AIRCRAFT LEASE AGREEMENT
Dated as of August 14, 2000
BETWEEN
FRONTIER AIRLINES, INC.
as LESSEE
and
INTERNATIONAL LEASE FINANCE CORPORATION
as LESSOR
Aircraft Make and Model: Used Boeing B737-300
Aircraft Manufacturer's Serial Number: 26301
Aircraft Registration Xxxx: Per Exhibit E
Make and Model of Engines: CFM56-3C1
Serial Numbers of Engines: 726115 and 727103
USED AIRCRAFT NO. 2
TABLE OF CONTENTS
ARTICLE 1 SUMMARY OF TRANSACTION....................................................................2
1.1 Description of Aircraft...................................................................2
1.2 Scheduled Delivery Date and Location......................................................2
1.3 Initial Lease Term........................................................................2
1.4 Lease Extension Option....................................................................2
1.5 Security Deposit..........................................................................2
1.6 Transaction Fee...........................................................................2
1.7 Rent During Initial Lease Term............................................................2
1.8 Rent During Lease Extension Term..........................................................3
1.9 Reserves..................................................................................3
1.10 Country of Aircraft Registration..........................................................3
1.11 Maintenance Program.......................................................................3
1.12 Agreed Value of Aircraft..................................................................3
1.13 LESSOR's Bank Account.....................................................................4
ARTICLE 2 DEFINITIONS...............................................................................5
2.1 General Definitions.......................................................................5
2.2 Specific Definitions.....................................................................10
ARTICLE 3 PLACE AND DATE OF DELIVERY...............................................................12
3.1 Place of Delivery........................................................................12
3.2 Scheduled Delivery Date..................................................................12
3.3 No LESSOR Liability......................................................................12
3.4 Total Loss of Aircraft prior to Delivery.................................................12
3.5 Cancellation for Delay...................................................................12
ARTICLE 4 LEASE TERM AND EXTENSION OPTION..........................................................13
4.1 Initial Lease Term.......................................................................13
4.2 Lease Extension Option...................................................................13
4.3 "Lease Term" and "Expiration Date".......................................................13
4.4 "Termination Date".......................................................................13
ARTICLE 5 SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS.....................15
5.1 Security Deposit.........................................................................15
5.2 Transaction Fee..........................................................................15
5.3 Rent.....................................................................................16
5.4 Reserves.................................................................................16
5.5 LESSOR's Bank Account....................................................................17
5.6 Default Interest.........................................................................18
5.7 No Deductions or Withholdings............................................................18
5.8 Value Added Taxes........................................................................18
5.9 Wire Transfer Disbursement Report........................................................19
5.10 Net Lease................................................................................19
5.11 LESSOR Performance of LESSEE Obligation..................................................20
5.12 Consideration for Rent and other Amounts.................................................20
ARTICLE 6 DELIVERY CONDITION AND INSPECTION OF AIRCRAFT............................................21
6.1 LESSEE Selection of Aircraft.............................................................21
6.2 Condition at Delivery....................................................................21
6.3 LESSEE Inspection of Aircraft at Delivery................................................21
6.4 Delivery of Aircraft to LESSEE...........................................................21
6.5 LESSEE Acceptance of Aircraft............................................................21
ARTICLE 7 PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS..............22
7.1 Pre-Delivery Requirements................................................................22
7.2 LESSOR's Pre-Delivery Requirements.......................................................22
7.3 Delivery Requirements....................................................................23
7.4 Post-Delivery Requirements...............................................................24
ARTICLE 8 DISCLAIMERS..............................................................................25
8.1 "As Is, Where Is"........................................................................25
8.2 Waiver of Warranty of Description........................................................25
8.3 LESSEE Waiver............................................................................26
8.4 Conclusive Proof.........................................................................26
8.5 No LESSOR Liability for Losses...........................................................26
8.6 No Liability to Repair or Replace........................................................27
8.7 No Waiver................................................................................27
ARTICLE 9 MANUFACTURERS' AND VENDORS' WARRANTIES...................................................28
9.1 Warranties...............................................................................28
9.2 Non-Assignable Warranties................................................................28
9.3 Reassignment.............................................................................28
9.4 Warranty Claims..........................................................................28
ARTICLE 10 OPERATION OF AIRCRAFT....................................................................29
10.1 Costs of Operation.......................................................................29
10.2 Compliance with Laws.....................................................................29
10.3 Training.................................................................................29
10.4 No Violation of Insurance Policies.......................................................29
10.5 Flight Charges...........................................................................29
ARTICLE 11 SUBLEASES................................................................................30
11.1 No Sublease without LESSOR Consent.......................................................30
11.2 LESSOR Costs.............................................................................30
11.3 Any Approved Sublease....................................................................30
11.4 Assignment of Sublease...................................................................31
11.5 Continued Responsibility of LESSEE.......................................................31
ARTICLE 12 MAINTENANCE OF AIRCRAFT..................................................................32
12.1 General Obligation.......................................................................32
12.2 Specific Obligations.....................................................................32
12.3 Replacement of Parts.....................................................................34
12.4 Removal of Engines.......................................................................35
12.5 Pooling of Engines and Parts.............................................................35
12.6 Installation of Engines on other aircraft................................................35
12.7 Engine Thrust Rating.....................................................................36
12.8 Modifications............................................................................36
12.9 Performance of Work by Third Parties.....................................................38
12.10 Reporting Requirements...................................................................38
12.11 Information Regarding Maintenance Program................................................38
12.12 LESSOR Rights to Inspect Aircraft........................................................38
ARTICLE 13 USE OF RESERVES..........................................................................39
13.1 Airframe Reserves........................................................................39
13.2 Engine Reserves..........................................................................39
13.3 Landing Gear Reserves....................................................................40
13.4 Reimbursement............................................................................40
13.5 Reimbursement Adjustment.................................................................40
13.6 Costs in Excess of Reserves..............................................................41
13.7 Reimbursement after Termination Date.....................................................41
ARTICLE 14 TITLE AND REGISTRATION...................................................................42
14.1 Title to the Aircraft During Lease Term..................................................42
14.2 Registration of Aircraft.................................................................42
14.3 Filing of this Lease.....................................................................42
14.4 Evidence of Registration and Filings.....................................................42
ARTICLE 15 IDENTIFICATION PLATES....................................................................43
15.1 Airframe Identification Plates...........................................................43
15.2 Engine Identification Plates.............................................................43
ARTICLE 16 TAXES....................................................................................44
16.1 General Obligation of LESSEE.............................................................44
16.2 Exceptions to Indemnity..................................................................44
16.3 After-Tax Basis..........................................................................45
16.4 Timing of Payment........................................................................46
16.5 Contests.................................................................................46
16.6 Refunds..................................................................................46
16.7 Cooperation in Filing Tax Returns........................................................46
16.8 Survival of Obligations..................................................................46
ARTICLE 17 INDEMNITIES..............................................................................47
17.1 General Indemnity........................................................................47
17.2 Exceptions to General Indemnities........................................................48
17.3 After-Tax Basis..........................................................................49
17.4 Timing of Payment........................................................................49
17.5 Subrogation..............................................................................49
17.6 Notice...................................................................................49
17.7 Refunds..................................................................................49
17.8 Defense of Claims........................................................................49
17.9 Survival of Obligation...................................................................50
ARTICLE 18 INSURANCE................................................................................51
18.1 Categories of Insurance..................................................................51
18.2 Write-back of any Date Recognition Exclusion.............................................51
18.3 Insurance for Indemnities................................................................51
18.4 Insurance required by Manufacturer.......................................................51
18.5 Renewal..................................................................................51
18.6 Assignment of Rights by LESSOR...........................................................51
18.7 Other Insurance..........................................................................52
18.8 Information..............................................................................52
18.9 Currency.................................................................................52
18.10 Grounding of Aircraft....................................................................52
18.11 Failure to Insure........................................................................52
18.12 Reinsurance..............................................................................52
18.13 Limit on Hull in favor of LESSEE.........................................................53
ARTICLE 19 LOSS, DAMAGE AND REQUISITION.............................................................54
19.1 Definitions..............................................................................54
19.2 Notice of Total Loss.....................................................................55
19.3 Total Loss of Aircraft or Airframe.......................................................55
19.4 Surviving Engine(s)......................................................................56
19.5 Total Loss of Engine and not Airframe....................................................56
19.6 Other Loss or Damage.....................................................................57
19.7 Copy of Insurance Policy.................................................................58
19.8 Government Requisition...................................................................58
19.9 LESSOR Retention of Reserves; Return of Security Deposit and Prepaid Rent................58
ARTICLE 20 REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE......................................59
20.1 Representations and Warranties...........................................................59
20.2 Covenants................................................................................60
ARTICLE 21 REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR......................................63
21.1 Representations and Warranties...........................................................63
21.2 Covenant of Quiet Enjoyment..............................................................64
ARTICLE 22 FINANCIAL AND RELATED INFORMATION........................................................65
ARTICLE 23 RETURN OF AIRCRAFT.......................................................................66
23.1 Date of Return...........................................................................66
23.2 Technical Report.........................................................................66
23.3 Return Location..........................................................................66
23.4 Full Aircraft Documentation Review.......................................................66
23.5 Aircraft Inspection......................................................................66
23.6 Certificate of Airworthiness Matters.....................................................67
23.7 General Condition of Aircraft at Return..................................................68
23.8 Checks Prior to Return...................................................................70
23.9 Engine Return Requirements...............................................................71
23.10 Hour/Cycle/Calendar Time Requirements....................................................73
23.11 Like for Like............................................................................74
23.12 Export and Deregistration of Aircraft....................................................74
23.13 LESSEE's Continuing Obligations..........................................................74
23.14 Airport and Navigation Charges...........................................................75
23.15 Return Acceptance Certificate............................................................75
23.16 Indemnities and Insurance................................................................76
23.17 Civil Reserve Air Fleet..................................................................76
ARTICLE 24 ASSIGNMENT...............................................................................78
24.1 No Assignment by LESSEE..................................................................78
24.2 Sale or Assignment by LESSOR.............................................................78
24.3 LESSOR's Lender..........................................................................78
24.4 LESSEE Cooperation.......................................................................78
24.5 Protections..............................................................................79
ARTICLE 25 DEFAULT OF LESSEE........................................................................80
25.1 LESSEE Notice to LESSOR..................................................................80
25.2 Events of Default........................................................................80
25.3 LESSOR's General Rights..................................................................82
25.4 Deregistration and Export of Aircraft....................................................82
25.5 LESSEE Liability for Damages.............................................................82
25.6 Waiver of Default........................................................................83
25.7 Present Value of Payments................................................................83
25.8 Use of "Termination Date"................................................................84
25.9 LESSEE's Remedies........................................................................84
25.10 Waiver of Consequential Damages..........................................................84
ARTICLE 26 NOTICES..................................................................................85
26.1 Manner of Sending Notices................................................................85
26.2 Notice Information.......................................................................85
ARTICLE 27 GOVERNING LAW AND JURISDICTION...........................................................86
27.1 California Law...........................................................................86
27.2 Non-Exclusive Jurisdiction in California.................................................86
27.3 Service of Process.......................................................................86
27.4 Prevailing Party in Dispute..............................................................86
27.5 Waiver...................................................................................86
ARTICLE 28 MISCELLANEOUS............................................................................87
28.1 Transportation of Personnel..............................................................87
28.2 Press Releases...........................................................................87
28.3 Power of Attorney........................................................................87
28.4 LESSOR Performance for LESSEE............................................................87
28.5 LESSOR's Payment Obligations.............................................................87
28.6 Application of Payments..................................................................87
28.7 Usury Laws...............................................................................87
28.8 Delegation by LESSOR.....................................................................88
28.9 Confidentiality..........................................................................88
28.10 Rights of Parties........................................................................88
28.11 Further Assurances.......................................................................88
28.12 Use of Word "including"..................................................................89
28.13 Headings.................................................................................89
28.14 Invalidity of any Provision..............................................................89
28.15 Time is of the Essence...................................................................89
28.16 Amendments in Writing....................................................................89
28.17 Counterparts.............................................................................89
28.18 Delivery of Documents by Fax.............................................................89
28.19 Entire Agreement.........................................................................89
28.20 Expenses.................................................................................90
EXHIBIT A AIRCRAFT DESCRIPTION.....................................................................92
EXHIBIT B CONDITION AT DELIVERY....................................................................93
EXHIBIT C CERTIFICATE OF INSURANCE.................................................................99
EXHIBIT D BROKERS' LETTER OF UNDERTAKING..........................................................106
EXHIBIT E ESTOPPEL AND ACCEPTANCE CERTIFICATE.....................................................108
EXHIBIT F OPINION OF COUNSEL......................................................................110
EXHIBIT G FORM OF POWER OF ATTORNEY...............................................................111
EXHIBIT H ASSIGNMENT OF RIGHTS (AIRFRAME).........................................................113
EXHIBIT I ASSIGNMENT OF RIGHTS (ENGINES)..........................................................118
EXHIBIT J RETURN ACCEPTANCE RECEIPT...............................................................122
EXHIBIT K MONTHLY REPORT..........................................................................132
EXHIBIT L AIRCRAFT DOCUMENTATION..................................................................135
EXHIBIT M TECHNICAL EVALUATION REPORT.............................................................137
AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT is made and entered into as of August 14, 2000.
BETWEEN:
FRONTIER AIRLINES, INC., a Colorado corporation whose address and principal place of business is at
00000 Xxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("LESSEE") and
INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation whose address and principal place
of business is at 1999 Avenue of the Stars, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of
America ("LESSOR").
The subject matter of this Lease is one (1) used B737-300 aircraft as more particularly described on
Exhibit A attached hereto. In consideration of and subject to the mutual covenants, terms and conditions
contained in this Lease, LESSOR hereby agrees to lease to LESSEE and LESSEE hereby agrees to lease from
LESSOR the aircraft and the parties further agree as follows:
ARTICLE 1 SUMMARY OF TRANSACTION
The following is a summary of the lease transaction between LESSEE and LESSOR. It is set forth for
the convenience of the parties only and will not be deemed in any way to amend, detract from or simplify the
other provisions of this Lease.
1.1 Description of Aircraft
One used Boeing B737-300 aircraft with two (2) installed CFM56-3C1 engines, all as
more particularly described on Exhibit A hereto
1.2 Scheduled Delivery Date and Location
On or about August 17, 2000 at the TIMCO maintenance facility at Greensboro, North
Carolina.
1.3 Initial Lease Term
Approximately 38 months ending on November 1, 2003. However, upon prior written
notice to LESSEE given on or before November 1, 2002 LESSOR may elect to continue such
initial lease term until July 31, 2004
1.4 Lease Extension Option
One (1) Lease extension option of nine (9) months
1.5 Security Deposit
*
1.6 Transaction Fee
*
1.7 Rent During Initial Lease Term
Period of Lease Term Amount of Rent
* *
* *
1.8 Rent During Lease Extension Term
*
1.9 Reserves
*
1.10 Country of Aircraft Registration
United States
1.11 Maintenance Program
LESSEE's Maintenance Program
1.12 Agreed Value of Aircraft
*
1.13 LESSOR's Bank Account
*
ARTICLE 2 DEFINITIONS
Except where the context otherwise requires, the following words have the following meanings for all
purposes of this Lease. The definitions are equally applicable to the singular and plural forms of the
words. Any agreement defined below includes each amendment, modification, supplement and waiver thereto in
effect from time to time.
2.1 General Definitions.
"Aircraft" means the Aircraft described on Exhibit A hereto, including the Airframe, two (2)
Engines, Parts and Aircraft Documentation, collectively. As the context requires, "Aircraft" may also mean
the Airframe, any Engine, any Part, the Aircraft Documentation or any part thereof individually. For
example, in the context of return to LESSOR the term "Aircraft" means the Airframe, Engines, Parts and
Aircraft Documentation collectively, yet in the context of LESSEE not creating any Security Interests other
than Permitted Liens on the Aircraft, the term "Aircraft" means any of the Airframe, any Engine, any Part or
the Aircraft Documentation individually.
"Aircraft Documentation" means all (a) log books, Aircraft records, manuals and other
documents provided to LESSEE in connection with the Aircraft, (b) documents listed in Exhibits E and L and
(c) any other documents required to be maintained during the Lease Term by the Aviation Authority, LESSEE's
Maintenance Program and this Lease.
"Airframe" means the airframe listed in the Estoppel and Acceptance Certificate executed at
Delivery together with all Parts relating thereto (except Engines or engines).
"Airframe Warranty Assignment" means the Assignment of Rights (Airframe) to be entered into
between LESSOR and LESSEE in the form of Exhibit H.
"Airworthiness Directives" or "ADs" means all airworthiness directives (or equivalent) of the
FAA and the Aviation Authority applicable to the Aircraft.
"APU" means the auxiliary power unit of the Aircraft.
"Aviation Authority" means the FAA or any Government Entity which under the Laws of U.S. from
time to time has control over civil aviation or the registration, airworthiness or operation of aircraft in
U.S. If the Aircraft is registered in a country other than the U.S., "Aviation Authority" means the agency
which regulates civil aviation in such other country.
"Aviation Documents" means any or all of the following which at any time may be obtainable
from the Aviation Authority: (a) if required, a temporary certificate of airworthiness from the Aviation
Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) an application
for registration of the Aircraft with the appropriate authority in the State of Registration, (c) the
certificate of registration for the Aircraft issued by the State of Registration, (d) a full certificate of
airworthiness for the Aircraft specifying transport category (passenger), (e) an air transport license,
(f) an air operator's certificate, (g) such recordation of LESSOR's title to the Aircraft and interest in this
Lease as may be available in the State of Registration and (h) all such other authorizations, approvals,
consents and certificates in the State of Registration as may be required to enable LESSEE lawfully to
operate the Aircraft.
"Basic Engine" means those units and components of the Engine which are used to induce and
convert fuel/air mixture into thrust/power; to transmit power to the fan and accessory drives; to supplement
the function of other defined systems external to the Engine; and to control and direct the flow of internal
lubrication, plus all essential accessories as supplied by Engine manufacturer. The nacelle, installed
components related to the Aircraft systems, thrust reversers, QEC and the primary flight nozzle are excluded.
"Business Day" means a day other than a Saturday or Sunday on which the banks in New York
City are open for the transaction of business of the type required by this Lease.
"Certificated Air Carrier" means any Person (except the U.S. Government) that is a "citizen
of the United States of America" (as defined in Section 40102 of Title 49 of U.S.C.) and holding a
Certificate of Public Convenience and Necessity issued under Section 41102 of Title 49 of U.S.C. by the
Department of Transportation or any predecessor or successor agency thereto, or, in the event such
certificates shall no longer be applicable, any Person (except the U.S. Government) that is a citizen of the
U.S. (as defined in Section 40102 of Title 49 of the U.S.C.) and legally engaged in the business of
transporting for hire passengers or cargo by air predominantly to, from or between points within the U.S.,
and, in either event, operating commercial jet aircraft capable of carrying ten or more individuals or 6,000
pounds or more of cargo, which also is certificated.
"Creditor" means any lessor, owner, bank, lender, mortgagee or other Person which is the
owner of or has any interest in an aircraft engine or aircraft operated by LESSEE.
"Creditor Agreement" means the applicable agreement between a Creditor and LESSEE or between
Creditors pursuant to which such Creditor owns, leases or has an interest in either an aircraft operated by
LESSEE on which an Engine may be installed or in an aircraft engine which may be installed on the Airframe.
"Default" means any event which, upon the giving of notice or the lapse of time would
constitute an Event of Default.
"Delivery" means the delivery of the Aircraft from LESSOR to LESSEE pursuant to Article 6.4.
"Delivery Date" means the date on which Delivery takes place.
"Dollars" and "$" means the lawful currency of the U.S.
"Engine" means (a) each of the engines listed on the Estoppel and Acceptance Certificate;
(b) any replacement engine acquired by LESSOR and leased to LESSEE pursuant to Article 19.5 following a Total
Loss of an Engine; and (c) all Parts installed in or on any of such engines at Delivery (or substituted,
renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in
LESSOR in accordance with the terms of Article 12.3.
"Engine Warranty Assignment" means the Assignment of Rights (Engines) to be entered into
between LESSOR and LESSEE in the form of Exhibit I.
"Estoppel and Acceptance Certificate" means that certain estoppel and acceptance certificate
in the form of Exhibit E pursuant to which LESSEE accepts Delivery of the Aircraft.
"Event of Default" means any of the events referred to in Article 25.2.
"FAA" means the Federal Aviation Administration of the Department of Transportation or any
successor thereto under the Laws of the U.S.
"FARs" means the U.S. Federal Aviation Regulations embodied in Title 14 of the U.S. Code of
Federal Regulations, as amended from time to time, or any successor regulations thereto.
"Geneva Convention" means the Convention on the International Recognition of Rights in
Aircraft signed in Geneva, Switzerland on June 19, 1948.
"Government Entity" means any (a) national, state or local government, (b) board, commission,
department, division, instrumentality, court, agency or political subdivision thereof and (c) association,
organization or institution of which any of the entities listed in (a) or (b) is a member or to whose
jurisdiction any such entity is subject.
"Landing Gear" means the installed main and nose landing gear, components and their
associated actuators, side braces and parts.
"Law" means any (a) statute, decree, constitution, regulation, order or any directive of any
Government Entity, (b) treaty, pact, compact or other agreement to which any Government Entity is a signatory
or party and (c) judicial or administrative interpretation or application of any of the foregoing.
"Lease" means this Aircraft Lease Agreement, together with all Exhibits hereto.
"LESSOR's Lien" means any Security Interest created by LESSOR or otherwise arising solely as
a result of any act or omission of LESSOR or any Person claiming by or through LESSOR.
"LESSOR's Taxes" means any Taxes referred to in Article 16.2.
"Maintenance Program" means LESSEE's maintenance program as approved by the Aviation
Authority or such other maintenance program as LESSOR may, in its reasonable discretion, accept in writing.
"Manufacturer" means The Boeing Company.
"MPD" means the Maintenance Planning Document published by Manufacturer and applicable to the
Aircraft. With respect to the hour/cycle/calendar time limitation of Parts and inspections, references to
the MPD mean the most restrictive limitation set forth therein.
"Operative Documents" means this Lease, the Airframe Warranty Assignment, the Engine Warranty
Assignment, the Estoppel and Acceptance Certificate and any Side Letter or other document or agreement
entered into on or after the date hereof between LESSEE and LESSOR relating to the leasing of the Aircraft
hereunder or the transactions contemplated hereby.
"Overhaul" means the full reconditioning of the Aircraft, an Engine, APU, Landing Gear,
module or Part, as the case may be, in which such equipment has been fully disassembled; cleaned; thoroughly
inspected; and returned to the highest standard specified by the applicable manufacturer's manual.
"Part" means any part, component, appliance, system module, engine module, accessory,
material, instrument, communications equipment, furnishing, LESSEE furnished or LESSOR purchased equipment,
the APU, or other item of equipment (other than complete Engines or engines) for the time being installed in
or attached to the Airframe or any Engine, or which, having been removed from the Airframe or any Engine,
remains the property of LESSOR.
"Permitted Lien" means (a) LESSOR's Liens; (b) Security Interests arising in the ordinary
course of LESSEE's business for Taxes either not yet assessed or, if assessed, not yet due or being contested
in good faith in accordance with Article 16.5 or (c) materialmen's, mechanics', workmen's, repairmen's,
employees' liens or similar Security Interests arising by operation of Law after the Delivery Date in the
ordinary course of LESSEE's business for amounts which are either not yet due or are being contested in good
faith by appropriate proceedings (and for which adequate reserves have been made or, when required in order
to pursue such proceedings, an adequate bond has been provided) so long as such proceedings do not involve
any danger of sale, forfeiture or loss of the Aircraft.
"Permitted Sublessee" has the meaning ascribed thereto in Article 11.1.1.
"Permitted Transferee" means any Person who:
(a) is a "citizen of the United States" as defined in Section 40102 of Title 49 of the
U.S.C. with the requisite power and authority to enter into and carry out the
transactions contemplated by this Lease;
(b) is not, and is not affiliated with, a Certificated Air Carrier;
(c) enters into a binding agreement with LESSEE pursuant to which it agrees to be bound by
the terms of this Lease and agrees to perform all of the obligations of LESSOR
hereunder; and
(d) is either (i) a U.S. bank, insurance company or other financial institution with a
consolidated net worth of at least $25,000,000, (ii) a corporation which has (or a
general partnership whose general partners have) a consolidated net worth of at least
$25,000,000 and which is a sophisticated entity, experienced in participating as an
equity investor in commercial aircraft leases, (iii) the trustee or agent of an
aircraft income or similar fund; provided that such trustee or agent has a
consolidated net worth of at least $25,000,000, or (iv) such other Person as LESSEE
shall approve in writing, such approval not to be unreasonably withheld or delayed.
"Person" means any individual, firm, partnership, joint venture, trust, corporation,
Government Entity, committee, department, authority or any body, incorporated or unincorporated, whether
having distinct legal personality or not.
"Prime Rate" means the rate of interest from time to time announced by Chase Manhattan Bank
in New York as its prime commercial lending rate.
"Prior Lessee" means Pro Air, Inc.
"Security Interest" means any encumbrance or security interest, however and wherever created
or arising including (without prejudice to the generality of the foregoing) any right of ownership, security,
mortgage, pledge, charge, encumbrance, lease, lien, statutory or other right in rem, hypothecation, title
retention, attachment, levy, claim or right of possession or detention.
"State of Registration" means U.S. or such other country or state of registration of the
Aircraft as LESSOR may, in its absolute discretion, approve in writing.
"U.S." means the United States of America.
2.2 Specific Definitions. The following terms are defined in the Articles referenced below:
Terms Article
Agreed Value 19.1
Airframe Reserves 5.4.1
CRAF 23.17.1
CRAF Program Requisition Period 23.17.1
Default Interest 5.6
Delivery Location 3.1
Engine Reserves 5.4.1
Expenses 17.1
Expiration Date 4.3
Extension Lease Term 4.2.1
Indemnitees 17.1
Initial Lease Term 4.3
Landing Gear Reserves 5.4.1
Lease Term 4.3
LESSOR's Assignee 24.2.1
LESSOR's Bank 5.5
LESSOR's Lender 24.3
Modification 12.8.1
Net Total Loss Proceeds 19.1
Outside Delivery Date 3.5
Passenger Service Equipment 12.8.1
Rent 5.3.1
Reserves 5.4.1
Scheduled Delivery Date 3.2
Security Deposit 5.1.1
Taxes 16.1
Termination Date 4.4
Total Loss 19.1
Total Loss Date 19.1
Total Loss Proceeds 19.1
Transaction Fee 5.2
ARTICLE 3 PLACE AND DATE OF DELIVERY
3.1 Place of Delivery. LESSOR will deliver the Aircraft to LESSEE at the TIMCO maintenance
facility at Greensboro, North Carolina or such other place as may be agreed in writing between the parties
(the "Delivery Location").
3.2 Scheduled Delivery Date. As of the date of this Lease, Delivery of the Aircraft from
LESSOR to LESSEE is scheduled to occur on or about August 17, 2000. LESSOR will notify LESSEE from time to
time and in a timely manner of the exact date on which LESSOR expects Delivery to take place (the "Scheduled
Delivery Date").
3.3 No LESSOR Liability. 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 willful misconduct of LESSOR.
3.4 Total Loss of Aircraft prior to Delivery. If a Total Loss of the Aircraft occurs prior to
Delivery, neither party will have any further liability to the other except that LESSOR will return to LESSEE
the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent, whereupon this Lease shall
terminate.
3.5 Cancellation for Delay. Promptly after LESSOR becomes aware that a delay will cause
Delivery to be delayed beyond September 30, 2000 (the "Outside Delivery Date"), LESSOR will notify LESSEE.
By written notice given within thirty (30) days after the first to occur of (i) LESSEE's receipt of such
LESSOR notice or (ii) the Outside Delivery Date, either party may by written notice to the other party
terminate this Lease and this Lease will terminate on the date of receipt of such notice. In the event of
such termination, neither party will have any further liability to the other party except that LESSOR will
return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent. If neither
party gives notice of termination within such thirty (30) day period, then the period for termination shall
be deemed to be extended for an additional one hundred and eighty (180) days after the expiration of such
thirty (30) day period. In the event that neither party gives a notice of termination within such one
hundred and eighty (180) day period, the Lease will automatically terminate upon the expiration of such
period, and LESSOR will return to LESSEE the Security Deposit and any prepaid Rent as provided above.
ARTICLE 4 LEASE TERM AND EXTENSION OPTION
4.1 Initial Lease Term. The term of leasing of the Aircraft will commence on the Delivery Date
and continue until November 1, 2003; provided, however, that upon prior written notice to LESSEE given on or
before November 1, 2002 LESSOR may elect to continue such initial lease term until July 31, 2004 (and upon
LESSEE's timely receipt of such notice the initial lease term will be deemed to continue until July 31, 2004
without any further act or notice) (the "Initial Lease Term").
4.2 Lease Extension Option.
4.2.1 So long as no payment Default or Event of Default has occurred and is continuing hereunder on the
date of exercise of the option or on the commencement date of the extension lease term with
respect to such option, LESSEE will have one (1) option to extend the term of the Lease for a
period of nine (9) months (the "Extension Lease Term").
4.2.2 In order to exercise its option, LESSEE must give written notice to LESSOR not less than nine (9)
months prior to the then existing Expiration Date of this Lease. Any notice given by LESSEE
in accordance herewith will be irrevocable.
4.3 "Lease Term" and "Expiration Date". "Lease Term" means the term of leasing commencing on
the Delivery Date and terminating on the Expiration Date. "Expiration Date" means the date on which LESSEE
is required to redeliver the Aircraft to LESSOR in the condition required by this Lease on the last day of
the Initial Lease Term or Extension Lease Term, if and as applicable.
4.4 "Termination Date". This Lease may in fact terminate on any of the dates set forth below:
(a) the Expiration Date, provided LESSEE returns the Aircraft to LESSOR on the Expiration
Date in the condition required by Article 23; or
(b) a date earlier than the Expiration Date, if:
(i) there is a Total Loss of the Aircraft prior to Delivery pursuant to Article 3.4;
(ii) cancellation of this Lease occurs pursuant to Article 3.5;
(iii) there is a Total Loss of the Aircraft and payment is made to LESSOR in
accordance with Article 19.3; or
(iv) an Event of Default occurs and LESSOR repossesses the Aircraft or otherwise
terminates this Lease pursuant to Article 25.3.
(c) a date later than the Expiration Date, if:
(i) LESSEE fails to return the Aircraft in the condition required by this Lease on
the Expiration Date in accordance with Article 23; or
(ii) an Event of Default occurs and LESSOR repossesses the Aircraft or otherwise
terminates this Lease pursuant to Article 25.3.
The "Termination Date" is the date on which this Lease terminates because one of the above has
occurred.
ARTICLE 5 SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND OTHER PAYMENTS
5.1 Security Deposit.
5.1.1 *
5.1.2 The Security Deposit may be commingled with LESSOR's general funds and any interest earned on such
Security Deposit will be for LESSOR's account. If the Security Deposit is reduced below the
required amount by application to meet LESSEE's unperformed obligations under this Lease,
LESSEE will replenish the Security Deposit within ten (10) days after LESSOR's demand
therefor. The Security Deposit will serve as security for the performance by LESSEE of its
obligations under this Lease and any other agreements between LESSEE and LESSOR relating to
aircraft, engines, aircraft equipment or the extension of credit and may be applied by LESSOR
upon the occurrence of an Event of Default hereunder or of an event of default by LESSEE
under any such other agreements.
5.1.3 Upon termination of this Lease in accordance with Article 4.4 other than if an Event of Default has
occurred and is continuing, LESSOR will return to LESSEE the amount of the Security Deposit
then held by LESSOR (so long as no default by LESSEE exists under any other agreement between
LESSEE and LESSOR relating to aircraft, engines or aircraft equipment or the extension of
credit by LESSOR to LESSEE in which case LESSOR will be entitled to set off amounts owing to
it), without interest, less an amount determined to be a reasonable estimate of the costs, if
any, which LESSOR will incur to remedy any unperformed obligations of LESSEE under this
Lease, including the correction of any discrepancies from the required condition of the
Aircraft on return of the Aircraft.
5.2 Transaction Fee.
*
5.3 Rent.
5.3.1
*
5.3.2 The first payment of the fixed portion of the Rent (US$20,000) during the Lease Term will be paid no
later than the Delivery Date. Each subsequent payment of the fixed portion of the Rent will
be due monthly thereafter no later than the same day of the month as the Delivery Date of the
Aircraft except that, if such day is not a Business Day, the Rent will be due on the
immediately preceding Business Day. If Delivery occurred on the 29th, 30th or 31st of the
month and in any given month during the Lease Term there is no such corresponding date, Rent
will be payable on the last Business Day of such month.
5.4 Reserves.
5.4.1 *
5.4.2 The amount of the Engine Reserves set forth in Article 5.4.1 may be increased by LESSOR in the event
of an increase in the thrust rating of an Engine in accordance with Article 12.7.
5.4.3 Such Reserves (along with the flight hour variable portion of the Rent referred to in Article 5.3.1)
will be paid on or before the 10th day of the calendar month next following the month in
which the Delivery Date occurs and on or before the 10th day of each succeeding calendar
month for flying performed during the calendar month prior to payment. All Reserves (and the
flight hour variable portion of the Rent referred to in Article 5.3.1) for flying performed
during the month in which the Termination Date occurs will be paid on the Termination Date,
unless otherwise agreed by the parties.
5.4.4 No interest will accrue or be paid at any time to LESSEE on such Reserves and, subject to LESSOR's
obligations under Article 13, LESSOR may commingle the Reserves with LESSOR's general funds.
5.5 LESSOR's Bank Account. The Security Deposit, Transaction Fee, Rent, Reserves and any other
payment due under this Lease will be paid by wire transfer of immediately available U.S. Dollar funds to
LESSOR's bank account at:
*
or to such other bank account as LESSOR may from time to time designate by written notice ("LESSOR's Bank").
When it is stated in this Lease that an installment of the Security Deposit, the monthly Rent, Reserves or
any other payment is due or must be paid or made by LESSEE by a specific date, then such payment actually
must be received by LESSOR's Bank on or before such specific date, even if, in order for such payment to be
received by LESSOR's Bank by such specific date, LESSEE must initiate the wire transfer prior to such
specific date.
5.6 Default Interest.
*
5.7 No Deductions or Withholdings. All payments by LESSEE under this Lease, including the
Security Deposit, Transaction Fee, Rent, Reserves, Default Interest, fees, indemnities or any other item,
will be made in full without any deduction or withholding whether in respect of set off, counterclaim,
duties, or Taxes (as defined in Article 16) imposed in the State of Registration or any jurisdiction from
which such payments are made except to the extent otherwise required by Law, in which event LESSEE will pay
any additional amount such that the net payment received by LESSOR after any required deduction or
withholding equals the amount that LESSOR would have received if such withholding had not been required;
provided, however, that if LESSEE pays any such additional amount to compensate for the withholding of any
LESSOR Taxes, LESSOR shall pay to LESSEE promptly after receipt of LESSEE's written request therefor (which
request shall include a description in reasonable detail of the LESSOR Taxes involved and the calculation of
the amounts to be paid) such amounts as are necessary so that the net additional amounts received by LESSOR
under this Article 5.7 do not exceed the amounts that LESSOR would have received if no amounts in respect of
LESSOR Taxes had been required to be withheld or deducted by LESSEE.
5.8 Value Added Taxes. The Rent and other amounts payable by LESSEE under this Lease are
exclusive of any value added tax, turnover tax or similar tax or duty.
5.9 Wire Transfer Disbursement Report. At the time of each Rent or other payment, LESSEE will
advise LESSOR in writing of the amount of the payment being made by LESSEE and the allocation of such payment
to the Security Deposit, Rent, Reserves, Default Interest and other charges. Notwithstanding the allocation
set forth in LESSEE's report, in the event an Event of Default has occurred and is continuing under this
Lease, LESSOR will have complete discretion to allocate LESSEE's payments as LESSOR determines.
5.10 Net Lease.
5.10.1 This Lease is a net lease and LESSEE's obligation to pay Rent and make other payments in
accordance with this Lease will be absolute and unconditional under any and all circumstances
and regardless of other events, including the following:
(a) any right of set off, counterclaim, recoupment, defense or other right (including any
right of reimbursement) which LESSEE may have against LESSOR, Prior Lessee, Manufacturer, the
Engine manufacturer or any other person for any reason, including any claim LESSEE may have
for the foregoing;
(b) unavailability or interruption in use of the Aircraft for any reason, including a
requisition thereof or any prohibition or interference with or other restriction against
LESSEE's use, operation or possession of the Aircraft (whether by Law or otherwise), any
defect in title, airworthiness, merchantability, fitness for any purpose, condition, design,
specification or operation of any kind or nature of the Aircraft, the ineligibility of the
Aircraft for any particular use or trade or for registration under the Laws of any
jurisdiction or Total Loss of the Aircraft;
(c) insolvency, bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution, liquidation, receivership, administration or similar proceedings by or against
LESSOR, LESSEE, Prior Lessee, Manufacturer, the Engine manufacturer or any other Person;
(d) invalidity or unenforceability or lack of due authorization of or other defect in this
Lease;
(e) failure or delay on the part of any party to perform its obligations under this Lease;
or
(f) any other circumstance which but for this provision would or might have the effect of
terminating or in any other way affecting any obligation of LESSEE hereunder.
5.10.2 Nothing in Article 5.10 will be construed to limit LESSEE's rights and remedies in the event
of LESSOR's breach of its warranty of quiet enjoyment set forth in Article 21.2 or to limit
LESSEE's rights and remedies to pursue in a court of law any claim it may have against LESSOR
or any other Person; provided, however, that LESSEE will have no obligation to pay Rent as
aforesaid, except in respect of Rent accrued at the time, for the number of days that LESSEE
is deprived of the possession and use of the Aircraft as the result of the breach by LESSOR
of its warranty of quiet enjoyment obligations set forth Article 21.2.
5.11 LESSOR Performance of LESSEE Obligation. If LESSEE fails to make any payment due under
this Lease to a third party in connection with the Aircraft or fails to perform any other obligation required
under this Lease, LESSOR may (but is not required to) at its election and without waiver of its rights
perform such obligation and/or pay such amount. Within five (5) Business Days after written notice to LESSEE
of the amount paid by LESSOR on behalf of LESSEE, LESSEE will repay such amount to LESSOR together with
Default Interest. Such payment to LESSOR will constitute additional Rent payable by LESSEE to LESSOR
hereunder. Any payment, performance or compliance by LESSOR of a LESSEE obligation hereunder will not affect
the occurrence or continuance of a Default or Event of Default, as the case may be.
5.12 Consideration for Rent and other Amounts. The amount of the Rent and other payments
contained herein are in consideration of LESSEE's waiver of warranties and indemnities set forth in
Articles 8 and 17, respectively, and the other provisions of this Lease.
ARTICLE 6
20
DELIVERY CONDITION AND INSPECTION OF AIRCRAFT
ARTICLE 6 DELIVERY CONDITION AND INSPECTION OF AIRCRAFT
6.1 LESSEE Selection of Aircraft. LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN
JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES
THAT LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING AGENT OF THE AIRCRAFT.
6.2 Condition at Delivery. LESSOR has advised LESSEE that at Delivery the Aircraft will be as
set forth in Exhibit A and in the condition set forth in Exhibit B. To the extent that at Delivery there are
non substantial or minor deviations from the condition set forth in Exhibit B which do not affect the
airworthiness of the Aircraft, LESSEE will nonetheless accept the Aircraft subject to such deviations and
LESSEE and LESSOR will mutually agree to either (i) adjust the return conditions of the Aircraft set forth in
Article 23 accordingly or (ii) arrange for LESSOR to reimburse LESSEE for the reasonable cost of
rectification of such deviations.
6.3 LESSEE Inspection of Aircraft at Delivery. LESSEE will have the ground inspection and
acceptance flight rights set forth in Exhibit B. LESSEE acknowledges that, as between LESSEE and LESSOR, in
accepting the Aircraft LESSEE is relying on its own inspection and knowledge of the Aircraft in determining
whether the Aircraft meets the requirements of this Lease.
6.4 Delivery of Aircraft to LESSEE. Subject to LESSEE having performed all of the conditions
precedent to Delivery set forth herein, LESSOR will deliver the Aircraft to LESSEE at the Delivery Location.
Provided that the Aircraft is in the condition required by Article 6.2, upon the tender of the Aircraft by
LESSOR to LESSEE, LESSEE will accept the Aircraft by executing and delivering to LESSOR the Estoppel and
Acceptance Certificate, whereupon Delivery will be deemed to have occurred for all purposes under this Lease,
including, but not limited to, the commencement of LESSEE's obligation to pay Rent hereunder.
6.5 LESSEE Acceptance of Aircraft. If LESSEE fails to (a) comply with the conditions contained
in Articles 7.1 and 7.3 so as to allow Delivery to take place on the Scheduled Delivery Date or (b) 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 incurred by LESSOR as a result thereof.
ARTICLE 7
PRE DELIVERY, DELIVERY AND POST DELIVERY
23
DOCUMENTARY AND OTHER REQUIREMENTS
ARTICLE 7 PRE DELIVERY, DELIVERY AND POST DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS
7.1 Pre Delivery Requirements. LESSEE will deliver to LESSOR each of the following prior to
the Scheduled Delivery Date of the Aircraft:
(a) copies of resolutions of the Board of Directors of LESSEE or other written evidence of
appropriate corporate action, duly certifying and authorizing the lease of the Aircraft
hereunder and the execution, delivery and performance of this Lease, together with an
incumbency certificate as to the person or persons authorized to execute and deliver
documents on behalf of LESSEE hereunder; and
(b) an opinion of counsel in the form and substance of Exhibit F.
(c) a Certificate of Insurance and Brokers' Letter of Undertaking in the form and
substance of Exhibits C and D, respectively, from LESSEE's insurance brokers evidencing
insurance of the Aircraft in accordance with this Lease from the Delivery Date;
(d) a copy of LESSEE's Air Operator's Certificate;
(e) a power of attorney empowering LESSEE's representative, who may be an officer or
employee of LESSEE, to accept the Aircraft on behalf of LESSEE;
(f) a power of attorney in the form of Exhibit G; and
(g) such other documents as LESSOR may reasonably request.
7.2 LESSOR's Pre Delivery Requirements. LESSEE's obligation to accept delivery of and lease
the Aircraft hereunder is subject to satisfaction of the following conditions precedent:
(a) LESSOR shall tender the Aircraft including the Aircraft Documentation to LESSEE at the
Delivery Location in accordance with Article 6.2;
(b) The Aircraft shall be registered in the U.S. in the name of LESSOR and the Aircraft
shall have a valid Certificate of Airworthiness and shall be in the condition required in
order to meet the operating requirements of FAR Part 121; and
(c) All Airworthiness Directives which are issued prior to the Delivery Date and which
require compliance (either by means of repetitive inspections, modifications or terminating
action) prior to Delivery or within one (1) year after Delivery will be complied with on a
terminating action basis at LESSOR's cost; Airworthiness Directives which do not have a
terminating action will be accomplished at the highest level of inspection or modification
possible.
7.3 Delivery Requirements. On the Delivery Date of the Aircraft, each of the following will
occur:
7.3.1 If not previously done, LESSEE will pay to LESSOR the first monthly installment of Rent in
accordance with Article 5.3.2;
7.3.2 LESSEE will execute and deliver to LESSOR the Estoppel and Acceptance Certificate covering the
Aircraft and dated the Delivery Date.
7.3.3 LESSEE will deliver a certificate signed by an officer of LESSEE stating all of the following:
(a) the representations and warranties contained in Article 20 are true and accurate on
and as of the Delivery Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date); and
(b) no Default has occurred and is continuing or will result from LESSEE's lease of the
Aircraft hereunder.
7.3.4 LESSEE's counsel will deliver an opinion confirming the matters set forth in the opinion of counsel
described in Article 7.1 and advising that all filing and other requirements described in the
earlier opinion of counsel have been met.
7.3.5 If any Creditor Agreement provides or contemplates that such Creditor will obtain any right, title
or interest in an Engine which is installed on such Creditor's aircraft, prior to placing the
Engine on such Creditor's aircraft LESSEE will deliver to LESSOR an engines cooperation
agreement in form and substance acceptable to LESSOR which is executed by LESSEE and LESSEE's
Creditors (as defined therein).
7.4 Post Delivery Requirements. Within fourteen (14) days after Delivery, if not previously
provided, LESSOR will deliver to LESSEE (a) the Airframe Warranty Assignment duly executed by LESSOR and
acknowledged by Manufacturer and (b) the Engine Warranty Assignment duly executed by LESSOR.
ARTICLE 8 DISCLAIMERS
LESSOR HAS COMMITTED TO LESSEE THAT ON THE DELIVERY DATE THE AIRCRAFT WILL BE IN THE
CONDITION REQUIRED BY EXHIBIT B. SUCH COMMITMENT OR COVENANT ON THE PART OF LESSOR EXPIRES AND THE
DISCLAIMERS SET FORTH IN THIS ARTICLE 8 APPLY UPON LESSEE'S ACCEPTANCE OF THE AIRCRAFT AND EXECUTION OF THE
ESTOPPEL AND ACCEPTANCE CERTIFICATE. AFTER SUCH TIME, THEN AS BETWEEN LESSOR AND LESSEE:
8.1 "As Is, Where Is". LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT "AS IS, WHERE IS".
LESSEE UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS,
EMPLOYEES OR REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION,
WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE) AS TO (a) THE CAPACITY, AGE,
AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE, DESCRIPTION, CONDITION
(WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP,
MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS
FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE
AIRCRAFT DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, OR
THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED,
EXTERIOR OR INTERIOR, (b) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER
INTELLECTUAL PROPERTY RIGHTS, (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING
OR USAGE OF TRADE OR (d) ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED EXCEPT AS EXPRESSLY
PROVIDED IN ARTICLE 21 HEREOF.
8.2 Waiver of Warranty of Description. IN CONSIDERATION OF (a) LESSEE'S RIGHTS HEREUNDER TO
INSPECT THE AIRCRAFT AND (b) LESSOR'S ASSIGNMENT TO LESSEE OF ANY EXISTING AND ASSIGNABLE WARRANTIES OF
MANUFACTURER AND THE ENGINE MANUFACTURER, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT
DELIVERY AND ITS EXECUTION AND DELIVERY OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE'S WAIVER
OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE
AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN
SECTIONS 10508 THROUGH 10522 OF THE CALIFORNIA COMMERCIAL CODE. EVEN IF AT ANY TIME THE FAILURE OF THE
AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND
EITHER (i) LESSEE ACCEPTED THE AIRCRAFT BASED ON A REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE
CURED AND IT WAS NOT SEASONABLY CURED OR (ii) LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE
NONCONFORMITY BUT LESSEE'S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY LESSOR'S ASSURANCES OR
BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO LESSOR FOR
DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.
8.3 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 or the Aircraft relating to any of the matters mentioned in Articles 8.1 or 8.2 and the leasing
thereof by LESSOR to LESSEE.
8.4 Conclusive Proof. DELIVERY BY LESSEE TO LESSOR OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE
WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE'S TECHNICAL EXPERTS HAVE EXAMINED AND
INVESTIGATED THE AIRCRAFT, INCLUDING THE ENGINES AND THE AIRCRAFT DOCUMENTATION AND THAT EACH IS IN THE
CONDITION REQUIRED HEREUNDER AND WITHOUT DEFECT, EXCEPT AS SPECIFICALLY SET FORTH IN SUCH CERTIFICATE,
(WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND OTHERWISE IN EVERY WAY SATISFACTORY TO LESSEE.
8.5 No LESSOR Liability for Losses. LESSEE agrees that LESSOR will not be liable to LESSEE,
any sublessee or any Person, whether in contract or tort and however arising, for any cost, loss or damage
(consequential or otherwise) arising out of the condition of the Aircraft, whether or not due in whole or in
part to an act or omission or the active or passive negligence of LESSOR.
8.6 No Liability to Repair or Replace. LESSOR will not be liable for any expense in repairing
or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the
Aircraft or any Part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit
for use.
8.7 No Waiver. Nothing in this Article 8 or elsewhere in this Lease will be deemed to be a
waiver by LESSEE of any rights it may have against Manufacturer, the Engine manufacturer or any other Person.
ARTICLE 9 MANUFACTURERS' AND VENDORS' WARRANTIES
9.1 Warranties. Effective upon Delivery LESSOR will assign to LESSEE for the duration of the
Lease Term the benefit of all warranties and indemnities given to LESSOR by Manufacturer and the Engine
manufacturer pursuant to the Airframe Warranty Assignment and the Engine Warranty Assignment, respectively.
Effective on the Delivery Date, all other assignable vendor warranties with respect to the Aircraft are
hereby assigned by LESSOR to LESSEE.
9.2 Non Assignable Warranties. To the extent that any warranty or indemnity given to LESSOR by
Manufacturer and others with respect to the Aircraft cannot be assigned, LESSEE will be entitled to take such
action to enforce such warranty or indemnity in the name of LESSOR against Manufacturer and such other
parties as LESSEE sees fit, but subject to LESSEE first ensuring that LESSOR is indemnified and secured to
LESSOR's satisfaction against all losses, damage, costs, expenses and liabilities thereby incurred or
reasonably likely to be incurred.
9.3 Reassignment. On the Termination Date, the benefit of any warranty assigned by LESSOR to
LESSEE will be reassigned automatically to LESSOR or its designee. LESSEE's rights under such warranties
(including LESSEE's claims and rights to payment thereunder) will revert to LESSOR during any period in which
an Event of Default is continuing. LESSEE at its own cost and expense will do all such things and execute
such documents as may be reasonably required for this purpose.
9.4 Warranty Claims. LESSEE will diligently and promptly pursue any valid claims it may have
against Manufacturer and others under such warranties with respect to the Aircraft and will provide notice of
the same to LESSOR.
ARTICLE 10 OPERATION OF AIRCRAFT
10.1 Costs of Operation. LESSEE will pay all costs incurred in the operation of the Aircraft
during the Lease Term, for profit or otherwise, including the costs of flight crews, cabin personnel, fuel,
oil, lubricants, maintenance, insurance, storage, landing and navigation fees, airport charges, passenger
service and any and all other expenses of any kind or nature, directly or indirectly, in connection with or
related to the use, movement and operation of the Aircraft. The obligations, covenants and liabilities of
LESSEE under this paragraph arising prior to return of the Aircraft to LESSOR will continue in full force and
effect, notwithstanding the termination of this Lease or expiration of the Lease Term.
10.2 Compliance with Laws. Except as expressly provided in this Lease, LESSEE agrees throughout
the Lease Term to maintain operational control of the Aircraft and use the Aircraft in accordance with
applicable Laws of the State of Registration and of any country, state, territory or municipality into or
over which LESSEE may operate. LESSEE will not employ, suffer or cause the Aircraft to be used in any
business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction,
seizure, or confiscation by any authority. LESSEE will not permit the Aircraft to fly to any airport or
country if so doing would cause LESSEE to be in violation of any Law applicable to LESSEE or the Aircraft.
10.3 Training. LESSEE will not use the Aircraft for testing or for training of flight crew
members other than LESSEE crew members and it will not use the Aircraft for training any more than it
utilizes for training the other B737 300 aircraft in its fleet.
10.4 No Violation of Insurance Policies. LESSEE will not use or permit the Aircraft to be used
in any manner or for any purpose which is not covered by the insurance policies LESSEE is required to carry
and maintain as set forth in this Lease. LESSEE will not carry any goods of any description excepted or
exempted from such policies or do any other act or permit to be done anything which could reasonably be
expected to invalidate or limit any such insurance policy.
10.5 Flight Charges. LESSEE will pay promptly when due all enroute navigation charges,
navigation service charges and all other charges payable by LESSEE for the use of or for services provided at
any airport, whether in respect of the Aircraft or any other aircraft of LESSEE, and will indemnify and hold
LESSOR harmless in respect of the same. This indemnity will continue in full force and effect
notwithstanding the termination or expiration of the Lease Term for any reason or the return of the Aircraft.
ARTICLE 11 SUBLEASES
11.1 No Sublease without LESSOR Consent. LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF
THE AIRCRAFT (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (NOT
TO BE UNREASONABLY WITHHELD OR DELAYED) EXCEPT FOR A SUBLEASE TO A PERMITTED SUBLESSEE PRE APPROVED IN
ARTICLE 11.1.1 BELOW, AND IN ACCORDANCE WITH SUCH REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING
BETWEEN LESSOR AND LESSEE. The wet leasing of the Aircraft during the Lease Term (in which LESSEE and its
crews retain operational control of the Aircraft) will not be considered a sublease of the Aircraft.
11.1.1 LESSEE may sublease the Aircraft without LESSOR's prior consent to an operator based in the
U.S. which is then currently a lessee of LESSOR, provided such operator is not then in
default under the aircraft lease agreement between such operator and LESSOR ("Permitted
Sublessee"). Any such sublease will be subject to the provisions of this Article 11,
including the provisions of Article 11.2 below.
11.2 LESSOR Costs. LESSEE will indemnify LESSOR on demand for all reasonable and actual
out of pocket expenses (including legal fees) incurred in connection with LESSOR's assessment of the
subleasing proposal (whether or not LESSOR's consent to such sublease is ultimately given), review of the
sublease documentation and implementation of the sublease.
11.3 Any Approved Sublease. Any sublease to a Permitted Sublessee, and any other sublease
approved by LESSOR will be for a term no greater than the remaining Lease Term and contain provisions
consistent with this Lease protecting LESSOR's title to the Aircraft, providing appropriate LESSOR
indemnities, regarding the maintenance and repair standards for the Aircraft, concerning the insurances which
will be carried by the sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any
such sublease will be subject and subordinate to this Lease. In its sole discretion, LESSOR may require an
opinion of counsel in connection with such sublease, including LESSOR's right to repossess the Aircraft in
the event of an Event of Default hereunder or under the sublease. LESSEE will not amend the terms of any
approved sublease without the prior written consent of LESSOR, which will not be unreasonably withheld.
Notwithstanding the foregoing, LESSOR agrees that even if an Event of Default has occurred and is continuing
hereunder, so long as the approved sublessee fully performs all of the obligations of LESSEE hereunder and
agrees to do so on a going forward basis and there is no risk to LESSOR of an impairment to LESSOR's
unencumbered title to the Aircraft, LESSOR will not interfere with such sublessee's quiet use and enjoyment
of the Aircraft.
11.4 Assignment of Sublease. Any approved sublease will be assigned to LESSOR as security.
LESSEE will deliver the original counterpart of the sublease to LESSOR and make any filings necessary to
protect LESSOR's security interest.
11.5 Continued Responsibility of LESSEE. LESSEE will continue to be responsible for performance
of its obligations under this Lease during any period of sublease.
ARTICLE 12 MAINTENANCE OF AIRCRAFT
12.1 General Obligation.
12.1.1 During the Lease Term and until the Aircraft is returned to LESSOR in the condition required
by this Lease, LESSEE alone has the obligation, at its expense, to maintain and repair the
Aircraft, Engines, and all of the Parts (a) in accordance with the Maintenance Program,
(b) in accordance with the rules and regulations of the Aviation Authority, (c) in accordance
with Manufacturer's type design, (d) in accordance with any other regulations or requirements
necessary in order to maintain a valid Certificate of Airworthiness for the Aircraft and meet
the requirements at all times during the Lease Term and upon return of the Aircraft to LESSOR
for issuance of a Standard Certificate of Airworthiness for transport category aircraft
issued by the FAA in accordance with FAR Part 21 (except during those periods when the
Aircraft is undergoing maintenance or repairs as required or permitted by this Lease and to
the extent in conflict with the requirements of the Aviation Authority) and (e) 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 discriminating against the Aircraft.
12.1.2 No Engine will remain in an unserviceable condition for more than three (3) months.
12.1.3 LESSEE will not enter into any Engine maintenance cost per flight hour, power by the hour or
similar agreement with Engine manufacturer or any other Engine maintenance facility or
organization without LESSOR's prior written consent, which consent shall not be unreasonably
withheld or delayed.
12.2 Specific Obligations. Without limiting Article 12.1, LESSEE agrees that such maintenance
and repairs will include but will not be limited to each of the following specific items:
(a) performance in accordance with the Maintenance Program of all routine and non routine
maintenance work;
(b) incorporation in the Aircraft of all Airworthiness Directives, 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;
(c) 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 rest of its B737 aircraft fleet. It is the intent of the parties that the Aircraft
will not be discriminated against in service bulletin compliance (including method of
compliance) or other maintenance matters compared with the rest of LESSEE's B737 aircraft
fleet. LESSEE will not discriminate against the Engines with respect to Overhaul build
standards and life limited part replacements;
(d) incorporation in the Maintenance Program for the Aircraft of a corrosion prevention
and control program 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;
(e) maintaining in English and keeping in an up to date status the records and historical
documents set forth in Exhibit L;
(f) maintaining historical records, in English, for on condition, 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; and
(g) 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
Documentation. In addition, all repairs to the Aircraft will be accomplished in accordance
with either (i) Manufacturer's Structural Repair Manual (or FAA approved Repair Approval
Sheets) or (ii) FAA approved data (such as FAA Form 8110 or equivalent). All Modifications
and alterations will be accomplished in accordance with FAA approved data (such as FAA Form
8110 or equivalent).
12.3 Replacement of Parts.
12.3.1 LESSEE, at its own cost and expense, will promptly replace all Parts which may from time to
time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
rendered unfit or beyond economical repair (BER) for use for any reason. In the ordinary
course of maintenance, service, repair, overhaul or testing, LESSEE may remove any Part
provided that LESSEE replaces such Part as promptly as practicable. All replacement Parts
will (a) be free and clear of all Security Interests (except Permitted Liens) of any kind or
description, (b) be in airworthy condition and of at least equivalent model, service bulletin
and modification status and have a value and utility at least equal to the Parts replaced,
assuming such replaced Parts were in the condition and repair required to be maintained by
the terms hereof and (c) have a current "serviceable tag" of the manufacturer or maintenance
facility providing such items to LESSEE, indicating that such Parts are new, serviceable or
Overhauled. So long as a substitution meets the requirements of the Maintenance Program and
the Aviation Authority, LESSEE may substitute for any Part a part that does not meet the
requirements of the foregoing sentence if a complying Part cannot be procured or installed
within the available groundtime of the Aircraft and as soon as practicable the noncomplying
part is removed and replaced by a complying Part. With respect to replacement modules in an
Engine, LESSEE will use best reasonable efforts to ensure that any replacement module will
not have been previously operated at a higher thrust rating than the replaced module provided
that in all circumstances life limited Parts in such replacement module will have no less
life remaining than the life limited Parts in the replaced module.
12.3.2 All Parts removed from the Airframe or any Engine will remain the property of LESSOR and
subject to this Lease no matter where located, until such time as such Parts have been
replaced by Parts (which have been incorporated or installed in or attached to the Airframe
or such Engine) which meet the requirements for replacement Parts specified above and title
to such replacement Parts has passed to LESSOR under the Laws of the State of Registration
and lex situs. To the extent permitted by the Laws of the State of Registration and the lex
situs it is the intent of LESSOR and LESSEE that without further act and immediately upon any
replacement Part becoming incorporated, installed or attached to the Airframe or an Engine as
above provided, (a) title to the removed Part will thereupon vest in LESSEE, free and clear
of all rights of LESSOR, (b) title to the replacement Part will thereupon vest in LESSOR free
and clear of all rights of LESSEE (other than LESSEE's rights under this Lease) and (c) such
replacement Part will become subject to this Lease and be deemed to be a Part hereunder to
the same extent as the Parts originally incorporated or installed in or attached to the
Airframe or such Engine.
12.4 Removal of Engines.
12.4.1 If an Engine is removed for testing, service, repair, maintenance, Overhaul work, alterations
or modifications, title to such Engine will at all times remain vested in LESSOR.
12.4.2 LESSEE will be entitled to remove any of the Engines from the Aircraft and install another
engine or engines on the Aircraft, provided that LESSEE complies with each of the following
obligations:
(a) the insurance requirements set forth in Article 18 and Exhibit C are in place;
(b) LESSEE ensures that the identification plates referred to in Article 15 are not
removed from any Engine upon such Engine being detached from the Aircraft; and
(c) title to the Engine remains with LESSOR free from all Security Interests (except
Permitted Liens) regardless of the location of the Engine or its attachment to or detachment
from the Aircraft.
12.5 Pooling of Engines and Parts. LESSEE may subject the Engines and Parts to normal
interchange or pooling agreements with responsible international scheduled commercial air carriers customary
in the airline industry and entered into by LESSEE in the ordinary course of its business with respect to its
entire B737 fleet so long as (a) in the case of pooling of an Engine, such Engine is returned to LESSEE
within four (4) months, (b) no transfer of title to the Engine occurs, (c) all other terms of this Lease
continue to be observed with respect to the Engines or Parts, including but not limited to Articles 8, 10,
12, 14, 15, 16, 17, 18 and 19 and (d) LESSEE continues to be fully responsible to LESSOR for the performance
of all of its obligations hereunder.
12.6 Installation of Engines on other aircraft. Any Engine removed from the Aircraft may be
installed on another aircraft in LESSEE's fleet which utilizes engines of the same type as the Engine only if
one of the situations described in this Article 12.6 exists:
12.6.1 LESSEE or LESSOR has title to such other aircraft free and clear of all Security Interests
(except Permitted Liens).
12.6.2 LESSEE, LESSOR and all of the Creditors of LESSEE of such aircraft enter into an engines
cooperation agreement in form and substance reasonably acceptable to LESSOR in which each
party agrees to recognize one another's rights in the engines. LESSEE will reimburse LESSOR
and LESSOR's Lender for their reasonable attorneys' fees and costs in negotiating and
finalizing engine cooperation agreement arrangements with LESSEE and its Creditors.
12.6.3 Such other aircraft is subject to a Creditor Agreement (but no other Security Interests
except Permitted Liens) which by its terms expressly or effectively states that such Creditor
and its successors and assigns will not acquire any right, title or interest in any Engine by
reason of such Engine being installed on such aircraft. LESSEE hereby agrees that if
LESSOR's title to an Engine is in fact impaired under any such Creditor Agreement, such
impairment will be deemed to be a Total Loss of such Engine and the provisions of
Article 19.5 will apply. To the extent another Creditor Agreement contains such provisions,
then LESSOR hereby agrees for the benefit of the Creditor of such Creditor Agreement that
neither LESSOR nor its successors or assigns will acquire or claim any right, title or
interest in any engine in which LESSEE or another Creditor has an interest as a result of
such engine being installed on the Airframe.
12.7 Engine Thrust Rating. If an Engine is utilized by LESSEE on the Aircraft or on any other
airframe (or if the Engine is utilized by any sublessee or user under a pooling arrangement in accordance
with this Lease) at a thrust rating greater than the thrust rating set forth in Exhibit A, LESSEE will
promptly notify LESSOR and the Engine Reserves amounts set forth in Article 5.4.1 will be increased in an
amount proportional to the accelerated rate of deterioration of the Engine resulting from the increased
thrust rating.
12.8 Modifications.
12.8.1
*
12.8.2 LESSOR may review LESSEE's proposed designs, plans, engineering drawings and diagrams, and
flight and maintenance manual revisions for any proposed Modification. If requested by
LESSOR, LESSEE will furnish LESSOR (at LESSEE's expense) with such documents in final form
and any other documents required by Law, as a result of such Modification. All Modifications
incorporated on the Aircraft will be properly documented in the Aircraft Documentation and be
fully approved by the Aviation Authority.
12.8.3 Notwithstanding any other provision of this Lease, no Modification will be made which has the
effect of decreasing the utility or value of the Aircraft or invalidating any warranty
applicable to the Aircraft.
12.8.4 No Modification will be made by LESSEE if an Event of Default exists and is continuing
hereunder.
12.8.5 Unless otherwise agreed by LESSOR in writing, all permanent or structural Modifications will
forthwith become a part of the Aircraft and LESSEE relinquishes to LESSOR all rights and
title thereto. However, all (i) temporary and non structural Modifications and (ii) all
Passenger Service Equipment so long as such equipment can be removed without causing material
damage to the Aircraft, will remain the property of LESSEE and, at LESSOR's request and
LESSEE's cost, will be removed from the Aircraft prior to return of the Aircraft, with LESSEE
restoring the Aircraft to the condition it was in prior to the Modification or installation
of Passenger Service Equipment in a manner cosmetically acceptable to LESSOR.
Notwithstanding the foregoing, no such removal will be permitted without LESSOR's permission
during the occurrence of an Event of Default hereunder and immediately upon the occurrence of
an Event of Default hereunder, without the requirement of any further act or notice, all
right, title and interest in such Modifications and Passenger Service Equipment will
immediately vest in LESSOR; provided however, that in the event of such an Event of Default,
with respect to any Passenger Service Equipment, LESSOR will use commercially reasonable
efforts to reach agreement with any vendors or suppliers holding title to the Passenger
Service Equipment in order to protect the mutual interests of LESSOR and such parties.
12.8.6 LESSOR will bear no liability for the cost of Modifications of the Aircraft whether in the
event of grounding or suspensions of certification, or for any other cause.
12.9 Performance of Work by Third Parties. Whenever maintenance and repair work on the Aircraft
or Engines will be regularly performed by a Person other than LESSEE, such Person will be an FAA authorized
repair station.
12.10 Reporting Requirements.
12.10.1 Commencing with a report furnished ten (10) days after the end of the calendar month in which
Delivery occurs, LESSEE will furnish to LESSOR a Monthly Report in English in the form
attached hereto as Exhibit K. Each Monthly Report will be furnished within ten (10) days
after the end of each calendar month, except that the Monthly Report pertaining to the last
month (or any portion thereof) of the Lease Term will be furnished to LESSOR on the
Termination Date.
12.10.2 Commencing with the second scheduled "C" check for the Aircraft, LESSEE will provide LESSOR
with a Technical Evaluation Report for the Aircraft in the form and substance of Exhibit M,
as revised. Such Technical Evaluation Report will be furnished within three (3) Business
Days after the completion of every second "C" check performed during the Lease Term and at
other times reasonably requested by LESSOR.
12.11 Information Regarding Maintenance Program. LESSEE will provide LESSOR with a copy of or
information regarding the Maintenance Program for the Aircraft, as reasonably requested by LESSOR.
12.12 LESSOR Rights to Inspect Aircraft. On reasonable notice, LESSOR and/or its authorized
agents or representatives will have the right to inspect the Aircraft and Aircraft Documentation. LESSOR
agrees that such requests will be coordinated with LESSEE so as to cause the minimum practical disturbance to
LESSEE's operation or its personnel. LESSEE agrees to cooperate with LESSOR in making the Aircraft and
Aircraft Documentation available to such authorized technical teams. LESSOR will have no duty to make any
such inspection and will not incur any liability or obligation by reason of (and LESSEE's indemnity
obligations pursuant to Article 17 will apply notwithstanding) not making any such inspection or by reason of
any reports it receives or any reviews it may make of the Aircraft records.
ARTICLE 13 USE OF RESERVES
13.1 Airframe Reserves. The Airframe Reserves payable by LESSEE hereunder will be retained by
LESSOR as LESSEE's contribution toward payment of the cost of performance of the "C7"inspection and the
22,400 flight hour structural inspection of the Aircraft pursuant to the MPD. LESSEE and LESSOR acknowledge
and agree that such "C7" and 22,400 flight hour structural inspection tasks will not be due to be performed
until after return of the Aircraft by LESSEE. As a result, the parties agree that the Airframe Reserves are
not reimburseable to LESSEE hereunder and that LESSOR will retain all Airframe Reserves paid by LESSEE;
provided, however, in the event of the Total Loss of the Aircraft, fifty percent (50%) of the Airframe
Reserves held by LESSOR will be retained by LESSOR and the remaining portion of such Reserves will be paid to
LESSEE in accordance with Article 19.9.
13.2 Engine Reserves.
13.2.1 Subject to the limitations set forth in Article 13.2.2, LESSOR will reimburse LESSEE from the
Engine Reserves for the actual cost associated with performance restoration, the replacement
of life limited Parts or permanent repair of on condition Parts in the Basic Engine during
completed Engine shop visits (i.e. heavy maintenance visits) requiring off wing teardown
and/or disassembly, with work performed for all other causes excluded, including those causes
set forth in Article 13.5. Subject to Article 16.1 and excluding exchange fees and handling,
packaging and shipping charges, reimbursement for an Engine will be made up to the amount in
the Engine Reserves applicable to such Engine at the time of removal of such Engine.
13.2.2 Twenty three percent (23%) of the per hour Engine Reserve payable by LESSEE for an Engine
will be designated and will be reimbursable solely for the replacement of life limited parts
in such Engine. With respect only to Engine Reserves applicable to performance restoration
of an Engine, reimbursement will be further limited as to each module of such Engine in
accordance with the following percentages of the remaining total amount in the Engine
Reserves for such Engine:
18% Fan & Accessory Gearbox
22% High Pressure Compressor Module
44% High Pressure Turbine Module
16% Low Pressure Turbine Module
13.2.3 LESSEE will not enter into any Engine maintenance cost per flight hour, power by the hour or
similar agreement with Engine manufacturer or any other Engine maintenance facility or
organization without LESSOR's consent which consent shall not be unreasonably withheld or
delayed.
13.3 Landing Gear Reserves. LESSOR will reimburse LESSEE from the Landing Gear Reserves for the
actual cost of an Overhaul of the Landing Gear, up to the amount remaining in the Landing Gear Reserves, with
work performed for all other causes excluded, including those causes set forth in Article 13.5.
13.4 Reimbursement. LESSEE will be entitled to reimbursement from the Engine Reserves and the
Landing Gear Reserves after the work is completed and the Engine or Landing Gear has left the repair agency,
by submitting invoices and proper documentation within six (6) months after completion of the work. For the
Engine, proper documentation includes a description of the reason for removal (if removed), a shop teardown
report, a shop findings report if an Engine is removed (or an equivalent report if an Engine is not removed),
a full description of the workscope and complete disk records for the Engine both prior to and after the
repair. Both the invoice supplied by the Engine repair facility and that submitted by LESSEE to LESSOR with
respect to an Engine will state whether or not credits were provided due to life remaining on any removed
Engine Parts and the amount of any such credits will be itemized. For the Landing Gear, proper documentation
includes the total calendar time, hours and cycles on the Landing Gear both prior to and after the Overhaul,
a copy of the complete Overhaul report which includes a life limited component list and a description of all
work performed on the Landing Gear assembly.
13.5 Reimbursement Adjustment. By way of example, among the exclusions from reimbursement are
those items resulting from repairs covered by LESSEE's or a third party's insurance, (deductibles being for
the account of LESSEE) or warranties or required as a result of an Airworthiness Directive, manufacturer's
service bulletin, faulty maintenance or installation, improper operations, misuse, neglect, accident,
incident, ingestion, or other accidental cause. Reimbursement from the Reserves will not be available for
the APU, quick engine change (QEC) Parts, thrust reversers, or any of their associated components. All
invoices subject to reimbursement from LESSOR will be reduced (by adjustment between LESSEE and LESSOR
retroactively if necessary) by the actual amounts received by LESSEE on account of such work from responsible
third parties or other sources, such as insurance proceeds, manufacturer's warranties, guarantees,
concessions and credits (including, with respect to Engines, credits due to life remaining on any removed
Engine Parts).
13.6 Costs in Excess of 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 Engine Reserves or Landing Gear
Reserves for a particular Engine or Landing Gear (at the time of removal, in the case of an Engine or the
Landing Gear) is insufficient to satisfy a claim for reimbursement in respect of such Engine or the Landing
Gear, as applicable, the shortfall may not be carried forward or made the subject of any further claim for
reimbursement.
13.7 Reimbursement after Termination Date. LESSEE may not submit any invoice for reimbursement
from the Engine Reserves or Landing Gear Reserves after the Termination Date unless on or prior to such date
LESSEE has notified LESSOR in writing that such outstanding invoice will be submitted after the Termination
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 six (6) months after the Termination
Date. In the event of the Total Loss of the Aircraft, fifty percent (50%) of the unreimbursed Reserves held
by LESSOR will be retained by LESSOR and the remaining portion of the Reserves will be paid to LESSEE in
accordance with Article 19.9.
ARTICLE 14 TITLE AND REGISTRATION
14.1 Title to the Aircraft During Lease Term. Title to the Aircraft will be and remain vested
in LESSOR. LESSOR and LESSEE intend this Lease to be a "true lease". LESSEE will have no right, title or
interest in the Aircraft except as provided in this Lease.
14.2 Registration of Aircraft. LESSOR at its sole cost and expense will register and maintain
registration of the Aircraft in the name of LESSOR at the register of aircraft in the State of Registration.
LESSEE will cooperate with LESSOR and will from time to time take all other steps then required by Law
(including the Geneva Convention if applicable) or as LESSOR may reasonably request to protect and perfect
LESSOR's interest in the Aircraft and this Lease in the State of Registration or in any other jurisdictions
in or over which LESSEE may operate the Aircraft.
14.3 Filing of this Lease. To the extent permitted by Law and in accordance with the
requirements of the Law from time to time, LESSEE at its sole cost and expense will cause this Lease to be
kept, filed, recorded and refiled or rerecorded in the State of Registration and in any other offices
necessary to protect LESSOR's rights hereunder as reasonably requested by LESSOR.
14.4 Evidence of Registration and Filings. As LESSOR may reasonably request from time to time,
LESSEE will furnish to LESSOR an opinion of counsel or other evidence reasonably satisfactory to LESSOR of
the registrations and filings required hereunder.
ARTICLE 15 IDENTIFICATION PLATES
LESSOR will affix and LESSEE will at all times maintain on the Airframe and each Engine the
identification plates containing the following legends or any other legend reasonably requested by LESSOR in
writing:
15.1 Airframe Identification Plates.
Location: One to be affixed to the Aircraft structure above the forward entry door
adjacent to and not less prominent than that of Manufacturer's data plate and
another in a prominent place on the flight deck.
Size: No smaller than 4" x 6".
Legend: "THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION.
MANUFACTURER'S SERIAL NO: 26301
OWNER'S ADDRESS:
INTERNATIONAL LEASE FINANCE CORPORATION
1999 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx of America
Fax: (000) 000 0000"
15.2 Engine Identification Plates.
Location: The legend on the plate must be no less prominent than the Engine data plate
and must be visible.
Size: No smaller than 2" x 6".
"THIS ENGINE IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION, LOS
ANGELES, CALIFORNIA, USA."
ARTICLE 16 TAXES
16.1 General Obligation of LESSEE. Except as set forth in Article 16.2, LESSEE agrees to pay
promptly when due, and to indemnify and hold harmless LESSOR on a full indemnity basis from, all license and
registration fees and all taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any
nature (including without limitation any value added, franchise, transfer, sales, gross receipts, use,
business, excise, turnover, personal property, stamp or other tax) together with any assessments, penalties,
fines, additions to tax or interest thereon, however or wherever imposed (whether imposed upon LESSEE,
LESSOR, on all or part of the Aircraft, the Engines or otherwise), by any Government Entity or taxing
authority in the U.S. (including without limitation the City or County of Los Angeles), or any foreign
country or by any international taxing authority, upon or with respect to, based upon or measured by any of
the following (collectively, "Taxes"):
(a) the Aircraft, Engines or any Parts;
(b) the use, operation or maintenance of the Aircraft or carriage of passengers or freight
during the Lease Term;
(c) this Lease, the payments due hereunder and the terms and conditions hereof; and
(d) the ownership, financing, delivery, import or export, return, sale, payment of Total
Loss Proceeds or other disposition of the Aircraft.
16.2 Exceptions to Indemnity. The indemnity provided for in Article 16.1 does not extend to any
of the following Taxes (hereinafter referred to as "LESSOR's Taxes"):
(a) Taxes imposed by the U.S. or by any state within the U.S. on the net income, profits
or gains, gross receipts, capital or net worth of LESSOR;
(b) Taxes attributable to the period, or an event occurring, prior to Delivery or after
return of the Aircraft to LESSOR in accordance with this Lease;
(c) Taxes attributable to LESSOR's gross negligence, willful misconduct or breach of this
Lease;
(d) Taxes which LESSEE is contesting in good faith in accordance with Article 16.5;
(e) Taxes imposed by any country other than the U.S. on the net income, gross receipts,
capital or net worth of LESSOR but only to the extent that (i) such Taxes were not in any way
connected with, due to or arising out of this Lease, LESSEE's business operations or office
locations in any such country or LESSEE's use and operation of the Aircraft and (ii) such
Taxes would be otherwise payable by LESSOR notwithstanding this Lease, LESSEE's business
operations or office locations in any such country or LESSEE's use and operation of the
Aircraft;
(f) excess Taxes imposed as a result of LESSOR's voluntary or involuntary transfer or
other disposition of the Aircraft, Engines or any Parts or this Lease (except a transfer or
sale resulting directly from LESSEE's Default) provided that LESSEE remains responsible for
payment of any Taxes and the specific amount of such Taxes that it would have been required
to indemnify for had such voluntary or involuntary transfer not occurred;
(g) Taxes consisting of any interest, penalties or additions to tax imposed on LESSOR as a
result, in whole or in part, of a failure of LESSOR to file any Tax return properly and
timely, unless such failure shall be caused by the failure of LESSEE to fulfill any
obligations of LESSEE under Section 16.7 with respect to such Tax return; or
(h) Taxes resulting from, or that would not have been imposed but for, any LESSOR's Lien
arising as a result of claims against, or acts or omissions of, or otherwise attributable to,
LESSOR or any related party.
16.3 After Tax Basis. The amount which LESSEE is required to pay with respect to any Taxes
indemnified against under Article 16.1 is an amount sufficient to restore LESSOR on an after tax basis to the
same position LESSOR would have been in had such Taxes not been incurred. If LESSOR determines in good faith
that it has realized a Tax benefit (by way of deduction, credit or otherwise) as a result of any payment for
which LESSEE is liable under Section 5.7 or 16.1 of this Lease, and such benefit was not previously taken
into account in calculating the amount of such payment on an after tax basis in accordance with the
immediately preceding sentence of this Article 16.3, LESSOR will pay to LESSEE an amount that is reasonably
sufficient to ensure that LESSOR is in no better an after tax position than it would have been in if the
event giving rise to LESSEE's liability for payment had not occurred.
16.4 Timing of Payment. Any amount payable to LESSOR pursuant to this Article 16 will be paid
within ten (10) days after receipt of a written demand therefor from LESSOR accompanied by a written
statement describing in reasonable detail the basis for such indemnity and the computation of the amount so
payable provided, however, that such amount need not be paid by LESSEE prior to the earlier of (a) the date
any Tax is payable to the appropriate Government Entity or taxing authority or (b) in the case of amounts
which are being contested by LESSEE in good faith or by LESSOR pursuant to Article 16.5, the date such
contest is finally resolved.
16.5 Contests. If claim is made against LESSOR for Taxes with respect to which LESSEE is liable
for a payment or indemnity under this Lease, LESSOR will promptly give LESSEE notice in writing of such claim
provided, however, that LESSOR's failure to give notice will not relieve LESSEE of its obligations hereunder
unless such failure materially impairs or precludes LESSEE's ability to contest the claim. So long as (a) a
contest of such Taxes does not involve any material risk of the sale, forfeiture or loss of the Aircraft or
any interest therein, (b) if LESSOR so requests, LESSEE has provided LESSOR with an opinion of independent
tax counsel that a reasonable basis exists for contesting such claim and (c) adequate reserves have been made
for such Taxes or, if required, an adequate bond has been posted, then LESSOR at LESSEE's written request
will in good faith, with due diligence and at LESSEE's expense, contest (or permit LESSEE to contest in the
name of LESSEE or LESSOR) the validity, applicability or amount of such Taxes.
16.6 Refunds. Upon receipt by LESSOR of a refund of all or any part of any Taxes (including any
deductions or withholdings referred to in Article 5.7) which LESSEE has paid, LESSOR will promptly pay to
LESSEE the net amount of such Taxes refunded.
16.7 Cooperation in Filing Tax Returns. LESSEE and LESSOR will cooperate with one another in
providing information which may be reasonably required to fulfill each party's tax filing requirements and
any audit information request arising from such filing.
16.8 Survival of Obligations. The indemnity obligations and other agreements of LESSEE as set
forth in this Article 16 will survive the Termination Date.
ARTICLE 17 INDEMNITIES
17.1 General Indemnity. Except as set forth in Article 17.2 and Article 28.20, LESSEE agrees to
indemnify and hold harmless LESSOR and its officers, directors, employees, agents and shareholders
(individually an "Indemnitee" and collectively "Indemnitees") from any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs, disbursements and expenses (including legal fees,
costs and related expenses) of every kind and nature, whether or not any of the transactions contemplated by
this Lease are consummated (collectively "Expenses"), which are imposed on, incurred by or asserted against
any Indemnitee and which are in any way relating to, based on or arising out of any of the following:
(a) this Lease or any transactions contemplated hereby;
(b) the operation, possession, use, non use, control, leasing, subleasing, maintenance,
storage, overhaul, testing, inspections or acceptance flights at return of the Aircraft, any
Engine, or any Part during the Lease Term by LESSEE, any sublessee or any other Person,
whether or not the same is in compliance with the terms of this Lease, 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;
(c) the manufacture, design, acceptance, rejection, delivery, return, sale after an Event
of Default, import, export, condition, repair, modification, servicing, rebuilding,
enforcement of warranties whether in LESSOR's or LESSEE's name, customer and product support
provided by Manufacturer and other vendors, airworthiness, registration, reregistration,
performance, sublease, merchantability, fitness for use, substitution or replacement of the
Aircraft, Engine, or any Part under this Lease or other transfer of use or possession of the
Aircraft, Engine, or any Part, including under a pooling or interchange arrangement,
including without limitation latent and other defects, whether or not discoverable and
patent, trademark or copyright infringement;
(d) any non compliance by LESSEE with any term of this Lease or the falsity or inaccuracy
of any representation or warranty of LESSEE set forth herein;
(e) the prevention or attempt to prevent the arrest, confiscation, seizure, taking in
execution, impounding, forfeiture or detention of the Aircraft, or in securing the release of
the Aircraft; or
(f) as a consequence of any Default in payment by LESSEE of any sum to be paid by LESSEE
when due under this Lease or any other Default by LESSEE in the due and punctual performance
of its obligations under this Lease.
The foregoing indemnity by LESSEE is intended to include and cover any Expense to which an Indemnitee may be
subject (in contract, tort, strict liability or under any other theory) regardless of the negligence, active
or passive or any other type, of such Indemnitee, so long as such Expense does not fall within any of the
exceptions listed in Article 17.2.
17.2 Exceptions to General Indemnities. The indemnity provided for in Article 17.1 will not
extend to Expenses of any Indemnitee to the extent resulting from or arising out of any of the following:
(a) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are
judicially determined to have resulted from the willful misconduct of such Indemnitee;
(b) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are
judicially determined to be attributable to incidents, accidents or occurrences prior to the
Delivery Date, but only where both the act or omission which gave rise to the incident,
accident or occurrence and the incident, accident or occurrence itself occurred prior to the
Delivery Date;
(c) Expenses which LESSEE and LESSOR mutually agree or, absent mutual agreement, are
judicially determined to be attributable to acts or events which occur after the Termination
Date and return of the Aircraft to LESSOR in the condition required hereunder, but in any
such case only to the extent not attributable to acts or omissions of LESSEE;
(d) Expenses representing Taxes, it being acknowledged that the terms of Article 16 apply
exclusively to LESSEE's indemnity obligations with respect to Taxes;
(e) Expenses due to the breach by LESSOR of its covenant of quiet enjoyment pursuant to
Article 21.2;
(f) Expenses related to LESSOR Taxes or a LESSOR's Lien; or
(g) Expenses that LESSOR has expressly agreed to pay under this Lease.
17.3 After Tax Basis. The amount which LESSEE will be required to pay with respect to any
Expense indemnified against under Article 17.1 will be an amount sufficient to restore the Indemnitee, on an
after tax basis, to the same position such Indemnitee would have been in had such Expense not been incurred.
17.4 Timing of Payment. It is the intent of the parties that each Indemnitee will have the
right to indemnification for Expenses hereunder as soon as a claim is made and as soon as an Expense is
incurred, whether or not such claim is meritorious and whether or not liability is established (but subject
to Article 17.8). LESSEE will pay an Indemnitee for Expenses pursuant to this Article 17 within ten (10)
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 and reasonable proof of such Expenses incurred.
17.5 Subrogation. Upon the payment in full of any indemnity pursuant to this Article 17 by
LESSEE, LESSEE will be subrogated to any right of the Indemnitee in respect of the matter against which such
indemnity has been made.
17.6 Notice. Each Indemnitee and LESSEE will give prompt written notice one to the other of any
liability of which such party has knowledge for which LESSEE is, or may be, liable under Article 17.1
provided, however, that failure to give such notice will not terminate any of the rights of Indemnitees under
this Article 17 except to the extent that LESSEE has been materially prejudiced by the failure to provide
such notice.
17.7 Refunds. If any Indemnitee obtains a recovery of all or any part of any amount which
LESSEE has paid to such Indemnitee, such Indemnitee will promptly pay to LESSEE the net amount recovered by
such Indemnitee.
17.8 Defense of Claims. Unless an Event of Default has occurred and is continuing, LESSEE and
its insurers will have the right (in each such case at LESSEE's sole expense) to investigate or, provided
that LESSEE or its insurers have not reserved the right to dispute liability with respect to any insurance
policies pursuant to which coverage is sought, defend or compromise any claim covered by insurance for which
indemnification is sought pursuant to Article 17.1 and each Indemnitee will cooperate with LESSEE or its
insurers with respect thereto. If LESSEE or its insurers are retaining attorneys to handle such claim, such
counsel must be reasonably satisfactory to the Indemnitees. If not, the Indemnitees will have the right to
retain counsel of their choice at LESSEE's expense.
17.9 Survival of Obligation. Notwithstanding anything in this Lease to the contrary, the
provisions of this Article 17 will survive the Termination Date and continue in full force and effect
notwithstanding any breach by LESSOR or LESSEE of the terms of this Lease, the termination of the lease of
the Aircraft to LESSEE under this Lease or the repudiation by LESSOR or LESSEE of this Lease.
ARTICLE 18 INSURANCE
18.1 Categories of Insurance. Throughout the Lease Term and until the Termination Date LESSEE
will, at its own expense, effect and maintain in full force and effect the types of insurance and amounts of
insurance (including deductibles) described in Exhibit C through such brokers and with such insurers as may
be approved by LESSOR, such approval not to be unreasonably withheld, in London or New York or such other
insurance markets as mutually agreed upon by the parties.
18.2 Write back of any Date Recognition Exclusion. In the event any of LESSEE's insurances
(either the primary insurance or the reinsurance) contain any date recognition exclusion clause or similar
clause excluding from such insurance coverage damage to any property (including the Aircraft) or death or
injury to any person on account of accidents, incidents or occurrences caused by date recognition or other
Year 2000 related problems, LESSEE at its cost will obtain for the benefit of itself and LESSOR the broadest
write back available in the U.S. insurance market with respect to such exclusion.
18.3 Insurance for Indemnities. The insurance referred to in Article 18.1 will in each case
include and insure (to the extent of the risks covered by the policies) the indemnity provisions of
Article 17 and LESSEE will maintain such insurance of the indemnities for a minimum of two (2) years following
the Termination Date.
18.4 Insurance required by Manufacturer. During the Lease Term, LESSEE will carry the insurance
required by Manufacturer in connection with LESSOR's assignment of Manufacturer's warranties and product
support to LESSEE.
18.5 Renewal. Not less than five (5) Business Days before the expiration or termination date of
any insurance required hereunder, LESSEE will provide LESSOR with fax confirmation from LESSEE's insurance
brokers that renewed certificates of insurance evidencing the renewal or replacement of such insurance and
complying with Exhibit C will be issued on the termination date of the prior certificate. Within seven (7)
days after such renewal, LESSEE will furnish its brokers' certificates of insurance to LESSOR.
18.6 Assignment of Rights by LESSOR. If LESSOR assigns all or any of its rights under this
Lease as permitted by this Lease or otherwise disposes of any interest in the Aircraft to any other Person as
permitted by this Lease, LESSEE will, upon request, procure that such Person hereunder be added as loss payee
and/or additional assured in the policies effected hereunder and enjoy the same rights and insurance enjoyed
by LESSOR under such policies. LESSOR will nevertheless continue to be covered by LESSEE's third party
liability insurance policies.
18.7 Other Insurance. LESSOR may from time to time by notice to LESSEE require LESSEE at
LESSEE's expense to effect such other insurance or such variations to the terms of the existing insurance as
may then be customary in the airline industry for aircraft of the same type as the Aircraft and at the time
commonly available in the insurance market.
18.8 Information. LESSEE will provide LESSOR with any information reasonably requested by
LESSOR from time to time concerning the insurance maintained with respect to the Aircraft or in connection
with any claim being made or proposed to be made thereunder.
18.9 Currency. All proceeds of insurance pursuant to this Lease will be payable in Dollars
except as may be otherwise agreed by LESSOR.
18.10 Grounding of Aircraft. If at any time any of the insurance required pursuant to this Lease
will cease to be in full force and effect, LESSEE will forthwith ground the Aircraft and keep the Aircraft
grounded until such time as such insurance is in full force and effect again.
18.11 Failure to Insure. If at any time LESSEE fails to maintain insurance in compliance with
this Article 18, LESSOR will be entitled but not bound to do any of the following (without prejudice to any
other rights which it may have under this Lease by reason of such failure):
(a) to pay any premiums due or to effect or maintain insurance consistent with the terms
of this Lease or otherwise remedy such failure in such manner as LESSOR considers appropriate
(and LESSEE will upon demand reimburse LESSOR in full for any amount so expended in that
connection); or
(b) at any time while such failure is continuing, to require the Aircraft to remain at any
airport or (as the case may be), if allowed by applicable Law proceed to and remain at any
airport within the continental U.S. designated by LESSOR, until such failure is remedied to
LESSOR's reasonable satisfaction.
18.12 Reinsurance. Any reinsurance will be maintained with reinsurers and brokers reasonably
acceptable to LESSOR. Such reinsurance will contain each of the following terms and will in all other
respects (including amount) be reasonably satisfactory to LESSOR:
(a) the same terms as the original insurance;
(b) a cut through and assignment clause reasonably satisfactory to LESSOR; and
(c) payment will be made notwithstanding (i) any bankruptcy, insolvency, liquidation or
dissolution of any of the original insurers and/or (ii) that the original insurers have made
no payment under the original insurance policies.
18.13 Limit on Hull in favor of LESSEE. LESSEE may carry hull all risks or hull war and allied
perils on the Aircraft in excess of the Agreed Value (such Agreed Value being payable to LESSOR) only to the
extent such excess insurance which would be payable to LESSEE in the event of a Total Loss does not exceed
ten percent (10%) of the Agreed Value and only to the extent that such additional insurance will not
prejudice the insurances required herein or the recovery by LESSOR thereunder. LESSEE agrees that it will
not create or permit to exist any liens or encumbrances over the insurances, or its interest therein, except
as constituted by this Lease.
ARTICLE 19 LOSS, DAMAGE AND REQUISITION
Throughout the Lease Term and until the Termination Date, LESSEE will bear all risk of loss,
theft, damage and destruction to the Aircraft.
19.1 Definitions. In this Article 19 and throughout this Lease:
"Agreed Value" *
"Net Total Loss Proceeds" means the Total Loss Proceeds actually received by LESSOR following
a Total Loss, less any legal and other out of pocket expenses, taxes or duties incurred by LESSOR in
connection with the collection of such proceeds.
"Total Loss" means any of the following in relation to the Aircraft, Airframe or any Engine,
and "Total Loss Date" means the date set forth in parenthesis after each Total Loss:
(a) destruction, damage beyond repair or being rendered permanently unfit for normal use
for any reason (the date such event occurs or, if not known, the date on which the Aircraft,
Airframe or Engine was last heard of);
(b) actual or constructive total loss (including any damage to the Aircraft which results
in an insurance settlement on the basis of a total loss) (the earlier of the date on which
the loss occurs or thirty (30) days after the date of notice to LESSEE's brokers or insurers
claiming such total loss);
(c) requisition of title, confiscation, forfeiture or any compulsory acquisition or other
similar event (the date on which the same takes effect);
(d) sequestration, detention, seizure or any similar event for more than sixty (60)
consecutive days or one hundred eighty (180) consecutive days if the Aircraft is located in
the U.S. for such entire period (the earlier of the date on which insurers make payment on
the basis of a total loss or the date of expiration of such period);
(e) requisition for use for more than one hundred eighty (180) consecutive days, except as
set forth in Article 19.8 (the earlier of the date on which the insurers make payment on the
basis of a total loss or the date of expiration of such period); or
(f) in the case of an Engine, the event described in Article 12.6.3 (the date on which the
same takes effect).
"Total Loss Proceeds" means the proceeds of any insurance or any compensation or similar
payment arising in respect of a Total Loss.
19.2 Notice of Total Loss. LESSEE will notify LESSOR in writing within two (2) Business Days
after a Total Loss Date of the Aircraft, Airframe or any Engine.
19.3 Total Loss of Aircraft or Airframe. If the Total Loss of the Aircraft or Airframe occurs
during the Lease Term, the following will occur:
19.3.1 After the Total Loss Date and until receipt by LESSOR of the Agreed Value and all other
amounts then due under this Lease, LESSEE will continue to pay Rent and the parties will
perform, to the extent possible, all of their other obligations under this Lease.
19.3.2 On the date which is the earlier of the following dates:
(a) the date on which the Total Loss Proceeds of the Aircraft or the Airframe are
paid by LESSEE's insurance underwriters or brokers and
(b) the date which falls forty five (45) days after the Total Loss Date,
LESSEE will pay to LESSOR an amount equal to the sum of:
(a) the Agreed Value and
(b) all other amounts then due under this Lease,
less an amount equal to the Net Total Loss Proceeds received by LESSOR by such date.
19.3.3 LESSOR will apply the Net Total Loss Proceeds and any amounts received from LESSEE pursuant
to Article 19.3.2 as follows:
(a) first, in discharge of any unpaid Rent and any other amounts accrued and unpaid
up to the date of LESSOR's receipt of the Agreed Value;
(b) second, in discharge of the Agreed Value; and
(c) third, payment of the balance, if any, to LESSEE.
19.3.4 Upon receipt by LESSOR of all monies payable by LESSEE in Article 19.3, this Lease will
terminate except for LESSEE's obligations under Articles 10.5, 16 and 17 which survive the
Termination Date.
FOR AVOIDANCE OF DOUBT, THE AGREED VALUE OF THE AIRCRAFT WILL BE PAYABLE TO LESSOR PURSUANT TO THIS
ARTICLE 19.3 WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE OR
ENGINES.
19.4 Surviving Engine(s). If a Total Loss of the Airframe occurs and there has not been a Total
Loss of an Engine or Engines, then, provided no Default has occurred and is continuing, at the request of
LESSEE (subject to agreement of relevant insurers) and on receipt of all monies due under Article 19.3 and
payment by LESSEE of all airport, navigation and other charges on the Aircraft, LESSOR will transfer all its
right, title and interest in the surviving Engine(s) to LESSEE, but without any responsibility, condition or
warranty on the part of LESSOR other than as to freedom from any LESSOR's Lien.
19.5 Total Loss of Engine and not Airframe.
19.5.1 Upon a Total Loss of any Engine not installed on the Airframe or a Total Loss of an Engine
installed on the Airframe not involving a Total Loss of the Airframe, LESSEE will replace
such Engine as soon as reasonably possible by duly conveying to LESSOR title to another
engine (a) free and clear of all Security Interests (except Permitted Liens) of any kind or
description, (b) in airworthy condition and of the same or improved model, service bulletin
and modification status and having a value and utility at least equal to the Engine which
sustained the Total Loss, (c) not older (by reference to serial number or manufacture date)
than the older of the two Engines (on the date of the replacement) delivered by LESSOR to
LESSEE with the Aircraft on the Delivery Date, and (d) in the same or better operating
condition as the Engine which sustained a Total Loss, including time in service, hours and
cycles since new and hours and cycles available to the next inspection, Overhaul or scheduled
or anticipated removal; provided that with respect to replacement modules in such other
engine, LESSEE will use best reasonable efforts to ensure that such other engine will not
have been previously operated at a higher thrust rating than the Engine which sustained the
Total Loss and provided further that in all circumstances life limited Parts in such
replacement engine will have no less life remaining than the life limited Parts in the Engine
which sustained the Total Loss. Such replacement engine will be an Engine as defined herein
and the Engine which sustained such Total Loss will cease to be an Engine; whereupon, subject
to agreement of relevant insurers, LESSOR will transfer all of its right, title and interest
in and to the Engine which sustained the Total Loss to LESSEE, but without any
responsibility, condition or warranty on the part of LESSOR other than as to title and
freedom from any LESSOR's Lien.
19.5.2 LESSEE agrees at its own expense to take such action as LESSOR may reasonably request in
order that any such replacement Engine becomes the property of LESSOR and is leased hereunder
on the same terms as the destroyed Engine. LESSEE's obligation to pay Rent will continue in
full force and effect, but an amount equal to the Net Total Loss Proceeds received by LESSOR
with respect to such destroyed Engine will, subject to LESSOR's right to deduct therefrom any
amounts then due and payable by LESSEE under this Lease, be paid to LESSEE.
19.6 Other Loss or Damage.
19.6.1 If the Aircraft or any Part thereof suffers loss or damage not constituting a Total Loss of
the Aircraft or the Airframe or any Engine, all the obligations of LESSEE under this Lease
(including payment of Rent) will continue in full force.
19.6.2
*
19.6.3 To the extent insurance proceeds received by LESSEE directly from its insurers do not cover
the cost of such repair work on the Aircraft or Engine and LESSOR has received additional
insurance proceeds from LESSEE's insurers with respect to such repair work, LESSOR will
(subject to LESSOR's right to deduct therefrom any amounts then due and payable by LESSEE
under this Lease and submission by LESSEE of reasonable documentation in support of such
excess repair costs) pay to LESSEE insurance proceeds received by LESSOR as and when such
repair work is performed on the Aircraft.
19.7 Copy of Insurance Policy. Promptly after the occurrence of a partial loss or Total Loss of
the Aircraft or an Engine, at the request of LESSOR (and then only in the event reasonably required by
LESSOR in connection with insurance policies pursuant to which coverage is sought) LESSEE will provide LESSOR
with a copy of the relevant portions of LESSEE's insurance policy. LESSEE's insurance policy will be
confidential between LESSOR and LESSEE and will not be disclosed by LESSOR to third parties other than
LESSOR's professional advisors and except as necessary in respect of proceedings relating to such insurance
claim.
19.8 Government Requisition. If the Aircraft, Airframe or any Engine is requisitioned for use
by any Government Entity, LESSEE will promptly notify LESSOR of such requisition. All of LESSEE's
obligations hereunder will continue as if such requisition had not occurred. So long as no Event of Default
has occurred and is continuing, all payments received by LESSOR or LESSEE from such Government Entity will be
paid over to or retained by LESSEE. If an Event of Default has occurred and is continuing, all payments
received by LESSEE or LESSOR from such Government Entity may be used by LESSOR to satisfy any obligations
owing by LESSEE.
19.9 LESSOR Retention of Reserves; Return of Security Deposit and Prepaid Rent . For avoidance
of doubt, the parties agree that (a) notwithstanding the Total Loss of the Airframe and/or Engines LESSOR
will retain an amount equal to fifty percent (50%) of all Reserves paid by LESSEE and not payable to LESSEE
pursuant to Article 13.4, and (b) in the event of the Total Loss of the Airframe and/or Engines upon receipt
by LESSOR of all monies payable by LESSEE in accordance with Article 19.1.3, and subject to Article 5.1.3,
LESSOR will (i) return the Security Deposit and any prepaid Rent to LESSEE and (ii) pay to LESSEE an amount
equal to fifty percent (50%) of the Reserves then held by LESSOR.
ARTICLE 20 REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE
20.1 Representations and Warranties. LESSEE represents and warrants the following to LESSOR as
of the date of execution of this Lease and as of the Delivery Date:
20.1.1 Corporate Status. LESSEE is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Colorado. It has the corporate power and authority
to carry on its business as presently conducted and to perform its obligations hereunder.
20.1.2 Governmental 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 this Lease, except as will have been duly effected as of the Delivery Date.
20.1.3 Binding. LESSEE's Board of Directors has authorized LESSEE to enter into this Lease and
the other Operative Documents and to perform its obligations hereunder and thereunder. This
Lease and the other Operative Documents that have been executed and delivered by LESSEE as
of the date of this Lease been duly executed and delivered by LESSEE and represent the valid,
binding and enforceable obligations of LESSEE except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar Laws of general application affecting
the enforcement of creditors' rights and by such principles of equity as a court having
jurisdiction may impose. When executed by LESSEE at Delivery, the same will apply to the
Estoppel and Acceptance Certificate and the other Operative Documents.
20.1.4 No Breach. The execution and delivery of the Operative Documents that have been executed
and delivered by LESSEE as of the date of this Lease, the consummation by LESSEE of the
transactions contemplated under the Operative Documents and compliance by LESSEE with the
terms and provisions thereof do not and will not contravene any Law applicable to LESSEE, or
result in any material breach of or constitute any material default under or result in the
creation of any Security Interest upon any property of LESSEE, pursuant to any indenture,
mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit
agreement, corporate charter, by law or other material 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 Estoppel and Acceptance
Certificate and the other Operative Documents.
20.1.5 Filings. Except for any filing or recording that may be required under the U.S. Federal
Aviation Administration and except for the filing of UCC 1 financing statements with the
Secretary of State of the State of Colorado, no filing or recording of any instrument or
document (including the filing of any financial statement) is necessary under the Laws of the
State of Registration in order for this Lease to constitute a valid and perfected lease of
record relating to the Aircraft.
20.1.6 Licenses. LESSEE holds all licenses, certificates and permits from applicable Government
Entities in the U.S. necessary for the conduct of its business as a Certificated Air Carrier
and performance of its obligations under this Lease.
20.1.7 No Suits. There are no suits, arbitrations or other proceedings pending or threatened
before any court or administrative agency against or affecting LESSEE which, if adversely
determined, would have a material adverse effect on the business, assets or condition
(financial or otherwise) of LESSEE or its ability to perform under this Lease, except as
described in the filings provided to LESSOR pursuant to Article 22.
20.1.8 Tax Returns. All necessary returns have been delivered by LESSEE to all relevant taxation
authorities in the jurisdiction of its incorporation and LESSEE is not in default in the
payment of any taxes due and payable.
20.1.9 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 which default if left uncured would have a material adverse
effect on its business, assets or condition.
20.1.10 No Default under this Lease. At the time of execution of this Lease, no Default has
occurred and is continuing and the financial statements provided to LESSOR pursuant to
Article 22 fairly present the financial condition of LESSEE.
20.2 Covenants. LESSEE covenants to LESSOR that it will comply with the following throughout
the entire Lease Term:
20.2.1 Licensing. LESSEE will hold all licenses, certificates and permits from applicable
Government Entities in the U.S. necessary for the conduct of its business as a Certificated
Air Carrier and performance of its obligations under this Lease. LESSEE will advise LESSOR
promptly in the event any such licenses, certificates or permits are cancelled, terminated,
revoked or not renewed.
20.2.2 Information about Suits. LESSEE will promptly give to LESSOR a notice in writing 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 Lease provided, however,
that compliance by LESSEE with the requirements of Article 22 hereof will be deemed
compliance with the provisions of this Article 20.2.2.
20.2.3 Restrictions on Mergers. LESSEE will not consolidate with or merge into any other
corporation or other Person, and will not convey, transfer, lease or otherwise dispose of all
or substantially all of its assets to any corporation or other Person, unless:
(i) such transaction shall not have any material adverse effect on the rights of LESSOR
under or in respect of the Lease or the Aircraft;
(ii) the Person formed by or surviving such consolidation or merger or the Person which
acquires by conveyance, transfer, lease or other disposition all or substantially all
of such property and other assets: (A) shall be a corporation organized and existing
under the laws of the U. S. or any State thereof or the District of Columbia; (B)
immediately after giving effect to such transaction, shall have acquired or succeeded
to all or substantially all of the assets of LESSEE (if such assets are being
transferred) as an entirety, and shall have a tangible net worth (determined in
accordance with GAAP) of not less than LESSEE's tangible net worth (determined in
accordance with GAAP) immediately prior to such transaction; (C) shall be a "citizen
of the United States" of America as defined in Section 40102(a)(15)(c) of Title 49 of
the U.S.C. and a Certificated Air Carrier; and (D) shall executed and deliver to
LESSOR (1) such recordations and filings with any Government Entity and such other
documents as shall be reasonably necessary or advisable in connection with such
consolidation, merger, sale, lease, transfer or other disposition (2) an agreement, in
form and substance reasonably satisfactory to LESSOR, assuming all of LESSEE's
obligations under the Lease and the other Operative Documents without amendment
thereto and (3) an officer's certificate to the effect that the requirements of this
Section have been satisfied; and
(iii) no Event of Default shall have occurred and be continuing or shall occur as a result
thereof.
20.2.4 Restriction on Relinquishment of Possession. LESSEE will not, without the prior consent of
LESSOR, deliver, transfer or relinquish possession of the Aircraft except in accordance with
Articles 11 and 12.
20.2.5 No Security Interests. LESSEE will not create or agree to or permit to arise any Security
Interest (other than Permitted Liens) on or with respect to the Aircraft, title thereto or
any interest therein. LESSEE will forthwith, at its own expense, take all action as may be
reasonably necessary to discharge or remove any such Security Interest if it exists at any
time.
20.2.6 Representations to Other Parties. LESSEE will not represent or hold out LESSOR as carrying
goods or passengers on the Aircraft or as being in any way connected or associated with any
operation of the Aircraft.
ARTICLE 21 REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR
21.1 Representations and Warranties. LESSOR represents and warrants the following to LESSEE as
of the date of execution of the Lease and as of the Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED HAVE BEEN WAIVED IN ACCORDANCE WITH ARTICLE 8:
21.1.1 Corporate Status. LESSOR is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of California. It has the corporate power and authority
to carry on its business as presently conducted and to perform its obligations hereunder.
21.1.2 Governmental Approvals. No authorization, approval, consent, license or order of, or
registration with, or the giving of notice to any U.S. Government Entity is required for the
valid authorization, execution, delivery and performance by LESSOR of this Lease.
21.1.3 Binding. This Lease and the other Operative Documents that have been have been executed
and delivered by LESSEE as of the date of this Lease have been duly authorized, 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
similar Laws of general application affecting the enforcement of creditors' rights and by
such principles of equity as a court having jurisdiction may impose. When executed by LESSOR
at Delivery, the same will apply to the other Operative Documents.
21.1.4 No Breach. The execution and delivery of the Operative Documents that have been executed
and delivered by LESSOR as of the date of this Lease, the consummation by LESSOR of the
transactions contemplated therein and compliance by LESSOR with the terms and provisions
thereof do not and will not contravene any Law applicable to LESSOR, or result in any
material breach of or constitute any material default under any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or credit agreement, corporate
charter, by law or other material agreement or instrument to which LESSOR is a party or by
which LESSOR or its properties or assets may be bound or affected. When executed by LESSOR
at Delivery, the same will apply to the other Operative Documents.
21.1.5 Title to Aircraft. On the Delivery Date LESSOR will have good and valid title to the
Aircraft.
21.1.6 Citizen of the United States. LESSOR is a "citizen of the United States of America" (as
defined in Section 40102 of Title 49 of U.S.C.).
21.1.7 Airframe and Engine Warranty Assignments. The Airframe Warranty Assignment and the Engine
Warranty Assignment when executed and delivered by LESSOR in accordance with Article 7.4
represent the valid and enforceable assignment to LESSEE of the warranties set forth therein.
21.2 Covenant of Quiet Enjoyment. So long as no Event of Default has occurred and is continuing
hereunder, LESSOR covenants that neither LESSOR nor any person lawfully claiming through LESSOR will
interfere with LESSEE's quiet, peaceful use and enjoyment of the Aircraft during the Lease Term.
ARTICLE 22 FINANCIAL AND RELATED INFORMATION
LESSEE agrees to furnish each of the following to LESSOR:
(a) within forty five (45) days after the end of each fiscal quarter of LESSEE, three (3)
copies of the unaudited consolidated financial statements (including a balance sheet and
profit and loss statement) prepared for such quarter in accordance with generally accepted
accounting principles in the U.S.;
(b) within ninety (90) days after the end of each fiscal year of LESSEE, three (3) copies
of the audited consolidated financial statements (including a balance sheet and profit and
loss statement) prepared as of the close of such fiscal year in accordance with generally
accepted accounting principles in the U.S.;
(c) promptly after distribution, three (3) copies of all reports and financial statements
which LESSEE sends or makes available to its stockholders or creditors generally;
(d) Technical Evaluation Reports in conjunction with every second "C" check for the
Aircraft and at other times reasonably requested by LESSOR in accordance with Article 12.10.2
hereof; and
(e) from time to time, such other reasonable information as LESSOR or LESSOR's Lender may
reasonably request concerning the location, condition, use and operation of the Aircraft or
the financial condition of LESSEE.
ARTICLE 23 RETURN OF AIRCRAFT
23.1 Date of Return. LESSEE is obligated to return the Aircraft, Engines, Parts and Aircraft
Documentation to LESSOR on the Expiration Date, unless a Total Loss of the Aircraft occurred prior to the
Expiration Date and this Lease was terminated early in accordance with Article 19.3. If LESSEE is in Default
hereunder by failing to return the Aircraft on the Expiration Date or if an Event of Default occurs prior to
the Expiration Date and LESSOR repossesses the Aircraft, the return requirements set forth in this Article 23
nonetheless must be met on the date the Aircraft is actually returned to LESSOR or repossessed by LESSOR.
23.2 Technical Report. Six (6) months prior to the Expiration Date (and in an updated form at
return of the Aircraft), LESSEE will provide LESSOR with a Technical Evaluation Report in the form and
substance of Exhibit M, as revised, and, in addition upon LESSOR's request, will make copies available of
(a) drawings of the interior configuration of the Aircraft both as it then exists and as it will exist at
return, (b) an Airworthiness Directive status list, (c) a service bulletin incorporation list, (d) rotable
tracked, hard time and life limited component listings, (e) a list of LESSEE initiated modifications and
alterations, (f) interior material burn certificates, (g) the Aircraft Maintenance Program, (h) the complete
workscope for the checks, inspections and other work to be performed prior to return, (i) a list of all
no charge service bulletin kits with respect to the Aircraft which were ordered by LESSEE from Manufacturer or
Engine manufacturer, (j) current Engine disk sheets and a description of the last shop visit for each Engine
and (k) any other data which is reasonably requested by LESSOR.
23.3 Return Location. LESSEE at its expense will return the Aircraft, Engines, Parts and
Aircraft Documentation to LESSOR at Denver, Colorado or to such other airport on LESSEE's route system as may
be mutually agreed to by LESSEE and LESSOR.
23.4 Full Aircraft Documentation Review. For the period commencing at least ten (10) Business
Days prior to the proposed redelivery date and continuing until the date on which the Aircraft is returned to
LESSOR in the condition required by this Lease, LESSEE will provide for the review of LESSOR and/or its
representative all of the Aircraft records and historical documents described in Exhibit L in one central
room at the Aircraft return location.
23.5 Aircraft Inspection.
23.5.1 During the maintenance checks performed immediately prior to the proposed redelivery and at
the actual return of the Aircraft, LESSOR and/or its representatives will have an opportunity
to conduct a full systems functional and operational inspection of the Aircraft (and other
types of reasonable inspections based upon the Aircraft type, age, use and other known
factors with respect to the Aircraft) and a full inspection of the Aircraft Documentation
(including records and manuals), all to LESSOR's reasonable satisfaction. Any deficiencies
from the Aircraft return condition requirements set forth in this Article 23 will be
corrected by LESSEE at its cost prior to the acceptance flight described in Article 23.5.2.
23.5.2 Immediately prior to the proposed redelivery of the Aircraft, LESSEE will carry out for
LESSOR and/or LESSOR's representatives an Aircraft acceptance flight in accordance with
Manufacturer's standard flight operation check flight procedures or, if agreed to in writing
by LESSOR, in accordance with an airline acceptance flight procedure, either of which will be
for two (2) hours, or such longer duration as is necessary to perform such check flight
procedures. Flight costs and fuel will be furnished by and at the expense of LESSEE. Any
deficiencies from the Aircraft return condition requirements set forth in this Article 23
will be corrected by LESSEE at its cost prior to return of the Aircraft.
23.5.3 To the extent that the ground inspection and acceptance flight extend beyond the Expiration
Date, the Lease Term will be deemed to have been automatically extended and the obligations
of LESSEE hereunder (including Article 23.13.3) will continue on a day to day basis until the
Aircraft is accepted by LESSOR as being in the condition required hereunder, which acceptance
shall be evidenced by LESSOR executing and delivering to LESSEE the Return Acceptance Receipt
in the form of Exhibit J.
23.6 Certificate of Airworthiness Matters.
23.6.1 The Aircraft will possess a current Certificate of Airworthiness issued by the Aviation
Authority for transport category aircraft in accordance with FAR Part 21 and FAR Part 121
(although this Certificate of Airworthiness may later be substituted by the Export
Certificate of Airworthiness or equivalent if requested by LESSOR pursuant to Article 23.12).
23.6.2 If the Aircraft is registered in a country other than the U.S. at time of return, LESSEE at
its cost will demonstrate that the Aircraft meets the requirements for issuance of the U.S.
Standard Certificate of Airworthiness for transport category aircraft specified in
ARTICLE 23.6.1 by delivering to LESSOR at its option either an actual U.S. Standard
Certificate of Airworthiness (if the Aircraft is to be registered in the U.S.) or a letter
acceptable to LESSOR signed by an FAA Designated Airworthiness Representative (DAR) or
another Person acceptable to LESSOR stating that the DAR or such Person has inspected the
Aircraft and Aircraft Documentation (including records and manuals) and has found that the
Aircraft meets the requirements for issuance of a U.S. Standard Certificate of Airworthiness
for transport category aircraft in accordance with FAR Part 21 and, in addition, meets the
operating requirements of FAR Part 121.
23.6.3 If the Aircraft is to be registered in a country other than in the U.S. after return from
LESSEE, LESSOR may in its sole discretion waive the requirements of Article 23.6.1 and
instead require that LESSEE at its expense (to the extent such expense is no greater than
that which LESSEE would have incurred pursuant to Article 23.6.1, with any additional
expenses being for LESSOR's account) put the Aircraft in a condition to meet the requirements
for issuance of a Certificate of Airworthiness of the Aviation Authority of the next country
of register, provided that if solely as a result of such work the Aircraft is returned after
the scheduled redelivery date, LESSEE will not be liable for payment of Rent in respect of
the period following the date the Aircraft would have been returned following completion of
the requirements of this Article 23, but for the provisions of this Article 23.6.3.
23.7 General Condition of Aircraft at Return.
23.7.1 The Aircraft, Engines and Parts will have been maintained and repaired in accordance with the
Maintenance Program, the rules and regulations of the Aviation Authority and this Lease.
23.7.2 Aircraft Documentation (including records and manuals) will have been maintained in an
up to date status, in accordance with the rules and regulations of the Aviation Authority and
the FAA and this Lease and in a form necessary in order to meet the requirements of
ARTICLE 23.6.2. The records and historical documents set forth in Attachment 1 of Exhibit J
will be in English.
23.7.3 The Aircraft will be in the same working order and condition as at Delivery (subject to the
other provisions of this Article 23, reasonable wear and tear from normal flight operations
excepted), with all pilot discrepancies and deferred maintenance items cleared on a
terminating action basis.
23.7.4 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 approved by Manufacturer, Aviation Authority and the FAA.
23.7.5 The interior of the Aircraft (including cabin and windows) will be in a reasonable condition
and cosmetically acceptable, with no cracks, tears or rips.
23.7.6 No special or unique Manufacturer, Engine manufacturer or Aviation Authority inspection or
check requirements which are specific to the Aircraft or Engines (as opposed to all aircraft
or engines of their types) will exist with respect to the Airframe, Engines and Aircraft
equipment, components and systems.
23.7.7 All repairs, modifications and alterations to the Aircraft will have been accomplished in
accordance with the FARs or Manufacturer's Structural Repair Manual (or FAA approved data
supported by FAA Form 8110 3) for the Aircraft, as applicable.
23.7.8 The Aircraft will be returned with LESSOR's Engines installed and with the same equipment as
at Delivery, subject only to those replacements, additions and Modifications permitted under
this Lease.
23.7.9 All Airworthiness Directives which are issued during the Lease Term and require compliance
(either by means of repetitive inspections, modifications or terminating action) prior to
return of the Aircraft to LESSOR or within one (1) year after the Termination Date will have
been complied with on the Aircraft on a terminating action basis at LESSEE's cost.
Airworthiness Directives which do not have a terminating action will be accomplished at the
highest level of inspection or modification possible. If, after using commercially
reasonable efforts, LESSEE is unable to acquire the material, parts or components necessary
to accomplish such Airworthiness Directive, LESSEE will pay to LESSOR upon return of the
Aircraft the estimated cost of terminating such Airworthiness Directive. If the estimated
cost cannot be mutually agreed upon by LESSEE and LESSOR, LESSEE and LESSOR will each obtain
an estimate from a reputable FAA approved maintenance facility (unaffiliated with LESSEE or
LESSOR) and the estimated cost will be the average of the two estimates.
23.7.10 The Aircraft will be in compliance with Manufacturer's Corrosion Prevention and Control
Program (CPCP) specified for the model type by Manufacturer.
23.7.11 If any waivers, deviations, dispensations, alternate means of compliance, extensions or
carry overs with respect to maintenance or operating requirements, repairs or Airworthiness
Directives are granted by the Aviation Authority or permitted by the Maintenance Program,
LESSEE at its sole cost and expense will nonetheless perform such maintenance or operating
requirements, repairs or Airworthiness Directives as if such waivers, deviations,
dispensations, alternate means of compliance, or extensions or carry overs did not exist;
provided, however, that if any Airworthiness Directive has been deemed terminated by means of
an alternate means of compliance that is widely accepted by the international airline
industry, such alternative means of compliance will be deemed to satisfy the terms of this
Article 23.7.11.
23.7.12 The Aircraft will be free from any Security Interest except LESSOR's Liens and no
circumstance will have so arisen whereby the Aircraft is or could become subject to any
Security Interest or right of detention or sale in favor of the Aviation Authority, any
airport authority, or any other authority.
23.7.13 All no charge vendor and Manufacturer's service bulletin kits received by LESSEE for the
Aircraft but not installed thereon will be on board the Aircraft as cargo. At LESSOR's
request, any other service bulletin kit which LESSEE paid for will also be delivered to
LESSOR on board the Aircraft, but LESSOR will reimburse LESSEE for its actual out of pocket
costs for such kit, unless LESSEE purchased such kit as part of its implementation of a
service bulletin on its fleet of aircraft of the same type as the Aircraft but had not yet
installed such kit on the Aircraft, in which case such kit will be furnished free of charge
to LESSOR.
23.7.14 The Aircraft will be free of any leaks and any damage resulting therefrom. All repairs will
have been performed on a permanent basis in accordance with the applicable manufacturer's
instructions.
23.7.15 The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be serviced
to full and the waste tank serviced in accordance with Manufacturer's instructions. Fuel
tanks will be at least as full as at Delivery.
23.7.16 The Aircraft will be painted in LESSEE's livery.
23.8 Checks Prior to Return. Prior to return of the Aircraft to LESSOR, LESSEE at its expense
will do each of the following:
23.8.1 Have performed, by LESSEE or any other FAA approved repair station, the next due "C" check as
described in the MPD. LESSEE will also weigh the Aircraft. Any discrepancies revealed
during such inspection will be corrected in accordance with Manufacturer's maintenance and
repair manuals or FAA approved data. LESSEE agrees to perform during such check any other
work reasonably required by LESSOR (and not otherwise required under this Lease) and LESSOR
will reimburse LESSEE for such work at LESSEE's preferred customer rates.
23.8.2 Perform an internal and external corrosion inspection where any evidence of corrosion exists
and correct 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 if and as recommended by Manufacturer.
23.8.3 All required external placards, signs and markings will be properly attached, free from
damage, clean and legible.
23.8.4 Clean the exterior and interior of the Aircraft.
23.8.5 If reasonably required by LESSOR, repaint the flight deck and replace placards of the
Aircraft.
23.8.6 In accordance with Article 23.7.7, permanently repair damage to the Aircraft that exceeds
Manufacturer's limits and replace any non flush structural patch repairs installed on the
Aircraft with flush type repairs, unless Manufacturer does not recommend a flush type repair.
23.9 Engine Return Requirements.
23.9.1 Immediately prior to the return of the Aircraft to LESSOR, LESSEE at LESSEE's expense will
perform each of the following on the Engines:
(a) With LESSOR or its representatives present, LESSEE will perform a full and complete
hot and cold section videotape borescope on each Engine and its modules in accordance with
the Engine manufacturer's maintenance manual.
(b) If the Engine historical and technical records and/or condition trend monitoring data
of any Engine (including the APU) indicate an acceleration in the rate of deterioration in
the performance of an Engine, LESSEE will correct, to LESSOR's reasonable satisfaction, such
conditions which are determined to be causing such accelerated rate of deterioration.
(c) With LESSOR or its representatives present, LESSEE will accomplish a maximum power
assurance run and an acceleration check on the Engines. LESSEE will evaluate the Engine
performance and record the Engine maximum power assurance test conditions and results on the
Return Acceptance Receipt.
23.9.2 At return, each Engine will meet all of the following:
(a) Each Engine will have at least 4,000 hours and 3,000 cycles remaining until its next
anticipated removal regardless of the operating environment of such Engine. In determining
whether an Engine has at least 4,000 hours and 3,000 cycles remaining until its next
anticipated removal, the following will be considered:
(i) the Engine manufacturer's estimated mean time between removals for engines of
the same type as the Engines;
(ii) the remaining EGT margin on such Engine; and
(iii) the Engine historical and technical records, borescope inspection, trend
monitoring, the maximum power assurance run and the acceleration check;
(b) The Engine historical and technical records, borescope inspection, trend monitoring,
the maximum power assurance run and the acceleration check do not reveal any condition which
would cause the Engines or any module to be serviceable with an increased frequency of
inspection or with calendar time, flight hour or flight cycle restrictions under the Engine
manufacturer's maintenance manual;
(c) No life limited Part of an Engine will have more hours or cycles consumed than such
Engine's data plate; and
(d) Each Part of an Engine which has a hard time limit will have at least 3,000 cycles
remaining to operate until its next scheduled Overhaul. Each Part of an Engine which has a
life limit will have at least 3,000 cycles remaining to operate until its removal.
LESSEE will correct any discrepancies in the required condition of the Engines set forth in this
Article 23.9.2 in accordance with the guidelines set out by the Engine manufacturer. If there is a
dispute as to whether an Engine meets the requirements of this Article 23.9.2, LESSEE and LESSOR
will consult with Engine manufacturer and follow Engine manufacturer's recommendations (including
the accomplishment of an Engine test cell operational check) and the manner in which any
discrepancies from the requirements of this Article 23.9.2 will be rectified.
23.10 Hour/Cycle/Calendar Time Requirements. At return, the condition of the Aircraft will be as
follows:
23.10.1 The Aircraft will have zero (0) hours consumed since completion of the last "C" check in
accordance with the MPD (excluding hours consumed on the acceptance flight and any ferry
flight).
23.10.2 The APU will be in serviceable condition.
23.10.3 The Landing Gear will be cleared for at least eight (8) months (or one (1) month if LESSEE
exercises its extension option) of operation until the next Overhaul or scheduled removal;
provided, however, that at LESSOR's request by notice at least six (6) months prior to the
Expiration Date, LESSEE will cause to be performed an Overhaul the Landing Gear prior to
return of the Aircraft and the costs of such Overhaul will be paid as follows: (i) first, by
application of the Landing Gear Reserves paid by LESSEE and (ii) second, the balance will be
paid by LESSOR.
23.10.4 Each Part of the Aircraft which has a hard time (hour/cycle) limit to Overhaul of less than
four thousand (4,000) hours or three thousand (3,000) cycles will be freshly overhauled or
replaced and each Part of the Aircraft which has a hard time (hour/cycle) limit to Overhaul
of more than four thousand (4,000) hours or three thousand (3,000) cycles will have four
thousand (4,000) hours and three thousand (3,000) cycles (whichever is applicable) remaining
to operate until its next scheduled Overhaul or removal.
23.10.5 Each life limited Part of the Aircraft will have four thousand (4,000) hours and three
thousand (3,000) cycles (whichever is applicable) remaining to operate until its next
scheduled removal.
23.10.6 Each Part (excluding Landing Gear) which has a calendar limit (including emergency equipment)
will have remaining to operate the lesser of the following calendar times: (i) one (1) year
from the return of the Aircraft to LESSOR or (ii) one hundred percent (100%) of such Part's
total approved life.
23.10.7 With respect to all installed Parts as a group, such Parts will have an average total time
since new no greater than that of the Airframe.
23.10.8 The Aircraft Landing Gear tires and brakes will have at least fifty percent (50%) life
remaining until their next Overhaul (except for the acceptance flight).
23.11 Like for Like. Notwithstanding anything in this Article 23 to the contrary, in the event
that at Delivery the Aircraft did not meet a particular standard with respect to a specific item set forth in
Exhibit B, and such deficiency was noted on the Estoppel and Acceptance Certificate, then LESSEE's return
obligations with respect to such specific item will be modified accordingly so that LESSEE is not required to
return such specific item with greater time remaining than existed at Delivery.
23.12 Export and Deregistration of Aircraft. At LESSOR's request by notice at least fifteen (15)
days prior to the Expiration Date, LESSEE at its cost (except as set forth in the second sentence of this
Article 23.12) will (a) provide an Export Certificate of Airworthiness or its equivalent from the State of
Registration for the country designated by LESSOR, (b) assist with deregistration of the Aircraft from the
register of aircraft in the State of Registration, (c) assist with arranging for prompt confirmation of such
deregistration to be sent by the registry in the State of Registration to the next country of registration
and (d) perform any other acts reasonably required by LESSOR in connection with such deregistration. If any
Aircraft work which LESSEE is not otherwise required to perform hereunder, including engineering, is required
in order to obtain such Export Certificate of Airworthiness, LESSEE will, to the extent reasonably possible,
perform such work and LESSOR will reimburse LESSEE for such work at LESSEE's preferred customer rates.
23.13 LESSEE's Continuing Obligations. In the event that LESSEE does not return the Aircraft to
LESSOR on the Expiration Date and in the condition required by this Article 23 for any reason (whether or not
the reason is within LESSEE's control):
23.13.1 the obligations of LESSEE under this Lease will continue in full force and effect on a
day to day basis until such return. This will not be considered a waiver of LESSEE's Event of
Default or any right of LESSOR hereunder.
23.13.2 Until such return, the Agreed Value will be an amount equal to the Agreed Value on the day
the Aircraft should have been returned to LESSOR pursuant to this Lease.
23.13.3 LESSEE will fully indemnify LESSOR on demand for all losses (including damages in accordance
with Article 25.5(b)), liabilities, actions, proceedings, costs and expenses thereby suffered
or incurred by LESSOR and, in addition, until such time as the Aircraft is redelivered to
LESSOR and put into the condition required by this Article 23, instead of paying the Rent
specified in Article 5.3, LESSEE will pay twice the amount of Rent for each day from the
scheduled Expiration Date until the Termination Date (the monthly Rent payable under
ARTICLE 5.3.1 will be prorated based on the actual number of days in the applicable month).
Payment will be made upon presentation of LESSOR's invoice. Notwithstanding the foregoing,
in the event that the Aircraft is removed from service by LESSEE and placed in a maintenance
facility for the performance of work required to put the Aircraft into the condition required
by this Article 23 and as a result of delays in the performance of such work the Aircraft is
not returned on the Expiration Date, for a period of up to seven (7) days following the
Expiration Date, LESSEE shall only be responsible for normal Rent. After the 7th day of such
period, if LESSEE has not returned the Aircraft to LESSOR in the condition required by this
Lease, LESSEE shall be responsible for twice the Rent for the period after such 7 day period
in accordance with the provisions of this Article 23.13.3 until the actual Termination Date.
23.13.4 LESSOR may elect, in its sole and absolute discretion, to accept the return of the Aircraft
prior to the Aircraft being put in the condition required by this Article 23 and thereafter
have any such non conformance corrected at such time as LESSOR may deem appropriate (but
within ninety (90) days following the return of the Aircraft) and at commercial rates
then charged by the Person selected by LESSOR to perform such correction. Any direct expenses
incurred by LESSOR for such correction will become additional Rent payable by LESSEE within
fifteen (15) days following the submission of a written statement by LESSOR to LESSEE,
identifying the items corrected and setting forth the expense of such corrections in
reasonable detail. LESSEE's obligation to pay such supplemental Rent will survive the
Termination Date.
23.14 Airport and Navigation Charges. LESSEE will ensure that at return of the Aircraft any and
all airport, navigation and other charges which give rise or would if unpaid give rise to any lien, right of
detention, right of sale or other Security Interest in relation to the Aircraft, Engine or any Part have been
paid and discharged in full and will at LESSOR's request produce evidence thereof satisfactory to LESSOR.
23.15 Return Acceptance Certificate. Upon return of the Aircraft in accordance with the terms of
this Lease, LESSEE will promptly prepare and execute two (2) Return Acceptance Certificates in the form and
substance of Exhibit J and LESSOR will countersign and return one such Return Acceptance Certificate to
LESSEE. In addition, LESSEE and LESSOR will execute a Lease Termination for filing with the FAA evidencing
termination of this Lease.
23.16 Indemnities and Insurance. The indemnities and insurance requirements set forth in
Articles 17 and 18, respectively, will apply to Indemnitees and LESSOR's representatives during return of the
Aircraft, including the ground inspection and acceptance flight. With respect to the acceptance flight,
LESSOR's representatives will receive the same protections as LESSOR on LESSEE's Aviation and Airline General
Third Party Liability Insurance.
23.17 Civil Reserve Air Fleet.
23.17.1 LESSEE may transfer possession of the Aircraft to the United States of America or any
instrumentality or agency thereof as part of the Civil Reserve Air Fleet Program authorized
under 10 U.S.C.ss.9511 et seq. (or any substantially similar program) ("CRAF Program") for a
period which includes (collectively, the "CRAF Program Requisition Period") (a) the entire
period of requisition under the CRAF Program and (b) an additional six (6) months after the
expiration of the requisition under the CRAF Program. If the CRAF Program Requisition Period
extends beyond the Expiration Date provided by this Lease, then the Lease will be deemed to
continue until the end of the CRAF Program Requisition Period at a monthly rental rate equal
to the monthly rental rate in effect at the end of the Lease Term and the Expiration Date
will be deemed to be the end of the CRAF Program Requisition Period. If the Aircraft is
requisitioned under the CRAF Program for a period which extends beyond the Lease Term, then
LESSEE will provide LESSOR with written notice of the proposed redelivery at least six (6)
months prior to such redelivery date and LESSEE must return the Aircraft in the condition
required by Article 23 on the redelivery date set forth in such written notice.
23.17.2 LESSEE will promptly notify LESSOR in writing in the event of the requisition for use of the
Aircraft under CRAF activation by the U.S. Government. All of LESSEE's obligations under
this Lease will continue to the same extent as if such requisition had not occurred.
23.17.3 Any provisions of this Lease to the contrary notwithstanding, if there is a requisition for
use of the Aircraft pursuant to the CRAF Program and/or CRAF activation, LESSOR agrees that
LESSEE's insurances described in Exhibit C may be supplemented or replaced by insurances
provided under Title XIII of the Act, and/or U.S. Government indemnification (which Title
XIII insurances and indemnification will be, as to the Aircraft, in an amount not less than
the Agreed Value and, as to all other insurances, in amounts not less than those established
in Exhibit C); provided, however, that LESSEE will remain responsible for full compliance
with all the provisions of this Lease, including Articles 17 and 19, to the extent Title XIII
and/or the U.S. Government indemnification do not satisfy LESSEE's obligations under this
Lease.
23.17.4 If there is a requisition for use of the Aircraft pursuant to the CRAF Program and/or CRAF
activation, there will be no limitation on the geographic area in which the Aircraft may be
operated so long as, taken as a whole, LESSEE's insurance, the Title XIII insurance and/or
the indemnification provided by the U.S. Government fully cover (without any geographic
exclusions) LESSEE's Exhibit C insurance requirements.
23.17.5 If an Event of Default occurs under this Lease and LESSOR elects to pursue its remedies under
Article 25.3(e) to terminate this Lease and repossess the Aircraft, LESSOR will so notify the
U.S. Government by sending a written communication with a copy to LESSEE as follows:
Headquarters Air Mobility Command
AMC Xxxxxxxxxxx Xxxxxx XXXX
Xxxxx Xxx Xxxxx Xxxx, Xxxxxxxx 00000 5007
23.17.6 So long as no Event of Default has occurred and is continuing, all payments received by
LESSOR or LESSEE from such Government Entity in connection with the requisition of the
Aircraft under the CRAF Program (except payments on account of a Total Loss of the Aircraft)
will be paid over to or retained by LESSEE. If an Event of Default has occurred and is
continuing, all payments received by LESSEE or LESSOR from such Government Entity in
connection with the requisition of the Aircraft under the CRAF Program may be used by LESSOR
to satisfy any obligations owing by LESSEE.
ARTICLE 24 ASSIGNMENT
24.1 No Assignment by LESSEE. EXCEPT AS EXPRESSLY PERMITTED BY ARTICLE 11 OR ARTICLE 20.2.3, NO
ASSIGNMENT, NOVATION, TRANSFER, MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE OF ANY OF ITS RIGHTS WITH
RESPECT TO THE AIRCRAFT, ENGINE OR PART OR THIS LEASE.
24.2 Sale or Assignment by LESSOR.
24.2.1 Subject to LESSEE's rights pursuant to this Lease, LESSOR may at any time and without
LESSEE's consent sell, assign or transfer its rights, interest and obligations hereunder,
under any other Operative Document, or with respect to the Aircraft to a Permitted
Transferee; provided, however, that no such transfer shall materially increase LESSEE's
liabilities or obligations hereunder or materially adversely affect LESSEE's rights under
this Lease. For a period of two (2) years after such sale or assignment and at LESSEE's
cost, LESSEE will continue to name LESSOR as an additional insured under the Aviation and
Airline General Third Party Liability Insurance specified in Exhibit C.
24.2.2 The term "LESSOR" as used in this Lease means the lessor of the Aircraft at the time in
question. In the event of the sale of the Aircraft and transfer of LESSOR's rights and
obligations under this Lease to a Permitted Transferee, such Permitted Transferee will become
"LESSOR" of the Aircraft under this Lease and the transferring party (the prior "LESSOR")
will be relieved of all liability to LESSEE under this Lease for obligations arising on and
after the date the Aircraft is sold. LESSEE will acknowledge and accept the Permitted
Transferee as the new "LESSOR" under this Lease and will look solely to the Permitted
Transferee for the performance of all LESSOR obligations and covenants under this Lease
arising on and after the Aircraft sale date.
24.3 LESSOR's Lender. Subject to LESSEE's rights pursuant to this Lease, LESSOR may at any time
and without LESSEE's consent grant security interests over the Aircraft and assign the benefit of this Lease
to a lender ("LESSOR's Lender") as security for LESSOR's obligations to LESSOR's Lender.
24.4 LESSEE Cooperation. On request by LESSOR, LESSEE will execute all such documents (such as
a consent to a lease assignment agreement) as LESSOR may reasonably require to confirm LESSEE's obligations
under this Lease and obtain LESSEE's acknowledgment that LESSOR is not in breach of the Lease. LESSEE will
provide all other reasonable assistance and cooperation to LESSOR in connection with any such sale or
assignment or the perfection and maintenance of any such security interest, including, at LESSOR's cost,
making all necessary filings and registrations in the State of Registration and providing all opinions of
counsel with respect to matters reasonably requested by LESSOR. LESSOR will reimburse LESSEE for its
reasonable out of pocket costs and expenses (including reasonable legal fees) in reviewing documents required
by LESSOR and cooperating with a transfer pursuant to this Article 24.
24.5 Protections.
24.5.1 LESSOR will obtain for the benefit of LESSEE a written acknowledgment from any Permitted
Transferee or LESSOR's Lender that, so long as no Event of Default has occurred and is
continuing hereunder, neither such Person nor any Person claiming by, through or under such
Person will not interfere with LESSEE's quiet, peaceful use and enjoyment of the Aircraft.
24.5.2 Wherever the term "LESSOR" is used in this Lease in relation to any of the provisions
relating to disclaimer, title and registration, indemnity and insurance contained in
ARTICLES 8, 14, 17 and 18, respectively, or with respect to Article 20.2.6, the term "LESSOR"
will be deemed to include any Permitted Transferee and its lenders, if applicable. For
avoidance of doubt, in the event of LESSOR's sale or financing of the Aircraft, the
disclaimer and indemnity provisions contained in Articles 8 and 17 will continue to be
applicable after the sale or assignment to International Lease Finance Corporation, as well
as being applicable to any Permitted Transferee and its lenders.
ARTICLE 25
82
DEFAULT OF LESSEE
ARTICLE 25 DEFAULT OF LESSEE
25.1 LESSEE Notice to LESSOR. LESSEE will promptly notify LESSOR if LESSEE becomes aware of the
occurrence of any Default.
25.2 Events of Default. The occurrence of any of the following will constitute an Event of
Default and material breach of this Lease by LESSEE:
*
25.3 LESSOR's General Rights. Upon the occurrence and continuance of any Event of Default,
LESSOR may do all or any of the following at its option (in addition to such other rights and remedies which
LESSOR may have by statute or otherwise but subject to any requirements of applicable Law):
(a) terminate this Lease by giving written notice to LESSEE;
(b) require that LESSEE immediately move the Aircraft to an airport or other location
designated by LESSOR;
(c) for LESSEE's account, do anything that may reasonably be required to cure any default
and recover from LESSEE all reasonable costs, including legal fees and expenses incurred in
doing so and Default Interest;
(d) proceed as appropriate to enforce performance of this Lease and to recover any damages
for the breach hereof, including the amounts specified in Article 25.5;
(e) terminate this Lease by taking possession of the Aircraft or by serving notice
requiring LESSEE to return the Aircraft to LESSOR at the location specified by LESSOR. If
LESSOR takes possession of the Aircraft, it may enter upon LESSEE's premises where the
Aircraft is located without liability except for the willful misconduct of LESSOR. Upon
repossession of the Aircraft, LESSOR will then be entitled to sell, lease or otherwise deal
with the Aircraft as if this Lease had never been made. LESSOR will be entitled to the full
benefit of its bargain with LESSEE; or
(f) apply all or any portion of the Security Deposit and any other security deposits held
by LESSOR pursuant to any other agreements between LESSOR and LESSEE to any amounts due.
25.4 Deregistration and Export of Aircraft. If an Event of Default has occurred and is
continuing, LESSOR may take all steps necessary to deregister the Aircraft in and export the Aircraft from
the State of Registration.
25.5 LESSEE Liability for Damages. Upon the occurrence and during the continuance of an Event
of Default, in addition to all other remedies available at law or in equity, LESSOR has the right to recover
from LESSEE and LESSEE will pay LESSOR within two (2) Business Days after LESSOR's written demand, all of the
following:
(a) all amounts which are then due and unpaid hereunder and which become due prior to the
earlier of LESSOR's recovery of possession of the Aircraft or LESSEE making an effective
tender thereof;
(b) subject to LESSOR's obligations at Law to mitigate its damages, any losses suffered
by LESSOR because of LESSOR's inability to place the Aircraft on lease with another lessee or
to otherwise utilize the Aircraft on financial terms as favorable to LESSOR as the terms
hereof or, if LESSOR elects to dispose of the Aircraft, the funds arising from a sale or
other disposition of the Aircraft are not as profitable to LESSOR as leasing the Aircraft in
accordance with the terms hereof would have been (and LESSOR will be entitled to accelerate
any and all Rent which would have been due from the date of LESSOR's recovery or repossession
of the Aircraft through the Expiration Date);
(c) all costs associated with LESSOR's exercise of its remedies hereunder, including but
not limited to repossession costs, legal fees, Aircraft storage costs and Aircraft re lease
or sale costs;
(d) any amount of principal, interest, fees or other sums paid or payable on account of
funds borrowed in order to carry any unpaid amount;
(e) any loss, premium, penalty or expense which may be incurred in repaying funds raised
to finance the Aircraft or in unwinding any financial instrument relating in whole or in part
to LESSOR's financing of the Aircraft;
(f) direct expenses incurred by LESSOR to correct non conformance of the Aircraft with
return conditions in accordance with Article 23.13.3; and
(g) an amount sufficient to fully compensate LESSOR for any loss of or damage to the
Aircraft caused by LESSEE's default.
25.6 Waiver of Default. By written notice to LESSEE, LESSOR may at its election waive any
Default or Event of Default and its consequences and rescind and annul any prior notice of termination of
this Lease. The respective rights of the parties will then be as they would have been had no Default or
Event of Default occurred and no such notice been given.
25.7 Present Value of Payments. In calculating LESSOR's damages hereunder, upon an Event of
Default all Rent and other amounts which would have been due hereunder during the Lease Term if an Event of
Default had not occurred will be calculated on a present value basis using a discounting rate of six percent
(6%) per annum discounted to the earlier of the date on which LESSOR obtains possession of the Aircraft or
LESSEE makes an effective tender thereof.
25.8 Use of "Termination Date". For avoidance of doubt, it is agreed that if this Lease
terminates and the Aircraft is repossessed by LESSOR due to an Event of Default, then, notwithstanding the
use of the term "Termination Date" in this Lease, the period of the Lease Term and the "Expiration Date" will
be utilized in calculating the damages to which LESSOR is entitled pursuant to Article 25.5. For example, it
is agreed and understood that LESSOR is entitled to receive from LESSEE the Rent and the benefit of LESSEE's
insurance and maintenance of the Aircraft until expiration of the Lease Term.
25.9 LESSEE's Remedies. Except as otherwise set forth in the Operative Documents, upon a breach
by LESSOR of any of the terms and conditions of this Lease, LESSEE shall have all rights available at law or
in equity.
25.10 Waiver of Consequential Damages. LESSEE and LESSOR each agree that it shall not be
entitled to recover, and hereby disclaims and waives any right that it may otherwise have to recover, any
special, indirect or consequential damages as a result of any breach or alleged breach by the other party of
any of the agreements, representations or warranties contained in this Lease or the other Operative
Documents; provided, however, that nothing herein shall be deemed to disclaim or waive any of LESSOR's
remedies expressly set forth in Article 25.5(a) through 25.5 (g).
ARTICLE 26 NOTICES
26.1 Manner of Sending Notices. Any notice, request or information required or permissible
under this Lease will be in writing and in English. Notices will be delivered in person or sent by fax,
letter (mailed airmail, certified and return receipt requested), or by expedited delivery addressed to the
parties as set forth in Article 26.2. In the case of a fax, notice will be deemed received upon actual
receipt (and the date of actual receipt will be deemed to be the date set forth on the confirmation of
receipt produced by the sender's fax machine immediately after the fax is sent). In the case of a mailed
letter, notice will be deemed received on the tenth (10th) day after mailing. 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.
26.2 Notice Information. Notices will be sent:
If to LESSOR: INTERNATIONAL LEASE FINANCE CORPORATION
1999 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000, X.X.X.
Attention: Legal Department
Fax: 000 000 0000
Telephone: 000 000 0000
If to LESSEE: FRONTIER AIRLINES, INC.
00000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
Fax: 000 000 0000
Telephone: 000 000 0000
or to such other places and numbers as either party directs in writing to the other party.
ARTICLE 27 GOVERNING LAW AND JURISDICTION
27.1 California Law. This Lease is being delivered in the State of California and will in all
respects be governed by and construed in accordance with the Laws of the State of California (notwithstanding
the conflict Laws of the State of California).
27.2 Non Exclusive Jurisdiction in California. As permitted by Section 410.40 of the California
Code of Civil Procedure, the parties hereby irrevocably submit to the non exclusive jurisdiction of the
Federal District Court for the Central District of California and the State of California Superior or
Municipal Court in Los Angeles, California. Nothing herein will prevent either party from bringing suit in
any other appropriate jurisdiction.
27.3 Service of Process. The parties hereby consent to the service of process (a) out of any of
the courts referred to above, (b) in accordance with Section 415.40 of the California Code of Civil Procedure
by mailing copies of the summons and complaint to the person to be served by air mail, certified or
registered mail to the address set forth in Article 26.2, postage prepaid, return receipt requested or (c) in
accordance with the Hague Convention, if applicable.
27.4 Prevailing Party in Dispute. If any legal action or other proceeding is brought in
connection with or arises out of any provisions in this Lease, the prevailing party will be entitled to
recover reasonable attorneys' fees and other actual and reasonable costs incurred in such action or
proceedings. The prevailing party will also, to the extent permissible by Law, be entitled to receive pre
and post judgment Default Interest.
27.5 Waiver. LESSEE AND LESSOR HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY. LESSEE AND LESSOR
HEREBY IRREVOCABLY WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS LEASE BROUGHT IN ANY OF THE COURTS REFERRED TO
IN ARTICLE 27.2, AND HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
ARTICLE 28 MISCELLANEOUS
28.1 Transportation of Personnel. LESSEE will provide transportation to LESSOR's personnel on a
positive space basis on the Aircraft or any other aircraft operated by LESSEE for the purposes of conducting
business between LESSEE and LESSOR.
28.2 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 Lease or the Aircraft.
28.3 Power of Attorney. LESSEE hereby irrevocably appoints LESSOR as its attorney for the
purpose of putting into effect the intent of this Lease following and during the continuation of 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 Exhibit G.
LESSEE will take all steps required under the Laws of the State of Registration to provide such power of
attorney to LESSOR.
28.4 LESSOR Performance for LESSEE. The exercise by LESSOR of its remedy of performing a LESSEE
obligation hereunder is not a waiver of and will not relieve LESSEE from the performance of such obligation
at any subsequent time or from the performance of any of its other obligations hereunder.
28.5 LESSOR's Payment Obligations. Any obligation of LESSOR under this Lease to pay or release
any amount to LESSEE is conditioned upon and will be delayed until (a) all amounts then due and payable by
LESSEE to LESSOR under this Lease or under any other agreement between LESSOR and LESSEE having been paid in
full and (b) no payment or other material Default having occurred and continuing hereunder at the time such
payment or release of payment is payable to LESSEE.
28.6 Application of Payments. Any amounts paid or recovered in respect of LESSEE liabilities
hereunder may be applied to Rent, Default Interest, fees or any other amount due hereunder in such
proportions, order and manner as LESSOR determines.
28.7 Usury Laws. The parties intend to contract in strict compliance with the usury Laws of the
State of California and, to the extent applicable, the U.S. Notwithstanding anything to the contrary in the
Operative 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 Operative 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 that
would have been payable in accordance with the interest rate set forth in Article 5.6.
28.8 Delegation by LESSOR. LESSOR may delegate to any Person(s) all or any of the rights,
powers or discretion vested in it by this Lease and any such delegation may be made upon such terms and
conditions as LESSOR in its absolute discretion thinks fit, provided that no such delegation shall relieve
LESSOR of any of its obligations hereunder.
28.9 Confidentiality. The Operative Documents and all non public information obtained by either
party about the other are confidential and are between LESSOR and LESSEE only and will not be disclosed by a
party to third parties (other than (i) to such party's auditors or professional advisors, (ii) to potential
equity investors or lenders or (iii) as required in connection with any filings of this Lease in accordance
with Article 14 or as otherwise required by Law) without the prior written consent of the other party. If
disclosure is required as a result of applicable Law, LESSEE and LESSOR will cooperate with one another to
obtain confidential treatment as to the commercial terms and other material provisions of this Lease.
28.10 Rights of Parties. The rights of the parties hereunder are cumulative, not exclusive, may
be exercised as often as each party considers appropriate and are in addition to its rights under general
Law. The rights of one party against the other party are not capable of being waived or amended except by an
express waiver or amendment in writing. Any failure to exercise or any delay in exercising any of such
rights will not operate as a waiver or amendment of that or any other such right any defective or partial
exercise of any such rights will not preclude any other or further exercise of that or any other such right
and no act or course of conduct or negotiation on a party's part or on its behalf will in any way preclude
such party from exercising any such right or constitute a suspension or any amendment of any such right.
28.11 Further Assurances. Each party agrees from time to time to do and perform such other and
further acts and execute and deliver any and all such other instruments as may be required by Law or
reasonably requested by the other party to establish, maintain or protect the rights and remedies of the
requesting party or to carry out and effect the intent and purpose of this Lease.
28.12 Use of Word "including". The term "including" is used herein without limitation.
28.13 Headings. All article and paragraph headings and captions are purely for convenience and
will not affect the interpretation of this Lease. Any reference to a specific article, paragraph or section
will be interpreted as a reference to such article, paragraph or section of this Lease.
28.14 Invalidity of any Provision. If any of the provisions of this Lease become invalid,
illegal or unenforceable in any respect under any Law, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired.
28.15 Time is of the Essence. Time is of the essence in the performance of all obligations of
the parties under this Lease and, consequently, all time limitations set forth in the provisions of this
Lease will be strictly observed.
28.16 Amendments in Writing. The provisions of this Lease may only be amended or modified by a
writing executed by LESSOR and LESSEE.
28.17 Counterparts. This Lease 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.
28.18 Delivery of Documents by Fax. Delivery of an executed counterpart of this Lease or of any
other documents in connection with this Lease by fax will be deemed as effective as delivery of an originally
executed counterpart. Any party delivering an executed counterpart of this Lease or other document by fax
will also deliver an originally executed counterpart, but the failure of any party to deliver an originally
executed counterpart of this Lease or such other document will not affect the validity or effectiveness of
this Lease or such other document.
28.19 Entire Agreement. The Operative Documents constitute the entire agreement between the
parties in relation to the leasing of the Aircraft by LESSOR to LESSEE and supersede all previous proposals,
agreements and other written and oral communications in relation hereto. The parties acknowledge that there
have been no representations, warranties, promises, guarantees or agreements, express or implied, except as
set forth herein.
28.20 Expenses. Each party shall be responsible for its own expenses in connection with the
drafting, negotiation, execution and delivery of this Lease and the other Operative Documents.
IN WITNESS WHEREOF, LESSEE and LESSOR have caused this Lease to be executed by their
respective officers as of August 14, 2000.
INTERNATIONAL LEASE FINANCE CORPORATION FRONTIER AIRLINES, INC.
By: By:
Its: Its:
EXHIBIT B AIRCRAFT DESCRIPTION
Aircraft Manufacturer and Model: B737 300
Seating Configuration: 148Y
Manufacturer's Serial Number: 26301
Registration Xxxx: N _____
Engine Manufacturer and Model: XXX00 0X0
Engine Serial Numbers: 726115 and 727103
Engine Thrust Rating: 22,000 pounds
Maximum Gross Takeoff Weight: 139,500 pounds
EXHIBIT C CONDITION AT DELIVERY
1. Technical Report
Prior to the Delivery Date, LESSOR will provide LESSEE with a Technical Evaluation Report in the
form and substance of Exhibit M, as revised, and, in addition upon LESSEE's request, will make
copies available of (a) drawings of the interior configuration of the Aircraft as it will exist at
Delivery, (b) an Airworthiness Directive status list, (c) a service bulletin incorporation list,
(d) rotable tracked, hard time and life limited component listings, (e) a list of Prior
Lessee initiated modifications and alterations, (f) information regarding Prior Lessee's maintenance
program for the Aircraft, (g) the complete workscope for the checks, inspections and other work to
be performed prior to Delivery, (h) a list of all no charge service bulletin kits with respect to
the Aircraft which were ordered by LESSOR from Manufacturer or Engine manufacturer, (i) current
Engine disk sheets and a description of the last shop visit for each Engine and (j) any other data
which is reasonably requested by LESSEE.
2. Full Aircraft Documentation Review
Prior to the Scheduled Delivery Date and continuing until the date on which the Aircraft is
delivered to LESSEE in the condition required by this Exhibit B, LESSOR will provide for the review
of LESSEE and/or its representative all of the Aircraft records and historical documents described
in Exhibit L in one central room at the Aircraft delivery location.
3. Aircraft Inspection
(a) During the maintenance checks performed prior to Delivery, LESSEE and/or its representatives will
have an opportunity to conduct a full systems functional and operational inspection of the Aircraft
(and other types of reasonable inspections based upon the Aircraft type, age, use and other known
factors with respect to the Aircraft) and a full inspection of the Aircraft Documentation (including
records and manuals), all to LESSEE's satisfaction. Any deficiencies from the delivery condition
requirements set forth in this Exhibit B will be corrected by LESSOR at its cost prior to Delivery.
(b) Immediately prior to the Delivery of the Aircraft, LESSOR will carry out for LESSEE and/or LESSEE's
representatives one takeoff and one landing phase. If LESSEE identifies any discrepancies
immediately following such takeoff and landing phase and requests LESSOR to correct such
discrepancies at LESSOR's cost, such discrepancies will be corrected.
4. Certificate of Airworthiness Matters
The Aircraft will possess a current Certificate of Airworthiness issued by the FAA.
5. General Condition of the Aircraft at Delivery
(a) The Aircraft, Engines and Parts will have been maintained and repaired in accordance with Prior
Lessee's maintenance program and the rules and regulations of the FAA.
(b) Aircraft Documentation (including records and manuals) will have been maintained in accordance with
the rules and regulations of the FAA.
(c) All pilot discrepancies and deferred maintenance items will be cleared on a terminating action basis.
(d) The Aircraft will be airworthy (conform to type design and be in a condition for safe operation
under FAR Part 121), with all Aircraft equipment, components and systems operating in accordance
with their intended use and within limits approved by Manufacturer and the FAA.
(e) The interior of the Aircraft (including cabin and windows) will be in a reasonable condition and
cosmetically acceptable, with no cracks, tears or rips.
(f) No special or unique Manufacturer, Engine manufacturer or FAA inspection or check requirements which
are specific to the Aircraft or Engines (as opposed to all aircraft or engines of their types) will
exist with respect to the Airframe, Engines and Aircraft equipment, components and systems.
(g) All repairs, modifications and alterations to the Aircraft will have been accomplished in accordance
with the FARs or Manufacturer's Structural Repair Manual (or FAA approved data supported by FAA
Form 8110 3) for the Aircraft, as applicable.
(h) All Airworthiness Directives which are issued prior to the Delivery Date and require compliance
(either by means of repetitive inspections, modifications or terminating action) prior to Delivery
of the Aircraft to LESSEE or within one (1) year after the Delivery Date will have been complied
with on the Aircraft on a terminating action basis at LESSOR's cost. Airworthiness Directives which
do not have a terminating action will be accomplished at the highest level of inspection or
modification possible.
(i) The Aircraft will be in compliance with Manufacturer's Corrosion Prevention and Control Program
(CPCP) specified for the model type by Manufacturer.
(j) If any waivers, deviations, dispensations, alternate means of compliance, extensions or carry overs
with respect to maintenance or operating requirements, repairs or Airworthiness Directives were
granted by the FAA or permitted by Prior Lessee's maintenance program, such maintenance or operating
requirements, repairs or Airworthiness Directives will have been performed as if such waivers,
deviations, dispensations, alternate means of compliance, or extensions or carry overs did not exist.
(k) The Aircraft will be free of fuel, oil and hydraulic leaks. Any temporary fuel leak repairs will
have been replaced by permanent repairs.
(l) The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and water) will be serviced to full
and the waste tank serviced in accordance with Manufacturer's instructions.
(m) The Aircraft will be fully fueled.
(n) The Aircraft will be painted in the livery of Prior Lessee.
6. Checks Prior to Delivery
Prior to Delivery of the Aircraft to LESSEE, the following will have been performed:
(a) A full and complete zonal, systems and structural check ("C" or its equivalent) and the
corresponding lower checks ("A" and "B" or equivalent) at an FAA approved repair station in
accordance with the MPD sufficient to clear the Aircraft until the next full and complete zonal,
systems and structural check. Any discrepancies revealed during such inspection will be corrected
in accordance with Manufacturer's maintenance and repair manuals or FAA approved data.
(b) All required external placards, signs and markings will be properly attached, free from damage,
clean and legible.
(c) Cleaning the exterior and interior of the Aircraft.
(d) If reasonably required by LESSEE, repainting the interior of the Aircraft, including flight deck,
and replace placards.
(e) In accordance with Manufacturer's Structural Repair Manual, permanently repairing damage to the
Aircraft that exceeds Manufacturer's limits. Any non flush structural patch repairs installed on
the Airframe will be replaced with flush type repairs if such flush type repairs are available
unless it is unreasonable to install a flush type repair.
7. Condition of the Engines At Delivery
(a) Prior to Delivery of the Aircraft to LESSEE, the following checks of the Engines will have been
performed:
(i) With LESSEE or its representatives present, performance of a full and complete hot and
cold section videotape borescope on each Engine and its modules in accordance with the Engine
manufacturer's maintenance manual.
(ii) If the Engine historical and technical records and/or condition trend monitoring data
of any Engine (including the APU) indicate an acceleration in the rate of deterioration in
the performance of an Engine, LESSOR will correct, to LESSEE's satisfaction, such conditions
which are determined to be causing such accelerated rate of deterioration.
(iii) With LESSEE or its representatives present, LESSOR will accomplish a maximum power
assurance run and an acceleration check on the Engines. LESSEE will evaluate the Engine
performance and record the Engine maximum power assurance test conditions and results on the
Estoppel and Acceptance Receipt.
(b) Each Engine will meet all of the following:
(i) Each Engine will have at least 4,000 hours and 3,000 cycles remaining until its next
anticipated removal regardless of the operating environment of such Engine. In determining
whether an Engine has at least 4,000 hours and 3,000 cycles remaining until its next
anticipated removal, the following will be considered:
(1) the Engine manufacturer's estimated mean time between removals for engines of
the same type as the Engines;
(2) the remaining EGT margin on such Engine; and
(3) the Engine historical and technical records, borescope inspection, trend
monitoring, the maximum power assurance run and the acceleration check;
(ii) the Engine historical and technical records, borescope inspection, trend monitoring,
the maximum power assurance run and the acceleration check do not reveal any condition which
would cause the Engines or any module to be serviceable with an increased frequency of
inspection or with calendar time, flight hour or flight cycle restrictions under the Engine
manufacturer's maintenance manual;
(iii) No life limited Part of an Engine will have more hours or cycles consumed than such
Engine's data plate; and
(iv) Each Part of an Engine which has a hard time limit will have at least 3,000 cycles
remaining to operate until its next scheduled Overhaul. Each Part of an Engine which has a
life limit will have at least 3,000 cycles remaining to operate until its removal.
LESSOR will correct any discrepancies in the required condition of the Engines set forth in this
Exhibit B in accordance with the guidelines set out by the Engine manufacturer. If there is a
dispute as to whether an Engine meets the requirements of this Exhibit B, LESSEE and LESSOR will
consult with Engine manufacturer and follow Engine manufacturer's recommendations (including the
accomplishment of an Engine test cell operational check) and the manner in which any discrepancies
from the requirements of this Exhibit B will be rectified.
8. Hour/Cycle/Calendar Times At Delivery
The condition of the Aircraft and installed systems upon Delivery to LESSEE will be as follows:
(a) The Aircraft will have no more that fifteen (15) months consumed since the last 24,000 Hour
Structural Check.
(b) The Aircraft will have not more than nine hundred forty (940) hours consumed since the last "C"
check or its equivalent in accordance with the MPD.
(c) The APU will be in serviceable condition.
(d) The Landing Gear will be cleared for four thousand five hundred (4,500) cycles/hours (depending on
Prior Lessee's maintenance program) of operation until the next Overhaul or scheduled removal.
(e) Each Part of the Aircraft which has a hard time (hour/cycle) limit to Overhaul of less than four
thousand (4,000) hours or three thousand (3,000) cycles will be freshly overhauled or replaced and
each Part of the Aircraft which has a hard time (hour/cycle) limit to Overhaul of more than four
thousand (4,000) hours or three thousand (3,000) cycles will have four thousand (4,000) hours and
three thousand (3,000) cycles (whichever is applicable) remaining to operate until its next
scheduled Overhaul or removal.
(f) Each life limited Part of the Aircraft will have four thousand (4,000) hours and three thousand
(3,000) cycles (whichever is applicable) remaining to operate until its next scheduled removal.
(g) Each Part which has a calendar limit (including emergency equipment and excluding Landing Gear which
is addressed in paragraph 8(d) above) will have remaining to operate the lesser of the following
calendar times: (i) one (1) year from the Delivery Date of the Aircraft to LESSEE or (ii) one
hundred percent (100%) of such Part's total approved life.
(h) With respect to all installed Parts as a group, such Parts will have an average total time since new
no greater than that of the Airframe.
(i) The Aircraft Landing Gear tires and brakes will have at least fifty percent (50%) life remaining
until their next Overhaul (except for the acceptance flight).
EXHIBIT D CERTIFICATE OF INSURANCE
[Refer to Aircraft Lease Agreement dated as of August 14, 2000 between LESSEE and LESSOR (the "Lease"). If
applicable, insurance certificates from both the insurers and reinsurers will be provided. If there is a
LESSOR's Lender, include references to it where appropriate after references to LESSOR.]
To: INTERNATIONAL LEASE FINANCE CORPORATION ("LESSOR")
1999 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx
Re: FRONTIER AIRLINES, INC.
("LESSEE")
Boeing B737 300
Manufacturer's Serial No.: 26301
Registration Xxxx: N _____ (the "Aircraft")
The following security has subscribed to the insurance and/or reinsurance policies:
[LIST COMPANIES & PERCENTAGES]
THIS IS TO CERTIFY THAT, as Insurance Brokers, we have effected Fleet Insurance in respect of
aircraft owned or operated by LESSEE (including the Aircraft) as specified below.
AIRCRAFT HULL ALL RISKS
COVERING:
*
DEDUCTIBLES:
*
GEOGRAPHICAL COVERAGE:
Worldwide.
AVIATION AND AIRLINE GENERAL THIRD PARTY LIABILITY
COVERING:
*
GEOGRAPHICAL LIMITS:
Worldwide.
HULL WAR AND ALLIED PERILS
COVERING:
*
DEDUCTIBLE:
*
GEOGRAPHICAL LIMITS:
Worldwide.
AIRCRAFT SPARES ALL RISKS INSURANCE
COVERING:
*
DEDUCTIBLE:
*
GEOGRAPHICAL COVERAGE:
Worldwide.
INSURANCE REQUIRED BY MANUFACTURER
LESSEE will carry the insurance required by Manufacturer in connection with LESSOR's assignment of
Manufacturer's warranties and product support to LESSEE.
CONTRACTUAL INDEMNITY
LESSEE has insurance coverage for the indemnities agreed to by LESSEE pursuant to Article 17 of the
Lease to the extent provided in the relevant policies.
PERIOD OF COVERAGE (ALL POLICIES)
From Delivery Date of Aircraft to [EXPIRATION DATE]
It is further certified that LESSOR has an interest in respect of the Aircraft under the Lease.
Accordingly, with respect to losses occurring during the period from the Effective Date until the expiry of
the Insurance or until the expiry or agreed termination of the Lease or until the obligations under the Lease
are terminated by any action of the Insured or LESSOR and in consideration of the Additional Premium it is
confirmed that the Insurance afforded by the Policy is in full force and effect and it is further agreed that
the following provisions are specifically endorsed to the Policy.
1. UNDER THE HULL (ALL RISKS AND HULL WAR AND ALLIED RISKS) AND AIRCRAFT SPARES INSURANCES
(a) *
(b) *
(c) Insurers have no right to replace the Aircraft on a Total Loss (arranged, constructive
or otherwise).
(d) Insurers recognize that LESSEE and LESSOR have agreed that a Total Loss of the
Airframe will constitute a Total Loss of the Aircraft.
(e) In the event of Total Loss of the Aircraft, Insurers agree to pay LESSOR all amounts
up to the Agreed Value based solely upon LESSOR's (not LESSEE's) execution of the appropriate form
of release/discharge document. LESSOR may sign any required release in lieu of the Insured in the
event of a Total Loss, Constructive Total Loss or Arranged Total Loss.
(f) "Cut through clause": Insurers confirm that in the event of any claim arising under
the hull insurances, the Reinsurers will in lieu of payment of the Insurers, its successors in
interest and assigns, pay to the person named as sole loss payee under the original insurances that
portion of any loss due for which the Reinsurers would otherwise be liable to pay the Insurers
(subject to proof of loss), it being understood and agreed that any such payment by any Reinsurers
will fully discharge and release such Reinsurer from any and all further liability in connection
therewith and provide for payment to be made notwithstanding (i) any bankruptcy, insolvency,
liquidation or dissolution of the Insurers and (ii) that the Insurers have made no payment under the
original insurance policies.
(g) Insurers confirm that under the insurance policies, if the Insured installs an engine
owned by a third party on the Aircraft, either (i) the hull insurance will automatically increase to
such higher amount as is necessary in order to satisfy both LESSOR's requirement to receive the
Agreed Value in the event of a Total Loss, Constructive Total Loss or Arranged Total Loss and the
amount required by the third party engine owner, or (ii) separate additional insurance on such
engine will attach in order to satisfy separately the requirements of the Insured to such third
party engine owner.
2. UNDER THE LEGAL LIABILITY INSURANCE
(a) Subject to the provisions of this Endorsement, the Insurance will operate in all
respects as if a separate Policy had been issued covering each party insured hereunder, but this
provision will not operate to include any claim arising howsoever in respect of loss or damage to
the Aircraft insured under the Hull or Spares Insurance of the Insured. Notwithstanding the
foregoing the total liability of Insurers in respect of any and all Insureds will not exceed the
limits of liability stated in the Policy.
(b) The Insurance provided hereunder will be primary and without right of contribution
from any other insurance which may be available to LESSOR.
3. UNDER ALL INSURANCES
(a) LESSOR, its successors and assigns, and (with respect to Aviation and Airline General
Third Party Liability only) its directors, officers and employees for their respective rights and
interests, are included as Additional Insureds.
(b) The cover afforded to LESSOR by the Policy in accordance with this Endorsement will
not be invalidated by any act or omission (including misrepresentation and non disclosure) of any
other person or party which results in a breach of any term, condition or warranty of the Policy
provided that LESSOR has not caused, contributed to or knowingly condoned the said act or omission.
(c) LESSOR will have no responsibility for premium and insurers will waive any right of
set off or counterclaim against LESSOR except in respect of outstanding premium in respect of the
Aircraft, provided that Insurer may only set off for premiums against the proceeds of the hull
insurance for outstanding premiums in connection with hull all risks and hull war and allied perils
insurance.
(d) Upon payment of any loss or claim to or on behalf of LESSOR, Insurers will to the
extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of
LESSOR indemnified hereby (but not against LESSOR). Insurers will not exercise such rights without
the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of
Insurers LESSOR will do all things reasonably necessary to assist the Insurers to exercise said
rights.
(e) Except in respect of any provision for Cancellation or Automatic Termination specified
in the Policy or any endorsement thereof, cover provided by this Endorsement may only be cancelled
or materially altered in a manner adverse to LESSOR by the giving of not less than thirty (30) days
notice in writing to LESSOR. Notice will be deemed to commence from the date such notice is given
by the Insurers. Such notice will NOT, however, be given at normal expiry date of the Policy or any
endorsement.
4. EXCEPT AS SPECIFICALLY VARIED OR PROVIDED BY THE TERMS OF THIS CERTIFICATE
(a) LESSOR IS COVERED BY THE POLICY SUBJECT TO ALL TERMS, CONDITIONS, LIMITATIONS,
WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS THEREOF.
(b) THE POLICY WILL NOT BE VARIED BY ANY PROVISIONS CONTAINED IN THE LEASE WHICH PURPORT
TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO THE POLICY.
SUBJECT (save as specifically stated in this Certificate) to policy terms, conditions, limitations
and exclusions.
Yours faithfully,
[BROKERS]
EXHIBIT E BROKERS' LETTER OF UNDERTAKING
To: INTERNATIONAL LEASE FINANCE CORPORATION
1999 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx
Date: Our Ref:
Re: FRONTIER AIRLINES, INC.
("LESSEE")
B737 300
Manufacturer's Serial No.: 26301
Registration Xxxx: N _____ (the "Aircraft")
Dear Sirs:
We confirm that insurance has been effected for the account of [LESSEE] (the "Operator") covering
all aircraft owned or operated by them, including the above referenced aircraft (the "Aircraft"). [Also
confirm, if applicable, the amount of any hull all risks or hull war and allied perils on the Aircraft which
LESSEE is carrying in excess of the Agreed Value (which excess insurance would be payable to LESSEE). Such
excess insurance may not exceed ten percent (10%) of the Agreed Value.]
Pursuant to instructions received from the Operator and in consideration of your approving the
arrangement of the Operator's "Fleet Policy" (under which the above referenced Aircraft is insured) through
the intermediary of ourselves as Brokers in connection with the insurance (the "Insurance") mentioned in our
Certificate of Insurance (Reference No. [ ] dated [ ] and attached hereto), we undertake as follows:
1. In relation to the Hull and War Risks Insurance to hold to your order the insurance Slips or
Contracts and any Policies which may be issued or any policies substituted (with your consent) therefor (but
only insofar as the same relate to the Aircraft only) and the benefit of the Hull and War Risks Insurance
thereunder, but subject to our requirements to operate the Fleet Policy insofar as it relates to any other
aircraft insured thereunder.
2. To advise you of any of the following:
(a) If any insurer cancels or gives notice of cancellation of any of the Insurance at
least thirty (30) days (or such lesser period as may be available in the case of War and Allied
Perils) before such cancellation is to take effect in respect of the Aircraft.
(b) Of any act or omission or of any event (including non payment of premium) of which we
have knowledge or are notified and which might invalidate or render unenforceable in whole or in
part any of the Insurance, insofar as the same relate to the Aircraft.
(c) If we do not receive instructions to renew all or any of the Insurance at least thirty
(30) days prior to their expiration.
(d) If any of the Insurance are not renewed on the same terms (save as to premium and
period of cover and as you might otherwise have notified us to be acceptable to you) seven (7) days
prior to expiry thereof.
The above undertakings are given subject to our continuing appointment for the time being as
Insurance Brokers to the Operator.
We also undertake to advise you if we cease to be Insurance Brokers to the Operator.
Yours faithfully,
EXHIBIT F ESTOPPEL AND ACCEPTANCE CERTIFICATE
FRONTIER AIRLINES, INC. ("LESSEE"), a corporation organized under the laws of Colorado does hereby
agree as follows:
1. LESSEE and INTERNATIONAL LEASE FINANCE CORPORATION, as LESSOR, have entered into an Aircraft
Lease Agreement dated as of August 14, 2000 (hereinafter referred to as the "Lease"). Words used herein
with capital letters and not otherwise defined will have the meanings set forth in the Lease.
2. LESSEE has this ____ day of __________, ____ (Time: __________) at ____________________
received from LESSOR possession of:
(a) One (1) Boeing B737 300 aircraft bearing Manufacturer's serial number 26301 and United
States registration xxxx N _____, together with two (2) CFM56 3C1 engines bearing manufacturer's
serial numbers 726115 and 727103 (each of which has 750 or more rated take off horsepower), all in
airworthy condition.
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks,
flight records and historical information regarding the Aircraft, Engines, and Parts.
3. All of the foregoing has been delivered on the date set forth above pursuant to the terms and
provisions of the Lease.
4. The amount of fuel on board at Delivery is __________ (circle one) pounds/kilos (________
gallons).
5. The Aircraft, Engines, Parts and Aircraft Documentation as described in the Lease have been
fully examined by LESSEE and, except as set forth in the attached Discrepancies List, have been received and
accepted by LESSEE in a condition fully satisfactory to LESSEE and in full conformity with the Lease in every
respect.
6. The Lease is in full force and effect, LESSOR has fully, duly and timely performed all of its
obligations of every kind or nature thereunder and LESSEE has no claims, offsets, deductions, set off or
defenses of any kind or nature in connection with the Lease.
7. LESSEE has obtained all required permits, authorizations, licenses and fees of the State of
Registration or any Government Entity thereof necessary in order for LESSEE to operate the Aircraft as
permitted by the terms of the Lease.
Dated on the date set forth above
FRONTIER AIRLINES, INC.
By:
Title:
EXHIBIT G OPINION OF COUNSEL
[SEE ATTACHED]
EXHIBIT H FORM OF POWER OF ATTORNEY
FRONTIER AIRLINES, INC. ("Frontier") hereby irrevocably appoints INTERNATIONAL LEASE FINANCE CORPORATION
("ILFC") of 1999 Avenue of the Stars, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, X.X.X. as Frontier's true and
lawful attorney so that ILFC may take any of the following actions in the name of and for Frontier with
respect to the Boeing B737 300 aircraft bearing manufacturer's serial number 26301 (the "Aircraft") leased
by ILFC to Frontier pursuant to an Aircraft Lease Agreement dated as of August 14, 2000 (the "Lease"):
1. Pursuant to the Lease, Frontier has procured and is maintaining insurances for the Aircraft.
ILFC has been named sole loss payee on the all risk hull and war risk insurances for the Aircraft. In the
event of a total loss or constructive total loss of the Aircraft, ILFC is entitled to receive insurance
proceeds in an amount equal to *. ILFC may take all action and sign all documents otherwise required to be
performed by Frontier, including execution on behalf of Frontier of an appropriate form of discharge/release
document, in order for ILFC to collect such insurance proceeds.
2. In the exercise of the rights of ILFC under the Lease to recover the Aircraft from Frontier
and United States after termination of the Lease due to an Event of Default under the Lease or for
termination of the Lease due to any other reason, ILFC may take all action otherwise required to be performed
by Frontier before the authorities and courts in United States in order to cause the Aircraft to be
repossessed by ILFC, deregistered from the U.S. Federal Aviation Administration and exported from the United
States.
3. In the exercise of the rights mentioned in paragraphs 1 and 2, ILFC may make any declarations
or statements and sign any public or private documents which may be considered necessary or appropriate.
4. ILFC may delegate the powers conferred hereby, in whole or in part, to any individual(s),
including but not limited to employees of ILFC or legal counsel in United States.
ILFC is empowered to determine in its sole discretion when to exercise the powers conferred upon
ILFC pursuant to this Power of Attorney. Any person, agency or company relying upon this Power of Attorney
need not and will not make any determination or require any court judgment as to whether an Event of Default
has occurred under the Lease or whether the Lease has been terminated. Frontier hereby waives any claims
against (a) any person acting on the instructions given by ILFC or its designee pursuant to this Power of
Attorney and (b) any person designated by ILFC or an officer of ILFC to give instructions pursuant to this
Power of Attorney. Frontier also agrees to indemnify and hold harmless any person, agency or company which
may act in reliance upon this Power of Attorney and pursuant to instructions given by ILFC or its designee.
This Power of Attorney is irrevocable until the Aircraft has been returned to the possession of
ILFC, deregistered and exported from United States.
FRONTIER AIRLINES has made and delivered this Power of Attorney on _________ in ____________.
FRONTIER AIRLINES
By:
Title:
EXHIBIT I ASSIGNMENT OF RIGHTS (AIRFRAME)
[DATE]
Boeing Commercial Airplane Group
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxx 00000 2207
Attention: Vice President Contracts
Mail Code 21 34
Subject: Full Assignment of Rights and Obligations International Lease Finance Corporation as Lessor and
Frontier Airlines, Inc. as Lessee of Model B737 300 aircraft bearing manufacturer's serial
number 26301
Ladies and Gentlemen:
In connection with International Lease Finance Corporation's lease to Frontier Airlines, Inc.
("Lessee") of a Boeing aircraft (more fully described below), reference is made to the following documents:
A. Purchase Agreement No. 1500 dated August 25, 1988 between The Boeing Company ("Boeing") and
International Lease Finance Corporation ("ILFC") (the "Boeing Agreement") under which ILFC purchased a
certain Boeing Model B737 300 aircraft bearing manufacturer's serial number 26301 (the "Aircraft").
B. Aircraft Lease Agreement (the "Lease") for the Aircraft dated as of November __, 1999 between
ILFC and Lessee.
Capitalized terms used herein without definition will have the same meaning as in the Boeing
Agreement.
In connection with ILFC's lease of the Aircraft under the Lease, ILFC is transferring to Lessee
certain rights of ILFC related to the Aircraft under the Boeing Agreement. To accomplish this transfer of
rights, as authorized by the provisions of the Boeing Agreement:
1. Lessee acknowledges that it has received copies of the following specific provisions of the
Boeing Agreement applicable to the Aircraft and agrees to be bound by and comply with all the terms,
conditions, and limitations contained in such provisions, including without limitation the disclaimer and
release, exclusion of liabilities, indemnity and insurance provisions thereof:
(a) Boeing Agreement
Article 6 Excusable Delay
6.1 General
Article 8 Assignment, Resale or Lease
8.1 Title and Risk with Boeing
8.2 Buyer's Indemnification of Boeing; Insurance
Article 10 Assignment, Resale or Lease
10.1 No Increase in Boeing Liability
10.3 Sale by Buyer after Delivery
10.4 Lease by Buyer after Delivery
10.5 No Increase in Boeing Liability
10.6 Exculpatory or Indemnity Clause in Post delivery Sale or Lease
Article 12 Product Assurance; Disclaimer and Release; Exclusion of Liabilities;
Customer Support; Indemnification and Insurance (in its entirety)
Article 14 Contractual Notices and Requests
Article 15 Miscellaneous
15.4 Governing Law
Exhibit B Product Assurance Document
Part A Boeing Warranty
Part B Warranty Repairs and Modifications by Buyer
Part C Boeing Service Life Policy
Part D Boeing Indemnity Against Patent Infringement
Part D 1 Boeing Indemnity Against Copyright Infringement
Part E Supplier Warranties and Patent Indemnities
Part G Boeing Interface Commitment
Part H General
Exhibit C 1 Customer Support Document
Part B Boeing Customer Support Services
Part D Technical Data and Documents
Part E Buyer's Indemnification of Boeing and Insurance
Exhibit E Buyer Furnished Equipment Provisions Document
Paragraph 8 Indemnification of Boeing
Paragraph 9 Patent Indemnity
Paragraph 10 Definitions
Paragraph 11 Notice of Claim
Letter Agreement No. 1500 __ Seller Purchased Equipment
Paragraph 6 Buyer's Indemnification of Boeing
2. Lessee recognizes that Boeing's obligation to provide support and services to Lessee pursuant
to Exhibit C of the Boeing Agreement is conditioned on the receipt by Boeing of evidence of compliance by
Lessee with the insurance requirements set forth in paragraph 2 of Part E of Exhibit C or in such other form
as may be satisfactory to Boeing, prior to the commencement of such support and services.
3. ILFC reserves to itself all rights, claims and interests it may have under the Boeing
Agreement not expressly assigned to Lessee hereunder. ILFC will remain responsible to Boeing for any amounts
with respect to the Aircraft owed to Boeing under the Boeing Agreement prior to the effective date of this
letter, including any amounts owed by ILFC to Boeing under the specific portions of the Boeing Agreement
referenced in paragraph 1 above based upon the events or incidents relating to the Aircraft occurring prior
to the effective date of this letter.
4. ILFC hereby assigns to Lessee the sole authority to exercise in Lessee's name all rights and
powers of ILFC with respect to the Aircraft under the specific portions of the Boeing Agreement referenced in
paragraph 1 above. Such authorization will continue until Boeing receives from ILFC written notice to the
contrary addressed to Boeing's Vice President, Contracts, X.X. Xxx 0000, Xxxxxxx, Xxxxxxxxxx 00000 2207 with
a copy to Lessee. Until Boeing receives such notice, Boeing will be entitled to deal exclusively with Lessee
with respect to the Aircraft under the specific portions of the Boeing Agreement referenced in paragraph 1
above and, with respect to the rights, powers, duties or obligations under such portions of the Boeing
Agreement, any and all actions taken by Lessee or agreements entered into by Lessee during the period prior
to Boeing's receipt of such notice will be final and binding on ILFC. In addition, any payment made by
Boeing as a result of claims made by Lessee will be made to the credit of Lessee.
5. Lessee hereby accepts the authorization set forth in paragraph 4 above and agrees to be bound
by and to comply with all the terms, conditions and limitations of the portion of the Boeing Agreement
referenced in paragraph 1 above.
6. This Assignment may be signed by the parties hereto in separate counterparts, each of which
when executed and delivered shall be an original, but all such counterparts shall together constitute but one
and the same instrument.
7. This Assignment shall be governed by, and construed in accordance with, the laws of the State
of Washington, including all matters of construction, validity and performance.
We request that Boeing, upon receipt of this letter, acknowledge receipt thereof and the transfer of
rights set forth above by signing the acknowledgment and forwarding one copy of this letter to each of the
undersigned.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be duly executed as
of the dates written below.
INTERNATIONAL LEASE FINANCE CORPORATION, as Lessor and FRONTIER AIRLINES, INC., as Lessee
Buyer
By: By:
Its: Its:
Receipt of the above letter is acknowledged and transfer of certain rights under the Boeing Agreement with
respect to the Aircraft is confirmed, effective as of this date.
THE BOEING COMPANY
By:
Its:
Date:
EXHIBIT J ASSIGNMENT OF RIGHTS (ENGINES)
November __, 1999
CFM INTERNATIONAL, INC.
0 Xxxxxxx Xxx, X 00
Xxxxxxxxxx, Xxxx 00000
Attention: Riv Xxxxxxx
Commercial Contracts
Warranty Assignment Administrator
Dear Xx. Xxxxxxx:
Reference is hereby made to that Consent to Assignment made as of April 29, 1988, (the "Consent to
Assignment"), by and between CFM INTERNATIONAL, INC. ("CFMI") and INTERNATIONAL LEASE FINANCE CORPORATION
("ILFC"). Terms defined in the Consent to Assignment are used herein with the same meaning as in the Consent
to Assignment.
As of November ___, 1999, ILFC has assigned all of its rights and interest in, to and under the
Engine Warranties to Frontier Airlines, Inc. ("Assignee") in connection with its lease to Assignee of a used
B737 300 aircraft (the "Aircraft") together with two (2) CFMI Model 56 3C1 bearing Manufacturer's Serial
Numbers 726115 and 727103 (the "Engines") as of the date each such Engine was delivered to Assignee. Such
assignment shall be effective from such date until ILFC provides written notice to CFMI (with a copy to
Assignee) that such assignment has been terminated.
The Assignee has accepted such assignment and all the limitations and liabilities pertaining to the
Engine Warranties as stated in the provisions of the GTA listed in Schedule 2 to the Consent to Assignment.
A copy of the aforesaid assignment is attached hereto.
Very truly yours,
INTERNATIONAL LEASE FINANCE CORPORATION
By:
Title:
cc: Xxxxx X. Xxxxxxx
Director, Commercial Contracts
ASSIGNMENT OF WARRANTIES
November __, 1999
In consideration of Frontier Airlines, Inc. ("Lessee") leasing from International Lease Finance
Corporation ("ILFC") one (1) B737 300 aircraft together with two (2) CFMI Model 56 3C1 engines bearing
manufacturer's serial numbers 726115 and 727103, it is hereby agreed as follows:
1. ILFC hereby assigns and transfers to Lessee all of ILFC's respective rights and interest in and to
and in and under the Engine Warranties set forth in and subject to the limitations and liabilities
set forth in Exhibit B Warranty, Section X (the "Engine Warranties") of CFM International, Inc.
ILFC General Terms Agreement No. 6 3987 dated 22 June 1984 (the "GTA") during the term of such
leases so long as Lessee is not in default thereunder.
2. Lessee hereby accepts such assignment including all the limitations and liabilities pertaining to
said Engine Warranties as stated in the provisions of Exhibit B Warranty, Section X of the GTA. In
addition, any payment made by CFM International, Inc. as a result of claims made by Lessee will be
made to the credit of Lessee.
3. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and
their respective successors and assigns to the extent permitted by the GTA and hereunder.
4. This Agreement shall be governed by and construed in accordance with the laws of the State of
California.
5. This Agreement may be executed in any number of counterparts, each of which when executed and
delivered is an original but all of which taken together constitute one and the same instrument and
any party may execute this Agreement by signing any counterpart.
IN WITNESS WHEREOF, the authorized representative of the parties hereto have executed this
Agreement as of the day and year first above written.
For and on behalf of For and on behalf of
INTERNATIONAL LEASE FINANCE CORPORATION FRONTIER AIRLINES, INC.
By: By:
Its: Its:
EXHIBIT K RETURN ACCEPTANCE RECEIPT
Date: _________________ ___, ____
1. FRONTIER AIRLINES, INC. as LESSEE, and INTERNATIONAL LEASE FINANCE CORPORATION, as LESSOR,
have entered into an Aircraft Lease Agreement dated as of August 14, 2000 (the "Lease"). Words used herein
with capital letters and not otherwise defined 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 B737 300 Aircraft bearing Manufacturer's serial number 26301, together
with two (2) CFM 56 3C1 Engines bearing manufacturer's serial numbers 726115 and 727103, and all
Parts attached thereto and thereon in an airworthy condition and
(b) All Aircraft Documentation, including the usual and customary manuals, logbooks,
flight records and historical information regarding the Aircraft, Engines, and Parts, as listed in
the Document Receipt attached hereto.
3. The Airframe, Engines, and Parts had the following hours/cycles at return:
(a) Airframe:
Total hours: _______________ Total Landings: _______________
Date last "C" check performed: _________________
______ hours/ ______ cycles since last "C" check
Date last "D" check performed: _________________
______ hours/ ______ cycles since last "D" check
(b) Engines:
Position Serial No. Total Hours Total Cycles Hrs/Cycles since
last shop visit
Time Remaining to Next
Life Limited Part Removal
Part Name Hours Cycles
MSN
MSN
(c) APU: MSN __________
Total hours: __________
______ hours/ ______ cycles since last Overhaul
______ hours/ ______ cycles remaining on APU life limited Parts
(d) Landing Gears:
Position Serial No. Total Hrs/Cycles Hrs/Cycles since Date of last
last Overhaul Overhaul
Nose
Right Main
Left Main
(e) Fuel on board at return: ______ (circle one) pounds/kilos (______ gallons)
4. Other technical information regarding the Aircraft and its components are correctly set forth
on the Technical Evaluation Report (in the form of Exhibit M) attached hereto.
5. With reference to Article 13.7 of the Lease regarding reimbursement from the Reserves after
return of the Aircraft:
_____ There are no claims for reimbursement from the Reserves which will be
submitted after the date hereof.
or
_____ Claims for reimbursement from the Reserves will be submitted after the
date hereof for the following:
Type of Work Estimated Invoice Amount
6. The above specified aircraft, engines and documentation are hereby accepted by LESSOR subject
to correction by LESSEE (or procurement by LESSEE at LESSEE's cost) as soon as reasonably possible of the
discrepancies specified in Attachment 2 hereto.
7. Subject to the following paragraph, 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, paragraph 6 above, paragraph 8 below, and Articles 10.5, 16 and 17.
8. 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.
9. This Return Acceptance Supplement is executed and delivered by the parties in [place].
IN WITNESS WHEREOF, the parties hereto have caused this Return Acceptance Receipt to be executed in
their respective corporate names by their duly authorized representatives as of the day and year first above
written.
INTERNATIONAL LEASE FINANCE CORPORATION FRONTIER AIRLINES, INC.
By: By:
Its: Its:
ATTACHMENTS:
1. List of Aircraft Documentation
2. List of Loose Equipment
3. List of Discrepancies
4. Engine Maximum Power Assurance Test Conditions and Results
5. Dent and Damage Chart
6. Form of No Accident/Incident Letter
7. Technical Evaluation Report (in the form of Exhibit M)
ATTACHMENT 1 TO RETURN ACCEPTANCE RECEIPT
LIST OF AIRCRAFT DOCUMENTATION
[INSERT LIST]
.
ATTACHMENT 2 TO RETURN ACCEPTANCE RECEIPT
LIST OF LOOSE EQUIPMENT
ATTACHMENT 3 TO RETURN ACCEPTANCE RECEIPT
LIST OF DISCREPANCIES
ATTACHMENT 4 TO RETURN ACCEPTANCE RECEIPT
ENGINE MAXIMUM POWER ASSURANCE TEST CONDITIONS AND RESULTS
ATTACHMENT 5 TO RETURN ACCEPTANCE RECEIPT
DENT AND DAMAGE CHART
ATTACHMENT 6 TO RETURN ACCEPTANCE RECEIPT
FORM OF NO ACCIDENT/INCIDENT LETTER
EXHIBIT L MONTHLY REPORT
(SEE FOLLOWING SHEET)
MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
Page 1 of 2
Report Due Date:
To: INTERNATIONAL LEASE FINANCE CORPORATION Fax: (000) 000 0000
1999 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx
Attn: Finance Department
From: FRONTIER AIRLINES
Contact: Fax:
AIRCRAFT TYPE: Boeing B737 300
ENGINE TYPE: CFM56 3C1 REGISTRATION: N _____
SERIAL NUMBER: 26301 MONTH OF:
NOTE: PLEASE RECORD TIME IN HOURS AND MINUTES NOT DECIMALS.
Aircraft Total Time Since New As Of Last Month: Hours: Min:
Aircraft Total Time Since New: Hours: Min:
Aircraft Total Cycles Since New: Cycles:
Airframe Hours Flown During Month: Hours: Min:
Airframe Cycles/Landings During Month: Cycles:
Time Remaining to "D" or Heavy Maintenance Check:
HOURS OR CYCLES FLOWN x US$ PER HOUR OR = RESERVES
DURING MONTH (as CYCLE (as applicable)
applicable)
TOTAL AIRFRAME: Hrs: x =
TOTAL LANDING GEAR: Hrs: x =
Original Engine Serial Number: Hrs: Min: x =
Cycles =
Original Engine Serial Number: Hrs: Min: x =
Cycles =
TOTAL AMOUNT OF RESERVES (US$) PAID THIS MONTH: US$
Monthly Aircraft Utilization and Status Report
From: FRONTIER AIRLINES Page 2 of 2
ENGINE SERIAL NUMBER: ENGINE SERIAL NUMBER:
ORIGINAL POSITION: ORIGINAL POSITION:
ACTUAL LOCATION: ACTUAL LOCATION:
CURRENT THRUST RATING: CURRENT THRUST RATING:
============================================================= ===========================================================
HOURS:/MIN: HOURS:/MIN:
Total Time Since New As Of Last Total Time Since New As Of Last
Month: Month:
Total Time Since New: Total Time Since New:
Total Cycles Since New: Total Cycles Since New:
Hours Flown During Month: Hours Flown During Month:
Cycles During Month: Cycles During Month:
IMPORTANT: IF ILFC OWNED ENGINE IS REMOVED OR INSTALLED ON ANOTHER AIRCRAFT, IT MUST BE REPORTED MONTHLY
ON THIS FORM.
EXHIBIT M AIRCRAFT DOCUMENTATION
AIRCRAFT RECORDS
1. Copies of original Certificates delivered by Boeing
a. Airworthiness Certificate for Export
b. Radio installation conformity certificate
c. Noise limitation certificate
2. Copies of original Documents delivered by Boeing:
a. Airworthiness Directive Compliance list
b. Aircraft inspection report
c. Aircraft Definition Report
d. Weighing report
3. Copies of current Certificates:
a. Airworthiness Certificate
b. Noise limitation
c. Radio license
d. Interior material burn certificates
e. Certificate of Export
f. Aircraft deregistration confirmation
e. Aircraft Registration
4. Letters signed and stamped by Quality Assurance:
a. Current aircraft hours and cycles
b. Current engines hours and cycles
c. Accident and Incident report
d. Summary of Maintenance Program
e. AD compliance during the lease term
5. Aircraft log books and Aircraft readiness log.
6. Aircraft Hard Time (HT) inspection status.
7. One year forecast for HT inspection.
8. Aircraft Modification status, including service bulletins.
9. Last weighing report prior to redelivery.
10. AD compliance report with original signoffs.
11. Routine and non routine job cards of the last "C" and "D" checks.
12. Past year pilots and maintenance discrepancies.
13. Major and Minor structural repairs with applicable approvals.
14. Compass Swing report of the last three years.
15. Cabin Configuration drawing (LOPA).
16. Emergency equipment location drawing.
17. Last X RAYs
ENGINES RECORDS
1. Last test cell run reports.
2. Life Limited Parts status and traceability.
3. AD compliance report with original signoffs.
4. Engine Modification / service bulletin /inspection report and applicable forms.
5. Last heavy maintenance records for each module.
6. Engine log books.
7. Engine removal history.
8. Past year trend monitoring reports.
9. Historical borescope reports.
10. Engine component report.
APU RECORDS
1. APU status (FH, FC, limits).
2. Life limited Part status and traceability.
3. AD compliance with original signoffs.
4. Modification status.
5. Last heavy maintenance documents.
6. APU log books.
7. Last test cell report.
COMPONENT RECORDS
1. Aircraft component inventory.
2. Hard time component inventory.
3. All serviceable tags.
4. Landing Gear status with last overhaul and life limited Part status.
5. AD compliance with original signoffs.
6. Modification status.
EXHIBIT N TECHNICAL EVALUATION REPORT
(SEE FOLLOWING SHEETS)
INTERNATIONAL LEASE FINANCE CORPORATION
AIRCRAFT / OPERATOR
TECHNICAL EVALUATION REPORT
133
TABLE OF CONTENTS
AIRCRAFT SUMMARY......................................................................................1
MAINTENANCE & INSPECTION..............................................................................2
LANDING GEAR..........................................................................................4
ENGINES...............................................................................................5
AUXILIARY POWER UNIT (APU)............................................................................8
PASSENGER CABIN CONFIGURATION (Seating)...............................................................9
GALLEY PROVISIONS....................................................................................10
LAVATORIES, AUDIO/ENTERTAINMENT, CARGO, INTERIOR.....................................................11
HYDRAULIC, FUEL, WEIGHT & BALANCE....................................................................12
AVIONICS SYSTEMS.....................................................................................13
INSPECTOR RECORD.....................................................................................16
CONFIDENTIAL INFORMATION REVISION 7
18
NOT FOR DISTRIBUTION January 1999 Page 18
AIRCRAFT SUMMARY as of / /
Aircraft Make Boeing Model
FUS No. S/N
MFG Date:
Current Registration: Country:
Previous Registration: Country:
Annual Utilization: Hour/Cycle Ratio:
Total Aircraft Time: TAT (Hrs) As of (date):
Total Aircraft Cycles: TAC (Cyc)
Time Since Last "C" or equivalent Check: (Hrs) (Cyc)
Time Since Last Structural Check: (Hrs) (Cyc)
Engine Make: Model: Thrust Rating:
Engine: 1 S/N: 2 S/N:
TSN: (Hrs)
CSN: (Cyc)
IMPORTANT NOTE: THE ENGINE SERIAL NUMBERS SPECIFIED ON THIS REPORT REFLECT THE ENGINE
SERIAL NUMBERS THAT DELIVERED WITH THE AIRCRAFT. IF THE ENGINE SERIAL NUMBER HAVE NOT BEEN
FILLED IN FOR YOU, PLEASE PROVIDE DATA FOR THE ENGINES ORIGINALLY DELIVERED WITH THE
AIRCRAFT (LESSOR OWNED ENGINES).
MAINTENANCE PROGRAM GENERAL
Aircraft Maintenance Program Provided By: [ ] Operator [ ] Other:
Program Approved By Authority Of: [ ] FAA Approved [ ] Other:
Repair Station Providing Service:
Repair Station Number: FAA Approved?: [ ] Yes [ ] No
Primary Line Maintenance Provided By: [ ] Operator [ ] Contract
Service
Reliability Controlled Maintenance Program?: [ ] Yes [ ] No
Component Tags Available For Controlled Components: [ ] Yes [ ] No
At Aircraft Delivery Currently Approved By Local Currently Operated/Maintained
Aviation Authority
ETOPS Qualification: Minutes Minutes Minutes
Auto Land Qualification: CAT I, II, IIIa, IIIb, IIIc CAT I, II, IIIa, IIIb, IIIc CAT I, II, IIIa, IIIb, IIIc
(Circle one that applies)
MAINTENANCE & INSPECTION PROGRAM DESCRIPTION
Check Operator's Calendar Frequency Hours Cycles Number of Phases
Nomenclature
"C"
"D" or Structural Program
MAINTENANCE & INSPECTION PROGRAM STATUS
Phase or Date Aircraft TAT Aircraft TAC
Equivalent
Next "C" Phase or Equivalent: / /
Last "C" Phase or Equivalent: / /
Time Remaining to Next Phase: (Days) (Hrs) (Cyc)
Structural Cards Worked During Last "C" Phase?: [ ] Yes [ ] No
CPCP Cards Worked During Last "C" Phase?: [ ] Yes [ ] No
Next "D" Phase or Equivalent
Structural: / /
Last "D" Phase or Equivalent
Structural: / /
Time Remaining to Next Phase: (Days) (Hrs) (Cyc)
CPCP Cards Worked During Last "D" Phase?: [ ] Yes [ ] No
Next CPCP Phase: / /
Last CPCP Phase: / /
Time Remaining to Next Phase: (Days) (Hrs) (Cyc)
Date of Last ATC Transponder Test: #1 #2
Date of Last Flight Recorder Check:
Date of Last Aircraft Weighing:
LANDING GEAR
MLG Tires: (Size) (MPH Rating) (MFG)
NLG Tires: (Size) (MPH Rating) (MFG)
Brake Manufacture: Type: [ ] Steel [ ] Carbon
LEFT MAIN: P/N S/N
Last Overhaul:(Date) _____/_____/_____ (Hrs) (Cyc)
Agency Performing Service: Cert #
Approved Overhaul Interval: (Hrs) (Cyc)
Present Landing Gear Total Time: (Hrs) (Cyc)
Time Remaining to Next Overhaul: (Hrs) (Cyc)
RIGHT MAIN: P/N S/N
Last Overhaul:(Date) _____/_____/_____ (Hrs) (Cyc)
Agency Performing Service: Cert #
Approved Overhaul Interval: (Hrs) (Cyc)
Present Landing Gear Total Time: (Hrs) (Cyc)
Time Remaining to Next Overhaul: (Hrs) (Cyc)
NOSE: P/N S/N
Last Overhaul:(Date) _____/_____/_____ (Hrs) (Cyc)
Agency Performing Service: Cert #
Approved Overhaul Interval: (Hrs) (Cyc)
Present Landing Gear Total Time: (Hrs) (Cyc)
Time Remaining to Next Overhaul: (Hrs) (Cyc)
ENGINES
ENGINE MAINTENANCE PROGRAM
Engine Maintenance Program Provided By:
Engine Condition Monitoring Trend Analysis Program?: [ ] Yes [ ] No
Engine Oil Type:
Engine(s) operated at INCREASED or DECREASED Thrust Rating; Program limitations & required
Mods. to operate at designated thrust rating
ENGINE SPECIFICATIONS
ENGINE NUMBER 1
Engine Make: Model: S/N:
Date of Mfg: Total Time: (Hrs) (Cyc)
Time Since Last Performance Restoration Visit: (Visit Date) (Hrs) (Cyc)
Time Since Last Shop Visit: (visit Date) (Hrs) (Cyc)
Test Cell EGT Margin:
Work Scope of Last Shop Visit:
Agency Performing Service:
Agency FAA Approved?: [ ] Yes [ ] No Cert. #:
1st LIMITER* Part Name:
Allowable Life/Insp Limit: (Hrs) (Cyc)
Total Component Time: (Hrs) (Cyc)
Time Remaining: (Hrs) (Cyc)
2nd LIMITER* Part Name:
Allowable Life/Insp Limit: (Hrs) (Cyc)
Total Component Time: (Hrs) (Cyc)
Time Remaining: (Hrs) (Cyc)
*Provide a copy of a current Disk Sheet for all modules.
ENGINE SPECIFICATIONS
ENGINE NUMBER 2
Engine Make: Model: S/N:
Date of Mfg: Total Time: (Hrs) (Cyc)
Time Since Last Performance Restoration Visit: (Visit Date) (Hrs) (Cyc)
Time Since Last Shop Visit: (Visit Date) (Hrs) (Cyc)
Test Cell EGT Margin:
Work Scope of Last Shop Visit:
Agency Performing Service:
Agency FAA Approved?: [ ] Yes [ ] No Cert. #:
1st LIMITER* Part Name:
Allowable Life/Insp Limit: (Hrs) (Cyc)
Total Component Time: (Hrs) (Cyc)
Time Remaining: (Hrs) (Cyc)
2nd LIMITER* Part Name:
Allowable Life/Insp Limit: (Hrs) (Cyc)
Total Component Time: (Hrs) (Cyc)
Time Remaining: (Hrs) (Cyc)
*Provide a copy of a current Disk Sheet for all modules.
AUXILIARY POWER UNIT
APU Make: Model: S/N:
Date of Mfg: Total Time: (Hrs) (Cyc)
APU Times Are Recorded By: [ ] APU Clock or [ ] A/C Time Ratio _____:_____
Time Between Overhaul: (Hrs) (Cyc)
Time @ Last Hot Section (Date) (Hrs) (Cyc)
Refurbishment:
Time @ Last Overhaul: (Date) (Hrs) (Cyc)
Time @ Last Shop Visit: (Date) (Hrs) (Cyc)
Work Scope:
Agency Performing Service: Location: Cert. #:
Agency FAA Approved?: [ ] Yes [ ] No APU Oil Type:
1st LIMITER Part Name:
Allowable Life/Insp Limit: (Hrs) (Cyc)
Total Component Time: (Hrs) (Cyc)
Time Remaining: (Hrs) (Cyc)
2nd LIMITER Part Name:
Allowable Life/Insp Limit: (Hrs) (Cyc)
Total Component Time: (Hrs) (Cyc)
Time Remaining: (Hrs) (Cyc)
PASSENGER CABIN CONFIGURATION
SEATING CONFIGURATION
Present Configuration Occupancy: No. of Handicap Seats Installed:
Passenger Exit Door Configuration:
Air Stairs: Installed / Partial Provision/ Full Provision (Circle One)
FIRST CLASS
Pax Qty: Seat Mfg: Model: P/N:
Seats Fireblocked? [ ] Yes [ ] No Color:
16 G Seat Installation: [ ] Yes [ ] No
BUSINESS CLASS
Pax Qty: Seat Mfg: Model: P/N:
Seats Fireblocked? [ ] Yes [ ] No Color:
16 G Seat Installation: [ ] Yes [ ] No
COACH CLASS
Pax Qty: Seat Mfg: Model: P/N:
Seats Fireblocked? [ ] Yes [ ] No Color:
16 G Seat Installation: [ ] Yes [ ] No
Provisions for Life Vests Under Seats?: [ ] Yes [ ] No
Entertainment Controls(PCU) Installed?: [ ] Yes [ ] No
Manufacturer: Part Number:
Emergency Escape Path Lighting: [ ] Floor Mounted [ ] Seat Mounted
Configuration Drawing Number: Source:
Engineering Order / Installation Document:
Installation FAA Approved?: [ ] Yes [ ] No Method of Approval:
GALLEY PROVISIONS
GALLEY's ARE (Check one): (___) Atlas Standard (___) KSSU Standard (____) Other
GALLEY LOCATION MANUFACTURER MODEL NUMBER PART NUMBER EQUIPPED
WaterPower
1. [ ] [ ]
2. [ ] [ ]
3. [ ] [ ]
4. [ ] [ ]
5. [ ] [ ]
6. [ ] [ ]
7. [ ] [ ]
8. [ ] [ ]
9. [ ] [ ]
10. [ ] [ ]
NOTE: Galley Locations per Spec or LOPA drawing i.e., G1, G2 etc. Galley Location numbers above correspond
to the numbers below.
OVENS BUN WARMERS REFER CHILLERS COFFEE WATER HOT HOT XXX
UNITS MAKERS BOILERS JUGS CUPS JUGS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
LAVATORIES
Number of Lavatories: Handicap Provisions?: [ ] Yes [ ] No
Locations:
IN FLIGHT AUDIO & ENTERTAINMENT SYSTEM
Boarding Music: [ ] Yes [ ] No
Auto Evac & Warning: [ ] Yes [ ] No
Pre Recorded Announcement: [ ] Yes [ ] No
Passenger Entertainment (Audio): [ ] Yes [ ] No
Passenger Entertainment (Video): [ ] Yes [ ] No
VTR Format: [ ] VHS [ ]Hi 8 [ ] Other
[ ] Projector [ ] PSU Monitor [ ] Isle Monitor [ ] In Seat
(Check All That Apply)
Passenger En Route Information Display: [ ] Yes [ ] No
Telephone: [ ] Yes [ ] No [ ] Leased [ ] Owned Satellite: [ ] Yes [ ] No
CARGO COMPARTMENT
Cargo Loading System Installed: [ ] Yes [ ] No
Smoke\Fire Detection System installed: [ ] Yes [ ] No
Fire Suppression System installed: [ ] Yes [ ] No
INTERIOR COLORS
Interior Color Scheme: Carpets: Curtains:
PLACARDS & LIGHTED SIGNS
English?: [ ] Yes [ ] No Bi Lingual?: [ ] Yes [ ] No
First Language: Second Language:
HYDRAULIC SYSTEM
Type of Hydraulic Fluid Used: (MFG):
FUEL SYSTEM
Total Fuel Capacity: U.S. gallons [ ] lbs or [ ] kilos
Number of Tanks: Auxiliary Tanks Installed?: [ ] Yes [ ] No
Auxiliary Tank Capacity: U.S. gallons [ ] lbs or [ ] kilos
Fuel Instrumentation / Calibration: [ ] U.S. pounds [ ] kilograms
WEIGHT & BALANCE
Has Aircraft Been Modified For Increased Gross Weight by Current Lessee?: [ ] Yes [ ] No
From MTOGW To MTOGW
Weight & Balance Manual Document No.: Rev:
For the below weights specify AFM approved limits:
POUNDS KILOS
Maximum Takeoff Gross Weight: (MTOGW) /
Maximum Taxi Weight: (MTW) /
Maximum Landing Weight: (MLW) /
Manufacturer's Empty Weight: (MEW) /
Maximum Zero Fuel Weight: (MZFW) /
Operational Empty Weight: (OEW) /
AVIONICS SYSTEMS
22 AUTO FLIGHT
QTY COMPONENT MANUFACTURER MODEL or PART NUMBER
FMGC Flight Management & Guidance
Computer:
FAC Flight Augmentation Computer:
FCU Flight Control Unit:
MCDU Multipurpose Control Display Unit:
23 COMMUNICATIONS
QTY COMPONENT MANUFACTURER MODEL or PART NUMBER
CIDS Director Cabin
Intercommunications Data System
HF Transceiver:
VHF Transceiver:
Cockpit Voice Recorder:
PRAM Tape Reproducer
(Pre Recorded PAX Address):
MPES Tape Reproducer (Audio
Entertainment):
Tape Reproducer (Video Entertainment):
Audio management unit/SELCAL Decoder:
ACARS Management Unit:
RMP Radio Management Panel:
AVIONICS SYSTEMS (continued)
27 FLIGHT CONTROL COMPUTER
QTY COMPONENT MANUFACTURER MODEL or PART NUMBER
ELAC Elevator/Aileron Computer:
SFCC Slat/flap Control Computer:
SEC Spoiler/Elevator Computer:
FCDC Flight Control Data Concentrator:
31 INDICATING AND RECORDING
QTY COMPONENT MANUFACTURER MODEL or PART NUMBER
Multifunction Printer:
DFDR Flight Data Recorder:
FDIU Digital Flight Data Interface
Unit:
Accelerometer:
FWC Flight Warning Computers:
Windshear Activated: Yes / No
QAR Quick Access Recorder:
AIDS Aircraft Integrated Data System:
ELECTRONIC INSTRUMENT SYSTEM (EIS)
PFD Primary Flight Display:
ND Navigation Display:
SDACS System Data Acquisition
Concentrators:
Display Management Computers:
EWD Engine/Warning Display:
SD System Display:
AVIONICS SYSTEMS (continued)
QTY COMPONENT MANUFACTURER MODEL or PART NUMBER
CFDIU Centralized Fault Display
Interface:
34 NAVIGATION
QTY COMPONENT MANUFACTURER MODEL or PART NUMBER
ADIRU Air Data/Intertial Reference
System:
DME Distance Measuring Equipment
Interrogators:
VHF VOR/Marker Beacon Receiver:
VHF ILS Receiver:
DDRMI Digital Distance & Radio
Magnetic Indicator:
Radio Altimeter Transceiver:
Weather Radar Transceiver:
TCAS Traffic Alert and Collision
Avoidance System Computer:
ATC Air Traffic Control System
Transponder:
Microwave Landing Receiver:
GPWS Ground Proximity Warning System:
ADF Automatic Direction Finder
Receiver:
INSPECTOR RECORD
INSPECTED BY: DATE:
OPERATOR: REGISTERED OWNER:
ADDRESS OF OPERATOR:
CONTACT (Name/Title):
TELEPHONE: TELEFAX:
Email Address:
Department Contact Name Phone Fax Email
Quality Control:
Power Plant Engineering:
Maintenance
Programs/Planning:
