SYNTHETIC AIRCRAFT LEASE
(S/N 258753)
DATED AS OF DECEMBER, 2005
----
BETWEEN
SUNTRUST LEASING CORPORATION
AS LESSOR
AND
POMEROY IT SOLUTIONS SALES COMPANY, INC. AND
POMEROY SELECT INTEGRATION SOLUTIONS, INC.
AS CO-LESSEES
THIS IS COUNTERPART NO. __ OF A TOTAL OF 4 COUNTERPARTS.
ONLY COUNTERPART NO.
1
SHALL BE CONSIDERED CHATTEL PAPER FOR PURPOSES OF THE
UNIFORM COMMERCIAL CODE
AND A SECURITY INTEREST MAY BE PERFECTED
ONLY BY POSSESSION OF COUNTERPART NO.
1.
<PAGE>
<TABLE>
<CAPTION>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
TABLE OF
CONTENTS
PAGE
----
<S>
<C>
<C>
Section 1. Lease
of Aircraft . . . . . . . . . . . . . . . . . . 1
Section 2.
Closing Conditions . . . . . . . . . . . . . . . . . 1
Section 3. Term
and Rent . . . . . . . . . . . . . . . . . . . . 1
Section 4.
Title; Quiet Enjoyment . . . . . . . . . . . . . . . . 2
Section 5.
Disclaimer and Assignment of Warranties . . . . . . . 2
Section 6.
Representations, Warranties and Agreements of Lessee . 2
Section 7. Net
Lease . . . . . . . . . . . . . . . . . . . . . . 3
Section 8. Taxes
. . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9.
Compliance, Use and Maintenance . . . . . . . . . . . 4
Section 10. Loss or
Damage . . . . . . . . . . . . . . . . . . . 6
Section 11.
Indemnification . . . . . . . . . . . . . . . . . . . 8
Section 12. Assignment
and Sublease . . . . . . . . . . . . . . . 8
Section 13. Events Of
Default and Remedies . . . . . . . . . . . 10
Section 14. Notices,
Reports, Further Assurances and Inspections . 13
Section 15.
Transaction Expenses. . . . . . . . . . . . . . . . . 14
Section 16.
Miscellaneous . . . . . . . . . . . . . . . . . . . . 14
Section 17. Truth In
Leasing . . . . . . . . . . . . . . . . . . 16
</TABLE>
EXHIBIT A - Definitions
Insurance Addendum
Closing Terms Addendum
Option Addendum
Return Addendum
Lease Supplement
i
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
AIRCRAFT LEASE (S/N 258753)
THIS
AIRCRAFT LEASE (S/N 258753) (together with all Supplements,
Exhibits,
Riders and Addenda
hereto, the "Lease") is made and entered into as of December
-----
,
2005, by and between
SUNTRUST LEASING CORPORATION, a Virginia corporation
----
("Lessor"), and
POMEROY IT SOLUTIONS SALES COMPANY, INC. a Delaware corporation
------
("Sales"), and
POMEROY SELECT INTEGRATION SOLUTIONS, INC., a Delaware
corporation
("Integration"),
(Sales and Integration
are jointly and severally
-----------
liable hereunder as
co-obligors, as more particularly provided in Section 17 of
this Lease,
and are each referred to individually as a "Lessee" and
------
collectively, the
"Lessees").
Certain capitalized
terms as used in this Lease
-------
are defined
in Exhibit A hereto, and such
definitions are incorporated herein
---------
and made a part hereof as though set forth in full herein.
SECTION 1. LEASE
OF AIRCRAFT. Subject
to the terms and conditions provided in
-----------------
this Lease, Lessor agrees to lease the Aircraft to Lessees, and
Lessees agree to
lease the Aircraft from Lessor. Lessor hereby appoints Lessees as
Lessor's
agent for the sole and limited purpose of accepting
delivery of the Aircraft
from the Supplier. The execution by Lessees of the Lease Supplement will
evidence that the
Aircraft is leased under, and is subject to all of the terms,
provisions and
conditions
of, this Lease and shall constitute each
Lessee's
unconditional and
irrevocable
acceptance
of the Aircraft for
all purposes of
this Lease.
SECTION 2.
CLOSING CONDITIONS.
Lessor's obligations to purchase the
Aircraft
------------------
from the Supplier and to lease the Aircraft to Lessees shall be
conditioned upon
the satisfaction
of all of the following conditions:
(a)
Lessor receives
the Required Documents
and Purchase Documents, in
form and substance satisfactory to Lessor,
at least one (1) Business Day prior
to the anticipated closing date;
(b)
all
representations
and warranties in this Lease, including the
Lease Supplement, are true and correct;
(c)
Lessees accept the Aircraft from Supplier on Lessor's behalf,
under
the Purchase Documents and under this Lease, on the Acceptance
Date;
(d)
FAA
Counsel confirms to Lessor that (A) it has
received in escrow
all of the FAA Documents, and (B) upon filing the FAA Documents, (1)
the
Airframe will be
registered in the name of Lessees, (2) the Aircraft (including
the Airframe
and Engines) will be
free and clear of all Liens, other than this
Lease, and
(3) this Lease creates a duly perfected security
interest in the
Aircraft in
favor of Lessor; and
(e)
each
Lessee authorizes (A)
the release from escrow of all Required
Documents and FAA
Documents held by Lessor or its FAA Counsel or other counsel,
and (B) Lessor or FAA Counsel to file the FAA Documents and any
other filings at
the FAA and any other applicable filing
offices; provided, such authorization
shall be deemed to have been automatically made by
Lessees (whether or not so
confirmed) immediately
upon the confirmed receipt by each Lessee, Seller or any
other Person (as
directed in the pay proceeds letter executed by either or both
of the Lessees on or before the date hereof) of the funds
constituting the
Lessor's Cost.
Each
Lessee acknowledges and agrees that (i) any advance of funds by
Lessor
prior to the satisfaction of all of the preceding conditions shall not
constitute a waiver by
Lessor of any such condition, and (ii) each Lessee shall
be irrevocably
obligated to satisfy all of such conditions prior to
the FAA
filing deadline on the day on which such funds are received.
SECTION 3.
TERM
AND RENT.
---------------
(a)
Term. The lease of the Aircraft to Lessees shall
commence on the
----
Acceptance Date
and end on the Expiration Date, unless extended
or earlier
terminated or cancelled pursuant to this Lease.
(b)
Rent. Lessees shall
pay to Lessor the following daily and periodic
----
rent amounts ("Basic Rent") (i) on the First Basic Rent Date, an
amount equal to
----------
the Lessor's Cost multiplied by the Daily Rent Percentage, for each
day starting
with the Acceptance Date, to but excluding the Rent
Commencement Date ("Daily
-----
Rent"), and
(ii) on the First Basic Rent Date and on each Basic Rent
Date
----
following that
date, an amount equal to the Lessor's Cost
multiplied by the
applicable Basic
Rent Percentage set forth on Schedule No. 2A for the
corresponding Basic
Rent
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
number corresponding
to such Basic Rent Date. Lessees shall also pay the
following amounts
as "Supplemental Rent" (together with all Basic Rent,
the
------------------
"Rent"): (i)
as and when due, any
other amount that any Lessee is obligated to
----
pay under this Lease to Lessor or others
(including, Casualty Value and/or any
amounts due
pursuant to any Addendum), (ii) interest accruing at the Late
Payment Rate
on any Rent not paid when due, until paid, and (iii) the
Administrative Charge
with respect to any Rent not paid when due (as
compensation to Lessor
for the expenses attributable to any Lessee's failure to
pay, and not as a
penalty). Lessees'
obligation to pay Supplemental Rent shall
survive the
expiration,
cancellation or other
termination of this Lease. All
payments of
Rent shall be made to Lessor, in United States Dollars
("U.S.
----
Dollars"), in
immediately available
funds on the date payable hereunder at the
-------
address designated
by Lessor for payment, or by wire transfer to an
account
specified by Lessor,
or at such other address or to such other Person as Lessor
may direct
by notice in writing to Lessees.
SECTION 4.
TITLE;
QUIET ENJOYMENT.
Each Lessee
acknowledges and agrees that
-----------------------
upon Lessor's
acquiring the Aircraft on the Acceptance
Date, and Lessees' and
Lessor's execution and
delivery of the Lease Supplement, Lessor shall be deemed
to have a validly perfected, first priority security interest against the
Aircraft, and each Lessee's right, title or interest in or to the
Aircraft shall
at all times be subject to the terms of this Lease, unless
and until it is
terminated in
accordance
with the express
provisions hereof.
Lessor warrants
that during
the Term, so long as no Event of Default has
occurred, Lessees'
possession and
use of the Aircraft shall not be
interfered with by Lessor or
anyone rightfully
claiming an interest
through Lessor. The
preceding warranty
is in lieu of all
other warranties by Lessor, whether written, oral or implied,
with respect to this
Lease or the Aircraft, and without limiting the provisions
of Section
7, any actual or purported breach of this
warranty shall not give
rise to any Abatement, and Lessor shall not be
deemed to have modified in any
respect the
obligations of any
Lessee pursuant to Section 7, which obligations
are and shall remain absolute, irrevocable and
unconditional under all events
and circumstances
whatsoever.
SECTION 5.
DISCLAIMER AND
ASSIGNMENT OF WARRANTIES.
---------------------------------------
(a)
LESSOR SHALL NOT BE
DEEMED TO HAVE MADE, AND HEREBY DISCLAIMS, ANY
REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE AIRCRAFT,
INCLUDING ANY
ENGINE, PART OR
RECORD, OR ANY MATTER WHATSOEVER, INCLUDING, THE
AIRCRAFT'S DESIGN,
CONDITION,
MERCHANTABILITY,
FITNESS FOR ANY PARTICULAR
PURPOSE, TITLE,
ABSENCE OF ANY PATENT, TRADEMARK OR
COPYRIGHT INFRINGEMENT OR
LATENT DEFECT
(WHETHER OR NOT DISCOVERABLE BY ANY LESSEE),
COMPLIANCE OF THE
AIRCRAFT WITH
ANY APPLICABLE LAW,
CONFORMITY OF THE AIRCRAFT TO THE PROVISIONS
AND SPECIFICATIONS
OF ANY PURCHASE
DOCUMENT OR TO THE DESCRIPTION SET FORTH IN
THIS LEASE, OR ANY INTERFERENCE OR INFRINGEMENT (EXCEPT AS
EXPRESSLY PROVIDED IN
SECTION 4), OR ARISING FROM ANY DEFECTS OR FROM ANY COURSE OF
DEALING, COURSE OF
PERFORMANCE, OR
USAGE OF TRADE, NOR SHALL LESSOR BE
LIABLE, FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR
ABSOLUTE LIABILITY
IN TORT; AND EACH LESSEE HEREBY WAIVES ANY CLAIMS ARISING
OUT OF ANY OF THE
FOREGOING. Without
limiting the foregoing, Lessor will not be
responsible to
any Lessee
or any other Person
with respect to, and each Lessee agrees to bear
sole responsibility
for, any risk or other matter that is the subject of
Lessor's disclaimer.
(b)
So
long as no Event of Default has
occurred, Lessees may exercise
Lessor's rights,
if any, under any warranty of Manufacturer
or Supplier with
respect to the
Aircraft. Lessees'
exercise of such rights shall be at its sole
cost and risk, shall not result in any prejudice to Lessor, and may
be exercised
only during the Term.
Lessees shall not attempt to enforce any such warranty by
legal proceeding without Lessor's prior written approval.
SECTION 6.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEES. Each Lessee
-----------------------------------------------------
represents, warrants,
and agrees (for itself and as to the other Lessee)
as
follows:
(a)
Due
Organization,
Name, Organizational Number, Etc.
Each Lessee
------------------------------------------------------
is, and will remain, a
corporation duly organized and existing in good standing
under the laws of the State of Delaware and is duly
qualified to do business
wherever necessary
to perform its obligations under this
Lease, including the
jurisdiction of
the Primary Hangar
Location. Each Lessee's exact legal name is
as shown in the caption of this Lease; each Lessee's organizational
identification number
and the address of such Lessee's mail,
chief executive
offices and
principal place of business are all as
respectively set forth in
Schedule No.
2. Each Lessee agrees that it shall not change its name,
organizational number
or any such address without prior written notice to
Lessor. Within
the previous six (6) years
2
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
neither Lessee has changed its name, done business under any other
name, changed
its chief place of business from its present
location, or merged or been the
surviving entity of any merger, except as disclosed to Lessor in
writing.
(b)
Due
Authorization;
No Violation. This Lease has been duly
----------------------------------
authorized by
all necessary action on the part of
each Lessee consistent with
its respective form of organization, does not require the approval
of, or giving
notice to,
any governmental authority and does
not contravene or constitute a
default under
any Applicable Law, certificate or
articles of incorporation or
organization or
by-laws or partnership certificate or agreement, or any
agreement, indenture,
or other instrument to which such Lessee is a party or by
which it may be bound.
(c)
Enforceability. This
Lease has been duly executed and delivered by
--------------
authorized
representatives of
each Lessee, respectively, and constitutes a
legal, valid
and binding obligation of each Lessee enforceable against
such
Lessee in accordance with its terms, except
to the extent that the enforcement
of remedies may be
limited under applicable bankruptcy and insolvency laws, and
the equitable discretion of any court of competent
jurisdiction.
(d)
Litigation. There
are no proceedings pending or, so far as the
----------
officers, managers,
or members of any Lessee know, threatened against or
affecting any
Lessee or any of its property before any
court, administrative
officer or
administrative
agency that could impair Lessor's title to the
Aircraft, or
that, if decided
adversely, could materially affect the financial
condition or
operations of such Lessee or the ability of such Lessee to
perform
its obligations
under this Lease. Neither Lessee has pending claims or
any
knowledge of any facts upon which a future claim may be based,
against any prior
owner, the
Manufacturer
or Supplier of the
Aircraft, or of any Engine or part
thereof for
breach of warranty or otherwise.
(e)
Good Title. At all times during the Term, the
records of the FAA
-----------
Aircraft Registry
shall reflect that Lessees are the registered
owner of the
Airframe and that
Lessor has a duly perfected, first priority security interest
in the Aircraft.
(f)
No
Competing Lienholders. No Lien exists, or will hereafter
--------------------------
attach, against the
Aircraft, the Rent or any other rights under this Lease, or
any Collateral,
or any interest of
either Lessee or Lessor therein (other than
any Lessor's
Liens), pursuant to any mortgage, conditional sale or
security
agreement or
other agreement to which either Lessee or any Person
claiming
through such
Lessee is a party, nor will any of the
transactions contemplated
under this Lease constitute a breach of any provision of any such
agreement.
SECTION 7. NET
LEASE. This Lease is a
net lease, and each Lessee acknowledges
---------
and agrees
that (a) Lessees'
joint and several obligation to pay, and Lessor's
right to receive, all Rent in accordance with this Lease
shall be absolute,
irrevocable, independent and unconditional and shall not be subject
to (and each
Lessee hereby waives and agrees not to assert) any abatement,
reduction, setoff,
defense, counterclaim
or recoupment (collectively, "Abatements") for any reason
----------
or under any circumstance whatsoever as to
any such Rent, and without limiting
the foregoing, each Lessee also waives any and all existing and
future claims to
any Abatement
against or as to such Rent, (b) it will pay all such Rent
regardless of any
Abatement, and (c) this Lease, and Lessees' joint and several
payment and
other obligations
hereunder, are non-cancelable and non-terminable
by any Lessee (except as expressly provided in any Addendum).
SECTION 8.
TAXES.
-----
(a)
Indemnity. Lessees
agree to: (1) (i) if
permitted by law, file in
---------
Lessees' own
names or on Lessor's
behalf, directly with all appropriate taxing
authorities all
registrations,
declarations,
returns, inventories and other
documentation with respect to any personal property taxes (or any
other taxes in
the nature
of or imposed in lieu of property
taxes) due or to become due with
respect to
the Aircraft, and if not so permitted by law, to
promptly notify
Lessor and
provide it with all information required in order for
Lessor to
timely file all such declarations, returns, inventories, or other
documentation,
and (ii) pay on or before the date when due
all such taxes assessed, billed or
otherwise payable
with respect to the Aircraft directly to the
appropriate
taxing authorities,
(2) (i) pay when due,
and (ii) defend and indemnify Lessor
on a net after-tax basis against
liability for all license and/or registration
fees, assessments, and
sales, use, property, excise, privilege, value added and
other taxes
(including
any related interest
or penalties) or other charges or
fees now or hereafter imposed by any governmental body or agency upon
the
Aircraft or
with respect to landing, airport use, manufacturing,
ordering,
shipment, purchase, ownership, delivery, installation, leasing
(pursuant to this
Lease, any
sublease, or otherwise), chartering, operation, possession,
use,
3
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
return, or
other disposition thereof or the Rent or other rentals
hereunder
(other than
taxes on or measured solely by the net
income of Lessor), and (3)
defend and
indemnify Lessor against any penalties,
charges, interest or costs
imposed with
respect to any items referred to in (1)
and (2) above (the items
referred to
in (1), (2), and (3) above being referred to herein as
"Impositions"). Any
Impositions
that are not paid when
due and which are paid
by Lessor shall, at Lessor's option, become immediately due
from Lessees to
Lessor.
Notwithstanding the
foregoing, each Lessee shall pay, indemnify Lessor
for, and hold Lessor harmless on a net after-tax basis
from and against, any
Imposition on or
measured by the net income of Lessor imposed against Lessor by
any local or foreign government or other local
or foreign taxing authority if
and to the extent that Lessor would not have
incurred such Imposition but for
the operation
or presence of the
Aircraft within the jurisdiction imposing it.
(b)
Survival. Lessees'
obligations under this
Section 8 shall survive
--------
any expiration, cancellation or other termination of this
Lease.
(c)
Tax
Benefits. For income tax purposes, Lessor will
treat Lessees
-------------
as the owner of the Aircraft; however, Lessor shall in no event be
liable to any
Lessee if any Lessee fails to secure any of
the tax benefits available to such
Lessee as co-owner of the Aircraft for such income tax
purposes.
SECTION 9.
COMPLIANCE, USE
AND MAINTENANCE.
-------------------------------
(a)
Compliance and
Use. On the Acceptance Date, and at all times
--------------------
thereafter until
the Aircraft is returned to Lessor pursuant to
this Lease,
Lessees shall
cause the Aircraft to be and remain duly
registered in Lessees'
names at the FAA, in accordance with the Transportation Code.
Each Lessee
agrees to comply with all Applicable Law related to this Lease and/or
the
Aircraft, including
its operation, maintenance, airworthiness, safety and
security. Each
Lessee will operate the Aircraft under and in
compliance with
Part 91 of the FARs, for purposes that are incidental to such
Lessee's business,
and in a manner that
is consistent with the transactions hereunder being deemed
commercial (and
not consumer) transactions under Applicable Law. Unless
otherwise expressly permitted hereunder, Lessees shall not operate
or permit the
Aircraft to
be operated for air
taxi operations or otherwise under Part 135 of
the FARs. The Aircraft shall be used solely in a
passenger configuration for
which Lessees
are duly authorized by the FAA. Lessees will not operate or
permit the
Aircraft to be operated in any manner at any time or in any
geographic area when
or where insurance required by the provisions hereof shall
not be in effect. Unless otherwise expressly
permitted by Section 12 of this
Lease, Lessees shall (i) retain operational control of the Aircraft
at all times
from the Acceptance Date until returning the Aircraft
in accordance with this
Lease; and (ii) shall base the Aircraft at the Primary Hangar
Location set forth
in Schedule
No. 2; provided, however, that the
Primary Hangar Location may be
-------- -------
changed to
another location
within the Continental United States upon at least
thirty (30)
days' prior written notice to Lessor.
The Aircraft will, at
all
times be operated by duly qualified pilots having (a) the
required FAA type
rating for
the Aircraft, (b) the required FAA
pilot certificates and ratings,
(c) a valid FAA Medical Certificate, (d) satisfied
all security requirements
imposed by
any governmental authority having
jurisdiction and (e) met any and
all requirements
established
and specified by (i)
the FAA, the Transportation
Security Administration and any other applicable governmental
authority and (ii)
the insurance
policies required under this Lease.
(b)
Use
Outside of U.S. The Aircraft shall not be
operated, used or
----------------------
located outside the
Continental U.S. except that it may be flown temporarily to
any country
in the world for any
purpose expressly permitted under this Lease.
Notwithstanding the
foregoing, the
Aircraft shall not be flown, operated, used
or located
in, to or over any
such country or area (temporarily or otherwise),
(i) which is excluded
from the required insurance coverages, or would otherwise
cause any Lessee to be in breach of the insurance requirements or
other
provisions of
this Lease, (ii) with
which the U.S. does not maintain favorable
diplomatic relations, (iii) in any area of recognized or threatened
hostilities,
or (iv) in violation of any Applicable Law, including
any U.S. law or United
Nations Security
Council Directive.
(c)
Maintenance and
Operation.
During the Term, Lessees shall (i)
---------------------------
maintain, inspect,
service, repair, overhaul and test the Airframe and each
Engine and
any APU in accordance with all Maintenance Requirements, all
Applicable Law, and,
if more stringent, prevailing industry standards, and (ii)
maintain (in the English language) all Records in accordance with
the Applicable
Law and all Maintenance Requirements, and as required
under this Lease.
All
maintenance procedures
shall be performed in accordance with all Applicable Law
and by properly trained, licensed, and certified maintenance sources and
maintenance personnel
utilizing replacement parts approved by the
FAA and the
Manufacturer, so as to
keep the Airframe and each Engine, any APU and each Part
in good operating
4
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
condition, ordinary
wear and tear, from proper use alone, excepted, and
to
enable the
airworthiness
certificate
for the Aircraft to be continually
maintained. Without
limiting the foregoing, Lessees shall comply with all
mandatory service
bulletins and
airworthiness directives by causing compliance
to such bulletins and/or directives to be completed through corrective
modification in
lieu of operating manual restrictions.
(d)
Loaner Engines.
In the event any Engine is damaged, being
---------------
inspected, repaired
or overhauled and provided no Event
of Default or Default
has occurred
and is continuing, any Lessee, at its option, may
temporarily
substitute another
engine of the same make and model as the Engine being
repaired or overhauled (any such substitute engine being
hereinafter referred to
as a "Loaner Engine") during the period of such repair or overhaul,
and provided
-------------
further (i)
installation
of the Loaner Engine is performed by a
maintenance
facility certified
by the FAA and manufacturer with
respect to an aircraft of
this type,
(ii) the Loaner Engine is removed and the repaired
or overhauled
original Engine
is reinstalled on the
Airframe promptly upon completion of the
repair or overhaul but in no event later than the
earlier of ninety (90) days
after removal,
or the expiration, cancellation or
earlier termination of this
Lease, and
(iii) the Loaner Engine is free and clear of any
Lien that might
impair Lessor's
rights or interests in the Aircraft and is maintained in
accordance
herewith.
(e)
Additions, Alterations
and Replacement Parts.
Lessees may install
---------------------------------------------
on the Aircraft any
additional accessory, device or equipment ("Additions") but
---------
only if such Additions
(i) are ancillary to the Aircraft; (ii) are not required
to render the Aircraft
complete for its intended use by Lessees; (iii) will not
impair the
originally intended
function or use of the Aircraft or diminish the
value of the same; and (iv) can be readily removed
without causing material
damage to the Aircraft. Each Addition not removed prior to
the return of the
Aircraft to
Lessor shall, upon such return, immediately
become a part of the
Aircraft for
all purposes of this
Lease, and subject to all of Lessor's rights
hereunder without
any payment by, or any cost or expense
to, Lessor.
Lessees
shall make
any alteration or
modification ("Alterations") to the Aircraft that
-----------
may at any time during the Term be required to comply with
airworthiness
directives or
other Applicable Law. Lessees will promptly replace all
Parts
that become
worn out, lost,
stolen, taken, destroyed, damaged beyond repair or
permanently rendered
or declared unfit for use for any reason whatsoever.
Lessees shall repair
all damage to the Aircraft resulting from the installation
and removal of Additions and/or Alterations so as to restore the
Aircraft to its
condition prior to
installation.
Alterations and/or replacement parts shall be
deemed accessions,
and shall immediately
become a part of the Aircraft for all
purposes of this
Lease, and subject to all of Lessor's rights hereunder without
any payment by or any cost or expense to Lessor. Except as permitted under this
Section 9(e),
Lessees will not modify the Aircraft (including any
change in
configuration) or
affix or remove any accessory to the Aircraft leased
hereunder.
(f)
Aircraft Marking.
Lessees agree to (i)
prominently display on the
-----------------
Aircraft the FAA
Registration number, specified in Schedule No. 1 or such other
"N" number
as has been approved by and exclusively
reserved to Lessor in its
name and duly recorded with the FAA; and (ii)
notify Lessor in writing thirty
(30) days prior to making any change in the appearance or coloring of
the
Aircraft.
(g)
Security. Without
limiting any Lessee's indemnities and other
--------
agreements under
this Lease, Lessees hereby: (i) expressly assume sole
responsibility for the determination and implementation of all
security measures
and systems
necessary or
appropriate for the proper protection of the Aircraft
(whether on
the ground or in flight) against theft, vandalism,
hijacking,
destruction, bombing, terrorism or similar acts directly or
indirectly affecting
the Aircraft, any part
thereof, or any persons who (whether or not on board the
Aircraft) may
sustain any injury or damage as a result of
any such acts, and
(ii) agree to provide
to Lessor promptly upon request with evidence of Lessees'
compliance with
its obligations under
this Section 9(g) (but in no event shall
Lessor, in
its capacity as lessor, owner or otherwise, be
deemed to have any
duty with respect to any security measures
imposed by this Lease or Applicable
Law, whether
or not complied with by Lessees, as the full and exclusive
assumption of responsibility by Lessees of such responsibility is
of the essence
of this Lease, and a condition to Lessor's
participation in the transactions
contemplated
herein).
SECTION 10.
LOSS OR DAMAGE.
----------------
(a)
Event of Loss with Respect to the Aircraft. Upon the occurrence of
------------------------------------------
any Event of Loss with respect to the Airframe
and/or Aircraft, Lessees shall
notify Lessor
within five (5) days
of the date thereof.
On (i) the next Basic
Rent Date following the date of such notice, or (ii) if such Event
of Loss
occurs after the Last Basic Rent Date, within thirty (30) days
after such notice
(any such date described in clause (i) or (ii) above, the
"Casualty Payment
----------------
Date"),
----
5
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
Lessees shall
pay to Lessor the Basic Rent payable
as of the Casualty Payment
Date, any other Rent then due, plus the Casualty Value of the Aircraft
determined as of the
Casualty Payment Date (but if the Casualty Payment Date is
after the last Basic Rent Date, the Casualty
Value for such date shall be the
amount equal
to the Lessor's Cost multiplied by
the applicable percentage set
forth on Schedule No.
3 for the last Basic Rent Date or the corresponding Basic
Rent number), together with interest at the Late Payment Rate for
the period (if
any) from the Casualty Payment Date through the
date of payment. Upon
making
the applicable payment required hereby, Lessees' obligation to pay
further Basic
Rent for the Aircraft subsequent to such
payment shall cease, but each Lessee
shall remain
liable for, and pay as and when due, all
Supplemental Rent.
If
recoverable, as between Lessor and Lessees, Lessees shall be
entitled to recover
possession of
the Aircraft and to any salvage value
in excess of the Casualty
Value paid
to Lessor, but subject to the requirements of any third
party
insurance carrier
in order to settle an insurance claim. Lessor shall be
entitled to
receive and retain all amounts payable by the
Manufacturer with
respect to
a Return to Manufacturer or by any governmental authority
with
respect to any
Requisition of Use, as the case may be, except that such
amounts
received in good collected funds shall be applied against Lessees'
obligation to
pay Casualty Value or,
so long as no Event of Default has occurred, remitted to
either or both of the Lessees (up to the amount
of the Casualty Value paid by
Lessees to
Lessor in good and indefeasible funds).
Lessor shall be under
no
duty to Lessees to pursue any claim against any
Person in connection with an
Event of Loss.
(b)
Event of Loss with Respect to an Engine or
an APU. Upon an
Event
---------------------------------------------------
of Loss with respect
to any Engine or any APU, but not the Airframe on which it
was installed, Lessees shall (i) give Lessor prompt written notice
thereof, (ii)
by the earlier of the ninetieth (90th) day after the occurrence of
such Event of
Loss or the receipt of the applicable
insurance proceeds, if any, cause to be
subject to the terms of this Lease for all purposes hereof an
engine or APU (and
thereby duly
convey to Lessor a
perfected, first priority security interest in
and against
such engine or APU), as applicable, of the same make
and model
number as the Engine or any APU suffering the
Event of Loss, and (iii) comply
with the other provisions of this Section 10(b). Such replacement engine or any
APU, as applicable, shall be free and clear of all Liens, have a
value, utility,
and useful life at
least equal to, and be in as good an operating condition as,
the Engine
or any APU suffering
the Event of Loss, assuming such Engine or any
APU was in the condition and repair required by
the terms hereof immediately
prior to the occurrence of such Event of
Loss. Lessees, at
their own cost and
expense, shall furnish
to Lessor such documents to evidence such conveyance, as
Lessor shall
request. Upon full compliance by Lessees with
the terms of this
paragraph, Lessor
will transfer to Lessees all of Lessor's right,
title and
interest, if
any, in and to such Engine or any APU, which
transfer shall be
"AS-IS, WHERE-IS" and
release Lessor's security interest in such Engine or APU.
Each such replacement engine or APU, as applicable, shall, after
such conveyance
to Lessor, be deemed
an "Engine" or "APU", as applicable, as defined herein and
------ ---
shall be deemed part
of the same Aircraft as was the Engine or any APU replaced
thereby.
(c)
Risk of Loss. Lessees shall bear the risk of loss, theft,
--------------
confiscation, taking,
unavailability,
damage or partial destruction of the
Aircraft and
shall not be released
from its obligations hereunder in the event
of any damage or Event of Loss to the Aircraft or
any part thereof.
Without
limiting any
other provision hereof, Lessees shall repair all damage to
the
Aircraft from
any and all causes, including as provided
in Sections 9(c) and
(e), and shall provide written notice to Lessor of any Material Damage
concurrently with
its report of same to
the applicable governmental authority,
and if no such report is required, within ten
(10) days of the occurrence of
such damage.
The required notice must be provided together with any
damage
reports provided to
the FAA or any other governmental authority, the insurer or
Supplier, and
any documents
pertaining to the repair of such damage, including
copies of work orders, and all invoices for related charges.
(d)
Credit for Insurance
Payments. If Lessor
receives a payment under
------------------------------
an insurance
policy required under this Lease in connection
with an Event of
Loss of an Airframe and/or an Engine or any APU, and such payment is
both
unconditional and
indefeasible,
then provided no Default or Event of
Default
shall have occurred
and be continuing, and Lessees shall have complied with the
provisions of
Section 10(a) or 10(b), Lessor shall either (i) remit such
proceeds to
either or both of the Lessees up to an amount equal
to (A) the
amount paid
by Lessees to Lessor as the Casualty Value pursuant to
Section
10(a), or (B) the amount of the replacement
costs actually incurred by Lessees
with respect to the
replacement of any Engine or APU pursuant to Section 10(b),
or (ii) credit such proceeds against any amounts owed
by Lessees pursuant to
Section 10(a).
Any excess insurance
proceeds shall be retained by each Lessee.
6
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
SECTION 11.
INDEMNIFICATION.
---------------
(a)
Each
Lessee shall indemnify, protect, save, defend and keep
harmless Lessor,
its agents, employees, officers, directors, shareholders,
subsidiaries,
affiliates and
Assignees (each an "Indemnitee"), on a net
----------
after-tax basis, from
and against any and all liabilities, obligations, losses,
damages, penalties,
claims, actions, suits, demands, costs, expenses and
disbursements
(including legal
fees and expenses) of any kind and nature
whatsoever ("Claims")
that may be imposed on, incurred by or
asserted against
------
any Indemnitee,
whether or not such
Indemnitee shall also be indemnified as to
any such Claim by any other Person, in any way relating to or
arising out of (a)
this Lease
or any of the other Lease Documents, or the
performance, breach
(including any
Default or Event of
Default) or enforcement of any of the terms
hereof or thereof, or (b) the Aircraft,
including the assertion or enforcement
of any manufacturer's,
vendor's, dealer's or other supplier's warranties on the
Aircraft or
any part thereof, or the manufacture, inspection,
construction,
purchase, pooling,
interchange,
acceptance,
rejection, ownership,
titling or
re-titling, delivery,
lease, sublease, charter, possession, use, operation,
maintenance,
management, security,
condition, registration or re-registration,
sale, return,
removal, repossession, storage or other disposition of the
Aircraft or any part thereof or any accident in connection
therewith, including,
Claims involving
or alleging environmental damage, criminal
acts, hijacking,
acts of terrorism or similar acts, product liability or strict or
absolute
liability in
tort, latent and other
defects (whether or not discoverable), for
patent, trademark
or copyright infringement and for any
other risk or matter,
the responsibility for which Lessees have agreed to bear in Section
5, including
any of the same that result in injuries,
death, destruction, or other harm or
loss to Persons or property, without regard as to who may have
operational
control of the Aircraft from time to time. Each Lessee's obligations under
this
Section 11
shall survive any expiration,
cancellation or other termination of
this Lease.
(b)
Notwithstanding the
foregoing,
Lessees shall not be required to
indemnify an
Indemnitee
under this Section 11
for (i) any Claim caused solely
and directly
by the gross negligence or willful
misconduct of such Indemnitee
(except as imputed by
law), (ii) any Impositions, or (iii) any Claim in respect
of the Aircraft arising from acts or
events which occur after (A) the Aircraft
has been redelivered to such Indemnitee in
accordance with this Lease, and (B)
any and all other obligations of any kind
whatsoever of the Lessees under this
Lease have
been fully paid or performed, as the case may
be, unless any such
Claims were
caused by any Lessee, or anyone claiming through
any Lessee, or
resulted directly or
indirectly, from any acts, events or omissions of any kind
whatsoever during
the Term of this Lease.
(c)
If
any Claim is made against any Lessee or an Indemnitee, the
party
receiving notice of
such Claim shall promptly notify the other, but the failure
of the party receiving notice to so notify the other shall not
relieve any
Lessee of any obligation hereunder.
SECTION 12.
ASSIGNMENT
AND SUBLEASE.
-------------------------
(a)
Lessees' Conveyances;
and Liens. Neither Lessee shall sell (or
----------------------------------
offer or advertise the sale of), assign, charter,
sublease, timeshare, pool,
interchange, convey,
mortgage or otherwise transfer or encumber this Lease, the
Aircraft, including
any Engine, any APU or any Part or any
Collateral, or its
interest with respect
thereto, and any such transfer or encumbrance, whether by
operation of
law or otherwise, shall be null and void in all respects.
In
addition, neither
Lessee shall
relinquish possession of the Airframe, any APU,
or any Engine or Part or install any APU or any
Engine or Part, or permit any
APU or any Engine or Part to be installed, on any Airframe
other than the
Airframe leased
hereunder except as
expressly set forth herein. The foregoing
shall not be deemed to
prohibit the delivery of possession of the Aircraft, any
APU, any Engine or Part to another Person for testing, service, repair,
maintenance, overhaul
or, to the extent permitted hereby, for
alteration or
modification. Neither
Lessee shall create or suffer to exist any
Liens on or
with respect
to the Aircraft, any APU, any Engine
or Part, any Collateral, or
any Lessee's interest therein other than Permitted Liens.
Lessees will
promptly
take such action as directed by Lessor to duly discharge any
such Lien. If
Lessees fail
to remove a Lien, Lessor may take such action as it deems
appropriate to remove such Lien, but without waiving its other
rights hereunder.
Lessees shall
reimburse Lessor on demand for any costs incurred
by Lessor in
connection with
such action, together with interest at
the Late Payment Rate.
Notwithstanding the
foregoing, provided that no Default or Event of Default
has occurred
and is continuing,
(i)
Lessees may enter into a management agreement with Manager (the
"Management
Agreement"), pursuant
to which Manager provide management services
---------------------
for Lessees' benefit with respect to the Aircraft, from
7
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
time to time subject to the following
terms and conditions: (1) Manager is and
remains a solvent,
domestic organization; (2) the Management Agreement does not
(aa) grant
a property interest to Manager with respect to the
Aircraft, and
expressly, and at all times, Manager's rights with respect to the
Aircraft shall
remain, subject and subordinate to this Lease and the rights of
Lessor hereunder
and in and to the Aircraft (and shall
terminate, or be canceled, at the option
of Lessor, upon the
occurrence of an Event of Default), (bb) permit any further
disposition (other
than any chartering permitted
hereunder), (cc) contain any
provisions that
are inconsistent with the provisions of this Lease or
cause
Lessees to
breach any of their
representations, warranties or agreements under
this Lease, or (dd)
otherwise fail to conform to any consent required by Lessor
pursuant hereto; and (3) and takes all actions reasonably requested
by Lessor to
protect and
give first priority to Lessor's
interest therein, and any and all
proceeds thereof;
and
(ii)
Manager may make any Aircraft temporarily available to a
charter
client (any such
charterer, a "Permitted User") pursuant to a charter agreement
--------------
(the "Charter
Agreement") subject to
the following conditions: (A) the Charter
------------------
Agreement entered
into with a Permitted User shall (1)
have substantially the
same terms
and conditions as the
Charter Agreement then attached as Exhibit B,
---------
but in all cases, have terms and conditions
consistent with the provisions of
this Lease,
(2) not convey any property right,
title or other interest in the
Aircraft, other
than the right to have the Aircraft made available
to such
Permitted User
pursuant to the Charter Agreement, (3) preclude any
further
disposition of
the Aircraft and (4) provide that any such availability
(howsoever
characterized under
law), as the case may be, shall (aa) terminate,
or be canceled, at the option of Lessor, upon the expiration or earlier
cancellation or
termination
of this Lease and (bb) be expressly, and
at all
times remain,
subject and subordinate to this Lease and the
rights of Lessor
hereunder and
in and to the Aircraft; (B) Manager shall
have and maintain a
current and
valid Air Carrier Certificate issued by the
FAA and shall at all
times be in full compliance with Part 135, Part 91K any and all
other applicable
Federal Aviation
Regulations
and other applicable statutes, laws, rules
and
regulations with
respect to the Charter
Agreement and/or the use and operation
of the Aircraft under the Charter Agreement; (C)
Lessees shall provide Lessor
with a certified copy of the executed, completed originals of any
Charter
Agreement relating to
the Aircraft, if requested by Lessor after the occurrence
of an Event of
Default; (D) Lessees shall cause a copy of the pertinent
Charter
Agreement to
be placed on board the Aircraft to the extent required by
applicable law;
and (E) Lessees shall
comply with and/or cause Manager or such
other Person to be in
compliance with such other terms and conditions as Lessor
deems reasonable
necessary and appropriate with respect to the
dispositions
described in
this sub-paragraph (ii).
In
addition to the conditions set forth above, Lessees' right to
enter
into, and to permit Manager to enter into, any such arrangement
described in the
preceding
sub-paragraphs (i) and (ii), is further conditioned upon, and
Lessees
shall comply and shall cause Manager to comply with the following:
(A) if Lessor
so requests, Lessees
shall deliver to Lessor a consent, prepared by and in form
and substance satisfactory to Lessor, duly executed and delivered
by Lessees and
Manager (upon
execution and delivery
thereof, the terms and conditions of such
consent shall
be hereby incorporated
herein by their reference without further
action), together
with any other
consents and/or acknowledgments duly executed
and in form and substance satisfactory to Lessor, along with such other
instruments
(including, without limitation, recording documents appropriate
for
recording with all applicable aviation registries, and UCC
financing statements)
as Lessor may reasonably require and shall take such other actions
as are deemed
reasonably necessary
or desirable by Lessor
to effect the terms and conditions
of this Section 12(a)
and to protect its title to the Aircraft and maintain the
perfection and
priority of Lessor's Lien on any Collateral; and (B)
Lessees
reimburse Lessor
for any and all costs
incurred by it in connection therewith.
None of the arrangements permitted above
will reduce any of the obligations of
Lessees hereunder
or the rights of Lessor hereunder, or
of either party under
any consent
required pursuant
hereto, and all of such obligations shall be and
remain primary and shall continue in full force and effect as the
obligations of
a principal and not of a guarantor or surety.
(b)
Lessor's Conveyances.
Lessor, may at any time, with or without
---------------------
notice to either or
both Lessees, grant a security interest in, sell, assign or
otherwise transfer
(an "Assignment") all or any part of its interest in
the
----------
Lease Documents or the
Aircraft or any Rent due or to become due hereunder, and
each Lessee
shall perform all of
its obligations under the Lease Documents, to
the extent so transferred, for the benefit of the beneficiary of
such Assignment
(such beneficiary,
including any
successors and assigns, an "Assignee") except
--------
that the interest of
any such Assignee shall be subject to such Lessee's rights
to the extent provided in this Lease.
Each Lessee waives any
right and agrees
not to assert against any Assignee any defense, setoff, recoupment,
claim,
counterclaim or
any other Abatement that such Lessee
may have against Lessor,
unless expressly
assumed by such Assignee, in
8
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
which case,
Lessor shall be relieved of any such assumed obligations.
The
foregoing waiver is
not intended to contradict or otherwise limit or modify the
provisions of Section
7. If so directed in
writing, Lessees shall pay all Rent
and all other sums due or to become due under
the Lease Documents directly to
the Assignee
or any other party designated in
writing by Lessor.
Each Lessee
acknowledges and
agrees that Lessor's right to enter into an Assignment is
essential to Lessor,
and, accordingly, waives any restrictions under Applicable
Law with respect to an Assignment and any related remedies.
Upon the request
of
Lessor or any Assignee, each Lessee also agrees (a) to promptly
execute and
deliver to
Lessor or to such Assignee an
acknowledgment of assignment in form
and substance satisfactory to the requesting party, an insurance
certificate and
such other documents
and assurances reasonably requested by Lessor or Assignee,
and (b) to comply with the reasonable requirements of any such
Assignee in order
to perfect
any such assignment or transfer.
(c)
Successors and Assigns. This Lease shall be binding upon
and inure
----------------------
to the benefit of, and may be enforced by (i) Lessor and
its successors and
other Assignees,
or other express third party beneficiaries, and (ii)
each
Lessee and its successors and assigns (subject to Section
12(a)).
SECTION 13.
EVENTS OF DEFAULT AND REMEDIES.
----------------------------------
(a)
Events of Default. The term "Event of Default" means:
-------------------
------------------
(i)
non-payment of
any Basic Rent, Supplemental Rent
(including
Casualty Value,
if applicable) and/or any other amount due pursuant to
any
Rider, Addendum
or Supplement hereto within ten (10)
days after any or all of
the same shall become due and payable, or, upon demand, any other amount
required to be paid herein or under any other agreement with
Lessor;
(ii)
failure to
maintain, use or operate the Aircraft in
compliance with
Applicable
Law;
(iii) any use of the Aircraft outside of the U.S. that is
prohibited by
this Lease;
(iv)
failure to
obtain, maintain and/or comply with all of the
insurance coverages
required under this Lease;
(v)
any prohibited
transfer or encumbrance, or the existence
of
any unpermitted Lien, or any other action or circumstance that is
prohibited by,
or any violation of, Section 12(a);
(vi)
failure to
return the Aircraft to
Lessor on the date and in
the manner
required by this Lease;
(vii) a default by any Lessee or Guarantor under
any loan, note,
security agreement,
lease, guaranty,
conditional sale or other agreement with,
or other financial obligation to, Lessor or its Affiliates;
(viii) a
default by any Lessee or Guarantor, after
the expiration
of any applicable grace or cure period, in the payment or
performance of any
indebtedness,
liability or
obligation
for borrowed money to
any Person other
than Lessor
or its Affiliates;
(ix)
a material
inaccuracy
in any representation or breach of
warranty by
any Lessee or Guarantor (including any false or misleading
representation or warranty) in any financial statement or Lease
Document;
(x)
the commencement
of any bankruptcy,
insolvency, receivership
or similar
proceeding
by or against any Lessee or Guarantor (unless, if
involuntary, the
proceeding
is dismissed within
sixty (60) days of the filing
thereof) or the
rejection of this Lease or any other Lease Document in any such
proceeding;
(xi)
the failure
by any Lessee or
Guarantor generally to pay its
debts as they become due or its admission in writing of such
inability;
(xii) any
Lessee or Guarantor
ceases to do business as a going
concern, liquidates,
dissolves or sells, transfers or otherwise disposes of all
or substantially
all of its assets or property; or
9
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
(xiii) the
occurrence of any of
the following events: (i) any Lessee
or Guarantor
enters into any transaction of merger, consolidation or
reorganization; or
(ii) any Lessee or Guarantor becomes the subject of,
or
engages in,
a leveraged buy-out; unless, in any such event, such Lessee
or
Guarantor shall
be the surviving
entity; and the surviving entity is organized
and existing under the
laws of the United States or any US state, and all costs
associated therewith
are borne, and paid in full, by the surviving
entity,
including, without
limitation,
all costs incurred by Lessor in connection
therewith, and
not less than sixty (60) days prior to such event: (A)
the
surviving entity
executes and delivers
to Lessor (1) an agreement satisfactory
to Lessor, in its reasonable discretion, containing such surviving
entity's full
and total assumption, and its agreement to pay, perform, comply with and
otherwise be liable for, pursuant to the terms and conditions of
this Agreement,
all of such Lessee's, or Guarantor's as the case may be,
obligations having
previously arisen, or
then or thereafter arising, under any and all of the Loan
Documents, and
(2) any and all other documents, agreements, instruments,
certificates, opinions
and filings requested
by Lessor; and (B) Lessor, in its
reasonable discretion, is satisfied as to the creditworthiness of
such surviving
entity, and
as to such surviving entity's conformance to
the other standard
criteria then
used by Lessor when approving transactions similar to the
transactions
contemplated in this
Lease; or (iii) the parties that control any
Lessee or Guarantor as of the Closing Date no longer control
such Lessee or
Guarantor; or
(xiv) a material adverse change in the business, operations,
financial reporting, or financial condition of any Lessee or
Guarantor or in its
ability to
comply with any Lease Documents since the date of this
Lease as
determined by Lessor, in its sole discretion and in good faith;
(xv)
failure by
any Lessee or Guarantor to notify
Lessor of any
Default or
Event of Default within ten (10) business
days of its occurrence;
(xvi) breach
by any Lessee or Guarantor of any other
covenant,
condition or agreement
(other than those in items (i)-(xv)) under this Lease or
any of the other Lease Documents that continues for thirty (30)
days after
Lessor's written
notice to either or both of the Lessees
(but such notice and
cure period
will not be applicable unless such
breach is curable by practical
means within
such notice period); or
(xvii) a default by Guarantor under the Guaranty.
(b)
Remedies. If
an Event of Default occurs, Lessor
may exercise any
--------
one or more of the following remedies (in its sole discretion):
(i)
proceed at
law or in equity, to enforce specifically any
Lessee's performance
or to recover damages;
(ii)
declare this
Lease in default and/or cancel this Lease
or
otherwise terminate
either or both of the Lessees' right to use of the Aircraft
and either
or both of the
Lessees' other rights, but not its obligations under
this Lease,
and Lessees shall immediately return the Aircraft to Lessor
in
accordance with
the terms of this Lease;
(iii) enter
the premises where the Aircraft is located and
take
immediate possession
of and remove (or disable in place)
the Aircraft (and/or
the APU, any Engines and Parts then unattached
to the Aircraft) by self-help,
summary proceedings
or otherwise without liability;
(iv)
use either
or both of the Lessees' premises for
storage as
set forth in this Lease without liability;
(v)
sell, re-lease
or otherwise dispose of the Aircraft
(or any
Engine or Part), whether or not in Lessor's possession, at
public or private
sale, with or without notice to any Lessee, and apply or retain the
net proceeds
of such disposition, with Lessees remaining jointly and severally
liable for any
deficiency and
with any excess being retained by
Lessor, or keep the Aircraft
idle;
(vi)
apply any deposit or other cash collateral,
or any proceeds
of any Collateral, at any time to reduce any amounts due to
Lessor;
10
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
(vii) demand
and recover from Lessees the
Liquidated Damages and
other Rent
whenever the same shall be due; and
(viii) terminate
or cancel any sublease or management
agreement,
without regard
as to the existence of any event of default thereunder
and
recover or
cause each Lessee, and/or any sublessee or manager to
relinquish
possession of and return the Aircraft, including the Engines and
Parts, pursuant
to this Section 13, and/or exercise any and all other remedies
under any consent
entered into
by such party pursuant to Section 12
hereof, or in any Lessee's
stead, any remedies
provided for under, or otherwise available to any Lessee in
connection with the applicable sublease and/or management
agreement; and
(viii) exercise
any and all other remedies allowed by
Applicable
Law, including
the UCC.
Without limiting
the generality of the
foregoing, (A) upon the occurrence
of an Event of
Default, Lessor may, among other things, demand and recover
from
Lessees the
Casualty Value (calculated as contemplated in the definition
of
Liquidated Damages)
or other applicable Liquidated
Damages (in lieu of future
Basic Rent,
and not as a penalty) and other Rent
then due, and/or demand that
Lessees return
the Aircraft in accordance with this
Lease; and (B) if Lessees
return the Aircraft,
and after Lessor disposes of it, Lessor will determine the
amount, if
any, of any credit or reimbursement or
deficiency, as applicable,
with respect
to Lessees' obligation to pay such Casualty Value or other
Liquidated Damages (all as contemplated in the definition of such
term).
(c)
Lessor's Performance.
If either Lessee fails to perform any of its
--------------------
agreements contained
in this Lease, including its obligations to keep the
Aircraft free
of Liens, comply with Applicable Law, or obtain the
requisite
insurance coverages, Lessor shall have the right, but shall not be
obligated, to
effect such
performance and any
expenses incurred by Lessor in connection with
effecting such
performance, together
with interest thereon at the Late Payment
Rate, shall
be payable by Lessees
promptly upon demand.
Any such action shall
not be a cure or waiver of any Default or Event of Default
hereunder.
(d)
Power-of-Attorney.
Each Lessee
irrevocably appoints Lessor as its
-----------------
attorney-in-fact to
act in such Lessee's name and on its behalf to make,
execute, deliver and file any instruments or documents (including
any filings at
the FAA), settle,
adjust, receive payment, make claim or proof of loss, endorse
such Lessee's
name on any checks received or drafts or other
instruments of
payment specifically
related to any
insurance claims and to take any action as
Lessor deems
necessary or appropriate to carry out the
intent of this Lease;
provided, however,
Lessor agrees that it will not exercise this power unless an
--------
-------
Event of Default has occurred and is continuing.
This appointment is
coupled
with an interest, is irrevocable and shall
terminate only upon payment in full
of the obligations set forth in this Lease and/or any
other Lease Documents.
(e)
Enforcement Costs.
Each Lessee shall be liable for, and pay to
------------------
Lessor upon
demand, all costs, charges and expenses incurred by Lessor in
enforcing or
protecting
its rights under this
Lease, whether by reason of any
Default or Event of Default, or otherwise, including, legal fees,
disbursements,
insurance, expert
witness fees, consultant fees, repossession, taxes, lien
removal, recovery,
storage, inspection, appraisal, repair, costs of
transportation,
refurbishing, advertising and brokers' fees, and other carrying
costs and costs of sale, re-lease or other disposition of the
Aircraft.
(f)
Cumulative Remedies,
Etc. No right or remedy is exclusive.
Each
--------------------------
may be used
successively and cumulatively and in addition to any other right
or
remedy referred
to above or otherwise
available to Lessor at law or in equity,
including, such rights and/or remedies as are provided for in the
UCC, but in no
event shall
Lessor be entitled to recover any amount
in excess of the maximum
amount recoverable
under applicable law with respect to any
Event of Default.
No express
or implied waiver by Lessor of any Default or Event of
Default
hereunder shall in any
way be, or be construed to be, a waiver of any future or
subsequent Default
or Event of Default. The failure or delay of Lessor in
exercising any
rights granted it hereunder upon the occurrence
of any of the
contingencies set
forth herein shall not
constitute a waiver of any such right
upon the continuation or reoccurrence 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
or otherwise referred to herein. Each Lessee hereby waives any
rights under the UCC to cancel or repudiate this Lease or any of
the other Lease
Documents, to
reject or revoke acceptance of the Aircraft or any
component
thereof, to
suspend performance, and to recover from Lessor any general,
special, incidental
or consequential damages, for any
reason whatsoever.
All
11
<PAGE>
SUNTRUST LEASING
CORPORATION
--------------------------------------------------------------------------------
remedies set
forth herein shall survive the
expiration, cancellation or other
termination of this Lease for any reason whatsoever.
SECTION 14. NOTICES,
REPORTS, FURTHER ASSURANCES AND INSPECTIONS.
---------------------------------------------------------
(a)
Notices. All
communications and
notices provided for herein shall
-------
be in writing and shall become effective (i)
upon hand delivery, or (ii) upon
delivery by
an overnight delivery
service, or (iii) upon two (2) Business Days
after being deposited
in the U.S. mail with proper postage for first-class mail
prepaid, sent
by registered or certified mail, return receipt
requested, and
addressed to Lessor or Lessees at their respective addresses set
forth under the
signatures hereto or
such other address as either party may hereafter designate
by written
notice to the other, or (iv) when sent by
telecopy (with customary
confirmation of
receipt of such telecopy) on the Business Day when sent or upon
the next Business Day if sent on other than a Business Day.
(b)
Reports. Each
Lessee will provide Lessor with the following in
-------
writing within
the time periods specified: (i) notice of any Lien which
attaches to the
Aircraft, and the full particulars of the Lien, within ten (10)
days after such Lessee becomes aware of the Lien; (ii) (A) each
Lessee's balance
sheet and statement of retained earnings, prepared in accordance
with GAAP,
certified by
a recognized firm of certified
public accountants, within ninety
(90) days of the close of each fiscal year of such
Lessee, (B) each Lessee's
quarterly financial
report certified by the chief financial officer of
such
Lessee, within
ninety (90) days of the close of each fiscal
quarter of such
Lessee, (C) all of each Lessee's Forms 10-K and 10-Q, if any, filed
with the SEC
within thirty
(30) days after the date on which they
are filed (by furnishing
these SEC Forms, or making them publicly available in
electronic form, such
Lessee shall be deemed to have satisfied the requirements of
clauses (b)(ii)(A),
(B), or (C)); (iii) notice to Lessor of any change of the Primary
Hangar
Location, ten
(10) days prior to any such change; (iv)
notice of any loss or
damage to the Aircraft in accordance with Section 10; (v) notice of
any accident
involving the
Aircraft causing bodily injury or property damage to third
parties, within five
(5) days of such accident; and (vi) ten (10) days prior to
the policy
expiration
date for any insurance
coverage required by this Lease,
evidence (having
the form and substance consistent with Section
2(g) of the
Closing Terms Addendum) of the renewal or replacement of such
coverage complying
with the terms hereof.
Each Lessee will also
provide Lessor with the following
in writing
promptly upon Lessor's request: (i) a copy
of any insurance policy
required by
this Lease; (ii) notice to Lessor of
the Aircraft's location, and
the location
of all Records relating to the
Aircraft and its use, maintenance
and/or condition; (iii) such information as may be necessary to
enable Lessor to
file any reports required by any governmental authority due to Lessor's
ownership of the Aircraft; (iv) copies of any manufacturer's
maintenance service
program contract
for the Airframe or Engines; (v) copies of all Records
evidencing each
Lessee's compliance with FAA airworthiness directives and
mandatory service
bulletins and of
compliance with the provisions of Section 9
hereof and
of the Return Addendum, and any other
requested Records; and (vi)
such other reports or information as Lessor may reasonably
request.
(c)
Further Assurances.
Each Lessee will promptly execute or otherwise
------------------
authenticate any
documents, filings and other records, including, amendments to
this Lease,
UCC, FAA or other applicable filings and acknowledgments of
assignment, and
will take such further
action as Lessor may reasonably request
in order to carry out more effectively the intent and purposes of
this Lease and
to establish
and protect Lessor's rights and remedies under this Lease,
or
otherwise with
respect to the Aircraft and/or the
Collateral. If and to
the
extent that
the Cape Town Convention on International Interests in
Mobile
Equipment as
respects the registration of interests in
aircraft equipment is
ratified by
the United States and made effective pursuant
to its terms, each
Lessee shall
take such further
action at its own cost as Lessor may reasonably
request to
establish and protect
Lessor's rights and interests in the Aircraft
and this Lease thereunder. Each Lessee irrevocably authorizes
Lessor to file
UCCs or other filings with respect to the
Aircraft or Collateral. Each Lessee
agrees not to file any
corrective or termination statements with respect to any
UCC or other filings relating to the Aircraft or any
Collateral.
(d)
Inspection. Lessor
shall have the right, but not the duty, to
----------
inspect the
Aircraft, any
