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Search Aircraft Lease Agreement by:
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"),
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SUNTRUST LEASING CORPORATION
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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
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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 the






