Exhibit 10.41
February 4, 1997
Page 1 of 3
PURCHASE ORDER NO. 60987, CHANGE ORDER NO. 2 AMENDMENT
Aircraft Leases for Three (3) DHC-7 Aircraft
(MSN 11, 44 and 57) each dated September 26, 1990
as amended (the "Leases")
The Leases shall be deemed to be amended as follows:
1. Lease Term: Two years from October 1, 1996, with options to extend for
two additional two year periods at the same lease rate. The Lessee may
excercise the option by giving the Lessor not less than 60 days written
notice prior to the end of each renewal period, provided that if the
Lessee has not received notice from the U.S. Army regarding the renewal
of its contract at the Kwajalein project by such date, then the Lessee
shall give prompt written notice following the receipt of its notice
from the U.S. Army.
2. Lease Rates: Effective October 1, 1996, the monthly lease rates
become:
MSN 11-$41,000.00
MSN 44-$38,500.00
MSN 57-$38,500.00
3. Economic Adjustment: The Leases are hereby amended to clarify that the
economic adjustment set out in Exhibit "G" will apply to the list of
life limited components described in Schedule "A" attached hereto (the
"Life Limited Components"), provided that the value of the hours/cycles
consumed between delivery and return shall be credited on a component
by component basis to the Lessor or the Lessee, as the case may be. The
following provisions of the Leases are amended:
11.6 Airframe and Components: Notwithstanding anything
contained herein or in any other agreement to the
contrary, all Life Limited Components (other than basic
engines and landing gear assemblies) shall be returned
with not less that 1,000 hours/and or cycles, whichever is
the more limiting factor, remaining until the next
required overhaul or replacement, based on the
manufacturer's requirements for DHC-7 or its component.
11.7 Landing Gear: Notwithstanding anything contained herein or
in any other agreement to the contrary, each landing gear
assembly including all its components shall be returned
with not less than twenty-five percent (25%) of the cycles
remaining until its next required replacement.
11.8 Engines: Notwithstanding anything contained herein or in
any other agreement to the contrary, each engine shall be
returned with at least 1,000 hours and cycles remaining
until its next required overhaul (based on a 5,500 hour
overhaul interval) and at least 500 hours and cycles
remaining until its next required hot section inspection
(based on a 1,500 hour HSI interval).
Page 2 of 3
11.11 Component Value Determination on Return: Upon the return
of the Aircraft, the parties shall determine the amount
due as an economic adjustment (the "Economic Adjustment")
under Exhibit "G" calculated on a component by component
basis and on an Aircraft by Aircraft basis. The labor cost
of conducting an engine overhaul and hot section
inspection shall be included in the Exhibit "G"
calculation; however, Lessee may elect to conduct a hot
section inspection and receive a corresponding credit.
Notwithstanding anything to the contrary set out in the
Lease, including without limitation, Exhibit "G" and any
amendments to the Lease or any other agreement between the
parties, the following shall apply in determining the
Economic Adjustment:
(a) All references to half-life, 50% or one-half in
Exhibit "G" are deleted.
(b) The current cost of overhaul or replacement used
for purposes of the Exhibit "G" determination
shall be fixed at the amounts set out in
Schedule "A" for the purposes of the delivery
and the return of the Aircraft, whether at the
end of the Lease Term or any renewal term. The
parties shall, however, mutually agree upon the
then currect cost of overhaul or replacement and
so amend Schedule "A" prior to the commencement
of each renewal term.
(c) The parties acknowledge and agree that the
Lessee shall only be required to pay an Economic
Adjustment for its actual use of the Life
Limited Components between the hours/cycles at
delivery as shown in Exhibit "A" and the
hours/cycles at return. Accordingly, if the
aggregate sum of the Vi (current time value of
item) of all Life Limited Components in respect
to the aircraft upon return exceeds the
aggregate sum of the Vi (current time value of
item) upon acceptance, the Lessee shall pay the
amount of such excess to the Lessor; and
(d) If the aggregate sum of the Vi (current time
value of item) of all Life Limited Components in
respect to the Aircraft upon acceptance exceeds
the aggregate sum of the Vi (current time value
of item) upon return, the Lessee shall not be
required to pay the Lessor any Economic
Adjustment.
In the event of any inconsistency between the provisions hereof
and the provisions of the Leases, the provisions hereof shall
prevail.
4. Sample Calculation: Attached hereto as Schedule "B" is a sample
calculation of the Component Value Determinations on return.
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5. Stipulated Loss Values: The Stipulated Loss Value for each Aircraft as
set out in the Leases shall be deemed to be replaced with the following:
MSN 11-$4,525,000.00
MSN 44-$3,690,000.00
MSN 57-$3,760,000.00
6. Life Remaining: All references to one-half life remaining in the Leases
are hereby deleted.
7. Governing Law: The governing law of the Leases is hereby changed from
the State of Florida to the Commonwealth of Massachusetts.
All other terms and conditions of the Leases shall continue in full force and
effect unamended.
Attachments:
Schedule A (SN 11) Life Limited Components - 3 pages
Schedule A (SN 44) Life Limited Components - 3 pages
Schedule A (SN 57) Life Limited Components - 3 pages
Schedule B - Sample Component Value Calculations - 1 page