TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS
DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY BE
CREATED THROUGH TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE
ORIGINAL COUNTERPART, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS
THE ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY AVIATION FINANCIAL
SERVICES INC.
AIRCRAFT LEASE AGREEMENT
Dated as of April 20, 2000
between
AVIATION FINANCIAL SERVICES INC.
as Lessor
and
FRONTIER AIRLINES, INC.
as Lessee
in respect of
Fifteen Airbus A319 Aircraft
as further identified herein
incorporating the provisions of a
COMMON TERMS AGREEMENT
AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT is made as of April 20, 2000 and is BETWEEN:
(1) Aviation Financial Services, Inc., a corporation incorporated under the
laws of Delaware and a wholly owned subsidiary of General Electric Capital
Corporation, a New York corporation ("GECC") having its principal place of
business at c/o GE Capital Aviation Services, Inc., 201 High Ridge Road,
Stamford, Connecticut 06927 ("Lessor"); and
FRONTIER AIRLINES, INC., a corporation incorporated under the laws of Colorado
with its principal place of business and chief executive office at 12015
East 46th Avenue, Suite 200 Denver, Colorado 80239 ("Lessee").
WHEREAS:
(A) Lessee wishes to lease the Aircraft (as defined below) from Lessor, and
Lessor wishes to lease the Aircraft to Lessee, on the terms and subject
to the conditions provided herein;
(B) GECC and Lessee have entered into the Common Terms Agreement (as
defined below) in respect of aircraft that may be leased from time to
time by Lessee or one of its Affiliates from Lessor or one of its
Affiliates; and
(C) Lessor and Lessee wish to incorporate by reference such Common Terms
Agreement, as well as Schedules A and B attached hereto, into this
Aircraft Lease Agreement for each of the Aircraft;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
16. INTERPRETATION
16.1 Definitions: In this Aircraft Lease Agreement,the following capitalized
words and expressions have the respective meanings set forth below:
Agreed Lessee Modifications means any modifications or changes to the
GECC A319 Baseline Specification as requested by Lessee and agreed by
Lessor for incorporation on any Aircraft prior to Delivery of such
Aircraft. Lessor agreement to such modifications shall not be
unreasonably withheld. All requests for any Agreed Lessee Modification
shall be made no later than * months prior to the Delivery of any
Aircraft.
Airbus Aircraft means individually each of the * A319-100 Aircraft with
installed Engines, Parts and Aircraft Documents and Records as further described
in Schedule A hereto and each Lease Supplement upon delivery.
Aircraft means individually, each of the Airframes, Engines, Parts and Aircraft
Documents and Records relating to each individual Aircraft described on Schedule
A hereto, and collectively all of the Airbus Aircraft as so further described.
Airframe Maintenance Adjustment shall have the meaning as set forth in Schedule
B, Part VI hereof.
Airframe 4C Check means the 4C check including 5 year structural inspections all
in accordance with Lessee's Maintenance Program which, at a minimum, shall
comply with the Manufacturer's Maintenance Planning Document and Manufacturer's
Maintenance Review Board Report.
Airframe 8C Check means the 8C check including 10 year structural inspections
all in accordance with Lessee's Maintenance Program which, at a minimum, shall
comply with the Manufacturer's Maintenance Planning Document and Manufacturer's
Maintenance Review Board Report.
Airframe Structural Check means a heavy maintenance visit which shall include
but not be limited to accomplishment of either or both of an Airframe 4C Check
and an Airframe 8C Check.
Airframe 4C Supplemental Rent and Airframe 4C Supplemental Rent Rate shall have
the respective meanings set forth in Clause (a) of Schedule B, Part V hereof.
Airframe 8C Supplemental Rent and Airframe 8C Supplemental Rent Rate shall have
the respective meanings set forth in Clause (a) of Schedule B, Part V hereof.
Alternate Scheduled Delivery Month means one Aircraft in each * as alternative
delivery months to a Scheduled Delivery Month; subject, however to the continued
availability of any Aircraft in any month other than an originally Scheduled
Delivery Month.
APU Supplemental Rent and APU Supplemental Rent Rate shall have the respective
meanings set forth in Clause (d) of Schedule B, Part V hereof.
Common Terms Agreement means the "Aircraft Lease Common Terms Agreement" dated
as of April 20, 2000 executed by GECC and Lessee (as in effect on the date
hereof without, unless Lessor and Lessee otherwise expressly agree, giving any
effect to any subsequent amendment, supplement, waiver or other modification
thereto), and which forms part of this Aircraft Lease Agreement.
Delivery Condition Requirements means the requirements specified in Part III of
Schedule A.
Delivery Location means Hamburg, Germany or such other location as Lessor and
Lessee mutually agree.
Deposit means all amounts payable pursuant to Section 3.1 hereof.
Discount Rate means *.
Engine LLP Supplemental Rent and Engine LLP Supplemental Rent Rate shall have
the respective meanings set forth in Clause (b) of Schedule B, Part V hereof.
Engine Refurbishment Maintenance Adjustment shall have the meaning as set forth
in Schedule B, Part VI hereof.
Engine Refurbishment Supplemental Rent and Engine Refurbishment Supplemental
Rent Rate shall have the respective meanings set forth in Clause (c) of Schedule
B, Part V hereof.
Final Delivery Date means the date that is * months after the last day of the
Scheduled Delivery Month for each Aircraft, respectively.
Financing Documents means any documentation reflecting a mortgage or other debt
financing for any of the Aircraft as the same may be restated, refinanced,
replaced or refunded, from time to time as notified by Lessor to Lessee.
Financing Parties means the holders of any indebtedness relating to the
Aircraft.
Financing Parties' Representative means any lender under the Financing
Documents, if any, and its successors or assigns.
Guarantor means any guarantor, if any, of the Lessee's obligations hereunder.
Indemnitee means each of Lessor, Owner, GE Capital, GECAS, the Financing
Parties' Representative and the Financing Parties, and their successors and
assigns, and each of their shareholders, contractors, directors, officers,
representatives, agents and employees.
Landing Gear Supplemental Rent and Landing Gear Supplemental Rent Rate shall
have the respective meanings set forth in Clause (e) of Schedule B, Part V
hereof.
Maintenance Adjustment means collectively the Airframe Maintenance Adjustment,
the Engine Refurbishment Maintenance Adjustment, the Engine LLP Maintenance
Adjustment, the APU Maintenance Adjustment and the Landing Gear Maintenance
Adjustment payable by Lessee pursuant to Section 5.4 of the Common Terms
Agreement, Section 3 of this Agreement and Schedule B, Part VI of this
Agreement.
Manufacturer means the manufacturer of each of the Airframe or an Engine, as the
case may be, as set forth on Schedule A hereto.
Owner means Lessor or such other entity as notified by Lessor to Lessee in
writing in accordance with the terms of the Lease, including Section 14 of the
Common Terms Agreement.
Redelivery Location means Denver, Colorado, or such other location on Lessee's
route system within the Continental United States as Lessor shall advise Lessee
in writing at least * prior to the Expiry Date; provided that, if an Event of
Default has occurred and is continuing, such notice may be delivered on the
Expiry Date.
Rent means all amounts payable pursuant to Section 3.2 hereof for each of the
Aircraft, respectively.
Rent Commencement Date means each respective date on which Lessor tenders an
Aircraft for Delivery to Lessee in accordance with Clause 4.3(a) of the Common
Terms Agreement.
Scheduled Delivery Date means the date notified by Lessor to Lessee in
accordance with Clause 4.1(a) of the Common Terms Agreement for the delivery of
each Aircraft in the Scheduled Delivery Month.
Scheduled Delivery Month means one Aircraft in each of *.
Scheduled Expiry Date means the date immediately preceding the date
corresponding to the Delivery Date in the month that is the * month after the
Delivery Date for each Aircraft, which date shall be specifically set forth in
Lease Supplement for such Aircraft
State of Registry means United States.
Supplemental Rent means, as applicable, all amounts payable under the Lease in
respect of each of Airframe Supplemental Rent, Engine Supplemental Rent, APU
Supplemental Rent and Landing Gear Supplemental Rent.
Supplemental Rental Cap shall have the meaning set forth in Schedule B, Part V
hereof.
Tax Indemnitee means each of Owner, Lessor, Financing Parties' Representative,
and each member of the consolidated group of which Lessor or Owner is a member
for United States Federal Income Tax purposes, and their successors and assigns.
16.2 Interpretation: Unless otherwise defined herein, words and expressions
defined in the Common Terms Agreement have the same respective meanings
for the purposes of this Aircraft Lease Agreement. The construction
provisions of Section 1.2 of the Common Terms Agreement shall apply to
this Aircraft Lease Agreement.
17. LEASING
17.1 Agreement to Lease: Subject to the terms and conditions of the Lease,
Lessor will lease each Aircraft to Lessee and Lessee will take delivery
of and lease each Aircraft from Lessor in accordance with the Lease for
the duration of the Term for each such Aircraft respectively.
17.2 Term: Subject to Sections 4.1 through 4.4 of the Common Terms
Agreement, Delivery of each Aircraft will occur at the Delivery
Location specified for such Aircraft, whereupon Lessee shall accept
each such Aircraft hereunder by executing and delivering a Lease
Supplement substantially in the form of Lease Supplement No. 1 as
provided in Section 4.3 of the Common Terms Agreement. The Term for
each Aircraft will commence on the Delivery Date for such Aircraft,
which Delivery Date is scheduled to occur on the Scheduled Delivery
Date for such Aircraft, and will expire on the Scheduled Expiry Date
for such Aircraft unless terminated earlier in accordance with the
provisions of the Lease.
18. PAYMENTS
18.1 Deposit and Letter of Credit: Lessee shall pay to Lessor the Deposit
for each Aircraft in cash or by Letter of Credit (to which each such
Deposit, Sections 5.12 and 5.13, as applicable of the Common Terms
Agreement shall apply) in the amount and at the times provided in
Schedule B hereto.
18.2 Rent: Lessee shall pay Rent for each Aircraft to Lessor on each Rent
Date for such Aircraft during the Term in the amount determined in
accordance with Schedule B hereto and as provided in Sections 5.2 and
5.3 of the Common Terms Agreement. The first instalment of Rent for
each Aircraft shall be due and payable on the Rent Commencement Date
for such Aircraft as defined herein. Provided no Event of Default has
occurred and is continuing, (i) during the first * Rental Periods with
respect to each of the first * A319 Aircraft to deliver, Lessor shall
grant Lessee a credit in an amount equal to the Initial Aircraft Rental
Credit and (ii) during the first three Rental Periods of this Agreement
with respect to each of the remaining * A319 Aircraft to deliver,
Lessor shall grant Lessee a credit in an amount equal to the Second
Aircraft Rental Credit. Each such credit shall be applied against the
Rent for the applicable Aircraft then due and payable for the
applicable Rental Periods as set forth above following each Aircraft
Delivery Date or in such other manner as Lessor and Lessee may agree.
18.3 Supplemental Rent and Maintenance Adjustment: Lessee shall pay (a)
Supplemental Rent for each Aircraft to Lessor on each applicable date
during the Term in accordance with Section 5.4 of the Common Terms
Agreement and in the amounts provided in Schedule B hereto; and (b) the
Maintenance Adjustments for each Airbus Aircraft to Lessor on the
Return Occasion in the amounts provided in Schedule B hereto and as
provided in Section 5.4 of the Common Terms Agreement. Lessor shall
retain all Supplemental Rent and Maintenance Adjustments, subject to
Section 3.4 below. Lessee's obligation to pay Supplemental Rent for any
Airbus Aircraft shall be suspended when the Supplemental Rental Cap for
such Aircraft has been reached. The Supplemental Rental Cap for each
Airbus Aircraft shall be maintained during the Term and increased from
time to time by an amount equal to any Lessor Maintenance Contribution
made by Lessor with respect to such Aircraft, whereupon Lessee shall
recommence payment of Supplemental Rent until the Supplemental Rental
Cap for each such Airbus Aircraft shall again have been reached.
18.4 Lessor's Maintenance Contribution: Lessor shall make Maintenance
Contribution payments as and to the extent provided in Section 7.2 of
the Common Terms Agreement.
18.5 Lessor's Bank Account: For the purposes of Section 5.5 of the Common
Terms Agreement, Lessor's bank account and wire transfer particulars,
to which all payments to Lessor shall be made, are at the date hereof
Bankers Trust Company, ABA number * for the account of GECC T&I Air
Depository Account, Account No. *.
19. Condition of the aircraft at delivery
19.1 On each Delivery Date, as a condition to Lessee's obligation to accept
delivery thereof, each Aircraft shall be in the condition provided in
Part III of Schedule A hereto.
20. CONDITION OF THE AIRCRAFT AT REDELIVERY
20.1 On the Return Occasion for each Aircraft, Lessee shall redeliver each
such Aircraft to Lessor at the Redelivery Location and at such
redelivery each such Aircraft shall be in the condition provided in
Part IV of Schedule A hereto and in the Common Terms Agreement,
including Schedule 6 of the Common Terms Agreement.
21. ADDRESSES FOR NOTICES
The addresses and facsimile and telephone numbers of Lessor and Lessee are as
follows:
Lessor: Aviation Financial Services Inc.
c/o GE Capital Aviation Services, Inc.
201 High Ridge Road
Stamford, CT 06927
Attention: Contracts Leader
Facsimile: (203) 357-3201
Telephone: (203) 357-4482
Lessee: Frontier Airlines, Inc.
Address: 12015 East 46th Avenue, Suite 200
Denver, Colorado 80239
Attention: General Counsel
Facsimile: (303) 371-7007
Telephone: (303) 371-7400
22. THE SCHEDULES AND COMMON TERMS AGREEMENT
All the provisions of Schedule A, Schedule B and the Common Terms Agreement are
incorporated by reference herein and are part of this Aircraft Lease Agreement
as if they were set out in full herein. Without limiting the generality of the
foregoing, by its signature below, the Lessee acknowledges and agrees that the
Lease of the Aircraft hereunder is on an "AS IS, where is" basis and that the
disclaimers, exculpations and limitations of liability, indemnities, the choice
of New York Law as the governing law, THE LESSEE'S submission to personal
jurisdiction in New York, and THE waiver of any right to a trial by jury
provided for in the Common Terms Agreement are incorporated herein by sUCH
reference and ARE PART OF this Agreement as if the same were set out in full
herein.
8. RIGHTS AND REMEDIES. The exercise by Lessor of its rights and remedies
pursuant to Section 13.2 of the CTA is subject to Part VII of Schedule
B of the Lease.
9. No amendment except in writing
No provision of this Lease, including any provision of Schedule A, Schedule B or
the Common Terms Agreement, may be amended, rescinded, changed, waived,
discharged, terminated or otherwise modified in any way whatsoever, except by a
writing signed by the party to be charged. Lessor and Lessee acknowledge their
agreement to the provisions of this Section 8 by their initials below:
Lessor: Lessee:
IN WITNESS whereof, the parties hereto have executed this Aircraft Lease
Agreement, each by their duly authorized representative(s), as of the date shown
at the beginning of this Aircraft Lease Agreement.
LESSOR: LESSEE:
AVIATION FINANCIAL SERVICES INC. FRONTIER AIRLINES, INC.
By: __________________________ By: __________________________
Name: __________________________ Name: __________________________
Title: __________________________ Title: __________________________
SCHEDULE A
PART I-Airframe and engines description
AIRBUS AIRCRAFT
Manufacturer: Airbus
Model: (15) x A319-100
Serial Number: To be advised
MTOW 154,300 pounds
ENGINES (each of which has 750 or more rated takeoff horsepower or the
equivalent of such horsepower)
Engine Type: CFM56-5B5/P
Serial Nos: To be advised at Delivery and included in
each respective Lease Supplement.
The serial numbers stated under "Aircraft" and "Engines" above are those advised
to Lessor by the Manufacturer. If the Manufacturer advises of any change to any
serial number, the new number will be deemed inserted under "Serial Number"
under "Aircraft" and "Engines" above, as the case may be, above.
SCHEDULE A
PART II-AIRCRAFT DOCUMENTS
MANUALS AVAILABLE (headlines)
1 - ENGINEERING DOCUMENTS
2 - MAINTENANCE & ASSOCIATED MANUALS
3 - MISCELLANEOUS PUBLICATIONS
4 - OPERATIONAL MANUALS AND DATA
5 - OVERHAUL DATA
6 - STRUCTURAL MANUALS
MANUALS AVAILABLE (detailed) Abbr Form Type Qty. Delivery
---------------------------------------------
1. ENGINEERING DOCUMENTS
Process and Material Specification PMS F E 1 0***
Standards Manual SM F E 1 -90
2. MAINTENANCE & ASSOCIATED MANUALS
APU Build-up Manual ABM P2 E 2 -90
Aircraft Maintenance Manual AMM F C 10 0 to +90
MF C 1 0 to +90
Aircraft Time Limits/Maintenance Checks TLMC P2 C 3 90
Aircraft Schematics Manual ASM F C 10 0 to +90
MF C 1 0 to +90
Aircraft Wiring Manual AWM F C 5 0 to +90
MF C 1 0 to +90
Aircraft Wiring Lists AWL F C 5 0 to +90
MF C 1 0 to +90
Consumable Material List CML P2 E 1 -90
Duct Repair Manual DRM P2 E 1 90***
Fuel Pipe Repair Manual FPRM P2 E 1 90***
Illustrated Parts Catalog (Airframe) IPC F C 10 0 to +90
MF C 1 0 to +90
Illustrated Parts Catalog (Power Plant)**PIPC F C 10 0 to +90
MF C 1 0 to +90
Illustrated Tools and Equipment Manual TEM P2 E 3 -180
Maintenance Facility Planning MFP P2 E 2 -360
Maintenance Planning Document MPD P2 P 1 -180
E 3 -90
Power Plant Build-up Manual** PBM P2 C 2 -90
Support Equipment Summary SES P1 E 2 -180
Tool and Equipment Drawings TED AC E 1 -180
Tool and Equipment Index TEI P2 E 2 360
Tool and Equipment Bulletins TEB P1 E 3 0
Trouble Shooting Manual TSM F C 10 0 to +90
MF C 1 0 to +90
3. MISCELLANEOUS PUBLICATIONS
Airplanes Characteristics for Airport Planning AC P2 E 2 -360***
Aircraft Recovery Manual ARM P2 E 2 0***
Cargo Loading System Manual CLS P2 E 2 -90
Crash Crew Chart CCC P1 E 5 -180
List of Radioactive and Hazardous Elements LRE P2 E 1 90***
List of Applicable Publications LAP P1 C 1 -180
Livestock Transportation Manual LTM P2 E 1 90***
Service Bulletin SB P2 C 2 0
F E 1 -90
Technical Publications Combined Index TPCI D E 1 -90
Service Information Letters SIL P1 E 1 0
Transportability Manual TM P1 E 1 -90***
Vendor Information Manual VIM D E 1 360
Vendor Information Manual GSE VIM/GSE P2 E 2 360
The quantities listed below are in addition to the set of one copy of
each operational manual to be delivered with the Aircraft (except
PEP/PPM).
4. OPERATIONAL MANUALS AND DATA
Quick Reference Handbook QRH P2 C 3 -90
Flight Crew Operating Manual FCOM P2 C 3 0
Flight Manual FM P2 C 1 -90
C 3 0
Master Minimum Equipment List MMEL P2 C 3 0
Performance Engineering Program PEP MT C 1 -90
D C 1 -90
Performance Program Manual PPM P2 C 3 90
Weight and Balance Manual WBM P2 C 3 0
5. OVERHAUL DATA
Component Documentation Status CDS D C 1 180***
Component Evolution List CEL P2 E 1 ***
Cable Fabrication Manual CFM P2 E 1 90***
Component Maintenance Manual Airframe
Manufacturer CMMM F E 2 -180 to +180*
6. STRUCTURAL MANUALS
Nondestructive Testing Manual NTM P2 E 2 -90***
Structural Repair Manual SRM F E 2 -90***
** Supplied by the Propulsion Systems manufacturer.
*** Optional. Delivered as follow-on for CDS.
MANUAL FORMAT AND TYPE IDENTIFICATION
FORM AC APERTURE CARD. Refers to 35mm film contained in punched aperture
cards.
D FLOPPY DISK 3"1/2
F MICROFILM. Refers to 16mm roll film on 3M type cartridges.
MF MASTER FILM. Refers to thick diaz film suitable for further
reproduction.
MP Refers to paper printed one side, unpunched quality shall be
suitable for further reproduction or microfilming.
MT MAGNETIC TAPE
P1 PRINTED ONE SIDE. Refers to manuals in paper with print on one
side of the sheets only.
P2 PRINTED BOTH SIDES. Refers to manuals with print on both sides
of the sheets.
TYPE C CUSTOMIZED. Refers to manuals which are customized.
E ENVELOPE. Refers to manuals which are not customized.
P PRELIMINARY. Refers to preliminary data or manuals which may
consist of:
o either one time issue not maintained by revision service, or
o preliminary issues maintained by revision service until final manual
or data delivery, or o supply of best available data under final
format with progressive completion through revision service.
DELIVERY Manual delivery is expressed either as the number of days
prior to delivery of the first Aircraft or as nil (0), which
designates the date of delivery of the first Aircraft. It is
agree that the number of days indicated will be rounded up to
the next regular revision release date.
SCHEDULE A
PART III-DELIVERY CONDITION REQUIREMENTS
Set forth below is a description of the condition in which each Airbus Aircraft
must be in order for Lessee to be obligated to accept each such Aircraft under
the Lease. It is solely a description of such condition precedent and shall not
be construed as a representation, warranty or agreement of any kind whatsoever,
express or implied, by Lessor with respect to each such Aircraft or its
condition, all of which have been disclaimed by Lessor and waived by Lessee as
set forth in the Lease, including in the Common Terms Agreement. Airbus Delivery
Condition Requirements:
1. The "Delivery Condition Requirements" for each Airbus Aircraft are as
follows:
On Delivery,each Airbus Aircraft shall
(i) be new, ex factory and painted in Lessee's livery;
(ii)have a valid Export Certificate of Airworthiness for the United States;
(iii)have an issued FAR 121 Compliance Statement from the Manufacturer;
(iv) on or prior to the Delivery Date, have had accomplished all
outstanding mandatory service bulletins, Airworthiness Directives and
similar requirements applicable to the Aircraft having a compliance
date prior to the Delivery Date or within * days after the Delivery
Date and which are required by the State of Design, the FAA or the
Manufacturer.
(v) and otherwise be in the condition required for delivery pursuant to
each of two Purchase Agreements, dated July 16, 1996 and September 29,
1998, respectively, each between the Manufacturer and GE Capital (each
a "Purchase Agreement" and together, the "Purchase Agreements") and
the Airbus Aircraft Specification Number D.000.0200, Issue Number 4,
dated April 30, 1995, except as amended by change orders initiated by
Lessor under the terms of the Purchase Agreement, including as
modified to include the additional GECC baseline SCNs in accordance
with the GECC A319 baseline specification Issue 1 (the "GECC A319
Baseline Specification.")
2. Modifications (a) The Agreed Lessee Modifications shall be accomplished
pre-delivery at the sole cost and expense of Lessee. Lessor shall use
reasonable efforts to accomplish all Agreed Lessee Modifications prior to
Delivery. Cost of all Agreed Lessee Modifications, including charges for
any "out of sequence production", shall be invoiced to Lessee upon Lessor's
receipt of invoice applicable to each individual Agreed Lessee Modification
from the relevant third party vendor. If Lessor notifies Lessee that any
Agreed Lessee Modification cannot be accomplished prior to the Delivery
Date, including without limitation any delays in accomplishing such
Modifications caused by failure of Lessee to deliver any materials or parts
to the Manufacturer by the required on-dock dates as advised by
Manufacturer, such Agreed Lessee Modification shall be excluded from the
Delivery Condition Requirements.
(b) Cost Adjustment. Lessor and Lessee agree that if all fees, costs and
expenses invoiced to Lessor directly attributable to the Agreed Lessee
Modifications, including without limitation, the order, purchase, delivery
and installation on the Aircraft of the galleys, seats, avionics, APU and
wheels and brakes (collectively, the "BFE/SFE") selected by Lessee as part
of the Agreed Lessee Modifications are less than such fees, costs and
expenses invoiced to Lessor for the BFE/SFE selected by Lessor as part of
the GECC A319 Baseline Specification , then upon the delivery of each new
Aircraft, Lessor shall pay to Lessee the difference between (i) the Lessee
selected BFE/SFE , pro-rata for each Aircraft leased by Lessee from Lessor
, and (ii) the Lessor selected BFE/SFE for such Aircraft. Lessee
acknowledges that Lessor is subject to confidentiality agreements with its
vendors relating the price of the above referenced BFE/SFE. Lessor shall
certify to Lessee the net difference between the costs of Lessee selected
BFE/SFE if less than the Lessor selected BFE/SFE.
(c) Specification Credit. Lessee has requested that the items listed below in
this clause (c ) (the "Listed Items") be removed from the GECC A319
Baseline Specification and not be included in any Aircraft. Lessor shall,
in its discretion, determine whether each Listed Item is, or is not,
removed from any Aircraft. In consideration thereof, Lessee hereby receives
a credit for each Aircraft in the amount of * (the "Specification Credit")
(i) first, against any amounts due and payable by Lessee to Lessor relating
to the cost of any additions to the GECC A319 Baseline Specification
selected by Lessee; (ii) second, to the extent any Specification Credit
remains, against any amounts due and payable by Lessee to Lessor relating
to the cost of any increase in BFE or SFE not already included in the GECC
A319 Baseline Specification and (iii) third, to the extent any
Specification Credit remains, against any amounts due and payable by Lessee
to Lessor under this Agreement. No Listed Items shall be included in the
cost adjustments provided in clause 2 (b) above.
Listed Items:
Ozone Catalytic Converters (G8EO2J1011101S1H)
HF LRU (G8E23J1113004S1H)
Third Radio Management Panel (G8E23J1310102S1H)
System Prov. For Audio Pax Entertainment Sys. (G8E23J3670000G1H)
System Provisions for PES Video (G8E23J3670000G1H,
G8E23J3610501S1H)
Lav. D Mod. for Stretcher Loading (G8E25J2070000G1H)
Prov. For Mech. Bulk Loading (G8E25J5231501S1H,
System in Fwd. And Aft Cargo Holds MCG8E25.52.003J1MO1)
SCHEDULE B
COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other
commercial and financial terms set forth in this Schedule B shall apply to the
leasing of the Aircraft under the Lease.
In addition, Lessor and Lessee understand and agree that the commercial
and financial information contained in this Schedule B are considered by Lessor
and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree,
and any of their assignees, upon becoming such shall agree that it will treat
this Schedule B as proprietary and confidential and will not, without the prior
written consent of the other, disclose or cause to be disclosed, the terms
hereof or thereof to any Person, except to its agents, representatives,
advisors, employees, counsel, underwriters, auditors, investors, financing
parties and head lessors as necessary or appropriate for the leasing transaction
which is the subject hereof, or except (a) as may be required by applicable Law
or pursuant to an order, or a valid and binding request, issued by any court or
other Government Entity having jurisdiction over Lessor, Lessee or the assignee
of either of them, as the case may be, or (b) as necessary to enable Lessor or
its assignee to make transfers, assignments or other dispositions to potential
transferees, assignees or participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information
contained herein or therein pursuant to any such applicable Law, Lessor, Lessee
or the assignee of either of them, as the case may be, shall request and use its
best reasonable efforts to obtain confidential treatment of this Schedule B and
the other party will cooperate in making and supporting any such request for
confidential treatment.
PART I PART I-CASUALTY OCCURRENCE DEFINITIONS
Agreed Value The Agreed Value shall be $* for each Airbus Aircraft.
Damage Notification Threshold means $*.
Deductible Amount means $*.
Minimum Liability Coverage means $*.
PART II DEPOSIT; LC AMOUNT; INTEREST RATE
Deposit means, for the purposes of Section 3.1 hereof, for each Airbus Aircraft
$*, * of which shall have been paid on or before the date hereof; and the
balance of which shall be paid no later than * days prior to delivery of each
Aircraft; provided, however, that Lessee may elect to provide Lessor with a
Letter of Credit in an amount, from a financial institution and otherwise in
form and substance, reasonably acceptable to Lessor. Lessee acknowledges and
agrees that it is not located in the State of New York within the meaning of
Section 7-101 1-c(b) of the New York General Obligations Law, and therefore the
requirements of Section 7-101 of the New York General Obligations Law do not
apply to the Deposit.
Initial Aircraft Rental Credit means, in respect of the first * Airbus Aircraft
to deliver, an amount equal to $* per Airbus Aircraft.
Interest Rate: The Interest Rate shall be the "prime rate" as quoted in the Wall
Street Journal from time to time during the applicable period plus * per annum,
but not to exceed the maximum amount permitted by Law.
LC Amount means, for the purposes of Section 3.1 hereof, the amount of one or
more Deposits for each Aircraft secured by a Letter of Credit.
Pre-Delivery Termination Value means $* per Airbus Aircraft.
Quotation Date means the day two Business Days before the Scheduled
Delivery Date. Second Aircraft Rental Credit means, in respect of the last *
Airbus Aircraft to deliver, an amount equal to $* per Airbus Aircraft.
PART III RENT
Assumed Rent means (i) for the first * Rental Periods (a) $* with
respect to each of the first * Aircraft to be delivered hereunder (the
"Initial Aircraft") and (b) $* with respect to each of the last *
Aircraft to be delivered hereunder (the "Subsequent Aircraft"); (ii)
for Rental Periods * through * (a) $* with respect to each Initial
Aircraft and (b) $* with respect to each Subsequent Aircraft; and (iii)
for each of the Aircraft for each Rental Period thereafter, $*. The
foregoing amounts are based upon the Manufacturer's Aircraft Price in
June, 1999 and an eight year swap rate between *% and *%. The Assumed
Rent shall be (A) increased by an amount equal to $* per month if
Lessee elects to pay the Deposit for any Aircraft pursuant to a Letter
of Credit and (B) increased by (i) $* per month if Lessee elects, upon
no less than * months prior written notice, to reschedule Delivery of
such Aircraft to any Alternate Scheduled Delivery Month in lieu of the
current Scheduled Delivery Month as herein defined or (ii) $* per month
if Lessee elects, upon no less than * months prior written notice, to
reschedule Delivery of such Aircraft to a month which is not a
Scheduled Delivery' Month or an Alternate Scheduled Delivery Month.
Rent. The Rent payable in respect of each Rental Period during the Term
for each Airbus Aircraft shall be payable in * consecutive monthly
installments, in advance on each Rent Date, with each such installment
equal to an amount calculated as follows:
Rent = * where:
* is the Assumed Rent for the applicable Rental Period;
* means the assumed 8-year U.S. Dollar Swap rate expressed as a
number determined as follows: (i) ifs is less than or equal to *,
then * is equal to *%, (ii) ifs is greater than *% and less than
*%, then * is equal to *, and (iii) ifs is equal to or greater
than *%, then * is equal to *%;
* is (i) the actual 8 year Dollar swap rate ("Open" rate per
Bloomberg screen "IRSB" ) expressed as a number and obtained by
Lessor on the Quotation Date: or, if on the Quotation Date the
Bloomberg Screen "IRSB" is not available or does not display
rates for the required period, the 8-year Dollar swap rate quoted
on the applicable Reuters page, expressed as a number and
obtained by Lessor on the Quotation Date; or (ii) the sum of(a)
the actual 8 year Dollar swap rate as set forth in (i) above
fixed on a date, at Lessee's option, which is earlier than title
Quotation Date upon 30 days' prior written notice to Lessor; and
(b) 15 basis points for each year from the effective date of such
notice (which effective date shall be 30 days after the date of
such notice) until the Scheduled Delivery Date, pro rated for any
partial year;
* is $*; and
* is *, rounded to the nearest * places of decimals, where:
* is the Manufacturer's Gross Invoice Price for the Aircraft
on the basis of delivery of the Aircraft on the Delivery
Date; provided, however, that * shall not be disclosed by
Lessor to Lessee and
* is the Manufacturer's Gross Invoice Price for the Aircraft
which would apply if the Aircraft were delivered in *;
provided, however, that * shall not be disclosed by Lessor
to Lessee.
PART IV [INTENTIONALLY OMITTED]
PART V SUPPLEMENTAL RENT
The Supplemental Rent payable will be determined with reference to the
following:
Airframe Supplemental Rent means all (i) Airframe 4C Supplemental Rent and (ii)
Airframe 8C Supplemental Rent in each case payable by Lessee pursuant to Clause
(a) below.
Annual Supplemental Rent Adjustment means (*%)
APU Supplemental Rent means all Supplemental Rent payable by Lessee pursuant to
Clause (d) below.
Assumed Ratio Adjustment: For the purposes of Section 5.4 of the Common Terms
Agreement, Assumed Ratio means a * hour to one cycle ratio (*) for each Airbus
Aircraft and any adjustment pursuant to Clause 5.4 shall be based on the
following table:
Airbus A319 Aircraft - FH/CYC * * * * * *
Ratio
Airframe 4C Supplemental Rent $* $* $* $* $* $*
Rate
Airframe 8C Supplemental Rent $* $* $* $* $* $*
Rate
Engine Refurbishment $* $* $* $* $* $*
Supplemental Rent Rate
Engine LLP Supplemental Rent Rate $* $* $* $* $* $*
APU Supplemental Rent Rate $* $* $* $* $* $*
Landing Gear Supplemental Rent $* $* $* $* $* $*
Rate
Assumed Utilization means an annual utilization of * hours per annum for each
Airbus Aircraft.
Engine Supplemental Rent means all (i) Engine LLP Supplemental Rent payable by
Lessee pursuant to Clause (b) below, and (ii) Engine Refurbishment Supplemental
Rent payable by Lessee pursuant to Clause (c) below.
Landing Gear Supplemental Rent means all Supplemental Rent payable by Lessee
pursuant to Clause (e) below.
Supplemental Rent equals each of the following amounts:
(a) Airframe: in respect of each Airframe 4C Check, $* ("Airframe 4C
Supplemental Rent Rate") for each Flight Hour operated by each Airbus
Aircraft during each calendar month during the Term ("Airframe 4C
Supplemental Rent") and Airframe 8C Check, $* ("Airframe 8C Supplemental
Rent Rate") for each Flight Hour operated by each Airbus Aircraft during
each calendar month during the Term ("Airframe 8C Supplemental Rent");
(b) Engine Life-Limited Parts: in respect of the life-limited Parts for each
Engine installed on an Airbus Airframe, $* ("Engine LLP Supplemental Rent
Rate") for each Flight Hour operated by that Engine during each calendar
month during the Term ("Engine LLP Supplemental Rent");
(c) Engine Refurbishment: in respect of each Engine installed on an Airbus
Airframe, $* ("Engine Refurbishment Supplemental Rent Rate") for each
Engine Flight Hour (or fraction thereof) operated by that Engine during
each calendar month during the Term ("Engine Refurbishment Supplemental
Rent"); -
(d) APU: in respect of the APU relating to each Airbus Airframe, $* ("APU
Supplemental Rent Rate") for each Flight Hour operated by the APU during
each calendar month during the Term ("APU Supplemental Rent"); and
(d) Landing Gear: in respect of the Landing Gear installed on an Airbus
Airframe, $* ("Landing Gear Supplemental Rent Rate") for each Flight Hour
operated by the Landing Gear during each calendar month during the Term
("Landing Gear Supplemental Rent").
Supplemental Rental Cap means an aggregate amount of all Supplemental Rent paid
in respect of each Airbus Aircraft during the Term in an amount equal to the sum
of (I) $* plus (ii) the amount of all Maintenance Contributions made by Lessor
in respect of each such Airbus Aircraft.
PART VI RETURN CONDITION DEFINITIONS; MAINTENANCE PAYMENTS AT REDELIVERY;
AIRWORTHINESS DIRECTIVE SHARING PAYMENTS
DEFINITIONS:
Engine Cycles Restriction means * Engine Cycles.
Engine Flight Hours Restriction means * Engine Flight Hours.
Engine Refurbishment means all scheduled and unscheduled off-the-wing Engine
maintenance and repair accomplished for each module in accordance with the
performance restoration, minimum restoration or full overhaul sections of the
Manufacturer's workscope planning guide and including performing the following
for each of the modules, for each of the Engines:
Hot Section Module means the combustor, combustor casing, HPT
nozzle, HPT rotor, LPT nozzle (stage one).
Hot Section Module Refurbishment means, with respect to any
Engine, the accomplishment of a "Performance Level"
refurbishment, per the CFMI Workscope Planning Guide, of the
Hot Section Module including the complete inspection and
repair as necessary per the shop manual of the combustor,
combustor casing, high pressure turbine nozzle section, high
pressure turbine rotor, and low pressure turbine nozzle stage
1 in an engine repair/overhaul station, including (without
limitation) complete unstacking of the high pressure turbine;
de-blading of discs; visual inspections of all discs;
verification that all snap diameters on discs are within
limits; inspection of all blades for tip condition, blade
length and cracking. Repair or replacement of all blades below
minimum with new or refurbished blades; blade-up of discs
using new lock plates; assembly of rotors in the turbine;
balance of all rotors; installation of rotor in the Engine.
HPC Module means the high pressure compressor rotor and the
high pressure compressor forward and aft stator .
HPC Module Refurbishment means, with respect to any Engine,
the accomplishment of a "Performance Level" refurbishment, per
the CFMI Workscope Planning Guide, of the HPC Module including
the completion of the following: complete unstacking of the
high pressure compressor and complete shop manual inspection;
of the forward and aft stator cases, de-blading discs; visual
inspections of all discs; verification that all snap diameters
on discs are within limits; inspection of all blades for
proper chord dimensions, cracking; and erosion on leading and
trailing edges; repair or replacement of blades below minimum;
inspection and repair of stators as necessary; blade-up of
discs using new lock plates; assembly of rotor in the
compressor; balance of all rotors; and installation of rotor
in the Engine..
Fan and Booster Module means the fan rotor and booster, the
number 1 and 2 bearing support, inlet gearbox and number 3
bearing assembly, and the fan frame assembly.
Fan and Booster Module Refurbishment means, with respect to
any Engine, the accomplishment of a "Minimum Level"
refurbishment, per the CFMI Workscope Planning Guide, of the
fan and booster module including the completion of the
following: removal from engine and shop manual inspection of
fan/booster assembly, removal and shop manual inspection of
fan blades, booster blades, and spacers. The fan disk should
be separated from the booster spool only for cause. Visually
inspect the exposed areas of the fan disk and booster spool.
Recontour fan blades, inspection of all blades for proper
chord dimensions and cracking; repair or replacement of blades
below minimum; inspection and repair of stators as necessary;
blade-up of discs using new lock plates; assembly of rotors in
the compressor; balance of all rotors; installation of rotor
in the Engine..
LPT Module means the low pressure turbine, LPT shaft, and LPT
Frame.
LPT Module Refurbishment means, with respect to any Engine,
the accomplishment of a "Minimum Level" refurbishment, per the
CFMI Workscope Planning Guide, of the LPT Module including the
complete visual inspection and repair as necessary of the low
pressure turbine module of an Engine in an engine
repair/overhaul station, including (without limitation)
complete unstacking of the low pressure turbine; complete
visual inspection; de-blading of discs ; visual inspections of
all discs; verification that all snap diameters on discs are
within limits; inspection of all blades for proper chord
dimensions and cracking; repair or replacement of all blades
below minimum; inspection and repair of stators as necessary;
blade-up of discs using new lock plates; assembly of rotors in
the turbine; balance of all rotors; and installation of rotor
in the Engine.
Accessory Drive Module means the Transfer Gearbox and
Accessory Gearbox.
Accessory Drive Module Refurbishment means with respect to any
engine the inspection and repair per shop manual.
Minimum APU Limit means * Flight Hours since the last gas path refurbishment.
Minimum Component Calendar Life means * months.
Minimum Component Cycles means * Cycles
Minimum Component Flight Hours means * Flight Hours
Minimum Engine Cycles means * Cycles.
Minimum Engine Flight Hours means * Flight Hours.
Minimum Landing Gear Calendar Time means * months
Minimum Landing Gear Cycles means * Cycles.
Minimum Landing Gear Flight Hours means * Flight Hours.
Minimum Measurable Fuel Requirement means the amount of fuel as at Delivery.
Redelivery "C" Check means the next sequential Block `C' check in
accordance with the Lessee's Maintenance Program including those
bridging tasks identified in the Manufacturer's Maintenance Planning
Document, Appendix J, to bridge the Aircraft back to a block program
and "Block `C' Structural Check" with at least * Flight Hours remaining
to the next "C" or higher check.
AD Sharing
AD Threshold means $*.
If any Airworthiness Directive is issued by the FAA for which
terminating action is required to be performed by Lessee pursuant to
Section 8.10(c)(ii) of the Common Terms Agreement and FAR Part 121 and
if the actual cost incurred by Lessee (as documented in the same manner
and paid within the same time as required under Section 7.2 of the
Common Terms Agreement for a Maintenance Contribution payment by
Lessor) in performing or causing to be performed such Airworthiness
Directive exceeds the AD Threshold, Lessor shall, following receipt of
the invoice in such amount and provided no (i) Default relating to any
payment under the Lease or (ii) any other Event of Default has occurred
and is continuing, reimburse to Lessee an amount calculated in
accordance with the following formula:
* where:
* = Total actual invoiced cost of such Airworthiness Directive
* = AD Threshold.
* = * months.
* = Months remaining to the Scheduled Expiry Date.
MAINTENANCE ADJUSTMENTS:
Maintenance Adjustment: In respect of each calendar month (or part thereof)
during the Term, Lessee will pay to Lessor at the end of the Term in accordance
with Section 5.4 of the Common Terms Agreement and Section 3.3 of this Agreement
the following Maintenance Adjustments for each Airbus Aircraft:
(a) Airframe Maintenance Adjustment: in respect of the Airframe 4C Check and
Airframe 8C Check, upon redelivery of the Aircraft to Lessor (but not after
the occurrence of an Event of Loss with respect to the Aircraft), Lessee
shall pay to Lessor for each Flight Hour since new or since the last
Airframe Structural Check, as applicable, an amount equal to (i)(A) the
number of Flight Hours on the Airframe since new or since the last Airframe
Structural Check, as applicable, multiplied by (B) the Airframe 4C
Supplemental Rent Rate less (C) the Remaining Airframe 4C Supplemental Rent
and an amount equal to (ii)(A) the number of Flight Hours on the Airframe
since new or since the last Airframe Structural Check, as applicable,
multiplied by (B) the Airframe 8C Supplemental Rent Rate less (C) the
Remaining Airframe 8C Supplemental Rent (collectively, the "Airframe
Maintenance Adjustment").
(b) Engine Refurbishment Maintenance Adjustment: in respect of each Engine,
upon redelivery of the Aircraft to Lessor (but not after the occurrence of
an Event of Loss with respect to the Aircraft or any Engine), for any life
used since new or since the latest Engine Refurbishment of each defined
module (as further described below, each a "Defined Module") in accordance
with the applicable percentage, whichever is less, to the date of
Redelivery, Lessee shall pay to Lessor an amount equal to (i) for each
Engine Flight Hour (or fraction thereof) operated by that Engine in the
aggregate during each calendar month during the Term since new or since the
last Engine Refurbishment multiplied by (ii) the Engine Refurbishment
Supplemental Rent Rate less (iii) Remaining Engine Refurbishment
Supplemental Rent (the "Engine Refurbishment Maintenance Adjustment"). For
purposes of this Clause, Defined Modules shall include each of the
Combustion Chamber/ High Pressure Turbine (*% of the Engine Refurbishment
Supplemental Rent Rate); High Pressure Compressor (*% of the Engine
Refurbishment Supplemental Rent Rate); the Low Pressure Turbine (*% of the
Engine Refurbishment Supplemental Rent Rate) and the Fan Booster (*% of
Engine Refurbishment Supplemental Rent Rate).
provided, however, if any of the amounts described above is less than zero then
the applicable Maintenance Adjustment shall be equal to zero.
(c) Engine Life Limited Parts: with respect to Engine Life-Limited Parts
("Engine LLPs"), upon redelivery of the Aircraft to Lessor (but not after
the occurrence of an Event of Loss with respect to the Aircraft or any
Engine), within any Engine, Lessee shall pay to Lessor an amount equal to
(i) for each Engine Flight Hour (or fraction thereof) operated by that
Engine in the aggregate during each calendar month during the Term since
new or since the last Engine Refurbishment multiplied by (ii) the Engine
LLP Supplemental Rent Rate less (iii) Remaining Engine LLP Supplemental
Rent (the "Engine LLP Maintenance Adjustment").
(d) APU: with respect to the APU, upon redelivery of the Aircraft to Lessor
(but not after the occurrence of an Event of Loss with respect to the
Aircraft), Lessee shall pay to Lessor an amount equal to (i) $* per Flight
Hour since new or HSI in accordance with the Manufacturer's recommendations
less (ii) the Remaining APU Supplemental Rent (the "APU Maintenance
Adjustment").
(e) Landing Gear Adjustment: with respect to Landing Gear (per shipset), upon
redelivery of the Aircraft to Lessor (but not after the occurrence of an
Event of Loss with respect to the Aircraft), Lessee shall pay to Lessor an
amount equal to (i) $* per Flight Hour since new or since complete overhaul
in accordance with the Manufacturer's recommendations, whichever is less,
minus (ii) the Remaining Landing Gear Supplemental Rent (the "Landing Gear
Maintenance Adjustment")
For purposes of this section: "Remaining Airframe Supplemental Rent" means the
amount equal to the aggregate amount of Airframe 4C Supplemental Rent and the
Airframe 8C Supplemental Rent paid under the Lease during the Term minus the
aggregate amount previously paid by Lessor under Section 7.2(a)(i) of the Common
Terms Agreement. "Remaining Engine LLP Supplemental Rent" means the amount equal
to the aggregate amount of Engine LLP Supplemental Rent paid under the Lease
during the Term minus the aggregate amount previously paid by Lessor under
Section 7.2(a)(ii) of the Common Terms Agreement. "Remaining Engine Supplemental
Rent" means the amount equal to the aggregate amount of Engine Supplemental Rent
paid under the Lease during the Term minus the aggregate amount previously paid
by Lessor under Section 7.2(a)(iii) of the Common Terms Agreement. "Remaining
APU Supplemental Rent" means the amount equal to the aggregate amount of APU
Supplemental Rent paid under the Lease during the Term minus the aggregate
amount previously paid by Lessor under Section 7.2(a)(iv) of the Common Terms
Agreement. "Remaining Landing Gear Supplemental Rent" means the amount equal to
the aggregate amount of Landing Gear Supplemental Rent paid under the Lease
during the Term minus the aggregate amount previously paid by Lessor under
Section 7.2(a)(v) of the Common Terms Agreement.
SCHEDULE B
INTENTIONALLY DELETED FROM THE VERSION OF THIS DOCUMENT FILED WITH THE FAA AS
CONTAINING CONFIDENTIAL AND PROPRIETARY INFORMATION.