x
Annual
report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|
||
For the Fiscal Year Ended December 31, 2009 | ||
or
|
||
o
Transition
report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
|
||
For the transition period
from to
|
Bermuda | 98-0444035 | |
(State or other Jurisdiction
of
Incorporation or organization) |
(I.R.S. Employer
Identification No.) |
Name of Each Exchange
|
||
Title of Each Class | on Which Registered | |
Common Shares, par value $.01 per share
|
New York Stock Exchange |
Large accelerated
filer
o
|
Accelerated filer x | |||
Non-accelerated
filer
o
|
(Do not check if a smaller reporting company) | Smaller reporting Company o |
Documents of Which Portions
|
Parts of Form 10-K into Which
Portion
|
|
Are Incorporated by Reference | Of Documents Are Incorporated | |
Proxy Statement for Aircastle Limited
|
Part III | |
2010 Annual General Meeting of Shareholders
|
(Items 10, 11, 12, 13 and 14) |
ITEM 1
BUSINESS
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Dividend
Aggregate
per Common
Dividend
Share
Amount
Record Date
Payment Date
(Dollars in thousands)
$
0.4375
$
22,584
December 29, 2006
January 15, 2007
$
0.50
33,634
March 30, 2007
April 13, 2007
$
0.60
40,460
June 29, 2007
July 13, 2007
$
0.65
43,822
September 28, 2007
October 15, 2007
$
0.70
55,004
December 31, 2007
January 15, 2008
$
0.25
19,640
March 31, 2008
April 15, 2008
$
0.25
19,647
June 30, 2008
July 15, 2008
$
0.25
19,655
September 30, 2008
October 15, 2008
$
0.10
7,862
December 31, 2008
January 15, 2009
$
0.10
7,923
March 31, 2009
April 15, 2009
$
0.10
7,923
June 30, 2009
July 15, 2009
$
0.10
7,924
September 30, 2009
October 15, 2009
$
0.10
7,955
December 31, 2009
January 15, 2010
Diversified portfolio of high-utility
aircraft.
We have a portfolio of high-utility
aircraft that is diversified with respect to geographic markets,
lessees, end markets (i.e., passenger and freight), lease
maturities and aircraft type. As of December 31, 2009, our
aircraft portfolio consisted of 129 aircraft comprising a
variety of passenger and freighter aircraft types that were
leased to 60 lessees located in 33 countries, and had lease
maturities ranging from 2010 to 2020. Our lease expirations are
well dispersed, with a weighted average remaining lease term of
4.9 years for aircraft we owned at December 31, 2009.
Moreover, over the next two years, approximately nine percent of
our fleet, weighted by net book value has scheduled lease
expirations, after taking into account lease and sales
commitments. While we seek to place our aircraft on lease to
operators and on terms that provide the best risk-adjusted
returns, many airlines are in a weak financial condition and
suffer from liquidity problems. Accordingly, we believe that our
focus on portfolio diversification reduces the risks associated
with individual lessee defaults and adverse geopolitical or
economic issues, and results in generally predictable cash flows.
Experienced management team with significant
expertise.
Our management team has
significant experience in the acquisition, leasing, financing,
technical management, restructuring/repossession and sale of
aviation assets. This experience enables us to access a wide
array of placement opportunities throughout the world and also
evaluate a broad range of potential investments and sales
opportunities in the global aviation industry. With extensive
industry contacts and relationships worldwide, we believe our
management team is highly qualified to manage and grow our
aircraft portfolio and to address our long-term capital needs.
In addition,
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our senior management personnel have extensive experience
managing lease restructuring and aircraft repossessions, which
we believe is critical to mitigate our customer default exposure.
Existing fleet financed on a long-term
basis.
Our aircraft are currently financed in
six separate long-term asset-based financings with the earliest
maturity date being in 2013, thereby limiting our near-term
financial markets exposure on our owned aircraft portfolio. We
have also demonstrated access to several debt financing sources
including commercial bank, securitization, and export credit
agency-backed markets.
Disciplined acquisition approach and broad sourcing
network.
We evaluate the risk-adjusted return
of any potential acquisition first as a discrete investment and
then from a portfolio management perspective. To evaluate
potential acquisitions, we employ a rigorous due diligence
process focused on: (i) cash flow generation with careful
consideration of macro trends, industry cyclicality and product
life cycles; (ii) aircraft specifications and maintenance
condition; (iii) when applicable, lessee credit worthiness
and the local jurisdictions rules for enforcing a
lessors rights; and (iv) other legal and tax
implications. We source our acquisitions through
well-established relationships with airlines, other aircraft
lessors, financial institutions and other aircraft owners.
Global and scalable business
platform.
We operate through offices in the
United States, Ireland and Singapore, using a modern asset
management system designed specifically for aircraft operating
lessors and capable of handling a significantly larger aircraft
portfolio. We believe that our facilities, systems and personnel
currently in place are capable of supporting an increase in our
revenue base and asset base without a proportional increase in
overhead costs.
Selectively investing in additional commercial jet
aircraft and other aviation assets when attractively priced
opportunities and cost effective financing are
available.
We believe the large and growing
aircraft market will continue to provide significant acquisition
opportunities over the long term and that the recent economic
and financial market dislocations will offer attractive near
term investment opportunities. We regularly evaluate potential
aircraft acquisitions and expect to resume our investment
program through additional passenger and cargo aircraft
purchases when attractively priced opportunities and cost
effective financing are available.
Maintaining an efficient capital structure by using
varying long-term debt structures to obtain cost effective
financing and leveraging the efficient operating platform and
strong operating track record we have
established.
We have financed our aircraft
acquisitions using varying long-term debt structures obtained
through several different markets to obtain cost effective
financing. Although we expect our access to capital to continue
to be somewhat limited in the short-term, we expect capital to
be available in the longer-term, thus allowing us to acquire
additional aircraft and other aviation assets to optimize the
return on our investments and to grow our business and profits.
We will also seek opportunities to increase our profits by
leveraging the efficient operating platform we have established.
Reinvest a portion of the cash flows generated by our
business and from selective asset dispositions in additional
aviation assets
and/or
our
own debt and equity securities.
Aircraft have
a finite useful life and through a strategy of reinvesting a
portion of our cash flows in our business, we will seek to
maintain our asset base. We will also continue to evaluate
additional
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investment opportunities in the context of the relative
risk/return profile as compared to the merits of repurchasing
our own debt or equity securities.
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Off-
2010
(1)
2011
(2)
2012
2013
2014
2015
2016
2017
2018
2019
2020
Lease
(3)
Total
2
6
3
4
6
9
30
1
6
2
1
1
1
12
1
3
4
2
4
3
3
1
1
22
3
6
7
8
2
1
27
1
1
4
4
1
11
1
1
1
5
1
1
2
12
1
1
5
2
2
1
12
1
2
3
5
10
28
21
22
13
11
5
5
3
3
3
129
(1)
Includes one Airbus Model A319 aircraft originally scheduled to
expire in 2009 but delayed to the first quarter of 2010 to allow
the existing customer to complete final maintenance work.
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(2)
Includes one Boeing Model
757-200
aircraft which we have contracted to sell when it is scheduled
to come off lease.
(3)
The three off-lease aircraft comprise two Boeing Model
757-200
aircraft which we contracted to sell in the second quarter of
2010 and one Boeing Model
737-300
aircraft we are actively marketing for sale or lease.
Scheduled lease expirations
placements.
For our 20 aircraft originally having
lease expirations in 2009, we executed leases and lease
renewals, or commitments to lease or renew, with respect to 19
aircraft, including one aircraft we took back earlier than
originally scheduled in 2009 on a consensual basis from a
lessee. The lease expiration for the remaining aircraft was
delayed to the first quarter of 2010 to allow the existing
customer to complete final maintenance work, and we are actively
marketing it for lease or sale. For the 19 aircraft, the
weighted average lease term for the new leases or renewals will
be six years with monthly lease rates that are approximately
five percent higher than the previous rentals. The relatively
strong lease rate performance reflects a generally strong market
at the time the new leases or renewals were executed, when our
strategy was to lock in re-lease and renewal rates as far in
advance of lease expiry as practicable and to seek longer lease
terms.
Aircraft acquisitions
placements.
In May 2009, we took delivery of one
new Airbus Model A330-200 aircraft and immediately placed it on
lease with Aerovias del Continente Americano, or Avianca, a new
customer. In December 2009, we advanced another New A330
Aircraft position, and acquired and leased another Airbus Model
A330-200 aircraft to Avianca.
Repossessions and other lease transitions
placements.
In 2009, we delivered on lease eight
aircraft we repossessed in 2008, seven Boeing Model
737-700
aircraft and one Boeing Model
737-300
aircraft. In addition to the early transition mentioned in
Scheduled lease expiration placements
above, we also completed consensual early lease terminations for
eight aircraft in 2009:
Two Airbus Model A320-200 aircraft, which were placed on lease
with new customers in the first and second quarters,
respectively, of 2009.
One Boeing Model
767-300ER
aircraft, which was placed on a short-term lease, and
subsequently extended to 2011.
Two Boeing Model
737-300
aircraft, which were returned to us in the third quarter of
2009, one of which we sold in the third quarter and the other is
being marketed for lease or sale.
One Airbus Model A330-300 aircraft with an originally scheduled
lease expiry in 2011, for which we approached our then-existing
customer to request an early termination, to take advantage of
relatively strong market conditions, and leased the aircraft to
another customer upon completion of the early return, in the
fourth quarter of 2009.
Two Boeing Model
757-200
aircraft, which had scheduled lease expirations in 2010 but were
returned to us in the fourth quarter of 2009 and which are
contracted for sale in the second quarter of 2010.
Scheduled lease expirations
placements.
For our 19 aircraft originally having
lease expirations in 2010, we have executed lease renewals, or
commitments to lease or renew, with respect to 13 aircraft, we
have signed sales agreements to sell two aircraft and we are
actively
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remarketing the remaining four aircraft and are also remarketing
an aircraft originally scheduled to expire in 2009 but delayed
into 2010 by the existing customer. We estimate that for these
19 aircraft, excluding the two we expect to sell, the weighted
average lease term for the new leases or renewals will be
between 3.5 and 4.5 years with monthly lease rates that are
approximately 30% to 35% percent lower than the previous
rentals. The drop in lease rates for these placements reflects
more challenging market conditions when these new leases or
renewals were executed, as well as a comparatively stronger
lease placement environment, on average, when the previous
leases where put in place. Given more challenging market
conditions, we generally continue to seek shorter lease terms
for placements so as to allow for the opportunity to benefit
more quickly from possible market improvements.
Aircraft acquisitions
placements.
We are scheduled to take delivery of
two of the New A330 Aircraft in 2010, both in the second half of
the year. We have executed lease agreements for both aircraft
with an affiliate of the HNA Group, the parent company of Hainan
Airlines. We currently have no other commitment to acquire
aircraft in 2010.
Scheduled lease expirations
placements.
We have 13 aircraft with lease
expirations scheduled in 2011. We have executed lease renewals,
or commitments to lease or renew, with respect to three of these
aircraft, and we have a signed sale agreement to sell one
aircraft. We are actively remarketing the remaining nine
aircraft. Taking into account lease and sale commitments, we
currently have 71 aircraft with lease expirations scheduled in
the period
2012-2014.
Aircraft acquisitions
placements.
We are scheduled to take delivery of
seven of the New A330 Aircraft in 2011 and one in 2012. We
executed a lease agreement for one of the New A330 Aircraft
scheduled for delivery in 2011 with an affiliate of the HNA
Group, and we executed lease agreements for six of the New A330
Aircraft scheduled for delivery in 2011 with South African
Airways PTY LTD., or South African Airways, and we are actively
remarketing the remaining one aircraft scheduled for delivery in
the second quarter of 2012. We currently have no other
commitment to acquire aircraft in the period
2011-2014.
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individual lessee exposures;
average portfolio credit quality;
geographic concentrations;
end market (i.e., passenger and freighter) concentrations;
lease maturity concentrations; and
aircraft type concentrations.
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ITEM 1A.
RISK
FACTORS
difficulty or inability to finance pre-delivery payment
obligations under, or to finance a portion of the remaining
purchase price for the New A330 Aircraft to be delivered under,
the Airbus A330 Agreement;
lack of liquidity in the market may continue to make it
difficult for buyers to finance acquisitions of aviation assets,
which would contribute to a decline in demand for aviation
assets and could result in a decline in the value of aviation
assets;
aircraft leasing companies and other aircraft investors may
decide or be forced to liquidate assets at discounted prices,
driving aviation asset values down generally;
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increased risk of default by our lessees resulting from
financial market distress, lack of available credit or
continuing effects of the global economic recession;
exposure to increased bank or counterparty risk in the current
environment, including the risk that our counterparties will not
be able to perform their obligations under interest rate hedging
contracts and the risk that banks issuing letters of credit we
hold as lease security deposits may fail to pay when we seek to
draw on these letters of credit; and
increased risk that we will not be able to re-finance our
securitizations and other long-term financings before the dates
on which the excess cash flow will be applied to reduce the
principal balance of the debt rather than made available to us
to pay dividends or for other corporate purposes.
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substantially all of our aircraft leases serve as collateral for
our secured indebtedness and the terms of certain of our
indebtedness require us to use proceeds from sales of aircraft,
in part, to repay amounts outstanding under such indebtedness;
we may be required to dedicate a substantial portion of our cash
flows from operations, if available, to debt service payments,
thereby reducing the amount of our cash flow available to pay
dividends, fund working capital, make capital expenditures and
satisfy other needs;
our failure to comply with the terms of our indebtedness,
including restrictive covenants contained therein, may result in
additional interest being due or defaults that could result in
the acceleration of the principal, and unpaid interest on, the
defaulted debt, as well as the forfeiture of the aircraft
pledged as collateral; and
non-compliance with loan to value ratios, interest coverage or
debt service coverage ratios, or other financial tests, would
limit or eliminate available cash flows from the assets financed
under the relevant financing.
Securitizations.
During the first five years
from the closing of each securitization, excess cash flow is
available to us from such securitization for corporate purposes,
to make new investments or to pay dividends to our shareholders.
However, if debt service coverage ratio requirements are not met
on two consecutive monthly payment dates in the fourth and fifth
year following the closing date of the applicable securitization
and in any month following the fifth anniversary of the closing
date, all excess securitization cash flow is required to be used
to reduce the principal balance of the indebtedness of the
applicable securitization and will not be available to us for
other purposes.
Term Financings.
Our term financings contain
loan to value and debt service coverage or interest coverage
tests. Under certain circumstances, if we fail these tests,
excess cash flow could be applied to pay down principal or, in
the case of Term Financing No. 2, a default could occur. In
2010, we will not initially meet the loan to value requirement
for Term Financing No. 1 and we anticipate that we will
therefore be obliged to make in addition to scheduled principal
payments approximately $20 million in supplemental
principal payments. To the extent that supplemental principal
payments are required, availability of excess cash flow for
other purposes will be reduced.
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ECA Term Financings.
Our ECA term financings
contain a $500 million minimum net worth covenant and also
contain, among other customary provisions, a material adverse
change default and cross-default to other ECA- or EXIM-
supported financings or other recourse financings of the Company.
create liens on assets;
incur additional indebtedness;
sell assets;
make certain investments or capital expenditures;
engage in mergers, amalgamations or consolidations among our
subsidiary companies or between a subsidiary company and a third
party;
engage in certain transactions with affiliates;
incur secured indebtedness; and
receive payments or excess cash flows from subsidiaries.
forfeiting deposits and progress payments and having to pay and
expense certain significant costs relating to these commitments,
such as actual damages, and legal, accounting and financial
15
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advisory expenses, and will not realize any of the benefits of
having the transactions completed; and
the focus of our management having been spent on these
commitments instead of on pursuing other opportunities that
could have been beneficial to us, without realizing any or all
of the benefits of having the transaction completed.
passenger and air cargo demand;
fuel costs and general economic conditions affecting our
lessees operations;
geopolitical events, including war, prolonged armed conflict and
acts of terrorism;
outbreaks of communicable diseases and natural disasters;
governmental regulation;
interest rates;
foreign exchange rates;
airline restructurings and bankruptcies;
the availability of credit;
changes in control of, or restructurings of, other aircraft
leasing companies which may result in, among other things, a
significant volume of asset sales, resulting in downward
pressure on aircraft values;
manufacturer production levels and technological innovation;
climate change initiatives, technological change, aircraft age
limits and other factors leading to retirement and obsolescence
of aircraft models;
manufacturers merging or exiting the industry or ceasing to
produce aircraft types;
reintroduction into service of aircraft previously in
storage; and
airport and air traffic control infrastructure constraints.
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the particular maintenance and operating history of the airframe
and engines;
the number of operators using that type of aircraft;
whether the aircraft is subject to a lease and, if so, whether
the lease terms are favorable to the lessor;
any renegotiation of a lease on less favorable terms;
any regulatory and legal requirements that must be satisfied
before the aircraft can be purchased, sold or re-leased; and
compatibility of our aircraft configurations or specifications
with other aircraft of that type owned by operators.
17
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20
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the costs of casualty, liability and political risk insurance
and the liability costs or losses when insurance coverage has
not been or cannot be obtained as required, or is insufficient
in amount or scope;
the costs of licensing, exporting or importing an aircraft,
airport charges, customs duties, air navigation charges, landing
fees and similar governmental or quasi-governmental impositions,
which can be substantial;
penalties and costs associated with the failure of lessees to
keep the aircraft registered under all appropriate local
requirements or obtain required governmental licenses, consents
and approvals; and
carbon taxes or other fees, taxes or costs imposed under
emissions limitations or climate change regulations or other
initiatives.
21
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22
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competition;
fare levels;
air cargo rates;
passenger and air cargo demand;
availability of financing and other circumstances affecting
airline liquidity, including covenants in financings, terms
imposed by credit card issuers and collateral posting
requirements contained in fuel hedging contracts and the ability
of airlines to make or refinance principal payments as they come
due;
geopolitical and other events, including war, acts or threats of
terrorism, outbreaks of epidemic diseases and natural disasters;
aircraft accidents;
operating costs, including the price and availability of jet
fuel and labor costs;
labor difficulties;
economic conditions, including recession, financial system
distress and currency fluctuations in the countries and regions
in which the lessee operates or from which the lessee obtains
financing;
losses on investments, including auction rate
securities; and
governmental regulation of or affecting the air transportation
business, including noise regulations, climate change
initiatives, and age limitations.
23
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result in a grounding of the aircraft;
in the event of a re-lease of the aircraft, cause us to incur
costs, which may be substantial, in restoring the aircraft to an
acceptable maintenance condition in order to induce a subsequent
lessee to lease the aircraft;
result in us not being able to re-lease the aircraft promptly or
result in a lower rental rate or a shorter term lease following
repossession of the aircraft; and
adversely affect the value of the aircraft.
24
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25
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26
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27
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28
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29
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30
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a classified board of directors with staggered three-year terms;
provisions in our bye-laws regarding the election of directors,
classes of directors, the term of office of directors and
amalgamations to be rescinded, altered or amended only upon
approval by a resolution of the directors and by a resolution of
our shareholders, including the affirmative votes of at least
66% of the votes attaching to all shares in issue entitling the
holder to vote on such resolution;
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provisions in our bye-laws dealing with the removal of directors
and corporate opportunity to be rescinded, altered or amended
only upon approval by a resolution of the directors and by a
resolution of our shareholders, including the affirmative votes
of at least 80% of the votes attaching to all shares in issue
entitling the holder to vote on such resolution;
the removal of directors by a resolution, including the
affirmative votes of at least 80% of all votes attaching to all
shares in issue entitling the holder to vote on such resolution;
our board of directors to determine the powers, preferences and
rights of our preference shares and to issue such preference
shares without shareholder approval;
advance notice requirements by shareholders for director
nominations and actions to be taken at annual meetings; and
no provision for cumulative voting in the election of directors;
all the directors standing for election may be elected by our
shareholders by a plurality of votes cast at a duly convened
annual general meeting, the quorum for which is two or more
persons present in person or by proxy at the start of the
meeting and representing in excess of 50% of all votes attaching
to all shares in issue entitling the holder to vote at the
meeting.
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variations in our quarterly or annual operating results;
failure to meet any earnings estimates;
actual or perceived reduction in our growth or expected future
growth;
actual or anticipated accounting issues;
publication of research reports about us, other aircraft lessors
or the aviation industry or the failure of securities analysts
to cover our common shares or the decision to suspend or
terminate coverage in the future;
additions or departures of key management personnel;
increased volatility in the capital markets and more limited or
no access to debt financing, which may result in an increased
cost of, or less favorable terms for, debt financing or may
result in sales to satisfy collateral calls or other pressure on
holders to sell our shares;
redemptions, or similar events affecting funds or other
investors holding our shares, which may result in large block
trades that could significantly impact the price of our common
shares;
adverse market reaction to any indebtedness we may incur or
preference or common shares we may issue in the future;
changes in or elimination of our dividend;
actions by shareholders;
changes in market valuations of similar companies;
announcements by us, our competitors or our suppliers of
significant contracts, acquisitions, dispositions, strategic
partnerships, joint ventures or capital commitments;
speculation in the press or investment community;
changes or proposed changes in laws or regulations affecting the
aviation industry or enforcement of these laws and regulations,
or announcements relating to these matters; and
general market, political and economic conditions and local
conditions in the markets in which our lessees are located.
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34
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35
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ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
RESERVED
37
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38
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ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Dividends
Declared Per
High
Low
Share ($)
$
26.54
$
10.98
$
0.25
$
16.73
$
7.68
$
0.25
$
14.40
$
8.20
$
0.25
$
9.93
$
2.80
$
0.10
$
5.47
$
2.54
$
0.10
$
7.98
$
4.47
$
0.10
$
10.62
$
6.31
$
0.10
$
10.23
$
7.52
$
0.10
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Maximum
Total Number of
Number of Shares
Total
Average
Shares Purchased
that may yet be
Number
Price
as Part of Publicly
Purchased under
of Shares
Paid
Announced Plans
the Plans or
Purchased
(b)
per Share
or
Programs
(c)
Programs
(c)
$
N/A
N/A
4,278
35.98
N/A
N/A
N/A
N/A
4,278
$
35.98
N/A
N/A
$
N/A
N/A
N/A
N/A
2,982
26.16
N/A
N/A
2,982
$
26.16
N/A
N/A
13,243
$
26.33
N/A
N/A
N/A
N/A
N/A
N/A
13,243
$
26.33
N/A
N/A
$
N/A
N/A
22,765
16.00
N/A
N/A
N/A
N/A
22,765
$
16.00
N/A
N/A
$
N/A
N/A
N/A
N/A
1,491
4.33
N/A
N/A
1,491
$
4.33
N/A
N/A
33,422
$
4.78
N/A
N/A
N/A
N/A
N/A
N/A
33,422
$
4.78
N/A
N/A
$
N/A
N/A
N/A
N/A
1,492
10.15
N/A
N/A
1,492
$
10.15
N/A
N/A
(a)
Information is presented on a financial calendar basis,
consistent with our quarterly financial reporting.
40
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(b)
Our Compensation Committee approved the repurchase of common
shares pursuant to an irrevocable election made under the
Amended and Restated Aircastle Limited 2005 Equity and Incentive
Plan, in satisfaction of minimum tax withholding obligations
associated with the vesting of restricted common shares on
December 31, 2007, 2008 and 2009.
(c)
The Company does not participate in any Publicly Announced Plans
or Programs.
*
$100 invested on 8/7/06 in Aircastles common shares or
7/31/06 in the S&P 500 Index, including reinvestment of
dividends.
8/7/06
9/30/06
12/31/06
3/31/07
6/30/07
9/30/07
12/31/07
3/31/08
6/30/08
9/30/08
12/31/08
3/31/09
6/30/09
9/30/09
12/31/09
100.00
126.35
130.97
159.31
181.96
155.55
125.83
54.83
42.31
51.10
25.22
25.06
40.16
53.37
54.92
100.00
105.02
112.05
112.77
119.85
122.28
118.21
107.04
104.13
95.41
74.47
66.27
76.83
88.82
94.18
100.00
100.00
102.11
124.27
135.50
110.77
90.24
76.48
53.84
47.00
18.39
16.61
33.39
46.14
45.65
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ITEM 6.
SELECTED
FINANCIAL DATA
Year Ended December 31,
2005
2006
2007
2008
2009
$
31,638
$
182,852
$
381,091
$
582,587
$
570,585
12,493
27,836
39,040
46,806
46,016
11,286
53,424
126,403
201,759
209,481
6,846
49,566
92,660
203,529
169,810
(803
)
45,920
114,403
115,291
102,492
1,031
5,286
12,941
228
51,206
127,344
115,291
102,492
$
(0.02
)
$
0.99
$
1.68
$
1.47
$
1.29
$
0.03
$
0.11
$
0.19
$
0.01
$
1.10
$
1.87
$
1.47
$
1.29
$
(0.02
)
$
0.99
$
1.68
$
1.47
$
1.29
$
0.03
$
0.11
$
0.19
$
0.01
$
1.10
$
1.87
$
1.47
$
1.29
$
1.1375
$
2.45
$
0.85
$
0.40
$
19,003
$
149,349
$
333,745
$
526,305
$
501,672
$
(20,974
)
$
42,712
$
200,210
$
321,806
$
300,811
(710,317
)
(858,002
)
(2,369,796
)
37,640
(269,434
)
811,234
793,465
2,125,014
(292,045
)
30,342
$
79,943
$
58,118
$
13,546
$
80,947
$
142,666
712,092
1,559,365
3,807,116
3,837,543
3,812,970
26,907
121,273
113,015
14,349
967,532
1,918,703
4,427,642
4,251,572
4,454,512
490,588
442,660
798,186
549,400
1,677,736
2,476,296
2,464,560
8,665
83,694
67,744
410,936
637,197
1,294,577
1,112,166
1,291,237
31
68
133
130
129
54.9
%
62.8
%
66.3
%
69.0
%
65.6
%
(1)
Effective January 1, 2009, ASC 260
Earnings Per Share,
determined that unvested share-based payment awards that
contain nonforfeitable rights to receive dividend or dividend
equivalents (whether paid or unpaid) are participating
securities and should be included in the computation for
42
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the purpose of applying the two-class method when calculating
earnings per share (EPS). The adoption requires us
to present EPS using the two-class method for our current period
EPS computations and to retrospectively revise our comparative
prior period EPS computations using the two-class method. The
adoption did not have a material effect on EPS.
(2)
EBITDA is a measure of operating performance that is not
calculated in accordance with US GAAP. EBITDA should not be
considered a substitute for net income, income from operations
or cash flows provided by or used in operations, as determined
in accordance with US GAAP. EBITDA is a key measure of our
operating performance used by management to focus on
consolidated operating performance exclusive of income and
expense that relate to the financing and capitalization of the
business.
We define EBITDA as income (loss) from continuing operations
before income taxes, interest expense and depreciation and
amortization. We use EBITDA to assess our consolidated financial
and operating performance, and we believe this non-GAAP measure,
is helpful in identifying trends in our performance. This
measure provides an assessment of controllable expenses and
affords management the ability to make decisions which are
expected to facilitate meeting current financial goals as well
as achieve optimal financial performance. It provides an
indicator for management to determine if adjustments to current
spending decisions are needed. EBITDA provides us with a measure
of operating performance because it assists us in comparing our
operating performance on a consistent basis as it removes the
impact of our capital structure (primarily interest charges on
our outstanding debt) and asset base (primarily depreciation and
amortization) from our operating results.
Year Ended December 31,
2005
2006
2007
2008
2009
$
228
$
51,206
$
127,344
$
115,291
$
102,492
11,286
53,424
126,403
201,759
209,481
734
(4,406
)
(7,379
)
(1,815
)
11,229
6,846
49,566
92,660
203,529
169,810
940
4,845
7,658
7,541
8,660
(1,031
)
(5,286
)
(12,941
)
$
19,003
$
149,349
$
333,745
$
526,305
$
501,672
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ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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45
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Owned
Aircraft as of
December 31,
2009
(1)
$
3,813
129
60
33
11.1
10.3
10.9
3.8
7.7
4.9
99
%
98
%
(1)
Calculated using net book value as of December 31, 2009.
(2)
Weighted average age (years) by net book value.
(3)
Weighted average remaining lease term (years) by net book value.
(4)
Aircraft on-lease days as a percent of total days in period
weighted by net book value, excluding aircraft in freighter
conversion.
(5)
One Boeing Model
737-400
aircraft which was being converted to freighter configuration
and which we delivered in the first quarter of 2010 is included
as Freighter aircraft; the remaining lease term for
this aircraft, for which we have an executed lease
post-conversion, is measured based on the ten-year term of the
post-conversion lease.
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Owned Aircraft as of
December 31, 2009
Number of
% of Net
Aircraft
Book Value
83
44
%
24
25
%
1
2
%
108
71
%
21
29
%
129
100
%
86
64
%
43
36
%
129
100
%
58
46
%
30
20
%
15
12
%
10
9
%
13
12
%
3
1
%
129
100
%
(1)
Includes one Boeing Model
737-400
aircraft which was being converted to freighter configuration
and for which we have an executed lease with a carrier in Asia
post-conversion and which we delivered in the first quarter of
2010.
(2)
Includes one Boeing Model
737-300
aircraft which was returned to us on a consensual early lease
termination in the third quarter of 2009 which we are actively
marketing for sale or lease and two Boeing Model
757-200
aircraft which were returned to us early on a consensual basis
in the third quarter of 2009 for which we have executed sales
agreements with expected delivery dates in the second and third
quarters of 2010.
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Percent of Net
Number of
Customer
Country
Aircraft
Greater than 6%
Martinair
(1)
Netherlands
5
Emirates
United Arab Emirates
2
US Airways
USA
8
3% to 6%
Avianca
Colombia
2
Iberia
Airlines
(2)
Spain
6
GOL
(2)
Brazil
6
Airbridge
Cargo
(3)
Russia
1
KLM
(1)
Netherlands
1
World Airways
USA
2
Less than 3%
Swiss International Air Lines
Switzerland
2
Icelandair
(4)
Iceland
5
China Eastern
Airlines
(5)
China
4
Korean Air
South Korea
2
Cimber-Sterling
Denmark
4
SriLankan Airlines
Sri Lanka
2
(1)
Martinair is a wholly owned subsidiary of KLM. Although KLM does
not guarantee Martinairs obligations under the relevant
lease, if combined, the two, together with another affiliated
customer, represent 11% of flight equipment held for lease.
(2)
GOL has guaranteed the obligations of an affiliate, VRG Linhas
Aereas, and accordingly, the two are shown combined in the above
table.
(3)
Guaranteed by Volga-Dnepr.
(4)
Icelandair Group hf, the parent company of Icelandair, has
guaranteed the obligations of an affiliate, SmartLynx, and
accordingly, the two are shown combined in the above table.
(5)
China Eastern Airlines has announced that it will acquire
Shanghai Airlines, a customer to which we lease four aircraft.
If combined, the entity would be our fourth largest customer,
with over 4% of net book value of flight equipment held for
lease.
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Year Ended
December 31,
2008
2009
$
542,270
$
511,459
1,815
(11,229
)
34,460
58,733
578,545
558,963
3,174
1,924
868
9,698
582,587
570,585
201,759
209,481
203,529
169,810
46,806
46,016
18,211
3,982
19,431
456,076
462,949
6,525
1,162
(10,204
)
2,354
(3,679
)
3,516
122,832
111,152
7,541
8,660
$
115,291
$
102,492
$24.1 million of revenue as a result of aircraft sales
(eight aircraft were sold during 2008 and three aircraft were
sold during 2009);
$15.0 million of revenue due to downtime in connection with
aircraft in transition and freighter conversions;
$9.9 million of revenue due to lower floating rate lease
rentals and lease rate changes.
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Year Ended
December 31,
2008
2009
$
169,860
$
146,617
16,623
463
15,488
12,894
1,003
13,603
12,232
216,577
172,206
(7,311
)
(939
)
(5,737
)
(1,457
)
$
203,529
$
169,810
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a $23.2 million decrease in interest expense on our
borrowings due primarily to a lower average debt balance
(average debt balance during the year ended December 31,
2009 was $2.45 billion as compared to $2.71 billion in
the same period in 2008) and lower interest rates during
2009 as compared to 2008;
a $16.2 million decrease resulting from changes in measured
hedge ineffectiveness due primarily to prior year debt changes;
a $2.6 million decrease in amortization of deferred losses
on interest rate derivatives due primarily to:
$6.6 million decrease related to accelerated amortization
of deferred losses from terminated interest rate derivatives for
borrowings that we are no longer making (i.e., that are no
longer probable of occurring) as a result of a lower forecasted
debt financings.
$4.0 million increase related to amortization of deferred
losses on terminated interest rate derivatives for borrowings we
anticipate making in the future (i.e., that are probable of
occurring). The deferred losses are amortized into interest
expense as the interest payments being hedged occur;
a $1.4 million decrease in amortization of deferred
financing fees resulting primarily from the closing of our
revolving credit facilities during 2008; and
a $1.0 million decrease in hedge termination charges.
a $6.4 million decrease in interest income earned on our
cash balances, resulting from significantly lower interest rates
during the year ended December 31, 2009 compared to the
same period in 2008; and
a $4.3 million decrease in capitalized interest due to
lower interest rates during the year ended December 31,
2009 compared to the same period in 2008 and the delivery of
aircraft from freighter conversion and the manufacturer.
$5.9 million in aircraft maintenance and other transition
costs relating to unscheduled lease terminations for eight
aircraft returned to us in 2009;
$4.7 million in aircraft maintenance and other transition
costs relating to unscheduled lease terminations for eight
aircraft returned to us in 2008 and transitioned to new lessees
in 2009;
$2.9 million in aircraft maintenance and transition costs
for four aircraft in freighter conversion; and
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$1.0 million in aircraft maintenance and transition costs
relating to scheduled lease terminations for six aircraft
returned to us in 2009.
$12.4 million lower
mark-to-market
adjustments on our undesignated interest rate derivatives;
a $5.2 million increase in the gain on sale of debt
investments; and
a $1.0 million gain on the purchase and re-sale of a spare
engine.
a $6.4 million decrease in gain on sale of flight equipment
for the three aircraft sold in 2009 (compared to eight aircraft
sold in 2008); and
a $4.0 million termination fee to cancel our engine
purchase commitments for the New Airbus A330 program.
a $337.8 million decrease in deferred losses resulting from
a decrease in the net change in the fair value of outstanding
interest rate derivatives qualifying for and designated as cash
flow hedges due to significant decreases in the
1-Month
LIBOR rates during 2008, causing large losses, and a leveling
off of the
1-Month
LIBOR rates during 2009.
1-Month
LIBOR rates as of December 31, 2007, 2008 and 2009 were
4.6%, 0.44% and 0.23% respectively; and
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a $10.7 million increase in the fair value of debt
investments as a result of the sale of our remaining debt
investments in 2009.
a $3.6 million decrease in amortization into earnings of
deferred net losses from terminated interest rate derivatives;
a $5.0 million decrease in gain on debt investments
reclassified into earnings; and
a $12.8 million decrease in net income.
Year Ended
December 31,
2007
2008
$
362,497
$
542,270
7,379
1,815
34,460
369,876
578,545
10,400
3,174
815
868
381,091
582,587
126,403
201,759
92,660
203,529
39,040
46,806
2,081
3,982
260,184
456,076
6,525
1,154
(10,204
)
1,154
(3,679
)
122,061
122,832
7,658
7,541
114,403
115,291
12,941
$
127,344
$
115,291
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$150.5 million of full year lease rental revenue for
aircraft acquired in 2007; and
$34.5 million of lease rental revenue for aircraft acquired
in 2008.
Year Ended December 31,
2007
2008
$
109,853
$
169,860
171
16,623
(4,849
)
15,488
1,003
6,991
13,603
112,166
216,577
(12,239
)
(7,311
)
(7,267
)
(5,737
)
$
92,660
$
203,529
a $60.0 million increase in interest expense on our
borrowings due primarily to a higher average debt balance
(average debt balance during the year ended December 31,
2008 was $2.71 billion as compared to $1.64 billion in
the same period in 2007);
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a $16.5 million increase in hedge ineffective losses due
primarily to changes in debt and debt forecasts as follows:
$13.5 million related to a lower forecasted amount of debt
for the New A330 Aircraft and a lower forecasted amount of debt
for, and an overall reduction in, anticipated aircraft
acquisitions; and
$3.0 million related to a lower amount of debt following
the sale of an aircraft and associated repayment of debt for
Securitization No. 1;
a $21.3 million increase in amortization of terminated
interest rate derivatives related to deferred losses in other
comprehensive income primarily composed of the following:
$9.8 million related to amortization of deferred losses on
terminated interest rate derivatives for borrowings we
anticipate making in the future (i.e., that are probable of
occurring). The deferred losses are amortized into interest
expense as the interest payments being hedged occur; and
$11.5 million related to accelerated amortization of
deferred losses from terminated interest rate derivatives for
borrowings that we no longer anticipate making (i.e., that are
no longer probable of occurring) as a result of a lower
forecasted debt financings;
a $6.6 million increase in amortization of deferred
financing fees as a result of the additional term financings and
credit facilities in 2008 over the same period in 2007;
a $4.9 million decrease in interest income on our cash and
cash equivalents resulting from lower interest rates during the
year ended December 31, 2008 compared to the same period in
2007; and
a $1.5 million decrease in capitalized interest related to
accelerated payments and progress payments made in respect to
flight equipment on forward order under the January 2007
Guggenheim Aviation Investment Fund LP asset purchase
agreement, or the GAIF Acquisition Agreement.
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Year Ended December 31,
2007
2008
$
2,364
$
(761
)
11,566
(185
)
12,984
(43
)
$
12,941
$
a $118.5 million increase in deferred losses resulting from
a decrease in the net change in the fair value of outstanding
interest rate derivatives qualifying for and designated as cash
flow hedges due to a significant decrease in the
1-Month
LIBOR rates. At December 31, 2007, the
1-Month
LIBOR spot rate was 4.6% as compared to 0.44% at
December 31, 2008;
a $4.7 million decrease in the fair value of debt
investments; and
a $12.1 million decrease in net income.
a $21.3 million increase in amortization into earnings of
deferred net losses from terminated interest rate derivatives.
56
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57
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flight equipment where estimates of the manufacturers
realized sales prices are not relevant (e.g., freighter
conversions);
flight equipment where estimates of the manufacturers
realized sales prices are not readily available; and
flight equipment which may have a shorter useful life due to
obsolescence.
58
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59
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60
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61
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lines of credit, our securitizations, term financings and, more
recently, secured borrowings supported by export credit agencies
for new aircraft acquisitions;
public offerings of common shares; and
asset sales.
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Year Ended
Year Ended
Year Ended
December 31,
December 31,
December 31,
2007
2008
2009
$
200,210
$
321,806
$
300,811
(2,369,796
)
37,640
(269,434
)
2,125,014
(292,045
)
30,342
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$30.8 million decrease in cash flow from lease rental
revenues;
$17.0 million increase in cash paid for aircraft transition
costs in 2009; and
$5.5 million decrease in cash flow from working capital
(changes in certain assets and liabilities).
$17.8 million increase in cash received for maintenance
revenue; and
$15.3 million decrease in cash payments for interest.
$150.5 million increase in lease rentals related to the
full year effect in 2008 for aircraft that were acquired in
2007; and
$34.5 million increase in lease rentals for aircraft
acquired in 2008.
$66.2 million increase in cash paid for interest in 2008.
$168.5 million lower proceeds from sale of flight equipment
(three aircraft sold in 2009 compared to eight aircraft sold in
2008);
$92.6 million in increased purchase deposits under our
Airbus A330 Agreement and aircraft undergoing freighter
conversion;
$59.9 million lower proceeds from the sale of and principal
repayments on our debt investments; and
$35.9 lower collateral call receipts, net of payments, on our
interest rate derivatives and repurchase agreements.
$49.5 million decrease in the acquisition and improvement
of flight equipment.
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$151.3 million of lower payments for terminated cash flow
hedges;
$82.3 million of lower dividend payments;
$67.7 million of lower principal payments on our repurchase
agreements;
$18.1 million of lower deferred financings costs; and
$14.1 million of security deposits and maintenance payments
received (net of payments).
$12.1 million of lower borrowings (net of repayments) on
our credit facilities, term debt financings and securitizations.
Final
Outstanding
Number of
Interest
Stated
Collateral
Borrowing
(1)
Aircraft
Rate
(2)
Maturity
(3)
(Dollars in thousands)
Interests in aircraft leases, beneficial interests in aircraft
owning entities and related interests
$
436,091
33
0.50
%
6/20/31
Interests in aircraft leases, beneficial interests in aircraft
owning entities and related interests
1,061,566
57
0.49
%
6/14/37
Interests in aircraft leases, beneficial interests in aircraft
owning entities and related interests
708,710
28
1.99
%
5/02/15
Interests in aircraft leases, beneficial interests in aircraft
owning entities and related interests
118,605
8
2.90
%
9/23/13
Interests in aircraft leases, beneficial interests in aircraft
leasing entities and related interests
139,588
2
4.48
%
and
3.96%
5/27/21
and
12/03/21
$
2,464,560
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(1)
Outstanding borrowing amount equals committed borrowing amount
at December 31, 2009.
(2)
Reflects floating rate in effect at the most recent applicable
reset date, except for the ECA Term Financings which are fixed
rate.
(3)
For Securitization No. 1, Securitization No. 2 and
Term Financing No. 1, all cash flows available after
expenses and interest will be applied to debt amortization, if
the debt is not refinanced by June 2011, June 2012, and May
2013, respectively.
Available Liquidity
December 31,
December 31,
Unused
Interest Rate
Liquidity Facility Provider
2008
2009
Fee
on any Advances
(Dollars in thousands)
Calyon
$
42,000
$
42,000
0.45
%
1M Libor + 1.00%
HSH Nordbank AG
82,343
79,617
(1)
0.50
%
1M Libor +
0.75%
(2)
Calyon
15,152
14,174
0.60
%
1M Libor + 1.20%
(1)
Following a ratings downgrade with respect to the liquidity
facility provider in May 2009, the liquidity facility was drawn
and the proceeds, or permitted investments thereof, remain
available to provide liquidity if required.
(2)
Amounts drawn following a ratings downgrade with respect to the
liquidity facility provider do not bear interest; however, net
investment earnings will be paid to the liquidity facility
provider and the unused fee continues to apply.
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70
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principal and interest payments made under our securitizations
and term financings; and
lower variable interest rates and payments made under our
purchase obligations.
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an increase in borrowings under our ECA Term Financings and
expected interest payments.
Payments Due By Period as of December 31, 2009
Less than
More than
Total
1 year
1-3 years
3-5 years
5 years
(Dollars in thousands)
$
436,091
$
20,988
$
146,309
$
186,522
$
82,272
1,061,566
59,356
165,799
341,737
494,674
708,710
48,900
97,800
198,854
363,156
118,605
31,498
66,161
20,946
139,588
9,347
19,953
21,776
88,512
2,464,560
170,089
496,022
769,835
1,028,614
138,607
30,119
51,613
36,682
20,193
356,811
102,573
160,743
66,557
26,938
495,418
132,692
212,356
103,239
47,131
4,034
1,118
2,237
388
291
730,205
246,054
484,151
$
3,694,217
$
549,953
$
1,194,766
$
873,462
$
1,076,036
(1)
Includes principal payments based on amortization schedules
through October 2015 that require the securitization cash flows
be applied to the outstanding principal balance of the
indebtedness so that the loan to assumed aircraft values are
held constant through June 2011, after which all excess cash
flow is required to reduce the principal balances of the
indebtedness.
(2)
Includes principal payments based on amortization schedules
through February 2018 that require the securitization cash flows
be applied to the outstanding principal balance of the
indebtedness so that the loan to assumed aircraft values are
held constant through June 2012, after which all excess cash
flow is required to reduce the principal balances of the
indebtedness. The Less than 1 year commitments include
repayment of $16.1 million and the 1-3 years
commitments include repayments of $7.4 million related to
contracted sales for two aircraft in 2010 and one aircraft in
2011.
(3)
Includes scheduled principal payments through May 2013, after
which all excess cash flow is required to reduce the principal
balances of the indebtedness until maturity in May 2015. Does
not include any supplemental principal payments of approximately
$20 million that we would expect to make over the next
twelve months if the loan to value for this portfolio is
approximately 78%.
(4)
Includes principal payments equal to 85% of the estimated cash
flow remaining after the payment of expenses, fees, interest and
amounts owing to interest rate hedge providers.
(5)
Includes scheduled principal based upon fixed rate,
12 year, fully amortizing loans.
(6)
Future interest payments on variable rate, LIBOR-based debt
obligations are estimated using the interest rate in effect at
December 31, 2009.
(7)
Future interest payments on derivative financial instruments are
estimated using the spread between the floating interest rates
and the fixed interest rates in effect at December 31, 2009.
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(8)
Represents contractual payment obligations for our office leases
in Stamford, Connecticut; Dublin, Ireland and Singapore.
(9)
At December 31, 2009, we had aircraft purchase agreements
and freighter conversion agreements, including the acquisition
of 10 New A330 Aircraft from Airbus. For the two New A330
Aircraft being delivered in 2010, we expect to debt finance 75%
to 85% of the total cost of these aircraft upon delivery. After
taking into consideration pre-delivery and buyer furnished
equipment payments and the anticipated debt financing, we expect
to receive $25.0 million to $35.0 million in net cash
upon delivery.
73
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Liability Derivatives
Future
Current
Maximum
Notional
Effective
Maturity
Notional
Floating
Fixed
Balance Sheet
Amount
Date
Date
Amount
Rate
Rate
Location
Fair Value
(Dollars in thousands)
$
450,340
Jun-06
Jun-16
$
450,340
1M LIBOR
+ 0.27%
5.78%
Fair value of
derivative liabilities
$
50,504
1,052,937
Jun-07
Jun-12
1,052,937
1M LIBOR
5.25% to
5.36%
Fair value of
derivative liabilities
86,826
643,453
Jun-08
May-13
643,453
1M LIBOR
4.04%
Fair value of
derivative liabilities
34,565
May-13
May-15
491,718
1M LIBOR
5.31%
Fair value of
derivative liabilities
4,342
2,146,730
2,638,448
176,237
106,549
Oct-08
Sep-13
106,549
3M LIBOR
3.17%
Fair value of
derivative liabilities
3,042
106,549
106,549
3,042
$
2,253,279
$
2,744,997
$
179,279
(1)
The interest payments related to Term Financing No. 1 are
being hedged by two consecutive interest rate derivatives. When
the first matures in May 2013, the next becomes effective.
(2)
Although we entered into this interest rate derivative to hedge
the variable rate interest payments in connection with Term
Financing No. 2, it has not been designated as a hedge for
accounting purposes.
74
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75
Table of Contents
Amount of
Amount of Deferred
Deferred
(Gain) or Loss
(Gain) or
Amortized (including
Loss
Unamortized
Accelerated
Expected to
Deferred
Amortization) into Interest
be
Original
Deferred
(Gain) or
Expense
Amortized
Maximum
(Gain) or
Loss at
For the Year Ended
Over the
Notional
Effective
Maturity
Fixed
Termination
Loss Upon
December 31,
December 31,
Next Twelve
Amount
Date
Date
Rate%
Date
Termination
2009
2007
2008
2009
Months
(Dollars in thousands)
$
400,000
Dec-05
Aug-10
4.61
Jun-06
$
(13,397
)
$
(1,847
)
$
(3,373
)
$
(3,214
)
$
(3,083
)
$
(1,845
)
200,000
Dec-05
Dec-10
5.03
Jun-06
(2,541
)
(297
)
(597
)
(892
)
(422
)
(297
)
500,000
Mar-06
Mar-11
5.07
Jun-07
(2,687
)
(798
)
(432
)
(746
)
(711
)
(677
)
200,000
Jan-07
Aug-12
5.06
Jun-07
(1,850
)
(873
)
(223
)
(386
)
(368
)
(350
)
410,000
Feb-07
Apr-17
5.14
Jun-07
(3,119
)
(2,010
)
(224
)
(487
)
(398
)
(348
)
150,000
Jul-07
Dec-17
5.14
Mar-08
15,281
11,401
1,825
2,055
1,917
440,000
Jun-07
Feb-13
4.88
Partial Mar-08
Full Jun-08
26,281
15,928
4,364
5,989
5,587
248,000
Aug-07
May-13
5.33
Jun-08
9,888
6,367
1,299
2,222
2,073
55,000
May-08
Mar-14
5.41
Jun-08
2,380
2,380
360,000
Jan-08
Feb-19
5.16
Partial Jun-08
Full Oct-08
23,077
11,993
8,499
2,585
2,001
74,000
Feb-06
Jul-10
5.02
Feb-08
878
878
5,000
Dec-05
Sep-09
4.94
Mar-08
144
144
2,900
Jun-05
Mar-13
4.21
Jun-08
(19
)
(19
)
238,000
Jan-11
Apr-16
5.23
Dec-08
19,430
18,445
985
231,000
Apr-10
Oct-15
5.17
Partial Jun-08
Full Dec-08
15,310
12,437
1,582
1,291
704
203,000
Jun-07
Jan-12
4.89
Dec-08
2,728
(1)
1,264
1,464
238,000
Jul-11
Sep-16
5.27
Dec-08
17,254
15,969
1,285
$
109,038
$
86,715
$
(4,849
)
$
16,491
$
12,894
$
8,765
(1)
The loss for this swap is related to the period prior to
de-designation.
76
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77
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Year Ended December 31,
2007
2008
2009
(Dollars in thousands)
$
171
$
16,623
$
463
11,963
4,924
(4,849
)
3,525
7,970
1,003
(4,849
)
16,491
12,894
$
(4,678
)
$
33,114
$
13,357
$
1,154
$
(11,446
)
$
959
$
1,154
$
(11,446
)
$
959
78
Table of Contents
depreciation and amortization, though not directly affecting our
current cash position, represent the wear and tear
and/or
reduction in value of our aircraft, which affects the
aircrafts availability for use and may be indicative of
future needs for capital expenditures; and
the cash portion of income tax (benefit) provision generally
represents charges (gains), which may significantly affect our
financial results.
79
Table of Contents
Year Ended December 31,
2007
2008
2009
$
127,344
$
115,291
$
102,492
126,403
201,759
209,481
(7,379
)
(1,815
)
11,229
92,660
203,529
169,810
7,658
7,541
8,660
(12,941
)
$
333,745
$
526,305
$
501,672
Year Ended December 31,
2007
2008
2009
$
127,344
$
115,291
$
102,492
171
29,589
5,387
(1,154
)
11,446
(959
)
(11,566
)
(6,525
)
(1,162
)
245
(4,965
)
4,000
114,795
150,046
104,793
127,164
201,759
209,481
(7,379
)
(1,815
)
11,229
$
234,580
$
349,990
$
325,503
80
Table of Contents
(1)
Included in Interest, net.
(2)
Included in Other income (expense) except for the 2007 gain on
sale of flight equipment which is part of discontinued
operations.
(3)
2007 amount includes depreciation of $761 recorded in
discontinued operations.
Year Ended December 31,
2007
2008
2009
67,177,528
77,750,136
77,986,155
890,731
895,978
1,317,547
68,068,259
78,646,114
79,303,702
Year Ended December 31,
2007
2008
2009
98.7
%
98.9
%
98.3
%
1.3
%
1.1
%
1.7
%
100.0
%
100.0
%
100.0
%
Year Ended December 31,
2007
2008
2009
67,177,528
77,750,136
77,986,155
Year Ended December 31,
2007
2008
2009
$
114,795
$
150,046
$
104,793
(1,502
)
(1,709
)
(1,741
)
$
113,293
$
148,337
$
103,052
$
1.69
$
1.91
$
1.32
$
1.69
$
1.91
$
1.32
Year Ended December 31,
2007
2008
2009
$
234,580
$
349,990
$
325,503
(3,070
)
(3,987
)
(5,408
)
$
231,510
$
346,003
$
320,095
$
3.45
$
4.45
$
4.10
$
3.45
$
4.45
$
4.10
(a)
For the years ended December 31, 2007, 2008 and 2009,
distributed and undistributed earnings to restricted shares is
1.3%, 1.1% and 1.7%, respectively, of net income. The amount of
restricted
81
Table of Contents
share forfeitures for all periods present is immaterial to the
allocation of distributed and undistributed earnings.
(b)
For the years ended December 31, 2007, 2008 and 2009, we
have no dilutive shares.
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
82
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES.
83
Table of Contents
84
Table of Contents
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE
COMPENSATION
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
86
Table of Contents
ITEM 14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
87
Table of Contents
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
E-1
(B) | EXHIBIT INDEX |
Exhibit No. | Description of Exhibit | |||
3 | .1 | Memorandum of Association | ||
3 | .2 | Bye-laws | ||
4 | .1 | Specimen Share Certificate | ||
4 | .2 | Amended and Restated Shareholders Agreement among Aircastle Limited and Fortress Investment Fund III LP, Fortress Investment Fund III (Fund B) LP, Fortress Investment Fund III (Fund C) LP, Fortress Investment Fund III (Fund D) L.P., Fortress Investment Fund III (Fund E) LP, Fortress Investment Fund III (Coinvestment Fund A) LP, Fortress Investment Fund III (Coinvestment Fund B) LP, Fortress Investment Fund III (Coinvestment Fund C) LP, Fortress Investment Fund III (Coinvestment Fund D) L.P., Drawbridge Special Opportunities Fund LP, Drawbridge Special Opportunities Fund Ltd. and Drawbridge Global Macro Master Fund Ltd. | ||
10 | .1 | Aircastle Limited 2005 Equity and Incentive Plan, # | ||
10 | .2 | Form of Restricted Share Purchase Agreement, # | ||
10 | .3 | Form of Restricted Share Grant Letter, # | ||
10 | .4 | Form of Amended Restricted Share Grant Letter Δ,# | ||
10 | .5 | Form of International Restricted Share Grant Letter, # | ||
10 | .6 | Form of Amended International Restricted Share Grant Letter Δ,# | ||
10 | .7 | Letter Agreement, dated May 2, 2005, between Aircastle Limited and Ron Wainshal, # | ||
10 | .8 | Letter Agreement, dated February 3, 2005, between Aircastle Limited and David Walton, # | ||
10 | .9 | Letter Agreement, dated March 8, 2006, between Aircastle Advisor LLC and David Walton, # | ||
10 | .10 | Letter Agreement, dated February 24, 2006, between Aircastle Advisor LLC and Joseph Schreiner, # | ||
10 | .11 | Letter Agreement, dated April 29, 2005, between Aircastle Advisor LLC and Jonathan Lang, # | ||
10 | .12 | Letter Agreement, dated March 8, 2006 between Aircastle Advisor LLC and Jonathan M. Lang, # | ||
10 | .13 | Letter Agreement, dated January 8, 2007, between Aircastle Advisor LLC and Michael Platt, # | ||
10 | .14 | Subscription Agreement, dated as of April 28, 2006, between Aircastle Limited and Ueberroth Family Trust | ||
10 | .15 | Trust Indenture, dated as of June 15, 2006, among ACS Aircraft Finance Bermuda Limited, as Issuer, ACS Aircraft Finance Ireland PLC, as Guarantor, Deutsche Bank Trust Company Americas, in its capacity as the Cash Manager, Deutsche Bank Trust Company Americas, in its capacity as the person accepting appointment as the Trustee under the Indenture, CALYON, Financial Guaranty Insurance Company and Deutsche Bank Trust Company Americas, in its capacity as the Drawing Agent | ||
10 | .16 | Trust Indenture, dated as of June 15, 2006, among ACS Aircraft Finance Ireland PLC, as Issuer, ACS Aircraft Finance Bermuda Limited, as Guarantor, Deutsche Bank Trust Company Americas, in its capacity as the Cash Manager, Deutsche Bank Trust Company Americas, in its capacity as the person accepting appointment as the Trustee under the Indenture, CALYON, Financial Guaranty Insurance Company and Deutsche Bank Trust Company Americas, in its capacity as the Drawing Agent | ||
10 | .17 | Amended and Restated Aircastle Limited 2005 Equity and Incentive Plan, # | ||
10 | .18 | Form of Indemnification Agreement with directors and officers | ||
10 | .19 | Employment Letter, dated April 12, 2007, between Aircastle Advisor LLC and Michael Inglese*, # | ||
10 | .20 | Separation Agreement, dated April 12, 2007, between Aircastle Advisor LLC and Mark Zeidman*, # |
E-2
Exhibit No. | Description of Exhibit | |||
10 | .21 | Trust Indenture, dated as of June 8, 2007, among ACS 2007-1 Limited, as Issuer, ACS Aircraft Finance Ireland 2 Limited, as Guarantor, Deutsche Bank Trust Company Americas, in its capacity as the Cash Manager, Deutsche Bank Trust Company Americas, in its capacity as the person accepting appointment as the Trustee under the Indenture, HSH Nordbank AG, New York Branch, Financial Guaranty Insurance Company and Deutsche Bank Trust Company Americas, in its capacity as the Drawing Agent** | ||
10 | .22 | Trust Indenture, dated as of June 8, 2007, among ACS Aircraft Finance Ireland 2 Limited, as Issuer, ACS 2007-1 Limited, as Guarantor, Deutsche Bank Trust Company Americas, in its capacity as the Cash Manager, Deutsche Bank Trust Company Americas, in its capacity as the person accepting appointment as the Trustee under the Indenture, HSH Nordbank AG, New York Branch, Financial Guaranty Insurance Company and Deutsche Bank Trust Company Americas, in its capacity as the Drawing Agent** | ||
10 | .23 | Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS*** | ||
10 | .24 | Amendment No. 1 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ, ◊ | ||
10 | .25 | Amendment No. 2 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ, ◊ | ||
10 | .26 | Amendment No. 3 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ | ||
10 | .27 | Amendment No. 4 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ | ||
10 | .28 | Amendment No. 5 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ | ||
10 | .29 | Amendment No. 6 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ | ||
10 | .30 | Amendment No. 7 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ | ||
10 | .31 | Amendment No. 8 to the Acquisition Agreement, dated as of June 20, 2007, by and between AYR Freighter LLC and Airbus SAS Δ | ||
10 | .32 | Credit Agreement (2008-B), dated as of May 2, 2008, by and among ACS 2008-1 Limited and ACS Aircraft Finance Ireland 3 Limited, as Borrowers, each lender from time to time party thereto, as Lenders, Calyon New York Branch, as Sole Bookrunner and Facility Agent, and Calyon New York Branch, HSH Nordbank AG, KfW Ipex-Bank GmbH and DVB Bank AG, as Joint Lead Arrangers^^^ | ||
10 | .33 | Intercreditor Agreement, dated as of May 2, 2008, by and among ACS 2008-1 Limited, as Borrower, ACS Aircraft Finance Ireland 3 Limited, as Guarantor, Aircastle Advisor LLC, as Administrative Agent, Calyon New York Branch, as Facility Agent, Collateral Agent and Liquidity Facility Provider, and Deutsche Bank Trust Company Americas, as Operating Bank^^^ | ||
10 | .34 | Intercreditor Agreement, dated as of May 2, 2008, by and among ACS Aircraft Finance Ireland 3 Limited, as Borrower, ACS 2008-1 Limited, as Guarantor, Aircastle Advisor LLC, as Administrative Agent, Calyon New York Branch, as Facility Agent, Collateral Agent and Liquidity Facility Provider and Deutsche Bank Trust Company Americas, as Operating Bank^^^ | ||
10 | .35 | Form of Lease Agreement, dated as of December 16, 2009, between Wells Fargo Bank Northwest, National Association, a national banking association, not in its individual capacity but solely as Owner Trustee, as Lessor and South African Airways (PTY) Ltd., as Lessee Δ, ◊ | ||
12 | .1 | Computation of Ratio of Earnings to Fixed Charges Δ | ||
21 | .1 | Subsidiaries of the Registrant Δ |
E-3
Exhibit No. | Description of Exhibit | |||
23 | .1 | Consent of Ernst & Young LLP Δ | ||
31 | .1 | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 Δ | ||
31 | .2 | Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 Δ | ||
32 | .1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Δ | ||
32 | .2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Δ | ||
99 | .1 | Owned Aircraft Portfolio at December 31, 2009 Δ |
| Incorporated by reference to the Companys registration statement on Form S-1, filed with the SEC on June 2, 2006, as amended on July 10, 2006, July 25, 2006 and August 2, 2006. | |
| Incorporated by reference to the Companys current report on Form 8-K filed with the SEC on January 9, 2007. | |
* | Incorporated by reference to the Companys current report on Form 8-K filed with the SEC on April 16, 2007. | |
** | Incorporated by reference to the Companys current report on Form 8-K filed with the SEC on June 12, 2007. | |
*** | Incorporated by reference to the Companys quarterly report on Form 10-Q filed with the SEC on August 14, 2007. | |
^ | Incorporated by reference to the Companys current report on Form 8-K filed with the SEC on February 6, 2008. | |
^^ | Incorporated by reference to the Companys current report on Form 8-K filed with the SEC on March 24, 2008. | |
^^^ | Incorporated by reference to Amendment No. 1 to the Companys current report on Form 8-K filed with the SEC on May 5, 2008. | |
# | Management contract or compensatory plan or arrangement. | |
Δ | Filed herewith. | |
◊ | Portions of this exhibit have been omitted pursuant to a request for confidential treatment. |
E-4
Page No. | ||
Consolidated Financial Statements
|
||
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 |
F-1
F-2
Table of Contents
F-3
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Revenues:
|
||||||||||||
Lease rental revenue
|
$ | 362,497 | $ | 542,270 | $ | 511,459 | ||||||
Amortization of net lease discounts and lease incentives
|
7,379 | 1,815 | (11,229 | ) | ||||||||
Maintenance revenue
|
| 34,460 | 58,733 | |||||||||
Total lease rentals
|
369,876 | 578,545 | 558,963 | |||||||||
Interest income
|
10,400 | 3,174 | 1,924 | |||||||||
Other revenue
|
815 | 868 | 9,698 | |||||||||
Total revenues
|
381,091 | 582,587 | 570,585 | |||||||||
Expenses:
|
||||||||||||
Depreciation
|
126,403 | 201,759 | 209,481 | |||||||||
Interest, net
|
92,660 | 203,529 | 169,810 | |||||||||
Selling, general and administrative (including non-cash share
based payment expense of $6,674, $6,529 and $6,868, respectively)
|
39,040 | 46,806 | 46,016 | |||||||||
Impairment of aircraft
|
| | 18,211 | |||||||||
Maintenance and other costs
|
2,081 | 3,982 | 19,431 | |||||||||
Total expenses
|
260,184 | 456,076 | 462,949 | |||||||||
Other income (expense):
|
||||||||||||
Gain on sale of flight equipment
|
| 6,525 | 1,162 | |||||||||
Other
|
1,154 | (10,204 | ) | 2,354 | ||||||||
Total other income (expense)
|
1,154 | (3,679 | ) | 3,516 | ||||||||
Income from continuing operations before income taxes
|
122,061 | 122,832 | 111,152 | |||||||||
Income tax provision
|
7,658 | 7,541 | 8,660 | |||||||||
Income from continuing operations
|
114,403 | 115,291 | 102,492 | |||||||||
Earnings from discontinued operations, net of income taxes
|
12,941 | | | |||||||||
Net income
|
$ | 127,344 | $ | 115,291 | $ | 102,492 | ||||||
Earnings per common share Basic:
|
||||||||||||
Income from continuing operations
|
$ | 1.68 | $ | 1.47 | $ | 1.29 | ||||||
Earnings from discontinued operations, net of income taxes
|
0.19 | | | |||||||||
Net income per share
|
$ | 1.87 | $ | 1.47 | $ | 1.29 | ||||||
Earnings per common share Diluted:
|
||||||||||||
Income from continuing operations
|
$ | 1.68 | $ | 1.47 | $ | 1.29 | ||||||
Earnings from discontinued operations, net of income taxes
|
0.19 | | | |||||||||
Net income per share
|
$ | 1.87 | $ | 1.47 | $ | 1.29 | ||||||
Dividends declared per share
|
$ | 2.45 | $ | 0.85 | $ | 0.40 | ||||||
F-4
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 127,344 | $ | 115,291 | $ | 102,492 | ||||||
Adjustments to reconcile net (loss) income to net cash provided
by operating activities (inclusive of amounts related to
discontinued operations)
|
||||||||||||
Depreciation
|
127,164 | 201,759 | 209,481 | |||||||||
Amortization of deferred financing costs
|
6,991 | 13,603 | 12,232 | |||||||||
Amortization of net lease discounts and lease incentives
|
(7,379 | ) | (1,815 | ) | 11,229 | |||||||
Deferred income taxes
|
(2,957 | ) | 4,913 | 6,176 | ||||||||
Accretion of purchase discounts on debt investments
|
(849 | ) | (579 | ) | (469 | ) | ||||||
Non-cash share based payment expense
|
6,674 | 6,529 | 6,868 | |||||||||
Cash flow hedges reclassified into earnings
|
(4,849 | ) | 16,491 | 12,894 | ||||||||
Ineffective portion of cash flow hedges
|
171 | 16,623 | 463 | |||||||||
Security deposits and maintenance payments included in earnings
|
(6,898 | ) | (37,885 | ) | (47,934 | ) | ||||||
Gain on the sale of flight equipment
|
(11,566 | ) | (6,525 | ) | (1,162 | ) | ||||||
Loss (gain) on sale of debt investments
|
| 245 | (4,965 | ) | ||||||||
Impairment of aircraft.
|
| | 18,211 | |||||||||
Other
|
(1,154 | ) | 11,445 | (959 | ) | |||||||
Changes on certain assets and liabilities:
|
||||||||||||
Accounts receivable
|
2,739 | 1,439 | 364 | |||||||||
Restricted cash and cash equivalents
|
(55,248 | ) | (21,306 | ) | (25,211 | ) | ||||||
Other assets
|
(4,867 | ) | 559 | (1,796 | ) | |||||||
Accounts payable, accrued expenses and other liabilities
|
12,263 | 3,564 | (3,189 | ) | ||||||||
Payable to affiliates
|
68 | (200 | ) | | ||||||||
Lease rentals received in advance
|
12,563 | (2,345 | ) | 6,086 | ||||||||
Net cash provided by operating activities
|
200,210 | 321,806 | 300,811 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Acquisition and improvement of flight equipment
|
(2,207,530 | ) | (264,586 | ) | (215,117 | ) | ||||||
Proceeds from sale of flight equipment
|
34,945 | 180,112 | 11,601 | |||||||||
Aircraft purchase deposits and progress payments, net of
returned deposits
|
(170,700 | ) | 9,545 | (83,081 | ) | |||||||
Purchase of debt investments
|
(15,251 | ) | | | ||||||||
Principal repayments on debt investments
|
20,801 | 11,801 | 3,786 | |||||||||
Proceeds from sale of debt investments
|
| 65,335 | 13,461 | |||||||||
Collateral call payments on derivatives and repurchase agreements
|
(104,121 | ) | (404,012 | ) | | |||||||
Collateral call receipts on derivatives and repurchase agreements
|
72,586 | 439,892 | | |||||||||
Leasehold improvements, furnishings and equipment
|
(526 | ) | (447 | ) | (84 | ) | ||||||
Net cash (used in) provided by investing activities
|
(2,369,796 | ) | 37,640 | (269,434 | ) | |||||||
Cash flows from financing activities:
|
||||||||||||
Issuance of common shares in public offerings, net
|
830,809 | | | |||||||||
Issuance of common shares to Fortress, directors and employees
|
1,218 | | | |||||||||
Repurchase of shares from Fortress, directors and employees
|
(445 | ) | (1,270 | ) | (262 | ) | ||||||
Proceeds from securitizations and term debt financings
|
1,170,000 | 992,715 | 142,228 | |||||||||
Securitization and term debt financing repayments
|
(41,664 | ) | (194,155 | ) | (153,964 | ) | ||||||
Credit facility borrowings
|
2,059,741 | 482,723 | | |||||||||
Credit facility repayments
|
(1,800,141 | ) | (1,280,909 | ) | | |||||||
Deferred financing costs
|
(14,140 | ) | (24,183 | ) | (6,127 | ) | ||||||
Restricted secured liquidity facility collateral
|
| | (81,000 | ) | ||||||||
Secured liquidity facility collateral
|
| | 81,000 | |||||||||
Proceeds from repurchase agreements
|
1,967 | | | |||||||||
Principal repayments on repurchase agreements
|
(17,917 | ) | (67,744 | ) | | |||||||
Security deposits and maintenance payments received
|
85,691 | 106,096 | 136,381 | |||||||||
Security deposits and maintenance payments returned
|
(18,547 | ) | (37,308 | ) | (53,524 | ) | ||||||
Proceeds from (payments for) terminated cash flow hedges
|
8,944 | (154,064 | ) | (2,758 | ) | |||||||
Dividends paid
|
(140,502 | ) | (113,946 | ) | (31,632 | ) | ||||||
Net cash provided by (used in) financing activities
|
2,125,014 | (292,045 | ) | 30,342 | ||||||||
Net increase (decrease) in cash and cash equivalents
|
(44,572 | ) | 67,401 | 61,719 | ||||||||
Cash and cash equivalents at beginning of year
|
58,118 | 13,546 | 80,947 | |||||||||
Cash and cash equivalents at end of year
|
$ | 13,546 | $ | 80,947 | $ | 142,666 | ||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Cash paid during the year for interest, net of capitalized
interest
|
$ | 94,677 | $ | 160,892 | $ | 145,573 | ||||||
Cash paid during the year for income taxes
|
$ | 5,804 | $ | 6,007 | $ | 1,782 | ||||||
Supplemental disclosures of non-cash investing activities:
|
||||||||||||
Security deposits and maintenance liabilities assumed in asset
acquisitions
|
$ | 106,322 | $ | | $ | | ||||||
Security deposits, maintenance liabilities and other liabilities
settled in sale of flight equipment
|
$ | | $ | | $ | 2,556 | ||||||
Lease rentals received in advance assumed in asset acquisitions
|
$ | 7,385 | $ | | $ | | ||||||
Supplemental disclosures of non-cash financing activities:
|
||||||||||||
Security deposits converted to maintenance payment liabilities
|
$ | | $ | | $ | 11,110 | ||||||
F-5
Common Shares |
Accumulated
|
|||||||||||||||||||||||||||
Additional
|
Retained
|
Other
|
Total
|
Total
|
||||||||||||||||||||||||
Paid-In
|
Earnings
|
Comprehensive
|
Shareholders
|
Comprehensive
|
||||||||||||||||||||||||
Shares | Amount | Capital | (Deficit) | Income (Loss) | Equity | Income (Loss) | ||||||||||||||||||||||
Balance, December 31, 2006
|
51,621,279 | $ | 516 | $ | 630,154 | $ | (3,382 | ) | $ | 9,909 | $ | 637,197 | ||||||||||||||||
Issuance of common shares Follow-on public
offerings, net of offering expenses
|
26,525,000 | 265 | 830,544 | | | 830,809 | ||||||||||||||||||||||
Issuance of common shares to directors and employees
|
458,918 | 5 | 1,213 | | | 1,218 | ||||||||||||||||||||||
Repurchase of common shares from directors and employees
|
(30,540 | ) | | (445 | ) | | | (445 | ) | |||||||||||||||||||
Amortization of share based payments
|
| | 6,674 | | | 6,674 | ||||||||||||||||||||||
Dividends declared
|
| | | (172,922 | ) | | (172,922 | ) | ||||||||||||||||||||
Net income
|
| | | 127,344 | | 127,344 | $ | 127,344 | ||||||||||||||||||||
Net change in fair value of derivatives, net of $1,928 tax
benefit
|
| | | | (126,892 | ) | (126,892 | ) | (126,892 | ) | ||||||||||||||||||
Net derivative gain reclassified into earnings
|
| | | | (4,849 | ) | (4,849 | ) | (4,849 | ) | ||||||||||||||||||
Net change in unrealized fair value of debt investments
|
| | | | (3,557 | ) | (3,557 | ) | (3,557 | ) | ||||||||||||||||||
Total comprehensive (loss)
|
| | | | | | $ | (7,954 | ) | |||||||||||||||||||
Balance, December 31, 2007
|
78,574,657 | 786 | 1,468,140 | (48,960 | ) | (125,389 | ) | 1,294,577 | ||||||||||||||||||||
Issuance of common shares to directors and employees
|
104,653 | 1 | (1 | ) | | | | |||||||||||||||||||||
Repurchase of common shares from directors and employees
|
(58,990 | ) | (1 | ) | (1,269 | ) | | | (1,270 | ) | ||||||||||||||||||
Amortization of share based payments
|
| | 6,529 | | | 6,529 | ||||||||||||||||||||||
Excess tax benefit from stock based compensation
|
| | 1,056 | | | 1,056 | ||||||||||||||||||||||
Dividends declared
|
| | | (66,804 | ) | | (66,804 | ) | ||||||||||||||||||||
Net income
|
| | | 115,291 | | 115,291 | $ | 115,291 | ||||||||||||||||||||
Net change in fair value of derivatives, net of $2,602 tax
benefit
|
| | | | (245,407 | ) | (245,407 | ) | (245,407 | ) | ||||||||||||||||||
Net derivative loss reclassified into earnings
|
| | | | 16,491 | 16,491 | 16,491 | |||||||||||||||||||||
Net change in unrealized fair value of debt investments
|
| | | | (8,297 | ) | (8,297 | ) | (8,297 | ) | ||||||||||||||||||
Total comprehensive (loss)
|
| | | | | | $ | (121,922 | ) | |||||||||||||||||||
Balance, December 31, 2008
|
78,620,320 | 786 | 1,474,455 | (473 | ) | (362,602 | ) | 1,112,166 | ||||||||||||||||||||
Issuance of common shares to directors and employees
|
983,532 | 10 | (10 | ) | | | | |||||||||||||||||||||
Repurchase of common shares from directors and employees
|
(53,431 | ) | | (262 | ) | | | (262 | ) | |||||||||||||||||||
Amortization of share based payments
|
| | 6,868 | | | 6,868 | ||||||||||||||||||||||
Excess tax benefit from stock based compensation
|
| | (1,056 | ) | | | (1,056 | ) | ||||||||||||||||||||
Dividends declared
|
| | | (31,725 | ) | | (31,725 | ) | ||||||||||||||||||||
Net income
|
| | | 102,492 | | 102,492 | $ | 102,492 | ||||||||||||||||||||
Net change in fair value of derivatives, net of $1,473 tax
expense
|
| | | | 92,396 | 92,396 | 92,396 | |||||||||||||||||||||
Net derivative loss reclassified into earnings
|
| | | | 12,894 | 12,894 | 12,894 | |||||||||||||||||||||
Gain on debt investments reclassified into earnings
|
(4,965 | ) | (4,965 | ) | (4,965 | ) | ||||||||||||||||||||||
Net change in unrealized fair value of debt investments
|
| | | | 2,429 | 2,429 | 2,429 | |||||||||||||||||||||
Total comprehensive income
|
| | | | | | $ | 205,246 | ||||||||||||||||||||
Balance, December 31, 2009
|
79,550,421 | $ | 796 | $ | 1,479,995 | $ | 70,294 | $ | (259,848 | ) | $ | 1,291,237 | ||||||||||||||||
F-6
Note 1. | Summary of Significant Accounting Policies |
F-7
F-8
| flight equipment where estimates of the manufacturers realized sales prices are not relevant (e.g., freighter conversions); | |
| flight equipment where estimates of the manufacturers realized sales prices are not readily available; and | |
| flight equipment which may have a shorter useful life due to obsolescence. |
F-9
F-10
F-11
F-12
F-13
Note 2. | Fair Value Measurements |
| Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities. | |
| Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities or market corroborated inputs. | |
| Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants price the asset or liability. |
F-14
| Market approach Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. | |
| Income approach Uses valuation techniques to convert future amounts to a single present amount based on current market expectation about those future amounts. | |
| Cost approach Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). |
Fair Value
|
Fair Value Measurements at December 31, 2008
|
|||||||||||||||||||
as of
|
Using Fair Value Hierarchy | |||||||||||||||||||
December 31,
|
Valuation
|
|||||||||||||||||||
2008 | Level 1 | Level 2 | Level 3 | Technique | ||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 80,947 | $ | 80,947 | $ | | $ | | Market | |||||||||||
Restricted cash and cash equivalents
|
182,623 | 182,623 | | | Market | |||||||||||||||
Debt investments
|
14,349 | | | 14,349 | Income | |||||||||||||||
Total
|
$ | 277,919 | $ | 263,570 | $ | | $ | 14,349 | ||||||||||||
Liabilities:
|
||||||||||||||||||||
Derivative liabilities
|
$ | 276,401 | $ | | $ | 210,080 | $ | 66,321 | Income | |||||||||||
Fair Value
|
Fair Value Measurements at December 31, 2009
|
|||||||||||||||||||
as of
|
Using Fair Value Hierarchy | |||||||||||||||||||
December 31,
|
Valuation
|
|||||||||||||||||||
2009 | Level 1 | Level 2 | Level 3 | Technique | ||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 142,666 | $ | 142,666 | $ | | $ | | Market | |||||||||||
Restricted cash and cash equivalents
|
207,834 | 207,834 | | | Market | |||||||||||||||
Total
|
$ | 350,500 | $ | 350,500 | $ | | $ | | ||||||||||||
Liabilities:
|
||||||||||||||||||||
Derivative liabilities
|
$ | 179,279 | $ | | $ | 140,372 | $ | 38,907 | Income | |||||||||||
F-15
Assets | Liabilities | |||||||
Debt
|
Derivative
|
|||||||
Twelve Months Ended December 31, 2009
|
Investments | Liabilities | ||||||
Balance as of December 31, 2008
|
$ | 14,349 | $ | (66,321 | ) | |||
Transfers in (out)
|
| | ||||||
Principal repayments
|
(3,787 | ) | | |||||
Sale of debt investments
|
(8,495 | ) | | |||||
Total gains/(losses), net:
|
||||||||
Included in interest income
|
469 | | ||||||
Included in other income (expense)
|
| (580 | ) | |||||
Included in interest expense
|
| 36 | ||||||
Included in other comprehensive income
|
(2,536 | ) | 27,958 | |||||
Balance as of December 31, 2009
|
$ | | $ | (38,907 | ) | |||
F-16
December 31, 2008 | December 31, 2009 | |||||||||||||||
Carrying Amount
|
Fair Value
|
Carrying Amount
|
Fair Value
|
|||||||||||||
of Asset
|
of Asset
|
of Asset
|
of Asset
|
|||||||||||||
(Liability) | (Liability) | (Liability) | (Liability) | |||||||||||||
Debt investments
|
$ | 14,349 | $ | 14,349 | $ | | $ | | ||||||||
Securitizations and term debt financings
|
(2,476,296 | ) | (2,328,574 | ) | (2,324,972 | ) | (2,037,718 | ) | ||||||||
ECA term financings
|
| | (139,588 | ) | (140,984 | ) | ||||||||||
Derivative liabilities
|
(276,401 | ) | (276,401 | ) | (179,279 | ) | (179,279 | ) |
Note 3. | Lease Rental Revenues and Flight Equipment Held for Lease |
Year Ending December 31,
|
Amount | |||
2010
|
$ | 507,382 | ||
2011
|
473,530 | |||
2012
|
411,118 | |||
2013
|
311,796 | |||
2014
|
237,008 | |||
Thereafter
|
513,365 | |||
Total
|
$ | 2,454,199 | ||
F-17
Year Ended December 31, | ||||||||||||
Region
|
2007 | 2008 | 2009 | |||||||||
Europe
|
44 | % | 46 | % | 46 | % | ||||||
Asia
|
27 | % | 24 | % | 20 | % | ||||||
North America
|
16 | % | 13 | % | 16 | % | ||||||
Latin America
|
6 | % | 7 | % | 7 | % | ||||||
Middle East and Africa
|
7 | % | 10 | % | 11 | % | ||||||
Total
|
100 | % | 100 | % | 100 | % | ||||||
2007 | 2008 | 2009 | ||||||||||||||||||||||
% of
|
% of
|
% of
|
||||||||||||||||||||||
Total
|
Total
|
Total
|
||||||||||||||||||||||
Country
|
Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | ||||||||||||||||||
China
|
$ | 41,585 | 11 | % | $ | | | % | $ | | | % | ||||||||||||
Netherlands
|
| | 57,693 | 10 | % | 67,372 | 12 | % | ||||||||||||||||
United States
|
45,770 | 12 | % | 55,610 | 10 | % | 65,662 | 12 | % |
December 31, 2008 | December 31, 2009 | |||||||||||||||
Number of
|
Net Book
|
Number of
|
Net Book
|
|||||||||||||
Region
|
Aircraft | Value% | Aircraft | Value% | ||||||||||||
Europe
|
56 | 44 | % | 58 | 46 | % | ||||||||||
Asia
|
32 | 23 | % | 30 | (1) | 20 | % | |||||||||
North America
|
14 | 12 | % | 15 | 12 | % | ||||||||||
Latin America
|
8 | 5 | % | 10 | 9 | % | ||||||||||
Middle East and Africa
|
12 | 11 | % | 13 | 12 | % | ||||||||||
Off-lease
|
8 | (2) | 5 | % | 3 | (3) | 1 | % | ||||||||
Total
|
130 | 100 | % | 129 | 100 | % | ||||||||||
F-18
(1) | Includes one Boeing Model 737-400 aircraft which was being converted to freighter configuration and for which we have an executed lease with a carrier in Asia post-conversion and which we delivered in the first quarter of 2010. | |
(2) | Includes one Boeing Model 737-300 aircraft which we delivered on lease to a carrier in the Middle East in the first quarter of 2009, three Boeing Model 737-700 aircraft which we delivered on lease to a carrier in Europe in the first quarter of 2009, two Boeing Model 737-700 aircraft which we delivered on lease to a carrier in Africa in the second quarter of 2009, one Boeing Model 737-700 aircraft which we delivered on lease to a carrier in Latin America in the second quarter of 2009 and one Boeing Model 737-700 aircraft which we delivered on lease to a carrier in Europe in the second quarter of 2009. | |
(3) | Includes one Boeing Model 737-300 aircraft which was returned to us on a consensual early lease termination in the third quarter of 2009 which we are actively marketing for sale or lease and two Boeing Model 757-200 aircraft which were returned to us early on a consensual basis in the third quarter of 2009 for which we have an executed sale agreement with expected delivery dates in the second and third quarters of 2010. |
2008 | 2009 | |||||||||||||||
Net Book
|
Net Book
|
Net Book
|
Net Book
|
|||||||||||||
Country
|
Value | Value % | Value | Value % | ||||||||||||
Netherlands
|
$ | 478,444 | 12 | % | $ | 435,796 | 11 | % |
Note 4. | Variable Interest Entities |
F-19
Note 5. | Discontinued Operations and Flight Equipment Held for Sale |
Year Ended
|
||||
December 31, 2007 | ||||
Earnings from discontinued operations:
|
||||
Lease rentals
|
$ | 2,364 | ||
Gain on disposition
|
11,566 | |||
Depreciation and other expenses
|
(761 | ) | ||
Other expenses
|
(185 | ) | ||
Interest expense, net
|
| |||
Earnings from discontinued operations before income tax provision
|
12,984 | |||
Income tax provision
|
(43 | ) | ||
Earnings from discontinued operations, net of income taxes
|
$ | 12,941 | ||
Note 6. | Debt Investments |
Note 7. | Securitizations and Borrowings under Credit Facilities |
At
|
||||||||||||
December 31,
|
||||||||||||
2008 | At December 31, 2009 | |||||||||||
Outstanding
|
Outstanding
|
Final Stated
|
||||||||||
Debt Obligation
|
Borrowings | Borrowings | Interest Rate (1) | Maturity (2) | ||||||||
Securitizations and Term Debt Financings:
|
||||||||||||
Securitization No. 1
|
$ | 472,048 | $ | 436,091 | 0.50% | 6/20/31 | ||||||
Securitization No. 2
|
1,097,913 | 1,061,566 | 0.49% | 6/14/37 | ||||||||
Term Financing No. 1
|
757,610 | 708,710 | 1.99% | 5/02/15 | ||||||||
Term Financing No. 2
|
148,725 | 118,605 | 2.90% | 9/23/13 | ||||||||
ECA Term Financings
|
| 139,588 | 4.48% and 3.96% | 5/27/21 and 12/03/21 | ||||||||
Total
|
$ | 2,476,296 | $ | 2,464,560 | ||||||||
F-20
(1) | Reflects floating rate in effect at the applicable reset date except for the ECA Term Financings, which are fixed rate. | |
(2) | For Securitization No. 1, Securitization No. 2 and Term Financing No. 1, all cash flows available after expenses and interest will be applied to debt amortization, if the debt is not refinanced by June 2011, June 2012, and May 2013, respectively. |
Available Liquidity | ||||||||||||||||||
Liquidity
|
December 31,
|
December 31,
|
Unused
|
Interest Rate
|
||||||||||||||
Facility
|
Facility Provider | 2008 | 2009 | Fee | on any Advances | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Securitization No. 1
|
Calyon | $ | 42,000 | $ | 42,000 | 0.45 | % | 1M Libor + 1.00 | % | |||||||||
Securitization No. 2
|
HSH Nordbank AG | 82,343 | 79,617 | (1) | 0.50 | % | 1M Libor + 0.75 | % (2) | ||||||||||
Term Financing No. 1
|
Calyon | 15,152 | 14,174 | 0.60 | % | 1M Libor + 1.20 | % |
(1) | Following a ratings downgrade with respect to the liquidity facility provider in May 2009, the liquidity facility was drawn and the proceeds, or permitted investments thereof, remain available to provide liquidity if required. | |
(2) | Amounts drawn following a ratings downgrade with respect to the liquidity facility provider do not bear interest; however, net investment earnings will be paid to the liquidity facility provider and the unused fee continues to apply. |
F-21
F-22
F-23
F-24
F-25
2010
|
$ | 170,089 | (1) | |
2011
|
200,795 | (1) | ||
2012
|
295,227 | |||
2013
|
378,585 | |||
2014
|
391,250 | |||
Thereafter
|
1,028,614 | |||
Total
|
$ | 2,464,560 | ||
(1) | Includes repayments of $16,134 in 2010 and $7,362 in 2011 related to contracted sales for two aircraft in 2010 and one aircraft in 2011. Does not include any supplemental principal payments of approximately $20 million that we would expect to make over the next twelve months if the loan to value for Term Financing No. 1 is approximately 78%. |
Note 8. | Shareholders Equity and Share Based Payment |
F-26
F-27
Weighted
|
Fair Value of
|
|||||||||||
Average
|
Non-vested
|
|||||||||||
Shares
|
Grant Date
|
Shares at
|
||||||||||
Non vested Shares
|
(in 000s) | Fair Value | Grant Date | |||||||||
Non-vested at January 1, 2007
|
901.3 | $ | 18.05 | $ | 16,266 | |||||||
Granted
|
436.5 | 30.72 | 13,410 | |||||||||
Cancelled
|
(17.3 | ) | 23.52 | (407 | ) | |||||||
Vested
|
(259.9 | ) | 19.20 | (4,988 | ) | |||||||
Non-vested at December 31, 2007
|
1,060.6 | 22.89 | 24,281 | |||||||||
Granted
|
85.0 | 14.84 | 1,262 | |||||||||
Cancelled
|
(0.6 | ) | 28.89 | (17 | ) | |||||||
Vested
|
(238.2 | ) | 18.91 | (4,504 | ) | |||||||
Non-vested at December 31, 2008
|
906.8 | 23.18 | 21,022 | |||||||||
Granted
|
1,069.4 | 5.97 | 6,386 | |||||||||
Cancelled
|
(0.3 | ) | 28.89 | (9 | ) | |||||||
Vested
|
(297.7 | ) | 20.30 | (6,044 | ) | |||||||
Non-vested at December 31, 2009
|
1,678.2 | $ | 12.73 | $ | 21,355 | |||||||
Note 9. | Dividends |
Dividend
|
Aggregate
|
|||||||||||
per
|
Dividend
|
|||||||||||
Declaration Date
|
Common Share | Amount | Record Date | Payment Date | ||||||||
December 13, 2006
|
$ | 0.4375 | 22,584 | December 29, 2006 | January 15, 2007 | |||||||
March 14, 2007
|
$ | 0.50 | 33,634 | March 30, 2007 | April 13, 2007 | |||||||
June 14, 2007
|
$ | 0.60 | 40,460 | June 29, 2007 | July 13, 2007 | |||||||
September 13, 2007
|
$ | 0.65 | 43,822 | September 28, 2007 | October 15, 2007 | |||||||
December 11, 2007
|
$ | 0.70 | 55,004 | December 31, 2007 | January 15, 2008 | |||||||
March 24, 2008
|
$ | 0.25 | 19,640 | March 31, 2008 | April 15, 2008 | |||||||
June 11, 2008
|
$ | 0.25 | 19,647 | June 30, 2008 | July 15, 2008 | |||||||
September 11, 2008
|
$ | 0.25 | 19,655 | September 30, 2008 | October 15, 2008 | |||||||
December 22, 2008
|
$ | 0.10 | 7,862 | December 31, 2008 | January 15, 2009 | |||||||
March 13, 2009
|
$ | 0.10 | 7,923 | March 31, 2009 | April 15, 2009 | |||||||
June 10, 2009
|
$ | 0.10 | 7,923 | June 30, 2009 | July 15, 2009 | |||||||
September 10, 2009
|
$ | 0.10 | 7,925 | September 30, 2009 | October 15, 2009 | |||||||
December 14, 2009
|
$ | 0.10 | 7,955 | December 31, 2009 | January 15, 2010 |
F-28
Note 10. | Earnings Per Share |
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Weighted-average shares:
|
||||||||||||
Common shares outstanding
|
67,177,528 | 77,750,136 | 77,986,155 | |||||||||
Restricted common shares
|
890,731 | 895,978 | 1,317,547 | |||||||||
Total weighted-average shares
|
68,068,259 | 78,646,114 | 79,303,702 | |||||||||
Percentage of weighted-average shares:
|
||||||||||||
Common shares outstanding
|
98.7 | % | 98.9 | % | 98.3 | % | ||||||
Restricted common shares
|
1.3 | % | 1.1 | % | 1.7 | % | ||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
F-29
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Earnings per common share Basic:
|
||||||||||||
Income from continuing operations
|
$ | 114,403 | $ | 115,291 | $ | 102,492 | ||||||
Less: Distributed and undistributed earnings allocated to
restricted common
shares
(a)
|
(1,497 | ) | (1,313 | ) | (1,703 | ) | ||||||
Income from continuing operations available to common
shareholders Basic
|
$ | 112,906 | $ | 113,978 | $ | 100,789 | ||||||
Earnings from discontinued operations
|
$ | 12,941 | $ | | $ | | ||||||
Less: Distributed and undistributed earnings allocated to
restricted common
shares
(a)
|
(169 | ) | | | ||||||||
Earnings from discontinued operations available to common
shareholders Basic
|
$ | 12,772 | $ | | $ | | ||||||
Weighted-average common shares outstanding Basic
|
67,177,528 | 77,750,136 | 77,986,155 | |||||||||
Income from continuing operations
|
$ | 1.68 | $ | 1.47 | $ | 1.29 | ||||||
Earnings from discontinued operations
|
0.19 | | | |||||||||
Net income per common share Basic
|
$ | 1.87 | $ | 1.47 | $ | 1.29 | ||||||
Earnings per common share Diluted:
|
||||||||||||
Income from continuing operations
|
$ | 114,403 | $ | 115,291 | $ | 102,492 | ||||||
Less: Distributed and undistributed earnings allocated to
restricted common
shares
(a)
|
(1,497 | ) | (1,313 | ) | (1,703 | ) | ||||||
Income from continuing operations available to common
shareholders Basic
|
$ | 112,906 | $ | 113,978 | $ | 100,789 | ||||||
Earnings from discontinued operations
|
$ | 12,941 | $ | | $ | | ||||||
Less: Distributed and undistributed earnings allocated to
restricted common
shares
(a)
|
(169 | ) | | | ||||||||
Earnings from discontinued operations available to common
shareholders Basic
|
$ | 12,772 | $ | | $ | | ||||||
Weighted-average common shares outstanding Basic
|
67,177,528 | 77,750,136 | 77,986,155 | |||||||||
Effect of diluted shares
|
| (b) | | (b) | | (b) | ||||||
Weighted-average common shares outstanding Diluted
|
67,177,528 | 77,750,136 | 77,986,155 | |||||||||
Income from continuing operations
|
$ | 1.68 | $ | 1.47 | $ | 1.29 | ||||||
Earnings from discontinued operations
|
0.19 | | | |||||||||
Net income per common share Diluted
|
$ | 1.87 | $ | 1.47 | $ | 1.29 | ||||||
(a) | For the years ended December 31, 2007, 2008 and 2009, distributed and undistributed earnings to restricted shares is 1.3%, 1.1% and 1.7%, respectively, of net income. The amount of restricted |
F-30
share forfeitures for all periods present is immaterial to the allocation of distributed and undistributed earnings. |
(b) | For the years ended December 31, 2007, 2008 and 2009, we have no dilutive shares. |
Note 11. | Income Taxes |
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
U.S. operations
|
$ | 2,352 | $ | 2,109 | $ | 1,971 | ||||||
Non-U.S.
operations
|
119,709 | 120,723 | 109,181 | |||||||||
Total
|
$ | 122,061 | $ | 122,832 | $ | 111,152 | ||||||
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Current:
|
||||||||||||
United States:
|
||||||||||||
Federal
|
$ | 4,365 | $ | 1,110 | $ | 1,805 | ||||||
State
|
749 | 205 | 96 | |||||||||
Non-U.S.
|
5,501 | 1,313 | 583 | |||||||||
Current income tax provision
|
10,615 | 2,628 | 2,484 | |||||||||
Deferred:
|
||||||||||||
United States:
|
||||||||||||
Federal
|
(1,216 | ) | 1,790 | 628 | ||||||||
State
|
(244 | ) | 251 | 244 | ||||||||
Non-U.S.
|
(1,497 | ) | 2,872 | 5,304 | ||||||||
Deferred income tax provision (benefit)
|
(2,957 | ) | 4,913 | 6,176 | ||||||||
Total
|
$ | 7,658 | $ | 7,541 | $ | 8,660 | ||||||
F-31
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Deferred tax assets:
|
||||||||||||
Non-cash share based payments
|
$ | 1,666 | $ | 2,382 | $ | 2,507 | ||||||
Hedge gain
|
537 | 77 | | |||||||||
Net operating loss carry forwards
|
1,622 | 5,366 | 5,775 | |||||||||
Interest rate derivatives
|
1,928 | 4,529 | 3,056 | |||||||||
Other
|
173 | | | |||||||||
Total deferred tax assets
|
5,926 | 12,354 | 11,338 | |||||||||
Deferred tax liabilities:
|
||||||||||||
Accelerated depreciation
|
(2,963 | ) | (12,007 | ) | (18,720 | ) | ||||||
Other
|
(119 | (159 | ) | (627 | ) | |||||||
Total deferred tax liabilities
|
(3,082 | ) | (12,166 | ) | (19,347 | ) | ||||||
Net deferred tax (liabilities) assets
|
$ | 2,844 | $ | 188 | $ | (8,009 | ) | |||||
F-32
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Notional U.S. federal income tax expense at the statutory rate:
|
$ | 42,721 | $ | 42,991 | $ | 38,903 | ||||||
U.S. state and local income tax, net
|
164 | 88 | 129 | |||||||||
Non-U.S.
operations
|
(35,434 | ) | (35,550 | ) | (31,061 | ) | ||||||
Non-deductible expenses in the U.S.
|
199 | 87 | 710 | |||||||||
Other
|
8 | (75 | ) | (21 | ) | |||||||
Provision for income taxes
|
$ | 7,658 | $ | 7,541 | $ | 8,660 | ||||||
Note 12. | Interest, Net |
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Interest on borrowings, net settlements on interest rate
derivatives, and other liabilities
|
$ | 109,853 | $ | 169,860 | $ | 146,617 | ||||||
Hedge ineffectiveness losses
|
171 | 16,623 | 463 | |||||||||
Amortization related to deferred (gains) losses
|
(4,849 | ) | 15,488 | 12,894 | ||||||||
Losses on termination of interest rate swaps
|
| 1,003 | | |||||||||
Amortization of deferred financing fees
|
6,991 | 13,603 | 12,232 | |||||||||
Interest Expense
|
112,166 | 216,577 | 172,206 | |||||||||
Less interest income
|
(12,239 | ) | (7,311 | ) | (939 | ) | ||||||
Less capitalized interest
|
(7,267 | ) | (5,737 | ) | (1,457 | ) | ||||||
Interest, net
|
$ | 92,660 | $ | 203,529 | $ | 169,810 | ||||||
F-33
Note 13. | Commitments and Contingencies |
December 31,
|
Amount | |||
2010
|
$ | 1,118 | ||
2011
|
1,118 | |||
2012
|
1,119 | |||
2013
|
194 | |||
2014
|
194 | |||
Thereafter
|
291 | |||
Total
|
$ | 4,034 | ||
December 31,
|
Amount | |||
2010
|
$ | 246,054 | ||
2011
|
423,806 | |||
2012
|
60,345 | |||
Total
|
$ | 730,205 | ||
Note 14. | Related Party Transactions |
F-34
Note 15. | Derivatives |
F-35
Liability Derivatives | ||||||||||||||||||||||||
Future
|
||||||||||||||||||||||||
Current
|
Maximum
|
|||||||||||||||||||||||
Notional
|
Effective
|
Maturity
|
Notional
|
Floating
|
Fixed
|
Balance Sheet
|
||||||||||||||||||
Hedged Item
|
Amount | Date | Date | Amount | Rate | Rate | Location | Fair Value | ||||||||||||||||
Interest rate derivatives designated as cash flow hedges :
|
||||||||||||||||||||||||
Securitization No. 1
|
$ | 450,340 | Jun-06 | Jun-16 | $450,340 |
1M LIBOR
+ 0.27% |
5.78% |
Fair value of
derivative liabilities |
$ | 50,504 | ||||||||||||||
Securitization No. 2
|
1,052,937 | Jun-07 | Jun-12 | 1,052,937 | 1M LIBOR |
5.25% to
5.36% |
Fair value of
derivative liabilities |
86,826 | ||||||||||||||||
Term Financing
No. 1
(1)
|
643,453 | Jun-08 | May-13 | 643,453 | 1M LIBOR | 4.04% |
Fair value of
derivative liabilities |
34,565 | ||||||||||||||||
Term Financing
No. 1
(1)
|
| May-13 | May-15 | 491,718 | 1M LIBOR | 5.31% |
Fair value of
derivative liabilities |
4,342 | ||||||||||||||||
Total interest rate derivatives designated as cash flow hedges
|
2,146,730 | 2,638,448 | 176,237 | |||||||||||||||||||||
Interest rate derivatives not designated as cash flow
hedges:
|
||||||||||||||||||||||||
Term Financing
No. 2
(2)
|
106,549 | Oct-08 | Sep-13 | 106,549 | 3M LIBOR | 3.17% |
Fair value of
derivative liabilities |
3,042 | ||||||||||||||||
Total interest rate derivatives not designated as cash flow
hedges
|
106,549 | 106,549 | 3,042 | |||||||||||||||||||||
Total interest rate derivatives
|
$ | 2,253,279 | $2,744,997 | $ | 179,279 | |||||||||||||||||||
(1) | The interest payments related to Term Financing No. 1 are being hedged by two consecutive interest rate derivatives. When the first matures in May 2013, the next becomes effective. | |
(2) | Although we entered into this interest rate derivative to hedge the variable rate interest payments in connection with Term Financing No. 2, it has not been designated as a hedge for accounting purposes. |
F-36
Effective Portion | Ineffective Portion | |||||||||||||||
Derivatives in
|
Location of
|
Amount of
|
Location of
|
|||||||||||||
ASC 815
|
Amount of
|
Gain or (Loss)
|
Gain or (Loss)
|
Gain or (Loss)
|
Amount of
|
|||||||||||
Cash Flow
|
Gain or (Loss)
|
Reclassified from
|
Reclassified from
|
Recognized in
|
Gain or (Loss)
|
|||||||||||
Hedging
|
Recognized in OCI
|
Accumulated OCI
|
Accumulated OCI into
|
Income on
|
Recognized in Income
|
|||||||||||
Relationships
|
on Derivative (a) | into Income | Income (b) | Derivative | on Derivative (c) | |||||||||||
Interest rate derivatives
|
$ | (6,631 | ) | Interest expense | $ | (106,997 | ) (1) | Interest expense | $ | (1,239 | ) (1) |
(a) | This represents the change in fair market value of our interest rate derivatives since year end, net of taxes, offset by the amount of actual cash paid related to the net settlements of the interest rate derivatives for each of the twelve months ended December 31, 2009. |
(b) | This represents the amount of actual cash paid, net of taxes, related to the net settlements of the interest rate derivatives for each month of the twelve months ended December 31, 2009 plus any effective amortization of net deferred interest rate derivative losses. |
(c) | This represents both realized and unrealized ineffectiveness incurred during the twelve months ended December 31, 2009. | |
(1) | Excludes accelerated deferred loss of $4,924 which was charged to interest expense during the twelve months ended December 31, 2009 as a result of changes in projected future debt related to the New A330 Aircraft. |
F-37
Derivatives Not
|
Location of Gain
|
Amount of Gain
|
||||
Designated as
|
or (Loss)
|
or (Loss)
|
||||
Hedging Instruments
|
Recognized in Income
|
Recognized in Income
|
||||
under ASC 815
|
on Derivative | on Derivative | ||||
Interest rate derivatives
|
Other income (expense) | $ | 959 |
F-38
Amount of
|
||||||||||||||||||||||||||||||||||||||
Deferred
|
||||||||||||||||||||||||||||||||||||||
Amount of Deferred (Gain) or
|
(Gain) or
|
|||||||||||||||||||||||||||||||||||||
Loss Amortized (including
|
Loss
|
|||||||||||||||||||||||||||||||||||||
Unamortized
|
Accelerated
|
Expected to
|
||||||||||||||||||||||||||||||||||||
Deferred
|
Amortization) into Interest
|
be
|
||||||||||||||||||||||||||||||||||||
Original
|
Deferred
|
(Gain) or
|
Expense
|
Amortized
|
||||||||||||||||||||||||||||||||||
Maximum
|
(Gain) or
|
Loss at
|
For the Year Ended
|
Over the
|
||||||||||||||||||||||||||||||||||
Notional
|
Effective
|
Maturity
|
Fixed
|
Termination
|
Loss Upon
|
December 31,
|
December 31, |
Next Twelve
|
||||||||||||||||||||||||||||||
Hedged Item
|
Amount | Date | Date | Rate % | Date | Termination | 2009 | 2007 | 2008 | 2009 | Months | |||||||||||||||||||||||||||
Securitization No. 1
|
$ | 400,000 | Dec-05 | Aug-10 | 4.61 | Jun-06 | $ | (13,397 | ) | $ | (1,847 | ) | $ | (3,373 | ) | $ | (3,214 | ) | $ | (3,083 | ) | $ | (1,845 | ) | ||||||||||||||
Securitization No. 1
|
200,000 | Dec-05 | Dec-10 | 5.03 | Jun-06 | (2,541 | ) | (297 | ) | (597 | ) | (892 | ) | (422 | ) | (297 | ) | |||||||||||||||||||||
Securitization No. 2
|
500,000 | Mar-06 | Mar-11 | 5.07 | Jun-07 | (2,687 | ) | (798 | ) | (432 | ) | (746 | ) | (711 | ) | (677 | ) | |||||||||||||||||||||
Securitization No. 2
|
200,000 | Jan-07 | Aug-12 | 5.06 | Jun-07 | (1,850 | ) | (873 | ) | (223 | ) | (386 | ) | (368 | ) | (350 | ) | |||||||||||||||||||||
Securitization No. 2
|
410,000 | Feb-07 | Apr-17 | 5.14 | Jun-07 | (3,119 | ) | (2,010 | ) | (224 | ) | (487 | ) | (398 | ) | (348 | ) | |||||||||||||||||||||
Term Financing No. 1
|
150,000 | Jul-07 | Dec-17 | 5.14 | Mar-08 | 15,281 | 11,401 | | 1,825 | 2,055 | 1,917 | |||||||||||||||||||||||||||
Partial Mar-08 | ||||||||||||||||||||||||||||||||||||||
Term Financing No. 1
|
440,000 | Jun-07 | Feb-13 | 4.88 | Full Jun-08 | 26,281 | 15,928 | | 4,364 | 5,989 | 5,587 | |||||||||||||||||||||||||||
Term Financing No. 1
|
248,000 | Aug-07 | May-13 | 5.33 | Jun-08 | 9,888 | 6,367 | | 1,299 | 2,222 | 2,073 | |||||||||||||||||||||||||||
Term Financing No. 2
|
55,000 | May-08 | Mar-14 | 5.41 | Jun-08 | 2,380 | | | 2,380 | | | |||||||||||||||||||||||||||
Partial Jun-08 | ||||||||||||||||||||||||||||||||||||||
Term Financing No. 2
|
360,000 | Jan-08 | Feb-19 | 5.16 | Full Oct-08 | 23,077 | 11,993 | | 8,499 | 2,585 | 2,001 | |||||||||||||||||||||||||||
Repurchase Agreement
|
74,000 | Feb-06 | Jul-10 | 5.02 | Feb-08 | 878 | | | 878 | | | |||||||||||||||||||||||||||
Repurchase Agreement
|
5,000 | Dec-05 | Sep-09 | 4.94 | Mar-08 | 144 | | | 144 | | | |||||||||||||||||||||||||||
Repurchase Agreement
|
2,900 | Jun-05 | Mar-13 | 4.21 | Jun-08 | (19 | ) | | | (19 | ) | | | |||||||||||||||||||||||||
ECA Term Financing and New A330 Aircraft future debt
|
238,000 | Jan-11 | Apr-16 | 5.23 | Dec-08 | 19,430 | 18,445 | | | 985 | | |||||||||||||||||||||||||||
New A330 Aircraft future debt and securitization
|
231,000 | Apr-10 | Oct-15 | 5.17 |
Partial Jun-08
Full Dec-08 |
15,310 | 12,437 | | 1,582 | 1,291 | 704 | |||||||||||||||||||||||||||
New A330 Aircraft future debt and securitization
|
203,000 | Jun-07 | Jan-12 | 4.89 | Dec-08 | 2,728 | (1) | | | 1,264 | 1,464 | | ||||||||||||||||||||||||||
New A330 Aircraft future debt and securitization
|
238,000 | Jul-11 | Sep-16 | 5.27 | Dec-08 | 17,254 | 15,969 | | | 1,285 | | |||||||||||||||||||||||||||
Total
|
$ | 109,038 | $ | 86,715 | $ | (4,849 | ) | $ | 16,491 | $ | 12,894 | $ | 8,765 | |||||||||||||||||||||||||
(1) | The deferred loss for this swap is related to the period prior to de-designation. |
F-39
F-40
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Interest Expense:
|
||||||||||||
Hedge ineffectiveness losses
|
$ | 171 | $ | 16,623 | $ | 463 | ||||||
Amortization:
|
||||||||||||
Accelerated amortization of deferred losses
|
| 11,963 | 4,924 | |||||||||
Amortization of deferred (gains) losses
|
(4,849 | ) | 3,525 | 7,970 | ||||||||
Losses on termination of interest rate swaps
|
| 1,003 | | |||||||||
Total Amortization
|
(4,849 | ) | 16,491 | 12,894 | ||||||||
Total charged to interest expense
|
$ | (4,678 | ) | $ | 33,114 | $ | 13,357 | |||||
Other Income (Expense):
|
||||||||||||
Mark to market gains (losses) on undesignated hedges
|
$ | 1,154 | $ | (11,446 | ) | $ | 959 | |||||
Total charged to other income (expense)
|
$ | 1,154 | $ | (11,446 | ) | $ | 959 | |||||
F-41
Note 16. | Segment Reporting |
Note 17. | Quarterly Financial Data (Unaudited) |
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
2008
|
||||||||||||||||
Revenues
|
$ | 134,956 | $ | 145,395 | $ | 144,454 | $ | 157,782 | ||||||||
Net income
|
$ | 31,637 | $ | 35,341 | $ | 23,574 | $ | 24,739 | ||||||||
Basic earnings per share:
|
||||||||||||||||
Net income
|
$ | 0.40 | $ | 0.45 | $ | 0.30 | $ | 0.31 | ||||||||
Diluted earnings per share:
|
||||||||||||||||
Net income
|
$ | 0.40 | $ | 0.45 | $ | 0.30 | $ | 0.31 | ||||||||
2009
|
||||||||||||||||
Revenues
|
$ | 132,138 | $ | 136,913 | $ | 165,740 | $ | 135,794 | ||||||||
Net income
|
$ | 18,471 | $ | 27,571 | $ | 33,458 | $ | 22,992 | ||||||||
Basic earnings per share:
|
||||||||||||||||
Net income
|
$ | 0.23 | $ | 0.35 | $ | 0.42 | $ | 0.29 | ||||||||
Diluted earnings per share:
|
||||||||||||||||
Net income
|
$ | 0.23 | $ | 0.35 | $ | 0.42 | $ | 0.29 |
F-42
Note 18. | Accumulated Other Comprehensive Income (Loss) |
Unrealized
|
Accumulated
|
|||||||||||
Appreciation
|
Other
|
|||||||||||
Fair Value of
|
Debt
|
Comprehensive
|
||||||||||
Derivatives | Securities | Income (Loss) | ||||||||||
January 1, 2007
|
$ | (4,481 | ) | $ | 14,390 | $ | 9,909 | |||||
Net change in fair value of derivatives, net of tax benefit of
$1,928
|
(126,892 | ) | | (126,892 | ) | |||||||
Net derivative gain reclassified into earnings
|
(4,849 | ) | | (4,849 | ) | |||||||
Net change in unrealized fair value of debt investments
|
| (3,557 | ) | (3,557 | ) | |||||||
December 31, 2007
|
(136,222 | ) | 10,833 | (125,389 | ) | |||||||
Net change in fair value of derivatives, net of tax benefit of
$2,602
|
(245,407 | ) | | (245,407 | ) | |||||||
Net derivative loss reclassified into earnings
|
16,491 | | 16,491 | |||||||||
Net change in unrealized fair value of debt investments
|
| (8,297 | ) | (8,297 | ) | |||||||
December 31, 2008
|
(365,138 | ) | 2,536 | (362,602 | ) | |||||||
Net change in fair value of derivatives, net of tax expense of
$1,473
|
92,396 | | 92,396 | |||||||||
Net derivative loss reclassified into earnings
|
12,894 | | 12,894 | |||||||||
Gain on debt investments reclassified into earnings
|
(4,965 | ) | (4,965 | ) | ||||||||
Net change in unrealized fair value of debt investments
|
| 2,429 | 2,429 | |||||||||
December 31, 2009
|
$ | (259,848 | ) | $ | | $ | (259,848 | ) | ||||
F-43
By:
Chief Executive Officer
March 5, 2010
Chief Financial Officer
March 5, 2010
Chief Accounting Officer
March 5, 2010
Chairman of the Board
March 5, 2010
Deputy Chairman of the Board
March 5, 2010
Director
March 5, 2010
Director
March 5, 2010
Director
March 5, 2010
Director
March 5, 2010
Director
March 5, 2010
S-1
AIRCASTLE LIMITED | ||||||
|
||||||
|
By |
|
||||
|
Name |
|
||||
|
Title |
|
||||
|
||||||
[NAME] | ||||||
|
||||||
The Participant |
2. | Restricted Share Unit Vesting and Issuance of Shares; DER Vesting and Payment Terms . |
Number of | ||
Vesting Date | Restricted Share Units / Shares | |
[January 1, 2010
|
X | |
January 1, 2011
|
X | |
January 1, 2012
|
X | |
January 1, 2013
|
X | |
January 1, 2014]
|
X |
AIRCASTLE LIMITED | ||||||
|
||||||
|
By |
|
||||
|
Name |
|
||||
|
Title |
|
||||
|
||||||
[NAME] | ||||||
|
||||||
The Participant |
Page 1/6
Page 2/6
1. | Clause 2 Specification | |
Para 2.2.1 is deleted in its entirety and replaced by the following: | ||
QUOTE |
2.2.1 Available Propulsion Systems | ||
Each of the Aircraft shall be equipped with any of the set of | ||
two Rolls Royce Trent 772B engines, or
two Pratt & Whitney PW4170 engines. |
||
(in each case the Propulsion Systems), as shall be selected by the Buyer pursuant to sub-Clause 2.2.2 below. Each Propulsion Systems shall include nacelles, thrust reversers and associated standard equipment, installed on such Aircraft on Delivery. |
UNQUOTE | ||
2. | Clause 3 PRICE | |
Paragraph 3.1.3 (i) of Clause 1 of Schedule 1 to Purchase Agreement stating the Base Price of the Propulsion Systems is cancelled in its entirety and replaced by the following: | ||
QUOTE |
Page 3/6
3. | Exhibit H Part 2 : PRATT AND WHITNEY PRICE REVISION FORMULA | |
Paragraph 1 of Part 2 of the Exhibit H is hereby deleted and replaced by the following paragraph: | ||
QUOTE |
UNQUOTE | ||
4. | Clause 4 PRICE REVISION | |
Paragraph 4.2.2 of the Agreement is deleted in its entirety and no further force and effect. | ||
5. | Letter Agreement No. 4 Other Matters | |
Paragraph 5.1 of Letter Agreement No. 4 of the Agreement is now deleted in its entirety and of no further force or effect. | ||
6. | Letter Agreement No. 8 Performance Guarantees | |
Letter Agreement No. 8 of the Agreement is deleted in its entirety and replaced with a restated Letter Agreement No. 8 (the Restated Letter Agreement No. 8) to the Agreement attached hereto. |
Page 4/6
7. | Confidentiality | |
This Amendment (and its existence) shall be treated by both parties as confidential and shall not be released (or revealed) in whole or in part to any third party without the prior consent of the other party except in accordance with Clause 22.9 of the Agreement. In particular, each party agrees not to make any press release concerning the whole or any part of the contents and/or subject matter hereof or of any future addendum hereto without the prior consent of the other party. |
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Agreed and Accepted | Agreed and Accepted | ||||||
For and on behalf of | For and on behalf of | ||||||
AYR FREIGHTER LLC | AIRBUS S.A.S. | ||||||
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By: | /s/ Michael Platt | By: | /s/ Christophe Mourey | ||||
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Date: 7 November 2007 | Date: 6 November 2007 |
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Page 1 of 15
AMENDMENT TO THE AGREEMENT | ||
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1. |
Clause 0 Definitions
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2. |
Clause 2 Propulsion Systems
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3. |
Clause 4 Price Revision
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4. |
Clause 16 Appendix
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5. |
Exhibits General
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6. |
Schedule 1 to Purchase Agreement
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7. |
Exhibit A Standard Specification
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8. |
Exhibit B2 A330-200 Aircraft SCN lists
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9. |
Exhibit D Certificate of acceptance
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10. |
Exhibit H General Electric Propulsion Systems Price Revision Formula
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AMENDMENT TO LETTER AGREEMENTS | ||
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11. |
Letter Agreements General
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12. |
Letter Agreement Nº 1 Purchase Incentives
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13. |
Letter Agreement Nº 2 Miscellaneous
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14. |
Letter Agreement Nº 3 Predelivery Payments
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15. |
Letter Agreement Nº 4 Other Matters
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16. |
Letter Agreement Nº 5 Lease Support
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17. |
Letter Agreement Nº 6 Flexibility
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18. |
Letter Agreement Nº 11 Conversion Rights
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19. |
Letter Agreement Nº12 Delivery Matters
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20. |
Letter Agreement Nº14 Purchase Agreement Matters
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21. |
General Provisions
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22. |
Miscellaneous
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APPENDICIES | ||
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Appendix A Exhibit A A330-200 Specification | ||
Appendix B Exhibit B2 A330-200 SCN List | ||
Appendix C Schedule 1 Revision 1 | ||
Appendix D Exhibit H Pratt and Whitney Price Revision Formula | ||
Appendix E Letter Agreement N° 11 Revision 1 |
Page 2 of 15
A) | the Buyer and the Seller have entered into a purchase agreement dated June 20th, 2007 which covers the manufacture and the sale by the Seller and the purchase by the Buyer of fifteen (15) A330-200 Freighter aircraft (the Agreement), | |
B) | the parties amended the Agreement to incorporate the new Pratt and Whitney 4170 Propulsion Systems as set out in the amendment to the Agreement dated November 6 th 2007 (Amendment Nº 1). |
Page 3 of 15
1. | Clause 0 Definitions | |
1.1 | Capitalised terms used herein and not otherwise defined in, or amended by, this Amendment N°2 shall have the meanings assigned thereto in the Agreement, as amended by Amendment N°1. | |
1.2 | The following new definitions shall be inserted in Clause 0 of the Agreement as follows: | |
QUOTE |
A330-200 Aircraft the A330-200 Aircraft together with all components, equipment, parts and accessories installed in or on such Aircraft and the relevant Propulsion Systems installed thereon upon delivery. | ||
A330-200 Freighter Aircraft the A330-200 Freighter Aircraft together with all components, equipment, parts and accessories installed in or on such Aircraft and the relevant Propulsion Systems installed thereon upon delivery. | ||
Airframe Price Revision Formula shall have the same meaning as the Seller Price Revision Formula this being the price revision formula set forth in Exhibit G. | ||
UNQUOTE | ||
1.3 | Following definitions in Clause 0 of the Agreement are herby deleted in their entirety and replaced by the following: | |
QUOTE | ||
Agreement this A330-200 Freighter Aircraft and A330-200 Aircraft purchase agreement, including all exhibits and appendices attached hereto, as the same may be amended or modified and in effect from time to time. | ||
Aircraft any or all of the twelve (12) firm aircraft, being either A330-200 Freighter Aircraft or A330-200 Aircraft as the case may be, and as the context demands, for which the delivery schedule is set forth in Clause 9.1.1, to be sold by the Seller and purchased by the Buyer pursuant to this Agreement. | ||
Airframe either the A330-200 Freighter Aircraft Airframe or the A330-200 Aircraft Airframe, as the case may be, excluding the relevant applicable Propulsion Systems. | ||
Specification the Standard Specification as amended by the SCNs set forth in Exhibit B-2 to the Agreement for the A330-200 Freighter Aircraft and for the A330-200 Aircraft the SCNs set out as Appendix B to this Amendment N°2, as may be further amended or modified in accordance with this Agreement. | ||
Standard Specification |
(i) | For the A330-200 Freighter Aircraft the standard specification document with reference G 000 0F000, Issue 2, dated November 30, 2007, published by the Seller, a copy of which is annexed as Exhibit A to the Agreement, and | ||
(ii) | For A330-200 Aircraft standard specification document with reference G 000 02000 issue 4.5, dated April 30, 2008 published by the Seller for the following increased design weights MTOW 233t, MLW 182t and |
Page 4 of 15
MZFW 170t, a copy of which is annexed as Appendix A to this Amendment N°1. |
UNQUOTE | ||
2. | Clause 2 Propulsion Systems | |
2.1 | Clause 2.2.1 of the Agreement is deleted in its entirety and replaced by the following: | |
QUOTE |
2.2.1 | Available Propulsion Systems | ||
The Aircraft shall be equipped with a set of two of the following Propulsion Systems, depending on the Aircraft type: | |||
2.2.1.1 | available A330-200 Freighter Aircraft Propulsion Systems | ||
two (2) Rolls Royce Trent 772B engines, or
two (2) Pratt & Whitney PW4170 engines; |
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2.2.1.2 | available A330-200 Aircraft Propulsion Systems | ||
two (2) Rolls Royce Trent 772B engines, or
two (2) Pratt & Whitney PW4170 engines; or two (2) General Electric CF6-80E1A4 engines, or two (2) General Electric CF6-80E1A3 engines. |
The Buyer, pursuant to sub-Clause 2.2.2 below, shall select the available Propulsion System for the relevant Aircraft type. Each Propulsion Systems shall include nacelles, thrust reversers and associated standard equipment, installed on such Aircraft on Delivery. | ||
For clarity, General Electric CF6 Propulsion Systems are not offered or available for the A330-200 Freighter Aircraft. | ||
UNQUOTE |
Page 5 of 15
3. | Clause 16 Appendix A. | |
Further to the introduction of the A330-200 Aircraft passenger aircraft, and the need for the Initial Operator to train cabin attendants, the parties agree to insert as clause 1.5 of Appendix A to Clause 16 the following: | ||
QUOTE |
1.5 | Instructor Cabin Attendants Familiarization Course |
The Seller shall provide to the Buyer instructor cabin attendants training free of charge for three (3) of the Buyers instructor cabin attendants per A330-200 Aircraft, at one of the locations defined in Clause 16.3.1. |
UNQUOTE | ||
4. | Exhibits General | |
References to Aircastle Advisor LLC in the Exhibits D and E will be deemed references to AYR Freighter LLC. | ||
5. | Schedule 1 to the Agreement | |
Schedule 1 to the Agreement shall be deleted in its entirety and replaced with the new Schedule 1 Revision 1 as attached as Appendix C to this Amendment N°2. This Schedule 1 Revision 1 contains the A330-200 Aircraft pricing, the revised delivery schedule and the Predelivery Payment Schedule. | ||
6. | Exhibit A Standard Specification | |
Exhibit A to the Agreement shall be supplemented by Appendix A to this Amendment N°2. | ||
7. | Exhibit B-2 A330-200 Aircraft SCN lists | |
The budgetary SCN list for the A330-200 Aircraft (as set out in Clause 3.1.3 (ii) of Schedule 1 Revision 1) is attached as Appendix B to this Amendment N°2 and is inserted immediately after A330-200 Freighter Aircrafts SCN List in Exhibit B 2 to the Agreement. | ||
8. | Exhibit D Certificate of acceptance | |
The same form of certificate of acceptance shall be used for either the A330-200 Freighter Aircraft or the A330-200 Aircraft. |
Page 6 of 15
9. | Exhibit H General Electric Propulsion Systems Price Revision Formula | |
9.1 | Clause 1 of Part 1 of the Exhibit H is deleted in its entirety and replaced by the following: | |
QUOTE |
1. | Reference Price of the Propulsion Systems | ||
The Reference Price of a set of two (2) GENERAL ELECTRIC CF6-80E1A3 Propulsion Systems (Lb 72,000) is: |
and | |||
The Reference Price of a set of two (2) GENERAL ELECTRIC CF6-80E1A4 Propulsion Systems (Lb 70,000) is: |
These Reference Prices are subject to adjustment for changes in economic conditions as measured by data obtained from the US Department of Labor, Bureau of Labor Statistics and in accordance with the provisions of Clauses 4 and 5 of this Exhibit H. |
UNQUOTE | ||
9.2 | Further to a disruption in publications of official US labour indexes, Pratt and Whitney have modified their Price Revision Formula and therefore Part 2 of Exhibit H, as modified by Amendment Nº1, is deleted in its entirety and replaced by a new Part 2 for the Pratt and Whitney Price Revision Formula that is set out Appendix D of this Amendment N°2. |
Page 7 of 15
10. | Letter Agreements General | |
General references to the A330-200F or A330-200 Freighter in the Letter Agreements shall be deemed as referencing either the A330-200 Freighter Aircraft or the A330-200 Aircraft, where the context demands, except if otherwise stated or limited by this Amendment N°2. | ||
Any reference in each and any of the Letter Agreements in which certain provisions are being provided by the Seller to the Buyer in consideration of the Buyer taking delivery of fifteen (15) A330-200F or A330-200 Freighter Aircraft, shall be, given the reduction in the number of Aircraft as set out herein, be provided in consideration of the Buyer taking delivery from the Seller of the twelve (12) Aircraft in accordance with the terms set out the Agreement as amended by this Amendment N° 2. | ||
The Letter Agreements signed by the parties, constituting an integral, non-severable part of the Agreement, shall be modified in accordance with the following provisions: | ||
11. | Letter Agreement Nº 1 Purchase Incentives | |
Following the conversion of the A330-200 Freighter Aircraft into A330-200 Aircraft in accordance with this Amendment N°2; (i) the purchase incentives provided in Clauses 1, 2 and 3 shall be specific and applicable to the A330-200 Freighter Aircraft only, and (ii) the Seller agrees to provide the Buyer with the following A330-200 Aircraft specific Purchase Incentives set out below which shall be inserted into Letter Agreement N°1 as clause 4, 5, and the assignment and confidentiality clauses of the Letter Agreement N°1 shall be renumbered Clause 6 and Clause 7 accordingly. |
QUOTE | ||
4. | A330-200 Aircraft Base Credit Memorandum | |
In consideration of the Buyer taking delivery of twelve (12) Aircraft or such lower number as may result from the termination of the Agreement with respect to any Aircraft resulting from (i) a Total Loss and/or (ii) a termination for reasons of Excusable Delay or Inexcusable Delay, the Seller shall grant to the Buyer, upon Delivery of each A330-200 Aircraft a credit memorandum (theA330-200 Aircraft Base Credit Memorandum) amounting to: |
This A330-200 Aircraft Base Credit Memorandum shall be applied against the Final Contract Price of each A330-200 Aircraft. Such A330-200 Aircraft Base Credit Memorandum is expressed at economic conditions prevailing for a theoretical delivery in January 2006 and shall be subject to revision up to the relevant A330-200 Aircraft Delivery Date in accordance with the Airframe Price Revision Formula set forth in the Agreement, as such Airframe Price Revision Formula is amended by the provisions of the Agreement. |
Page 8 of 15
5. | A330-200 Aircraft Increased Order Credit Memorandum | |
In consideration of the Buyer taking delivery of twelve (12) Aircraft or such lower number as may result from the termination of the Agreement with respect to any Aircraft resulting from (i) a Total Loss and/or (ii) a termination for reasons of Excusable Delay or Inexcusable Delay, the Seller shall grant to the Buyer, upon Delivery of each A330-200 Aircraft an increased order credit memorandum (the A330-200 Increased Order Credit Memorandum) amounting to: |
12 | Letter Agreement Nº2 Miscellaneous | |
Further to the agreement between the parties to reschedule the Aircraft as per the delivery schedule set out in Schedule 1 Revision 1, and given that the final Aircraft deliveries are in 2012, the Seller agrees to extend the Cap Period, as the term is defined in Letter Agreement Nº2, to cover the 2012 period. | ||
Therefore the parties agree to: | ||
12.1 | Delete references to December 31 st, 2011 in Clause 1 (ii) and replaced it with the following; | |
QUOTE | ||
December 31 st 2012 (the Cap Period) | ||
UNQUOTE |
Page 9 of 15
12.2 | Delete the table of Fm values in its entirety and replace it with the following: |
UNQUOTE | ||
13. | Letter Agreement Nº3- Predelivery Payments | |
The parties hereby agree to extend the decision date by which the Buyer shall elect to defer the Pre-delivery Payments in accordance with the terms of Clause 2 of Letter Agreement N° 3. | ||
Therefore the parties agree to delete the first paragraph of Clause 2 and replace it with | ||
QUOTE |
At the Buyers option, such option to be exercised by the Buyer by written notice to the Seller, no later than September 30 th , 2008, the Buyer may elect not to make any Predelivery Payments on [***]. If the Buyer elects such option, the definition of the Predelivery Payments Reference Price in sub-Clause 5.2.2 shall be revised to [***] and the Seller shall credit the allocable amount of the Predelivery Payment theretofore paid against the next Predelivery Payment due to the Seller. |
UNQUOTE |
Page 10 of 15
14. | Letter Agreement Nº 4 Other Matters | |
14.1 | For clarity is hereby understood by the parties that following Clauses and credit memorandum of Letter Agreement N°4 shall only apply to the A330-200 Freighter Aircraft and not the A330-200 Aircraft: |
(i) | Clause 1 Payload [***] | ||
(ii) | Clause 5 Propulsion Systems | ||
(iii) | Clause 8 Certification Issues | ||
(iv) | Clause 9.1, 9.2 and 9.3 Specification | ||
(v) | Clause 10 Multiple Choice Cargo Loading System |
14.2 | The parties hereby agree that the date December 31, 2011 in the second paragraph of Clause 9.1 of Letter Agreement Nº 4 is hereby amended to May 31, 2012. | |
Further, the parties agree to delete references to the Call Right in such paragraph. | ||
14.3 | The parties hereby agree to insert the following as clause 9.4 to Letter Agreement Nº 4 in order to clarify the specification upgrade mechanism applicable to the A330-200 Aircraft and for the A330-300 Aircraft if converted in accordance with Letter Agreement 11 Revision 1; | |
QUOTE |
9.4 | The Seller agrees to propose to the Buyer any future new standard specification upgrades beyond the A330-200 (or -300, as applicable) Standard Specification. |
Standard specification upgrades, or part of a specification upgrade other than those set out in (a) and (b) above, which shall include Development Changes, shall be introduced into the A330-200 (or -300, as applicable) Aircraft in accordance with the terms of Clause 2 of the Agreement as amended by Letter Agreement 14. |
UNQUOTE |
Page 11 of 15
14.4 | Clause 11 of Letter Agreement Nº 4 shall be deleted in its entirety, as it is no longer applicable. | |
15. | Letter Agreement Nº 5 Lease Support | |
The parties agree that the Lease Fund Credit Memorandum as set forth in Letter Agreement Nº 5 is only applicable to the A330-200 Freighter Aircraft. |
16. | Letter Agreement Nº 6 Flexibility Whereas the parties have agreed to reschedule the Aircraft as set out herein and therefore the parties agree that both the Buyers Aircraft Deferral Right and the Sellers Call Right as set out in this Letter Agreement Nº 6 are hereby extinguished and neither party shall have any rights or obligation to the other hereunder, and any references elsewhere in the Agreement to such Aircraft Deferral Right or Call Right shall be null and void and have no contractual effect. | |
17. | Letter Agreement Nº 11 Conversion Rights | |
The parties hereby agree to delete Letter Agreement N°11 in its entirety such that it is null and void and replace it by Letter Agreement N°11 Revision 1 attached as Appendix E to this Amendment N°2. |
Page 12 of 15
18. | Letter Agreement Nº 12 Delivery Matters | |
The parties hereby agree that the date December 31, 2011 in Clause 3.2.1 of Letter Agreement Nº 12 is hereby amended to December 31, 2012. | ||
19. | Letter Agreement Nº 14 Purchase Agreement Matters | |
The parties agree to delete clause 11 of Letter Agreement Nº 14, entitled Clause 20 - Assignments and Transfers, in its entirety and replace it with the following; | ||
QUOTE |
11 | Clause 20 Assignments and Transfers | ||
With respect to Clauses 20.2.1 and 20.2.2, the parties hereto agree that they will negotiate in good faith the terms and conditions under which the Buyer may assign some of its rights and obligations under the Agreement. Notwithstanding the discussions to be held between Buyer and Seller on this subject, the parties agree that the Buyer may assign, to the third parties financing the Predelivery Payments or the Aircraft (the Financiers), the benefit of the credit memoranda as follows: |
The Seller agrees that in such discussions with the Buyer, it will not discriminate against the Buyer (as compared to other leasing companies that may also seek predelivery payment financing for A330-200 Freighter Aircraft or A330-200 Aircraft). |
UNQUOTE |
20. | General Provisions | |
20.1 | Cancelled Aircraft | |
It is expressly agreed that the parties shall cancel three (3) A330-200 Freighter Aircraft, which prior to the execution of this Amendment Nº 2, had rank numbers 5, 10 and 13 that were due for delivery on the following respective Scheduled Delivery Months December 2010, June 2011 and September 2011 (the Cancelled Aircraft). | ||
The parties agree that neither party shall have any rights or obligations regarding the Cancelled Aircraft, except that the Seller shall set off an amount equal to the Predelivery Payment received from the Buyer with respect to such Cancelled Aircraft amounting to a total of [***], against the Predelivery Payments due in accordance with the revised delivery schedule as set out in Clause 3 of Schedule 1 Revision 1. | ||
20.2 | Waiver | |
The parties recognise the mutual benefit of the revised Delivery Schedule as set out in Clause 3 of Schedule 1 Revision 1 and improved Aircraft type flexibility and conversion rights as per the terms of this Amendment Nº 2. |
Page 13 of 15
The Buyer and the Seller hereby agree that this Amendment Nº 2 is entered into in consideration, amongst other things, of the Buyer not exercising any rights it may have under Clause 11 of the Agreement as a result of the A330-200 Freighter Aircraft delays that have been reflected in the revised Delivery Schedule as set out in Clause 3 of Schedule 1 Revision 1 (the 2008 Delays). | ||
Consequently, the Buyer hereby expressly waives and renounces any and all claims, rights of action and proceedings against the Seller arising out of or in connection with the 2008 Delays, whether in contract or at law, including, but not limited to, any rights the Buyer may have in relation to receiving (i) any liquidated damages due by the Seller to the Buyer in respect of the 2008 Delays pursuant to Clause 11 of the Agreement and (ii) any interest accrued by the Seller on the Predelivery Payments during the period the Seller has held such Predelivery Payments. |
Both the Buyer and the Seller hereby agree that this Amendment N°2 shall constitute a full and final settlement between the Buyer and the Seller of all matters relating to the 2008 Delays. | ||
For the avoidance of doubt, the provisions of the Agreement shall apply in respect of any delay that affects the revised Delivery Schedule as set out in Clause 3 of Schedule 1 Revision 1. | ||
21. | Miscellaneous | |
21.1 | The Agreement, its Exhibits, its Letter Agreements together with Amendment N° 1 and Amendment N° 2, contain the entire agreement in relation to their subject matter between the parties and supersede any previous understandings, commitments and/or representations whatsoever oral or written to the extent it relates to the subject matter hereof. |
21.2 | In the event of any inconsistencies between the terms of the Agreement, including its Exhibits and Letter Agreements and this Amendment N°2, Amendment N°2 shall prevail to the extent of such inconsistency. | |
21.3 | The Agreement including its Exhibits and Letter Agreements shall be deemed amended and supplemented to the extent herein provided and as so amended and supplemented shall remain in full force and effect. | |
21.4 | This Amendment N 2 shall not be modified or varied except by an instrument in writing executed by both parties or by their duly authorised representatives. | |
21.5 | Clauses 22.2 (Notices), 22.3 (Waiver), 22.6 (Interpretation and Law) 22.4 (International Supply Contract), 22.13 (Language), 22.15 (Counterparts) and 22.9 (Confidentiality) of the Agreement shall apply to this Amendment N° 5 mutatis mutandis as if set out in full herein. | |
21.6 | The scope of Personal Information as set out in Clause 22.9 shall be expanded to include the additional type flexibility and conversion rights from the Freighter Aircraft to the Passenger Aircraft. |
Page 14 of 15
Agreed and Accepted
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Agreed and Accepted | |||||||
For and on behalf of
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For and on behalf of | |||||||
AYR FREIGHTER LLC
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AIRBUS S.A.S. | |||||||
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By: |
/s/ Ron Wainshal
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By: | /s/ Christophe Mourey | |||||
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Its: Managing Director
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Its: Senior Vice President Contracts | |||||||
Date: July 31, 2008
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Date: 31 st July, 2008 |
Page 15 of 15
A) | the Buyer and the Seller have entered into a purchase agreement dated June 20th, 2007 which covers the manufacture and the sale by the Seller and the purchase by the Buyer of fifteen (15) A330-200 Freighter aircraft (the Agreement), | |
B) | the parties amended the Agreement to incorporate the new Pratt and Whitney 4170 Propulsion Systems as set out in the amendment to the Agreement dated November 6th 2007 (Amendment Nº 1). | |
C) | the parties amended the Agreement to (i) convert five (5) A330-200 Freighter Aircraft into A330-200 Aircraft, (ii) to modify the Scheduled Delivery Months of the Aircraft, and (iii) to cancel three (3) A330-200 Freighter Aircraft as set as set out in the amendment to the Agreement dated July 31st 2008 (Amendment Nº 2). |
Aircraft CAC ID | the contractual Aircraft ID number that is assigned to each Aircraft by the Seller and remains unchanged despite of deferrals or advances in the Delivery Schedule. |
UNQUOTE |
2. | Schedule 1 to the Agreement Delivery Schedule |
Aircraft | Scheduled Delivery | |||||||
CAC ID | Rank | Aircraft type | Month | |||||
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264217
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1 | A330-200 Freighter Aircraft | August 2010 | |||||
264219
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3 | A330-200 Freighter Aircraft | October 2010 | |||||
264218
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2 | A330-200 Aircraft | November 2010 | |||||
264220
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4 | A330-200 Freighter Aircraft | December 2010 | |||||
264222
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5 | A330-200 Aircraft | April 2011 | |||||
264223
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6 | A330-200 Aircraft | May 2011 | |||||
264224
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7 | A330-200 Aircraft | May 2011 | |||||
264225
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8 | A330-200 Aircraft | June 2011 | |||||
264227
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9 | A330-200 Freighter Aircraft | October 2011 | |||||
264228
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10 | A330-200 Freighter Aircraft | November 2011 | |||||
264230
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11 | A330-200 Freighter Aircraft | April 2012 | |||||
264231
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12 | A330-200 Freighter Aircraft | May 2012 |
UNQUOTE |
3. | Notices |
4. | Miscellaneous | |
4.1 | The Agreement, its Exhibits, its Letter Agreements together with Amendment N° 1, Amendment N° 2 and Amendment N° 3, contain the entire agreement in relation to their subject matter between the parties and supersede any previous understandings, commitments and/or representations whatsoever oral or written to the extent it relates to the subject matter hereof. |
4.2 | In the event of any inconsistencies between the terms of the Agreement, including its Exhibits and Letter Agreements and this Amendment N°3, Amendment N°3 shall prevail to the extent of such inconsistency. | |
4.3 | The Agreement including its Exhibits and Letter Agreements shall be deemed amended and supplemented to the extent herein provided and as so amended and supplemented shall remain in full force and effect. | |
4.4 | This Amendment N ° 3 shall not be modified or varied except by an instrument in writing executed by both parties or by their duly authorised representatives. | |
4.5 | Clauses 22.2 (Notices), 22.3 (Waiver), 22.6 (Interpretation and Law) 22.4 (International Supply Contract), 22.13 (Language), 22.15 (Counterparts) and 22.9 (Confidentiality) of the Agreement shall apply to this Amendment N° 3 mutatis mutandis as if set out in full herein. |
Agreed and Accepted
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Agreed and Accepted | ||||||
For and on behalf of
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For and on behalf of | ||||||
AYR FREIGHTER LLC
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AIRBUS S.A.S. | ||||||
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BY: |
/s/ Michael Inglese
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BY: | /s/ Christophe Mourey | ||||
ITS: Managing Director
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ITS: Senior Vice President Contracts | ||||||
DATE: September 30, 2008
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DATE: September 30, 2008 |
A) | the Buyer and the Seller have entered into a purchase agreement dated June 20th, 2007 which covers the manufacture and the sale by the Seller and the purchase by the Buyer of fifteen (15) A330-200 Freighter aircraft (the Agreement), | |
D) | the parties amended the Agreement to incorporate the new Pratt and Whitney 4170 Propulsion Systems as set out in the amendment to the Agreement dated as of November 6th 2007 (Amendment Nº 1). | |
E) | the parties amended the Agreement to (i) convert five (5) A330-200 Freighter Aircraft into A330-200 Aircraft, (ii) to modify the Scheduled Delivery Months of the Aircraft, and (iii) to cancel three (3) A330-200 Freighter Aircraft as set as set out in the amendment to the Agreement dated July 31st 2008 (Amendment Nº 2). | |
F) | the parties amended the Agreement to modify the Scheduled Delivery Month for certain Aircraft as set out in amendment to the Agreement dated September 30th 2008 (Amendment Nº 3). |
1. | Schedule 1 to the Agreement Delivery Schedule | |
1.1 | The parties have agreed that Clause 3 of Schedule 1 Revision 1, included as Appendix C to Amendment Nº2 to the Purchase Agreement, as amended by Amendment Nº3 to the Purchase Agreement, shall be deleted in its entirety and replaced by the following: |
Aircraft | Scheduled Delivery | |||||||
CAC ID | Rank | Aircraft type | Month | |||||
264217
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1 | A330-200 Freighter Aircraft | August 2010 | |||||
264219
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3 | A330-200 Freighter Aircraft | October 2010 | |||||
264218
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2 | A330-200 Aircraft | March or April or May 2012 | |||||
264220
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4 | A330-200 Freighter Aircraft | December 2010 | |||||
264222
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5 | A330-200 Aircraft | April 2011 | |||||
264223
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6 | A330-200 Aircraft | May 2011 | |||||
264224
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7 | A330-200 Aircraft | May 2011 | |||||
264225
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8 | A330-200 Aircraft | June 2011 | |||||
264227
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9 | A330-200 Freighter Aircraft | October 2011 | |||||
264228
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10 | A330-200 Freighter Aircraft | November 2011 | |||||
264230
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11 | A330-200 Freighter Aircraft | April 2012 | |||||
264231
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12 | A330-200 Freighter Aircraft | May 2012 |
UNQUOTE | ||
1.2 | The parties have hereby agreed that A330-200 Aircraft with CAC ID 264218 (the Flexible Delivery Aircraft) is now scheduled for Delivery in March, April or May 2012. | |
The Seller shall notify the Buyer in writing of the Scheduled Delivery Month selection no later than March 1 st 2010. | ||
The Scheduled Delivery Month shall be determined by Seller at its sole discretion, but may only be in one of March, April or May 2012, unless otherwise agreed in writing by the parties. |
2. | Miscellaneous | |
2.1 | The Agreement, its Exhibits, its Letter Agreements together with Amendment N° 1, Amendment N° 2, Amendment N° 3 and Amendment Nº 4, contain the entire agreement in relation to their subject matter between the parties and supersede any previous understandings, commitments and/or representations whatsoever oral or written to the extent it relates to the subject matter hereof. | |
2.2 | In the event of any inconsistencies between the terms of the Agreement, including its Exhibits and Letter Agreements and this Amendment N°4, Amendment N°4 shall prevail to the extent of such inconsistency. | |
2.3 | The Agreement including its Exhibits and Letter Agreements shall be deemed amended and supplemented to the extent herein provided and as so amended and supplemented shall remain in full force and effect. | |
2.4 | This Amendment N ° 4 shall not be modified or varied except by an instrument in writing executed by both parties or by their duly authorised representatives. | |
2.5 | Clauses 22.2 (Notices), 22.3 (Waiver), 22.6 (Interpretation and Law) 22.4 (International Supply Contract), 22.13 (Language), 22.15 (Counterparts) and 22.9 (Confidentiality) of the Agreement shall apply to this Amendment N° 4 mutatis mutandis as if set out in full herein. |
Agreed and Accepted
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Agreed and Accepted | |
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For and on behalf of
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For and on behalf of |
AYR FREIGHTER LLC | AIRBUS S.A.S. | ||||||
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BY:
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/s/ Michael Platt | BY: | /s/ Christophe Mourey | ||||
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ITS: Manager | ITS: Senior Vice President Contracts | |||||
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DATE: 2/24/2009 | DATE: 2/24/2009 |
A) | the Buyer and the Seller have entered into a purchase agreement dated June 20th, 2007 which covers the manufacture and the sale by the Seller and the purchase by the Buyer of fifteen (15) A330-200 Freighter aircraft (the Freighter Aircraft) (the Purchase Agreement), | |
G) | the parties amended the Agreement to incorporate the new Pratt and Whitney 4170 Propulsion Systems as set out in the amendment to the Agreement (as defined below) dated as of November 6th 2007 (Amendment Nº 1). | |
H) | the parties amended the Agreement to (i) convert five (5) Freighter Aircraft into A330-200 Airbus aircraft type (the A330-200 Aircraft), (ii) to modify certain Scheduled Delivery Months of the Freighter Aircraft, and (iii) to cancel three (3) Freighter Aircraft as set as set out in the amendment to the Agreement dated July 31st 2008 (Amendment Nº 2). | |
I) | the parties amended the Agreement to modify the Scheduled Delivery Month for certain Aircraft as set out in amendment to the Agreement dated September 30th 2008 (Amendment Nº 3). | |
J) | the parties amended the Agreement to, amongst other things, modify the Scheduled Delivery Month for certain Aircraft, as set out in the amendment to the Agreement dated February 24th 2009 (Amendment Nº 4). |
F) | the parties hereby agree to enter into the Amendment N°5 in order to provide for the terms under with the Buyer shall engage in a purchase and lease back transaction involving an aircraft which is the subject of a purchase agreement between the Seller and another customer. |
1.1 | The parties agree that the Buyer intends to close, through an affiliate or a special purpose company established for the benefit of the Buyer, a purchase and leaseback transaction involving one (1) A330-200 model aircraft scheduled for delivery in May 2009 (the PLB Aircraft) ordered by Aerovias del Continente Americano S.A. Avianca, a Colombian sociedad anónima created and existing under Colombian law having its registered office in Bogota, Colombia (the PLB Party) from the Seller pursuant to a definitive purchase agreement between the PLB Party and the Seller dated February 16, 2007 (the PLB Party Agreement) upon delivery of such PLB Aircraft (the PLB Transaction). | |
1.2 | The terms and conditions of the PLB Transaction shall be subject to agreement between the Buyer and the PLB Party. Any transfer, novation or assignment of the PLB Partys rights under the PLB Party Agreement shall be made with the prior written consent of the Seller and in a form and substance satisfactory to the Seller. | |
1.3 | The parties hereby acknowledge that any other consideration between the Buyer and Seller with respect to the PLB Transaction shall be agreed by the Buyer and Seller in writing. |
Agreed and Accepted | Agreed and Accepted | |||||||||||||
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For and on behalf of | For and on behalf of | |||||||||||||
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AYR FREIGHTER LLC | AIRBUS S.A.S. | |||||||||||||
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BY: | /s/ Michael Inglese | BY: | /s/ Christophe Mourey | |||||||||||
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ITS: | Manager | ITS: | Senior Vice President Contracts |
DATE: April 17, 2009
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DATE: 17 April, 2009 |
A) | the Buyer and the Seller have entered into a purchase agreement dated June 20th, 2007 which covers the manufacture and the sale by the Seller and the purchase by the Buyer of fifteen (15) A330-200 Freighter aircraft (the Purchase Agreement), | |
K) | the parties amended the Agreement to incorporate the new Pratt and Whitney 4170 Propulsion Systems as set out in the amendment to the Agreement dated as of November 6th 2007 (Amendment Nº 1). | |
L) | the parties amended the Agreement to (i) convert five (5) A330-200 Freighter Aircraft into A330-200 Aircraft, (ii) to modify the Scheduled Delivery Months of the Aircraft, and (iii) to cancel three (3) A330-200 Freighter Aircraft as set as set out in the amendment to the Agreement dated July 31st 2008 (Amendment Nº 2). | |
M) | the parties amended the Agreement to modify the Scheduled Delivery Month for certain Aircraft as set out in amendment to the Agreement dated September 30th 2008 (Amendment Nº 3). | |
N) | the parties amended the Agreement to, amongst other things, modify the Scheduled Delivery Month for certain Aircraft, as set out in the amendment to the Agreement dated February 24 th 2009 (Amendment Nº4). | |
O) | The parties amended the Agreement to provide for the terms under which the Buyer engaged in a purchase and lease back transaction, as set out in the amendment to the Agreement dated April 17 th 2009 (Amendment Nº5). |
G) | The Buyer and Seller hereby agree to modify the Scheduled Delivery Month for Aircraft with rank 4 and to modify the Conversion Notice deadline for certain Aircraft, upon the terms and conditions set out herein. |
Aircraft | Scheduled Delivery | |||||
CAC ID | Rank | Aircraft type | Month | |||
|
||||||
264217 | 1 |
A330-200 Freighter Aircraft
|
August 2010 | |||
264219 | 3 |
A330-200 Freighter Aircraft
|
October 2010 | |||
264218 | 2 |
A330-200 Aircraft
|
March or April or May 2012 | |||
264220 | 4 |
A330-200 Freighter Aircraft
|
July 2011 | |||
264222 | 5 |
A330-200 Aircraft
|
April 2011 | |||
264223 | 6 |
A330-200 Aircraft
|
May 2011 | |||
264224 | 7 |
A330-200 Aircraft
|
May 2011 | |||
264227 | 9 |
A330-200 Freighter Aircraft
|
October 2011 | |||
264228 | 10 |
A330-200 Freighter Aircraft
|
November 2011 | |||
264230 | 11 |
A330-200 Freighter Aircraft
|
April 2012 | |||
264231 | 12 |
A330-200 Freighter Aircraft
|
May 2012 |
UNQUOTE |
2. | Predelivery Payments | |
2.1 | The Buyer will make Predelivery Payments with respect to the Rescheduled Aircraft pursuant to Clause 5 of the Agreement based on the revised Scheduled Delivery Month, except as provided for in Paragraph 2.2 below. For information purposes, with respect to such Rescheduled Aircraft, the parties hereto agree that the applicable Predelivery Payment amounts and dates due are revised as set forth in Exhibit 1 to this Amendment. | |
2.2 | The parties agree that the Seller shall retain excess Predelivery Payments resulting from the rescheduling pursuant to Paragraph 1.1 above without interest accruing to the Buyer (the Retained PDP). The Seller agrees to apply an amount equal to the Retained PDP towards subsequent Predelivery Payment(s) due from the Buyer to the Seller, pursuant to the Agreement, until the Retained PDP is reduced to an amount equal to zero. | |
3. | Conversion Notice deadlines for Aircraft with Rank 9 and 10 | |
The parties agree that Clause 2 of Letter Agreement Nº11 Revision 1, as amended by Amendment Nº2 to the Agreement, is hereby deleted and replaced by the following: | ||
QUOTE |
2 | Notice |
Such Aircraft type conversion is subject to the Buyer notifying the Seller in writing, |
(i) | for a conversion of the Eligible A330-200 Freighter Aircraft with ranks 9 and 10 to either A330-200 Aircraft or an A330-300 Aircraft, no later than November 1 st , 2009. | ||
(ii) | for a conversion of the Eligible A330-200 Freighter Aircraft with ranks 11 and 12 to either A330-200 Aircraft or an A330-300 Aircraft, no later than the first day of the twenty-sixth (26 th ) month prior to the Eligible A330-200 Freighter Aircrafts Scheduled Delivery Month, | ||
(iii) | for a conversion of an A330-200 Aircraft to an A330-300 Aircraft, no later than the first day of the eighteenth (18 th ) month prior to the A330-200 Aircrafts Scheduled Delivery Month, |
UNQUOTE | ||
4. | Miscellaneous | |
4.1 | In this Amendment the terms herein, hereof, hereunder and words of similar import refer to this Amendment. | |
4.2 | Capitalised terms used herein and not otherwise defined in, or amended by, this Amendment shall have the meanings assigned thereto in the Agreement, as amended from time to time. | |
4.3 | The Agreement, its Exhibits, its Letter Agreements together with Amendment N° 1, Amendment N° 2, Amendment N° 3, Amendment Nº 4, Amendment Nº5 and this Amendment, contain the entire agreement in relation to their subject matter between the parties and supersede any previous understandings, commitments and/or representations whatsoever oral or written to the extent it relates to the subject matter hereof. | |
4.4 | In the event of any inconsistencies between the terms of the Agreement, including its Exhibits and Letter Agreements and this Amendment, this Amendment shall prevail to the extent of such inconsistency. | |
4.5 | The Agreement including its Exhibits and Letter Agreements shall be deemed amended and supplemented to the extent herein provided and as so amended and supplemented shall remain in full force and effect. | |
4.6 | This Amendment shall not be modified or varied except by an instrument in writing executed by both parties or by their duly authorised representatives. | |
4.7 | Clauses 22.2 (Notices), 22.3 (Waiver), 22.6 (Interpretation and Law) 22.4 (International Supply Contract), 22.13 (Language), 22.15 (Counterparts) and 22.9 (Confidentiality) of the Agreement shall apply to this Amendment mutatis mutandis as if set out in full herein. |
Agreed and Accepted | Agreed and Accepted | |||||
For and on behalf of | For and on behalf of | |||||
AYR FREIGHTER LLC | AIRBUS S.A.S. | |||||
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BY: /s/ Michael Platt | BY: /s/ Christophe Mourey | |||||
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DATE: 7/28/2009 | DATE: 28 July 2009 |
A) | the Buyer and the Seller have entered into a purchase agreement dated June 20th, 2007 which covers the manufacture and the sale by the Seller and the purchase by the Buyer of fifteen (15) A330-200 Freighter aircraft (the Freighter Aircraft) (the Purchase Agreement), | |
P) | the parties amended the Agreement to incorporate the new Pratt and Whitney 4170 Propulsion Systems as set out in the amendment to the Agreement (as defined below) dated as of November 6th 2007 (Amendment Nº 1). | |
Q) | the parties amended the Agreement to (i) convert five (5) Freighter Aircraft into A330-200 Airbus aircraft type (the A330-200 Aircraft), (ii) to modify certain Scheduled Delivery Months of the Freighter Aircraft, and (iii) to cancel three (3) Freighter Aircraft as set as set out in the amendment to the Agreement dated July 31st 2008 (Amendment Nº 2). | |
R) | the parties amended the Agreement to modify the Scheduled Delivery Month for certain Aircraft as set out in amendment to the Agreement dated September 30th 2008 (Amendment Nº 3). | |
S) | the parties amended the Agreement to, amongst other things, modify the Scheduled Delivery Month for certain Aircraft, as set out in the amendment to the Agreement dated February 24th 2009 (Amendment Nº 4). | |
T) | the parties amended the Agreement to provide for the terms under which the Buyer engaged in a purchase and lease back transaction, as set out in the amendment to the Agreement dated April 17 th 2009 (Amendment Nº5). | |
U) | the parties amended the Agreement to modify the Scheduled Delivery Month for Aircraft with rank 4 and to modify the Conversion Notice deadline for certain Aircraft, as set out in the amendment to the Agreement dated July 28 th 2009 (Amendment Nº6). |
1. | Schedule 1 to the Agreement Delivery Schedule | |
1.2 | The parties agree that the Buyer, or an Affiliate or a special purpose company established for the benefit of the Buyer, intends to close a purchase and leaseback transaction involving one (1) A330-200 model aircraft scheduled for delivery in December 2009 (the PLB 2 Aircraft) ordered by Aerovias del Continente Americano S.A. Avianca, a Colombian sociedad anónima created and existing under Colombian law having its registered office in Bogota, Colombia (the PLB Party) from the Seller pursuant to a definitive purchase agreement between the PLB Party and the Seller dated February 16, 2007 (the PLB Party Agreement), upon delivery of such PLB 2 Aircraft (the PLB 2 Transaction). | |
1.2 | The terms and conditions of the PLB 2 Transaction shall be subject to agreement between the Buyer and the PLB Party. Any transfer, novation or assignment of the PLB Partys rights under the PLB Party Agreement shall be made with the prior written consent of the Seller and in a form and substance satisfactory to the Seller. | |
1.3 | The parties hereby acknowledge that any other consideration between the Buyer and Seller with respect to the PLB 2 Transaction shall be agreed by the Buyer and Seller in writing. | |
2. | Miscellaneous | |
2.1 | The Agreement, its Exhibits, its Letter Agreements and Amendment N°7, contain the entire agreement in relation to their subject matter between the parties and supersede any previous understandings, commitments and/or representations whatsoever oral or written to the extent it relates to the subject matter hereof. | |
2.2 | In the event of any inconsistencies between the terms of the Agreement, including its Exhibits and Letter Agreements and this Amendment N°7, Amendment N°7 shall prevail to the extent of such inconsistency. | |
2.3 | The Agreement including its Exhibits and Letter Agreements shall be deemed amended and supplemented to the extent herein provided and as so amended and supplemented shall remain in full force and effect. |
Agreed and Accepted
|
Agreed and Accepted | ||||||
For and on behalf of
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For and on behalf of | ||||||
AYR FREIGHTER LLC
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AIRBUS S.A.S. | ||||||
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BY: |
/s/ David Walton
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BY: | /s/ Guy Brunon | ||||
ITS: Manager
|
ITS: V.P. Contracts | ||||||
DATE: October 2, 2009
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DATE: 2 nd October 2009 |
A) | the Buyer and the Seller have entered into a purchase agreement dated June 20th, 2007 which covers the manufacture and the sale by the Seller and the purchase by the Buyer of fifteen (15) A330-200 Freighter aircraft (the Freighter Aircraft) (the Purchase Agreement), | |
V) | the parties amended the Agreement to incorporate the new Pratt and Whitney 4170 Propulsion Systems as set out in the amendment to the Agreement (as defined below) dated as of November 6th 2007 (Amendment Nº 1). | |
W) | the parties amended the Agreement to (i) convert five (5) Freighter Aircraft into A330-200 Airbus aircraft type (the A330-200 Aircraft), (ii) to modify certain Scheduled Delivery Months of the Freighter Aircraft, and (iii) to cancel three (3) Freighter Aircraft as set as set out in the amendment to the Agreement dated July 31st 2008 (Amendment Nº 2). | |
X) | the parties amended the Agreement to modify the Scheduled Delivery Month for certain Aircraft as set out in amendment to the Agreement dated September 30th 2008 (Amendment Nº 3). | |
Y) | the parties amended the Agreement to, amongst other things, modify the Scheduled Delivery Month for certain Aircraft, as set out in the amendment to the Agreement dated February 24th 2009 (Amendment Nº 4). | |
Z) | the parties amended the Agreement to provide for the terms under which the Buyer engaged in a purchase and lease back transaction, as set out in the amendment to the Agreement dated April 17 th 2009 (Amendment Nº5). | |
AA) | the parties amended the Agreement to modify the Scheduled Delivery Month for Aircraft with rank 4 and to modify the Conversion Notice deadline for certain Aircraft, as set out in the amendment to the Agreement dated July 28 th 2009 (Amendment Nº6). |
BB) | the parties amended the Agreement to provide for the terms under with the Buyer shall engage in a purchase and lease back transaction involving an aircraft which is the subject of a purchase agreement between the Seller and another customer, as set out in the amendment to the Agreement dated October 2, 2009 (Amendment Nº7). | |
CC) | the Buyer exercised its right under the Agreement to convert the A330-200 Freighter Aircraft with ranks 9, 10, 11 and 12 to A330-200 Aircraft by written notice received by the Seller on October 27, 2009. | |
DD) | the Buyer has reached an agreement to lease six (6) Aircraft (the SAA Aircraft) to SOUTH AFRICAN AIRWAYS (PRORIETARY) LIMITED, a Republic of South Africa corporation whose address and principal place of business is at Airways Park, Private Bag X13, Johannesburg International Airport, South Africa 1627 (SAA) on the terms contained in the lease agreements dated as of December , 2009 (the Leases); |
1. | Schedule 1 to the Agreement Delivery Schedule | |
1.1 | At request of the Buyer, the parties hereby agree that the SAA Aircraft with rank 2 scheduled for Delivery in either March, April or May 2012 (CAC ID 264218), rank 7 scheduled for Delivery in May 2011 (CAC ID 264224), rank 9 scheduled for Delivery in October 2011 (CAC ID 264227) and rank 10) scheduled for Delivery in November 2011(CAC ID 264228, are hereby rescheduled to respectively February 2011, July 2011, September 2011 and December 2011 (the SAA Rescheduled Aircraft). For clarity, it is hereby understood that the Scheduled Delivery Month of the SAA Aircraft with rank 5 (CAC ID 264222) and rank 6 (CAC ID 264223) shall remain unchanged, meaning April and May 2011 respectively. | |
1.3 | The parties agree that by virtue of the amendments described in Clause 1.1 herein, Clause 3 of Schedule 1 of the Agreement, as has been amended from time to time, shall be deleted in its entirety and replaced by the following: |
QUOTE |
Aircraft | Scheduled Delivery | |||||||
CAC ID | Rank | Aircraft type | Month | |||||
264217
|
1 | A330-200 Freighter Aircraft | August 2010 | |||||
264219
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3 | A330-200 Freighter Aircraft | October 2010 | |||||
264218
|
2 | A330-200 Aircraft | February 2011 | |||||
264220
|
4 | A330-200 Freighter Aircraft | July 2011 | |||||
264222
|
5 | A330-200 Aircraft | April 2011 | |||||
264223
|
6 | A330-200 Aircraft | May 2011 | |||||
264224
|
7 | A330-200 Aircraft | July 2011 | |||||
264227
|
9 | A330-200 Aircraft | September 2011 | |||||
264228
|
10 | A330-200 Aircraft | December 2011 | |||||
264230
|
11 | A330-200 Aircraft | April 2012 |
UNQUOTE |
2. | Specification matters | |
2.1 | The parties acknowledge that the conversion rights to A330-300 Aircraft as set out in the Letter Agreement Nº11 Revision 1 to the Agreement, are no longer applicable for the SAA Aircraft, and that such SAA Aircraft shall be delivered as A330-200 Aircraft. | |
2.2 | For the purposed of Clause 2.2.2 of the Agreement, as amended from time to time, the Buyer hereby irrevocably confirms that each of the SAA Aircraft shall be delivered with Rolls Royce Trent 772B Series Propulsion Systems. | |
2.3 | The parties hereby agree that the SAA Aircraft, except as otherwise agreed in writing by the Parties, shall be built and delivered according to the technical cabin specification with LOPA drawing number 330-25.30653, included as Exhibit 1 hereto. Any request by the Buyer for a change to such technical specification with respect to the SAA Aircraft, shall require prior written agreement by the Seller to confirm its feasibility, including but not limited to the BFE supply compliance with the Sellers industrial constraints. | |
2.4 | Without prejudice to other provisions of Clause 18 of the Agreement, the parties hereby agree that the Delivery of the SAA Aircraft with rank 2 (CAC ID 264218), rank 5 (CAC ID 264222) and |
rank 6 (CAC ID 264223) in the respective Scheduled Delivery Months of February, April and May 2011, is subject to such SAA Aircraft being equipped with the following BFE: |
Business Class seats:
|
Majesty Sicma Aero Seat | |
Economy Class seats:
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Model 5750 Weber Aircraft | |
In-flight Entertainment system:
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Thales i5000 | |
Galleys:
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AIM Aviation |
3. | Predelivery Payments | |
3.1 | The Buyer will make Predelivery Payments with respect to the SAA Rescheduled Aircraft pursuant to Clause 5 of the Agreement based on the revised Scheduled Delivery Months, except as provided for in Paragraph 3.2 below. | |
3.2 | Subject to the provisions of Paragraph 3.3 below, any Predelivery Payments with respect to the SAA Rescheduled Aircraft falling due prior to the date hereof by virtue of the rescheduling contemplated herein (the Due PDP), but not paid by the Buyer prior to the date hereof, shall be paid within 5 Business Days after signature hereof. | |
3.3 | The parties agree that the Seller shall retain excess Predelivery Payments resulting from the rescheduling pursuant to Paragraph 1.1 above without interest accruing to the Buyer (the Retained PDP). The Seller agrees to apply an amount equal to the Retained PDP towards the Due PDP, as defined in Paragraph 3.2 above. Any remaining excess of the Retained PDP shall be applied towards subsequent Predelivery Payment(s) due from the Buyer to the Seller, pursuant to the Agreement, until the Retained PDP is reduced to an amount equal to zero. | |
4. | Aircraft Conversion new Scheduled Delivery Month. | |
The parties agree that for the purpose of Clause 3 of Letter Agreement Nº11 Revision 1, as amended by Amendment Nº2 and Amendment Nº3 to the Agreement, the Scheduled Delivery Month after conversion of the Converted Aircraft with ranks 9, 10, 11 and 12, shall be the one reflected in Clause 3 of Schedule 1 of the Agreement, as amended by Clause 1.2 herein. | ||
5. | Miscellaneous | |
5.1 | The Agreement, its Exhibits, its Letter Agreements and Amendment N°8, contain the entire agreement in relation to their subject matter between the parties and supersede any previous understandings, commitments and/or representations whatsoever oral or written to the extent it relates to the subject matter hereof. | |
5.2 | In the event of any inconsistencies between the terms of the Agreement, including its Exhibits and Letter Agreements and this Amendment N°8, Amendment N°8 shall prevail to the extent of such inconsistency. | |
5.3 | The Agreement including its Exhibits and Letter Agreements shall be deemed amended and supplemented to the extent herein provided and as so amended and supplemented shall remain in full force and effect. |
5.4 | This Amendment N ° 8 shall not be modified or varied except by an instrument in writing executed by both parties or by their duly authorised representatives. | |
5.5 | Clauses 22.2 (Notices), 22.3 (Waiver), 22.6 (Interpretation and Law) 22.4 (International Supply Contract), 22.13 (Language), 22.15 (Counterparts) and 22.9 (Confidentiality) of the Agreement shall apply to this Amendment N°8 mutatis mutandis as if set out in full herein. | |
5.6 | The parties hereby agree that the present Amendment N°8 shall enter into full force and effect from the date mentioned here above. |
Agreed and Accepted | Agreed and Accepted | |||||||||
For and on behalf of | For and on behalf of | |||||||||
AYR FREIGHTER LLC | AIRBUS S.A.S. | |||||||||
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BY:
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/s/ David Walton | BY: | /s/ Christophe Mourey | |||||||
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ITS: Manager
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ITS:Senior Vice President Contracts | |||||||||
DATE: Dec. 16, 2009
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DATE: 16/12/2009 |
1.
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Definitions; Construction and Interpretation | |
2.
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Lease of Aircraft | |
3.
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Rent; Payments | |
4.
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Security Deposit; Letter Of Credit | |
5.
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Representations and Warranties | |
6.
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General Covenants | |
7.
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Title; Registration and Filings; Etc | |
8.
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Possession | |
9.
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Indemnities | |
10.
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Risk of Loss, Destruction and Requisition, Etc. | |
11.
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Insurance | |
12.
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Events of Default | |
13.
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Remedies | |
14.
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Transfer of Lease | |
15.
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No Setoff, Counterclaim, Etc. | |
16.
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Further Assurances, Etc. | |
17.
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Confidentiality | |
18.
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Governing Law and Jurisdiction | |
19.
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Miscellaneous |
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1. | DEFINITIONS; CONSTRUCTION AND INTERPRETATION | |
The capitalized terms used in this Lease Agreement shall have the respective meanings ascribed thereto in Part I of Schedule 1. The rules of construction and interpretation for this Lease Agreement and each other Operative Document are set forth in Part II of Schedule 1. The Schedules and Exhibits to this Lease Agreement are incorporated herein as if set forth herein in full. | ||
2. | LEASE OF AIRCRAFT | |
2.1 | Delivery | |
Lessor hereby agrees to deliver the Aircraft to Lessee at the Delivery Location and to lease the Aircraft to Lessee, and Lessee hereby agrees to accept the Aircraft at the Delivery Location and to lease the Aircraft from Lessor, in each case, on the Scheduled Delivery Date and in the Delivery Condition, subject to the satisfaction or waiver of the conditions precedent set out in Schedule 7 and Schedule 8 and otherwise subject to the terms and conditions of the Operative Documents. Lessor and Lessee shall consult regularly regarding the expected Scheduled Delivery Date. Lessee shall execute and deliver the Acceptance Certificate to Lessor on the Delivery Date. The delivery requirements and delivery procedures are more fully set out in Schedule 3. | ||
2.2 | Lease Term | |
Lessee shall lease the Aircraft pursuant hereto for the Lease Term. | ||
2.3 | Return | |
Lessee shall return the Aircraft to Lessor at the Return Location, and Lessor hereby agrees to accept the Aircraft at the Return Location from Lessee, in each case, on the last day of the Lease Term and in the Return Condition, subject to the terms and conditions of the Operative Documents. Lessor shall execute and deliver the Return Acceptance Certificate to Lessee at the Return. The return requirements and return procedures are more fully set out in Schedule 4. |
-1-
3. | RENT; PAYMENTS | |
3.1 | RentPeriodic | |
Lessee shall pay periodic rent for the Aircraft on each Rent Payment Date in an amount equal to the RentPeriodic Amount. | ||
3.2 | RentSupplemental | |
Lessee shall pay promptly to Lessor, or to whosoever shall be entitled thereto, any and all RentSupplemental when and as the same shall become due and owing. | ||
3.3 | Payments in General | |
3.3.1 | Timing and Place of Payment | |
All payments of Rent due to Lessor shall be made directly by Lessee in Dollars by wire transfer of immediately available funds on the required date of payment, for receipt on such date and with value on such date, to the account for Lessor specified in Schedule 5, or to such other account as Lessor shall otherwise direct by not less than five days prior written notice to Lessee. Any amounts owing by Lessor to Lessee under any Operative Document shall be paid by wire transfer of immediately available Dollars to Lessees account specified in Schedule 5, or to such other account as Lessee shall otherwise direct by not less than five days prior written notice to Lessor. | ||
3.3.2 | Business Day Convention | |
If the due date for any payment or obligation is not a Business Day, then, unless otherwise provided herein, such payment or the performance of such obligation shall be due on the Business Day immediately succeeding such due date with the same force and effect as if made or performed on such original due date and, in the case of payment, without adjustment in the amount due. | ||
3.3.3 | Past Due Rate | |
Lessee also shall pay to Lessor, or to whosoever shall be entitled thereto, on demand, as RentSupplemental, interest at the Past Due Rate on any Rent not paid when due for any period for which the same shall remain unpaid. | ||
4. | SECURITY DEPOSIT; LETTER OF CREDIT | |
4.1 | Payment of the Security Deposit | |
Lessor acknowledges receipt of Security Deposit Installment1 and Security Deposit Installment2. Lessee shall pay to Lessor, on or prior to the final Scheduled Delivery Date, Security Deposit Installment3. | ||
On each anniversary of the Delivery Date, if Lessor is then holding a Security Deposit and provided that no Payment/Bankruptcy Default shall have occurred and then be continuing, Lessor shall credit to the Security Deposit, and the Security Deposit shall be deemed to be increased by, an amount equal to notional interest accrued thereon for the period held by Lessor (and for which |
-2-
interest has not previously been credited) at one-year Dollar LIBOR (as determined at monthly intervals during such period by Lessor by reference to Bloomberg BBAM page (or, if such page is unavailable, to a replacement market-standard screen agreed by Lessor or Lessee)) and calculated using monthly compounding. | ||
4.2 | Lessors Interest in Security Deposit | |
The Security Deposit shall secure the timely payment and performance by Lessee of the Secured Obligations. Lessee hereby assigns to Lessor absolutely, by way of security, the Security Deposit to secure such payment and such performance and Lessee agrees not to grant, assign, transfer or pledge to any other Person any right, title or interest in or to the Security Deposit. Except as expressly permitted under this Lease Agreement, Lessee shall not be entitled to payment or repayment of the Security Deposit. Subject to Lessors obligations to return or repay the Security Deposit, the Security Deposit may be assigned, charged or pledged by Lessor to another Person in connection with an Absolute Transfer or Security Transfer permitted under Section 14.1. The Security Deposit may be commingled by Lessor or such other Person with its own general other funds during the Lease Term. If an Event of Default shall occur and be continuing, then, in addition to any other rights Lessor or such other Person may have under applicable law or under any Operative Document or any Other Lease Agreement, Lessor or such other Person may at any time as an agreed remedy apply, in such order as Lessor or such other Person thinks fit, all or any portion of the Security Deposit in full or partial payment for amounts constituting or corresponding to any Secured Obligation then due and payable. If Lessor, or such other Person, applies all or a portion of the Security Deposit, Lessee shall within 10 days upon demand from Lessor pay to Lessor or such other Person an amount sufficient to restore the Security Deposit to its required total sum. | ||
4.3 | Return of Security Deposit | |
That portion of the Security Deposit that has not previously been applied as provided for in any Operative Document, shall be returned to Lessee, with any unpaid accrued interest as provided in Section 4.1, on the day on which the Aircraft is ret u rned to Lessor in accordance with this Lease Agreement and all of the Secured Obligations which are then due and payable have been satisfied in full. | ||
4.4 | Substitution of Letter of Credit for Security Deposit |
(1) | On or at any time prior to the Delivery Date or from time to time during the Lease Term, so long as no Payment/Bankruptcy Default is then continuing, if Lessor is holding a Security Deposit provided pursuant to Section 4.2, Lessee shall have the option to substitute for the Security Deposit a letter of credit (the Letter of Credit ), as security for all of the Secured Obligations, with a stated amount equal to the sum of the Security Deposit Installment1, the Security Deposit Installment2 and Security Deposit Installment3 plus all interest accrued thereon pursuant to Section 4.2 and to be paid to Lessee pursuant to the last paragraph of this Clause (1). The Letter of Credit: |
(a) | shall be in the form of Exhibit E; | ||
(b) | shall be issued or confirmed by a first class international bank (or branch thereof) in New York or London reasonably acceptable to Lessor and having at least the Letter of Credit Bank Minimum Rating; and |
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(c) | shall remain in full force and effect until the Letter of Credit Validity Date (or, if the Letter of Credit is at any time due to expire prior to such date, then Lessee shall cause a valid renewal or replacement letter of credit to be issued in accordance with this Section 4.2 not later than 30 days prior to such expiry date, the original Letter of Credit and each such renewal or replacement to be valid for a period of not less than one year or, if less, until the Letter of Credit Validity Date). |
Upon valid substitution by Lessee of a Letter of Credit for the Security Deposit in accordance with the provisions of this Section 4.4, Lessor shall simultaneously (if it has received reasonable advance notice thereof) or promptly (and in any event within five Business Days) refund to Lessee the amount of the cash Security Deposit which has not previously been applied as provided for in any Operative Document, together with interest accrued as provided in Section 4.2. | |||
(2) | In the event that at any time prior to the Letter of Credit Validity Date the bank issuing or confirming the Letter of Credit no longer has at least the Letter of Credit Bank Minimum Rating, Lessee shall within thirty days of demand by Lessor provide Lessor with a replacement Letter of Credit issued or confirmed by a first class international bank in New York or London having at least the Letter of Credit Bank Minimum Rating and otherwise meeting the requirements of this Lease Agreement. | ||
(3) | Lessor shall be entitled to make multiple demands under the Letter of Credit following the occurrence of an Event of Default. If for any reason Lessor is paid under the Letter of Credit, then (a) Lessor may at any time as an agreed remedy, apply or retain all or any portion of the amounts so paid in full or partial payment for amounts constituting or corresponding to the Secured Obligations and/or may retain all or any portion of the amounts so paid as security for the performance of the Secured Obligations, and any amounts so retained shall be treated as a Security Deposit hereunder, and (b) Lessee shall within 10 days cause an additional Letter of Credit to be issued, or shall pay Lessor such amount in cash, so that the Lessor shall at all times have the benefit of cash and/or a Letter of Credit for the full Security Deposit which would otherwise be required under Section 4.1. | ||
(4) | Unless the Letter of Credit is fully drawn, Lessor shall return the Letter of Credit to Lessee (a) not later than five Business Days after the date upon which the Aircraft is returned to Lessor in accordance with this Lease Agreement and all of the Secured Obligations which are then due and payable have been satisfied in full (and shall send Lessee a confirmation of cancellation of the Letter of Credit on the date upon which the Aircraft is returned to Lessor in accordance with this Lease Agreement and all of the Secured Obligations which are then due and payable have been satisfied in full), (b) as provided in Section 10.3, upon payment in full of all amounts due and payable as a result of an Event of Loss or (c) upon replacement with a substitute letter of credit as provided in Section 4.4(2). |
4.5 | Substitution of Security Deposit for Letter of Credit | |
From time to time during the Lease Term, so long as no Payment/Bankruptcy Default is then continuing, if Lessor is holding a Letter of Credit provided pursuant to Section 4.4, Lessee shall have the option to substitute for the Letter of Credit an amount of Dollars equal to the stated |
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amount of the Letter of Credit provided that (1) under the Laws of Lessee Jurisdiction (including any insolvency laws) neither Lessee nor any representative (howsoever denominated) for Lessee or its creditors may reclaim, revoke or otherwise clawback such payment of the Security Deposit (under circumstances where the proceeds of a letter of credit could not have been so reclaimed, revoked or otherwise clawed back) in the event that Lessee is involved in any of the proceedings listed in Sections 12.3 and 12.4 or otherwise and (2) Lessee has provided Lessor with a recent legal opinion from Lessee Jurisdiction legal counsel reasonably satisfactory to Lessor stating that Lessors rights are not materially prejudiced by such substitution and otherwise in form and substance reasonably satisfactory to Lessor. Unless the Letter of Credit is fully drawn, upon valid substitution by Lessee of a Security Deposit for the Letter of Credit in accordance with the provisions of this Section 4.5, Lessor shall promptly (and in any event within five Business Days) return to Lessee the Letter of Credit. | ||
4.6 | Limitation on Substitution | |
Notwithstanding any other provision of this Section 4, if Lessee exercises its substitution rights under Section 4.4 or 4.5, then Lessee may not exercise its substitution rights under Section 4.5 or 4.4, respectively, for at least 12 months. | ||
5. | REPRESENTATIONS AND WARRANTIES | |
A DISCLAIMER BY LESSOR IS CONTAINED IN PART II OF SCHEDULE 3. LESSEE CONFIRMS THAT IT HAS CAREFULLY REVIEWED SUCH DISCLAIMER AND THAT LESSEE ACCEPTS AND AGREES TO SUCH DISCLAIMER. | ||
5.1 | Lessors Representations and Warranties | |
Lessor hereby represents and warrants to Lessee that: |
(1) | Lessor (a) is a national banking association duly organized under the Laws of the Lessor Jurisdiction and (b) has the corporate power and authority to own its assets wherever located or used and to carry on its business as it is now being conducted and to enter into and perform its obligations under each Operative Document to which it is a party; the execution and delivery by Lessor of the Operative Documents to which it is a party, and the performance of its obligations thereunder, have been (as and when delivered by Lessor) duly authorized by all necessary corporate action on its part. Such Operative Documents each have been duly executed and delivered by it and each constitutes legal, valid and binding obligations, enforceable against Lessor in accordance with its terms. | ||
(2) | Lessor holds all authorizations necessary to permit its execution and delivery of each Operative Document to which it is a party and the performance of its obligations thereunder. | ||
(3) | Neither the execution and delivery of any Operative Document by Lessor, nor the performance by Lessor of its obligations thereunder, contravenes any of the provisions of its constitutional documents or any Law applicable to it or any of its assets or conflicts with or results in a default under any document which is binding on Lessor or any of its assets. |
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(4) | Lessor is subject to civil and commercial Law with respect to its obligations under each Operative Document to which it is a party and neither it nor any of its assets is entitled to any right of immunity and the entry into and performance of each such Operative Document constitute its private and commercial acts. | ||
(5) | The obligations of Lessor under the Operative Documents to which it is party rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessor, with the exception of such obligations as are mandatorily preferred by Law and not by virtue of any contract. | ||
(6) | There are no pending or, to Lessors knowledge, threatened actions or proceedings before any court, arbitration or administrative agency in respect of this Lease Agreement or any other Operative Document or the Aircraft or the performance by Lessor of its obligations hereunder or under any other Operative Document to which it is a party. |
The representations and warranties above will survive execution of this Lease Agreement and those contained in clauses (1) through (5) of this Section 5.1 are continuing representations and warranties and shall be deemed made and given on and as of the date hereof and each Rent Payment Date. | ||
5.2 | Lessees Representations and Warranties | |
Lessee hereby represents and warrants to Lessor that: |
(1) | Lessee (a) is a private limited liability company duly organized under the Laws of the Lessee Jurisdiction and (b) has the corporate power and authority to own its assets wherever located or used and to carry on its business as it is now being conducted and to enter into and perform its obligations under each Operative Document to which it is a party; the execution and delivery by Lessee of the Operative Documents to which it is a party, and the performance of its obligations thereunder, have been (as and when delivered by Lessee) duly authorized by all necessary corporate action on its part. Such Operative Documents each have been duly executed and delivered by it and each constitutes legal, valid and binding obligations, enforceable against it in accordance with its terms. | ||
(2) | Lessee will on the Delivery Date and throughout the Lease Term hold all Authorizations necessary to (a) permit it to engage in air transport and to carry on passenger and cargo service in each case as presently conducted, (b) permit its execution and delivery of each Operative Document to which it is a party and the performance of its obligations thereunder and (c) permit it to operate the Aircraft in compliance with all Laws applicable to Lessee. | ||
(3) | Lessee is in compliance with all Laws applicable to Lessee, including in respect of aircraft maintenance, training and operation and neither the execution and delivery of any Operative Document by Lessee, nor the performance by Lessee of its obligations thereunder, contravenes any of the provisions of its constitutional documents or any Law applicable to it or any of its assets or conflicts with or results in a default under any document which is binding on Lessee or any of its assets. |
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(4) | Lessee is subject to civil and commercial Law with respect to its obligations under each Operative Document to which it is a party and neither it nor any of its assets is entitled to any right of immunity and the entry into and performance of each such Operative Document constitute its private and commercial acts. | ||
(5) | The obligations of Lessee under the Operative Documents to which it is party rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee, with the exception of such obligations as are mandatorily preferred by Law and not by virtue of any contract. | ||
(6) | Except for the registrations, recordations and filings described in Section 7, each of which will be duly made and effected by Lessee as and when required, no further action, including the registration, recordation or filing of any instrument or document, is necessary under the Laws of the Lessee Jurisdiction, the State of Registration or any jurisdiction in which the Aircraft shall be operated (a) in order for this Lease Agreement to constitute a valid and enforceable lease of record relating to the Aircraft, (b) to authorize or permit Lessee to perform its obligations under each Operative Document to which it is a party, (c) to fully protect, establish, perfect and preserve Owners and Lessors and Security Trustees rights and interests in the Aircraft and the Operative Documents as against Lessee and otherwise or (d) to make each Operative Document admissible in evidence in the Lessee Jurisdiction or the State of Registration. | ||
(7) | There are no pending or, to Lessees knowledge, threatened actions or proceedings before any court, arbitration or administrative agency (a) in respect of this Lease Agreement or any other Operative Document or the Aircraft or the performance by Lessee of its obligations hereunder or under any other Operative Document to which it is a party or (b) which might, if adversely determined, have a Material Adverse Effect. | ||
(8) | Each Operative Document and the financial and other information furnished by Lessee in connection with this Lease Agreement or any other Operative Document do not contain any untrue statement or omit to state facts, the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading in any material respect, nor omit to disclose any material matter to Lessor, and all expressions of expectation, impression, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry by Lessee. |
The representations and warranties above will survive execution of this Lease Agreement and those contained in clauses (1) through (5) of this Section 5.2 are continuing representations and warranties and shall be deemed made and given on and as of the date hereof and each Rent Payment Date. | ||
6. | GENERAL COVENANTS | |
6.1 | Lessors Covenants | |
Lessor covenants and agrees with Lessee that during the Lease Term: |
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6.1.1 | Quiet Enjoyment | |
So long as no Event of Default shall have occurred and be continuing, none of Owner, Lessor or any Person validly claiming by or through Owner or Lessor shall violate Lessees quiet enjoyment of the use, operation and possession of the Aircraft and rights thereto under this Lease Agreement. | ||
6.1.2 | No Claims by Lessor | |
For the benefit of each lessor of an airframe or engine leased to Lessee and each holder of a security interest in an airframe or engine owned by Lessee under a security agreement, neither Lessor nor Owner shall acquire or claim, as against such lessor or security interest holder, any right, title or interest in any engine covered by any such lease or security agreement as a consequence of such engine being attached to the Airframe. | ||
6.2 | Lessees Covenants | |
Lessee covenants and agrees with Lessor that during the Lease Term: | ||
6.2.1 | Reporting Requirements | |
Lessee shall furnish to Lessor: |
(1) | On the 10th day of each calendar month during the Lease Term, a completed and duly executed Aircraft Status Report in respect of the previous month and substantially in the form of Exhibit D (or such other form as Lessor may reasonably require). | ||
(2) | Reasonable prior notice of and an ability to participate in any roadshow (howsoever denominated) given by Lessee for the purpose of informing creditors of the business and properties, operations and or condition (financial or otherwise) of Lessee. | ||
(3) | Within 180 days after the close of each financial year of Lessee, copies of audited consolidated and consolidating financial statements (including a balance sheet and a profit and loss statement) of Lessee prepared in South African Rand in accordance with Applicable Accounting Principles, all in reasonable detail and setting forth in comparative form the respective figures as of the end of and for the preceding financial year as certified by Lessees independent certified (or equivalent) accountants, including their certificate and accompanying comments; provided Lessee shall be deemed to have satisfied the requirements set forth in this Section 6.2.1(3) so long as such documents are accessible to Lessor from Lessees website. If any such materials are not in English, a complete and accurate translation of such materials will be provided by Lessee together with such materials. | ||
(4) | [Intentionally Omitted] | ||
(5) | Within a reasonable period of time (but in any event within 15 days of request), such other information respecting the business and properties, operations or condition (financial or otherwise) of Lessee, or the location, condition, use and operation of the Aircraft, as Owner or Lessor may from time to time reasonably request, including copies of all regular, periodic and special reports, that Lessee makes available for review by the |
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public or other creditors and including copies of all statements of account of any Government Entity or other Person in respect of any Flight Charges or CO2 emissions charges for which Lessee may be liable. In addition, Lessee shall, within a reasonable period of time (but in any event within 15 days of request), on request furnish or cause to be furnished to Lessor such information as may be required to enable an Indemnified Party to file on a timely basis any reports, returns or filings which it may provide to any Government Entity because of its rights, title and interests in and to the Aircraft or under any Operative Document. | |||
(6) | Advance notice of any off-aircraft maintenance on either Engine, with Lessee to provide such notice, to the extent reasonably practical, at least 30 days prior to removal. |
6.2.2 | Liens | |
Lessee shall not directly or indirectly create, incur, assume or suffer to exist, or agree to create or assume, any Lien on or with respect to the Aircraft, any Engine or any Part or any Operative Document, or in any right, title or interest in any of the foregoing, except (a) the rights of Lessor, Owner and Lessee provided in the Operative Documents, (b) Lessor Liens, including Liens incurred in connection with any back-leverage or similar transaction permitted under Section 14.1.1(2) or any Financing Security Documents, (c) the rights of others under agreements or arrangements to the extent permitted by the terms of Sections 6.1.2 and 8 and Section 1.3.6 of Schedule 2, (d) Liens for Taxes of Lessee (or any Permitted Sublessee) arising in the ordinary course of business either not yet overdue or being contested in good faith by appropriate proceedings, (e) materialmens, mechanics, workmens, repairmens, employees or other like Liens arising by operation of law in the ordinary course of Lessees (or, if a Permitted Sublease is then in effect, Permitted Sublessees) business, securing obligations that are not yet overdue, (f) Liens arising out of any judgment or award against Lessee (or any Permitted Sublessee), unless the judgment shall remain undischarged for a period of 10 days or more, during which time execution of such judgment or judgments shall not be effectively stayed nor adequate bonding fully covering such judgment or judgments exist, (g) any other Lien with respect to which Lessee (or any Permitted Sublessee) shall have provided a bond, cash collateral or other security adequate in the reasonable opinion of Lessor, and (h) Liens approved in writing by Lessor, so long as in the case of clauses (d), (e) and (f), (y) adequate reserves have been set aside by Lessee for payment of such obligations and (z) the continued existence of any such Lien does not give rise to any likelihood of the sale or forfeiture of any portion of the Aircraft or any interest therein or of any criminal or material civil liability of any Indemnified Party or other liens. Lessee will promptly, at its own expense, take (or cause to be taken) such actions as may be necessary to discharge duly any such Lien not excepted above if the same shall arise at any time during the Lease Term or in connection with any act or omission by Lessee (the Liens described in clauses (a) through (h), collectively, Permitted Liens ). Without limiting the foregoing or any other provision of any Operative Document, Lessee will not do or permit to be done anything which may expose the Aircraft or any part thereof to penalty, forfeiture, seizure, arrest, impoundment, detention, confiscation, taking in execution, attachment, appropriation or destruction, or which may jeopardize the rights of Owner, Lessor or any Financing Party in the Aircraft or the validity, enforceability or priority of the Financing Security Documents or any security expressed to be created thereunder or which may expose any Indemnified Party to any criminal or material civil liability, nor abandon the Aircraft or any material part of the Aircraft. |
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6.2.3 | Corporate Existence; Authorizations | |
Lessee shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and to obtain and hold all Authorizations necessary to (1) permit it to engage in air transport and to carry on passenger and cargo service in each case as presently conducted, (2) permit its execution and delivery of each Operative Document to which it is a party and the performance of its obligations thereunder and (3) permit it to operate the Aircraft in compliance with all Laws applicable to Lessee. | ||
6.2.4 | Merger of Lessee |
(1) | Lessee shall not reorganize or consolidate with or merge into any other Person, or sell, lease, exchange, transfer or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all its property, assets or revenues, whether now owned or hereafter acquired, or any substantial portion thereof, or liquidate or dissolve, unless Lessee is the surviving entity of a reorganization, consolidation or merger or (a) the entity formed by such reorganization, consolidation or merger or the Person that so acquires such assets by purchase, lease, exchange, transfer or other disposition (i) is a private limited liability company or a corporation duly organized and validly existing under the laws of the Lessee Jurisdiction or a political subdivision thereof and (ii) is permitted it to engage in air transport and to carry on passenger and cargo service in each case substantially as presently conducted, (b) immediately after giving effect to such reorganization, consolidation, merger or disposition, no Event of Default shall have occurred and be continuing, (c) Lessee shall have delivered to the Lessor a compliance certificate from an authorized officer of Lessee stating that such reorganization, consolidation, merger or disposition complies with this Section 6.2.4 and that all conditions precedent provided for herein relating to such transaction have been complied with or satisfied, (d) such entity executes and delivers to Lessor a duly authorized, legal, valid, binding and enforceable agreement, reasonably satisfactory in form and substance to Lessor, containing an effective assumption by such Person of the due and punctual performance and observance of each covenant, agreement and condition in the Operative Documents to be performed or observed by Lessee; (e) if the Aircraft is, at the time, registered with the Aviation Authority, such entity makes such filings and recordings with the Aviation Authority as shall be necessary to evidence such reorganization, consolidation, merger or disposition or, if the Aircraft is, at the time, not registered with the Aviation Authority, such person makes such filings and recordings with the Aviation Authority as shall be necessary to evidence such reorganization, consolidation, merger or disposition; and (f) such entity makes such filings with the international registry (as defined in Schedule 9) as shall be necessary to evidence such reorganization, consolidation, merger or disposition. | ||
(2) | Upon any such consolidation or merger of Lessee with or into, or the conveyance, transfer or lease by Lessee of all or substantially all of its assets to, any Person in accordance with this Section 6.2.4, unless Lessee is the surviving entity of a consolidation or merger, such Person will succeed to, and be substituted for, and may exercise every right and power of, Lessee under the Operative Documents to which Lessee is a party with the same effect as if such person had been named as Lessee therein. |
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7. | TITLE; REGISTRATION AND FILINGS; ETC. | |
7.1 | Title to the Aircraft | |
Lessee acknowledges that the Operative Documents constitute for all purposes, including tax purposes, an agreement by the Lessor to lease the Aircraft to Lessee and, accordingly, Lessee shall have no right, title or interest in the Aircraft except the right to possess and use the Aircraft during the Lease Term as provided herein. | ||
Lessee will not at any time represent or hold out Lessor, Owner or any Financing Party as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation of the Aircraft or pledge the credit of Lessor, Owner or any Financing Party or, except as expressly provided herein, attempt, or hold itself out as having any power, to sell, charge, lease or otherwise dispose of or encumber the Aircraft, the Engines or any Part and shall at all times make clear that title to the Aircraft is held by Owner. | ||
7.2 | Registration, Recordation, Filings, Etc. | |
Lessee shall procure that on the Delivery Date the Aircraft is duly registered with the Aviation Authority in the name of Lessee as operator (registered owner in the nomenclature of the Aviation Authority) and, to the extent permitted by applicable Law, with the interests of Owner and Lessor and (if requested by Lessor) one or more of the Financing Parties noted on the register. During the Lease Term, Lessee shall take, or cause to be taken, such action with respect to the registration, recording, filing, reregistering, rerecording and refiling of any Operative Document, any Financing Security Document or other documents or instruments and take such other actions (including amending the Operative Documents and/or entering into new agreements and other documents reflecting the commercial agreements of Lessor and Lessee under the Operative Documents), in each case as necessary or advisable under the Laws of the State of Registration, the Lessee Jurisdiction or any jurisdiction in which the Aircraft will be operated or under any international treaty, convention or protocol (including, if applicable, the Cape Town Agreements), fully to protect, establish, perfect and preserve Owners, Lessors and each Financing Partys rights and interests in the Aircraft, the Operative Documents and the Financing Security Documents as against Lessee and any other Person. Lessee shall not take any action or omit to take any action that may invalidate any such registration, recording, filing, reregistering, rerecording and refiling or otherwise prejudice Owners, Lessors or any Financing Partys rights and interests in the Aircraft, the Operative Documents or the Financing Security Documents as against Lessee and any other Person. Lessee shall provide Lessor with evidence of such registration, recording, filing, reregistering, rerecording and refiling as soon as it becomes available. Lessee shall ensure that the original certificate of registration for the Aircraft is kept in the Aircraft or, if Lessor permits it to be removed, at a location designated by Lessor. | ||
7.3 | Cape Town Convention | |
Lessor and Lessee agree to comply with the requirements of Schedule 9 in respect of the delivery of the Aircraft hereunder and during the Lease Term. |
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8. | POSSESSION | |
8.1 | No Transfer of Possession | |
Lessee shall not, without the prior written consent of Lessor, for the duration of the Lease Term in any manner deliver, transfer or relinquish possession of the Aircraft, Airframe or an Engine or any Part, or install an Engine, or permit any such Engine to be installed, on an airframe other than the Airframe covered hereby, provided that so long as (1) except in the case of testing, service, repair, maintenance or overhaul work under Section 8.1.2, no Event of Default shall have occurred and be continuing and (2) the action to be taken shall not adversely affect, or be of a nature that could reasonably be expected to adversely affect, Owners, Lessors or any Financing Partys right, title and interest in and to the Aircraft or Airframe, or any Engine or Part, or under any Operative Document, then: | ||
8.1.1 | Wet Lease ; Subleasing |
(1) | Lessee may (or may permit any Permitted Sublessee to) operate the Aircraft for the benefit of a third party under a wet lease arrangement pursuant to which the Aircraft shall at all times (a) remain in the sole and direct possession, dominion and control of Lessee, (b) maintain its registration in the State of Registration without any amendment or modification as a consequence of such arrangement, (c) be operated solely and directly by regular employees of Lessee, and (d) be maintained, insured and otherwise operated by Lessee in accordance with all Laws applicable to Lessee and the requirements of each Operative Document (and pursuant to which no possessory rights whatsoever are granted to the wet lessee) (a Wet Lease). | ||
(2) | Lessee may sublease the Aircraft to a Permitted Air Carrier for a period not extending beyond the end of the Lease Term and in any event not exceeding three years (not counting renewals), provided that: |
(a) | Such Permitted Air Carrier (i) expressly acknowledges directly to Lessor, Owner and the Financing Parties their respective interest in the Aircraft and under the Operative Documents, (ii) covenants directly to Lessor, Owner and the Financing Parties not to do anything which would prejudice their respective interests, rights and benefits in the Aircraft or the Insurances or under the Operative Documents and (iii) agrees directly with Lessor that such Permitted Air Carriers rights under such lease shall be subject and subordinate to the rights of Lessor under this Agreement and that the leasing of the Aircraft to such Permitted Air Carrier and the right of the Permitted Air Carrier to the use, possession and enjoyment of the Aircraft shall terminate simultaneously with the giving by Lessor of any notice of termination pursuant to Section 13 or any other termination of the Lease Term. | ||
(b) | The relevant sublease agreement shall contain such terms and provisions as shall ensure that the Permitted Air Carrier thereunder, if complying with the said terms and conditions, will comply with, and will not do anything which would contravene, the provisions of the Operative Documents, and shall not permit any further subleasing without the prior consent of Lessor, which consent may be withheld in Lessors sole discretion. |
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(c) | At the request of Lessor, Lessee shall assign the sublease agreement and any related documents to Lessor as security for Lessees obligations under the Operative Documents, such assignment to be in form and substance reasonably satisfactory to Lessor and to be consented to by the Permitted Air Carrier (for the avoidance of doubt, such assignment shall provide that Lessee shall be entitled to receive the rent payable under the assigned sublease agreement until such time as an Event of Default shall have occurred). | ||
(d) | Lessee shall provide to Lessor evidence reasonably satisfactory to Lessor confirming that Insurances are and will remain in full force and effect in accordance with the terms of Section 11 during the term of the sublease or, if the Permitted Air Carrier is to maintain insurance coverage during the term of such sublease, Lessee or such Permitted Air Carrier shall have furnished to Lessor all such documents, evidence and information relating to insurance coverage as are reasonably required to satisfy Lessor that the proposed insurance coverage is on terms equivalent to the required Insurances (including, without limitation, the currencies of payment required under the Insurances) and is in all respects reasonably satisfactory. | ||
(e) | Lessee shall obtain, at Lessees cost, a legal opinion from counsel reasonably acceptable to Lessor, addressed to Lessor, Owner and the Financing Parties and which is satisfactory in form and substance to Lessor, acting reasonably, confirming (i) that the priority, validity and enforceability of any existing ownership, leasehold, security and/or other interest held by Lessor, Owner or the Financing Parties on or in respect of the Aircraft under the Financing Security Documents will not be adversely affected by the relevant subleasing, (ii) if the Aircraft is to be registered on a register other than that of the initial State of Registration, that all necessary steps have been taken to ensure the continued priority, validity and enforceability of each such ownership, leasehold, security and/or other interest notwithstanding the transfer of the registration of the Aircraft to a register other than that of the initial State of Registration, (iii) the authority of the Permitted Air Carrier to enter the agreements described in this Section 8.1.1(2), the due execution and delivery of such agreements by the Permitted Air Carrier, the enforceability of such agreements and the priority and perfection of the sublease assignment described in Section 8.1.1(2)(c), and (iv) such other matters as may be requested by Lessor, acting reasonably. | ||
(f) | Notwithstanding any other provision of this Section 8.1.1(2), no sublease permitted under this Section 8.1.1(2) shall involve any transfer of title to or ownership interest in the Aircraft or any Engine or Part thereof. | ||
(g) | Lessee shall give Lessor at least 30 days prior written notice of any agreement to enter into the proposed subleasing, specifying the name of the proposed Permitted Air Carrier and the term of the proposed sublease and in the case of a sublease pursuant to which the Aircraft is to be registered outside the initial State of Registration, the name of the proposed State of Registration, provided that the State of Registration may be changed only if Lessor is satisfied, acting reasonably, that the interests of Lessor and Owner and of the Financing Parties shall not be adversely affected by such change. |
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(h) | Lessee shall give to Lessor, no later than 15 days prior to the proposed date of execution of any sublease agreement, a copy of the agreed form of such sublease agreement and Lessee shall deliver to Lessor no later than seven days after the date of execution of any sublease agreement a copy certified by an officer of Lessee of such sublease agreement. | ||
(i) | Lessee will be responsible for and shall pay to Lessor on demand all reasonable costs and expenses (including reasonable attorneys fees and expenses and out-of-pocket expenses incurred in connection with any registrations required under Section 7.3.5 and other costs) payable or incurred by Lessor in connection with the subleasing and any reregistration (including any termination of such subleasing and any related reregistration) of the Aircraft. |
8.1.2 | Maintenance, Etc. | |
Lessee may (or may permit any Permitted Sublessee to) deliver or cause to be delivered possession of the Airframe or an Engine or any Part to the manufacturer thereof or to any Agreed Maintenance Performer for testing, service, repair, maintenance or overhaul work or for alterations, modifications or additions to the extent required or permitted by the terms hereof. | ||
8.1.3 | Installation of Engines on Other Airframes | |
Lessee may (or may permit any Permitted Sublessee to) install an Engine on any Airframe Manufacturer model A330-200 airframe (other than the Airframe) owned, leased or hire-purchased by Lessee if (1) such airframe is free and clear of all Liens except (A) Permitted Liens and those Liens which apply only to the engines (other than Engines and Parts installed on the Engines), appliances, parts, instruments, appurtenances, accessories, furnishings and other equipment installed on such airframe (but not the airframe as an entirety), and (B) the rights of the parties to any security agreement, mortgage, lease or hire-purchase agreement covering such airframe, (2) such security agreement, mortgage, lease or hire-purchase agreement effectively provides that such Engine shall not become subject to the interest of the Lien, ownership or leasehold interest of any party to such security agreement, mortgage, lease or hire-purchase agreement, notwithstanding the installation thereof on such airframe at any time while such Engine is owned by Owner, (3) neither (a) the provisions of any applicable Law or (b) the terms of any lease or other agreement or security interests to which such aircraft or engine is subject prohibit such installation or will have the effect at any time of divesting, prejudicing or impairing the title and interests of Owner, Lessor or the Financing Parties in respect of that Engine or under any Operative Document or Financing Security Document, and (4) the interests of the Indemnified Parties are protected in the same manner as if the Engine were installed upon the Airframe and (5) such Engine is not operated above 71,100 pounds thrust. | ||
8.2 | General | |
The rights of any Person (other than a mechanic or materialman to the extent of any mechanics or materialmens Lien) who receives possession of the Aircraft, Airframe, any Engine or any Part on or after the Delivery Date shall be subject and subordinate to all the terms of each Operative Document, including the covenants contained in this Section 8 and in Section 11 and the rights of Lessor to repossession pursuant to Section 13 and to avoid any transfer of possession by Lessee. No relinquishment or transfer of possession of the Aircraft, Airframe, any Engine or any Part on or after the Delivery Date shall in any way release, discharge or otherwise limit or diminish any |
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of Lessees obligations to Lessor (it being agreed that notwithstanding any such transfer or relinquishment of possession, Lessee shall continue to be primarily liable and responsible for performance of all of its obligations under each Operative Document), or constitute a waiver of Lessors rights or remedies hereunder or affect the registration of the Aircraft or the interests of the Financing Parties in the Aircraft or under the Operative Documents or Financing Security Documents. | ||
Lessor acknowledges that any consolidation or merger of Lessee or conveyance, transfer or lease of all or substantially all of Lessees assets otherwise permitted by the Operative Documents shall not be prohibited by this Section 8. In addition, Lessor acknowledges that the restrictions on assignment set forth in Section 14 shall not prohibit the exercise by Lessee of its rights under this Section 8. | ||
9. | INDEMNITIES | |
9.1 | General Indemnity | |
Subject only to the exceptions set forth in Section 9.2, Lessee hereby assumes liability for and hereby agrees on demand to indemnify and keep indemnified each Indemnified Party against, and agrees to protect, save and keep harmless each Indemnified Party from (whether or not the transactions contemplated in the Operative Documents are consummated), any and all Expenses from time to time imposed on, incurred by or asserted against any Indemnified Party in any way relating to or arising out of: |
(1) | The Aircraft, the Airframe, any Engine or engine installed on the Aircraft, any Part, any Aircraft Documentation or any other thing delivered under any Operative Document; | ||
(2) | The acceptance, delivery, lease, sublease, registration, deregistration, ownership, re-registration, possession, repossession, presence, operation, location, condition, use or non-use, control, management, airworthiness, overhaul, replacement, existence, insurance, storage, preparation, installation, testing, manufacture, design, modification, alteration, maintenance, repair, re-lease or sale or any other transfer or disposition (in the case of each such re-lease, sale or other transfer or disposition, after the occurrence of an Event of Default), return, transfer, exportation, importation, abandonment or other disposition of, or the imposition of any Lien (or the incurrence of any liability to refund or pay over any amount as the result of any such Lien) on, the Aircraft, the Airframe, any Engine or engine, any Part or any other thing delivered under any Operative Document (whether on the ground or in the air) or any interest therein regardless of when the same arises or whether it arises out of or is attributable to any act or omission, neglect (actual, implied or imputed) or otherwise, of any Indemnified Party; and | ||
(3) | Any Operative Document, any of the transactions contemplated thereby (other than pursuant to any financing arrangements) or the enforcement of any of the terms thereof, including any breach or noncompliance by Lessee of any provision of any Operative Document or the enforcement of this Section 9, including any Expenses incurred, assumed or suffered by Lessor as a consequence of Lessees failure to accept the Aircraft in accordance with the Operative Documents. |
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9.2 | Exceptions to General Indemnity |
The indemnity provided for in Section 9.1 will not extend to any of the following Expenses of a particular Indemnified Party (but without limiting any rights of Lessor under Section 13): |
(1) | Expenses to the extent caused by the gross negligence or willful misconduct of any Indemnified Party (other than willful misconduct imputed to such person by reason of its interest in the Aircraft or any Operative Document); | ||
(2) | Taxes, it being agreed that Sections 9.3 and 9.6 and Schedule 6 set forth the agreements of Lessor and Lessee in relation to Taxes; | ||
(3) | Expenses to the extent attributable to acts of an Indemnified Party or the Follow-On Operator, or events which occur after this Lease Agreement has terminated or expired and Lessee has returned the Aircraft to Lessor in the condition and manner required by this Lease Agreement (except in the case of an Event of Loss, in which case no return of the Aircraft shall be required), and which are not fairly attributable to acts, events or circumstances occurring prior to such termination or expiration and, if applicable, such return; | ||
(4) | Expenses that Lessor has expressly agreed to pay under this Lease Agreement; | ||
(5) | Expenses attributable to Lessor Liens; | ||
(6) | Expenses to the extent caused by a breach by such Indemnified Party of any covenant, or by the inaccuracy or falsity of a representation or warranty made by such Indemnified Party, in this Lease Agreement or the documents and agreements delivered by such party to Lessee; | ||
(7) | Expenses constituting amounts payable under any documents related to the debt or equity financing or refinancing of the Aircraft for the payment of principal, interest, break funding, make-whole fees or other similar fees; | ||
(8) | Expenses constituting amounts payable to any Financing Party pursuant to any Financing Security Document (other than operational indemnities of the type and within the scope of operational indemnities contained in Section 9.1); | ||
(9) | Expenses associated with the financing or structuring of any entity directly or indirectly holding an interest in Lessor (other than operational indemnities of the type and within the scope of operational indemnities contained in Section 9.1); | ||
(10) | Expenses associated with claims attributable to the negotiation, execution and delivery of the Operative Documents; | ||
(11) | Expenses attributable to any Lien which an Indemnified Party is required to remove pursuant to the terms of the Operative Documents; | ||
(12) | Expenses that are internal or external costs related to the administration of normal course VAT compliance by Lessor or Owner in Lessee Jurisdiction (e.g., for services provided KPMG in connection with such VAT compliance); |
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(13) | Expenses to the extent attributable to events which occur prior to the Delivery Date and not attributable to any act or omission by Lessee in breach of the Operative Documents; and | ||
(14) | Expenses directly or indirectly attributable to satisfying the requirements of the Department of Trade and Industry of Lessee Jurisdiction under the National Industrial Participation Programme. |
9.3 | Taxes | |
Lessees tax indemnity and other related agreements are contained in Schedule 6, which schedule is hereby incorporated in this Section 9.3 by reference. |
9.4 | Currency Indemnity |
(1) | If any Indemnified Party or Tax Indemnitee receives an amount from Lessee in respect of Lessees liability under any Operative Document, or if such a liability is converted into a claim, proof, judgment or order, in a currency other than the currency (the contractual currency ) in which the amount is expressed to be payable under any Operative Document, and if the amount received by such Indemnified Party or Tax Indemnitee, when converted into the contractual currency (at the market rate at which such Indemnified Party or Tax Indemnitee is able on the relevant date to purchase the contractual currency in New York or, at such Indemnified Partys or Tax Indemnitees option, London with such other currency), is less than the amount owed by Lessee in the contractual currency, then Lessee shall on demand pay the amount of such deficit to such Indemnified Party or Tax Indemnitee, in the contractual currency, along with any costs or Taxes it shall have incurred or will incur in connection therewith. | ||
(2) | Lessee waives any right it may have in any jurisdiction to pay any amount under any Operative Document in a currency other than that in which it is expressed to be payable. |
9.5 | Scope, Survival, Etc. |
(1) | Lessee shall be obligated under this Section 9 and Schedule 6 as a primary obligor irrespective of whether an Indemnified Party or Tax Indemnitee shall also be indemnified, guaranteed or insured with respect to the same matter under any of the Operative Documents or otherwise by any other Person, and such Indemnified Party or Tax Indemnitee may proceed directly against Lessee under this Section 9 and/or Schedule 6 without first resorting to any such other rights of indemnification, guarantee or insurance and without declaring this Lease Agreement to be in default or taking other action under any Operative Document. | ||
(2) | All indemnities provided for in this Section 9 (except as provided in in Section 9.2(3)) and Schedule 6 (except as provided in Section 2(3) of Schedule 6) shall survive and remain in full force and effect, notwithstanding the expiration or termination of the Lease Term or of any Operative Documents (other than as provided in Section 2 of Part II of Schedule 3), the return of the Aircraft and the payment in full of all sums payable under the Operative Documents. |
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(3) | Lessee acknowledges that the Indemnified Parties and Tax Indemnitees, or any of them, may authorize Lessor, by notice in writing to Lessor and Lessee, to make claims and demands under any indemnity under any Operative Document on behalf of such Indemnified Parties and Tax Indemnitees, and Lessee shall be obligated to make all payments pursuant to any such indemnity to Lessor, to the extent claimed by Lessor on behalf of such Indemnified Parties and Tax Indemnitees (it being understood that Lessee is entitled to, and shall, conclusively rely upon the instructions of Lessor with respect to the payment of amounts owing to any Indemnified Party or Tax Indemnitee under the indemnities); provided that before any Indemnified Party or Tax Indemnitee authorizes Lessor to make such claims or demands, such indemnified person must agree in writing to be bound by Section 9.5 and 19.6 and Section 6 of Schedule 6. | ||
(4) | Each Indemnified Party and Tax Indemnitee will give prompt written notice to Lessee of any liability of which such party has knowledge for which Lessee is, or may be, liable under Section 9.1 or Schedule 6 provided that failure to give such notice will not prejudice or otherwise affect any of the rights of the Indemnified Parties or Tax Indemnitees under Section 9.1 or Schedule 6 except to the extent Lessees rights to contest are prejudiced or any penalties or interest is incurred as a result of such failure. | ||
(5) | Lessee shall provide the relevant Indemnified Party or Tax Indemnitee with such information not within the control of such Person, as is in Lessees control or is reasonably available to Lessee, which such Person may reasonably request and Lessee shall otherwise cooperate with and consult with such Person so as to enable such Person to defend any action, suit or proceeding brought against such Person for which Lessee is responsible under this Section 9 or Schedule 6. | ||
(6) | Provided no Default shall have occurred and be continuing, Lessee shall, following such cooperation and consultation, have the right to assume and conduct, at its own expense, promptly and diligently, the defense of the relevant Indemnified Party with respect to a claim under Section 9.1, provided that the following shall have occurred (each to the satisfaction of Lessor): |
(a) | Lessee shall have consulted, and shall continue to consult, with Lessor as to the appropriate defense and conduct thereof and shall only instruct and retain counsel reasonably acceptable to Lessor; | ||
(b) | Lessee shall have confirmed in writing that any such amounts payable in relation to such claim, in the event Lessees defense is unsuccessful, are covered by the terms of this Section 9; | ||
(c) | such defense shall not adversely affect the ability of the Insured Parties to claim under any Insurances; | ||
(d) | Lessor shall be entitled, upon consultation with and prior written notice to Lessee, to terminate Lessees participation in the defense of any claim where an act, delay or omission of Lessee, or the conduct of such defense by Lessee, indicates (in any case, in the reasonable view of Lessor) that the interests of any Indemnified Party may be materially adversely prejudiced by Lessees continued defense of such claim; |
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(e) | such defense or any related proceedings do not involve any material risk of the sale, forfeiture or seizure of, or the creation of a material Lien on, the Aircraft; and | ||
(f) | Lessee shall not enter into a settlement or other compromise on Lessors behalf with respect to any Expense without the relevant Indemnified Partys prior written consent. |
The relevant Indemnified Party may participate at its own expense and with its own counsel in any judicial proceeding controlled by Lessee pursuant to this Section 9.5(6). |
9.6 | Indemnities Payable on an After-Tax Basis | |
Lessee agrees that, with respect to any payment or indemnity to an Indemnified Party or Tax Indemnitee under this Section 9 or Schedule 6, Lessees payment or indemnity obligations shall be increased by an amount, if any, which after taking into account any Tax benefits generated by such payment or liability and actually utilized by such Tax Indemnitee currently in reducing its liability for Taxes shall be necessary to hold such Indemnified Party or Tax Indemnitee harmless from all Taxes required to be paid by such Indemnified Party or Tax Indemnitee in respect of the receipt or accrual of such payment or indemnity (including any payment by such Indemnified Party or Tax Indemnitee of any Taxes in respect to any indemnity payments received or receivable (including any indemnity payments received by a Person other than an Indemnified Party but treated as taxable in the hands of such Indemnified Party) under this Section 9 or Schedule 6). |
10. | RISK OF LOSS, DESTRUCTION AND REQUISITION, ETC. |
10.1 | Risk of Loss | |
Throughout the Lease Term and until the Return, Lessee shall bear all risk of loss, damage, theft or destruction of, or any other Event of Loss with respect to, the Aircraft, the Airframe, each Engine and each Part and the following provision of this Section 10 shall apply during such period (but not before). |
10.2 | Notice of Damage or Event of Loss |
(1) | Lessee shall notify (with then available details) Lessor promptly (and in any case within five Business Days) of any loss or damage (whether or not constituting an Event of Loss) of or to the Aircraft, the Airframe or any Engine for which the cost of correction or repairs may exceed the Damage Notice Threshold and, if not constituting an Event of Loss, shall provide Lessor promptly with a proposal for carrying out the correction or repair, which repair shall minimize any diminution in marketability or residual value of the Aircraft resulting from such loss or damage. Lessee and Lessor agree that if any dispute arises about the scope or nature of such correction or repair, they shall consult with Airframe Manufacturer, Engine Manufacturer or other relevant manufacturer, as appropriate, and Lessee and Lessor agree to accept as conclusive, and be bound by, such manufacturers directions or recommendations as to the manner in which to carry out such correction or repair. |
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(2) | Upon the occurrence of (a) an event or circumstance which may (given the passage of time or otherwise) result in an Event of Loss of the Aircraft or any Engine, Lessee shall promptly notify Lessor of such event or circumstance and of the steps being taken (or proposed to be taken) with respect thereto and (b) an Event of Loss with respect to the Aircraft or any Engine, Lessee shall forthwith (and in any case within two Business Days after such occurrence) give Lessor written notice of such Event of Loss and Lessee shall take all reasonable steps in order to preserve the Aircraft or Engine, as applicable, including the Aircraft Documentation, for purposes of investigation. |
10.3 | Event of Loss With Respect to the Aircraft |
(1) | By the earlier of (a) 180 days after the occurrence of an Event of Loss with respect to the Aircraft or (b) the date on which the applicable insurance or requisition proceeds are paid, Lessee shall pay or cause to be paid to Lessor the Stipulated Loss Value after taking into account any amounts already paid against Lessees obligation to pay the Stipulated Loss Value, unless (i) an amount equal to the Stipulated Loss Value was actually received by Lessor from the insurers or, in the case of a requisition, from the relevant Government Entity and (ii) Lessor was able, under applicable Law, to apply such amount against Lessees obligation to pay the Stipulated Loss Value. | ||
(2) | Until the date on which the Stipulated Loss Value is paid in full, Lessee shall continue to pay all RentPeriodic as scheduled and shall continue to perform all of its other obligations under the Operative Documents, except to the extent rendered impossible by the occurrence of such Event of Loss or rendered, in the reasonable opinion of Lessor, unnecessary. If the Stipulated Loss Value is paid in full on a date other than a Rent Payment Date, Lessor shall, so long as all other Secured Obligations then due and owing have been paid in full, refund or cause to be refunded to Lessee any paid but unaccrued RentPeriodic. | ||
(3) | Upon receipt by Lessor of the full amount of the Stipulated Loss Value pursuant to this Section 10.3, and if all Secured Obligations then due and owing have been paid or performed, then Lessor shall, (a) upon the joint written request of Lessee and each relevant insurance underwriter, convey or cause to be conveyed to the Person designated in such request title to the Aircraft (including the Engines and all Parts) without recourse or warranty (except as to absence of all rights of Owner and Lessor and all Lessor Liens) and subject to the disclaimer set forth in Section 4 of Part II of Schedule 3 and (b) return to Lessee (i) the Security Deposit or Letter of Credit, as applicable, and any Letter of Credit provided in lieu of paying Reserves in respect of life-limited Parts for each Engine and (ii) an amount equal to the then notional account balance of the Reserves and (c) any insurance proceeds from the Insurances required under this Section 11 paid to Lessor in excess of the Stipulated Loss Value due under clause (1) of this Section 10.3. Upon request by Lessee and assuming no Payment/Bankruptcy Default has occurred and is continuing, Lessor and Lessee shall discuss using a netting mechanism in respect of the payment of the amounts due to Lessee under this clause (3) and the payment of the Stipulated Loss Value due to Lessor under clause (1) of this Section 10.3. |
10.4 | Event of Loss With Respect to an Engine | |
If an Event of Loss occurs with respect to an Engine, under circumstances not constituting an Event of Loss with respect to the Aircraft, then: |
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(1) | Lessee shall promptly and, in any event, within 18 months after the occurrence of such Event of Loss (or, if earlier, the date of expiration or termination of the Lease Term), convey or cause to be conveyed to Owner with full title guarantee, as replacement for the Engine with respect to which such Event of Loss occurred, title to a Replacement Engine, free and clear of all Liens (other than Permitted Liens), provided that if Lessee has not so conveyed or caused to be so conveyed to Owner a Replacement Engine with six months after the occurrence of such Event of Loss, then Lessee shall pay, or cause the relevant insurers to pay or provide a letter of credit (substantially in the form attached to this Lease Agreement, mutatis mutandis) for, the replacement value of the Engine to Lessor, which amount or letter of credit shall deemed a part of the Security Deposit and which amount or letter of credit shall be returned to Lessee once Lessee has so conveyed or caused to be so conveyed to Owner a Replacement Engine (or otherwise when the Security Deposit is required to be returned under the Lease), provided further that in the event that Lessee satisfies the preceding proviso, Lessor agrees that in the event Lessor receives any insurance proceeds with respect to such Engine Event of Loss, such proceeds shall be paid over to Lessee. | ||
(2) | Prior to or at the time of any conveyance of a Replacement Engine, Lessee shall comply with each of the following requirements: |
(a) | Furnish Owner with a full warranty bill of sale, in form and substance reasonably satisfactory to Owner, conveying legal and beneficial title to Owner of such Replacement Engine, free of Liens (other than Permitted Liens), execute a supplement subjecting such Replacement Engine to this Lease Agreement and furnish such evidence and opinions relating to the transfer of title to such Replacement Engine and the effectiveness of such supplement as Owner or Lessor shall request. | ||
(b) | File such instruments as are necessary or advisable in Owners or Lessors reasonable opinion to establish and protect the interests of Owner, Lessor and each Financing Party in any such Replacement Engine (whether under the Cape Town Agreements or otherwise). | ||
(c) | Assign to Owner the benefit of all manufacturers and vendors warranties with respect to such Replacement Engine, if any. |
(3) | Upon compliance by Lessee with the requirements of this Section 10.4, Lessor shall, upon the joint written request of Lessee and each insurer which contributed to the payment of any insurance proceeds with respect to the lost Engine, convey or cause to be conveyed to the Person designated in such request title to such Engine without recourse or warranty (except as to absence of all rights of Owner and Lessor and all Lessor Liens) and subject to the disclaimer set forth in Section 4 of Part II of Schedule 3, and such Engine shall thereupon cease to be an Engine leased hereunder and, for all purposes of the Operative Documents, the conveyed Replacement Engine shall be deemed part of the property leased hereunder, and shall be deemed an Engine. | ||
(4) | No Event of Loss with respect to an Engine shall result in any reduction in or abatement of Rent. |
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(5) | Forthwith upon title to a Replacement Engine passing to Owner pursuant to this Section 10.4, Lessor and Lessee shall reasonably determine whether the life-limited Part Reserves then held by Lessor (in cash or in the form of a letter of credit) for the Engine replaced are at an appropriate level (based primarily on Engine Manufacturers list price for such parts), and within 14 days of such agreement (a) where the Reserves are held in cash, Lessor shall refund to Lessee any agreed excess or Lessee shall pay Lessor any agreed deficiency and (b) where the Reserves are held in the form of a letter of credit, Lessor shall agree an adjustment to the stated amount of such Letter of credit and Lessee shall arrange for an amendment to such letter of credit to reflect such new stated amount. |
Other than as provided in this Section 10.4 and Section 1.5(7) of Schedule 2 and Section 1.1 of Part II of Schedule 4, Lessee shall not have the right to substitute any engine for an Engine. |
11. | INSURANCE |
11.1 | Scope of Insurances | |
At all times during the Lease Term, and until the Aircraft is returned to Lessor in the condition and manner required by each Operative Document, Lessee shall maintain or cause to be maintained with respect to the Aircraft, at its own expense, the following described insurances with reputable insurers in the international aviation market: |
11.1.1 | Liability Coverage | |
Aviation legal liability and comprehensive general liability, including products, bodily injury (including passengers), property damage, personal injury, cargo, mail, baggage liability insurance (including War and Allied Risks), for a combined single limit of not less than the Stipulated Liability Coverage. |
11.1.2 | Hull and Spares Coverage | |
Hull all-risk ground and flight aircraft hull insurance covering the Aircraft, and all-risk spares insurance covering Engines and Parts while not treated as part of Aircraft for insurance purposes (including while in transit), (1) for an agreed value not less than the Stipulated Loss Value in respect of all-risk hull insurance and (2) for the full replacement value in respect of spares insurance. |
11.1.3 | War Hull and Spares Coverage | |
War-risk, hijacking and allied perils insurance, on form LSW555D or such other comparable form as is standard cover provided by the aviation insurance market, covering each of the perils specified in paragraphs (a) and (c) through (g), inclusive, of AVN.48B, including requisition by the government of registry of the Aircraft, in an amount at least equal to (1) the Stipulated Loss Value, in respect of hull coverage (and with an overall policy limit, any one loss and in all during the policy period, in an amount reasonably satisfactory to Lessor from time to time) and (2) full replacement value in respect of spares coverage. |
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11.1.4 | General Requirements | |
The insurances required under Sections 11.1.1 through 11.1.3 shall (1) apply worldwide, subject to standard insurance market geographical limits, provided that such geographical limits do not exclude any area where the Aircraft is operated and that overflying of such excluded areas is covered, (2) be of the type and covering the same risks usually carried by comparable international airlines operating similar aircraft and engines on similar routes, and, in any case, covering risks of the kind customarily insured against by such air carriers with respect to aircraft operating on such routes, and shall be reasonably satisfactory in form and substance to Lessor, (3) be placed with insurers in the London markets (and if placed through brokers, through brokers) of recognized reputation, responsibility and substantial financial capacity, specializing in and normally participating in aviation insurance markets and otherwise satisfactory to Lessor, (4) in the case of hull and spares coverage, provide for deductibles (except in connection with a total loss) in such amounts as are customary with respect to aircraft and engines of the same type and used in the same manner as the Aircraft or Engines, as the case may be, by other similar air carriers, but in no event in an amount greater than the Stipulated Deductible Amount per aircraft or engine per occurrence and in no event shall any other form of self insurance be permitted with respect to the risks covered by any insurance required under this Section 11, and (5) otherwise comply with the requirements set forth in, and be consistent with the issuance of a valid Certificate of Insurance in the form of Exhibit B. For the avoidance of doubt, it is a specific requirement of this Lease Agreement that the insurances comply and be consistent with the provisions set out herein and in the form of Certificate of Insurance attached as Exhibit B. |
11.2 | Application of Proceeds of Hull Insurance |
11.2.1 | Aircraft Event of Loss | |
All proceeds of hull and hull war insurance up to the Stipulated Loss Value maintained in compliance with this Section 11 and received by Lessor as the result of the occurrence of an Event of Loss with respect to the Aircraft shall be paid in accordance this Lease Agreement and with Exhibit B. |
11.2.2 | Damage Not Constituting an Aircraft Event of Loss | |
All proceeds of casualty insurance maintained in compliance with this Section 11 and received with respect to damage to or loss of any part of the Aircraft (including an Engine) in circumstances not constituting an Event of Loss with respect to the Aircraft shall be paid in accordance with this Lease Agreement and Exhibit B. |
11.3 | Liability Insurance | |
After the last day of the Lease Term, provided such insurance is available to Lessee at no additional cost or at de minimis additional cost (or Lessor agrees to pay such additional cost), Lessee shall purchase and maintain, or cause to be purchased and maintained, at its own expense, liability insurance of the types (or the equivalent, which may include products liability cover) and in the amounts required under Section 11.1.1 and each Insured Party shall be named as an additional insured thereunder, for a period ending two years from the last day of the Lease Term, or until the next heavy check following the date of the Return of the Aircraft. This obligation shall survive and remain in full force and effect, notwithstanding the expiration or termination of the Lease Term or of any Operative Documents. |
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11.4 | Reports, Etc. | |
Lessee shall furnish, or cause to be furnished, to Lessor on or before the Delivery Date and not later than the renewal date of any insurance, and otherwise upon reasonable request a Certificate of Insurance substantially in the form of Exhibit B and a brokers letter in the form of Exhibit C. |
11.5 | Special Undertakings |
(1) | Lessee shall comply with the terms and conditions of each policy of the insurances required by this Section 11 and shall not do, consent or agree to, or permit, any act or omission which (a) invalidates or may invalidate such insurances, (b) renders or may render void, voidable, unenforceable or otherwise not in full force in effect the whole or any part of any such insurances or (c) brings any particular liability within the scope of an exclusion or exception to such insurances. | ||
(2) | Lessee will: |
(a) | ensure that all legal requirements as to insurance of the Aircraft, any Engine or any Part which may from time to time be imposed by the Laws of the State of Registration or any state to, from or over which the Aircraft may be flown, in so far as they affect or concern the operation of the Aircraft, are complied with and, in particular, those requirements compliance with which is necessary to ensure that (i) the Aircraft is not in danger of detention or forfeiture, (ii) the Insurances remain valid and in full force and effect and (iii) the interests of the Indemnified Parties in the Insurances and the Aircraft, any Engine or any Part are not thereby prejudiced; and | ||
(b) | not use, cause or permit the Aircraft, any Engine or any Part to be used for any purpose or in any manner not covered by the Insurances or outside any geographical limit imposed by the Insurances. |
(3) | If at any time Lessee fails to maintain insurance in compliance with this Section 11, Lessor shall be entitled but not bound to do any of the following, without prejudice to any other rights which it may have under this Lease Agreement or any other Operative Document by reason of such failure, (a) to pay any premiums due or effect or maintain such insurance or otherwise remedy such failure in such manner as Lessor considers appropriate, and Lessee shall upon demand reimburse Lessor in full for any amount so expended together with interest at the Past Due Rate, from the date of expenditure by Lessor to the date of reimbursement by Lessee, and/or (b) at any time while such failure is continuing, require the Aircraft to remain at any airport or proceed to and remain at any airport designated by Lessor until such failure is remedied to Lessors satisfaction. |
11.6 | Change of Circumstance and Industry Practice | |
In the event that there is a material change in the generally accepted industry-wide practice with regard to the insurance of similar aircraft or any material change with respect to the insurance of similar aircraft based or operated in any jurisdiction in which the Aircraft may then be based or operated (whether relating to all or any of the types of insurance required to be effected under this Section 11), such that Lessor, on the basis of advice received from an independent insurance advisor of international reputation, shall be of the reasonable opinion that the insurance required |
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pursuant to this Section 11 is insufficient to protect the respective interests of Lessor and/or any other Insured Parties, the insurance requirements set forth in this Section 11 shall, following consultation with Lessee and its insurance advisors, be amended so as to include such additional or varied requirements as Lessor (upon the advice of such independent insurance advisor) may reasonably consider appropriate. |
11.7 | Additional Insurance | |
Lessee acknowledges that each of Lessor and Owner has an insurable interest in the Aircraft. Each of Lessor and Owner shall have the right to obtain insurance in its own name and at its own expense with respect to such insurable interest to the extent that obtaining such insurance does not have the effect of raising the cost of the Insurances required hereunder. Lessee shall render each of Lessor and Owner all reasonable assistance requested by it in order that it may adequately protect such insurable interest. Lessee agrees that the maximum amounts payable to it or to others for its account or to be applied in discharge of its obligations by any underwriter or carrier of insurance maintained by Lessee upon the occurrence of an Event of Loss with respect to the Aircraft shall be limited to the Stipulated Loss Value unless the maintenance of any such insurance in an amount in excess of such Stipulated Loss Value does not prejudice Lessors or Owners interests under the insurances otherwise required by this Section 11 or prevent Lessor or Owner from obtaining such insurances as it requires. At Lessors request, Lessee shall have Lessees policies for the Aircraft amended so as to cover, in addition to the insurance required under this Section 11, Lessors or Owners insurable interest therein, provided that the agreement and cooperation of the primary insurer has been obtained and that Lessor, in such case, reimburses Lessee in the amount of the additional premium required to provide such additional coverage. |
12. | EVENTS OF DEFAULT | |
A fundamental term and condition of this Lease Agreement is that none of the following events shall occur and that the occurrence of any of the following events shall constitute a repudiatory breach of this Lease Agreement (but not a termination) and an Event of Default (whether any such event shall be voluntary or involuntary or come about or be effected by operation of Law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any Government Entity): |
12.1 | Payments |
(1) | Lessee shall have failed to make any periodic or scheduled payment in accordance with any Operative Document (including any payment of RentPeriodic, Reserves, Return Compensation Payments or Stipulated Loss Value) within three Business Days after the date the same shall have become due; or | ||
(2) | Lessee shall have failed to make any other payment in accordance with the Operative Documents when the same shall have become due and such failure shall continue for seven Business Days after Lessees receipt of written demand therefor by the party entitled thereto; or |
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12.2 | Covenants; Representations and Warranties |
(1) | Lessee shall have failed to carry and maintain any insurance required to be maintained under Section 11 (or a notice of cancellation in relation to such insurance is issued), the Aircraft shall be operated in contravention of the requirements of the conditions of any such insurance, or Lessee shall breach any warranty or condition of any such insurance that would invalidate in whole or material part or result in the cancellation of such insurance; or | ||
(2) | Lessee shall have failed to accept delivery of the Aircraft when obliged to do so under Section 2 or have otherwise failed to perform its obligations under the Operative Documents with the effect that the delivery of the Aircraft is delayed, provided that Lessee and Lessor shall work together to coordinate the delivery scheduling to the extent of any flexibility permitted by the Airframe Manufacturer Purchase Agreement (for the avoidance of doubt, this Section 12.2(2) shall have no force or effect after the Delivery Date); or | ||
(3) | Lessee shall have failed to return the Aircraft at the end of the Lease Term as and in the condition required by Schedule 4, except as provided in Exhibit G; or | ||
(4) | Lessee suspends or ceases or threatens to suspend or cease to carry on all or a substantial part of its business or operations; or | ||
(5) | Lessee disposes or threatens to dispose of all or a substantial part of its assets, whether by one or a series of transactions, related or not, except as permitted in Section 6.2.4; or | ||
(6) | Lessee shall have failed in any material respect to comply with, observe or perform, or shall fail to cause to be complied with, observed and performed, any of its covenants, agreements or obligations under any Operative Document (except as set forth in clause (2) or (3) above) and, except to the extent provided above in this Section 12, if such failure is capable of remedy, such failure shall continue for 30 days (five days in the case of Sections 4, 6.2.2, 6.2.5, 8 and 14.2 of the Lease Agreement) after the earlier of written notice thereof to Lessee; or | ||
(7) | Any representation or warranty made by Lessee in any Operative Document shall have proven to have been incorrect, inaccurate or untrue in any material respect as of the time made or repeated and, only if the same is capable of cure, such incorrectness, inaccuracy or untruth shall have (a) continued for a period of 30 days after written notice thereof to Lessee and (b) is material at the end of such period; or | ||
(8) | During the Lease Term Eurocontrol (or any authority on its behalf), the relevant body of the European Union (or any authority on its behalf) responsible for charges relating to the European Union Emission Trading Scheme or any other authority notifies Lessor that there are material navigation, landing, airport, emission or similar charges due from Lessee, and such material charges remain outstanding for a period of 30 days from the date of such notice, provided that (1) no Event of Default shall arise under this Section 12.2(8) for so long as such charges are being contested in good faith and by appropriate proceedings, an adequate bond has been provided and such proceedings do not involve any material danger of the detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; and (2) such 30-day period shall not apply if there |
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is any material risk of detention, interference with use or operation or sale, forfeiture or loss of the Aircraft; or |
(1) It is or becomes unlawful for Lessee to perform any of its obligations under any Operative Document to which it is a party, or (2) any Operative Document to which it is a party is or becomes wholly or partly illegal, invalid or unenforceable or (3) the existence, validity, enforceability or priority of the rights of Owner or Lessor of the Aircraft or under any Operative Document or otherwise, are or become illegal, invalid or unenforceable or are challenged by Lessee or any other Person claiming by or through Lessee, or (4) the existence, validity, enforceability or priority of the rights of the Financing Parties under the Financing Security Documents are challenged by Lessee or any other Person claiming by or through Lessee, other than, in the cases of each of clauses (1) through (4) of this Section 12.5, as provided in the legal opinions provided to Lessor under Schedule 7 ; or |
12.6 | Indebtedness or Lease Default |
(1) | Lessee shall have failed to pay any amount in respect of any Indebtedness, when and howsoever due, or Lessee shall breach any other provision contained in any agreement or instrument relating to any indebtedness, and (a) such failure to pay or such breach shall continue after the applicable grace period, if any, specified in the agreement or |
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instrument relating to such indebtedness, (b) the maturity of such indebtedness has been accelerated and (c) the aggregate outstanding amount of all indebtedness under any such agreements or instruments which has been accelerated exceeds, in the aggregate, US$20,000,000 (or the equivalent thereof); or |
(2) | Lessee shall breach any provision of any aircraft lease agreement (other than an Other Lease Agreement), and such breach shall continue after the applicable grace period, if any, specified in such agreement, if, as a result of such breach, the relevant lessor has terminated the leasing of the relevant aircraft and attempted to repossess such aircraft on an involuntary basis; or | ||
(3) | any Event of Default shall have occurred and be continuing under any Other Lease Agreement; or |
12.7 | Judgments | |
One or more judgments are rendered against Lessee that either (1) impose on it an obligation for the payment of money in excess of US$20,000,000 (or the equivalent thereof) in the aggregate or (2) grant to any Person equitable relief of any nature that would, if enforced, be reasonably expected to have a Material Adverse Effect and, in the case of any such judgments, the same shall remain undischarged for a period of 10 days or more, during which time execution of such judgment or judgments shall not be effectively stayed nor adequate bonding fully covering such judgment or judgments exist; or |
12.8 | Adverse Change | |
A Material Adverse Effect shall occur; or | ||
12.9 | Change in Ownership | |
Any single Person or group of Persons acquire control, directly or indirectly, of Lessee without the Lessors prior written consent. |
13. | REMEDIES | |
13.1 | Event of Default | |
Upon the occurrence of any Event of Default and so long as the same shall be continuing, Lessor shall have the right to, in each case exercisable in Lessors sole discretion, (1) accept such Event of Default as a repudiation of this Lease Agreement and terminate the Lease Term and/or terminate this Lease Agreement and each other Operative Document and (2) whether or not Lessor exercises its rights under clause (1), do all or any of the following, at its option and in its sole discretion whereupon all rights of Lessee under this Lease Agreement and the Operative Documents shall cease forthwith (but without prejudice to the continuing obligations of Lessee thereunder), in addition to such other rights and remedies which Lessor may have under Law: |
13.1.1 | Retake Possession | |
Upon the written demand of Lessor and at Lessees expense, cause Lessee to return promptly, and Lessee shall return promptly, the Aircraft and any part thereof (including the Aircraft |
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Documentation) as Lessor may so demand to Lessor or its order in the manner and condition required by, and otherwise in accordance with all the provisions of, this Lease Agreement as if such were being returned at the expiration of the Lease Term, or Lessor at its option, may enter upon the premises where the Aircraft or any part thereof is located and take immediate possession of and remove the same by summary proceedings or otherwise, and Lessee waives any right it may have under Law to a hearing prior to repossession of the Aircraft or any part thereof (and/or, at Lessors option, store the same at Lessees premises until disposal thereof by Lessor), all without liability accruing to Lessor for or by reason of such entry or taking of possession or removing whether for the restoration of damage to property caused by such action or otherwise, and Lessor is hereby irrevocably by way of security for Lessees obligations under this Lease Agreement appointed attorney for Lessee in causing the redelivery and will have all the powers and authorizations necessary for taking that action. |
13.1.2 | Termination or Enforcement | |
Terminate this Lease Agreement and any other Operative Document, terminate the leasing of the Aircraft hereunder by Lessee (whereupon all of Lessees rights in relation to the Aircraft shall cease forthwith) and/or exercise any other right or remedy which may be available to it under Law or proceed by appropriate court action to enforce the terms hereof and/or exercise any other power, right or remedy which may be available to Lessor hereunder or under Law. Without limiting the generality of the foregoing Lessor shall have the right: |
(1) | to require Lessee to move the Aircraft to a location designated by Lessor and cease operating the Aircraft except as expressly authorized or directed by Lessor (and, to the extent not inconsistent therewith, with Lessee to comply with all of its obligations hereunder and under each other Operative Document); | ||
(2) | to require Lessee, and Lessee will, at request of Lessor, take all steps necessary to effect (if applicable) deregistration of the Aircraft and its export from the country where the Aircraft is for the time being situated and the Lessee Jurisdiction and any other steps necessary to enable the Aircraft to be redelivered to Lessor in accordance with this Lease Agreement; | ||
(2) | to require Lessee and Lessee will, at request of Lessor and at Lessees expense, take all steps necessary to ensure all rights under any warranty from any manufacturer, vendor, sub-contractor or supplier with respect to the Aircraft are assigned, including the obtaining of any such partys consent to such assignment, to Owner and/or Lessor to the extent such warranties have not expired otherwise than through the assignment itself; and | ||
(3) | without need of any consent, authorization or action of Lessee, to cause the Aircraft to be deregistered by the Aviation Authority, and to be made ready for export and to be exported out of the country where the Aircraft is for the time being situated and the Lessee Jurisdiction, and to cause all rights of Lessee in respect of the Aircraft and this Lease Agreement and each other Operative Document under or in connection with or resulting from the registration of the Aircraft or the recordation of the Operative Documents with the Aviation Authority or otherwise, to be terminated and extinguished. In furtherance of the foregoing, Lessor shall be entitled and empowered to act in the name and in the place of Lessee as may be necessary or desirable, in Lessors sole discretion, including with respect to the execution of documents and instruments, to effect such deregistration, derecordation, exportation, termination and extinguishment. |
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Lessee hereby irrevocably and by way of security for its obligations under this Lease Agreement appoints Lessor as its attorney to execute and deliver any documentation and to do any act or thing required in connection with the foregoing. | |||
(4) | to refuse to perform an obligation, or take any other action required, under any Operative Document, and such refusal shall not alter or reduce Lessees obligations under the Operative Documents. |
13.1.3 | Application of Funds, Etc. |
(1) | Without limiting any other provision of this Lease Agreement or of any other Operative Document, Lessor shall have the right to continue to hold any amounts (including the Security Deposit) received or held in respect of any Secured Obligations, and to withhold or set off against all amounts otherwise payable to Lessee hereunder or under any other Operative Document, and to use and apply in whole or in part any or all of such amounts, withholdings and setoffs to and against the Secured Obligations (in whatever order and according to whatever priority Lessor may choose), and any such use, application or setoff shall be absolute, final and irrevocable. | ||
(2) | If any sum paid or recovered in respect of the liabilities of Lessee under this Lease Agreement or any other Operative Document is less than the amount then due, Lessor may apply that sum to amounts due from Lessee under this Lease Agreement or any other Operative Document in such proportions and order and generally in such manner as Lessor may determine. | ||
(3) | Lessor may set off any Secured Obligation against any obligation owed by Lessor (or an Affiliate of Lessor) to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available in London or, at its option, New York, for the purpose of the set-off. Amounts which would otherwise be due to Lessee from Lessor will fall due only if and when Lessee has paid all Secured Obligations, except only to the extent Lessor otherwise agrees or sets off such amounts against payments owing to it pursuant to the foregoing provisions of this clause (3). | ||
(4) | Notwithstanding the above, Lessor confirms its obligations under Section 4 with respect to the return of the Security Deposit and any Letter of Credit. |
13.1.4 | Damages | |
In addition to (but not in duplication of) Lessors rights under Section 9.1, recover from Lessee, and Lessee shall on demand indemnify Lessor and/or Owner for, all damages (other than consequential damages except to the extent set forth in clause (2) below) suffered by Lessor and/or Owner in connection with such Event of Default or the exercise of Lessors and/or Owners remedies with respect to such Event of Default, including each of the following: |
(1) | All accrued and unpaid RentPeriodic payable hereunder in respect of any period prior to Return of the Aircraft to Lessor in the condition and otherwise in the manner required under this Lease Agreement. |
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(2) | All Expenses incurred by Owner and/or Lessor and/or each Participant in connection with such Event of Default or the exercise of Lessors and/or Owners remedies with respect to such Event of Default, including (a) all reasonable costs and expenses incurred in connection with recovering possession, deregistration, exportation of the Airframe or any Engine and/or all reasonable costs and expenses in placing such Airframe or Engine in the configuration, condition and repair required by Schedule 4 and the other provisions of this Lease Agreement and all lost RentPeriodic payments during such recovery and reconditioning, and in addition (to the extent not duplicative of any reasonable costs and expenses incurred to place such Aircraft in the configuration, condition and repair required by Schedule 4) all unpaid Reserves and Return Compensation Payments, and (b) all damages incurred by Lessor and/or Owner in connection with such Event of Default, including all losses suffered by Lessor and/or Owner because of its inability to place the Aircraft on lease with another lessee on terms as favorable to it as this Lease Agreement or because whatever use, if any, to which Lessor and/or Owner is able to put the Aircraft upon its return to Lessor, or the amount received by Lessor and/or Owner upon a sale or other disposal of the Aircraft, is not as profitable to Lessor and/or Owner as leasing the Aircraft for the remainder of the scheduled Lease Term in accordance with the terms of this Lease Agreement would have been, including in each case, amounts corresponding to the payments of RentPeriodic which would have been due from the Return of the Aircraft to Lessor until the Aircraft is placed on lease or otherwise disposed of by Lessor and/or Owner, provided that in the case where the only Event of Default is a Event of Default under Section 12.2(3) then Lessors damages under this clause (b) shall be capped at an amount equal to 15 months of Fair Market Rent. | ||
(3) | Any break funding cost which is incurred in repaying funds raised to finance the Aircraft or in unwinding any interest rate swap or forward interest rate agreement. |
Lessor will use commercially reasonable endeavors to mitigate any such amounts for which Lessee is responsible under clause (2)(b) above, but Lessor shall not be obliged to consult with Lessee concerning any proposed course of action or to notify Lessee in advance of the taking of any particular action. Lessor shall provide a statement, with reasonable details, of any amount claimed under this Section 13.1.4. | ||
For the avoidance of doubt and without limiting Lessors other rights under this Section 13 or under Section 9, in connection with the occurrence of any Event of Default, Lessor shall have the right to demand, and Lessee shall on demand pay to Lessor, damages to equal all Expenses incurred by Owner and/or Lessor in connection with such Event of Default. | ||
For the purposes of this Section 13.1.4, Fair Market Rental shall mean the monthly rental (excluding reserves) contained in any lease to a Follow-On Operator, provided that if no such lease exists Fair Market Rental shall be the monthly rental value (excluding reserves) which would be obtained for the Aircraft in an arms-length transaction between an informed and willing lessee under no compulsion to lease and an informed and willing lessor in possession under no compulsion to lease and assuming that the condition of the Aircraft was in compliance with the terms of the Operative Documents (including being in the Return Condition), which value shall be determined by mutual agreement of Lessor and Lessee within five Business Days of request by either Lessor or Lessee. In the absence of mutual written agreement within such period, each of Lessor and Lessee shall appoint within five Business Days an internationally recognized firm of independent aircraft appraisers to determine and agree the Fair Market Rental. If either Lessor or Lessee fails to appoint such an appraisal firm within such period, the Fair |
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Market Rental Value shall be determined by the one appointed appraisal firm. If the two appraisal firms are so appointed and fail to determine and agree a Fair Market Rental within 15 Business Days, then each appraisal firm shall submit its determination of the Fair Market Rental before the end of such 15 Business Day period and Lessor shall request the American Arbitration Association (or any successor organization thereto) in New York, New York to appoint a third internationally recognized firm of independent aircraft appraisers, which third appraisal firm shall select within 10 Business Days the determination of one of the two initially appointed appraisal firms as being closest to the Fair Market Rental Value, and such determination shall be the Fair Market Rental for purposes of this Section 13.1.4. The cost of all appraisal firms shall be borne by Lessee. |
13.1.5 | Sale or Re-lease of Aircraft | |
If an Event of Default occurs, Lessor and/or Owner shall have the right to sell or re-lease or otherwise deal with the Aircraft at such time and in such manner and on such terms as Lessor considers appropriate in its absolute discretion, free and clear of any interest of Lessee, as if this Lease Agreement had never been entered into, subject to Lessors obligation to mitigate as provided in the penultimate paragraph of Section 13.1.4. |
13.2 | General | |
Any amount referred to in any Operative Document which is payable to or retainable by Lessee thereunder shall not be paid to or retained by Lessee while a Payment/Bankruptcy Default shall have occurred and be continuing, but instead such amount shall be held by or paid over to Lessor, as security for the Secured Obligations, to be held and applied against the Secured Obligations as and when due. At such time as there shall not be continuing any Payment/Bankruptcy Default, such amount shall be paid to Lessee to the extent not so applied. | ||
14. | TRANSFER OF LEASE | |
14.1 | Transfer by Lessor | |
14.1.1 | Right to Transfer | |
Lessor may, without the consent of Lessee, at any time: |
(1) | sell, transfer, assign absolutely or otherwise dispose of its right, title and interest in and to this Lease Agreement, any other Operative Document and the Aircraft, to any Person, including pursuant to a sale and leaseback or a novation of this Lease Agreement together with a sale of the Aircraft (any such transaction, an Absolute Transfer ); or | ||
(2) | mortgage, assign or otherwise grant an interest or transfer as security all or any portion of its right, title and interest in and to this Lease Agreement, any Operative Document and/or the Aircraft, to any Person, including pursuant to a secured loan financing (any such transaction, a Security Transfer ); or |
Participant may, without the consent of Lessee, at any time sell, transfer, assign absolutely or otherwise dispose of Participants right, title and interest in and to Owner (any such transaction, a Participant Transfer ). |
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In the case of any Absolute Transfer, Security Transfer or Participant Transfer, Lessor will notify Lessee no later than 10 days prior to any transfer and Lessee agrees to promptly execute and deliver in connection with any transfer such documents and assurances (including executing a consent to the assignment, transfer or a novation agreement, as applicable, and procuring the reissuance of insurance certificate(s) to reflect such transaction and the taking of all necessary steps to obtain consequential amendments to the Financial Approval, if so required) and to take such further action as Lessor may reasonably request to establish or protect the rights and remedies created or intended to be created in favor of the transferees in connection with any transfer, provided that any such transfer shall comply with the conditions specified in Section 14.1.2. |
14.1.2 | Conditions | |
As conditions precedent to any Absolute Transfer, Security Transfer or Participant Transfer becoming effective: |
(1) | Lessor will procure that the transferee shall have executed and delivered to Lessee a letter of quiet enjoyment in respect of Lessees use and possession of the Aircraft which shall contain a covenant substantially in the form of Section 6.1.1. | ||
(2) | Lessor shall have reimbursed to Lessee (or following such transfer shall promptly reimburse to Lessee) its reasonable out-of-pocket expenses actually incurred in connection with co-operating with Lessor in relation to any such transfer referred to in this Section 14.1, provided that such expenses are substantiated to Lessors reasonable satisfaction and provided further that no Event of Default has occurred and is continuing. | ||
(3) | Lessees obligations under the Operative Documents shall not, as measured at the time of the completion of such transfer, increase as a consequence of such transfer (other than in respect of Taxes, which are addressed in Schedule 6) and Lessees rights and benefits under the Operative Documents shall not, as measured at the time of the completion of such transfer, be diminished as a consequence of such transfer. Neither a change in the Person or Persons to whom, or for whose benefit, Lessee performs its obligations under the Operative Documents, nor an increase in the number of, or change in the nature of, beneficiaries under any indemnification, insurance or other obligation shall, in each case, constitute by itself or in the aggregate an increase in the obligations of Lessee under the Operative Documents. | ||
(4) | In the case of an Absolute Transfer only, all obligations of Lessor under the Operative Documents which arise from and after such transfer shall have been assumed by the transferee of Lessor pursuant to an agreement enforceable by Lessee; thereupon, without the necessity of any further action by any Party the assigning Lessor shall be released from all of the obligations so assumed. | ||
(5) | In the case of an Absolute Transfer, Lessor shall ensure that such transferee shall at the time of transfer shall have a combined capital and surplus or tangible net worth not less than US$30,000,000 or the obligations of such transferee under the Operative Documents be guaranteed (pursuant to a guarantee reasonably acceptable to Lessee, with Lessee confirming that the form of guarantee attached to this Lease Agreement is acceptable to Lessee) by an entity with at the time of transfer a net worth of not less than |
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US$30,000,000. Lessor will procure that Lessee shall have received a certified balance sheet from either the transferee or the guarantor, as applicable. | |||
(6) | In the case of a Participant Transfer, Lessor shall ensure that such transferee shall provide a guarantee reasonably acceptable to Lessee (with Lessee confirming that the form of guarantee attached to this Lease Agreement is acceptable to Lessee) and guaranteeing the obligations of Lessor under the Operative Documents issued by an entity with at the time of transfer a net worth of not less than US$30,000,000. Lessor will procure that Lessee shall have received a certified balance sheet from either the transferee or the guarantor, as applicable. |
Without prejudice to any rights of any Indemnified Party under any Operative Document in effect on or after the occurrence of an Absolute Transfer or Participant Transfer, after such transfer and Lessee shall comply with the terms and conditions of Section 11.3 with respect to Lessor or Participant, as the case may be and each other Indemnified Party (as determined immediately prior to such Absolute Transfer) as if the effective date of such transfer were the last day of the Lease Term. | ||
14.2 | Assignment or Transfer by Lessee | |
Lessee may not, without the prior written consent of Lessor, assign or transfer (including by merger or consolidation other than as permitted by Section 6.2.4) any of its right, title or interest in, or delegate any of its obligations under, any Operative Document, and any such assignment, transfer or delegation without the prior written consent of Lessor shall be null and void. This Section 14.2 is not intended to be a restriction on Lessees rights under Section 8.1.1(2). | ||
14.3 | Successors and Assigns | |
Subject to the foregoing, the terms and provisions of each Operative Document shall be binding upon and inure to the benefit of Lessor and Lessee and their respective successors and permitted assigns and permitted transferees. | ||
15. | NO SETOFF, COUNTERCLAIM, ETC. | |
This Lease Agreement is a net lease and Lessees obligation to pay Rent is and shall be absolute and unconditional and shall not be abated, suspended, diminished, reduced, delayed, discontinued, terminated or otherwise affected by any condition, circumstance, act or event of any kind whatsoever, including any of the following: (1) the unavailability, interruption or cessation in use of the Aircraft for any reason, (2) any defect in the title, airworthiness, merchantability, fitness for any purpose, condition, design, specification or operation of any kind or nature of the Aircraft, or the ineligibility of the Aircraft for any particular use or trade or for registration or certification, or (3) any other circumstance, happening or event whatsoever, whether or not similar to the foregoing, which but for this provision would or might have the effect of terminating or in any other way affecting any obligation of Lessee hereunder, it being the express intention of Lessor and Lessee that all Rent and other amounts payable by Lessee under any Operative Document shall be payable in all events, unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Lease Agreement. Lessee hereby waives, to the extent permitted by Law, any and all rights which it may have or which at any time hereafter may be conferred upon Lessee, by Law or otherwise, to terminate, cancel, quit or surrender any Operative Document, or to abate, suspend, defer, reduce or otherwise fail to comply in full with |
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(1) | No failure on the part of any Person to exercise and no delay in exercising any right, power, remedy or privilege under any Operative Document or provided by statute or at law or in equity or otherwise shall impose any liability upon such Person or shall impair, prejudice or constitute a waiver of any such right, power, remedy or privilege or be construed as a waiver of any breach or as an acquiescence thereto, nor shall any single or partial exercise of any such right, power, remedy or privilege impair, prejudice or preclude any other or further exercise thereof or the exercise of any other right, power, remedy or privilege. No acceptance of partial payment or performance shall, whether or not expressly stated, be or be deemed to be a waiver of any breach then existing or a waiver or release of full payment and performance. No notice to or demand on any Person shall in any case entitle such Person to any other or further notice or demand in |
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other or similar circumstances or constitute a waiver of the right of any other Person to any other or further action in any circumstances without notice or demand. |
(2) | Nothing contained in any Operative Document shall be construed to limit in any way any right, power, remedy or privilege of any Person under any Operative Document or now or hereafter existing at law or in equity. Each and every right, power, remedy and privilege of any Person under the Operative Documents (a) shall be in addition to and not in limitation of, or in substitution for, any other right, power, remedy or privilege under any Operative Document or at law or in equity, (b) may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by Lessor and such Person and (c) shall be cumulative and not mutually exclusive, and the exercise of one shall not be deemed a waiver of the right to exercise any other. Lessor may decline to exercise any rights or remedies herein without incurring any liability to any Person. |
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be enforced against it in the courts of any other jurisdiction. Nothing herein shall limit the right of either Lessor or Lessee to bring any legal action or proceeding or obtaining execution of judgment against the other in any other appropriate jurisdiction or concurrently in more than one jurisdiction. Each of Lessor and Lessee further agrees that, subject to applicable Law, a final judgment in any action or proceeding arising out of or relating to this Lease Agreement or any other Operative Document shall be conclusive and may be enforced in any other jurisdiction outside England by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of the indebtedness or liability therein described, or in any other manner provided by Law. |
18.3 | Process Agent |
(1) | Lessee hereby irrevocably designates, appoints and empowers Lessees United Kingdom Office at Fifth Floor, Elsinore House, 77 Fulham Palace Road, London W6 8AD, as its authorized agent to receive on its behalf and on behalf of its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding between Lessor and Lessee arising out of or relating to any Operative Document. Such service may be made by mailing or delivering a copy of such process in care of the appropriate process agent described in this Section 18.3 and Lessee hereby irrevocably authorizes and directs its designated process agent to accept such service on its behalf. Lessee further agrees that failure by a process agent appointed in accordance with the foregoing terms to notify Lessee of the process shall not invalidate the proceeding concerned. Notwithstanding the foregoing, nothing herein shall affect the rights of either party to serve process in any other manner permitted by applicable Law. Lessee shall maintain such process agent, or such other Person located within England as may be acceptable to Lessor, as its agent for service of process in England during the Lease Term and six months thereafter, at Lessees sole cost and expense. Lessor will send to Lessee a copy of any documents delivered to the process agent promptly after delivering such documents to the process agent. | ||
(2) | Lessor hereby irrevocably designates, appoints and empowers Law Debenture Corporate Services Limited (company number 3388362) at Fifth Floor, 100 Wood Street, London EC2V 7EX, as its authorized agent to receive on its behalf and on behalf of its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding between Lessor and Lessee arising out of or relating to any Operative Document. Such service may be made by mailing or delivering a copy of such process in care of the appropriate process agent described in this Section 18.3 and Lessor hereby irrevocably authorizes and directs its designated process agent to accept such service on its behalf. Lessor further agrees that failure by a process agent appointed in accordance with the foregoing terms to notify Lessor of the process shall not invalidate the proceeding concerned. Notwithstanding the foregoing, nothing herein shall affect the rights of either party to serve process in any other manner permitted by applicable Law. Lessor shall maintain such process agent, or such other Person located within England as may be acceptable to Lessee, as its agent for service of process in England during the Lease Term and six months thereafter, at Lessors sole cost and expense. Lessee will send to Lessor a copy of any documents delivered to the process agent promptly after delivering such documents to the process agent. |
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18.4 | Waiver of Immunity | |
Lessee irrevocably and unconditionally agrees that if Lessor brings legal proceedings against it or its assets in relation to this Lease Agreement or any other Operative Document no immunity from such legal proceedings (which will be deemed to include suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) will be claimed by or on behalf of Lessee or with respect to its assets. Lessee further irrevocably and unconditionally (1) waives any such right of immunity which it or its assets now have or may in the future acquire and (2) consents generally in respect of any such proceedings to the giving of any relief or the issue of any process in connection with such proceedings, including the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such proceedings. | ||
19. | MISCELLANEOUS | |
19.1 | Amendments | |
No provision of any Operative Document may be amended, changed, waived or discharged orally, but only by an instrument in writing specifying the provision intended to be amended, changed, waived or discharged and signed by each party hereto or thereto; and no provision of any Operative Document shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or other matter not specifically set forth in an agreement in writing and signed by each party hereto or thereto. | ||
19.2 | Severability | |
If any provision of any Operative Document should be held invalid, illegal or unenforceable in any respect in any jurisdiction, then, to the extent permitted by Law (1) all other provisions thereof shall remain in full force and effect in such jurisdiction and (2) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. | ||
19.3 | Counterparts | |
Any Operative Document and any amendments, waivers, consents or supplements hereto or thereto may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument. | ||
19.4 | Chattel Paper | |
To the extent, if any, that this Lease Agreement constitutes chattel paper (as defined in the Uniform Commercial Code in effect from time to time in any applicable jurisdiction) no security interest in this Lease Agreement may be created through the transfer or possession of any counterpart other than as provided on the cover page of this Lease Agreement. |
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19.5 | Time of the Essence | |
Subject only to the periods of grace referred to in Section 12, time shall be of the essence as regards the performance by each of Lessee and Lessor of its respective obligations under each Operative Document. | ||
19.6 | Notices | |
All notices, requests and other communications to Lessee or Lessor under any Operative Document shall be in writing (for this purpose, writing includes fax or email), shall refer specifically to such Operative Document and shall be personally delivered or sent by fax or email, or sent by overnight courier service (e.g., Federal Express), in each case to the respective address specified in Schedule 5 hereto or such other address as such Person may hereafter specify by notice to the other parties hereto. Each such notice, request or other communication shall be effective when received or, if by fax or email, when confirmed by the sending fax machine or email software, provided that any such notice by fax or email so confirmed after 6:00 p.m., for the recipient, shall be effective on the next succeeding local Business Day. | ||
19.7 | Language | |
All notices to be given under each Operative Document shall be in English. All documents delivered to Lessor pursuant to each Operative Document will be in English, or if not in English, will be accompanied by a certified English translation. The language of each Operative Document, and the language of its interpretation, is English. If there is any inconsistency between the English version of any Operative Document and any version in any other language, whether or not such other version is executed by Lessor or Lessee, the English version will prevail for all purposes. | ||
19.8 | Entire Agreement | |
Save for the Officers Certificate dated 10 December 2009 furnished by Lessee to Lessors Affiliate, this Lease Agreement and the other Operative Documents constitute the entire agreement between the parties concerning the subject matter hereof, and supersede all previous proposals, agreements, understandings, negotiations and other written and oral communications in relation hereto. The parties acknowledge that there have been no representations, warranties, promises, guarantees or agreements, express or implied, except as set forth herein or in the other Operative Documents. | ||
19.9 | Logo Usage | |
Lessee agrees that Lessors affiliates Aircastle Limited and/or Aircastle Advisor LLC may use the name, logos, trademarks, and service marks of Lessee on and in connection with its internet website and other marketing materials to identify the Lessee as a customer, provided that this Section 19.9 is not intended to create any code share or marketing affiliation or partnership between Lessor and Lessee. | ||
19.10 | Relationship of the Parties | |
Nothing in this Lease Agreement or the other Operative Documents shall create (or be deemed or construed to create) a partnership, joint venture, agency, fiduciary relationship, and/or any other |
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affiliation, relationship or association between the parties hereto of any kind other than the relationship of lessor and lessee as explicitly and specifically stated in this Lease Agreement and the other Operative Documents. The relationship between the Lessor and the Lessee is limited to that of lessor and lessee as set forth in this Lease Agreement and the other Operative Documents. Nothing contained in this Lease Agreement or any other Operative Documents shall permit or obligate (or be construed as permitting or obligating) the Lessor to act as a financial or business advisor or consultant to the Lessee and/or to control the Lessee or conduct the Lessees operations. Each party acknowledges that it is experienced with respect to the subject matter of this Lease Agreement and the other Operative Documents and has made its own independent decisions regarding such subject matter. Each party further acknowledges that it has had the opportunity to obtain the advice of experienced and sophisticated counsel of its own choosing in connection with the negotiation and execution of this Lease Agreement and the other Operative Documents and to obtain the advice of such counsel with respect to all matters contained herein and therein. |
19.11 | Rights of Third Parties |
(1) | Each Financing Party, Indemnified Party, Tax Indemnitee and Insured Party may rely on and enforce the rights expressed to be conferred on it under this Lease Agreement together with any ancillary rights against the Lessee under the Contracts (Rights of Third Parties) Act 1999. | ||
(2) | The consent of any Indemnified Party, Tax Indemnitee or Insured Party, as the case may be (in each case, other than the Lessor), is not necessary for any variation (including any release or compromise in whole or in part of any liability) or termination of this Lease Agreement, or any provision of any thereof or provisions ancillary thereto. | ||
(3) | Except as expressly stated in Section 19.7(1), the terms of this Lease Agreement may be enforced only by a party to it or a partys successors and permitted transferees and assigns. |
20. | EXPENSES | |
Whether or not the transactions contemplated herein shall be consummated and except as expressly provided in any Operative Document (other than Section 9.1), each party shall be responsible for its own costs and expenses (including legal fees and expenses) in connection with the preparation, negotiation, execution and delivery of the Operative Documents on the date hereof and on the Delivery Date and the consummation of the transactions contemplated herein; provided, however, that Lessee shall pay all filing and registration fees, as well as any stamp duty with respect to the execution, filing and registration of the Operative Documents and any other documents required to be executed thereunder by any applicable authority in order to register or perfect the Aircraft or Lessors or Owners interest, or any Financing Partys interest, if such Financing Partys interest has been created as of the Delivery Date, in the Aircraft or the Lease Agreement. |
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EXECUTED
as a
DEED
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By
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its duly authorized attorney-in-fact
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for and on behalf of
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WELLS FARGO BANK NORTHWEST,
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NATIONAL ASSOCIATION,
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not in its individual capacity
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but solely as Owner Trustee
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in the presence of:
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Attorney-in-Fact |
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EXECUTED
as a
DEED
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By
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its duly authorized attorney-in-fact
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for and on behalf of
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SOUTH AFRICAN AIRWAYS (PTY) LTD.
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Attorney-in-Fact |
By
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its duly authorized attorney-in-fact
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for and on behalf of
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SOUTH AFRICAN AIRWAYS (PTY) LTD.
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Attorney-in-Fact |
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(1) | is performed on such Engine in accordance with the Engine Manufacturers Engine Management Programme and the Engine Manufacturers Engine Manual and results from such Engines performance deterioration detected by condition and trend monitoring, | ||
(2) | includes the Overhaul (Level 3 or higher refurbishment), as defined in the Engine Manufacturers, Engine Management Programme, of any of the following engine modules: Module 1 LP Fan Shaft & Rotor, Module 2 Intermediate Pressure Compressor, Module 3 Intermediate Case, Module 4 High Pressure System, Module 5 Intermediate Pressure Turbine, Module 6 External Gear Box, Module 7 Low Pressure Compressor Case, Module 8 Low Pressure Turbine, and | ||
(3) | fully restores each such modules performance and service life using the workscope defined in the Engine Manufacturers Engine Maintenance Manual and the Engine Manufacturers Engine Maintenance Planning Guide and so that such module can reasonably be expected (as determined by the Engine Manufacturer if Lessor and Lessee fail to agree) to run for the average meantime between performance restorations (based on Engine Manufacturer data) for engines of the same model as the Engine. |
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(1) | [Intentionally Omitted] | ||
(2) | The destruction of or damage of such property which renders (a) repair of such property uneconomical or (b) such property permanently unfit for normal use by Lessee or Lessor. | ||
(3) | Any loss of or damage to such property or other occurrence which the insurers determine or agree to be a total loss. | ||
(4) | The confiscation, condemnation, seizure, forfeiture, requisition or similar taking of the title to such property (for any reason whatsoever and whether de jure or de facto). | ||
(5) | The confiscation, condemnation, seizure, requisition or similar taking by any Government Entity or purported Government Entity of use or hire of such property which shall have resulted in the loss of possession or use of such property by Lessee for a period that continues until the earlier of (a) the date that is 180 days following the commencement of such loss of possession or use (or, if earlier, the last day of the Lease Term) and (b) the date upon which the Aircraft is modified in such a manner as would render conversion of such property for use in normal commercial passenger service impractical or uneconomical. | ||
(6) | The disappearance, hijacking or theft (including a confiscation, condemnation, seizure, forfeiture, requisition or similar taking of title or use not otherwise included in this definition) of such property which shall have resulted in the loss of possession or use of such property by Lessee for a period that continues until the earlier of (a) the date that is 30 days following the commencement of such loss of possession or use (or, if less, the remaining Lease Term) and (b) the date upon which the Aircraft is modified in such a manner as would render conversion of such property for use in normal commercial passenger service impractical or uneconomical. | ||
(7) | In the case of an Engine only, any divestiture or impairment of any right, title or interest of Owner or Lessor in or to an Engine as a result of the installation of such Engine on any other airframe in violation of Section 8 of the Lease Agreement. |
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(1) | the date corresponding to the Delivery Date in the 120th month after the Delivery Date or if there is no such date in such month, the last day of such month or | ||
(2) | at Lessees option, the date designated by Lessee in an irrevocable notice not less than 24 months before the last day of the then scheduled Lease Term, provided that (a) Lessees right to designate such date is conditioned upon no Event of Default having occurred and |
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being continuing on the date such notice is given and (b) the date designated shall not be less than 120 months or more than 144 months after the Delivery Date and shall be between February 1 and May 15, |
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1. | In each Operative Document, unless expressly provided otherwise therein, a reference to: |
(a) | Each of Lessor or Lessee or any other Person includes, without prejudice to the provisions of such Operative Document, any successor in title to it and any permitted assignee or permitted transferee and, in the case of any Government Entity, any Government Entity succeeding to all or any of its functions. | ||
(b) | The word including shall be construed as including, without limitation. | ||
(c) | Words importing the plural include the singular and vice versa. | ||
(d) | Any document includes that document as amended, from time to time in accordance with its terms, and any document entered into in substitution or replacement therefor. | ||
(e) | The words this Agreement, this Lease Agreement, hereby, herein, hereto, hereof and hereunder and words of similar import when used in such Operative Document refer to such Operative Document as a whole including the Schedules and Exhibits, and all Annexes, Attachments and Supplements thereto, and not to any particular provisions of such Operative Document. | ||
(f) | A Section or an Exhibit or a Schedule or an Annex is a reference to a section of, or an exhibit or a schedule or an annex to, such Operative Document. | ||
(g) | An amendment includes a supplement, novation or re-enactment and amended is to be construed accordingly. | ||
(h) | A Law (1) includes any statute, decree, constitution, any kind of regulation, order and circular order, judgment or directive of any Government Entity (including the Financial Approval and the National Industrial Participation Programme of the Department of Trade and Industry); (2) includes any treaty, pact, compact or other agreement to which any Government Entity is a signatory or party; (3) includes any judicial or administrative or fiscal interpretation or official statement or application thereof and (4) is a reference to that provision as amended. | ||
(i) | A month is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month except that if there is no numerically corresponding day in the calendar month in which that period ends, that period shall end on the last Business Day in that calendar month. | ||
(j) | A quarter is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the third succeeding calendar month except that if there is no numerically corresponding day in the calendar month in which that period ends, that period shall end on the last Business Day in that calendar month. |
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(k) | The Cape Town Convention and the Cape Town Aircraft Protocol shall be read and interpreted together as a single instrument as required by Article 6(1) of the Cape Town Convention. |
2. | Headings used in each Operative Document are for convenience only and shall not in any way affect the construction of, or be taken into consideration in interpreting, such Operative Document. |
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1. | MAINTENANCE; OPERATION; ETC. | |
As between Lessor and Lessee and except as expressly provided herein, during the Lease Term Lessee shall have sole responsibility for the operation, maintenance, servicing, repair, inspection and testing of the Aircraft and shall bear all costs in connection therewith. | ||
1.1 | Maintenance and Repairs | |
1.1.1 | General Maintenance | |
Lessee, at its own expense, shall, at all times during the Lease Term and until the Aircraft is returned pursuant to the requirements of the Lease Agreement, maintain, service, repair, test, inspect and overhaul the Aircraft, or cause the Aircraft (subject to Section 8 of the Lease Agreement) to be maintained, serviced, repaired, tested, inspected and overhauled in accordance with: |
(1) | Lessees Maintenance Program; | ||
(2) | the rules and regulations of the Aviation Authority; and | ||
(3) | Lessees general maintenance practices and without discrimination. |
The workscope, to the extent practically available, for any maintenance that constitutes Final Maintenance or that will affect the amount of Reserves reimbursable under the Lease Agreement or Return Compensation Payments payable under the Lease Agreement shall be provided to Lessor for review (but not approval) prior to the commencement of such maintenance (or as soon as practical thereafter). Lessor shall have the right to increase such workscope above the workscope required by this Lease Agreement subject to Lessees consent (such consent not to be unreasonably withheld (for example, if such increase in workscope will result in material additional downtime for the Aircraft, Engine or Part, as applicable, Lessee may not consent)), provided that Lessor shall reimburse Lessee for any incremental labor and material costs associated with such increase. | ||
For the avoidance of doubt, Lessee may not perform any maintenance that will materially affect the amount of Reserves reimbursable under the Lease Agreement or Return Compensation Payments payable hereunder prior to the required date for such maintenance, unless required by the Lease Agreement or any other Operative Document, without the consent of Lessor (not to be unreasonably withheld). | ||
1.1.2 | Repairs | |
Lessee shall procure that all repairs to the Aircraft shall be (1) accomplished in accordance with the applicable manufacturers repair manual, (2) otherwise accomplished in accordance with the rules and regulations of the Aviation Authority and EASA and (3) in respect of repairs to the exterior of the Aircraft, flush repairs. All temporary repairs shall be performed in accordance with the Airframe Manufacturers structural repair manual and shall be replaced with permanent |
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repairs in accordance with the Airframe Manufacturers structural repair manual or accompanied with an EASA approved RAS issued by the Airframe Manufacturer prior to the end of the Lease Term. Without limiting the foregoing, all repairs shall be properly documented and Lessee shall ensure that the aircraft records will include repair details, bill of materials used, dirty finger print records and any associated paperwork / correspondence. | ||
1.1.3 | Agreed Maintenance Performer | |
Lessee shall ensure that only an Agreed Maintenance Performer services, maintains, overhauls, repairs or performs any Modifications on or to the Aircraft or any installed engine or part. | ||
1.2 | Replacement of Parts | |
1.2.1 | Replacement of Parts Required | |
Lessee shall replace, at its own expense, all Parts which may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever with replacement parts as set forth in this Section 1.2, and Lessee may not remove any Part (other than Obsolete Parts) for any other reason, provided that (x) Lessee may remove Modification Parts pursuant to Section 1.3.3 of this Schedule 2 and (y) Lessee (or any Permitted Sublessee or any Agreed Maintenance Performer) may temporarily remove in the ordinary course of maintenance, service, repair, overhaul or testing of the Aircraft, any Part, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use provided that Lessee shall reinstall or replace with a replacement part such Part as promptly as practicable (or the end of such maintenance, service, repair, overhaul or testing, whichever is earlier) and (z) Lessee (or any Agreed Maintenance Performer) may temporarily remove any Part if reasonably necessary for use on other Aircraft operated by Lessee, whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use provided that Lessee shall reinstall or replace such Part with a replacement part within 60 days (or the end of the Lease Term, whichever is earlier). Each such replacement part incorporated or installed in or attached or added to the Airframe or any Engine shall: |
(1) | Be free and clear of all Liens except for Permitted Liens. | ||
(2) | Be in as good operating condition, and have the same interchangeable modification status as, be no more than 110% older (in age, cycles or hours) than, and have a value and utility at least equal to, the Part replaced (assuming it was in the condition and repair required under this Lease Agreement) and be OEM parts and not parts manufactured with PMA approval unless previously approved by Lessor in writing. | ||
(3) | Be of the same make and the same or more advanced model. | ||
(4) | Have a current, legal and valid release certificate/airworthiness approval tag identified as FAA Form 8130-3 or EASA Form 1. |
Other than in connection with Clause (y) or (z) above, Lessee may use a replacement part that does not comply with the requirements of this Section 1.2.1 if a complying part cannot be procured or installed within the available ground time of the Aircraft, provided that the original Part is reinstalled or the non-complying part is removed and replaced by a complying part, in |
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each case as promptly as practicable (and in any event on or before the last day of the Lease Term). | ||
1.2.2 | Ownership of Parts | |
Except as provided in the final paragraph of this Section 1.2.1, immediately upon any part (including Modification Parts) becoming incorporated in, installed on or attached to the Airframe or any Engine, without further act: |
(1) | title to such part vest, with full title guarantee, in Owner, free and clear of all Liens other than Permitted Liens and such part shall become subject to the Lease Agreement and any Financing Security Documents and be deemed a Part of such Airframe or such Engine for all purposes hereof; and | ||
(2) | title to any replaced Part shall thereupon vest in Lessee, free and clear of all rights of Owner and Lessor and all Lessor Liens and shall no longer be deemed a Part. |
Lessee will, at its own expense, take all such steps and execute, and procure the execution of, all such instruments as Lessor may reasonably require and which are necessary to ensure that title so passes to Owner according to all applicable laws. At any time when requested by Lessor, Lessee will provide evidence to Lessors reasonable satisfaction that title has so passed to Owner. | ||
All Parts (other than Modification Parts removed in accordance with Section 1.3 of this Schedule 2 and Obsolete Parts) at any time removed from the Aircraft shall remain the property of Owner, no matter where located, until such time as such Parts shall be replaced by Parts which have been incorporated or installed in or attached to the Airframe or any Engine and which meet the requirements set forth in Sections 1.2.1(1)-(4) of this Schedule 2. Obsolete Parts with a value equal to or more than US$50,000 shall either be retained by Lessee and returned with the Aircraft or shall be shipped to Lessor as a location to be designated by Lessor for such part at such time. Obsolete Parts with a value less than US$50,000 may be retained by Lessee. | ||
If any part which does not comply with the requirements of Sections 1.2.1(1)-(4) of this Schedule 2 is incorporated in, installed in or attached to the Aircraft, title to such part shall not vest in Owner and title to the replaced part shall not vest in Lessee until a part complying with such Section 1.2.1(1)-(4) is incorporated, installed in or attached to the Aircraft. | ||
1.3 | Modifications and Inspections | |
1.3.1 | Required Modifications and Inspections | |
Without limiting Lessees obligations under Section 1.1 of this Schedule 2, Lessee shall, at its own expense (subject to Section 1.3.8 of this Schedule) procure that (1) all AD Modifications and all alert SB Modifications applicable to the Aircraft and due or recommended during the Lease Term are completed on a timely basis and (2) all AD inspections and all alert SB inspections due or recommended during the Lease Term are completed on a timely basis (clauses (1) and (2), collectively, Required Actions ). |
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1.3.2 | Lessee Modifications | |
Lessee, at its own expense, may from time to time add further parts or accessories and make such Modifications to the Airframe or any Engine as Lessee may deem desirable in the proper conduct of its business, provided that: |
(1) | Lessee shall not, without Lessors prior written consent, not to be unreasonably withheld, make any Major Modifications to the Aircraft (other than any Modification to the extent that it is part of a Required Action), and, in connection with obtaining such consent, Lessee shall provide Lessor with advance copies of all designs, plans, diagrams, drawings and data to be used by Lessee in accomplishing such Major Modifications. Upon completion of such modification, Lessee shall obtain an EASA supplemental type certificate for such Major Modification or, in lieu thereof, reverse such Modification and return the Aircraft to the condition it was in prior to such Modification so that the Aircraft is in EASA Condition; | ||
(2) | No such Modification (other than any Modification to the extent that it is part of a Required Action) shall (a) diminish the value, marketability or utility of the Airframe or such Engine, (b) damage the Aircraft or (c) impair the condition or airworthiness thereof, assuming in each case the Airframe or such Engine is in the condition and repair required to be maintained by the terms of each Operative Document, provided that with respect to any Modification that only diminishes the marketability of the Aircraft and/or results in minor repairable damage to the Aircraft, then Lessee shall be permitted to perform such Modification provided that prior to the last day of the Lease Term Lessee reverses such Modification and restores the Aircraft to a condition as if such Modification had not been made; and | ||
(3) | Subject to Section 1.3.8 of this Schedule 2, Lessor shall not be required under any circumstances to pay directly or indirectly for any Modifications. |
1.3.3 | Reversal of Modification at Lessees Option | |
Notwithstanding the foregoing, Lessee may, at any time during the Lease Term and at its own expense, reverse any Modification, provided that (1) such Modification is not required to have been made pursuant to the terms hereof and (2) Lessee restores the Aircraft to a condition as if such Modification had not been made. | ||
1.3.4 | [Intentionally Omitted] | |
1.3.5 | Title to Removed Modification Part | |
Upon the removal by Lessee of any Modification Part and reversal of the related Modification as provided in Sections 1.3.3 or 1.3.4 of this Schedule 2, title in such Modification Part shall, without further act, vest in Lessee free and clear of all rights of Owner and Lessor and all Lessor Liens, and such Modification Part shall no longer be deemed a Part of the Airframe or Engine from which it was removed. Any Modification Part not removed by Lessee as above provided prior to the return of the Airframe or Engine to Lessor hereunder shall remain the property of Owner. |
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1.3.6 | Passenger Communication/Entertainment Equipment | |
Notwithstanding Section 1.2 of this Schedule 2, Lessee may from time to time install on the Aircraft equipment that is leased or conditionally sold to Lessee (and title to such equipment shall remain vested in the lessor or conditional vendor thereof) if (1) such equipment is passenger communications and entertainment equipment and (2) it can be removed without causing material damage to the Aircraft and any damage caused by such removal is, prior to Return, repaired so that the Aircraft is restored to a condition as if such installation had not been made. | ||
1.3.7 | Service Bulletin Kits | |
During the Lease Term, Lessee shall from time to time request, and shall install or retain in storage, all SB kits relating to the Aircraft, any Engine or any Part which are available to Lessee at no cost other than shipping and handling costs. If any no cost period lapses without Lessee acquiring such kit, Lessee shall be obligated to acquire such kit at the manufacturers then cost for such kit. | ||
1.3.8 | AD Modification Cost Sharing | |
With respect to each Modification required during the Lease Term by an EASA AD (excluding, for the avoidance of doubt, any Modification required by an Aviation Authority AD which is not also required by an EASA AD) issued during the last two years of the scheduled Lease Term, complied with on a terminating basis during the Lease Term and having a cost of compliance (determined as provided below) in excess of US$100,000, Lessor shall reimburse Lessee, subject to the following provisions, for a portion of the cost of compliance with such modification as follows: | ||
R = (60 - M)/60) x (C - US$100,000) | ||
where | ||
R means the portion of the cost of compliance with such modification to be reimbursed to Lessee. | ||
M means the number of months (including parts thereof counted based on number of days elapsed) between (1) the earlier of (a) the date of actual completion of such modification and (b) the originally required date of mandatory compliance and (2) the scheduled end of the Lease Term. | ||
C means the cost of compliance with such modification at the normal commercial labor charge rates (but without mark-up for profit if Lessee or any Affiliate of Lessee performs the work) of the Agreed Maintenance Performer(s) performing such modification, plus reasonable cost of materials, less any subsidy, warranty payment or other benefit provided to Lessee (but in any case not including loss or expenses incurred because of inability to operate the Aircraft). | ||
Lessee shall submit to Lessor detailed and substantiated labor and material invoices for all such costs for which reimbursement is sought under this Section 1.3.8. Lessor shall pay to Lessee all amounts reimbursable hereunder on the last day of the Lease Term, or if later, promptly following Lessors receipt of such detailed and substantiated labor and material invoices. |
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Nothing in this Section 1.3.8 shall be construed an obligation of Lessor to do anything other than to reimburse Lessee for the portion of the cost of certain ADs. | ||
1.4 | Documentation | |
During the Lease Term, Lessee shall maintain: |
(1) | the Delivery Documentation and all other documentation delivered to Lessee with respect to the Aircraft, either Engine or any Part by Lessor, Airframe Manufacturer, Engine Manufacturer or other vendor or maintenance or repair facility; | ||
(2) | all other logbooks, records, manuals, data, drawings or other documents that are required to be maintained during the Lease Term under the terms of any Operative Document, by the Aviation Authority, EASA, the MPD, Airframe Manufacturer, Engine Manufacturer or the manufacturer of any Part and those that are provided to Lessee or otherwise maintained during the Lease Term with respect to the Aircraft including, in the case of each life-limited Part, accurate back-to-birth records; and | ||
(3) | updates or additions to any of the foregoing and renewals, revisions and replacements to any of the foregoing from time to time created or obtained, including all revisions and updates to any of the foregoing, and any new manuals and documents created, following the completion of modifications or alterations to the Aircraft; |
all of which shall be maintained in the English language, current and up-to-date (through subscription by Lessee to Airframe Manufacturer and Engine Manufacturer update services and with all documents and records unique to the Aircraft to be maintained unique to the Aircraft) and be kept by the Lessee in its possession at a location approved by the Aviation Authority in fire proof storage containers in an area free from any risk of flooding and not, without the Lessors prior written consent, be in the possession or control of any person other than the Lessee. Any Modifications accomplished to the Aircraft during the Lease Term, and not reversed before the end of the Lease Term, which result in a P/N, wiring diagram or operational change shall be incorporated into the applicable manufacturers manuals on a permanent basis. Records with respect to each Airframe Check6Y, Airframe Check12Y, Engine Basic Shop Visit, Engine repair, Landing Gear Overhaul and APU Basic Shop Visit performed during the Lease Term shall be sent to Lessor in electronic form promptly upon completion of each such event. | ||
Any Aircraft Documentation which Lessee is no longer required to retain under the provisions of Lessees Maintenance Program and the requirements of EASA and/or the Aviation Authority shall be returned to Lessor at Return (with the exception of technical log pages and daily, weekly and smaller check work packs). | ||
1.5 | Operation |
(1) | Lessee shall not operate the Aircraft (or permit the operation of the Aircraft) in violation of any Law of any Government Entity having jurisdiction over Lessee or the Aircraft, in violation of the MPD, any manufacturers operating manuals, recommendations or instructions, in violation of any airworthiness certificate, license or registration relating to the Aircraft issued by any such Government Entity, or in violation of U.N. sanctions or restrictions. In addition, Lessee shall not operate the Aircraft (or permit the operation of the Aircraft) in violation of any export Laws (howsoever denominated) applicable to |
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Lessor or Owner. Lessee shall at all times during the Lease Term maintain a valid transport category airworthiness certificate for the Aircraft in full force and effect. |
(2) | Lessee shall not operate or locate the Aircraft or permit the Aircraft to be operated or located (1) outside of the Permitted Jurisdictions, (2) in any area excluded from coverage by, or in any manner or for any purpose excepted from coverage under, any insurance policy in effect or required by the terms of the Lease Agreement or (3) in any war zone or in any recognized or threatened area of hostilities unless covered to the satisfaction of Lessor by appropriate insurance (including war-risk and allied perils). | ||
(3) | Lessee shall not use, or permit the use of, the Aircraft for testing or for training, qualifying or reconfirming the status of flight crew members other than employees of Lessee, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other Airframe Manufacturer Model A330-200 aircraft owned or operated by Lessee. | ||
(4) | Lessee shall ensure that the crew and engineers, if any, employed by it in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licenses required by the Aviation Authority and Laws applicable to Lessee. | ||
(5) | Lessee shall use the Aircraft solely in commercial or other operations for which Lessee is duly authorized by the Aviation Authority and Laws applicable to Lessee. | ||
(6) | Lessee shall not use the Aircraft for the carriage of: |
(a) | whole animals living or dead (other than living humans) except in the cargo compartments according to I.A.T.A. regulations, and except domestic pet animals carried in a suitable container to prevent the escape of any liquid and to ensure the welfare of the animal; | ||
(b) | acids, toxic chemicals, other corrosive materials, explosives, nuclear fuels, nuclear wastes, or any nuclear assemblies or components, except as permitted for passenger aircraft under the Restriction of Goods schedule issued by I.A.T.A. from time to time and provided that all the requirements for packaging or otherwise contained therein are fulfilled; | ||
(c) | any other goods, materials or items of cargo which could reasonably be expected to cause damage to the Aircraft and which would not be adequately covered by the Insurances; or | ||
(d) | with Lessees knowledge, any illegal item or substance. |
(7) | Provided that no Event of Default shall have occurred and be continuing, Lessee may install, and allow to remain installed, an Engine Manufacturer Trent 772B engine on the Airframe other than an Engine so long as such engine is airworthy and otherwise complies with the requirements of the Aviation Authority and all Laws applicable to Lessee. | ||
(8) | In connection with Owners tax planning and structuring, Lessee has agreed not to, and Lessee shall not, use or permit the use of the Aircraft on any route that both originates |
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and terminates in the United States. Promptly following the end of each calendar quarter Lessee shall provide Lessor with sufficient information in written form so that Lessor can determine (a) the total number of landings for the Aircraft during the calendar quarter and (b) the total number of landings and the total number of takeoffs, in each case for the Aircraft in the United States during the calendar quarter, identifying the airport(s) for such United States takeoffs and landings (e.g., copies of Pegasus printouts or the equivalent). | |||
(9) | Neither Engine shall be operated above 71,100 pounds thrust |
1.6 | Identification Plates, Etc. | |
On or before the Delivery Date, Lessor shall affix, and thereafter Lessee shall at all times maintain in respect of the Airframe and each Engine a fireproof and legible identification plate of a reasonable size, in the location specified below, that contains the following legends or any other legend requested from time to time by Lessor in writing: |
(1) | In the case of the Airframe, in the upper sill of the left-hand forward entry door, adjacent to Airframe Manufacturers plate, THIS AIRCRAFT IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE, AND IS HELD UNDER LEASE BY SOUTH AFRICAN AIRWAYS (PTY) LTD. | ||
(2) | In the case of each Engine, in a clearly visible place in close proximity to the manufacturers plate, THIS ENGINE IS OWNED BY WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS OWNER TRUSTEE AND IS HELD UNDER LEASE BY SOUTH AFRICAN AIRWAYS (PTY) LTD. |
1.7 | Inspection | |
At all reasonable times and upon at least 10 days prior written notice to Lessee, Lessors or Security Trustees personnel and/or its authorized representatives may (at Lessors or Security Trustees risk and expense or, if such inspection is made in connection with or following an Event of Default, with no notice and at Lessees expense) inspect the Airframe and Engines and inspect and make copies of the Aircraft Documentation and Lessees Maintenance Program, and if such inspection is made at the time of any maintenance operation, such Persons may inspect behind any panels, bays or other apertures that have already been opened in the course of such maintenance operation, provided that no exercise of such inspection right shall unreasonably interfere with the normal operation or maintenance of the Aircraft by Lessee or any Permitted Sublessee. Neither Lessor nor Security Trustee shall have a duty to make any such inspection nor shall it incur any liability or obligation by reason of making or not making any such inspection. Lessee shall take such action as may reasonably be required by Lessor or Security Trustee to facilitate its inspection, including without limitation facilitating access to any premises where the Aircraft is located. Except during the final 24 months of the Lease Term or during the continuance of an Event of Default, all inspections by Lessor or Security Trustee and their authorized representatives provided for under this Section 1.7 shall, in regard to Lessor or Security Trustee be limited to one inspection of any kind contemplated by this Section 1.7 during any calendar year. During the period commencing 730 days prior to the scheduled expiry date and ending on such scheduled expiry date, there shall be no limit on the number of inspections by Lessor or Security Trustee and their authorized representatives provided for under this Section 1.7. |
-64-
2. | MAINTENANCE RESERVES | |
2.1 | Maintenance Reserves and Adjustments | |
2.1.1 | Amounts |
(1) | The contents of this section are in Exhibit G to the Lease Agreement. | ||
(2) | Lessee shall pay the following amounts to Lessor: |
(a) | On the 15th day of each calendar month following the Delivery Date, the aggregate amount accrued in accordance with Section 2.1.1(1) of this Schedule 2 during the preceding calendar month. | ||
(b) | On the last day of the Lease Term, the aggregate amount accrued in accordance with Section 2.1.1(1) of this Schedule 2 during the Lease Term and not theretofore paid. |
2.1.2 | [Intentionally Omitted] | |
2.1.3 | [Intentionally Omitted] | |
2.1.4 | Letter of Credit in Lieu of Engine Life-Limited Parts Reserves | |
Lessee may elect, by notice to Lessor on or before the Delivery Date, to provide a letter of credit to Lessor in lieu of paying Reserves in respect of life-limited Parts for each Engine (as provided in Section 2.1.1(1)(d) of this Schedule 2). The letter of credit shall comply with the requirements of Section 4.4 of the Lease Agreement except that the initial stated amount of the letter of credit will be in an amount equal to the product of (1) 2 (being the number of Engines), (2) 500 (being the agreed expected cycle utilization of the Engines for one year) and (3) the Reserve Rate set forth in Section 2.1.1(1)(d) of this Schedule 2 as escalated through the Delivery Date. Lessee shall cause the stated amount of the letter of credit to be increased on or before each anniversary of the Delivery Date by an amount equal to the product of (1) 2 (being the number of Engines), (2) the expected cycle utilization of the Engines for the next year of the Lease Term as agreed by Lessor and Lessee (but in no case less than 500 cycles) and (3) the Reserve Rate set forth in Section 2.1.1(1)(d) of this Schedule 2 as escalated through such anniversary. At Return Lessee shall pay Lessor for each Engine an amount equal to the Reserves that Lessor would be holding at Return had Lessee paid reserves for life-limited Parts for each Engine through the Return in accordance with this Section 2 (without regard to this Section 2.1.4) and upon such payment and satisfaction of all the Secured Obligations due at Return Lessor shall return such letter of credit to Lessee. Lessor agrees that it shall not draw such letter of credit for an amount greater than the Reserves that Lessor would be holding at Return had Lessee paid reserves for life-limited Parts for each Engine. | ||
2.2 | Reimbursement | |
Lessor shall, subject to the other provisions of this Section 2 and provided that no Payment/Bankruptcy Default has occurred and is then continuing, reimburse Lessee for the actual costs incurred by Lessee in respect of labor and materials consumed during, and following completion of, the following maintenance during the Lease Term: |
-65-
(1) | Any Airframe Check6Y, Airframe Check12Y, excluding APU and Landing Gear and excluding components (unless such components are scheduled to be overhauled at that check in accordance with the MPD and their lives are fully restored). | ||
(2) | [Intentionally Omitted] | ||
(3) | The replacement of any Engine life-limited Part with a new Part, provided that (a) the reimbursement for any such part shall be reduced by an amount equal to the product of (i) the Dollar amount listed in Section 2.1.1(2)(c) of this Schedule 2, as adjusted by this Section 2, and (ii) the percentage for such part contained in Annex 1 to this Schedule 2 and (iii) (A) the approved cycle-life of such removed Engine life-limited Part less (B) the total cycles then accumulated on such removed Engine life-limited Part and (b) such reimbursement shall be for the cost of the part only and not for its installation. | ||
(4) | An APU Basic Shop Visit. | ||
(5) | A scheduled Landing Gear Overhaul. |
excluding, in each case, (i) any maintenance resulting from design faults or damage covered by warranty or caused by accidental damage, foreign objects, faulty maintenance or operational mishandling; (ii) any cost items which are the costs of transportation or are exchange, handling or similar costs or charges, (iii) any cost which is in excess of the relevant manufacturers list price for the relevant parts or maintenance work; and (iv) any maintenance, overhaul, renewal, replacement or repair cost which is reimbursable out of any insurance claim (assuming, for these purposes, that no deductibles applied to the relevant insurances). | ||
2.3 | Account Balances | |
Lessor shall keep a notional running account in respect of the Airframe, each Engine (life-limited Parts subaccounts), the Landing Gear and the APU to which shall be credited all amounts in respect thereof received under the above Section 2.1 hereof, and debited all sums paid in respect thereof by Lessor to, or on behalf of, Lessee under the above Section 2.2. The life-limited Part subaccount for each Engine to be maintained using a further subaccount for each part using the percentage allocation contained in Annex 1 to this Schedule 2, such life-limited Part allocation to be adjusted on the Delivery Date and each anniversary of the Delivery Date based on the Engine Manufacturers then current list price for such Parts and their respective intervals. | ||
For the avoidance of doubt, it is agreed and acknowledged that the Reserves are additional Rent based on Lessees utilization of or the time elapsed on the Aircraft during the Lease Term and are the sole and exclusive property of Lessor. The purpose of the notional accounts and sub-accounts referred to in this Section 2.3 is solely to determine the amount of Lessor maintenance reimbursement obligation under this Section 2 and Lessee has no right or interest whatsoever in such accounts or the Reserves. Similarly, Lessor shall have no obligation to perform the relevant maintenance or to assure that it has been performed correctly. | ||
2.4 | No Negative Balances | |
Lessor shall not be obliged to pay any sum under Section 2.2 of this Schedule 2 to the extent the amount requested would exceed the lesser of (1) the balance in the relevant notional account (or sub-account, as the case may be) at and as of the time the relevant maintenance event was |
-66-
completed and (2) the balance of such notional account (or sub-account, as the case may be) at the time Lessor is required pursuant to this Section 2 to make a payment to Lessee in respect of such request. In any case in which the amount reimbursed to Lessee under Section 2.2 is not sufficient to pay the cost of the relevant work, Lessee shall be obligated to meet all excess costs from its own resources. No shortfall may be carried forward or made the subject of any further claim for reimbursement. | ||
2.5 | Payments | |
Lessee shall promptly submit to Lessor detailed and substantiated labor and material invoices (including the final statement showing a zero balance due) for all maintenance for which reimbursement is sought under this Section 2 and, in any event, not later than the 90th day following receipt by Lessee of such invoices from the Agreed Maintenance Performer (or, if such maintenance is performed by Lessee, not later than the 90th day following completion of such maintenance). Lessor shall pay to Lessee all amounts reimbursable hereunder promptly upon its receipt of such invoices and any other substantiating documentation reasonably requested by Lessor. |
-67-
Fan
|
||||
LP Rotor Fan Disk
|
5.48 | % | ||
LP Rotor Shaft
|
0.97 | % | ||
Fan Blades
|
17.61 | % | ||
Annulus Fillers
|
5.27 | % | ||
|
||||
Intermediate Pressure Compressor
|
||||
IP Rotor Compressor Shaft
|
16.28 | % | ||
IP Rotor Rear Shaft
|
0.88 | % | ||
|
||||
High Pressure Compressor
|
||||
HP Compressor Rotor
|
26.75 | % | ||
|
||||
High Pressure Turbine
|
||||
HP Turbine Rotor Disc
|
10.93 | % | ||
|
||||
Intermediate Pressure Turbine
|
||||
IP Turbine Rotor Disc
|
1.11 | % | ||
IP Turbine Rotor Shaft
|
5.01 | % | ||
|
||||
Low Pressure Turbine
|
||||
LP Turbine Stage 1 Disc
|
1.95 | % | ||
LP Turbine Stage 2 Disc
|
1.95 | % | ||
LP Turbine Stage 3 Disc
|
2.37 | % | ||
LP Turbine Stage 4 Disc
|
1.36 | % | ||
LP Turbine Rotor Shaft
|
2.09 | % | ||
|
||||
|
100 | % |
-68-
1. | CONDITION OF AIRFRAME AND ENGINES | |
On the Delivery Date, the Aircraft shall be delivered new from the Airframe Manufacturer in compliance with the Baseline Specification and otherwise, subject to availability, as follows: | ||
1.1 | SCNs | |
With the following SCN selections and any MSCNs applicable to the Aircraft: |
Price | ||||||
EPAC/TDU | TITLE | USD 01/08 | ||||
|
||||||
ATA 02 Certification
|
||||||
CL02.10.134/37 |
Compliance status report EU OPS equivalent of JAR OPS 1,
subparts K and L
|
5,000 | ||||
CL02.10.133/01 |
Full compliance with FAR Amendment 121-306 new assist space
requirements |
6,900 | ||||
CL02.40.100/01 |
Rudder leading edge painting according to vertical
stabilizer dominant color
|
No Charge | ||||
CL02.40.101/01 |
External livery
|
116,500 | ||||
|
||||||
ATA 03 General Aircraft Design Criteria
|
||||||
CL03.20.321.57 |
A330-2xx dual weight variant MTOW to 236 t, MLW to 182 t,
MZFW to 170 t / MTOW to 238 t, MLW to 182 t, MZFW to 168 t
|
No Charge | ||||
|
||||||
ATA 11 Placards and markings
|
||||||
CL11.00.124/01 |
Installation of leasing plate on engines
|
No Charge | ||||
CL11.00.124/02 |
Installation of leasing plate on forward LH passenger door
|
No Charge | ||||
CL11.00.124/03 |
Installation of leasing plate on cockpit rear partition
|
No Charge | ||||
CL11.00.124/04 |
Installation of leasing plate on APU
|
No Charge | ||||
CL11.30.110/04 |
Passenger placards and signs alternate marking English only
|
No Charge | ||||
|
||||||
ATA 21 Air Conditioning
|
||||||
CL21.20.110/06 |
Particle filter element LE BOZEC, PN 430B100-3
|
No Charge | ||||
CL21.28.105/08 |
Installation of lower deck fwd cargo compartment ventilation
system and temp control (A330/A340-300)
|
404,100 | ||||
CL21.70.102/03 |
Combined VOC/ozone catalytic converters alternate equipment
ENGELHARDT, PN 44142002 |
6,500 |
-69-
Price | ||||||
EPAC/TDU | TITLE | USD 01/08 | ||||
ATA 23 Communications
|
||||||
GLOBAL IFE
|
546,400 | |||||
GLOBAL CIDS
|
40,000 | |||||
CL23.00.100/12 |
Installation of an automatic ELT with remote control panel in the
cockpit ELTA ADT 406 AF
|
15,900 | ||||
CL23.11.110/06 |
Activation of HF datalink function for HFDR1 on Fans A and Fans
A+ configuration
|
42,500 | ||||
CL23.11.135/02 |
Dual HF system alternate equipment HONEYWELL
|
No Charge | ||||
CL23.11.157/09 |
Dual HFDR system HONEYWELL
|
36,600 | ||||
CL23.12.130/02 |
VDR HONEYWELL, PN 064-50000-0505
|
No Charge | ||||
CL23.12.130/18 |
VDR transceivers capable mode 2 HONEYWELL, RTA-50D, PN
965-1696-051 |
No Charge | ||||
CL23.28.110/16 |
High rate SATCOM avionics MCS 7000 (7 channels AERO H+) with
RFUIA HONEYWELL
|
No Charge | ||||
CL23.36.334/07 |
IFE Media content loading at Final Assembly Line
|
6,200 | ||||
CL23.50.126/36 |
Boomsets alternate equipment SENNHEISER type HME46-C, PN
046-55-999-0231
|
No Charge | ||||
CL23.50.144/13 |
Installation of headset for fourth occupant SENNHEISER type HD
46-K1, PN 046-69-999-0931
|
850 | ||||
CL23.70.110/02 |
Installation of Cockpit Door Surveillance System (CDSS)
|
25,500 | ||||
CL23.71.175/06 |
CVR HONEYWELL, PN 980-6022-001
|
No Charge | ||||
Additional i5000 data wiring cabin redundancy at FDB-FDB level
|
Incl. In Global IFE | |||||
Cable raceway relocation in B/C
|
TBD | |||||
|
||||||
ATA 24
|
||||||
CL24.56.134/03 |
Additional 15 kVA galley power supply in door n° 4 area
|
32,900 | ||||
|
||||||
ATA 25 Cabin & Cockpit
|
||||||
CL25.23.500/01 |
INTERIOR COLOR SCHEME DEFINITION
|
Incl. In Cabin | ||||
GLOBAL EMERGENCY EQUIPMENT
|
10,000 | |||||
GLOBAL CABIN LAYOUT
|
1,390,000 | |||||
GALLEY COOLING
|
25,100 | |||||
GLOBAL ISPSS
|
10,400 | |||||
CL25.24.164/07 |
Deletion of lateral OHSC at door 3 level
|
Incl. in Cabin | ||||
CL25.35.050/01 |
Installation of galley catering equipment (BFE)
|
Incl. in Cabin | ||||
CL25.45.100/01 |
Lavatory equipment selection (SFE)
|
Incl. in Cabin | ||||
CL25.26.205/40 |
Installation of curtains according to curtain definition checklist
|
Incl. in Cabin | ||||
CL25.74.200/01 |
Structural and system provisions for a main deck FCRC
|
Incl. In FCRC install | ||||
CL25.74.210/06 |
Inst. Of main deck FCRC based on prov. dual pilot compmnt (temp.
Ctrl in AAP) (SFE)
|
446,200 | ||||
CL25.75.231/02 |
Installation of a large staircase housing/stowage at door 3 for
LDMCR (large entrance cutout) (BFE)
|
Incl. In LDMCR install | ||||
CL25.75.235/02 |
Structural and system provision for LDMCR at door 3 with large
entrance cut-out
|
Incl. In LDMCR install |
-70-
Price | ||||||
EPAC/TDU | TITLE | USD 01/08 | ||||
CL25.75.240/01 |
Installation of an LDMCR in the aft lower deck cargo compartment
(BFE)
|
605,000 | ||||
CL25.11.140 / 11 |
Captain and first officer seat covering with grey sheepskin
|
9,200 | ||||
CL25.50.160/02 |
Installation of sidewall lining protections in lower deck cargo
compartments
|
16,900 | ||||
CL25.65.100/06 |
Installation of one pair of fireproof gloves (BFE) BENNETT
SAFETYWEAR LTD, PN FKK8-35KL
|
Incl. in EE | ||||
CL25.40.245/08 |
Provision for installation of lavatory at position L74 (TYPE Z)
|
Incl in Cabin | ||||
CL25.52.100/01 |
Installation of additional tie-down points in lower deck forward
cargo compartment
|
20,800 | ||||
CL25.30.359/51 |
Structural and system provisions for installation of galley at
location 31.100
|
Incl in Cabin | ||||
CL25.34.750/01 |
Floor Thermal insulation
|
Incl. in Galley cooling | ||||
|
||||||
ATA 26 Fire protection
|
||||||
CL26.13.101/02 |
APU fire extinguisher KIDDE AEROSPACE, PN 472 412-1
|
No Charge | ||||
CL26.21.107/std |
Engine fire extinguishers PACIFIC SCIENTIFIC
|
STD | ||||
CL26.23.106/std |
Cargo fire extinguishers KIDDE
|
STD | ||||
CL26.24.110 / 12 |
Cockpit portable fire extinguisher (SFE) TOTAL FEUERSCHUTZ, PN
74-20
|
900 | ||||
CL26.24.600 / 22 |
Installation of halon fire extinguisher in cabin (SFE) TOTAL
FEUERSCHUTZ, PN 74-20
|
Incl. in Global EE | ||||
|
||||||
ATA 27 Flight controls
|
||||||
CL27.50.103/01 |
Flap track sealed for life roller bearings KAMATICS, PN
27F5757306X.20X
|
19,300 | ||||
|
||||||
ATA 29 Hydraulic power
|
||||||
CL29.10.113/05 |
Electro Motor Pumps (EMP) EATON AEROSPACE, PN 974540
|
No Charge | ||||
|
||||||
ATA 31 Indicating/Recording systems
|
||||||
CL31.33.114/14 |
Flight Data Recorder (FDR) (256 w/s) HONEYWELL, PN 980-4700-042
|
No Charge | ||||
|
||||||
ATA 32 Landing Gear
|
||||||
CL32.40.100/24 |
A330 Wheels and brakes HONEYWELL (2 500 LPO)
|
No Charge | ||||
CL32.41.140/32 |
A330 Radial tires (MLG) BRIDGESTONE, PN APR06911
|
No Charge | ||||
CL32.41.141/04 |
A330-200/300 & A340-300 Radial tires (NLG) BRIDGESTONE, PN
APR06500
|
No Charge | ||||
|
||||||
ATA 33 Lights
|
||||||
Global lighting
|
54,200 | |||||
CL33.24.150 / 02 |
B/C Lavatory lighting Reduced dimmed illumination
|
No Charge |
-71-
Price | ||||||
EPAC/TDU | TITLE | USD 01/08 | ||||
CL33.24.150 / 03 |
Y/C Lavatory lighting Reduced dimmed illumination
|
No Charge | ||||
CL33.25.200 / 02 |
Installation of in-seat reading light in B/C
|
No Charge | ||||
CL33.26.115 / 01 |
Self dimmed Lavatory Occupied Signs
|
3,700 |
-72-
Price | ||||||
EPAC/TDU | TITLE | USD 01/08 | ||||
ATA 34 Navigation
|
||||||
CL34.15.112/01 |
Angle of attack sensor BF GOODRICH AEROSPACE, PN 0861ED
|
No Charge | ||||
CL34.20.203/02 |
ISIS baro setting in inches Hg
|
3,900 | ||||
CL34.20.203/04 |
ISIS display of metric altitude
|
3,900 | ||||
CL34.41.125/26 |
Dual weather radar HONEYWELL with PWS and autotilt activation, new dual
antenna mount
|
56,000 | ||||
CL34.42.100/17 |
Radio altitude automatic call-outs
|
4,000 | ||||
CL34.42.113/13 |
Radio altimeter HONEYWELL Quantum line
|
No Charge | ||||
CL34.51.108/09 |
DME HONEYWELL, PN 066-50013-1212
|
No Charge | ||||
CL34.52.102/01 |
Compliance with ADS-B OUT regulation for NRA
|
3,600 | ||||
CL34.00.300/01 |
RNP AR/SAAAR capability (Step 1)
|
70,000 | ||||
CL34.55.102/09 |
VOR/MARKER receivers alternate equipment HONEYWELL, PN 066-50012-1212
|
No Charge | ||||
CL34.58.310/34 |
MMR alternate equipment providing ILS and GPS functions with FLS/GLS
capability ROCKWELL COLLINS
|
No Charge | ||||
|
||||||
ATA 35 Oxygen
|
||||||
CL35.11.110/02 |
In-situ replenishment facility for cockpit oxygen cylinder (A330/A340)
EROS, PN DKR142 |
32,500 | ||||
CL35.11.112/01 |
Flight crew oxygen cylinder 115 cu ft (steel) EROS, PN 891511-14
|
1,900 | ||||
CL35.22.021/11 |
Installation of one additional mask in each oxygen box (chemical system)
|
6,700 | ||||
CL35.30.106 / 03 |
One PBE in cockpit DAe SYSTEMS GmbH, PN E28180-10 (SFE)
|
300 | ||||
CL35.32.490 / 01 |
Portable oxygen device General information and typical installation
|
Incl. in Global EE | ||||
CL35.32.505 / 21 |
Installation of PBE in cabin (SFE) DAe SYSTEMS GmbH, PN E28180-10
|
Incl. in Global EE | ||||
CL35.32.601 / 01 |
Instal. of portable oxygen cylinder AVOX SYSTEMS INC 4.25 cuft outlet
code A, PN 9700-A1A-BF23A
|
Incl. in Global EE | ||||
CL35.32.640 / 02 |
Installation of demo oxygen mask AVOX SYSTEMS INC, PN 289-1002
|
Incl. in Global EE | ||||
CL35.32.650 / 01 |
Installation of manual release tool for passenger oxygen system B/E
AEROSPACE ISG, LENEXA
|
Incl. in Global EE | ||||
|
||||||
ATA 38 Water/Waste
|
||||||
CL38.00.222/02 |
Certificate of sanitary construction for water and waste system
compliance with USPHSS
|
No Charge | ||||
CL38.00.222/03 |
Disinfections result certificate for potable water system
|
No Charge | ||||
CL38.11.112/01 |
Installation of a third potable water tank (total capacity 1 050 liters)
|
42,800 | ||||
CL38.11.116/01 |
Water quantity preselection of potable water at service panel (A330 and
A340-300)
|
12,800 | ||||
CL38.12.102/04 |
Installation of potable water filter housing and cartridge 1
micrometer dechlorinating
|
900 |
-73-
Price | ||||||
EPAC/TDU | TITLE | USD 01/08 | ||||
ATA 46 Information Systems
|
||||||
CL46.21.100/10 |
Airbus AOC software for ATSU (Fans A+) (weights in kg) HONEYWELL
|
No Charge | ||||
CL46.21.105/01 |
Activation of ARINC 623 in the ATSU
|
7,200 | ||||
CL46.21.111/01 |
Activation of VDL mode 2 function in the ATSU
|
37,600 | ||||
|
||||||
ATA 47
|
||||||
CL47.10.100 / 01 |
Installation of system provision for Fuel Tank Inerting System (FTIS)
|
107,000 | ||||
|
||||||
ATA 51 Structure
|
||||||
CL51.22.230/04 |
Intermediate coat paint system (LOW VOC/CF primer) fuselage and vertical stabilizer
|
41,100 | ||||
|
||||||
ATA 52 Doors
|
||||||
CL52.51.103/02 |
Installation of deadbolt for manual locking of cockpit door
|
No Charge | ||||
CL52.51.104/01 |
Install damping devices to reduce noise by door slam
|
14,500 | ||||
|
||||||
ATA 55 Stabilizer
|
||||||
CL55.30.101/01 |
Metal sheet cover on vertical stabilizer
|
15,700 | ||||
|
||||||
ATA 56 Windows
|
||||||
CL56.10.104/10 |
PPG INDUSTRIES front and side windows (chemically tempered)
|
No Charge | ||||
|
||||||
ATA 72 Engines
|
||||||
CL72.00.117/03 |
Engines selection RR TRENT 772B
|
No Charge | ||||
|
||||||
ATA 79 Oil
|
||||||
CL79.20.100/13 |
Engine, engine accessories and APU lubricating oil BP 2197
|
No Charge |
-74-
Price | ||||
EPAC/TDU | TITLE | USD 01/08 | ||
|
||||
ATA 02 Certification
|
||||
CL02.12.122/04 |
ETOPS up to 240 minutes
|
TBD |
-75-
1.2 | BFE | |
With the following BFE selections: |
Price | ||||||||
EPAC/TDU | TITLE | USD 01/09 | COMMENTS | |||||
CL23.00.100/12 |
Installation of an automatic ELT with remote
control panel in the cockpit ELTA ADT 406 AF
|
$ | 10,000 | |||||
CL23.28.110/16 |
High rate SATCOM avionics MCS 7000 (7 channels
AERO H+) with RFUIA HONEYWELL
|
$ | 318,164 | |||||
CL23.30.017/33 |
Thales Avionics TopSeries (i5000) IFE
|
$ | 2,824,912 | Recurring Cost per aircraft | ||||
CL23.30.017/34 |
Thales Avionics TopSeries (i5000) IFE
|
$ | 0 | Non Recurring Cost per fleet | ||||
CL25.21.20.00 |
Seat Cover Fabric/Leather Lantal
|
$ | 90,000 | |||||
CL25.21.460/60 |
Sicma Majesty Business Class Seats
|
$ | 1,693,613 | Recurring Cost per aircraft | ||||
CL25.21.460/61 |
Sicma Majesty Business Class Seats
|
$ | 371,250 | Non Recurring Cost per fleet | ||||
CL25.21.470/80 |
Webber 5750 Economy Class Seats
|
$ | 781,129 | Recurring Cost per aircraft | ||||
CL25.21.470/81 |
Webber 5750 Economy Class Seats
|
$ | 451,862 | Non Recurring Cost per fleet | ||||
CL25.21.710/02 |
Installation of 110 VAC / 60 Hz PED power
outlets in B/C seat KID-SYSTEME GMBH
|
(Incl in IFE cost) | ||||||
CL25.22.300/03 |
Installation of high comfort floor-mounted cabin
attendant seat (Goodrich Interiors) forward door
2, LH, at location 53
|
$ | 23,000 | |||||
CL25.22.300/04 |
Installation of high comfort floor-mounted cabin
attendant seat (Goodrich Interiors) forward door
2, RH, at location 55
|
$ | 23,000 | |||||
CL25.26.205/40 |
INSTALLATION OF CURTAINS ACCORDING TO CURTAIN
DEFINITION CHECKLIST |
$ | 10,000 | |||||
INSTALLATION OF CARPETS
|
$ | 30,000 | ||||||
CL25.27.313/01 |
Installation of wall-mounted baby bassinet based
on provisions INNOVINT
|
$ | 1,000 | |||||
CL25.30.005/01 |
AIM Aviation Henshalls Galleys
|
$ | 1,149,222 | Recurring Cost per aircraft | ||||
CL25.30.005/02 |
AIM Aviation Henshalls Galleys
|
$ | 309,959 | Non Recurring Cost per fleet | ||||
CL25.34.410/31 |
Installation of 4500 BTU/h air chiller unit
B/E AEROSPACE, PN 236-8
|
Incl in Galley | ||||||
CL25.34.410/51 |
Installation of 7000 BTU/h air chiller unit
B/E AEROSPACE, PN 267-100
|
Incl in Galley Equipment |
-76-
Price | ||||||||
EPAC/TDU | TITLE | USD 01/09 | COMMENTS | |||||
CL25.35.050/01 |
Installation of galley catering equipment
|
See Table below | ||||||
CL25.65.00.00 |
Seat Belts
|
$ | 10,000 | |||||
CL25.65.100/06 |
Installation of one pair of fireproof
gloves BENNETT SAFETYWEAR LTD, PN FKK8-35KL
|
$ | 30 | |||||
CL25.66.00.00 |
Life Vests
|
$ | 10,000 | |||||
CL25.75.231/02 |
Installation of a large staircase
housing/stowage at door 3 for LDMCR (large
entrance cutout)
|
$ | 670,605 | Recurring Cost per aircraft | ||||
CL25.75.231/03 |
Installation of a large staircase
housing/stowage at door 3 for LDMCR (large
entrance cutout)
|
$ | 0 | Non Recurring Cost per fleet | ||||
CL25.75.240/01 |
Installation of an LDMCR in the aft lower
deck cargo compartment
|
$ | 97,575 | Recurring Cost per aircraft | ||||
CL25.75.240/02 |
Installation of an LDMCR in the aft lower
deck cargo compartment
|
$ | 0 | Non Recurring Cost per fleet | ||||
CL33.25.200 / 02 |
Installation of in-seat reading light in B/C
|
Incl in Business Class Seats | ||||||
CL46.21.100/10 |
Airbus AOC software for ATSU (Fans A+)
(weights in kg) HONEYWELL
|
$ | 11,587 |
-77-
S/S Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Item | Equipment | Supplier | P/N | Price | Status | G1A | G1R | G2F | G2A | G4F | G4L | G4R | S3R | S2R | S2L | Total | S/S Price | (01/ 09 USD) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1
|
WATER BOILER | B/E Aerospace | 4360004-85-00-18 | | 4,998.00 | BFE | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 1 | | 4,998 | $ | 7,997 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2
|
HOT CUP | DRIESSEN | JA028003 | $ | 300 | BFE | 1 | 0 | 1 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 3 | $ | 900 | $ | 900 | |||||||||||||||||||||||||||||||||||||||||||||||||||
6
|
ESPRESSO MAKER | IACOBUCCI | HFE-2005-01 | | 10,500 | BFE | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | | 21,000 | $ | 33,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||
6
|
MOUNTING RAIL | IACOBUCCI | CA2-01 | | 1,000 | BFE | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | | 2,000 | $ | 3,200 | |||||||||||||||||||||||||||||||||||||||||||||||||||
7
|
STEAM OVEN | B/E Aerospace | 4323100-01-6622 | | 10,298 | BFE | 2 | 0 | 2 | 1 | 0 | 3 | 4 | 0 | 0 | 0 | 12 | | 123,576 | $ | 197,722 | |||||||||||||||||||||||||||||||||||||||||||||||||||
8
|
TRASH COMPACTOR | MONOGRAM | 3210005WB106 | $ | 47,000 | BFE | 0 | 0 | 0 | 1 | 0 | 1 | 0 | 0 | 0 | 0 | 2 | $ | 94,000 | $ | 94,00 | |||||||||||||||||||||||||||||||||||||||||||||||||||
9
|
COFFEE MAKER | B/E Aerospace | 4510-42LG-00 | $ | 7,174 | BFE | 2 | 0 | 2 | 3 | 0 | 2 | 2 | 0 | 0 | 0 | 11 | $ | 78,914 | $ | 78,914 | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
COFFEE MAKER RAIL | B/E Aerospace | 64759-151 | $ | 1,002 | BFE | 2 | 0 | 2 | 3 | 0 | 2 | 2 | 0 | 0 | 0 | 11 | $ | 11,022 | $ | 11,022 | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
INSULATED SERVER | B/E Aerospace | 3520-0603-01 | $ | 0 | 2 | 0 | 2 | 3 | 0 | 2 | 2 | 0 | 0 | 0 | 11 | $ | 0 | $ | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
10
|
Air Chiller 4500BTU | B/E Aerospace | 236-8 | $ | 22,849 | BFE | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | $ | 22,849 | $ | 22,849 | |||||||||||||||||||||||||||||||||||||||||||||||||||
11
|
Air Chiller | B/E Aerospace | 267-100 | $ | 23,951 | BFE | 0 | 0 | 1 | 1 | 0 | 1 | 1 | 0 | 0 | 0 | 4 | $ | 95,804 | $ | 95,804 |
-78-
bbbb1.4 | LOPA |
In the configuration as pictured in the LOPA attached as Annex 1 to this Schedule 3. | ||
Any Airframe Manufacturer paperwork (including any SCNs) signed by both Lessee and Lessor (or an Affiliate) shall be deemed an amendment to this Schedule 3. | ||
2. | AIRCRAFT DOCUMENTATION | |
Lessor shall deliver to Lessee at the Delivery Location the Delivery Documentation. | ||
3. | WARRANTIES | |
With effect from the Delivery Date and for the period of the Lease Term, Lessor will make available to Lessee, and authorize Lessee to exercise, such rights as Lessor may have under any warranty with respect to the Aircraft, any Engine or any Part made by any manufacturer, vendor, storage company, sub-contractor or supplier, to the extent that the same may be made available to Lessee and subject to any terms and conditions set forth in the relevant agreement with the relevant manufacturer, vendor, storage company, subcontractor or supplier including any necessary consents. | ||
4. | TRAINING AND OTHER SERVICES | |
No Airframe Manufacturer training is being provided by Lessor with respect to the Aircraft. | ||
5. | PERFORMANCE GUARANTEE | |
With effect from the Delivery Date and for the period of the Lease Term, Lessor assigns to Lessee, and authorizes Lessee to exercise, such rights (including the right to payment) as Lessor may have under the performance guarantees received from Airframe Manufacturer with respect to the Aircraft pursuant to a letter agreement dated on or about December 16, 2009. |
-79-
1. | PRE-DELIVERY INSPECTION | |
1.1 | Inspection Process | |
Lessee shall inspect the Aircraft and participate in a demonstration flight of the Aircraft to be conducted by Lessor or its designee at the Delivery Location. Lessee shall participate in such inspections and demonstration flight and shall give Lessor prompt notice of any potential discrepancies from the condition of the Aircraft as described in Part 1 of this Schedule 3. Lessor and Lessee shall enter into a Airframe Manufacturer Participation Agreement in form and substance reasonably satisfactory to Lessor and Lessee. | ||
1.2 | Discrepancies | |
Any discrepancy from the condition of the Aircraft as described in Part 1 of Schedule 3 which is identified in writing to Lessor by Lessee on or prior to the Scheduled Delivery Date and which is not corrected by Lessor or Airframe Manufacturer on or prior to the Delivery Date shall be corrected by Airframe Manufacturer or its designee, at Airframe Manufacturers cost and expense, after the Delivery Date pursuant to a commitment letter procured from Airframe Manufacturer by Lessor or, if Lessor is unable to procure such a commitment letter with respect to such discrepancy, shall be corrected by Lessee or its designee and Lessor shall reimburse Lessee at 100% of Lessees reasonable actual cost for such correction, payable on demand (together with detailed and substantiated labor and material invoices for all such amounts for which reimbursement is sought). Lessees rights under such commitment letter or, if applicable, its right to make such a claim for reimbursement shall be Lessees sole remedy for noncompliance, and Lessee shall not have the right to refuse acceptance of the Aircraft because of such discrepancies unless the existence of such discrepancies would prevent the use of the Aircraft in Lessees expected commercial operation. | ||
2. | CHANGES IN DELIVERY DATE | |
If on the Scheduled Delivery Date any of the conditions precedent specified in Schedules 7 or 8 has not been met or waived in accordance with such Schedules, then the delivery of the Aircraft under this Lease Agreement shall be delayed beyond the Scheduled Delivery Date and Lessee shall accept delivery of the Aircraft on the first Business Day after the Scheduled Delivery Date on which all of such conditions precedent have been so satisfied or waived. Notwithstanding the foregoing, if delivery of the Aircraft under the Lease Agreement is delayed more than 365 days past the last day of [______], either party hereto (unless such delay is caused by such party failing to satisfy a condition precedent for which it is responsible as set forth in Schedule 7 or 8, as applicable) may, by written notice to the other, terminate this Lease Agreement and each other Operative Document, whereupon, except as otherwise provided in Section 13 of the Lease Agreement, (1) Lessor shall return to Lessee the Security Deposit and/or the Letter of Credit and any amounts of RentPeriodic paid by Lessee prior to such termination and (2) neither Lessor nor Lessee shall have any further obligation to the other hereunder or thereunder. | ||
If the Delivery Date has not occurred on or prior to the Scheduled Delivery Date, and Lessee does not exercise its option to terminate this Agreement pursuant to this Section 2, Lessor shall pay to Lessee Lessees Share of any per diem delay penalty actually paid by Airframe Manufacturer for the Aircraft with respect to the period from the Scheduled Delivery Date through the Delivery Date. If the Delivery Date occurs then such amount shall be paid by |
-80-
Lessor to Lessee promptly after the Delivery Date and if the Delivery Date does not occur or a Payment/Bankruptcy Default has occurred and is continuing then Lessee shall not be entitled to any share of such penalty. For purposes of this paragraph, Lessees Share shall be such per diem delay penalty payable, and actually paid, by Airframe Manufacturer to the extent it exceeds Lessors costs and expenses arising out of such delay, including, without limitation Lessors cost of funds for any pre-delivery payments held by Airframe Manufacturer. | ||
If an Event of Loss occurs with respect to the Aircraft prior to the Delivery Date and the Aircraft is not being replaced by the Airframe Manufacturer pursuant to the purchase agreement for the Aircraft and the Scheduled Delivery Date postponed accordingly, then this Lease Agreement and each other Operative Document shall automatically terminate and (1) Lessor shall return to Lessee the Security Deposit and/or the Letter of Credit and any amounts of RentPeriodic paid by Lessee prior to such termination and (2) neither Lessor nor Lessee shall have any further obligation to the other hereunder or thereunder. | ||
3. | DISCLAIMER | |
EFFECTIVE UPON ACCEPTANCE OF THE AIRCRAFT BY LESSEE, WHICH SHALL BE EVIDENCED BY DELIVERY OF THE AIRCRAFT TO LESSEE AND LESSEES EXECUTION OF THE ACCEPTANCE CERTIFICATE, THE AIRCRAFT SHALL BE LEASED UNDER THE LEASE AGREEMENT AS-IS, WHERE-IS, WITH ALL FAULTS AND LESSEE AGREES, ACKNOWLEDGES AND ACCEPTS THAT NO INDEMNIFIED PARTY MAKES ANY WARRANTY OR REPRESENTATION WHATSOEVER CONCERNING THE AIRCRAFT. EFFECTIVE UPON ACCEPTANCE OF THE AIRCRAFT BY LESSEE, WHICH SHALL BE EVIDENCED BY DELIVERY OF THE AIRCRAFT TO LESSEE AN LESSEES EXECUTION OF THE ACCEPTANCE CERTIFICATE, LESSEE, FOR THE BENEFIT OF EACH INDEMNIFIED PARTY, HEREBY WAIVES, RELEASES AND RENOUNCES ALL WARRANTIES, REPRESENTATIONS AND OTHER INDEMNITIES, GUARANTIES, OBLIGATIONS AND LIABILITIES OF ANY INDEMNIFIED PARTY AND ANY RIGHTS, CLAIMS AND REMEDIES OF LESSEE, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, IN EACH CASE, WITH RESPECT TO THE AIRCRAFT, ANY ENGINE, ANY PART, ANY AIRCRAFT DOCUMENTATION OR ANY OTHER THING DELIVERED, LEASED, SOLD OR TRANSFERRED UNDER ANY OPERATIVE DOCUMENT, INCLUDING: |
(1) | ANY WARRANTY AS TO THE AIRWORTHINESS, VALUE, CONDITION, DESCRIPTION, DESIGN OR OPERATION THEREOF, OR THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, OR THE ABSENCE OF ANY DEFECT THEREIN; | ||
(2) | ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE; | ||
(3) | ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; | ||
(4) | ANY OBLIGATION OR LIABILITY WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT OR OTHER INTELLECTUAL PROPERTY INFRINGEMENT; | ||
(5) | ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT IN STRICT OR ABSOLUTE LIABILITY OR ARISING |
-81-
FROM THE NEGLIGENCE OF ANY INDEMNIFIED PARTY, ACTUAL OR IMPUTED, ACTIVE OR PASSIVE; |
(6) | ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO THE AIRCRAFT, ANY ENGINE, ANY PART, ANY AIRCRAFT DOCUMENTATION OR ANY OTHER THING, AND | ||
(7) | FOR ANY LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES. |
DELIVERY BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE AIRCRAFT AND THE AIRCRAFT DOCUMENTATION, THAT THE AIRCRAFT AND THE AIRCRAFT DOCUMENTATION ARE SATISFACTORY TO LESSEE AND THAT LESSEE HAS IRREVOCABLY AND UNCONDITIONALLY ACCEPTED THE AIRCRAFT FOR LEASE HEREUNDER WITHOUT ANY RESERVATIONS WHATSOEVER. | ||
TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ANY STATUTE OR OTHERWISE THAT MAY LIMIT OR MODIFY LESSORS RIGHTS OR LIMIT OR MODIFY LESSEES OBLIGATIONS AS DESCRIBED IN THIS LEASE AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT. | ||
LESSEE HEREBY CONFIRMS THAT IT HAS BEEN ADVISED OF AND FULLY UNDERSTANDS THE LEGAL IMPORT AND IMPLICATIONS OF THIS SECTION 4 AND THAT THE PROVISIONS OF THIS SECTION 4 ARE APPROPRIATE IN A TRANSACTION OF THIS KIND. | ||
FOR THE AVOIDANCE OF DOUBT, THE FOREGOING SHALL NOT AFFECT OR DIMINISH IN ANY WAY LESSEES RIGHTS AGAINST AIRFRAME MANUFACTURER, ENGINE MANUFACTURER OR THE MANUFACTURER OF ANY PART. | ||
4. | POST DELIVERY | |
As soon as they are available but in any event within 30 days after the Delivery Date Lessee shall provide the following to Lessor: |
(1) | Evidence of the registration of the Aircraft in accordance with Section 7 of the Lease Agreement, including a copy of the Certificate of Registration issued by the Aviation Authority. | ||
(2) | A copy of the certificate of airworthiness for the Aircraft issued by the Aviation Authority. | ||
(3) | A copy of the Air Operators Certificate (with reference to the Aircraft) issued by the Aviation Authority. | ||
(4) | Any other evidence that the Aircraft has been validly registered under the laws of the State of Registration and all other filing and registrations required by the Lease Agreement have been made. |
-82-
-83-
NOMENCLATURE
|
Self-explanatory. | |
|
||
ABBREVIATED DESIGNATION (Abbr)
|
Self-explanatory. | |
|
||
AVAILABILITY (Avail)
|
| ON-LINE (ON) through the relevant service on Airbus|World, and / or | |
| OFF-LINE (OFF) through the most suitable means applicable to the size of the concerned document (e.g CD or DVD). |
| SGML Standard Generalized Mark-up Language, which allows further data processing by the Buyer. | |
| XML Extensible Mark-up Language, evolution of the SGML text format to cope with WEB technology requirements. | |
| CGM Computer Graphics Metafile, format of the interactive graphics associated with the XML and /or SGML text file delivery. | |
| PDF (PDF) Portable Document Format allowing data consultation. | |
| Advanced Consultation Tool refers to Technical Data Consultation application that offers advanced consultation & navigation functionality compared to PDF. Both browser software & Technical Data are packaged together. | |
| P1 / P2 refers to manuals printed on one side or both sides of the sheet. | |
| CD-P refers to CD-Rom including Portable Document Format (PDF) Data. |
TYPE
|
C | CUSTOMIZED. Refers to manuals that are applicable to an individual Airbus customer/operator fleet or aircraft. | ||
|
||||
|
G | GENERIC. Refers to manuals that are applicable for all Airbus aircraft types/models/series. |
-84-
|
E | ENVELOPE. Refers to manuals that are applicable to a whole group of Airbus customers for a specific aircraft type/model/series. |
QUANTITY (Qty)
|
Self-explanatory for physical media. | |
|
||
DELIVERY (Deliv)
|
Delivery refers to scheduled delivery dates and is expressed in either the number of corresponding days prior to first Aircraft delivery, or nil (0) corresponding to the first delivery day. | |
|
||
|
The number of days indicated shall be rounded up to the next regular revision release date. |
-85-
-86-
NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
Flight Manual
|
FM | OFF | P2 | C | 1 | 0 | Plus one copy per Aircraft at Delivery | |||||||||||
|
FM | OFF | CD-P | C | 5 | 0 | ||||||||||||
|
FM | ON | C | N/A | 0 |
-87-
NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
OPERATIONAL MANUALS AND DATA | ||||||||||||||||||
Master Minimum Equipment List
|
MMEL | OFF | P2 | C | 2 | 180 | Plus one copy per Aircraft at Delivery | |||||||||||
|
MMEL | OFF | CD-P | C | 2 | 180 | PDF CD is fallback solution to paper for on-ground consultation only (For Temporary Revisions & OEBs, refer to paper) | |||||||||||
|
MMEL | ON | C | N/A | 180 | |||||||||||||
|
MMEL | OFF | SGML | C | 1 | 180 |
SGML data, including Parts 1 and 2, for further
processing by the Buyer.
SGML is recommended for issue of the Customer MEL Note: Airbus Starter Pack (for conversion of SGML Data to Adobe. Framemaker or MS Word RTF format) available with relevant training. |
|||||||||||
|
||||||||||||||||||
Quick Reference Handbook
|
QRH | OFF | P2 | C | 2 | 90 | Per crew quantity / Plus one copy per Aircraft at Delivery | |||||||||||
|
||||||||||||||||||
Trim Sheet
|
TS | OFF | WordDoc | C | 1 | 0 | Office Automation format (.doc) for further processing by the Buyer | |||||||||||
|
||||||||||||||||||
Weight and Balance Manual
|
WBM | OFF | P1 | C | 1 | 0 | Fleet customized WBM for reference in central Library (*) plus one copy per Aircraft at Delivery. For the WBM the flight deck copy is an advance copy only of the customized manual, not subject to revision or updating. Weighing Equipment List delivered two weeks after Aircraft Delivery | |||||||||||
|
WBM | OFF | CD-P | C | 5 | 0 | Available for SA aircraft | |||||||||||
|
WBM | ON | C | N/A | 0 | Available for SA aircraft | ||||||||||||
|
||||||||||||||||||
Performance Engineers Programs
|
PEP | ON | Performance Computation Tool | C | 1 | 90 | A collection of aircraft Performance software tools in a common interface. | |||||||||||
|
PEP | OFF |
Performance Computation
Tool on CD |
C | N/A | 90 | ||||||||||||
|
||||||||||||||||||
Performance Programs Manual
|
PPM | OFF | CD-P | C | 1 | 90 | Explains how to use the PEP & contains specific Data for engineers, which are not contained in the FCOM |
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-89-
NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
1. AirN@v / Associated Data
Consumable Material List CML
Standards Manual SM
Electrical Standard Practices Manual ESPM
Tooling Data TD (*)
|
AirN@v | ON | Advanced Consultation Tool | G | N/A | 360 |
Tooling Data invcludes the previous Tool and
Equipment Manual (TEM) Support Equipment Summary
(SES) and Tool and Equipment Index (TEI) information.
Tooling Data first issue in AirN@v /Associated Data scheduled for end 2007 |
|||||||||||
|
AirN@v | OFF | Advanced Consultation Tool on DVD | G | 20 | 360 | ||||||||||||
|
||||||||||||||||||
Technical Follow-up
|
TFU | OFF | CD-P | E | 20 | 90 | TFU for Trouble shooting & maintenance, to be used with AirN@v | |||||||||||
|
||||||||||||||||||
Aircraft Maintenance Manual
|
AMM | ON | C | N/A | 90 | |||||||||||||
|
AMM | OFF | CD-P | C | 3 | 90 | Fallback solution to AirN@v / Maintenance | |||||||||||
|
AMM | OFF | SGML | C | 1 | 90 | If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place at the time of explicit request from the Buyer Graphics in CGM, in general compliance with iSpec 2200 |
-90-
NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
Aircraft Schematics Manual
|
ASM | ON | C | N/A | 90 | |||||||||||||
|
ASM | OFF | CD-P | C | 3 | 90 | Fallback solution to AirN@v / Maintenance: | |||||||||||
|
ASM | OFF | SGML | C | 1 | 90 | If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place at the time of explicit request from the Buyer Graphics in CGM, in general compliance with iSpec 2200 |
-91-
NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||||
MAINTENANCE AND ASSOCIATED MANUALS (Contd) | ||||||||||||||||||||
|
||||||||||||||||||||
Aircraft Wiring List
|
AWL | ON | C | N/A | 90 | |||||||||||||||
|
AWL | OFF | CD-P | C | 3 | 90 |
Fallback solution to AirN@v / Maintenance.
AWL PDF will be discontinued in 2009 after implementation of the AirN@v / Maintenance Technical Data Upgrade programme. |
|||||||||||||
|
AWL | OFF | SGML | C | 1 | 90 |
If selected by the Buyer, SGML format will
not be automatically supplied. Effective
delivery will only take place at the time
of explicit request from the Buyer
(Graphics in CGM, in general compliance with iSpec 2200 ) |
|||||||||||||
|
||||||||||||||||||||
Aircraft Wiring Manual
|
AWM | ON | C | N/A | 90 | |||||||||||||||
|
AWM | OFF | CD-P | C | 3 | 90 | Fallback solution to AirN@v / Maintenance | |||||||||||||
|
AWM | OFF | SGML | C | 1 | 90 |
If selected by the Buyer, SGML format will
not be automatically supplied.
Effective delivery will only take place at
the time of explicit request from the Buyer
(Graphics in CGM, in general compliance with iSpec 2200 ) |
|||||||||||||
|
||||||||||||||||||||
Consumable Material List
|
CML | OFF | SGML | G | 1 | 180 | If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place at the time of explicit request from the Buyer | |||||||||||||
|
||||||||||||||||||||
Ecam System Logic Data
|
ESLD | ON | E | N/A | 90 | |||||||||||||||
|
ESLD | OFF | CD-P | E | 5 | 90 |
-92-
NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
MAINTENANCE AND ASSOCIATED MANUALS (Contd) | ||||||||||||||||||
Electrical Load Analysis
|
ELA | OFF |
PDF/RTF/
Excel |
C | 1 | +30 |
One ELA supplied for each Aircraft,
delivered one month after Aircraft
Delivery
PDF File + Office automation format RTF & Excel file delivered on one single CD for ELA updating by the Buyer |
|||||||||||
|
||||||||||||||||||
Electrical Standard Practices Manual
|
ESPM | OFF | SGML | G | 1 | 90 |
If selected by the Buyer, SGML format
will not be automatically supplied
Effective delivery will only take place at the time of explicit request from the Buyer (Graphics in CGM, in general compliance with iSpec 2200 ) |
|||||||||||
|
||||||||||||||||||
Electrical Standard Practices booklet
|
ESP | OFF | P2* | G | 20 | 90 | *Pocket size format booklets which provide maintenance personnel with quick and easy access for identifying of electrical equipment and the required tooling | |||||||||||
|
||||||||||||||||||
Flight Data Recording Parameter Library
|
FDRPL | OFF | Advanced Consultation Tool on CD | E | 5 | 90 | ||||||||||||
|
||||||||||||||||||
Illustrated Parts Catalog (Airframe)
|
IPC | ON | C | N/A | 90 | |||||||||||||
|
IPC | OFF | CD-P | C | 3 | 90 |
Fallback solution to AirN@v / Maintenance
IPC PDF will be discontinued in 2009 after implementation of the AirN@v / Maintenance Technical Data Upgrade programme. |
|||||||||||
|
IPC | OFF | SGML | C | 1 | 90 |
If selected by the Buyer, SGML format
will not be automatically supplied.
Effective delivery will only take place
at the time of explicit request from the
Buyer
(Graphics in CGM, in general compliance with iSpec 2200) |
|||||||||||
|
||||||||||||||||||
Illustrated Parts Catalog (Powerplant)
|
PIPC | ON | C | N/A | 90 | |||||||||||||
|
PIPC | OFF | CD-P | C | 20 | 90 |
Integrated in the SA aircraft IPC for
IAE V2500 A1/A3 Engines.
Integrated in the LR A340-500/-600 aircraft IPC for RR Trent 500 Engines. For other Aircraft and engine types, supplied by Propulsion Systems Manufacturer concurrently with the Airframe IPC. |
-93-
-94-
NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
Trouble Shooting Manual
|
TSM | ON | C | N/A | 90 | |||||||||||||
|
TSM | OFF | CD-P | C | 3 | 90 | Fallback solution to AirN@v / Maintenance | |||||||||||
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TSM | OFF | SGML | C | 1 | 90 | If selected by the Buyer, SGML format will not be automatically supplied. Effective delivery will only take place at the time of explicit request from the Buyer (Graphics in CGM, in general compliance with iSpec 2200 ) |
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NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
STRUCTURAL MANUALS | ||||||||||||||||||
AirN@v
/ Repair
, including:
Structural Repair Manual (*) SRM
Non Destructive Testing Manual NTM
|
AirN@v | ON | Advanced Consultation Tool | E | N/A | 90 | The Nacelle SRM shall be supplied by the relevant Powerplant Supplier | |||||||||||
|
OFF | Advanced Consultation Tool on DVD | E | 5 | 90 | |||||||||||||
|
SRM | OFF | SGML | E | 1 | 90 |
If selected by the Buyer, SGML format will not be
automatically supplied.
Effective delivery will only take place at the time of explicit request from the Buyer (Graphics in CGM, in general compliance with iSpec 2200 ) |
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|
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Structural Repair Manual
|
SRM | ON | E | N/A | 90 | |||||||||||||
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OFF | CD-P | E | 5 | 90 | Fallback solution to AirN@v- Repair | ||||||||||||
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Non Destructive Testing Manual
|
NTM | ON | E | N/A | 90 | |||||||||||||
|
OFF | CD-P | E | 5 | 90 | Fallback solution to AirN@v- Repair |
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NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
OVERHAUL DATA
|
||||||||||||||||||
AirN@v
/ Workshop
, including:
Component Maintenance Manual Manufacturer CMMM
Duct Fuel Pipe Repair Manual- DFPRM |
AirN@v | ON | Advanced Consultation Tool | E | N/A | 180 | AirN@v / Workshop first issue scheduled for early 2008. | |||||||||||
|
OFF | Advanced Consultation Tool on DVD | E | 5 | 180 | |||||||||||||
|
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Component Maintenance Manual Manufacturer CMMM
|
CMMM | ON | E | N/A | 180 | |||||||||||||
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OFF | CD-P | E | 5 | 180 | Fallback solution to AirN@v / Workshop | ||||||||||||
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Component Maintenance Manual Vendor
|
CMMV | OFF | CD-P | E | 1 | 180 | PDF on CD to be provided by Vendors. If more than one Airbus aircraft type in operation with the Buyer, dispatch of the common CMMV only | |||||||||||
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CMMV | ON | E | N/A | 180 | Available from the Supplier Technical Documentation Service in Airbus|World | ||||||||||||
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Component Documentation Status
|
CDS | OFF | CD | C | 1 | 180 | Revised until 180 days after Aircraft Delivery | |||||||||||
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Component Evolution List
|
CEL | ON | G | N/A | | |||||||||||||
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CEL | OFF | CD-P | G | 1 | | Delivered as follow-on for CDS. |
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NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
MISCELLANEOUS PUBLICATIONS
|
AC/MFP | ON | E | N/A | 360 | Available On-Line from the Airbus/ World | ||||||||||||
Airplane Characteristics for Airport Planning- AC
Maintenance Facility Planning MFP |
AC/ MFP | OFF | CD-P | E | 5 | 360 | AC, MFP are grouped on one single CD Fallback solution to on-line AC / MFP | |||||||||||
|
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ATA 100 Breakdown
|
ATAB | ON | E | N/A | 360 | 6 Digits ATA 100 Breakdown | ||||||||||||
|
OFF | CD-P | E | 5 | 360 | |||||||||||||
|
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C@DETS /Technical Data Training Course Ware
Software |
C@DETS | OFF | Advanced Consultation Tool on CD | G | 5 | 360 | Training Course applicable to major Maintenance, Material, Repair Technical Data | |||||||||||
|
C@DETS | ON | G | NA | 360 | |||||||||||||
|
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Aircraft Recovery Manual
|
ARM | ON | E | N/A | 90 | |||||||||||||
|
ARM | OFF | CD-P | E | 1 | 90 | ||||||||||||
|
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|
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Aircraft Rescue & Firefighting Chart
|
ARFC | ON | E | N/A | 180 | Available On-Line from the Airbus | World | ||||||||||||
|
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Crash Crew Chart
|
CCC | OFF | P1 | E | 20 | 180 | ||||||||||||
|
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Cargo Loading System Manual
|
CLS | ON | E | N/A | 180 | |||||||||||||
|
CLS | OFF | CD-P | E | 1 | 180 | One CLS per delivered Aircraft | |||||||||||
|
||||||||||||||||||
List of Effective Technical Data
|
LETD | ON | C | N/A | 90 |
The LETD provides for each Technical Data
information about
-Applicable issue and revision date -Shipping information with search functions by manual or delivery address criteria -Tracking of shipments through the Carrier Website,. |
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|
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List of Radioactive and Hazardous Elements
|
LRE | ON | G | N/A | 90 | |||||||||||||
|
LRE | OFF | CD-P | G | 1 | 90 |
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NOMENCLATURE | Abbr | Avail | Form | Type | Qty | Deliv | Comments | |||||||||||
MISCELLANEOUS PUBLICATIONS
|
||||||||||||||||||
Supplier Product Support Agreements 2000
|
SPSA | ON | G | N/A | 360 |
The SPSA contains all the GCP 2000 issue 04 Agreements
signed by Airbus SFE Suppliers.-
The GCP 2000 is an Agreement signed by Airbus and its Suppliers which specifies: Airbus Support Standards The individual Suppliers contractual support commitments |
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SPSA | OFF | CD-P | G | 5 | 360 | ||||||||||||
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Transportability Manual
|
TM | OFF | CD-P | G | 1 | 180 | ||||||||||||
|
||||||||||||||||||
Vendor Information Manual
|
VIM | ON | Advanced Consultation Tool | G | N/A | 360 | ||||||||||||
|
VIM | OFF | Advanced Consultation Tool on CD | G | 5 | 360 | ||||||||||||
|
||||||||||||||||||
Ground Support Equipment Vendor
Information Manual / GSE VIM |
GSE VIM | ON | G | N/A | 360 | |||||||||||||
|
||||||||||||||||||
Livestock Transportation Manual
|
LTM | ON | E | N/A | 90 | |||||||||||||
|
LTM | OFF | CD-P | E | 1 | 90 | ||||||||||||
|
||||||||||||||||||
Service Bulletins
|
SB | ON | Advanced Consultation Tool | C | N/A | 0 |
Full SB content and SB search functions available from
the ETDS / Engineering Technical Documentation Service in Airbus | World /
Note: SB cross reference Index available from AirN@v /Engineering on DVD |
|||||||||||
|
SB | OFF | CD-P | C | 1 | 0 | One CD for every SB issued and/or revised |
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1. | CONDITION OF AIRFRAME AND ENGINES | |
On the last day of the Lease Term, the Aircraft shall conform to the configuration of the Aircraft, and with all equipment installed as, on the Delivery Date (as described in Schedule 3 to the Lease Agreement), except as changed in a manner either required or permitted pursuant to any Operative Document or as agreed by Lessor and shall: | ||
1.1 | General Requirements |
(1) | Have been operated, maintained and repaired in accordance with the Lease Agreement, have all the same capabilities as on the Delivery Date, have no deferred maintenance, | ||
(2) | Have all of the Aircraft equipment, components and systems functioning in accordance with their intended use and specifications, within applicable limits and showing no signs of incipient fault, in each case irrespective of deviations or variations authorized by the Minimum Equipment List (MEL) or Configuration Deviation List (CDL), | ||
(3) | Be free of all Liens other than Lessor Liens and not have installed thereon any equipment, components and/or parts which are leased or loaned or otherwise owned by Lessee or a third party. | ||
(4) | Be free of corrosion, and shall be in good condition, normal wear and tear excepted. |
AYR FREIGHTER LLC A330-200F
Amendment No.1 |
page 101/ 13 |
if applicable) in block format in accordance with the MPD (which check shall incorporate all lower-level checks, structural inspections and any special repair items or special inspections as well as inspections that have a frequency less than such a then C check interval) and (2) have no task for the Airframe due under the MPD for the greatest of 24 months, the then current MPD C Check interval or the then Lessee C check interval (or, as applicable, the equivalent number of Airframe Flight Cycles or Airframe Flight Hours, these being 1,500 Airframe Flight Cycles and 10,000 Airframe Flight Hours for 24 months). If during the Lease Term the Aircraft is maintained under a phased maintenance program, Lessee shall, at Lessees cost and expense, perform all checks, inspections, maintenance, etc., necessary to return the Aircraft to a block maintenance program based upon the MPD and otherwise acceptable to Lessor. | ||
1.4.2 | Related Work | |
Have, as a part of the final C check, completed a refurbishment and deep cleaning of the flight deck and cabin and other portions of the interior and corrosion inspections, such refurbishment, deep cleaning and inspections to be performed to the standard which Lessee would use for an aircraft being placed in service in its fleet, which shall include inspection and repair of all seats, replacement of damaged, discolored or worn seat covers and cushions and other work to ensure that such seats are in good operating condition. The Aircraft carpeting and galley area matting shall be replaced (unless replaced during the previous six months and in good condition). | ||
1.5 | ADs, Service Bulletins, Etc. | |
1.5.1 | Required Actions | |
Be in compliance on a terminating basis with all modification Required Actions where (1) in the case of ADs, the compliance date for any action under such AD falls during the Lease Term or the then Lessee C check interval (or, as applicable, the equivalent number of Airframe Flight Cycles or Airframe Flight Hours, but at least 1,500 Airframe Flight Cycles or 10,000 Airframe Flight Hours) after the Return and (2) in the case of SB modifications, the issuance date thereof is during the Lease Term and the recommended compliance date for any action under such SB falls during the Lease Term or the then Lessee C check interval (or, as applicable, the equivalent number of Airframe Flight Cycles or Airframe Flight Hours, but at least 1,500 Airframe Flight Cycles or 10,000 Airframe Flight Hours) after the Return, provided that (1) with respect to an AD where the compliance date or an SB where the recommended compliance date falls at least 90 days after the last day of the scheduled Lease Term and (2) where such AD or SB was issued within nine months prior to the last day of the scheduled Lease Term and (3) where despite Lessees commercially reasonable efforts to comply with such AD or SB prior to the last day of the scheduled Lease Term, Lessee is unable to comply with such AD or SB prior to the last day of the scheduled Lease Term, then Lessee may in lieu of complying with such AD or SB, pay Lessor an amount equal to the sum of the following (y) the expected direct cost (e.g., labor, engineering and materials) of compliance with such AD or SB and (z) any expected indirect costs (e.g., downtime) of compliance with such AD or SB, less any amount as calculated pursuant to Section 1.3.8 of Schedule 2. | ||
1.5.2 | Inspections | |
Have no required inspection Required Action (1) due within either (a) the then MPD C check interval (or, as applicable, the equivalent number of Airframe Flight Cycles or Airframe Flight Hours, but at least 1,500 Airframe Flight Cycles or 10,000 Airframe Flight Hours) after the |
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Return or (b) a full inspection period whichever is less or (2) under any AD or SB where modification or repair would eliminate or reduce such inspection requirement. |
1.5.3 | No Waivers | |
In the case of both Sections 1.5.1 and 1.5.2 of this Part 1, in the event that Lessee has obtained a waiver or deviation from the Aviation Authority, Airframe Manufacturer or otherwise from having to comply with any such Required Actions, Lessee shall, irrespective of such waiver or deviation, comply with all such Required Actions as provided in the this Section 1.5 prior to the Return. | ||
1.6 | Engine Condition | |
Have neither Engine on watch for any reason whatsoever, and (1) each Engine shall have at least 9,000 Engine Flight Hours and 1,500 Engine Flight Cycles remaining until its next anticipated Engine Basic Shop Visit (as determined by (a) borescope inspections, (b) engine health trend monitoring analysis, (c) ground runs, (d) technical log analysis, (e) previous shop visit assessment (if applicable) and (f) engine oil SOAP analysis and MCD inspection) and (2) the Engine operational and performance parameters shall be sufficiently within Engine Manufacturers then current published limits and the condition of the Engine shall otherwise be such to permit full take-off power to manufacturers specification (as determined by, inter alia, an examination of the last six months of trend monitoring). If Lessor and Lessee are unable to agree whether any of the foregoing conditions have been met, Lessor and Lessee shall consult a qualified Engine Manufacturer engineer and agree to be bound by the determination of such engineer (the cost of such engineer to be shared equally by Lessor and Lessee). Lessee shall correct any discrepancies outside of then current published-approved AMM limits. | ||
1.6.1 | Engine Borescope | |
For each Engine, a complete (100% of all stages) hot (including combustion chamber) and cold section video borescope inspection for such Engine shall have been performed, at Lessors cost, after the return demonstration flight and Lessee shall correct any discrepancies outside of then current published-approved AMM limits. | ||
1.6.2 | Full-Rated Performance | |
Each Engine shall be capable of certificated, full-rated performance without limitations throughout the operating envelope as defined in the airplane flight manual; performance compliance will be demonstrated: (1) by on-wing static inspection and testing of the powerplants in accordance with the engine maintenance manual and (2) by review of historical maintenance records, including trend monitoring and EGT/test cell data (in the event an Engine is just out of test cell). Lessee shall correct any discrepancies outside of then current published-approved AMM limits. | ||
1.7 | APU Condition | |
With respect to the APU, have not more than 3,500 APU Hours since its last removal and APU Basic Shop Visit, and the APU shall have had a complete (100% of all accessible stages) video borescope inspection shall have been performed at Lessors cost. Lessee shall correct any discrepancies outside of manufacturer-approved limits found during such inspection. In addition, |
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the APU shall meet all air outputs and temperature limitations under load in accordance with the MPD, and any defects discovered in such inspection, which exceed the APU manufacturers in-service limits, shall be corrected at Lessees expense |
1.8 | Landing Gear Condition | |
With respect to each Landing Gear, have not more than 36 months since its last Landing Gear Overhaul and no more flight cycles than 110% of Airframe Flight Cycles accumulated by the Airframe. | ||
1.9 | Life Limited and Time Controlled Parts |
(1) | With respect to each Airframe life limited and time controlled component, have a minimum of 50% life (months, hours and/or cycles, as relevant) remaining to its next scheduled test, inspection or removal in accordance with the MPD, but: |
(a) | if a component has less than 50% life (months, hours and/or cycles, as relevant) remaining to its next scheduled test, inspection or removal in accordance with the MPD and such remaining percent life is sufficient to enable such components to have a full MPD C Check interval, then such component may be returned with less than 50% life remaining, however for each such component Lessee shall compensate Lessor in accordance with the following formula: | ||
P = (C/L) x (L/2-R) | |||
where: | |||
P is the amount Lessee shall compensate Lessor
C is the manufacturers list price for the component or the cost to overhaul, test or inspect such component, as applicable. L is the components scheduled test, inspection or removal interval in accordance with the MPD. R is the life remaining to the components next scheduled test, inspection or removal in accordance with the MPD and |
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(b) | if a component has a limit that is less than the then current MPD C Check interval (or, as applicable, the equivalent number of Airframe Flight Cycles or Airframe Flight Hours, but at least 1,500 Airframe Flight Cycles or 10,000 Airframe Flight Hours), then such component shall have full life remaining and (c) on-condition and condition-monitored components shall be serviceable. All Airframe life, calendar and time controlled components shall have the same or more recent part or dash number as the component installed on the Aircraft on the Delivery Date. Each Airframe life limited and time controlled component shall be supported by back to birth traceability and appropriate certification documentation in the form of EASA Form 1s or FAA Form 8130s. |
(2) | No Engine life-limited Part shall have less than 3,500 Engine Flight Cycles remaining until the next scheduled removal or replacement and will be supported by back-to-birth traceability and appropriate certification documentation in the form of EASA Form 1s or FAA Form 8130s. |
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1.10 | Tires and Brakes | |
Have no less than 50% tread life remaining on the tires on average with no single tire having less than 30% tread life remaining (and with not more than three re-caps) and have remaining not less than 50% service wear life remaining on the brakes on average with no single brake having less than 30% service wear life remaining. | ||
1.11 | Paint | |
With the Aircraft, (including nacelles, vertical stabilizer, wings and horizontal stabilizer) properly stripped (if then required by Airframe Manufacturer, otherwise rub sanded) and painted in, at Lessors option, (1) a livery to be designated by Lessor provided that Lessor provides Lessee with necessary templates and drawings at least 30 days prior to the Return or (2) in a shade of white to be designated by Lessor at least 30 days prior to the Return, and after such painting Lessee shall balance the rudder in accordance with Airframe Manufacturer procedures. Immediately after such stripping (or rub sanding), the exterior of the Aircraft shall be inspected and any corrosion, structural damage, or other defects shall be corrected in accordance with the Airframe Manufacturer Structural Repair Manual and as recommended by Airframe Manufacturer. At least 30 days prior to the Return, Lessor may waive the requirements of this Section 1.11 and Lessee shall pay Lessor US$210,000 (subject to escalation from January 1, 2009, at 3.00% per annum, compounded annually) on the date of Return in lieu of painting the Aircraft. | ||
1.12 | Service Bulletin Kits | |
Have all free of charge service bulletins for which kits have been received or manufactured by Lessee for the Aircraft, as of the commencement of the Final Inspection, installed thereon prior to Return (with all other such kits received by Lessee after such time to be shipped by commercial carrier to a location specified by Lessor) and, at Lessors option, with all other service bulletin kits ordered by Lessee specifically for the Aircraft being provided to Lessor, subject to Lessor reimbursing to Lessee its cost for such kits. | ||
1.13 | Fuel and Oil | |
With each fuel tank and oil tank having the same level as at delivery to Lessee on the Delivery Date. | ||
1.14 | General |
(1) | The Aircraft shall (a) be clean, (b) have no excessive, multiple, overlaid or non-flush external repairs, (c) have no loose, missing or pulled fasteners, and (d) be free of scribes, scratches, buckles and damage exceeding manufacturer tolerances. | ||
(2) | The Aircraft shall be free of fuel, oil and hydraulic leaks the fuel, hydraulic and oil systems of the Aircraft, including the Engines and the fuel tanks, shall have been tested and free of any contaminants and corrosion and Lessee shall provide to Lessor the results of laboratory tests of all such systems. | ||
(3) | All decals and required notices shall be installed and shall be clean, secure and legible. |
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(4) | All doors shall be free moving, correctly rigged and be fitted with serviceable seals, and free of any air noise or leaks. |
(5) | All panels and other surfaces shall be secure, properly sealed and free of excessive cracks, stains and other disfigurement. | ||
(6) | Windows shall be free of delamination, blemishes, and crazing, and shall be properly sealed and free of any air leaks. | ||
(7) | All control surfaces, unpainted cowlings and fairings shall be waxed and polished in accordance with approved procedures. | ||
(8) | All seats, (including installed IFE hardware) shall be serviceable and in good condition. All damaged, discolored or worn covers and cushions shall be replaced. | ||
(9) | All emergency equipment having a calendar life shall have a minimum remaining life of one C Check interval (determined as above) or one hundred percent (100%) of its total approved life, whichever is less. | ||
(10) | All galley areas shall be free from contamination and in good condition. | ||
(11) | All floor coverings shall be replaced and effectively sealed. | ||
(12) | All cargo nets shall be in good condition. | ||
(13) | Landing gear and doors shall be free of leaks and properly rigged. | ||
(14) | Wheel wells shall be free of leaks. | ||
(15) | The IFE system shall be functioning in accordance with its intended use throughout the cabin. | ||
(16) | All loose equipment delivered shall be installed and in good condition. |
2. | AIRCRAFT DOCUMENTATION | |
At Return, Lessee shall deliver to Lessor at the Return Location the Aircraft Documentation. All Aircraft Documentation provided to Lessor at time of Return shall be listed and included as an attachment to the Return Acceptance Certificate. Lessee shall ensure that all Aircraft Documentation provided to Lessor shall be in good condition, complete, in English, readable and capable of being reproduced using standard reproduction processes and otherwise shall have been maintained in accordance with the requirements of the Operative Documents. All Aircraft Documentation shall be in printed (including legible handwriting) form (except only those documents which Lessee has received only in non-printed form and certain aircraft manuals which may be provided in electronic format). | ||
3. | WARRANTIES | |
At Return Lessee shall assign to Lessor any remaining Airframe, Engine, Part or other warranties with respect to the Aircraft pursuant to a written agreement in form and substance reasonably |
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satisfactory to Lessor, and Lessee shall arrange for all necessary manufacturer and other vendor consents to such assignment or novation. |
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commencement of the Final Maintenance, Lessee shall give Lessor final written confirmation of the date of, and any changes to the plan for, the Final Maintenance. During such Final Maintenance, the Aircraft, including the Aircraft Documentation, shall be made available to Lessor and/or Lessors agents, representatives and designees (each, an Inspecting Party) for ground inspection by the Inspecting Parties at the location of the Final Maintenance. During the Final Maintenance, if damage or corrosion is found, Lessor shall have the right to have adjacent panels or areas opened to ensure that all such damage or corrosion is found. No less than 60 days prior to the end of the Lease Term, Lessee shall make available to the Inspecting Parties such documentation regarding the condition, use, maintenance, operation and history of the Aircraft during the Lease Term as Lessor may reasonably request. The Final Inspection shall include the procedures set forth in Part I to this Schedule 4. Lessee shall ensure that all amounts due to the Agreed Maintenance Performer for the completion of the Final Maintenance are paid in full when due. |
1.3.2 | Demonstration Flight | |
Immediately prior to Lessors technical acceptance of the Aircraft, Lessee shall, using its own pilots, carry out for the Inspecting Parties a demonstration flight of the Aircraft in accordance with such procedures as may be mutually agreed between Lessor and Lessee to demonstrate compliance with the requirements of this Section 1. Such flight shall continue for the duration necessary to perform such check flight procedures, but for a period not exceeding three hours of flying time. Lessee shall allow at least three observers on such flight. | ||
1.4 | Technical Acceptance | |
Upon completion of the Final Inspection and, unless otherwise agreed by Lessor pursuant to this Section 1.4, correction of any discrepancies from the required return condition of the Aircraft and where Lessee has otherwise complied with its obligations under this Section 1, Lessor shall execute and deliver to Lessee a Return Acceptance Certificate which shall evidence Lessees redelivery of the Aircraft. If any such discrepancies are not corrected when the Aircraft is scheduled to be returned, Lessor may accept the Aircraft and any such discrepancies may be corrected by Lessor or its designee after return of the Aircraft, provided that this Section 1.4 shall not be construed as permitting or authorizing Lessee to fail to meet, or consenting to or waiving any failure by Lessee to perform, Lessees obligation to return the Aircraft in accordance with the requirements of the Lease Agreement. Lessee shall indemnify Lessor on demand for the reasonable Expenses incurred by Lessor or its designee in accomplishing such discrepancy corrections. | ||
1.5 | Failure to Return Aircraft | |
If Lessee shall not return the Aircraft at the time or in the condition specified herein or return of the Aircraft is not accepted by Lessor because of Lessees failure to meet the requirements of this Section 1, the obligations of Lessee provided in each Operative Document to which Lessee is a party (including the obligation to pay Rent, with RentPeriodic payable on a per diem basis in arrears at 100% of the RentPeriodic Amount) shall continue in effect with respect to the Aircraft, and the Lease Term shall, unless earlier terminated in accordance with the Lease Agreement, be deemed to be extended until Return of the Aircraft to Lessor, provided that Lessee may not, during such extension period use the Aircraft for any flight operations except those related directly to the redelivery of the Aircraft to Lessor and this Section 1.5 shall not be construed as permitting or authorizing Lessee to fail to meet, or consenting to or waiving any |
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failure by Lessee to perform, Lessees obligation to return the Aircraft in accordance with the requirements of the Lease Agreement, provided, that Lessee shall not be responsible (including for holdover rent) for (1) Lessors failure to accept return of the Aircraft in accordance with the terms of this Lease Agreement in a timely manner where Lessee has tendered the Aircraft for return at or after the end of the scheduled Lease Term and in full compliance with all provisions of this Lease Agreement, or for Rent or other obligations under this Lease Agreement with respect to periods after Lessee has tendered the Aircraft for return at or after the end of the scheduled Lease Term and in accordance with and in full compliance with all provisions of this Lease and has paid all amounts then due and payable under the Operative Documents or (2) delays caused by additional workscope agreed by Lessor and Lessee pursuant to Section 1.1.1 of Schedule 2 to the Lease Agreement. |
Lessor may elect (either on first tender of the Aircraft by Lessee or at any time during the said extension period) to accept redelivery of the Aircraft notwithstanding non-compliance with this Section 1, in which case Lessee will indemnify Lessor on an after-tax basis, and provide cash to Lessor (in an amount satisfactory to Lessor) as security for that indemnity, in respect of the cost of Lessor of putting the Aircraft into the condition required by this Lease Agreement. | ||
2. | RETURN COMPENSATION PAYMENTS | |
The contents of this section are in Exhibit G to the Lease Agreement. |
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Bank: | Bank of America | |
ABA No.: | 026009593 | |
Account Number: | 003926083111 | |
Account Name: | Aircastle Advisor LLC | |
Reference: | SAA A330 |
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1. | LESSEES LIABILITY | |
Lessee shall pay or cause to be paid, and on written demand shall indemnify and hold harmless each Tax Indemnitee from and against, any and all Taxes howsoever imposed or levied on or asserted against, from time to time, any Tax Indemnitee, Lessee, the Aircraft, Airframe or any Engine or any Parts or any interest therein by any Government Entity on, with respect to, based on or measured by: |
(1) | The acceptance, rejection, delivery, ownership, nondelivery, lease, sublease, charter, transport, subcharter, registration, deregistration, reregistration, possession, repossession, presence, operation, location, condition, use or non-use, control, airworthiness, overhaul, replacement, existence, storage, preparation, installation, testing, manufacture, design, modification, alteration, maintenance, repair, re-lease, sale, return, transfer, exportation, importation, abandonment or other disposition of, or the imposition of any Lien on, the Aircraft, the Airframe, any Engine or engine or Part or any other thing delivered under the Lease Agreement or any other Operative Document or interest therein (or the incurrence of any liability to refund or pay over any amount as the result of any such Lien); | ||
(2) | The rentals, receipts, insurance proceeds, or earnings from, or other amounts payable by Lessee under the Operative Documents or in connection with, the Aircraft, Airframe or any Engine or Parts thereof or interest therein or any of the transactions contemplated by the Operative Documents; | ||
(3) | The Aircraft, Airframe or any Engine or any Parts thereof or interest therein (including, without limitation, title or a security interest therein) or any data or any other thing delivered or to be delivered under the Operative Documents; or | ||
(4) | Otherwise with respect to or in connection with the execution, delivery, enforcement, performance, amendment or supplement to the Operative Documents or the transactions contemplated by the Operative Documents. |
2. | EXCLUSIONS FROM LESSEES LIABILITY | |
The provisions of Section 1 of this Schedule 6 shall not apply to any of the following (each, an Excluded Tax): |
(1) | Taxes that are imposed on a Tax Indemnitee by any Government Entity that are based on, or measured by or with respect to, net or gross income, gross or net receipts, minimum or alternative Taxes, Tax preferences, capital, net worth, franchise or conduct of business of such Tax Indemnitee or any of its Affiliates; provided, however, that the exclusion from Lessees liability under Section 1 of this Schedule 6 that is contained in this Section 2(1) shall not apply to any such Taxes that: |
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(a) | are in the nature of or similar to sales, use, ad valorem, license, property, value-added Taxes (except if such value-added Taxes (other than any value added taxes in Lessee Jurisdiction) are in the nature of, or imposed in lieu of, an income or similar Tax), | ||
(b) | are caused by : |
(i) | the occurrence of any of the transactions contemplated by the Operative Documents in such jurisdiction to the extent related to the location or operations of Aircraft or the activities of Lessee or any Affiliate thereof or use of the Aircraft in such jurisdiction if, but for such transactions such Taxes would not have been incurred, | ||
(ii) | the registration, use, operation or presence of the Aircraft, the Airframe, any Engine or other Parts in such jurisdiction or | ||
(iii) | the presence (whether such presence is established through formation of a local legal entity, a branch, or through the conduct of transitory activities or otherwise) or activities of (including, without limitation, the making of any payment by) Lessee or any successor, assign or Affiliate of Lessee or any user of the Aircraft in such jurisdiction, or |
(c) | are imposed on a Tax Indemnitee in the Lessees jurisdiction, unless such Tax Indemnitee has, for reasons unrelated to the transactions contemplated by the Operative Documents or any Other Lease Agreement, a taxable presence in such jurisdiction. |
(2) | Sales, use or similar transfer Taxes imposed on a Tax Indemnitee upon any voluntary transfer or disposition by such Tax Indemnitee other than: |
(a) | any transfer by such Tax Indemnitee to or requested in writing by Lessee, | ||
(b) | any transfer by such Tax Indemnitee pursuant to any exercise of remedies in connection with or otherwise caused by an Event of Default or Event of Loss, or | ||
(c) | any deemed transfer by such Tax Indemnitee caused by Lessee, any Affiliate of Lessee or any user of the Aircraft of any equitable or legal interest in the Aircraft, Airframe, any Engine or any Part (e.g., as a result of a casualty, etc.). |
(3) | So long as no Event of Default has occurred and is continuing, Taxes to the extent incurred with respect to any act occurring before the commencement of the Lease or after the later of: |
(a) | expiration or earlier termination of the Lease Agreement in accordance with its terms, and | ||
(b) | the (i) return of possession of the Aircraft in accordance with Schedule 4 to the Lease Agreement, (ii) sale or other transfer or disposition of the Aircraft constituting or following an Event of Loss or (iii) sale or transfer of the Aircraft |
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following an Event of Default with respect to the Aircraft in accordance with Section 10 of the Lease Agreement; |
provided, however, that the exclusion from Lessees liability under Section 1 of this Schedule 6 that is contained in this Section 2(3) shall not apply to the extent such Taxes relate to periods prior to, or events occurring or matters arising prior to or in connection with, such expiration, termination or sale. | |||
(4) | Taxes imposed by any Government Entity of a jurisdiction to the extent such Taxes are caused by (a) the presence or activities (including having been organized or formed in the jurisdiction, or having or being deemed to have a place of business or other permanent establishment in the jurisdiction (other than any place of business or permanent establishment a Tax Indemnitee is treated as maintaining by reason of (i) the activities of Lessee or any Affiliate of Lessee in the jurisdiction or (ii) the use, leasing, location, operation or registration of the Aircraft, the Airframe, any Engine, any Part or any part thereof in such jurisdiction) of a Tax Indemnitee in the jurisdictionthat are unrelated to the Aircraft or the enforcement of such Tax Indemnitees rights in the Aircraft or under the Lease with respect to the Aircraft or (b) the location of any property of such Tax Indemnitee (other than the Aircraft, the Airframe, any Engine, any Part or any part thereof or any property related to such Tax Indemnitees enforcement of its rights in the Aircraft or under the Lease with respect to the Aircraft) in such jurisdiction. | ||
(5) | Taxes attributable to Lessors Liens. | ||
(6) | Taxes caused by the willful misconduct or gross negligence of any Tax Indemnitee. | ||
(7) | Taxes imposed on any transferee of a Tax Indemnitee (including a branch or office of such Tax Indemnitee located in a country other than the one in which such Tax Indemnitee is incorporated that received its interest herein (including by change in the designation of the payee of the Rent from one branch or office of the Tax Indemnitee to another) after the commencement of the Lease) (a) if, pursuant to the Law in effect at the time of the transfer, such Taxes would not have been imposed on the transferor Tax Indemnitee or (b) to the extent such Taxes, pursuant to the Law in effect at the time of the transfer, exceed the amount of Taxes that would have been imposed on the transferor Tax Indemnitee; provided, however, that this clause (7) shall not apply to any Tax imposed as a result of a change in law, ruling or regulation that is enacted or promulgated and that becomes effective after the date of transfer unless such Tax is not one that would have been imposed on the transferor and the proposal for such Tax had been passed by at least one legislative or administrative body within such jurisdiction with responsibility for such type of Tax, was pending enactment at the time of such transfer, and was actually enacted within one year after such transfer. | ||
(8) | Taxes during the period such Taxes are being contested pursuant to the contest provisions contained in Section 6 of this Schedule 6. | ||
(9) | Taxes to the extent caused by the failure of a Tax Indemnitee to timely and properly file any tax return or to timely and properly pay any Tax, unless such failure is caused by Lessees failure to timely provide information requested or required to be provided under the Operative Documents or applicable Law. |
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(10) | Taxes to the extent caused by a Tax Indemnitees breach of any covenant or the inaccuracy of any representation or warranty of a Tax Indemnitee in any of the Operative Documents. | ||
(11) | Taxes directly or indirectly attributable to any back-leveraging or other financing by or on behalf of any Tax Indemnitee of all or part of the cost of Aircraft, the Airframe, the Engines, any Part, or any part of any thereof, or any interest therein (including the creation of any security interest with respect to any thereof pursuant to section 14.1.1(2)). | ||
(12) | Taxes to the extent caused by a Tax Indemnitees failure to provide Lessee any forms, certificates, documents or information requested in writing by Lessee and required to be provided by such Tax Indemnitee by this Schedule 6. | ||
(13) | Taxes imposed on Lessor in respect of the fees, commissions, or compensation payable to Lessor for services rendered in its capacity as owner trustee under the Operative Documents. | ||
(14) | Unless an Event of Default has occurred and is continuing, Taxes resulting from the authorization or giving of any future amendments, supplements, waivers or consents with respect to any of the Operative Documents, other than any amendment, supplement, waiver or consent that (a) has been requested or approved in writing by or results from actions of Lessee or any of its Affiliates, or (b) is required or contemplated by (and, if contemplated by, in compliance with) the Operative Documents (but not if such required or contemplated action results from any breach by a Tax Indemnitee of its obligations thereunder or any voluntary act on the part of a Tax Indemnitee other than the exercise of rights under the Operative Documents by any person, including Lessee) in order to give effect thereto or necessary to accomplish the purpose thereof or (c) is required by Law. | ||
(15) | Taxes to the extent that such Tax Indemnitee has received from Insurance, the premiums for which have been paid fully by Lessee, an amount equal on an after-Tax basis to such Tax. | ||
(16) | Taxes caused by a Tax Indemnitees failure to comply with applicable Law, unless such failure is caused by an act or omission, misrepresentation or breach by Lessee, its Affiliates or any Person in possession or in control of the Aircraft. | ||
(17) | Taxes payable in connection with satisfying the requirements of the Department of Trade and Industry of Lessee Jurisdiction under the National Industrial Participation Programme. |
3. | NO REDUCTION FOR WITHHOLDING, ETC. | |
All payments by Lessee to Lessor under the Lease Agreement or any other Operative Document, whether in respect of Rent, interest, fees or any other item, shall be made in full without any deduction or withholding (whether in respect of setoff, counterclaim, duties, Taxes, charges, wages or otherwise whatsoever), unless the withholding or deduction is required by applicable Law, in which event Lessee shall: |
(1) | Forthwith pay to Lessor such additional amount so that the net amount received by Lessor after the deduction or withholding of any Tax (other than an Excluded Tax) will |
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equal the full amount which would have been received by it had no such deduction or withholding been made. | |||
(2) | Unless such Tax, duty, charge, wage or other amount is an Excluded Tax, pay to the relevant taxing authorities within the period for payment permitted by applicable Law the full amount of the deduction or withholding (including, but without prejudice to the generality of the foregoing, the full amount of any deduction or withholding from any additional amount paid pursuant to this Section 3). | ||
(3) | Furnish to Lessor, within the period for payment permitted by applicable Law, an official receipt of the relevant taxation or other authorities involved for all amounts deducted or withheld as aforesaid or, if no such receipt is issued, a certificate of deduction or equivalent evidence thereof. |
The parties shall cooperate to find a solution eliminating any withholding, deduction or indemnity on account of Taxes which could be required after the date hereof in respect of any amounts due under the Lease Agreement or any other Operative Documents, provided that neither Lessor nor any Tax Indemnitee is thereby required to take any action or agree to any arrangements that it determines in good faith to be materially adverse to it or that subjects it to any material cost, expense or liability that is not paid or indemnified against (or agreed to be paid or indemnified against) by the requesting party to the reasonable satisfaction of the responding party. | ||
4. | REPORTS AND TAX FILINGS | |
Lessee shall provide promptly upon request such information as may be reasonably requested by a Tax Indemnitee or required to enable a Tax Indemnitee to timely and properly fulfill its tax filing requirements with respect to the transactions contemplated by the Operative Documents, including, without limitation, those requirements that relate to the actual time the Aircraft is located in a particular place irrespective of whether the Aircraft is there for revenue, maintenance, storage purposes or otherwise. If any report, return or statement is required to be filed with respect to any Tax which is subject to indemnification under this Schedule 6, Lessee shall timely file the same (except (a) any Lessee Jurisdiction value added tax filings and (b) for any such report, return or statement that Tax Indemnitee has notified Lessee that Tax Indemnitee intends to file or for income tax returns or any other return, report or statement which the Tax Indemnitee is required by applicable Law to file in its own name); provided, that upon written request of Lessee, the relevant Tax Indemnitee shall furnish Lessee with any information in such Tax Indemnitees possession or control that is reasonably necessary to file any such return, report, or statement and is reasonably requested in writing by Lessee, provided that such Tax Indemnitee shall not be required to provide anything that it determines in good faith is proprietary or confidential unless required expressly by a Government Entity. Lessee shall either file such report, return or statement and send a copy of such report, return or statement to the Tax Indemnitee or, where Lessee is not permitted to file such report, return or statement, it shall notify such Tax Indemnitee of such requirement and prepare and deliver such report, return or statement to such Tax Indemnitee in a manner reasonably satisfactory to such Tax Indemnitee within a reasonable time prior to the time such report, return or statement is to be filed. Lessee shall hold each Tax Indemnitee harmless from and against any liabilities, including, without limitation, penalties, late payment charges, notary charges, additions to tax, fines and interest arising out of any failure to timely file or inaccuracy in any such return, statement, report or information to the extent that such failure to timely file or inaccuracy is attributable to Lessees failure to fulfill its obligations under this Section 4 of Schedule 6. Notwithstanding anything to the contrary |
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contained herein, Lessee shall not have any right to examine the tax returns of any Tax Indemnitee, although a Tax Indemnitee may be required to furnish relevant information contained therein that is not considered by such Tax Indemnitee in good faith to be proprietary or confidential. Lessee agrees to use its reasonable best efforts to obtain official receipts, or other evidence reasonably satisfactory to the relevant Tax Indemnitee, indicating the payment by Lessee of all foreign income and withholding Taxes that are required to be paid or withheld by Lessee under Section 1 of this Schedule 6 and shall promptly deliver to the relevant Tax Indemnitee each such receipt or other evidence of payment obtained by Lessee. | ||
5. | PAYMENT | |
Upon written demand of the Tax Indemnitee, Lessee shall promptly pay any Tax for which it is liable pursuant to this Schedule 6 in immediately available funds directly to the appropriate Government Entity if legally permissible, or to such Tax Indemnitee (or, if a contest occurs in accordance with Section 6 of this Schedule 6, after a Final Determination (as defined below)), but in no event shall such payment be required more than five Business Days prior to the date such Tax is due (taking into account any extensions or delays of the due date resulting from a contest pursuant to Section 6 of this Schedule 6). Any such demand for payment from a Tax Indemnitee shall specify, in reasonable detail, the calculation of the amount of the payment and the legal basis and facts upon which the right to payment is based and shall be verified upon the request and at the expense of Lessee by a recognized public independent accounting firm selected by the Tax Indemnitee and reasonably satisfactory to Lessee, provided that Lessee shall not be allowed to examine any Tax returns of any Tax Indemnitee, although a Tax Indemnitee may be required to furnish relevant information contained therein. The cost of verification by the independent accountants for Lessor will be borne by the Tax Indemnitee if the Tax Indemnitees calculation of the tax liability differs by more than 10% from the amount calculated by the independent accountants. Each Tax Indemnitee shall promptly forward to Lessee any notice, bill or advice in the nature of a notice or bill received by it concerning any Tax. As soon as practical after each payment of any Tax by Lessee directly to any Government Entity, Lessee shall furnish the appropriate Tax Indemnitee with the original or a certified copy of a receipt for Lessees payment of such Tax or such other evidence of payment of such Tax as is reasonably acceptable to such Tax Indemnitee. For purposes of this Section 5, a Final Determination shall mean (A) a decision, judgment, decree, or other order by any court of competent jurisdiction that occurs pursuant to the provisions of Section 6 of this Schedule 6, which decision, judgment, decree, or other order has become final and unappealable or which decision the Lessee has indicated it does not want to appeal, (B) a closing agreement or settlement agreement entered into in accordance with Section 6 of this Schedule 6 that has become binding and is not subject to further review or appeal absent fraud or misrepresentation, or (C) the termination of administrative proceedings and the expiration of the time for instituting a claim in a court proceeding or (D) a decision by Lessee not to pursue the contest any further. | ||
If any Tax Indemnitee shall actually realize and utilize currently in reducing its Taxes (by way of a deduction, credit, or other savings) not indemnified against by Lessee by reason of any Tax paid or indemnified by Lessee pursuant to this Schedule 6 and such reduction in Taxes was not otherwise taken into account in computing such payment or indemnity, such Tax Indemnitee shall pay to Lessee an amount equal to the lesser of (A) the amount of such reduction in Taxes, plus any additional Tax Savings realized as the result of any payment made pursuant to this sentence and (B) the amount of all payments made by Lessee to such Tax Indemnitee with respect to the event giving rise to the reduction in Taxes (reduced by any payments previously made by such Tax Indemnitee to Lessee pursuant to this Schedule 6), and the excess, if any, of the amount |
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described in clause (A) over the amount described in clause (B) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Tax Indemnitee pursuant to this Schedule 6. No Tax Indemnitee shall have any obligation to make any such payment while a Default of a monetary nature or an Event of Default has occurred and is continuing. | ||
Any Taxes that are imposed on any Tax Indemnitee as a result of the disallowance or reduction of any Tax Savings or reduction in Taxes referred to in this Schedule 6 by a Government Entity as to which such Tax Indemnitee has made the payment to Lessee required hereby or which Tax Savings or reduction in Taxes was otherwise taken into account in computing Lessees indemnity obligation pursuant to this Schedule 6 in a taxable year subsequent to the utilization by such Tax Indemnitee shall be treated as a Tax for which Lessee is obligated to indemnify pursuant to this Schedule 6. | ||
6. | CONTEST | |
If written claim is made against and received by any Tax Indemnitee for any Tax for which Lessee may be required to indemnify such Tax Indemnitee or make a payment under this Schedule 6 (including a written notice of such proceeding), or if a Tax Indemnitee makes a determination that a Tax is due for which Lessee could have an indemnity obligation hereunder, such Tax Indemnitee shall notify Lessee promptly in writing of such claim (including with such notice a copy of such claim), but the failure to so notify shall not affect any obligation of Lessee under this Schedule 6 provided that nothing contained herein shall prevent Lessee from making a claim for any damages it suffers with respect to an obligation to indemnify such Tax Indemnitee hereunder solely as a result of such failure to notify by such Tax Indemnitee. The Tax Indemnitee shall not take any action with respect to such claim or Tax without the consent of Lessee for 30 days following the receipt of such notice by Lessee, provided that, if such Tax Indemnitee shall be required by Law to take action prior to the end of such 30-day period, such Tax Indemnitee shall, in such notice to Lessee, so inform Lessee, and such Tax Indemnitee shall take no action for as long as it is legally able to do so (it being understood that a Tax Indemnitee shall be entitled to pay the Tax claimed and sue for a refund prior to the end of such 30-day period if (A)(I) the failure to so pay the Tax would result in any civil penalties (unless immediately reimbursed by Lessee) and the act of paying the Tax would not prejudice the right to contest or (II) the failure to so pay would result in criminal penalties and (B) such Tax Indemnitee shall act in connection with paying the Tax in the manner that is in its reasonable good faith opinion the least prejudicial to the pursuit of the contest). In addition, such Tax Indemnitee shall at Lessees expense (provided that Lessee shall have agreed to keep such information confidential other than to the extent necessary in order to contest the claim) furnish Lessee with copies of the relevant portions of any requests for information from any Government Entity relating to such Taxes with respect to which Lessee may be required to indemnify hereunder. | ||
If requested by Lessee in writing, such Tax Indemnitee shall contest (or, allow Lessee to contest, to the extent provided in the next paragraph) such claim by (v) resisting payment thereof, (w) not paying the same except under protest if protest is necessary and proper, (x) if the payment is made, using reasonable efforts to obtain a refund thereof in an appropriate administrative and/or judicial proceeding, (y) appealing any adverse administrative or judicial decision, except that the Tax Indemnitee shall not be required to pursue any appeals to the highest court in South Africa or the United States Supreme Court and/or (z) taking such other reasonable action as is reasonably requested by Lessee from time to time, provided that (1) Lessee shall reimburse such Tax Indemnitee on demand for all reasonable expenses incurred by such Tax Indemnitee for the |
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purpose of conducting such contest, including, without limitation, any attorney, accountants or advisory fees, (2) before the commencement of any administrative or judicial action, Lessee shall acknowledge its obligation in writing to indemnify such Tax Indemnitee for the amount of Tax in controversy if the contest is unsuccessful, provided that Lessee shall not be bound by its acknowledgment of liability if the contest is resolved on the basis of a written decision of the adjudicator that clearly and unambiguously indicates that the basis for the resolution is such that the Lessee has no liability under this Schedule 6 with respect to such Tax, (3) Lessee provides and pays for an opinion of independent tax counsel mutually acceptable to Lessee and such Tax Indemnitee that there is a reasonable basis for the contest, (4) there is no material risk of forfeiture of the Aircraft as a result of such contest, and (5) if such contest involves paying the Tax claimed and claiming a refund thereof, Lessee (A) shall have advanced to such Tax Indemnitee the amount of such Tax (to the extent indemnified hereunder) on an interest-free basis and (B) shall have agreed to indemnify such Tax Indemnitee for any adverse tax consequences of such interest-free loan (in the case of clauses (A) and (B), determining such amount after taking into account any Tax Savings or other reduction in Taxes referred to in the penultimate paragraph of Section 5 of this Schedule 6 resulting from any imputed interest deduction arising from such interest free advance from Lessee). | ||
If (i) in the case of an indemnified Tax other than an income or similar Tax the Tax Indemnitee is able to separate (at the cost and expense of Lessee) the contested issue or issues from other issues arising in the same administrative or judicial proceeding that are unrelated to the transactions contemplated by the Operative Documents without, in the sole good faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee shall permit Lessee to control the conduct of any such proceeding (a Lessee-Controlled Contest) without foregoing its right to participate and shall (at the cost and expense of Lessee) provide to Lessee such information and data that is in such Tax Indemnitees control or possession that is reasonably necessary to conduct such contest and that is not considered by such Tax Indemnitee in ggod faith to be proprietary or confidential. The Tax Indemnitee and Lessee shall consult with each other and each others counsel in good faith regarding the manner of contesting any claim hereunder and shall keep each other reasonably informed regarding the progress of such contest. | ||
Notwithstanding any of the foregoing, if any Tax Indemnitee shall release, waive, compromise, or settle any claim (which the Tax Indemnitee shall be free to do) which may be indemnifiable by Lessee pursuant to this Schedule 6 without the written permission of Lessee, Lessees obligation to indemnify such Tax Indemnitee with respect to such claim (and all directly related claims and claims based on the outcome of such claim) shall terminate, and such Tax Indemnitee shall promptly repay to Lessee any amount previously paid or advanced to such Tax Indemnitee with respect to such claim (other than amounts described in clause (1) of the second preceding paragraph to the extent previously incurred). | ||
In addition, if a Tax Indemnitee receives an award of attorneys fees in a contest for which Lessee has paid an allocable portion of expenses, the Tax Indemnitee shall promptly pay to Lessee that portion of the award paid by Lessee that relates to the issues contested under this Schedule 6. | ||
7. | COOPERATION | |
If at any time during the Lease Term, Lessor or Lessee becomes subject to any material Tax that was not contemplated as of the date hereof, Lessor and Lessee agree to use reasonable efforts to conclude arrangements that would eliminate or minimize such Tax; provided, however, that neither Lessor, nor any Tax Indemnitee nor Lessee shall be under any obligation to take any |
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action or agree to any arrangements that it determines in its reasonable discretion to be adverse to its rights, interests or internal policies or that subjects it to any cost, expense or liability that is not paid or indemnified against by the requesting party to the satisfaction of the responding party. | ||
8. | FORMS, INFORMATION, ETC. | |
Each Tax Indemnitee shall provide Lessee with such forms, certifications, information, and documentation as shall be reasonably requested by Lessee in writing to minimize any indemnity payment pursuant to this Schedule 6 and any withholding Taxes (but only if (1) such Tax Indemnitee is legally entitled to furnish such forms, certifications, information or documentation, (2) in the case of withholding taxes, such Tax Indemnitee is legally eligible to claim a reduction therein or exemption therefrom, and (3) in the reasonable good faith opinion of such Tax Indemnitee, such forms, certifications, information, and documentation may be furnished by such Tax Indemnitee without any out of pocket cost or materially adverse consequences or risk thereof to such Tax Indemnitee, unless such cost or consequence or risk is paid by Lessee or is indemnifiable, does not in the good faith judgment of such Tax Indemnitee expose such Tax Indemnitee to a risk of criminal penalties or a material risk of civil penalties, the indemnity is reasonably satisfactory to the Tax Indemnitee and, if requested, Lessee provides security for its indemnity obligation reasonably acceptable to the Tax Indemnitee, it being understood that the provision of any certifications, documentation or information required to be provided in connection with any withholding form as constituted on the day the Tax Indemnitee becomes a party to the Operative Documents or designates a new office or location for receiving payments under the Operative Documents shall be deemed not to have any adverse consequences or risk thereof to any Tax Indemnitee). | ||
9. | REFUNDS AND CREDITS | |
If any Tax Indemnitee shall receive a refund or credit (or would have received such refund or credit but for a counterclaim or other claim not indemnified by Lessee hereunder (a deemed refund or credit)) with respect to all or any part of any Taxes paid, reimbursed, or advanced by Lessee, in each case, whether by means of a deduction, credit, refund, or otherwise, and which was not taken into account in computing such payment or indemnity, such Tax Indemnitee shall pay to Lessee within 30 days of such receipt or, in the case of a deemed refund or credit, within 30 days of the resolution of such contest, an amount equal to the lesser of (A) the amount of such refund or credit or deemed refund or credit actually realized by such Tax Indemnitee, plus any additional Tax Savings or other reduction in Taxes referred to in the penultimate paragraph of Section 5 of this Schedule 6 actually realized and utilized currently by such Tax Indemnitee in reducing its Taxes as a result of any payment made pursuant to this sentence (including clause (A)), and (B) such Tax payment, reimbursement, or advance by Lessee to such Tax Indemnitee theretofore made pursuant to this Schedule 6 and the excess, if any, of the amount described in clause (A) over the amount described in clause (B) shall be carried forward and applied to reduce pro tanto any subsequent obligations of Lessee to make payments to such Tax Indemnitee pursuant to this Schedule 6. If, in addition to such refund or credit (or deemed refund or credit), such Tax Indemnitee shall receive or be credited with (or would have received but for a counterclaim or other claim not indemnified by Lessee hereunder) an amount representing interest on the amount of such refund or credit or deemed refund or credit, as the case may be, such Tax Indemnitee shall pay to Lessee within 30 days of such receipt or, in the case of a deemed refund or credit, within 30 days of the resolution of such contest, that portion of such interest that shall be fairly attributable to Taxes paid, reimbursed, or advanced by Lessee prior to the receipt of such refund or credit or deemed refund or credit (reduced by any increase in Taxes |
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payable by reason of the receipt or accrual of such interest and increased by any Tax Savings or other reduction in Taxes referred to in the penultimate paragraph of Section 5 of this Schedule 6 resulting from the payment pursuant to this sentence). Each Tax Indemnitee agrees to reasonably cooperate at Lessees expense in good faith with Lessee in claiming and pursuing any such refunds or credits of any Taxes payable or indemnifiable pursuant to this Schedule 6. | ||
10. | REIMBURSEMENTS BY TAX INDEMNITEES | |
If for any reason Lessee is required by applicable Law or by any Tax Indemnitee to make any payment, with respect to Taxes imposed on or with respect to any Tax Indemnitee in respect of the transactions contemplated by the Operative Documents and it is determined by the parties thereafter that such Taxes are not the responsibility of Lessee under this Schedule 6 or the Operative Documents, the relevant Tax Indemnitee shall (a) pay to Lessee an amount which equals the amount paid by Lessee to such Tax Indemnitee with respect to such Taxes plus interest at the Past Due Rate, in the case of payments that were made to the Tax Indemnitee, or the prevailing government rate of interest in the case of payments made to any Government Entity, during the period commencing on the date Lessee gives notice to the Tax Indemnitee that it has paid an amount described in this Section 10 and ending on the date that Lessee actually receives such payment. | ||
11 | NON-PARTIES | |
If a Tax Indemnitee is not a party to this Agreement, Lessee may require the Tax Indemnitee to agree in writing, in a form reasonably acceptable to Lessee, to the terms of this Schedule 6 prior to making any payment to such Tax Indemnitee under this Schedule 6. |
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1. | AGREEMENTS AND DOCUMENTS | |
The following documents, agreements, instruments or certificates shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Lessor, any Affiliate of Lessor, any Financing Party, Airframe Manufacturer and Engine Manufacturer), shall each be reasonably satisfactory in form and substance to Lessor and shall be in full force and effect (unless expressly provided otherwise) and in the English language, where required by applicable Law, shall have been duly notarized and legalized and executed counterparts thereof shall have been delivered to Lessor: | ||
1.1 | Lease Agreement | |
The Lease Agreement. | ||
1.2 | Acceptance Certificate | |
The Acceptance Certificate (provided that Lessee shall not be obligated to sign the Acceptance Certificate if Lessees conditions precedent in Schedule 8 have not been met). | ||
1.3 | Lessee Consent | |
A consent of the Lessee to Lessors security assignment of the Operative Documents in connection with the financing of the Aircraft, such consent to be in form and substance reasonably acceptable to Lessee. | ||
1.4 | Airbus Warranties Agreement | |
The Airbus Warranties Agreement, such agreement to be in form and substance reasonably acceptable to Lessee. | ||
1.5. | Roll-Royce Warranties Agreement | |
The Rolls-Royce Warranties Agreement, such agreement to be in form and substance reasonably acceptable to Lessee. |
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complied with, and that the import of the Aircraft into each of the State of Registration and the Lessee Jurisdiction (as applicable) is exempt from Taxes and/or that such Taxes have been paid. | ||
1.14 | Aircraft Charges Letter | |
A letter from Lessee to, inter alia, the Director Central Route Charges Office of Eurocontrol and Airport Company South Africa Limited in which Lessee authorizes the addressee to issue to Lessor, upon Lessors request from time to time, a statement of account of all sums due by Lessee to the addressees in respect of all aircraft (including the Aircraft) operated by Lessee. | ||
1.15 | Cape Town Compliance | |
Lessee shall have satisfied the conditions precedent in Section 4 of Schedule 9 (except to the extent of any action required to be taken by Lessor) to the Lease Agreement. | ||
1.16 | Exchange Control Approval | |
A copy of the Financial Approval of the SARB confirming that all payments made or to be made by Lessee under or in connection with the Lease Agreement and the other Operative Documents to which Lessee is a party, excluding all payments made by Lessee to Lessor prior to the date of such Financial Approval, when made will be approved by the SARB. Lessee shall use reasonable efforts to include all payments made by Lessee to Lessor prior to the date of such Financial Approval. | ||
1.17 | [Intentionally Omitted] | |
1.18 | Licenses | |
A certified copy of Lessee Air Transport License, Air Operators Certificate (without reference to the Aircraft) and International Air Service License. | ||
1.19 | Registration | |
A certified copy of the application for registration (CAR 47A) of the Aircraft in the State of Registration and evidence of the submission of the completed form to the Aviation Authority. | ||
2. | FIRST RENT PAYMENT MADE | |
Lessee shall have paid the first installment of RentPeriodic when due pursuant to Section 3.1 of the Lease Agreement. | ||
3. | SECURITY DEPOSIT PAID OR LETTER OF CREDIT DELIVERED | |
Lessee shall have (1) paid all installments of the Security Deposit due on or before the Delivery Date pursuant to Section 4.1 of the Lease Agreement or (2) delivered to Lessor a Letter of Credit, which Letter of Credit complies with the requirements of Section 4.4 of the Lease Agreement. |
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4. | NO DEFAULT; REPRESENTATIONS AND WARRANTIES | |
No Default in respect of any obligation under the Operative Documents shall have occurred and be continuing and no Event of Default shall have occurred and be continuing, and the representations and warranties of Lessee under the Operative Documents are correct and would be correct if repeated on the Delivery Date. | ||
5. | AIRCRAFT | |
The Aircraft shall have been delivered by Airframe Manufacturer in compliance with the requirements of Part I of Schedule 3 to the Lease Agreement. | ||
6. | EVENT OF LOSS | |
No Event of Loss (or event, condition or circumstance that would with the giving of notice or passage of time become or give rise to an Event of Loss) of the Aircraft shall have occurred unless the Aircraft is being replaced by the Airframe Manufacturer pursuant to the purchase agreement for the Aircraft, in which case the Scheduled Delivery Date will be postponed accordingly. | ||
The conditions precedent specified in this Schedule 7 are for the sole benefit of Lessor and may be waived or deferred in whole or in part and with or without condition by Lessor. If any of such conditions is not satisfied or waived in writing by Lessor on and as of the Delivery Date and Lessor, in its sole discretion, nonetheless proceeds with the delivery of the Aircraft to Lessee hereunder, Lessee hereby covenants and agrees to satisfy, or cause the satisfaction of, such outstanding conditions (other than Sections 1.8, 5 and 6 of this Schedule 6) within 30 days after the Delivery Date. |
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1. | AGREEMENTS AND DOCUMENTS | |
The following documents, agreements, instruments or certificates shall have been duly authorized, executed and delivered by the respective party or parties thereto (other than Lessee and any Affiliate of Lessee), shall each be reasonably satisfactory in form and substance to Lessee and shall be in full force and effect (unless expressly provided otherwise) and in the English language, and executed counterparts shall have been delivered to Lessee: | ||
1.1 | Lease Agreement | |
This Lease Agreement. | ||
1.2 | Acceptance Certificate | |
The Acceptance Certificate (provided that Lessor shall not be obligated to sign the Acceptance Certificate if Lessors conditions precedent in Schedule 7 have not been met). | ||
1.3 | Secretarys or Officers Certificate of Lessor | |
A secretarys or officers certificate addressing, inter alia , Lessors power and authority to enter into the Operative Documents and perform its obligations thereunder, and attaching, inter alia, a copy of Lessors constitutional documents and the corporate approvals required for the transactions contemplated by the Operative Documents. | ||
1.4 | Guarantee | |
A guarantee from an Affiliate of Lessor with a net worth of at least US$30,000,000 in the form of Exhibit F to the Lease Agreement on the date of the Lease Agreement. | ||
1.5 | Legal OpinionGuarantor | |
A legal opinion of Guarantors independent legal counsel in Bermuda regarding the due authorization and execution of the Guarantee by Guarantor within 15 days of the date of the Lease Agreement. |
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1.6 | Airbus Performance Guarantees | |
An assignment of the Airframe Manufacturer performance guarantees received from Airframe Manufacturer with respect to the Aircraft pursuant to a letter agreement dated on or about December 16, 2009 | ||
2. | NO DEFAULT; REPRESENTATION AND WARRANTIES | |
Lessor shall not be in default of any of its obligations under the Operative Documents, and Lessors representations and warranties contained in Section 5.1 of the Lease Agreement shall be true and correct on the Delivery Date. | ||
3. | CONDITION OF AIRCRAFT | |
Subject to the provisions of Schedule 3 to the Lease Agreement, the Aircraft shall have been delivered by Airframe Manufacturer in compliance with the requirements of Part I of Schedule 3 to the Lease Agreement. | ||
4. | EVENT OF LOSS | |
No Event of Loss (or event, condition or circumstance that would with the giving of notice or passage of time become or give rise to an Event of Loss) of the Aircraft shall have occurred unless the Aircraft is being replaced by the Airframe Manufacturer pursuant to the purchase agreement for the Aircraft, in which case the Scheduled Delivery Date will be postponed accordingly. |
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1. | DEFINITIONS | |
In this Schedule 9 the following expressions have the respective meanings given to them in Article 1 of the Cape Town Convention and Article I of the Cape Town Aircraft Protocol: |
2. | AGREEMENTS | |
Lessor and Lessee agree that: |
(1) | It is the understanding and intention of the parties, and a fundamental part of the transactions set out in this Agreement, that Lessors interest as lessor under this Agreement comprise an international interest and the Cape Town Agreements shall apply to this Agreement and, accordingly, Lessee shall not assert the inapplicability of the Cape Town Agreements or the provisions thereof ( including the application of Article XI, Alternative A, of the Cape Town Aircraft Protocol, with a waiting period of 30 days) under any circumstances; | ||
(2) | The aircraft register of the State of Registration is the State of registry for the purposes of the Cape Town Agreements; | ||
(3) | The Airframe is an airframe and, accordingly, an aircraft object and the Engines are aircraft engines and, accordingly, aircraft objects; | ||
(4) | At Lessors option, the prospective international interests of Lessor in the Airframe and each of the Engines, shall on or prior to delivery of the Aircraft hereunder be registered under the Cape Town Agreements and each such registration may be amended or extended prior to its expiry by either Lessor or Lessee, with the consent in writing of the other, such consent not to be unreasonably withheld or delayed; | ||
(5) | The events which are referred to in Section 12 of the Lease Agreement as Events of Default are events that constitute a default or otherwise give rise to the rights and remedies specified in Articles 8 to 10 and 13 of the Cape Town Convention and Articles IX and X of the Cape Town Aircraft Protocol; |
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(6) | Each of Lessor and Owner shall have the remedies referred to in Articles 13(1) of the Cape Town Convention and Articles IX(1) and X(3) of the Cape Town Aircraft Protocol; | ||
(7) | Each of Lessor and Owner has power to dispose of the Airframe and the Engines for the purpose of Article 7(b) of the Cape Town Convention; | ||
(8) | Lessor may assign the associated rights, which associated rights consist of all rights to payment or other performance by Lessee under the Lease Agreement. Lessee further undertakes with Lessor that it will duly and punctually perform all of its obligations under the Operative Documents. Any such assignment shall transfer to the relevant assignee the related international interests of Lessor; and | ||
(9) | Lessee shall, on or prior to the Delivery Date, execute and deliver to the Aviation Authority an irrevocable de-registration and export request authorization in favor of Lessor in the form annexed to the Cape Town Aircraft Protocol. |
3. | REPLACEMENT ENGINE | |
If either of the Engines is replaced by a Replacement Engine in accordance with Section 10 of the Lease Agreement, Lessor, Owner and Lessee shall, at Lessees expense and on or prior to title to the Replacement Engine being vested in Owner, take such steps as shall be available to them under the terms of the Cape Town Agreements and as are necessary or desirable in Lessors opinion for the purposes of protecting, establishing, perfecting Lessors, Owners and each Financing Partys rights and interests in the Replacement Engine to same extent as for the engine which has been replaced. | ||
4. | CONDITIONS PRECEDENT | |
The conditions precedent referred to at paragraph 1. 15 of Schedule 7 are: |
(1) | Evidence that registration has been effected of the international interests of Lessor in such order of priorities as shall be reasonably acceptable to Lessor; | ||
(2) | A legal opinion from legal counsel reasonably acceptable to Lessor (which may be internal counsel) as to the applicability of the Cape Town Agreements, the enforceability of the provisions of the Cape Town Agreements, including the application of Article XI, Alternative A, of the Cape Town Aircraft Protocol, with a waiting period of 30 days, in the State of Registration, and the due constitution, registration and priority of the international interests of Lessor; and | ||
(3) | Evidence that the irrevocable de-registration and export request authorization referred to in Section 2(9) of this Schedule 9 has been recorded by the Aviation Authority as contemplated by Article XIII(2) of the Cape Town Aircraft Protocol. |
Lessor shall cooperate with Lessee in satisfying the conditions precedent in this Section 1.15. |
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5. | TERMINATION | |
Upon the termination by Lessor of the leasing of the Aircraft pursuant to the terms of the Lease Agreement, Lessee covenants to promptly cooperate in discharging any international interest in respect thereof for which the Lessee is listed as debtor in the International Registry. | ||
6. | SUBLEASING | |
If the Aircraft is to be sub-leased to a Permitted Sublessee in accordance with Section 8 of the Lease Agreement and Lessee proposes to register its international interest as a creditor in the Airframe and/or the Engines as lessor under a leasing agreement to a Permitted Sublessee (the Lessees International Interest), Lessor, Lessee and the Permitted Sublessee shall, prior to the commencement of the sub-leasing of the Aircraft to the Permitted Sublessee, enter into such documents and effect such registrations under the Cape Town Agreements as shall be required to reflect the subordination of the Permitted Sublessees rights in relation to the Airframe and/or the Engines and the subordination of the Lessees International Interest to the rights and the respective international interests of Lessor and the Financing Parties under the Lease Agreement and the Financing Security Documents. It shall be a condition precedent to the commencement of the sub-leasing of the Aircraft pursuant to any such sub-lease to a Permitted Sublessee that: |
(1) | The Permitted Sublessee shall execute and deliver to the Aviation Authority an irrevocable de-registration and export request authorization in favor of Lessor in the form annexed to the Cape Town Aircraft Protocol; | ||
(2) | The Lessees International Interest referred to above shall have been assigned to Lessor and such assignment shall: |
(a) | Constitute an assignment for the purposes of the Cape Town Agreements; | ||
(b) | Comply with the requirements of Article 32 of the Cape Town Convention; | ||
(c) | Have been registered in accordance with the Cape Town Agreements; and |
(3) | Lessor shall have received a legal opinion from legal counsel reasonably acceptable to Lessor as to the due constitution, registration and priority under and in accordance with the Cape Town Agreements of the international interests of Lessor, the Financing Parties and Lessee referred to in this Section 6. |
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1. | Lessee hereby irrevocably and unconditionally accepts and leases from Lessor on the date hereof and at [delivery location], under and for all purposes of the Operative Documents, the Aircraft, as more particularly defined in the Lease Agreement, but including the following: | |
One new Airbus Model A330-200 airframe bearing manufacturers serial number [MSN] (including the loose equipment listed on Annex 1 hereto), together with (a) two Rolls-Royce Model Trent 772B engines bearing manufacturers serial numbers [Engine 1] and [Engine 2], respectively, (b) [Manufacturer] Model [ _] APU bearing manufacturers serial number [ ], (c) three landing gear assemblies bearing manufacturers serial numbers [ ] (LM), [ ] (RM) and [ ] (N) and (d) the Aircraft Documentation listed on Annex 2 hereto. The current status of the Aircraft is set out in Annex 3 hereto [to include fuel and oil]. | ||
2. | Lessee hereby confirms that the Delivery Date for all purposes of the Lease Agreement is the date set forth in the opening paragraph of this Acceptance Certificate and confirms that the Lease Term shall commence on the Delivery Date. | |
3. | Lessee hereby confirms its agreement to pay Rent throughout the Lease Term in the amounts, to the Persons and otherwise in accordance with the provisions of Section 3 of the Lease Agreement and in accordance with the other provisions of the Operative Documents. | |
4. | Lessee hereby confirms that it has inspected the Aircraft and that the Aircraft is in compliance with the delivery requirements of the Lease Agreement and each other Operative Document[,except for such items listed in Annex 4]. Lessee further confirms that it has read and agrees with the DISCLAIMER set forth in Section 3 of Schedule 3 to the Lease Agreement. Without limiting the terms of such DISCLAIMER, Lessee confirms and acknowledges that: |
(1) | LESSEE HAS FULLY INSPECTED, AND PARTICIPATED IN THE DEMONSTRATION FLIGHT OF, THE AIRCRAFT, AND, SPECIFICALLY, HAS INSPECTED THE AIRCRAFT DOCUMENTATION. | ||
(2) | EXCEPT FOR SUCH ITEMS LISTED IN ANNEX 4, THE CONDITION OF AIRCRAFT, INCLUDING THE AIRCRAFT DOCUMENTATION, IS SATISFACTORY TO LESSEE. | ||
(3) | LESSEE IS AN EXPERIENCED OPERATOR OF COMMERCIAL AIRCRAFT. LESSEE HEREBY CONFIRMS THAT IN ACCEPTING THE AIRCRAFT LESSEE IS RELYING SOLELY ON ITS OWN INVESTIGATION AND IS NOT RELYING UPON |
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ANY REPRESENTATION, STATEMENT OR OTHER ASSERTION OF LESSOR OR ANY PERSON OR ENTITY CONNECTED WITH LESSOR WITH RESPECT TO THE AIRCRAFT. |
(4) | LESSEE HAS BEEN ADVISED OF AND FULLY UNDERSTANDS THE LEGAL IMPORT AND IMPLICATIONS OF THIS ACCEPTANCE CERTIFICATE. |
5. | THIS ACCEPTANCE CERTIFICATE SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF ENGLAND AND WALES. |
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SOUTH AFRICAN AIRWAYS (PTY) LTD.
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||||
By: | ||||
Name: | ||||
Title: | ||||
By: | ||||
Name: | ||||
Title: | ||||
By: | ||||
Name: | ||||
Title: | ||||
Annex 1: | Loose Equipment List (including safety and galley equipment) | |
Annex 2: | Documentation List | |
Annex 3: | Status of the Aircraft | |
Annex 4: | Discrepancies |
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INSURED:
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South African Airways (Pty) Limited and associated and affiliated and subsidiary companies now existing or as may hereafter be constituted for their respective rights and interests. Including as of commencement date hereof existing companies managed by the Insured. | |
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PERIOD:
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[Date] to [Date] both days at 12.01 am Local Standard Time | |
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EQUIPMENT:
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One Airbus A330-200 | |
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MSN: [MSN] | |
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Reg : [TBA] | |
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SITUATION:
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WORLDWIDE excluding Iraq. | |
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COVERAGE:
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1. | HULL All Risks of Loss or Damage whilst in flight, taxiing and on the ground for an Agreed Value each aircraft. Cover under this section is subject to a deductible of USD1,000,000 each and every claim except in respect of total loss, constructive total loss or arranged total loss of the Aircraft. | |
Nevertheless, in the event of an incident arising hereon involving the application of more than one deductible then only one deductible shall apply, being the highest deductible applicable to the incident. This deductible shall be applied as an aggregate deductible for all claims arising out of that incident. | ||
Cover includes 50/50 Provisional Claims Settlement Clause (AVS103). | ||
2. | SPARES All Risks for the following limits:- | |
USD200,000,000 any one occurrence
USD30,000,000 any one sending |
||
Subject to a deductible of USD10,000 each and every claim other than as a result of losses arising out of an accident to the carrying aircraft / vehicle transporting such spares or to claims arising out of fire, lightning, explosion, wind, tornado, storm, hail, earthquake, cyclone or flood. |
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Ingestion claims occurring during engine running/testing to be subject to the applicable Hull All Risks deductible according to aircraft type to which the engine is destined to be fitted (excluding any form of total loss). | ||
3. | HULL WAR AND ALLIED PERILS in accordance with LSW555D wording, including Hi-jacking and Confiscation, subject to an annual aggregate of USD1,000,000,000, for an Agreed Value as above. | |
(The coverage under this section includes confiscation by the Government of Registration subject to an annual aggregate sub-limit of USD250,000,000) | ||
In respect of Spares coverage is limited to the following: | ||
USD200,000,000 any one occurrence
USD 30,000,000 any one item |
||
In respect of spares the cover provided for War risks (paragraph (a) of LSW555D) applies to sea and air transits only. | ||
Cover includes a 50/50 provisional claims settlement clause (AVS103). | ||
4. | AIRCRAFT THIRD PARTY, PASSENGERS, PASSENGER BAGGAGE, CARGO, MAIL AND AVIATION GENERAL THIRD PARTY LEGAL LIABILITY for a Combined Single Limit of at least USD1,000,000,000 any one occurrence each aircraft and in the aggregate in respect of products liability. | |
The coverage for War and Allied Perils is provided by the attachment of Extended Coverage Endorsement (Aviation Liabilities) AVN52E subject to a sub-limit of USD150,000,000 any one Occurrence and in the annual aggregate except with respect to passengers and their baggage and personal effects and cargo and mail while it is on the aircraft for which the full policy limit(s) shall apply. This sub-limit shall apply within the full Policy limit and not in addition thereto. | ||
IN RESPECT OF ABOVE SUB-LIMIT THE FOLLOWING ADDITIONAL COVERAGE IS IN FORCE | ||
TO PAY : |
(1) | A Combined Single Limit (Bodily Injury/Property Damage) of at least USD 850,000,000 any one occurrence and in the annual aggregate. |
EXCESS OF |
(2) | A Combined Single Limit (Bodily Injury/Property Damage) of USD 150,000,000 any one occurrence and in the annual aggregate. |
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Equipment:
|
One Airbus A330-200, with two Rolls-Royce Trent 772B engines
MSN: [MSN] Reg : [TBA] |
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Agreed Value: USD[ ] | |
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Contract Parties:
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[Lessor]
[Owner] [Security Trustee], as loss payee |
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And in respect of liability insurances only, [list Insured Parties] and the successors and permitted transferees and assigns of each of the foregoing, and the directors, officers, corporate stockholders, partners, employees, contractors, servants and agents of each of the foregoing. | |
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||
Contracts:
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[Lease Agreement]
[Financing/security documents] |
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Effective Date
:
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[Date] | |
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Additional Premium
:
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USD100 receipt of which is hereby acknowledged | |
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Appointed Broker
:
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Willis Limited |
1. | Under the Hull, Hull War and Aircraft Spares Insurances | |
1.1 | In respect of any claim on Equipment that becomes payable on the basis of a Total Loss, settlement (net of any relevant Policy Deductible) shall be made to, or to the order of the Contract Party(ies). In respect of any other claim, settlement (net of any relevant Policy Deductible) shall be made with such party(ies) as may be necessary to repair the Equipment unless otherwise agreed after consultation between the Insurers and Insured and, where necessary under the terms of the Contract, the Contract Party(ies). Such payments shall only be made provided they are in compliance with all applicable laws and regulations. | |
1.2 | Insurers shall be entitled to the benefit of salvage in respect of any property for which a claims settlement has been made. |
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2. | Under the Legal Liability Insurance | |
2.1 | Subject to the provisions of this Endorsement, the Insurance shall operate in all respects as if a separate Policy had been issued covering each party insured hereunder, but this provision shall not operate to include any claim howsoever arising in respect of loss or damage to the Equipment insured under the Hull or Spares Insurance of the Insured. Notwithstanding the foregoing the total liability of Insurers in respect of any and all Insureds shall not exceed the limit of liability stated in the Policy. | |
2.2 | The Insurance provided hereunder shall be primary and without right of contribution from any other insurance which may be available to the Contract Party(ies). | |
2.3 | This Endorsement does not provide coverage for the Contract Party(ies) with respect to claims arising out of their legal liability as manufacturer, repairer, or servicing agent of the Equipment. | |
3. | Under ALL Insurances | |
3.1 | The Contract Party(ies) are included as Additional Insured(s). | |
3.2 | The coverage afforded to each Contract Party by the Policy in accordance with this Endorsement shall not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any other person or party which results in a breach of any term, condition or warranty of the Policy PROVIDED THAT the Contract Party so protected has not caused, contributed to or knowingly condoned the said act or omission. | |
3.3 | The provisions of this Endorsement apply to the Contract Party(ies) solely in their capacity as financier(s)/lessor(s) in the identified Contract(s) and not in any other capacity. Knowledge that any Contract Party may have or acquire or actions that it may take or fail to take in that other capacity (pursuant to any other contract or otherwise) shall not be considered as invalidating the cover afforded by this Endorsement. | |
3.4 | The Contract Party(ies) shall have no responsibility for premium and Insurers shall waive any right of set-off or counterclaim against the Contract Party(ies) except in respect of outstanding premium in respect of the Equipment. | |
3.5 | Upon payment of any loss or claim to or on behalf of any Contract Party(ies), Insurers shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of the Contract Party(ies) indemnified hereby (but not against any Contract Party). Insurers shall not exercise such rights without the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of Insurers such Contract Party(ies) shall do all things reasonably necessary to assist the Insurers to exercise said rights. | |
3.6 | Except in respect of any provision for Cancellation or Automatic Termination specified in the Policy or any endorsement thereof, cover provided by this Endorsement may only be cancelled or materially altered in a manner adverse to the Contract Party(ies) by the giving of not less than Thirty (30) days notice in writing to the appointed broker (7 days or such lesser period as may customarily be available in respect of War and Allied Perils). Notice shall be deemed to commence from the date such notice is given by the Insurers. Such notice will NOT, however, be given at normal expiry date of the Policy or any endorsement. |
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1. | THE CONTRACT PARTY(IES) ARE COVERED BY THE POLICY SUBJECT TO ALL TERMS, CONDITIONS, LIMITATIONS, WARRANTIES, EXCLUSIONS AND CANCELLATION PROVISIONS THEREOF. | |
2. | THE POLICY SHALL NOT BE VARIED BY ANY PROVISIONS CONTAINED IN THE CONTRACT(S) WHICH PURPORT TO SERVE AS AN ENDORSEMENT OR AMENDMENT TO THE POLICY. |
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Aircraft Type | : | Airbus A330-200 |
MSN | : | [MSN] |
OPERATOR | : | SOUTH AFRICAN AIRWAYS (PTY) LIMITED and their respective Associated and Affiliated and Subsidiary Companies for their respective rights and interests |
1. | In relation to the Hull and Hull War Risks Insurances, to hold the insurance slips and the benefit of those insurances to your order in accordance with the loss payable provision referenced in the said Certificate or Insurance, but subject always to our requirements to operate the Fleet Policy in so far as it relates to any other aircraft insured thereunder. | |
2. | To advise you promptly:- |
2.1. | of the receipt by us of any notice of cancellation or material change in the insurances; and | ||
2.2. | if any premiums are not paid to us in accordance with the accounting procedures that exist between the Operator and ourselves before we notify insurers of such non-payment of premiums; and | ||
2.3. | upon application from you, of the premium payment situation; and | ||
2.4. | if we cease to be Insurance Brokers to the Operator. |
3. | Following a written application received from you not later than one month before expiry of these insurances to notify you within fourteen days of the receipt of such application in the event of our not having received renewal instructions from the Operator. |
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a. | our continuing appointment for the time being as Insurance Brokers to the Operator; and | |
b. | all claims and return premiums being collected through ourselves as Insurance Brokers; and | |
c. | our lien, if any, on the said insurances for premiums due in respect of the Aircraft. |
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MONTHLY REPORT
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||||||||
MONTH ENDING
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AIRCRAFT S/N
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TYPE | REG | ||||||
TOTAL FLIGHT HOURS | FLT. HOURS FOR MONTH | |||||||
TOTAL CYCLES | CYCLES FOR MONTH |
LANDING GEAR | LAST OVERHAUL | NEXT DUE | ||||
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NLG | |||||
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LH MLG | |||||
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RH MLG |
DELIVERED ENGINES ONLY | ENGINE 1 | ENGINE 2 | APU | |||
ENGINE S/N
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TOTAL FLIGHT HRS
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TOTAL CYCLES
|
||||||
FLIGHT HRS FOR MONTH
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CYCLES FOR MONTH
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||||||
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CURRENT LOCATION
|
||||||
LLP LIMITER: PART
|
||||||
LLP LIMITER: REMAINING CYCLES
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||||||
SINCE LAST SV: HOURS
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SINCE LAST SV: CYCLES
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FORECASTED SV DATE:
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THRUST RATING:
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REMOVAL | INSTALLATION | |||||
ENGINE S/N
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ENGINE S/N | |||||
AIRCRAFT S/N
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AIRCRAFT S/N | |||||
POSITION
|
POSITION | |||||
REMOVAL DATE
|
INSTALL DATE | |||||
TOTAL HRS @REM
|
TOTAL HRS @INST | |||||
TOTAL CYC @REM
|
TOTAL CYC @INST |
REASON FOR REMOVAL | ||||||
REPAIR AGENT
|
WORKSCOPE | |||||
LOCATION
|
A-Check
|
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C-Check
|
||
HMV
|
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The capitalized terms used in this Guarantee shall have the respective meanings ascribed thereto in the Lease. This Guarantee shall be construed and interpreted in accordance with Schedule 1 to the Lease. |
2.1 | Guarantee | |
Guarantor hereby, irrevocably, unconditionally, as primary obligor not merely as surety and without offset, abatement, deferment or deduction, guarantees to Beneficiary (1) the prompt payment in full when due of all amounts owed by, and the performance of all obligations of, Company under the Lease Agreement and the other Operative Documents to which Company is a party and (2) the accuracy of all representations and warranties made by Company in the Operative Documents, in each case strictly in accordance with the terms thereof (such payment and performance obligations, and the accuracy of such representations and warranties, collectively, the Guaranteed Obligations). | ||
If Company fails to pay any payment in full any amounts owed by it under the Lease Agreement, Guarantor will promptly and fully pay such payment obligations when due and payable without demand or notice. If Company fails to perform any of its obligations under the Lease for any |
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reason, Guarantor will fully and promptly perform such obligations or cause such obligations to be performed without any demand or notice. |
2.2 | Indemnity | |
Without prejudice to Beneficiarys rights under Section 2.1, Guarantor unconditionally and irrevocably undertakes, as a separate, additional and continuing obligation, to indemnify Beneficiary against all losses, liabilities, damages, costs and expenses whatsoever arising out of or in connection with any failure by Guarantor to fulfill the Guaranteed Obligations, or any breach by Guarantor of any provision of this Guarantee, and this indemnity shall remain in full force and effect notwithstanding that the guarantee under Section 2.1 may be or become void, voidable, unenforceable or illegal or cease to be legal, valid or enforceable against Guarantor for any reason whatsoever, including any lack of authority of Company to enter into or perform its obligations under any document underlying any of the Guaranteed Obligations or any invalidity or unenforceability of the Guaranteed Obligations or any such document. | ||
2.3 | Waivers | |
The occurrence of any one or more of the following shall not prejudice or otherwise affect the liability of Guarantor hereunder: |
(1) | at any time or from time to time, without notice to Guarantor, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended or renewed, or such performance or compliance shall be waived; | ||
(2) | any of the Guaranteed Obligations shall be modified, discharged, supplemented or amended in any respect, or any right under any document underlying any of the Guaranteed Obligations, shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released, compromised, varied or exchanged in whole or in part or otherwise dealt with; | ||
(3) | any intermediate payment or settlement of any sum or sums owing or payable by Guarantor hereunder, it being the intent of Guarantor that this Guarantee and shall remain in full force and effect until the Guaranteed Obligations have been unconditionally, indefeasibly and irrevocably paid and discharged in full to the satisfaction of Beneficiary; | ||
(4) | any other security now or in the future held by Beneficiary or any other rights of Beneficiary in relation to any of the Guaranteed Obligations or any related document; | ||
(5) | Beneficiary and Company shall agree to increase, reduce or otherwise adjust the amount of any payment or payments, or change any performance, comprising the Guaranteed Obligations, regardless of whether, without limitation, (a) Guarantor shall be notified, (b) such agreement shall later be canceled or rescinded for any reason or (c) the direct or indirect result of such increase, reduction or adjustment shall increase or otherwise affect the obligations of Guarantor; and/or | ||
(6) | any other action, omission, occurrence or circumstance whatsoever which may in any manner or to any extent vary the risk or effect discharge of the Guarantor hereunder as a matter of law or otherwise or any other occurrence or circumstance whatsoever which |
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might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. |
Guarantor hereby expressly waives, to the fullest extent permitted by applicable law, diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that Beneficiary (or any trustee or agent on behalf of Beneficiary) exhaust any right, power or remedy or proceed against Company, or against any other Person under any other guarantee of, or security or support for, any of the Guaranteed Obligations, it being the intent of Guarantor that this Guarantee is a guarantee of payment and not merely of collection. Further, this Guarantee is a continuing guarantee and will extend to the final balance of all sums payable by Company in respect of any of the Guaranteed Obligations, whether or not any discharge is made in whole or in part in the meantime. | ||
2.4 | Reinstatement | |
The obligations of Guarantor under this Guarantee shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of Beneficiary in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations. | ||
2.5 | Waiver of Subrogation | |
Guarantor hereby agrees that until the final, unconditional, indefeasible and irrevocable payment and satisfaction in full of all Guaranteed Obligations, Guarantor shall not exercise any right or remedy arising by reason of any performance by it of this Guarantee, whether by subrogation or otherwise, against Company or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations, all of which rights are hereby waived by Guarantor. | ||
2.6 | Termination | |
Notwithstanding anything in this Guarantee or in any other Operative Document to the contrary, this Guarantee shall terminate and be of no further force or effect, and Guarantor shall be released from all of its obligations hereunder, to the extent arising from and after, or related to the period after, the date of any Absolute Transfer or Participant Transfer in accordance with the provisions of Section 14 of the Lease. |
Guarantor represents and warrants to Beneficiary that: |
(1) | Guarantor is (a) a company duly organized, validly existing and in good standing under the laws of [ ___ ] , (b) has all requisite corporate power, and has all material governmental licenses, authorizations, consents and approvals, necessary to carry on its business as presently conducted and (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary. | ||
(2) | The execution, delivery and performance by Guarantor of this Guarantee are within Guarantors corporate powers and have been duly authorized by all necessary corporate action on the part of Guarantor. |
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(3) | No authorization, approval, consent or other action by, and no notice to or filing with, any governmental agency or regulatory body is required for the due execution, delivery and performance by Guarantor of this Guarantee. | ||
(4) | This Guarantee has been duly and validly executed and delivered by Guarantor and constitutes the legal, valid and binding obligation of Guarantor and is enforceable against Guarantor in accordance with its terms. | ||
(5) | None of the execution and delivery by Guarantor of this Guarantee, the performance of its obligations hereunder, the consummation of the transactions contemplated hereby or the compliance with the terms and provisions hereof will conflict with or result in a breach of, or require any consent under, the organizational documents of Guarantor, or any applicable law or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Guarantor is a party or by which it is bound or to which it is subject, or constitute a default under any such agreement or instrument. |
18.1 | English Law | |
THIS GUARANTEE, UNLESS OTHERWISE EXPRESSLY PROVIDED THEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF ENGLAND AND WALES. | ||
18.2 | Jurisdiction | |
Guarantor hereby agrees that the English courts are to have non-exclusive jurisdiction to settle any disputes between them which may arise in connection with this Guarantee, and by execution and delivery of this Guarantee Guarantor hereby irrevocably submits to and accepts with regard to any such action or proceeding, for itself and in respect of its assets, generally and unconditionally, the jurisdiction of the aforesaid courts. Guarantor waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings between them in connection with the Guarantee and agrees that a judgment or order of an English court in connection with the Guarantee is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction. Nothing herein shall limit the right of Beneficiary to bring any legal action or proceeding or obtaining execution of judgment against Guarantor in any other appropriate jurisdiction or concurrently in more than one jurisdiction. Guarantor further agrees that, subject to applicable Law, a final judgment in any action or proceeding arising out of or relating to this Guarantee shall be conclusive and may be enforced in any other jurisdiction outside England by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of the indebtedness or liability therein described, or in any other manner provided by Law. |
5.1 | Amendments | |
No provision hereof may be amended, changed, waived or discharged orally, but only by an instrument in writing specifying the provision intended to be amended, changed, waived or |
-148-
discharged and signed by Guarantor and Beneficiary; and no provision hereof shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or other matter not specifically set forth in an agreement in writing and signed by Guarantor and Beneficiary. |
5.2 | Severability | |
If any provision hereof should be held invalid, illegal or unenforceable in any respect in any jurisdiction, then, to the extent permitted by law (1) all other provisions hereof shall remain in full force and effect in such jurisdiction and (2) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. | ||
5.3 | No Assignments | |
Neither Beneficiary not Guarantor may assign or delegate its rights or obligations hereunder without the written consent of the other party. Subject to the foregoing, the terms and provisions of this Guarantee shall be binding upon and inure to the benefit of Beneficiary and Guarantor and their respective successors and permitted assigns. | ||
5.4 | Notices. | |
All notices, requests and other communications to Beneficiary or Guarantor hereunder shall be in writing (for this purpose, writing includes fax), shall refer specifically to this Guarantee and shall be personally delivered or sent by fax, or sent by overnight courier service (e.g., Federal Express), in each case to the respective address specified in Schedule 1 hereto or such other address as such Person may hereafter specify by notice to the other party hereto. Each such notice, request or other communication shall be effective when received or, if by fax, when confirmed by the sending fax machine, provided that any such notice by fax so confirmed after 6:00 p.m., for the recipient, shall be effective on the next succeeding local Business Day. | ||
5.6 | Entire Agreement. | |
This Guarantee constitutes the entire agreement between the parties concerning the subject matter hereof, and supersedes all previous proposals, agreements, understandings, negotiations and other written and oral communications in relation hereto. |
-149-
[GUARANTOR],
as Guarantor |
By: | ||||
Name: | ||||
Title: |
-150-
-151-
-152-
1. | CAC 264218 February 2011 | |
2. | CAC 264222 April 2011 | |
3. | CAC 264223 May 2011 | |
4. | CAC 264224 July 2011 | |
5. | CAC 264227 September 2011 | |
6. | CAC 264228 December 201 |
-153-
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Fixed Charges:
|
||||||||||||
Interest expense
|
$ | 112,166 | $ | 216,577 | $ | 172,206 | ||||||
Capitalized interest
|
7,267 | 5,737 | 1,457 | |||||||||
Portion of rent expense representative of
interest
(a)
|
296 | 436 | 412 | |||||||||
Total fixed charges
|
$ | 119,729 | $ | 222,750 | $ | 174,075 | ||||||
Earnings:
|
||||||||||||
Income from continuing operations before income taxes
|
$ | 122,061 | $ | 122,832 | $ | 111,152 | ||||||
Fixed charges from above
|
119,729 | 222,750 | 174,075 | |||||||||
Less capitalized interest from above
|
(7,267 | ) | (5,737 | ) | (1,457 | ) | ||||||
Amortization of capitalized interest
|
| 283 | 384 | |||||||||
Earnings (as defined)
|
$ | 234,523 | $ | 340,128 | $ | 284,154 | ||||||
Ratio of earnings to fixed charges
|
1.96 | 1.53 | 1.63 | |||||||||
(a) | Estimated to be 1/3 of rent expense, which we believe is an appropriate interest factor for operating leases. |
Name of Subsidiary
|
Jurisdiction
|
|||||
1
|
Aircastle Advisor LLC | Delaware | ||||
2
|
Aircastle Advisor (International) Limited | Bermuda | ||||
3
|
Aircastle Advisor (Ireland) Limited | Ireland | ||||
4
|
Aircastle Bermuda Holding Limited | Bermuda | ||||
5
|
Aircastle Bermuda Securities Limited | Bermuda | ||||
6
|
ABH 12 Limited | Bermuda | ||||
7
|
ACS 2007-1 Limited | Bermuda | ||||
8
|
ACS 2008-1 Limited | Bermuda | ||||
9
|
ACS 2008-2 Limited | Bermuda | ||||
10
|
ACS Aircraft Finance Bermuda Limited | Bermuda | ||||
11
|
ACS Aircraft Finance Ireland 2 Limited | Ireland | ||||
12
|
ACS Aircraft Finance Ireland 3 Limited | Ireland | ||||
13
|
ACS Aircraft Finance Ireland Public Limited Company | Ireland | ||||
14
|
ACS Aircraft Leasing (Ireland) Limited | Ireland | ||||
15
|
Aircastle Holding Corporation Limited | Bermuda | ||||
16
|
AHCL Securities Limited | Bermuda | ||||
17
|
Aircastle Ireland Holding Limited | Ireland | ||||
18
|
Aircastle Investment Holdings Limited | Bermuda | ||||
19
|
Aircastle Investment Holdings 2 Limited | Bermuda | ||||
20
|
Aircastle Investment Holdings 3 Limited | Bermuda | ||||
21
|
Aircraft MSN 138 LLC | Delaware | ||||
22
|
Aircraft MSN 148 LLC | Delaware | ||||
23
|
Aircraft MSN 313 LLC | Delaware | ||||
24
|
Aircraft MSN 324 LLC | Delaware | ||||
25
|
Aircraft MSN 368 LLC | Delaware | ||||
26
|
Aircraft MSN 637 LLC | Delaware | ||||
27
|
Aircraft MSN 1006 LLC | Delaware | ||||
28
|
Aircraft MSN 1012 LLC | Delaware | ||||
29
|
Aircraft MSN 1047 LLC | Delaware | ||||
30
|
Aircraft MSN 1054 LLC | Delaware | ||||
31
|
Aircraft MSN 1059 LLC | Delaware | ||||
32
|
Aircraft MSN 1067 LLC | Delaware | ||||
33
|
Aircraft MSN 1099 LLC | Delaware | ||||
34
|
Aircraft MSN 1101 LLC | Delaware | ||||
35
|
Aircraft MSN 1119 LLC | Delaware | ||||
36
|
Aircraft MSN 24061 LLC | Delaware | ||||
37
|
Aircraft MSN 24066 LLC | Delaware | ||||
38
|
Aircraft MSN 24084 LLC | Delaware | ||||
39
|
Aircraft MSN 24226 LLC | Delaware | ||||
40
|
Aircraft MSN 24541 LLC | Delaware | ||||
41
|
Aircraft MSN 24570 LLC | Delaware | ||||
42
|
Aircraft MSN 24738 LLC | Delaware |
Aircraft MSN 24747 LLC
Delaware
Aircraft MSN 24748 LLC
Delaware
Aircraft MSN 24838 LLC
Delaware
Aircraft MSN 24952 LLC
Delaware
Aircraft MSN 24975 LLC
Delaware
Aircraft MSN 25000 LLC
Delaware
Aircraft MSN 25076 LLC
Delaware
Aircraft MSN 25117 LLC
Delaware
Aircraft MSN 25587 LLC
Delaware
Aircraft MSN 25702 LLC
Delaware
Aircraft MSN 25703 LLC
Delaware
Aircraft MSN 27137 LLC
Delaware
Aircraft MSN 27152 LLC
Delaware
Aircraft MSN 27183 LLC
Delaware
Aircraft MSN 27342 LLC
Delaware
Aircraft MSN 27425 LLC
Delaware
Aircraft MSN 27681 LLC
Delaware
Aircraft MSN 28038 LLC
Delaware
Aircraft MSN 28213 LLC
Delaware
Aircraft MSN 28231 LLC
Delaware
Aircraft MSN 28414 LLC
Delaware
Aircraft MSN 28867 LLC
Delaware
Aircraft MSN 29045 LLC
Delaware
Aircraft MSN 29046 LLC
Delaware
Aircraft MSN 29329 LLC
Delaware
Aircraft MSN 29345 LLC
Delaware
Aircraft MSN 29916 LLC
Delaware
Aircraft MSN 29917 LLC
Delaware
Aircraft MSN 29918 LLC
Delaware
Aircraft MSN 29919 LLC
Delaware
Aircraft MSN 29920 LLC
Delaware
Aircraft MSN 35233 LLC
Delaware
Aircraft MSN 35235 LLC
Delaware
Aircraft MSN 35236 LLC
Delaware
Aircraft MSN 35237 LLC
Delaware
Aircraft MSN 48445 LLC
Delaware
AYR Bermuda Limited
Bermuda
AYR Delaware LLC
Delaware
AYR Freighter LLC
Delaware
AYR E Note Limited
Bermuda
Constellation Aircraft Leasing (France) SARL
France
Constitution Aircraft Leasing (Ireland) 3 Limited
Ireland
Constitution Aircraft Leasing (Ireland) 4 Limited
Ireland
Constitution Aircraft Leasing (Ireland) 5 Limited
Ireland
Constitution Aircraft Leasing (Ireland) 6 Limited
Ireland
Constitution Aircraft Leasing (Ireland) 7 Limited
Ireland
Constitution Aircraft Leasing (Ireland) 8 Limited
Ireland
Constitution Aircraft Leasing (Ireland) 9 Limited
Ireland
Delphie Aircraft Leasing Limited
Bermuda
Emer Aircraft Leasing (Ireland) Limited
Ireland
Endeavor Aircraft Leasing (Sweden) AB
Sweden
Endeavor Aircraft Leasing (Sweden) 2 AB
Sweden
Endeavor Aircraft Leasing (Sweden) 3 AB
Sweden
Enterprise Aircraft Leasing (France) SARL
France
GAIF Malaysia I, Ltd.
Labuan
GAP Investment One LLC
Delaware
GAP Investment Two, LLC
Delaware
GAP Investment Twenty-One, LLC
Delaware
GAP Investment Twenty-Four, LLC
Delaware
GAP Investment Twenty-Five, LLC
Delaware
GAP Investment Twenty-Six, LLC
Delaware
Grayston Aircraft Leasing Limited
Cayman Islands
Injet400 Aircraft Leasing Co Limited
Cayman Islands
Injet800 Aircraft Leasing Co Limited
Cayman Islands
Intrepid Aircraft Leasing (France) SARL
France
Jimin Aircraft Leasing Limited
Bermuda
Momo Aircraft Leasing Limited
Bermuda
Perdana Aircraft Leasing (Labuan) Limited
Labuan
Really Useful Aircraft Leasing (Ireland) 1 Limited
Ireland
Zebra Aircraft Leasing Limited
Cayman Islands
Zephyr Aircraft Leasing B.V.
The Netherlands
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
1. | I have reviewed this annual report on Form 10-K of Aircastle Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Manufacturer | Date of | |||||||||||||
Aircraft Group | Aircraft Type | Engine Type | Serial Number | Manufacture | Financing | |||||||||
Latest Generation Narrowbody Aircraft
|
A319-100 | CFM56-5B6/2P | 1048 | Jul-99 | Securitization No. 2 | |||||||||
|
A319-100 | CFM56-5B6/2P | 1086 | Sep-99 | Securitization No. 2 | |||||||||
|
A319-100 | CFM56-5B6/2P | 1124 | Nov-99 | Securitization No. 2 | |||||||||
|
A319-100 | CFM56-5B6/2P | 1160 | Jan-00 | Securitization No. 1 | |||||||||
|
A319-100 | CFM56-5B6/2P | 1336 | Oct-00 | Securitization No. 1 | |||||||||
|
A319-100 | CFM56-5B6/2P | 1388 | Dec-00 | Securitization No. 1 | |||||||||
|
A320-200 | V2527-A5 | 667 | Apr-97 | Securitization No. 1 | |||||||||
|
A320-200 | V2527-A5 | 739 | Nov-97 | Securitization No. 1 | |||||||||
|
A320-200 | V2527-A5 | 743 | Nov-97 | Securitization No. 1 | |||||||||
|
A320-200 | V2527-A5 | 758 | Jan-98 | Securitization No. 1 | |||||||||
|
A320-200 | CFM56-5B4/P | 967 | Apr-99 | Securitization No. 1 | |||||||||
|
A320-200 | V2527-A5 | 990 | May-99 | Securitization No. 2 | |||||||||
|
A320-200 | CFM56-5B4/P | 1041 | Jul-99 | Securitization No. 2 | |||||||||
|
A320-200 | CFM56-5B4/P | 1047 | Aug-99 | Term Financing No. 1 | |||||||||
|
A320-200 | CFM56-5B4/2P | 1054 | Sep-99 | Securitization No. 2 | |||||||||
|
A320-200 | CFM56-5B4/P | 1059 | Aug-99 | Term Financing No. 1 | |||||||||
|
A320-200 | CFM56-5B4/P | 1067 | Sep-99 | Term Financing No. 1 | |||||||||
|
A320-200 | CFM56-5B4/2P | 1081 | Oct-99 | Securitization No. 2 | |||||||||
|
A320-200 | CFM56-5B4/P | 1099 | Oct-99 | Term Financing No. 1 | |||||||||
|
A320-200 | CFM56-5B4/P | 1101 | Nov-99 | Term Financing No. 1 | |||||||||
|
A320-200 | CFM56-5B4/P | 1119 | Dec-99 | Term Financing No. 1 | |||||||||
|
A320-200 | CFM56-5B4/P | 1316 | Oct-00 | Securitization No. 2 | |||||||||
|
A320-200 | CFM56-5B4/P | 1345 | Nov-00 | Securitization No. 2 | |||||||||
|
A320-200 | CFM56-5B4/2P | 1370 | Jan-01 | Securitization No. 2 | |||||||||
|
A320-200 | V2527-A5 | 2524 | Sep-05 | Securitization No. 2 | |||||||||
|
A320-200 | V2527-A5 | 2564 | Oct-05 | Securitization No. 2 | |||||||||
|
A321-200 | CFM56-5B3/P | 1006 | Apr-99 | Securitization No. 2 | |||||||||
|
A321-200 | CFM56-5B3/2P | 1012 | Apr-99 | Securitization No. 2 | |||||||||
|
737-700 | CFM56-7B22 | 28008 | Feb-99 | Securitization No. 2 | |||||||||
|
737-700 | CFM56-7B22 | 28009 | Mar-99 | Securitization No. 2 | |||||||||
|
737-700 | CFM56-7B22 | 28010 | Oct-99 | Securitization No. 2 | |||||||||
|
737-700 | CFM56-7B22 | 28013 | Oct-00 | Term Financing No. 1 | |||||||||
|
737-700 | CFM56-7B22 | 28014 | Feb-01 | Term Financing No. 1 | |||||||||
|
737-700 | CFM56-7B22 | 28015 | Feb-01 | Securitization No. 2 | |||||||||
|
737-700 | CFM56-7B22 | 29045 | Dec-98 | Securitization No. 2 | |||||||||
|
737-700 | CFM56-7B22 | 29046 | Jan-99 | Securitization No. 2 | |||||||||
|
737-700 | CFM56-7B22 | 29078 | Apr-99 | Securitization No. 1 | |||||||||
|
737-800 | CFM56-7B26 | 28056 | May-99 | Securitization No. 1 | |||||||||
|
737-800 | CFM56-7B26 | 28213 | Jun-98 | Securitization No. 2 | |||||||||
|
737-800 | CFM56-7B26 | 28220 | Feb-99 | Securitization No. 1 | |||||||||
|
737-800 | CFM56-7B27 | 28227 | Jan-00 | Securitization No. 1 | |||||||||
|
737-800 | CFM56-7B27 | 28231 | May-00 | Term Financing No. 1 | |||||||||
|
737-800 | CFM56-7B26 | 28381 | May-99 | Securitization No. 1 | |||||||||
|
737-800 | CFM56-7B26 | 28384 | Nov-99 | Securitization No. 1 | |||||||||
|
737-800 | CFM56-7B26 | 29036 | Dec-98 | Securitization No. 2 | |||||||||
|
737-800 | CFM56-7B26 | 29037 | Jan-99 | Securitization No. 2 | |||||||||
|
737-800 | CFM56-7B26 | 29329 | Mar-99 | Securitization No. 2 | |||||||||
|
737-800 | CFM56-7B27 | 29345 | May-02 | Term Financing No. 1 | |||||||||
|
737-800 | CFM56-7B24 | 29916 | Mar-99 | Term Financing No. 1 | |||||||||
|
737-800 | CFM56-7B24 | 29917 | Jun-99 | Term Financing No. 1 | |||||||||
|
737-800 | CFM56-7B24 | 29918 | Jun-99 | Term Financing No. 1 | |||||||||
|
737-800 | CFM56-7B24 | 29919 | Aug-99 | Term Financing No. 1 | |||||||||
|
737-800 | CFM56-7B24 | 29920 | Sep-99 | Term Financing No. 1 | |||||||||
|
737-800 | CFM56-7B24 | 30230 | Jan-00 | Securitization No. 2 | |||||||||
|
737-800 | CFM56-7B27 | 30296 | Feb-05 | Term Financing No. 1 |
Manufacturer
Date of
Aircraft Group
Aircraft Type
Engine Type
Serial Number
Manufacture
Financing
A320-200
CFM56-5A1/F
138
Jan-91
Term Financing No. 2
A320-200
CFM56-5A1/F
148
Feb-91
Term Financing No. 2
737-300
CFM56-3B1
23173
Apr-85
Securitization No. 2
737-300
CFM56-3B2
24570
Jan-90
Securitization No. 2
737-300
CFM56-3C1
24669
Aug-90
Securitization No. 1
737-300
CFM56-3C1
24672
Sep-90
Securitization No. 1
737-400
CFM56-3C1
24644
Oct-90
Securitization No. 2
737-400
CFM56-3C1
25147
May-91
Securitization No. 1
737-400
CFM56-3C1
26280
Mar-92
Securitization No. 1
737-400
CFM56-3C1
27001
Jul-92
Securitization No. 1
737-400
CFM56-3C1
27003
Jul-92
Securitization No. 1
737-400
CFM56-3C1
27094
Feb-93
Securitization No. 1
737-400
CFM56-3C1
27826
Feb-95
Securitization No. 2
737-400
CFM56-3C1
28038
May-96
Securitization No. 2
737-400
CFM56-3C1
28867
Apr-97
Securitization No. 2
737-500
CFM56-3C1
27425
Sep-95
Securitization No. 2
757-200
PW2040
24738
Apr-90
Securitization No. 2
757-200
PW2040
24747
Apr-90
Securitization No. 2
757-200
PW2040
24748
May-90
Securitization No. 2
757-200
RB211-535E4
24838
Aug-90
Securitization No. 2
757-200
PW2037
27152
Jun-93
Term Financing No. 1
757-200
PW2037
27183
Sep-93
Term Financing No. 1
757-200
RB211-535E4
27201
Mar-94
Securitization No. 2
757-200
PW2040
27203
Nov-94
n/a
757-200
RB211-535E4
27244
Mar-94
Securitization No. 2
757-200
RB211-535E4
27245
Jul-94
Securitization No. 2
757-200
PW2037
27342
Aug-94
Term Financing No. 1
757-200
PW2037
27681
Jul-95
Term Financing No. 1
A330-200
Trent 772B
313
Jan-00
Securitization No. 2
A330-200
PW4168A
324
Feb-00
Term Financing No. 1
A330-200
PW4168A
343
Jun-00
Securitization No. 1
A330-200
Trent 772B
1016
May-09
ECA Term Financing
A330-200
Trent 772B
1073
Dec-09
ECA Term Financing
A330-300
CF6-80E1A2
86
Jul-95
Term Financing No. 1
A330-300
PW4168A
171
Apr-97
Securitization No. 2
A330-300
PW4168A
337
May-00
Securitization No. 2
A330-300
PW4168A
342
Jun-00
Securitization No. 2
A330-300
PW4168A
368
Nov-00
Term Financing No. 1
A330-300
PW4168A
370
Dec-00
Securitization No. 1
A330-300
PW4168A
375
Jan-01
Securitization No. 1
767-200ER
CF6-80C2B2
24894
Nov-90
Securitization No. 1
767-300ER
CF6-80C2B6
24084
May-88
Securitization No. 2
767-300ER
PW4060-1C
24541
Aug-89
Securitization No. 2
767-300ER
CF6-80C2B6F
24844
Aug-90
Securitization No. 1
767-300ER
PW4062-3
24849
Sep-90
Securitization No. 2
767-300ER
PW4060-1
24952
Mar-91
Term Financing No. 2
767-300ER
PW4060-1
25000
Aug-91
Term Financing No. 2
767-300ER
CF6-80C2B6F
25076
May-91
Term Financing No. 2
767-300ER
CF6-80C2B6F
25117
May-91
Term Financing No. 2
767-300ER
PW4060
25365
Oct-91
Securitization No. 1
767-300ER
PW4060-3
25587
Feb-96
Securitization No. 2
767-300ER
CF6-80C2B6
28656
May-97
Securitization No. 1
777-200ER
Trent 892B-17
28414
May-98
Securitization No. 2
Manufacturer
Date of
Aircraft Group
Aircraft Type
Engine Type
Serial Number
Manufacture
Financing
747-400BCF
PW4056-3
24061
Mar-89
Securitization No. 2
747-400BCF
PW4056-3
24066
Jun-90
Term Financing No. 1
747-400BCF
PW4056-3
24226
Sep-90
Term Financing No. 1
747-400BCF
PW4056-3
24975
Feb-91
Securitization No. 2
747-400BCF
PW4056-3
27137
Aug-93
Term Financing No. 2
747-400BDSF
PW4056-1C
25700
May-93
Term Financing No. 1
747-400BDSF
PW4056-1C
25702
Nov-93
Term Financing No. 2
747-400ERF
CF6-80C2B5F
35233
Jan-07
Securitization No. 2
747-400ERF
CF6-80C2B5F
35235
Jul-07
Securitization No. 2
747-400ERF
CF6-80C2B5F
35236
Feb-08
Term Financing No. 1
747-400ERF
CF6-80C2B5F
35237
Apr-08
Term Financing No. 1
A310-300F
CF6-80C2A2
502
Aug-89
Securitization No. 1
737-300QC
CFM56-3C1
23835
Nov-87
Securitization No. 1
737-300QC
CFM56-3C1
23836
Feb-88
Securitization No. 1
737-300QC
CFM56-3C1
23837
Mar-88
Securitization No. 1
737-300QC
CFM56-3C1
24283
Feb-89
Securitization No. 1
737-400SF
CFM56-3C1
29032
Nov-97
Securitization No. 2
737-400SF
CFM56-3C1
29033
Dec-97
Securitization No. 2
737-400SF
CFM56-3C1
29034
Mar-98
Securitization No. 2
737-400SF
CFM56-3C1
29035
Jun-98
Securitization No. 2
MD11-SF
PW4462-3
48445
Apr-91
Securitization No. 2