, but not limited to Lessee's obligation to pay the
Term-Out Payments and all Additional Rent payments, Lessor shall not declare an
Event of Default under the Lease relating to Lessee's non-payment of any Basic
Rent and Additional Rent amounts due prior to the date of this Side Letter.
11. AD COST SHARING. Lessor and Lessee agree that during the Term-Out
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Period, Lessor shall not be obligated to contribute to any AD costs, as
contemplated in Section 7.4 of the Lease.
12. RELEASE;OPERATIONAL INDEMNIFICATION.
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a. Release. Lessee herby releases Lessor, Wells Fargo and all additional
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Indemnitees from all claims by Lessee or any successor or assign of Lessee for
injury to or for death of any person or damage to property (including personnel
and property of Lessee, Lessor, Wells Fargo or any other Indemnitees) directly
or indirectly arising out of the use, operation, control, storage or condition
of the Aircraft and Aircraft Documents and for any defects (latent or patent) in
the Aircraft and Aircraft Documents.
b. Operational Indemnification. Lessee agrees to indemnify, reimburse and
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hold harmless, on an After-Tax Basis (as hereinafter defined), Lessor, Wells
Fargo, and all additional Indemnitees from and against any and all claims,
damages, losses, liabilities, demands, suits, judgments, causes of action, legal
proceedings, whether civil or criminal, penalties, fines, other sanction
and any costs and expenses in connection therewith including costs of
investigation and reasonable attorneys' fees and expenses (any and all of which
are hereinafter referred to as "CLAIMS") which may result from or arise in any
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manner out of or in relation to an event occurring from and which arise out of
or relate to (i) the ownership, leasing, subleasing, possession, disposition,
use or operation of the Aircraft or (ii) any defect in the Aircraft including
defects arising from any testing, maintenance, service, repair or overhaul of
the Aircraft whether or not the Aircraft is at the time in the possession of
Lessee and regardless of where the Aircraft may be located. (For purposes of
this Side Letter, "AFTER-TAX BASIS" shall mean on a basis such that any payment
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received or deemed to have been received by any Person shall be supplemented by
a further amount paid to that Person, so that the recipient is held harmless on
an after-tax basis from all taxes, penalties, fines, interest and other charges
taking into account any related credits or deductions resulting from the receipt
(actual or constructive) of such payments imposed by or under any governmental
authority.)
13. INSURANCE. Lessee agrees to name Lessor, Wells Fargo, and all
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additional Indemnitees as additional insureds under its comprehensive aviation
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liability insurance policy for a period of two years from the Closing Date and
the amount of coverage under such policy shall be not less than US$500,000,000,
except for coverage for third party war risk liability which shall be limited to
US$50,000,000 or such higher amounts as may become available in the
international insurance markets.
14. TAXES; CLOSING LOCATION; FEES AND EXPENSES.
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a. Taxes. Lessee agrees to assume responsibility for and to pay sales, use,
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value added, property, ad valorem, franchise or other taxes, licenses,
customs, inspection or other fees, bonds, permits or certificates assessed or
levied by any federal, state, provincial or local or other taxing authority now
or hereafter imposed upon or arising out of the sale, delivery, registration,
use or ownership of the Aircraft, but excluding any such taxes imposed on the
income of Lessor ("TAXES"), regardless of who is responsible therefore at law
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and Lessee shall hold Lessor harmless in respect thereof and shall reimburse
Lessor, on an After-Tax Basis, on demand for any such Taxes. Lessee's
obligations under this Section 14(a) shall survive the transfer of title of the
Aircraft as contemplated hereunder.
b. Closing Location. Lessor and Lessee shall cooperate and shall take all
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actions reasonably requested by the other to ensure that the Aircraft is located
on the Closing Date in a jurisdiction that eliminates or minimizes, to the
maximum extent possible, the imposition upon Lessor or Lessee of any Taxes
arising out of the transfer of title of the Aircraft pursuant to this Side
Letter.
c. Fees and Expenses. Lessee shall be responsible for all expenses
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incurred, including but not limited to legal fees, whether incurred by or on
-
behalf of Lessee or Lessor, in connection with the negotiation, preparation and
execution of this Side Letter and in connection with the subsequent preparation
and execution of the Bill of Sale and the Lease Termination Agreement and the
transfer of title of the Aircraft, whether or not the transactions contemplated
thereby are finalized.
15. MISCELLANEOUS.
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a. Notices. All notices required or permitted hereunder shall be in writing
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and may be either personally delivered, faxed, telexed or sent by a reputable
international courier service addressed as follows:
(i) If to Lessor:
Wells Fargo Bank Northwest, N.A.
79 South Main Street
Salt Lake City, Utah 84111 USA
Attention: Corporate Trust Department
Telephone: +1-801-246-5630
Telefax: +1-801-246-5053
with a copy to the Beneficiaries at:
c/o Equis Financial Group, Inc.
88 Broad Street
Boston, Massachusetts 02110 USA
Attention: Operations Department
Telephone: +1-617-854-5862
Telefax: +1-617-695-0956
with an additional copy to:
Sigma Aircraft Management LLC
232 East 50th Street
New York, New York 10022 USA
Attention: Mr. Anders Hebrand
Telephone: +1-212-752-9800
Telefax: +1-212-752-9801
(ii) If to Lessee:
Air Slovakia BWJ, Ltd.
Letisko M.R. Stefanika
Ivanska cesta
P.O. Box 2
82001
Bratislava
Attention: Jan Janok
Telephone: +421-7-4342-2742
Telefax: +421-7-4342-2742
or at such other address as either party gives to the other from time to time
through proper notice. Any such notice shall be effective and shall be deemed
to have been given when received at the addresses set forth above, as such
addresses are modified as set forth above.
b. Assignment of Warranties and Records. On the Closing Date, pursuant to
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the terms of this Side Letter, Lessor shall be deemed to have irrevocably
assigned to Lessee all of Lessor's rights under any warranty, express or
implied, service policy or product agreement of any manufacturer, of any
maintenance and overhaul agency or of any subcontractor, supplier or vendor of
any item of the Aircraft to the extent that such rights are assignable and are
not extinguished as a result of this Side Letter or such assignment. Lessor
makes no representation or warranty to Lessee as to whether any such rights are
assignable. From time to time upon the reasonable request and at the sole cost
and expense (including counsel fees, if any) of Lessee, Lessor shall give notice
to any such manufacturer, maintenance and overhaul agency, subcontractor,
supplier or vendor of the assignment of such warranties to Lessee.
c. Nonwaiver; Remedies Cumulative. Forbearance or indulgence by any party
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in any regard whatsoever shall not constitute a waiver of the covenant or
condition to which such forbearance or indulgence may relate, and until complete
performance thereof, or the written waiver thereof, the forbearing or
indulging party shall be entitled to invoke any right or remedy available to it
under this Side Letter or by law or in equity or otherwise despite such
forbearance or indulgence. No right or remedy of any party provided for herein
is exclusive of any other right or remedy, but all such rights and remedies are
cumulative of every other right and remedy provided for herein, at law, in
equity, by statute, or otherwise, and may be exercised concurrently or
separately from time to time. The prevailing party shall be entitled to
reasonable attorneys' fees and forum costs.
d. Applicable Law. This Side Letter shall in all respects be governed by,
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and construed in accordance with, the laws of the State of New York (without
regard to any conflicts of law rule which might result in the application of the
laws of any other jurisdiction), applicable to contracts entered into and
to be performed entirely in the State of New York by residents of such state,
including all matters of construction, validity and performance.
e. Severability. Any provision of this Side Letter which may be prohibited
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or unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability in such jurisdiction only, without invalidating
the remaining provisions hereof in such jurisdiction and without invalidating
any of the provisions hereof in any other jurisdiction.
f. Waiver of Jury Trial. EACH OF LESSEE AND LESSOR HEREBY KNOWINGLY,
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VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS SIDE LETTER OR ANY OTHER TRANSACTION DOCUMENT.
g. Jurisdiction. Each of Lessor and Lessee hereby irrevocably submits to an
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accepts the exclusive jurisdiction of the United States District Court for
the Southern District of New York and the New York Supreme Court, New York
County, in each case located in the Borough of Manhattan (the "AGREED COURTS")
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with regard to any action or proceeding arising out of or relating to this Side
Letter or any other Transaction Document. Final judgment against Lessor or
Lessee rendered by any Agreed Court in any suit shall be conclusive and may be
enforced in any other jurisdiction by suit on a judgment, a certified or true
copy of which shall be conclusive evidence of the facts and of the amount of any
indebtedness or liability of such party.
h. Waiver. Each of Lessor and Lessee irrevocably waives any objection which
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it may now or hereafter have to the laying of venue of any suit, action or
proceeding brought in any Agreed Court and further irrevocably waives any claim
that any such suit, action or proceeding brought in any Agreed Court has been
brought in an inconvenient forum.
(i) Without prejudice to any other mode of service, Lessee (i) appoints
LEXIS Document Services, 125 Park Avenue, 23rd Floor, New York, New York 10017
as its agent for service of process relating to any proceedings before the
Agreed Courts in connection with this Side Letter and agrees to maintain the
process agent in New York, New York notified to Lessor, and (ii) agrees that
failure by a process agent to notify Lessor of the process shall not invalidate
the proceedings concerned.
(ii) Without prejudice to any other mode of service, each of Lessor and
Lessee consents to the service of process relating to any proceedings involving,
directly or indirectly, any matter arising out of or relating to this Side
Letter by U.S. Postal Service registered mail (prepaid, return receipt
requested) of a copy of the process to Lessee's address identified in Section
15(a)(ii).
i. Survival. All representations, warranties, indemnities and agreements of
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the Lessor and Lessee under this Side Letter shall survive the termination
of the Lease and the transfer of title of the Aircraft on the Closing Date.
j. Further Assurances. Lessor and Lessee will promptly, at any time and
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from time to time, execute and deliver to each other such further instruments
and documents, and take such further action, as Lessor or Lessee, as the case
may be, may from time to time reasonably request and which is necessary to carry
out this Side Letter and to establish and protect the rights, interests,
and remedies created in favor of Lessor or Lessee provided such documents are
prepared at the sole cost and expense of the requesting party and such documents
are in form and substance reasonably acceptable to the party requested to
execute same.
k. Written Changes Only. No term or provision of this Side Letter nor any
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right or remedy hereunder may be changed or waived orally, but only by an
instrument in writing signed by both parties.
l. Exclusivity. This Side Letter and the other Transaction Documents are
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the complete and exclusive agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior oral and written communications,
proposals, agreements, representations, statements, negotiations and
undertakings between the parties hereto with respect to the subject matter
hereof.
m. No Broker. Lessee and Lessor each hereby represents to the other that it
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has not directly or indirectly employed or otherwise procured any broker in
connection with the transfer of title of the Aircraft contemplated hereby for
whose compensation the other party is responsible or liable. Each party agrees
to pay, indemnify and hold harmless the other party from and against any and all
liabilities, losses, costs, damages, claims and expenses (including reasonable
attorneys' fees and litigation costs) the other party shall ever suffer, incur
or be threatened with because of any claim by any broker or agent claiming by,
through or under the indemnifying party, whether or not meritorious, for any
fee, commission or other compensation with respect to the purchase or sale of
the Aircraft.
n. Confidentiality. Each party to this Side Letter agrees that it will
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treat this Side Letter, each of the other Transaction Documents, and the
contents thereof as privileged and confidential and will not disclose, or cause
to be disclosed, the terms hereof or thereof to any Person, except that any such
information may be disclosed (a) to the extent necessary in connection with
the enforcement of such party's rights under any Transaction Documents, (b) to
such party's agents, attorneys and accountants in the course of performing
customary professional services, (c) to the extent required pursuant to
applicable law or by any governmental authority, (d) to the extent that prior to
such disclosure, such information is publicly available, (e) to the
Beneficiaries, any financing party of the Lessee and to such party's agents,
attorneys and accountants and (f) with the prior written consent of Lessee and
Lessor.
o. Counterparts. This document may be executed in counterparts, each of
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which shall be deemed an original and all of which together shall constitute but
one and the same original.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Lessor and Lessee, each pursuant to due authority, have
caused this Side Letter to Lease Agreement to be executed by their duly
authorized officers as of the day and year first above written.
LESSOR:
WELLS FARGO BANK NORTHWEST, N.A.
(formerly First Security Bank, National
Association), not in its individual capacity,
but solely as the Owner Trustee
By: ___________________________
Name: _________________________
Title: __________________________
LESSEE:
AIR SLOVAKIA BWJ, LTD.
By: ____________________________
Name: __________________________
Title: ___________________________
EXHIBIT A
LEASE TERMINATION AGREEMENT
This LEASE TERMINATION AGREEMENT, dated as of ____________________, 2002,
is entered into between WELLS FARGO BANK NORTHWEST, N.A. (formerly First
Security Bank, National Association), not in its individual capacity but solely
as Owner Trustee, hereinafter called the "Lessor", and AIR SLOVAKIA BWJ, LTD.,
hereinafter called the "Lessee".
WHEREAS, Lessor and Lessee are parties to that certain Lease Agreement
dated as of August 31, 2000 as at any time amended or supplemented
(collectively, the "Lease");
WHEREAS, the Lease relates to one (1) Boeing Model 737-200A Aircraft
bearing Slovakian Registration Mark OM-ERA, and manufacturer's serial number
21722; two (2) Pratt & Whitney model JT8D-9A engines bearing manufacturer's
serial numbers 707430 and 665325;
WHEREAS, Lessor and Lessee desire to terminate the Lease.
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledge, the
parties hereto agree as follows:
1. The Lease is hereby terminated with respect to the Aircraft, without
prejudice to any indemnities, rights or obligations which are expressly provided
to survive the term of the Lease.
2. Lessee hereby releases all right, title and interest in and to the
Security Deposit and any and all Additional Rent held by Lessor and directs
Lessor to retain said Security Deposit and Additional Rent.
3. This Lease Termination Agreement shall be governed by and construed in
accordance with the laws of the state of New York.
4. This Lease Termination Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
counterparts shall constitute one and the same Lease Termination Agreement.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Termination
Agreement to be duly executed as of the day and year first above written.
LESSOR:
WELLS FARGO BANK NORTHWEST, N.A.
(formerly First Security Bank, National
Association), not in its individual capacity,
but solely as the Owner Trustee
By: ___________________________
Name: _________________________
Title: __________________________
LESSEE:
AIR SLOVAKIA BWJ, LTD.
By: ____________________________
Name: __________________________
Title: ___________________________
EXHIBIT B
BILL OF SALE
The undersigned, WELLS FARGO BANK NORTHWEST, N.A. (formerly First Security
Bank, National Association), not in its individual capacity but solely as the
Owner Trustee under Trust Agreement No. III dated as of December 30, 1991
("Seller") in consideration of TEN UNITED STATES DOLLARS (US$10.00) and other
good and valuable consideration does hereby grant, bargain, sell, assign,
transfer and set over unto AIR SLOVAKIA BWJ, LTD. ("Buyer"), its successors and
assigns, all right, title and interest of Seller in and to the following
described aircraft (the "Aircraft").
Manufacturer and Model: Boeing Model 737-200A
Manufacturer's Serial Number: 21722
Slovakian Registration Mark: OM-ERA
including two JT8D-9A engines bearing manufacturer's serial nos. 707430 and
665325, systems, avionics, instruments and equipment as appertain to and are now
on board the Aircraft and the Aircraft Documents.
Seller hereby represents and warrants to Buyer, its successors and assigns
that Seller has title to the Aircraft as was conveyed to it, and the Aircraft is
free and clear of any liens created by or through Seller.
EXCEPT FOR THE FOREGOING WARRANTY OF TITLE, THE AIRCRAFT IS SOLD TO BUYER
ON AN "AS IS" AND "WHERE IS" BASIS. SELLER MAKES NO OTHER WARRANTY, EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE INCLUDING BUT NOT LIMITED TO ANY WARRANTY
AS TO CONDITION, VALUE, DESIGN, QUALITY, OPERATION, SUITABILITY, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE.
Defined terms used herein and not otherwise defined shall have the meaning
given such terms in that certain Side Letter to Lease Agreement dated as of
January 6, 2002, between Seller, as lessor, and Buyer, as lessee.
IN WITNESS WHEREOF, the Seller has caused this Bill of Sale to be executed
and delivered by its duly authorized officer as of the ___ day of
__________________ 2002.
WELLS FARGO BANK NORTHWEST, N.A.
(formerly First Security Bank, National
Association), not in its individual capacity,
but solely as the Owner Trustee
By:____________________________________
Name:
Title: