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SYNTHETIC AIRCRAFT LEASE

Aircraft Lease Agreement

SYNTHETIC AIRCRAFT LEASE | Document Parties: POMEROY IT SOLUTIONS INC | SUNTRUST LEASING CORPORATION You are currently viewing:
This Aircraft Lease Agreement involves

POMEROY IT SOLUTIONS INC | SUNTRUST LEASING CORPORATION

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Title: SYNTHETIC AIRCRAFT LEASE
Governing Law: Maryland     Date: 4/17/2006
Industry: Computer Hardware    

SYNTHETIC AIRCRAFT LEASE, Parties: pomeroy it solutions inc , suntrust leasing corporation
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                            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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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.


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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
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--------------------------------------------------------------------------------

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
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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


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          (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
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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  


 
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