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Exhibit 10.16(a)
EXHIBIT A
TO
AIRCRAFT LEASE AGREEMENT N0. 2
LEASE SUPPLEMENT N0. 1
LEASE SUPPLEMENT NO. 1, dated March__, 1995 ("Lease Supplement No. 1")
to Aircraft Lease Agreement No. 2 dated as of March 15, 1995 (the "Lease") by
and between CHAUTAUQUA AIRLINES, INC., as lessee ("Lessee"), and LAMBERT
LEASING, INC., as lessor ("Lessor").
I N T R O D U C T I O N
WHEREAS, Lessor and Lessee have heretofore entered into the Lease
(defined terms therein being hereinafter used with the same meanings). The Lease
provides for the execution and delivery of a Lease Supplement for the purpose of
leasing the Aircraft under the Lease as and when delivered by Lessor to Lessee
in accordance with the terms thereof; and
WHEREAS, a counterpart of the Lease, with this Lease Supplement No. 1
attached thereto, is being filed for recordation with the FAA Aircraft Registry
as one document;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged Lessor and Lessee hereby agree as follows:
A. THE AIRCRAFT. Lessee hereby confirms to Lessor that Lessee has accepted
the Aircraft and each Engine and Propeller described below for all purposes
hereof and of the Lease as being airworthy, in accordance with specifications,
in good working order and repair and without defect in condition, design,
operation or fitness for use, whether or not discoverable by Lessee as of the
date hereof; PROVIDED, HOWEVER, that nothing contained herein or in the Lease
diminishes or affects any right Lessor or Lessee may have with respect to the
Aircraft against the Manufacturer, GE, Dowty, any vendor or any subcontractor or
supplier thereof:
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Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 406 of the Securities Act of 1933. The
omitted materials have been filed separately with the Securities and Exchange
Commission.
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<Table>
<Caption>
AIRFRAME
MANUFACTURER MODEL SERIAL NUMBER U.S. REG. NO.
Saab-Fairchild 340A 340A-006 N360CA
INSTALLED
ENGINES RATED
MANUFACTURER MODEL SERIAL NUMBER TAKEOFF H/P
General CT7-5A GE-E-367-122 (left) Each of which
Electric GE-E--367-141 (right) Engines has 750
or more rated
take off
horsepower or
the equivalent
thereof.
INSTALLED
PROPELLERS RATED TAKEOFF
MANUFACTURER MODEL SERIAL NUMBER SHAFT H/P
Dowty Rotol R354/4- DRG/7827/82 (left) Each of which
123-F/13 DRG/1727/84 (right) propellers is
capable of
absorbing 750
or more rated
take off shaft
horsepower.
</Table>
B. STIPULATED LOSS VALUE. Lessee hereby agrees to pay in accordance with and
when required by the Lease Stipulated Loss Value payments in the amounts set
forth in Annex 1 to the Lease Rent Schedule and incorporated herein by
reference.
C. REPRESENTATIONS BY LESSEE. Lessee hereby represents and warrants to Lessor
that on the above date:
(1) The representations and warranties of Lessee set forth in the Lease are true
and correct in all material respects as though made on the date above;
(2) Lessee has satisfied or complied with all requirements in the Lease, to be
completed by it on or prior to the date hereof;
(3) No Default or Event of Default has occurred and is continuing on the date
above; and
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(4) Lessee has obtained, and there are in full force and effect, such insurance
policies with respect to the Aircraft, as are required to be obtained under
the terms of the Lease.
D. DELIVERY DATE: March___, 1995
E. TERM: The Term shall commence on the
Delivery Date and expire on March
___, 2005, unless terminated earlier
pursuant to and in accordance with
the Lease.
F. BASE RENT: Lessee agrees to pay Lessor, Base
Rent monthly in arrears, in the
amounts and on the dates, as set
forth in the Lease Rent Schedule.
G. FIRST BASE RENT April___, 1995
PAYMENT DATE:
H. BASE RENT Base Rent during the Term shall be
PAYMENT DATE: paid on the same day of each month as
the day of the month of the First
Base Rent Payment Date.
I. AIR CRAFT BASE: Indianapolis, Indiana or Akron,
Ohio.
J. DELIVERY SITE: St. Louis, Missouri
K. COUNTERPARTS: This Lease Supplement No. 1 may be
executed in any number of
counterparts and by the parties
hereto on separate counterparts,
each of which counterparts, shall
for all purposes be deemed an
original, and all such counterparts
shall together constitute but one
and the same Lease Supplement No. 1.
L. REFERENCE: All the terms and provisions of the
Lease are hereby incorporated by
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reference in this Lease Supplement
No. 1 to the same extent as if fully
set forth herein.
IN WITNESS WHEREOF. Lessor and Lessee have caused this Lease
Supplement No. 1 to be duly executed by their authorized officers as of the day
and year first above written.
LAMBERT LEASING, INC.,
as Lessor
By: /s/ Gena H. Laurent
---------------------------------
Gena H. Laurent
Vice President
By: /s/ Bengt Nilsson
---------------------------------
Bengt Nilsson
Treasurer and Credit Manager
CHAUTAUQUA AIRLINES, INC.,
as Lessee
By: /s/ Timothy L. Coon
---------------------------------
Timothy L. Coon
Senior Vice President
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EXHIBIT B
TO
AIRCRAFT LEASE AGREEMENT N0. 2
INSURANCE ENDORSEMENTS
It is understood and agreed that the Saab Fairchild 340A Aircraft,
MSN-340A-006, U.S. Registration No. N360CA with two General Electric CT7-5A
Engines, serial nos. GE-E-367-122 and GE-E-367-141, respectively, and two Dowty
Rotol R354/4-123-F/13 Propellers, serial nos. DRG/7827/82 and DRG/1727/84,
respectively, is leased by Lambert Leasing, Inc., a Delaware corporation, as
lessor ("Lessor"), under Lease Agreement No. 2 dated as of March 15, 1995 (the
"Lease") to Chautauqua Airlines, Inc., as Lessee ("Named Insured").
As provided in Part B below, Lessor and (until at least December 22,
1996) Security Pacific Equipment Leasing, Inc., as their interests may appear,
shall be Additional Insureds with respect to each policy of liability insurance
to which these endorsements are attached, and Lessor shall be the Loss Payee
with respect to each policy of "all risks" insurance to which these endorsements
are attached. With respect to the interests of each Additional Insured or Loss
Payee in and with respect to the Aircraft as defined in Section 2 of the Lease
(the "Subject Property") insured under each policy by the insurers listed in the
Schedule of Insurers attached as Annex 1 hereto (collectively, the "Company"),
the Company hereby agrees that each "all risks" 'policy includes the
endorsements in Part A below; each liability policy includes the endorsements in
Part B below; and all policies include the endorsements in Part C below:
A. LOSS PAYABLE ENDORSEMENTS (HULL POLICY)
This "all risks" insurance is endorsed with respect to the Subject
Property, (A) to name Lessor as an additional insured, as its interests may
appear ("Additional Insured") and Lessor, as loss payee, as its interests may
appear ("Loss Payee").
1. Loss or damage, if any, to the Subject Property described in this policy to
the extent of the Stipulated Loss Values set forth in the Stipulated Loss
Value Table attached as Schedule 1 hereto shall be payable as follows:
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(i) loss or damage with respect to the Subject Property which does not
constitute an Event of Loss (as defined in the Lease) shall be payable
in United States Dollars solely to Lessor; except loss or damage with
respect to the Aircraft of $ 100,000.00 or less shall be payable to Named
Insured, unless prior to any loss or damage, Lessor notifies the Company
that an Event of Default exists, in which case such amounts shall be
payable to Lessor; and
(ii) loss or damage with respect to the Subject Property described in this
policy which constitutes an Event of Loss shall be payable by
distributing (x) the amount set forth in Schedule 1 hereto ("SLV Amount^)
solely to Lessor, and (y) any remaining amounts solely to Named insured.
2. Subject to paragraph 4 hereof, the insurance under this policy as to the
interest only of the Loss Payee shall not be impaired in any way (i) by any
action or inaction by Lessee and shall insure the interest of the Loss Payee
regardless of any breach or violation by Lessee or any other additional
insured of any warranty, declaration or condition contained in such policies,
and if available at commercially reasonable cost such coverages shall be
provided otherwise than by way of endorsement with Lloyd's Form AVN67A;
PROVIDED HOWEVER, that with respect to secretion, embezzlement or conversion
by Lessee, no coverage shall apply to any Person which is a willful party to
such secretion, embezzlement or conversion, or (ii) because of a subjection
of the Aircraft to any condition, use or operation not permitted by the
policy or (iii) because of any false statement with respect to the policy by
Lessee or its employees, agents or representatives, or any other Person
except the Loss Payee (and then such policy shall be impaired only as to such
Person), whether occurring before or after the attachment of this
endorsement, or whether before or after the loss.
3. If the Named Insured fails to pay any premium or additional premium which
shall be or become due under the terns of this policy, the Company agrees to
give written notice to each Loss Payee of such nonpayment of premium and this
policy shall continue in full force and effect if the Loss Payee when so
notified in writing by the Company of the failure of the Named Insured to pay
such premium, pays or causes to be paid the premium within thirty (30) days
following receipt of the Company's written notice (seven (7) days, or such
shorter period as may from time to time be the longest period obtainable in
the industry, in the case of any war risk and allied perils coverage). If no
Loss Payee pays said premium or additional premium, the rights of Agent,
Lessor, Lessee or
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the Loss Payee under this Loss Payable Endorsement may be terminated by the
Company thirty (30) days after receipt of said written notice by the Loss
Payee (seven (7) days, or such shorter period as may from time to time be the
longest period obtainable in the industry, in the case of any war risk and
allied perils coverage).
4. If the Company elects to cancel this policy in whole or in part for
nonpayment of premium or for any other reason, the Company will forward a
copy of the cancellation notice to the Loss Payee at its office specified
hereinafter concurrently with the sending of notice to the Named Insured but
in such case this policy shall continue in force for the benefit of the Loss
Payee for thirty (30) days (seven (7) days, or such shorter period as may
from time to time be the longest period obtainable in the industry, in the
case of any war risk and allied perils coverage) after written notice of such
cancellation is received by the Loss Payee by a copy sent by certified or
registered mail, return receipt requested. In no event, as to the interest
only of the Loss Payee, shall cancellation, lapse or adverse material change
of any insurance under this policy be effected at the request of the Named
Insured before thirty (30) days (seven (7) days, or such shorter period as
may from time to time be the longest period obtainable in the industry, in
the case of any war risk and allied perils coverage) after written notice of
request for cancellation shall have been received by the Loss Payee by a copy
sent by certified or registered mail, return receipt requested. If this
policy is cancelled, the unearned premium shall be paid to the Loss Payee
that has advanced such premium.
5. The coverage provided herein is primary without contribution from any other
insurance which might be available to the Loss Payee.
6. Whenever the Company pays to Lessor or Named Insured any sum representing a
total loss to the Subject Property insured under this policy, and claims that
as to the Named Insured, no liability therefor exists, the Company, at its
option, may pay to Lessor or Named Insured, as the case may be, the
Stipulated Loss Value (as such term is defined in the Lease and the Schedules
attached hereto, but in no event to exceed the Agreed Inured Value as stated
in the policy), and the Company shall thereupon be subrogated to and receive
a full assignment and transfer, without recourse, of said obligation and the
security held as collateral therefor; but shall not exercise such subrogation
and assignment right until each Additional Insured has recovered in full the
amount of its respective claims against the Named Insured.
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7. The coverage granted under this policy shall continue in full force and
effect as to the interest of the Loss Payee if the Loss Payee agrees to pay
the premium therefor, for a period of thirty (30) days after expiration of
said policy unless an acceptable policy in renewal thereof with loss
thereunder payable in accordance with the terms of this Loss Payable
Endorsement shall have been issued by an insurance company acceptable to
Lessor.
8. Should this policy be continued for the term hereof for the benefit of the
Loss Payee (with all incidents of ownership of the policy), Paragraphs 2, 6
and 7 of Part A of this Loss Payable Endorsement shall no longer apply to the
Loss Payee; PROVIDED, NEVERTHELESS, all privileges and endorsements which, by
reason of the printed conditions of this policy, are or may be necessary to
maintain the validity of the contract are hereby granted for a period of
thirty (30) days, and all notices likewise required to be given to the
company by Named Insured are hereby waived for a period of thirty (30) days
with the exception of requirements applying at the time of or subsequent to a
loss.
9. The Company waives any rights of subrogation against the Loss Payee, to the
same extent as Lessee has waived its right against the Loss Payee, except
with respect to the gross negligence and/or willful misconduct of the Loss
Payee; PROVIDED, that with respect to liability and property damage coverages
hereunder such waiver shall not operate to prejudice the Company's rights of
recourse against Saab Aircraft AB and/or Saab Aircraft of America, Inc.,
and/or any subsidiary thereof and General Electric Company and/or any
subsidiary thereof, as manufacturers, repairers, suppliers or servicing
agents (other than financial services) where such rights of recourse would
have existed had such waiver not been given; and PROVIDED, FURTHER, that the
exercise by the Company of rights of subrogation derived from rights retained
by Named Insured shall not, in any way, delay payment of any claim that would
otherwise be payable by the Company but for the existence of rights of
subrogation derived from rights retained by Named Insured.
B. LIABILITY POLICY ENDORSEMENTS
This liability insurance policy is endorsed, with respect to the
Subject Property:
(A) To name Lessor and (until at least December 22, 1996) Security Pacific
Equipment Leasing, Inc. as additional insureds as
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their respective interests may appear ("Additional Insureds") and shall
cover (i) each of the shareholders of each Additional insured, and (ii)
officers, directors, employees, agents and representatives of each
Additional insured (with respect to each Additional Insured, collectively,
"Covered Persons");
(B) To provide that if this policy is cancelled for any reason whatsoever, or
any substantial change is made in the coverage which affects the interest of
the Additional Insureds and Covered Persons, or if such insurance is
cancelled for nonpayment of premium or allowed to lapse, such cancellation,
change or lapse shall not be effective as to the Additional Insureds and
Covered Persons thirty (30) days (seven (7) days, or such shorter period as
may from time to time be the longest period obtainable in the industry, in
the case of war risk and allied perils coverage) after receipt by such
Additional Insureds of written notice from the Company sent by certified or
registered mail, return receipt requested, of such cancellation, change or
lapse;
(C) To provide that if the Named Insured fails to pay any premium or additional
premium which shall be or become due under the terms of this policy, the
Company agrees to give written notice to each Additional Insured of such
nonpayment of premium and this policy shall continue in full force and
effect if any one or more of the Additional Insureds when so notified in
writing by the Company of the failure of the Named Insured to pay such
premium, pays or causes to be paid the premium due within thirty (30) days
following receipt of the Company's written notice. If no Additional Insured
pays said premium or additional premium, the rights of Lessor and other
Additional Insureds and Covered Persons under this Liability Endorsement may
be terminated by the Company thirty (30) days after receipt of said written
notice by each Additional Insured;
(D) To provide that the Coverage granted under this policy shall continue in
full force and effect as to the interest of each Additional Insured and
Covered Person if any Additional Insured agrees to pay the premium therefor,
for a period of thirty (30) days after expiration of said policy unless an
acceptable policy in renewal thereof shall have been issued by an insurance
company acceptable to Lessor;
(E) To provide that in respect of the interest of the Additional Insureds and
Covered Persons, (i) this policy shall not be invalidated by any action of
Named Insured and shall insure the respective interests of the Additional
Insureds and Covered Persons named and covered under this Endorsement, as
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they appear, regardless of any breach or violation by Named Insured of any
warranties, declarations or conditions contained in this policy or in the
application therefor, if any, and (ii) severability of interest is included,
PROVIDED nothing herein shall operate to increase the limits of liability
and that coverage provided herein is primary without contribution from any
other insurance which might be available to the Additional Insureds, and
(iii) this insurance shall provide the same protection to each insured
hereunder as would have been available had this policy been issued
separately to each insured, except that in no event shall the Company's
total liability exceed $100,000,000.00;
(F) the Company waives any rights of subrogation against any Additional Insured
and the Covered Persons of such Additional Insured to the same extent as
Lessee has waived its right against such Additional Insured and the Covered
Persons of such Additional insured, except with respect to the gross
negligence and/or willful misconduct of such party; PROVIDED, that with
respect to liability and property damage coverages hereunder such waiver
shall not operate to prejudice the Company's rights of recourse against Saab
Aircraft AB and/or Saab Aircraft of America, Inc., and/or any subsidiary
thereof as manufacturers, repairers, suppliers or servicing agents (other
than financial services) where such rights of recourse would have existed
had such waiver not been given, and PROVIDED, FURTHER, that the exercise by
the Company of rights of subrogation derived from rights retained by Named
Insured shall not, in any way, delay payment of any claim that would
otherwise be payable by the Company but for the existence of rights of
subrogation derived from rights retained by Named Insured; and
(G) to insure the Additional Insureds and the Covered Persons with respect to
liability for matters which are the subject of Named Insured's obligations
under the Lease and Lessee Documents to the extent such insurance is
provided under this policy; and to provide that such Additional Insureds and
Covered Persons are warranted to have no operational interest.
Nothing in these Insurance Endorsements shall be deemed or construed
to be an agreement by the Company to insure the Manufacturer of the Aircraft,
Saab Aircraft AB, or the manufacturer of the engines, General Electric Company,
against claims arising out of product liability.
C. NOTICES
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All notices herein provided to be given by the Company to Lessor in
connection with this policy and these Endorsements shall be mailed to or
delivered to Lessor, Lambert Leasing, Inc., 21300 Ridgetop Circle, Sterling,
Virginia 20166, Attention: Vice President, Telecopy No. (703) 406-7309; and to
security Pacific Equipment Leasing, Inc. at Four Embarcadero Center, Suite 1200,
San Francisco, CA 94111, Attention: Equipment Management Unit #5824, Telecopy
No. (415) 765-7343.
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Nothing herein contained shall be held to vary, alter, waive or extend
any of the terms, conditions, agreements or limitations of this policy, other
than as above stated.
The insurance described herein is subject to the limitations,
conditions, definitions and exclusions of the policies.
[SEE ATTACHED "SCHEDULE OF INSURERS"]
The Company
By
-------------------------
Authorized Representative
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ANNEX 1
TO
INSURANCE ENDORSEMENTS
SCHEDULE OF INSURERS
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SCHEDULE 1
TO
INSURANCE ENDORSEMENTS
STIPULATED LOSS VALUE TABLE
The Stipulated Lose Value computed using the immediately preceding
Base Rent Payment Date, or if on a Base Rent Payment Date, computing using such
Base Rent Payment Date.
<Table>
<Caption>
DATE TOTAL
- ---- -----
[*] [*]
</Table>
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* Confidential
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SCHEDULE 1
TO
AIRCRAFT LEASE AGREEMENT NO.2
CERTAIN PROCEEDINGS
Not applicable
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Lease Rent Schedule
<Table>
<Caption>
Date Payment Number Amount
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[*] [*] [*]
</Table>
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* Confidential
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NOTE TO EXHIBIT 10.16(a)
The five additional Lease Supplements No. 1 are substantially identical
in all material respects to the filed Lease Supplement No. 1 except as follows:
<Table>
<Caption>
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TAIL NUMBER CLOSING DATE OWNER-PARTICIPANT
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N35 April, 1995 Lambert Leasing, Inc.
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N40CQ July, 1995 Lambert Leasing, Inc.
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</Table>