AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT, dated as of April 14, 1994 (together
with all supplements, annexes, exhibits and schedules hereto hereinafter
referred to as the "Lease", between GENERAL ELECTRIC CAPITAL CORPORATION,
with an CORPORATION, with an office at ▇▇-▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (hereinafter called, together with its successors and assigns, if any,
"Lessor") and TRC Realty Co., a corporation organized and existing under
the laws of the State of Vermont with its mailing address and chief place of
business at ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter
called "Lessee").
W I T N E S S E T H :
I. LEASING:
(a) Subject to the terms and conditions set forth below, Lessor
agrees to Lessee, and Lessee agrees to lease from Lessor, the aircraft,
including the airframe, engines and all appurtenant equipment (together
hereinafter the "Aircraft") described in Annex A.
(b) The obligation of Lessor to purchase the Aircraft from the
manufacturer or supplier thereof ("Supplier") and to lease the same to Lessee
hereunder shall be subject to the Commencement Date of the Lease, as that
term is hereinafter defined in Section II, occurring on or prior to the Last
Delivery Date specified in Annex B, on the representations and warranties of
Lessee contained herein being true and accurate as of the Commencement Date
and further conditioned on receipt by Lessor, on or prior to the Commencement
Date, of each of the following documents in form and substance satisfactory
to Lessor: (i) a copy of this Lease executed by Lessee, (ii) unless Lessor
shall have delivered its purchase order for such Aircraft, the Purchase
Documents(s) Assignment and Consent in the form of Annex C, with copies of
the purchase order or other purchase documents attached thereto; (iii) copies
of insurance policies or, at Lessor's option, such other evidence of
insurance which complies with the requirements of Section X, (iv) evidence of
Lessee's reservation of an N number for the Aircraft together with an
assignment of the rights thereto to Lessor; (v) evidence that the Aircraft
has been duly certified as to type and airworthiness by the Federal Aviation
Administration ("FAA"); (vi) evidence that FAA counsel has received in escrow
the executed ▇▇▇▇ of sale and AC Form 8050-1 Aircraft Registration Form
(except for the pink copy which shall be available to be placed on the
Aircraft upon acceptance thereof), and an executed duplicate of this Lease
all in proper form for filing with the FAA; (vii) resolution of Lessee
authorizing this Lease in the form of Annex D; (viii) completed survey with
respect to the Aircraft in accordance with subsection (c) hereof and (ix)
such other documents as Lessor may reasonably request. Lessor's obligation to
lease the Aircraft hereunder is further conditioned upon (aa) the cost to
Lessor of the acquisition of the Aircraft not exceeding the Capitalized
Lessor's Cost stated on Annex a; (bb) upon delivery of the aircraft, Lessee's
execution and delivery to Lessor of a Certificate of Acceptance in the form
of annex E; and (dd) filing of all necessary documents with, and the
acceptance thereof by, the FAA.
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(c) The survey required by I(b)(viii) hereof will be undertaken at
Lessee's expense by a consultant named by Lessor and shall include (i) a
complete inventory of the Aircraft, including without limitation engines,
spare parts and avionics; (ii) review of all operating and maintenance logs
(including any computerized program under which the Aircraft has been
maintained); (iii) physical inspection of the Aircraft (including a
demonstration flight)
(d) Lessor hereby appoints Lessee its agent for inspection and
acceptance of the Aircraft from the Supplier. Subject to the aforestated
conditions, upon execution by Lessee of the Certificate of Acceptance, the
Aircraft described thereon shall be deemed to have been delivered to, and
irrevocably accepted by, Lessee for lease hereunder.
II. TERM, RENT AND PAYMENT:
(a) The rent ("Rent") payable hereunder and Lessee's right to use the
Aircraft shall commence on the date of execution by Lessee of the Certificate
of Acceptance ("Commencement Date"). The term ("Term") of this Lease shall
commence on the Commencement Date and shall continue, unless earlier
terminated pursuant to the provisions hereof, until and including the
Expiration Date stated in Annex B. If any term is extended or renewed, the
word "Term" shall be deemed to refer to all extended or renewal terms, and
all provisions of this Lease shall apply during any such extension or renewal
terms, except as may be otherwise specifically provided in writing.
(b) Rent shall be paid to Lessor at its address stated above, except as
otherwise directed by Lessor. Payments of Rent shall be in the amount,
payable at such intervals and shall be due in accordance with subsections (c)
through (d) hereof and the provisions of Annex B. (Each payment of Rent is
hereinafter referred to as a "Rent Payment".) If one or more Advance Rent is
payable, such Advance Rent shall be (i) set forth on Annex B and due in
accordance with the provisions of Annex B, and (ii) when received by Lessor,
applied to the first Basic Term Rent Payment and the balance, if any, to the
final Rent Payment(s), in inverse order of maturity. In no event shall any
Advance Rent or any other Rent Payment be refunded to Lessee. If Rent is not
paid within fifteen (15) days of its due date, Lessee agrees to pay a late
charge of five cents (5) per dollar on, and in addition to, the amount of
such Rent but not exceeding the lawful maximum, if any.
(c) For the period from and including the Commencement Date to the
Basic Term Commencement Date ("Interim Period") stated in Annex B, Lessee
shall pay as Rent ("Interim Rent") for the Aircraft, the product of the Daily
Lease Rate Factor stated in Annex B times the Capitalized Lessor's Cost of
same stated in Annex A times the number of days in the Interim Period.
Interim Rent shall be due on the date stated in Annex B.
(d) Commencing on the First Basic Rent Date stated in Annex B and
thereafter as stated in Annex B (each, a "Rent Payment Date") during the
Basic Term, Lessee shall pay as Rent ("Basic Term Rent") the product of the
Basic Term Lease Rate Factor stated in Annex B times the Capitalized Lessor's
Cost stated in Annex A.
III. RENT ADJUSTMENT:
(a) The periodic rent payments in Annex B have been calculated on the
assumption (which, as between Lessor and Lessee, is mutual) that the maximum
effective corporate income tax rate (exclusive of any minimum tax rate) for
calendar-year taxpayers ("Effective Rate") will be thirty-five percent (35%)
each year during the Term of this Lease.
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(b) If, solely as a result of Congressional enactment of any law
(including, without limitation, any modification of, an amendment or addition
to, the Internal Revenue Code of 1986, as amended (the "Code"), the Effective
Rate is higher than thirty-five percent (35%) for any year during the lease
Term, then Lessor shall have the right to increase such rent payments by
requiring payment of a single additional sum equal to the product of (i) the
Effective Rate (expressed as a decimal) for such year less .35 (or, in the
event that any adjustment has been made hereunder for any previous year, the
Effective Rate (expressed as a decimal) used in calculating the next previous
adjustment) times (ii) the adjusted Termination Value. The adjusted
Termination Value shall be the Termination Value (calculated as of the first
rental due in the year for which such adjustment is being made) less the
product of the Tax Benefits as defined in Article XV, Paragraph (b) that
would be allowable under Section 168 of the Code (as of the first day of the
year for which such adjustment is being made and all subsequent years for
which such adjustment is being made). Lessee shall pay to Lessor the full
amount of the additional rent payment on the later of (i) receipt of notice
or (ii) the first day of the year for which such adjustment is being made.
(c) Lessee's obligations under this Section III shall survive any
expiration or termination of this lease.
IV. TAXES: Except as provided in Section III and XV(c), Lessee shall have
no liability for taxes imposed by the United States of America or any State
or political subdivision thereof which are on or measured by the net income
of Lessor. Lessee shall report (to the extent that it is legally permissible)
and pay promptly all other taxes, fees and assessments due, imposed, assessed
or levied against the Aircraft (or the purchase, ownership, delivery,
leasing, possession, use or operation thereof), this Lease (or any rentals or
receipts hereunder), Lessor or Lessee by any foreign, federal, state or local
government or taxing authority during or related to the Term of this Lease,
including, without limitation, all license and registration fees, and all
sales, use, personal property, excise, gross receipts, franchise, stamp or
other taxes, imposts, duties and charges, together with any penalties, fines
or interest thereon (all hereinafter called "Taxes"). In the event that
Lessor receives any billing for Taxes, Lessor shall promptly forward to
Lessee any such bills. Lessee shall (a) reimburse Lessor upon receipt of
written request for reimbursement for any Taxes charged to or assessed
against Lessor, (b) on request of Lessor, submit to Lessor written evidence
of Lessee's payment of Taxes, (c) on all reports or returns show the
ownership of the Aircraft by Lessor, and (d) send a copy thereof to Lessor.
V. REPORTS: Lessee will provide Lessor with the following in writing
within the time periods specified: (a) notice of tax or other lien which
attaches to the Aircraft within ten (10) days of Lessee's obtaining knowledge
of such attachment and such additional information reasonably related thereto
with respect to the tax or lien forthwith upon request of Lessor; (b) The
balance sheet and profit and loss statement of Lessee's parent company,
Tennessee Restaurant Company, within one hundred twenty (120) days of the
close of each fiscal year of Tennessee Restaurant Company, and any further
financial information or reports, upon request; (c) notice to Lessor of the
Aircrafts' location, and, the location of all information, logs, documents
and records regarding or in respect to the Aircraft and its use, maintenance
and/or condition, immediately upon request; (d) notice to Lessor of the
relocation of the Aircraft's primary hangar location, ten (10) days prior to
any relocation;
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(e) notice of loss or damage to the Aircraft (where the estimated
repair costs would exceed 10% of the Aircraft's then fair market value)
within ten (10) days of such loss or damage; (f) notice of any accident
involving the Aircraft causing personal injury or property damage within ten
(10) days of such accident; (g) copies of the insurance policies or other
evidence of insurance required by the terms hereof, promptly upon request by
Lessor; (h) copies of all information, logs, documents and records regarding
or in respect to the Aircraft and its use, maintenance and/or condition,
within twenty (20) days of such request; (i) a certificate of the authorized
officer of Lessee stating that he has reviewed the activities of Lessee and
that, to the best of his knowledge, there exists no default (as described in
Section XII) or event which with notice or lapse of time (or both) would
become such a default: (j) such information as may be required to enable
Lessor to file any reports required by any governmental authority as a result
of Lessor's ownership of the Aircraft, promptly upon request of Lessor; (k)
copies of manufacturer's maintenance service program contract for the
airframe or engines, promptly upon request; (l) evidence of Lessee's
compliance with FAA airworthiness directives and advisory circulars and of
compliance with other maintenance provisions of Section VII hereof and the
return provisions of Section XI, upon request of Lessor; and (m) such other
reports as Lessor may reasonably request.
VI. DELIVERY, REGISTRATION, USE AND OPERATION:
(a) The Aircraft shall be delivered directly from the Supplier to
Lessee.
(b) Lessee, at its own cost and expense, shall cause the Aircraft to be
duly registered in the name of Lessor under the U.S. Federal Aviation Act and
shall not register the Aircraft under the laws of any other country.
(c) The possession, use and operation of the Aircraft shall be at the
sole risk and expense of Lessee. Lessee agrees that the Aircraft will be used
and operated in compliance with any and all statutes, laws, ordinances,
regulations and standards or directives issued by any governmental agency
applicable to the use or operation thereof, in compliance with any
airworthiness certificate, license or registration relating to the Aircraft
issued by any agency and in a manner that does not modify or impair any
existing warranties on the Aircraft or any part thereof. Lessee will operate
the Aircraft predominantly in the conduct of its business and not operate or
permit the Aircraft to be operated (i) in a manner wherein the predominance
of use during any consecutive twelve month period would be for a purpose
other thant transportation for Lessee or its Affiliates, which is hereinafter
defined to mean any entity or person that controls, is controlled by or is
under common control with the Lessee, or in a manner, for any time period,
such that Lessor or a third party shall be deemed to have "operational
control" of the Aircraft, or (ii) for the carriage of persons or property for
hire or the transport of mail or contraband. The Aircraft will, at all times
be operated by duly qualified pilots holding at least a valid commercial
airman certificate and instrument rating and any other certificate, rating,
type rating or endorsement appropriate to the Aircraft, purpose of flight,
condition of flight or as otherwise required by the Federal Aviation
Regulations ("FAR"). Pilots shall be employed, paid and contracted for by
Lessee or its Affiliates, shall meet all recency of flight requirements and
shall meet the requirements established and specified by the insurance
policies required hereunder the the FAA. The primary hangar location of the
Aircraft shall be as stated in annex B. Lessee shall not relocate the primary
hangar location to a hangar location outside the United States.
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(d) Lessee agrees no to operate or locate the Aircraft in (i) any area
of hostilities, (i) any country or jurisdiction that does not maintain full
diplomatic relations with the United States of America, (iii) any area which
is not covered by any insurance policy required hereunder, or (iv) any
country that is the subject of sanctions under the U.S. International
Economic emergency Powers Act or U.N. Security Council directives (presently
Haiti, Iraq, Libya and the Federal Republic of Yugoslavia (Serbia and
Montenegro)). Lessee also agrees not to operate or locate the aircraft in any
country restricted under the U.S. Trading with the Enemy Act and the U.S.
Export Administration Act except as may be permitted by operating in
accordance with the conditions specified by the U.S. Export Administration
Regulations, General License GATS (15 CFR Part 771.19) (presently Cuba, Iran,
North Korea, sudan, syria and Vietnam). The engines set forth on annex A
shall be used only on the airframe described in Annex A and shall only be
removed for maintenance in accordance with the provisions hereof.
VII. MAINTENANCE:
(a) Lessee agrees that the Aircraft will be maintained in compliance
with any and all statutes, laws, ordinances, regulations and standards or
directives issued by any governmental agency applicable to the maintenance
thereof, in compliance with any airworthiness certificate, license or
registration relating to the Aircraft issued by any agency and in a manner
that does not modify or impair any existing warranties on the Aircraft or any
part thereof.
(b) Lessee shall maintain, inspect, service, repair, overhaul and test
the Aircraft (including each engine of same) in accordance with (i) all
maintenance manuals initially furnished with the Aircraft, including any
subsequent amendments or supplements to such manuals issued by the
manufacturer from time to time, (ii) all recommended "Service Bulletins"
issued, supplied, or available by or through the manufacturer and/or the
manufacturer of any engine or part with respect to the Aircraft, and (iii)
all airworthiness directives and advisory circulars issued by the FAA or
similar regulatory agency having jurisdictional authority, and causing
compliance to such directives or circulars to be completed through corrective
modification in lieu of operating manual restrictions. Lessee shall maintain
all records, logs and other materials required by the manufacturer thereof
for enforcement of any warranties or by the FAA. All maintenance procedures
required hereby shall be undertaken and completed in accordance with the
manufacturer's recommended procedures, and by properly trained, licensed, and
certificated maintenance sources and maintenance personnel, so as to keep the
Aircraft and each engine in as good operating condition as when delivered to
Lessee hereunder, ordinary wear and tear excepted, and so as to keep the
Aircraft in such operating condition as may be necessary to enable the
airworthiness certification of such Aircraft to be maintained in good
standing at all times under the FAA.
(c) Lessee agrees, at its own cost and expense, to (i) cause the
Aircraft and each engine thereon to be kept numbered with the identification
or serial number therefor as specified annex A; (ii) prominently display on
the Aircraft that N number, and only that N number, specified in Annex A;
(iii) notify Lessor in writing thirty (30) days prior to making any change in
the configuration (other than changes in configuration mandated by the FAA),
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appearance and coloring of the Aircraft from that in effect at the time the
Aircraft is accepted by Lessee hereunder, and in the event of such change or
modification of con uration, coloring or apperance to restore, upon
request of Lessor, the Aircraft to the configuration, coloring or appearance
in effect on the Commencement Date or, at Lessor's option to pay to Lessor an
amount equal to the reasonable cost of such restoration, (iv) affix and
maintain inside the Aircraft adjacent to the airworthiness certificate and on
each engine a metal nameplate bearing the Aircraft marking specified in annex
A and such other markings or writings as from time to time may be required by
law or otherwise deemed necessary by Lessor in order to protect its title to
the Aircraft and its rights hereunder. Lessee will not place the Aircraft in
operation or exercise any control or dominion over the same until such
Aircraft marking has been placed thereon. Lessee will replace promptly any
such Aircraft marking which may be removed, defaced or destroyed.
(d) Lessee shall be entitled from time to time during the Term of this
lease to acquire and install on the Aircraft at Lessee's expense, any
additional accessory device or equipment as Lessee may desire (each such
accessory, device or equipment, an "Addition"), but only so long as such
Addition (i) is ancillary to the Aircraft; (ii) is not required to render the
Aircraft complete for its intended use by Lessee; (iii) does not alter or
impair the originally intended function or use of the Aircraft; and (iv) can
be readily removed without causing material damage. Title to each Addition
which is not removed by Lessee prior to the return of the Aircraft to Lessor
shall vest in Lessor upon such return. Lessee shall repair all damage to the
Aircraft resulting from the installation or removal of any Addition so as to
restore the Aircraft to its condition prior to installation, ordinary wear
and tear excepted.
(e) Any alteration or modification (each an "Alteration") with respect
to the Aircraft that may at any time during the Term of this Lease be
required to comply with any applicable law or any governmental rule or
regulation shall be made at the expense of Lessee. Any repair made by Lessee
of or upon the Aircraft or replacement parts, including any replacement
engine, installed thereon in the course of repairing or maintaining the
Aircraft, or any Alteration required by law or any governmental rule or
regulation, shall be deemed an accession, and title thereto shall be
immediately vested in Lessor without cost or expense to Lessor.
(f) Except as permitted under this Section VII, Lessee will not modify
the Aircraft or affix or remove any accessory to the Aircraft leased
hereunder.
VIII. LIENS, SUBLEASE AND ASSIGNMENT:
(a) LESSEE SHALL NOT SELL, TRANSFER, ASSIGN OR ENCUMBER THE AIRCRAFT,
ANY ENGINE OR ANY PART THEREOF, LESSOR'S TITLE OR ITS RIGHTS UNDER THIS LEASE
AND SHALL NOT SUBLET OR PART WITH POSSESSION OF THE AIRCRAFT OR ANY ENGINE OR
PART THEREOF OR ENTER INTO ANY INTERCHANGE AGREEMENT WITHOUT THE WRITTEN
CONSENT OF LESSOR WHICH WILL NOT BE UNREASSONABLY WITHHELD; PROVIDED,
HOWEVER, THAT LESSEE MAY ASSIGN ITS RIGHTS IN THE AIRCRAFT AND THIS LEASE TO
TENNESSEE RESTAURANT COMPANY UPON GIVING LESSOR NOT LESS THAN FORTY-FIVE (45)
DAYS PRIOR WRITTEN NOTICE OF SUCH ASSIGNMENT, AND IN SUCH EVENT LESSEE AND
TENNESSEE RESTAURANT COMPANY WILL SIGN SUCH ASSIGNMENT DOCUMENTATION AS
LESSOR MAY REASONABLY REQUEST. Lessee shall not permit any engine to be used
on any other Aircraft. Lessee shall keep the Aircraft each engine and any
part thereof free and clear of all liens and encumbrances other than those
which result from (i) the respective rights of Lessor and Lessee as herein
provided; (ii) liens arising from the acts of Lessor; (iii) liens for taxes
not yet due; and (iv) inchoate materialmen's, mechanics',
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ILLEGIBLE, employees or other like liens arising from the ordinary course of
business of Lessee for sums not yet delinquent or being contested in good
faith (and for the payment of which adequate assurances in Lessor's judgment
have been provided Lessor).
(b) Lessor and any assignee of Lessor may assign this Lease, or any
party hereof and/or the Aircraft subject hereto provided that such assignment
shall be subject to this Lease and the rights of the Lessee under it. Lessee
hereby waives and agrees not to assert against any such assignee, or
assignee's assigns, any defense, set-off, recoupment claim or counterclaim
which Lessee has or may at any time have against Lessor for any reason
whatsoever.
IX. LOSS, DAMAGE AND STIPULATED LOSS VALUE: Lessee hereby assumes and
shall bear the entire risk of any loss, theft, confiscation, expropriation,
requisition, damage to, or destruction of, the Aircraft, any engine or part
thereof from any cause whatsoever. Lessee shall promptly and fully notify
Lessor in writing if the Aircraft, or any engine thereto shall be or become
worn out, lost, stolen, confiscated, expropriated, requisitioned, destroyed,
irreparably damaged or permanently rendered unfit for use from any cause
whatsoever (such occurrences being hereinafter called "Casualty
Occurrences"). In the event that, in the opinion of Lessor, a Casualty
Occurrence has occurred which affects only the engine(s) of the Aircraft,
then Lessee, at its own cost and expense, shall replace such engine with an
engine acceptable to Lessor and shall cause title to such engine to be
transferred to Lessor for lease to Lessee hereunder. Upon transfer of title
to Lessor of such engine(s), such engine shall be subject to the terms and
conditions of this Lease, and Lessee shall execute whatever documents or
filings Lessor deems necessary and appropriate in connection with the
substitution of such replacement engine for the original engine. In the event
that, in the opinion of Lessor, a Casualty Occurrence has occurred in respect
to the Aircraft in its entirety, on the Rent Payment Date next succeeding a
Casualty Occurrence (the "Payment Date"), Lessee shall pay Lessor the sum of
(a) the Stipulated Loss Value as set forth in Annex F calculated as of the
Rent Payment Date immediately preceding such Casualty Occurrence; and (b) all
Rent and other amounts which are due hereunder as of the Payment Date. Upon
payment of all sums due hereunder, the Terms of this Lease as to the Aircraft
shall terminate and Lessor shall be entitled to recover possession of the
salvage thereof.
X. INSURANCE: Lessee shall secure and maintain in effect at its own
expense throughout the Term hereof insurance against such hazards and for
such risks as Lessor may direct. All such insurance shall be with companies
satisfactory to Lessor. Without limiting the generality of the foregoing,
Lessee shall maintain (a) breach of warranty insurance, (b) liability
insurance covering public liability and property, cargo and environmental
damage (against hazards and risks as is generally available in the industry
with respect to like Aircraft), in amounts not less than twenty (20) million
U.S. dollars with any single occurrence, (c) all-risk aircraft hull and
engine insurance (including, without limitation, foreign object damage
insurance) in an amount which is not less than the Stipulated Loss Value, and
(d) confiscation and war risk insurance. All insurance shall name the Lessor
as owner of the Aircraft and as loss payee and additional insured (without
responsibility for premiums) and shall provide that any cancellation or
substantial change in coverage shall not be effective as to the Lessor for
thirty (30) days after receipt by Lessor of written notice from such
insurer(s) of such cancellation or change (or in the case of war risk such
lesser period as customarily available), shall insure Lessor's interest
regardless of any breach or violation by Lessee of any warranties,
declarations or conditions in such policies, shall include a severability of
interest clause providing that such policy shall operate in
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the same manner as if there were a separate policy covering each insured,
shall waive any right of set-off against Lessee or Lessor, and shall waive
any rights of subrogation against Lessor. Such insurance shall be primary and
not be subject to any offset by any other insurance carried by Lessor or
Lessee. Upon the occurrence of an Event of Default, Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to make proof of loss and claim for and
to receive payment of and to execute or endorse all documents, checks or
drafts in connection with all policies of insurance in respect of the
Aircraft. Any expense of adjusting or collecting insurance proceeds shall be
borne by Lessee. Lessor may, at its option, apply proceeds of insurance, in
whole or in part, to (i) repair or replace the Aircraft or any part thereof
or (ii) satisfy any obligation of Lessee to Lessor hereunder. Any balance
remaining (taking into account salvage of the Aircraft) which is above Fair
Market Value, as defined in Section XIX, as of the date of the loss shall be
returned to Lessee.
XI. RETURN OF AIRCRAFT:
(a) Upon the expiration or termination of this Lease, Lessee, at its
own expense, will return the Aircraft and shall deliver all logs, manuals and
data, including without limitation inspection, modification and overhaul
records required to be maintained with respect thereto under this Lease or
under the applicable rules and regulations of the FAA and under the
manufacturer's recommended maintenance program, along with a currently
effective FAA airworthiness certificate to Lessor to any location within the
continental United States as Lessor shall direct. Lessee shall, upon request,
assign to Lessor its rights under any manufacturer's maintenance service
contract or extended warranty for the Aircraft, any engine or part thereof.
All expenses for return of the Aircraft and delivery of the aforementioned
logs, manuals and data shall be borne by Lessee. The Aircraft shall be
returned in the condition in which the Aircraft is required to be maintained
pursuant to Section VII hereof, but with all logos or other identifying marks
of Lessee removed. Additionally, the Lessee (i) shall have had completed
within thirty (30) days prior to return, the next required annual inspection
on the Aircraft, and the next periodic inspection on each engine; (ii) shall
assure that each engine shall have available operating hours until both the
next scheduled "hot section" inspection and next scheduled major overhaul of
not less than 50% of the total operating hours respectively available between
such hot section inspections or major overhauls; and (iii) shall assure that
the airframe shall have at least: (aa) one-half the available operating
hours; and (bb) one-half the available operating months until the next
schedule major airframe inspection allowable between major airframe
inspections.
(b) Upon the return of the Aircraft: (i) each fuel tank shall contain
the same quantity of fuel as was contained in such tanks when such Aircraft
was delivered to Lessee, (which shall be presumed to be 50 percent (50%) of
full capacity unless otherwise specified in the purchase order or other
purchase documents or, in the case of differences in such quantity, an
appropriate adjustment will be made by payment at the then current market
price of fuel.
(c) Upon return of the Aircraft, Lessor shall arrange for the
inspection of same within one hundred and twenty (120) days of return to
determine if the Aircraft has been maintained and returned in accordance with
the provisions hereof. Lessee shall be responsible for the cost of such
inspection and shall pay Lessor such amount as additional Rent within ten
(10) days of demand for same. Lessor shall promptly provide Lessee with a
copy of the invoice and the inspection report. In the event that the results
of such inspection indicate that the Aircraft, any engine thereto or part
thereof, has not been
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maintained or returned in accordance with the provisions hereof, Lessee shall
pay to Lessor within thirty (30) days of demand, as liquidated damages, the
estimated cost ("Estimated Cost") of servicing or repairing the Aircraft,
engine or part. The Estimated Cost shall be determined as follows: Each of
Lessee and Lessor shall obtain one quote, from a qualified, unaffiliated
entity as to the cost of performing such service or repairs. Lessee shall
bear the cost, if any, incurred by Lessor in obtaining such quotes. If such
quotes are not the same, and the parties cannot agree on an Estimated Cost
the parties shall select an independent appraiser to determine the Estimated
Cost, which appraisal shall be final and binding on both parties.
(d) If Lessee fails to return the Aircraft on termination or
expiration of the Term, Lessor shall be entitled to damages equal to the
higher of (i) the Rent for the Aircraft, pro-rated on a per diem basis, for
each day the Aircraft is retained in violation of the provisions hereof; or
(ii) the daily fair market rental for the Aircraft at termination or
expiration, as applicable. Such damages for retention of the Aircraft after
termination or expiration of the Term shall not be interpreted as an
extension or reinstatement of the Term.
(e) All of Lessor's rights contained in this Section shall survive the
expiration or other termination of this Lease.
XII. EVENTS OF DEFAULT: The term "Event of Default", wherever used herein,
shall mean any of the following events under this Lease, whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary,
or come about or be effected by operation of law, or be pursuant to or in
compliance with any judgment, decree or order of any court or any order, rule
or regulation or any administrative or governmental body: (a) Lessee shall
fail to make any payment of Rent within ten (10) days after receipt of
written notice the same shall become due; or (b) Lessee shall fail to keep in
fully force and effect insurance required under this Lease; or (c) Lessee
shall or shall attempt to (except as expressly permitted by the provisions of
this Lease) remove, sell, transfer, encumber, part with possession of, assign
or sublet the Aircraft, any engine or any part thereof, use the Aircraft for
an illegal purpose, or permit the same to occur; or (d) Lessee shall fail to
perform or observe any covenant, condition or agreement not included within
(a), (b) or (c) above which is required to be performed or observed by it
under this Lease or any agreement, document or certificate delivered by
Lessee in connection herewith, and such failure shall continue for twenty
(20) days after receipt of written notice thereof from Lessor to Lessee; or
(e) any representation or warranty made by Lessee in this Lease or any
agreement, document or certificate delivered by Lessee in connection herewith
or pursuant hereto shall prove to have been incorrect in any material respect
when any such representation or warranty was made or given (or, if a
continuing representation or warranty, at any material time); or (f) Lessee
shall generally fail to pay its debts as they become due or shall file a
voluntary petition in bankruptcy or a voluntary petition or an answer seeking
reorganization in a proceeding under any bankruptcy laws (as now or hereafter
in effect) or an answer admitting the material allegations of a petition
filed against Lessee in any such proceeding, or Lessee shall, by voluntary
petition, answer or consent, seek relief under the provisions of any other
now existing or future bankruptcy or other similar law (other than a law
which does not provide for or permit the readjustment or alteration of
Lessee's obligations hereunder) providing for the reorganization or
liquidation of corporations, or providing for an agreement, composition,
extension or adjustment with its creditors; or (g) a petition is filed
against Lessee in a proceeding under applicable bankruptcy laws or other
insolvency laws (other than any law which does not provide for or permit any
readjustment or alteration of Lessee's obligations hereunder in each case),
as now or
9
hereafter in effect, and is not withdrawn or dismissed within ninety (90)
days thereafter, or if, under the provisions of any law (other than any law
which does not provide for or permit any readjustment or alteration of
Lessee's obligations hereunder in each case) providing for reorganization or
liquidation of corporations which may apply to Lessee, any court of competent
jurisdiction shall assume jurisdiction, custody or control of Lessee or of
any substantial part of its property and such jurisdiction, custody or
control shall remain in force unrelinquished, unstayed or unterminated for a
period of sixty (60) days; or (h) Lessee breaches or is in default beyond
notice and reasonable cure period, if any, under any other agreement by and
between Lessor and Lessee; or (i) there is a material adverse change in the
financial condition of Lessee from the time of execution hereof.
XIII. REMEDIES:
(a) Upon the occurrence of any Event of Default and so long as the same
shall be continuing, Lessor may, at its option, at any time thereafter,
exercise one or more of the following remedies, as Lessor in its sole
discretion shall lawfully elect: (i) demand that Lessee forthwith pay as
liquidated damages, for loss of a bargain and not as a penalty, an amount
equal to the Stipulated Loss Value of the Aircraft, computed as of the Basic
Rent Date immediately preceding such demand together with all Rent and other
amounts due and payable for all periods up to and including the Basic Rent
Date following the date on which Lessor made its demand for liquidated
damages; (ii) demand that Lessee pay all amounts due for failure to maintain
or return the Aircraft as provided herein and cause Lessee to assign to
Lessor Lessee's rights under any manufacturer's service program contract or
any extended warranty contract in force for the Aircraft; (iii) proceed by
appropriate court action, either at law or in equity, to enforce the
performance by Lessee of the applicable covenants of this Lease or to recover
damages for breach hereof; (iv) by notice in writing terminate this Lease,
whereupon all rights of Lessee to use of the Aircraft or any part thereof
shall absolutely cease and terminate, and Lessee shall forthwith return the
Aircraft in accordance with Section XI, but Lessee shall remain liable as
provided in Section XI; (v) request Lessee to return the Aircraft to a
designated location in accordance with Section XI; (vi) enter the premises,
with or without legal process, where the Aircraft is believed to be and take
possession thereof; (vii) sell or otherwise dispose of the Aircraft at
private or public sale, in bulk or in parcels, with or without notice, and
without having the Aircraft present at the place of sale; (viii) lease or
keep idle all or part of the Aircraft; (ix) use Lessee's premises for storage
pending lease or sale or for holding a sale without liability for rent or
costs; (x) collect from Lessee all costs, charges and expenses, including
reasonable legal fees and disbursements, incurred by Lessor by reason of the
occurrence of any Event of Default or the exercise of Lessor's remedies with
respect thereto; (xi) in the case of a failure of Lessee to comply with any
provision of this Lease, Lessor may effect such compliance, in whole or in
part, and collect from Lessee as additional Rent, all monies spent and
expenses incurred or assumed by Lessor in effecting such compliance; and/or
(xii) declare any default under the terms of this Lease to be a default under
any other agreement between Lessor and Lessee. Lessor shall, at all times,
act in a commercially reasonable manner with regard to any disposition of the
Aircraft pursuant to this Paragraph (a).
(b) The foregoing remedies are cumulative, and any or all thereof may
be exercised in lieu of or in addition to each other or any remedies at law,
in equity, or under statute.
(c) Lessor shall have the right to any proceeds of sale, lease or
other disposition of the Aircraft, if any, and shall have the right to apply
same in
10
the following order of priorities: (i) to pay all of Lessor's costs, charges
and expenses incurred enforcing its rights hereunder or in taking,
removing, holding, repairing, selling, leasing or otherwise disposing of the
Aircraft; then, (ii) to the extent not previously paid by Lessee, to pay
Lessor all sums due from Lessee hereunder; then (iii) to reimburse to Lessee
any sums previously paid by Lessee as liquidated damages; and (iv) any
surplus shall be retained by Lessor.
(d) Waiver of any default shall not be a waiver of any other or
subsequent default. Lessor's effecting compliance in accordance with
sub-section (a)(xi) hereof shall not constitute a waiver of an Event of
Default. The failure or delay of Lessor in exercising any rights granted it
hereunder upon any occurrence of any of the contingencies set forth herein
shall not constitute a waiver of any such right upon the continuation or
recurrence of any such contingencies or similar contingencies and any single
or partial exercise of any particular right by Lessor shall not exhaust the
same or constitute a waiver of any other right provided for in this Lease.
XIV. NET LEASE; NO SET-OFF, ETC: This Lease is a net lease. Lessee's
obligation to pay Rent and other amounts due hereunder shall be absolute and
unconditional. Lessee shall not be entitled to any abatement or reduction of,
or set-offs against, said Rent or other amounts, including, without
limitation, those arising or allegedly arising out of claims (present or
future, alleged or actual, and including claims arising out of strict tort of
Lessor) of Lessee against Lessor under this Lease or otherwise. Except as
otherwise expressly stated in Sections IX, XVIII and XIX herein, nor shall
this Lease terminate or the obligations of Lessee be affected by reason of
any defect in or damage to, or loss of possession, use or destruction of, the
Aircraft from whatsoever cause. it is the intention of the parties that Rent
and other amounts due hereunder shall continue to be payable in all events in
the manner and at the times set forth herein unless the obligation to do so
shall have been terminated pursuant to the express terms hereof.
XV. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify, save and keep harmless Lessor,
its agents, employees, successors and assigns from and against any and all
losses, damages, penalties, injuries, claims, actions and suits, including
reasonable legal expenses, of whatsoever kind and nature, in contract or tort
or otherwise, except for those caused solely by the gross negligence or
willful misconduct of Lessor, and including, but not limited to, Lessor's
strict liability in tort, arising out of (i) the selection, manufacture,
purchase, acceptance or rejection of Aircraft, the ownership of Aircraft
during the Term of this Lease, and the delivery, lease, possession,
maintenance, use, condition, return or operation of the Aircraft (including,
without limitation, latent and other defects, whether or not discoverable by
Lessor or Lessee and any claim for patent, trademark or copyright
infringement), or (ii) the condition of the Aircraft sold or disposed of
after use by Lessee, any sublessee or employees of Lessee; provided that the
foregoing indemnity shall not extend to any losses, damages, penalties,
injuries, claims, actions or suits to the extent attributable to acts or
events which occur after the Aircraft is no longer leased to the Lessee under
this Lease. Lessee shall, upon request, defend any actions based on, or
arising out of, any of the foregoing.
(b) Lessee hereby represents and warrants that (i) on the Commencement
Date, the Aircraft will qualify for all of the items of deduction and credit
specified in Annex B ("Tax Benefits") in the hands of Lessor (all references
to Lessor in this Section XV include Lessor and the consolidated taxpayer
11
group of which Lessor is a member), and (ii) at no time during the Term of
this Lease will Lessor take or omit to take, nor will permit any such
sublessee or assignee to take or omit to take, any action (whether or not
such act or omission is otherwise permitted by Lessor or the provisions of
this Lease), which will result in the disqualification of the Aircraft for,
or recapture of, all or any portion of such Tax Benefits.
(c) If as a result of a breach of any representation, warranty or
covenant of the Lessee contained in this Lease (i) tax counsel of Lessor
shall determine that Lessor is not entitled to claim on its federal income
tax return all or any portion of the Tax benefits with respect to any
Aircraft, or (ii) any such Tax Benefit claimed on the Federal income tax
return of Lessor is disallowed or adjusted by the Internal Revenue Service,
or (iii) any such Tax Benefit is recomputed or recaptured (any such
determination, disallowance, adjustment, recomputation or recapture being
hereinafter called a "Loss"), then Lessee shall pay to Lessor, as an indemnity
and as additional Rent, such amount as shall, in the reasonable opinion of
Lessor, cause Lessor's after-tax economic yields and cash flows, computed on
the same assumptions, including tax rates (unless any adjustment has been
made under Section III hereof, in which case the Effective Rate used in the
next preceding adjustment shall be substituted), as were utilized by Lessor
in originally evaluating the transaction (such yields and flows being
hereinafter called the "Net Economic Return") to equal the Net Economic
Return that would have been realized by Lessor if such loss had not occurred.
Such amount shall be payable on demand accompanied by a statement describing
in reasonable detail such Loss and the computation of such amount.
(d) All of Lessor's rights, privileges and indemnities contained in
this Section shall survive the expiration or other termination of this Lease
and the rights, privileges and indemnities contained herein are expressly
made for the benefit of, and shall be enforceable by Lessor, its successors
and assigns.
XVI. DISCLAIMER: LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE AIRCRAFT
WITHOUT ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES AND THAT LESSOR
IS LEASING THE AIRCRAFT IN AN "AS IS" CONDITION. LESSOR DOES NOT MAKE, HAS
NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO
THE AIRCRAFT LEASED HEREUNDER OR ANY COMPONENT THEREOF, OR ANY ENGINE
INSTALLED THEREON, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO
CONDITION, AIRWORTHINESS, DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF
MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR
OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. All
such risks, as between Lessor and Lessee, are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the following, except if
caused by the gross negligence or willful misconduct of Lessor (i) any
liability, loss or damage caused or alleged to be caused directly or
indirectly by any Aircraft, any inadequacy thereof, any deficiency or defect
(latent or otherwise) therein, or any other circumstance in connection
therewith; (ii) the use, operation or performance of any Aircraft or any
risks relating thereto; (iii) any interruption of service, loss of business
or anticipated profits or consequential damages; or (iv) the delivery,
operation, servicing, maintenance, repair, improvement or replacement of any
Aircraft. If, and so long as, no Event of Default exists under this Lease,
Lessee shall be, and hereby is, authorized during the Term to assert
12
and enforce, at Lessee's sole cost and expense, from time to time, in the
name of and for the account of Lessor and/or Lessee, as their interests may
appear, whatever claims and rights Lessor may have against any Supplier of
the Equipment.
XVII. REPRESENTATIONS AND WARRANTIES OF LESSEE: Lessee hereby represents and
warrants to Lessor that on the date hereof and at all times during the Term
hereof:
(a) Lessee has adequate power and capacity to enter into, and perform
under, this Lease and all related documents (together, the "Documents") and
is duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Aircraft is
to have its primary hangar location, and any jurisdiction requiring such
qualifications.
(b) The Documents have been duly authorized, executed and delivered by
Lessee and constitute valid, legal and binding agreements, enforceable in
accordance with their terms, except to the extent that the enforcement of
remedies therein provided may be limited under applicable bankruptcy and
insolvency laws.
(c) No approval, consent or withholding of objections is required from
any governmental authority or instrumentality with respect to the entry into
or performance by Lessee of the Documents except such as have already been
obtained.
(d) The entry into and performance by Lessee of the Documents will not:
(i) violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or By-Laws; or (ii) result
in any breach of, constitute a default under or result in the creation of any
lien, charge, security interest or other encumbrance upon any Aircraft
pursuant to any indenture, mortgage, deed of trust, bank loan or credit
agreement or other instrument (other than this Lease) to which Lessee is a
party.
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or
affecting Lessee, which will have a material adverse effect on the ability of
Lessee to fulfill its obligations under this Lease.
(f) The Aircraft is and will remain tangible personal property.
(g) Lessee has received a copy of the survey completed in accordance
with Section I hereof. Since the date thereof, there has not occurred any
material change in the configuration or condition of the Aircraft (except
such modifications or repairs specified in such survey as being necessary to
undertake) and neither engine has accrued more than fifty (50) operating
hours since the date of such survey.
(h) Each Balance Sheet and Statement of Income delivered to Lessor has
been prepared in accordance with generally accepted accounting principles,
and since the date of the most recent such Balance Sheet and Statement of
income, there has been no material adverse change.
13
(i) Lessee is and will be at all times validly existing and in good
standing under the laws of the State of its incorporation (specified in the
first sentence of this Lease) and Lessee is and will continue to be a
"Citizen of the United States" within the meaning of Section 101(16) of the
Federal Aviation Act. Unless Lessor has consented in writing, Lessee shall
not consolidate, reorganize or merge into any other corporation or entity or
sell, convey, transfer or lease all or substantially all of its property
during the Term hereof; provided that Lessee may merge or consolidate with or
into Tennessee Restaurant Company or assign its interests in the Aircraft and
this Lease to Tennessee Restaurant Company upon giving Lessor not less than
forty-five (45) days prior written notice thereof and in such event Lessee
and Tennessee Restaurant Company will sign such assignment documents as
lessor may reasonably request.
(j) The chief executive office or chief place of business (as either
of such terms is used in Article 9 of the uniform Commercial Code) of Lessee
is located at the address set forth above, and Lessee agrees to give Lessor
prior written notice of any relocation of said chief executive office or
chief place of business from its present location.
(k) A copy of this Lease, and a current and valid AC Form 8050-1 will
be kept on the Aircraft at all times during the Term of this Lease.
(l) Lessee has selected the Aircraft, manufacturer and vendor thereof,
and all maintenance facilities required thereby.
(m) Lessee shall maintain all logs, books and records (including any
computerized maintenance records) pertaining to the Aircraft and engines and
their maintenance during the Term in accordance with FAA rules and
regulations.
(n) Lessee shall not operate the Aircraft under Part 135 of the Federal
Aviation Regulations without the prior written approval of Lessor.
(o) Lessee shall notify the FAA forty-eight (48) hours prior to the
first flight of the Aircraft.
XVIII. EARLY TERMINATION:
(a) On or after the First Termination Date (specified in Annex B),
Lessee may, so long as no Event of Default exists hereunder, terminate this
Lease upon at least ninety (90) days prior written notice to Lessor effective
on the Rent Payment Date ("Termination Date") specified in such notice, in
addition to other termination rights contained in Addendum No. 3 to Annex B.
(b) Lessee shall, and Lessor may, solicit cash bids for the Aircraft on
an AS IS, WHERE-IS basis without recourse to or warranty from Lessor, express
or implied ("AS IS BASIS"). Prior to the Termination Date, Lessee shall, (i)
certify to Lessor any bids received by Lessee; and (ii) pay to Lessor, (a)
the Termination Value (calculated as of the Termination Date) for the
Aircraft; and (b) all Rent and other sums due and unpaid as of the
Termination Date. Neither Lessee nor its Affiliates shall be permitted to bid.
(c) Provided that all amounts due hereunder have been paid on the
Termination Date, Lessor shall (i) sell the Aircraft on an AS IS BASIS for
cash to the highest bidder; and (ii) refund the proceeds of such sale (net of
any related expenses) to Lessee up to the amount of the Termination Value
paid by Lessee. If such sale is not consummated, no termination shall occur
and Lessor shall refund the Termination Value (less any expenses incurred by
Lessor) to Lessee, but Lessee may solicit new bids and Lessee's election,
until the Aircraft is sold.
14
(d) Notwithstanding the foregoing, Lessor may elect by written notice,
at any time prior to the Termination Date, not to sell the Aircraft. In that
event, on the Termination Date Lessee shall: (i) return the Aircraft (in
accordance with Section XI); and (ii) pay to Lessor all amounts required
under Section XVIII(b) less the amount of the highest bid certified by Lessee
to Lessor.
XIX. PURCHASE OPTION:
(a) So long as there is no Event of Default hereunder and the lease has
not been earlier terminated, Lessee may at Lease expiration, upon at least
ninety (90) but not more than one hundred and eighty (180) days prior written
notice to Lessor, purchase the Aircraft on an AS IS BASIS for cash equal to
its then Fair Market Value (plus all applicable sales taxes) in addition to
other purchase options contained in Addenda Nos. 1 and 2 to Annex 8.
(b) "Fair Market Value" shall mean the price which a willing buyer (who
is neither a lessee in possession nor a used equipment dealer) would pay for
the Aircraft in an arm's-length transaction to a willing seller under no
compulsion to sell; PROVIDED, HOWEVER, that in such determination: (i) the
Aircraft shall be assumed to be in the condition in which it is required to
be maintained and returned under this Lease; (ii) in the case of any
installed additions to the Aircraft, same shall be valued on an installed
basis; and (ii) costs of removal of the Aircraft from the current location
shall not be a deduction from such valuation. If Lessor and Lessee are unable
to agree on the Fair Market Value at least sixty (60) days before Lease
expiration, Lessor shall appoint an independent appraiser (reasonably
acceptable to Lessee) to determine Fair Market Value, and that determination
shall be final, binding and conclusive. Lessee shall bear all costs
associated with any such appraisal.
(c) Lessee shall be deemed to have waived this option unless it
provides Lessor with written notice of its irrevocable election to exercise
the same within fifteen (15) days after Fair market Value is determined (by
agreement or appraisal).
XX. MISCELLANEOUS:
(a) Unless and until Lessee exercises its rights under Section XVIII or
XIX above, nothing herein contained shall give or convey to Lessee any right,
title or interest in and to the Aircraft except as a lessee under this Lease.
Any cancellation or termination by Lessor, pursuant to the provisions of this
Lease, or any supplement or amendment hereto, or the lease of any Aircraft
hereunder, shall not release Lessee from any then outstanding obligations to
Lessor hereunder. All Aircraft shall at all times remain personal property of
Lessor regardless of the degree of its annexation to any real property and
shall not by reason of any installation in, or affixation to, real or
personal property become a part thereof.
(b) Time is of the essence of this Lease. Lessee agrees, upon Lessor's
request, to execute any instrument necessary or expedient for filing,
recording or perfecting the interest of Lessor. LESSEE HEREBY UNCONDITIONALLY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS LEASE, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS,
15
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY RELATED
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION. In the event of litigation, this Lease may be filed as a written
consent to a trial by the court. All notices required to be given hereunder
shall be deemed adequately given if delivered in hand or sent by registered
or certified mail to the addressee at its address stated herein, or at such
other place as such addressee may have designated in writing. This Lease and
any Annexes hereto constitute the entire agreement of the parties with
respect to the subject matter hereof, and all Annexes referenced herein are
incorporated herein by reference. NO VARIATION OR MODIFICATION OF THIS LEASE
OR ANY WAIVER OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN
WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH PARTY HERETO.
(c) Excluding Rent, any other amount due hereunder and not paid to
Lessor within ten (10) days of receipt of notice that it is overdue shall
bear interest, both before and after any judgment or termination hereof, at
the lesser of eighteen percent (18%) per annum or the maximum rate allowed by
law. Any provisions in this Lease which are in conflict with any statute, law
or applicable rule shall be deemed omitted, modified or altered to conform
thereto.
XXI. TRUTH-IN-LEASING:
(a) LESSEE HAS REVIEWED THE AIRCRAFT'S MAINTENANCE AND OPERATION LOGS
SINCE ITS DATE OF MANUFACTURE AND HAS FOUND THAT THE AIRCRAFT HAS BEEN
MAINTAINED AND INSPECTED UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS.
LESSEE CERTIFIES THAT THE AIRCRAFT PRESENTLY COMPLIES WITH THE APPLICABLE
MAINTENANCE AND INSPECTION REQUIREMENTS OF PART 91 OF THE FEDERAL AVIATION
REGULATIONS.
(b) LESSEE CERTIFIES THAT LESSEE, AND NOT LESSOR, IS RESPONSIBLE FOR
OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE DURING THE TERM HEREOF.
LESSEE FURTHER CERTIFIES THAT LESSEE UNDERSTANDS ITS RESPONSIBILITY FOR
COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
(c) LESSEE CERTIFIES THAT THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED
UNDER PART 91 OF THE FEDERAL AVIATION REGULATIONS FOR OPERATIONS TO BE
CONDUCTED UNDER THIS LEASE. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS
BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN
BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE, GENERAL
AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT OFFICE.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Lease to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation TRC Realty Co.
------------------------------------ ---------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ signature
-------------------------------- ---------------------------------------
Title: Region Credit Analyst Title: Vice President
----------------------------- --------------------------------
16
ANNEX A
DESCRIPTION OF AIRCRAFT, LESSOR'S COST, AND AIRCRAFT MARKINGS
1. DESCRIPTION
ONE (1) USED 1992, BEECHJET 400A Aircraft which consists of the following
components:
(a) Airframe bearing FAA Registration ▇▇▇▇ N 998GP and Manufacturer's Serial
No. RK-32;
(b) TWO, (2) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇-15D-5 engines bearing Manufacturer's Serial
Nos. PCE-100248 and PCE-100245, respectively (each of which has 750 or more
rated takeoff horsepower or the equivalent of such horsepower);
(c) Standard accessories and optional equipment and such other items fitted
or installed on the Aircraft and set forth hereinafter:
AVIONICS PACKAGE:
Three Tube EFIS
▇▇▇▇▇▇▇ Pro Line IV all digital package
▇▇▇▇▇▇▇ FMS 850 flight management with data Base
Dual ▇▇▇▇▇▇▇ AHC-85E AHRS
Dual ▇▇▇▇▇▇▇ ADC-850 air data computer with altitude encoder
▇▇▇▇▇▇▇ APS-85 autopilot
▇▇▇▇▇▇▇ AAP-850 altitude awareness control
Rosemont probe
▇▇▇▇▇▇▇ CMA-764 VLF omega long range NAV
▇▇▇▇▇▇▇ WXR-850 doppler turbulence avoidance radar
Dual ▇▇▇▇▇▇▇ VHF-422A Comms
Dual ▇▇▇▇▇▇▇ ▇▇▇-▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇-▇▇▇ ADF receiver
Dual market beacons
Dual glide slopes
Dual ▇▇▇▇▇▇▇ DME-442 distance measuring equipment
Dual ▇▇▇▇▇▇▇ TDR-94 mode "S" transponders
▇▇▇▇▇▇▇ ALT-55B radar altimeter
▇▇▇▇▇▇▇ SDU-640A RMI
J.E.T. standby horizon
Dual digital clocks with timers
▇▇▇▇▇▇▇▇▇ A100A CVR
Wulfsberg Elitefone VI
Passenger briefing system
Flight hour meter
Cabin display -- true airspeed, altitude, temperature and time
Engine synchronizer
FEATURES:
Supplemental Freon Air Modifications (Hangar One); 400A Aft baggage
compartment extension (Hangar One); Fresh 400 inspection.
19
INTERIOR:
Freon air conditioning
Seven place cabin: 6 chairs (3 swiveling) and belted
Flushing toilet
6 drawer refreshment cabinet
3 drawer pyramid cabinet with flitephone
2 folding tables
Aft. vanity with water tank
Dual cockpit relief robes
Custom ice/cooler cabinet
Panasonic AG-513 television/VCR
Pioneer CDX-M4O CD player
Pioneer GM-800 4 channel amplifier
Pioneer DEX-M400 cordless remote control unite
Headliner: oyster ultrasuede
Cabin chairs: Light ▇▇▇▇ with English elm trim
Sidewalls: light ▇▇▇▇ with blue accent
EXTERIOR:
Overall: Matterhorn white, March 1994
Stripe: Yellow and Blue Stripes
Tail logo lights, Wing ice lights
(d) Those items of Lessee Furnished Equipment described in a ▇▇▇▇ of sale or
bills of sale therefor (copies of which are appended hereto), delivered by
Lessee to Lessor which constitute appliances and equipment which will be
installed on the Aircraft;
(e) Sales Tax $266,000.00; State of Illinois (to be paid directly by Lessee.)
Capitalized Lessor's Cost $3,800,000.00
II. Aircraft Markings (referenced in Section VII of Lease)
(a) Four-by-six inch plaque to be maintained in cockpit and affixed in
conspicuous position stating:
GENERAL ELECTRIC CAPITAL CORPORATION,
Owner and Lessor. TRC REALTY CO.
Lessee under a certain Lease dated as
of 4-14, 1994, has operational control
of this aircraft.
(b) Similar markings shall be permanently affixed to each engine.
Initials:
Lessee: [cad 157]SIGNATURE[cad 179]
Lessor: [cad 157]SIGNATURE[cad 179]
20
ANNEX B
SCHEDULE OF FINANCIAL TERMS
(10-year Basic Lease Term)
Basic Term Commencement Date: ▇-▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇: One Hundred Twenty (120) months
-------------------------------
Advance Rent: (a) Amount: $190,000.00
-------------------------------
(b) Due Date: Upon Acceptance
-------------------------------
Interim Rent: Due Date: N/A
-------------------------------
First Basic Rent Date: 4-14-94
----------------------------------------------
Basic Rent Dates: 14th of each month thereafter
----------------------------------------------
First Termination Date: Thirty-Six (36) months after the
----------------------------------------------
Basic Term Commencement Date
----------------------------------------------
Early Purchase Option Date(s): Thirty-Six (36) months and
----------------------------------------------
Sixty (60) months
----------------------------------------------
(Please refer Addendum No. 1 and
----------------------------------------------
Addendum No. 2)
----------------------------------------------
Cancellation Option: Please refer to Addendum No. 3
----------------------------------------------
Last Basic Rent Date: 3-14-04
----------------------------------------------
Expiration Date: 4-14-04
----------------------------------------------
Daily Lease Rate Factor: Factor Rental No.
-------------------- -----------------
0.16667% 1
-------------------- -----------------
0.02965% 2-60
-------------------- -----------------
0.03164% 61-120
-------------------- -----------------
Basic Term Lease Rate Factor(s): Factor Rental No.
-------------------- -----------------
5.00000% 1
-------------------- -----------------
0.88947% 2-60
-------------------- -----------------
0.94915% 61-120
-------------------- -----------------
Primary Hangar Location: Palwaukee Municipal Airport
----------------------------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------------------------
Last Delivery Date: December 31, 1994
----------------------------------------------
Tax Benefits: 200% declining balance method, switching to
----------------------------------------------
straight line method for the first taxable
----------------------------------------------
year for which using the straight line method
----------------------------------------------
with respect to the adjusted basis as of the
----------------------------------------------
beginning of such year will yield a larger
----------------------------------------------
allowance.
----------------------------------------------
Recovery Period: Five (5) years.
----------------------------------------------
Basis: 100% of Capitalize Lessor's Cost
----------------------------------------------
Initials:
Lessee:
Lessor:
21
ANNEX C
PURCHASE DOCUMENT(S) ASSIGNMENT AND CONSENT
THIS PURCHASE DOCUMENT(S) ASSIGNMENT ("Assignment") is dated as
of 4-14-94 by and between GENERAL ELECTRIC CAPITAL CORPORATION (the "Lessor")
and TRC REALTY CO. (the "Lessee").
W I T N E S S E T H :
Lessor and Lessee have entered into an Aircraft Lease dated as of
4-14-94 (the "Lease") pursuant to which Lessee has agreed to lease from
Lessor the Aircraft referred to therein. (All terms used herein which are not
otherwise defined shall have the meaning ascribed to them in the Lease.)
Lessee desires to lease rather than purchase the Aircraft and Lessor is
willing to acquire certain of Lessee's rights and interests under the
purchase order(s) or purchase contracts (hereinafter either referred to as
the "Purchase Documents") which Lessee has heretofore issued to the
Supplier(s) of such Aircraft.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, Lessor and Lessee hereby agree as follows:
SECTION I. ASSIGNMENT:
(a) Lessee does hereby assign and set over to Lessor all of Lessee's
rights and interests in and to such Aircraft and the Purchase Documents,
description of such Purchase Documents is attached hereto as Schedule I, as
the same relate to such Aircraft including, without limitation, in such
assignment (i) the right to purchase the Aircraft pursuant to the Purchase
Documents, and the right to take title to such Aircraft and to be named the
purchaser in the ▇▇▇▇ of sale for such Aircraft, (ii) all claims for damages
in respect of the Aircraft purchased by Lessor arising as a result of any
default by the Supplier thereof under the related Purchase Documents,
including, without limitation, all warranty and indemnity provisions
contained in such Purchase Documents, and all claims arising thereunder, in
respect of such Aircraft, and (iii) any and all rights of Lessee to compel
performance of the terms of such Purchase Documents.
(b) If, and so long as, no default or event which, with notice and the
lapse of time or both, would constitute a default under the Lease has
occurred and is continuing, Lessee shall be, and is hereby authorized on
behalf of Lessor in the name of Lessee to exercise all rights and powers of
the purchaser under all Purchase Documents with respect to such Aircraft and
to retain any recovery or benefit resulting from the enforcement of any
warranty, indemnity or right to damages under the Purchase Documents or
otherwise existing against the Supplier in respect of such Aircraft.
(c) Lessor agrees that it will promptly provide Lessee all notices and
communications it receives in connection with the Aircraft.
22
SECTION 2. CONTINUING LIABILITY OF LESSEE:
It is expressly agreed that, anything herein contained to the contrary
notwithstanding: (a) Lessee shall at all times remain liable to the Supplier
to perform all of the duties and obligations of the purchaser under the
Purchase Documents to the same extent as if this Agreement had not been
executed, (b) the execution of this Agreement shall not modify any
contractual rights of the Supplier under the Purchase Documents and the
liabilities of the Supplier under the Purchase Documents shall be to the same
extent and continue as if this Agreement had not been executed, (c) the
exercise by the Lessor of any of the rights assigned hereunder shall not
release Lessee from any of its duties or obligations to the Supplier under
the Purchase Documents, and (d) Lessor shall not have any obligation or
liability under the Purchase Documents by reason of, or arising out of, this
Agreement or be obligated to perform any of the obligations or duties of
Lessee under the Purchase Documents or to make any payment (other than under
the terms and conditions set forth in the Lease) or to make any inquiry of
the sufficiency of or authorization for any payment received by any Supplier
or to present or file any claim or to take any other action to collect or
enforce any claim for any payment assigned hereunder.
IN WITNESS WHEREOF, Lessee has caused this Assignment to be executed
this 14th day of April, 1994 by its duly authorized representative.
LESSEE: TRC REALTY CO.
BY: [SIGNATURE]
------------------------------------
TITLE: [SIGNATURE]
------------------------------------
DATE: 4-14-94
------------------------------------
The foregoing Assignment is hereby accepted this 14th day of April, 1994.
LESSOR: GENERAL ELECTRIC CAPITAL CORPORATION
BY: [SIGNATURE]
------------------------------------
TITLE: [SIGNATURE]
------------------------------------
DATE: 4-14-94
------------------------------------
CONSENT AND AGREEMENT
Supplier hereby consents ("Consent") to the above Assignment and agrees
not to asset any claims against Lessor or Lessee inconsistent with such
Assignment. Supplier agrees that the Purchase Documents are hereby amended as
necessary to provide as follows:
(a) Title to and risk of loss of the Aircraft shall pass to Lessor upon
Lessee's execution of the Certificate of Acceptance for such Aircraft; and
(b) Supplier hereby waives and discharges any security interest, lien
or other encumbrance in or upon the Aircraft and agrees
3
to execute such
documents as Lessor may request evidencing the release of any such
encumbrance and the conveyance of title thereto to Lessor.
(c) Supplier agrees that on and after the date this Consent is executed
it will not make any addition to or delete any items from the Purchase
Documents referred to in the Assignment without the prior written consent of
both Lessor and Lessee.
IN WITNESS WHEREOF, the undersigned has caused this Consent to be
executed this _____ day of April, 1994 by its duly authorized representative.
SUPPLIER:
Jet Trading International, Inc.
------------------------------------
BY: [SIGNATURE]
------------------------------------
TITLE: [SIGNATURE]
------------------------------------
DATE:
------------------------------------
4
Schedule No. 1
to
Annex C
to
Aircraft Lease
PURCHASE DOCUMENTS
1. Aircraft Purchase Agreement between TRC REALTY CO. and JET TRADING
INTERNATIONAL, INC. dated as of 4-14, 1994.
2. Manufacturer's Full Warranty ▇▇▇▇ of Sale to Lessor dated 4-14, 1994.
3. FAA ▇▇▇▇ of Sale.
1
ANNEX E
CERTIFICATE OF ACCEPTANCE
under
AIRCRAFT LEASE dated as of 4-14 , 1994 (the "Lease"), between
GENERAL ELECTRIC CAPITAL CORPORATION, as lessor (the "Lessor"), and TRC
Realty Co., as lessee (the "Lessee").
A. THE AIRCRAFT: Lessee hereby certifies that the Aircraft as set forth
and described in Schedule I hereto has been delivered to Lessee, inspected by
Lessee, found to be in good order and fully equipped to operate as required
under applicable law for its intended purpose, and is, on the date as set
forth below, and fully and finally accepted under the Lease.
B. REPRESENTATIONS BY LESSEE: Lessee hereby represents and warrants to
Lessor that on the date hereof:
(1) The representations and warranties of Lessee set forth in the
Lease and all certificates and opinions delivered in connection
therewith were true and correct in all respects when made and are
true and correct as of the date hereof.
(2) Lessee has satisfied or complied with all conditions precedent
and requirements set forth in the Lease, and the Commitment Letter
(if any), which are required to be or to have been satisfied or
complied with on or prior to the date hereof.
(3) No Default or Event of Default under the Lease has occurred and
is continuing on the date hereof.
(4) Lessee has obtained, and there are in full force and effect,
such insurance policies with respect to the Aircraft, as such term
is defined in the Lease, as are required to be obtained under the
terms of the Lease.
(5) Lessee has furnished no equipment for the Aircraft other than
as sold to Lessor and as stated on Schedule 1 hereto or permitted as
an Addition thereto pursuant to the Lease.
Date and Delivery of Acceptance: 4-14-94
-------------
IN WITNESS WHEREOF, Lessee has caused this Certificate of Acceptance to
be duly executed by its officers thereunto duly authorized.
TRC Realty Co.
---------------------------
By: /s/ signature
-----------------------
Title: Vice President
--------------------
Date: 4-14-94
---------------------
28
PURCHASE DOCUMENTS:
1. Aircraft Purchase Agreement between TRC Realty Co. and Jet Trading
International, Inc. dated as of 4-14 , 1994.
2. Manufacturer's Full Warranty ▇▇▇▇ of Sale to Lessor dated 4-14-94, 1994.
3. FAA ▇▇▇▇ of Sale
ANNEX F
STIPULATED LOSS AND TERMINATION VALUES
The Stipulated Loss and Termination Value of the Aircraft shall be the
percentage of Capitalized Lessor's Cost of the Aircraft* set forth opposite
the applicable rent payment.
*Capitalized Lessor's Cost $3,800,000.00.
Interim Period and
Basic Rent Stipulated Loss Termination
Payment Number Value Value
--------------- -------------- -----------
41 87.546 87.546
42 87.120 87.120
43 86.690 86.690
44 86.255 86.255
45 85.816 85.816
46 85.371 85.371
47 84.922 84,922
48 84.468 84.468
49 84.009 84.009
50 83.546 84.546
51 83.077 83.077
52 82.603 82.603
53 82.125 82.125
54 81.641 81.641
55 81.153 81.153
56 80.660 80.660
57 80.161 80.161
58 79.658 79.658
59 79.150 79.150
60 78.637 78.637
61 78.121 78.121
62 77.542 77.542
63 76.959 76.959
64 76.373 76.373
65 75.782 75,782
66 75.187 75.187
67 74.588 74.588
68 73.984 73.984
69 73.377 73.377
70 72.766 72.766
71 72.150 72.150
72 71.528 71.528
73 70.904 70.904
74 70.279 70.279
75 69.653 69.653
76 69.025 69.025
77 68.391 68.391
78 67.755 67.755
79 67.118 67.118
80 66.476 66.476
Page 2 of 3
41
ANNEX F
STIPULATED LOSS AND TERMINATION VALUES
The Stipulated Loss and Termination Value of the Aircraft shall be the
percentage of Capitalized Lessor's Cost of the Aircraft* set forth opposite
the applicable rent payment.
*Capitalized Lessor's Cost $3,800,000.00.
Interim Period and
Basic Rent Stipulated Loss Termination
Payment Number Value Value
--------------- -------------- -----------
81 65.831 65.831
82 65.185 65.185
83 64.533 64.533
84 63.876 63.876
85 63.217 63.217
86 62.556 62.556
87 61.893 61.893
88 61.228 61.228
89 60.558 60.558
90 59.885 59.855
91 59.211 59.211
92 58.531 58.531
93 57.849 57.849
94 57.165 57.165
95 56.476 56.476
96 55.780 55.780
97 55.082 55.082
98 54.383 54.383
99 53.681 53.681
100 52.977 52.977
101 52.267 52.267
102 51.555 51.555
103 50.841 50.841
104 50.121 50.121
105 49.399 49.399
106 48.675 48.675
107 47.944 47.944
108 47.207 47.207
109 46.469 46.469
110 45.727 45.727
111 44.984 44.984
112 44.238 44.238
113 43.486 43.486
114 42.732 42.732
115 41.975 41.975
116 41.212 41.212
117 40.447 40.447
118 39.679 39.679
119 38.905 38.905
120 38.124 38.124
Initials:
Lessee: [Signature]
Lessor:
Page 3 of 3
42
LETTER OF CREDIT AGREEMENT
THIS LETTER OF CREDIT AGREEMENT, dated 4-14, 1994 ("Agreement"), between TRC
REALTY CO., a CORPORATION organized and existing under the laws of the State
of VERMONT ("Lessee"), and GENERAL ELECTRIC CAPITAL CORPORATION, a New York
Corporation ("Lessor").
RECITALS:
WHEREAS, Lessee desires to lease from Lessor certain equipment or other
property (collectively, "Equipment") pursuant to a Aircraft Lease Agreement
dated as of 4-14, 1994 (said Aircraft Lease Agreement together all present
and future schedules thereto, as the same may be from time to time extended,
amended, restated or otherwise modified, being hereinafter collectively
referred to as the "Lease"); and
WHEREAS, Lessor is unwilling to lease the Equipment to Lessee unless and
until Lessee provides Lessor with certain additional assurances in the form
of a letter of credit as hereinafter described;
NOW, THEREFORE, in consideration of the above premises and promises
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. Concurrently with the execution of this Agreement, Lessee shall, at
its sole cost and expense and as additional security for the prompt payment
and performance of all of its obligations (whether now existing or hereafter
arising) under the Lease, deliver or cause to be delivered to Lessor an
irrevocable standby letter of credit ("Letter of Credit") which shall be (i)
in the amount of THREE HUNDRED EIGHTY THOUSAND AND 00/100 US Dollars (US
$380,000.00), (ii) issued by The First National Bank of Boston or other such
bank which is acceptable to Lessor in its reasonable discretion, (iii)
substantially in the form of EXHIBIT A attached hereto (or in such other form
as may be acceptable to Lessor in its sole discretion), and (iv) for an
initial term of one year with automatic annual renewals thereafter (without
amendment except for extension of the then current expiry date by an
additional year) until Lessee has received written notice from Lessor to the
effect that the Letter of Credit is being released in its entirety. After all
of Lessee's obligations under the Lease have been indefeasibly paid and
performed in full, Lessor shall, upon the request of Lessee, release the
Letter of Credit and provide Lessee with a written notice to that effect. If
requested by Lessor, the Letter of Credit shall, at Lessee's sole cost and
expense, be accompanied by an opinion of counsel regarding its due
authorization, execution, and enforceability (which opinion shall be in form
and substance, and from counsel, acceptable to Lessor in its sole discretion).
2. Lessee shall be in default under this Agreement and the Lease if
for any reason whatsoever: (a) Lessor fails to receive the Letter of Credit
in the time and manner required herein; (b) the Letter of Credit is not
automatically renewed as required herein; (c) Lessor receives any notice to
the effect that the Letter of Credit will not be automatically renewed as
required herein; or (d) Lessee otherwise breaches any of its obligations
hereunder. The foregoing events of default are in addition to, not in lieu
of, those set forth in the Lease.
3. Upon the occurrence of any default under this Agreement or an Event
of Default under the Lease, or upon the filing of any petition by or against
Lessee under any bankruptcy, insolvency or similar laws, then in any such
event and at any time
33
thereafter Lessor shall have the right, with or without notice to or demand
upon Lessee, to draw upon the Letter of Credit, by presenting to the issuer
one or more sight drafts and any other necessary documents, and to receive
(in a lump sum or in several sums from time to time at the sole discretion of
Lessor) and retain an amount not to exceed, in the aggregate, that available
under the Letter of Credit.
4. If Lessor draws on the Letter of Credit, the proceeds received by
Lessor therefrom shall be applied: first, towards costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred by Lessor in connection with such draw or in otherwise enforcing its
rights and remedies hereunder; and thereafter, towards any rent or other sums
of any kind then due and unpaid by Debtor under the Lease (in accordance with
the priorities contemplated thereby). Any excess proceeds may be held by
Lessor as cash collateral (commingled with its own funds and without any need
to pay interest or income thereon) for any further obligations of Lessee
under the Lease. Once all obligations of Lessee under the Lease have been
indefeasibly paid and performed in full, any remaining excess proceeds from
the Letter of Credit shall be remitted by Lessor to Lessee. In any event,
Lessee shall remain liable for any deficiency under the Lease.
5. Lessor's rights and remedies under this Agreement (including,
without limitation, the right to draw upon the Letter of Credit), the Lease
or otherwise are cumulative and may be exercised singularly or concurrently.
Neither any failure nor delay on the part of Lessor to draw upon the Letter
of Credit or to exercise any other rights or remedies shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or
remedy howsoever arising. Under no circumstances shall Lessor be deemed or
construed to have waived its right to draw upon the Letter of Credit or to
exercise any of its other rights or remedies unless such waiver is in writing
and executed by a duly authorized representative of Lessor. A waiver of any
right or remedy on any one occasion shall not operate as a waiver of such
right or remedy on any future occasion or as a waiver of any other right or
remedy.
6. LESSEE AND LESSOR HEREBY UNCONDITIONALLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, THE
LETTER OF CREDIT, THE LEASE, ANY DOCUMENTS RELATING HERETO OR THERETO, ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN THEM. The scope of
this waiver is intended to be all encompassing of any and all disputes that
may be filed in any court (including, without limitation, contract claims,
tort claims, breach of duty claims, and all other common law and statutory
claims). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE LETTER OF
CREDIT, THE LEASE OR ANY DOCUMENTS RELATING HERETO OR THERETO. In the event
of litigation, this Agreement may be filed as a written consent to trial by
the court.
7. Any notices to be given in connection herewith shall be delivered
in the manner contemplated by the Lease. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof,
and supersedes all prior understandings (whether written, verbal, implied or
otherwise) with respect thereto. None of the terms hereof may be amended,
waived or otherwise modified except pursuant to a written instrument duly
executed by the party to be charged. Lessor may assign its rights hereunder
34
at any time, but Lessee may not do so without the prior written consent of
Lessor, except that Lessee shall have the right to assign this Agreement to
any of its Affiliates as defined in the Aircraft Master Lease. This Agreement
shall be binding upon, and shall inure to the benefit of, Lessor, Lessee, and
their respective successors and permitted assigns.
IN WITNESS WHEREOF, Lessee and Lessor have caused their duly authorized
representatives to execute and delivery this Agreement on the year and day
first above written.
LESSEE: LESSOR:
--------------------------------------- ------------------------------------
TRC REALTY CO. GENERAL ELECTRIC CAPITAL CORPORATION
By: SIGNATURE By: SIGNATURE
---------------------------------- -------------------------------
Title: SIGNATURE Title: SIGNATURE
------------------------------- ------------------------------
35
ADDENDUM NO. 1
TO ANNEX B
TO AIRCRAFT LEASE AGREEMENT
DATED AS OF 4-14, 1994
THIS ADDENDUM (this "ADDENDUM") amends and supplements the above referenced
Annex B (the "SCHEDULE") to the above referenced lease (the "LEASE"),
between General Electric Corporation ("LESSOR") and TRC REALTY CO. ("LESSEE")
and is hereby incorporated unto the Schedule as though fully set forth
therein. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Lease.
For purposes of this Schedule only, the Lease is amended by adding the
following thereto:
EARLY PURCHASE OPTION.
(a) Provided that the Lease has not been earlier terminated and
provided further that no Event of Default is continuing. Lessee may, UPON AT
LEAST 30 DAYS BUT NO MORE THAN 270 DAYS PRIOR WRITTEN NOTICE TO LESSOR OF
LESSEE'S IRREVOCABLE ELECTION TO EXERCISE SUCH OPTION, purchase all (but not
less than all) of the Equipment listed and described in this Schedule on the
rent payment date (the "EARLY PURCHASE DATE") which is 60 months from the
Basic Term Commencement Date of the Schedule for a price equal to
$2,968,598.00 (the "FMV EARLY OPTION PRICE"), plus all applicable sales taxes
on an AS IS BASIS. Lessor and Lessee agree that the FMV Early Option Price is
a reasonable prediction of the Fair Market Value (as such term is defined in
Section XIX(b) hereof) of the Equipment at the time the option is
exercisable. Lessor and Lessee agree that if Lessee makes any non-severable
improvement to the Equipment which increases the value of the Equipment and
is not required or permitted or permitted by Sections VII or XI of the Lease
prior to lease expiration, then at the time of such option being exercised,
Lessor and Lessee shall adjust the purchase price to reflect any addition to
the price anticipated to result from such improvement. (The purchase option
granted by this subsection shall be referred to herein as the "EARLY PURCHASE
OPTION").
(b) If Lessee exercises its Early Purchase Option with respect to the
Equipment issued hereunder, then on the Early Purchase Option Date. Lessee
shall pay to Lessor any Rent and other sums due and unpaid on the Early
Purchase Option Date and Lessee shall pay the FMV Early Option Price, plus
all applicable sales taxes, to Lessor in cash.
Except as expressly modified hereby, all terms and provisions of the
Lease shall remain in full force and effect. This Addendum is not binding nor
effective with respect to the Lease or the Equipment until executed on behalf
of Lessor and Lessee by authorized representatives of Lessor and Lessee.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Addendum to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation TRAC Realty Co.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ------------------------------
Title: Region Credit Analyst Title: Vice-President
-------------------------------- ------------------------------
Attest:
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name:
------------------------------
ADDENDUM NO. 2
TO ANNEX B
TO AIRCRAFT LEASE AGREEMENT
DATED AS OF 4-14, 1994
THIS ADDENDUM (this "ADDENDUM") amends and supplements the above referenced
Annex B (the "Scheduler") to the above referenced lease (the "Lease"),
between General Electric Corporation ("Lessor") and TRC REALTY CO. ("Lessee")
and is hereby incorporated unto the Schedule as though fully set forth
therein. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Lease.
For purposes of this Schedule only, the Lease is amended by adding the
following thereto:
EARLY PURCHASE OPTION.
(a) Provided that the Lease has not been earlier terminated and
provided that no Event of Default is continuing. Lessee may, UPON AT
LEAST 30 DAYS BUT NO MORE THAN 270 DAYS PRIOR WRITTEN NOTICE TO LESSOR OF
LESSEE'S IRREVOCABLE ELECTION TO EXERCISE SUCH OPTION, purchase all (but not
less than all) of the Equipment listed and described in this Schedule on the
rent payment date (the "Early Purchase Date") which is 36 months from the
Basic Term Commencement Date of the Schedule for a price equal to
$3,435,200.00 (the "FMV Early Option Price"), plus all applicable sales taxes
on an AS IS BASIS. Lessor and Lessee agree that the FMV Early Option Price is
a reasonable prediction of the Fair Market Value (as such term is defined in
Section XIX(b) hereof) of the Equipment at the time the option is
exercisable. Lessor and Lessee agree that if Lessee makes any non-severable
improvement to the Equipment which increases the value of the Equipment and
is not required or permitted or permitted by Sections VII or XI of the Lease
prior to lease expiration, then at the time of such option being exercised,
Lessor and Lessee shall adjust the purchase price to reflect any addition to
the price anticipated to result from such improvement. (The purchase option
granted by this subsection shall be referred to herein as the "Early Purchase
Option").
(b) If Lessee exercises its Early Purchase Option with respect to the
Equipment issued hereunder, then on the Early Purchase Option Date. Lessee
shall pay to Lessor any Rent and other sums due and unpaid on the Early
Purchase Option Date and Lessee shall pay the FMV Early Option Price, plus
all applicable sales taxes, to Lessor in cash.
Except as expressly modified hereby, all terms and provisions of the
Lease shall remain in full force and effect. This Addendum is not binding nor
effective with respect to the Lease or the Equipment until executed on behalf
of Lessor and Lessee by authorized representatives of Lessor and Lessee.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Addendum to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation TRAC REALTY CO.
By: [SIGNATURE] By: [SIGNATURE]
-------------------------------- ------------------------------
Name: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: [SIGNATURE]
-------------------------------- ------------------------------
Title: Region Credit Analyst Title: Vice President
-------------------------------- ------------------------------
Attest:
By: [SIGNATURE]
-------------------------------- ------------------------------
Name:
-------------------------------- ------------------------------
ADDENDUM NO. 3
TO ANNEX B
TO AIRCRAFT LEASE AGREEMENT
DATED AS OF 4-14, 1994
THIS ADDENDUM (this "ADDENDUM") amends and supplements the above referenced
Annex B (the "SCHEDULE") to the above referenced lease (the "LEASE"),
between General Electric Capital Corporation ("LESSOR") and TRC REALTY CO.
("LESSEE") and is hereby incorporated unto the Schedule as though fully set
forth therein. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Lease.
For purposes of this Schedule only, the Lease is amended by adding the
following to the end thereof:
CANCELLATION OPTION:
(a) So long as no Event of Default is continuing hereunder and
expressly provided that all of the terms and conditions of this Section are
fulfilled. Lessee may cancel the Agreement as to all (but not less than all)
of the Equipment on this Schedule as of any one of the Cancellation Dates set
forth below (each, a "CANCELLATION DATE") upon at least 90 days prior written
notice (the "NOTICE DATE") to Lessor (which notice shall be irrevocable and
shall be sent to the attention of Lessor's Asset Management Organization, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇). Such notice shall state the
Cancellation Date which shall apply. If all of the terms and conditions of
the Section are not fulfilled, this Lease shall continue in full force and
effect and Lessee shall continue to be liable for all obligations thereunder,
including, without limitation, the obligations to continue paying rent.
(b) Prior to the Cancellation Date, Lease shall
(i) pay to Lessor, as additional rent, (A) the Cancellation Value
(set forth below for the applicable Cancellation Date) for the
Equipment, plus (B) all rent and all other sums due and unpaid as of the
Cancellation Date (including, but not limited to, any Rent payment due
and payable on the Cancellation Date and any sales taxes and property
taxes); and
(ii) return the Equipment in full compliance with Section XI of
this Lease, such compliance being independently verified by an
independent appraiser selected by Lessor (reasonably to Lessee) to
determine that the Equipment is in such compliance, which determination
shall be final, binding and conclusive. Lessee shall bear all costs
associated with such appraiser's determination and such costs, if any,
to cause the Equipment to be in full compliance with Section XI of the
Lease on or prior to such Cancellation Date.
(c) The Cancellation Dates and the applicable Cancellation Values are
as set forth below:
CANCELLATION DATES CANCELLATION VALUES
Month(x) $468,598.00
(d) Lease shall, from the applicable Notice Date through the
Cancellation Date.
(i) continue to comply with all of the terms and conditions of the
Lease, including, but not limited to, Lessee's obligation to pay rent,
and
(ii) make the Equipment available to Lessor in such a manner as to allow
Lessor to market and demonstrate the Equipment to potential purchasers
or lessees from such premises at no cost to Lessor, PROVIDED, HOWEVER,
that, subject to Lessor's right to market and demonstrate the Equipment
to potential purchasers or lessees from time to time. Lessee may still
use the Equipment until the Cancellation Date.
(e) Lease shall, from the applicable Cancellation Date through the
earlier of the date the Equipment is sold by Lessor to a third party or
30 days following the Cancellation Date, comply with the following terms
and conditions:
(i) continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in Section X or the
Agreement, and
(ii) make the Equipment available to Lessor and/or allow Lessor to store
the Equipment at Lessee's premises, in such a manner as to allow Lessor
to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor.
(f) The proceeds of any sale or re-lease of the Equipment after Lessee
has exercised its Cancellation Option shall be for the sole benefit of
Lessor and Lessee shall have no interest in or any claim upon any of
such proceeds.
Except as expressly modified hereby, all terms and provisions of the
Lease shall remain in full force and effect. This Addendum is not binding nor
effective with respect to the Lease of the Equipment until executed on behalf
of Lessor and Lessee by authorized representatives of Lessor and Lessee.
