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agreement_26.md | 5.11 PAYMENTS; TAX REPORTS; INFORMATION:
(a) PAYMENTS: Lessee shall pay each Indemnified Tax (as defined in
Clause 5.11(b)) in a timely and proper manner directly to the
relevant taxing authority, to the extent that direct payment
by Lessee is permitted by applicable law, and shall deliver to
the Tax Indemnitee for the account of which Lessee paid such
Tax the original (or a certified copy of an) official receipt
for Lessee's payment of such Tax (if obtainable by Lessee) or
such other documentary evidence of Lessee's payment of such
Tax as is reasonably acceptable to such Tax Indemnitee. Any
additional amount payable by Lessee directly to any Tax
Indemnitee pursuant to Clause 5.7
53
shall be paid together with the payment to which such
additional amount relates. Any amount payable by Lessee
directly to any Tax Indemnitee pursuant to Clause 5.8, 5.9 or
5.10 shall be paid in immediately available funds within ten
(10) days after Lessee receives such Tax Indemnitee's written
demand therefor. Any claim for payment pursuant hereto shall
be made by Lessor or the relevant Tax Indemnitee in writing,
accompanied by a certificate of an officer of such Tax
Indemnitee setting forth in reasonable detail the amount and
method of calculation of the payment so demanded. | 1000 |
agreement_26.md | (b) REPORTS: If any report, return, certification, statement or
other document (a "Tax Document") is required to be filed by
any Tax Indemnitee with respect to any Tax for which Lessee is
required to indemnify such Tax Indemnitee pursuant to this
Clause 5 (an "Indemnified Tax"), Lessee shall promptly notify
such Tax Indemnitee of such requirement and:
(i) if permitted by applicable law, prepare and file such
Tax Document in a timely and proper manner (except for
any such Tax Document which such Tax Indemnitee notifies
Lessee that such Tax Indemnitee intends to prepare and
file) and deliver a copy of such Tax Document to such
Tax Indemnitee, provided that such Tax Indemnitee
delivers to Lessee, at Lessee's timely written request
and expense, such information within such Tax
Indemnitee's reasonable control as Lessee may reasonably
request and as may be reasonably necessary for Lessee to
prepare such Tax Document; or
(ii) if Lessee is not permitted by applicable law to file
such Tax Document, Lessee shall prepare and deliver to
such Tax Indemnitee a proposed form of such Tax Document
within a reasonable time prior to the time such Tax
Document is required to be filed; | 1001 |
agreement_26.md | (c) INFORMATION: Lessee shall furnish to each Tax Indemnitee,
promptly after receipt of such Tax Indemnitee's written
request therefor, such documents and other information as such
Tax Indemnitee may reasonably request to enable such Tax
Indemnitee to comply with its Tax reporting, payment, audit
and litigation requirements relating to such Tax Indemnitee's
participation in the transactions contemplated in the
Transaction Documents. Each of Lessor and Beneficiary shall
furnish to Lessee such information maintained in the regular
course of its business as is (i) reasonably requested by
Lessee in writing, (ii) reasonably necessary to enable Lessee
to comply with its Tax reporting, payment, audit and
litigation requirements relating to the transactions
contemplated in the Transaction Documents, and (iii) not
otherwise available to Lessee; provided that Lessor shall not
be required to furnish or disclose to Lessee
54
or any other Person any Tax return or other document relating
to the tax affairs of Lessor or any of its Affiliates; and | 1002 |
agreement_26.md | (d) REFUNDS; TAX SAVINGS: If and to the extent that a Tax
Indemnitee (x) receives a refund (in cash or as an offset
against any liability for a Lessor Tax) of any Indemnified Tax
previously paid by Lessee or for which Lessee previously paid
an indemnity to a Tax Indemnitee pursuant to Clause 5.7, 5.8,
5.9 or 5.10 (a "Refund"), or (y) actually realizes a reduction
in its liability for any Lessor Tax as a result of any
deduction, Tax credit or other Tax benefit for any Indemnified
Tax paid by Lessee or for which Lessee previously paid an
indemnity to a Tax Indemnitee pursuant to Clause 5.7, 5.8, 5.9
or 5.10 (a "Tax Saving"), such Tax Indemnitee shall pay to
Lessee, the amount of such actual Refund or Tax Saving minus
the net amount of all Taxes payable by such Tax Indemnitee
with respect to the receipt or accrual of such Refund or Tax
Saving and minus all costs and expenses incurred by such Tax
Indemnitee with respect to claiming and obtaining such Refund
or Tax Savings, provided, however, that if a Default or an
Event of Default exists and is continuing, such Tax Indemnitee
may hold the amount then due to Lessee under this Clause
5.11(d) until such Default or Event of Default ceases to
exist, and provided, further, that in no event shall such
payment exceed (i) the amount of all prior payments by Lessee
to such Tax Indemnitee under Clause 5.7, 5.8, 5.9 or 5.10 | 1003 |
agreement_26.md | to such Tax Indemnitee under Clause 5.7, 5.8, 5.9 or 5.10
minus (ii) the amount of all prior payments by such Tax
Indemnitee pursuant to this Clause 5.11(d), but any such
excess shall be carried forward and applied as a credit to
reduce any future indemnity liability of Lessee under Clause
5.7, 5.8, 5.9 or 5.10. If a Tax Indemnitee pays Lessee any
amount under this Clause 5.11(d) and if and to the extent that
it is subsequently determined by the taxing authority having
jurisdiction that such Tax Indemnitee was not entitled to the
Tax Saving or Refund for which such Tax Indemnitee made such
payment to Lessee, such determination shall be treated as the
imposition of a Tax for which Lessee is obligated to indemnify
such Tax Indemnitee pursuant to the provisions of Clause 5.8,
without regard to the exclusion of Lessor Taxes in Clause 5.8. | 1004 |
agreement_26.md | 5.12 CONTEST OF CLAIM FOR TAX
(a) If a claim shall be made for or in respect of any Tax
(including withholding Taxes) for which the Lessee is
obligated pursuant to Clauses 5.7, 5.8, 5.9 or 5.10, to
indemnify such Tax Indemnitee (a "Tax Claim"), such Tax
Indemnitee shall give Lessee written notice of such Tax Claim
as soon as reasonably practicable, provided that any failure
of such Tax Indemnitee to give such notice or any delay by
such Tax Indemnitee in giving such notice shall not affect the
obligations of Lessee under this Clause 5 unless, and only to
the extent that, the failure to promptly provide such notice
results in (A) a material increase in the amount which Lessee
55 | 1005 |
agreement_26.md | 55
is required to indemnify, (B) material additional obligations
for Lessee in defending against such Tax Claim or (C)
precluding or materially prejudicing Lessee's right to defend
any such Tax Claim. If Lessee delivers to such Tax Indemnitee
within thirty days after the date of receipt of such Tax
Indemnitee's notice, a written request that such Tax
Indemnitee contest such Tax Claim (or, in the case of a Lessee
Controlled Contest, permit Lessee to contest such Tax Claim)
and if (and only so long as) the conditions described in
clause 5.12(b) are satisfied, such Tax Indemnitee shall, in
good faith and at Lessee's expense, contest (or, in the case
of a Lessee Controlled Contest, permit Lessee to contest if
permitted by applicable law) the validity, applicability or
amount (as the case may be) of the Taxes that are the subject
of such Tax Claim by (x) resisting payment thereof, (y) not
paying such Taxes except under protest if protest is necessary
and proper, or (z) if payment is made, using reasonable
efforts to obtain a refund thereof in administrative and/or
judicial proceedings permitted by applicable law (including
all appeals, other than, as appellant, an appeal or petition
to the United States Supreme Court or the equivalent court of
any other jurisdiction). | 1006 |
agreement_26.md | (b) CONDITIONS: A Tax Indemnitee's obligation under Clause 5.12(a)
with respect to any Tax Claim is subject to the satisfaction
of the following conditions at the time the contest is
requested and at all times while the contest (if any) is
continuing: (i) no Default described in Clause 13.1(a) or (g)
or Event of Default shall have occurred and be continuing,
(ii) the amount of the Tax Claim (plus, if the Tax that is the
subject of the Tax Claim is a recurring Tax, the aggregate
amount of all similar Tax Claims with respect to all
subsequent tax periods during the remainder of the Term) shall
exceed the Tax Contest Threshold, (iii) if requested by such
Tax Indemnitee, such Tax Indemnitee shall have received (at
Lessee's expense) from independent tax counsel selected by
Lessee and reasonably acceptable to such Tax Indemnitee a
written opinion that there is a realistic expectation that
such contest will be successful, (iv) Lessee shall have agreed
to pay, and shall be paying, on demand and on an After-Tax
Basis, all reasonable costs and expenses incurred by such Tax
Indemnitee in connection with the contest of such Tax Claim,
(v) if the contest is to be conducted in a manner requiring
payment of the Tax Claim, Lessee shall have advanced to such
Tax Indemnitee, without interest, the amount of the Tax Claim
and shall have agreed to indemnify such Tax Indemnitee on an
After-Tax Basis for any adverse Tax consequences of such
interest-free advance, (vi) Lessee shall have agreed in
writing that the Taxes that are the subject of the Tax Claim
are Indemnified Taxes, except to the extent that the final
determination of such contest demonstrates that such Taxes are | 1007 |
agreement_26.md | are Indemnified Taxes, except to the extent that the final
determination of such contest demonstrates that such Taxes are
Lessor Taxes and (vii) Lessor shall have determined in good
faith that the action to be taken will not result in any risk
of criminal penalty or any material risk of sale, forfeiture
or loss of, or the creation of any Lien (other than a
Permitted Lien) on, the Aircraft. | 1008 |
agreement_26.md | 56 | 1009 |
agreement_26.md | (c) LESSEE CONTROLLED CONTESTS: For the purposes of this Clause 5,
the words "Lessee Controlled Contest" means a contest pursuant
to this Clause 5.12 involving only Indemnified Taxes, provided
that (i) such contest may be conducted under applicable law in
the name of Lessee and participation by a Tax Indemnitee in
the contest is not required, (ii) no tax return of a Tax
Indemnitee is held open with respect to which such Tax
Indemnitee may reasonably be considered to have an actual or
potential liability for Taxes that are not Indemnified Taxes,
and (iii) no Tax Indemnitee shall then be contesting the same
Tax in the same jurisdiction. Lessee shall, at its expense,
conduct and control any Lessee Controlled Contest and, in the
case of any contest involving a claim for one or more
Indemnified Taxes and a claim for one or more Lessor Taxes,
conduct and control such contest to the extent that it relates
to claims for Indemnified Taxes, but only to the extent that
the contest of the claims for Indemnified Taxes may be and are
severed from the contest of claims for Lessor Taxes (and
Lessor shall, at the request and expense of Lessee, use
reasonable efforts in good faith to obtain such severance),
provided, however, that in no event shall the Lessee be
permitted, or a Tax Indemnitee be required, to take any action
pursuant to this Clause 5.12 unless (and only so long as) the
conditions described in clause 5.12(b) are satisfied. With
respect to any contest conducted by the Lessee, the Lessee
shall retain control over such contest but shall consult in
good faith with Lessor and shall consider in good faith | 1010 |
agreement_26.md | shall retain control over such contest but shall consult in
good faith with Lessor and shall consider in good faith
reasonable requests of Lessor including reasonable requests to
participate in such contest. | 1011 |
agreement_26.md | (d) TAX INDEMNITEE CONTROLLED CONTESTS: The affected Tax
Indemnitee shall, at the expense of Lessee, conduct and
control any contest (other than a Lessee Controlled Contest)
of a Tax Claim pursuant to this Clause 5.12, provided,
however, that in no event shall the Tax Indemnitee be required
to commence or continue any contest pursuant to this Clause
5.12 unless (and only so long as) the conditions described in
clause 5.12(b) are satisfied. With respect to any contest
conducted by the a Tax Indemnitee, the Tax Indemnitee shall
have sole control over such contest (including choice of
forum) but shall consult in good faith with Lessee and shall
consider in good faith reasonable requests of Lessee including
reasonable requests to participate in such contest.
(e) No Tax Indemnitee shall settle or compromise any Tax Claim or
contest proceeding or (except as permitted by Clause 5.12(a))
refrain from appealing any adverse determination with respect
thereto without the prior written consent of Lessee, provided
that a Tax Indemnitee may in its sole discretion
unconditionally waive in writing its right to the
indemnification provided for in Clause 5.8 with respect to any
Tax Claim and refrain from contesting, or continuing the
contest of, such claim, in which event:
57
(i) Lessee shall have no liability to such Tax Indemnitee
with respect to such Tax Claim (and, if the Indemnified
Tax that is the subject of such Tax Claim is a recurring
Tax, with respect to any corresponding claim with
respect to any other taxable period if and to the extent
that such failure to contest causes the contest of such
corresponding claim to be precluded), and | 1012 |
agreement_26.md | (ii) the Tax Indemnitee shall refund to Lessee any amounts
theretofore paid or advanced by Lessee with respect to
such Indemnified Tax, excluding all contest costs
described in Clause 5.12(b)(iv) above.
(f) Upon a final determination of a contest pursuant to this
Clause 5.12:
(i) if the amount of the indemnity payable by Lessee
pursuant to this Clause 5 with respect to the contested
Tax Claim exceeds the amount (if any) advanced by Lessee
to the Tax Indemnitee pursuant to Clause 5.12(b)(v),
Lessee shall pay to the Tax Indemnitee the amount of
such excess not later than thirty (30) days after the
day on which Lessee receives the Tax Indemnitee's
written demand for the indemnity payable by the Lessee
after the date of such final determination; or
(ii) if the amount (if any) of the advance made by Lessee to
the Tax Indemnitee pursuant to Clause 5.12(b)(v) exceeds
the amount of the indemnity payable by Lessee to the Tax
Indemnitee pursuant to this Clause 5 with respect to the
contested Tax Claim, the Tax Indemnitee shall pay to
Lessee the amount of such excess not later than thirty
(30) days after the date on which the Lessor receives
the Lessee's written demand therefor after the date of
such final determination.
5.13 INDEMNITIES TO BE PAID ON AN AFTER-TAX BASIS/SURVIVAL:
Any indemnity or other amount payable by Lessee pursuant to Clause
5.7, 5.8, 5.9 or 5.10 shall be paid on an After-Tax Basis. | 1013 |
agreement_26.md | All the obligations and liabilities of Lessee under this Clause 5
shall survive and remain in full force and effect, notwithstanding
the expiration or earlier termination or cancellation of this
Agreement and the return of the Aircraft to Lessor, until all such
obligations have been fully performed and all such liabilities have
been paid in full.
5.14 ABSOLUTE OBLIGATIONS:
This Agreement is a net lease. Lessee's payment and other
obligations under this Agreement are absolute and unconditional
irrespective of any contingency whatsoever including (but not
limited to):
58
(a) any right of setoff, counterclaim, recoupment, defense or
other right which either party to this Agreement may have
against the other, or which Lessee may have against the
Manufacturer or any other Person for any reason whatsoever;
(b) any unavailability of the Aircraft for any reason (other than
Lessor's failure to properly tender delivery of the Aircraft
in accordance with this Agreement), including, but not limited
to, a requisition of the Aircraft or any prohibition or
interruption of or interference with or other restriction
against Lessee's use, operation or possession of the Aircraft;
(c) any lack or invalidity of title or any other defect in title,
airworthiness, merchantability, fitness for any purpose,
condition, design, or operation of any kind or nature of the
Aircraft for any particular use or trade, or for registration
or documentation under the laws of any relevant jurisdiction,
or any Event of Loss in respect of or any damage to the
Aircraft occurring after Delivery;
(d) any insolvency, bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar
proceedings by or against Lessor or Lessee; | 1014 |
agreement_26.md | (e) any invalidity or unenforceability or lack of due
authorization of, or other defect in, this Agreement or any
other Transaction Document; and
(f) any other cause which but for this provision would or might
otherwise have the effect of terminating or in any way
affecting any obligation of Lessee under this Agreement.
Nothing in this Clause 5.14 will be construed so as to limit
Lessee's right to institute separate legal proceedings or otherwise
independently pursue any claim against Lessor or any other Person in
the event of a breach of Clause 7.1 or to otherwise limit Lessee's
rights and remedies to pursue in a court of law any claim it may
have against Lessor or any other Person.
5.15 SECURITY:
(a) To the fullest extent permitted by law and by way of
continuing security, Lessee grants a security interest in the
Security Deposit and all rights of Lessee to payment thereof,
the debt represented thereby and/or any and all interest of
Lessee therein to Lessor by way of first priority possessory
security interest as security for Lessee's obligations under
this Agreement and the Other Transaction Documents (the
"Secured Liabilities"). Except as expressly permitted or
required under this Agreement, including without limitation as
set forth in Clauses 4.4 and 7.2 hereof, Lessee will not be
entitled to repayment of the Security Deposit. Lessee will not
assign, transfer or otherwise dispose of all or part of its
rights in the
59
Security Deposit and Lessee agrees that it will enter into any
additional documents and instruments necessary or reasonably
requested by Lessor to evidence, create or perfect Lessor's
Security Interest in and to the Security Deposit; | 1015 |
agreement_26.md | (b) If Lessee fails to comply with any provision of this Agreement
or any Event of Default has occurred and is continuing, Lessor
may immediately or at any time thereafter, without prior
notice to Lessee:
(i) setoff all or any part of the Secured Liabilities
against the liabilities of Lessor in respect of the
Security Deposit; and/or
(ii) apply or appropriate the Security Deposit in or towards
the payment or discharge of the Secured Liabilities in
such order as Lessor sees fit; and/or
(iii) exercise any other remedy or right available under
applicable law.
(c) If Lessor has exercised the setoff described in subclause (b)
above, Lessee shall, following a demand in writing from
Lessor, promptly restore the Security Deposit to the level at
which they stood immediately prior to such setoff.
5.16 CURRENCY INDEMNITY:
(a) Except for Losses suffered or incurred by Lessor and in
respect of which Lessee has an obligation to indemnify Lessor
hereunder, which shall be payable by Lessee to Lessor in the
currency and in the amount in which such Loss is suffered or
incurred, all amounts payable to Lessor under this Agreement
shall be payable in Dollars in New York and payment in Dollars
in New York is of the essence.
(b) If Lessor receives an amount in respect of Lessee's liability
under this Agreement or if such 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 this Agreement:
(i) Lessee will indemnify Lessor, on an After-Tax Basis, as
an independent obligation against any loss arising out
of or as a result of such conversion; | 1016 |
agreement_26.md | (ii) if the amount received by Lessor, when converted into
the contractual currency (at the market rate at which
Lessor is able on the relevant date to purchase the
contractual currency in London or at its option New York
with that other currency), is less than the amount owed
in the contractual currency, Lessee will, forthwith on
60
demand, pay to Lessor an amount in the contractual
currency equal to the deficit; and
(iii) Lessee will pay to Lessor on demand any exchange costs
and Taxes (other than Lessor Taxes) payable in
connection with the conversion;
(c) Lessee waives any right it may have in any jurisdiction to pay
any amount under this Agreement in a currency other than that
in which it is expressed to be payable.
5.17 SETOFF:
Lessor may set off any matured obligation owed by Lessee under this
Agreement or the Other Agreements against any obligation owed by
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 setoff.
6. MANUFACTURER'S WARRANTIES | 1017 |
agreement_26.md | 6. MANUFACTURER'S WARRANTIES
(a) So long as no Event of Default has occurred which is
continuing, with effect from Delivery, Lessor assigns to
Lessee, and authorizes 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, sub-contractor or supplier (including compensation for
loss of use of the Aircraft) to the extent that the same may
be assigned or otherwise made available to Lessee. In
furtherance of the foregoing, Lessor shall take such actions,
at Lessee's cost and expense, as Lessee may reasonably request
to make such warranties available to Lessee. Manufacturer
shall deliver its consent to the assignment of any such
warranties upon Delivery of the Aircraft. Lessee will give
Lessor prompt written notice of any warranty claim in excess
of the Warranty Claim Notification Threshold which is settled
with Lessee on the basis of a cash payment other than
reimbursements for work performed directly by Lessee;
(b) If any Default has occurred and is continuing, Lessor may:
(i) retain for its own account any such proceeds previously
paid to Lessor which would have been remitted to Lessee
under this Clause 6 in the absence of such Default; and
(ii) cause any proceeds of any pending claims to be paid to
Lessor, rather than Lessee;
until Lessee shall have cured any such Default whereupon
Lessor shall pay any such proceeds which have not otherwise
been applied to Lessee.
61 | 1018 |
agreement_26.md | 61
(c) On the Final Expiry Date, all rights held by Lessee derived
from any warranties referenced in this Clause 6 (other than in
respect of claims pending or discovered (provided the claim is
filed promptly after the Final Expiry Date) as of the Final
Expiry Date) shall immediately revert to Lessor, without any
further act or deed by any Person; provided, however, Lessee
shall nonetheless take such actions, at Lessee's cost and
expense, as Lessor may reasonably request to ensure that all
such rights are made available to Lessor; and
(d) Notwithstanding anything to the contrary set forth above in
this Clause 6 or elsewhere in this Agreement, nothing in this
Clause 6 shall be deemed to impose any liability or obligation
on Lessor to transfer, assign or otherwise make available to
Lessee any rights with respect to any warranties other than
such rights, if any, as may have been transferred, assigned or
otherwise made available to Lessor.
7. LESSOR'S COVENANTS
7.1 QUIET ENJOYMENT: | 1019 |
agreement_26.md | 7. LESSOR'S COVENANTS
7.1 QUIET ENJOYMENT:
Provided no Event of Default has occurred and is continuing, neither
Lessor nor any Person claiming through or under Lessor (excluding a
Person claiming through Lessor with respect to any Losses, Taxes or
other liability for which Lessee is obligated to indemnify Lessor
under this Agreement or for which Lessee is otherwise responsible
under this Agreement) will disturb the quiet use, possession and
enjoyment of the Aircraft by Lessee in accordance with the terms of
this Agreement; but the proper exercise by Lessor of its rights
under or in connection with this Agreement will not constitute such
a disturbance. The foregoing covenant is given by Lessor in lieu of
the rights of Lessee arising under, and Lessee hereby waives and
disclaims any and all rights arising under, Section 2A-211 of the
UCC. Lessee agrees that its only right with respect to a default by
Lessor under this Agreement, including a breach of the foregoing
covenant, is to make a claim against Lessor for actual damages
resulting directly therefrom and in any event subject to Clause 16.3
hereof.
7.2 LESSOR OBLIGATIONS FOLLOWING FINAL EXPIRY DATE: | 1020 |
agreement_26.md | 7.2 LESSOR OBLIGATIONS FOLLOWING FINAL EXPIRY DATE:
Within thirty (30) days following the Final Expiry Date, or such
later time as Lessee has paid to Lessor all amounts which may then
be due and payable under this Agreement and/or the Other Agreements,
so long as no Default or Event of Default has occurred and is
continuing, Lessor will pay to Lessee an amount (the "Relevant Cash
Amount") equal to the amount (if any) of the Security Deposit then
held and not applied by Lessor pursuant to Clauses 5.15 or 13.2,
together with Interest (as defined below). Should a Default or Event
of Default have occurred and be then continuing, Lessor shall retain
the Relevant Cash Amount, may apply the same in full or partial
satisfaction of any such Default or Event of
62
Default and shall return such Relevant Cash Amount to Lessee less
any amount so applied promptly after such Default or Event of
Default ceases to exist.
For the purposes of this Clause 7.2, "Interest" means interest at
the rate of six-month Dollar LIBID on an amount equal to the
Relevant Cash Amount for a period equal to the period during which
such amount was held by Lessor (net of any and all Taxes).
7.3 UNAPPLIED SUPPLEMENTAL RENT: | 1021 |
agreement_26.md | 7.3 UNAPPLIED SUPPLEMENTAL RENT:
So long as no Default or Event of Default has then occurred and is
continuing, on the Final Expiry Date Lessor shall pay to Lessee an
amount equal to the Unused Supplemental Rent minus the Landing Gear
Supplemental Rent. Should a Default or Event of Default have
occurred and be then continuing, Lessor shall retain the amounts
otherwise payable to Lessee under this Clause 7.3 until such time as
such Default or Event of Default shall have ceased to exist
whereupon it shall promptly pay to Lessee such amounts less any
amount thereof applied in full or partial cure of such Default or
Event of Default.
7.4 MAINTENANCE CONTRIBUTIONS:
(a) Provided no Default has occurred and is continuing, Lessor
will pay (as a separate and independent obligation and not as
a return of Supplemental Rent) the following amounts to the
relevant Agreed Maintenance Performer (or to Lessee, shall
Lessor have received evidence of payment of the relevant
Agreed Maintenance Performer), up to the amount owing to it
(with any remaining balance to be paid to Lessee), by way of
contribution to the cost of maintenance of the Aircraft
performed by any Agreed Maintenance Performer:
(i) AIRFRAME: With respect to the Airframe, the completion,
in accordance with this Agreement, of the Airframe
6C/24,000 Hour Block Structural Check, an amount equal
to the aggregate amount of the Airframe 6C/24,000 Hour
Block Supplemental Rent actually paid by Lessee at the
date such work starts less the aggregate amount
previously paid by Lessor under this sub-clause; | 1022 |
agreement_26.md | (ii) ENGINE LIFE-LIMITED PARTS: With respect to Life-Limited
Parts within any Engine, the replacement, in accordance
with this Agreement, of those Parts, the lesser of (x)
the amount of that invoice and (y) an amount equal to
the aggregate amount of the Engine LLP Supplemental Rent
actually paid in respect of that Engine paid by Lessee
at the date such work starts less the aggregate amount
previously paid in respect of that Engine by Lessor
under this sub-clause;
63
(iii) ENGINE PERFORMANCE RESTORATION: With respect to any
Engine, the performance, in accordance with this
Agreement, of Engine Performance Restoration in respect
of that Engine, an amount equal to the aggregate amount
of the Engine Supplemental Rent actually paid by Lessee
in respect of that Engine at the date such work starts
less the aggregate amount previously paid in respect of
that Engine by Lessor under this sub-clause;
(iv) APU PERFORMANCE RESTORATION: With respect to the APU,
the performance, in accordance with this Agreement, of
all APU Performance Restoration shop visits, an amount
equal to the aggregate amount of the APU Supplemental
Rent actually paid by Lessee at the date such work
starts less the aggregate amount previously paid by
Lessor under this sub-clause; and
(v) LANDING GEAR: With respect to the Landing Gear, the
performance in accordance with this Agreement, of all
work on the Landing Gear in the nature of overhaul and
requiring removal and disassembly, an amount equal to
the aggregate amount of the Landing Gear Supplemental
Rent actually paid by Lessee at the date such work
starts less the aggregate amount previously paid by
Lessor under this sub-clause.
7.5 CLAIMS FOR REIMBURSEMENT: | 1023 |
agreement_26.md | 7.5 CLAIMS FOR REIMBURSEMENT:
Lessee shall promptly submit to Lessor invoices with customary
detail for labor and materials for all maintenance for which
reimbursement is sought under Clause 7.4. Lessor shall, subject as
provided below, pay to Lessee all amounts reimbursable hereunder
within thirty (30) days of actual receipt of (i) an invoice for the
relevant work, (ii) evidence of payment thereof and (iii) the agreed
workscope maintenance plans, the final report and such other
supporting documentation as typically provided by the Agreed
Maintenance Performer, in each case reasonably satisfactory to
Lessor, evidencing the performance of such maintenance.
Notwithstanding the above Lessor and Lessee may agree a mutually
satisfactory mechanism for the acceptance by Lessor of preliminary
invoices. If within ten (10) days following the expiry of such
thirty (30) day period referred to above, Lessor has not provided a
detailed and reasoned explanation to Lessee as to why it is not
satisfied with such invoices and supporting documentation, Lessor
shall be deemed to be so satisfied for the purposes of this Clause
7.5; provided however that no reimbursement shall be made in respect
of (i) components unless they are scheduled to be overhauled at that
check and their lives are fully restored (and if this is not the
case, a pro-rating payment adjustment will be made in respect of
overhauls or replacements that are made before the relevant
component scheduled life limit); (ii) any maintenance resulting from
design faults or damage covered by warranty or caused by accidental
damage, foreign objects, faulty maintenance, operational mishandling
(unless the same shall result in a full
64 | 1024 |
agreement_26.md | 64
restoration) or line related quick engine change (QEC) kit
maintenance (unless such maintenance is carried out at a different
facility to the relevant Airframe check) or line replacement unit
component maintenance; (iii) any cost items which are the costs of
removal, reinstallation, transportation or are exchange, handling or
similar costs or charges; (iv) any cost which is in excess of the
relevant manufacturer's list price for the relevant parts or
maintenance work; or (v) any maintenance, overhaul, renewal,
replacement or repair which may be reimbursable out of any insurance
claim (assuming, for these purposes, that no deductibles applied to
the relevant insurances).
Any overhaul, performance restoration or other work performed by
Lessee or by any Affiliate of Lessee shall be invoiced at Lessee's
or such Affiliate's standard rate in respect of performing such work
(which shall be no higher than the standard rate then prevailing in
the United States aviation industry in respect of performing such
work).
8. LESSEE'S COVENANTS
8.1 DURATION:
The undertakings in this Clause and in Clause 12 will:
(a) except as otherwise stated, be performed at the expense of
Lessee; and
(b) remain in force until the Final Expiry Date in accordance with
this Agreement and thereafter to the extent of any accrued
rights of Lessor in relation to those undertakings.
8.2 INFORMATION:
Lessee will:
(a) notify Lessor promptly of the occurrence of any Event of Loss
and of any Default or any other event which reasonably may be
expected to have a materially adverse effect on Lessee's
ability to perform any of its obligations under this
Agreement;
(b) furnish to Lessor: | 1025 |
agreement_26.md | (b) furnish to Lessor:
(i) as soon as available but not in any event later than 90
days after the last day of each fiscal quarter of
Lessee, the consolidated financial statements of Lessee
as soon as they are available (and comprising a balance
sheet, a profit and loss statement and a statement of
cash flows) prepared for the most recent previous
financial quarter certified by a duly authorized
financial officer of Lessee as being true and correct,
each prepared in accordance with GAAP;
65
(ii) as soon as available but in no event later than 120 days
after the last day of each financial year of Lessee, its
audited consolidated balance sheet as of such day and
its audited consolidated profit and loss statement and
audited consolidated statement of cash flows for the
year ending on such day (each prepared in accordance
with GAAP); and
(iii) on request from time to time, such other information
regarding Lessee as Lessor may reasonably request;
(c) without duplication of the information contained in the
monthly reports furnished pursuant to Clause 8.2(e) below,
promptly furnish to Lessor all information Lessor from time to
time reasonably requests regarding the Aircraft, any Engine or
any Part, its use, location and condition including, without
limitation, the hours available on the Aircraft and any Engine
until the next scheduled Major Check, or Engine overhaul or
shop visit, as the case may be;
(d) on request by Lessor from time to time, furnish to Lessor
evidence reasonably satisfactory to Lessor that all Taxes and
charges incurred by Lessee with respect to the Aircraft,
including without limitation all payments due to the relevant
air traffic control authorities, have been paid and discharged
in full; | 1026 |
agreement_26.md | (e) within ten days following the end of each calendar month
during the Term, provide Lessor with a monthly report on the
Aircraft and each Engine substantially in the form of Schedule
6 or in such other form as Lessor may reasonably request from
time to time with respect to such calendar month (or portion
thereof falling within the Term);
(f) without duplication of information or reporting provided under
paragraph (e) above, give Lessor not less than 30 days' prior
written notice as to the time and location of all Major
Checks;
(g) without duplication of information or reporting provided under
paragraph (e) above, notify Lessor, promptly, of the removal
of any Engine for the purpose of Engine Performance
Restoration; and
(h) promptly notify Lessor of:
(i) any loss, theft, damage or destruction to the Aircraft,
any Engine or any Part, or any modification to the
Aircraft, if in any such case the potential cost would
reasonably be expected to exceed the Damage Notification
Threshold; and
(ii) any claim or other occurrence likely to give rise to a
claim under the Insurances in excess of the Damage
Notification Threshold and
66
provide, from time to time upon request by Lessor, the
status of any negotiations with the insurance brokers
over any such claim.
8.3 LAWFUL AND SAFE OPERATION:
Lessee will operate the Aircraft only for commercial purposes from
the Delivery Date until the date on which the Aircraft is returned
to Lessor pursuant to this Agreement; provided, that Lessee must
always: | 1027 |
agreement_26.md | (a) comply with the law for the time being in force in any country
or jurisdiction which may for the time being be applicable to
the Aircraft or, so far as concerns the use and operation of
the Aircraft, an owner or operator thereof, and take all
reasonable steps to ensure that the Aircraft is not used for
any illegal purpose;
(b) not use the Aircraft in any manner contrary to any
recommendation of the manufacturers of the Aircraft, any
Engine or any Part or any recommendation or regulation of the
Air Authority or for any purpose for which the Aircraft is not
designed or reasonably suitable;
(c) ensure that the crew and engineers employed by Lessee have the
qualifications and hold the licenses required by the Air
Authority and applicable law;
(d) use the Aircraft solely in commercial or other operations
primarily in passenger service and in passenger configuration
for which Lessee is duly authorized by the Air Authority and
applicable law;
(e) not use the Aircraft for the carriage of any goods, materials,
livestock or items of cargo which involves a change of
passenger configuration (or is inconsistent with passenger
service and passenger configuration) or which could reasonably
be expected to cause damage to the Aircraft or which would not
be adequately covered by the Insurances, or any item or
substance whose possession or carriage is illegal under any
applicable law. Lessee will comply with any carriage
regulations or restrictions from time to time issued by IATA;
(f) not use the Aircraft for purposes of training, qualifying or
re-confirming the status of cockpit personnel, except for the
benefit of Lessee's cockpit personnel, and then only if the
use of the Aircraft for such purpose is not disproportionate
to the use of other aircraft of the same type operated by
Lessee for such purpose; | 1028 |
agreement_26.md | (g) not cause or permit the Aircraft to proceed to, or remain at,
any location in an Excluded Country; provided, however, that
no Default shall occur, if, due to climatic or atmospheric
conditions, acts of God or to preserve the Aircraft or any
Engine or Part or to preserve the life or safety of
67
passengers and/or crew, the Aircraft proceeds to an Excluded
Country and the Lessee causes the Aircraft to be removed from
such Excluded Country as soon as practicable after such
conditions shall have ceased to exist;
(h) obtain and maintain in full force all certificates, licenses,
permits and authorizations for the time being required for the
use and operation of the Aircraft, and for the making of
payments required by, and the compliance by Lessee with, its
other obligations under this Agreement;
(i) not use, operate, or locate the Aircraft or suffer or permit
the Aircraft to be used, operated or located (x) in any manner
not covered by the Insurances, or (y)(A) in any recognized or
threatened area of hostilities (unless covered by war risk and
allied perils insurance pursuant to Schedule 4) or (B) in any
area excluded from coverage by the Insurances, or (z) in any
manner which would prejudice the interests of the Indemnitees
in the Insurances, the Aircraft, any Engine or any Part;
(j) not operate, maintain, insure or deal with the Aircraft or any
Engine or Part in a manner which discriminates against the
Aircraft or such Engine or Part, when compared with the manner
in which Lessee operates, maintains, insures or deals with
similar aircraft, engines or parts in Lessee's fleet; | 1029 |
agreement_26.md | (k) promptly pay or cause to be paid within such period as may be
agreed between Lessee and the relevant Government Entity all
license, registration, navigation and airport fees and charges
assessed and demanded by any Governmental Authority relating
to the Aircraft which if not paid within such period would
give rise to a Lien on the Aircraft other than a Permitted
Lien; and
(l) In the event that the Aircraft is detained or arrested in
connection with outstanding charges incurred during the Lease
Term in connection with (i) the furnishing, issue or provision
of information, directions and other facilities in connection
with the navigation or movement of aircraft (including the
control or movement of vehicles in any part of an airport used
for the movement of aircraft), or (ii) the landing, parking or
taking off of aircraft at airports or for the use of, or
services provided at, airports, then, without prejudice to
Lessor's rights under Clause 13, Lessee agrees that it shall
promptly discharge such charges and procure that such
detention or arrest is lifted. Neither Lessor nor any
Financing Party shall have any liability whatsoever as a
result of any detention or arrest of the Aircraft in respect
of any such charges or in relation to such detention or arrest
or the lifting thereof.
8.4 OUTGOINGS:
68
Lessee will, except as otherwise expressly set forth herein,
promptly pay on an After-Tax Basis: | 1030 |
agreement_26.md | 68
Lessee will, except as otherwise expressly set forth herein,
promptly pay on an After-Tax Basis:
(a) all license, registration, filing, recording and landing fees
and all other amounts of any nature imposed by any Government
Entity with respect to the Aircraft, including without
limitation, ownership, delivery, leasing, possession, use,
operation, return, sale or other disposition of the Aircraft
(other than any such fees or amounts which are attributable to
a sale or other disposition of any right, title or interest in
or to the Aircraft or this Lease and other Transaction
Documents by Lessor, Owner or Beneficiary except to the extent
such sale or other disposition arise as a result of and during
the continuance of an Event of Default or is required by the
terms of the Transaction Documents); and
(b) all rent, fees, charges and other amounts in respect of any
premises where the Aircraft or any Part thereof is located
from time to time;
(in each case other than Taxes because Lessee's indemnification
obligations with respect to Taxes are set forth in Clauses 5.7, 5.8,
5.9, 5.10 and 5.13) except to the extent that such payment is being
contested in good faith by appropriate proceedings, in respect of
which adequate resources have been provided by Lessee and nonpayment
of which does not give rise to any material likelihood of the
Aircraft or any interest therein being sold, forfeited or otherwise
lost or of criminal liability on the part of Owner, Lessor or any
Financing Party.
8.5 SUB-LEASING: | 1031 |
agreement_26.md | 8.5 SUB-LEASING:
(a) Except as otherwise set forth in this Clause 8.5, Lessee will
not, without the prior written consent of Lessor, sublease or
otherwise part with possession of the Aircraft, the Engines or
any Part except that Lessee may part with possession (i) with
respect to the Aircraft, the Engines or any Part to the
relevant manufacturers for testing or similar purposes or to
an Agreed Maintenance Performer for testing, service, repair,
maintenance or overhaul work, or alterations, modifications or
additions to the extent required or permitted by this
Agreement; and (ii) with respect to an Engine or Part, as
expressly permitted by this Agreement;
(b) Notwithstanding Clause 8.5(a), Lessee shall be permitted to
wet lease the Aircraft for a term (including renewals) not to
exceed six months, provided the Aircraft (i) shall be operated
solely by regular employees of Lessee (or by personnel
contracted by Lessee in the same manner as with respect to its
other flight operations) possessing all current certificates
and licenses that are required by applicable Regulations,
including by the Country of Registration, and shall remain in
the operational control and possession of Lessee, (ii) shall
be subject to insurance coverage as provided for in this
Agreement, (iii) shall be used and operated in
69
accordance with this Agreement and shall be maintained or
caused to be maintained by Lessee in accordance with the
Approved Maintenance Program and Lessee's normal maintenance
practices and (iv) shall not be subject to any change in its
Habitual Base or Country of Registration.
8.6 INSPECTION: | 1032 |
agreement_26.md | 8.6 INSPECTION:
(a) Lessor and any Person designated by Lessor may at reasonable
times and on reasonable written notice, at their own expense,
visit, inspect and survey the Aircraft, any Engine, any Part
or the Aircraft Documents (or any portion thereof); provided,
however, that (i) any inspection of the Aircraft will not
interfere with the maintenance or operation of the Aircraft,
or otherwise disrupt Lessee's normal business operations, (ii)
any inspection of the Aircraft Documents shall occur only
during normal business hours, (iii) any inspection of the
Aircraft shall occur only during regularly scheduled
maintenance (Lessee to notify Lessor, upon request, of the
next scheduled maintenance) and (iv) Lessor shall not perform
an inspection more than once in any calendar year (except
during the last year of the Lease Term or if a Default or
Event of Default shall have occurred and be continuing, in
which case the frequency of such inspection rights shall be
reasonable but otherwise unlimited). Lessee shall comply with
the reasonable requests of Lessor or its designee during the
course of such inspection including (x) any request to travel
on the flight deck as an observer, subject to any applicable
Regulations and insurances, and (y) any requests to conduct
visual, walk-around inspections of the Aircraft during
regularly scheduled maintenance for the Aircraft and requests
to go on board the Aircraft and/or to open any panels, bays,
etc. during any such walk-around inspection, provided no such
request shall materially affect the date of completion of such
maintenance and return of the Aircraft to revenue service; | 1033 |
agreement_26.md | (b) Lessee will pay to Lessor on demand all reasonable
out-of-pocket expenses incurred by Lessor in connection with
any such visit, inspection or survey to the extent that such
visit, inspection or survey is made to verify the correction
of defects identified by Lessor during a prior visit,
inspection or survey; and
(c) Lessor will have no duty or liability to make, or arising out
of any such visit, inspection or survey.
8.7 TITLE:
Lessee will:
70
(a) not do or knowingly permit to be done or omit or knowingly
permit to be omitted to be done any act or thing which might
reasonably be expected to jeopardize the title of Owner in and
to the Aircraft or any Engine;
(b) on all occasions when the ownership of the Aircraft, any
Engine or any Part is relevant, make clear to third parties
that title is held by Owner;
(c) not at any time (i) represent or hold out Owner, Lessor,
Beneficiary or the Financing Parties as carrying goods or
passengers on the Aircraft or as being in any way connected or
associated with any operation or carriage (whether for hire or
reward or gratuitously) which may be undertaken by Lessee; or
(ii) pledge the credit of Owner, Lessor, Beneficiary or the
Financing Parties;
(d) ensure that there is always affixed, and not removed or in any
way obscured, a fireproof plate (having dimensions of not less
than 10 cm. x 7 cm.) in a reasonably prominent position on
Aircraft and on each Engine stating: | 1034 |
agreement_26.md | "THIS [AIRCRAFT/ENGINE] IS OWNED BY WELLS FARGO BANK
NORTHWEST, N.A., AS TRUSTEE, AND IS LEASED TO Compania
Panamena de Aviacion, S.A."
(e) not create or permit to exist any Security Interest upon the
Aircraft, any Engine or any Part;
(f) not do or permit to be done anything outside the scope of
normal airline operations and procedures which may reasonably
be expected to cause the Aircraft, any Engine or any Part to
become subject to penalty, forfeiture, impounding, detention,
damage or destruction and without prejudice to the foregoing,
if any such penalty, forfeiture, impounding, detention, damage
or destruction occurs, give Lessor notice thereof as promptly
as reasonably practicable and promptly commence and diligently
prosecute all steps necessary to procure the immediate release
of the Aircraft, any Engine or Part, as the case may be;
(g) not abandon the Aircraft, any Engine or any Part;
(h) pay and discharge or cause to be paid and discharged when due
and payable or make adequate provision by way of security or
otherwise for all debts, damages, claims and liabilities
before they give rise to a Security Interest over or affecting
the Aircraft, any Engine or any Part except to the extent the
same are being contested in good faith by appropriate
proceedings during the pendency of such proceedings and
adequate resources therefor have been provided in accordance
with GAAP; and
71
(i) not attempt, or hold itself out as having any power, to sell,
lease (except as permitted by this Agreement) or otherwise
dispose of the Aircraft, any Engine or any Part.
8.8 GENERAL:
Lessee will: | 1035 |
agreement_26.md | 8.8 GENERAL:
Lessee will:
(a) maintain its business as a commercial airline, will preserve
its corporate existence (other than as permitted in Clause
8.8(c)) and will maintain such of its rights, privileges,
licenses and franchises as are required to perform its
obligations under this Agreement;
(b) not change its "location" (as determined with reference to and
for purposes of Section 9-307 of the UCC) in such manner as
would, pursuant to Section 9-307 of the UCC, change the
location for filing financing statements or renewals thereof
from the District of Columbia, except upon 10 days prior
written notice thereof to Lessor;
(c) not consolidate or merge into or with any other corporation or
other Person, and not convey, transfer, lease or otherwise
dispose of all or substantially all of its property and other
assets to, or acquire all or substantially all of the property
or other assets or capital stock of (if such acquisition is
analogous in either purpose or effect to a consolidation or
merger), any corporation or other Person without the prior
written consent of the Lessor, such consent not to be
unreasonably withheld, unless:
(i) the Person formed by such consolidation or into which
Lessee is merged or the Person that acquires by
conveyance, transfer or lease all or substantially all
of the assets of Lessee (the "Lessee Successor"):
(a) has a tangible net worth (determined in accordance
with GAAP) equal to or greater than that of Lessee
immediately prior to such merger or consolidation; | 1036 |
agreement_26.md | (b) shall execute and deliver to Lessor, Owner and
Beneficiary an agreement in a form reasonably
satisfactory to such Persons containing an
assumption by such Lessee Successor of the due and
punctual performance and observance of each
covenant and condition to be performed or observed
by Lessee under each of the Transaction Documents
to which Lessee is a party, whether actual or
contingent or relating to the period before or
after the date of such assumption; and
72
(c) the Copa Holdings Guarantee shall continue to be
applicable and enforceable in accordance with its
terms;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing;
(iii) Lessee shall have delivered to Lessor, Owner and
Beneficiary (x) a certificate of an officer to the
effect that such consolidation, merger, conveyance,
transfer or lease and the assumption agreement described
in clause (i) above comply with this Clause 8.8(c) and
that all conditions precedent herein provided for
relating to such transaction have been complied with and
that such assumption agreement has been duly authorized,
executed and delivered by the Lessee Successor,
constitutes its legal, valid and binding obligation and
is enforceable against such Lessee Successor in
accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights of creditors generally and by principles of
equity, and (y) an opinion of counsel in form and
substance reasonable satisfactory to Lessor and
Beneficiary; and
(iv) Such filings and recordings shall have been made and
Lessee shall have delivered to Lessor such other
opinions and documents, in each case as either of them
shall reasonably request. | 1037 |
agreement_26.md | Upon any consolidation or merger, or any conveyance, transfer
or lease of all or substantially all of the assets of Lessee
in accordance with this Clause 8.8(c), the Lessee Successor
shall succeed to, be substituted for, and may exercise every
right and power of, and shall assume every obligation and
liability of, Lessee under this Lease with the same effect as
if the Lessee Successor had been named as Lessee herein. No
such conveyance, transfer or lease of all or substantially all
of the assets of Lessee shall have the effect of releasing
Lessee or any Lessee Successor which shall theretofore have
become such in the manner prescribed in this Clause 8.8(c)
from any liability under the Transaction Documents. Nothing
contained herein shall permit any lease, sublease or other
arrangement for the use, operation or possession of the
Aircraft except in compliance with the applicable provisions
of this Lease.
(d) the obligation of Lessee to pay in U.S. Dollars outside The
Republic of Panama is of the essence to Lessor. If for any
reason any exchange control or other legal prohibition or
restriction shall be imposed by The Republic of Panama with
respect to the payment in U.S. Dollars outside The Republic of
Panama, Lessee shall forthwith obtain any permit,
authorization, waiver or exemption as may be necessary to
permit the free
73 | 1038 |
agreement_26.md | 73
transfer of such U.S. Dollars to designated places outside The
Republic of Panama or obtain all necessary waivers and
exemptions therefrom, and if Lessee shall for any reason,
because of legal restrictions or otherwise, be unable to
obtain such permit, authorization, waiver or exemption, it
shall forthwith make all necessary and satisfactory
arrangements with reputable banking or other financing
institutions to provide satisfactory assurance to Lessor that
all of Lessee's obligations hereunder will be satisfied as
they arise in the manner contemplated by this Lease.
8.9 NON-DISCRIMINATION:
Without limiting any other provision of this Agreement, Lessee will
cause the Aircraft and the Engines to be maintained and used, in
substantially the same manner and with substantially the same care
as used by or on behalf of Lessee with respect to similar aircraft
and engines of like make, model and vintage operated by Lessee.
Lessee also agrees that it will not, nor will it permit anyone to,
discriminate in a manner in any way adverse to the interests of
Lessor, Owner or any Financing Party in the Aircraft (as compared to
other aircraft of the same type operated by or on behalf of Lessee)
with respect to its use, operation or maintenance, modification or
alteration during the Lease Term other than the withdrawal of the
Aircraft from use and operation as is necessary to prepare the
Aircraft for return to Lessor upon such expiration, cancellation or
termination.
8.10 RECORDS:
Lessee will: | 1039 |
agreement_26.md | 8.10 RECORDS:
Lessee will:
(a) procure that accurate, complete and current records of all
flights made by, and all maintenance carried out on, the
Aircraft (including in relation to each Engine and Part
subsequently installed, before the installation) are kept in
English and in such manner as the Air Authority may from time
to time require (including, but not limited to the
requirements of FAR 91.417, FAR 121.380 and the requirements
of the Approved Maintenance Program). The maintenance records
will form part of the Aircraft Documents;
(b) procure access (in house or through third parties) to a
revision service in respect of, and will maintain with
appropriate revisions in English and in accordance with FAR
91.417 and FAR 121.380, all technical publications required by
applicable laws and sound practice of major international air
transport operators in respect of the Aircraft; and
(c) retain the Aircraft Documents and other materials at Lessee's
principal place of business, and subject to applicable law,
regulation and legal process not permit any other person to
have possession of or control over the same without Lessor's
prior written consent, except for an Approved
74
Maintenance Provider while completing maintenance, testing,
repair, modification or other services in respect of the
Aircraft or any Engine or Part.
8.11 PROTECTION:
Lessee will:
(a) take all actions reasonably requested by Lessor that are
within Lessee's control to keep the Aircraft registered with
the Air Authority in the name of Owner; | 1040 |
agreement_26.md | (b) make any and all filings required to be made with the Air
Authority registry that are within its control and take all
other actions within its control that are requested by Lessor
and necessary or advisable to reflect on the Air Authority
registry any change in the ownership of the Aircraft, or in
the interests of Lessor, Owner or the Financing Parties in
this Agreement or the Aircraft, any modification to the
Aircraft (such as the permanent replacement of any Engine or
Part in accordance with this Agreement) or as a result of any
change in applicable law. Lessor will bear any costs incurred
as a consequence of a transfer by Lessor, Owner or the
Financing Parties of the interests of Lessor, Owner or the
Financing Parties in this Agreement or the Aircraft or a
change in the identity of Lessor, Owner or the Financing
Parties (in each case, unrelated to the replacement of any
Engine or Part by Lessee or a Default), and Lessee will bear
any other costs incurred in complying with this Clause,
including in connection with the replacement of any Engine or
Part by Lessee in accordance herewith; and
(c) do all acts and things (including, without limitation, making
any filing or registration with the Air Authority or any other
Government Entity or as required to comply with the Geneva
Convention where applicable) and execute and deliver all
documents (including, without limitation, any amendment of
this Agreement) as may from time to time be required by
Lessor:
(i) following any change in the ownership or financing of
the Aircraft which is permitted pursuant to Clause 14 or
in the manner of securing Lessor's obligations to the
Financing Parties, in each case at the cost of Lessor;
or | 1041 |
agreement_26.md | (ii) following any modification of the Aircraft, any Engine
or any Part or the permanent replacement of any Engine
or Part in accordance with this Agreement, so as to
ensure that the rights of Lessor as owner of the
Aircraft and under this Agreement apply with the same
effect as before; or
75
(iii) to establish, maintain, preserve, perfect and protect
the rights of Lessor under this Agreement or in the
Aircraft and, at the cost of Lessor, the rights of any
Financing Party, in particular (without limitation), if
in the Country of Registration there shall be, or shall
be brought into force, any legislative or other
provisions giving effect to the Geneva Convention or
otherwise relating to recognition of rights in aircraft,
Lessee shall at its own cost forthwith do all such acts
as may be necessary to perfect recognition of Lessor's
title to and interest in the Aircraft and, at the cost
of Lessor, the rights of any Financing party as
mortgagee and/or assignee in accordance with such
legislative or other provisions.
If the Country of Incorporation has, or at any time brings
into force, any legislative or other provisions giving effect
to the Convention on International Interests in Mobile
Equipment (the "Convention") and/or the Protocol to the
Convention on International Interests in Mobile Equipment on
Matters Specific to Aircraft Equipment (the "Protocol"),
Lessee at its own cost and expense shall from time to time, do
or cause to be done any and all acts and things which may be
required or desirable (in the reasonable opinion of Lessor) to
ensure that Lessor and, at the cost of Lessor, any Financing
Party have the full benefit of the Convention and/or the
Protocol in connection with the Aircraft and any Engine,
including (but not limited to): | 1042 |
agreement_26.md | (A) any matters connected with registering, perfecting,
preserving and/or enhancing any international
interest(s) vested in Lessor with respect to the
Aircraft and/or any Engine and constituted by this
Agreement;
(B) entry in to agreements (subordination or otherwise) to
protect and/or enhance and/or improve the priority of
any international interest(s) referred to in the
foregoing paragraph (A); and
(C) excluding in writing the application of any provisions
of the Convention and/or Protocol that Lessor may deem
desirable in connection with the foregoing.
In this sub clause the following terms have the following meanings:
INTERNATIONAL INTEREST has the meaning as expressed in the
Convention and Protocol;
STATE has the meaning as expressed in the Convention and Protocol;
and
76
STATE IN WHICH LESSEE IS SITUATED IN shall be constructed in
accordance with the expression "state in which the debtor is
situated in" as set out in Article 4 of the Convention.
(d) if at any time subsequent to the initial registration of the
Aircraft and the initial filing of Uniform Commercial Code
financing statements, any other filing or any recording or
other act becomes necessary to perfect, protect and preserve
the rights and interests of Lessor hereunder and in the
Aircraft and the Security Deposit, including without
limitation the filing of continuation statements with respect
to filed Uniform Commercial Code financing statements, at its
cost and expense, procure that such filings, recordings and
acts are done pursuant to applicable law. Lessee agrees that
Lessor is hereby authorized to make any filings or recordings
referred to in this paragraph;
(e) not to revoke the Lessee Power of Attorney; and
(f) to cause the following: | 1043 |
agreement_26.md | (e) not to revoke the Lessee Power of Attorney; and
(f) to cause the following:
(i) the filing of a Spanish language Public Deed with
respect to the Bill of Sale, the Trust Agreement, this
Agreement and Lease Supplement No. 1 at the Public
Registry of Panama within 48 hours after the date and
time of Delivery;
(ii) the obtaining of a temporary `certificado de matricula'
from the National Aeronautic Registry of the Civil
Aviation Authority of Panama with respect to the
Aircraft at or before Delivery;
(iii) the obtaining of a permanent `certificado de matricula'
from the National Aeronautic Registry of the Civil
Aviation Authority of Panama promptly, and in any event
within 45 days after Delivery; and
(iv) promptly and in due course after Delivery, a Public
Registry Certificate confirming registration of the
Public Deed referred to in the preceding clause (i).
8.12 MAINTENANCE AND REPAIR:
Lessee will, at its own expense:
(a) keep the Aircraft airworthy (except during any period during
which the Aircraft is undergoing maintenance, repair or
modification as required or permitted hereunder) in all
respects and in good repair and condition;
(b) not change the Approved Maintenance Program without all
necessary approvals from the Air Authority; provided, however,
that if any such
77 | 1044 |
agreement_26.md | (b) not change the Approved Maintenance Program without all
necessary approvals from the Air Authority; provided, however,
that if any such
77
change adversely affects the interests of Lessor with respect
to the maintenance status of the Aircraft (or payments in
respect of such status) required pursuant to the provisions of
Clause 12 and Schedule 3 of this Agreement, then the
requirements of such provisions shall be deemed adjusted so
that the maintenance condition of the Aircraft at redelivery
required thereby is not diminished, and the payments to or by
Lessor are not adversely changed from the maintenance
condition and payments that would have been required in the
absence of such change to the Approved Maintenance Program;
(c) provide Lessor with a summary of, access to and information
regarding substantial changes to the Approved Maintenance
Program;
(d) maintain the Aircraft in accordance with the Approved
Maintenance Program through an Agreed Maintenance Performer;
(e) maintain the Aircraft in accordance with the rules and
regulations of the Air Authority applicable to the Aircraft;
(f) comply (or cause compliance) with all Mandatory Orders and
Airworthiness Directives and similar mandatory requirements
applicable to the Aircraft, any Engine or Part having a
compliance date during the Term or existing as of the Final
Expiry Date and having a compliance date within 180 days after
the Final Expiry Date and which are required by the Air
Authority or the FAA (provided that in relation to
Airworthiness Directives Lessor and Lessee agree to the cost
sharing formula set out in Schedule 11); | 1045 |
agreement_26.md | (g) comply (or cause compliance) with all applicable laws and the
regulations of the Air Authority and other aviation
authorities with jurisdiction over Lessee or the Aircraft, any
Engine or Part regardless of upon whom such requirements are
imposed and which relate to the maintenance, condition, use or
operation of the Aircraft or require any modification or
alteration to the Aircraft, any Engine or Part; and
(h) maintain in good standing a current certificate of
airworthiness (in the appropriate category for the nature of
the operations of the Aircraft) for the Aircraft issued by the
Air Authority except where (i) the Aircraft is undergoing
maintenance, modification or repair required or permitted by
this Agreement; or (ii) the Air Authority shall have withdrawn
or suspended such certificate in respect of all aircraft of
the same model or period of manufacture as the Aircraft (in
which case Lessee shall comply with all directions of the Air
Authority in connection with such withdrawal or suspension).
Lessee will from time to time provide to Lessor a copy of the
certificate of airworthiness promptly after receipt of a
written request.
78
8.13 PERMANENT REPLACEMENT OF ENGINES AND PARTS:
(a) Subject to Clauses 8.14 and 8.16, Lessee shall promptly
procure the replacement of any Engine (an "Original Engine")
which has suffered an Engine Event of Loss, and Lessee may
procure the replacement of any Engine (an "Original Engine")
in order to comply with the requirements of the Return
Conditions, in each case with an engine complying with the
following conditions: | 1046 |
agreement_26.md | (i) it is of the same manufacturer and model (or, at
Lessee's option, an improved model), it is suitable for
installation and use on the Airframe without impairing
the value or utility of the Airframe and it is
compatible with the remaining installed Engine, it has
equivalent interchangeable modification status,
equivalent or lower flight hours elapsed and cycles
elapsed since Life Limited Parts replacement and since
last Engine Performance Restoration, equivalent
remaining warranty status as the Original Engine and
equivalent or greater value and utility as the Original
Engine; at the time of the engine replacement Lessor or
Lessee, as applicable, shall adjust the Engine
Supplemental Rent to reflect the maintenance utility of
the replacement engine;
(ii) it has become and remains the property of Lessor free
from Security Interests (except Permitted Liens) and on
installation on the Aircraft will without further act be
subject to this Agreement; and Lessee shall supply to
Lessor with an officer's certificate demonstrating full
compliance with this Clause 8.13(a); and
(iii) Lessee has full details of its source and maintenance
records with back to birth traceability on all Life
Limited Parts. | 1047 |
agreement_26.md | (iii) Lessee has full details of its source and maintenance
records with back to birth traceability on all Life
Limited Parts.
Such replacement Engine shall be deemed an "Engine" as defined
herein for all purposes hereunder. Lessee agrees to promptly
notify Lessor of any such substitution, and provide Lessor
with an officer's certificate confirming full compliance with
this Clause 11.1(e). Lessee agrees to take such action and
execute such documents, including a warranty bill of sale, as
Lessor may reasonably request in order that any such
replacement Engine shall be duly and properly titled in the
name of Owner and leased by Lessor hereunder to the same
extent as the Engine thereby. Lessor shall take such action
and shall execute such documents, and shall cause Owner to
take such action and execute such documents, as are reasonably
necessary to convey title to the Engine replaced pursuant to
the preceding sentence to Lessee. Such conveyance shall be
free of and warranted as against Lessor Liens, but otherwise
without representation or warranty, express or implied.
79
(b) Subject to Clause 8.16 hereof, Lessee shall promptly procure
the replacement of any Part which has become time-, cycle- or
calendar-expired, lost, stolen, seized, confiscated,
destroyed, damaged beyond repair, unserviceable or permanently
rendered unfit for use, with a part complying with the
following conditions:
(i) it is of the same manufacturer and model (or, at
Lessee's option, an improved model), it is in as good
operating condition as the replaced Part, it has
equivalent interchangeable modification status and
equivalent or more hours available until the next
scheduled check, inspection, overhaul and shop visit as
the replaced Part and it is of an equivalent or greater
value and utility as the replaced Part; | 1048 |
agreement_26.md | (ii) it has become and remains the property of Lessor free
from Security Interests (except Permitted Liens) and on
installation on the Aircraft will without further act be
subject to this Agreement; and Lessee shall supply to
Lessor all such title documents as Lessor may require in
good faith to evidence and perfect the same; and
(iii) Lessee has full details of its source and maintenance
records with back to birth traceability as to Life
Limited Parts.
(c) Any Part so replaced, upon satisfaction of the requirements
set forth above, shall become the property of Lessee free and
clear of Lessor Liens.
8.14 REMOVAL AND INTERCHANGE OF ENGINES:
Lessee will:
(a) ensure that no Engine is removed from the Airframe unless it
is promptly replaced as expressly permitted by this Agreement;
(b) ensure that any Engine which is not installed on the Aircraft,
or an aircraft permitted by paragraph (d) below is, except as
expressly permitted by this Agreement, properly and safely
stored (unless installed on another airframe operated by
Lessee as permitted hereunder) and insured, and kept free from
Security Interests (other than Permitted Liens), and either
(i) has been inducted into a repair shop and is undergoing
repair or (ii) unserviceable awaiting repair shop visit for no
longer than 45 days; and
(c) be permitted, if no Event of Default has occurred and is
continuing, to install any Engine on an aircraft operated by
Lessee (or, any permitted sub-lessee), provided that neither
(i) the provisions of any applicable law nor (ii) the terms of
any lease or other agreement or Security Interest to which
such aircraft or engine is subject, prohibit such installation
or will
80 | 1049 |
agreement_26.md | 80
have the effect at any time of divesting or impairing the
title and interests of Lessor as owner and any Financing Party
as mortgagee of such Engine.
Lessee shall obtain from the lessor of any airframe on which an
Engine is installed and from any holder of a Security Interest in
any airframe on which an Engine is installed, an agreement (which
may be in the form of a relevant clause in any lease agreement,
mortgage, security agreement or similar agreement in respect of such
airframe) in writing for the benefit of the Lessor (or directly with
the Lessor) that such Person will respect the interests of Lessor as
owner and lessor, respectively, and of the Financing Parties, in
such Engine and will not acquire or claim any right, title or
interest in such Engine as a result of such Engine being installed
on such other airframe at any time while such Engine is subject to
this Agreement. Provided Lessee shall have received from a lessor of
or secured party holding a Security Interest in any airframe leased
to Lessee or owned by Lessee and subject to a Security Interest
under such an agreement, Lessor hereby agrees for the benefit of
such lessor or secured party that Lessor will not acquire or claim
as against such lessor or secured party, any rights, title or
interest in any engine covered by such lease or Security Interest as
a result of any such engine being installed on the Airframe at any
time while such engine is subject to such lease or Security
Interest.
8.15 REMOVAL AND INTERCHANGE OF PARTS:
Lessee will, subject to Clause 8.16:
(a) ensure that no Part is at any time removed from the Aircraft
unless it is promptly replaced by a part complying with Clause
8.13(b); | 1050 |
agreement_26.md | (b) ensure that any Part which is not installed on the Aircraft
(or any other aircraft as expressly permitted by this
Agreement) is properly and safely stored and insured, and kept
free from Security Interests (other than Permitted Liens); and
(c) be permitted, if no Event of Default has occurred and is
continuing, to install any Part on an aircraft operated by
Lessee (or any permitted sub-lessee), provided that Clause
8.14(d) would be complied with in respect of such Part if it
were an Engine.
8.16 TEMPORARY INSTALLATION OF ENGINES AND PARTS:
Notwithstanding the provisions of Clause 8.13 and Clause 8.15,
Lessee will be permitted, if no Event of Default has occurred and is
continuing, to install, or permit the installation of, any engine or
part on the Aircraft by way of replacement if:
(a) there is not available to Lessee or, where there is a
permitted sublease in place, the sub-lessee thereunder, at the
time and in the place that engine or
81
part is required to be installed on the Aircraft, a
replacement engine or, as the case may be, part complying with
the requirements of Clause 8.13 above;
(b) it would result in a disruption of the operation of the
Aircraft and/or the business of Lessee or, where there is a
permitted sublease in place, the sub-lessee thereunder, to
ground the Aircraft until an engine or part, as the case may
be, complying with the requirements of Clause 8.13 above
becomes available for installation on the Aircraft; and | 1051 |
agreement_26.md | (c) as soon as practicable after installation of the same on the
Aircraft but, in any event, no later than the earlier of (i)
the next Major Check or Engine Shop Visit (as applicable) or
(ii) the Final Expiry Date, Lessee or, where there is a
permitted sublease in place, the sub-lessee thereunder,
removes any such engine or part and replaces it with the
Engine or Part replaced by it or by an engine or part, as the
case may be, complying with Clause 8.13 above.
8.17 POOLING OF ENGINES AND PARTS:
Without prejudice to its rights pursuant to Clauses 8.14(d) and
8.15(c), Lessee shall not without the prior written consent of
Lessor, which consent shall not be unreasonably withheld or delayed,
permit or enter into any agreement or arrangement for the pooling or
interchange of any Engine or Part with any other Person.
8.18 EQUIPMENT CHANGES:
(a) Lessee shall not make any modification or addition to the
Aircraft (each an "Equipment Change"), except for an Equipment
Change which:
(i) is completed in connection with the post-Delivery
installation of the In-flight
Entertainment/Communications System (IFE) or the
Winglets; or
(ii) is expressly permitted by this Agreement; or
(iii) does not diminish the value, utility, condition, or
airworthiness of the Aircraft and either (aa)
constitutes a modification to the class configuration or
passenger seating in the cabin, or (bb) has a cost of
less than US$250,000, or (cc) has the prior written
approval of Lessor which approval shall not be
unreasonably withheld or delayed; or | 1052 |
agreement_26.md | (iv) arises due to the requirements of the Air Authority
and/or the FAA or otherwise constitutes an obligation of
Lessee under this Agreement.
82
(b) So long as no Default or Event of Default has occurred and is
continuing, Lessee may remove any Equipment Change to the
extent it is severable from the Aircraft and (i) such
Equipment Change is not required by the Air Authority and/or
the FAA and (ii) such severance will not adversely affect the
value, utility, condition or airworthiness of the Aircraft as
compared to value, utility, condition or airworthiness of the
Aircraft immediately prior to such severance, assuming the
Aircraft was of the value and utility and in the condition and
repair required by the terms of this Agreement; and | 1053 |
agreement_26.md | (c) Title to Equipment Change, whether or not the removal of which
is permitted pursuant to Clause 8.18(b), will on installation
and until such permitted removal, without further act, vest in
Lessor subject to this Agreement free and clear of all
Security Interests (other than Permitted Liens). Lessee will
at its own expense take all such steps and execute, and
procure the execution of, all such instruments as Lessor may
require and which are necessary to ensure that title so passes
to Lessor according to all applicable laws. At any time when
requested by Lessor, Lessee will provide evidence to Lessor's
satisfaction (including the provision, if required, to Lessor
of bills of sale and legal opinions) that title has so passed
to Lessor. Upon any permitted removal thereof, Lessor will, at
Lessee's cost and upon Lessee's request, provide Lessee with
such documents as Lessee shall reasonably request to cause
title to such modifications to vest in Lessee free and clear
of Lessor Liens but otherwise without representation or
warranty, express or implied.
8.19 THIRD PARTY:
All the obligations of Lessee under this Agreement shall continue in
full force and effect notwithstanding any parting with possession of
the Aircraft by Lessee (other than redelivery of the Aircraft by
Lessee to Lessor pursuant to Clause 12).
9. INSURANCE
9.1 INSURANCES: | 1054 |
agreement_26.md | 9. INSURANCE
9.1 INSURANCES:
(a) Lessee shall, at its own expense, maintain in full force
during the Lease Period insurances in respect of the Aircraft
in terms, amounts, form and substance customarily maintained
by similar carriers operating similar aircraft in similar
circumstances otherwise satisfactory to Lessor (acting
reasonably) complying with the requirements of this Clause 9
and Schedule 4 (the "Insurances", which expression includes,
where the context so admits, any relevant re-insurance(s));
(b) The Insurances shall be effected through such brokers and with
such insurers (in each case which are properly licensed and
are operating in
83
accordance with Panamanian law), and shall be subject to such
deductibles and subject to such exclusions, as may (in each
case) be indicated in Schedule 4 or otherwise satisfactory to
Lessor; and
(c) The Insurances shall be effected either:
(i) on a direct basis with insurers of recognized standing
who normally participate in aviation insurances in the
leading international insurance markets and led by
reputable underwriter(s) satisfactory to Lessor, acting
reasonably (and for such purposes Lessee's current lead
underwriter is deemed to be satisfactory to Lessor); or
(ii) with a single insurer or group of insurers approved by
Lessor who does not fully retain the risk but effects
substantial reinsurance with reinsurers in the leading
international insurance markets and through brokers each
of recognized standing and acceptable to Lessor for a
percentage acceptable to Lessor (acting reasonably) of
all risks insured (and for such purposes Lessee's
current lead underwriter is deemed to be acceptable to
Lessor).
9.2 REQUIREMENTS | 1055 |
agreement_26.md | 9.2 REQUIREMENTS
Lessor's current requirements as to the Insurances are as specified
in this Clause and in Schedule 4. Lessor may from time to time and
in good faith stipulate other requirements for the Insurances so
that (a) the scope and level of cover are maintained in line with
best industry practice of similar carriers operating similar
aircraft in similar circumstances, and (b) the interests of Lessor
and the other Indemnitees continue to be prudently protected,
provided that other requirements shall not reduce the maximum
deductibles, nor raise the minimum war and allied perils liabilities
amount, unless Lessee shall have raised the same on a fleet wide
basis..
9.3 STANDARDS
Lessee shall be obligated to maintain insurance in respect of the
Aircraft for the purposes of this Agreement which reflects Lloyds'
endorsement AVN67B (as at the date hereof) or the equivalent
thereof. In the event that any provision of AVN67B (as at the date
hereof) conflicts or is otherwise inconsistent with the requirements
of this Clause 9 and Schedule 4 then (so long as it shall be general
industry practice to insure aircraft financed or leased on the basis
of such endorsement) the provisions of AVN67B shall prevail and such
endorsement shall be deemed to satisfy the requirements of this
Agreement.
9.4 CHANGE
84 | 1056 |
agreement_26.md | 9.4 CHANGE
84
If at any time Lessor, following a change in circumstances and
acting reasonably, decides to revoke its approval of any insurer or
reinsurer, Lessor and/or its brokers shall consult with Lessee and
Lessee's insurers or, if applicable, brokers regarding whether that
approval should be revoked to protect the interests of the parties
insured. If, following the consultation, Lessor considers that any
change should be made, Lessee shall then, as promptly as reasonably
practicable, arrange or procure the arrangement of alternative cover
satisfactory to Lessor, provided such change is approved by each
other Lessor or secured lender on aircraft in Lessee's fleet
affected by such change and does not otherwise make compliance by
Lessee with the insurance requirements set forth in this Clause 9 or
in Schedule 4 hereto impossible or not practicable.
9.5 INSURANCE COVENANTS
Lessee shall:
(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 Country of Registration or any
state, 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 Indemnitees in the Insurances and
the Aircraft or any Part are not thereby prejudiced;
(b) comply with the terms and conditions of each policy of the
Insurances and not do, consent or agree to any act or omission
which: | 1057 |
agreement_26.md | (i) invalidates or may be reasonably expected to invalidate
the Insurances; or
(ii) renders or may be reasonably expected to render void or
voidable the whole or any part of any of the Insurances;
or
(iii) brings any particular insured liability within the scope
of an exclusion or exception to the Insurances;
(c) not without the prior written approval of Lessor take out any
additional insurance or reinsurance in respect of the Aircraft
which would prejudice the rights of Lessor or any additional
insured in respect of the policies required to be maintained
by Lessee hereunder, unless relating solely to
85
liability insurances, hull total loss, business interruption,
profit commission and deductible risk;
(d) on request, provide to Lessor evidence that the Insurance
premiums have been paid;
(e) not make any modification or alteration to the Insurances
material and adverse to the interests of any of the
Indemnitees;
(f) be responsible for any deductible under the Insurances;
(g) if at any time insurance clause AVN 2000 or its successor is
endorsed on the policies of Insurance, ensure that the
insurance write back clauses AVN 2001 and AVN 2002 as
applicable (or any equivalent clauses) are endorsed on the
policies of Insurance required to be maintained under this
Agreement and give and comply with all representations,
warranties and undertakings required by the insurers or
reinsurers in connection with such clauses; and
(h) provide any other material information and assistance in
respect of the Insurances which Lessor may from time to time
reasonably request for substantial reasons.
9.6 RENEWAL OF INSURANCES
Lessee shall commence renewal procedures in a timely manner prior to
expiry of any of the Insurances, and provide to Lessor: | 1058 |
agreement_26.md | Lessee shall commence renewal procedures in a timely manner prior to
expiry of any of the Insurances, and provide to Lessor:
(a) upon the request of Lessor, a written status report of renewal
negotiations 10 days prior to each expiry date;
(b) confirmation of completion of renewal prior to each expiry
date; and
(c) certificates of insurance (and where appropriate certificates
of reinsurance), and a broker's letter of undertaking in a
form acceptable to Lessor in English, detailing the coverage
and confirming the insurers' (and any reinsurers') agreement
to the specified insurance requirements of this Agreement
within seven days after each renewal date (and, in the case of
the reinsurance certificate and reinsurance broker's letter of
undertaking, within 14 days after each renewal date).
9.7 FAILURE TO INSURE
If Lessee fails to maintain the Insurances in compliance with this
Agreement, Lessee shall:
86
(a) forthwith ground or cause to be grounded the Aircraft and
shall keep or procure that the Aircraft be kept grounded until
such time as the Insurances shall again be in full force and
effect; and
(b) immediately notify Lessor of the non-compliance of the
Insurances and provide Lessor with full details of any steps
which Lessee is taking or proposes to take, in order to remedy
such non-compliance;
and each of the Indemnitees will be entitled but not bound (without
prejudice to any other rights of Lessor under this Agreement): | 1059 |
agreement_26.md | and each of the Indemnitees will be entitled but not bound (without
prejudice to any other rights of Lessor under this Agreement):
(i) to pay the premiums due or to effect and maintain
insurances required hereunder but not maintained in
accordance herewith or otherwise remedy Lessee's failure
in such manner (including, without limitation to effect
and maintain an "owner's interest" policy) as Lessor
acting in good faith considers appropriate. Any sums so
expended by Lessor will become immediately due and
payable by Lessee to Lessor together with interest
thereon at the Default Rate, from the date of
expenditure by Lessor up to the date of reimbursement by
Lessee; and
(ii) at any time while such failure is continuing to require
the Aircraft to remain at any airport or to proceed to
and remain at any airport designated by it until the
failure is remedied.
9.8 CONTINUING INSURANCE FOR INDEMNITY
Lessor may require Lessee to effect and to maintain (at no cost to
Lessor) liability insurance after the Final Expiry Date with respect
to its liability under the indemnities in Clause 10 for such period
as Lessor may reasonably require (but in any event for not more than
two years following the Final Expiry Date or until completion of the
next C Check (or equivalent check) with respect to the Aircraft
(whichever is the earlier to occur)) which provides for each
Indemnitee to be named as additional insured. Lessee's obligation in
this Clause shall not be affected by Lessee ceasing to be lessee of
the Aircraft and/or any of the Indemnitees ceasing to have any
interest in respect of the Aircraft.
10. INDEMNITY
10.1 GENERAL: | 1060 |
agreement_26.md | 10. INDEMNITY
10.1 GENERAL:
Lessee agrees to defend, indemnify and hold harmless the
Indemnitees, on demand and on an After-Tax Basis, from and against
any and all Losses (regardless of when the same is made or incurred,
whether before, during or after the Term):
87
(a) which may at any time be imposed, incurred, suffered or
asserted, directly or indirectly as a result of or connected
with the possession, delivery, performance, management,
ownership or possession, registration, control, maintenance,
condition, service, repair, overhaul, leasing, use, operation,
modification, insurance, inspection, testing, design,
sublease, condition or return of, or other matters relating
to, the Aircraft, any Engine or Part (either in the air or on
the ground) whether or not such Losses may be attributable to
any defect in the Aircraft, any Engine or any Part, whether or
not discoverable, or to its design, testing or use or
otherwise, and regardless of when the same arises or whether
it arises out of or is attributable to any act or omission,
negligent or otherwise, of any Indemnitee or to strict
liability; or
(b) which without duplication of recovery arise out of any act or
omission which invalidates or which renders voidable any of
the Insurances; or
(c) which without duplication of recovery may at any time be
suffered or incurred as a consequence of (i) any design,
article or material in the Aircraft, any Engine or any Part,
including any defect in design and regardless of whether it is
discoverable; or (ii) its operation or use during the Term
hereof constituting an infringement of patent, copyright,
trademark, design or other proprietary right; or | 1061 |
agreement_26.md | (d) which may at any time be suffered or incurred, directly or
indirectly, as a result of any breach by Lessee of any of its
obligations under this Agreement.
but excluding any Losses in relation to a particular Indemnitee to
the extent that such Losses:
(i) are covered pursuant to any other indemnity provision of
this Agreement or in respect of which Lessor has agreed
to not seek reimbursement from Lessee pursuant to an
express provision of this Agreement; or
(ii) arise as a result of the gross negligence (other than
gross negligence imputed to that Indemnitee by reason of
its interest in the Aircraft or this Agreement), willful
misconduct of that Indemnitee or any Indemnitee or
breach of any representation, warranty or obligation
hereunder or under any other Transaction Document; or
(iii) consists of Taxes (but without prejudice to any
Indemnitee's rights under any other provision of this
Agreement relating to Taxes); or
(iv) arise as a result of a Lessor Lien; or
88
(v) represents or constitutes ordinary and usual operation
or overhead expenses of such Indemnitee, except to the
extent that the same arise on the occurrence of an Event
of Default; or
(vi) is attributable to an event or circumstances which occur
after the Final Expiry Date unless such Loss results
from, or arises out of, any act, omission or
circumstance existing during the Term; or | 1062 |
agreement_26.md | (vii) are attributable to the sale, assignment or other
transfer (voluntary or involuntary) of all or part of
any Indemnitee's interest in or to the Aircraft, any
Engine or Part, this Agreement or any Transaction
Document other than a sale, assignment or other transfer
required by the terms of a Transaction Document, arising
as a result of or otherwise in connection with an Event
of Default or an Event of Loss or if requested by, or
consented to, by Lessee; or
(viii) are costs or expenses of entering into amendments to
this Agreement and/or other Transaction Documents not
required by the terms of a Transaction Document, and not
requested by, or consented to, by Lessee.
10.2 NOTIFICATION:
Lessor shall promptly notify Lessee in writing of any matter for
which Lessee is obligated to indemnify under this Clause 10 (each a
"Claim"); provided, however, the delay or failure of Lessor to give
notice to Lessee in accordance with this Clause 10.2 will not
discharge or release Lessee from any of its indemnity obligations
under Clause 10.1 except, and only to the extent, that such delay or
failure was attributable to circumstances which were, given
reasonable diligence, impractical or impossible for Lessor to avoid
and results in a material increase in the amount which Lessee is
required to indemnify, materially prejudices or precludes Lessee's
right to defend any such Claim or results in material, additional
obligations for Lessee in defending against any suit or proceeding
relating to such matter.
10.3 CONTEST: | 1063 |
agreement_26.md | 10.3 CONTEST:
Lessor and Lessee will consult with one another to consider what
action may properly be taken to defend or otherwise resist or
mitigate any Claim. Provided no Default or Event of Default shall
have occurred and be continuing, Lessee shall, following such
consultation, have the right to assume and conduct promptly and
diligently the defense of the relevant Indemnitee with respect to
such Claim, and no Claim will be settled by an Indemnitee without
the prior written consent of Lessee (not to be unreasonably withheld
or delayed), provided that:
(a) Lessee shall have consulted, and shall continue to consult,
with Lessor as to the defense and conduct thereof;
89
(b) Lessee shall have made, and continue to make, adequate
provision or reserve with respect to such Claim and any
associated costs and expenses (in accordance with GAAP) and
shall have fully indemnified or agreed to indemnify the
Indemnitees for all costs, liabilities, expenses or damages on
an After Tax Basis arising as a result of such Claim or its
defense by Lessee of such Indemnitee pursuant to this Clause;
provided, however, that Lessee shall not be bound by such an
agreement to indemnify to the extent that it is established
that, in accordance with the terms of this Clause 10, that
Lessee is not liable to such Indemnitees in respect of such
Claim. | 1064 |
agreement_26.md | (c) without prejudice to Lessee's continued right to contest any
Claim, no Indemnitee shall be prevented by this Clause 10.3
from settling or paying any Claim immediately if such
Indemnitee is required by applicable law to do so but such
Indemnitee shall pay over to Lessee any amount paid by Lessee
by way of indemnity in respect of such settlement or payment
which is later refunded to such Indemnitee if (i) Lessee
agrees that it was liable for such claim under this Clause 10
and (ii) Lessee establishes that it would have been successful
in respect of such contest and (iii) no Default has occurred
and is continuing, and if a Default shall have occurred and be
continuing the same shall be retained by Lessor until such
Default (and any other Default) shall have been cured then
promptly paid to Lessee to the extent not applied in
satisfaction of Lessee's obligations in respect of any
Default; and
Lessor shall be entitled, upon consultation with and prior written
notice to Lessee, to terminate Lessee's participation in the defense
of a Claim where an act or omission of Lessee indicates that the
interests of any Indemnitee have a reasonable likelihood of being
materially adversely prejudiced by Lessee's continued participation
in the defense of such Claim.
10.4 SUBROGRATION:
Upon payment in full to an Indemnitee of any demand for
indemnification under this Agreement, Lessee will be subrogated to
any rights and remedies of such Indemnitee in respect of the Loss in
respect of which such payment has been made (a "Subrogated Claim")
and without warranty as to the enforceability of such rights, and
subject to the following provisions: | 1065 |
agreement_26.md | (a) such Indemnitee shall, at the sole cost and expense of Lessee,
assist Lessee in any manner reasonably requested by Lessee for
the purpose of enforcing and obtaining the rights and benefits
intended to be conferred by this Clause 10.4 upon Lessee;
90
(b) Lessee shall keep Lessor fully informed of any Subrogated
Claim by Lessee, shall consult with Lessor regarding the
conduct of such Subrogated Claim; and
Unless doing so would materially prejudice Lessee's ability to
recover on such Subrogated Claim, Lessee shall pursue any Subrogated
Claim in its own name, as subrogee to the rights thereto.
10.5 DURATION:
The indemnities contained in this Agreement will continue in full
force after the Final Expiry Date.
11. EVENTS OF LOSS
11.1 EVENTS OF LOSS
(a) PRE-DELIVERY: If an Event of Loss occurs prior to delivery of
the Aircraft to Lessee, this Agreement will immediately
terminate and except as expressly stated in this Agreement
neither party will have any further obligation or liability
under this Agreement other than pursuant to Clause 15.8,
except that Lessor will refund to Lessee the amount of any
Security Deposit and any other amounts paid by or on behalf of
Lessee under this Agreement; and | 1066 |
agreement_26.md | (b) POST-DELIVERY: If an Event of Loss occurs after delivery of
the Aircraft to Lessee, Lessee will pay the Agreed Value to
Lessor on or prior to the earlier of (i) ninety (90) days
after the Event of Loss; and (ii) the date of receipt of the
insurance proceeds in respect of that Event of Loss. Subject
to the rights of any insurers and reinsurers or other third
party, upon irrevocable payment in full to Lessor of that
amount and all other amounts which are then due and owing to
Lessor under this Agreement, Lessor will without recourse or
warranty (except as to the absence of Lessor Liens) procure
that Owner shall transfer to Lessee all right, title and
interest in and to the Aircraft, all on an as is, where is,
basis, and will at Lessee's expense, execute and deliver such
bills of sale and other documents and instruments as Lessee
may reasonably request to evidence (on the public record or
otherwise) the transfer and the vesting of Owner's rights in
the Aircraft in Lessee, free and clear of (x) all rights of
Owner and Lessor and (y) all Lessor Liens. The receipt by
Lessor of the insurance proceeds in respect of the Event of
Loss on or prior to the date required pursuant to this Clause
11.1(b) shall discharge Lessee from its obligation to pay the
Agreed Value to Lessor, provided such proceeds are not less
than the Agreed Value and are available to Lessor to be
applied to pay such Agreed Value and any excess of insurance
proceeds (and any other amounts if any, paid to Lessor by or
on behalf of Lessee) over and above the Agreed
91 | 1067 |
agreement_26.md | 91
Value, less any other amounts due and owing on the date of
payment of the Agreed Value by Lessee to Lessor hereunder,
shall be promptly refunded to Lessee or as otherwise required
by law. If the insurance proceeds are paid initially to Lessee
and not to Lessor, they may be retained by Lessee if Lessee
shall have paid the Agreed Value and all other amounts then
due and owing to Lessor, otherwise Lessee shall pay the Agreed
Value to Lessor immediately upon the receipt by Lessee of such
proceeds. If Lessee pays the Agreed Value and all other
amounts due and owing to Lessor in accordance with this Clause
11.1(b), Lessor shall promptly assign (and shall procure that
Owner assigns) to Lessee its rights under the Insurances to
receive the insurance proceeds in respect of the Event of Loss
(to the extent that such proceeds shall not have been paid to
Lessee). Additionally, but without duplication, upon receipt
by Lessor of the Agreed Value and any other amounts then due
and owing by Lessee hereunder following an Event of Loss,
Lessor shall pay or cause to be paid to Lessee amounts equal
to any amounts held by Lessor or to its order as Supplemental
Rent less any portion thereof theretofore applied or paid by
Lessor to Lessee or its order in accordance with the terms and
provisions of this Agreement.
11.2 REQUISITION:
During any requisition for use or hire of the Aircraft, any Engine
or Part which does not constitute an Event of Loss: | 1068 |
agreement_26.md | During any requisition for use or hire of the Aircraft, any Engine
or Part which does not constitute an Event of Loss:
(a) the Rent and other charges payable under this Agreement will
not be suspended or abated either in whole or in part, and
Lessee will not be released from any of its other obligations
under this Agreement (other than operational obligations with
which Lessee is unable to comply by virtue of the
requisition); and
(b) so long as no Default or Event of Default has occurred and is
continuing, Lessee will be entitled to any hire or other
compensation paid by the requisitioning authority during the
Term. Lessee will, as soon as practicable after the end of any
such requisition, cause the Aircraft to be put into the
condition required by this Agreement. Lessor will be entitled
to all compensation payable by the requisitioning authority in
respect of any change in the structure, state or condition of
the Aircraft arising during the period of requisition, and
Lessor will apply such compensation in reimbursing Lessee for
the cost of complying with its obligations under this
Agreement in respect of any such change; provided, however, if
any Default or Event of Default has occurred and is
continuing, Lessor may apply the compensation or hire in or
towards settlement of any amounts owing by Lessee under this
Agreement or the other Transaction Documents and any excess
thereof shall be applied as described above.
92
12. RETURN OF AIRCRAFT
12.1 RETURN: | 1069 |
agreement_26.md | 92
12. RETURN OF AIRCRAFT
12.1 RETURN:
On the Final Expiry Date, Lessee will, unless an Event of Loss shall
have occurred, at its expense, redeliver the Aircraft and Aircraft
Documents to Lessor at the Redelivery Location, in a condition
complying with Schedule 3, free and clear of all Security Interests
and Permitted Liens (other than Lessor Liens).
12.2 FINAL INSPECTION:
Immediately prior to redelivery of the Aircraft, Lessee will make
the Aircraft available to Lessor for the Final Inspection, as set
forth in Schedule 3.
12.3 NON-COMPLIANCE:
(a) If at the time of completion of Final Inspection Lessee has
not fully complied with its obligation to redeliver the
Aircraft and Aircraft Documents to Lessor in the condition and
status required under this Agreement (including Schedule 3
hereto), or Lessee fails to make the Aircraft available to
Lessor on a timely basis for inspection and redelivery
pursuant to Clause 12.1 and Schedule 3 hereto, the Term may
be, upon written notice by Lessor acting in good faith in this
regard, extended up to the time when the Aircraft has been
redelivered to Lessor in full compliance with this Agreement,
for the sole purpose of enabling such non-compliance or
failure to be promptly rectified, and during such extension
period:
(i) Lessee shall not use the Aircraft in flight operations
except those related directly to the redelivery of the
Aircraft to Lessor;
(ii) all Lessee's obligations and covenants under this
Agreement will remain in full force until Lessee so
redelivers the Aircraft
(iii) | 1070 |
agreement_26.md | (iii)
(A) if such extension is due to any act or omission of
Lessor or any Person claiming through Lessor,
Lessee shall not be obligated to pay Rent during
such extension period and Lessor shall promptly
after receipt of an invoice, reimburse Lessee for
any and all out-of-pocket expenses incurred for
the maintenance of Insurances, maintenance,
storage, testing, inspection, repair and parking
of the Aircraft to the extent such expenses are
attributable to any such act or omission of
Lessor, or
93
(B) otherwise, Lessee shall pay Rent to Lessor during
such extension period at a rate per month equal to
the amount of Rent payable in respect of the last
scheduled Rental Period at a rate per month equal
to the Rent payable in respect of the last
scheduled Rental Period plus, after the first ten
(10) days of such extension period, thirty-five
percent (35%) prorated for actual time elapsed.
(b) Unless otherwise agreed by Lessee and Lessor any extension of
the Term under this Clause 12.3 (other than an extension
arising as a result of an act or omission of Lessor, Owner or
Beneficiary) shall not prejudice Lessor's right to treat such
non-compliance or failure as an Event of Default at any time,
and to enforce such rights and remedies as may be available to
Lessor in respect thereof under the terms of this Agreement or
applicable law. Without limiting the generality of the
foregoing, Lessee's Rent obligation under Clause 12.3(a)(iii)
above shall be without prejudice to (but without duplication
of) Lessor's rights under Clause 13; and | 1071 |
agreement_26.md | (c) 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 Clause 12.1 or Schedule 3, in which case
Lessee will indemnify Lessor on an After-Tax Basis, and
provide cash to Lessor (in an amount satisfactory to Lessor
acting reasonably) as security for that indemnity in respect
of the actual cost to Lessor of putting the Aircraft into the
condition required by this Agreement based upon reasonable
prevailing market labor rates and costs of materials.
12.4 ACKNOWLEDGEMENT:
Provided Lessee has complied with its obligations under this Clause
12 (including Schedule 3), upon redelivery of the Aircraft by Lessee
to Lessor at the Redelivery Location, Lessor will deliver to Lessee
an acknowledgement confirming that Lessee has redelivered the
Aircraft to Lessor in accordance with this Clause 12 (including
Schedule 3).
12.5 REDELIVERY MAINTENANCE ADJUSTMENT:
On the Final Expiry Date, Lessee shall make maintenance adjustment
payments to Lessor on an After-Tax Basis in accordance with Part 3
of Schedule 3 hereto.
12.6 EXPORT DOCUMENTS:
Upon redelivery Lessee shall provide to Lessor all documents
necessary to export the Aircraft from the Habitual Base (including,
without limitation, a valid and subsisting export license for the
Aircraft if required by the relevant Governmental Authorities of the
Habitual Base) and required in relation to the deregistration of the
Aircraft with the Air Authority.
94
12.7 MAINTENANCE PROGRAM | 1072 |
agreement_26.md | 94
12.7 MAINTENANCE PROGRAM
Prior to the Final Expiry Date and upon Lessor's request, Lessee
shall provide Lessor or its agent reasonable access to the Aircraft
Documents (including without limitation all completed maintenance
records) and the Approved Maintenance Program as updated and
maintained by Lessee up to the date of redelivery in order to
facilitate the Aircraft's integration into any subsequent operator's
fleet including a cross-reference of Lessee's Approved Maintenance
Program items including task-cards to the MRB (Maintenance Review
Board) or Manufacturer's Maintenance Planning Document items, as
appropriate.
12.8 FUEL:
Upon redelivery of the Aircraft to Lessor, an adjustment shall be
made in favor of Lessor or Lessee, as the case may be, in respect of
fuel on board on the Delivery Date and the Final Expiry Date at the
lower of the price then prevailing or then available at the
Redelivery Location.
13. DEFAULT
13.1 EVENTS:
Each of the following events will constitute an Event of Default
(whether the occurrence of any such events is voluntary or
involuntary or occurs 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):
(a) NONPAYMENT: Lessee fails to make any payment of Security
Deposit, Rent, Supplemental Rent or Agreed Value or any
payment pursuant to Clause 12.5 within three (3) Business Days
following the due date or, in the case of other sums payable
to Lessor or any other Indemnitee, within ten (10) Business
Days following the date of receipt of demand therefor or the
date otherwise due in accordance with this Agreement; | 1073 |
agreement_26.md | (b) INSURANCE: Lessee fails to comply with any provision of Clause
9 or any insurance required to be maintained under this
Agreement is cancelled or terminated or notice of cancellation
is given in respect of any such insurance and no substitute
insurance meeting the requirements of Clause 9 and Schedule 4
of this Agreement has been procured;
(c) BREACH: Lessee fails to comply with any provision of this
Agreement that is not otherwise addressed in this Clause 13.1
and, if such failure is capable of remedy, the failure
continues for 30 days after receipt by Lessee of notice from
Lessor to Lessee;
(d) REPRESENTATION: any representation or warranty made (or deemed
to be repeated) by Lessee in or pursuant to this Agreement is
or proves to have
95
been incorrect in any material respect when made or deemed to
be repeated and, if such incorrectness is capable of remedy,
the same continues for 30 days after receipt of notice by
Lessee from Lessor;
(e) CROSS DEFAULT:
(i) Financial Indebtedness of Lessee having a principal
amount in the aggregate in excess of the Cross-Default
Amount (or the equivalent thereof in other currencies)
is or are not paid when due or within any originally
agreed upon applicable grace period relating thereto; or
(ii) any such Financial Indebtedness becomes due prior to the
date when it would otherwise have become due as a result
of an event of default (howsoever described); or
(iii) any event of default, howsoever described, occurs under
any Other Agreement; or | 1074 |
agreement_26.md | (iii) any event of default, howsoever described, occurs under
any Other Agreement; or
(iv) any event of default, howsoever described, occurs under
any aircraft lease agreement in which Lessee is lessee
and as a result thereof a dispossessory remedy is
exercised by or on behalf of the lessor; provided that,
should the relevant event of default not relate to
payment of rent under such lease, such exercise of a
dispossessory remedy is not frivolous or vexatious under
prevailing circumstances.
(f) BANKRUPTCY, ETC.:
(i) Lessee or Guarantor shall consent to, or commence any
case, proceeding or other action seeking, the
appointment of a custodian, receiver, trustee,
liquidator or other similar official of itself or of a
substantial part of its property, or shall admit in
writing its inability to pay its debts generally as they
come due, or shall suspend payments on its indebtedness
or a moratorium shall be declared in respect of all or a
substantial part of the indebtedness of Lessee or
Guarantor, or a court of competent jurisdiction shall
determine that Lessee or Guarantor is generally not
paying its debts as such debts become due, or Lessee or
Guarantor shall make a general assignment for the
benefit of creditors; or
(ii) Lessee or Guarantor shall file a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking
reorganization, suspension of payments (suspension de
pagos) or relief with respect to it in a proceeding
under any bankruptcy or insolvency or other similar laws
(as now or hereafter in effect) or an answer admitting
the material allegations of a petition filed against
Lessee
96 | 1075 |
agreement_26.md | 96
or Guarantor in any such proceeding, or Lessee or
Guarantor shall, by voluntary petition, answer or
consent, seek relief under the provisions of any now
existing or future bankruptcy, insolvency, liquidation,
receivership, administrative receivership,
administration, suspension of payments or other similar
law providing for the reorganization or winding-up of
debtors, or providing for an agreement, composition,
extension or adjustment with its creditors; or
(iii) if the Lessee or Guarantor convenes a general meeting of
its creditors with a view to a general readjustment or
general rescheduling of its indebtedness (or a
substantial part thereof); or
(iv) if the Lessee or Guarantor becomes or is declared
insolvent (en quiebra) or in suspension of payments
(suspension de pagos) or any application is made to any
court for the Lessee or Guarantor to be declared
insolvent (en quiebra) or in suspension of payments
(suspension de pagos) or the Lessee or Guarantor is
deemed for the purposes of any law of The Republic of
Panama to be unable to pay its debts as they fall due or
to be insolvent; and in the case of any such event which
occurs without the consent of the Lessee, a period of 60
days shall have elapsed without such event being cured,
dismissed, stayed or eliminated; or | 1076 |
agreement_26.md | (v) an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction
appointing, without the consent of Lessee or Guarantor,
a custodian, receiver, trustee, liquidator or other
similar official of Lessee or Guarantor or any
substantial part of its property, or sequestering any
substantial part of the property of Lessee or Guarantor
(other than for the purposes of amalgamation, merger or
reorganization not involving or arising out of
insolvency), and any such order, judgment or decree or
appointment or sequestration shall remain in force
undismissed, unstayed or unvacated for a period of 60
days after the date of entry thereof; or
(vi) a petition against Lessee or Guarantor in a proceeding
under applicable bankruptcy, insolvency or other similar
laws, as now or hereafter in effect, shall be filed and
shall not be stayed, withdrawn or dismissed within 60
days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of debtors
which may apply to Lessee or Guarantor, any court of
competent jurisdiction shall assume jurisdiction,
custody or control of Lessee or Guarantor of any
substantial part of its property and such jurisdiction,
custody or control shall remain in force
97
unrelinquished, unstayed or unterminated for a period of
60 days; or | 1077 |
agreement_26.md | 97
unrelinquished, unstayed or unterminated for a period of
60 days; or
(vii) any additional proceeding similar to those referred to
in paragraph (i), (ii), (iii), (iv), (v) or (vi) above
for the relief of financially distressed debtors under
the laws of the United States or The Republic of Panama
or any other jurisdiction is instituted, taken or
commenced by or against Lessee or Guarantor, voluntarily
or involuntarily, and if involuntarily, has not been
stayed or dismissed within 60 days.
(g) SUSPENSION OF BUSINESS: Lessee ceases to operate as a
regularly scheduled air carrier or suspends such operations
for a period in excess of ninety (90) days other than as a
result of war, insurrection, acts of terrorism, acts of God
(such as fires, floods or earthquakes), labor strife or strike
or regulatory order affecting all similarly situated operators
of similar aircraft or all aircraft of the same type and
vintage as the Aircraft; or
(h) DISPOSAL: Lessee disposes, conveys or transfers all or
substantially all of its assets, liquidates or dissolves or
consolidates or merges with any other Person (whether by one
or a series of transactions, related or not) except as
permitted in Clause 8.8(c); or
(i) DELIVERY: Lessee fails to accept delivery of the Aircraft when
validly tendered pursuant to this Agreement by Lessor; or
(j) REDELIVERY: Lessee fails to return the Aircraft to Lessor on
the Final Expiry Date in accordance with Clause 12 and
Schedule 3, except as otherwise provided in Sub-Clause 12.3;
or | 1078 |
agreement_26.md | (k) LITIGATION: a judgment for the payment of money not covered by
insurance in excess of the Cross-Default Amount (or the
equivalent thereof in other currencies) shall be rendered
against Lessee or Guarantor and the same shall remain
undischarged for a period of sixty (60) days, unless during
such period, execution of such judgment shall have been
effectively stayed by agreement of the parties involved or by
court order or such judgment shall have been adequately
bonded; or
(l) ASSIGNMENT/TRANSFER/SUBLEASE: Lessee makes or permits any
assignment or transfer of Lessee's interest in this Agreement,
or of Lessee's right to possession of the Aircraft or the
Airframe, or Lessee subleases the Aircraft, the Airframe or
any Engine, in any case except as expressly permitted or
required in this Agreement; or
(m) ARREST/ATTACHMENT: Any arrest is made, or any attachment or
other kind of judicial lien over the Aircraft is registered
(excluding an attachment or
98
judicial lien which constitutes a Permitted Lien), and such
arrest, attachment or judicial lien is not discharged by
Lessee within 60 days thereafter; or
(n) APPROVALS: any consent, authorization, license, certificate or
approval of or registration with or declaration to any
Government Entity required in connection with this Agreement,
including, without limitation:
(i) any authorization required by Lessee to obtain and
transfer freely dollars (or any other relevant currency)
out of any relevant country; or
(ii) any authorization required by Lessee to authorize, or
required in connection with, the execution, delivery,
validity, enforceability or admissibility in evidence of
this Agreement or any other Transaction Document or the
performance by Lessee of its obligations under this
Agreement or any other Transaction Document; or | 1079 |
agreement_26.md | (iii) the registration of the Aircraft or the Aircraft's
certificate of airworthiness; or
(iv) any airline license or air transport license required by
Lessee,
is withheld, or is revoked, suspended, cancelled, withdrawn,
terminated or not renewed, or otherwise ceases to be in full force
(other than, in the case of subclause (iii) above, as a result of
any act or omission of Lessor or any party claiming by or through
Lessor not resulting from an act or omission of the Lessee) and is
not, as applicable, restored, replaced, returned, re-granted or
renewed within sixty (60) days; or
(o) ADVERSE CHANGE: any event or series of events occurs which, in
the reasonable opinion of Lessor, might reasonably be expected
to have a material adverse effect on the financial condition
or operations of Lessee or on the ability of Lessee to comply
with its obligations under this Agreement; or
(p) UNLAWFUL: it is or becomes unlawful for Lessee (other than as
a result of any act or omission of Lessor or any Person
claiming by or through Lessor not attributable to an act or
omission of Lessee) to perform any of its obligations under
this Agreement or any other Transaction Document, or this
Agreement or any other Transaction Document is or becomes
wholly or partly invalid or unenforceable and the same
continues for a period in excess of sixty (60) days; or
(q) CHANGE OF CONTROL: Any Person or group of Persons acquires
control of Lessee without the prior consent of Lessor, which
consent shall not be
99 | 1080 |
agreement_26.md | 99
unreasonably withheld or delayed. This Section 13.1(q) shall
not apply in the event that a current shareholder or Affiliate
of Lessee acquires control of Lessee. As used herein, the term
"control" shall mean the direct or indirect right to control
in excess of 50% of the voting shares of Lessee.
13.2 RIGHTS AND REMEDIES:
If an Event of Default occurs, Lessor may at its option (and without
prejudice to any of its other rights under this Agreement), at any
time thereafter so long as the same shall be continuing (without
notice to Lessee except as specified or required under applicable
law):
(a) by notice to Lessee and with immediate effect cancel the
leasing of the Aircraft (but without prejudice to the
continuing obligations of Lessee under this Agreement),
whereupon the Lease Term and all rights of Lessee under this
Agreement shall cease; and/or
(b) proceed by appropriate court action or actions to enforce
performance of this Agreement including the payment of all
Rent and all other amounts payable to Lessor or any Indemnitee
pursuant to the terms of this Agreement; and/or
(c) proceed by appropriate court action or actions to recover
damages for the breach of this Agreement which shall include: | 1081 |
agreement_26.md | (c) proceed by appropriate court action or actions to recover
damages for the breach of this Agreement which shall include:
(i) all Rent and other amounts which are or become due and
payable under this Agreement prior to (A) in the case of
clause (ii)(a) below, the date Lessor re-leases the
Aircraft, (B) in the case of clause (ii)(b) below
(unless the proviso thereto is applicable), the date
Lessor is tendered or obtains possession of the
Aircraft, and (C) otherwise, the date Lessor specifies
for payment of the amounts determined pursuant to this
clause (c); or, in any case, if earlier, (x) the date on
which Lessee tenders full payment of the amounts
determined as provided in this clause (c), or (y) the
date on which Lessor obtains or is tendered possession
of the Aircraft (such applicable date, the "Reference
Date");
(ii) an amount (the "Mitigated Rent Amount") equal to the
aggregate Rent for the remainder of the Term (determined
without reference to any right of Lessor to cancel the
leasing of the Aircraft, whether or not such right is
exercised), discounted periodically (equal to
installment frequency) to present worth at the Discount
Rate to the Reference Date, less the applicable amount,
if any, set forth below:
(a) in the event that Lessor has re-let the Aircraft
on terms (other than rental payment terms) which,
taken as a whole, Lessor reasonably regards as
being substantially similar to
100 | 1082 |
agreement_26.md | 100
the terms of this Agreement, an amount equal to
the aggregate basic rental payments to become due
under such re-lease for the period coinciding with
the remainder of the Term (determined without
reference to any right of Lessor to cancel the
leasing of the Aircraft, whether or not such right
is exercised), discounted periodically (equal to
installment frequency) to present worth at the
Discount Rate to the Reference Date; or
(b) in the event that Lessor elects to retain the
Aircraft or has sold the Aircraft or has re-let
the Aircraft on terms (other than rental payment
terms) which, taken as a whole, Lessor does not
reasonably regard as being substantially similar
to the terms of this Agreement, an amount equal to
the fair market rental value (determined pursuant
to the Appraisal Procedure) of the Aircraft for
the period commencing with the date that Lessor
reasonably anticipates that the Aircraft could be
re-let at such rental rate and ending with the
date that the Term was scheduled to expire
(determined without reference to any right of
Lessor to cancel the leasing of the Aircraft,
whether or not such right is exercised),
discounted periodically (equal to installment
frequency) to present worth at the Discount Rate
to the Reference Date; provided that, if Lessor is
unable after reasonable effort to dispose of the
Aircraft or if circumstances reasonably indicate
that such effort will not be availing, the
Mitigated Rent Amount shall be determined pursuant
to clause (ii) above without subtracting any
amounts pursuant to this clause (b); | 1083 |
agreement_26.md | (iii) all costs, expenses and other incidental damages
incurred by Lessor in exercising its remedies hereunder
or otherwise incurred by Lessor as a result of an Event
of Default, including repossession costs, legal fees,
Aircraft storage, preservation, shipment, repair,
refurbishment, modification, maintenance and insurance
costs, Aircraft re-lease or sale costs (including any
costs incurred prepare the Aircraft for sale or lease,
advertising costs, sale or lease costs (including
commissions), in any way relating to the Aircraft or any
Part, including to put the Aircraft in the condition
required in Clause 12 and Schedule 3, or in the
Redelivery Location, all such costs and incidental
damages being referred to herein collectively as
"Enforcement and Remarketing Costs";
(iv) without duplication, any loss, cost, expense or damage
to Lessor's residual interest in the Aircraft, incurred
by Lessor due to Lessee's failure to maintain the
Aircraft in accordance with the terms of this Agreement
or Lessee's failure to redeliver the Aircraft in the
101
condition required by this Agreement, if any, including
any consequential loss of revenue or profits, all such
amounts being referred to herein collectively as
"Aircraft Condition Damages"; and
(v) without duplication, any premium, penalty or incremental
expense which may be incurred as a result of such Event
of Default in repaying funds received by Lessor to
finance the Aircraft or in unwinding any financial
instrument relating in whole or in part to Lessor's
financing of the Aircraft, all such amounts being herein
referred to collectively as "Unwind Expenses"; | 1084 |
agreement_26.md | provided, however, that if the measure of damages provided in
clauses (i)-(v) above is inadequate to place Lessor in the
same economic position, on an After-Tax Basis, as Lessor would
have been in if Lessee had timely performed each of its
obligations under this Agreement, then Lessor shall be
entitled to recover as damages such additional amount, giving
due credit for payments or proceeds of dispositions of the
Aircraft, as is necessary to place Lessor in such economic
position; and/or
(d) either:
(i) enter upon the premises where all or any part of the
Aircraft and/or any Engine is located and take immediate
possession of and, at Lessor's sole option, remove the
same, all without liability accruing to Lessor for or by
reason of such entry or taking of possession whether for
the restoration of damage to property, conversion or
otherwise, caused by such entry or taking, except
damages caused by Lessor's gross negligence or willful
misconduct; or
(ii) by delivering notice to Lessee, require Lessee to
redeliver the Aircraft and/or any Engine to Lessor at
the Redelivery Location on the date specified in such
notice and in all respects in the condition required by
this Agreement upon the return pursuant to Clause 12 (it
being understood that Lessee shall not delay any such
return for the purpose of placing the Aircraft and/or
any Engine in such condition, but shall nevertheless be
liable to Lessor for the failure of the Aircraft and/or
any Engine to be in such condition); and/or | 1085 |
agreement_26.md | (e) sell at private or public sale, as Lessor may determine, or
hold, use, operate or lease to others the Aircraft and/or any
Engine as Lessor in its sole discretion may determine, all
free and clear of any rights of Lessee as if this Agreement
had not been entered into, it being agreed that Lessor shall
have no obligation or duty to sell the Aircraft and/or any
Engine and Lessor shall be obligated to attempt to re-lease
the Aircraft only to the
102
extent, if any, that it is required to do so under Article 2A
of the UCC; and/or
(f) by written notice to Lessee specifying a payment date (which
shall be a date not earlier than five (5) Business Days
following the date of such notice), Lessor may demand that
Lessee pay to Lessor, and Lessee shall pay to Lessor on the
payment date specified in such notice (in lieu of the Rent due
for the period commencing after the date specified for payment
in such notice) the sum of the following amounts:
(i) all Rent and other amounts which are, or will become,
due and payable under this Agreement prior to the
Reference Date (references therein to clause (c) being
deemed references to this clause (f));
(ii) an amount equal to the Mitigated Rent Amount; and
(iii) an amount equal to Lessor's reasonably anticipated
Enforcement and Remarketing Costs, Unwind Expenses and
Aircraft Condition Damages; | 1086 |
agreement_26.md | (iii) an amount equal to Lessor's reasonably anticipated
Enforcement and Remarketing Costs, Unwind Expenses and
Aircraft Condition Damages;
provided, however, that if the measure of damages provided in
clauses (i)-(ii) above is inadequate to place Lessor in the
same economic position, on an After-Tax Basis, as Lessor would
have been in if Lessee had timely performed each of its
obligations under this Agreement, then Lessor shall be
entitled to recover as damages such additional amount, giving
due credit for payments or proceeds of dispositions of the
Aircraft, as is necessary to place Lessor in such economic
position; it being understood that (subject to any final
non-appealable judgment of a court of competent jurisdiction),
to the extent that any of the foregoing amounts in clause
(iii) above represents an estimate by Lessor of losses,
damages, costs or expenses which Lessor reasonably anticipates
to incur, (x) Lessor shall adjust (upward or downward, as the
case may be) the amount thereof as needed to reflect the
actual amount of such losses, damages, costs or expenses
incurred by Lessor when substantially all of such amounts
become known to Lessor, but Lessee shall remain obligated to
pay the amount demanded by Lessor in accordance with clause
(iii) above (subject to such subsequent adjustment) and (y)
notwithstanding the amount specified in such demand, Lessor
shall be entitled to claim such other (and greater) amount as
described in subclause (x) in any action against Lessee
hereunder; and/or
(g) draw upon the Security Deposit and apply such amounts to any
amounts owing to Lessor hereunder,
103 | 1087 |
agreement_26.md | (g) draw upon the Security Deposit and apply such amounts to any
amounts owing to Lessor hereunder,
103
In addition to the foregoing, Lessor shall be entitled to exercise
such other rights and remedies as may be available under applicable
law and Lessee shall be liable on an After-Tax Basis for, and shall
pay Lessor on demand interest on all unpaid amounts at the Interest
Rate, from the due date until the date of payment in full.
Lessee hereby agrees that, in the event of the return to or
repossession by Lessor of the Aircraft and/or any Engine or any
Part, any rights in any warranty (express or implied) previously
assigned to Lessee or otherwise held by Lessee shall without further
act, notice or writing be assigned or reassigned to Lessor, if
assignable, subject to the terms hereof.
No remedy referred to in this Clause 13 is intended to be exclusive,
but, to the extent permissible under this Agreement or under
applicable law, each shall be cumulative and in addition to any
other remedy referred to above or otherwise available to Lessor at
law or in equity; and the exercise or beginning of exercise by
Lessor of any one or more of such remedies shall not preclude the
simultaneous or later exercise by Lessor of any or all of such other
remedies; provided, however, that nothing in this Clause 13 shall be
construed to permit Lessor to obtain a duplicate recovery of any
element of damages to which Lessor is entitled or to obtain damages
in excess of those permitted by law. No express or implied waiver by
Lessor of any Default or Event of Default shall in any way be, or be
construed to be, a waiver of any future or subsequent Default or
Event of Default.
13.3 POWER OF ATTORNEY: | 1088 |
agreement_26.md | 13.3 POWER OF ATTORNEY:
Lessee hereby appoints Lessor as the attorney-in-fact of Lessee,
with full authority in the place and stead of Lessee and in the name
of Lessee or otherwise, for the purpose of carrying out the
provisions of this Agreement in accordance with the terms and
conditions hereof and taking any action and executing any instrument
that Lessor may, acting reasonably, deem necessary or advisable to
accomplish the purposes hereof (including, but not limited to, the
return of the Aircraft and, upon termination or cancellation of this
Agreement, the removal of this Agreement from public records);
provided, however, that Lessor may only take action or execute
instruments under this Clause 13 after an Event of Default has
occurred and while it is continuing. Lessee hereby declares that the
foregoing powers are granted for valuable consideration, constitute
powers granted as security for the performance of the obligations of
Lessee hereunder and are coupled with an interest and shall be
irrevocable. Without limiting the generality of the foregoing or any
other rights of Lessor under this Agreement, upon the occurrence and
during the continuation of an Event of Default, Lessor shall have
the sole and exclusive right and power to (i) settle, compromise,
adjust or defend any actions, suits or proceedings relating to or
pertaining to the Engine, any Part or this Agreement (other than
suits between the parties hereto) and (ii) make proof of loss,
appear in and prosecute any action arising from any policy or
policies of insurance maintained pursuant to this Agreement, and
settle, adjust or
104 | 1089 |
agreement_26.md | 104
compromise any claims for loss, damage or destruction under, or take
any other action in respect of, any such policy or policies, but, in
no event, may settle any matter by means of an admission of
liability on the part of Lessee unless required by law to do so.
14. ASSIGNMENT
14.1 ASSIGNMENT BY LESSEE:
LESSEE WILL NOT ASSIGN, DELEGATE OR OTHERWISE TRANSFER (VOLUNTARILY,
INVOLUNTARILY, BY OPERATION OF LAW OR OTHERWISE) ANY OF ITS RIGHTS
OR OBLIGATIONS UNDER THIS AGREEMENT EXCEPT IN CONNECTION WITH A
TRANSACTION PERMITTED BY CLAUSE 8.8(C), OR CREATE OR PERMIT TO EXIST
ANY SECURITY INTEREST (OTHER THAN PERMITTED LIENS) OVER ANY OF ITS
RIGHTS UNDER THIS AGREEMENT, AND ANY ATTEMPT TO DO SO SHALL BE NULL
AND VOID.
14.2 ASSIGNMENT BY LESSOR:
(a) Lessor or Owner may sell, assign or transfer all or any of
their respective rights under this Agreement and in the
Aircraft (a "Transfer") subject to compliance with the
following conditions:
(i) the proposed purchaser, assignee or transferee (the
"Transferee") shall confirm, in favor of Lessee and
Guarantor, in writing its undertaking to perform the
obligations of Lessor under this Agreement and other
Transaction Documents (including without limitation, all
obligations in respect of any Security Deposit, proceeds
of insurance and/or Supplemental Rent), to the extent
the same arise on or after the effective date of
Transfer and confirm Lessor's covenant of quiet
enjoyment which confirmations shall be reasonably
satisfactory to Lessee, whereupon Lessor or Owner, as
the case may be, will be released from its obligations
under this Agreement and the Participation Agreement; | 1090 |
agreement_26.md | (ii) the Transfer will not increase Lessee's and Guarantor's
indemnity or other obligations (including with respect
to withholding taxes) under this Agreement or the
Guaranty, as applicable or diminish Lessee's rights
under this Agreement (to be determined in each case at
the time of such Transfer by applying all applicable
laws as are in effect on the effective date of the
Transfer or which have been enacted on or prior to such
effective date but scheduled to come into effect
thereafter); and
(iii) unless an Event of Default has occurred and is
continuing, Lessor shall be responsible for and pay (on
or promptly after the time of
105
such Transfer) Lessee's and Guarantor's legal and other
costs incurred in respect of such Transfer;
(iv) the Transferee shall not be in bankruptcy or similar
proceedings at the time of the transfer;
(v) no Transferee shall be an air carrier or Affiliate
(other than a financial institution or credit company)
of an air carrier in competition with Lessee and
operating similar aircraft; and
(vi) the Transferee shall confirm in writing its agreement to
keep the trust structure, or another tax structure not
materially adversely affecting the tax position of this
Lessee, in place.
(b) Notwithstanding any such Transfer, Lessor, Owner and
Beneficiary will remain entitled to the benefit of each
indemnity under this Agreement to the extent that any claim
thereunder relates to any period prior to the effective date
of such Transfer, and shall remain entitled to the benefit of
the liability insurances effected pursuant to this Agreement
for a period of two years following the effective date of such
Transfer. | 1091 |
agreement_26.md | (c) Upon and subject to compliance by Lessor and any Transferee
with the terms and conditions of Clause 14.2(a), Lessee shall
execute and deliver in connection with such Transfer such
documents and assurances (including a consent to the Transfer)
and take such further action at Lessor's cost (unless an Event
of Default has occurred and is continuing) as Lessor may
reasonably request to establish or protect the rights and
remedies created or intended to be created in favor of
Transferee in connection with such Transfer.
14.3 GRANTS OF SECURITY INTERESTS:
Lessor or Owner shall be entitled at any time after the Delivery
Date to grant a Security Interest in the Aircraft or its right,
title and interest in this Agreement (each, an "Additional
Mortgage") in favor of any Financing Party (each, an "Additional
Mortgagee") provided the same shall not result in an increase of
Lessee's obligations or liabilities hereunder on the date of such
transaction nor restrict Lessee's rights in respect of this
Agreement or the Aircraft. In the case of any such grant by Lessor
or Owner of an Additional Mortgage to an Additional Mortgagee in all
or any portion of Lessor's or Owner's rights, title and interest in
and to the Aircraft and this Agreement, subject to this Clause 14.3
and to Lessee receiving a letter of quiet enjoyment substantially
similar to Part 4 of Schedule 5 (and including the additional
paragraphs set forth in Part 5 of Schedule 5 if the Additional
Mortgage includes an Assignment (or such substantially similar
wording as Lessor and Lessee may agree)) from such Additional
Mortgage and notice of assignment in a form reasonably acceptable to
Lessee, Lessee shall
106 | 1092 |
agreement_26.md | 106
promptly, at the specific written request of Lessor, as the case may
be, and with Lessor or Owner, as the case may be, paying all of
Lessee's out-of-pocket costs and expenses execute an acknowledgement
of assignment in such form as Lessor or Owner, as the case may be,
may reasonably request.
15. MISCELLANEOUS
15.1 SURVIVAL:
All provisions of this Agreement constituting an obligation on the
part of either party to indemnify the other party or any other
Indemnitee shall survive the expiration or any termination or
cancellation of this Agreement and shall continue in full force and
effect.
15.2 WAIVERS, REMEDIES CUMULATIVE:
The rights under this Agreement:
(i) may be exercised as often as necessary;
(ii) are cumulative and not exclusive of its rights under any
law; and
(iii) may be waived only in writing and specifically.
Delay in exercising or nonexercise of any such right will not
constitute a waiver of that right.
15.3 DELEGATION:
Lessor may delegate to any Person or Persons all or any of the
trusts, powers or discretions vested in it by these presents and any
such delegation may be made upon such terms and conditions and
subject to such regulations (including power to subdelegate) as
Lessor in its absolute discretion thinks fit, provided no such
delegation shall affect the rights, obligations or liabilities of
Lessee or Guarantor.
15.4 CERTIFICATES:
Save where expressly provided in this Agreement, any determination
by Lessor (in accordance with the terms of this Agreement) as to any
rate of interest payable under this Agreement will, in the absence
of manifest error, be conclusive and binding on Lessee.
15.5 APPROPRIATION: | 1093 |
agreement_26.md | 15.5 APPROPRIATION:
If any sum paid or recovered in respect of the liabilities of Lessee
under this Agreement is less than the amount then due, Lessor may
apply that sum to amounts due under this Agreement in such
proportions and order and generally in
107
such manner as Lessor, acting reasonably, may determine and, upon
written request, notify Lessee of such application.
15.6 SEVERABILITY:
If a provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that will not affect:
(a) the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
(b) the legality, validity or enforceability in any other
jurisdiction of that or any other provision of this Agreement.
15.7 REMEDY:
If Lessee fails to comply with any provision of this Agreement,
Lessor may, without being in any way obliged to do so or responsible
for so doing and without prejudice to the ability of Lessor to treat
the noncompliance as a Default or an Event of Default, effect
compliance on behalf of Lessee, whereupon Lessee shall become liable
to pay immediately any sums expended by Lessor together with all
costs and expenses (including legal costs) in connection therewith.
15.8 EXPENSES:
(a) Each of Lessor and Lessee will pay its own expenses (including
legal, professional, and out-of-pocket expenses) incurred or
payable in connection with the negotiation, preparation, and
execution of this Agreement; | 1094 |
agreement_26.md | (b) Without duplication of any other amounts payable by Lessee
hereunder, Lessee will pay to Lessor promptly following demand
all reasonable expenses (including legal, professional, and
out-of-pocket expenses) related to any amendment to or
extension of any other documentation in connection with, or
the granting of any waiver or consent under, this Agreement
which has been requested by Lessee;
(c) Lessor will pay to Lessee promptly following demand all
reasonable expenses (including legal, professional, and
out-of-pocket expenses) related to any amendment to or
extension of any other documentation in connection with, or
the granting of any waiver or consent under, this Agreement
which has been requested by Lessor unless the same arises out
of, or is connected with, the occurrence of an Event of
Default;
(d) Without duplication of any other amounts payable by Lessee
hereunder, Lessee will pay to Lessor promptly following demand
all reasonable expenses (including legal and other costs)
payable or incurred by Lessor in
108
connection with the enforcement of or preservation of any of
Lessor's rights under, this Agreement, or in respect of the
repossession of the Aircraft; and | 1095 |
agreement_26.md | (e) Except as provided in clause 14.2(a)(ii), Lessee will pay to
Lessor promptly following demand all reasonable expenses
(including legal, survey and other costs) payable or incurred
by Lessor in connection with (i) up to $2,000 with respect to
the Trust Agreement and the tax structure of this transaction,
and (ii) the filing or recording of this Agreement in the
Country of Registration, the Habitual Base and other states
(as appropriate given the operation of the Aircraft),
including, in each case, the provision of legal opinions, tax
advice (to the extent related to the Trust Agreement and the
tax structure of this transaction), stamp duties, notarial
fees, translations and registrations, if required by either
Lessor or Lessee.
All expenses payable pursuant to this Clause 15.8 will be paid in
the currency in which they are incurred by Lessor or Lessee, as the
case may be.
15.9 TIME OF ESSENCE:
The time stipulated in this Agreement for all payments and for the
performance of all other obligations under this Agreement will be of
the essence of this Agreement.
15.10 NOTICES:
All notices under, or in connection with, this Agreement will,
unless otherwise stated, be given in writing by letter or facsimile.
Any such notice is deemed effectively to be given as follows:
(i) if by letter, when delivered;
(i) if by facsimile, when transmitted and full transmission
has been separately notified by telephone by the
transmitting party.
The address, facsimile and telephone numbers of Lessee and Lessor
are as follows: | 1096 |
agreement_26.md | The address, facsimile and telephone numbers of Lessee and Lessor
are as follows:
Lessee: Address: Compania Panamena de Aviacion, S.A.
Avenida Justo Arosemena y Calle 39
Apartado 1572
Panama 1, Republic of Panama
Attn: Vice President - Finance
Facsimile: 011.507.227.2522
Telephone: 011.507.227.2623
109
Lessor: Address: WELLS FARGO BANK NORTHWEST, N.A.
299 South Main Street
Salt Lake City, Utah 84111
Attn: Corporate Trust Department
Facsimile: +1 (801) 246-5053
Telephone: +1 (801) 246-5630
15.11 LAW AND JURISDICTION:
(a) This Agreement is governed by the Governing Law including all
matters of construction, validity and performance. This
Agreement is delivered in the State of New York; | 1097 |
agreement_26.md | (b) Both parties agree that the Supreme Court of the County of New
York, State of New York and the federal courts of the United
States of America sitting in the Southern District of New York
are to have jurisdiction to settle any disputes that may arise
in connection with or arising out of the legal relationships
established by this Agreement (including, without limitation,
claims for set-off or counterclaim) and the other Transaction
Documents or otherwise arising in connection with this
Agreement and the other Transaction Documents. Both parties
hereby irrevocably and unconditionally submit to the
jurisdiction of the Supreme Court of the City of New York,
State of New York and the federal courts of the United States
of America sitting in the Southern District of New York. The
submission to such jurisdiction shall not (and shall not be
construed so as to) limit the rights of any party to take
proceedings against any other party in any other court of
competent jurisdiction, nor shall the taking of proceedings in
any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or
not;
(c) Nothing in this Clause limits the right of either party to
bring proceedings against the other in connection with this
Agreement:
(i) in any other court of competent jurisdiction; or
(ii) concurrently in more than one jurisdiction.
(d) Each party irrevocably and unconditionally:
(i) agrees that if the other party brings legal proceedings
against it or its assets in relation to this Agreement
no immunity from such legal proceedings (which will be
deemed to include, to the extent available, suit,
attachment prior to judgment, other attachment, the
110
obtaining of judgment, execution or other enforcement)
will be claimed by or on behalf of itself or with
respect to its assets; | 1098 |
agreement_26.md | 110
obtaining of judgment, execution or other enforcement)
will be claimed by or on behalf of itself or with
respect to its assets;
(ii) waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or
proceeding, the defense of sovereign immunity, any claim
that it is not personally subject to the jurisdiction of
the above-named courts by reason of sovereign immunity
or otherwise or that it is immune from any legal process
(whether thorough service of notice, attachment prior to
judgment, attachment in aid of execution, execution or
otherwise) with respect to itself of its property, or
any objection on the grounds of venue or forum non
conveniens or any similar grounds; and
(iii) 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, without
limitation, 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.
(e) Each party:
(i) irrevocably waives objection to the Supreme Court of the
County of New York, State of New York and the federal
courts of the United States of America sitting in the
Southern District of New York on grounds of venue or
inconvenient forum or otherwise as regards proceedings
in connection with this Agreement; and
(ii) agrees that a final (no longer appealable) judgment or
order of a court of the State of New York or a federal
court of the United States of America sitting in the
Southern District of New York in connection with this
Agreement is conclusive and binding on it and may be
enforced against it in the courts of any other
jurisdiction. | 1099 |