5.1 In the event that the Renter exercises the option to purchase the Aircraft as described in Clause 9 of this Agreement, the Lessor undertakes to offset the deposit against the purchase price (as defined in Clause 9 of this Agreement). In the event that HRT decides to terminate this Agreement before the end of the Term and without exercising the purchase option, the Owner will refund part of the deposit to the Renter, the amount of which will be determined on the basis of the time remaining between the date of termination and the end of the Term. Simply put, leasing aircraft for a finance lease is similar to a loan agreement. As long as the lessee pays instalments and substantially fulfills all other obligations under the lease, the lessor will not interrupt the use and operation of the aircraft by the lessee during the term of the lease. The main difference between a finance lease and a secured loan is that the lessor assumes the market value risk at the end of the lease. 1.13 (ii) a contract, pact, covenant or other agreement of which a signatory or party is a governmental agency; (iii) any judicial or administrative interpretation or application of any law described in points (i) or (ii); and (iv) any modification or revision of any law described in points (i) or (ii) above. 6.1.3 (ii) the seller`s constitutional documents; or (iii) any important agreement or document to which Seller is a party or to which Seller or any of its features are bound; and the FAA prohibits companies from charging a fee for the operation of the aircraft and prohibits individual member companies from owning and operating an aircraft. This is commonly referred to as the « flight department company trap ». As a result, some companies will form an LLC as a leasing company and lease the aircraft to the actual operator.
Aircraft leasing is a popular private aviation option for businesses and individuals. To lease an aircraft, a lessee and a lessor must sign an aircraft lease that sets out the terms of the lease, s. B who is responsible for the operation and maintenance of the aircraft, the duration of the lease, etc. This Agreement (including all annexes, appendices and documents attached to this Agreement) contains the entire agreement and understanding between Seller and Buyer with respect to the subject matter of this Agreement and supersedes all prior written or oral agreements and understandings with respect to such matters. For the avoidance of doubt, the parties expressly agree that, upon performance of this Agreement by the parties, the Lease and Option Agreement will be automatically terminated and will no longer have force or effect. Any controversy, dispute, suit, cause of action or other claim arising out of or relating to the provisions of this Agreement that cannot be resolved amicably shall be finally settled by arbitration in London, England, in accordance with the Arbitration Rules of the International Chamber of Commerce, by an arbitrator appointed in accordance with these Rules. All arbitrations will be conducted in English. The arbitrator shall resolve such disputes or claims in strict accordance with the applicable law referred to in clause 16.4.
The arbitrator may make a default decision against any party who is not participating in the arbitration. The buyer`s obligation to purchase and accept the seller`s aircraft on the date of delivery is subject to the following conditions precedent: Traditional Ownership Structure Lease It is unusual for a bank or lender to be involved in a traditional leasing structure, unless the situation requires both traditional ownership leasing and leasing. In a traditional leasing structure, FAA regulations require the lessor and tenant to use the pilot management services of an independent third party. Leasing without the provision of pilot services is considered a « dry lease », while a lease with an aircraft and a pilot is considered a « wet lease » and requires FAA certification. The vast majority of traditional property leases that people enter into are dry leases. These leases are generally « net » leases, which means that the lessee agrees to pay all costs associated with the ownership, operation, maintenance, maintenance, insurance and registration of the aircraft, as well as related taxes. Essentially, the lessee bears all the risks associated with the property, with the exception of the decrease in the market value of the aircraft. Aircraft leasing will include a number of requirements and restrictions to ensure the safe operation and condition of the aircraft. For example, the tenant is required to indemnify the landlord against liability claims, government taxes, and loss of tax benefits expected from the landlord. Although the lease cannot usually be terminated by the lessee, the lessee is required to pay the lessor the agreed value of the aircraft set at the beginning of the lease. Outside of an accident, some finance leases may also allow the lessee to cancel the lease and purchase the aircraft from the lessor or make the lessor complete. .