Document:

exv10w5

 

Exhibit 10.5

AIRCRAFT PARTS SALE AGREEMENT

dated as of June 27, 2007

between

KITTY HAWK AIRCARGO, INC.,

Seller,

and

AIRLEASE INTERNATIONAL, INC.,

Buyer.

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AIRCRAFT PARTS SALE AGREEMENT

          THIS AIRCRAFT PARTS SALE AGREEMENT, executed this 27th day of June 2007 (the “Execution
Date”), but effective as of May 1, 2007 (the “Effective Date”) (this “Agreement”) is between KITTY
HAWK AIRCARGO, INC., a Texas corporation (“Seller”), and AirLease International, Inc., a Texas
corporation (“Buyer”). Capitalized terms used herein, unless otherwise defined herein, shall have
the meanings ascribed to such terms in Section 1 of this Agreement.

RECITALS

     WHEREAS, Seller owns:

Boeing 727-200 aircraft parts (excluding those parts that are common to Seller’s Boeing 737
aircraft fleet) together with all, logbooks, manuals and records in the possession of Seller
(the “Parts”).

     WHEREAS, subject to the terms and conditions of this Agreement, Seller wishes to sell the
Parts to Buyer, and Buyer wishes to buy the Parts from Seller in as is where is condition and Buyer
understands and agrees that Seller makes no warranty of the airworthiness of the Parts.

     NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as follows:

     Section 1. Definitions.

     The following terms, when capitalized, shall have the following meanings for all purposes of
this Agreement, except where the context otherwise requires:

     “Affiliate” of any Person means any other Person (i) directly or indirectly
controlling, directly or indirectly controlled by or under direct or indirect common control with
such Person; (ii) that beneficially owns or holds (directly or through a Subsidiary) 50% or more of
the voting power of any class of voting securities of the Person; or (iii) 50% or more of the
voting securities (or in the case of a Person which is not a corporation, 50% or more of the equity
interest) of which is beneficially owned or held by the Person or a Subsidiary thereof. For
purposes of this definition, “control” when used with respect to any specified Person shall
mean the power to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

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     “Bill of Sale” means the long form Bill of Sale, in the form attached hereto as
Exhibit “B” from Seller to Buyer.

     “Business Day” means any day other than a Saturday, Sunday or day on which commercial
banking institutions are required or authorized by law to close in New York, New York.

     “Buyer” has the meaning set forth in the preamble hereof.

     “Delivery” means, with respect to the Parts, the time at which the Buyer obtains title
to such Parts in accordance with this Agreement.

     “Delivery Date” means the Effective Date as previously defined.

     “Delivery Location” shall have the meaning set forth in Section 3(a).

     “Delivery Receipt” means the Delivery Receipt in the form attached hereto as Exhibit
“A.”

     “Dollars” and the sign “$” mean the lawful currency of the United States of
America.

     “Event of Loss” means any loss or destruction of any Parts.

     “Governmental Body” means any national government, political subdivision thereof, or
local jurisdiction therein or any instrumentality, board, court, agency or commission thereof.

     “Losses” means losses, costs, expenses, fees (including legal fees and disbursements),
payments, demands, liabilities, claims, actions, proceedings, penalties, fines, damages and
judgments of any kind and nature whatsoever (other than Taxes).

     “Payment Date” means that date three (3) business days after the Execution Date.

     “Person” means an individual, corporation, national banking association, partnership,
limited liability company, trust, unincorporated association, joint venture, joint-stock company,
Governmental Body or any other entity.

     “Purchase Price” means total sale price for the Parts of One Million One Hundred
Thousand United States Dollars, ($1,100.000.00).

     “Sale Documents” means this Agreement, the Bill of Sale and the Delivery Receipt.

     “Seller” has the meaning set forth in the preamble hereto.

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     “Seller Indemnitees” means Seller and its respective directors, members, managers,
servants, agents, employees, successors and assigns.

     “Subsidiary” of any Person means any other Person more than 50% of the outstanding
voting stock of which is at the time owned or controlled directly or indirectly by the Person or a
Subsidiary thereof.

     Section 2. Sale of Parts; Purchase Price.

     (a) Sale of Parts. Subject to the terms of this Agreement, effective as of the
Delivery Date for the Parts, the Seller shall sell the Parts listed in Schedule 1 attached hereto
to the Buyer, and the Buyer shall purchase the Parts from the Seller. The obligation of the Seller
and the Buyer to effect such sale and purchase shall be subject only to the compliance or waiver of
their respective conditions precedent set forth in Section 4 hereof.

     (b) Purchase Price. The Purchase Price for the Parts shall be paid by the Buyer to
the Seller on or before the Payment Date.

     (c) Payment

The payments provided for herein shall be paid to KHA via wire transfer to account number:

Beneficiary: Kitty Hawk Aircargo, Inc.

Capital One, N.A.

14651 Dallas Parkway, Suite 300

ABA # 111 901 014

Account # 3620477833

Swift code: HIBKUS44

With confirmation of payment concurrently sent to the attention of Jessica Wilson, Chief
Accounting Officer, 1535 W. 20th St., P.O. Box 612787, DFW Int’l Airport, TX
75261.

     Section 3. Parts Delivery, Title, Risk of Loss.

     (a) Place of Delivery. Delivery of the Parts shall be at Seller’s Dallas, Texas
headquarters.

     (b) Condition of Parts. Buyer confirms that the Parts and the related logbooks,
manuals and records have been made available to it, that it has inspected the Parts and such
logbooks, manuals and records and the condition of the Parts, logbooks, manuals and records are

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acceptable to it for all purposes. Buyer shall be given the opportunity, upon notice from Seller
two days prior to the scheduled Delivery Date of the Parts, to inspect such Parts, logbooks,
manuals and records to confirm that same are not in materially different condition than when
inspected and accepted by Buyer. Parts are sold as is where is.

     (c) Storage and Handling of Parts. Seller agrees to continue storage, insurance, and
warehousing services for the Parts including packing for shipment, excluding shipping costs, of
sold parts for Buyer at no cost to Buyer until termination of the Power by the Hour Maintenance
Agreement dated June 27, 2007. Upon termination of the Power by the Hour Maintenance Agreement,
Buyer will have six (6) months to relocate Parts remaining at that time at Buyer’s cost.

     (d) Title and Risk of Loss. All right, title and interest in and to the Parts and the
risk of loss or destruction of, or damage to, the Parts and all other risks relating thereto shall
pass to Buyer upon the delivery (and release) of the Bill of Sale therefor to Buyer.

     (e) Event of Loss. In the event that, prior to the Payment Date, any Parts suffer an
Event of Loss, then the Seller shall immediately notify the Buyer in writing of such occurrence and
such notice shall discharge and terminate all obligations and liabilities of the parties hereunder
only with respect to such Parts that have suffered an Event of Loss.

     (f) Force Majeure. The Seller shall not be liable for any delay or failure in
Delivery of the Parts or the performance of any other obligation under this Agreement where such
failure or delay is the result of any cause or matter beyond the Seller’s reasonable control.

     Section 4. Conditions Precedent.

     (a) The obligation of the Seller to sell the Parts on the Delivery Date therefor pursuant to
Section 2(a) hereof shall be subject only to the following conditions precedent, unless, in any
case, waived by the Seller in its sole discretion:

(i) Buyer shall have paid in full the Purchase Price for such Parts and paid it to
Seller in accordance with Section 2(b) hereof;

(ii) Buyer shall have executed and delivered the Delivery Receipt for such Parts to
Seller;

(iii) the representations and warranties of the Buyer contained in Section 5 hereof
shall be true and accurate in all material respects on and as of the Delivery Date
as though made on and as of such date except to the extent that such representations
and warranties relate solely to an earlier date (in which event such representations
and warranties shall have been true and accurate on and as of such earlier date);
and

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(iv) such Parts shall not have suffered an Event of Loss.

     (b) The obligation of the Buyer to purchase the Parts and pay the Purchase Price therefor on
the Delivery Date therefor shall be subject only to the following conditions precedent unless, in
any case, waived by the Buyer in its sole discretion:

(i) the Seller shall have executed and delivered the Bill of Sale for such Parts to
Buyer;

(ii) the Seller shall have executed and delivered the Delivery
Receipt for such Parts to Buyer;

(iii) the Seller shall have executed and delivered to Buyer a
certificate of non-incident statement on Seller’s letterhead in a form
materially the same as Exhibit “C” attached hereto; Seller shall have stamped
a non-incident statement and original appropriate signatures executed on each
page of the inventory listings in Schedule 1.

(iv) the representations and warranties of the Seller contained in Section 5 hereof
shall be true and accurate in all material respects on and as of the Delivery Date
as though made on and as of such date except to the extent that such representations
and warranties relate solely to an earlier date (in which event such representations
and warranties shall have been true and accurate on and as of such earlier date);
and

(v) such Parts shall not have suffered an Event of Loss prior to the Payment Date.

Section 5. Representations and Warranties.

     (a) Representations and Warranties of the Seller. The Seller hereby represents and
warrants to the Seller that:

(i) The Seller is a Texas corporation and has the corporate power and authority to
perform its obligations under this Agreement and the other Sale Documents to which
it is a party and this Agreement and the other Sale Documents to which it is a party
have been duly authorized by all necessary corporate action on the part of Seller;

(ii) this Agreement has been duly executed and delivered by the Seller and
constitutes, and each other Sale Document to which it is a party when executed

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and
delivered by the Seller will constitute, the legal, valid and binding obligation of
the Seller, enforceable in accordance with its terms, subject only to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting creditors’
rights generally and to general equitable principles;

(iii) the execution, delivery and performance by the Seller of this Agreement are
not in violation of its certificate of incorporation or by-laws or of any indenture,
mortgage, contract or other agreement to which the Seller is a party or by which it
is bound or of any order or judgment applicable to the Seller or any law, government
rule or regulation binding upon the Seller or applicable to its business generally
and do not require the consent or approval of, or the giving of notice to, the
registration with or the taking of any other action in respect of any Governmental
Body;

(iv) there is no litigation or proceeding pending or, to the best knowledge of the
Seller, threatened against the Seller an adverse decision in which would prohibit or
materially frustrate the consummation by the Seller of the transactions contemplated
by this Agreement or any other Sale Document to which it is a party;

(v) as of Delivery Date, the Seller will be the legal owner of such Parts and will
transfer to Buyer good and marketable title to such Parts, free and clear of all
Liens; and,

(vi) as of each of the Delivery Date, the Execution Date and the Payment Date, the
Seller is not, or will not, have any knowledge of any Losses which would otherwise
be covered by or within the scope of Seller’s indemnification of Buyer and Buyer’s
Indemnitees as provided in Section 7(c) of this Agreement.

     (b) Representations and Warranties of the Buyer. The Buyer hereby represents and
warrants to the Seller that:

(i) The Buyer is Texas corporation and has the power and authority to perform its
obligations under this Agreement and this Agreement has been duly authorized by all
necessary action on the part of Buyer;

(ii) this Agreement has been duly executed and delivered by the Buyer and
constitutes the legal, valid and binding obligation of the Buyer, enforceable in
accordance with its terms, subject only to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and to
general equitable principles;

(iii) the execution, delivery and performance by the Buyer of this Agreement are not
in violation of its organizational documents or of any indenture, mortgage,

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contract
or other agreement to which the Buyer is a party or by which it is bound or of any
order or judgment applicable to the Buyer or any law, government rule or regulation
binding upon the Buyer or applicable to its business generally and do not require
the consent or approval of, or the giving of notice to, the
registration with or the taking of any other action in respect of any Governmental
Body;

(iv) there is no litigation or proceeding pending or, to the best knowledge of the
Buyer, threatened against the Buyer an adverse decision in which would prohibit or
materially frustrate the consummation by the Buyer of the transactions contemplated
by this Agreement or any other Sale Document to which it is a party.

     (c) The Seller confirms that acceptance by the Seller of payment of the Purchase Price for the
Parts pursuant to Section 2 hereof on the Payment Date therefor will constitute a certification by
the Seller that its representations and warranties contained in this Section 5 are true and
accurate on and as of the Delivery Date and the Payment Date. The Buyer confirms that the payment
by the Buyer of the Purchase Price for the Parts pursuant to Section 2 hereof on the Delivery Date
therefor will constitute a certification by the Buyer that its representations and warranties
contained in this Section 5 are true and accurate on and as of the Delivery Date and the Payment
Date.

     (d) The representations and warranties contained in this Section 5 shall survive the sale of
the Airframes hereunder and the execution and delivery of the agreements contemplated hereby.

     (e) Disclaimer. Other than the express representations and warranties of the Seller
set forth above in this Section 5 and in the Bill of Sale, theParts are being sold hereunder, “AS
IS, WHERE IS” and THE BUYER ACKNOWLEDGES AND AGREES THAT THE SELLER NOR ANY OF ITS AFFILIATES,
OFFICERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES OR REPRESENTATIVES HAS MADE OR WILL BE DEEMED TO
HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER
STATUTORY OR OTHERWISE) AS TO (a) THE CAPACITY, AGE, VALUE, QUALITY, DURABILITY, DESCRIPTION,
CONDITION (WHETHER OF THE AIRFRAME OR ANY PART THEREOF), DESIGN, WORKMANSHIP, MATERIALS,
MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR
ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE PARTS OR USE THE
PARTS IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE PARTS, OR ANY PART THEREOF, (b) THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR
CONCEALED, EXTERIOR OR INTERIOR, AND (c) ANY IMPLIED WARRANTY ARISING FROM THE COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, IT BEING UNDERSTOOD THAT NOTHING HEREIN WILL BE
DEEMED TO

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LIMIT THE BUYER FROM AVAILING ITSELF OF ANY WARRANTIES, COVENANTS, AND REPRESENTATIONS OF
ANY MANUFACTURER.

     Section 6. Taxes. The Buyer and the Seller shall reasonably
endeavor to complete this transaction in a manner to avoid or minimize any transaction taxes.
However, if such taxes are
due, the Buyer shall pay any and all sales, other applicable transfer, use, value-added, stamp,
registration and other similar taxes and any penalties, fines, additions to tax or interest
thereon, (individually a “Tax”, and collectively called “Taxes”), imposed upon the
Seller by any taxing jurisdiction or authority arising out of the sale of the Airframe hereunder;
provided, however, Buyer shall not have any obligation to pay Taxes imposed on the
Seller by any Governmental Body in the state or country in which such other party is incorporated,
organized or conducts any business. In the event that any taxes are due, assessed and/or paid by
Buyer or Seller, Buyer and Seller each as to each other agree to assist and cooperate with each
other to preserve and obtain any and all refunds or credits arising therefrom.

     Section 7. Indemnification.

     (a) Buyer assumes liability for, and hereby agrees to indemnify, protect, save and keep
harmless each Seller Indemnitee from and against any and all Losses which may arise on or after the
Payment Date in any manner out of or in relation to injury to or death of any persons whomsoever or
loss or damage to any property of any Person and which may result from, or arise in any manner out
of, or be attributable to (i) the condition, ownership, leasing, purchase, delivery, possession,
disposition, use or operation of the Parts or any part thereof either in the air or on the ground;
or (ii) any defect in the Parts or any part thereof arising from its manufacture or any material or
article used therein or from the design, testing or use thereof or from any maintenance, service,
repair, overhaul or testing of the Parts, in the case of either (i) or (ii) in respect of Losses
arising out of acts, omissions or events after the Payment Date; provided, however, that
the Buyer’s obligations under this Section 7 to any Seller Indemnitee shall not extend to any
Losses caused by the negligence or willful misconduct of any such Seller Indemnitee or arising from
or related to the lease, use, operation, possession or use of any Airframe (as defined in the
General Terms Agreement of even date herewith between Buyer and Seller (the “GTA”)) under the terms
of the GTA if any such Parts are used on or in connection with the operation of any Airframe.

     (b) The Buyer hereby agrees to indemnify, reimburse, and hold harmless the Seller Indemnitees
from any Losses arising out of (i) the breach by Buyer of any of its representations or warranties
hereunder or any other Sale Document, and (ii) the non-performance by Buyer of its obligations
hereunder or any other Sale Document.

     (c) Seller agrees to indemnify, protect, save and keep harmless Buyer and each of Buyer’s
officers, directors, employees, agents, servants and contractors (collectively, “Buyer’s
Indemnitees”) from and against any and all Losses which may have arisen either before the

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Effective
Date or during the period from and after the Effective Date and on or before the Payment Date, in
any manner out of or in relation to injury to or death of any persons whomsoever or loss or damage
to any property of any Person and which may result from, or arise in any manner out of, or be
attributable to (i) the condition, ownership, leasing, purchase, delivery, possession, disposition,
use or operation of the Parts or any part thereof either in the air or on the ground; or (ii) any
defect in the Parts or any part thereof arising from their manufacture or any material or article
used therein or from the design, testing or use thereof or from any
maintenance, service, repair, overhaul or testing of the Parts, in the case of either (i) or
(ii) in respect of Losses arising out of acts, omissions or events prior to the Payment
Date; provided, however, that the Seller’s obligations under this Section 7 to Buyer or any
Buyer’s Indemnitee shall not extend to any Losses caused by the negligence or willful misconduct of
Buyer or any such Buyer’s Indemnitee.

     Section 8. Assignment of Manufacturer’s Warranties. The Seller
shall extend to the Buyer the rights and benefits, to the extent that the same are not extinguished
by the sale of the Parts or the passage of time, of any warranties, service life policies and
patent indemnities of any manufacturer and any maintenance and overhaul agencies of and for such
Parts which the Seller may have to the extent that the same are assignable and transferable. The
Seller also hereby grants to the Buyer rights of subrogation relating to any claim which the Seller
may have under such warranties (if any) concerning the Parts.

     Section 9. Default and Remedies.

     (a) The following events shall constitute events of default (hereafter “Events of Default”):

(i) if the Buyer shall fail to make any payment when due hereunder; or

(ii) if either party shall default in the performance of this Agreement and such
default shall continue for five (5) Business Days after written notice of default to
the defaulting party and is not thereafter waived; provided that no Event of Default
shall be deemed to have occurred under this sub-section if the relevant party is
using diligent efforts to cure the default as soon as may be practicable (but, in
any case, within fourteen (14) days after notice from the other party); or

(iii) if the Seller or the Buyer shall file a voluntary petition in bankruptcy, or
shall be adjudicated as bankrupt or insolvent, or shall file any petition or answer
seeking any reorganization, composition, readjustment, liquidation or similar relief
for itself under any present statute, law or regulation or any future statute, law
or regulation adopted on or prior to the Delivery Date, or shall seek or consent to,
or acquiesce in, the appointment of any trustee, or shall make any

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general
assignment for the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due; or

(iv) if a petition shall be filed against the Seller or the Buyer seeking any
reorganization, composition, readjustment, liquidation or similar relief under any
present statute, law or regulation or any future statute, law or regulation adopted
on or prior to the Delivery Date or if any trustee, receiver or liquidator of either
party is appointed.

     (b) Upon the occurrence of an Event of Default by one party under this Agreement, the other
party shall be entitled, by notice in writing to the other, to terminate this Agreement and/or
recover such damages and/or remedies as are available to it under applicable Law, and, in addition
to such remedies of Seller, upon the occurrence of an Event of Default by Buyer, Seller shall, as
liquidated damages for loss of a bargain and not as a penalty, retain any Deposit paid to Seller
and Buyer shall have no further right or interest therein.

     Section 10. Broker’s Commissions. Each party hereto agrees that
should any claim be made for commissions or other amounts by any broker or brokers by or through or
on account of actions of that party, that party shall hold the other parties free and harmless from
any and all claims, demands, liabilities, damages, losses, judgments and expenses of every kind
(including legal fees, costs and related expenses) in connection therewith.

     Section 11. Miscellaneous.

     (a) Notice. All notices required or permitted hereunder shall be in writing and may
be either telefaxed or sent by internationally recognized overnight courier service, addressed as
follows:

     If to Seller:

Kitty Hawk Aircargo, Inc.

P.O. Box 612787

DFW Airport, Texas 75261-2787

Telephone: 972-456-2427

Facsimile: 972-456-2350

(Attention: Robert Barron)

     If to Buyer:

AirLease International, Inc.

Attn: Harold Woody, President

204 Whispering Hills Street

Hot Springs, AR 71901

(501) 318-2341 Fax

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or to such other address as the party desiring the change advises the others from time to time
through a notice given in accordance with the provisions of this Section 11(a). Any such notice
shall be effective and shall be deemed to have been given, in the case of a facsimile, upon
confirmation of receipt of such facsimile by the addressee (provided that if the date of dispatch
is not a Business Day, it shall be deemed to have been received at the opening of business in the
country of the addressee on the next Business Day), and in the case of a notice sent by courier
service, when delivered personally (provided that if delivery is tendered but refused, such notice
shall be deemed effective upon such tender).

     (b) Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall be an original, and all counterparts together shall be but one and the same
Agreement.

     (c) Applicable Law; Jurisdiction. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
NEGOTIATED AND MADE IN, AND SHALL BE GOVERNED AND INTERPRETED UNDER THE LAWS OF, THE STATE OF
TEXAS, UNITED STATES, APPLICABLE TO AGREEMENTS MADE BY RESIDENTS THEREOF TO BE ENTIRELY PERFORMED
THEREIN.

     (d) Dispute Resolution: The parties hereby agree that any dispute that arises
under this Lease which is not disposed of by mutual agreement shall be resolved through mediation
and/or arbitration. Specifically, any disputes arising out of or connected with this Lease will be
submitted to mediation in Tarrant County, Texas, in accordance with the rules for alternative
dispute resolutions set forth under Texas law. The parties will mutually cooperate to select the
mediator to be used. Any and all information, negotiation and results of the mediation will remain
confidential.

In the event that mediation is not successful, any remaining dispute that may arise in connection
with any and all aspects of this Agreement, on the written request of either party, shall be
submitted to binding arbitration in accordance with appropriate statutes of the State of Texas and
the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon the award
rendered by the arbitrators may be entered in any court having appropriate jurisdiction. The
parties agree to act in good faith to select a single, neutral arbitrator. If the parties are
unable to do so within ninety (90) days after one party notifies the other party, in writing, of a
dispute or claim, then each party shall appoint one person as arbitrator, and a third neutral
arbitrator shall be chosen by the two arbitrators previously selected by the parties. The third
arbitrator shall then conduct the arbitration alone. It is provided, however, that if there is no
agreement as to the third arbitrator within sixty (60) days after the notice is served, then the
third arbitrator shall be selected by a district judge in Tarrant County, Texas, having subject
matter jurisdiction over the dispute. In such event, all three arbitrators shall conduct the
arbitration. It

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is further agreed that the expenses of the arbitration shall be paid in
proportions as the arbitrators decide, except that the successful party in any proceeding seeking
enforcement of the provisions of this agreement shall be entitled to receive from the party not
prevailing reasonable and necessary attorneys’ fees and expenses, in addition to any other sums to
which such successful party may be entitled. The arbitrators shall decide the identity of the
successful party for the purposes of the preceding sentence.

     (e) Time of the Essence. Time shall be of the essence in the performance of the
duties of the parties hereto.

     (f) Captions and Paragraph Headings. Captions and paragraph headings used herein are
for convenience only and are not a part of this Agreement and shall not be used in construing it.

     (g) Severability. In the event that any one or more of the provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect or in any jurisdiction, the
validity, legality and enforceability of the remaining provisions contained herein or of the same
provisions in any other jurisdiction shall not, in any way, be affected or impaired thereby.

     (h) Further Assurances. Seller and Buyer will promptly, at any time and from time to
time, execute and deliver to each other such further instruments and documents and take such
further action as may be required by law or as they may each reasonably request to establish,
maintain and protect their respective rights and remedies and to carry out the intent of the
parties under this Agreement.

     (i) Written Changes Only. No term or provision of this Agreement may be changed or
waived orally, but only by an instrument in writing signed by the parties hereto.

     (j) Exclusiveness. This Agreement and the other Sale Documents are the complete and
exclusive statement of the parties hereto with respect to the subject matter hereof and supersede
all prior oral and written communications, proposals, agreements, representations, statements,
negotiations and undertakings, whether express or implied, between the parties hereto with respect
to the subject matter hereof.

     (k) Terms and Definitions. The terms and definitions, as herein contained, shall
include the singular and/or plural, masculine, feminine and/or neuter, successors and/or permitted
assigns wherever the context so requires or admits.

     (l) Successors and Assigns. This Agreement shall be binding upon, and shall inure to
the benefit of and shall be enforceable by the parties hereto and their respective successors and
assigns.

     (m) Confidentiality. This Agreement and the terms and conditions contained herein
shall be and remain strictly privileged and confidential between the parties, and shall not be

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discussed, revealed, disseminated or divulged to the media or general public, or to any other third
party, without the express prior written consent of the other party, which consent shall not be
unreasonably withheld; except that (i) the Buyer may disclose any relevant term to a financial
institution for the purpose of financing the purchase of the Airframe or any technical data to any
potential purchaser or lessee of the Airframe from the Buyer; (ii) the Buyer may disclose any
relevant term to its insurers for the purpose of insuring the Airframe; (iii) either party may
disclose any relevant term to any of its Affiliates; (iv) either party may make any disclosure
required by generally accepted accounting principles, by applicable Law or by any order of a court
or other Governmental Body; (v) either party may make any disclosure in connection with any
litigation relating to the transactions contemplated by this Agreement; (vi) either party, or their
professional advisors, may make any disclosure to any of its agents, employees, auditors,
lawyers, any Governmental Body having jurisdiction over it or any other person which it in good
faith determines has reason to have knowledge of such information; (vii) either party may make any
disclosure to the extent such information is publicly available through no fault of the party
making the disclosure; (viii) either party may make any disclosure to the extent such disclosure is
necessary to carry out its obligations hereunder; (ix) the Seller may make a press announcement in
respect of the transactions contemplated hereby and may announce the same in any of its shareholder
or other reports; and (x) subject to the Seller having approved the text and content of the same in
advance, the Buyer may make a press announcement in respect of the transactions contemplated hereby
and may announce the same in any of its shareholder or other reports.

     (n) Expenses. Except to the extent provided herein, each party will bear and be
responsible for all costs and expenses incurred or to be incurred by it in connection with this
Agreement and the transactions contemplated hereby.

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     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement through
their respective duly authorized officers, as of the date and year first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	KITTY HAWK AIRCARGO, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robbie Barron	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Robbie Barron	 	 
	 	 	Title: VP & COO	 	 
	 
	 	 	 	 	 	 
	 	 	AirLease International, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Harold M. Woody	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Harold M. Woody	 	 
	 	 	Title: President	 	 

 - 15 -exv10w1

 

EXHIBIT 10.1

FORM OF PERFORMANCE SHARE AGREEMENT

     Crosstex Energy, Inc. (“Company”) hereby agrees to award to the participant named below
(“Participant”) the number of shares of Common Stock, $.01 par value, of Company (the “Shares”), in
accordance with and subject to the terms, conditions and restrictions of this Agreement. If the
conditions described below are satisfied, such award will be made under the terms of the Crosstex
Energy, Inc. Long Term Incentive Plan (the “Plan”) on the Future Award Date.

     1. Definitions. Capitalized terms used herein and not otherwise defined herein shall
have the meaning ascribed to them in the Plan.

          (a) The basic terms of this Award include the following:

	 	 	 
	“Participant”

	 	_______
	“Target Number of Shares”

	 	___Shares
	“Minimum Number of Shares”

	 	___% of Target
	“Maximum Number of Shares”

	 	___% of Target
	“Commencement Date”

	 	________, 20___
	“Grant Date”

	 	________, 20___
	“Future Award Date”

	 	________, 20___
	“Vesting Date”

	 	________, 20___
	“Target Growth Rate”

	 	___%
	“Minimum Growth Rate”

	 	___%
	“Maximum Growth Rate”

	 	___%

          (b) Other definitions include the following:

     “Cause” means (i) Participant has failed to perform the duties assigned to him and such
failure has continued for thirty (30) days following delivery by Company of written notice to
Participant of such failure, (ii) Participant has been convicted of a felony or misdemeanor
involving moral turpitude, (iii) Participant has engaged in acts or omissions against Company
constituting dishonesty, breach of fiduciary obligation, or intentional wrongdoing or misfeasance,
(iv) Participant has acted intentionally or in bad faith in a manner that results in a material
detriment to the assets, business or prospects of Company, or (v) Participant has breached any
obligation under this Agreement.

     “DCF/U” means the distributable cash flow per unit of Crosstex Energy, L.P. Any units that do
not require quarterly distributions are ignored for purposes of this calculation. The DCF/U for
each calendar quarter is determined by the Company and approved by the Board each quarter in
connection with the determination of quarterly earnings.

     “Disability” shall mean a physical or mental condition of Participant that, in the good faith
judgment of not less than a majority of the entire membership of the Board (excluding Participant,
if then a member of the Board), based upon certification by a licensed physician reasonably
acceptable to Participant and the Board, (i) prevents Participant from being able to perform the
services required under this Agreement, (ii) has continued for a period of at least 180 days during
any 12-month period, and (iii) is expected to continue.

 

 

     “Growth Rate” is the percentage increase (or decrease) in DCF/U during a particular calendar
year compared to DCF/U in the immediately preceding year. The “Average Growth Rate” is equal to the
sum of the annual Growth Rates divided by the number of years in the Measurement Period.

     “Good Reason” means any of the following: (i) the assignment to Participant of any duties
materially inconsistent with Participant’s position, authority, duties or responsibilities; (ii)
Company requiring Participant to be based at any office other than offices in the greater Dallas,
Texas area; or (iii) a breach or violation by Company of any material provision of any written
agreement with Participant, which breach or violation remains unremedied for more than 30 days
after written notice thereof is given to Company by Participant. For purposes of this definition,
no act or failure to act on Company’s part shall be considered a “Good Reason” unless Participant
has given Company written notice of such act or failure to act within 30 days thereof and Company
fails to remedy such act or failure to act within 30 days of its receipt of such notice.

     “Measurement Period” means the period beginning on the Commencement Date and ending on the
Future Award Date.

     “Qualifying Termination” means Participant’s employment or service with Company or its
Affiliates is terminated (i) by Company without Cause, (ii) by Participant for Good Reason, (iii)
due to Participant’s death, or (iv) due to Participant’s Disability.

     2. Award of Performance Shares. An award of Restricted Stock under the Plan will be
made to Participant effective as of the Future Award Date if Participant on such date is, and has
continuously been, employed by Company or an Affiliate since the Grant Date. Subject to the terms
hereof, no Shares will be credited to Participant until such Future Award Date. After such future
award is made, the Shares will be released from restrictions on the Vesting Date only upon the
satisfaction of all terms and conditions set forth in this Agreement.

     (a) The number of Shares will be determined using the following formulas:

     If the Average Growth Rate is less than the Target Growth Rate, the formula is as
follows:

	 	 	 	 	 	 	 
	 

	 	T x (100% - (___%  x
	 	B - A
	)) 	 
	 

	 	 	 	C	 	 

     If the Average Growth Rate is more than the Target Growth Rate, the formula is as
follows:

	 	 	 	 	 	 	 
	 

	 	T x (100% + (___% x
	 	A - B
	)) 	 
	 

	 	 	 	D	 	 

	 	 	 	 	 
	     Legend:

	 	A =
	 	Average Growth Rate (which will not be less than Minimum

Growth Rate nor more than Maximum Growth Rate)
	 

	 	B =
	 	Target Growth Rate
	 

	 	C =
	 	Spread between Target Growth Rate and Minimum Growth Rate
	 

	 	D =
	 	Spread between Maximum Growth Rate and Target Growth Rate
	 

	 	T =
	 	Target Number of Shares

     (b) Except as otherwise provided in this Section 2, provided Participant has continuously been
employed by Company or an Affiliate since the Grant Date, unrestricted ownership of the Shares will
occur on the Vesting Date and the Shares will be delivered to Participant shortly thereafter by
electronic transfer or the issuance of one or more certificates representing the Shares.

 

 

     (c) If Participant ceases to be employed by Company or an Affiliate before the Vesting Date
for any reason other than a Qualifying Termination, this Agreement shall become null and void and
no awards or payments will be due to Participant.

     (d) If Participant’s employment is terminated due to a Qualifying Termination before the
Vesting Date, the terms of this subparagraph will apply. If the Qualifying Termination occurs
before the first April 1 following the Commencement Date, no award will be made and no payments
will be due under this Agreement. If the Qualifying Termination occurs at any time thereafter,
Participant or Participant’s estate will receive an award of the number of shares determined below
on the 90th day following the Qualifying Termination:

     (i) The Average Growth Rate that is achieved with respect to a short period ending on
the Qualifying Termination date will be based upon the Growth Rates of (x) each full
calendar year from the Commencement Date and (y) each short year during such period that
consists of at least one full calendar quarter (in which event, the Growth Rate for such
short year will be determined by annualizing the DCF/U for each of the full calendar
quarters during such short year).1

     (ii) The number of Shares will be determined using the Average Growth Rate established
in subsection 2(d)(i) and the formula described in subsection 2(a). In the case of a
Qualifying Termination due to Participant’s death or Disability, Participant or
Participant’s estate will be entitled to the full number of Shares without pro-ration. In
all other cases involving a Qualifying Termination, the number of Shares will be pro-rated
by multiplying the full number of Shares by a fraction with the numerator being the full
number of months Participant was employed by Company during the Measurement Period and the
denominator being the original number of months in the Measurement Period.

     (e) Until vesting, Participant shall have no rights with respect to the Shares, including but
not limited to, rights to sell, vote, exchange, transfer, pledge, hypothecate or otherwise dispose
of the Shares. This Award is not assignable or transferable by Participant.

     (f) During the period between the Grant Date and the Vesting Date, Participant will receive
quarterly cash payments, less all applicable taxes, equal to the dividends that would have been
paid on the Target number of Shares Participant is entitled to hereunder, beginning with dividends
that are made in the second calendar quarter of the year that includes the Commencement Date;
provided, however, no cash dividends will be payable to or on behalf of Participant with respect to
any payment date occurring after Participant has forfeited a right to receive the Shares pursuant
to the terms of this Agreement or the Plan.

     (g) Notwithstanding anything contained herein to the contrary, (i) the Committee shall have
the right to accelerate the Future Award Date and/or cancel all or any portion of any outstanding
restrictions prior to the termination of such restrictions with respect to any or all of the Shares
on such terms and conditions as the Committee may deem appropriate and (ii) in the event of a
Change in Control,

 

			
	1	 	An example of this calculation is as follows:
Assume that Participant’s employment is terminated in a Qualifying
Termination on July 15 in the year following the year of the Commencement Date
and that the DCF/U in the year before the Commencement Date was $2.50, in year
1 was $2.75, in the first quarter of year 2 was $0.75, and in the second
quarter of year 2 was $0.80. The annualized DCF/U for year 2 would be $3.10
(total DCF/U for two quarters of $1.55 multiplied by 2 to calculate an
annualized total). The Growth Rate for year 1 would be 10% ($0.25 growth over
base year DCF/U of $2.50) and the Growth Rate for year 2 would be 12.73% ($0.35
growth over year 1 DCF/U of $2.75). The Average Growth Rate would be 11.36%
(10% plus 12.73% divided by 2 years).

 

 

the maximum award contemplated by this Agreement shall be made and automatically vested in
full as of the date of the Change in Control.

     (h) In the event that the number of Company’s shares, as a result of a stock split or stock
dividend or combination of shares or any other change or exchange for other securities, by
reclassification, reorganization or otherwise, are increased or decreased or changed into or
exchanged for a different number or kind of shares of stock or other securities of Company or of
another corporation, the number of Shares to be awarded under this Agreement shall be adjusted to
reflect such change in such manner as the Board or the Committee may deem appropriate. If any such
adjustment shall result in a fractional share, such fraction shall be disregarded.

     3. Each notice relating to this award shall be in writing. All notices to Company shall be
addressed to the Secretary, at Company’s headquarters. All notices to Participant shall be
addressed to Participant in accordance with Company’s payroll records.

     4. Taxes. PARTICIPANT REPRESENTS THAT PARTICIPANT IS NOT RELYING ON COMPANY FOR ANY
TAX ADVICE IN CONNECTION WITH THIS AWARD. Participant will pay to Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to (i) distributions received, and (ii) the termination
of restrictions with respect to the Shares (in which case arrangements will be made no later than
the date of the termination of the restrictions). Participant shall, to the extent permitted by
law, have the right to deliver to Company or its Affiliates Shares to which Participant shall be
entitled upon the vesting thereof (or other Shares owned by Participant), valued at the fair market
value of such Shares at the time of such delivery to Company or its Affiliates, to satisfy the
obligation of Participant under this Agreement. Any provision of this Agreement to the contrary
notwithstanding, if Participant does not otherwise satisfy the obligation of Participant under this
Section, then Company and its Affiliates shall, to the extent permitted by law, have the right to
deduct from any payments of any kind otherwise due from Company or its Affiliates to or with
respect to Participant, whether or not pursuant to this Agreement or the Plan and regardless of the
form of payment, any federal, state or local taxes of any kind required by law to be withheld with
respect to the ownership of the Shares (with respect to which the restrictions set forth herein
have terminated).

     5. Entirety and Modification. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof and supersedes any and all
prior agreements, whether written or oral, between such parties relating to such subject matter.
No modification, alteration, amendment or supplement to this Agreement shall be valid or effective
unless the same is in writing and signed by the party against whom it is sought to be enforced.

     6. Severability. If any provision of this Agreement is held to be unenforceable, this
Agreement shall be considered divisible, and such provision shall be deemed inoperative to the
extent it is unenforceable, and in all other respects this Agreement shall remain in full force and
effect; provided, however, that if any such provision may be made enforceable by limitation
thereof, then such provision shall be deemed to be so limited and shall be enforceable to the
maximum extent permitted by applicable law.

     7. This Agreement has been made in and shall be construed under and in accordance with
the laws of the State of Delaware.

 

 

	 	 	 	 	 
	 	CROSSTEX ENERGY, INC.

 	 
	 	 	 
	 	By:  	 	 
	 	 	Title:  	 	 
	 
	 	PARTICIPANT:

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