<PAGE>
EXHIBIT 10.32
TO THE EXTENT THAT THIS AIRCRAFT LEASE AGREEMENT
CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE NO
SECURITY INTEREST IN THIS AIRCRAFT LEASE AGREEMENT MAY
BE CREATED THROUGH TRANSFER OR POSSESSION OF ANY
COUNTERPART OTHER THAN THE ORIGINAL COUNTERPART, SHALL
BE IDENTIFIED AS THE COUNTERPART DESIGNATED AS THE
ORIGINAL ON THE SIGNATURE PAGE OF THIS AGREEMENT BY
LESSOR (AS TERM IS DEFINED HEREIN).
AIRCRAFT LEASE AGREEMENT
Dated as of September 15, 2000
between
AVIATION FINANCIAL SERVICES INC.
as Lessor
and
MIDWAY AIRLINES CORPORATION
as Lessee
in respect of Aircraft: Boeing 737-700
Serial No: 29893
_________________________________
incorporating the provisions of that certain
COMMON TERMS AGREEMENT
(as defined herein)
______________________________
<PAGE>
AIRCRAFT LEASE AGREEMENT
THIS AIRCRAFT LEASE AGREEMENT is made as of September 15, 2000, and is BETWEEN:
(1) AVIATION FINANCIAL SERVICES INC., a company incorporated under the laws of
the State of Delaware, having its principal place of business and chief
executive office at 260 Long Ridge Road, Stamford, CT 06927 ("Lessor"); and
(2) MIDWAY AIRLINES CORPORATION, a company incorporated under the laws of the
State of Delaware, having its principal place of business and chief
executive office at 2801 Slater Road, Suite 200, Morrisville, NC 27560
("Lessee").
WHEREAS:
(A) Lessee wishes to lease the Aircraft (as defined below) from Lessor, and
Lessor wishes to lease the Aircraft to Lessee, on the terms and subject to
the conditions provided herein;
(B) General Electric Capital Corporation and Lessee have entered into the
Common Terms Agreement (as defined below); and
(C) Lessor and Lessee wish to incorporate by reference such Common Terms
Agreement, as well as Schedules A and B attached hereto, into this Aircraft
Lease Agreement for the Aircraft;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. INTERPRETATION
1.1 Definitions: In this Aircraft Lease Agreement, the following capitalized
words and expressions have the respective meanings set forth below and the
meanings set forth in Schedules A and B:
Aircraft means the Airframe and Engines described on Part I of Schedule A
and includes the Aircraft Documents and Records.
Airframe Maintenance Adjustment shall have the meaning as set forth in
Schedule B, Part VI hereof.
Airframe Structural Check means a heavy maintenance visit which shall
include but not be limited to accomplishment of a block C6 Systems and
Structural Check (equivalent to a "D" check), all lesser checks, and
interior refurbishment (including lavatories and galley) consistent with
average industry standards for the first C6 Systems and Structural check
for the Airframe type. Where relevant, the workscope and intervals
(calendar and/or hourly) shall not be less than those prescribed by the
Lessee's Maintenance Program. If the Lessee's Maintenance Program is not a
block program then the Lessee shall perform those tasks required to bridge
the Aircraft to the
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block program as set forth in Appendix J of the Manufacturer's Maintenance
Planning Document.
Common Terms Agreement means the "Aircraft Lease Common Terms Agreement"
dated as of September 10, 1999 executed by General Electric Capital
Corporation and Midway Airlines Corporation, as amended by letter agreement
dated as of the date hereof (as in effect on the date hereof without,
unless Lessor and Lessee otherwise expressly agree, giving any effect to
any subsequent amendment, supplement, waiver or other modification
thereto), and which forms part of this Aircraft Lease Agreement.
Delivery Condition Requirements means the requirements specified in Section
1 of Part III of Schedule A.
Delivery Location means a location in the United States mutually acceptable
to Lessor and Lessee.
Deposit means all amounts payable pursuant to Section 3.1 hereof.
Engine Refurbishment Maintenance Adjustment shall have the meaning as set
forth in Schedule B, Part VI hereof.
Final Delivery Date means the date that is two (2) months after the
Scheduled Delivery Date.
Indemnitee means each of Lessor, GECAS, and each of their respective
shareholders, subsidiaries, Affiliates, partners, servants, contractors,
directors, officers, agents and employees.
LC Amount is not applicable.
Lessee Modification Costs shall have the meaning as defined in the
Modification Side Letter.
Lessee Modification Fee means an amount equal to 1.98% of the Lessee
Modification Costs.
Maintenance Adjustment means collectively the Airframe Maintenance
Adjustment and the Engine Refurbishment Maintenance Adjustment as the
amounts payable by Lessee pursuant to Section 5.4 of the Common Terms
Agreement, Section 3 of this Agreement and Schedule B, Part VI of this
Agreement.
Manufacturer means the manufacturer of the Airframe or an Engine, as the
case may be, as set forth on Part I of Schedule A hereto.
Minimum Measurable Fuel Requirement means 2,000 U.S. gallons.
Modification Side Letter means a side letter agreement between Lessee and
Lessor substantially in the form attached hereto as Schedule C relating to
post-delivery modifications.
Owner means Lessor.
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Redelivery Location means (i) such location in the continental United
States as Lessor may elect, or (ii) such other location as may be agreed in
writing by Lessor and Lessee.
Rent means all amounts payable pursuant to Section 3.2 hereof.
Rent Commencement Date means the date on which Lessor tenders the Aircraft
for Delivery to Lessee under Section 4.3(a) of the Common Terms Agreement.
Scheduled Delivery Date means a date notified by Lessor to Lessee in
accordance with Section 4.1(a) of the Common Terms Agreement in November,
2000.
Scheduled Delivery Month means November, 2000.
Scheduled Delivery Week is not applicable.
Scheduled Expiry Date means the date falling sixty-one (61) months after
the Rent Commencement Date.
State of Registry means the United States of America.
Sublease Fee means the fee amount set forth in Part VII of Schedule B
hereof.
Supplemental Rent means all amounts payable pursuant to Section 3.3 hereof.
Tax Indemnitee means Lessor and each Financing Party, if any, and each
member of the consolidated group of which Lessor is a member for United
States Federal Income Tax purposes.
Term shall have the meaning as set forth for such word in Section 2.2
herein.
1.2 Interpretation: Unless otherwise defined herein, words and expressions
defined in the Common Terms Agreement have the same respective meanings for
the purposes of this Aircraft Lease Agreement. The construction provisions
of Section 1.2 of the Common Terms Agreement shall apply to this Aircraft
Lease Agreement.
2. LEASING
2.1 Agreement to Lease: Subject to the terms and conditions of the Lease,
Lessor will lease the Aircraft to Lessee and Lessee will take delivery of
and lease the Aircraft from Lessor in accordance with the Lease for the
duration of the Term.
2.2 Term: Subject to Sections 4.1 through 4.4 of the Common Terms Agreement,
Delivery of the Aircraft will occur at the Delivery Location, whereupon
Lessee shall accept the Aircraft hereunder and evidence such Delivery and
acceptance by executing and delivering a Certificate of Technical
Acceptance and Lease Supplement No. 1 as provided in Section 4.3 of the
Common Terms Agreement. The Term will commence on the Delivery Date, which
Delivery Date is scheduled to occur on the Scheduled Delivery Date, and
will expire on the Scheduled Expiry Date unless terminated earlier in
accordance with the provisions of the Lease.
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3. PAYMENTS
3.1 Deposit: Lessee shall pay to Lessor the Deposit in cash (to which Deposit
Section 5.13 of the Common Terms Agreement shall apply), in the amounts and
at the times provided in Part II of Schedule B hereto.
3.2 Rent: Lessee shall pay Rent to Lessor on each Rent Date during the Term in
the amount provided in Part III of Schedule B hereto and as provided in
Sections 5.2 and 5.3 of the Common Terms Agreement. The first instalment of
Rent shall be due and payable on the Rent Commencement Date as defined
herein. Provided no Default has occurred and is continuing, during the
first Rental Period of this Agreement, Lessor shall grant Lessee a credit
in an amount equal to fifty percent (50%) of the Rent otherwise due and
payable by Lessee hereunder, calculated on a per diem basis for the actual
number of days elapsed, for a period commencing on the Delivery Date to a
date not to exceed thirty (30) days after the Delivery Date during which
the Aircraft is undergoing post-Delivery modifications. Such credit shall
be applied against the Rent then due and payable for the second Rental
Period following the Delivery Date or in such other manner as Lessor and
Lessee may agree.
3.3 Supplemental Rent and Maintenance Adjustment: Lessee shall pay (a)
Supplemental Rent to Lessor on each applicable date during the Term in
accordance with Section 5.4 of the Common Terms Agreement and in the
amounts provided in Schedule B hereto; and (b) the Maintenance Adjustments
to Lessor on the Return Occasion in the amounts provided in Schedule B
hereto and as provided in Section 5.4 of the Common Terms Agreement. Lessor
shall retain all Supplemental Rent and Maintenance Adjustments, subject to
Section 3.4 below.
3.4 Lessor's Maintenance Contribution: Lessor shall make Maintenance
Contributions payments as and to the extent provided in Section 7.2 of the
Common Terms Agreement.
3.5 Lessor's Bank Account: For the purposes of Section 5.5 of the Common Terms
Agreement, Lessor's bank account and wire transfer particulars, to which
all payments to Lessor shall be made, are at the date hereof Bankers Trust
Company, ABA number 021 001 033 for the account of GECC T&I Air Depository
Account, Account No. 50 255 888.
4. CONDITION OF THE AIRCRAFT AT DELIVERY
4.1 On the Delivery Date, as a condition to Lessee's obligation to accept
delivery thereof, the Aircraft shall be in the condition provided in Part
III of Schedule A; provided, however, Lessee shall have no obligation to
-------- -------
pay Rent until the Rent Commencement Date.
5. CONDITION OF THE AIRCRAFT AT REDELIVERY
5.1 On the Return Occasion, Lessee shall redeliver the Aircraft to Lessor at
the Redelivery Location and at such redelivery the Aircraft shall be in the
condition provided herein
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and in the Common Terms Agreement, including Schedule 6 of the Common Terms
Agreement.
6. ADDRESSES FOR NOTICES
The addresses and facsimile and telephone numbers of Lessor and Lessee are
as follows:
Lessor: Aviation Financial Services Inc.
Address: c/o GE Capital Aviation Services
201 High Ridge Road
Stamford, CT 06927
Attention: Contracts Leader
Facsimile: (203) 357-4585
Telephone: (203) 357-3201
Lessee: Midway Airlines Corporation
Address: 2801 Slater Road, Suite 200
Morrisville, NC 27560
Attention: General Counsel
Facsimile: (919) 595-1705
Telephone: (919) 595-6009
7. SCHEDULES AND COMMON TERMS AGREEMENT
All the provisions of Schedule A, Schedule B hereto and the Common Terms
Agreement (including the schedules thereto) are incorporated by reference
herein and are part of this Aircraft Lease Agreement as if they were set
out in full herein. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BY
ITS SIGNATURE BELOW, THE LESSEE ACKNOWLEDGES AND AGREES THAT THE LEASE OF
THE AIRCRAFT HEREUNDER IS ON AN "AS-IS, WHERE-IS" BASIS AND THAT THE
----- --------
DISCLAIMERS, EXCULPATIONS AND LIMITATIONS OF LIABILITY, INDEMNITIES, THE
CHOICE OF NEW YORK LAW AS THE GOVERNING LAW, THE LESSEE'S SUBMISSION TO
PERSONAL JURISDICTION IN NEW YORK, AND THE WAIVER OF ANY RIGHT TO A TRIAL
BY JURY PROVIDED FOR IN THE COMMON TERMS AGREEMENT ARE INCORPORATED HEREIN
BY SUCH REFERENCE AND ARE PART OF THIS AGREEMENT AS IF THE SAME WERE SET
OUT IN FULL HEREIN.
8. NO AMENDMENT EXCEPT IN WRITING
No provision of this Lease, including any provision of Schedule A, Schedule
B or the Common Terms Agreement (including any provision of the schedules
thereto), may be amended, rescinded, changed, waived, discharged,
terminated or otherwise modified in any way whatsoever, except by a writing
signed by the party to be charged. Lessor and Lessee acknowledge their
agreement to the provisions of this Section 8 by their initials below:
Lessor: _____ Lessee: _______
5
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IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Lease
Agreement, each by their duly authorized representative(s), as of the date
shown at the beginning of this Aircraft Lease Agreement.
LESSOR:
AVIATION FINANCIAL SERVICES INC.
By: ______________________________
Name: ___________________________
Title: __________________________
LESSEE:
MIDWAY AIRLINES CORPORATION
By: _____________________________
Name: ___________________________
Title: __________________________
6
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SCHEDULE A
PART I-AIRFRAME AND ENGINES DESCRIPTION
AIRCRAFT
Manufacturer: Boeing
Model: 737-700
Serial Number: 29893
ENGINES (each of which has 750 or more rated takeoff horsepower or the
equivalent of such horsepower)
Manufacturer General Electric
Engine Type: CFM56-7B22
Serial Nos: To be determined and set forth in Lease Supplement No.2
PART II-AIRCRAFT DOCUMENTS AND RECORDS
A. CERTIFICATES
1. FAA Certificate of Airworthiness (on board aircraft)
2. Current Aircraft Registration Certificate (on board aircraft)
B. AIRCRAFT RECORDS
At delivery the Aircraft will be accompanied by the standard compliment of
manuals and records furnished by the Aircraft and Engine manufacturers with
a new Aircraft for a customer entitled to Customer Support at the Boeing
Level Code 3.
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SCHEDULE A
PART III-DELIVERY CONDITION REQUIREMENTS
Set forth below is a description of the condition in which the Aircraft must be
in order for Lessee to be obligated to accept the Aircraft under the Lease. It
is solely a description of such condition precedent and shall not be construed
as a representation, warranty or agreement of any kind whatsoever, express or
implied, by Lessor with respect to the Aircraft or its condition, all of which
have been disclaimed by Lessor and waived by Lessee as set forth in the Lease,
including in the Common Terms Agreement.
On delivery, the Aircraft shall be new, ex factory and painted in Lessee's
external livery. The Aircraft will be in the condition required for delivery
pursuant to the Purchase Agreement No. 1905 dated as of April 25, 1996 between
the Manufacturer (the "Purchase Agreement") and the Aircraft Specification D6-
38808-34 except as amended by change orders initiated by Lessor under the terms
of the Purchase Agreement. The Aircraft shall be configured in preparation for
the configuration modifications as set forth in the Modification Side Letter.
A-2
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SCHEDULE B
COMMERCIAL TERMS
Lessor and Lessee hereby agree that the definitions and other commercial
and financial terms set forth in this Schedule B shall apply to the leasing of
the Aircraft under the Lease.
In addition, Lessor and Lessee understand and agree that the commercial and
financial information contained in this Schedule B are considered by Lessor and
Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and
any of their assignees, upon becoming such shall agree, that it will treat this
Schedule B as proprietary and confidential and will not, without the prior
written consent of the other, disclose or cause to be disclosed, the terms
hereof or thereof to any Person, except to its agents, representatives,
advisors, employees, counsel, underwriters and auditors as necessary or
appropriate for the leasing transaction which is the subject hereof, or except
(a) as may be required by applicable Law or pursuant to an order, or a valid and
binding request, issued by any court or other Government Entity having
jurisdiction over Lessor, Lessee or the assignee of either of them, as the case
may be, or (b) as necessary to enable Lessor or its assignee to make transfers,
assignments or other dispositions to potential transferees, assignees or
participants of its interest in and to the Lease.
In connection with any such disclosure or any filing of the information
contained herein or therein pursuant to any such applicable Law, Lessor, Lessee
or the assignee of either of them, as the case may be, shall request and use its
best reasonable efforts to obtain confidential treatment of this Schedule B and
the other party will cooperate in making and supporting any such request for
confidential treatment.
PART I CASUALTY OCCURRENCE DEFINITIONS
Agreed Value means [****]
Damage Notification Threshold means [****]
Deductible Amount means [****] or such higher amount as requested by
Lessee and consented to by Lessor in writing (which consent may not be
unreasonably withheld upon receipt of an opinion from an internationally
recognized, independent insurance broker to the effect that such higher
amount is the deductible amount then being maintained by major United
States air carriers with respect to aircraft similar to the Aircraft).
Minimum Liability Coverage means [****]
PART II DEPOSIT; [****]
[****]
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[****] Lessee acknowledges and agrees that it is not located in the State
of New York within the meaning of Section 7-101 1-c(b) of the New York
General Obligations Law, and therefore the requirements of Section 7-101 of
the New York General Obligations Law do not apply to the Deposit.
[****]
Interest Rate: The Interest Rate shall be the "prime rate" as quoted in
the Wall Street Journal from time to time during the applicable period
-------------------
plus [****] per annum, but not to exceed the maximum amount permitted by
Law.
PART III RENT
The Rent payable in respect of each Rental Period during the Term will be
[****] per month, which shall be due and payable in advance on each Rent
Date and is based a manufacturer's price paid in July 1999 Dollars and
assumes a five year US Dollar Swap Rate (ask side, semi-annual 30/360
basis) as quoted in Bloomberg IRSB Page 1 yield [****] ("Cost of Funds").
(a) Rent shall be adjusted no less than two (2) days prior to the
Scheduled Delivery Date to reflect changes from the Cost of Funds plus
the Margin (if any) and [****] (increasing or decreasing by [****] as
the case may be, for each 10 bps change in the Cost of Funds).
Provided Lessee gives Lessor two (2) days prior written notice no
later than two (2) days before the Scheduled Delivery Date, Lessee
may, at its option at any time, elect to adjust the monthly Rent by
fixing for the Term from the floating rate based on the changes from
the assumed Cost of Funds as set forth in the preceding paragraph,
based on the difference between (i) [****] and (ii) the Cost of Funds
on the date notice is received by Lessor plus the Margin. The "Margin"
shall equal one (1) basis point for each calendar month before the
Scheduled Delivery Date that the notice to fix the Rent is received by
Lessor.
(b) Rent shall be increased (to reflect changes in the manufacturer's
price for the aircraft from July 1999 to the Delivery Date) by an
amount equal to R*((G1 - G2)/G2) where:
R = [****] as adjusted pursuant to the provisions of paragraph (a),
above.
G1 = manufacturer's price for the Aircraft on the basis of delivery of
the Aircraft on the Delivery Date; and
G2 = manufacturer's price for the Aircraft which would apply if the
Aircraft was delivered in July 1999.
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Lessee acknowledges that Lessor shall not be obligated to disclose
manufacturer's price or any other pricing or financial terms relating to
the purchase of the Aircraft.
[****]
PART IV TAX DEFINITIONS; SPECIAL TAX INDEMNITY
TAX DEFINITIONS:
Lessor/Owner Tax Jurisdiction means the United States.
MACRS Deductions means cost recovery deductions for 100% of the cost of the
Aircraft pursuant to Section 168(b) of the Internal Revenue Code of 1986,
as amended (the "Code"), commencing in 1999, computed (a) on the basis that
the Aircraft is "7-year property" within the meaning of Section 168(e) of
the Code), (b) by using the 200% declining balance method over a seven (7)
year recovery period, switching to the straight-line method for the first
taxable year of the Indemnitee during the term for which such method yields
a larger allowance, (c) assuming salvage value is zero, and (d) using a
half-year convention.
SPECIAL TAX INDEMNITY:
MACRS Deductions Indemnity
Lessee will on demand pay and indemnify each Tax Indemnitee for any loss,
disallowance, or deferral of, or delay in claiming the MACRS Deductions
resulting from Lessee's using the Aircraft in such a manner as to cause the
Aircraft to be treated as "used predominantly outside the United States"
within the meaning of Section 168(g) of the Code (hereinafter referred to
as a "MACRS Loss"). In determining the indemnity required in connection
with a MACRS Loss to the Tax Indemnitee under this Clause, the Tax
Indemnitees shall be assumed to be subject to a combined U.S. and state
income tax rate of (after giving effect to the deductibility of such state
income taxes for U.S. income tax purposes) 38% in 1999 and in each year
thereafter (the "Assumed Tax Rate"), and the Tax Indemnitee will have
sufficient taxable income to be taxed at the Assumed Tax Rate after full
utilization of the MACRS Deductions. The amount payable under this
indemnity shall be the amounts required from time to time, which, after
deduction by the Tax Indemnitee of the amount of all additional U.S.,
state, local, and foreign taxes required to be paid by Tax Indemnitee in
respect of the receipt or accrual of such amount, will equal the increase
in income taxes payable by (or not refundable to) Tax Indemnitee as the
result of such MACRS Loss, plus the amount of any actual interest,
penalties, and additions to tax payable by Tax Indemnitee with respect to
such MACRS Loss.
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If, as the result of a MACRS Loss, the amount of the U.S. income taxes
payable by an Tax Indemnitee for any taxable year shall be less than the
amount of such taxes that would have been payable by the Tax Indemnitee had
such MACRS Loss not occurred (or as the result thereof, an Tax Indemnitee
shall receive a refund of U.S. income taxes payable that shall be greater
than the amount of such refund, if any, that the Tax Indemnitee would have
received had such MACRS Loss not occurred), then such Tax Indemnitee shall
pay to the Lessee the amount of such increased reduction in taxes (or
refund, including any actual interest (net of any taxes payable with
respect to such interest) received thereon), plus any net additional U.S.,
state, local, or foreign tax benefits actually realized by the Tax
Indemnitee as the result of any payment made pursuant to this sentence
(such reduction in, or increased refund of, income taxes to be determined
on a hypothetical basis, i.e., assuming the Tax Indemnitee can utilize any
additional tax benefits resulting from the MACRS Loss at the Assumed Tax
Rate); provided, however, that the amount payable by the Tax Indemnitee
pursuant to this sentence shall not exceed the sum of the amounts
previously paid by the Lessee to the Tax Indemnitee pursuant to the
preceding paragraph with respect to such MACRS Loss to the extent not
previously taken into account under this sentence.
PART V SUPPLEMENTAL RENT
The Supplemental Rent payable will be determined with reference to the
following:
Airframe Supplemental Rent means all Supplemental Rent payable by Lessee
pursuant to Clause (a) below.
Annual Supplemental Rent Adjustment means [****]
APU Supplemental Rent means all Supplemental Rent payable pursuant to
Clause (d) below;
Assumed Ratio Adjustment: For the purposes of Section 5.4 of the Common
Terms Agreement, Assumed Ratio means a [****] and any adjustment pursuant
to Clause 5.4 shall be based on the following table:
[***]
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Engine Supplemental Rent means all Supplemental Rent payable by Lessee
pursuant to Clause (c) below.
Landing Gear Supplemental Rent means all Supplemental Rent payable by
Lessee pursuant to Clause (e) below.
Supplemental Rent equals each of the following amounts:
(a) Airframe: in respect of the Airframe, [****] ("Airframe Supplemental
---------------------
Rent Rate") for each Flight Hour operated by the Aircraft during the
---------
calendar month ("Airframe Supplemental Rent");
--------------------------
(b) Engine Life-Limited Parts: in respect of the life-limited Parts for
each Engine, [****] ("Engine LLP Supplemental Rent Rate") for each
---------------------------------
Flight Hour operated by that Engine during that calendar month
("Engine LLP Supplemental Rent");
----------------------------
(c) Engines: in respect of each Engine, [****] ("Engine Supplemental Rent
------------------------
Rate") for each Engine during that calendar month ("Engine
---- ------
Supplemental Rent");
-----------------
(d) APU: in respect of the APU, [****] ("APU Supplemental Rent Rate") for
--------------------------
each Flight Hour operated by the APU during that calendar month ("APU
---
Supplemental Rent"); and
-----------------
(e) Landing Gear: in respect of the Landing Gear, [****] ("Landing Gear
------------
Supplemental Rent Rate") for each Flight Hour operated by the Landing
----------------------
Gear during that calendar month ("Landing Gear Supplemental Rent").
------------------------------
PART VI MAINTENANCE AND RETURN CONDITION DEFINITIONS; MAINTENANCE
PAYMENTS AT REDELIVERY
DEFINITIONS:
Engine Cycles Restriction means [****] Engine Cycles.
Engine Flight Hours Restriction means [****] Engine Flight Hours.
[****]
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[****]
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[****]
Minimum Airframe Life Limited Component Cycles means [****] Cycles.
Minimum Airframe Life Limited Component Flight Hours means [****] Flight
Hours.
Minimum APU Limit means [****] Flight Hours.
Minimum Component Calendar Life means [****] months.
Minimum Engine Cycles means [****] Cycles.
Minimum Engine Flight Hours means [****] Flight Hours.
Minimum Hard Time Component Cycles means [****] Cycles.
Minimum Hard Time Component Flight Hours means [****] Flight Hours
Minimum Landing Gear Calendar Time means [****] months.
Minimum Landing Gear Cycles means [****] Cycles.
Minimum Landing Gear Flight Hours means [****] Flight Hours.
[****]
MAINTENANCE ADJUSTMENTS:
Maintenance Adjustment: In respect of each calendar month (or part thereof)
during the Term, Lessee will pay to Lessor at the end of the Term in
accordance with Section 5.4 of the Common Terms Agreement and Section 3.3
of this Agreement the following Maintenance Adjustments:
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[****]
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[****]
PART VII SUBLEASE FEE
Sublease Fee means a non-refundable fee of [****], which shall be payable
by Lessee to Lessor upon receipt of an invoice for such amount to cover
Lessor's cost of evaluating the proposed subleasing arrangement, which
amount shall remain non-refundable whether or not Lessor consents to such
arrangement.
PART VIII [****]
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SCHEDULE C
Form of Modification Side Letter
As of September 15, 2000
Midway Airlines Corporation
2801 Slater Road, Suite 2000
Morrisville, North Carolina 27560
Re: Modification Services to be performed by BF Goodrich, on behalf of Midway
Airlines Corporation ("Lessee"), for three Boeing 737-700 aircraft bearing
manufacturer's Serial Number 29893, 28654 and 32244, respectively (together
the "Aircraft" and each an "Aircraft") being purchased by Aviation
Financial Services Inc. ("Lessor") and leased by Lessor to Lessee
Ladies and Gentlemen:
We refer to three (3) Aircraft Lease Agreements each dated as of September 15,
2000 each as between Lessor and Lessee and incorporating the provisions of one
Common Terms Agreement dated September 10, 1999 between General Electric Capital
Corporation, as lessor, and Lessee, as lessee (collectively, the "Leases" and
each a "Lease") relating to the Aircraft. Capitalised terms used herein but not
defined shall have the meanings ascribed thereto in the Leases. This is the
Modification Side Letter as defined in the Leases.
Following Delivery of the Aircraft to Lessee, Lessee shall, with the assistance
of the Manufacturer and the Lessor, deliver the Aircraft to BF Goodrich in the
State of Washington (the "Location") for post-delivery modifications described
in Annex A hereto (the "Modifications") pursuant to an agreement between GE
Capital Aviation Services, Inc., as agent for Lessor ("GECAS"), and BF Goodrich
(the "Modification Agreement"). The Modifications to be performed by BF
Goodrich under the Modification Agreement have been ordered or procured by GECAS
solely at the request of Lessee.
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
[****]
2. Lessee shall ensure that its representative is available to accept the
satisfactory completion of the Modifications and/or any other relevant
services and/or works as and when required by the terms of the Modification
Agreement.
[****]
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[****]
[****]
(c) Payments pursuant to this paragraph 3 shall be made to Lessor's account.
Lessor shall provide Lessee with invoices for such payments at least 5
days prior to the due date for the relevant payment.
[****]
5. Nothing in this Side Letter shall be construed to modify the Lease.
[****]
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[****]
7. GECAS shall be responsible for any breach of its obligations set forth
herein.
8. GECAS is authorized to designate any person or persons to carry out its
obligations under this Side Letter.
This letter shall be governed by and construed in accordance with New York law
and shall be incorporated by reference into each of the Leases.
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Please confirm your agreement and acceptance of the terms of this letter by
countersigning below.
Yours faithfully
GE CAPITAL AVIATION SERVICES, INC.
as agent for Lessor
By: _________________________
Name: _________________________
Title: _________________________
Date: As of September 15, 2000
We hereby confirm and agree to be bound by the terms of this letter.
MIDWAY AIRLINES CORPORATION
By: _________________________
Name: _________________________
Title: _________________________
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ANNEX A
-------
[****]
C-5
