<PAGE>
EXHIBIT 10.1
AMENDED AND RESTATED AIRCRAFT AND ENGINE USE AGREEMENT
This Amended and Restated Aircraft Use Agreement (this
"Agreement"), is
made as of the 1st day of January, 2004, by
and between Kitty Hawk Aircargo,
Inc. ("Aircargo") and the Kitty Hawk
Collateral Liquidating Trust, by Langdon
Asset Management, Inc., its Trust Manager
(the "Trust").
A.
Aircargo and the Trust entered into that certain Aircraft and
Engine Use Agreement dated as of September
30, 2002 (the "Original Agreement").
B.
Aircargo and the Trust have determined to amend and restate
the Original Agreement in its entirety as
set forth herein.
C. In consideration
of the foregoing premises (which constitute
an integral part of this Agreement) and the
mutual covenants hereinafter set
forth, and for other good and valuable
consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
1.
Utilization of Airframes. Until the latest date shown on
Schedule A, Aircargo shall use the
airframes identified on Schedule A (the
"Airframes") collectively, in total, a
minimum of ***** block hours ("Block
Hours") per month (the "Minimum Airframe
Usage"). Each Airframe shall be
available for use by Aircargo for purposes
of this Agreement until the date set
forth opposite such Airframe on Schedule A
(for each Airframe, the "Available to
Date"). Notwithstanding the foregoing, if
for any reason during any month fewer
than four (4) heavy weight Airframes (the
four current heavy weight Airframes
being N278US, N279US, N281KH and N284KH,
and, collectively, the "Heavy Weight
Airframes") are available for Aircargo's
use, the Minimum Airframe Usage for
such month will be reduced by ***** Block
Hours for each of the four (4) heavy
weight Airframes not available for
Aircargo's use. For purposes of determining
the Minimum Airframe Usage requirement in
any month, the Available to Dates of
Airframes N278US and N279US set forth on
Schedule A shall apply regardless of
whether Aircargo elects an Airframe
Extension Option (as defined below) with
respect to such Airframes. In the event
that any Airframe is not available for
use by Aircargo during any part of a month
prior to the Available to Date
applicable to such Airframe, the Minimum
Airframe Usage requirement for such
month shall be reduced by the number of
Block Hours attributable to such
Airframe prorated for such part of the
month for which such Airframe is
unavailable based on a thirty-day
month.
2.
Rates for Airframes. The Block Hour rate for utilization of
each of the Airframes shall be as
follows:
<TABLE>
<CAPTION>
Airframe
Rate per Block
Hour
--------
-------------------
<S>
<C>
N278US
$*****
N279US
$*****
N281KH
$*****
N284KH
$*****
</TABLE>
Confidential Treatment has been requested by Kitty Hawk, Inc.
for
certain portions of this document. Confidential portions have
been
filed separately with the Securities and Exchange Commission.
Omitted
portions are indicated in this agreement with "*****"
<PAGE>
<TABLE>
<CAPTION>
Airframe Rate per
Block Hour
--------
-------------------
<S>
<C>
N69739
$*****
N69740
$*****
N854AA
$*****
N855AA
$*****
N252US
$*****
N6809
$*****
N6827
$*****
N6833
$*****
</TABLE>
3.
Modifications to Airframes. The Airframes shall be modified as
provided below. Such modifications shall be
completed prior to the date required
by the rules and regulations of the Federal
Aviation Administration:
a. TCAS
(traffic collision avoidance system) Avionics:
For any Airframe requiring the installation
of TCAS avionics prior to the
Available to Date applicable to such
Airframe, Aircargo will pay for the
installation of such TCAS avionics and the
costs for the wiring of such Airframe
to accommodate the installation of the TCAS
avionics. The Trust will reimburse
up to $***** of the costs incurred by
Aircargo related to the installation of
the TCAS avionics for any such Airframe,
including costs related to the
acquisition and installation of the TCAS
avionics computer processor (the
"Computer Processor"), upon the receipt by
the Trust of written demand for such
reimbursement from Aircargo. The Trust
shall own the Computer Processor
following the installation of the TCAS
avionics. In the event that Aircargo uses
any Airframe upon which TCAS avionics has
been installed for less than *****
Block Hours following the installation of
the TCAS avionics and prior to the
Available to Date applicable to such
Airframe, Aircargo will, upon the receipt
by Aircargo of written demand notice from
the Trust, reimburse the Trust the
lesser of: (i) ***** percent (*****%) of
the actual cost of the Computer
Processor or (ii) $*****. If the Trust
makes such demand and Aircargo pays the
Trust accordingly, ownership of the TCAS
avionics will transfer to Aircargo. The
TCAS avionics shall include the Computer
Processor, two (2) IVSI's, two (2)
antennas, a Mode S transponder, Radar
Indication and related Control Head.
b. RVSM
(reduced vertical separation): For any Airframe
for which Aircargo requires the
installation of an RVSM system prior to the
Available to Date applicable to such
Airframe, the Trust will pay for the
installation of the RVSM system upon thirty
(30) days written notice of demand
by Aircargo to install the RVSM system on
such Airframe; provided, however, that
the Trust may, within a reasonable time,
except as it pertains to an Airframe
upon which Aircargo has elected an Airframe
Extension Option (as defined below),
in its sole discretion, elect not to
install an RVSM system, at which time
Aircargo may elect to retire and remove the
Airframe from Schedule A to this
Agreement. The cost of the parts of the
RVSM system for which the Trust will be
obligated will not exceed $***** per
Airframe.
c.
EGPWS/TAWS (enhanced ground proximity warning): For
any Airframe requiring the installation of
an EGPWS/TAWS system prior to the
Available to Date applicable to such
Airframe, the Trust will pay for the
installation of the EGPWS/TAWS system upon
thirty
2
Confidential Treatment has been requested by Kitty Hawk, Inc.
for
certain portions of this document. Confidential portions have
been
filed separately with the Securities and Exchange Commission.
Omitted
portions are indicated in this agreement with "*****"
<PAGE>
(30) days written notice of demand by
Aircargo to install the EGPWS/TAWS system
on such Airframe; provided, however, that
the Trust may, within a reasonable
time, except as it pertains to an Airframe
upon which Aircargo has elected an
Airframe Extension Option, in its sole
discretion, elect not to install an
EGPWS/TAWS system at which time Aircargo
may elect to retire and remove the
Airframe from Schedule A to this Agreement.
The cost of the parts of the
EGPWS/TAWS system for which the Trust will
be obligated will not exceed $*****
per Airframe.
4.
Aircraft Extension Option.
a.
Aircargo may elect, in its sole discretion, to extend
the Available to Date of any or all of
Airframes N278US, N279US, N69739 and
N69740 by delivering written notice of such
election to the Trust at any time
prior to November 1, 2004 ("Airframe
Extension Option"). In the event that any
such notice of election is delivered by
Aircargo to the Trust, Aircargo shall
specify in such notice whether Aircargo
elects "Option A-Long Term Extension
Option" ("Option A Election") or "Option
B-Short Term Extension Option" ("Option
B Election") for any Airframe for which
such Airframe Extension Option is
permitted; provided, however, that for
Airframe N278US no Option B Election
shall be permitted. In the event that an
Option A Election or an Option B
Election is made for any Airframe for which
an Airframe Extension Option is
permitted, such election shall be governed
by the terms of such Airframe
Extension Option set forth on Schedule B to
this Agreement. For purposes of any
Airframe Extension Option listed on
Schedule B, the terms "Heavy C check
commitment" and "Light C check commitment"
shall refer to the maximum amount
that the Trust shall be obligated to pay
for maintenance under such Airframe
Extension Option. The Trust's obligation
with respect to the installation of a
9-G Bulkhead on Airframe N69740 shall not
exceed $*****.
b. In
the event that Aircargo elects an Airframe
Extension Option with respect to any
Airframe pursuant to Section 4(a) above and
the Trust fulfills its obligation to
perform the Heavy C check commitment or
Light C check commitment maintenance
applicable to such Airframe Extension
Option, Aircargo shall pay to the Trust an
amount equal to the rate per Block
Hour applicable to such Airframe multiplied
by the number of actual Block Hours
that such Airframe was used by Aircargo in
the manner provided in Section 6 of
this Agreement. Upon the expiration of the
Extended Available to Date applicable
to any Airframe Extension Option, Aircargo
shall make an additional payment to
the Trust if the total number of Block
Hours that Aircargo used the relevant
Airframe prior to the Extended Available to
Date is less than the minimum Block
Hours commitment applicable to such
Airframe Extension Option. Such payment
shall be made within thirty (30) days after
the Extended Available to Date for
such Airframe Extension Option. The payment
shall be in an amount equal to the
Block Hour rate applicable to such Airframe
multiplied by the number of Block
Hours by which the minimum Block Hours
commitment exceeds the actual total Block
Hours such Airframe was used by Aircargo
prior to the Extended Available to
Date.
5.
Transfer of Engines and Rates for Engines.
a.
Aircargo and the Trust agree and affirm that on
September 15, 2003, each party transferred
certain engines that each such party
owned for certain engines owned by the
3
Confidential Treatment has been requested by Kitty Hawk, Inc.
for
certain portions of this document. Confidential portions have
been
filed separately with the Securities and Exchange Commission.
Omitted
portions are indicated in this agreement with "*****"
<PAGE>
other party. Aircargo and the Trust further
agree and affirm that the transfer
of such engines from each party to the
other constituted a transfer of all
ownership rights in the transferred engines
to the other party, effective as of
September 15, 2003, and that each party
will transfer all documents of title or
other documents or instruments evidencing
ownership of the transferred engines
to the other party no later than February
27, 2004. The engines so transferred
are set forth on Schedule C to this
Agreement. Aircargo and the Trust agree that
this Agreement shall serve as a bill of
sale for such engine transfers. To the
extent that any Aircargo engine that was
transferred to the Trust was subject to
a lien in favor of a secured creditor prior
to September 15, 2003, the Trust
affirms that such lien shall remain in
place until satisfied. Schedule D to this
Agreement sets forth the engines owned by
the Trust as of December 3, 2003 (the
"Engines"), and sets forth the Block Hour
rate that Aircargo will pay for the
use of each of the Engines from January 1,
2004 to December 31, 2007 (the
Available to Date of such Engines)
regardless of whether such Engines are
installed on one of the Airframes, on an
Aircargo airframe or on the airframe of
a third party. In the event that Aircargo
does not elect an Airframe Extension
Option prior to November 1, 2004 for any of
the Airframes identified in Schedule
B to this Agreement, the Trust or Aircargo
may remove up to three Engines from
Schedule D of the type corresponding to
such Airframe from Schedule A as
follows:
<TABLE>
<CAPTION>
NUMBER OF ENGINES
AIRFRAME
ENGINE TYPE
AVAILABLE FOR REMOVAL
---------------------------------------------------------------
<S>
<C>
<C>
N278US
JT8D-15
3
---------------------------------------------------------------
N279US
JT8D-15
3
---------------------------------------------------------------
N69739
JT8D-9A
3
---------------------------------------------------------------
N69740
JT8D-9A
3
---------------------------------------------------------------
</TABLE>
b.
Prior to December 31, 2007, Aircargo will use the
Engines collectively, in total and on a
pooled basis, for a minimum of *****
percent (*****%) of the expected Block Hour
life of the Engines set forth on
Schedule D ("Minimum Engine Block Hours").
Aircargo shall pay to the Trust an
amount equal to the rate per Block Hour
applicable to each Engine multiplied by
the actual number of Block Hours that such
Engine was used by Aircargo in the
manner provided in Section 6 below. In the
event that the total actual number of
Block Hours used for all Engines between
January 1, 2004 and December 31, 2007
do not exceed the Minimum Engine Block
Hours, within thirty (30) days after
December 31, 2007, Aircargo shall pay to
the Trust an amount equal to the
Weighted Average Engine Block Hour Rate (as
provided on Schedule D to this
Agreement) multiplied by the number of
hours by which the Minimum Engine Block
Hours exceeds the total actual Engine Block
Hours used by Aircargo. In the event
that any Engine is removed from Schedule D
to this Agreement in the manner
provided in Section 9 below, the Minimum
Engine Block Hours shall be reduced by
the expected Block Hour life attributable
to such removed engine as provided on
Schedule D.
6.
Monthly Payments.
a. On
or about the 10th day of each month after January
2004, Aircargo will provide to the Trust a
schedule of the number of Block Hours
that each Airframe and each Engine was used
in the immediately preceding month
and will pay to the Trust an amount equal
to the applicable Block Hour rate for
each Airframe and each Engine multiplied by
the actual
4
Confidential Treatment has been requested by Kitty Hawk, Inc.
for
certain portions of this document. Confidential portions have
been
filed separately with the Securities and Exchange Commission.
Omitted
portions are
indicated in this agreement with "*****"
<PAGE>
number of Block Hours that each such
Airframe and each such Engine was used in
the immediately preceding month.
b. If
for any month Aircargo fails to achieve the
Minimu
