AIRCRAFT LEASE AGREEMENT
between
Indigo Aviation AB (publ)
as Lessor
and
Frontier Airlines, Inc
as Lessee
Dated as of 15 March 1999
Aircraft Make and Model: One Boeing 737-3L9
Aircraft Manufacturer's Serial Number: 26440
Aircraft Registration Mark: N310FL
Engines Make and Model: CFM56-3B2
Engines Serial Numbers: 726422 and 726492
To the extent, if any, that this Agreement constitutes chattel paper under the
Uniform Commercial Code in any jurisdiction, no security interest in this
Agreement may be created through the transfer and possession of any counterpart
other than the original counterpart of this Agreement, so identified by the
signature of Lender on the receipt set forth on the signature page of such
original counterpart.
Items marked with "*" have been omitted pursuant to a request for confidential
treatment.
TABLE OF CONTENTS
1. DEFINITIONS................................................................2
1.1 Definitions............................................................2
1.2 Construction..........................................................12
2. REPRESENTATIONS AND WARRANTIES............................................14
2.1 Lessee's Representations and Warranties...............................14
2.2 Lessor's Representations and Warranties...............................17
2.3 Survival of Representations and Warranties............................18
3. CONDITIONS PRECEDENT......................................................18
3.1 Lessor's Conditions Precedent.........................................18
3.2 Waiver................................................................20
3.3 Lessee's Conditions Precedent.........................................20
3.4 Waiver................................................................22
4. DELIVERY CONDITION AND INSPECTION OF AIRCRAFT.............................22
4.1 Lessee Selection of Aircraft..........................................22
4.2 Condition at Delivery.................................................22
4.3 Lessee Inspection and Acceptance Flight...............................22
4.4 Delivery of Aircraft to Lessee........................................22
4.5 Lessee's Failure to take Delivery.....................................23
5. LEASE TERM................................................................23
5.1 Initial Lease Term and Base Lease Term................................23
5.2 Extension Lease Option................................................23
5.3 Expiry Date...........................................................23
5.4 Survival of Certain Lessee Obligations................................24
5.5 Risk..................................................................25
6. DELIVERY..................................................................25
6.1 Location and Time of Delivery.........................................25
6.2 Delay or Failure in Delivery..........................................25
7. RENT......................................................................27
7.1 Initial Rent Dates....................................................27
7.2 Amount of Initial Rent................................................27
7.3 Basic Rent Period.....................................................27
7.4 Time of Payment of Basic Rent.........................................27
7.5 Amount of Basic Rent..................................................27
7.6 Maintenance Reserves..................................................28
7.7 Supplemental Rent for Excess Cycles...................................28
8. SECURITY DEPOSIT..........................................................28
8.1 Security Deposit......................................................28
8.2 Letter of Credit......................................................28
8.3 Lessor's Rights.......................................................28
9. MAINTENANCE RESERVES......................................................29
9.1 Amount................................................................29
9.2 Payments..............................................................29
9.3 Adjustment............................................................29
9.4 Release of Maintenance Reserves.......................................30
9.5 Costs in Excess of Maintenance Reserves...............................31
9.6 Reimbursement after Expiry Date.......................................31
10. PAYMENTS.................................................................32
10.1 Account for Lessee Payments..........................................32
10.2 Default Interest.....................................................32
10.3 Absolute Obligations.................................................32
10.4 Application of Payments to Lessor....................................33
10.5 Currency Indemnity...................................................33
10.6 Set-off..............................................................34
10.7 Time for Payments....................................................34
11. LESSOR'S COVENANTS.......................................................34
11.1 Quiet Enjoyment......................................................34
11.2 Lessor Obligations Following Expiry Date.............................34
12. LESSEE'S COVENANTS.......................................................35
12.1 Duration.............................................................35
12.2 Information..........................................................35
12.3 Lessor Visits........................................................37
12.4 Periodic Estoppel Certificates.......................................37
12.5 Airport and Navigation Charges.......................................37
12.6 Operation of Aircraft................................................38
12.7 Areas of Operation...................................................38
12.8 Non-Prejudicial Action...............................................39
12.9 Non-Representation of Lessor.........................................39
12.10 Inspection..........................................................39
12.11 Registration........................................................41
12.12 Name Plates.........................................................41
12.13 Geneva Convention...................................................42
12.14 Merger and Shareholding.............................................42
12.15 Ownership...........................................................42
12.16 Maintenance of Principal Business Place.............................43
12.17 Maintenance of Flight Records.......................................43
13. POSSESSION...............................................................43
13.1 No Relinquishment of Possession......................................43
13.2 Copy of Sublease.....................................................46
13.3 Lessee Primarily Liable..............................................46
13.4 Recognition of Rights................................................47
14. SECURITY INTERESTS.......................................................47
14.1 Title................................................................47
14.2 No Security Interests................................................47
14.3 Base of Aircraft.....................................................47
14.4 Notice to Lessor.....................................................47
14.5 Procure Release......................................................48
15. MAINTENANCE AND REPAIR...................................................48
15.1 General Obligations..................................................48
15.2 Specific Obligations.................................................49
16. REPLACEMENT OF PARTS.....................................................50
16.1 Replacement of Parts.................................................51
16.2 Title to Replacement Parts...........................................51
16.3 Pooling of Parts.....................................................51
16.4 Alterations..........................................................52
16.5 Removal of Parts.....................................................53
16.6 Substitution of Engine...............................................53
16.7 Temporary Removal of Parts...........................................54
16.8 Parts Incapable of Transfer..........................................56
17. MANUFACTURER'S WARRANTIES................................................56
17.1 Authorization........................................................56
17.2 Proceeds.............................................................57
17.3 Agreements with Manufacturers........................................57
17.4 No Operation Contrary to Warranties..................................57
18. DISCLAIMERS..............................................................58
18.1 General..............................................................58
18.2 As Is, Where Is......................................................58
18.3 Waiver of Warranty of Description....................................59
18.4 Lessee Acknowledgement...............................................59
18.5 Lessee Waiver........................................................59
18.6 Lessee Examination of Aircraft.......................................59
18.7 No Lessor Liability for Losses.......................................60
18.8 Exclusion............................................................60
18.9 Waiver...............................................................60
18.10 No Waiver...........................................................61
18.11 Confirmation........................................................61
19. INDEMNITIES..............................................................61
19.1 General Indemnity....................................................61
19.2 Exception to General Indemnity.......................................62
19.3 Time of Payment......................................................62
19.4 Survival of General Indemnity........................................62
19.5 Notice to Lessee.....................................................62
20. TAXATION.................................................................63
20.1 Gross-up.............................................................63
20.2 Tax Indemnity........................................................63
20.3 Value Added Taxes....................................................65
20.4 Taxation of Indemnity Payments.......................................65
20.5 Benefit of Indemnities...............................................65
20.6 Lessor Indemnification...............................................65
20.7 Survival of Tax Indemnities..........................................66
20.8 Mitigation and Co-operation..........................................66
20.9 Furnishing Forms.....................................................66
21. INSURANCE................................................................66
21.1 Insurances...........................................................66
21.2 Reinsurance..........................................................68
21.3 Requirements.........................................................68
21.4 Insurance Covenants..................................................68
21.5 Renewal of Insurances................................................70
21.6 Failure to Insure....................................................70
21.7 Continuation of Insurances...........................................71
21.8 Application of Insurance Proceeds....................................71
21.9 Pursuit of Claims....................................................72
22. TOTAL LOSS AND REQUISITION...............................................72
22.1 Total Loss Prior to Delivery.........................................72
22.2 Total Loss After Delivery............................................72
22.3 Total Loss of Engines................................................73
22.4 Requisition..........................................................73
23. REDELIVERY...............................................................75
23.1 Redelivery of Aircraft...............................................75
23.2 Final Inspection.....................................................76
23.3 Discrepancies........................................................76
23.4 Non-compliance.......................................................76
23.5 Acknowledgement......................................................77
23.6 Storage etc..........................................................77
24. EVENTS OF DEFAULT........................................................77
24.1 Notice...............................................................77
24.2 Events...............................................................78
24.3 Lessor's Rights......................................................81
24.4 Default Payments.....................................................82
24.5 Cumulative Rights....................................................83
25. ASSIGNMENT AND TRANSFER..................................................83
25.1 By Lessee............................................................83
25.2 By Lessor............................................................83
25.3 Assignment to Lender.................................................84
25.4 Lessee Co-operation..................................................84
25.5 Lessor Includes Lessor's Assignee and Lender.........................84
26. MISCELLANEOUS PROVISIONS.................................................85
26.1 Rights Cumulative, Waivers...........................................85
26.2 Delegation...........................................................85
26.3 Expenses.............................................................85
26.4 Time of Essence......................................................86
26.5 Entire Agreement.....................................................86
26.6 Further Assurances...................................................86
26.7 Language.............................................................86
26.8 Variation............................................................86
26.9 Invalidity of any Provision..........................................86
26.10 Survival............................................................87
26.11 Reimbursement.......................................................87
26.12 Press Releases......................................................87
26.13 Power of Attorney...................................................87
26.14 Usury Laws..........................................................87
26.15 Confidentiality.....................................................88
26.16 Counterparts........................................................88
26.17 Bankruptcy..........................................................88
27. NOTICES..................................................................89
28. GOVERNING LAW AND JURISDICTION...........................................90
28.1 New York Law.........................................................90
28.2 Non-exclusive Jurisdiction in New York...............................90
28.3 Service of Process Agent.............................................90
28.4 Waiver...............................................................90
SCHEDULES
Schedule 1 Aircraft Specification 102
Annexure 1Aircraft Documents 104
Schedule 2 Certain Business Terms 107
Schedule 3 Insurance Requirements 110
Schedule 4 Delivery Conditions 115
Schedule 5 Acceptance Certificate 123
Schedule 6 Officer's Certificate 126
Schedule 7 Letter of Authority 128
Schedule 8 Power of Attorney 129
Schedule 9 Opinion of Lessee Counsel 130
Schedule 10 Monthly Aircraft Utilisation and Status Report 135
Schedule 11 Letter of Quiet Enjoyment 137
Schedule 12 Return Conditions 138
Schedule 13 Return Acceptance Certificate 145
Annexure 1Aircraft Documents 148
Annexure 2Discrepancies 151
Schedule 14 Lease Supplement 152
THIS AGREEMENT is made as of 15 March 1999.
BETWEEN:
(1) INDIGO AVIATION AB (publ), a Swedish limited liability company whose address
and principal place of business is at Sodra Forstadsgatan 4, S-211 43 Malmo,
Sweden, ("Lessor"); and
(2) FRONTIER AIRLINES, INC. a Colorado corporation whose address and principal
place of business is at 12015 E. 46th Avenue, Denver, Colorado, United States of
America ("Lessee").
WHEREAS
Owner Trustee holds title to the Aircraft for the benefit of Lessor;
Owner Trustee, as headlessor, leases the Aircraft to Lessor under the terms of
the Headlease Agreement;
In consideration of and subject to the mutual covenants, terms and conditions
contained in this Agreement, Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease from Lessor the Aircraft for the Lease Term and the
parties further agrees as follows:
1. DEFINITIONS
1.1 Definitions
In this Agreement the following words and expressions have the following
meanings unless the context otherwise requires:
Acceptance Certificate means a certificate of acceptance substantially in the
form set out in Schedule 5;
Agreed Value has the meaning ascribed to it in Schedule 2;
Aircraft means the Airframe, the Engines, the Parts and the Aircraft Documents,
collectively. As the context requires, the Aircraft may also mean the Airframe,
any Engine, any Part, the Aircraft Documents or any part thereof individually;
Aircraft Documents means the documents, data and records referred to in Annexure
1 to Schedule 1 of this Agreement and, at Delivery, more closely identified in
Annexure 1 to the Acceptance Certificate and all additions, renewals, revisions
and replacements from time to time made to any of the foregoing in accordance
with this Agreement;
Airframe means the airframe described in Schedule 1 together with all Parts
relating thereto (except Engines or engines);
Air Navigation Charges means all charges incurred with the furnishing, issue or
provision of information, directions and other facilities in connection with the
navigation or movement of the Aircraft (including the control or movement of
vehicles in any part of an airport used for the movement of aircraft);
Airport Charges means all charges incurred in connection with the landing,
parking or taking-off of aircraft at airports or for the use of, or for services
provided at, airports;
Airworthiness Directive means an airworthiness directive or other mandatory
requirement issued by the FAA or any other Aviation Authority or Government
Entity;
APU means the auxiliary power unit installed on the Aircraft on the Delivery
Date and any replacement auxiliary power unit installed in accordance with this
Agreement, title to which is transferred to Owner Trustee;
Assignment of Insurances means the assignment by Lessee to Lessor, or at the
request of Lessor, to Lender, of all of Lessee's rights, title and interest in
and to the Insurances with respect to the Aircraft (other than the Insurances
relating to liability) or any other form of Security Interest in favour of
Lessor, Owner Trustee or Lender in and to the Insurances with respect to the
Aircraft;
Aviation Authority means all and any of the authorities, government departments,
committees or agencies which under the laws of the State of Registration shall
from time to time:
(a) have control or supervision of civil aviation in that state; or
(b) have jurisdiction over the registration, airworthiness or operation
of, or other matters relating to, the Aircraft;
Base Lease Expire Date means the date falling 65 months from the Initial Lease
Expiry Date.;
Base Lease Term means the period commencing on the day following the Initial
Lease Term and ending on Base Lease Expiry Date.;
Basic Rent means all amounts payable pursuant to Clause 7.5;
Basic Rent Period means each period ascertained in accordance with Clause 7.3;
Business Day means any day (other than a Saturday or Sunday or holidays
scheduled by law) on which banks are open for foreign exchange business in
London, New York and Stockholm;
"C" Check means a "C" check (a complete zonal and systems check and the
corresponding lower "A" and "B" checks or equivalent in accordance with the MPD)
in accordance with the Maintenance Program;
Conditions Precedent means the conditions specified in Clause 3;
CPCP means corrosion prevention control program;
Cycle means one take-off and landing of the Airframe or, in relation to an
Engine or Part, one take-off and landing of the airframe to which that Engine or
Part may be attached;
"D" Check means a "C7" Check plus structural items (a complete "block" system,
zonal, corrosion and structural inspection in accordance with the MPD);
Damage Notification Threshold has the meaning ascribed to it in Schedule 2;
Default means any Event of Default or any event which with the lapse of time or
giving of notice or making of any determination, would constitute an Event of
Default;
Default Rate means, for the relevant period, 3% percent above the rate of
interest at the start of that relevant period publicly quoted by Chase Manhattan
Bank N.A as its prime rate;
Delivery means delivery of the Aircraft by Lessor to Lessee pursuant to Clause 6
Delivery Date means the date on which Delivery occurs;
Delivery Location means Munich, Germany or such other location as the parties
may agree;
Dollars and US$ means the lawful currency of the United States of America;
Engine means, whether or not for the time being installed on the Aircraft:
(a) each engine of the manufacture, model and serial number specified
in Schedule 1 which Lessor elects to tender to Lessee, whether or
not installed on the Airframe on the Delivery Date, such engines
being described as to serial numbers on the Acceptance
Certificate; or
(b) any engine that has replaced that engine, title to which has, or
should have, passed to Owner Trustee in accordance with this
Agreement,
and in each case includes all modules and Parts from time to time belonging to
or installed in that engine but excludes any properly replaced engine title to
which has, or should have, passed to Lessee pursuant to this Agreement;
Engine Agreed Value has the meaning ascribed to it in Schedule 2;
Engine Manufacturer means CFM International;
Engine Performance Restoration Visit means any Overhaul, refurbishment, hot
section inspection, replacement of internal life limited parts, disassembly,
assembly and testing required thereof during an engine shop visit which
requires, as a minimum, a major disassembly of an Engine and the removal and
reinstallation of internal rotating parts;
Engine Total Loss means the occurrence with respect to an Engine only, whether
or not installed on the Airframe, of any of those events described in the
definition of Total Loss;
Event of Default means any event specified in Clause 24.2;
Expiry Date means the date determined in accordance with Clause 5.3;
Extension Lease Expiry Date has the meaning ascribed to it in Schedule 2;
Extension Lease Option means the option set out in Clause 5.2;
Extension Lease Term means the period commencing on the day following the Base
Lease Expiry Date and ending on the Extension Lease Expiry Date;
FAA means the Federal Aviation Administration of the Department of
Transportation of the United States of America and any successor thereof;
FAR means the Federal Aviation Regulations set forth in Title 14 of the United
States Code of Federal Regulations, as amended, modified or replaced from time
to time and any successor regulation thereto;
Federal Aviation Act means Title 49 Subtitle VII of the U.S. Code, as amended,
modified or replaced from time to time;
Final Inspection has the meaning given to it in Clause 23.2;
Financial Indebtedness means any indebtedness in respect of:
(a) moneys borrowed or raised;
(b) payments due under finance or operating leases;
(c) any guarantee or indemnity in respect of obligations of the type
referred to in paragraphs (a) or (b);
Flight Hour means each hour or part thereof (rounded up to two decimal places)
elapsing from the moment the wheels of the Aircraft leave the ground at take off
until the wheels of the Aircraft next touch the ground at landing;
Geneva Convention means the Convention on the International Recognition of
Rights in Aircraft signed in Geneva, Switzerland on 19 June 1948, and amended
from time to time, but excluding the terms of any adhesion thereto or
ratification thereof containing reservations to which the State of Registration
does not accede;
Government Entity means:
(a) any national, state or local government, political subdivision
thereof, or local jurisdiction therein;
(b) any instrumentality, board, commission, court, or agency of any
thereof, however constituted including, for the avoidance of
doubt, the Aviation Authority; and
(c) any association, organization, or institution of which any of the
above is a member or to whose jurisdiction any thereof is subject
or in whose activities any of the above is a participant;
Headlease Agreement means the aircraft headlease agreement entered into between
Owner Trustee and Lessor dated as of even date hereof and which is being filed
with FAA simultaneously herewith;
Indemnitees means Lessor, Owner Trustee, Lender or any other person identified
by Lessor to have an interest in the Transaction Documents and their respective
successors and assigns, shareholders, subsidiaries, affiliates, partners,
contractors, directors, officers, servants, agents and employees;
Initial Lease Term means the period commencing on the Delivery Date and ending
on the Initial Lease Expiry Date;
Initial Lease Expiry Date has the meaning ascribed to it in Schedule 2;
Initial Rent means all amounts payable pursuant to Clause 7.2 ;
Initial Rent Dates means the dates pursuant to Clause 7.1;
Insurances has the meaning ascribed to it in Clause 21.1;
Landing Gear means the landing gear assembly of the Aircraft, including all life
limited parts;
Lease Term means the Initial Lease Term, the Base Lease Term and, upon exercise
of the Lease Extension Option, the Extension Lease Term;
Lender means any person or persons notified by Lessor to Lessee as providing
financing to Owner Trustee or Lessor in respect of the acquisition, ownership or
leasing of the Aircraft from time to time (including any successors in title or
assignees of any such persons);
Lessor Lien means:
(a) any Security Interest from time to time created by or through
Lessor in connection with the financing of the Aircraft;
(b) any other Security Interest in respect of the Aircraft that
results from acts of or claims against Lessor not related to the
transactions contemplated by or permitted under this Agreement;
(c) any Security Interest in respect of the Aircraft for Lessor Taxes;
(d) any Security Interest in respect of the Aircraft existing prior to
Delivery;
(e) any Security Interest arising as a result of any act or omission
of Lessor that constitutes a breach by Lessor of this Agreement;
or
(f) any Security Interest that results from any indebtedness,
liability or other obligation arising by, through or under Lessor
or any of the Indemnitees and that is not indemnified against by
Lessee under this Agreement;
Lessor Taxes means Taxes:
(a) imposed as a result of activities of Lessor in the jurisdiction
imposing the liability unrelated to this Agreement or the
operation of the Aircraft by Lessee;
(b) imposed on the net income, profits or gains of Lessor (but
excluding for the avoidance of doubt, taxes directly related to
payment made under this Agreement); or
(c) imposed with respect to (i) any event occurring prior to the
Delivery Date or after the Expiry Date or (ii) any period
commencing and ending prior to Delivery Date or any period
commencing after the Expiry Date;
Letter of Credit has the meaning ascribed to it in Clause 8.2;
LIBOR means the rate per annum which is the offered rate (if any) appearing on
page 3750 of the Telerate screen (or any replacement page) which displays
British Bankers Association Interest Settlement Rates for deposits in Dollars
equal, or as close as practicable, to the period for which such rate is to be
determined at 11:00 a.m. (London time) on the relevant date;
LLP means life limited part;
Loss means any and all loss, liability, obligation, action, claim, suits,
proceeding, judgement, penalty, fine, damages, fee, cost, disbursement and
expense and Losses shall be construed accordingly;
Maintenance Facility means a FAA approved maintenance facility or such other
maintenance facility as Lessor may, in its absolute descretion, from time to
time approve in writing;
Maintenance Program means Lessee's maintenance program as approved by the
Aviation Authority provided in compliance with the MPD or such other maintenance
program as Lessor may, in its absolute discretion, approve in writing;
Maintenance Reserves means all amounts payable pursuant to Clause 9.1;
Manufacturer means the Boeing Company, a Delaware Corporation with its principal
office in Seattle, State of Washington, United States of America;
Minimum Liability Coverage has the meaning ascribed to it in Schedule 2;
Monthly Report means a report substantially in the form of Schedule 10;
Mortgage means a mortgage over the Aircraft created for the benefit of Lender;
MPD mean the Maintenance Planning Document published by the Manufacturer and
applicable to the Aircraft;
Other Agreements means any other aircraft lease or sublease agreement or other
agreement from time to time entered into between Lessor (or any parent company,
subsidiary, associate or affiliate of Lessor) and Lessee (or any subsidiary,
associate or affiliate of Lessee);
Overhaul means the full refurbishment of the Aircraft, an Engine, the APU, a
Landing Gear, a module or a Part, as the case may be, in which such equipment
has been disassembled, cleaned, thoroughly inspected, repaired, reworked or had
a replacement of parts, reassembled, and tested to the tolerances and standards
specified by the applicable manufacturer's overhaul procedures manual or
equivalent;
Owner Trustee means First Security Bank, National Association;
Part means, whether or not for the time being installed in or attached to the
Airframe or any Engine:
(a) any component, furnishing or equipment (other than a complete
Engine) installed or attached to the Airframe or any Engine on the
Delivery Date; and
(b) any other component, furnishing or equipment (other than a
complete Engine) title to which has, or should have, passed to
Owner Trustee pursuant to this Agreement;
but excludes any such items title to which has, or should have, passed to Lessee
pursuant to this Agreement;
Permitted Air Carrier has the meaning ascribed to it in Clause13.1.1;
Permitted Lien means:
(a) any lien for Lessee Taxes not assessed or, if assessed, not yet
due and payable, or being contested in good faith by appropriate
proceedings;
(b) any inchoate liens of a repairer, materialman, workman, employee,
mechanic, carrier, hangar keeper or other similar lien arising in
the ordinary course of business in respect of obligations which
are not overdue or are being contested in good faith by
appropriate proceedings;
(c) any Lessee liens arising out of judgements or awards with respect
to which at the time (i) an appeal proceedings for review is being
contested diligently and in good faith and (ii) a stay of
execution shall have been secured (and remains in force);
(d) any Lessor Lien; and
(e) any Security Interest over the Aircraft created by Lessee with the
written consent of Lessor,
but only if (in the case of (a), (b) and (c)) (i) adequate resources are
available for the payment of those Taxes or obligations and (ii) such
proceedings, or the continued existence of the lien, do not involve any danger
(in the reasonable opinion of Lessor or Lender) of the sale, forfeiture or other
loss of the Aircraft or any interest therein;
Present Lessee means Maersk Air;
Redelivery Date means the Expiry Date or the earlier date of termination of the
leasing of the Aircraft in accordance with the terms of this Agreement;
Redelivery Location means a location in the continental US reasonably requested
by Lessor or such other location as Lessor and Lessee may agree;
Rent means Initial Rent or Basic Rent, as the case may be, and Supplemental
Rent;
Rent Date means the Initial Rent Dates and the day preceding each Basic Rent
Period;
Replacement Engine means an engine complying with Clause 16.6;
Return Conditions means the conditions specified in Schedule 12;
Scheduled Delivery Date has the meaning ascribed to it in Schedule 2;
Security Deposit has the meaning ascribed to it in Schedule 2;
Security Interest means any encumbrance or security interest, however and
wherever created or arising, including without limitation, any right of
ownership, security, mortgage, charge, pledge, lien, encumbrance, assignment,
hypothecation or any other agreement or arrangement conferring security;
Side Letter means the Side Letter No. 1 to this Agreement between Lessor and
Lessee (a copy of which has not been included in the FAA counterpart of this
Agreement);
State of Incorporation means the State of Colorado, United States of America;
State of Registration means in relation to the Aircraft, the United States of
America or any other state or territory in which the Aircraft is, in accordance
with the provisions hereof, registered from time to time;
Supplemental Rent means any and all amounts, liabilities and obligations (other
than Initial Rent and Basic Rent) which Lessee assumes, agrees or is otherwise
obligated to pay Lessor hereunder including Maintenance Reserves, Total Loss
Proceeds, payment of Indemnity, interest or Default Interest;
Taxes means all present and future taxes, imports, levies, duties or charges,
deductions, withholdings of any nature (including without limiting the foregoing
any value added, franchise, transfer, sales, gross receipts, business, excise,
personal property, stamp, documentary, registration or other tax of whatsoever
nature) together with any assessments, fines, additions to tax or interest
thereon included and Tax and Taxation shall be construed accordingly;
Total Loss means with respect to the Aircraft (including for the purposes of
this definition the Airframe):
(a) the actual, constructive, compromised, arranged or agreed total
loss of the Aircraft; or
(b) the Aircraft being destroyed, damaged beyond economic repair or
permanently rendered unfit for normal use for any reason
whatsoever; or
(c) the requisition of title, confiscation, sequestration restraint,
detention, forfeiture or any compulsory acquisition or seizure or
requisition for hire by or under the order of any government
(whether civil, military or de facto) or public or local
authorities or courts; or
(d) the hi-jacking, theft or disappearance of the Aircraft or any
other occurrence resulting in loss of possession by Lessee and/or
operation thereof for a period of thirty (30) consecutive days or
longer;
(e) any sale of the Aircraft in connection with a Lessee bankruptcy
whether by an administrator, trustee or court;
(f) any other occurrence not permitted under this Agreement that
deprives Lessee of use and possession for a period of thirty (30)
consecutive days or longer;
For the avoidance of doubt, a Total Loss of the Aircraft will be deemed to have
occurred when a Total Loss of the Airframe occurs even if there has not been a
Total Loss of an Engine or Engines;
Total Loss Date means:
(a) in the case of an actual total loss or destruction, damage beyond
repair, or being rendered permanently unfit, the date on which
such loss, destruction, damage or rendition occurs (or, if the
date of loss or destruction is not known, the date on which the
Aircraft or the relevant part thereof was last heard of);
(b) in the case of a constructive, compromised, arranged or agreed
total loss, whichever shall be the earlier of (i) the date being
sixty (60) days after the date on which notice claiming such total
loss is issued to the insurers or brokers, and (ii) the date on
which such loss is agreed or compromised by the insurers;
(c) in the case of paragraph (c) in the definition of Total Loss, the
date on which the referred to therein takes effect;
(d) in the case of paragraph (d) in the definition of Total Loss, the
final day of the said period of thirty (30) consecutive days;
(e) in the case of paragraph (e) in the definition of Total Loss, the
date on which the Aircraft is sold; and
(f) in case of paragraph (f) above the definition of Total Loss, the
final day of the said period of thirty (30) consecutive days;
Total Loss Proceeds means the proceeds of any insurance or any other
compensation or similar payment arising in respect of a Total Loss;
Transaction Documents means
(a) this Aircraft Lease Agreement;
(b) the Acceptance Certificate;
(c) the Assignment of Insurances;
(d) the acknowledgement by Lessee of the security assignment or the
pledge of, inter alia, this Agreement in favour of the Lender and
any documents duly executed pursuant to any of the foregoing by
Lessee or Lessor;
(e) the Lease Supplement; and
(f) the Side Letter;
US Air Carrier means an air carrier (a) operating under (i) a certificate of
public convenience and necessity issued under 49 U.S.C 41102(a) and of the type
referred to in U.S.C section 1110, which is in full force and effect and (ii) an
air carrier operators certificate issued pursuant to chapter 447 of the FAA for
aircraft capable of carrying ten or more individuals or 6,000 pounds or more of
cargo which is in full force and effect; and (b) qualifying as a debtor subject
to 11 U.S.C section 1110;
1.2 Construction
1.2.1 References in this Agreement to:
(i) Clauses or Schedules are, unless otherwise specified, references to
Clauses of, and Schedules to, this Agreement;
(ii) any statutory or other legislative provision shall be
construed as including any statutory or legislative
modification or re-enactment thereof, or any provision
enacted in substitution therefor;
(iii) the Aircraft includes any part of the Aircraft, and,
where the context so admits, any of the Aircraft
Documents, and references to any part of the Aircraft
include any part of any Engine;
(iv) the word person or persons or to words importing
persons include individuals, partnerships, limited
liability companies, corporations, government agencies,
committees, departments, authorities and other bodies,
corporate or unincorporated, whether having distinct
legal personality or not;
(v) Lessor or Lessee include any assignee or successor in
title to the Lessor or the Lessee respectively (subject
to the provisions of Clause 25);
(vi) any agreement or instrument shall include such
agreement or instrument as it may from time to time be
amended, supplemented or substituted;
(vii) an agreement shall also include a concession, contract,
deed, franchise, license, treaty or undertaking (in
each case, whether oral or written);
(viii) the assets of any person shall be construed as a
reference to the whole or any part of its business,
undertaking, property, assets and revenues (including
any right to receive revenues);
(ix) law includes common or customary law and any
constitution, decree, judgement, legislation, order,
ordinance, regulation, statute, treaty or other
legislative measure in any jurisdiction or any present
or future directive, regulation, request or requirement
in each case, whether or not having the force of law
but, if not having the force of law, the compliance
with which is in accordance with the general practice
of persons to whom the directive, regulation, request
or requirement is addressed;
(x) month are references to a period starting on one day in
a calendar month and ending on the day preceding the
numerically corresponding day in the next calendar
month (and references to months shall be construed
accordingly).
(xi) any statute or other legislative provision or
regulation shall be read to include any statutory or
legislative or administrative modification or
re-enactment thereof, or any substitution therefor;
(xii) the words "including" or "include" are used herein
without limitation to mean by way of example;
(xiii) the words "Agreement", "hereof", "herein" and
"hereinafter" refer to this entire Agreement; and
(xiv) the word "or" is used inclusively to mean "and/or".
1.2.2 Headings are for ease of reference only.
1.2.3 Where the context so admits, words importing the singular number only
shall include the plural and vice versa, and words importing neuter
gender shall include the masculine or feminine gender.
2. REPRESENTATIONS AND WARRANTIES
2.1 Lessee's Representations and Warranties
Lessee represents and warrants to Lessor as of execution of this
Agreement and each other Transaction Document, as of the Delivery
Date and as of each date on which Rent is paid hereunder each of
the following representations and warranties.
(i) Corporate Status: Lessee is a corporation duly
incorporated, validly existing and in good standing
under the laws of the State of Incorporation and has
the corporate power and authority to carry on its
business as presently conducted and to perform its
obligations hereunder.
(ii) Government Approvals: No authorization, approval,
consent, license or order of, or registration with, or
the giving of notice to the Aviation Authority or any
other Government Entity is required for the valid
authorization, execution, delivery and performance by
Lessee of the Transaction Documents or to make the
Transaction Documents admissible in evidence in the
State of Incorporation, except as will have been duly
effected as of the Delivery Date.
(iii) Binding: Lessee's Board of Directors has authorized
Lessee to enter into the Transaction Documents and
perform its obligations under the Transaction
Documents. This Agreement and the other Transaction
Documents have been duly executed and delivered by
Lessee and represent the valid, enforceable and binding
obligations of Lessee except as enforceability may be
limited by bankruptcy, insolvency, reorganization or
other laws of general application affecting the
enforcement of creditors' rights. When executed by
Lessee at Delivery, the same will apply to the
Acceptance Certificate.
(iv) No Breach: The execution and delivery of the
Transaction Documents, the consummation by Lessee of
the transactions contemplated herein and by the other
Transaction Documents and compliance by Lessee with the
terms and provisions hereof do not and will not
contravene any law applicable to Lessee, or result in
any breach of or constitute any default under or result
in the creation of any Security Interest upon any
property of Lessee, pursuant to any mortgage, chattel
mortgage, deed of trust, conditional sales contract,
bank loan or credit agreement, corporate charter,
by-law or other agreement or instrument to which Lessee
is a party or by which Lessee or its properties or
assets may be bound or affected. When executed by
Lessee at Delivery, the same will apply to the
Acceptance Certificate.
(v) Filings: Except for the filing or recording of this
Agreement with the FAA, no other filing or recording of
any instrument or document (including the filing of any
financial statement) is advisable under the laws of the
State of Registration to evidence the interests of
Owner Trustee, Lessor and Lender in the Aircraft or any
Transaction Document.
(vi) Licenses: Lessee holds, all licenses, certificates and
permits from all applicable Government Entities for the
conduct of its business as a certified air carrier and
performance of its obligations under the Transaction
Document.
(vii) No Suits: There are no suits, arbitrations or other
proceedings pending or threatened against Lessee before
any court or administrative agency against or affecting
Lessee that, if adversely determined, would have a
material adverse effect on the financial condition or
business of Lessee or its ability to perform its
obligations under this Agreement or any other
Transaction Document.
(viii) No Withholding: Under the laws of the State of
Incorporation or the State of Registration, Lessee will
not be required to deduct any withholding or other Tax
from any payment it may make under this Agreement.
(ix) No restrictions on Payments: As of the date of
execution of this Agreement, there are under the laws
of the State of Incorporation no present restrictions
on Lessee to make the payments required by this
Agreement.
(x) General Obligations: The obligations of Lessee under
this Agreement are direct, general and unconditional
obligations of Lessee and rank or will rank at least
pari passu with all other present and future unsecured
and unsubordinated obligations (including contingent
obligations) of Lessee, with the exception of such
obligations as are mandatorily preferred by law.
(xi) Tax Returns: All necessary returns have been delivered
by Lessee to all relevant taxation authorities in the
State of Incorporation and Lessee is not in default in
the payment of any taxes due and payable.
(xii) No Material Adverse Effect: Lessee is not in default
under any agreement to which it is a party or by which
it may be bound that would have a material adverse
effect on its business, assets or condition and no
material litigation or administrative proceedings
before any Government Entity is presently pending or to
the knowledge of Lessee threatened against it or its
assets that would have a material adverse effect on the
business, assets or condition (financial or otherwise)
of Lessee.
(xiii) No Default under this Agreement: At the time of
execution of this Agreement, no Default has occurred
and is continuing.
(xiv) Financial Statements: The balance sheet and other
financial statements for Lessee for the financial year
which ended 31st of March 1998 were prepared in
accordance with accounting principles consistently
applied and generally accepted in the State of
Incorporation.
(xv) No Winding Up: No meeting has been convened or other
action taken for winding up or dissolution, or for the
appointment of any receiver or similar officer, in
relation to Lessee or any of its assets.
(xvi) Continuation of Business: Lessee will continue to
operate substantially the same business as it is
presently engaged in, will preserve its corporate
existence, conduct its business in an orderly and
efficient manner, satisfy its debts and obligations as
they fall due and keep and maintain all of its assets
and properties in good working order and condition.
(xvii) No Immunity: In any proceedings taken in the State of
Incorporation in relation to the Transaction Documents
it would not be entitled to claim for itself or any of
its assets any immunity from suit, execution,
attachment or other legal process.
(xviii) Information: All information furnished by or on behalf
of the Lessee in connection with all transactions
contemplated by the Transaction Documents is complete,
true and correct in all material respects and all
relevant facts concerning the business and affairs of
the Lessee have been disclosed to the Lessor.
(xix) Status: Sublessee is a US Air Carrier and a "citizen of
the United States as defined in 49 U.S.C Section 40102.
Sublessee shall operate the Aircraft under Part 121 of
the FAR and shall at all times remain duly certified US
Air Carrier.
(xx) Principal Place of Business: Lessee's principal place
of business and chief executive office are located at
the address specified in the preamble of this
Agreement.
(xxi) Flight Records: Lessee's flight records are located at
Lessee's principal place of business on the address
stated in Clause 27.
(xxii) Year 2000 Compliance: Lessee has (i) initiated a review
and assessment of all areas within its business and
operations (including those affected by suppliers and
vendors) that could be adversely affected by the "Year
2000 Problem" (this is, the risk that computer
applications used by Lessee, or its suppliers,
customers and vendors, may be unable to recognise and
perform properly date-sensitive functions involving
certain dates prior to, on and any date after December
31, 1999), (ii) developed a plan for addressing the
Year 2000 Problem on a time basis, and (iii) is in the
process of implementing such plan.
2.2 Lessor's Representations and Warranties
Lessor represents and warrants to Lessee as of the Delivery Date
each of the following representations and warranties.
(i) Title to Aircraft: Lessor warrants that title to the
Aircraft will be vested in Owner Trustee and the
Aircraft shall be free and clear of any and all
Security Interest except for the Security Interests of
Owner Trustee and Lessor under the Headlease Agreement
and of Lender.
(ii) Organisational Status: Lessor is a company created and
validly existing under the laws of Sweden, and has the
organisational power and authority to carry on its
business as presently conducted and to perform its
obligations under this Agreement and each other
Transaction Document to which it is a party.
(iii) Trust Agreement: The Trust Agreement dated as of even
date herwith, by and between Owner Trustee and Lessor
(the "Trust Agreement") has been duly authorized,
validly executed and delivered on the part of Lessor,
is legally binding upon Lessor, and creates a legally
enforceable trust (as hereinafter defined as the
"Trust"). Owner Trustee, in its capacity as Trustee of
the Trust, has legal power and authority to take legal
title to the Aircraft and has legal authority and is
qualified as the holder of legal title to the Aircraft
to register the Aircraft in accordance with the terms
of the Federal Aviation Act.
(iv) Government Approvals: No authorization, approval,
consent, license or order of, or registration with, or
the giving of notice to any Government Entity is
required for the valid authorization, execution,
delivery and performance by Lessor of this Agreement,
except as will have been duly effected as of the
Delivery Date.
(v) Binding: This Agreement and the other Transaction
Documents to which Lessor is a party have been duly
executed and delivered by Lessor and represent the
valid, enforceable and binding obligations of Lessor
except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general
application affecting the enforcement of creditors'
rights.
(vi) No Breach: The execution and delivery of the
Transaction Documents, the consummation by Lessor of
the transactions contemplated herein and compliance by
Lessor with the terms and provisions hereof do not and
will not contravene any law applicable to Lessor, or
result in any breach of or constitute any default under
or result in the creation of any Security Interest upon
any property of Lessor, pursuant to any indenture,
mortgage, chattel mortgage, deed of trust, conditional
sales contract, bank loan or credit agreement,
corporate charter, by-law or other agreement or
instrument to which Lessor is a party or by which
Lessor or its properties or assets may be bound or
affected.
2.3 Survival of Representations and Warranties
All of the foregoing Lessee's and Lessor's representations and
warranties shall survive the execution and delivery of this
Agreement and the Delivery of the Aircraft.
3. CONDITIONS PRECEDENT
3.1 Lessor's Conditions Precedent
Lessor's obligation to deliver and lease the Aircraft to Lessee
under this Agreement is subject to satisfaction of each of the
following conditions.
3.1.1 Receipt by Lessor from Lessee on or prior to the Delivery Date of
the following, each in form and substance reasonably satisfactory
to Lessor:
(i) Officer's Certificate: A certificate of an officer of
Lessee substantially in the form of Schedule 6;
(ii) Consents: Evidence that all governmental or other
consents, licenses, approvals and authorizations
required for the execution, delivery and performance by
Lessee of the Transaction Documents have been obtained
or made and are in full force and effect;
(iii) Accounts: The balance sheet and other financial
statements of Lessee for the financial year ended
March 31 1998;
(iv) Licences: Copies of Lessee's air transport license and
air operator's certificate issued by the US Department
of Transportation and FAA, respectively;
(v) Transaction Documents: Originals of the Transaction
Documents (duly executed by all parties other than
Lessor);
(vi) Insurances: Evidence that the Insurances are in place
together with an insurance broker's letter of
undertaking (in a form acceptable to Owner Trustee,
Lessor and Lender) addressed to Owner Trustee, Lessor
and Lender;
(vii) Opinions: Legal opinions from:
(a) Counsel to Lessee addressed to Owner Trustee,
Lessor and Lender substantially in the form
of Schedule 9 and otherwise in a form and
substance acceptable to Owner Trustee, Lessor
and Lender; and
(b) Special FAA counsel to Lessee addressed to
Owner Trustee, Lessor and Lender confirming
that this Agreement and other appropriate
documents have been filed with the FAA;
(viii) Security: Receipt by Lessor of the Security Deposit
and the Letter of Credit;
(ix) Authority: A letter of authority substantially in the
form of Schedule 7 duly executed by Lessee to such
addressees as requested by Lessor;
(x) Power of Attorney: A power of attorney in the form of
Schedule 8 duly executed by Lessee; and
(xi) Others: Any other documents, approvals, consents,
certificates that Lessor or Lender may reasonably
require.
3.1.2 The representations and warranties of Lessee under Clause 2.1 shall be
correct and would be correct if repeated on Delivery.
3.1.3 No Default shall have occurred and be continuing.
3.2 Waiver
The Lessor's Conditions Precedent are for the sole benefit of
Lessor and may be waived or deferred by Lessor in whole or in part
and with or without conditions. If any of the Conditions Precedent
are not satisfied on the Delivery Date and Lessor (in its absolute
discretion) nonetheless agrees to deliver the Aircraft to Lessee,
Lessee shall ensure that such Conditions Precedent are fulfilled
within fifteen (15) days after the Delivery Date, and Lessor may
treat the failure of Lessee to do so as an Event of Default.
3.3 Lessee's Conditions Precedent
Lessee's obligation to accept and lease the Aircraft from Lessor
under this Agreement is subject to satisfaction of each of the
following conditions.
3.3.1 The Aircraft is substantially and materially in the condition set forth
in Schedule 4.
3.3.2 The receipt by Lessee from Lessor on or prior to the Delivery Date
of the following, each in form and substance reasonably
satisfactory to Lessee:
(i) Evidence of Authority: Certified copies of evidence of
appropriate action approving the execution, delivery
and performance of the Transaction Documents by Lessor
and of the person or persons authorized to sign the
Transaction Documents on behalf of Lessor or any other
documents to be delivered to Lessee by Lessor;
(ii) Specimen signatures: A certificate of an officer of
Lessor setting out the names and signatures of the
persons authorized to sign on behalf of Lessor the
Transaction Documents and any documents to be delivered
by Lessor pursuant hereto contemporaneously herewith;
and
(iii) Transaction Documents: Originals of this Agreement and
the Side Letter (duly executed by Lessor).
3.3.3 The representations and warranties of Lessor under Clause 2.2 shall be
correct and would be correct if repeated on Delivery.
3.4
Waiver
The Lessee's Conditions Precedent are for the sole benefit of
Lessee and may be waived or deferred by Lessee in whole or in part
and with or without conditions.
4. DELIVERY CONDITION AND INSPECTION OF AIRCRAFT
4.1 Lessee Selection of Aircraft
IN ADDITION TO THE DISCLAIMERS IN CLAUSE 18, LESSEE REPRESENTS AND
WARRANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGEMENT IN
SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN
AND TYPE. LESSEE ACKNOWLEDGES THAT LESSOR IS NEITHER A
MANUFACTURER OF THE AIRCRAFT NOR A DEALER IN THE AIRCRAFT.
4.2 Condition at Delivery
In addition to the disclaimers in Clause 18, Lessor has advised
Lessee that at Delivery the Aircraft will be substantially and
materially in the condition set forth in Schedule 4, provided that
this confirmation expires as at Delivery.
4.3 Lessee Inspection and Acceptance Flight
Lessor will arrange with Present Lessee for Lessee to perform such
ground inspection of the Aircraft prior to the Scheduled Delivery
Date as is reasonable. Lessor will procure that Lessee may have up
to two (2) observers on board the Aircraft during the redeliver
acceptance flight from the Present Lessee. Lessee acknowledges
that, as between it and Lessor, in accepting the Aircraft it is
relying on its own inspection and knowledge of the Aircraft in
determining whether it meets the requirements of this Agreement.
4.4 Delivery of Aircraft to Lessee
Subject to Lessee having complied with the conditions set out in
Clause 4.2, or the waiver thereof by Lessor, Lessor will deliver
the Aircraft to Lessee at the Delivery Location. Provided that the
Aircraft is in the condition required by Clause 4.2, upon the
tender of the Aircraft by Lessor to Lessee, Lessee will accept the
Aircraft and the date of tender by Lessor to Lessee will be deemed
to be the Delivery Date for all purposes under this Agreement,
including, but not limited to, the commencement of Lessee's
obligation to pay Rent hereunder. Lessee shall execute and deliver
the Acceptance Certificate to Lessor on the Delivery Date.
4.5 Lessee's Failure to take Delivery
If Lessee fails to (i) comply with the conditions contained in
Clauses 3.1 so as to allow Delivery to take place upon tender or
(ii) take delivery of the Aircraft when properly tendered for
Delivery by Lessor in the condition required hereunder, Lessee
will indemnify Lessor for all costs and expenses, directly or
indirectly, incurred by Lessor as a result thereof.
5. LEASE TERM
5.1 Initial Lease Term and Base Lease Term
Lessor shall lease the Aircraft to Lessee and Lessee shall take
the Aircraft on lease in accordance with this Agreement for the
duration of the Initial Lease Term and the Base Lease Term and,
subject to Clause 5.2, the Extension Lease Term.
5.2 Extension Lease Option
So long as no Default has occurred and is continuing hereunder
both on the date of exercise of the option and from such date to
the commencement date of the Extension Lease Term, Lessee will
have the option (the Extension Lease Option) to extend the Base
Lease Term under this Agreement for the period of the Extension
Lease Term. In order to exercise such option, Lessee must give
written notice to Lessor not less than nine (9) months prior to
the Base Lease Expiry Date.
5.3 Expiry Date
The Expiry Date shall be the Base Lease Expiry Date or, if Lessee
has exercised the Lease Extension Option, the Extension Lease
Expiry Date subject to the following provisions:
(i) If Lessor, acting in accordance with Clause 3.2,
notifies Lessee that it is terminating this Agreement,
Lessee shall immediately redeliver the Aircraft in
accordance with Clause 23 and the Expiry Date shall be
the date upon which the Aircraft has been redelivered
in accordance with the terms hereof and Lessee has
complied with all its obligations hereunder;
(ii) If Lessor, upon an Event of Default, exercises its
rights in accordance with Clause 24.3 and terminates
the leasing of the Aircraft to Lessee under this
Agreement, Lessee shall immediately redeliver the
Aircraft in accordance with Clause 23 and the Expiry
Date shall be the date upon which the Aircraft has been
redelivered in accordance with the terms hereof and
Lessee has complied with all its obligations hereunder;
(iii) If the Aircraft or the Airframe suffers a Total Loss
prior to Delivery, the Expiry Date shall be the Total
Loss Date;
(iv) If the Aircraft or the Airframe suffers a Total Loss
after Delivery, the Expiry Date shall be the date upon
which Lessee has paid to Lessor the Agreed Value and
all other sums due from Lessee to Lessor hereunder;
(v) If Clause 23.4 becomes applicable, the Expiry Date
shall be the date when any non-compliance referred to
in Clause 23.4 has been fully rectified and Lessor
shall have accepted redelivery of the Aircraft and
Lessee shall have complied with all its obligations
hereunder; and
(vi) Under any other circumstances, the Expiry Date shall be
the date upon which the Aircraft is redelivered in
accordance with Clause 23 and the Return Acceptance
Receipt has been duly executed and delivered by Lessor
in accordance with that clause.
5.4 Survival of Certain Lessee Obligations
5.4.1 For the avoidance of doubt, in respect of Clauses 5.3 (i), (ii),
(v) and (vi) the obligations of Lessee in respect of payment of
Rent and all other obligations shall continue to be payable and
valid in respect of those days prior to the redelivery to Lessor
of the Aircraft in the condition required under Clause 23.1, and
in respect of Clause 5.3 (iv) such obligations shall continue
until payment of the Total Loss Proceeds.
5.4.2 The obligations of Lessee set forth in Clauses 12.5, 12.17, 19, 20
and 21.7 and any other obligations of Lessee that were due to have
been performed but have not been fully performed prior to the
termination of the Agreement pursuant to this Clause 5.4, will
survive the Expiry Date.
5.5 Risk
5.5.1 Throughout the Lease Term and until redelivery of the Aircraft in
the condition required under Clause 23.1, Lessee shall bear all
risks of loss, theft, damage, confiscation and destruction of or
to the Aircraft and every part thereof.
5.5.2 If the Aircraft is lost, stolen, confiscated, damaged, destroyed
or otherwise rendered unfit and unavailable for use, Lessor shall
not be liable to repair the same or supply any equipment in
substitution therefor, unless caused by the intentional act or
gross negligence of Lessor, its employees or agents.
6. DELIVERY
6.1 Location and Time of Delivery
Lessor will deliver the Aircraft to Lessee at the Delivery
Location on or about the Scheduled Delivery Date, which is the
date when Present Lessee shall redeliver the Aircraft to Lessor.
Lessor will notify Lessee from time to time and in a as timely
manner as is possible of any changes to the Scheduled Delivery
Date.
6.2 Delay or Failure in Delivery
6.2.1 Lessee and Lessor expressly acknowledge that Delivery of the
Aircraft to Lessee is subject to and conditioned upon delivery of
the Aircraft by Present Lessee to Lessor. Lessor will not be
liable for any loss or expense, or any loss of profit, arising
from any delay or failure in Delivery to Lessee unless such delay
or failure arises as a direct consequence of the gross negligence
or wilful default of Lessor, and in no event will Lessor be liable
for any delay or failure that is caused by any failure, breach or
delay on the part of Present Lessee.
6.2.2 If a delay, not caused by Lessor's or Lessee's breach of this
Agreement, causes Delivery to be delayed beyond seventy-five (75)
days after the Scheduled Delivery Date either party will have the
right to terminate this Agreement by giving the other party
written notice within ten (10) Business Days after such date and
this Agreement will terminate on the date of receipt of such
notice. In the event of such termination, neither party will have
any further obligation or liability to the other under this
Agreement, except that Lessor will repay to Lessee under this
Agreement any prepaid Rent the amount of Security Deposit, if
paid, and return the Letter of Credit. If either party does not
give notice of termination within such ten (10) Business Days,
both parties lose all rights to terminate under this Clause 6.2.2,
unless otherwise agreed by the parties.
7. RENT
7.1 Initial Rent Dates
Shall be the Initial Rent Dates (first and second) determined in
accordance with Schedule 2.
7.2 Amount of Initial Rent
The Initial Rent shall be the amounts set out as Initial Rent in
Schedule 2.
7.3 Basic Rent Period
The first Basic Rent Period shall commence on the day following
the Initial Lease Expiry Date and each subsequent Basic Rent
Period shall commence on the date succeeding the last day of the
previous Rent Period within the Base Lease Term (and Extension
Lease Term, if applicable). Each Basic Rent Period shall end on
the date immediately preceding the numerically corresponding day
one (1) month thereafter, except that:
(i) if there is no such numerically corresponding day in
that month, it shall end on the last day of that month;
and
(ii) if a Basic Rent Period would otherwise end after the
Expiry Date, it shall end on the Expiry Date and the
Rent for such Basic Rent Period will be prorated on the
basis of a thirty (30) day month.
7.4 Time of Payment of Basic Rent
Lessee shall pay Basic Rent to Lessor or to its order in advance
on each Rent Date. Lessee shall initiate payment adequately in
advance of each Rent Date to ensure that Lessor receives credit
for the payment on such Rent Date. If a Rent Date is a day which
is not a Business Day, the Rent payable in respect of that rent
period shall be paid on the Business Day immediately preceding the
Rent Date.
7.5 Amount of Basic Rent
The Basic Rent payable on each Rent Date during the Base Lease
Term and the Extension Lease Term, if applicable, shall be the
amount set out as Basic Rent in Schedule 2.
7.6 Maintenance Reserves
Lessee will pay to Lessor Maintenance Reserves in accordance with
Clause 9 as Supplemental Rent, based on Lessee's use of the
Aircraft during the Lease Term.
7.7 Supplemental Rent for Excess Cycles
Lessee shall pay to Lessor Supplemental Rent based on Lessee's
operation of the Aircraft in the amount and at the times set forth
in Schedule 2.
8. SECURITY DEPOSIT
8.1 Security Deposit
Lessee shall pay to Lessor a Security Deposit in the amount and at
the times set forth in Schedule 2. The Security Deposit will serve
as security for the performance by Lessee of its obligations under
the Transaction Documents and the Other Agreements.
Upon Lessor's receipt of the additional Security Deposit set forth
in Clause 8.2 the initial deposit set forth in this Clause 8.1
will be credited to the payment of Rent payable during the Initial
Lease Term and, if applicable, during the Base Lease Term.
8.2 Letter of Credit
Lessee shall provide Lessor with an additional Security Deposit in
the form of an irrevocable, assignable, standby letter of credit
in favour of Lessor in the amount and issued by a major US Bank
and in the form and substance acceptable by Lessor. The Letter of
Credit will serve as security for the performance by Lessee of its
obligations under the Transaction Documents and the Other
Agreements.
8.3 Lessor's Rights
8.3.1 If an Event of Default shall have occurred and be continuing, in
addition to all rights and remedies accorded to Lessor elsewhere
in this Agreement or under applicable law in respect of the
Security Deposit or Letter of Credit, Lessor may immediately, or
at any time thereafter, without prior notice to Lessee, apply all
or part of the Security Deposit or Letter of Credit in or towards
the payment or discharge of any matured obligation owed by Lessee
under the Transaction Documents or the Other Agreements, in such
order as Lessor sees fit, and/or exercise any of the rights of
set-off described in Clause 10.6 against all or part of the
Security Deposit or Letter of Credit.
8.3.2 If Lessor exercises the rights described in Clause 8.3.1, Lessee
shall, following a demand in writing from Lessor, immediately
restore the Security Deposit (if applicable) or Letter of Credit
to the level at which it stood immediately prior to such exercise.
8.3.3 Lessee acknowledges that Lessor may commingle all or any part of
the Security Deposit with its general funds and that no interest
shall accrue in favour of Lessee in respect of the Security
Deposit.
8.3.4 Lessor's obligations in respect of return of the Security Deposit
and Letter of Credit shall be those of debtor and not those of a
trustee or other fiduciary.
9. Maintenance reserves
9.1 Amount
Lessee shall during the Lease Term pay Maintenance Reserves to
Lessor in the amount set forth in Schedule 2.
9.2 Payments
9.2.1 Lessee shall pay the Maintenance Reserves in respect of each
calendar month during which the Maintenance Reserves accrue on the
tenth (10) day immediately following the end of that calendar
month on the basis of the information contained in the applicable
Monthly Report.
9.2.2 Lessee acknowledges that Lessor may commingle all or any part of
the Maintenance Reserves with its general funds and that no
interest shall accrue in favour of Lessee in respect of the
Maintenance Reserves.
9.2.3 Lessor's obligations to release the Maintenance Reserves as set
out hereinafter shall be those of debtor and not those of a
trustee or other fiduciary.
9.3 Adjustment
The amount payable by Lessee to the Maintenance Reserves shall be
subject to escalation in accordance with the terms set forth in
Schedule 2.
9.4 Release of Maintenance Reserves
9.4.1 Airframe Maintenance Reserves
Lessor will reimburse Lessee from the actual Airframe Maintenance
Reserves, if paid by Lessee, provided that no Default has occurred
and is continuing, for the actual cost of the structural
inspection portion of completed scheduled "D" Checks and the
rectification of any structural deficiencies resulting from such
inspection whenever such inspections and rectification work is
performed (provided that such inspection and rectification extends
the available life of the Aircraft). Work performed for all other
causes is excluded from such reimbursement, including the charges
set forth in Clause 9.4.5 below.
9.4.2 Engine Maintenance Reserves
Lessor will reimburse Lessee from the actual Engine Maintenance
Reserves, if paid by Lessee, provided that no Default has occurred
and is continuing, for the actual cost of completed Engine
Performance Restoration Visits to the extent the work performed
during such Engine Performance Restoration Visits consisted of the
replacement of life/time limited components resulting in
performance restoration, with work performed for all other causes
excluded, including those causes set forth in Clause 9.4.5 below.
Reimbursement will be made up to the amount in the Engine
Maintenance Reserve applicable to such Engine.
9.4.3 Landing Gear Maintenance Reserves
Lessor will reimburse Lessee from the actual Landing Gear
Maintenance Reserves, if paid by Lessee, provided that no Default
has occurred and is continuing, for the actual cost associated
with the completed Landing Gear Overhauls, with work performed for
all other causes excluded, including those causes set forth in
Clause 9.4.5. Reimbursement will be made up to the amount in the
Landing Gear Maintenance Reserve at the time for the Landing Gear
Overhaul.
9.4.4 APU Maintenance Reserves
Lessor will reimburse Lessee from the actual APU Maintenance
Reserves, if paid by Lessee, provided that no Default has occurred
and is continuing, for the actual cost associated with the
completed APU performance restoration, with work performed for all
other causes excluded, including those causes set forth in Clause
9.4.5 Reimbursement will be made up to the amount in the APU
Maintenance Reserve at the time for the APU performance
restoration.
9.4.5 Exclusion
Each of the following causes shall be excluded from this Clause
9.4: accomplishment of Airworthiness Directives and FAR's,
accident, faulty maintenance or installation, incident, improper
operations, abuse, neglect, misuse, optional parts replacement
(where such replacement does not increase operational life) or
work covered by manufacturer's service bulletins or which is
reimbursed by a claim under manufacturer's warranties or by
insurance (with deductibles being treated as reimbursable by
insurance for this exclusion).
9.4.6 Remaining balance
For the avoidance of doubt, Lessee has no right to payment of any
amount from the Maintenance Reserves not paid in cash by Lessee
and, subject to Clause 9.6, any remaining balances of the
Maintenance Reserves on the Expiry Date, after application of the
foregoing provisions, shall be retained by Lessor as its sole
property.
9.5 Costs in Excess of Maintenance Reserves
Lessee will be responsible for payment of all costs in excess of
the amounts reimbursed hereunder. If on any occasion the balance
in the relevant Reserve is insufficient to satisfy a claim for
reimbursement in respect of the Airframe, an Engine, the Landing
Gears or the APU, as the case may be, the shortfall may not be
carried forward or made the subject of any further claim for
reimbursement.
9.6 Reimbursement after Expiry Date
Lessee may not submit any invoice for reimbursement from the
Maintenance Reserves after the Expiry Date unless on or prior to
such date Lessee has notified Lessor in writing that such
outstanding invoice will be submitted after the Expiry Date and
the anticipated amount of such invoice. So long as Lessee has
provided such notice to Lessor, Lessee may then submit such
outstanding invoice at any time within three (3) months after the
Expiry Date; provided, however, if Lessee contests any such
invoice and provides Lessor with notice of such contest and
periodic updates of the progress of such contest, the time for
submitting an invoice shall be extended until the resolution of
such contest.
10. Payments
10.1 Account for Lessee Payments
All payments by Lessee to Lessor under this Agreement will be made
for value on the due date in dollars and in same day funds to:
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.'s account
ABA reference 021000238, account number 65830747 with
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York
United States of America
Att. Mr Richard Polkerman, reference Corporate Finance
Reference Maersk-Indigo
or to such other account as Lessor may from time to time notify to
Lessee in writing.
10.2 Default Interest
If Lessee fails to pay any amount payable under this Agreement on
the due date, Lessee shall pay to Lessor on demand from time to
time interest both before and after judgement on that amount, from
the due date or, in the case of amounts expressed to be payable on
demand, from the date of receipt of such demand to the date of
payment in full by Lessee to Lessor, at the Default Rate. All such
interest will accrue on a day-to-day basis and be compounded
weekly and calculated on the basis of a 360 day year.
10.3 Absolute Obligations
This Agreement is a net lease and Lessee's obligations under this
Agreement are absolute and unconditional, irrespective of any
contingency or circumstance whatsoever, including (but not limited
to):
(i) any right of set-off, counterclaim, recoupment,
reimbursement, defense or other right which Lessor or
Lessee may have against the other or against any other
person;
(ii) any unavailability of the Aircraft for any reason,
including, but not limited to, requisition of the
Aircraft or any prohibition or interruption of or
interference with or other restriction against Lessee's
use, operation or possession of the Aircraft;
(iii) any lack or invalidity of title or any other defect in
title, airworthiness, merchantability, fitness for any
purpose, condition, design, or operation of any kind or
nature of the Aircraft for any particular use or trade,
or for registration or documentation under the laws of
any relevant jurisdiction, or any Total Loss in respect
of or any damage to the Aircraft;
(iv) any insolvency, bankruptcy, reorganisation,
arrangement, readjustment of debt, dissolution,
liquidation or similar proceedings by or against Lessor
or Lessee or any other person;
(v) any invalidity, illegality, unenforceability or lack
of due authorization of, or other defect in, this
Agreement; and
(vi) any other cause or circumstance that, but for this
provision, would or might otherwise have the effect of
terminating or in any way affecting any obligation of
Lessee under this Agreement.
10.4 Application of Payments to Lessor
If any sum paid to Lessor or recovered by Lessor in respect of the
liabilities of Lessee under this Agreement is less than the amount
then due, Lessor may apply that sum to amounts due under this
Agreement in such proportions and order and generally in such
manner as Lessor may determine.
10.5 Currency Indemnity
If under any applicable law, whether as a result of judgement
against Lessee or the liquidation of Lessee or for any other
reason, any payment under or in connection with this Agreement is
made or is recovered in a currency ("other currency") other than
the currency in which it is payable pursuant to this Agreement
("contractual currency"), Lessee shall, to the extent that the
payment (when converted into the contractual currency at the rate
of exchange on such date or, in the case of a liquidation, the
latest date for the determination of liabilities permitted by the
applicable law) falls short of the amount payable under this
Agreement, as a separate and independent obligation, fully
indemnify Lessor against the amount of the shortfall. For the
purposes of this sub-Clause "rate of exchange" means the rate at
which the Lessor is able on the relevant date to purchase the
contractual currency in London or any other place Lessor may
reasonably choose with the other currency.
10.6 Set-off
Lessor may set-off any matured obligation owed by Lessee under the
Transaction Documents or any Other Agreements against any
obligation, whether or not matured, owed by Lessor to Lessee.
10.7 Time for Payments
If any payment due under this Agreement other than a payment of
Rent (see Clause 7.4) would otherwise be due on a day that is not
a Business Day, it shall be due on the next succeeding Business
Day.
11. Lessor's covenants
11.1 Quiet Enjoyment
Provided no Default has occurred and is continuing, Lessor shall
not, and no one claiming by or through the acts or omissions of
Lessor or Owner Trustee shall, interfere with the quiet use,
possession and enjoyment of the Aircraft by Lessee during the
Lease Term. Lessor will cause Lender to confirm, substantially in
the form of Schedule 11 or such other form as Lender may
reasonably require, that it will not interfere with the quiet use,
possession and enjoyment of the Aircraft by Lessee during the
Lease Term, provided no Default has occurred and is continuing.
11.2 Lessor Obligations Following Expiry Date
Within five (5) Business Days after:
(i) redelivery of the Aircraft to Lessor in accordance with
and in the condition required by this Agreement; or
(ii) payment received by Lessor of the Agreed Value
following a Total Loss after the Delivery Date; or in
each case such later time as Lessor is reasonably
satisfied that Lessee has irrevocably paid to Lessor
all amounts that may then be outstanding or become
payable under the Transaction Documents and the Other
Agreements, Lessor shall (provided that no Default has
occurred and is continuing):
(a) pay to Lessee an amount equal to the balance
of the Security Deposit, if any, paid by
Lessee under this Agreement and then held by
Lessor; and
(b) pay to Lessee the amount of any Rent received
in respect of any period falling after the
Redelivery Date or the date of payment of the
Agreed Value, as the case may be; provided,
however, if there is a dispute between Lessor
and Lessee as to the amount due to Lessee,
Lessor shall nevertheless pay to Lessee such
amount as in Lessor's reasonable judgement is
not in dispute or is in excess of the amount
Lessor's claim is due; and
(c) return the Letter of Credit.
12. lessee's covenants
12.1 Duration
Lessee shall perform and comply with its undertakings and
covenants in this Agreement and the other Transaction Documents at
all times during the Lease Term. All such undertakings and
covenants shall, except where expressly otherwise stated, be
performed at the expense of Lessee.
12.2 Information
12.2.1 Lessee shall notify Lessor forthwith of the occurrence of a
Default or an Event of Default and the steps it is taking to cure
such Default or Event of Default.
12.2.2 Lessee shall furnish to Lessor:
(i) as soon as available, but not in any event later than
ninety (90) days after the last day of each financial
year of Lessee, its audited consolidated balance sheet
as of such day and its audited consolidated profit and
loss statement for the year ending on such day prepared
in accordance with generally accepted accounting
principles in the State of Incorporation;
(ii) as soon as available, but not in any event later than
forty-five (45) days after the last day of each quarter
of Lessee, its unaudited consolidated balance sheet as
of such day and its unaudited consolidated profit and
loss statement for the quarter ending on such day
prepared in accordance with generally accepted
accounting principles in the State of Incorporation;
(iii) such information as may reasonably be requested by
Lessor to fulfil its Tax filing or other information
reporting requirements with respect to the transactions
contemplated by this Agreement;
(iv) within ten (10) days following the end of each month a
Monthly Report in the form of Schedule 10, detailed
technical reports following completion of each "C"
Check and other information reasonably requested by
Lessor concerning the location, condition, use and
operation of the Aircraft; and
(v) such other information and documents regarding Lessee's
business and financial condition as Lessor may from
time to time reasonably request.
12.2.3 Lessee shall promptly notify Lessor in writing:
(i) of any loss, theft, damage or destruction to the
Aircraft, any Engine or any Part if the cost of the
repair or replacement thereof may exceed the Damage
Notification Threshold, or any modification to the
Aircraft if the potential cost of repair or of such
modification may exceed the Damage Notification
Threshold;
(ii) of any suit, arbitration or proceeding before any
court, administrative agency or Government Entity
which, if adversely determined, would materially
adversely affect Lessee's financial condition, affairs,
operations or its ability to perform under this
Agreement;
(iii) of any Total Loss to the Aircraft or any damage caused
to the Aircraft that is expected to be in excess of the
Damage Notification Threshold and the amount of the
deductible under the Insurance or equivalent in any
currency;
(iv) of any loss, arrest, hijacking, confiscation, seizure,
requisitioning, impounding, taking in execution, or
forfeiture of the Aircraft or any Engine or any major
part thereof;
(v) of any substantial injury or damage to a third party
causes by, or in connection with, the Aircraft which is
expected to give rise to any loss or liability on the
part of the Lessor or to a loss or liability in excess
of the Damage Notification Threshold; and
(vi) of any other event in respect of the Aircraft which in
the reasonable opinion of the Lessee might reasonably
be expected to involve the Lessor in any loss or
liability.
(vii) promptly notify Lessor in the event Lessee is made
aware of or determines that any computer application
(including those of its suppliers, customers and
vendors) that is material to the business and operation
of Lessee will not be year 2000 compliant (as described
in Clause 2.1 (xxii)) on a timely basis, except to the
extent that such failure could not reasonably be
expected to have a materially adverse effect.
12.3 Lessor Visits
Lessor may visit, upon reasonable notice, Lessee's premises to
discuss Lessee's general affairs and finances with Lessee's
principal officers.
12.4 Periodic Estoppel Certificates
Lessee will, within ten (10) Business Days after receipt of
written notice from Lessor (which will not occur more often than
four (4) times in any calendar year), execute, acknowledge and
deliver to Lessor a written statement as to each of the following:
(i) certifying that this Agreement is unmodified and in
full force and effect (or, if modified, stating the
nature of such modification and certifying that this
Agreement, as so modified, is in full force and effect)
and the date to which the Rent and other charges are
paid in advance, if any;
(ii) acknowledging that there are not, to Lessee's
knowledge, any uncured defaults on the part of Lessor
hereunder, or specifying such defaults if there are any
claimed by Lessee; and
(iii) acknowledging that Lessee has no claims against Lessor
by reason of the condition of the Aircraft as of the
Delivery Date or arising subsequent thereto to the date
of such statement.
If Lessee does not deliver such statement within such time-limit,
the statements set forth in this Clause 12.4 will be deemed
correct and binding upon Lessee.
12.5 Airport and Navigation Charges
12.5.1 Lessee will promptly pay and discharge when due all landing fees
and other similar Airport Charges imposed by the authorities of
any airport from or to which the Aircraft may operate and any
charges (including without limitation, all Air Navigation Charges)
imposed by virtue of any regulations made by any relevant
authority or any other charges in respect of air navigation
incurred, in each case in respect of all aircraft of which it is
the operator, and will indemnify and holdharmless Lessor in
respect of the same. This indemnity will continue in full force
and effect notwithstanding the termination or expiration of this
Agreement. Lessee will ensure that all such charges are paid on a
regular basis and that invoices are received (and, if not
received, are specifically requested) by it from the relevant
authorities no more than three (3) months after the event to which
the charges relate.
12.5.2 If requested by Lessor, Lessee will provide Lessor with a list of
the airports to which the Aircraft or Lessee's other aircraft are
regularly operated. Lessee hereby authorises any Aviation
Authority, any airport or any other creditor claiming rights on
the Aircraft or Lessee's other aircraft to confirm the status of
Lessee's payments to such creditor for the Aircraft and its other
aircraft, as and when requested by Lessor. To evidence this
authority, Lessee will at Lessor's request execute one or more
authorities substantially in the form of Schedule 7.
12.6 Operation of Aircraft
Lessee shall not maintain, use or operate the Aircraft in
violation of any law or any mandatory rule, regulation or order of
any Government Entity having jurisdiction in any country, state,
province or other political subdivision in or over which the
Aircraft is flown or in violation of any airworthiness
certificate, license or registration relating to the Aircraft
issued by the Aviation Authority or any similar authority or any
jurisdiction in or over which the Aircraft is flown. If any such
law, rule, regulation or order requires alteration of the
Aircraft, Lessee shall conform or procure conformance thereto at
its own expense and maintain or procure maintenance of the
Aircraft in proper operating condition under such laws, rules,
regulations and orders; provided that Lessee may in good faith
contest, or procure the contest of, the validity or application of
any such law, rule, regulation or order in any reasonable manner
that does not adversely affect Lessor or its interest in the
Aircraft. In particular, Lessee will ensure that the Aircraft at
all times during the Lease Term is operated by duly qualified
pilots and aircrew employees, and is not used to transport
contraband or illegal narcotics or hazardous or perilous cargo
(other than pursuant to applicable FAA and carrier regulations).
The Aircraft may be used or operated in flight crew conversion,
training for Lessee's own employees and for experimental flights;
provided, however, prior to any such flights Lessee shall notify
Lessor and shall deliver to Lessor evidence that insurance
coverage is in effect for such flights.
12.7 Areas of Operation
Lessee shall not operate or locate the Airframe or any Engine or
Part or suffer the Airframe or any Engine or Part to be operated
or located (i) in any area, or for carriage of any goods, excluded
from coverage by the Insurances or (ii) in any recognized or
threatened area of hostilities unless fully covered by war risk
insurance or (iii) outside the United States of America, Mexico or
Canada.
12.8 Non-Prejudicial Action
Lessee shall not do anything that, or omit to do anything the
omission of which, prejudices any right Lessor may have against
either the Manufacturer or the manufacturer or supplier of any
part of the Aircraft in respect of the Aircraft or any part
thereof.
12.9 Non-Representation of Lessor
Lessee shall not at any time represent Lessor, Owner Trustee or
Lender as carrying goods or passengers in the Aircraft or as being
in any way connected or associated with any operation or carriage
being undertaken by Lessee or as having any operational interest
in or responsibility for the Aircraft.
12.10 Inspection
Lessor may at all reasonable times on reasonable notice inspect,
or appoint an inspector (including Lender) on its behalf to
inspect, the Aircraft or any part thereof, provided that if no
Default or Event of Default has occurred and is continuing Lessee
shall not be obliged hereunder to permit, or procure permission
for, any such inspection that would result in an unreasonable
disruption of the operation of the Aircraft or the operation of
the business of Lessee as an airline. Lessee agrees to reimburse
the out-of-pocket expenses of Lessor incurred in making any such
inspection when such inspection shows that the Aircraft is not
materially in the condition required by the terms of this
Agreement, provided that Lessee shall in all cases pay or
reimburse Lessor for the costs of such inspection or survey if
Lessor is required by law or change of law to make an inspection
or survey. Lessor shall have no duty to make any such inspection
and shall not incur any liability or obligation by reason of not
making any such inspection. Lessee shall provide Lessor with such
information regarding the present and anticipated location and
regarding the condition of the Aircraft as Lessor may reasonably
require. For the purposes mentioned in this Clause 12.10 and
subject to the limitations herein contained, Lessor and any
inspector may gain access to the Aircraft, including the Aircraft
Documents. Lessee shall forthwith effect such repairs to the
Aircraft as such inspection may reasonably show are required for
the terms of this Agreement to be complied with, but if it fails
to do so after receipt of notice requiring it to do so from
Lessor, Lessor may at the cost and expense of Lessee, itself
arrange for such repairs to be carried out. Lessee shall on demand
reimburse the costs and expenses incurred by Lessor in effecting
such repairs.
12.11 Registration
12.11.1 Lessee shall at its own expense procure that the Aircraft and the
interests of the parties set out below is duly registered,
recorded or filed with the Aviation Authority (to the extent that
the Aviation Authority permits registration in that manner) as
follows:
(i) Owner Trustee as owner;
(ii) the first priority security interest of Lender
(iii) Lessor's interest, by filing the Lease Supplement
according to Schedule 14;
(iv) Lessee as operator of the Aircraft and maintain or
provide the maintenance of such registration
throughout the Lease Term. Lessee shall further provide
that the interests of any successors and assigns to the
parties referred to in this paragraph will be filed and
recorded with the FAA and that such recordation will be
maintained in the same manner as required herein.
Lessee will not take any action or omit to take any
action that will invalidate any such registration or
recordation. Lessee shall provide Lessor as soon as
available with evidence of such registration.
12.11.2 Lessee shall at its own expense provide that at all times during
the Lease Term, the Aircraft possesses a valid current FAA
Certificate of Airworthiness, and all such other certificates,
licenses, permits and authorizations as are from time to time
required for the use and operation of the Aircraft for the public
transport of passengers or cargo from any Government Entity having
jurisdiction in any country, state, province or other political
subdivision in or over which the Aircraft is flown including
without limitation any Aviation Authority.
12.12 Name Plates
On the Delivery Date or as soon thereafter as is reasonably
practicable, Lessee shall affix and thereafter maintain, or
procure the affixation and maintenance of, in a prominent position
in the cockpit of the Aircraft and on each Engine a fireproof
metal nameplate bearing a legible inscription in a form reasonably
required by Lessor stating the Aircraft type, manufacturer's
serial number and current registration letters of the Aircraft and
denoting the name of (i) Lessor as lessor (ii) Owner Trustee as
owner trustee and (iii) Lender as mortgagee. Except as above
provided Lessee will not allow the name of any person to be placed
on the Airframe or on any Engine as a designation that constitutes
a claim of ownership or a claim of any Security Interest; provided
that nothing herein contained shall prohibit Lessee (or any person
to which possession of the Airframe or any Engine is delivered or
transferred in accordance with Clauses 13 and 14) from placing its
customary colours and insignia on the Airframe.
12.13 Geneva Convention
Whenever the State of Registration is a signatory state that has
ratified the Geneva Convention, Lessee shall, at its own cost, do
any and all things necessary in the State of Registration to
perfect recognition of the interests of Owner Trustee, Lessor and
Lender to the Aircraft by every other signatory state that has
ratified the Geneva Convention.
12.14 Merger and Shareholding
Lessee will not sell its business to or operate its business in
any other corporate form or entity (the new entity) unless (a)
such new entity is solvent and duly organised and existing under
the law of the State of Incorporation or any federal state
thereof, if applicable, and the new entity has executed and
delivered to Lessor an agreement in form and substance acceptable
to Lessor assuming the due and punctual performance and observance
of each of the terms of this Agreement and the other Transaction
Documents and (b) immediately after such sale or the giving effect
to such operation as that new entity, the tangible net worth of
such new entity is equal to or greater than that of Lessee and the
creditworthiness of such new entity does not, in Lessor's
reasonable opinion, adversely affect the ability of such new
entity to perform its obligations under this Agreement and the
other Transaction Documents or any Other Agreements. Lessee will
give Lessor prior written notice of any such proposed sale or
change in operation together with a non-refundable processing fee
in the amount as set forth in Schedule 2 and a request of Lessor's
approval. Lessee shall reimburse Lessor within ten (10) days of
Lessor's invoice for all out-of-pocket expenses incurred by Lessor
as a result of such proposed merger whether or not Lessor approves
and whether or not it actually occurs.
12.15 Ownership
Title to the Aircraft will be and remain vested in Owner Trustee.
Lessee will have no right, title or interest in the Aircraft
except as provided for in this Agreement. Lessee shall not hold
itself out as owner of the Aircraft and, on all occasions when the
ownership of the Aircraft or any part of it is relevant, will make
clear to third parties that title to the same is held by Owner
Trustee, subject to the Mortgage.
12.16 Maintenance of Principal Business Place
Lessee shall maintain its principal place of business and chief
executive office and the office where it keeps its business and
financial records and files concerning the Transaction Documents
at the location specified in Clause 27. Lessee shall hold and
preserve such records and files concerning the Transaction
Documents and shall permit representatives of Lessor at any time
during normal business hours to inspect and make abstracts from
such records and files. Lessee shall give Lessor at least thirty
(30) days prior written notice of any change in Lessee's principal
place of business and chief executive office, and shall co-operate
with Lessor in executing and delivering all such documents as
Lessor may reasonably request which are required or desirable as a
result of such change of principal place of business of Lessee.
12.17 Maintenance of Flight Records
Lessee shall maintain flight records pertaining to the Aircraft
required to be maintained pursuant to section 47.9(e) of the FAR
at the address given in Clause 27 and shall hold and preserve such
records at such address and permit inspection of such records by
the FAA, Lessor, Owner Trustee and Lender. Lessee shall give
Lessor at least thirty (30) days prior written notice of change in
location of the flight records of the Aircraft.
13. Possession
13.1 No Relinquishment of Possession
Lessee shall not sub-lease or otherwise deliver, transfer or
relinquish possession of the Airframe or any Engine or install any
Engine or permit any Engine to be installed, on any airframe other
than the Airframe, provided that, (i) so long as no Default shall
have occurred and be continuing, (ii) Lessee continues to be fully
responsible to Lessor for all its obligations hereunder and (iii)
Lessee in advance, obtains written acknowledgement(s) of Lender's
Security Interest in the Airframe and/or any Engines from any
person who will be in possession of the Airframe and/or any Engine
in the form and substance requested by Lessor, Lessee may:
13.1.1 subject any Engine to normal interchange or pooling agreements or
arrangements in each case customary in the airline industry and
entered into by Lessee in the ordinary course of its business with
a commercial air operator which is approved by Lessor in writing
and on terms and conditions that Lessor has approved (such
approval not to be unreasonably withheld) (any such commercial air
operator being hereinafter called a Permitted Air Carrier)
provided THAT the terms of this Agreement shall be observed and if
either:
(i) Owner Trustee's title to the Engine shall be divested
under the terms of any such agreement or arrangement,
or
(ii) any Permitted Air Carrier shall have possession of any
such Engine under any such agreement or arrangement for
more than ninety (90) days,
Lessee shall forthwith substitute, or procure the substitution of,
a Replacement Engine therefor in accordance with and which
satisfies the conditions of Clause 16.6;
13.1.2 deliver possession of the Airframe or any Engine to the
manufacturer thereof for testing or other similar purposes or to
any organisation for service, repair, maintenance or Overhaul work
on the Airframe or such Engine or any part thereof or for
alterations or modifications in or additions to the Airframe or
such Engine to the extent required or permitted by the terms of
Clauses 16.4 and 16.5;
13.1.3 install an Engine on an airframe owned by Lessee and operated by
and under the operating control of flight crew engaged by Lessee
which is free and clear of all Security Interests, except (i)
Permitted Liens, (ii) Security Interests that apply only to the
engines (other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment (other
than Parts) installed on such airframe but not to the airframe as
an entirety and (iii) the rights of Permitted Air Carriers under
normal interchange agreements which are customary in the airline
industry and do not contemplate, permit or require the transfer of
title to the airframe or engines installed thereon;
13.1.4 install an Engine on an airframe operated by Lessee that is owned
by or leased or subleased to Lessee and/or subject to any security
agreement, provided that (i) such airframe is free and clear of
all Security Interests except the rights of the parties to any
security agreement covering such airframe and except Permitted
Liens and any Security Interests or rights of the type permitted
by sub-paragraphs (ii) and (iii) of Clause 13.1.3 and (ii) Lessee
shall have obtained from the sublessor or secured party, as
relevant, of such airframe a written agreement, which may be in
the sublease agreement or security agreement in respect of such
airframe, in form and substance satisfactory to Lessor (it being
understood that an agreement from such sublessor or secured party
to substantially the same effect as the agreement of Lessor set
forth in the final sentence of Clause 13.4 shall be deemed to be
satisfactory to Lessor), whereby such Lessor or secured party
expressly agrees that neither it nor its successors or assignees
will acquire or claim any right, title or interest in any Engine
by reason of such Engine being installed on such airframe at any
time while such Engine is subject to this Agreement;
13.1.5 install an Engine on an airframe owned by Lessee, leased or
subleased to Lessee, or purchased by Lessee, subject to any
security agreement under circumstances where neither Clause 13.1.1
nor 13.1.2 can be fulfilled in the circumstances, provided that it
would otherwise have resulted in an unreasonable disruption of the
operation of the Aircraft or the business of the Lessee and in
such event Lessee shall, as promptly as possible and in any event
within fifteen (15) days substitute a Replacement Engine therefor
in accordance with Clause 16.6 and which satisfies the conditions
specified in Clause 16.6;
13.1.6 sublease the Aircraft or Airframe to any person provided that the
Aircraft or Airframe is operated by, and remains throughout the
term of such sublease under the operational control of, flight
crew engaged by Lessee, and provided further that:
(i) no Default has occurred and is continuing;
(ii) any such sublease will not result in any change in the
State of Registration;
(iii) the length of any such sublease does not extend beyond
the Expiry Date;
(iv) the relevant sublessee shall acknowledge that its
rights are subordinate to Lessor's rights under this
Agreement and the rights of Lender under any finance
document or security document entered into between
Owner Trustee or Lessor in relation to the Aircraft;
13.1.7 sublease the Aircraft or Airframe to any wholly-owned subsidiary
of Lessee on terms that the Aircraft or Airframe is not operated
by, and does not remain under the operational control of, flight
crew engaged by Lessee provided that the following conditions are
satisfied in relation to any such sublease hereunder:
(i) no Default has occurred and is continuing;
(ii) the proposed sublessee and the proposed form of the
sublease is approved by Lessor and Lender in writing,
which approval will not be unreasonably withheld or
delayed provided all the following conditions set out
in this Clause 13.1.7 are satisfied;
(iii) the sublease shall terminate on or before termination
of this Agreement and the terms and conditions of the
sublease are not inconsistent with those contained in
this Agreement or any finance or security document
entered into between Lessor and/or Owner Trustee and/or
Lender and the sublessee shall acknowledge that its
rights are subordinate to Owner Trustee's, Lessor's and
Lender's rights under this Agreement (provided that the
sublease shall not permit further subleasing);
(iv) the Insurances are in full force and effect in
accordance with the terms of this Agreement and, if the
sublessee is to maintain such insurances during the
term of such sublease, it shall have furnished to
Lessor all such documents, evidence and information
relating to such insurances which Lessee is required to
furnish or cause to be provided to Lessor under this
Agreement;
(v) if the Aviation Authority for the duration of the
sublease is to be other than the FAA, Lessor and Lender
approves the change of registration and Lessor receives
(x) an opinion of counsel in the State of Registration
in form and substance reasonably satisfactory to Lessor
and the Lender which opinion must, at least, address
the satisfactory recognition of Owner Trustee's
ownership of, and Lender's Security Interest in the
Aircraft and (y) evidence that all actions recommended
in such opinion have been or will be duly taken.
13.2 Copy of Sublease
No less than three (3) Business Days after the execution of any
sublease entered into by Lessee under Clause 13.1.6 or Clause
13.1.7 Lessee shall provide Lessor with a copy of such executed
sublease.
13.3 Lessee Primarily Liable
Notwithstanding anything contained in Clause 13.1, Lessee shall
remain primarily liable hereunder for the performance of all of
the terms of this Agreement to the same extent as if such transfer
or sublease had not occurred. No interchange agreement, sublease
or other relinquishment of possession of the Airframe or any
Engine permitted by this Clause 13 shall in any way discharge or
diminish any of Lessee's obligations hereunder.
13.4 Recognition of Rights
If Lessee shall have obtained from the sublessor or secured party
of any engine subleased to Lessee or owned by Lessee subject to
any Security Interest, a written agreement complying with the
terms of sub-paragraph (ii) of Clause 13.1.4, Lessor hereby agrees
for the benefit of such sublessor or secured party that Lessor
shall not acquire or claim, as against such sublessor or secured
party, any right, title or interest in any such engine as a result
of such engine being installed on the Airframe at any time while
such engine is subject to such sublease or security agreement and
owned by such sublessor or subject to a Security Interest in
favour of such secured party and Lessor shall, at the request of
Lessee, confirm such agreement in writing for any such sublessor
or secured party.
14. Security Interests
14.1 Title
Lessee shall not do, or permit to be done, any act, which might
reasonably be expected to jeopardise the interest of Owner
Trustee, Lessor or Lender. Lessee shall make clear to all third
parties that legal title to the Aircraft is owned by Owner Trustee
or the relevant title holder advised by Owner Trustee.
14.2 No Security Interests
Lessee shall not create, incur or permit to subsist over the
Aircraft or any part thereof or over the Transaction Documents any
Security Interest other than Permitted Liens.
14.3 Base of Aircraft
Lessee shall not keep or habitually base the Aircraft or any part
thereof outside the State of Registration for any continuous
period exceeding ten (10) days.
14.4 Notice to Lessor
Lessee shall notify Lessor:
(i) as and when it becomes aware of the same, of any
Security Interest (x) (excluding Permitted Liens)
arising over the Aircraft or any Engine or other major
part thereof or (y) (in the case of all Security
Interests including Permitted Liens) exercised over the
Aircraft or any Engine or other major part thereof or
(z) of any arrest or detention or purported or
attempted arrest or detention of the Aircraft; and
(ii) promptly on request of Lessor, of the location of the
Airframe and each Engine including an Engine that is
not for the time being installed on the Airframe.
14.5 Procure Release
Lessee shall as soon as possible and in any event within five (5)
Business Days of becoming aware of the same procure the release of
any Security Interest (other than Permitted Liens) arising over
the Aircraft or any part thereof and procure the release of the
Aircraft from any arrest or detention to which it is subject.
15. maintenance and repair
15.1 General Obligations
15.1.1 Lessee shall, or procure that any sublessee will, at its own expense
at all times during the Lease Term:
(i) maintain, service, repair, Overhaul and test the
Aircraft and all Parts thereon and equipment thereon
and the Engines and all Parts and equipment therein
(whether or not such Parts and equipment are the
property of Lessor), or procure the same, in accordance
with the applicable requirements of the FAA and the
Insurances and comply with all Airworthiness Directives
and alert service bulletins issued by the Manufacturer
(unless to do so would be in breach of the FAA's
requirements, in which case the FAA's requirements
shall prevail) and the MPD so as to keep the Aircraft
in good operating condition, ordinary wear and tear
excepted, and in accordance with sound international
aviation industry practice and in such condition as may
be necessary to enable (a) the airworthiness
certification of the Aircraft with the Aviation
Authority to be maintained in good standing at all
times during the Lease Term (b) the issuance of a
standard certificate of airworthiness for transport
category aircraft issued by the FAA in accordance FAR
Part 21 and, (c) the Aircraft to be placed on the
operations specifications of a U.S. airline in
accordance with Part 121 of the FAR's;
(ii) maintain, service, repair, Overhaul and test the
Aircraft and the Engines, in the same manner and with
the same care as used by Lessee with respect to similar
aircraft and engines operated by Lessee and without in
any way adversely discriminating against the Aircraft
and the Engines; and
(iii) maintain, or procure the maintenance of, the Aircraft
Documents including technical records and any other
records, logs and other materials required by the FAA
to be maintained in respect of the Aircraft in the
English language and permit Lessor to examine such
records, logs and other materials at any reasonable
time upon reasonable notice.
15.1.2 The performer of such maintenance and repairs as stated in this Clause
15.1 shall be approved by the Lessor with such approval not to be
unreasonably withheld.
15.2 Specific Obligations
Without limiting Clause 15.1, Lessee agrees that the performance
by Lessee or any sublessee of such maintenance and repairs as
stated therein will include, but will not be limited to, each of
the following specific items:
(i) performance in accordance with the Maintenance Program
of all routine and non-routine maintenance work;
(ii) incorporation in the Aircraft of all applicable
Airworthiness Directives or equivalent, all alert
service bulletins of Manufacturer, Engine Manufacturer
and other vendors or manufacturers of Parts
incorporated on the Aircraft and any service bulletins
which must be performed in order to maintain the
warranties on the Aircraft, Engines and Parts;
(iii) incorporation in the Aircraft of all other service
bulletins of Manufacturer, the Engine Manufacturer and
other vendors which Lessee schedules to adopt within
the Lease Term for the major part of its fleet of
aircraft of the same make as the Aircraft. It is the
intent of the parties that the Aircraft will not be
discriminated from the rest of Lessee's fleet in
service bulletin compliance (including method of
compliance) or other maintenance matters. Lessee will
not discriminate against the Engines with respect to
overhaul build standards and life limited part
replacements;
(iv) incorporation into the Maintenance Program for the
Aircraft of a CPCP as recommended by Manufacturer, the
Aviation Authority and the FAA and the correction of
any discrepancies in accordance with the
recommendations of Manufacturer and the structural
repair manual. In addition, all inspected areas will be
properly treated with corrosion inhibitor as
recommended by Manufacturer;
(v) incorporation into the Maintenance Program of an
anti-fungus/biological growth and contamination
prevention, control and treatment program of all fuel
tanks in accordance with Manufacturer's approved
procedures;
(vi) providing without delay written summaries of all
sampling programs and amendments thereof involving or
affecting the Aircraft;
(vii) maintaining in English and keeping in an up-to-date
status all relevant records and historical documents;
(viii) maintaining historical records, in English, for
condition-monitored, hard time and life limited Parts
(including tags from the manufacturer of such Part or a
repair facility which evidence that such Part is new or
Overhauled and establish authenticity, total time in
service and time since Overhaul for such Part), the
hours and cycles the Aircraft and Engines operate and
all maintenance and repairs performed on the Aircraft;
(ix) properly documenting all repairs, modifications and
alterations and the addition, removal or replacement of
equipment, systems or components in accordance with the
rules and regulations of the Aviation Authority and
reflecting such items in the Aircraft Documents. In
addition, all repairs, to the Aircraft will be
accomplished in accordance with Manufacturer's
structural repair manual, where possible, or approved
data from the Manufacturer accepted by the Aviation
Authority; and
(x) ensuring that Overhauls are accomplished utilising
maintenance and quality control procedures approved by
the Aviation Authority and that the repair agency
provides a complete record of all work performed during
the course of such Overhaul and certifies that such
Overhaul was accomplished, that the equipment is
airworthy and released for return to service and that
the Overhaul was in conformity with the original type
design.
16. replacement of parts
16.1 Replacement of Parts
Lessee shall, at its own expense, promptly replace, or procure the
replacement of, all Parts that become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond economical repair
or permanently rendered unfit for use for any reason whatsoever,
except as otherwise provided in Clause 16.4 or 16.5 In addition,
Lessee may at its own cost and expense, remove, or permit the
removal of any Parts including Engines, whether or not worn out,
lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use, provided that Lessee
shall, except as otherwise provided in Clause 16.7, at its own
cost and expense, immediately replace, or procure the replacement
of, such Parts. Title to all replacement Parts shall be vested in
Owner Trustee, subject to the Mortgage, free and clear of all
Security Interests except Permitted Liens and shall, except as
otherwise provided in Clause 16.7, be in as good operating
condition as, and shall have a value, age, configuration and
utility at least equal to, the replaced Parts, assuming such
replaced Parts were in the condition and repair required to be
maintained by the terms hereof, and shall have a current
"serviceable tag" of the manufacturer or maintenance facility
providing such items to Lessee.
16.2 Title to Replacement Parts
All Parts at any time removed from the Airframe or any Engine
shall remain the property of Owner Trustee and subject to the
terms of this Agreement, no matter where located, until such time
as such Parts shall be replaced by Parts that have been
incorporated or installed in or attached or added to the Airframe
or Engine and which meet the requirements for replacement Parts
specified above. Immediately upon any replacement Part becoming
incorporated or installed in or attached or added to the Airframe
or any Engine as above provided, without further act, (a) title to
the replaced Part shall thereupon vest in Lessee, shall cease to
be subject to this Agreement and shall no longer be deemed a Part
hereunder and (b) title to such replacement Part shall pass to
Owner Trustee, subject to the Mortgage, free and clear of all
Security Interests except Permitted Liens and such replacement
Part shall become subject to this Agreement and be deemed Part of
the Airframe or Engine for all purposes hereof to the same extent
as the Parts originally incorporated or installed in or attached
or added to such Airframe or Engine and shall become a Part
hereunder.
16.3 Pooling of Parts
Any Part removed from the Airframe or any Engine as provided in
Clause 16.1 or 16.2 may be subjected to a normal pooling
arrangement customary in the airline industry entered into in the
ordinary course of Lessee's business, provided that the part
replacing such removed Part shall be incorporated or installed in
or attached to the Airframe or such Engine in accordance with
Clause 16.1 and 16.2 as soon as practicable after the removal of
such removed Part. Without prejudice to the generality of the
foregoing sentence, any replacement Part when incorporated or
installed in or attached to the Airframe or any Engine may be
owned by a third person subject to such a normal pooling
arrangement, provided that Lessee, at its own expense, as promptly
thereafter as possible, either (a) causes title to such
replacement Part to vest in Owner Trustee in accordance with
Clause 16.1 and 16.2 free and clear of all Security Interests
except Permitted Liens, or (b) replaces or procures the
replacement of such replacement Part by the incorporation or
installation in or attachment to such Airframe or Engine of a
further replacement Part (which meets the requirements of this
Clause 16) free and clear of all Security Interests except
Permitted Liens and by causing title to such further replacement
Part to vest in the Owner Trustee, subject to the Mortgage, in
accordance with Clause 16.1 and 16.2 and such further replacement
Part shall forthwith be deemed Part of the Airframe or Engine to
the same extent as the Part originally incorporated or installed
in or attached to the Airframe or such Engine and shall become a
Part hereunder.
16.4 Alterations
Lessee shall at its own expense, make, or procure the making of,
such alterations and modifications in and additions to the
Airframe and Engines as may be required from time to time to meet
the standards of the Aviation Authority or any Government Entity
having jurisdiction in any country, state, county or other
political subdivision in or over which the Aircraft is flown or
the FAA and any mandatory or recommended service bulletins of the
Manufacturer. In addition, Lessee may, at its own expense, from
time to time, make, or procure the making of, such alterations and
modifications in and additions including the making of any
improvements to the Airframe or any Engine as Lessee may deem
desirable in the proper conduct of its business, including,
removal of Parts (for purposes of this Clause 16.4, Obsolete
Parts) which Lessee deems obsolete or no longer suitable or
appropriate for use in the Airframe or such Engine, provided that
no such alteration, modification, addition or removal shall cost
over US$ 200,000, or alter the fundamental nature of the Aircraft
as a passenger carrying aircraft, or change its original type
design or configuration, or materially diminish the value or
utility of the Airframe or any such Engine, or impair the
condition or airworthiness thereof, below the value, utility,
condition and airworthiness thereof immediately prior to such
alteration, modification, addition or removal assuming such
Airframe or Engine was then in the condition and repair required
to be maintained by the terms of this Agreement. Title to all
Parts incorporated or installed in or attached or added to the
Airframe or any such Engine as the result of such alteration,
modification or addition shall be vested in Owner Trustee, subject
to the Mortgage, and shall forthwith be deemed Part of the
Airframe or such Engine. Neither Owner Trustee, Lender nor Lessor
shall be required under any circumstances to pay directly for any
alteration, modification or addition to the Aircraft or to
reimburse Lessee for the cost thereof. Any other alterations other
than those permitted according to Clause 16.5 require Lessor's
prior written consent, which consent shall not be unreasonably
withheld or delayed.
16.5 Removal of Parts
Notwithstanding the foregoing, so long as no Default shall have
occurred and be continuing, Lessee may remove, or permit the
removal of, at any time during the Lease Term, any Part, provided
that (a) such Part is in addition to, and not in replacement of or
substitution for, any Part originally incorporated or installed in
or attached to the Airframe or any Engine at the time of Delivery
or in replacement of, or substitution for, any such Part, (b) such
Part is not required to be incorporated or installed in or
attached or added to the Airframe or such Engine pursuant to the
terms of Clause 16.4 or 16.5, and (c) such Part can be removed
from the Airframe or such Engine without causing damage to the
Airframe or such Engine or if it causes any such damage is to be
repaired and promptly thereafter is repaired and without
diminishing or impairing the value, utility, condition or
airworthiness required to be maintained by the terms of this
Agreement that the Airframe or such Engine would have had at such
time had such alteration, modification or addition not occurred
assuming it was in the condition and repair required to be
maintained under this Agreement. Upon the removal of any Part as
provided in the immediately preceding sentence and the removal of
any Obsolete Part, title thereto shall, without further act, vest
in Lessee, free and clear of all rights of Owner Trustee, Lender
and Lessor and such Part shall no longer be deemed part of the
Airframe or Engine from which it was removed. Any Part not so
removed shall remain the property of Owner Trustee, subject to the
Mortgage.
16.6 Substitution of Engine
In addition to its rights under Clause 13, Lessee shall have the
right at its option at any time, on at least thirty (30) days
prior written notice to Owner Trustee, Lender and Lessor, to
substitute or procure the substitution of an engine of the same
make and model as the Engine specified in Schedule 1 or an engine
of an improved model suitable for installation and use on the
Airframe for any such Engine not then installed or held for use on
the Airframe. Any such substitute engine, the substitution of
which is in accordance with the provisions of this Clause 16.6 and
which complies with the requirements of this Clause 16.6 being a
"Replacement Engine" provided that title to the Replacement Engine
shall be vested in Owner Trustee, subject to the Mortgage, free
and clear of all Security Interests, other than Permitted Liens,
and the Replacement Engine shall have a value and utility and
maintenance status, including time since last Engine Performance
Restoration Visit, at least equal to the replaced Engine and time
since new no greater than the replaced Engine as reasonably
determined by Lessor, assuming that such Engine was in the
condition and repair required to be maintained by the terms of
this Agreement and Lessee shall deliver such documents including a
bill of sale and opinion of counsel as to title and recordation
with the FAA, as Lessor may reasonably request to evidence the
foregoing. In such event, immediately upon the effectiveness of
such substitution on the date set forth in such notice and without
further act:
(i) title to the replaced Engine shall thereupon vest in
Lessee free and clear of all rights of Owner Trustee,
Lender and Lessor, and the replaced Engine shall cease
to be subject to this Agreement and shall no longer be
deemed an Engine hereunder; and
(ii) title to such Replacement Engine shall vest in Owner
Trustee, subject to the Mortgage, free and clear of all
Security Interests except Permitted Liens and such
Replacement Engine shall become subject to this
Agreement and an Engine hereunder and be deemed part of
the Aircraft for all purposes hereof.
16.7 Temporary Removal of Parts
Lessee shall be entitled, so long as no Default shall have
occurred which has not been remedied or waived to the reasonable
satisfaction of Lessor, to substitute, replace or renew any Part
with a part that does not satisfy the requirements of Clause 16.1
or 16.2 provided that:
(i) there shall not have been available to Lessee, at the
time and in the place that such substitute or
replacement part was required to be installed on the
Airframe or Engines a substitute or replacement part
complying with the requirements of Clause 16.1 and
16.2;
(ii) it would have resulted in an unreasonable disruption of
the operation of the Aircraft or the business of Lessee
as an airline to have grounded the Aircraft until such
time as a substitute or replacement part complying with
the requirements of Clause 16.1 and 16.2 became
available for installation in or on the Aircraft;
(iii) Lessee shall have notified Lessor prior to or, in the
case of an extreme urgency as soon as possible after,
the making of such substitution, replacement or renewal
of any material Part; and
(iv) as soon as possible after installation of the same in
or on the Airframe or Engine (and in any event no later
than fifteen (15) days thereafter) Lessee shall remove
any such part not complying with the requirements of
Clause 16.1 and 16.2 and replace or substitute the same
with a Part complying with such requirements.
16.8 Parts Incapable of Transfer
If any replacement Part is incapable of becoming the property of
Owner Trustee free of all Security Interests (other than Permitted
Liens) as required by Clause 16 the part which it has replaced
shall, unless Lessor shall otherwise agree in writing, be kept and
maintained by the Lessee or any sublessee, as the case may be,
until the Expiry Date and be placed on the Aircraft in good
working order before the Aircraft is redelivered to the Lessor on
the Expiry Date.
17. Manufacturer's warranties
17.1 Authorization
17.1.1 With effect from Delivery, Lessor authorises Lessee to exercise
such rights as Lessor may have in relation to any warranty with
respect to the Aircraft, any Engine or any Part made by any
manufacturer, vendor, subcontractor, maintenance facility or
supplier subject to Lessee notifying Lessor in writing of any
warranty claim of a material nature and keeping Lessor
continuously informed of the development of such warranty claim.
To the extent that the same may not be available to Lessee,
Lessor agrees to, at the sole cost and expense of Lessee, enforce
such rights as Lessor may have with respect thereto for the
benefit of Lessee. Lessor shall also have the right, rather than
enforcing or making such claim on behalf of Lessee under such
warranties, to appoint Lessee as its agent for such purpose, and
in such instance, Lessee agrees to accept such appointment and
make such claims and enforce such warranties at its sole cost and
expense. This authorization shall cease on the Expiry Date. Lessee
shall not be entitled to exercise its authorisation hereunder
while a Default is continuing (during which time all such rights
shall revert to Lessor and Lessor hereby agrees to exercise and
enforce such rights during such period).
17.1.2 Lessee shall give Lessor prompt written notice of any warranty
claim that is settled with Lessee on the basis of a total or
partial cash payment. Any cash payments shall be applied to remedy
the defect subject to such warranty claim unless Lessor otherwise
consents in writing. Any cash payments to Lessee in respect of
warranty claims that (either with Lessor's written consent or
because the defect can not be remedied) are not applied to the
repair or remedy of defects in the Aircraft or to compensate
Lessee for the costs incurred for any such repair or remedy, and
which are not in respect of compensation for loss of use of the
Aircraft, an Engine or Part during the Lease Term due to a defect
covered by such warranty, shall be for Lessor's account.
17.2 Proceeds
So long as no Default has occurred and is continuing, Lessor
agrees, subject to Clause 17.1, to co-operate with Lessee to cause
any proceeds from any warranty referred to in Clause 17.1 to be
paid directly to Lessee, and, if any such proceeds are nonetheless
paid to Lessor, Lessor agrees to remit promptly such proceeds to
Lessee. However, while a Default is continuing, Lessor may
immediately:
(i) retain for its own account any such proceeds previously
paid to Lessor which would have been remitted to Lessee
under this Clause 17.2 in the absence of such Default
or Event of Default; and
(ii) cause any proceeds of any pending claims to be paid to
Lessor, rather than to Lessee.
Once the Default is cured, Lessor shall reimburse Lessee to the
extent that it would have been obliged to under this Clause 17.2
had no such Default occurred.
17.3 Agreements with Manufacturers
To the extent that any warranties relating to the Aircraft are
made available under an agreement between any manufacturer,
vendor, subcontractor or supplier and Lessee, Lessee will:
(i) apply the proceeds of any claim under such agreement in
accordance with Clause 17.2; and
(ii) take all such steps as are necessary at the end of the
Lease Term to ensure that the benefit of any of those
warranties that have not expired is vested in Lessor.
17.4 No Operation Contrary to Warranties
Lessee shall not operate the Aircraft contrary to the terms of any
warranty referred to in Clause 17.1.1, provided that Lessor has
advised Lessee of the terms of such warranties.
18. Disclaimers
18.1 General
LESSOR AND LESSEE AGREE THAT THE DISCLAIMERS, WAIVERS AND
CONFIRMATIONS SET FORTH IN CLAUSES 18.2 THROUGH 18.11 BELOW SHALL
APPLY AS BETWEEN LESSOR AND LESSEE AT ALL TIMES DURING THE LEASE
TERM WITH EFFECT FROM LESSEE'S ACCEPTANCE OF THE AIRCRAFT BY
EXECUTION OF THE ACCEPTANCE CERTIFICATE, WHICH SHALL BE CONCLUSIVE
EVIDENCE THAT LESSEE HAS FULLY INSPECTED THE AIRCRAFT AND EVERY
PART THEREOF AND THAT THE AIRCRAFT, THE ENGINES, THE PARTS AND THE
AIRCRAFT DOCUMENTS ARE IN ALL RESPECTS ACCEPTABLE TO LESSEE (SAVE
AS EXPRESSLY NOTED ON THE ACCEPTANCE CERTIFICATE) AND ARE IN
SUITABLE CONDITION FOR DELIVERY TO AND ACCEPTANCE BY LESSEE.
18.2 As Is, Where Is
PRIOR TO DELIVERY HEREUNDER, LESSEE HAD THE OPPORTUNITY TO INSPECT
THE AIRCRAFT, ACCORDINGLY, LESSEE UNCONDITIONALLY ACKNOWLEDGES AND
AGREES THAT NEITHER OWNER TRUSTEE, LENDER OR LESSOR, NOR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES
HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION,
REPRESENTATION, WARRANTY OR COVENANT EXPRESSED OR IMPLIED (WHETHER
STATUTORY OR OTHERWISE) AS TO (i) THE CAPACITY, AGE,
AIRWORTHINESS, VALUE, QUALITY, DURABILITY, DESCRIPTION, CONDITION
(WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE
AIRCRAFT DOCUMENTS), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE,
CONSTRUCTION, OPERATION, STATE, MERCHANTABILITY, PERFORMANCE,
FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY
TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTS
IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY
PART THEREOF, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS,
WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR
CONCEALED, EXTERIOR OR INTERIOR, (ii) THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER
INTELLECTUAL PROPERTY RIGHTS, (iii) ANY IMPLIED WARRANTY ARISING
FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE,
OR (iv) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS
OR IMPLIED WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL
OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.
18.3 Waiver of Warranty of Description
LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT
DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ACCEPTANCE
CERTIFICATE WILL RE-AFFIRM AND INDEPENDENTLY CONSTITUTE ITS WAIVER
OF THE WARRANTY OF DESCRIPTION AND ANY CLAIMS IT MAY HAVE, AND OF
ANY RIGHT TO MAKE ANY CLAIM AGAINST LENDER OR LESSOR BASED UPON
THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION OR
ANY AIRCRAFT SPECIFICATIONS AND ITS AGREEMENT NOT TO LOOK TO OWNER
TRUSTEE, LENDER OR LESSOR FOR DAMAGES OR RELIEF ARISING OUT OF THE
FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTIONS OR
SPECIFICATIONS, NOTWITHSTANDING ANY ASSURANCES FROM LESSOR, THE
DIFFICULTY OF DISCOVERING ANY DEFECT OR ITS ASSUMPTION THAT ANY
NONCONFORMITY WOULD BE CURED.
18.4 Lessee Acknowledgement
LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT "AS IS, WHERE IS AND
WITH ALL FAULTS".
18.5 Lessee Waiver
Lessee hereby waives as between itself and Lessor and agrees not
to seek to establish or enforce any rights and remedies, express
or implied (whether statutory or otherwise) against Lessor, Owner
Trustee, Lender or the Aircraft relating to any of the matters
mentioned in Clause 18.1 through 18.6 and the leasing thereof by
Lessor to Lessee.
18.6 Lessee Examination of Aircraft
DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE IS
CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE'S
TECHNICAL EXPERTS HAD EXAMINED AND INVESTIGATED THE AIRCRAFT,
ENGINES AND EACH PART THEREOF AND DETERMINED THAT (i) EACH WAS
AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR AND (ii) THE
AIRCRAFT, ENGINES, EACH PART THEREOF AND THE AIRCRAFT DOCUMENTS
WERE WITHOUT DEFECT (WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND
IN EVERY WAY SATISFACTORY TO LESSEE.
18.7 No Lessor Liability for Losses
Lessee agrees that Lessor will not be liable to Lessee, any
sublessee or any person, whether in contract, tort or otherwise
and however arising, for any unavailability, loss of use or
service, cost, loss (consequential or otherwise), liability,
damage or delay of or to or in connection with the Aircraft, any
person or property whatsoever, whether on board the Aircraft or
elsewhere and irrespective of whether such occurrences arise from
any act or omission or the active or passive negligence of Lessor
or Owner Trustee or their agents or representatives excepting only
Lessor's or Owner Trustee or their respective agents' or
representatives' gross negligence or wilful misconduct.
18.8 Exclusion
Neither Owner Trustee, Lender, nor Lessor shall have any
obligation or liability whatsoever to Lessee, any sublessee or any
other person whether arising in contract, tort or otherwise and
whether arising by reference to negligence or strict liability of
Lessor, Owner Trustee or Lender or otherwise for:
(i) any liability, loss or damage (consequential or
otherwise) caused or alleged to be caused directly or
indirectly by the Aircraft or any Engine or by any
inadequacy thereof or deficiency or defect therein or
by any other circumstance in connection therewith;
(ii) the use, operation or performance of the Aircraft or
any risks relating thereto;
(iii) any interruption of service, loss of business or
anticipated profits or any other direct, indirect or
consequential loss or damage; or
(iv) the delivery, operation, servicing, maintenance,
repair, improvement or replacement of the Aircraft, any
Engine or any Part except as otherwise expressly
provided under this Agreement.
18.9 Waiver
Lessee hereby waives, as between itself and Owner Trustee, Lender
and Lessor, all its rights in respect of any warranty or
representation, express or implied, on the part of Owner Trustee,
Lender or Lessor and all claims against Owner Trustee, Lender or
Lessor howsoever and whenever arising at any time in respect of or
out of the matters referred to in Clause 18.
18.10 No Waiver
Nothing in this Clause 18 or elsewhere in this Agreement will be
deemed to be an waiver by Lessee of any rights it may have against
the Manufacturer, the Engine Manufacturer or any other person.
18.11 Confirmation
Lessee confirms that the foregoing provisions of this Clause 18
and the following provisions in Clause 19 have been taken into
account by both parties in negotiating the rent and other amounts
payable under this Agreement.
19. Indemnities
19.1 General Indemnity
Lessee agrees to defend, indemnify and hold harmless on an after
Tax basis each of the Indemnitees on demand from and against any
and all Losses arising from events occurring during the Lease
Term:
(i) that may at any time be suffered or incurred directly
or indirectly as a result of or in connection with the
possession, delivery, performance, management,
ownership, registration, import, control, maintenance,
condition, service, repair, Overhaul, leasing,
subleasing, deregistration, export, manufacture,
storage, transportation, design, testing, replacement,
use, operation or redelivery of the Aircraft, any
Engine or Part (either in the air or on the ground)
whether or not such Losses may be attributable to any
defect in the Aircraft, any Engine or any Part or to
their respective design, testing or use or otherwise,
and regardless of when the same arises (but excluding
any injuries or claims which arise prior to Delivery)
or whether it arises out of or is attributable to any
act or omission, negligent (active or passive) or
otherwise, of any Indemnitee (including without
limitation claims for death, personal injury, property
damage, other loss or harm to any person and claims
relating to any Laws, including without limitation
environmental control, noise and pollution laws rules
or regulations);
(ii) that may at any time be suffered or incurred as a
consequence of any breach of the Transaction Documents
by the Lessee or by misrepresentation of or breach of
warranty by Lessee; and
(iii) that may at any time be suffered or incurred as a
consequence of any design, article or material in the
Aircraft, any Engine or any Part or its operation or
use constituting an infringement of patent, copyright,
trademark, design or other proprietary right or a
breach by Lessee, or anyone acting by or through
Lessee, of any obligation of confidentiality owed to
any person in respect of any of the matters referred to
in this Clause 19.1 (iii),
19.2 Exception to General Indemnity
The indemnity provided for in Clause 19.1 will not extend to any
Loss in relation to a particular Indemnitee to the extent that
such Loss:
(i) arises as a direct result of the gross negligence or
wilful misconduct of such Indemnitee; or
(ii) arises as a direct result of Lessor Taxes, a Lessor
Lien or a wilful breach by Lessor of its obligations
under any of the Transaction Documents; or
(iii) constitutes a Tax or liability for Taxes.
19.3 Time of Payment
Lessee will pay an Indemnitee for Losses within ten (10) Business
Days after receipt of a written demand therefor from such
Indemnitee accompanied by a written statement describing in
reasonable detail the basis for such indemnity.
19.4 Survival of General Indemnity
Notwithstanding anything in this Agreement to the contrary, the
provisions of Clause 19.1 shall survive the Expiry Date for two
(2) years and continue in full force and effect notwithstanding
any breach by Lessor or Lessee of the terms of this Agreement, the
termination of the lease of the Aircraft to Lessee under this
Agreement or the repudiation by Lessor or Lessee of this
Agreement.
19.5 Notice to Lessee
Lessor shall promptly after obtaining actual knowledge thereof
notify the Lessee of any claim as to which indemnification is
sought; provided that a failure to so notify will not diminish or
relieve Lessee of any obligations hereunder, unless such failure
materially adversely affects Lessee's defence of such claim and
directly results in a material increase in liability of the Lessee
in respect of such claim or prevents it from materially reducing
liability therefor, in which case the Lessee shall not be required
to indemnify such Indemnitee for the amount by which such
liability was increased or not reduced.
20. Taxation
20.1 Gross-up
20.1.1 All payments by Lessee under or in connection with this Agreement
shall be made in full without any set-off or counterclaim, free
and clear of and without deduction or withholding for or on
account of all Taxes, except Lessor Taxes, unless Lessee is
required by law to make any such deduction or withholding.
20.1.2 If any Taxes, except Lessor Taxes, are required to be deducted or
withheld from any amount payable hereunder, Lessee shall pay to
Lessor by way of Supplemental Rent such additional amounts, in the
same currency as such payment as may be necessary in order that
the amount of the net payment received by Lessor on the date of
such payment, after deduction or withholding for all such Taxes,
will be equal to the amount that Lessor would have received if
such Taxes had not been deducted or withheld.
20.1.3 If any payment is made by Lessee under Clause 19.2 and Lessor in
good faith determines that it is entitled to receive a credit
against, or relief or remission for, or repayment of, any Tax paid
or payable by Lessor in respect of or calculated with reference to
the deduction or withholding giving rise to such payment, Lessor
shall, to the extent that it can do so without prejudice to the
retention of the amount of such credit, relief, remission or
repayment and without leaving Lessor in any worse net after tax
position than that in which it would have been had such deduction
or withholding not been required to be made, promptly pay to
Lessee such amount as Lessor shall reasonably have determined to
be attributable to the relevant deduction or withholding.
20.2 Tax Indemnity
20.2.1 Lessee shall indemnify Lessor on demand against all Taxes (other
than Lessor Taxes) levied or imposed against or upon Lessor,
Lessee or the Aircraft directly or indirectly in connection with
the importation, exportation, registration, ownership, leasing,
subleasing, purchase, delivery, sale, possession, use, operation,
repair, maintenance, Overhaul, transportation, landing, storage,
presence or redelivery of the Aircraft or any part thereof or any
rent, receipts, insurance proceeds, income or other amounts
arising therefrom except to the extent that such liability for
such Taxes:
(i) arises as a result of a Lessor Lien; or
(ii) arises in respect of the period ending prior to
Delivery and commencing immediately after the Expiry
Date; or
(iii) is directly attributable to Lessor's gross negligence
or wilful misconduct; or
(iv) relates to any deduction or withholding on any payment
to be made to Lessor that is covered by Clause 20.1; or
(v) imposed as a direct result of the sale, transfer or
assignment or other disposition of the Aircraft or this
Agreement by Lessor, other than by Lessor to Lessee, or
by any party claiming by or through Lessor and except
(a) any sale, transfer, assignment or other disposition
that is made solely as a result of the occurrence of an
Event of Default or Total Loss of the Aircraft or any
part thereof or interest therein and (b) any Taxes
imposed by the State of Registration.
20.2.2 If Lessor becomes aware of any claim against Lessor for any Loss
that Lessee is required to pay or indemnify against pursuant to
this Clause 20.2, Lessor shall as soon as is reasonably
practicable notify Lessee in writing of such claim. If requested
in writing by Lessee that it wishes Lessor to contest such claim,
Lessor will consult with Lessee with a view to determining whether
there are grounds for contesting such claim. Lessor will consider
in good faith any representation made by Lessee in this respect.
Lessor shall not be under any obligation to bring any proceedings
in respect of any such claim in any court of law or other relevant
forum except that Lessor shall bring such proceedings in the event
that tax counsel reasonably acceptable to Lessor in the relevant
jurisdiction provides Lessor with a legal opinion to the effect
that there are legitimate grounds for contesting such claim. Any
costs and expenses of any such contest shall be fully indemnified
by Lessee. Further Lessor shall be under no obligation to take any
action in respect of any claim unless it shall previously have
been provided with security in an amount equal to the amount of
such claim and reasonable costs and otherwise satisfactory in its
absolute discretion for any such costs. Any amount payable under
this Clause 20.2 shall be paid to or on behalf of Lessor or, if so
directed by Lessor, directly to the relevant taxing authority,
promptly after receipt by Lessee of a written demand therefor.
20.3 Value Added Taxes
The Rent and other amounts payable by Lessee under this Agreement
are exclusive of any value added tax, turnover tax or similar tax
or duty. If a value added tax or any similar tax or duty is
payable in any jurisdiction in respect of any Rent or other
amounts as aforesaid, Lessee will pay all such tax or duty and
indemnify Lessor against any claims for the same and any related
claims, losses or liabilities.
20.4 Taxation of Indemnity Payments
20.4.1 Notwithstanding any other provision of this Agreement, if and to
the extent that any sums payable to any Indemnitee by Lessee under
this Agreement by way of indemnity are insufficient, by reason of
any Taxes payable in respect of those sums, for such Indemnitee to
discharge the corresponding liability to the relevant third party
(including any taxation authority), or to reimburse such
Indemnitee for the cost incurred by it to a third party (including
any taxation authority) Lessee shall pay to such Indemnitee such
sum as will after the tax liability has been fully satisfied leave
that Indemnitee with the same amount as it would have been
entitled to receive in the absence of that liability.
20.4.2 If and to the extent that any sums constituting (directly or
indirectly) an indemnity to an Indemnitee but paid by Lessee to
any person other than such Indemnitee are treated as taxable in
the hands of such Indemnitee, Lessee shall pay to such Indemnitee
such sum as will, after the tax liability has been fully
satisfied, indemnify such Indemnitee to the same extent as it
would have been indemnified in the absence of such liability.
20.5 Benefit of Indemnities
All rights expressed to be granted to each Indemnitee (other than
Lessor) under this Agreement are given to Lessor on behalf of that
Indemnitee.
20.6 Lessor Indemnification
Without prejudice to Clause 20.5, Lessor shall be entitled (but
not obliged) to indemnify Indemnitees (other than Lessor) on terms
equivalent to the indemnities given by Lessee under this Agreement
and the obligations of Lessee to Lessor shall extend to
reimbursement of Lessor of any amount properly paid by Lessor to
such other Indemnitee provided always that nothing in this Clause
20.6 shall operate to increase the obligations or liabilities of
Lessee.
20.7 Survival of Tax Indemnities
Notwithstanding anything in this Agreement to the contrary, the
provisions of Clause 19 shall survive the Expiry Date and continue
in full force and effect notwithstanding any breach by Lessor or
Lessee of the terms of this Agreement, the termination of the
lease of the Aircraft to Lessee under this Agreement or the
repudiation by Lessor or Lessee of this Agreement.
20.8 Mitigation and Co-operation
In any case where Lessee would be obliged to bear Taxes or make
additional payment on account of Taxes pursuant to the provisions
of this Agreement as a result of any change in applicable laws or
regulations or practice, Lessor shall at the written request of
Lessee, without limiting, reducing or otherwise qualifying the
rights of Lessor and the Security Interest of Lender, consult with
Lessee in good faith as to such steps which Lessor and Lessee can
mutually accept and agree upon in order to mitigate or avoid the
effects of such circumstances. In case Lessor and Lessee can not
agree within a period of thirty (30) days after Lessee has made a
written request, Lessor shall not have any further obligation
towards Lessee.
20.9 Furnishing Forms
Lessor agrees to furnish, and to procure that any other Indemnitee
furnishes to Lessee, or to such other person as Lessee may
designate, at Lessee's sole cost and expense, such duly executed
and properly completed forms as such Indemnitee may be permitted
and legally able to deliver and as may be necessary or appropriate
in order to claim any reduction of, or exemption from any Tax
which Lessee may be required to indemnify against hereunder,
unless such Indemnitee reasonable determines that furnishing such
forms may have an adverse effect on either the business, tax
status, tax liability or operations of such Indemnitee.
21. Insurance
21.1 Insurances
21.1.1 Lessee shall, at its own expense, maintain in full force and
effect during the Lease Term insurances in respect of the Aircraft
that, subject to this Clause 21, comply with the requirements set
out in Schedule 3 (the Insurances).
21.1.2 The Insurances shall be effected through brokers of international
standing and repute in the London or New York aviation insurance
markets as may be approved by Lessor, such approval not to be
unreasonably withheld.
21.1.3 For the avoidance of doubt it is understood that the Insurances to
be provided for by Lessee are not Lessor's sole remedy and
protection under this Agreement as the obligations of Lessee are
in excess of the requirements of the Insurances.
21.2 Reinsurance
Any reinsurance will be maintained with reinsurers and brokers
approved by Lessor, such approval not to be unreasonably withheld.
Such reinsurance will contain each of the following terms and will
in all other respects (including amount) be satisfactory to
Lessor:
(i) The same terms as the original insurance;
(ii) A cut-through and assignment clause satisfactory to
Lessor;
(iii) Payment will be made notwithstanding (a) any
bankruptcy, insolvency, liquidation or dissolution of
any of the original insurers and/or (b) that the
original insurers have made no payment under the
original insurance policies.
21.3 Requirements
The current requirements as to the Insurances are as specified in
this Clause 21 and in Schedule 3. Lessor and Lender may from time
to time stipulate other requirements for the Insurances so that
(a) the scope and level of cover are maintained in line with best
international airline practice, and (b) the interests of Lessor
and Lender continue to be protected. Lessee shall procure that
such changes are effected.
21.4 Insurance Covenants
Lessee shall:
(i) ensure that all requirements as to insurance of the
Aircraft, any Engine or any Part which may from time to
time be imposed by the laws of the State of
Registration or any state to, from or over which the
Aircraft may be flown, in so far as they affect or
concern the operation of the Aircraft, are complied
with;
(ii) comply with the terms and conditions of each policy of
the Insurances and not do, consent or agree to any act
or omission which:
(a) invalidates or may invalidate the Insurances;
or
(b) renders or may render void or voidable the
whole or any part of any of the Insurances;
or
(c) brings any particular insured liability
within the scope of an exclusion or exception
to the Insurances;
(iii) not make any modification or alteration to the
Insurances material and adverse to the interests of any
of the Indemnitees;
(iv) be responsible for any deductible under the Insurances;
(v) provide any other information and assistance in respect
of the Insurances that Lessor may from time to time
reasonably require including, for the avoidance of
doubt, lists of the underwriters and the exposures of
each of those underwriters which may carry the
Insurances from time to time; and
(vi) not create any Security Interests over the Insurances
except pursuant to the Assignment of Insurances;
(vii) not use or keep or permit the Aircraft or any part
thereof to be used or kept for any purpose, in any
manner or in any place not covered by the required
policies;
(viii) not cause or permit the Aircraft or any part thereof to
be employed in any place or in any manner or for any
purpose inconsistent with the terms or outside the
cover provided by any required policy;
(ix) not knowingly effect or authorise the placement of
insurance covering the same subject matter as that
covered by the Insurances (except on a contingent or
other secondary basis); and
(x) furnish to Lessor:
(a) not later than seven (7) days prior to the
Scheduled Delivery Date and thereafter within
seven (7) days after each renewal date of
each policy, a certificate or certificates
signed by the insurers or the insurance
broker and a letter of undertaking by the
insurance broker providing evidence of
insurance coverage pursuant to this
Agreement;
(b) on request, confirmation of payment by, or at
the direction of the Lessor of each sum
payable under or in connection with any
required policy;
(c) on request, such evidence as the Lessor may
require of the Lessee's compliance with its
obligations under this Agreement; and
(d) any notice received from the insurers or the
insurance brokers (within three (3) Business
Days of receipt) relating to or in connection
with any cancellation of the Insurances or
any material alteration of the Insurances.
21.5 Renewal of Insurances
Lessee shall commence renewal procedures at least thirty (30) days
prior to expiry of any of the Insurances, and provide to Lessor:
(i) confirmation of completion of renewal at least fifteen
(15) days prior to each expiry date of any of the
Insurances;
(ii) certificates of insurance and a brokers' letter of
undertaking in a form acceptable to Lessor and in
English, detailing the coverage and confirming the
insurers' agreement to the specified insurance
requirements of this Agreement within seven (7) days
after each renewal date; and
(iii) any other information as Lessor may reasonable request
be provided by the insurance broker at least fifteen
(15) days before such expiry.
21.6 Failure to Insure
If Lessee fails to maintain the Insurances in compliance with this
Agreement, Lessee shall:
(i) forthwith ground or cause to be grounded the Aircraft
and shall keep or procure that the Aircraft be kept
grounded until such time as all the Insurances shall
again be in full force and effect; and
(ii) immediately notify Lessor of the non-compliance of the
Insurances and provide Lessor with full details of any
steps which Lessee is taking or proposes to take, in
order to remedy such non-compliance;
and each of the Indemnitees will be entitled but not bound,
without prejudice to any other rights of Lessor under this
Agreement:
(a) to pay the premiums due or to effect and
maintain insurances satisfactory to Lessor
and substantially the same as the Insurances
required hereunder or otherwise remedy
Lessee's failure in such manner, including to
effect and maintain an "owner's interest"
policy, as Lessor considers appropriate. Any
sums so expended by Lessor will become
immediately due and payable by Lessee to
Lessor together with interest thereon at the
Default Rate, from the date of expenditure by
Lessor up to the date of reimbursement by
Lessee; and
(b) at any time while such failure is continuing
to require the Aircraft to remain at any
airport or to proceed to and remain at any
airport designated by Lessor until the
failure is remedied to Lessor's satisfaction.
21.7 Continuation of Insurances
Lessee agrees to effect and maintain at Lessee's cost airline
general third party liability insurances in the form required by
this Agreement for two (2) years after the Expiry Date whether or
not Lessee or Lessor continues to have any interest in the
Aircraft.
21.8 Application of Insurance Proceeds
As between Lessor and Lessee:
(i) all insurance payments received as the result of a
Total Loss occurring during the Lease Term will be paid
to Lessor or to Lender pursuant to the terms of any
security given by Owner Trustee and Lessor;
(ii) all insurance proceeds of any damage or loss to the
Aircraft, any Engine or any Part occurring during the
Lease Term not constituting a Total Loss and in excess
of the Damage Notification Threshold will be paid to
Lessor and applied in payment (or to reimburse Lessee)
for repairs or replacement property, upon Lessor being
satisfied that the repairs or replacement have been
effected in accordance with this Agreement; and
(iii) notwithstanding Clauses 21.8 (i) or 21.8 (ii) above, if
at the time of the payment of any such insurance
proceeds a Default has occurred and is continuing, all
such proceeds will be paid to or retained by Lessor to
be applied toward payment of any amounts which may be
or become payable by Lessee in such order as Lessor
sees fit or as Lessor may elect.
21.9 Pursuit of Claims
The parties shall co-operate in the pursuit of any claims under
the Insurances. In pursuing any such claims, the parties shall
take account of each others interests but, if there is any
material disagreement between the parties in respect of how any
such claim shall be pursued, the interests of Lessor shall be
paramount.
22. Total loss and requisition
22.1 Total Loss Prior to Delivery
If a Total Loss occurs prior to Delivery, this Agreement shall
immediately terminate, and except as expressly stated in this
Agreement neither party will have any further obligation or
liability under this Agreement, except that Lessor will repay to
Lessee any prepaid Rent, the amount of Security Deposit, if paid,
and return the Letter of Credit under this Agreement.
22.2 Total Loss After Delivery
22.2.1 If a Total Loss occurs after Delivery, Lessee shall pay the Lessor
on or prior to the earlier of:
(i) thirty (30) days after the Total Loss Date; and
(ii) the date of receipt of insurance proceeds in respect of
such Total Loss,
the aggregate of (x) the Agreed Value and (y) Rent and all other
amounts accrued under this Agreement to the date of payment and
(z) interest on the Agreed Value accruing on a daily basis at the
Default Rate for the period, if any, from the Total Loss Date to
the date of payment.
22.2.2 Subject to the rights of any insurers or other third parties, upon
irrevocable payment in full to Lessor of the Agreed Value and all
other amounts which may be or become payable to Lessor under this
Agreement, Lessor shall direct Owner Trustee to transfer to Lessee
all of Owner Trustee's and Lessor's rights (if any) to (x) the
Airframe or any Engines and Parts whether or not installed when
the Total Loss occurred, on an as-is where-is basis and without
recourse or warranty (save as to freedom from Lessor Liens), and
Lessor shall procure the execution and delivery of such bills of
sale and other instruments as Lessee may reasonably request to
evidence such transfer, free and clear of all rights of Owner
Trustee and Lessor and (y) any other rights in respect of the
Aircraft or any part thereof or any further requisition or
insurance proceeds in respect thereof. Lessee shall indemnify
Owner Trustee and Lessor for all fees, expenses and Taxes incurred
by Owner Trustee and Lessor in connection with any such transfer.
22.2.3 If a Total Loss of the Aircraft or the Airframe occurs during the
Lease Term, Lessee's obligation to pay Rent shall continue in full
force and effect until the date of payment of the Agreed Value and
all other amounts due under this Agreement and upon payment of the
Agreed Value and all other sums due under this Agreement, the
leasing of the Aircraft shall immediately terminate, but without
prejudice to the continuing obligations of Lessee (as to indemnity
or otherwise) under this Agreement; and Lessor and, if not already
recovered, Lessee shall proceed diligently and co-operate fully
with each other in the recovery of the Total Loss Proceeds.
22.3 Total Loss of Engines
22.3.1 Upon an Engine Total Loss of any Engine not installed on the
Aircraft, or an Engine Total Loss of an Engine installed on the
Airframe not involving a Total Loss of the Airframe (in either
case, a Destroyed Engine), Lessee shall give Lessor prompt written
notice thereof and Lessee shall replace the Destroyed Engine as
soon as reasonably possible by procuring that Owner Trustee
acquires, at Lessee's expense, title to another engine complying
with the requirements of Clause 16.6. Such Replacement Engine
shall upon acquisition by Owner Trustee be an Engine as defined
herein.
22.3.2 Lessee agrees to take such action as Lessor may reasonably request
in order that any such Replacement Engine shall be the property of
Owner Trustee, and leased hereunder on the same terms as the
Destroyed Engine. Lessee's obligation to pay Rent shall continue
in full force and effect, but an amount equal to the Total Loss
Proceeds received by Lessor or Lender, as the case may be, with
respect to the Destroyed Engine, less any cost, expenses, Taxes or
duties incurred in connection with the collection thereof, shall,
subject to Lessor's right to deduct therefrom any amounts then due
and payable by Lessee under this Agreement, be paid to Lessee.
22.3.3 Immediately upon the effectiveness of such substitution, and
without further act, title to the replaced Engine shall thereupon
vest in Lessee, in an as-is, where-is condition, free and clear of
all rights and Security Interests of Owner Trustee, Lender and
Lessor and shall no longer be deemed an Engine hereunder.
22.4 Requisition
22.4.1 During any requisition for use or hire of the Aircraft, any Engine
or Part that does not constitute a Total Loss:
(i) the Rent and other amounts payable under this Agreement
will not be suspended or abated either in whole or in
part, and Lessee will not be released from any of its
other obligations under the Agreement (other than
operational obligations with which Lessee is unable to
comply solely by virtue of the requisition);
(ii) so long as no Default or Event of Default has occurred
and is continuing, Lessee shall be entitled to any hire
paid by the requisitioning authority in respect of the
Lease Term;
(iii) Lessee shall, as soon as practicable after the end of
any such requisition, cause the Aircraft to be put into
the condition required by this Agreement.
22.4.2 If the Aircraft is under requisition for hire at the Expiry Date,
the leasing of the Aircraft under this Agreement shall continue
until the earlier of (x) when the Aircraft becomes a Total Loss
and Lessor receives the Agreed Value together with any other
amounts then due and unpaid under this Agreement and (y) when the
Aircraft is returned prior to becoming a Total Loss, and Lessee
satisfies the Return Conditions provided that:
(i) the obligations of Lessee including in respect of
payment of Rent including Maintenance Reserves, if any,
shall continue in full force and effect until the
leasing ends except that during the continuation of the
requisition for hire while it does not constitute a
Total Loss, Lessee shall be released from those of its
obligations that it is prevented from performing as a
result of the requisition of the Aircraft;
(ii) unless a Total Loss has occurred (in which case Clause
22.2 shall apply), Lessee shall be obliged to redeliver
the Aircraft to Lessor in accordance with Clause 23;
(iii) provided no Default or Event of Default is continuing,
Lessee shall be entitled to receive and retain any
requisition payments made in respect of the Aircraft;
and
(iv) Lessee shall indemnify Lessor for any Losses which
Lessor suffers (Lessor undertakes to use its reasonable
best efforts to mitigate such Losses) as a result of
Lessee returning the Aircraft to Lessor after the
Expiry Date.
23. Redelivery
23.1 Redelivery of Aircraft
On the Redelivery Date, Lessee shall, unless a Total Loss has
occurred, redeliver the Aircraft and the Aircraft Documents to
Lessor at Lessee's cost and expense at the Redelivery Location. If
the Aircraft has been damaged and is being repaired in a timely
manner, then the term of the lease will be extended and Lessee's
obligations under this Agreement shall continue in full force and
effect and during the course of such repair and, so long as no
Default or Event of Default shall have occurred and be continuing,
the Lessor will make insurance proceeds available to accomplish
such repairs as provided in Clause 22. When the repairs are
completed, the Aircraft shall be redelivered to Lessor. At the
time of the redelivery of the Aircraft:
(i) the Aircraft shall be free and clear of all Security
Interests other than Lessor Liens;
(ii) all maintenance to the Aircraft due for performance on
or before the Redelivery Date shall have been completed
in accordance with this Agreement;
(iii) the Aircraft shall be in compliance with the Return
Conditions;
(iv) the Aircraft shall comply with such other reasonable
requirements as Lessor may request that Lessee has had
timely notice of and that Lessor has agreed to pay for;
provided, however, that if compliance with Lessor's
request is the sole cause of a delay in the return of
the Aircraft beyond the Expiry Date, then Rent shall
abate for the period of such delay solely attributable
to Lessee's compliance with Lessor's request; and
(v) any service bulletin kits which are allocated to the
Aircraft at no charge by the Manufacturer and not
delivered to Lessor as at the Redelivery Date will be
shipped to a location specified by Lessor at Lessee's
cost.
For the avoidance of doubt, Lessee will not be responsible for any
inaccuracy or incompleteness in the Aircraft Documents that
pertains to any period prior to Delivery, provided always that the
foregoing shall not in any way be construed as a waiver by Lessor
of Lessee's obligations to keep, maintain and update the Aircraft
Documents during the Lease Term in accordance with the other
provisions of this Agreement.
23.2 Final Inspection
Immediately prior to redelivery of the Aircraft, Lessee shall make
the Aircraft available to Lessor for inspection (Final Inspection)
at the Redelivery Location in order to verify that the condition
of the Aircraft complies with the Return Conditions. The Final
Inspection shall be long enough to permit Lessor to:
(i) inspect the Aircraft Documents;
(ii) inspect the Aircraft and uninstalled Parts;
(iii) inspect the Engines, including without limitation (i) a
video boroscope inspection of (A) the low pressure and
high pressure compressors and (B) turbine area and (ii)
engine condition runs.
23.3 Discrepancies
Lessee shall repair all discrepancies discovered during the Final
Inspection and demonstration flight, which exceed maintenance
manual allowable limits, and shall correct all discrepancies in
the Aircraft Documents. When Lessee has complied with the
provisions of this Clause 23.3, Lessee shall redeliver the
Aircraft to Lessor at Lessee's cost and expense at the Redelivery
Location.
23.4 Non-compliance
23.4.1 To the extent that, at the time of Final Inspection, the condition
of the Aircraft does not comply with this Agreement (except Clause
23.1 (iv)), Lessee shall at Lessor's option:
(i) immediately rectify the non-compliance and to the
extent the non-compliance extends beyond the Redelivery
Date, the Lease Term will be automatically extended
until the non-compliance has been rectified and Lessee
shall be required to pay Rent to Lessor during that
period at the rate equal to two (2) times the daily
Basic Rent (Basic Rent per month divided by thirty
(30)) per day payable monthly or, if earlier, on the
date on which the non-compliance is rectified and the
return of the Aircraft is accepted by Lessor; or
(ii) redeliver the Aircraft to Lessor and indemnify Lessor,
and provide cash to Lessor in an amount reasonably
satisfactory to Lessor as security for that indemnity,
against the cost of putting the Aircraft into the
condition required by this Agreement.
23.4.2 Lessor's option in Clause 23.4 is not available to Lessor provided
that (i) Lessee has notified Lessor of its intent to rectify the
non-compliance prior to the Redelivery Date and (ii) Lessee will
in the reasonable opinion of Lessor be able to rectify such
non-compliance on or before Redelivery Date.
23.4.3 For the avoidance of doubt, Lessor shall not be entitled to
exercise its option under Clause 23.4.1 and Lessee shall suffer no
loss or penalty to the extent that the Aircraft does not, on Final
Inspection, comply with Clause 23.1 (iv) but is otherwise in
compliance with the Return Conditions.
23.5 Acknowledgement
Provided Lessee has complied with its obligations under this
Agreement, following redelivery of the Aircraft by Lessee to
Lessor at the Redelivery Location, the parties shall execute an
acknowledgement confirming that Lessee has redelivered the
Aircraft to Lessor in accordance with this Agreement substantially
in the form of Schedule 13.
23.6 Storage etc.
Notwithstanding the performance in full by Lessee of all its
obligations under this Clause 23, Lessor may require Lessee to
continue to lease the Aircraft from Lessor for a period of up to
thirty (30) days from the Expiry Date. During this period, Lessee
will have no obligations under this Agreement except to park and
store the Aircraft in accordance with Manufacturer's recommended
short term storage program at one of Lessee's storage facilities
and to continue insurances in respect of the Aircraft at Lessee's
cost. Such parking and storage is being made at the risk of Lessor
and Lessee shall have no liability for Losses except for any
Losses arising out of Lessee's gross negligence or wilful
misconduct arising during such period. Lessee also agrees during
this period to ferry/fly the Aircraft to such location as Lessor
may require. Lessee will not otherwise utilise the Aircraft during
this period. Any out of pocket costs or expenses incurred by
Lessee during this period with respect to the Aircraft for
storage, insurance or such ferry/flight shall be reimbursed by
Lessor to Lessee promptly after demand and upon receipt by Lessor
of an invoice and documentation, reasonably satisfactory to
Lessor, of such costs and expenses.
24. Events of default
24.1 Notice
Lessee will promptly notify Lessor if Lessee becomes aware of the
occurrence of any Default.
24.2 Events
Each of the following events will constitute an Event of Default
and a material breach of this Agreement:
(i) Non-payment: Lessee fails to pay any amount payable by
it under the Transaction Documents or the Other
Agreements in the currency in which such sum fell due
in respect of payments of Rent or Maintenance Reserves,
if any, within three (3) Business Days of the due date
for payment thereof and, in respect of any other
payments, within five (5) Business Days of the date of
receipt of written notice for payment thereof;
(ii) Insurance: Insurance cover on or with respect to the
Aircraft for the benefit of Lessor (and any additional
insured) is not maintained in accordance with the
provisions of this Agreement or the Aircraft is
operated outside the scope of such insurance coverage;
or
(iii) Delivery: Lessee fails to take Delivery of the Aircraft
when obligated to do so under the terms of this
Agreement; or
(iv) Redelivery: Lessee fails to return the Aircraft to
Lessor on the Redelivery Date in accordance with Clause
23; or
(v) Breach: Lessee defaults in the due performance and
observance of any other obligations contained in the
Transaction Documents and such default is not remedied
within fourteen (14) days of becoming aware of such
default; or
(vi) Representation: Any representation, warranty or
statement made or deemed to be made by Lessee in the
Transaction Documents or in any certificate, statement
or opinion delivered by it hereunder or in connection
herewith is incorrect, inaccurate or misleading in any
respect which Lessor considers material when made or
deemed to be made or if the effects or consequences of
the incorrect, inaccurate or misleading representation,
warranty or statement are capable of cure and Lessee
fails to cure such effects or consequences within
twenty (20) days after becoming aware of such default;
or
(vii) Approvals: Any governmental or other consent, license
or authorization required by law for the validity or
legality of the Transaction Documents or the
performance hereof or thereof (other than any such
which may be required to be obtained by Lessor) is
withdrawn or ceases, for any reason, to be in full
force and effect or is not renewed or obtained when
required and such withdrawal, cessation, non-renewal or
non-obtaining in the opinion of Lessor may prejudice
the rights of Lessor under this Agreement or in the
reasonable opinion of Lessor may have a material
adverse effect on Lessee's obligation to perform its
obligations under this Agreement; or
(viii) Registration:
(a) the Registration of the Aircraft is cancelled
other than as a result of an act or omission
of Lessor or another Indemnitee including
Owner Trustee and Lessor or an affiliate of
the Owner Trustee and Lessor;
(b) Lessee ceases to be an US Air Carrier
authorised to transport passengers in common
carrier; or
(c) the Aircraft ceases to be "based and
primarily used in the United States" within
the meaning of the 14 Code of Federal
Regulations 47.9: or
(ix) Possession: Lessee abandons the Aircraft or the
Engines, or Lessee or any Permitted Air Carrier no
longer has unencumbered control (other than Permitted
Liens) or possession of the Aircraft or Engines, except
as otherwise permitted by this Agreement; or
(x) Discontinuation: Lessee threatens to or temporarily or
permanently discontinues business or sells or otherwise
disposes of all or substantially all of its assets; or
(xi) Adverse Change: A material adverse change occurs in the
financial condition of Lessee which in the reasonable
opinion of Lessor may have a material negative impact
on Lessee's ability to perform its obligations
hereunder; or
(xii) Cross Default: Any Financial Indebtedness of Lessee (in
an aggregate amount in excess of US$1,000,000 or its
equivalent in other currencies) becomes due and
payable, or may be declared due and payable, prior to
its stated maturity by reason of default by Lessee
(having regard to any applicable grace period) or any
such Financial Indebtedness is not paid on the due date
for payment thereof (as extended by any applicable
grace period); or
(xiii) Insolvency: Lessee is declared bankrupt or becomes
insolvent or is unable to pay its debts as and when the
same fall due or declares a moratorium on the payment
of its indebtedness or makes an assignment for the
benefit of creditors generally or is subject to
bankruptcy, liquidation, debt negotiations or any
analogous proceedings; or
(xiv) Proceedings: Any proceedings, resolutions, filings or
other steps are instituted or threatened with respect
to the Lessee or a substantial part of Lessee's
property relating to the bankruptcy, liquidation,
reorganisation or protection from creditors of Lessee.
If instituted by Lessee or done by the Lessee, the same
will be an immediate Event of Default. If instituted by
another person, the same will be an Event of Default if
not dismissed, remedied or relinquished within twenty
(20) days; or
(xv) Judgements: Any order, judgement or decree is entered
by any court of competent jurisdiction appointing a
receiver, trustee or liquidator of Lessee or a
substantial part of its property or if a substantial
part of its property is to be sequestered. If
instituted by Lessee or done by the Lessee, the same
will be an immediate Event of Default. If instituted by
another person, the same will be an Event of Default if
not dismissed, remedied or relinquished within twenty
(20) days; or
(xvi) Air Navigation Charges: Any competent authority has
unpaid Air Navigation Charges due from Lessee (unless
such charges are being contested in good faith and by
appropriate proceedings and such proceedings do not
involve any danger of the detention, interference with
the use or operation, sale, forfeiture or loss of the
Aircraft) and such charges remain outstanding of a
period of ten (10) days from the due date thereof;
provided that such ten (10) day grace period will not
apply if there is a danger of detention, interference
with the use or operation, sale, forfeiture or loss of
the Aircraft; or
(xvii) Airport Charges: Any airport has unpaid Airport Charges
due from Lessee (unless such charges are being
contested in good faith and by appropriate proceedings
and such proceedings do not involve any danger of the
detention, interference with the use or operation,
sale, forfeiture or loss of the Aircraft) and such
charges remain outstanding for a period of ten (10)
days from the due date thereof; provided that such ten
(10) day grace period will not apply if there is a
danger of detention, interference with the use or
operation, sale, forfeiture or loss of the Aircraft;
(xviii) Other Default: An Event of Default is continuing
unremedied under any Other Agreement between Lessee and
Lessor or another lessor or sublessor that either (i)
shares the same general partner or controlling
shareholder with Lessor or (ii) whose beneficiary
shares the same general partner or controlling
shareholder with Lessor; or
(xix) Sublessee: Any approved sublessee acts so as to prevent
present or future performance by Lessee of its
obligations under this Agreement.
24.3 Lessor's Rights
24.3.1 Upon the occurrence of any Event of Default, all rights of Lessee
under this Agreement and with respect to the Aircraft will
immediately cease and terminate, but without prejudice to the
continuing obligations of Lessee under this Agreement. Without
prejudice and in all cases in addition to any other rights of
Lessor under this Agreement or under applicable law, Lessor may
upon the occurrence of any Event of Default exercise all or any of
the following rights at its option:
(i) require that Lessee immediately move the Aircraft to a
location specified by Lessor;
(ii) for Lessee's account do anything that may reasonably be
required to cure any default and recover from Lessee
all reasonable costs, including reasonable legal fees
and expenses incurred in doing so and interest thereon
at the Default Rate; or
(iii) proceed by appropriate court action or actions to
enforce performance of this Agreement or to recover
damages for the breach of this Agreement; or
(iv) enter upon the premises where the Airframe or any or
all Engines or any or all Parts are located or believed
to be located and take immediate possession of and
remove such Airframe, Engine or Parts without the
necessity for first instituting proceedings, or by
summary proceedings or otherwise, and Lessee shall
comply therewith, all without liability to Lessor for
or by reason of such entry or taking possession,
whether for the restoration or damage to property
caused by such taking or otherwise;
(v) apply all or any portion of the Security Deposit, the
Letter of Credit and any other security deposit held by
Lessor pursuant to any Other Agreements to any amounts
due.
24.3.2 Whether or not Lessor shall have exercised, or shall thereafter
any timer exercise, any of its rights under Clause 24.3.1 (i) or
(iv) above with respect to all or any part of the Aircraft,
Lessor, by written notice to Lessee specifying payment date not
earlier than ten (10) days from the date of such notice, may
demand that Lessee pay to Lessor, and Lessee shall pay Lessor, on
the payment date specified in such notice as liquidated damages
and not as a penalty (in lieu of the instalments of Rent due for
periods commencing on or after the payment date in such notice),
any unpaid instalments of Rent due for periods prior to the
payment date specified in such notice plus the present value of
the remaining instalments of Rent during the Lease Term, using in
each case a discount rate of the amount of interest then paid on
U.S. Treasury Bills of similar maturity. In addition, Lessee shall
be liable for the amounts set forth in Clause 24.4 (ii ) and (iii)
24.3.3 If an Event of Default occurs, Lessor may sell or re-lease or
otherwise deal with the Aircraft at such time and in such manner
as Lessor considers appropriate in a commercially reasonable
manner, free and clear of any interest of Lessee as if this
Agreement had never been entered into and as if Lessee had never
made any payments hereunder. While an Event of Default is
continuing, Lessee will not operate the Aircraft without the
consent of Lessor.
24.3.4 If an Event of Default has occurred and is continuing, Lessor may
take all steps necessary to de-register the Aircraft in and export
the Aircraft from the State of Registration.
24.4 Default Payments
Lessee shall be liable for:
(i) any and all unpaid Rent due hereunder before or after
any termination hereof;
(ii) any and all unpaid Supplemental Rent due hereunder
before or after any termination hereof;
(iii) all costs and expenses (including attorney's fees and
disbursements) incurred by Lessor in connection with or
as a result of any Event of Default or exercise of
remedies hereunder, including, but not limited to, (i)
all costs and expenses incurred in connection with
recovering possession of the Aircraft and in carrying
out any works or modifications required to place the
Aircraft in the condition specified in Clause 23.1 and
remarketing the Aircraft, (ii) interest at the Default
Rate on any amount not paid when due under this
Agreement and (iii) an amount sufficient to fully
compensate Lessor for any loss of or damage to Lessor's
residual interest in the Aircraft.
All costs and expenses referred to in the preceding
sentence shall be payable by Lessee upon demand by
Lessor unless otherwise specified in this Agreement.
All such obligations shall survive any termination of
this Agreement or the leasing of the Aircraft or any
portion thereof hereunder.
24.5 Cumulative Rights
Except as otherwise expressly provided above, no remedy referred
to in this Clause 24 is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy referred to
above or otherwise available to Lessor at law or in equity. The
exercise or beginning of exercise by Lessor of any one or more of
such remedies shall not preclude the simultaneous or later
exercise by Lessor of any or all such other remedies. No express
or implied waiver by Lessor of any Event of Default hereunder
shall in any way be, or be construed to be, a waiver of any future
or subsequent Event of Default.
25. Assignment and transfer
25.1 By Lessee
No assignment, novation, transfer or Security Interest may be made
by Lessee in any of its rights with respect to the Aircraft,
Engine, Parts, this Agreement or the other Transaction Documents
(other than Permitted Liens).
25.2 By Lessor
Subject to Lessee's rights pursuant to this Agreement, Lessor may
at any time and without Lessee's consent sell, assign or transfer
its rights and interest hereunder and under the other Transaction
Documents to a third party, (Lessor's Assignee). Lessor will in
good faith co-operate with Lessee to ensure minimum practical
disturbance or cost in connection with such assignment or transfer
of rights and interest hereunder. Lessee agrees to co-operate in
good faith with Lessor in such sale, assignment or transfer and
provide Lessor and Lessor's Assignee with such reasonable
assistance as Lessor may require, including but not limited to
assisting in any of Lessor's and Lessor's Assignee's efforts to
minimise or eliminate any Taxes related to such assignment or
transfer. For a period of two (2) years after any such sale or
assignment and at Lessee's cost, Lessee will continue to name
Owner Trustee, Lessor and Lender as additional insureds in
accordance with the insurance requirements set out in Clause 21.
25.3 Assignment to Lender
Subject to Lessee's rights under this Agreement, Owner Trustee may
at any time grant Security Interests over the Aircraft and the
benefit of this Agreement, the other Transaction Documents and any
other agreement related to the Aircraft to any Lender as security
for Owner Trustee's obligations to such Lender. Owner Trustee's
rights to grant any such Security Interests shall be subject only
to receipt by Lessee of an acknowledgement from or on behalf of
Lender relating to quiet enjoyment by Lessee of the Aircraft as
referred to in Clause 25.4.2.
25.4 Lessee Co-operation
25.4.1 On request by Lessor, Lessor's Assignee, Owner Trustee or Lender,
Lessee will, at Lessee's sole expense, promptly execute all such
documents as Lessor, Lessor's Assignee, Owner Trustee or Lender
may reasonably require (including such estoppel certificate as
referred to in Clause 12.4 to confirm Lessee's obligations under
this Agreement and the other Transaction Documents), to obtain
Lessee's confirmation that no Default is outstanding and for the
purpose of perfecting and ensuring and maintaining the perfection
of any Security Interest granted by Owner Trustee over the
Aircraft, this Agreement, the other Transaction Documents or any
other agreement related to the Aircraft. Lessee will promptly
provide all other reasonable assistance and co-operation at
Lessor's expense to Lessor, Lessor's Assignee, Owner Trustee or
Lender in connection with any of the matters referred to in this
Clause 25 or the perfection and maintenance of any related
Security Interest, the making of any necessary changes to the
Insurances, the making of any necessary filings and registrations
in the State of Incorporation or the State of Registration or the
provision of any appropriate counsel's opinions in relation to
Lessee's obligations.
25.4.2 Lessor will obtain for the benefit of Lessee an acknowledgement
from any Lessor's Assignee or Lender, so long as no Default has
occurred and is continuing hereunder, such person will not
interfere with Lessee's quiet, peaceful use and enjoyment of the
Aircraft, substantially in the form of Schedule 11 or such other
form as Lessor's Assignee or Lender may reasonably require.
25.5 Lessor Includes Lessor's Assignee and Lender
Wherever the term "Lessor" is used in this Agreement in relation
to any of the provisions relating to registration, title,
disclaimer, indemnity and insurance respectively, the term
"Lessor" will be deemed to include Lessor's Assignee and Lender.
26. Miscellaneous Provisions
26.1 Rights Cumulative, Waivers
The rights of Lessor under this Agreement are cumulative, may be
exercised as often as Lessor considers appropriate and are in
addition to Lessor's rights under the general law. The rights of
Lessor against Lessee or in relation to the Aircraft, whether
arising under this Agreement or the general law, shall not be
capable of being waived or varied otherwise than by an express
waiver or variation in writing; and in particular any failure to
exercise or any delay in exercising any of such rights shall not
operate as a waiver or variation of that or any other such right;
any defective or partial exercise of any of such rights shall not
preclude any other or further exercise of that or any other such
right; and no act or course of conduct or negotiation on Lessor's
part or on its behalf shall in any way preclude it from exercising
any such right or constitute a suspension or any variation of any
such right.
26.2 Delegation
Lessor may delegate to any person or persons all or any of its
rights, powers or discretions vested in it by this Agreement, and
any such delegation may be made upon such terms and conditions and
subject to such regulations (including power to sub-delegate) as
Lessor in its absolute discretion thinks fit.
26.3 Expenses
So long as the Aircraft is tendered for Delivery to Lessee
pursuant to this Agreement, Lessee shall pay to Lessor on demand:
(i) all reasonable expenses including legal, professional,
and out-of-pocket expenses incurred or payable by
Lessor in connection with any amendment to or extension
of or other documentation requested by Lessee in
connection with, or the granting of any waiver or
consent under this Agreement or the monitoring of
compliance by Lessee with this Agreement, but in the
case of such monitoring of compliance, only if upon
such monitoring Lessee is found to be in Default under
this Agreement; and
(ii) all expenses including legal, survey and other costs
payable or incurred by Lessor following a Default in
connection with the enforcement of or preservation of
any of Lessor's rights under this Agreement, or in
respect of the repossession of the Aircraft.
All expenses payable pursuant to this Clause 26.3 shall be paid in
the currency in which they are incurred by Lessor.
26.4 Time of Essence
The time stipulated in this Agreement for all payments by Lessee
to Lessor and for the prompt performance of Lessee's other
obligations under this Agreement will be of the essence for this
Agreement.
26.5 Entire Agreement
The Transaction Documents are the sole and entire agreements
between Lessor and Lessee in relation to the leasing of the
Aircraft, and supersede all previous agreements in relation to
that leasing.
26.6 Further Assurances
The parties shall take such action as Lessor and Lessee reasonably
consider to be in furtherance of the commercial intent of the
parties under the Transaction Documents including, without
limitation, such action as may be required properly to transfer
title to engines and parts as contemplated in this Agreement in
compliance with the laws of the lex situs of the relevant engine
or part at the relevant time.
26.7 Language
All notices to be given under this Agreement will be in English.
All documents delivered to Lessor pursuant to this Agreement will
be in English or, if not in English, will be accompanied by a
certified English translation. If there is any inconsistency
between the English version of this Agreement and any version in
any other language, the English version will prevail.
26.8 Variation
The provisions of this Agreement shall not be varied or amended
otherwise than by an instrument in writing executed by or on
behalf of Lessor and Lessee.
26.9 Invalidity of any Provision
If any provision of this Agreement becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality
and enforceability of the remaining provisions shall not in any
way be affected or impaired.
26.10 Survival
All indemnities and other obligations of Lessee which arise or are
attributable to circumstances occurring during the Lease Term
shall survive, and remain in full force and effect,
notwithstanding the expiration or other termination of this
Agreement or the leasing of the Aircraft hereunder.
26.11 Reimbursement
If Lessee defaults in the performance of any of its obligations
under this Agreement that can be rectified by the spending of
money, Lessor shall be entitled (but not obliged) to expend money
to rectify such matter and Lessee shall reimburse Lessor on demand
the money so expended. Any expenditure by Lessor pursuant to this
Clause 26.11 shall not prejudice the rights of Lessor in respect
of any Default or Event of Default.
26.12 Press Releases
The parties will give copies to one another, in advance if
possible, of all news, articles and other releases provided to the
public media regarding this Agreement or the Aircraft.
26.13 Power of Attorney
Lessee hereby irrevocably appoints Lessor as its attorney for the
purpose of putting into effect the intent of this Agreement
following an Event of Default, including without limitation, the
return, repossession, deregistration and exportation of the
Aircraft. To evidence this appointment, Lessee has executed the
power of attorney in the form of Schedule 8. Lessee will take all
steps required under the laws of the State of Registration to
provide such power of attorney to Lessor.
26.14 Usury Laws
Notwithstanding anything to the contrary in the Transaction
Documents, Lessee will not be obligated to pay Default Interest or
other interest in excess of the maximum non-usurious interest
rate, as in effect from time to time, which may by applicable law
be charged, contracted for, reserved, received or collected by
Lessor in connection with the Transaction Documents. During any
period of time in which the then applicable highest lawful rate is
lower than the Default Interest rate, Default Interest will accrue
and be payable at such highest lawful rate; however, if at later
times such highest lawful rate is greater than the Default
Interest rate, then Lessee will pay Default Interest at the
highest lawful rate until the Default Interest which is paid by
Lessee equals the amount of interest which would have been payable
in accordance with the interest rate set forth in Schedule 2.
26.15 Confidentiality
The Transaction Documents and all non-public information obtained
by either party about the other are confidential and are between
Lessor and Lessee only and the commercial terms and other material
provisions of this Agreement will not be disclosed by a party to
third parties (other than to such party's auditors, lenders and
legal advisors) without the prior written consent of the other
party except in connection with enforcement of rights hereunder.
If disclosure is required as a result of applicable law, Lessee
and Lessor will co-operate with one another to obtain confidential
treatment as to the commercial terms and other material provisions
of this Agreement; provided, however, if they are unable to obtain
such confidential treatment and disclosure is required by
applicable law, then such disclosure may be made in accordance
with such law.
26.16 Counterparts
This Agreement may be executed in any number of identical
counterparts, each of which will be deemed to be an original, and
all of which together will be deemed to be one and the same
instrument when each party has signed and delivered one such
counterpart to the other party. Delivery of an executed
counterpart of this Agreement by facsimile will be deemed
effective as delivery of an originally executed counterpart. Any
party delivering an executed counterpart of this Agreement by
facsimile will also deliver an originally executed counterpart;
provided, however, the failure of any party to deliver an
originally executed counterpart of this Agreement will not affect
the validity or effectiveness of this Agreement.
26.17 Bankruptcy
It is the intention of the parties that the Lessor shall be
entitled to the benefits of 11 U.S.C 1110 with respect to the
right to repossess the Airframe, Engines and Parts as provided
herein, and in any circumstances where more than one construction
of the terms and conditions of this Agreement is possible, a
construction which would preserve such benefits shall control over
any construction which would not preserve such benefits or would
render them doubtful. To the extent consistent with the provisions
of 11 U.S.C 1110 or any analogous section of the Federal
bankruptcy laws, as amended from time to time, it is hereby
expressly agreed and provided that, notwithstanding any other
provisions of the Federal bankruptcy laws, as amended from time to
time , any right of the Lessor to take possession of the Aircraft
in compliance with the provisions of this Agreement shall not be
affected by the provisions of 11 U.S.C 362 or 363, as amended from
time to time, or any analogous provisions of any superseding
statute or any power of the bankruptcy court to enjoin such taking
of possession. This Agreement is a true lease and not one intended
as security.
27. Notices
Any notice or other communication under or in connection with this
Agreement shall be in writing and shall be delivered personally,
by reputable overnight courier or express service or by post or
facsimile transmission to the respective addresses or facsimile
numbers given below or such other address or facsimile number as
the recipient may have notified to the sender in writing. Proof of
posting or despatch shall be deemed to be proof of receipt. Notice
shall be deemed received:
(i) in the case of a letter, on the fifth Business Day
after posting; and
(ii) in the case of a facsimile, on the Business Day
immediately following the date of despatch or
transmission.
In the case of a notice sent by expedited delivery, notice will be
deemed received on the date of delivery set forth in the records
of the person which accomplished the delivery. If any notice is
sent by more than one of the above listed methods, notice will be
deemed received on the earliest possible date in accordance with
the above provisions. Notices will be addressed as follows:
Lessor: INDIGO AVIATION AB (publ)
Address: Sodra Forstadsgatan 4, SE-211 43 Malmo, Sweden
Attention: Legal Department
Facsimile: +46 40 302350
Lessee: FRONTIER AIRLINES, INC.
Address: 12015 e. 46th Avenue, Denver Colorado,
United States of America
Attention: General Counsel
Facsimile: (303) 371 9669
28. Governing law and jurisdiction
28.1 New York Law
This Agreement will in all respects be governed by and construed
in accordance with the laws of the State of New York including all
matters of construction, validity and performance but excluding
section 7-101 of the general obligations law (notwithstanding the
conflict laws of the State of New York).
28.2 Non-exclusive Jurisdiction in New York
28.2.1 Each of Lessor and Lessee (a) irrevocably submit to the
non-exclusive jurisdiction of the Supreme Court of the State of
New York, New York City County, and the United States Districts
Court for the Southern District of New York for the purposes of
any suit, action, or other proceeding arising out of this
agreement of the Transaction Documents or the subject matter
hereof or thereof or the transactions contemplated hereby or
thereby brought by the other party or its successor or assign and
(b) to the extent permitted by applicable law, irrevocably waives
and agrees not to assert by way of motion, as defence or otherwise
any claim that it is not personally subject to the jurisdiction of
the abovenamed courts; that the suit, action or proceedings is
brought in an inconvenient forum, that venue is improper or that
this agreement or the other Transaction Documents or the subject
matter hereof or thereof may not be enforced in or by such court.
Nothing herein contained shall prevent either party from bringing
suit in any other appropriate jurisdiction.
28.3 Service of Process
28.3.1 With respect to actions, suits and proceedings brought in the
courts named in Clause 28.2. each of Lessor and Lessee hereby
waives personal service of process and agrees that service of
process may be made upon certified or registered mail, return
receipt requested, at the address specified in Clause 27 and that
such service shall be deemed completed on the fifth business day
after service is deposited in the mail. Nothing herein shall
affect the right to service process in any other manner provided
by applicable law or accordance with the Hague Convention if
applicable.
28.4 Waiver
Lessee and Lessor hereby waive the right to a trial by jury.
SIGNATURE PAGE
IN WITNESS whereof the parties hereto have executed this Agreement on the date
showed at the beginning of this Agreement.
SIGNED on behalf of INDIGO AVIATION AB (publ)
By: ___________________________
Name: ___________________________
Title: ___________________________
SIGNED on behalf of FRONTIER AIRLINES, INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
Receipt of the "original" counterpart of this Agreement is hereby acknowledged.
SCHEDULE 1
AIRCRAFT SPECIFICATION
Model Boeing 737-3L9
Serial Numbers 26440
Current Registration D - ADBB
New Registration Mark N310FL
Line Number 2234
Date of Manufacture March, 1992
Engines CFM56-3B2 (22K)
APU Garrett GTCP85-129H
Present Operator Deutsche BA
WEIGHTS Lbs.
Max Taxi Weight 140,000
Max Take Off Weight 139,500
Max Landing Weight 114,000
Max Zero Fuel Weight 106,500
Basic Empty Weight 71,989
Max Fuel capacity 5,311 US Gallons
(Provisioning for Aft Body Aux Fuel Tank installed - 500 US Gallons)
INTERIOR CONFIGURATION
Seating 136 Y Recaro 3230
Galleys G1, G2, G3, G4B Henshall
Stowages G7 Henshall
Lavatories Three
1 Forward, 2 Aft Boeing Standard
AIRFRAME AND ENGINE STATUS (As of March 2, 1999)
AIRFRAME
Total Hours 17,231
Total Cycles 16,044
Time to D Check (7C+SI) 5,169
AIRFRAME MAINTENANCE PROGRAM
CHECK SCHEDULE
A Check 250 hours
I Check 500 hours
C Check 3,600 hours or 15 months
D Check 22,400 hours
ENGINES
Serial Number 726422 726492
Total Hours 16,837 16,837
Total Cycles 15,616 15,616
Next Limiter LPT Con Support LPT Con Support
Cycles Remaining 8,185 8,185
Hours Since Shop Visit 2 2
LANDING GEAR
Right/Left Main 16,044 Cycles/17,231 hours
Nose 16,044 Cycles/17,231 hours
Overhaul limit 22,400 hours
NAVIGATIONAL, COMMUNICATION, ELECTRONIC SYSTEMS,
FURNISHING & EQUIPMENT LIST
DESCRIPTION MANUFACTURER MODEL OR PART NUMBER QTY
Dual Flight Control System
(CATIIIa) Honeywell SP300 1
Autothrottle System Smiths Industries 735SUE 1
VHF Communication Collins VHF700 2
HF Communication Collins 628T-2A 1
(Provisions for HF-2)
Selcal Motorola NA1401C 1
Passenger Address Collins 346D-2B 1
Announcement System Matsushita RDAX7308 1
CVR Fairchild A 100A 1
Flight Data Recorder Sundstrand DXUS 1
DFDAU SFIM ED44B 1
Printer Bendix PTA-45B 1
Air Data Computer Smiths 501FAD1 2
IRU Honeywell HG1050 2
EADI Colour Collins EDU-766D 2
EHSI Colour Collins EDU-776D 2
Marker Collins 51 Z4 1
VHF Nav Collins 51RV4B 2
Symbol Generator Collins EFIP-701D 2
WX-Radar Collins WRT701X 1
GPWS Sundstrand MK V 1
Radar Altimeter Collins 860 F-4 2
DME Collins 860 E-5 2
ATC (Mode S) Collins TPR720 2
ADF Collins 51 Y7 2
FMC Smiths U5.0 1
FMCS CDU Smiths - 2
Primary Engine Display Smiths EIS 1
Secondary Engine Display Smiths EIS 1
All data and information included herein are subject to change without notice.
No warranty is made or implied as to the accuracy of the information contained
herein which is subject to independent verification upon inspection.
Annexure 1
AIRCRAFT DOCUMENTATION
Note: This Annexure 1 is to be used for reference purposes only. The
Aircraft Documents will be more closely identified in Annexure 1
to the Acceptance Certificate.
A. Certificates
- - Certificate of Airworthiness
- - Certificate of Registration
- - Noise Certificate
- - Radio License
B. Aircraft Status Records
- - Technical Log Book
- - Airframe Maintenance Status Report
- - Manufacturer's Service Bulletin Status Report
- - Airworthiness Directive Compliance Report (terminated and
repetitive)
- - Local Modification Status Report List with Substantiating Data
- - Last Weighing Report
- - Repair Datas Structural Repairs
C. Aircraft Maintenance Records
- - Test Flight Reports
- - Last Boeing "C" check and maintenance check Work Cards for each
"C" check multiple (or segment)
D. Aircraft History Records
- - Aircraft Structural Repair History (if applicable)
- - Service Difficulty Report (if applicable)
- - Accident or Incident Report (if applicable)
E. Engine Records (for each engine)
- - Log Books
- - Last overhaul and repair documents for each module
- - Airworthiness Directive Compliance Report (terminated and
repetitive)
- - Manufacturer's Service Bulletin Status Report
- - Engine Disk Sheet
- - Engine Data Submittal Sheet
- - Condition Monitoring Status Report
F. APU Records
- - Log Book
- - Last overhaul and repair documents
- - Manufacturer's Service Bulletin Status Report
G. Component Records (including components installed engines and APU)
- - Time Controlled Component Status Report with remaining hours and
cycles (if applicable)
- - Serviceability tags or back-up documentation for components
replace since delivery from Boeing
H. Manuals
1. Airplane Flight Manual
2. Quick Reference Handbook
1. Aircraft Operating Manual
1. Weight and Balance Manual Supplement
1. Wiring Diagram Manual (microfilm)
1. Illustrated Parts Catalog (microfilm)
1. Aircraft Maintenance Manual (microfilm)
1. CFMI Illustrated Parts Catalog
1. Vendor Manual Seats
1. Vendor Manual Galleys
1. Vendor Manual Ovens
1. Vendor Manual Coffeemakers
I. Miscellaneous Technical Documents
- - Maintenance Program Specifications/Requirements
- - Interior Configuration Drawings
- - Loose Equipment Inventory List
- - Delivery documentation ex Boeing
- Export Certificate of Aircraft
- Aircraft Readiness Log
- Rigging Record Brochure
- Miscellaneous Delivery Record Brochure
- Fuel Measuring Stick Calibration Brochure
- FAA Airworthiness Directive Compliance Record
SCHEDULE 2
CERTAIN BUSINESS TERMS
1. Agreed Value
Agreed Value means *
2. Basic Rent
The Basic Rent payable on each Rent Date during the Base Lease
Term and the Extension Lease Term shall be * .
3. Damage Notification Threshold
Damage Notification Threshold means * .
4. Engine Agreed Value
Engine Agreed Value means for each engine * .
5. Extension Lease Expiry Date
Extension Lease Expiry Date means, upon exercise of the Extension
Option, the date falling twelve (12) months from the Base Lease
Expiry Date or such other date as Lessor and Lessee may agree in
writing.
6. Initial Lease Expiry Date
Initial Lease Expiry Date means the 14th of May 1999.
7. Initial Rent and Initial Rent Dates
o From Delivery until 14th of April 1999, the Initial Rent
shall be * payable on the 15th of April 1999 (First
Initial Rent Date); and
o from 15th of April 1999 until Initial Lease Expiry Date,
the Initial Rent shall be the lesser of:
(a) * per flight hour for each hour flown during the
period commencing on the 15th of April and
ending on Initial Lease Expiry Date; and
(b) * payable as follows: (i)on the First Initial
Rent Date: * (ii) on the date falling ten (10)
days after the Initial Lease Expiry Date (Second
Initial Rent Date); the remaining amount.
8. Letter of Credit
The Lessee shall provide the Lessor with an additional Security
Deposit in form of an irrevocable, assignable standby letter of
credit in the amount of issued at least three days prior to
Scheduled Delivery Date by a major US Bank in a form and
substance acceptable by Lessor (the Letter of Credit).
9. Maintenance Reserves
Lessee shall during the Lease Term pay the following Maintenance
Reserves to Lessor:
(i) Airframe Maintenance Reserve
* for each Flight Hour that the Airframe is operated;
(ii) Engine Maintenance Reserve
* for each Flight Hour that each Engine is operated;
(iii) Landing Gear Maintenance Reserve
* for each Flight Hour that the Aircraft is operated;
(iv) APU Maintenance Reserve
* for each Flight Hour that the APU is operated.
The amounts payable by Lessee to the Maintenance Reserves as set
out herein shall be subject to escalation on each of the
anniversary dates of the first day of the Base Lease Term with *
per year.
10. Minimum Liability Coverage
Minimum Liability Coverage means * on each occurrence.
11. Scheduled Delivery Date
Scheduled Delivery Date means 31st of March 1999 or such other
date as the parties may mutually agree and Lessor may be able to
deliver the Aircraft to Lessee.
12. Security Deposit
Lessee has paid to Lessor a cash Security Deposit in the amount
of * and shall provide Lessor with additional Security Deposit
according to Clause 8 of this Schedule 2.
The cash Security Deposit of * will be credited to the payment of
Rent payable by Lessee during the Initial Lease Term, and, if
applicable, during the Base Lease Term. The Security Deposit will
be non-refundable in the event of failure by Lessee to take
delivery of the Aircraft in accordance with this Agreement.
13. Supplemental Rent for Excess Cycles
If on each of the anniversary dates of the first day of the Base
Lease Term, based on the previous twelve (12) months period (or
portion thereof) of the Base Lease Term the Aircraft has been
operated more Cycles than the number of Cycles which would result
from an average Flight Hour/Cycle ratio of one point five (1.5)
Flight Hours to one (1) Cycle, Lessee will pay Lessor as
Supplemental Rent * for each Cycle the Aircraft actually operated
during such twelve (12) months period (or portion thereof) in
excess of the number of Cycles which result from an average
Flight Hour/Cycle ratio of one point five (1.5) Flight Hours to
one (1) Cycle. A calculation will be made as of the last day of
each anniversary of the first day of the Base Lease Term each
year and such Supplemental Rent will be due and payable by Lessee
on the date on which the next Maintenance Reserve payment is due
(in accordance with Clause 9.2) following such Flight Hour/Cycle
calculation period.
SCHEDULE 3
INSURANCE REQUIREMENTS
1.1 Types of Insurance
The Insurances required to be maintained are as follows:
(a) an All Risks Hull Insurance Policy on the Aircraft on an agreed
value basis in an amount not less than the Agreed Value with
insurers not entitled to replace the Aircraft in the event of an
insured Total Loss;
(b) an All Risk Hull Insurance Policy on each Engine when not
installed on the Aircraft on an agreed value basis not less than
the Engine Agreed Value;
(c) insurance covering all risks of physical loss or damage howsoever
occasioned in respect of engines, spare parts and equipment
forming part of the Aircraft but which for the time being are
removed from the Aircraft, and are not insured by the Aircraft's
hull and war risk insurance in an agreed value of not less than
their replacement cost;
(d) a War Risks Insurance Policy on the Aircraft covering all of those
risks which are currently enumerated in Lloyds Form AVN.48B War,
Hi-jacking and Other Perils Exclusion Clause (Aviation), other
than paragraph (b) thereof to the fullest extent possible and any
additional risks which may hereafter be included therein or in any
form succeeding to any of its functions on an agreed value basis
in any amount not less than the Agreed Value;
(e) Liability Insurance, being Aircraft Third Party Legal Liability,
Passenger, Contractual Legal Liability, Baggage Legal Liability,
Cargo and Mail Legal Liability and Airline General Third Party
Legal Liability including war and allied perils to the fullest
extent available for a combined single limit of liability bodily
injury/property damage of not less than the Minimum Liability
Coverage any one accident provided that if the Lessor on the basis
of advice received from an independent insurance adviser believe
that the relevant liabilities shall be unlimited or that such
limit should be revised upwards, it shall be replaced by unlimited
liability or such higher limit as may be appropriate in the light
of circumstances prevailing in the international airline industry
at the time and provided further that the Lessor shall not be
obliged by this Clause to effect and maintain insurance in respect
of any inability to recover from any manufacturer of the Airline,
Engines or any Part, losses and liabilities incurred as a result
of negligent manufacture.
1.2 Terms of Hull and Spares Insurance
All required hull and spares insurance, so far as it relates to
the Aircraft, will:
(a) Settlement of Losses: provided that any loss will be payable in
Dollars to Lender, if none, to Lessor or at the request of Lessor
to Lender. In respect of any other claim, the relevant policy
shall provide that settlement (net of any relevant policy
deductible) shall be made with such parties as may be necessary to
repair the Aircraft or as otherwise agreed after consultation
between the Lender, the Owner Trustee, the Lessor and the Lessee.
The relevant policy shall provide that such payments shall only
made provided the same are in compliance with all applicable laws
and regulations.
(b) 50/50 Provision: if separate hull "all risks" and "war risks"
insurances are arranged, include a 50/50 provision in accordance
with market practice AVS. 103 is the current market language;
(c) Deductibles: provide for deductibles in respect of the Aircraft
All Risks Hull Insurance Policy or War Risks Insurance Policy of
no more than US$500,000 (or the minimum deductible amount carried
under the airline's insurance policy if less than US$500,000).
(d) Customary Risks: cover at least such risks as are customarily
insured against in the airline industry for any amount not less
than the Agreed Value;
(e) Sound Practice: be in accordance with sound international airline
practice.
1.3 Terms of Liability Insurance
All required liability insurances will:
(a) cover at least such risks as are customarily insured against in
the airline industry and names the additional assured as
additional named insured for their respective rights and interest;
(b) be in form and substance in accordance with sound international
airline practice (having regard to the type of aircraft or engines
involved);
(c) provide that upon payment of any loss or claim by the insurers in
accordance with the endorsement relating to the relevant policy
naming the additional assured as additional assureds, the insurers
shall to the extent and in respect of such payment be thereupon
subrogated to all legal and equitable rights of the additional
assured indemnified under such endorsement relating to the
Insurances (but not against any additional assured) and further
provides that the insurers shall not exercise such rights without
the consent of those additional assured such consent not to be
unreasonably withheld and at the expense of the insurers such
additional assured shall do all things reasonably necessary to
assist the insurers to exercise the said rights;
(d) provide that except in respect of any provision for automatic
termination or cancellation specified in the policy or any
endorsement thereof, cover for the interests added by the
endorsement relating to the relevant policy may only be cancelled
or materially altered in a manner adverse to the additional
assured by the giving of not less than thirty (30) days (but seven
(7) days or such lesser period as may be customarily available in
respect of War risks) notice in writing to the insurance brokers
and that notice shall be deemed to commence from the date such
notice is given by the insurers and that such notice will not be
given at the normal expiry date of the policy or any endorsement;
(e) is primary without right of contribution from any other insurance
which may be available to the additional assured;
(f) subject to the provisions naming the additional assured as
additional assured, operates in all respects as if a separate
policy had been issued covering each additional assured;
(g) provides that non of the additional assured shall be responsible
for any premiums in respect thereof, and that the insurers shall
waive any right of set-off or counterclaim against the additional
assured (except in respect of any outstanding premiums in respect
of the Aircraft);
(h) provides that the insurance thereunder shall not be invalidated by
any act or omission, including misrepresentation and
non-disclosure, of any other person which results in breach of any
term, condition or warranty of the relevant policy provided that
the additional assured so protected has not caused or contributed
to or knowingly condoned the said act or omission;
(i) has a deductible in respect of passenger baggage and cargo of an
amount which, at any time, is customary in the international
aviation market at the time for Boeing 737-300 aircraft in each
case in respect of any one claim;
(j) contains a provision insuring (to the extent of the risks covered
by the policy) the indemnity provisions of security document
entered into in favour of the Lender; and
(k) specifically refers to any security document entered into in
favour of the Lender or any loan agreement.
1.4 Terms of All Insurances
All Insurances will:
(a) Dollars: provide cover denominated in dollars;
(b) World-wide: operate on a world-wide basis subject to such
limitations and exclusions as the parties and the insurance market
may agree;
(c) Acknowledgement: acknowledge the insurer is aware and has seen a
copy of this Agreement, that the Aircraft is owned by Owner
Trustee for the benefit of and the existence of any financing or
security documents to which Lenders may be party;
(d) Breach of Warranty: provide that, in relation to the interests of
each of the additional assureds, the Insurances will not be
invalidated by any act or omission, including misrepresentation
and non-disclosure, by Lessee, or any other person provided that
such additional assureds regardless of any breach or violation by
Lessee, or any other person other than the respective additional
assured seeking protection of any warranty, declaration or
condition, contained in such Insurances has not caused or
contributed to or knowingly condoned the said act or omission;
(e) Subrogation: provide that upon payment of any loss or claim by the
insurers in accordance with the endorsement relating to the
relevant policy naming the additional assured as additional
assureds, the insurers shall to the extent and in respect of such
payment be thereupon subrogated to all legal and equitable rights
of the additional assured indemnified under such endorsement
relating to the Insurances (but not against any additional
assured) and further provides that the insurers shall not exercise
such rights without the consent of those additional assured such
consent not to be unreasonably withheld and at the expense of the
insurers such additional assured shall do all things reasonably
necessary to assist the insurers to exercise the said rights;
(f) Premiums: provide that the additional assureds will have no
obligation or responsibility for the payment of any premiums due
but reserve the right to pay the same should any of them elect so
to do and that the insurers will not exercise any right of set-off
or counter-claim in respect of any premium due against the
respective interests of the additional assureds other than
outstanding premiums relating to the Aircraft, any Engine or Part
the subject of the relevant claim;
(g) Cancellation/Change: provide that the Insurances will continue
unaltered for the benefit of the additional assureds for at least
thirty (30) days after written notice by registered mail or telex
of any cancellation, change, event of non-payment of premium or
instalment thereof has been sent to Lessor, except in the case of
war risks for which 7 days or such lesser period as is or may be
customarily available in respect of war risks or allied perils
will be given and that notice shall be deemed to commence from the
date such notice is given by the insurers and that such notice
will not be given at the normal expiry date of the policy or any
endorsement;
(h) Indemnities: accept and insure the indemnity provisions of this
Agreement to the extent of the risks covered by the policies (it
being understood that certain matters listed in Clause 20.1.1:
registration, import, Overhaul, deregistration, export,
manufacture, design and testing and (c) are not covered).
(i) Endorsement: contains an endorsement naming:
(i) the Lender as loss payee in the case of a Total Loss;
(ii) the Lender as loss payee in the case where the amount
payable by the insurers upon any claim other than in
respect of Total Loss is greater than US$5,000,000; and
(iii) the Lessor as loss payee in the case where the amount
payable by the Insurers upon any claim other than in
respect of a Total Loss is less than US$5,000,000
unless and until the Lender notifies the insurance
brokers or the insurers that an Event of Default has
occurred, in which event the loss payee shall be the
Lender;
(j) specifically refer to each loan agreement or charge between the
Lessor and any Lender.
1.5 Deductibles
Lessee shall be responsible for any and all deductibles under the
Insurances.
1.6 AVN 67B
Notwithstanding the foregoing, if Lessee provides insurance
certificates in compliance with AVN 67B it shall be regarded as
having satisfied those of the insurance provisions set out above
that are covered by that endorsement.
1.7 AVN 2000 (or similar)
If AVN 2000 or similar "Date Recognition Exclusion Clause" applies
in respect of the Insurances then:
(a) the Insurance certificate shall state that this is the case; and
(b) the Insurances must provide for AVN 2001 (aircraft exposures) and
AVN 2002 (non-aircraft exposures) or similar "Date Recognition
Limited Coverage Clauses" and the insurance certificates must
state that this is the case.
SCHEDULE 4
DELIVERY CONDITIONS
The Aircraft will be delivered "AS IS, WHERE IS" at the Delivery Location and
will conform to the conditions outlined in this Schedule 4.
The actual condition of the Aircraft at Delivery will be documented on the
Acceptance Certificate as noted in Schedule 5 of the Aircraft Lease Agreement.
Certification:
A United States Standard Certificate of Airworthiness suitable for Part 121
operations. The Aircraft will be airworthy (conform to type design and be in a
condition for safe operation), with all Aircraft equipment, components and
systems operating in accordance with their intended use and within limits
established by the Aircraft Maintenance Manual.
Configuration:
An all economy 136 seat interior with a 31" minimum seat pitch.
Paint:
The exterior will be sanded or stripped as needed and painted in Frontier's
white base color and green lettering. Frontier will provide the tail decals.
Airframe:
Fresh from next Block C Check, excluding hours and cycles used on the
Demonstration/Ferry Flights, with a minimum of 3,000 hours remaining until the
next C7 Check/Structural Inspection.
A. The Aircraft will have no deferred maintenance items, unique inspection
or temporary repairs at Delivery.
B. Modifications and Repairs installed on the Aircraft at Delivery will
have been accomplished in accordance with FAA approved data.
C. The Aircraft will be in compliance with the Manufacturer's CPC program.
D. If available, any No Charge Service Bulletin Kits not installed by
Present Lessee will be loaded onboard the Aircraft as cargo.
F. Fuel tanks will be free from contamination.
Engines:
Each Engine will have at least 5,000 hours remaining until next anticipated
performance restoration shop visit and have at least a minimum of 8,000 hours
and 8,000 cycles remaining until the next LLP limiter at 3B2 Power (22,000 Lbs
Thrust).
Each Engine will pass a Performance Engine Run in accordance with the Aircraft
Maintenance Manual.
Each Engine will pass a hot and cold section borescope inspection.
APU:
Serviceable and passing a borescope inspection.
Components:
Each component that is time controlled will have at least 2,250 flight hours or
cycles remaining until next inspection/overhaul. Each component that is calendar
controlled will have 12 months remaining until its next inspection/overhaul.
Condition Monitored/On Condition components will be serviceable.
Landing Gear:
Each Landing Gear will have at least 3,000 hours remaining until the next
inspection or overhaul.
Airworthiness Directives (AD's):
Airworthiness Directives requiring compliance within 90 days after delivery will
be in compliance. Airworthiness Directives that require inspection or repetitive
inspection will be cleared for 3,000 hours or the maximum inspection interval if
less than 3,000 hours.
Demonstration Flight:
Present Lessee will perform a one and one half hour flight demonstrating the
satisfactory operation of the Aircraft with no more than two Lesseeobservers, as
designated by Lessor, on board during such Demonstration Flight.
Records:
Documentation required to receive a United States Standard Certificate of
Airworthiness will be in English or translated into English prior to delivery.
TCAS:
TCAS will be installed prior to Delivery, subject to the Side Letter.
Aircraft Documentation:
The Aircraft Documents will be identified in Annexure 1 to the Acceptance
Certificate.
SCHEDULE 5
ACCEPTANCE CERTIFICATE
This Acceptance Certificate is delivered, on the date set out below by FRONTIER
AIRLINES, INC. (Lessee), to INDIGO AVIATION AB (publ) (Lessor), pursuant to the
Aircraft Lease Agreement dated 15 March 1999 between Lessor and Lessee (the
Lease). Capitalized terms used in this Certificate shall have the meanings given
to such terms in the Lease.
1. Details of acceptance
Lessee hereby confirms to Lessor that Lessee has at _____o'clock on this ___ day
of ______, at _____ accepted the following, in accordance with the provisions of
the Lease:
(a) Airframe
Type: _____ Reg.: _____ S/N: _____
(b) Engines
Type: _____ S/N No.1: _____ S/N No. 2: _____
(c) APU:
MSN Total Flight Flight Hours/ Cycles Flight Hours/Cycles
Hours remaining until next HSI remaining on turbine and
inspection compressor life limited
parts
- ----- ---- ------ -----
(d) Landing Gears
Position Serial Total Flight Flight Hours/ Cycles Flight Hours/
No. Hours/Cycles since last Overhaul Cycles to next
sched. Removal
Nose ____ ___ Flight Hours ___ Flight Hours ___ Flight Hours
___ Cycles ___Cycles ___ Cycles
Right Main ____ ___ Flight Hours ___ Flight Hours ___ Flight Hours
___ Cycles ___Cycles ___ Cycles
Left Main ____ ___ Flight Hours ___ Flight Hours ___ Flight Hours
___ Cycles ___Cycles ___ Cycles
(e) Equipment Check List: as per list signed by Lessor and Lessee and
attached hereto; and
(f) Aircraft Documents List: as per list signed by Lessor and Lessee
and attached hereto; and
(g) Place of Acceptance: ______________
2. Confirmation
Lessee confirms to Lessor that as at the time indicated above, being the
Delivery Date:
(a) the representations and warranties contained in Clause 2.1 of the
Lease are hereby repeated;
(b) the Aircraft is insured as required by the Lease; and
(c) Lessee's authorised technical experts have inspected the Aircraft
and the Aircraft Documents to ensure that the Aircraft and the
Aircraft Documents conform to Lessee's requirements. The Aircraft
and the Aircraft Documents are in accordance with the
specifications of the Lease and satisfactory in all respects.
3. Fuel at Delivery
3.1 Fuel on board at Delivery: ____ kilos (___ gallons).
3.1 Annexed hereto is details of any damage to the Aircraft as at
Delivery.
3.1 The Airframe, Engines and Parts had the following Flight
Hours/Cycles at Delivery:
(a) Airframe:
Total hours Total landings Since last "C" Check Since last "A" Check
_________ ________ ______ Flight Hours ______ Flight Hours
______ Cycles ______ Cycles
(b) Engines:
Position Serial No. Total Flight Total Cycles Since last shop Since last
Hours visit Engine
Performance
Restoration
Visit
____ Flight ____ Flight
Hours Hours
____ Cycles ____ Cycles
See attached Engine run records and disc sheets for further description of
Engines at Delivery.
IN WITNESS WHEREOF, Lessee has, by its duly authorised representative, executed
this Certificate on the date specified in paragraph 1 above.
Lessee: FRONTIER AIRLINES, INC.
By: _________________________
Title: _________________________
Annexure 1 Aircraft Documents
Annexure 2 Aircraft Equipment List
Annexure 3 Damage Chart
SCHEDULE 6
CERTIFICATE OF DIRECTOR
OF
FRONTIER AIRLINES, INC.
I, _____________________, do hereby certify that:
1. I am a duly and acting Director of Frontier Airlines, Inc., a Colorado
corporation (the "Company").
2. Attached hereto as Exhibit A is a true, correct and complete copy of
the Certificate of Incorporation of the Company, as amended to the date
hereof, and such Certificate of Incorporation remains in full force and
effect on the date hereof.
3. Attached hereto as Exhibit B is a true, correct and complete copy of
the Articles of Association to of the Company and by-laws, as amended
to the date hereof, and such Articles of Association and by-laws remain
in full force and effect on the date hereof.
4. Attached hereto as Exhibit C is true, correct and complete copy of
resolutions duly adopted by the Board of Directors of the Company at a
meeting duly called and held in [ ] approving the execution, delivery
and performance of the Aircraft Lease Agreement dated as of 15 March
1999 between Indigo Aviation AB (publ) as lessor and the Company as
lessee (the "Lease") and the other Transaction Documents (as defined
in the Lease) to which the Company is a party, and said resolutions
have not been revoked, rescinded or modified and, at the date hereof,
are in full force and effect.
5. The following persons are duly qualified and acting officers of the
Company, and each of such officers certifies that the signature
appearing opposite the name of each other officer is his genuine
signature:
6. I do hereby certify that all of the Company's representations and
warranties set forth in the Lease are true and correct at the date
hereof.
Title Name Signature
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the ____
day of ___________.
I, ________, acting as special counsel to Frontier Airlines, Inc., do hereby
certify that ______________ is a duly elected, qualified and acting director of
Frontier Airlines, Inc. and that the signature set forth above is his genuine
signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the ___
day of ____________.
SCHEDULE 7
FORM OF LETTER OF AUTHORITY
[ Addressee ]
AUTHORITY
This Authority is given on _________.
Pursuant to an Aircraft Lease Agreement (the Lease) dated as of 15 March 1999,
made between Indigo Aviation AB (publ) as lessor (Lessor) and Frontier Airlines,
Inc. as lessee (Lessee) relating to one (1) Boeing 737-3L9 aircraft bearing
manufacturer's serial number 26440 and registration mark N310FL (the Aircraft),
Lessee will operate the Aircraft during the term of the Lease.
Lessee hereby irrevocably authorises yourselves, during the term of the Lease,
to disclose to Lessor or to anyone duly appointed by it, upon request by the
same, particulars of any and all outstanding charges due to or collectable by
you and incurred in respect of:
(i) the Aircraft; and
(ii) any other aircraft being operated by Lessee on the date
such request, from time to time, is made.
IN WITNESS WHEREOF a duly authorised representative of Lessee has granted this
Authority on the day and year first above mentioned.
Signed by:
for and on behalf of
SCHEDULE 8
POWER OF ATTORNEY
The undersigned, Frontier Airlines, Inc. (Lessee) refers to the Aircraft Lease
Agreement dated as of 15 March 1999, as amended and supplemented from time to
time (the Lease) between, Indigo Aviation AB (publ) (Lessor) and Lessee with
respect to one (1) Boeing 737-3L9 Aircraft bearing manufacturer's serial number
26440 and registration mark N310FL (the Aircraft).
In consideration of the sum of US$ 1 paid by Lessor to Lessee (the receipt and
sufficiency of which is hereby acknowledged), Lessee irrevocably appoints Lessor
(Attorney) as its true and lawful attorney to:
Execute and to do and perform upon its behalf and in its name or otherwise to
deliver any documents, instruments or certificates with such amendments thereto
(if any) which may be required to obtain deregistration of the Aircraft from the
register of aircraft maintained by the Federal Aviation Administration of the
United States of America and the export of the Aircraft from the State of
Registration (as defined in the Lease) upon the lawful termination of the Lease
of the Aircraft;
AND generally to do any and all such acts and things and to execute under seal
or hand (as appropriate) and deliver any and all documents under seal or under
hand (as appropriate) as may be requested or required for such deregistration
and export;
AND Lessee hereby undertakes from time to time and at all times to indemnify the
Attorney against all costs, claims, expenses and liabilities howsoever incurred
by all such Attorney in connection herewith and further undertakes to ratify and
confirm whatsoever the Attorney shall lawfully do or cause to be done in or by
virtue of this Power of Attorney;
AND for the better doing, performing and executing of the matters and things
aforesaid Lessee hereby further grants unto the Attorney full power and
authority to substitute and appoint in its place one or more attorney or
attorneys to exercise for them as attorney or attorneys of Lessee any or all the
powers and authorities hereby conferred and to revoke any such appointments from
time to time and to substitute or appoint any other or others in the place of
such attorney or attorneys as each attorney shall from time to time think fit.
This Power of Attorney shall be subject to, governed by and construed in
accordance with the laws of [ ].
SIGNED ON BEHALF OF FRONTIER AIRLINES, INC.
By: _______________________
Title: ______________________
SCHEDULE 9
Note: This form is made on the assumption that the State of Incorporation
and the State of Registration are the same [herein "State"].
FORM OF OPINION OF LESSEE COUNSEL
to be addressed to [ Lessor ]
and
[ Lender ]
We have acted as counsel in [ Country of Lessee ] as counsel to [Name of Lessee]
("Lessee") in connection with an aircraft lease agreement dated [ ] and made
between [ Name of Lessor ] as Lessor and Lessee as the lessee in respect of one
[ Type of Aircraft ] bearing manufacturer's serial number [ ] (the "Aircraft")
(the "Lease") and owned by Lessor, and have examined a copy of the following
documents;
(i) the Lease;
(ii) the Acceptance Certificate;
(iii) the Letter(s) of Authority;
(iv) the Power of Authority;
(v) [ other documents ]; and
(vi) [ ]
and such other documents as we have considered it necessary or desirable to
examine in order that we may give this opinion.
The documents referred to under (i) to (v) above are referred to as the
"Relevant Documents".
Terms defined in the Lease shall have the same meaning herein.
On the basis on the foregoing we are of the opinion that:
(a) Lessee is duly incorporated in [ State ] for an indefinite period
as a limited company and is a validly existing separate legal
entity, which is subject to suit in its own name, in good
standing, and, to the best of my knowledge, no steps have been, or
are being, taken to appoint a receiver, liquidator, trustee or
similar officer over Lessee, or to wind up Lessee or commence any
other insolvency proceedings with respect to Lessee or to have
Lessee dissolved by merger;
(b) Lessee has the corporate power to enter into and perform, and has
taken all necessary corporate action to authorise the entry into,
performance and delivery of the Lease and the transactions
contemplated by the Lease and the Lease constitutes the legal
binding obligations of the Lease, enforceable against the Lessee
in accordance with its terms;
(c) the entry into and performance by Lessee of, and the transactions
contemplated by, the Lease does not and will not:
(i) conflict with any laws binding on Lessee; or
(ii) conflict with the constitutional documents of Lessee;
or
(iii) result in the creation of any Security Interest upon
any property of Lessee, pursuant to any mortgage,
chattel mortgage, deed of trust, conditional sales
contract, bank loan or credit agreement, corporate
charter, by-law or other agreement or instrument to
which Lessee is a party or by which Lessee or its
properties or assets may be bound or affected;
(d) Lessee has obtained all authorizations, consents, licences,
approvals and registrations necessary to be obtained from any
governmental or other regulatory authorities in [ State ] to
enable Lessee:
(i) to enter into and perform the transactions contemplated
by the Lease;
(ii) to import the Aircraft into [ State ];
(iii) to conduct commercial air transport with the Aircraft
in, to and from [ State ] in accordance with the
applicable [ State's ] rules and regulations;
(iv) to effect all payments provided for in the Lease.
(e) no registration, recording, filing or notarisation in any public
office or elsewhere in [ State ] is necessary and no payment of
any tax or duty is necessary to ensure the validity,
enforceability or admissibility in evidence of the Lease, or the
priority, if any, of the respective rights of Lessor and Lender
under the Lease other than [please advise if applicable] and no
other instrument is required to ensure the priority,
enforceability and validity of the obligations of Lessee under the
Lease and the Lease is in proper legal form under the laws of [
State ] for the enforcement thereof, if applicable, in the courts
of [ State ];
(f) the Aircraft may be registered on the [ State's ] aircraft
registry in the name of Lessor and no other steps are necessary or
desirable to record or perfect either Lessor's interest in the
Aircraft in [ State ];
(g) a mortgage over the Aircraft may be registered on the aircraft
registry in [State] and with [ Name of authority ] for the benefit
of Lessor and will upon registration constitute a valid and
perfected security over the Aircraft under the laws of [ State ];
(h) upon termination of the Lease in accordance with its terms
(whether on expiry or earlier termination) Lessor would be
entitled:
(i) to repossess the Aircraft without requiring any further
permissions or approvals of any regulatory authority in
[ State ];
(ii) to de-register the Aircraft from the register of
aircraft maintained by the Aviation Authority and to
export the Aircraft from [ State ] without requiring
any further permissions or approvals of any authority
in [ State ] or any further regulators consent from
Lessee or any third party, provided no mortgages are
registered over the Aircraft, in which case the
mortgagees have to consent to the de-registration;
(i) the Relevant Documents have been properly signed and delivered on
behalf of Lessee and the obligations on the part of Lessee
contained therein, assuming them to be valid and binding according
to the laws of Sweden, are valid and legally binding on and
enforceable against Lessee under the laws of [ State ] and in the
courts of [ State ];
(j) the obligations of Lessee under the Relevant Documents are direct,
general and unconditional, and rank or will rank at least pari
passu with all other present and future unsecured and
un-subordinated obligations of Lessee, with the exception of such
obligations as are mandatorily preferred by law and not by reason
of any security interest;
(k) under the laws of [ State ] the execution and delivery of the
Relevant Documents, and the carrying out of the transactions
thereby contemplated and the observance and performance by all
parties of their respective obligations thereunder do not and will
not result in any prejudice to or impairment or diminution of
Lessor's interest in the Aircraft except for the express rights of
possession of Lessee under the Lease;
(l) the Lease does not grant to Lessee any title rights in the
Aircraft, nor does it give Lessee any capability of passing valid
title to a purchaser or to create a mortgage over the Aircraft;
(m) Lessee, or any of its properties, assets, are not entitled to
claim immunity from suit, execution, attachment or other legal
process in [ State ] or any other jurisdiction affecting Lessee;
the entry into and performance of the Lease Agreement by the
company constitute private and commercial acts;
(n) there is no application usury or interest limitation law in
[ State ] which restricts the recovery of payments of Default
Interest in accordance with the Lease;
(o) Lessee is not in default under any agreement to which it is a
party or by which is may be bound which would have a material
adverse effect on its business, assets or condition and no
material litigation or administrative proceedings before any
Government entity is presently pending or, to the knowledge of
Lessee, threatened against it or its assets which would have a
material adverse effect on the business, assets or condition
(financial or otherwise) of Lessee;
(p) the financial position of Lessee is represented by its audited
financial statements prepared in accordance with accounting
principles generally accepted in [ State ];
(q) it is not necessary under the laws and constitution of [ State ],
in order to enable the Lessor to enforce its rights under the
Agreement or by reason of the execution of the Agreement or the
performance by each of them of its obligation thereunder, that any
of them should be licensed, qualified or entitled to carry on
business in [ State ];
(r) there are under the laws of [ State ] no present restrictions on
Lessee to make the payments required by the Transaction Documents;
(s) there are no registration, stamp or other taxes or duties of any
kind payable in [ State ] by Lessor in connection with the
signature, entering into, registration or performance of the Lease
or the registration of title of ownership or a mortgage over the
Aircraft except the following:
(i) registration of mortgages in [ State ];
(ii) registration of the Lease Agreement;
(ii) registration of title or ownership: [ ]; and
(iv) registration of the mortgages in the [ Name of
Authority ]: [ ].
(t) Lessor will not violate any law or regulation in [ State ] nor
become liable to tax in [ State ] by reason of Lessor entering
into the Lease with Lessee, or performing its obligations
thereunder;
(u) the choice of the laws of [ Applicable Law ] to govern the
[ Lease/Relevant Documents ] is a valid and binding choice
of law and will be recognised and applied by the courts of
[ State ];
(v) Lessee's submission to the jurisdiction of the courts of [Relevant
Court(s) ] in the Lease is its legally valid and binding
obligation;
(w) any judgement by the courts of [ Relevant Court(s) ] against
Lessee which is enforceable in [ Relevant jurisdiction of
Court(s)] is enforceable against Lessee in [ State ] provided [
advise conditions ];
(x) [If relevant] Lessee's submission to arbitration in accordance
with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce in the Lease is its legally
valid and binding obligation;
(y) [If relevant] any award by the arbitrators against Lessee, will be
enforceable and confirmed by any competent [ State ] Court, as
provided by the [ State ] law concerning confirmation of
arbitration award by courts, without re-examination or
re-litigation of the matter;
(z) there is no withholding tax or other tax to be deducted from any
payment whatsoever which may be made by the Lessee to the Lessor
under the Lease; the provisions in the Lease providing for the
full compensation of the Lessor by the Lessee for any amount so
withholding (and any amount withheld on such additional
compensation) is legally binding upon Lessee and enforceable in
accordance with the laws of [ State ].
SCHEDULE 10
MONTHLY AIRCRAFT UTILISATION AND STATUS REPORT
To: Indigo Aviation AB (publ)
From: Frontier Airlines, Inc.
Aircraft Type: Boeing 737-3L9
Registration Mark: N310FL
Serial Number: 26440 Month of: _____
- --------------------------------------------------------------------------------
Aircraft Total Time (Flight Hours) Since New:
- --------------------------------------------------------------------------------
Aircraft Total Cycles Since New:
- --------------------------------------------------------------------------------
Airframe Flight Hours Flown During Month:
- --------------------------------------------------------------------------------
Airframe Cycles/Landing During Month:
- --------------------------------------------------------------------------------
Time Remaining to C7 Check:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Engine Serial Number: Engine Serial Number:
- --------------------------------------------------------------------------------
Original Position: Original Position:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Actual Location: Actual Location:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Time Since New: Total Time Since New:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Cycles Since New: Total Cycles Since New:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Flight Hours During Month: Flight Hours During Month:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cycles During Month: Cycles During Month:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Time Since Last Boroscope: Time Since Last Boroscope:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Time Until Next Boroscope: Time Until Next Boroscope:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Landing Gear: Time Since Time Since Cycles Since Cycles Since New:
Overhaul: New: Overhaul:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RH Main:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LH Main:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Nose:
- --------------------------------------------------------------------------------
Note: If an Engine is removed or installed on another Aircraft (subject to the
provisions of the Agreement) it must be reported monthly on this form.
Any service bulletins, Airworthiness Directives, engineering modifications or
changes: .......................................................................
................................................................................
- --------------------------------------------------------------------------------
Hours/Cycles x US$ Per Fligh = Reserve payment
During Month Hour/Cycle
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Airframe: Hours: x =
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Original Engine Hours: x =
Serial Number:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Original Engine Serial
Number: Hours: x =
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Engines: Hours: x =
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LLP: Hours: x =
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Landing Gear: Cycles: x =
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APU: Hours: x =
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total
- --------------------------------------------------------------------------------
SCHEDULE 11
FORM OF QUIET ENJOYMENT LETTER
From: [ Lender ]
To: [ Lessee ]
Dated: [ ]
Dear Sirs,
[ ] Aircraft bearing Manufacturer's Serial Number [ ] (the Aircraft)
equipped with two (2) [ ] Engines bearing Serial Numbers [ ] and [ ]
(the Engines)
With reference to that certain Aircraft Lease Agreement dated [ ] between [ ] as
lessor (Lessor) and [ ] as lessee (Lessee) in relation to the Aircraft and the
Engines (the Lease), we, the undersigned, hereby undertake that we shall not by
our own acts interfere with Lessee's rights under the Lease during the Lease
Term (as defined therein), including without limitation its rights to quiet use,
possession and peaceful enjoyment of the Aircraft and the Engines, provided that
no Default (as defined in the Lease) shall have occurred and be continuing.
- -------------------
signed for and on behalf of [Lender]
SCHEDULE 12
RETURN CONDITIONS
On the Redelivery Date the Aircraft will be in the same condition as at
Delivery, ordinary wear and tear excepted.
Location:
A city in the continental United States of America (48 contiguous states)
reasonably requested by Indigo.
Certification:
A United States Standard Certificate of Airworthiness suitable for Part 121
operations or an Export Certificate of Airworthiness as requested by Lessor.
The Aircraft will be airworthy (conform to type design and be in a condition for
safe operation), with all Aircraft equipment, components and systems operating
in accordance with their intended use and within limits established by the
Aircraft Maintenance Manual.
Configuration:
An all economy 136 seat interior with a 31" minimum seat pitch.
Paint:
The Fuselage and the Vertical Stabilizer exterior will be sanded or stripped as
needed and painted white. Frontier will install next lessee's logo on the
fuselage provided the logo is no more complex than Frontier's logo. If the next
lessee's logo is more complex than Frontier's then Frontier and Indigo will
mutually agree in writing how the next lessee's logo will be installed.
Airframe:
Fresh from next Block C Check, excluding hours and cycles used on the
Demonstration/Ferry Flights, with a minimum of 3,000 hours remaining until the
next C7 Check /Structural Inspection.
A. The Aircraft will have no deferred maintenance items, unique
inspections or temporary repairs at Delivery.
B. Modifications and Repairs installed on the Aircraft at Delivery
will have been accomplished in accordance with FAA approved data.
C Aircraft will be in compliance with the Manufacturer's CPC program
D: If available, any No Charge Service Bulletin Kits not installed by
Present Lessee will be loaded onboard the Aircraft as cargo.
E. Fuel tanks will be free from contamination.
Engines:
Each Engine will have no more time since last engine performance restoration
visit than as of Delivery (unless otherwise agreed) and a minimum of at least
5,000 hours remaining until next anticipated performance restoration shop visit
and have at least a minimum of 5,000 hours and 5,000 cycles remaining until the
next LLP limiter at 3B2 Power (22,000 Lbs Thrust).
Each Engine will pass a Performance Engine Run in accordance with the Aircraft
Maintenance Manual.
Each Engine will pass a hot and cold section borescope inspection.
Lessee will notify Lessor in writing not less than six (6) months prior to the
Redelivery Date to discuss and agree upon the pre-redelivery shop visit work
scope, as applicable.
APU:
Serviceable and passing a borescope inspection.
Components:
Each component that is time controlled will have at least 2,250 hours or cycles
remaining until next inspection/ overhaul. Each component that is calendar
controlled will have 12 months remaining until its next inspection/overhaul.
Condition Monitored/On Condition components will be serviceable.
Landing Gear:
Each Landing Gear will have at least 3,000 hours remaining until the next
inspection or overhaul.
Airworthiness Directives (AD's):
Airworthiness Directives requiring compliance within 90 days after Redelivery
will be in compliance. Airworthiness Directives that require inspection or
repetitive inspection will be cleared for 3,000 hours or the maximum inspection
interval if less than 3,000 hours.
Demonstration Flight:
Lessee will perform a one and one half hour flight demonstrating the
satisfactory operation of the aircraft with no more than two observers, as
designated by Lessor, on board during such Demonstration Flight.
Records:
Documentation delivered to lessee at Delivery will be returned to Lessor along
with the up to date Aircraft Maintenance Records that the Lessee has collected
during the Lease Term.
Aircraft Documentation
Lessee will prepare the Aircraft Documents in one location at least ten (10)
days prior to redelivery of the Aircraft. The Aircraft Documents, as identified
in Annexure 1 to the Acceptance Certificate, will be redelivered in their latest
revision to Lessor at the Redelivery Date.
SCHEDULE 13
RETURN ACCEPTANCE CERTIFICATE
1. Frontier Airlines, Inc. (Lessee) and Indigo Aviation AB (publ)
(Lessor) have entered into an Aircraft Lease Agreement dated 15
March 1999, (Lease). Unless otherwise defined, capitalised terms
used herein will have the meanings set forth in the Lease.
2. Lessor has this _____ day of ______ (Time: _____) at _______
received from Lessee possession of:
(a) one (1) Boeing 737-3L9 Aircraft, bearing manufacturer's serial
number 26440, registration mark N310FL together with two (2)
CFM56-3B2 engines bearing serial numbers 726422 and 726492, all
Parts attached thereto and thereon in an airworthy condition; and
(b) all Aircraft Documents as listed in the Document Receipt attached
hereto.
3. The Airframe, Engines and Parts had the following Flight Hours/
Cycles at return:
(a) Airframe:
Total hours Total landings Since last "C" Check Since last "A" Check
______ _____ ______ Flight Hours _____ Flight Hour
_______ Cycles _____ Cycles
(b) Engines:
Position Serial No. Total Flight Total Cycles Since last Since last
Hours shop visit Engine
Performance
Restoration
Visit
_____ _____ _____ ______ ____ Flight _____Flight
Hours Hours
____ Cycles ____ Cycles
Time Remaining to next life limited part removal
Flight Hours Cycles
MSN: _____ _____
MSN: _____ _____
(c) APU:
MSN Total Flight Hours Flight Hours/ Cycles Flight Hours/Cycles
remaining until next remaining on turbine and
HSI inspection compressor life limited
parts
- ----- ---- ------ -----
(d) Landing Gears:
Position Serial Total Flight Flight Hours/ Cycles Flight Hours/
No. Hours/Cycles since last Overhaul Cycles to next
sched. Removal
Nose ____ ___ Flight Hours ___ Flight Hours ___ Flight Hours
___ Cycles ___Cycles ___ Cycles
Right Main ____ ___ Flight Hours ___ Flight Hours ___ Flight Hours
___ Cycles ___Cycles ___ Cycles
Left Main ____ ___ Flight Hours ___ Flight Hours ___ Flight Hours
___ Cycles ___Cycles ___ Cycles
(e) Status of components or Parts with time/Cycle and calendar limits (see
attached sheet);
(f) Fuel on board at return: ___kilos (____ gallons)
4. Other technical information regarding the Aircraft and its
components are correctly set forth on the Aircraft report attached
hereto.
5. The above specified Aircraft, Engines and documents are hereby
accepted by Lessor subject to:
(a) the provisions of the Lease; and
(b) correction by Lessee of the discrepancies specified in Annex 2
hereto (which correction Lessee hereby undertakes to perform as
soon as reasonably possible).
6. Subject to Paragraph 7, the leasing of the Aircraft by Lessor to
Lessee pursuant to the Lease is hereby terminated without
prejudice to Lessee's continuing obligations under the Lease
including, without limitation, Clauses 19 and 20.
7. Lessee represents and warrants that during the term of the Lease
all maintenance and repairs to the Airframe and Engines were
performed in accordance with the requirements contained in the
Lease. Lessee further confirms that all of its obligations under
the Lease whether accruing prior to the date hereof or which
survive the termination of the Lease by their terms and accrue
after the date hereof, will remain in full force and effect until
all such obligations have been satisfactorily completed. Lessee
represented that the documents delivered and listed in Annex 1 are
true and accurate.
8. This Return Acceptance Certificate is executed and delivered by
the parties in ____________.
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance
Receipt to be executed in their respective corporate names by their duly
authorised representatives as of the day and year first above written.
FRONTIER AIRLINES, INC.
By:
Title:
INDIGO AVIATION AB (publ)
By:
Title:
ATTACHMENTS:
Annexure 1. Aircraft Documents
Annexure 2. List of Discrepancies
Annexure 1
AIRCRAFT DOCUMENTS
Note: This Annexure 1 is to be used for reference purposes only. The
Aircraft Documents will be more closely identified in Annexure 1
to the Acceptance Certificate.
A. Certificates
- - Certificate of Airworthiness
- - Certificate of Registration
- - Noise Certificate
- - Radio License
B. Aircraft Status Records
- - Technical Log Book
- - Airframe Maintenance Status Report
- - Manufacturer's Service Bulletin Status Report
- - Airworthiness Directive Compliance Report (terminated and
repetitive)
- - Local Modification Status Report List with Substantiating Data
- - Last Weighing Report
- - Repair Datas Structural Repairs
C. Aircraft Maintenance Records
- - Test Flight Reports
- - Last Boeing "C" check and maintenance check Work Cards for each
"C" check multiple (or segment)
D. Aircraft History Records
- - Aircraft Structural Repair History (if applicable)
- - Service Difficulty Report (if applicable)
- - Accident or Incident Report (if applicable)
E. Engine Records (for each engine)
- - Log Books
- - Last overhaul and repair documents for each module
- - Airworthiness Directive Compliance Report (terminated and
repetitive)
- - Manufacturer's Service Bulletin Status Report
- - Engine Disk Sheet
- - Engine Data Submittal Sheet
- - Condition Monitoring Status Report
F. APU Records
- - Log Book
- - Last overhaul and repair documents
- - Manufacturer's Service Bulletin Status Report
G. Component Records (including components installed engines and APU)
- - Time Controlled Component Status Report with remaining hours and
cycles (if applicable)
- - Serviceability tags or back-up documentation for components
replace since delivery from Boeing
H. Manuals
1. Airplane Flight Manual
2. Quick Reference Handbook
1. Aircraft Operating Manual
1. Weight and Balance Manual Supplement
1. Wiring Diagram Manual (microfilm)
1. Illustrated Parts Catalog (microfilm)
1. Aircraft Maintenance Manual (microfilm)
1. CFMI Illustrated Parts Catalog
1. Vendor Manual Seats
1. Vendor Manual Galleys
1. Vendor Manual Ovens
1. Vendor Manual Coffeemakers
I. Miscellaneous Technical Documents
- - Maintenance Program Specifications/Requirements
- - Interior Configuration Drawings
- - Loose Equipment Inventory List
- - Delivery documentation ex Boeing
- - Export Certificate of Aircraft
- - Aircraft Readiness Log
- - Rigging Record Brochure
- - Miscellaneous Delivery Record Brochure
- - Fuel Measuring Stick Calibration Brochure
- - FAA Airworthiness Directive Compliance Record
Annexure 2
Discrepancies
SCHEDULE 14
LEASE SUPPLEMENT
LEASE SUPPLEMENT NO. 1 d ated March __, 1999, between Indigo Aviation AB (publ)
(the "Lessor") and FRONTIER AIRLINES, INC. (the "Lessee").
Lessor and Lessee have previously entered into that certain Aircraft Lease
Agreement dated as of March 15, 1999 (herein called the "Lease" and the defined
terms therein being hereinafter used with the same meaning). The Lease provides
for the execution and delivery from time to time of a Lease Supplement
substantially in the form hereof for the purpose of leasing the aircraft
described below under the Lease as and when delivered by Lessor to Lessee in
accordance with the terms thereof.
The Lease relates to the Aircraft, Parts and Engines as more specifically
described below. A counterpart of the Lease is attached hereto and this Lease
Supplement and the Lease shall form one document.
In consideration of the premises and other good and sufficient consideration,
Lessor and Lessee hereby agree as follows:
1. Lessor hereby delivers and leases to Lessee under the Lease and
Lessee hereby accepts and leases from Lessor under the Lease, that
certain used Boeing Model 737-3L9 Aircraft bearing FAA
Registration Mark N310FL, including the Airframe bearing
manufacturers serial number 26440 and the two (2) CFM
INTERNATIONAL CFM 56-3B2 Engines bearing manufacturer's serial
numbers 726422 and 726492 described in Schedule 1 herewith
("Delivered Aircraft").
2. The Delivery Date of the Aircraft is the date of this Lease
Supplement set forth in the opening paragraph hereof.
3. The Lease Term for the Aircraft shall commence on the Delivery
Date and shall end on the Lease Expiry Date.
4. The amount of Rent for the Aircraft is set forth in the Lease and
is payable as provided in the Lease.
5. Lessee hereby confirms to Lessor that (i) the Aircraft and each
Engine installed thereon or belonging thereto have been duly
marked in accordance with the terms of Clause 12.12 of the Lease,
(ii) Lessee has inspected the Aircraft and the Aircraft satisfies
the conditions set forth in the Lease and (iii) Lessee has
accepted the Aircraft for all purposes hereof and of the Lease.
6. All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to the same
extent as if fully set forth herein.
7. This Lease Supplement may be executed in any number of
counterparts, each of such counterparts, except as provided on the
front page of the Lease, shall for all purposes be deemed to be an
original; and all such counterparts shall together constitute but
one and the same Lease Supplement.
8. This Lease Supplement has been delivered in New York.
SIGNATURE PAGE
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to the
Lease to be duly executed as of the day and year first above written.
LESSOR,
INDIGO AVIATION AB (publ)
By:
Title:
LESSEE,
FRONTIER AIRLINES, INC.
By:
Title: