Exhibit 10.1
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
dated as of June 26, 2001
between
GENERAL ELECTRIC CAPITAL CORPORATION
and
THE OTHER SELLERS LISTED ON ANNEX A HERETO
and
LIFT TRUST-SUB 1
TABLE OF CONTENTS
Page
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1. INTERPRETATION....................................................................1
2. SALE AND PURCHASE................................................................11
3. DELIVERY AND ACCEPTANCE..........................................................13
4. SUBSTITUTE AND UNDELIVERED AIRCRAFT..............................................15
5. PAYMENTS.........................................................................17
6. CONDITIONS PRECEDENT - SELLER....................................................20
7. CONDITIONS PRECEDENT - PURCHASER.................................................23
8. REPRESENTATIONS AND WARRANTIES OF GECC AND EACH OTHER
SELLER....................................................................29
9. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER..................................40
10. INDEMNITY.....................................................................42
11. TAXES.........................................................................43
12. WARRANTIES AND DISCLAIMERS....................................................47
13. ASSIGNMENT....................................................................48
14. MISCELLANEOUS.................................................................48
15. SUBROGATION...................................................................51
LIST OF ATTACHMENTS:
EXHIBIT A......... - Form of Assignment of Beneficial Interest
EXHIBIT B......... - Form of Xxxx of Sale
EXHIBIT C......... - Form of Acknowledgement of Delivery
EXHIBIT D......... - Form of Guaranty
EXHIBIT E-1....... - Conditions Precedent - Aircraft Delivery (BI Aircraft)
EXHIBIT E-2....... - Conditions Precedent - Aircraft Delivery (Independent Aircraft)
EXHIBIT F......... - Form of Servicing Agreement
EXHIBIT G......... - Form of Administrative Agency Agreement
SCHEDULE 1........ - Sellers and Related Aircraft
SCHEDULE 2........ - Aircraft Information
SCHEDULE 3........ - Documents and Conditions - Delivery
SCHEDULE 4........ - Documents and Conditions - Post-Delivery
SCHEDULE 5........ - State of Incorporation
SCHEDULE 6........ - LIFT Entities
ii
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is dated as of June 26, 2001
between: (i) GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation; (ii)
THE OTHER SELLERS LISTED ON ANNEX A HERETO; and (iii) LIFT TRUST-SUB 1, a
Delaware business trust.
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. INTERPRETATION
1.1 For all purposes of this Agreement, the following terms shall have the
following meanings:
"ACKNOWLEDGEMENT OF DELIVERY" means, for any Aircraft title to which
passes as a result of being physically delivered pursuant to the terms
and conditions of this Agreement, an executed acknowledgement of
delivery from the Purchaser thereof to the Seller thereof substantially
in the form of Exhibit C.
"AFFILIATE" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common
control with, the Person specified; PROVIDED, HOWEVER, that LIFT
Trust-Sub 1 and its Subsidiaries, on the one part, and GECC and its
Subsidiaries, on the other part, shall not be considered to be
Affiliates of each other.
"AGREED FORM" means, when used in relation to any draft certificate,
document, agreement or opinion referred to in this Agreement, (a)
substantially in the form agreed between GECC and LIFT Trust-Sub 1 on
or before the Purchase Date with such changes thereto as may
subsequently be agreed between GECC and LIFT Trust-Sub 1 and (b) in the
case of any opinion, such form as each of the Rating Agencies shall
approve.
"AIR AUTHORITY" means each Person who is vested with the control and
supervision of, or has jurisdiction over, the registration,
airworthiness and operation of aircraft and other matters relating to
civil aviation in the State of Registration of the relevant Aircraft.
"AIRCRAFT" means each aircraft listed on Schedule 1 and described in
further detail in Schedule 2 or, where any such aircraft has become a
Remaining Aircraft pursuant to Section 4.1(a), and unless the context
otherwise requires, any Substitute Aircraft designated in lieu thereof
pursuant to Sections 4.1(b) and (c) and described in the applicable
Substitute Aircraft Supplement, together with the Engines, and includes
where the context admits, a separate reference to the Engines, Parts
and Aircraft Documents.
"AIRCRAFT DOCUMENTS" means, for any Aircraft, all records, logs,
technical data, manuals and any other documents defined as "Aircraft
Documents" or any similar term under the relevant Lease therefor, title
to which is vested in the Seller thereof at Delivery.
"AIRCRAFT NO." means, for any Aircraft, the reference number assigned
to such Aircraft in Schedule 2 or the Substitute Aircraft Supplement,
as applicable.
"AIRCRAFT PURCHASE PRICE" means on any date, in respect of any Aircraft
(other than a Substitute Aircraft), the "Aircraft Purchase Price" for
such Aircraft as set forth in Schedule 2, and for any Substitute
Aircraft, 84.4677987% of the Appraised Value of such Aircraft.
"AIRCRAFT VALUE" means, in respect of any Aircraft, the product of (i)
the Aircraft Purchase Price of such Aircraft and (ii) the quotient
obtained by dividing (A) the Depreciation Factor applicable to such
Aircraft as of the Delivery Date for such Aircraft or in the case of
any Aircraft to which the payment provisions of Section 4.2 applies,
the Delivery Expiry Date by (B) the Depreciation Factor applicable to
such Aircraft on the Purchase Date.
"APPRAISED VALUE" means, for any Aircraft, the average of the three
most recent "Base Value" appraisals for such Aircraft, as obtained by
GECC from the Appraisers provided, that, for any Substitute Aircraft,
such appraisals shall be dated less than six months prior to the
expected Delivery Date for such Substitute Aircraft.
"APPRAISERS" means Aircraft Information Services, Inc., BK Associates,
Inc. and Xxxxxx Xxxxx & Xxxxx, Inc. or such other appraisers as are
reasonably acceptable to LIFT Trust-Sub 1.
"ASSET" means any Independent Aircraft or Beneficial Interest purchased
by the relevant Purchaser pursuant to this Agreement.
"ASSIGNED LEASE" means, for any Lease the subject of an Assignment of
Lease, such Lease as assigned to the relevant Purchaser or relevant
LIFT Entity ("NEW LESSOR"), and as amended by the applicable Assignment
of Lease.
"ASSIGNED PROPERTY" has the meaning specified in Section 2.1.
"ASSIGNMENT OF BENEFICIAL INTEREST" means the instrument pursuant to
which a BI Seller conveys right, title and interest to the beneficial
interest of a LIFT Entity to a Purchaser, the form of which is attached
as Exhibit A hereto.
"ASSIGNMENT OF LEASE" means, for any Aircraft, a lease assignment and
assumption agreement in the Agreed Form between the Purchaser or New
Lessor thereof and the Seller thereof to be entered into between such
Seller or an Affiliate of such Seller ("Existing Lessor"), such
Purchaser and/or New Lessor and the relevant Lessee, under which the
relevant Lease will be assigned, assumed and/or amended so that such
Purchaser or New Lessor (as appropriate) will be substituted as lessor
of such Aircraft in place of Existing Lessor.
"ASSIGNMENT OF WARRANTIES" means, for any Aircraft, an assignment in
the Agreed Form between the Seller or Affiliate of Seller thereof and
the Purchaser, LIFT Entity or New Lessor thereof, and consented to by
the Manufacturer, of such Seller's right, title and interest in the
Manufacturer's warranties in respect of such Aircraft, subject to the
interests of the relevant Lessee.
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"BASIC RENT" means, for any Lease, any scheduled rent thereunder,
whether denominated as "Basic Rent", "Rent" or otherwise (which, for
the avoidance of doubt, shall not include any Maintenance Reserves).
"BENEFICIAL INTEREST" means, for any LIFT Entity, 100% of the equity
interest, both beneficial and of record, in such LIFT Entity whether
such be in the form of shares of a corporation, membership in a limited
liability company or beneficial interest in a trust.
"BI AIRCRAFT" means any Aircraft owned by any LIFT Entity on the
Purchase Date (subject to Section 3.1).
"BI SELLER" means either GECC, or any other entity designated as a "BI
Seller" on Schedule I hereof, each a Seller of the Beneficial Interest
in a LIFT Entity.
"CODE" mean the Internal Revenue Code of 1986, as amended from time to
time.
"BI TRANSFER DATE" has the meaning specified in Section 2.1.
"XXXX OF SALE" means, for any Aircraft, an executed xxxx of sale from
the Seller thereof to the Purchaser or relevant LIFT Entity
substantially in the form of Exhibit B (with such modifications as
counsel to any Seller in any Delivery Location may advise as necessary
or desirable) and, as necessary, any FAA Xxxx of Sale executed by the
Seller thereof.
"COLLECTIONS ACCOUNT" has the meaning specified in the Indenture.
"CONTRACTS" has the meaning specified in Section 8.3.
"DELIVERY" means, (a) for any Independent Aircraft, transfer of title
to such Aircraft from the Seller thereof to LIFT Trust-Sub 1 or any
other subsidiary of LIFT Trust-Sub 1, in accordance with Section 3.4(b)
and the other provisions of this Agreement, and (b) for any BI
Aircraft, Transfer of the Beneficial Interest of the LIFT Entity that
has title, or holds the Beneficial Interest in another LIFT Entity that
has title, to such BI Aircraft in accordance with Section 3.4(a) and
the other provisions of this Agreement.
"DELIVERY DATE" means, for any Aircraft, the date on which Delivery
therefor occurs in accordance with this Agreement.
"DELIVERY EXPIRY DATE" means the date that is 210 days after the
Purchase Date.
"DELIVERY LOCATION" means, for any Aircraft, the location of such
Aircraft at the time of Delivery as GECC shall designate, subject to
Section 3.
"DISCLOSURE LETTER" means the First Disclosure Letter or a Supplemental
Disclosure Letter.
"DOLLARS" and "$" means the lawful currency for the time being of the
United States of America.
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"ENGINE" means, in respect of any Aircraft, each engine for such
Aircraft as described in Schedule 2 or the Substitute Aircraft
Supplement, as applicable, concerning such Aircraft or, where any such
engine has been replaced under the terms of the relevant Lease and
title to the replacement engine has passed to the Seller thereof, such
replacement engine as described in the relevant Xxxx of Sale or
Acknowledgement of Delivery as the case may be, together with all
equipment, parts and accessories belonging to, installed in or
appurtenant to such engine and includes, where the context permits, a
separate reference to the Aircraft Documents concerning such engine.
"EVENT OF LOSS" means, for any Aircraft, any event defined as such or
as "Casualty Occurrence" or "Total Loss" or the like in the relevant
Lease.
"EXISTING LESSOR" has the meaning ascribed thereto in the definition of
"Assignment of Lease" herein.
"FAA XXXX OF SALE" means, with respect to any Aircraft the State of
Registration of which is the United States of America, a Federal
Aviation Administration Xxxx of Sale (AC Form 8050-2) to be executed by
the Seller in favor of the Purchaser or LIFT Entity, and upon Delivery,
filed with the Air Authority of the United States of America.
"FINAL DETERMINATION" means (i)(A) a decision, judgment, decree or
other order by any court of competent jurisdiction, which decision,
judgment, decree or other order has become final after all appeals
allowable by law by either party to the action have been exhausted or
the time for filing such appeals has expired or (B) in any case
involving United States federal income taxes where judicial review
shall at the time be unavailable because the proposed adjustment
involves a decrease in net operating loss carry forwards or business
credit carry forwards, a decision, judgment, decree or other order of
an administrative official or agency of competent jurisdiction, which
decision, judgment, decree or other order has become final (I.E., where
all administrative appeals have been exhausted by all parties thereto),
(ii) a closing agreement entered into (x) under Section 7121 of the
Code or any other settlement agreement entered into in connection with
an administrative or judicial proceeding and (y) with the consent of
GECC, (iii) the expiration of the time for instituting suit with
respect to the claimed efficiency or (iv) the expiration of the time
for instituting a claim for refund or, if such a claim was filed, the
expiration of the time for instituting suit with respect thereto.
"FIRST DISCLOSURE LETTER" means a letter from GECC to the Purchaser
dated the date hereof setting out certain information as at the date
hereof.
"FORMATION AGREEMENT" means, for each LIFT Entity, the formation
document or trust agreement pursuant to which such LIFT Entity was
created, as amended or supplemented to the date of determination.
"GECAS" means GE Capital Aviation Services, Limited, an Irish
corporation.
"GE GROUP" has the meaning specified in Section 11(d)(iii).
"GECC" means General Electric Capital Corporation, a New York
corporation.
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"GOVERNMENT ENTITY" means:
(1) any national government, political sub-division
thereof, or local jurisdiction therein;
(2) any instrumentality, board, commission, department,
division, organ, court, exchange control authority,
or agency of any thereof, however constituted; or
(3) any association, organization, or institution of
which any of the above is a member or to whose
jurisdiction any thereof is subject or in whose
activities any thereof is a participant.
"GUARANTY" means the Guaranty of GECC in respect of the transactions
contemplated hereby in substantially the form of Exhibit D hereto.
"HEAD LEASE" means, for any Aircraft, any lease therefor in the Agreed
Form between the applicable LIFT Entities.
"INDENTURE" means the Indenture dated as of the date hereof between
LIFT Trust-Sub 1, as the Bridge Note Issuer, Bankers Trust Company and
the other parties referred to therein.
"INDEPENDENT AIRCRAFT" means each Aircraft listed on Schedule I (other
than any BI Aircraft but subject to Section 3.1) and, in each case, any
Substitute Aircraft substituted therefor pursuant to Section 4.1.
"INDEPENDENT SELLER" means each Independent Seller listed on Schedule
1.
"INITIAL APPRAISED VALUE" means, for any Aircraft, the Appraised Value
of such Aircraft as set forth in Schedule 2 or the Substitute Aircraft
Supplement, as applicable, for such Aircraft.
"INTERCOMPANY LEASE" means, individually or collectively as the context
indicates, the Intermediate Leases and/or the Head Leases.
"INTERMEDIATE LEASE" means, for any Aircraft, a lease therefor in the
Agreed Form between the applicable LIFT Entities.
"LEASE" means, for any Aircraft, the aircraft lease agreement (as
amended or supplemented by any relevant Lease Document) between the
Existing Lessor thereof and the relevant Lessee identified as such in
Schedule 2 or the Substitute Aircraft Supplement, as applicable,
concerning such Aircraft.
"LEASE ASSIGNMENT DOCUMENTS" has the meaning ascribed thereto in the
Security Trust Agreement.
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"LEASE DOCUMENTS" means, for any Aircraft, all agreements identified as
such in Schedule 2 or the Substitute Aircraft Supplement, as
applicable, concerning such Aircraft, as such may be amended by any
Disclosure Letter the contents of which have been agreed to by LIFT
Trust-Sub 1.
"LEASE NOVATION" means, for any Aircraft, a lease novation and
amendment agreement therefor in the Agreed Form, to be entered into
between the Purchaser thereof and/or New Lessor, the Existing Lessor
thereof as lessor and the relevant Lessee, under which the relevant
Lease will be novated and amended so that such Purchaser or New Lessor
(as appropriate) will be substituted as lessor of such Aircraft in
place of such Existing Lessor.
"LESSEE" means, for any Aircraft, the lessee of such Aircraft as
identified in Schedule 2 or the Substitute Aircraft Supplement, as
applicable, and includes where the context permits a separate reference
to the lessee under an Intercompany Lease.
"LESSEE ENCUMBRANCE" means, for any Aircraft, any Encumbrance which is
created by or is attributable to the debts or liabilities of the
applicable Lessee or its Affiliates.
"LESSEE FURNISHED EQUIPMENT" means, for any Aircraft, those appliances,
parts, accessories, instruments, navigational and communications
equipment, furnishings modules, components and other items of equipment
installed in or furnished with such Aircraft at Delivery and ownership
of which is not required pursuant to the relevant Lease to vest in or
be transferred to the lessor or owner of such Aircraft, as the case may
be.
"LIABILITIES" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured
or determined or determinable, including, without limitation, those
arising under any Applicable Law (including, without limitation, any
environmental law), and those arising under any contract, agreement,
arrangement, commitment or undertaking.
"LIFT" means Lease Investment Flight Trust, a Delaware business trust.
"LIFT CORPORATE CHINESE ENTITY" means any LIFT Entity designated as a
LIFT Corporate Chinese Entity in Schedule 6 hereto.
"LIFT CORPORATE ENTITY" means any LIFT Entity designated as a LIFT
Corporate Entity in Schedule 6 hereto.
"LIFT ENTITY" means any of the entities listed in Schedule 6 hereto.
"LIFT NON-CORPORATE ENTITY" means any LIFT Entity designated as a LIFT
Non-Corporate Entity Partnership in Schedule 6 hereto.
"LIFT STATE CORPORATE ENTITY" has the meaning set forth in Section 8.6.
"LIFT TRUST-SUB 1" means LIFT Trust-Sub 1, a Delaware business trust.
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"LOSSES" has the meaning specified in Section 10.1.
"MAINTENANCE RESERVES" means, for any Aircraft, any amount defined
under the Lease for such Aircraft as a "Maintenance Accrual",
"Maintenance Fund" or "Maintenance Reserve" or the like or as
"Supplemental Rent" or "Variable Rent" in relation to any and/or all of
(as the context may require) airframes, Engines, auxiliary power units
and landing gear, in each case being the amounts held by the lessor
under such Lease, there being no amounts due and unpaid by the
applicable Lessee.
"MANUFACTURER" means, for any Aircraft, the manufacturer thereof as
identified in Schedule 2 or the Substitute Aircraft Supplement, as
applicable, and includes where the context admits a separate reference
to the manufacturer of each Engine as identified in Schedule 2 or the
Substitute Aircraft Supplement, as applicable.
"MATERIAL DEFAULT" means, for any Lease:
(1) any Event of Default as defined in such Lease; or
(2) any default (a "Payment Default") in the making of
any payment when due and payable under such Lease
which shall include, without limitation, defaults
that have been cured by either (i) debiting the
Security Deposit with respect to such Lease unless
such Security Deposit has been replenished by the
applicable Lessee, and/or (ii) restructuring such
Lease to eliminate such default and/or (iii) by
waiver; or
(3) any other default under such Lease known to GECC;
unless, in any such case, such Event of Default, Payment
Default or other default has been disclosed to each Rating
Agency prior to the Purchase Date.
"NEW LESSOR" has the meaning ascribed thereto in the definition of
"Assigned Lease" herein.
"NON-DELIVERED AIRCRAFT ADJUSTMENT AMOUNT" means, with respect to any
Aircraft to which the payment provisions of Section 4.2 applies, the
remainder, which may be a negative number, of (A) all Maintenance
Reserves received by or on behalf of the relevant lessor under the
Lease of such Aircraft and paid to LIFT Trust-Sub 1 pursuant to Section
5.3 hereof, MINUS (B) the amount of maintenance or other expenditures
made by or on behalf of LIFT Trust-Sub 1 for such Aircraft on or after
the Purchase Date.
"NOVATED LEASE" means, for any Lease subject to a Lease Novation, such
Lease as novated to the Purchaser or New Lessor (as appropriate) of the
Aircraft the subject of such Lease, and as amended by the applicable
Lease Novation.
"OPERATIVE DOCUMENTS" means, for any Aircraft, (a) this Agreement, (b)
the Guaranty, (c) the Xxxx of Sale or Acknowledgement of Delivery
therefor, as applicable, (d) either (i) the Lease Novation or (ii) the
Assignment of Lease therefor, and (e) in the case of any BI Aircraft,
the Assignment of Beneficial Interest together with, in case of
Beneficial
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Interests consisting of capital stock or equity interest, certificates
representing such Beneficial Interest duly issued and registered in
the name of LIFT Trust-Sub 1.
"ORDER" means any writ, judgment, decree, injunction or similar order
of any governmental or regulatory authority (in each case whether
preliminary or final).
"PARTS" shall mean any part, component, appliance, accessory,
instrument or other item of equipment (other than any of the Engines)
installed in or furnished with or attached to any of the Aircraft at
Delivery (or part thereof) except Lessee Furnished Equipment.
"PERMITS" has the meaning specified in Section 8.3.
"PERMITTED ENCUMBRANCE" means:
(1) any Purchaser Encumbrance;
(2) the rights conferred by the Lease Documents; and
(3) any Lessee Encumbrances.
"PRE-CLOSING TAXES" has the meaning specified in Section 11(d)(iv).
"PRE-CLOSING TAX RETURNS" has the meaning specified in Section
11(d)(iii).
"PURCHASE DATE" means June 26, 2001.
"PURCHASER" means, for any Asset, the purchaser of such Asset pursuant
to this Agreement, which shall be LIFT Trust-Sub 1 or, in the case of
any Independent Aircraft, any of LIFT Trust-Sub 1, any Subsidiary of
LIFT Trust-Sub 1 or such other entity as designated in writing by LIFT
Trust-Sub 1 at least three Business Days (or such shorter period as may
be agreed) prior to the relevant Delivery Date.
"PURCHASER ENCUMBRANCE" means any Encumbrance which is created by or
results from debts or liabilities or actions or omissions of any
Purchaser of an Asset or its Affiliates.
"PURCHASER INDEMNITEES" means LIFT Trust-Sub 1, any subsidiary of LIFT
Trust-Sub 1, each other Purchaser, the Purchaser Parent, the Security
Trustee, the Owner Trustee, the Controlling Trustees, the Trustee, the
Holders, the Certificateholders and any of their respective successors
and assigns, shareholders, subsidiaries, Affiliates, directors,
servants, agents and employees.
"PURCHASER PARENT" means (i) prior to the issuance of the Initial Notes
under the Indenture, Automatic LIFT I, LP, or (ii) on or subsequent to
the issuance of the Initial Notes under the Indenture, Lease Investment
Flight Trust, a Delaware business trust.
"REMAINING AIRCRAFT" has the meaning specified in Section 4.1(a).
"RETAINED RIGHTS" has the meaning specified in Section 2.1.
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"SECURITY DEPOSIT" means, for any Aircraft, the amount (whether in the
form of cash, a letter of credit, guarantee, promissory note or
otherwise) set forth opposite the term "Security Deposit" in respect of
such Aircraft on Schedule 2 or the Substitute Aircraft Supplement, as
applicable.
"SECURITY TRUST AGREEMENT" has the meaning ascribed thereto in the
Indenture.
"SELLER" means with respect to any Asset, the BI Seller or the
Independent Seller, as the case may be, selling such Asset. For the
avoidance of doubt, Seller shall not mean any seller of aircraft or any
other asset to any of the Purchasers other than pursuant to this
Agreement.
"SELLER INDEMNITEES" means, for any Aircraft, the Seller thereof (and
each party named as an Indemnitee with respect to the Lease of such
Aircraft prior to amendment thereof by an Assignment of Lease or Lease
Novation, as the case may be), GECC and any of their respective
successors and assigns, shareholders, subsidiaries, Affiliates,
directors, servants, agents, and employees.
"STATE OF REGISTRATION" means, for any Aircraft, the country identified
in Schedule 2 or the Substitute Aircraft Supplement, as applicable,
concerning such Aircraft.
"SUBSIDIARY" of any Person means a corporation, company or other
entity: (i) more than 50% of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, or (ii) which does not have outstanding shares
or securities (as may be the case in a partnership, joint venture or
unincorporated association), but more than 50% of whose ownership
interest representing the right to make decisions for such other entity
is, now or hereafter owned or controlled, directly or indirectly, by
such Person, but such corporation, company or other entity shall be
deemed to be a Subsidiary only so long as such ownership or controls
exists.
"SUBSTITUTE AIRCRAFT" has the meaning specified in Section 4.1(b).
"SUBSTITUTE AIRCRAFT ADJUSTMENT AMOUNT" means, with respect to a
Substitute Aircraft and the related Remaining Aircraft, the sum of (a)
the difference (whether positive or negative) obtained by subtracting
(i) the amount obtained by subtracting (A) the amount of maintenance or
other expenditures made by or on behalf of the relevant lessor under
the Lease for such Substitute Aircraft on or after the Purchase Date
from (B) the amount of maintenance payments received by or on behalf of
the relevant lessor under the Lease for such Substitute Aircraft on or
after the Purchase Date, from (ii) the amount obtained by subtracting
(A) the amount of maintenance or other expenditures made by or on
behalf of LIFT Trust-Sub 1 for such Remaining Aircraft on or after the
Purchase Date from (B) the amount of maintenance payments received by
LIFT Trust-Sub 1 for such Remaining Aircraft on or after the Purchase
Date and (b) the difference (whether positive or negative) obtained by
subtracting (i) the sum of the portions of any Basic Rent under the
Lease for such Substitute Aircraft received (and any amounts debited
from the Security Deposit relating to such Substitute Aircraft due to
the nonpayment of such Basic Rent) by or on behalf of the related
Seller or relevant Lessor, as applicable, related to the
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period subsequent to the Purchase Date from (ii) the sum of the
portions of any Basic Rent under the Lease for such Remaining Aircraft
received (and any amounts debited from the Security Deposit relating to
such Remaining Aircraft due to the nonpayment of such Basic Rent) by or
on behalf of LIFT Trust-Sub 1, related to the period subsequent to the
Purchase Date.
"SUBSTITUTE AIRCRAFT SUPPLEMENT" means, for any Substitute Aircraft, a
supplement to this Agreement in the Agreed Form which, among other
things, sets forth such matters as GECC and LIFT Trust-Sub 1 shall
agree apply specifically to such Substitute Aircraft, as provided in
Section 4.1(c).
"SUPPLEMENTAL DISCLOSURE LETTER" means, (a) for any Independent
Aircraft, a letter from GECC to LIFT Trust-Sub 1 setting out certain
information as of the Delivery Date for such Aircraft and (b) for any
BI Aircraft, a letter from GECC to LIFT Trust-Sub 1 setting out certain
information as of the relevant BI Transfer Date.
"TAXES" means any and all present and future sales, use, personal
property, customs, ad valorem, value added, turnover, franchise,
windfall or other profits, payroll, capital stock, employment, social
security, workers' compensation, unemployment compensation, stamp,
transfer, excise, interest equalization, income, gross receipts,
limited liability company minimum, limited partnership minimum or other
taxes, fees, withholdings, imposts, duties, deductions, levies, or
other charges of any nature, together with any penalties, fines, or
interest thereon, imposed, levied, or assessed by, or otherwise payable
to, any Government Entity.
"TAX RETURN" with respect to any entity means a report, return or other
information (including any amendments) required to be supplied to a
Government Entity with respect to Taxes of such entity including,
information returns and, where permitted or required, combined or
consolidated returns for any group of entities that include the entity.
"TAX SHARING AGREEMENT" has the meaning specified in Section 11(d)(i).
"TRANSFER" means the sale, conveyance and transfer of any Beneficial
Interest.
"TREASURY REGULATIONS" means proposed, temporary or final regulations
promulgated under the Code by the United States Treasury Department.
1.2 In addition to the terms defined in Section 1.1, and for all purposes
of this Agreement, all capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned to such terms in the
Indenture.
1.3 (a) In this Agreement, unless the contrary intention is stated, a
reference to:
(i) each of "GECC", any "Seller", "LIFT Trust-Sub 1", any
"Purchaser" or any other Person includes without
prejudice to the provisions of this Agreement any
successor in title to it or any permitted assignee;
(ii) words in the plural include the singular and vice versa;
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(iii) any document includes that document as amended, novated
or supplemented, in each case in accordance with its
terms;
(iv) a law (1) includes any statute, decree, constitution,
regulation, order, judgment or directive of any
Government Entity; (2) includes any treaty, pact, compact
or other agreement to which any Government Entity is a
signatory or party; (3) includes any judicial or
administrative interpretation or application thereof; and
(4) is a reference to that provision as amended,
substituted or re-enacted; and
(v) a Section, an Exhibit or a Schedule is a reference to a
clause of or an exhibit or a schedule to this Agreement.
(b) The headings in this Agreement are to be ignored in
construing this Agreement.
2. SALE AND PURCHASE
2.1 On the Purchase Date, or as promptly thereafter as practical (but no
later than the Delivery Expiry Date), and upon the satisfaction of all
of the conditions precedent by the BI Seller in Sections 6 and 7 with
respect to all of the BI Aircraft then owned by each LIFT Entity (each
such date, the "BI TRANSFER DATE" for such LIFT Entity), the Purchaser
will purchase from Seller and concurrently therewith, the BI Seller
will sell to Purchaser, the Beneficial Interest in such LIFT Entity by
delivery to the Purchaser of either an Assignment of the Beneficial
Interest in the form of Exhibit A hereto, dated such BI Transfer Date,
or certificates (with all required stock transfer tax having been paid)
evidencing such Beneficial Interest, conveying to the Purchaser
outright and unconditionally all of the BI Seller's right, title and
interest in, to and under such Beneficial Interest of such LIFT Entity,
including, without limitation, all of the BI Seller's rights as
shareholder, member or beneficiary, as the case may be, of such LIFT
Entity, any applicable Security Deposit or Maintenance Reserves but
excluding any Maintenance Reserves paid to such BI Seller or any of its
Affiliates prior to the Purchase Date, together with all other
agreements, contracts, documents and instruments evidencing any of such
right, title and interest as well as the proceeds of all thereof, in
each case free from any Encumbrances other than Permitted Encumbrances
(individually or collectively, the "ASSIGNED PROPERTY" for such LIFT
Entity) on, and subject to, the terms and conditions contained in this
Agreement; RESERVING, HOWEVER, to such Seller all claims for
indemnities payable to such Seller (or the applicable LIFT Entity)
under the related Lease(s) in respect of any act or omission or events
occurring prior to later of the (i) Purchase Date and (ii) Delivery
Date for such LIFT Entity (the "RETAINED RIGHTS" for the Aircraft
relating to or for such LIFT Entity). Effective as of the BI Transfer
Date for each LIFT Entity, on, and subject to, the terms and conditions
contained in this Agreement, the Purchaser agrees to accept the
assignment of the Assigned Property for such LIFT Entity from the BI
Seller and assume and undertake all of the duties, obligations and
liabilities of the BI Seller with respect to such Assigned Property
arising and to be performed on or after such BI Transfer Date and
agrees to be bound by all the terms of and to undertake all of the
duties, obligations and liabilities arising after such BI Transfer Date
of the BI Seller with respect to the Assigned Property for such LIFT
Entity.
11
Each Purchaser or LIFT Trust-Sub 1 with respect to a Related Right
shall take such actions or pursue such claims as reasonably requested
to by the Seller; PROVIDED, (i) all costs incurred by the Purchaser and
LIFT Trust-Sub 1 shall be for the Seller's account, (ii) the Seller
agrees to indemnify the Purchaser and LIFT Trust-Sub 1 for any costs or
liabilities incurred in connection with such action or pursuit of claim
and (iii) such action or pursuit of claim shall not be inconsistent
with a Purchaser's or LIFT Trust-Sub 1's obligations under any of the
Operative Documents.
2.2 With respect to each Independent Aircraft, on or after the Purchase
Date (but no later than the Delivery Expiry Date), and upon the
satisfaction of all of the conditions precedent by any Independent
Seller in Sections 6 and 7 with respect to any Independent Aircraft
owned by such Independent Seller, such Independent Seller will sell to
the Purchaser thereof and such Purchaser agrees to purchase from such
Independent Seller, such Independent Aircraft, including, without
limitation, the Aircraft Documents and any applicable Security Deposit
or Maintenance Reserves, but excluding any Maintenance Reserves paid to
such Independent Seller or any of its Affiliates prior to the Purchase
Date, on and subject to the terms and conditions contained in this
Agreement (including, without limitation, the execution of a Lease
Novation or Assignment of Lease (as the case may be) in respect of such
Independent Aircraft and delivery of the Lease Documents therefor),
each in its "AS IS" and "WHERE IS" condition at the relevant Delivery
Location, free from any Encumbrances other than Permitted Encumbrances.
2.3 The parties hereto acknowledge, consent and agree that from and after
the Purchase Date, each of the Aircraft shall be subject to the
Administrative Agency Agreement as attached as Exhibit G hereto and the
Servicing Agreement as attached as Exhibit F hereto on the terms and
conditions provided herein and therein whether or not such Aircraft
shall have been delivered hereunder or any Delivery Date shall have
occurred, PROVIDED always that (without prejudice to the terms of the
Administrative Agency Agreement or the Servicing Agreement) from and
after the Delivery Expiry Date an Aircraft shall cease to be subject to
the Administrative Agency Agreement and the Servicing Agreement upon
payment by GECC of the amount specified in Section 4.2 in respect of
such Aircraft. After the issuance of the Bridge Notes and prior to the
Effective Time (as defined in the Indenture), the terms of the
Servicing Agreement shall be in full force and effect (without the
satisfaction of the conditions set forth in Section 8.01 of the
Servicing Agreement except to the extent that either LIFT Trust-Sub 1
or GECAS shall otherwise require) between LIFT Trust-Sub 1 and the
Servicer and (x) each reference to "Lease Investment Flight Trust" or
"LIFT" in the Servicing Agreement shall be deemed to be a reference to
LIFT Trust-Sub 1 and (y) each reference to "Closing Date" therein shall
be deemed a reference to Purchase Date. After the Effective Time and
upon the execution and delivery of the Servicing Agreement by LIFT and
the Servicer, the preceding sentence shall cease to be in effect. After
the issuance of the Bridge Notes and prior to the Effective Time, the
terms of the Administrative Agency Agreement shall be in full force and
effect between LIFT Trust-Sub-1 and the Administrative Agent only and
each reference to "Lease Investment Flight Trust" or "LIFT" in the
Administrative Agency Agreement shall be deemed to be a reference to
LIFT Trust-Sub 1. After the Effective Time and upon the execution and
delivery of the Administrative Agency Agreement by LIFT, its
subsidiaries and the Administrative Agent, the preceding sentence shall
cease to be in effect.
12
3. DELIVERY AND ACCEPTANCE
3.1 Each of the relevant BI Seller and the Purchaser shall use all
reasonable efforts to cause the Transfer of the Beneficial Interest for
each LIFT Entity to occur on or as soon as reasonably practicable after
the Purchase Date, and each of GECC and each of the Independent Sellers
and the Purchaser shall use all reasonable efforts to cause Delivery of
each Independent Aircraft to occur on a date occurring as soon as
reasonably practicable after the Purchase Date, in each case subject to
the other terms and conditions of this Agreement but in no event later
than the Delivery Expiry Date. Delivery of the Independent Aircraft
need not take place concurrently or in the order set out in Schedule 2.
If the failure to satisfy one or more conditions precedent with respect
to any BI Aircraft (but less than all the BI Aircraft) owned by any
LIFT Entity is the sole reason preventing the Transfer of the
Beneficial Interest of such LIFT Entity to occur prior to the Delivery
Expiry Date, GECC may, following notice to LIFT Trust-Sub 1, cause such
LIFT Entity first to effect delivery of such BI Aircraft to one of the
Sellers (or other entity designated in writing by GECC at least three
Business Days (or such shorter period as may be agreed) prior to the
date of such delivery) prior to the Delivery Expiry Date (whereupon
such BI Aircraft shall be an Independent Aircraft for purpose of this
Agreement), and promptly thereafter on or prior to the Delivery Expiry
Date to Transfer the Beneficial Interest of such LIFT Entity to LIFT
Trust-Sub 1.
3.2 GECC and any other Seller of any Independent Aircraft shall cause the
Delivery Location for such Aircraft to be in a jurisdiction:
(a) where GECC has determined, in its sole discretion, that there are
no Taxes (other than income taxes imposed on the Seller thereof)
that would be imposed upon such Seller, the Purchaser thereof or
the Aircraft as a result of the transfer of title to the
applicable Aircraft to such Purchaser, provided that the Seller
may (but shall not be obligated to) complete any sale where such
Taxes would be imposed on such Seller and, with the prior written
consent of the Purchaser thereof, such Seller may (but shall not
be obligated to) complete any sale where such Taxes would be
imposed on such Purchaser; and
(b) where the security, if any, contemplated by the applicable
Assignment of Lease, Lease Novation or any related Lease Document
to be granted to the Purchaser or New Lessor thereof would be
effective relative to such Aircraft.
3.3 GECC shall use reasonable efforts to keep LIFT Trust-Sub 1 advised as
to any information of which GECC becomes aware as to the intended
whereabouts of each Independent Aircraft on the expected Delivery Date
therefor and of each Independent Aircraft on the expected BI Transfer
Date relating to such Independent Aircraft. Each Purchaser shall,
subject to the terms and conditions of this Agreement and using
reasonable efforts, cooperate with the Seller of each Aircraft (at such
Seller's cost) so as to allow the Delivery relating to such Independent
Aircraft, as the case may be, to occur when such Aircraft is at the
Delivery Location therefor. In the event that GECC or the relevant
Seller reasonably believes that the jurisdiction of the Delivery
Location is a jurisdiction where there may be Taxes imposed upon any
Seller Indemnitee or any
13
Purchaser Indemnitee as a result of the transfer of the Seller's
interest in the applicable Aircraft or LIFT Entity to the Purchaser or
for which the Seller would otherwise be liable under Section 11 hereof,
the Seller may, to the extent a favorable Delivery Location cannot be
arranged, elect to treat such Aircraft as a Remaining Aircraft.
3.4 (a) For each BI Aircraft, on the Delivery Date therefor, subject to
the satisfaction of the conditions precedent set out in Section
7.1 and Exhibit E-1 applicable thereto, the Seller thereof shall
be deemed to have tendered such BI Aircraft for Delivery. On each
BI Transfer Date, subject to the satisfaction of the conditions
precedent set out in Sections 6 and 7 applicable thereto, the BI
Seller shall execute an Assignment of Beneficial Interest in the
form of Exhibit A attached hereto, and in the case of a Beneficial
Interest consisting of capital stock or equity interest
certificates cause the certificates representing the Beneficial
Interest to be duly registered in the name of LIFT Trust-Sub 1.
(b) For each Independent Aircraft, on the Delivery Date therefor,
subject to satisfaction of the conditions precedent set out in
Sections 6 and 7 applicable thereto, the Seller thereof shall
tender such Independent Aircraft for Delivery. Delivery and
acceptance of any Independent Aircraft hereunder shall take place
while such Independent Aircraft is located at the Delivery
Location therefor, by such Seller either (i) subject to Section
3.4(d), delivering physical possession of such Independent
Aircraft to the Purchaser thereof or (ii) executing and delivering
to such Purchaser a Xxxx of Sale. Thereupon, full legal and
beneficial title to such Independent Aircraft, free from
Encumbrances other than Permitted Encumbrances, shall pass from
the Seller thereof to the Purchaser thereof. Simultaneously with
physical delivery of any Independent Aircraft or delivery to the
Purchaser of the Xxxx of Sale (as the case may be), title to the
Aircraft Documents therefor shall pass as provided in the Lease
Novation or the Assignment of Lease, as applicable, the Lease
related thereto shall be novated or assigned (as the case may be)
upon the Delivery of such Independent Aircraft. Where Delivery is
effected by delivering physical possession of any Independent
Aircraft, the Seller thereof shall execute and deliver to the
Purchaser thereof an Acknowledgement of Delivery and, at any time
after Delivery upon reasonable request of the Purchaser, a
confirmatory xxxx of sale substantially in the form of the Xxxx of
Sale, MUTATIS MUTANDIS; notwithstanding the foregoing, the parties
hereto agree that each Seller may refuse any such request of any
Purchaser to deliver a confirmatory xxxx of sale if such delivery
would result in the imposition of any Taxes, including without
limitation, documentary taxes on such Seller, such Purchaser or
the Independent Aircraft.
(c) Each Seller of an Independent Aircraft agrees that it will elect
to Deliver such Aircraft to the Purchaser thereof pursuant to a
Xxxx of Sale unless such Delivery will result in any documentary
Taxes or other Taxes being imposed upon such Seller or Purchaser
or the Aircraft that would not otherwise be imposed as a result of
such Delivery and/or the opinion delivered in accordance with
clause (f)(iv) of Exhibit E-2 states that such Delivery is not a
valid transfer of title.
14
3.5 The risk of loss of, or damage to, each Aircraft (other than a
Substitute Aircraft) and the Aircraft Documents relating thereto shall
pass from the Seller thereof to the Purchaser thereof on the Purchase
Date (provided that if Delivery in respect of any such Aircraft shall
not occur on or before the Delivery Expiry Date such risk of loss or
damage with respect to such undelivered Aircraft (and the Aircraft
Documents relating thereto) shall return to the Seller thereof), and
the risk of loss of, or damage to, each Substitute Aircraft and the
Aircraft Documents related thereto shall pass from the Seller thereof
to the Purchaser thereof upon physical delivery of the Substitute
Aircraft to such Purchaser or upon delivery of the Xxxx of Sale for
such Aircraft to such Purchaser by such Seller, as the case may be,
pursuant to Section 3.4(a) or (b).
3.6 Each Aircraft to be sold hereunder shall be delivered to the Purchaser
(or in the case of the BI Aircraft, deemed delivered on the applicable
BI Transfer Date to LIFT Trust-Sub 1) "AS IS" and "WHERE IS", at the
Delivery Location and SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY
AND REPRESENTATION AS SET OUT IN SECTION 12 but without limiting any
representation, warranty or covenant of GECC or any other Seller
expressly set forth herein and/or in the Xxxx of Sale or
Acknowledgement of Delivery (as the case may be) and/or Assignment of
Beneficial Interest for, or in respect of, such Aircraft (together
with, in the case of any Beneficial Interest consisting of capital
stock or equity interest, the certificate representing the same)
delivered pursuant to this Agreement. Subject to receipt or
satisfaction or waiver of the conditions precedent referred to in
Section 7 applicable thereto and the other provisions of this
Agreement, each Purchaser of an Aircraft or of the related Beneficial
Interest shall unconditionally accept such Aircraft or Beneficial
Interest for all purposes hereunder upon tender of a Xxxx of Sale or an
Acknowledgement of Delivery or of an Assignment of Beneficial Interest
(together with, in the case of any Beneficial Interest consisting of
capital stock certificates representing the same), as the case may be,
in accordance with Section 3.4 and the other provisions of this
Agreement in the condition in which such Aircraft exists on the
Delivery Date (or in the case of any BI Aircraft, on the applicable BI
Transfer Date). Acceptance by any Purchaser of a Xxxx of Sale or of
physical delivery as set forth in an Acknowledgement of Delivery in
respect of any Aircraft or of an Assignment of Beneficial Interest in
respect of any Aircraft then owned by any LIFT Entity thereof shall
constitute an acknowledgement by such Purchaser for the purposes of
this Agreement that such Aircraft is in every respect satisfactory to
such Purchaser, provided that the foregoing is not intended nor shall
the same be construed as a waiver by such Purchaser of any claim that
it may have against GECC or any other Seller for breach of any
representation, warranty or covenant expressly contained in this
Agreement.
4. SUBSTITUTE AND UNDELIVERED AIRCRAFT
4.1 (a) If any Seller is unable to effect Delivery of, or Transfer
with respect to, any Aircraft at any time prior to the 30th day
before the Delivery Expiry Date for any reason (including, without
limitation, the failure of one or more of the conditions set forth
in Exhibit E-2 or 7.2 but excluding an Event of Loss in respect of
such Aircraft), then, in each such case, such Aircraft shall
become a "Remaining Aircraft" and the provisions of Section 4.1(b)
and (c) and Section 4.2 shall apply.
15
(b) If an Aircraft becomes a Remaining Aircraft, then GECC shall
promptly inform LIFT Trust-Sub 1 thereof specifying the reason
therefor and shall use reasonable commercial efforts to designate
in lieu thereof a substitute aircraft to be delivered on or before
the Delivery Expiry Date that (i) is subject to an operating lease
contract containing the Core Lease Provisions, (ii) will not
result in the weighted average age of all Aircraft computed as of
the Purchase Date to exceed 4.39 years (determined on the basis of
the Appraised Value of each of the Aircraft including the
Substitute Aircraft), (iii) is of the same type as such
undelivered Remaining Aircraft, (iv) does not result in a
Concentration Default under the Indenture, and (v) in respect of
which GECC shall have obtained a Rating Agency Confirmation with
respect to the substitution of such Remaining Aircraft (each, a
"SUBSTITUTE AIRCRAFT").
(c) At least three Business Days but not more than five Business Days
prior to the Delivery Date of a Substitute Aircraft, (i) GECC
shall provide LIFT Trust-Sub 1, the Purchaser Parent, the
Indenture Trustee and the Administrative Agent a certification of
the amount of maintenance or other expenditures made and
maintenance payments received by the relevant lessor for such
Substitute Aircraft on or after the Purchase Date, and (ii) LIFT
Trust-Sub 1 shall provide GECC, the Indenture Trustee and the
Administrative Agent a certification of the amount of maintenance
or other expenditures made by or on behalf of LIFT Trust-Sub 1 and
maintenance payments received from the applicable Seller or GECC
for the related Remaining Aircraft on or after the Purchase Date,
and on such Delivery Date, each of GECC and LIFT Trust-Sub 1 shall
confirm such amounts to the Indenture Trustee and the
Administrative Agent. Upon the Delivery of a Substitute Aircraft,
the Remaining Aircraft which was replaced by such Substitute
Aircraft shall cease to be subject to this Agreement and all
rights and obligations of the parties hereunder concerning such
Remaining Aircraft shall cease, and such Substitute Aircraft shall
become and thereafter be subject to the terms and conditions of
this Agreement to the same extent as such Remaining Aircraft,
except as to any matters (other than the matters referred to in
Section 4.1(b)) which may be agreed as to such Substitute
Aircraft, which shall be set forth in a Substitute Aircraft
Supplement, except that the substitution of any Aircraft shall not
effect GECC's obligations under Section 4.2 (provided always that,
for the avoidance of doubt, until a Substitute Aircraft is so
delivered for a Remaining Aircraft, such Remaining Aircraft shall
continue to be subject to this Agreement). On the Delivery Date of
a Substitute Aircraft, GECC shall pay or cause the Seller thereof
to pay to the Purchaser thereof, an amount, or, if such amount is
a negative number, LIFT Trust-Sub 1 shall pay or cause the
Purchaser thereof to pay to GECC, an amount equal to the
difference between (a) the Aircraft Value of the Remaining
Aircraft and (b) the sum of (1) the Aircraft Value of such
Substitute Aircraft (which for purposes of this clause (c) shall
be deemed not to exceed the Aircraft Value of the related
Remaining Aircraft) and (2) the Substitute Aircraft Adjustment
Amount. LIFT Trust-Sub 1 shall promptly thereafter repay to GECC
the amount of the cash Security Deposits, if any, LIFT Trust-Sub 1
then holds for such Remaining Aircraft and GECC shall promptly
16
pay to LIFT Trust-Sub 1 the amount of the cash Security Deposits,
if any, GECC or the Existing Lessor then holds for such Substitute
Aircraft.
(d) If an Aircraft (including a BI Aircraft) shall have suffered an
Event of Loss, the applicable Seller may, but shall not be
obligated to, designate a Substitute Aircraft in respect of such
Aircraft, and, if no Substitute Aircraft shall have been
designated therefor as provided above, then the Seller shall have
no obligation to deliver and the Purchaser shall have no
obligation to accept delivery of such Aircraft hereunder.
4.2 If any Aircraft shall not have been delivered on or prior to the
Delivery Expiry Date for any reason (whether as a result of an Event of
Loss or otherwise), or if the Beneficial Interest of any LIFT Entity is
not transferred on or prior to the Delivery Expiry Date for any reason,
and provided no Substitute Aircraft shall have been delivered in
substitution therefor on or prior to the Delivery Expiry Date then
(unless such Aircraft shall have suffered an Event of Loss in respect
of which GECC shall be obligated to account to the Purchaser for any
and all loss proceeds received in respect thereof in accordance with
the provisions of Section 5.3 hereof) on such date GECC irrevocably and
unconditionally agrees to pay, or cause the Seller thereof to pay, to
LIFT Trust-Sub 1 an amount equal to the Aircraft Value of such Aircraft
minus the Non-Delivered Aircraft Adjustment Amount. In addition, LIFT
Trust-Sub 1 shall promptly thereafter repay to GECC the amount of the
cash Security Deposits, if any, LIFT Trust-Sub 1 then holds for such
Aircraft. If on the Delivery Expiry Date the Lessee of any such
Aircraft is then in default in the payment of basic rent under its
Lease of such Aircraft in respect of the period prior to the Delivery
Expiry Date, GECC agrees to pay to LIFT Trust-Sub 1, promptly following
GECC's (or the Existing Lessor's) receipt thereof, the amount of any
such basic rent thereafter received by or on behalf of the Lessor of
such Aircraft in respect of the period from and including the Purchase
Date to but excluding the Delivery Expiry Date.
4.3 Save as otherwise expressly provided in Sections 4.1 and 4.2, if
Delivery of an Aircraft (or Beneficial Interest pertaining thereto)
under this Agreement is delayed or does not occur for any reason
outside the control of the Seller of such Aircraft, including by reason
of the lack of cooperation of any Lessee or other person (other than
such Seller or any of its Affiliates), neither GECC nor the Seller
thereof will be responsible for any damages, losses, including loss of
profit, costs, expenses, liabilities, demands, payments, claims or
action arising from or in connection with the delay or failure suffered
or incurred by the Purchaser.
5. PAYMENTS
5.1 On the Purchase Date, LIFT Trust-Sub 1 shall pay, for the account of
the Purchaser of each Aircraft (or Beneficial Interest), to GECC for
the account of the Seller thereof the Aircraft Purchase Price for each
Aircraft (or Beneficial Interest) subject only to the receipt by LIFT
Trust-Sub 1 of each of the following:
(a) the rents referred to in Section 5.2 hereof together with a
statement addressed to LIFT Trust-Sub 1 identifying the same;
17
(b) the Security Deposits referred to in Section 5.4 hereof;
(c) an opinion of independent and in-house counsel as applicable to
GECC in the Agreed Form as to the due execution and delivery of
the Guaranty and as to such other matters relating thereto as LIFT
Trust-Sub 1 may reasonably request;
(d) the Guaranty duly executed and delivered by GECC;
(e) a certification in the Agreed Form from a duly authorized officer
of GECC to the effect that the representations and warranties of
GECC set forth herein are true and correct as of the Purchase
Date;
(e) a copy, certified by a duly authorized officer of GECC to be a
true, complete and up-to-date, of the articles of incorporation
and by-laws of GECC;
(g) a copy, certified by a duly authorized officer of GECC to be a
true, complete and up-to-date, of the resolutions of the Board of
Directors (or duly authorized committee thereof) of GECC, (i)
approving the transactions contemplated by this Agreement, the
Guaranty and the other Operative Documents to which GECC is a
party, and (ii) authorizing a Person or Persons to sign and
deliver on behalf of GECC, this Agreement, the Guaranty and the
other Operative Documents to which GECC is a party and any notices
or other documents to be given pursuant hereto or thereto; and
(h) certified copies of organizational documents (including
certificates or articles of incorporation, by-laws, limited
liability company agreements, trust agreements and documents of a
similar nature) of such LIFT Entity.
5.2 If, on or before the Purchase Date (and, for the avoidance of doubt,
irrespective of whether or not the Delivery Date for any Asset shall
have occurred), GECC, any Seller or any Existing Lessor shall have
received from any Lessee any rent (which, for avoidance of doubt, shall
not include any Maintenance Reserves) under any Lease in respect of the
period subsequent to the Purchase Date, then on the Purchase Date GECC
shall pay or cause the Seller of the Asset subject to such Lease to pay
to LIFT Trust-Sub 1 (for account of the Purchaser thereof) an amount
equal to the portion of any rent received by or on behalf of such
Seller or Existing Lessor, as applicable which relates to the period
subsequent to the Purchase Date. In respect of Aircraft No. 34, any
payment of rent received in arrears by LIFT Trust-Sub 1 which relates
to the period prior to the Purchase Date shall paid over by LIFT
Trust-Sub 1 to GECC.
5.3 From and after the Purchase Date and to and including the earlier to
occur of the Delivery Expiry Date and the Delivery Date for any
Aircraft (if other than the Purchase Date), GECC shall collect, or
cause to be collected, on behalf of the relevant Purchaser any and all
rent or other sums paid by the Lessees under the Leases and shall cause
any and all such sums received by or on behalf of the relevant Existing
Lessor under the related Lease in respect of any period from and after
the Purchase Date, and with respect to amounts received in payment of
rent under such Lease, in respect of any period from and after the
Purchase Date, in each instance, to be paid to LIFT Trust-Sub 1 (for
account of
18
the relevant Purchaser) within two Business Days of receipt thereof
and each such payment to be accompanied by a statement identifying the
Lease under which such payment was received and the nature of the
payment whether constituting basic rent, Maintenance Reserves, loss
proceeds or otherwise. From and after the Purchase Date, all
maintenance payment obligations of a lessor in respect of the Aircraft
will be determined in accordance with the terms of the Servicing
Agreement. Notwithstanding the foregoing, (i) if an Aircraft suffers an
Event of Loss prior to its Delivery and a Substitute Aircraft shall
have been designated therefor in accordance with the provisions of
Section 4 hereof, neither GECC nor the Seller shall be obligated to pay
to the Purchaser thereof any loss proceeds received in respect thereof
or (ii) in respect of any Aircraft which suffers an Event of Loss after
the Purchase Date but prior to the Delivery Expiry Date and in respect
of which no Substitute Aircraft has been designated pursuant to the
terms of this Agreement, GECC shall collect on behalf of the relevant
Purchaser any and all insurance proceeds paid in respect of such
Aircraft, and upon the receipt thereof, pay the same to LIFT Trust-Sub
1 (net of any amount required to be paid to the relevant Lessee).
5.4 On the Purchase Date, GECC shall cause an amount equal to the Security
Deposit held by or on behalf of each Existing Lessor in cash (if any)
for each Aircraft to be paid and delivered by the Seller thereof to
LIFT Trust-Sub 1 (for account of the Purchaser thereof).
5.5 All amounts payable under this Agreement will be made for value on the
due date in Dollars in immediately available funds (and to the extent
not expressly provided herein) to such account as (in the case of any
payment due to GECC or any Seller) GECC or as (in the case of any
payment due to LIFT Trust-Sub 1 or any Purchaser) LIFT Trust-Sub 1 may
notify LIFT Trust-Sub 1 or GECC, as the case may be, from time to time
(upon three Business Days' prior written notice). In furtherance of the
foregoing, each Purchaser hereby instructs GECC and each Seller to make
each payment due to LIFT Trust-Sub 1 or any other Purchaser hereunder
to the Collections Account with advice of credit to the Administrative
Agent and in sufficient detail to enable the Administrative Agent to
determine the Lease under or in respect of which such payment is being
made and the nature thereof.
5.6 If the party making payment (the "PAYING PARTY") fails to pay any
amount payable under this Agreement on the due date, the Paying Party
will pay on demand from time to time to the other party (the "RECEIVING
PARTY") interest (both before and after judgment) on that amount, from
the due date to the date of payment in full by the Paying Party to the
Receiving Party, at the rate of LIBOR. All such interest will be
compounded monthly and calculated on the basis of the actual number of
days elapsed and a 360 day year.
5.7 Each Purchaser and LIFT Trust-Sub 1 irrevocably and unconditionally:
(i) guarantees, as a primary obligation, to each Seller and GECC the
due and punctual payment to such Seller or GECC, as the case may
be, by each other Purchaser of all monies due from such other
Purchaser hereunder and will pay to such Seller from time to time,
on the first Payment Date falling at least 5 Business
19
Days after written demand therefor, any and every sum of money
which such other Purchaser shall at any time be liable to pay to
such Seller hereunder;
(ii) undertakes as a primary obligation to indemnify each Seller and
GECC from time to time on demand from and against any loss
incurred by such Seller or GECC, as the case may be, as a result
of any obligation of any other Purchaser to pay to such Seller or
GECC, as the case may be, any amounts hereunder being or becoming
void, voidable, unenforceable or ineffective as against such other
Purchaser, for any reason (whether or not known to any Seller or
GECC), the amount of such loss being the amount which such Seller
would otherwise have been entitled to recover from such other
Purchaser; and
(iii) authorizes each Seller and GECC (in their sole discretion by
notice to LIFT Trust-Sub 1) from time to time to set off, apply or
combine all or any amounts for the time being due from any Seller
or GECC, as the case may be, to any Purchaser towards the
repayment or discharge of any amount for the time being due to a
Seller or GECC from LIFT Trust-Sub 1 pursuant to the above.
Each Purchaser acknowledges that:
(a) neither its above-described liability nor the rights, powers and
remedies conferred on a Seller or GECC by this Section or by law
shall be discharged, impaired or otherwise affected by any act,
event or omission which would otherwise operate to discharge,
impair or otherwise affect such liability or such rights, powers
or remedies, and
(b) so long as it is under the above-described liability, it shall not
exercise any rights or remedies which it may at any time have to
be indemnified by or claim any contribution from any other
Purchaser.
5.8 GECC authorizes LIFT Trust-Sub 1 (in its sole discretion by notice to
GECC) from time to time to set off, apply or combine all or any amounts
for the time being due from LIFT Trust-Sub 1 or any other Purchaser to
GECC or any other Seller towards the repayment or discharge of any and
all amounts for the time being due to LIFT Trust-Sub 1 or any other
Purchaser from GECC or any other Seller hereunder or under the
Guaranty.
6. CONDITIONS PRECEDENT - SELLER
6.1 The obligations of any Seller to sell, transfer or deliver any Aircraft
or Beneficial Interest of any LIFT Entity hereunder are subject to the
satisfaction of the following express conditions precedent on or prior
to the applicable BI Transfer Date in the case of any Beneficial
Interest or the applicable Delivery Date in the case of any Independent
Aircraft, as the case may be:
(a) the relevant Operative Documents for such Aircraft have been
entered into by the parties thereto (other than GECC and any
Seller);
20
(b) the Servicing Agreement shall have been entered into by the
parties thereto (other than GECC and any other Seller);
(c) GECC shall be satisfied that the Delivery Location does not give
rise to any Taxes; and
(d) Seller thereof shall have received payment of all amounts due by
the Purchaser of such Aircraft.
6.2 The obligation of the BI Seller to sell, transfer or deliver any
Beneficial Interest hereunder is further subject to the condition that
such BI Seller has received on or prior to the Purchase Date or, in the
case of subsection (c) below, the applicable BI Transfer Date:
a copy of the constitutional documents of the Purchaser and any
other Affiliate of such Purchaser which is a party to any
Operative Document in respect of such Aircraft, certified, or
subject to a certificate confirming no change thereto, such
certification to be dated not more than ten (10) days prior to the
expected Delivery Date for such Aircraft to be a true, complete
and up-to-date copy;
b copy of resolutions of the directors or other applicable governing
body of such Purchaser and any other Affiliate of such Purchaser
which is a party to any Operative Document in respect of such
Aircraft certified, or subject to a certificate confirming no
change to such resolutions, such certification to be dated not
more than ten (10) days prior to the expected Delivery Date for
such Aircraft to be a true, complete and up-to-date copy:
(i) approving the transactions contemplated by this Agreement and
the other Operative Documents to which LIFT Trust-Sub 1 is or
is to be a party; and
(ii) authorizing a Person or Persons to execute and deliver on
behalf of LIFT Trust-Sub 1 this Agreement and the other
Operative Documents to which it is or is to be a party and any
notices or other documents to be given pursuant hereto or
thereto;
(c) evidence that all governmental and other licenses, approvals,
certificates, exemptions, consents, registrations and filings
necessary in the relevant State of Registration and any other
relevant jurisdiction (including the domicile of the Lessee of
such Aircraft) for any matter or thing contemplated by this
Agreement and the other applicable Operative Documents for such
Aircraft, and any notices or other documents to be given pursuant
hereto or thereto and for the legality, validity, enforceability,
admissibility in evidence and effectiveness hereof and thereof
have been obtained or effected on an unconditional basis and
remain in full force and effect (or in the case of effecting any
licenses, approvals, consents, certificates, exemptions,
registrations and filings, that arrangements reasonably
satisfactory to such Seller have been made for the effectiveness
of the same within any applicable time limit);
21
(d) a favorable opinion of independent counsel to such Purchaser dated
as of such Delivery Date reasonably acceptable to such Seller in
the Agreed Form as to (1) certain of the matters set out in
Section 9 and (2) such other matters as such Seller may reasonably
request with regard to the subject matter contemplated herein or
in each case such Aircraft;
(e) a quiet enjoyment letter with respect to each BI Aircraft and the
Lease thereof from the Security Trustee, and, if requested by the
Seller, from LIFT Trust-Sub 1 and the Purchaser Parent addressed
to the relevant Lessee (and, if applicable, the relevant
sublessee) in substantially the form attached to the relevant
Operative Document;
(f) a certification from LIFT Trust-Sub 1 that its representations and
warranties in Section 9.1 are true and correct as of the Purchase
Date; and
(g) if requested by the Seller, a guaranty from the Purchaser and the
Purchaser Parent to a Lessee.
6.3 The obligations of any Independent Seller to deliver any Independent
Aircraft hereunder are further subject to the condition that on or
prior to the Delivery Date for any Independent Aircraft, such Seller
has received:
(a) a copy of the constitutional documents of the Purchaser of such
Aircraft, certified on or prior to the expected Delivery Date for
such Aircraft to be a true and complete copy;
(b) a copy of resolutions of the Board of Directors (or duly
authorized committee thereof) of such Purchaser on or prior to the
expected Delivery Date for such Aircraft, to be a true and
complete copy:
(i) approving the transactions contemplated by this Agreement and
the other Operative Documents to which such Purchaser is or is
to be a party; and
(ii) authorizing a Person or Persons to execute and deliver on
behalf of such Purchaser this Agreement and the other
Operative Documents to which it is or is to be a party and any
notices or other documents to be given pursuant hereto or
thereto; and
(c) a favorable opinion of independent counsel to such Purchaser dated
as of such Delivery Date reasonably acceptable to such Seller in
the Agreed Form as to (1) certain of the matters set out in
Section 9 and (2) such other matters as such Seller may reasonably
request with regard to the subject matter contemplated herein or
in each case such Aircraft;
(d) a quiet enjoyment letter with respect to such Aircraft and the
Lease thereof from the Security Trustee, and, if requested by
Seller, from LIFT Trust-Sub 1 or Purchase Parent addressed to the
relevant Lessee (and, if applicable, the relevant
22
sublessee) in substantially the form attached to the relevant
Operative Document; and
(e) if requested by the Seller, a guaranty from the Purchaser and the
Purchaser Parent in favor of a Lessee guaranteeing the obligations
of the applicable LIFT Entity.
7. CONDITIONS PRECEDENT - PURCHASER
7.1 The obligation of LIFT Trust-Sub 1 to purchase the Beneficial Interest
of any LIFT Entity on the applicable BI Transfer Date is subject to
satisfaction of the following express conditions precedent on such BI
Transfer Date, subject to the right of LIFT Trust-Sub 1 to waive any
condition pursuant to Section 7.3(a) and the rights of such Seller
under Section 7.3(b):
(a) LIFT Trust-Sub 1 shall have received (i) the documents referred to
in Section 2.1 and the documents referred to in Exhibit E-1 in
connection with the Deliveries of the related BI Aircraft (other
than as listed on Schedule 4) and (ii) a certificate from a duly
authorized officer of GECC dated such BI Transfer Date stating
that (A) the conditions set forth in Exhibit E-1 with respect to
the Delivery of such BI Aircraft have been satisfied or otherwise
disclosed in the First Disclosure Letter and such documents are
unchanged and are in full force and effect as of such BI Transfer
Date, (B) the representations and warranties of the Seller (or its
Affiliate) of such BI Aircraft and of such LIFT Entity contained
in the Assignment of Lease or Lease Novation, as applicable, for
such BI Aircraft were true and correct as of the date of such
Assignment of Lease or Lease Novation, as applicable, and (C) the
xxxx of sale for, or physical delivery of (as acknowledged in the
acknowledgement of delivery pertaining thereto), as applicable,
such BI Aircraft was effective to convey irrevocably full legal
and beneficial title to the Purchaser or LIFT Entity thereof on
the relevant delivery date of transfer to the LIFT Entity;
(b) no Material Default shall have occurred and be continuing as of
the Purchase Date with respect to such BI Aircraft;
(c) LIFT Trust-Sub 1 shall have received payment of all amounts due by
the Seller thereof or GECC in respect of such Aircraft;
(d) LIFT Trust-Sub 1 shall have received a certification from the BI
Seller dated such BI Transfer Date to the effect that (i) the
representations and warranties of such BI Seller hereunder are
true and correct as of such BI Transfer Date and (ii) such LIFT
Entity has full legal and beneficial title to such BI Aircraft,
free from Encumbrances other than Permitted Encumbrances;
(e) unless and to the extent LIFT Trust-Sub 1 shall otherwise agree,
or a Rating Agency Confirmation shall have been obtained with
respect thereto, all the conditions precedent to the effectiveness
of the Assignment of Lease or Lease Novation, as applicable, for
such BI Aircraft shall have been satisfied and LIFT Trust-Sub 1
shall have received a certification from the BI Seller to such
effect;
23
(f) receipt of the following documents by LIFT Trust-Sub 1:
(i) a list from GECC specifying the BI Aircraft then owned by such
LIFT Entity;
(ii) a certificate of solvency dated as of such BI Transfer Date
in the Agreed Form relating to the BI Seller issued by a
director or authorized officer thereof and if such Seller is
other than GECC, a certificate of solvency dated as of such
date in the Agreed Form relating to GECC issued by a director
or authorized officer of GECC;
(iii) a favorable opinion of independent counsel to the BI Seller,
dated as of the Purchase Date, reasonably acceptable to such
Purchaser in the Agreed Form, that the sale of such Beneficial
Interest constitutes, or will constitute, a "true-sale" and a
valid transfer of title to such Beneficial Interest and that
after the Transfer of such Beneficial Interest such Seller
retains, or will retain, no interest in such Beneficial
Interest and as to such other matters as LIFT Trust-Sub 1 may
reasonably request with regard to the subject matter
contemplated herein;
(iv) to the extent applicable, opinions dated as of such BI
Transfer Date in the Agreed Form from independent counsel to
the BI Seller in each Delivery Location, covering, without
limitation, that, except if the Delivery Location is in the
United States, the Transfer of such Beneficial Interest will
not result in the imposition of any Tax in such jurisdiction
on the Purchaser Parent, LIFT Trust-Sub 1, any Subsidiary of
LIFT Trust-Sub 1, such BI Aircraft, the related Leases or
otherwise in respect of such Transfer;
(v) for such BI Aircraft, an opinion dated as of such BI Transfer
Date in the Agreed Form from counsel to the relevant Seller in
the relevant State of Registration or, if applicable, the
relevant jurisdiction of the Lessee to the effect that (A) the
terms of the relevant Lease or Novated Lease or Assigned Lease
and the relevant Operative Documents and the other Lease
Documents are legal, valid, binding and enforceable under the
laws of such country to the extent necessary to enable the
applicable LIFT Entity to receive the practical benefits of
its rights thereunder, (B) such LIFT Entity shall be
recognized as the owner of such Aircraft under the applicable
laws of such jurisdiction, (C) except if the State of
Registration is the United States, it is not necessary for
such LIFT Entity as a result of its ownership of such Aircraft
to qualify to do business in such jurisdiction as a result of
its ownership of such Aircraft and it is not necessary for the
LIFT Entity to qualify to do business in such jurisdiction,
for the purpose of exercising any remedies under any Lease
Document relating to such Aircraft or otherwise, (D) except if
the State of Registration is the United States, payments of
rent under the Lease are not subject to withholding under the
applicable laws of such jurisdiction or, if subject to
withholding,
24
the gross up provisions of such Lease will be enforceable, (E)
the interest of the LIFT Entity in such BI Aircraft has been
properly registered in the relevant State of Registration (to
the extent applicable) and (F) the Security Trust Agreement,
to the extent required, has been or is in the process of being
duly recorded in any relevant registry and, if such opinion is
reasonably practicable to obtain, that the lien created
thereunder will be recognized as constituting a first priority
perfected security interest in and to the related Leases in
favor of the Security Trustee;
(vi) evidence that all governmental and other licenses, approvals,
consents, certificates, exemptions, registrations and filings
necessary in the state of incorporation or formation of GECC,
any Seller of a BI Aircraft or such LIFT Entity and any other
relevant jurisdiction (including the domicile of the Lessee)
and the relevant State of Registration of such BI Aircraft for
any matter or thing contemplated by this Agreement and the
other applicable Operative Documents for such BI Aircraft, the
bank accounts provided for under the Administrative Agency
Agreement, the Servicing Agreement, the Security Trust
Agreement and the Indenture and any notices or other documents
to be given pursuant hereto or thereto and for the legality,
validity, enforceability, admissibility in evidence and
effectiveness hereof and thereof (including, to the extent
reasonably practicable in such jurisdiction, the establishment
of a first priority perfected security interest in and to the
related Leases in favor of the Security Trustee) have been
obtained or effected on an unconditional basis and remain in
full force and effect (or in the case of effecting any
certificates, exemptions, registrations and filings, that
arrangements satisfactory to LIFT Trust-Sub 1 have been made
for the effectiveness of the same within any time limit
provided therefor under applicable law and Rating Agency
Confirmation has been received with respect thereto);
(vii) for any Aircraft where there are Maintenance Reserves or a
Security Deposit held in cash, a certificate stating the
amount of Maintenance Reserves or such cash Security Deposit
then held under the Lease for such Aircraft shall have been
provided at least three Business Days but not more than five
Business Days prior to such BI Transfer Date;
(viii) a certificate of GECC confirming that so far as is known to
GECC, no Event of Loss has occurred with respect to such BI
Aircraft;
(ix) each of the documents required to be delivered on or prior
thereto pursuant to Section 5;
(x) a copy of the currently valid certificate of airworthiness for
such Aircraft issued by the appropriate Air Authority;
(xi) for such BI Aircraft, originals, or certified copies, of
certificates evidencing the insurance required to be
maintained pursuant to the
25
relevant Assigned Lease or the Novated Lease, as appropriate,
for such Aircraft together, if applicable, with a letter or
report from an independent firm of insurance brokers; and
(xii) the report of LIFT Trust-Sub 1's and/or such Purchaser's
insurance advisor in substantially the Agreed Form.
(g) the matters disclosed in the First Disclosure Letter, if any, and
any Supplemental Disclosure Letter delivered on or prior to such
BI Transfer Date shall be in substance satisfactory to LIFT
Trust-Sub 1;
(h) subject to Section 7.3(b), on such BI Transfer Date, if the
Security Deposit held under the Lease for any such BI Aircraft is
in the form of a letter of credit, guarantee, promissory note or
other instrument, GECC shall cause such letter of credit,
guarantee or other instrument to be duly endorsed, amended or
reissued in favor of such LIFT Entity thereof (or the relevant
Affiliate of such LIFT Entity) and GECC shall have taken such
other actions as may be necessary to effectuate the assignment of
all right, title and interest of the Existing Lessor in and to
such letter of credit, guarantee, promissory note or instrument to
such LIFT Entity;
(i) GECC shall have provided to LIFT Trust-Sub 1 a confirmation from
GECAS that such BI Aircraft has, as of the Purchase Date, become
an "Aircraft Asset" under and as defined in the Servicing
Agreement;
(j) the chattel paper original of the Lease (or if an original was
never so designated or such original has been lost, a certificate
from GECC to such effect) and the Assignment of Lease or Lease
Novation, as applicable, for such BI Aircraft shall have been
delivered to the Security Trustee on such BI Transfer Date;
(k) for such BI Aircraft, (A) an original of the applicable Lease
(together with the related Lease Assignment Documents) and (B) an
original of each other Lease Document (or otherwise a copy
certified to be true and correct) shall be delivered to the
Security Trustee on or prior to the Purchase Date (except that
with respect to Substitute Aircraft, such originals shall be
delivered on the Delivery Date therefor); provided that, if any
such Lease Document contains a material right for the benefit of
the lessor thereunder and the LIFT Entity and/or the Seller
thereof does not have an original of such Lease Document in its
possession, GECC and each such Seller shall provide such other
assurances as to the enforceability and admissibility of such
Lease Document in any court in the State of New York as LIFT
Trust-Sub 1 may reasonably request; and
(l) the Formation Agreement for such LIFT Entity shall be in form and
substance satisfactory to LIFT Trust-Sub 1.
(m) LIFT Trust-Sub I shall have received a certificate of good
standing for each LIFT Entity which is the subject of a Transfer,
provided such certificate is provided by such LIFT Entity's
jurisdiction of organization for entities of the same type as such
LIFT Entity;
26
(n) there shall not be in effect on the BI Transfer Date any Order or
Applicable Law restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions
contemplated by this Agreement, the other applicable Operative
Agreements, the Servicing Agreement, the Security Trust Agreement
and the Indenture, or which could reasonable be expected to
otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement, the other applicable
Operative Agreements, the Servicing Agreement, the Security Trust
Agreement and the Indenture to Purchaser, and there shall not be
pending or threatened on the BI Transfer Date any action or
proceeding in, before or by any governmental or regulatory
authority which could reasonably be expected to result in the
issuance of any such Order.
(o) all parties to the Indenture (except LIFT and LIFT Trust-Sub 1)
shall have executed such agreement and LIFT Trust-Sub 1 shall have
received the funds to be paid to it upon issuance of the Bridge
Notes.
7.2 The obligation of any Purchaser to purchase any Independent Aircraft on
any Delivery Date hereunder is subject to satisfaction of the following
express conditions precedent on the Delivery Date for such Independent
Aircraft, subject to the right of the relevant Purchaser to waive any
condition pursuant to Section 7.3:
(a) LIFT Trust-Sub 1 shall have received notice of the expected
Delivery Date at least four (4) Business Days prior thereto;
(b) LIFT Trust-Sub 1 shall have received (i) the documents referred to
in Exhibit E-2 in connection with the Delivery of such Aircraft
(other than as listed on Schedule 4) and (ii) a certificate from a
duly authorized officer of GECC dated such Delivery Date stating
that (A) the conditions set forth in Exhibit E-2 with respect to
the Delivery of such Aircraft have been satisfied or otherwise
disclosed in a Disclosure Letter, (B) the representations and
warranties of the Seller of such Aircraft contained in the
Assignment of Lease or Lease Novation, as applicable, for such
Aircraft are true and correct as of such Delivery Date, and (C)
the xxxx of sale for, or physical delivery of (as acknowledged in
the acknowledgement of delivery pertaining thereto), as
applicable, such Aircraft is effective to convey irrevocably full
legal and beneficial title to the Purchaser thereof on such
Delivery Date;
(c) no Material Default shall have occurred and be continuing as of
the Purchase Date with respect to such Aircraft;
(d) GECC shall have provided LIFT Trust-Sub 1 a confirmation from
GECAS that such Aircraft (other than a Substitute Aircraft
therefor) has, as of the Purchase Date, become an "AIRCRAFT ASSET"
under and as defined in the Servicing Agreement (or that such
Substitute Aircraft will, upon Delivery to the Purchaser, become
an "Aircraft Asset"); and
27
(e) the Purchaser shall have received the following documents:
(i) the Disclosure Letter, if any, with respect to such
Aircraft, which will not disclose any matter not
satisfactory to LIFT Trust-Sub 1 in substance; and
(ii) each of the documents with respect to such Aircraft
required to be delivered on or prior thereto pursuant to
Section 5.
7.3 (a) Any Purchaser of an Asset or Aircraft, as the case may be, may, at
the request of the Seller thereof, in its absolute discretion
agree to waive satisfaction of one or more conditions precedent
set out in this Section 7 (and in the event of any such waiver
such Purchaser may impose such conditions to such waiver as it
reasonably thinks fit), provided, that (i) such waiver is
disclosed in reasonable detail in the First Disclosure Letter, or
(ii) such waiver is disclosed in reasonable detail in the
Supplemental Disclosure Letter with respect to such Aircraft and
Rating Agency Confirmation has been obtained with respect thereto
on or prior to the Delivery Date for, or BI Transfer Date in
respect of, such Aircraft; and
(b) In the event that any letter of credit or guarantee to be issued
on behalf of the relevant Lessee pursuant to the relevant
Operative Documents has not been delivered, the Seller of the
Aircraft in respect of such Lease may at such Seller's own
election:
(i) subject to a Rating Agency Confirmation, deliver a letter of
credit from GECC or other issuer in lieu (and until delivery)
of any letter of credit or guarantee to be issued on behalf of
the relevant Lessee pursuant to the Operative Documents, so
long as the issuer thereof is rated at least the same as the
issuer (or, if higher, any confirming bank) of the undelivered
letter of credit or guarantee, such letter of credit to be on
substantially the same terms as the undelivered letter of
credit or guarantee;
(ii) subject to a Rating Agency Confirmation, have the relevant
Lessee deliver to the Purchaser thereof (or the relevant
Affiliate of such Purchaser) acting as lessor under an Assigned
Lease or Novated Lease therefor a letter of credit or guarantee
or cash (in Dollars) in lieu of and in the amount of any letter
of credit or guarantee set out in Schedule 3 or the Substitute
Aircraft Supplement, as applicable, in each case so long as
such letter of credit or guarantee is on substantially the same
terms as the undelivered letter of credit or guarantee; or
(iii) subject to a Rating Agency Confirmation, the Seller of such
Aircraft shall have agreed (and GECC shall have confirmed its
guarantee of such obligation of such Seller) to hold such
letter of credit or guarantee for the sole benefit of the
Purchaser and act on its instructions (provided that the Seller
must provide the substitute letter of credit or guarantee as
required within 90 days after the applicable Delivery Date).
28
7.4 Each Seller of the relevant Aircraft or Asset hereby agrees to satisfy
each of the conditions, if any, set forth in Schedule 4 with respect to
the Delivery or Transfer of such Aircraft or Asset within the period
therein specified therefor.
8. REPRESENTATIONS AND WARRANTIES OF GECC AND EACH OTHER SELLER
8.1 GECC and each other Seller (in respect of itself only in the case of
each Seller other than GECC) represents and warrants to each Purchaser
as of the date of this Agreement, each BI Transfer Date and on each
Delivery Date of an Independent Aircraft as follows:
(a) GECC and each other Seller is a company or trust duly incorporated
and validly existing under the laws of its state of incorporation
and has the corporate or other power to own its assets and carry
on its business as it is contemplated herein;
(b) GECC and each other Seller has the corporate power to enter into
and perform, and has taken all necessary corporate or other action
to authorize the entry into, performance and delivery of, this
Agreement and each other Operative Document to which it is a
party;
(c) the relevant Operative Documents to which GECC and each other
Seller is a party have been, or when executed and delivered will
have been, duly entered into by GECC and each other Seller party
thereto and delivered by GECC and each other Seller party thereto
and constitute or, in the case of any Operative Document to be
executed on or about the applicable Delivery Date, will constitute
on such Delivery Date, the legal, valid and binding obligation of
GECC and each other Seller party thereto, enforceable in
accordance with their terms (subject to customary qualifications
in any relevant legal opinion);
(d) the entry into and performance by GECC and each other Seller of,
and the transactions contemplated by, the relevant Operative
Documents to which it is a party do not and will not:
(i) conflict with any laws binding on GECC or any other Seller;
or
(ii) result in any breach of, or constitute a default under the
constitutional documents of GECC or any other Seller; or
(iii) result in any breach of, or constitute a default under any
document which is binding upon GECC or any other Seller or
any of their respective assets nor result in the creation
of any Encumbrance (other than the Novated Lease or the
Assigned Lease as the case may be) over any of their
respective assets to be transferred to the relevant
Purchaser hereunder;
(e) the provisions of Section 14 concerning applicable law, service of
process and jurisdiction are valid and binding on GECC and each
other Seller under the laws of its jurisdiction of establishment,
and no provision purporting to be binding on GECC or any other
Seller of this Agreement or any of the other applicable
29
Operative Documents is prohibited, unlawful or unenforceable
under the laws of its state of incorporation;
(f) no liquidator, provisional liquidator, analogous or similar
officer has been appointed in respect of all or any part of the
assets of GECC or any other Seller nor has any application been
made to a court which is still pending for an order for, or any
act, matter or thing been done which with the giving of notice,
lapse of time or satisfaction of some other condition (or any
combination thereof) will lead to, the appointment of any such
officers or equivalent in any jurisdiction;
(g) except if and as advised by GECC to the relevant Purchaser in a
Disclosure Letter, no litigation, arbitration or claim before any
court, arbitrator, governmental or administrative agency or
authority which would have a material adverse effect on the
ability of GECC or any other Seller to observe or perform their
respective obligations under this Agreement or any other
applicable Operative Documents to which GECC or such Seller is a
party is in progress, or to the knowledge of GECC, threatened
against GECC or any other Seller; and
(h) if applicable, its state of incorporation or organization is as
specified on Schedule 5.
8.2 GECC and each other Seller (in respect of itself only in the case
of each Seller other than GECC) of an Aircraft further represents
and warrants on the Delivery Date with respect to each Independent
Aircraft as follows and in respect of such Aircraft:
(a) except if and as advised by GECC to the Purchaser thereof in a
Disclosure Letter, so far as concerns the obligations of GECC and
any such Seller (and except for the registration of particulars of
the relevant Lease Novation or Assignment of Lease with the
appropriate Air Authority or other actions referred to therein, if
applicable) all authorizations, consents, registrations and
notifications required in connection with the entry into,
performance, validity and enforceability of, this Agreement, the
transactions contemplated by this Agreement and the other
applicable Operative Documents to which it is a party, have been
(or will on or before the Delivery Date of such Aircraft have
been) obtained or effected (as appropriate) and are (or will on
their being obtained or effected be) in full force and effect;
(b) except if and as advised by GECC to the Purchaser thereof in a
Disclosure Letter, the Lease Documents listed in Schedule 2 or the
Substitute Aircraft Supplement, as applicable constitute the whole
agreement between the relevant lessor and the relevant Lessee
immediately prior to Delivery and pertaining to the period on and
after Delivery) relating to such Aircraft and includes a complete
list (other than the Operative Documents) of all amendments,
supplements, novations, and written consents, approvals and
waivers relevant to the Lease with respect to the period on and
after Delivery, and there are no oral waivers in effect that would
modify or amend the terms thereof with respect to the period on
and after Delivery;
30
(c) except if and as advised by GECC to the Purchaser thereof in the
First Disclosure Letter, to GECC's knowledge no Material Default
has occurred and is continuing under the relevant Lease on and as
of the Purchase Date;
(d) except if and as advised by GECC to the Purchaser thereof in a
Disclosure Letter, there are no claims which have been asserted by
the Lessee against GECC or any other Seller arising out of the
relevant Lease (other than claims constituting Permitted
Encumbrances);
(e) such Seller has, or at Delivery will have, full legal and
beneficial title to such Aircraft, free from Encumbrances other
than Permitted Encumbrances and the Xxxx of Sale or physical
delivery (as acknowledged in the Acknowledgement of Delivery
pertaining thereto), as applicable, is effective to convey
irrevocably title to the Purchaser thereof;
(f) to GECC's knowledge, and except if and as advised by GECC to the
Purchaser thereof in the First Disclosure Letter, there are no
Lessee Encumbrances on and as of the Purchase Date which are not
permitted pursuant to the terms of the relevant Lease Document;
(g) to GECC's knowledge, (i) such Aircraft has not, except if and as
advised by GECC to the Purchaser thereof in the First Disclosure
Letter, been involved in any incident on or before the Purchase
Date which caused damage in excess of the amount required to be
disclosed to the relevant lessor under the relevant Lease or which
would materially adversely affect the residual value of such
Aircraft, and (ii) the information provided by GECC and its
representatives to the Appraisers with respect to such Aircraft
and on which the Appraisers relied in making their Appraisals is
true and correct in all material respects and there are no facts
or circumstances known to GECC as of the Purchase Date which would
render any of the assumptions contained in the Appraisals for such
Aircraft to be materially inaccurate;
(h) to GECC's knowledge, except if and as advised by GECC to the
Purchaser thereof in the First Disclosure Letter, no compulsory
airworthiness directives are outstanding on and as of the Purchase
Date against such Aircraft which would require GECC or any other
Seller or such Purchaser to make any contributions to the cost of
compliance therewith pursuant to the terms of the relevant Lease;
(i) to GECC's knowledge, except if and as disclosed by GECC to the
Purchaser thereof in the First Disclosure Letter, no options to
purchase such Aircraft, extend or terminate the relevant Lease
have been exercised on or before the Purchase Date by the relevant
Lessee under the relevant Lease Documents;
(j) the information set forth in each of the Disclosure Letters with
respect to such Aircraft is or will be when issued true and
accurate in all material respects as of its date;
31
(k) except if and as advised by GECC to the Purchaser thereof in a
Disclosure Letter, to GECC's knowledge, the provisions of each
Lease relating to the granting of any Security Deposit thereunder
remain in full force and effect;
(l) to GECC's knowledge and except if and as advised by GECC to the
Purchaser thereof in a Disclosure Letter, no event has occurred or
act or thing done or omitted to be done by GECC or any other
Seller pursuant to which or as a result of which the relevant
Lease can be terminated or the obligations of any such party
thereunder would be rendered invalid or unenforceable;
(m) to GECC's knowledge, except if and as advised by GECC to the
Purchaser thereof in the First Disclosure Letter, such Aircraft is
not as of the Purchase Date subject to any sub-lease from the
relevant Lessee; (n) to GECC's knowledge, the information provided
by GECC to the Purchaser thereof prior to the Delivery Date as to
the identities of all of such Seller's predecessors in title to
such Aircraft thereof is complete and accurate;
(o) to GECC's knowledge, except if and as advised by GECC to the
Purchaser thereof in a Disclosure Letter, such Aircraft has been
accepted by the relevant Lessee under the Lease thereof without
qualification or exception or to the extent that any such
acceptance was given subject to any qualification or exception or
subject to any liability on the part of such Seller or relevant
Affiliate of the Seller to pay or reimburse any costs or expenses
or to undertake any repairs or modifications at the expense of
such Seller, such qualifications and exceptions have been
discharged or waived by the Lessee and have ceased to apply and no
such costs or expenses remain to be reimbursed and all defects
referred to therein have been duly rectified or waived by such
Lessee;
(p) the information and statements as to and relating to such
Aircraft, the relevant Lease and the Lease Documents set forth in
Schedule 2 as of the Purchase Date or the Substitute Aircraft
Supplement, as applicable, are true and complete;
(q) the sale of such Aircraft contemplated hereby constitutes a valid
and irrevocable transfer of such Aircraft to the Purchaser thereof
and after Delivery of such Aircraft such Seller shall retain no
right, title or interest in such Aircraft; and
(r) the lessor under the relevant Lease pertaining to such Aircraft
shall have paid to the relevant Lessee all amounts then due and
payable by such lessor to such Lessee in respect of maintenance
theretofore performed on such Aircraft.
8.3 Each BI Seller further represents and warrants on each BI Transfer
Date with respect to the Transfer of the Beneficial Interest of
the relevant LIFT Entity as follows:
(a) so far as concerns the obligations of any such Seller and such
LIFT Entity, all authorizations, consents, registrations and
notifications required in connection with the entry into,
performance, validity and enforceability of, this Agreement, the
transactions contemplated by this Agreement and the other
applicable
32
Operative Documents to which it or such LIFT Entity is a party,
have been (or will on or before such date have been) obtained or
effected (as appropriate) and are (or will on their being obtained
or effected be) in full force and effect;
(b) except if and as advised by GECC to LIFT Trust-Sub 1 with respect
thereto in the First Disclosure Letter, the Lease Documents listed
in Schedule 2 as applicable constitute the whole agreement between
the relevant lessor and the relevant Lessee immediately prior to
such date (and pertaining to the period after such date) relating
to such Aircraft and includes a complete list (other than the
Operative Documents) of all amendments, supplements, novations,
and written consents, approvals and waivers relevant to the Lease
with respect to the period on and after such date, and there are
no oral waivers in effect that would modify or amend the terms
thereof with respect to the period on and after such date;
(c) except if and as advised by GECC to LIFT Trust-Sub 1 in the First
Disclosure Letter, to GECC's knowledge no Material Default has
occurred and is continuing under the relevant Lease on and as of
the Purchase Date;
(d) except if and as advised by GECC to LIFT Trust-Sub 1 in a
Disclosure Letter, there are no claims which have been asserted by
the Lessee against GECC or any Seller or the New Lessor or such
LIFT Entity arising out of the relevant Lease (other than claims
constituting Permitted Encumbrances) which will be applicable
after such date;
(e) such Seller has, or at such date will have, full legal and
beneficial title to such Beneficial Interest, free from
Encumbrances other than Permitted Encumbrances, and such LIFT
Entity will at such date have full legal and beneficial title to
the related Aircraft, free from Encumbrances other than Permitted
Encumbrances and the transfer of such Beneficial Interest is not
avoidable or otherwise subject to rescission by reason of any
claim of any other Person (including any prior transferor thereof
or of the related Aircraft or any Person acting on behalf of or
claiming through any such transferor);
(f) to GECC's knowledge, and except if and as advised by GECC to LIFT
Trust-Sub 1 in the First Disclosure Letter, there are no Lessee
Encumbrances on and as of the Purchase Date which is not permitted
pursuant to the terms of the relevant Lease Document;
(g) to GECC's knowledge, (i) such Aircraft has not, except if and as
advised by GECC to LIFT Trust-Sub 1 in the First Disclosure
Letter, been involved in any incident on or before the Purchase
Date which caused damage in excess of the amount required to be
disclosed to the relevant lessor under the relevant Lease or which
would materially adversely affect the residual value of such
Aircraft, and (ii) the information provided by Affiliates of GECC
and their representatives to the Appraisers with respect to such
Aircraft and on which the Appraisers relied in making their
Appraisals is true and correct in all material respects and there
are no facts or circumstances known to GECC as of the Purchase
Date which would
33
render any of the assumptions contained in the Appraisals for
such Aircraft to be materially inaccurate;
(h) to GECC's knowledge, except if and as advised by GECC to LIFT
Trust-Sub 1 in the First Disclosure Letter, no compulsory
airworthiness directives are outstanding on and as of the Purchase
Date against such Aircraft which would require GECC or any Seller
or LIFT Trust-Sub 1 or such LIFT Entity to make any contributions
to the cost of compliance therewith pursuant to the terms of the
relevant Lease;
(i) to GECC's knowledge, except if and as disclosed by GECC to LIFT
Trust-Sub 1 in the First Disclosure Letter, no options to purchase
such Aircraft, extend or terminate the relevant Lease have been
exercised on or before the Purchase Date by the relevant Lessee
under the relevant Lease Documents;
(j) the information set forth in the First Disclosure Letter with
respect to such Aircraft is or will be when issued true and
accurate in all material respects as of its date;
(k) except if and as advised by GECC to LIFT Trust-Sub 1 in a
Disclosure Letter, to GECC's knowledge, the provisions of each
such Lease relating to the granting of any Security Deposit
thereunder remain in full force and effect;
(l) to GECC's knowledge and except if and as advised by GECC to LIFT
Trust-Sub 1 in a Disclosure Letter, no event has occurred or act
or thing done or omitted to be done by GECC or any Seller or such
LIFT Entity pursuant to which or as a result of which the relevant
Lease can be terminated or the obligations of any such party
thereunder would be rendered invalid or unenforceable;
(m) to GECC's knowledge, except if and as advised by GECC to LIFT
Trust-Sub 1 in the First Disclosure Letter, such Aircraft is not
as of the Purchase Date subject to any sub-lease from the relevant
Lessee;
(n) the information and statements as to and relating to such
Aircraft, the relevant Lease and the Lease Documents set forth in
Schedule 2 are, as of the Purchase Date, true and complete;
(o) the sale of such Beneficial Interest contemplated hereby
constitutes a valid and irrevocable transfer of such Beneficial
Interest to the Purchaser thereof and after Delivery of such
Beneficial Interest such Seller shall retain no right, title or
interest in such Beneficial Interest;
(p) the lessor under the relevant Lease pertaining to such Beneficial
Interest shall have paid to the relevant Lessee all amounts then
due and payable by such lessor to such Lessee in respect of
maintenance theretofore performed on such Aircraft;
(q) neither the BI Seller nor anyone acting on its behalf has offered
such Beneficial Interest or any similar securities for sale to, or
solicited any offer to buy any of the
34
same from, any person in a manner which would violate the
Securities Act, and neither the BI Seller nor anyone acting on
their behalf have taken, or will take, any action that would
subject the issuance or sale of such Beneficial Interest to the
registration requirements of Section 5 of the Securities Act;
(r) with respect to each LIFT Entity, there are no voting trusts,
membership agreements, proxies or other agreements or
understandings in effect with respect to (i) the voting of the
Beneficial Interest or (ii) other than those contained in the
Lease Documents or the Formation Agreement, the Transfer of the
Beneficial Interest and, that no Formation Agreement contains any
provision that would prohibit or impair the Transfer of Beneficial
Interest in accordance with this Agreement;
(s) complete and accurate copies of any membership register, minute
book or stock register with respect to the relevant LIFT Entity
has been provided to LIFT Trust-Sub 1;
(t) thereare no Liabilities of the LIFT Entity other than Liabilities
arising in the ordinary course of business or disclosed in a
Disclosure Letter, all of which Liabilities shall have been
discharged in full or are indemnified by GECC pursuant to Section
10 hereof and all Encumbrances related thereto shall have been
released, in each case in a manner satisfactory to LIFT Trust-Sub
1 other than those Liabilities that arise after the Purchase Date
under the Lease and Lease Documents;
(u) save to the extent that same is the responsibility of the Lessee
under a Lease, the relevant LIFT Entity has obtained and is
maintaining all permits, licenses, authorizations, certifications,
exemptions and approvals necessary to enable it to carry on its
business as presently conducted (collectively, the "PERMITS"), and
all such Permits are in full force and effect; and
(v) full and accurate particulars of all material contracts or
agreements (collectively, the "CONTRACTS") to which the relevant
LIFT Entity is a party at the Purchase Date that do not consist of
the Lease, the Operative Documents or other documents described
herein have been disclosed to LIFT Trust-Sub 1 in the First
Disclosure Letter and each Contract (i) is legal, valid and
binding on the relevant LIFT Entity and is in full force and
effect in accordance with its terms and (ii) upon completion of
the transactions contemplated by the Operative Documents, shall
continue in full force and effect, without penalty or adverse
consequence. Neither the BI Sellers nor the LIFT Entity is in
breach of, or default under, any Contract to which it is a party.
8.4 GECC with respect to each LIFT Entity, and each BI Seller with respect
to such LIFT Entity the Beneficial Interests of which such BI Seller
will Transfer, further represents and warrants on each BI Transfer Date
as follows:
35
(a) such LIFT Entity is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization
and has full corporate, company or other power and authority to
conduct its business as and to the extent now conducted and to
own, use and lease its assets. Such LIFT Entity is duly qualified,
licensed or admitted to do business and is in good standing in
those jurisdictions in which the ownership, use or leasing of its
assets, or the conduct or nature of its business, makes such
qualification, licensing or admission necessary, except for those
jurisdictions in which the adverse effects of all such failures by
such LIFT Entity to be qualified, licensed or admitted and in good
standing can in the aggregate be eliminated without material cost
or expense by such LIFT Entity, as the case may be, becoming
qualified or admitted and in good standing. GECC has, prior to the
execution of this Agreement, delivered to Purchaser true and
complete copies of such LIFT Entity's organizational documents
(including any limited liability company agreements, limited
partnership agreements or trust agreements) as in effect on the
date hereof.
(b) the Beneficial Interests of such LIFT Entity are duly authorized,
validly issued, outstanding, fully paid and nonassessable. Seller
owns the Beneficial Interests, beneficially and of record, free
and clear of all Encumbrances (other than Permitted Encumbrances),
and there are no other Beneficial Interests of such LIFT Entity
issued and outstanding. Except for this Agreement, there are no
outstanding options to acquire the Beneficial Interests or any
other equity interest with respect to such LIFT Entity. In the
case of Beneficial Interests represented by certificates, the
delivery of a certificate or certificates at the Closing
representing the Beneficial Interests in the manner provided in
Section 2.1 will transfer to Purchaser full legal and beneficial
title to the Beneficial Interests, free and clear of all
Encumbrances (other than Permitted Encumbrances). In the case of
Beneficial Interests not represented by certificates, delivery of
the Assignment of Beneficial Interest and recording of Purchaser's
ownership of such Beneficial Interests in the books and records of
the LIFT Entity will transfer to Purchaser full legal and
beneficial title to the Beneficial Interests, free and clear of
all Encumbrances (other than Permitted Encumbrances).
(c) such LIFT Entity has no Subsidiaries except as disclosed in the
First Disclosure Letter.
(d) on or prior to the BI Transfer Date, the Assignment of Lease or
Lease Novation, as the case may be, has been duly executed and
delivered by all parties thereto.
(e) except for (i) its obligations arising under the Operative
Documents to which it is a party and any Lease, Lease Document, or
any Intercompany Lease to which it is a party, organization and/or
maintenance arrangements and (ii) any Security Deposit or
Maintenance Reserves, such LIFT Entity has no Liabilities. Except
for (i) the Aircraft listed on Schedule 1 for such LIFT Entity,
(ii) cash or other property held for the account of any Lessee as
Security Deposit or Maintenance Reserves, (iii) any rights arising
under the Operative Documents to which it is a party and the
Lease, other Lease Documents and any Intercompany Lease and (iv)
36
any Subsidiary disclosed in the First Disclosure Letter, such LIFT
Entity has no other Assets.
(f) except for the Operative Documents to which it is a party and any
Lease, other Lease Documents and any Intercompany Lease to which
it is a party, and organization and/or maintenance arrangements,
such LIFT Entity is not a party to any other Contract.
(g) except for the Lease, the Lease Documents, any Intercompany Lease
and the Assignment of Lease or Lease Novation, as the case may be,
there are no Encumbrances (other than Permitted Encumbrances) on
any of the assets or properties of such LIFT Entity and the
Transfer of the Beneficial Interests in the manner contemplated by
this Agreement will not create any Encumbrances on the assets or
properties of such LIFT Entity.
(h) such LIFT Entity has no employees.
(i) to GECC's knowledge and such BI Seller's knowledge, there are no
Orders outstanding against such LIFT Entity.
(j) such LIFT Entity is not and has not at any time since its
organization as an entity been, or has received any notice that it
is or has at any time since its organization as an entity been, in
violation of or in default under, in any material respect,
Applicable Law or Order applicable to such LIFT Entity or any of
its assets or properties.
(k) no liquidator, provisional liquidator, analogous or similar
officer has been appointed in respect of all or any part of the
assets of such LIFT Entity nor has any application been made to a
court which is still pending for an Order for, or any act, matter
or thing been done which with the giving of notice, lapse of time
or satisfaction of some other condition (or any combination
thereof) will lead to, the appointment of any such officers or
equivalent in any jurisdiction.
8.5 Except if and as advised by GECC to the Purchaser thereof in a
Disclosure Letter, each BI Seller of a LIFT Non-Corporate Entity
further represents and warrants on the Purchase Date with respect
to the Transfer of the Beneficial Interest of the relevant LIFT
Non-Corporate Entity as follows:
(a) such LIFT Non-Corporate Entity is and has been at all time from
its organization an entity taxable as a disregarded entity for
Federal income tax purposes and the relevant BI Seller has made an
election, where it is required, to treat the LIFT Non-Corporate
Entity at all time from its organization as an entity taxable as a
disregarded entity for Federal, foreign, state and local income
tax purposes; PROVIDED THAT each of the four Cayman organized LIFT
Corporate Entities described on Schedule 6 has been
at least from the day preceding the Purchase Date an entity
taxable as a disregarded entity for Federal income tax purposes
and relevant BI Seller has made an election, where it is required,
to treat such LIFT
37
Corporate Entity from at least the day preceding the Purchase
Date as a disregarded entity for Federal, state and local income
tax purposes;
(b) such LIFT Non-Corporate Entity has paid all Taxes that are due or
claimed or asserted by any taxing authority to be due from such
LIFT Non-Corporate Entity on or prior to the Purchase Date and
there are no Tax liens upon the assets of the LIFT Non-Corporate
Entity except liens for Taxes not yet due; and
(c) such LIFT Non-Corporate Entity has complied with all applicable
laws, rules, and regulations relating to the payment and
withholding of Taxes (including withholding and reporting
requirements under Code Sections 1441 through 1464, 3401 through
3406, 6041 and 6049 and similar provisions under any other
applicable laws) and has, within the time and in the manner
prescribed by law, withheld from employee wages and paid over to
the proper governmental authorities all required amounts.
8.6 Except if and as advised by GECC to the Purchaser thereof in a
Disclosure Letter, each BI Seller of (i) a LIFT Corporate Entity and
(ii) of a LIFT Non-Corporate Entity to the extent such LIFT
Non-Corporate Entity is not treated as a disregarded entity for
foreign, state or local income tax purposes (a "LIFT State Corporate
Entity") further represents and warrants on the Purchase Date with
respect to the Transfer of the Beneficial Interest of the relevant LIFT
Corporate Entity or LIFT State Corporate Entity as follows:
(a) such LIFT Corporate Entity or such LIFT State Corporate Entity has
filed (or has had filed on its behalf) all material Tax Returns
required to be filed by applicable law prior to the date hereof
and all Tax Returns were materially true, complete and, to the
extent material, correct and filed on a timely basis;
(b) such LIFT Corporate Entity or such LIFT State Corporate Entity has
paid all material Taxes that are due, or claimed or asserted by
any taxing authority to be due, from the LIFT Corporate Entity or
such LIFT State Corporate Entity on or prior to the Purchase Date
and there are no Tax liens upon such assets of the LIFT Corporate
Entity or such LIFT State Corporate Entity except liens for Taxes
not yet due;
(c) such LIFT Corporate Entity or such LIFT State Corporate Entity has
complied with all applicable laws, rules, and regulations relating
to the payment and withholding of Taxes (including withholding and
reporting requirements under Code Sections 1441 through 1464, 3401
through 3406, 6041 and 6049 and similar provisions under any other
applicable laws) and has, to the extent material, within the time
and in the manner prescribed by law, withheld from employee wages
and paid over to the proper governmental authorities all required
amounts;
(d) such LIFT Corporate Entity or such LIFT State Corporate Entity has
not requested (and no request has been made on its behalf) any
extension of time within which to file any Tax Return;
38
(e) such LIFT Corporate Entity or such LIFT State Corporate Entity has
not executed any outstanding waivers or comparable consents
regarding the application of the statute of limitations for any
Taxes or Tax Returns (and no extensions have been executed on its
behalf);
(f) no audits or other administrative proceedings or court proceedings
are presently pending with regard to any Taxes or Tax Returns of
such LIFT Corporate Entity or such LIFT State Corporate Entity;
(g) such LIFT Corporate Entity or such LIFT State Corporate Entity has
not received any written ruling of a taxing authority relating to
Taxes, or any other written and legally binding agreement with a
taxing authority relating to Taxes;
(h) such LIFT Corporate Entity has not filed (and will not file prior
to the Purchase Date) a consent pursuant to Code Section 341(f) or
any analogous state or local Tax provision or agreed to have Code
Section 341(f)(2) apply to any disposition of a subsection (f)
asset, as defined in Code Section 341(f)(4);
(i) such LIFT Corporate Entity is not required to include in income
any adjustment pursuant to Code Section 481(a) by reason of a
voluntary change in accounting method initiated by the LIFT
Corporate Entity and the Internal Revenue Service has not proposed
an adjustment or change in accounting method;
(j) such LIFT Corporate Entity is not a party to any agreement,
contract, or arrangement that would result, separately or in the
aggregate, in the payment of any "excess parachute payments"
within the meaning of Code Section 280G;
(k) on or before the Purchase Date, such LIFT Corporate Entity or such
LIFT State Corporate Entity had no United States state or local,
or foreign Tax Return filing obligations in respect of income,
franchise, doing business or similar Taxes, other than, in the
case of a LIFT Corporate Chinese Entity, its obligation for
Delaware corporate income or franchise tax; and
(l) GECC or the relevant BI Seller has paid or will pay all Taxes with
respect to the operations of the LIFT Corporate Entity or LIFT
State Corporate Entity, for all such taxable periods ending on or
before the Purchase Date and that portion of such taxable period
that includes the Purchase Date (calculated as if the Purchase
Date were the end of a taxable period).
8.7 GECC represents, warrants and covenants as follows:
(a) neither GECC nor any of its Affiliates shall acquire any Class D
Notes or any beneficial interest in LIFT on the Purchase Date;
(b) following the Delivery Date for any Aircraft and unless as a
result of a Final Determination, neither GECC or any of its
Affiliates will claim for United States
39
federal, state or local or for foreign tax purposes to be the
owner of such Aircraft or to be the owner of any equity interest
in LIFT; and
(c) prior to the Purchase Date, GECC or its Affiliates treated itself
as the owners of the Aircraft for United States federal, state and
local income tax purposes.
8.8 As used herein "to GECC's knowledge" means the awareness of facts or
other information by any person at GECC or GECAS actively involved in
the transactions contemplated by this Agreement or (in respect of any
Aircraft), the leasing of such Aircraft and something being "known to
GECC" shall be construed accordingly.
8.9 GECC and each other Seller acknowledges that each Purchaser is entering
into this Agreement and the other Operative Documents in reliance upon
the accuracy of each of the representations and warranties, which
representations and warranties have been given by GECC and the other
Sellers so as to induce each Purchaser to enter into this Agreement and
the other Operative Documents.
8.10 The representations and warranties may at the sole discretion of the
relevant Purchaser be waived by such Purchaser with or without
conditions.
8.11 The benefit of the representations and warranties shall run to the
Security Trustee.
8.12 The representations and warranties in respect of any Aircraft shall
continue and survive in full force and effect after the Delivery Date
therefor for a period of three years after the Purchase Date.
8.13 Each of the representations and warranties shall be construed as a
separate and independent representation and warranty and shall not be
limited or restricted by reference to the terms of any other provision
of this Agreement, the other Operative Documents or any other
representation or warranty.
9. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
9.1 LIFT Trust-Sub 1 hereby represents and warrants to GECC and each Seller
as of the date of this Agreement and on each subsequent Delivery Date
that:
(a) LIFT Trust-Sub 1 is a business trust validly existing under the
laws of Delaware, and each other Purchaser of any Asset is a
company or trust duly established and validly existing under the
laws of its jurisdiction of establishment, and each has the trust
or corporate power (as the case may be) to own its assets and
carry on its business as it is being conducted;
(b) LIFT Trust-Sub 1 and each other Purchaser of any Asset has the
trust or corporate power (as the case may be) to enter into and
perform, and has taken all necessary action to authorize the entry
into, performance and delivery of, this Agreement and the other
applicable Operative Documents to which it is a party;
40
(c) this Agreement and the other applicable Operative Documents to
which it is a party have been, or when executed and delivered will
have been, duly entered into and delivered by LIFT Trust-Sub 1 and
each other Purchaser of any Asset and constitute or, in the case
of any Operative Document to be executed on or about the
applicable Delivery Date, will constitute on such Delivery Date,
each such Person's legal, valid and binding obligations;
(d) the entry into and performance by LIFT Trust-Sub 1 and any other
Purchaser of any Asset of, and the transactions contemplated by,
this Agreement and the other applicable Operative Documents to
which it is a party do not and will not:
(i) conflict with any laws binding on LIFT Trust-Sub 1 or any
other Purchaser of any Asset; or
(ii) result in any breach of, or constitute a default under the
constitutional documents of LIFT Trust-Sub 1 or any other
Purchaser of any Asset; or
(iii) result in any breach of, or constitute a default under or
result in default under any document which is binding upon
LIFT Trust-Sub 1 or any other Purchaser or any Asset or any of
their respective assets;
(e) so far as concerns the obligations of LIFT Trust-Sub 1 and any
other Purchaser of any Asset, all authorizations, consents,
registrations and notifications required in connection with the
entry into, performance, validity and enforceability of, this
Agreement and the other applicable Operative Documents to which
any such Person is a party and the Servicing Agreement and the
transactions contemplated by this Agreement and the other
applicable Operative Documents to which any such Person is a
party, have been obtained or effected (as appropriate) and are (or
will on their being obtained or effected be) in full force and
effect;
(f) the provisions of Section 14 concerning applicable law, service of
process and jurisdiction are valid and binding on LIFT Trust-Sub 1
and each other Purchaser under the laws of the State of New York,
and no provision purporting to be binding on LIFT Trust-Sub 1 or
any other Purchaser of any Asset, this Agreement or any of the
other applicable Operative Documents is prohibited, unlawful or
unenforceable under the laws of the State of New York;
(g) no liquidator, provisional liquidator, official manager, trustee,
receiver or receiver and manager or similar officer has been
appointed in respect of all or any part of the assets of LIFT
Trust-Sub 1 or any other Purchaser of any Asset nor has any
application been made to a court which is still pending for an
order for, or any act, matter or thing been done which with the
giving of notice, lapse of time or satisfaction of some other
condition (or any combination thereof) will lead to the
appointment of any such officers;
(h) no litigation, arbitration or claim before any court, arbitrator,
governmental or administrative agency or authority which would
have a material adverse effect on the ability of LIFT Trust-Sub 1
or any other Purchaser of any Asset to observe or
41
perform its obligations under this Agreement is in progress, or
to the knowledge of any such Person, threatened against any such
Person;
(i) LIFT Trust-Sub 1 and each other Purchaser of any Asset intends for
the sale of any Aircraft contemplated hereby to constitute a valid
transfer of such Aircraft to the relevant Purchaser and intends
that after Delivery of such Aircraft the Seller thereof shall
retain no right, title or interest in such Aircraft;
(j) LIFT Trust-Sub 1 represents and warrants that the Beneficial
Interest of any LIFT Entity purchased by LIFT Trust-Sub 1 is being
acquired for investment for LIFT Trust-Sub 1's own account, not as
a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that LIFT Trust-Sub 1 has no
intent of selling, granting any participation in, or otherwise
distributing the same in violation of the Securities Act of 1933;
and
(k) LIFT Trust-Sub 1 is a "citizen of the United States" as such term
is defined in Section 40102(a)(15) of Part A of Subtitle VII or
Title 49 of the United States Code and the Federal Aviation
Regulations.
10. INDEMNITY
10.1 Each Purchaser of an Asset or Aircraft agrees to indemnify the Seller
on its behalf and on behalf of each other Seller Indemnitee from and
against any claims, damages, losses, costs, expenses, fees, payments,
demands, liabilities, actions, proceedings, penalties or fines
("Losses") (other than, in each case, on account of any Taxes resulting
from any Delivery) which any Seller Indemnitee may incur in relation to
such Asset or Aircraft to the extent it arises out of a loss or
liability (A) incurred after the later of (i) the Delivery thereof and
(ii) the Purchase Date, and for any Losses due to the gross negligence
or willful misconduct of any Purchaser Indemnitee, except to the extent
such Losses are due to the gross negligence or willful misconduct of
any Seller Indemnitee and (B) arising in connection with any of the
Retained Rights.
10.2 Without derogation to the disclaimer in Section 12, each Seller of an
Aircraft agrees to indemnify the Purchaser thereof on its behalf and on
behalf of each Purchaser Indemnitee from and against any Losses which
any Purchaser Indemnitee may incur in relation to such Asset or
Aircraft to the extent it arises out of loss or liability incurred
prior to the later of (i) the Delivery thereof and (ii) the Purchase
Date, and for any Losses due to the gross negligence or willful
misconduct of any Seller Indemnitee, except to the extent such Losses
are due to the gross negligence or willful misconduct of any Purchaser
Indemnitee.
10.3 If a written claim is made against a party (the "FIRST PARTY") for any
sum which is the subject of an indemnity by the other party (the
"INDEMNIFYING PARTY") under this Section 10, the first party will
promptly notify the indemnifying party. If reasonably requested by the
indemnifying party in writing within thirty (30) days following receipt
by the indemnifying party of such notice, and provided the first party
is indemnified by the indemnifying party against costs and expenses,
the first party will in good faith contest in
42
its name (or, at the indemnifying party's election if such contest may
be undertaken by the indemnifying party in its own name or on behalf of
the indemnifying party, permit the indemnifying party to contest) the
validity, applicability and amount of such claim in appropriate
administrative and judicial proceedings; provided that the first party
shall have no such obligation if any such contest would expose the
first party itself to a liability claim.
10.4 The relevant Seller shall pay, within forty-five (45) days after
receipt of an approved invoice therefor, costs and expenses, including
legal fees and disbursements, which the relevant Purchaser incurs as a
result of (but subject to the provisions of Section 4.3 in the case of
clauses (ii) and (iii) below):
(i) the application of Section 4.1 (including, without limitation,
costs incurred in arranging or taking steps to arrange the
preparation, execution and delivery of any documents in
anticipation of Delivery of a Substitute Aircraft); or
(ii) any of the documents or conditions referred to in Schedule 3
not being satisfied on or before Delivery of the relevant
Aircraft or Transfer of the Beneficial Interest of the
relevant Aircraft or any of the documents or conditions
referred to in Schedule 4 not being satisfied within the
period specified therein; or
(iii) any condition referred to in Section 7.2(a) or (b) not being
satisfied on or before Delivery of the relevant Aircraft.
10.5 If and to the extent that any sums constituting (directly or
indirectly) an indemnity to the first party but paid by the
indemnifying party pursuant to this Agreement are treated as taxable in
the hands of the first party, the indemnifying party will pay to the
first party such sums as will after the tax liability has been fully
satisfied indemnify the first party to the same extent as it would have
been indemnified in the absence of such liability together with
interest on the amount payable by the indemnifying party under this
sub-clause at the rate of interest stated in Section 5.5 in respect of
the period commencing on the date on which the payment of taxation is
finally due until payment by the indemnifying party (both before and
after judgment), but the indemnifying party will be under no liability
to make any payment under this Section 10.5 to the first party to the
extent the first party would be in a better position than if no payment
by way of indemnity had needed to have been made.
11. TAXES
(a) Each Seller of an Asset hereby covenants to pay all Taxes imposed
on the Purchaser thereof, on the Purchaser Parent (or any assignee
or successor thereto) or on any Aircraft, any Beneficial Interest,
the Lease Documents or the Operative Documents as a result of (i)
the execution of, delivery of or performance under this Agreement,
(ii) the Delivery of any Aircraft or Transfer of the Beneficial
Interest in a LIFT Entity that holds title to any Aircraft, (iii)
any required re-
43
registration of title to or the lease of any Aircraft with any
Government Entity that is necessary or advisable to reflect or
record the Operative Documents or the events occurring pursuant to
the Operative Documents, (iv) the purchase by such Purchaser of
any Aircraft hereunder, (v) such Purchaser's entering into of the
Lease Documents and the Operative Documents, (vi) without regard
to clause (y) of this Section 11(a), the inaccuracy of such
Seller's representation or warranty or the breach by such Seller
of any covenant, or (vii) an Aircraft being located in an
Unfavorable Tax Jurisdiction at any time whether before or after
the moment of Delivery on the Delivery Date for such Aircraft or
on the Purchase Date, other than (v) Taxes in respect of events
occurring after, but not on, the Delivery Date unless arising as a
result of events described in clause (iii) or (vi) above, (w) in
the case of clause (vii), Taxes imposed by a Jurisdiction other
than the Unfavorable Tax Jurisdiction, (x) Taxes that the relevant
Lessee is liable to pay or reimburse under the relevant Lease
and/or the Operative Documents, (y) any Taxes (other than sales,
use and similar Taxes and Taxes which are imposed as a result of
an event described in clause (vi) of this Section 11(a)) imposed
on the Purchaser of such Aircraft or any other Purchaser that are
based on or measured by gross or net income or receipts
(including, without limitation, withholding and Taxes on tax
preference items) of such Purchaser or any other Purchaser or that
are capital, doing business, accumulated earnings, personal
holding company, excess profits, successor, estate or net worth
Taxes of such Purchaser (including interest, additions to Tax,
penalties, or other charges in respect thereof), in each case to
the extent imposed on the Purchaser or any other Purchaser by
reason of such Purchaser or an Affiliate thereof being organized
in the jurisdiction imposing such Taxes or conducting activities
in such jurisdiction unrelated to the transactions contemplated by
the Operative Documents or (z) Taxes resulting from the gross
negligence or willful misconduct of such Purchaser.
As used herein, "Unfavorable Tax Jurisdiction" means a
jurisdiction that imposes Tax on an Asset or any Person directly
or indirectly holding an interest in the Asset by reason of a
transfer of the Asset or a beneficial interest in the Asset as a
result of the applicable Aircraft being located in that
jurisdiction.
(b) Each Purchaser covenants not to bring into the United Kingdom any
document held by it subject to stamp duty in the United Kingdom
and covered by the indemnity in Section 11(a) above unless it is
necessary to do so to enforce the same, whereupon such Purchaser
shall notify the relevant Seller that it has brought such a
document into the United Kingdom and such Seller shall be
responsible for the payment of such duty.
(c) Each BI Seller of each LIFT Entity hereby covenants to pay and to
indemnify and hold harmless such LIFT Entity and its Affiliates
(and their direct and indirect beneficial interest holders) from
any and all claims, actions, causes of action, liabilities,
losses, damages, and reasonable out-of-pocket expenses and costs
resulting from, arising out of or relating to (i) all Taxes
imposed on the LIFT Entity or the Purchaser thereof related to the
activity of the LIFT Entity for all
44
taxable periods ending on or before the Purchase Date, (ii) all
Taxes imposed on the LIFT Entity or Purchaser thereof for such
portion of any taxable period including the Purchase Date as ends
on the Purchase Date, (calculated as if the Purchase Date had been
the last day of a taxable period and the books of the LIFT Entity
had been closed on such day (it being understood that Taxes other
than income Taxes for which the last day of a taxable period is
not the Purchase Date are to be allocated in a manner that fairly
reflects (and is no less favorable to the Purchaser than pro rata
per day) the period ending on the Purchase Date and the period
commencing after the Purchase Date)) and (iii) any Tax liability
that arises solely by reason of the LIFT Entity being severally
liable for any Tax of the consolidated group (or combined group
pursuant to Treasury Regulation Section 1.1502-6 or any analogous
state or local Tax provisions) of which GECC or a BI Seller is a
member (the "GE GROUP") other than, in the case of clauses (i),
(ii) and (iii) Taxes that the relevant Lessee is liable to pay or
reimburse under the relevant Lease and/or the Operative Documents;
PROVIDED, HOWEVER, in the case of clauses (i) and (ii) above,
Taxes imposed with respect to the activities of a LIFT Entity or
the Purchaser after the time the sale contemplated by this
Agreement is effective shall be subject to indemnification only to
the extent (A) (I) set forth in Section 11(a)(vi) or (vii) or (II)
such Taxes arise in connection with the sale on the Purchase Date
of any direct or indirect beneficial interest in the LIFT
Entities, and (B) such Taxes do not arise as a result of an
election under Section 338 of the Code or similar election under
Tax laws of any jurisdiction outside of the United States
PROVIDED, FURTHER, that the BI Seller shall not be responsible for
Taxes measured by net income attributable to any Rent received by
LIFT Trust-Sub 1 solely allocable to the Purchase Date. In the
case of Taxes payable by GECC and a BI Seller pursuant to clause
(ii), the amount of such Taxes, as reasonably computed by the
Purchaser, will be remitted to the Purchaser at least three
business days prior to the due date of the relevant Tax Return
(with interest being imposed at a rate equal to Purchaser's or its
Affiliate's cost of funds (as documented by the Purchaser or its
Affiliate in a reasonable manner) for any late payment.
(d) Each BI Seller of a LIFT Corporate Entity or a LIFT State
Corporate Entity hereby covenants:
(i) any tax sharing agreements, tax settlement agreements,
arrangements, policies or guidelines, formal or informal,
express or implied that may exist between any LIFT Corporate
Entity or LIFT State Corporate Entity and GECC, any Seller or
any Affiliate of GECC or any Seller (other than the LIFT
Corporate Entity or LIFT State Corporate Entity) (a "Tax
Sharing Agreement") shall terminate as of the Purchase Date
and, except as specifically provided herein, any obligation to
make payments under any Tax Sharing Agreement shall be
cancelled as of the Purchase Date;
(ii) if any LIFT Corporate Entity or LIFT State Corporate Entity
has been a member of a United States consolidated federal
income tax return or any foreign, state or local consolidated
or combined income or franchise tax
45
returns, the BI Seller shall cause such LIFT Corporate Entity,
to the extent permitted by law, to continue to join in such
returns through the Purchase Date;
(iii) the GE Group shall timely prepare and file (or cause to be
so prepared and filed) all Tax Returns required by law,
covering any LIFT Corporate Entity or LIFT State Corporate
Entity for all taxable periods ending on or before the
Purchase Date ("Pre-Closing Tax Returns");
(iv) the GE Group shall timely pay or cause to be paid all Taxes
related to Pre-Closing Tax Returns ("Pre-Closing Taxes") of
such LIFT Corporate Entity or LIFT State Corporate Entity;
(v) GECC or the relevant Seller will, to the extent permitted by
applicable law, elect, or assist Purchaser to elect, with the
relevant foreign United States state and local taxing
authorities to close the taxable period of each LIFT Corporate
Entity or LIFT State Corporate Entity on the Purchase Date,
HOWEVER, in any case, where applicable law does not permit
such LIFT Corporate Entity or such LIFT State Corporate Entity
to close its taxable year on the Purchase Date, the Purchaser
will be responsible for and will cause to be prepared and duly
filed all Tax Returns relating to Taxes of such LIFT Corporate
Entity for any taxable period which includes and ends after
the Purchase Date; and
(vi) after the Purchase Date, GECC and the relevant Seller of each
LIFT Corporate Entity will cooperate in the preparation of all
Tax Returns of such LIFT Corporate Entity and LIFT State
Corporate Entity and will provide (or cause to be provided)
any records and other information the Purchaser requests that
are reasonably necessary for the preparation of such Tax
Returns and GECC and the relevant Seller will cooperate with
the Purchaser in connection with any Tax investigation, audit
or other proceeding related to such LIFT Corporate Entity;
provided that if any of the information requested is contained
in tax returns or other documents involving matters unrelated
to the LIFT Corporate Entity or LIFT State Corporate Entity or
it otherwise confidential information, then GECC and the
relevant Seller will be required to provide such information
only to a nationally recognized firm of independent accounts
selected by the Purchaser and reasonably satisfactory to GECC
which independent accounting firm will prepare such Tax
Returns without disclosure of the confidential information to
the LIFT Corporate Entity or the LIFT State Corporate Entity;
provided, further, however, that nothing in the preceding
proviso will prevent the LIFT Corporate Entity or the LIFT
State Corporate Entity from reviewing its Tax Returns.
(e) GECC and the relevant Seller of each LIFT Corporate Entity shall
have the right to control any audit or examination relating to
Taxes by any taxing authority, initiate any claim for refund, file
any amended return, contest, resolve and defend against any
assessment, notice of deficiency or other adjustment or proposed
adjustment relating or with respect to any Taxes of any LIFT
Corporate Entity or
46
LIFT State Corporate Entity for all taxable periods ending prior
to or on the Purchase Date and for that portion of any taxable
period that includes the Closing Date that ends on the Closing
Date (an "Event"), and shall be entitled to all refunds with
respect to such taxable periods or portions thereof; HOWEVER, to
the extent that an Event could result in liability for the
Purchaser pursuant to this Agreement, GECC or the Seller shall
notify the Purchaser of such Event, and shall consult with the
Purchaser with respect to the resolution of any issue relating to
Taxes arising as a result of or in connection with such Event.
12. WARRANTIES AND DISCLAIMERS
12.1 WITHOUT PREJUDICE TO THE EXPRESS TERMS AND CONDITIONS STATED HEREIN AND
IN THE OTHER OPERATIVE DOCUMENTS, EACH AIRCRAFT WILL BE DELIVERED AND
SOLD (OR IN THE CASE OF THE BI AIRCRAFT, DEEMED DELIVERED AND SOLD ON
THE RELEVANT BI TRANSFER DATE TO LIFT TRUST-SUB 1) IN ITS "AS IS, WHERE
IS" CONDITION, AND EXCEPT AS EXPRESSLY STATED IN SECTION 8 OF THIS
AGREEMENT AND AS OTHERWISE REPRESENTED AND WARRANTED HEREIN IN THE
OTHER OPERATIVE DOCUMENTS AND/OR IN THE XXXX OF SALE OR ACKNOWLEDGEMENT
OF DELIVERY AND/OR ASSIGNMENT OF BENEFICIAL INTEREST (AS THE CASE MAY
BE) FOR OR IN RESPECT OF SUCH AIRCRAFT OR ANY CERTIFICATE DELIVERED
PURSUANT TO THIS AGREEMENT, THE SELLER (AND THE APPLICABLE LIFT ENTITY)
MAKES NO WARRANTIES, GUARANTEES OR REPRESENTATIONS, EXPRESS OR IMPLIED,
ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY OF THE AIRCRAFT.
12.2 SUBJECT AS PROVIDED IN SECTION 12.1 EACH PURCHASER WAIVES RELEASES AND
RENOUNCES ALL WARRANTIES, OBLIGATIONS AND LIABILITIES OF ANY SELLER (OR
LIFT ENTITY) INCLUDING BUT NOT LIMITED TO (1) ANY IMPLIED WARRANTY AS
TO THE DESCRIPTION, AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR ANY
PURPOSE, VALUE, CONDITION, DESIGN, DATE PROCESSING, USE OR OPERATION OF
THE AIRCRAFT OR ANY PAST PERFORMANCE, COURSE OF DEALING, USAGE OR TRADE
OR OTHERWISE, (2) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN
TORT (INCLUDING STRICT LIABILITY), AND (3) ANY OBLIGATION, LIABILITY,
RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR LOSS
OF USE, REVENUE OR PROFIT WITH RESPECT TO THE AIRCRAFT, FOR ANY
LIABILITY OF ANY LESSEE TO ANY THIRD PARTY, FOR ANY LIABILITY OF THE
PURCHASER TO ANY THIRD PARTY, OR FOR ANY OTHER DIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES; AND ALL SUCH WARRANTIES, GUARANTEES,
REPRESENTATIONS, OBLIGATIONS, LIABILITIES, RIGHTS, CLAIMS OR REMEDIES,
EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, ARE EXPRESSLY EXCLUDED.
47
12.3 THIS SECTION 12 SHALL NOT BE MODIFIED EXCEPT BY A WRITTEN AGREEMENT
SIGNED ON BEHALF OF THE SELLER AND THE PURCHASER BY THEIR RESPECTIVE
DULY AUTHORIZED REPRESENTATIVES.
13. ASSIGNMENT
13.1 No Purchaser of an Asset or Aircraft shall assign, transfer or
otherwise convey this Agreement or all or any part of its rights
hereunder to any Person without the prior written consent of the Seller
of such Asset or Aircraft other than in favor of the Security Trustee
under the Security Trust Agreement, to which the Seller hereby
consents. For the avoidance of doubt, the sale of the beneficial
interest in LIFT Trust-Sub 1 to LIFT shall not require the consent of
any Seller.
13.2 No Seller of an Asset or Aircraft shall assign, transfer or otherwise
convey this Agreement or all or any part of its rights hereunder to any
Person without the prior written consent of the Purchaser of such Asset
or Aircraft other than so far as concerns assignments to existing
owners or financiers or Affiliates of such Seller of amounts or its
rights to receive amounts payable to such Seller hereunder on terms and
conditions which do not increase any obligation of such Purchaser
hereunder or otherwise expose such Purchaser to any increased liability
cost or expense. Notwithstanding the foregoing, the Seller may at any
time and from time to time assign its rights under this Agreement (but
not its obligations) with respect to one or more of the Aircraft to
Chicago Deferred Exchange Corporation ("CDEC") and CDEC may
subsequently reassign such rights to the Seller, in each case without
having to obtain the prior written consent of the Purchaser but in each
case giving the Purchaser written notice of such assignment and in the
exercise of such rights, CDEC shall be bound by the terms and
provisions of Section 14.2 hereof.
14. MISCELLANEOUS
14.1 GECC shall indemnify, hold harmless and defend LIFT Trust-Sub 1, each
other Purchaser and in connection with Section 8.7 hereof only any
holders of beneficial interest in LIFT and Affiliates thereof and their
respective successors and assigns from and against all liabilities,
obligations, claims, demands, judgments, causes of action, damages,
costs, losses and expenses (including reasonable legal fees, costs)
rising out of or pertaining to any claim which results from any breach
by GECC or any other Seller of any of its obligations, representations,
warranties or covenants under this Agreement, any Assignment of
Beneficial Interest, any Acknowledgement of Delivery or any Xxxx of
Sale and solely in respect of any claim that arises with respect to any
holders of beneficial interest in LIFT and Affiliates thereof, GECC
shall have the rights set forth in Sections 10.3 and 11 (e) in respect
of such claim.
14.2 None of GECC or any other Seller shall take any steps for the purpose
of procuring the appointment of any administrative receiver or the
making of any administrative order or for instituting any bankruptcy,
reorganization, arrangement, insolvency, winding up, liquidation,
composition or any like proceedings under the laws of any jurisdiction
in respect of LIFT Trust-Sub 1 or any other Purchaser or in respect of
any of their respective
48
liabilities, including, without limitation, as a result of any claim
or interest of any of GECC or any other Seller.
14.3 No amendment or waiver of any provision of this Agreement, and no
consent to any departure herefrom by any party hereto, shall in any
event be effective unless the same shall be in writing and signed by
each party hereto, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given. No failure on the part of any party hereto to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any
other right.
14.4 In the event that any provision of this Agreement or the application
thereof to any party hereto or to any circumstance or in any
jurisdiction governing this Agreement shall, to any extent, be invalid
or unenforceable under any applicable statute, regulation or rule of
law, then such provision shall be deemed inoperative to the extent that
it is invalid or unenforceable and the remainder of this Agreement, and
the application of any such invalid or unenforceable provision to the
parties, jurisdictions or circumstances other than to whom or to which
it is held invalid or unenforceable, shall not be affected thereby nor
shall the same affect the validity or enforceability of this Agreement.
14.5 All notices and other communications provided for hereunder shall be in
writing (including telecopier) and mailed, telecopied or delivered to
the intended recipient at its address specified in Section 12.05 of the
Indenture or
in the case of GECC or any Seller, as follows:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Senior Vice President-Corporate Treasury and
Global Funding Operation of GE Capital
Facsimile: (000) 000-0000
With a copy to:
GE Capital Aviation Services, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Contracts Leader
Facsimile: (000) 000-0000
and, in the case of any Purchaser, as follows:
LIFT Trust-Sub 1
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
00
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Corporate Trust Administrator
Facsimile: (000) 000-0000
with a copy to:
Phoenix American Financial Services, Inc.,
Administrative Agent
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxx, XX 00000
Attention: Financial Services
Facsimile: (000) 000-0000
or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party complying as to
delivery with the terms of this Section 14.5. Each such notice shall be
effective (a) upon receipt when sent through the mails, registered or
certified mail, return receipt requested, postage prepaid, with such
receipt to be effective the date of delivery indicated on the return
receipt, or (b) one Business Day after delivery to an overnight
courier, or (c) on the date personally delivered to an authorized
officer of the party to which sent, or (d) on the date transmitted by
legible telecopier transmission with a confirmation of receipt.
14.6 (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
(b) Each party hereto hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York
County for the purposes of all legal proceedings arising out of or
relating to this agreement and each other operative document or
the transactions contemplated hereby or thereby. GECC and each
other Seller irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. Each Seller (other than
GECC so long as GECC is a New York corporation) hereby irrevocably
appoints CT Corporation System, with an office on the date hereof
at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent to
receive on its behalf and on behalf of its property, service of
copies of the summons and complaint and any other process that may
be served in any such action or proceeding. As an alternative
method of service, each of GECC and each other Seller hereby
irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies to it or in any
other manner permitted by Applicable Law.
50
(c) To the extent permitted by Applicable Law, each of the parties
hereto hereby irrevocably waives the right to demand a trial by
jury, in any such suit, action or other proceeding arising out of
this agreement, the other operative documents, or the subject
matter hereof or thereof or the overall transaction brought by any
of the parties hereto or their successors or assigns.
14.7 Nothing in Section 14.4 limits the right of LIFT Trust-Sub 1 or any
other Purchaser to bring proceedings against GECC or any other Seller
in connection with this Agreement:
(i) in any other court of competent jurisdiction; or
(ii) concurrently in more than one jurisdiction.
14.8 Each party hereto will promptly and duly execute and deliver such
further documents to make such further assurances for and take such
further action reasonably requested by any party to whom such first
party is obligated, all as may be reasonably necessary to carry out
more effectively the intent and purpose of this Agreement and the other
Operative Documents.
14.9 This Agreement may be executed in any number of counterparts and by any
party hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which, when taken
together, shall constitute one and the same agreement.
15. SUBROGATION
15.1 Upon the provision of substitute collateral by GECC or any other Seller
pursuant to Section 7.2(b)(i), and upon any claim being made against
GECC or any other Seller for breach of any representation or warranty
in Section 8.2, GECC or such other Seller, as the case may be, shall be
subrogated to all rights, remedies and claims of LIFT Trust-Sub 1 and
each other Purchaser against the Lessee or any Affiliate of the Lessee
under the applicable Novated Lease or Assigned Lease, the Operative
Documents, the Lease Documents and otherwise, with respect to such
provision of substitute collateral or such claim, and LIFT Trust-Sub 1
shall cooperate, and shall cause each other Purchaser of any Asset to
cooperate, in taking such action as GECC or such other Seller may
reasonably request in connection with exercising any such right, remedy
or claim (and the reasonable costs and expenses thereof shall be paid
by GECC).
51
IN WITNESS WHEREOF, the parties hereto have entered into this Asset Purchase
Agreement the day and year first above written.
GENERAL ELECTRIC CAPITAL
CORPORATION
By /s/ Xxxxx X. Xxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
LIFT TRUST-SUB 1
By Wilmington Trust Company,
Not in its individual capacity but solely
as Owner Trustee
By /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
ALCYONE FSC CORPORATION
By /s/ Xxxxx X. Xxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
ALNITAK FSC TWO CORPORATION
By /s/ Xxxxx X. Xxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
CASTLE HARBOUR LEASING, INC.
By /s/ Xxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
AVIATION FINANCIAL SERVICES, INC.
By /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
The undersigned hereby agrees to the terms solely of the second and third
sentences of Section 2.3 of this Agreement.
GE CAPITAL AVIATION SERVICES, LIMITED
By /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Director
The undersigned hereby agrees to the terms solely of the fourth sentence of
Section 2.3 of this Agreement.
PHOENIX AMERICAN FINANCIAL SERVICES, INC.
By /s/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: AVP
EXHIBIT A
ASSIGNMENT OF BENEFICIAL INTEREST
The undersigned, [BENEFICIAL INTEREST SELLER] (the "SELLER"), as
[record and beneficial owner of the capital stock/equity interest] (the
"BENEFICIAL INTEREST") in [Name] (the "ENTITY"), hereby sells, assigns, conveys,
transfers and sets over to LIFT Trust-Sub 1, a Delaware business trust (the
"PURCHASER"), all of the Seller's right, title and interest in and to the
Beneficial Interest, including, without limitation, the Trust Estate (as defined
in the Trust Agreement), other than the Retained Rights (as such term is defined
in that certain Asset Purchase Agreement dated as of [__________, 2001] (the
"PURCHASE AGREEMENT") among the parties hereto and others). The Seller hereby
warrants to the Purchaser, its successors and assigns, that (i) there is hereby
irrevocably conveyed to the Purchaser full legal and beneficial title to the
Beneficial Interest, free and clear of all Encumbrances (other than Permitted
Encumbrances) and (ii) the Entity holds full legal and beneficial title to each
of the Aircraft listed in Schedule I hereto (the "BI AIRCRAFT") free and clear
of all Encumbrances (other than Permitted Encumbrances). The Seller agrees with
the Purchaser, and its successors and assigns, that the Seller will warrant and
defend such title to the Entity and such title of the Entity in each BI Aircraft
forever against all claims and demands whatsoever (other than Permitted
Encumbrances). This Assignment of Beneficial Interest is being made and entered
into pursuant to the Purchase Agreement and shall be governed by and construed
in accordance with the laws of the State of New York. Except as otherwise
provided in the Purchase Agreement, the Beneficial Interest (and the Entity's
interest in each BI Aircraft) is sold "AS IS" and "WHERE IS". Capitalized terms
used herein and not otherwise defined shall have the meanings attributed thereto
in the Purchase Agreement.
[BENEFICIAL INTEREST SELLER]
By: __________________________
Name:
Title:
The above and foregoing Assignment of Beneficial Interest is hereby
accepted and agreed to this ___ day of [________], 2001.
LIFT Trust-Sub 1
By: __________________________
Name:
Title:
EXHIBIT B
XXXX OF SALE
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, [_______________], a corporation organized and existing under the
laws of [_______________] and having its registered office at [_______________]
(the "SELLER"), owner of the full legal and beneficial title (subject to the
Aircraft Lease Agreement referred to below) to the aircraft, engines, equipment
and documents described below (hereinafter referred to as the "AIRCRAFT"):
1. one (1) [_______________] aircraft bearing manufacturer's serial no.
[_______________] and registration xxxx [_______________]; and
2. [_______________] [_______________] engines bearing the following
manufacturer's serial nos.: [_______________], [_______________],
[_______________];
3. all equipment, accessories and parts belonging to, installed in or
appurtenant to such Aircraft or Engines to the extent title thereto has
been vested in the Seller in under the Aircraft Lease Agreement
referred to below; and
4. all Aircraft Documents relating to the Aircraft and such Engines;
does hereby sell, grant, transfer and deliver all its right, title and interest
in and to the Aircraft (subject to the Aircraft Lease Agreement dated as of
[_______________], between [_______________] and [______________]) unto
[_______________] (the "Purchaser") and its successors and assigns, to have and
to hold the Aircraft forever.
The Seller hereby warrants to the Purchaser, its successors and assigns, that
there is hereby conveyed to the full legal and beneficial title to the Aircraft,
free and clear of all Encumbrances (other than Permitted Encumbrances). The
Seller agrees with the Purchaser, and its successors and assigns, that the
Seller will warrant and defend such title forever against all claims and demands
(other than Permitted Encumbrances) whatsoever. Except as otherwise provided
herein or in the Asset Purchase Agreement, the Aircraft is sold "AS IS" and
"WHERE IS."
This Xxxx of Sale shall be governed by and construed in accordance with the laws
of the State of New York. Capitalized terms used but not otherwise defined
herein shall have the same meanings as used in the Asset Purchase Agreement.
IN WITNESS WHEREOF, the Seller has caused this Xxxx of Sale to be duly executed
as of this [__] day of [__________], 2001.
-------------------------------
By_____________________________
Name:
Title:
The representation, warranties, and
covenants of the above named Seller
under this Xxxx of Sale are hereby
irrevocably and unconditionally
guaranteed and confirmed:
General Electric Capital Corporation
By___________________________
Name:
Title:
EXHIBIT C
ACKNOWLEDGEMENT OF DELIVERY
This Acknowledgement of Delivery is given in connection with the Asset Purchase
Agreement as amended, modified or otherwise supplemented (the "AGREEMENT") dated
as of [________] __, 2001 among, inter alia, [_______________], a corporation
organized and existing under the laws of [_______________] and having its
registered office at [_______________] (the "SELLER"), [______________], a
[company/trust] duly established and existing pursuant to the laws of
[_______________] and having its principal place of business at _______________
(the "PURCHASER") and the other parties thereto.
The Seller hereby acknowledges to the Purchaser that the full legal and
beneficial title (subject to the Aircraft Lease Agreement referred to below) to
the aircraft, engines, equipment and documents described below (hereinafter
referred to as the "AIRCRAFT"):
1. one (1) [_______________] aircraft bearing manufacturer's serial no.
[_______________] and registration xxxx [_______________]; and
2. [_______________] [_______________] engines bearing the following
manufacturer's serial nos.: [_______________], [_______________],
[_______________];
3. all equipment, accessories and parts belonging to, installed in or
appurtenant to such Aircraft or Engines to the extent title thereto has
been vested in the Seller in under the Aircraft Lease Agreement
referred to below; and
4. all Aircraft Documents relating to the Aircraft and such Engines;
has passed by physical delivery from the Seller to the Purchaser in accordance
with the terms of the Agreement (subject to the Aircraft Lease Agreement dated
as of [_______________], between [_______________] and [_______________]).
The Seller hereby warrants to the Purchaser, its successors and assigns, that
there was conveyed to the Purchaser full legal and beneficial title to the
Aircraft, free and clear of all Encumbrances (other than Permitted
Encumbrances). The Seller agrees with the Purchaser, and its successors and
assigns, that the Seller will warrant and defend such title forever against all
claims and demands whatsoever (other than Permitted Encumbrances). Except as
otherwise provided herein and in the Agreement, the Aircraft was sold "AS IS"
and "WHERE IS".
This Acknowledgement of Delivery shall be governed by and construed in
accordance with the laws of the State of New York. Capitalized terms used but
not otherwise defined herein shall have the same meanings as used in the
Agreement.
IN WITNESS WHEREOF, the Seller has caused this Acknowledgement of Delivery to be
duly executed as of this [__] day of [__________], 2001.
------------------------------
By_____________________________
Name:
Title:
The representation, warranties, and
covenants of the above named Seller
under this Acknowledgement of Delivery
are hereby irrevocably and unconditionally
guaranteed and confirmed:
General Electric Capital Corporation
By___________________________
Name:
Title:
2
Exhibit D
GUARANTY
GUARANTY (the "Guaranty") dated as of June 26, 2001 of General Electric
Capital Corporation, a New York corporation ("GECC") in favor of LIFT Trust-Sub
1 ("LIFT Trust-Sub 1").
Reference is made to that certain Asset Purchase Agreement dated as of
June 26, 2001 (the "Asset Purchase Agreement") among GECC, the other Sellers
named therein and LIFT Trust-Sub 1 and the other Purchasers. All capitalized
terms used but not otherwise defined herein shall have the respective meanings
assigned to such terms in the Asset Purchase Agreement. To induce the Purchasers
to acquire the Aircraft or the Beneficial Interest in a LIFT Entity under the
Asset Purchase Agreement and to pay the purchase price thereof on the Purchase
Date in advance of the Delivery of the Aircraft or the Beneficial Interest in a
LIFT Entity and to otherwise perform their respective obligations thereunder,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, GECC is willing to execute and deliver this
Guaranty to the Purchasers and accordingly GECC does hereby agree as follows:
Section 1. GUARANTY BY GECC. (a) From and after the date hereof, GECC
hereby irrevocably and unconditionally guarantees to the Purchasers the payment
and performance in full when due of each of the obligations of each of the
Sellers under the Asset Purchase Agreement and each Assignment of Beneficial
Interest, Xxxx of Sale, Acknowledgment of Delivery, Lease Novation and/or
Assignment of Lease delivered pursuant thereto (collectively, the "Guaranteed
Obligations"), in each case after any applicable grace periods or notice
requirements, according to the terms of the Asset Purchase Agreement; PROVIDED,
HOWEVER, that with respect to any payment obligation of any Seller thereunder,
GECC shall not be liable to make any such payment until 15 Business Days (as
used herein, a "Business Day" shall refer to a day other than a Saturday or a
Sunday on which commercial banks are open for business in New York City)
following receipt by GECC of a written demand for payment from LIFT Trust-Sub 1.
GECC hereby agrees that its obligations hereunder shall be absolute and
unconditional, irrespective of (i) the validity, regularity or enforceability of
the Asset Purchase Agreement, any other Operative Document or any other
agreement or instrument referred to herein or therein, any change therein or
amendment thereto, the absence of any action to enforce the same, any waiver or
consent by the Purchasers with respect to any provision thereof, the recovery of
any judgment against any of the Sellers or any action to enforce the same, or
any other circumstances which may otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor and (ii) any difference between
the law selected as the governing law of the Asset Purchase Agreement or the
other Operative Documents and the law selected as the governing law of this
Guaranty; PROVIDED, HOWEVER, that nothing contained herein shall be construed to
be a waiver by GECC of the foregoing demand for payment. GECC covenants that
this Guaranty will not be discharged except by complete and final performance of
the Guaranteed Obligations.
(b) GECC shall be subrogated to all rights of the Purchasers in respect
of any amounts paid by GECC pursuant to the provisions of this Guaranty;
provided, however, that GECC shall be entitled to enforce, or to receive any
payments arising out of or based upon, such right of subrogation only after all
of the Guaranteed Obligations have been finally paid in full.
(c) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Guaranteed Obligations
is rescinded or must otherwise be returned by any Purchaser upon the insolvency,
bankruptcy or reorganization of any Seller or otherwise, all as though such
payment had not been made.
Section 2.1. NOTICES. All notices to GECC under this Guaranty and
copies of all notices to the Sellers under the Asset Purchase Agreement shall,
until GECC furnishes written notice to the contrary, be in writing and mailed,
faxed or delivered to GECC at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx
00000-0000, and directed to the attention of the Senior Vice President-Corporate
Treasury and Global Funding Operation of GE Capital (facsimile no. (203)
357-4975).
Section 2.2. GOVERNING LAW. This Guaranty shall be construed and
enforced in accordance with, and governed by, the laws of the State of New York,
United States of America.
Section 2.3. INTERPRETATION. The headings of the sections and other
subdivisions of this Guaranty are inserted for convenience only and shall not be
deemed to constitute a part hereof.
Section 2.4. ATTORNEY'S COST. GECC agrees to pay all reasonable
attorney's fees and disbursements and all other reasonable and actual costs and
expenses which may be incurred by the Purchasers in the enforcement of this
Guaranty.
Section 2.5 CURRENCY OF PAYMENT. Any payment to be made by GECC shall
be made in the same currency as designated for payment in the Asset Purchase
Agreement and such designation of the currency of payment is of the essence.
Section 2.6 NO SET-OFF. By acceptance of this Guaranty, LIFT Trust-Sub
1 and each of the other Purchasers shall be deemed to have waived any right to
set-off, combine, consolidate or otherwise appropriate and apply (i) any assets
of GE Capital at any time held by any Purchaser or (ii) any indebtedness or
other liabilities at any time owing by any Purchaser to GECC, as the case may
be, against, or on account of, any obligations or liabilities owed by GECC to
the Purchasers under this Guaranty.
2
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
-----------------------------------
Senior Vice President
Corporate Treasury and
Global Funding Operation
ACKNOWLEDGMENT AND AGREEMENT
LIFT Trust-Sub 1 for and on behalf of itself and each of the Purchasers does
hereby acknowledge and consent to the provisions of the foregoing Guaranty.
LIFT Trust-Sub 1
By:
------------------------------
Title:
3
EXHIBIT E-1
CONDITIONS PRECEDENT - AIRCRAFT DELIVERY (BI AIRCRAFT)
With respect to the Delivery of each BI Aircraft to LIFT Trust-Sub 1 on the
relevant Delivery Date:
(a) the relevant Operative Documents for such Aircraft, as the case
may be, have been entered into by the parties thereto;
(b) receipt of the following documents by such Purchaser:
(i) a copy of the constitutional documents of such Seller and any
other Affiliate of such Seller which is a party to any
Operative Document in respect of such Aircraft, certified as
of such Delivery Date to be a true, complete and up-to-date
copy of the constitutional documents of such Seller, or if a
certified copy of such documents has previously been delivered
to such Purchaser hereunder, a certificate dated such Delivery
Date confirming no changes to such documents; and
(ii) a copy of resolutions of the Board of Directors (or duly
authorized committee thereof) of such Seller:
(A) approving the transactions contemplated by the Operative
Documents to which such Seller is a party; and
(B) authorizing a Person or Persons to sign and deliver on
behalf of such Seller or, as the case may be, authorizing
the execution by the relevant Person of the Operative
Documents to which it is a party and any notices or other
documents to be given pursuant hereto or thereto,
certified as of such Delivery Date to be a true copy of such
resolutions and as being in full force in effect and not amended
or rescinded or, if a certified copy of such resolutions has
previously been delivered to such Purchaser hereunder, a
certificate dated such Delivery Date confirming no changes to such
resolutions;
(c) no Event of Loss shall have occurred with respect to such
Aircraft; and
(d) delivery of the following documents:
(i) a certificate of solvency dated as of Delivery Date in the
Agreed Form relating to such Seller issued by a director or
authorized officer thereof;
(ii) a letter from counsel to such Seller, dated as of such
Delivery Date, confirming the opinion delivered on the
Purchase Date as to the sale of such Aircraft constituting a
"true-sale" and a valid transfer of title to such Aircraft and
such Seller retaining no interest in such Aircraft after the
Delivery of such Aircraft;
(iii) an opinion dated as of such Delivery Date in the Agreed Form
from counsel to the relevant Seller in the relevant State of
Registration to the effect that (A) the terms of the relevant
Lease or Novated Lease or Assigned Lease and the relevant
Operative Documents and the other Lease Documents are legal,
valid, binding and enforceable under the laws of such country
to the extent necessary to enable the applicable LIFT Entity
to receive the practical benefits of its rights thereunder,
(B) such LIFT Entity shall be recognized as the owner of such
Aircraft under the applicable laws of such jurisdiction, (C)
except if the State of Registration is the United States, it
is not necessary for such LIFT Entity as a result of its
ownership of such Aircraft to qualify to do business in such
jurisdiction as a result of its ownership of such Aircraft and
it is not necessary for the LIFT Entity to qualify to do
business in such jurisdiction, for the purpose of exercising
any remedies under any Lease Document relating to such
Aircraft or otherwise and (D) except if the State of
Registration is the United States, payments of rent under the
Lease are not subject to withholding under the applicable laws
of such jurisdiction or, if subject to withholding, the gross
up provisions of such Lease will be enforceable;
(iv) opinions dated as of such Delivery Date in the Agreed Form
from the counsel to the Seller in the Delivery Location,
covering, without limitation, the following matters: (a)
except if the Delivery Location is in the United States, that
the transfer of title to such Aircraft will be effective under
the laws of such jurisdiction and will not result in the
imposition of any tax in such jurisdiction on LIFT Trust-Sub
1, such LIFT Entity, such Aircraft, the related Lease or
otherwise in respect of such transfer and (b) the interest of
the Purchaser or the relevant LIFT Entity has been properly
registered in the relevant State of Registration;
(v) copies of all notices, consents or acknowledgements of such
Seller or the applicable Lessee as are required under the
terms of the Operative Documents;
(vi) evidence that all governmental and other licenses, approvals,
consents, certificates, exemptions, registrations and filings
necessary in the state of incorporation or formation of GECC,
any Seller, or any Purchaser and any other relevant
jurisdiction (including the domicile of the Lessee) and the
relevant State of Registration for any matter or thing
contemplated by the applicable Operative Documents for such
Aircraft, and any notices or other documents to be given
pursuant hereto or thereto and for the legality, validity,
enforceability, admissibility in evidence and effectiveness
hereof
2
and thereof have been obtained or effected on an unconditional
basis and remain in full force and effect;
(vii) the documents or satisfaction of the conditions listed in
Schedule 3 relevant to such Aircraft;
(viii) a certificate of GECC confirming that so far as is known to
GECC, no Event of Loss has occurred;
(ix) a copy of the currently valid Certificate of Registration for
such Aircraft, issued by the appropriate Air Authority; and
(x) if applicable, a copy of the Assignment of Warranties with
respect to such Aircraft executed by each of the parties
thereto.
3
EXHIBIT E-2
CONDITIONS PRECEDENT - AIRCRAFT DELIVERY (INDEPENDENT AIRCRAFT)
With respect to the Delivery of each Independent Aircraft to LIFT Trust-Sub 1 or
a Subsidiary of LIFT Trust-Sub 1:
(a) the relevant Operative Documents for such Aircraft, as the case
may be, have been entered into by the parties thereto (other than
LIFT Trust-Sub 1 or any Affiliate thereof);
(b) LIFT Trust-Sub 1 shall have received payment in full of any
Security Deposit and the relevant amount of Maintenance Reserves
with respect to such Aircraft;
(c) the relevant Purchaser shall have received a certification dated
such Delivery Date from GECC and such Seller to the effect that
(i) the representations and warranties of GECC and such Seller set
forth herein are true and correct as of such Delivery Date and
(ii) the Seller has full legal title to such Aircraft, free from
Encumbrances other than Permitted Encumbrances;
(d) unless and to the extent LIFT Trust-Sub 1 shall otherwise agree,
or a Rating Agency Confirmation shall have been obtained with
respect thereto, all the conditions precedent to the effectiveness
of the Assignment of Lease or Lease Novation, as applicable, for
such Aircraft shall have been satisfied and LIFT Trust-Sub 1 shall
have received a certification from GECC and such Seller to such
effect;
(e) receipt of the following documents by such Purchaser:
(i) a copy of the constitutional documents of such Seller and any
other Affiliate of such Seller which is a party to any
Operative Document in respect of such Aircraft, certified as
of such Delivery Date to be a true, complete and up-to-date
copy of the constitutional documents of such Seller, or if a
certified copy of such documents has previously been delivered
to such Purchaser hereunder, a certificate dated such Delivery
Date confirming no changes to such documents; and
(ii) a copy of resolutions of the Board of Directors (or duly
authorized committee thereof) of such Seller:
(A) approving the transactions contemplated by this Agreement
and the other Operative Documents to which such Seller is
a party; and
(C) authorizing a Person or Persons to sign and deliver on
behalf of such Seller or, as the case may be, authorizing
the execution by the relevant Person of this Agreement
and the other Operative
Documents to which it is a party and any notices or other
documents to be given pursuant hereto or thereto,
certified as of such Delivery Date to be a true copy of such
resolutions and as being in full force in effect and not
amended or rescinded or, if a certified copy of such
resolutions has previously been delivered to such Purchaser
hereunder, a certificate dated such Delivery Date confirming
no changes to such resolutions;
(f) no Event of Loss shall have occurred with respect to such
Aircraft;
(g) delivery of the following documents:
(i) a certificate of solvency dated as of such Delivery Date in
the Agreed Form relating to such Seller issued by a director
or authorized officer thereof and a certificate of solvency
dated as of such Delivery Date in the Agreed Form relating to
GECC issued by a director or authorized officer of GECC;
(ii) a favorable opinion of counsel to such Seller, dated as of
the Purchase Date, reasonably acceptable to LIFT Trust-Sub 1
in the Agreed Form, that the sale of such Aircraft
constitutes, or will constitute, a "true-sale" and a valid
transfer of title to such Aircraft and that after the Delivery
of such Aircraft such Seller retains, or will retain, no
interest in such Aircraft and as to such other matters as such
Purchaser may reasonably request with regard to the subject
matter contemplated herein and a letter from counsel to such
Seller, dated as of such Delivery Date, confirming such
opinion;
(iii) an opinion dated as of such Delivery Date in the Agreed Form
from counsel to the relevant Seller in the relevant State of
Registration to the effect that (A) the terms of the relevant
Lease or Novated Lease or Assigned Lease and the relevant
Operative Documents and the other Lease Documents are legal,
valid, binding and enforceable under the laws of such country
to the extent necessary to enable such Purchaser to receive
the practical benefits of its rights thereunder, (B) the
applicable LIFT Entity shall be recognized as the owner of
such Aircraft under the applicable laws of such jurisdiction,
(C) except if the State of Registration is the United States,
it is not necessary for such LIFT Entity as a result of its
ownership of such Aircraft to qualify to do business in such
jurisdiction as a result of its ownership of such Aircraft and
it is not necessary for the LIFT Entity to qualify to do
business in such jurisdiction, for the purpose of exercising
any remedies under any Lease Document relating to such
Aircraft or otherwise, (D) except if the State of Registration
is the United States, payments of rent under the Lease are not
subject to withholding under the applicable laws of such
jurisdiction or, if subject to withholding, the gross up
provisions of such Lease will be enforceable, (E) the interest
of the relevant LIFT Entity has been properly registered in
the relevant
2
State of Registration and (F) the Security Trust Agreement,
to the extent required, has been or is in the process of
being duly recorded in any relevant registry and, if such
opinion is reasonably practicable to obtain in such
jurisdiction, that the lien created thereunder will be
recognized in such State of Registration as constituting a
first priority perfected security interest in and to the
related Lease in favor of the Security Trustee;
(iv) opinions dated as of such Delivery Date in the Agreed Form
from the counsel to the Seller in the Delivery Location,
covering, without limitation, that, except if the Delivery
Location is in the United States, that the transfer of title
to such Aircraft will be effective under the laws of such
jurisdiction and will not result in the imposition of any tax
in such jurisdiction on LIFT Trust-Sub 1 or a Subsidiary of
LIFT Trust-Sub 1, such Aircraft, the related Lease or
otherwise in respect of such transfer;
(v) the chattel paper original of the Lease (or, if an original
was never so designated or such original has been lost, a
certificate from GECC to such effect) and the Assignment of
Lease or Lease Novation, as applicable, for such Aircraft
shall have been delivered to the Security Trustee on such
Delivery Date;
(vi) (A) an original of the applicable Lease (together with the
related Lease Assignment Documents) and (B) an original of
each other Lease Document that is to be transferred to such
Purchaser (or otherwise a copy certified to be true and
correct) to be delivered to the Security Trustee on or prior
to the Purchase Date (except that with respect to Substitute
Aircraft, such originals shall be delivered on the Delivery
Date therefor); PROVIDED that, if any such Lease Document
contains a material right for the benefit of the lessor
thereunder and the Seller thereof does not have an original of
such Lease Document in its possession, such Seller shall
provide such other assurances as to the enforceability and
admissibility of such Lease Document in any court in the State
of New York as such Purchaser may reasonably request;
(vii) copies of all notices, consents or acknowledgements of such
Seller or the applicable Lessee as are required under the
terms of the Operative Documents;
(viii) a copy of the currently valid certificate of airworthiness
for such Aircraft issued by the appropriate Air Authority;
(ix) evidence that all governmental and other licenses, approvals,
consents, certificates, exemptions, registrations and filings
necessary in the state of incorporation or formation of GECC,
any Seller, or any Purchaser and any other relevant
jurisdiction (including the domicile of the Lessee) and the
relevant State of Registration for any matter or thing
contemplated by this Agreement and the other applicable
Operative Documents for such
3
Aircraft, the bank accounts provided for under the
Administrative Agency Agreement, the Servicing Agreement, the
Security Trust Agreement and the Indenture and any notices or
other documents to be given pursuant hereto or thereto and for
the legality, validity, enforceability, admissibility in
evidence and effectiveness hereof and thereof (including, to
the extent reasonably practicable in such jurisdiction, the
establishment of a first priority perfected security interest
in and to the related Leases in favor of the Security Trustee)
have been obtained or effected on an unconditional basis and
remain in full force and effect (or in the case of effecting
any certificates, exemptions, registrations and filings, that
arrangements satisfactory to such Purchaser have been made for
the effectiveness of the same within any time limit provided
therefor under applicable law and Rating Agency Confirmation
has been received with respect thereto);
(x) the documents or satisfaction of the conditions listed in
Schedule 3 relevant to such Aircraft;
(xi) a certificate of GECC confirming that so far as is known to
GECC, no Event of Loss has occurred;
(xii) a copy of the currently valid Certificate of Registration
for such Aircraft, issued by the appropriate Air Authority;
and
(iii) if applicable, a copy of the Assignment of Warranties with
respect to such Aircraft executed by each of the parties
thereto (other than LIFT Trust-Sub 1, the relevant Purchaser
or any Affiliate of such Purchaser) with respect to such
Aircraft.
(h) originals, or certified copies, of certificates evidencing the
insurance required to be maintained pursuant to the relevant
Assigned Lease or the Novated Lease, as appropriate, for such
Aircraft together, if applicable, with a letter or report from an
independent firm of insurance brokers in a form reasonably
acceptable to LIFT Trust-Sub 1; and
(i) the report of LIFT Trust-Sub 1's and/or such Purchaser's insurance
advisor in substantially the Agreed Form.
4
Exhibit F
================================================================================
FORM OF
SERVICING AGREEMENT
between
GE CAPITAL AVIATION SERVICES, LIMITED
and
LEASE INVESTMENT FLIGHT TRUST
================================================================================
SERVICING AGREEMENT
TABLE OF CONTENTS
(Not part of Agreement)
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions ...................................................1
SECTION 1.02. Construction and Usage.........................................1
ARTICLE II
APPOINTMENT; SERVICES
SECTION 2.01. Appointment ...................................................1
SECTION 2.02. Aircraft Asset Services........................................4
SECTION 2.03. Notes Offerings................................................6
SECTION 2.04. Compliance with Applicable Laws and
GE Policies...................................................14
SECTION 2.05. Limitations ..................................................15
ARTICLE III
STANDARD OF CARE; CONFLICTS OF INTEREST;
STANDARD OF LIABILITY
SECTION 3.01. Standard of Care..............................................17
SECTION 3.02. Conflicts of Interest.........................................17
SECTION 3.03. Standard of Liability.........................................20
SECTION 3.04. Waiver of Implied Standard....................................21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Aircraft Assets...............................................21
SECTION 4.02. Aircraft Assets Related Documents.............................22
SECTION 4.03. Accounts and Cash Flow........................................22
SECTION 4.04. Organization and Standing.....................................22
SECTION 4.05. Authority ..................................................23
SECTION 4.06. No Conflicts..................................................23
SECTION 4.07. Compliance with Applicable Laws...............................24
SECTION 4.08. Litigation; Decrees...........................................24
SECTION 4.09. Appointments..................................................25
SECTION 4.10. Authority ..................................................25
i
SECTION 4.11. No Conflicts..................................................25
SECTION 4.12. Compliance with Applicable Laws of
Ireland.......................................................26
ARTICLE V
SERVICER UNDERTAKINGS
SECTION 5.01. Access .......................................................26
SECTION 5.02. Compliance with Law...........................................27
SECTION 5.03. Commingling ..................................................27
SECTION 5.04. Restrictions on Exercise of Certain
Rights........................................................27
SECTION 5.05. Coordination with LIFT Group..................................27
ARTICLE VI
UNDERTAKINGS OF LIFT
SECTION 6.01. Cooperation ..................................................27
SECTION 6.02. No Representation with Respect to
Third Parties.................................................28
SECTION 6.03. Related Document Amendments...................................28
SECTION 6.04. Other Aircraft................................................28
SECTION 6.05. Communications................................................28
SECTION 6.06. Ratification..................................................29
SECTION 6.07. Additional Aircraft Assets....................................29
SECTION 6.08. Execution, Amendment, Modification or
Termination of Aircraft Assets
Related Documents.............................................29
SECTION 6.09. Access to LIFT Group Information..............................30
SECTION 6.10. LIFT Group Accounts and Cash
Arrangements..................................................31
SECTION 6.11. Notification of Bankruptcy....................................31
SECTION 6.12. Further Assurances............................................32
SECTION 6.13. Guarantees ..................................................32
SECTION 6.14. Transfers of Funds............................................32
ARTICLE VII
LIFT GROUP RESPONSIBILITY
SECTION 7.01. LIFT Group Responsibility.....................................32
SECTION 7.02. Performance with Respect to Aircraft
Assets........................................................33
SECTION 7.03. Lease Operating Budget; Aircraft
Asset Expenses Budget.........................................33
ii
SECTION 7.04. Transaction Approval Requirements.............................35
SECTION 7.05. Approved Budgets and Transaction
Approval Requirements.........................................38
ARTICLE VIII
EFFECTIVENESS
SECTION 8.01. Effectiveness.................................................39
ARTICLE IX
SERVICING FEES; EXPENSES; TAXES;
PRIORITY OF SERVICING FEES
SECTION 9.01. Servicing Fees................................................39
SECTION 9.02. Monthly Base Fee..............................................39
SECTION 9.03. Rent Fees ....................................................39
SECTION 9.04. Sales Fee ....................................................41
SECTION 9.05. Additional Servicing Fees.....................................41
SECTION 9.06. Expenses .....................................................43
SECTION 9.07. Taxes ........................................................43
SECTION 9.08. Priority of Payments to Servicer..............................48
ARTICLE X
TERM; RIGHT TO TERMINATE; RESIGNATION;
CONSEQUENCES OF EXPIRATION, TERMINATION,
RESIGNATION OR REMOVAL; CERTAIN TAX MATTERS; SURVIVAL
SECTION 10.01. Term ........................................................48
SECTION 10.02. Right to Terminate...........................................49
SECTION 10.03. Resignation or Removal.......................................54
SECTION 10.04. Consequences of Expiration,
Termination, Resignation or Removal..........................55
SECTION 10.05. Survival ....................................................57
ARTICLE XI
INDEMNIFICATION
SECTION 11.01. Indemnity ..................................................58
SECTION 11.02. Procedures for Defense of Claims.............................59
SECTION 11.03. Reimbursement of Costs.......................................60
SECTION 11.04. Waiver of Certain Claims; Special
Indemnity....................................................60
SECTION 11.05. Waiver of Certain Accounting Claims; Special
iii
Indemnity....................................................61
SECTION 11.06. Continuing Liability under Other
Agreements...................................................61
ARTICLE XII
ASSIGNMENT AND DELEGATION
SECTION 12.01. Assignment and Delegation....................................62
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Documentary Conventions......................................63
SECTION 13.02. Power of Attorney............................................63
SECTION 13.03. Reliance ..................................................63
SECTION 13.04. Certain Information..........................................63
SECTION 13.05. Original Aircraft............................................64
SECTION 13.06. Amendments Involving Leveraged
Lease Transactions...........................................64
SCHEDULES
Schedule 2.02(a) Aircraft Assets Services
Schedule 2.02(a)(i) Applicable Indenture Covenants
Schedule 2.02(a)(ii) Form of Officer's Certificate
Schedule 4.01 Aircraft Assets
Schedule 4.02 Aircraft Assets Related Documents
Schedule 4.03 Bank Accounts
Schedule 4.04(a) List of Persons within the LIFT Group and Jurisdictions
Schedule 7.01 Responsibilities of LIFT Group
Schedule 7.04 Liabilities Incurred in Ordinary Course of Business
Schedule 8.01 Conditions to Execution
Schedule 9.06(a) Overhead Expenses
Schedule 9.06(b) Categories of Aircraft Asset Expenses
Schedule 13.02 Power of Attorney
iv
ANNEXES
Annex 1 Insurance Guidelines
Annex 2 Concentration Limits
APPENDICES
Appendix A Construction and Usage; Definitions
Appendix B Form of Guarantee
Appendix C Notices
v
SERVICING AGREEMENT dated as of June 26,
2001, between GE CAPITAL AVIATION SERVICES, LIMITED,
a company incorporated under the laws of Ireland (the
"Servicer") and LEASE INVESTMENT FLIGHT TRUST, a
Delaware statutory business trust ("LIFT").
For the consideration set forth herein and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Servicer and LIFT agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Unless otherwise defined herein,
all capitalized terms used but not defined herein have the meanings assigned to
such terms in Appendix A.
SECTION 1.02. CONSTRUCTION AND USAGE. The conventions of
construction and usage set forth in Appendix A are incorporated by reference
herein.
ARTICLE II
APPOINTMENT; SERVICES
SECTION 2.01. APPOINTMENT. (a) LIFT appoints the Servicer as
the exclusive provider of the Services (as defined in Section 2.02(a)) to (1)
LIFT, (2) Subsidiaries of LIFT and (3) Affiliates of LIFT in which LIFT or any
of its Subsidiaries has a direct or indirect ownership interest (collectively,
the "LIFT GROUP") in respect of the Aircraft Assets on the terms and subject to
the conditions set forth in this Agreement. In furtherance of the foregoing, the
parties hereto acknowledge and agree that, notwithstanding any other provision
of this Agreement, without the consent of the Servicer, LIFT shall not, and
shall not permit any Person within the LIFT Group and any agent of any thereof,
including the Administrative Agent, to, contact directly or otherwise have any
direct dealings with any Lessee or any relevant third party with respect to any
Aircraft Asset (which, as provided in the definition of "Aircraft Assets", the
parties understand shall not include any
2
SERVICING AGREEMENT
Aircraft Asset (x) that shall have ceased to be an Aircraft Asset in accordance
with the provisions of Sections 2.04(b) or 3.02(d), but shall include any Former
Aircraft Asset that shall have become an Aircraft Asset pursuant to Section 6.07
of the Servicing Agreement or (y) in respect of which the obligation of the
Servicer to provide Services shall have been terminated in accordance with
Article X) (such contact or other direct dealing, a "LESSEE CONTACT") to the
extent that such Lessee Contact constitutes, or involves taking any action that
constitutes, the provision or performance of any Services (to such extent, a
"RESTRICTED LESSEE CONTACT"). Notwithstanding the foregoing, in the event that
LIFT or, in the case of clauses (iv) or (v) below only, any holder of any
Beneficial Interest Certificates reasonably believes that it shall be necessary
for there to be a Restricted Lessee Contact under circumstances in which one of
the following clauses is applicable:
(i) during the period (x) commencing upon the occurrence of an
Event of Default under Section 4.01 of the Indenture in respect of the
payment of interest on any Class A Note (as defined in the Indenture)
due to an insufficiency of funds in the Collection Account on the
relevant date, which Event of Default (1) shall have occurred on a date
on which no amount is available for drawing under any Credit Facility
(as defined in the Indenture) in respect thereof and (2) shall have
continued unremedied for 60 days and (y) ending upon the remedying of
such Event of Default;
(ii) following the occurrence of an Event of Default (other
than one referred to in clause (i) of this Section 2.01(a)) under the
Indenture and, other than in respect of an Event of Default under
Sections 4.01(e) or 4.01(f) of the Indenture, the issuance of a Default
Notice (pursuant to which the Outstanding Principal Balance of the
Notes and all accrued and unpaid interest thereon shall become due and
payable) in accordance with the terms of the Indenture, and provided
that at the time of such Event of Default at least 10 Aircraft Assets
shall not be subject to Leases and each such Aircraft Asset shall have
been off-lease and reasonably available for re-lease (including in the
possession of the Servicer, together with the related Aircraft
Documents) during the three-month period ending on the date of such
Event of Default;
3
SERVICING AGREEMENT
(iii) in respect of any claim for indemnification made by the
Servicer under this Agreement in respect of a Loss incurred by the
Servicer related to a Lessee;
(iv) to discharge LIFT's, or such holder's, as the case may
be, obligations under Applicable Law including any requirement to file
any report with any governmental authority or to respond to any court
order or to prosecute or defend any suit;
(v) to respond to requests from LIFT's or such holder's, as
the case may be, auditors;
(vi) to enable LIFT to discharge its obligations under Article
VII;
(vii) to enable the Administrative Agent to monitor the
Servicer's performance under this Agreement in accordance with the
express terms of the Administrative Agency Agreement;
(viii) to enable LIFT to perform its express obligations under
the Indenture and Security Trust Agreement including, without
limitation, LIFT's obligations under Sections 5.02 and 5.03 of the
Indenture and Sections 2.06 and 3.01 of the Security Trust Agreement;
or
(ix) the Servicer's material failure to perform a Service
which involves a Lessee and necessitates a Lessee Contact, which
material failure continues unremedied for 30 days after the Servicer's
receipt of written notice of such material failure from LIFT and which
if left unremedied would have a Material Adverse Effect on the LIFT
Group taken as a whole;
then LIFT shall deliver a written notice to the Servicer setting forth in
reasonable detail the reasons for such Restricted Lessee Contact (including
which of the foregoing clauses (i) through (ix) is applicable thereto) and the
specifics of such Restricted Lessee Contact. In the case of clauses (i) and (ii)
and (iv) through (viii) above, after receipt of such notice, the Servicer shall
promptly notify LIFT whether the Servicer will itself make such Restricted
Lessee Contact, or whether a Person within the LIFT Group or agent of any
thereof, including the Administrative Agent, should make such Restricted Lessee
Contact. In the case of clauses (iii) and (ix) above, after delivering such
notice to the Servicer, any
4
SERVICING AGREEMENT
Person within the LIFT Group shall be permitted to make such Restricted Lessee
Contact directly itself or through any agent, including the Administrative
Agent. In making any Restricted Lessee Contact LIFT shall not, and shall not
permit any Person within the LIFT Group or any agent of any thereof, including
the Administrative Agent, to interfere with the Servicer's performance of any
Services.
(b) The Servicer hereby accepts its appointment pursuant to
the first sentence of Section 2.01(a) and agrees to perform the Services on the
terms and subject to the conditions set forth in this Agreement.
SECTION 2.02. AIRCRAFT ASSET SERVICES. (a) The Services to be
provided by the Servicer in respect of the Aircraft Assets are as set forth in
Schedule 2.02(a) (the "SERVICES"), the provisions of which Schedule 2.02(a) are
hereby incorporated herein by reference.
(b) LIFT has advised the Servicer that each Person within the
LIFT Group has appointed LIFT to act as its representative with respect to any
matter in respect of which LIFT has or any other Person within the LIFT Group is
required or permitted to take any action pursuant to the terms of this
Agreement. Accordingly, in connection with the performance of the Services, the
Servicer shall in all cases be entitled to rely on the instructions (or other
actions) of LIFT as representative of each Person within the LIFT Group. The
Servicer shall not be liable to any Person within the LIFT Group or any other
Person for any act taken or omission to act in accordance with such instructions
(or other actions), except to the extent otherwise provided in Section 3.03 and
Article XI. The Servicer shall in all cases be entitled to rely upon the
instructions (or other actions) of LIFT and upon notices, reports or other
communications (whether written or oral) made by any Lessee or any other Person
(other than any Affiliate of the Servicer) in or concerning any Aircraft Assets,
Aircraft Assets Related Document or any document in connection therewith and
shall not be responsible for the accuracy or completeness of any such notices,
reports or other communications.
(c) LIFT has advised the Servicer that it has appointed the
Administrative Agent, on a revocable basis, to, among other things, act on its
behalf in connection with any actions required or permitted to be taken by LIFT
on its own behalf or on behalf of any other Person
SERVICING AGREEMENT
within the LIFT Group (including as provided in Section 2.02(b)) pursuant to the
terms of this Agreement. Accordingly, in connection with the performance of the
Services, unless earlier notified in writing by LIFT that the Administrative
Agent's appointment to act on behalf of LIFT has been revoked or terminated, the
Servicer shall in all cases be entitled to rely on the instructions (or other
actions) of the Administrative Agent; PROVIDED, HOWEVER, that the Servicer shall
not be obliged to act upon the instructions of, or with respect to, the
Administrative Agent unless the Servicer consented to the appointment of such
Administrative Agent in writing, which consent shall not be unreasonably
withheld (it being understood that the Servicer may consider, among other
factors, whether the proposed Administrative Agent is a Competitor). The
Servicer hereby consents to the appointment of Phoenix American Financial
Services, Inc. as the initial Administrative Agent. The appointment of the
Administrative Agent to act on behalf of LIFT shall in no way limit or otherwise
derogate from the Servicer's right to rely on the instructions (or other
actions) of LIFT as set forth in Section 2.02(b). Without limiting the
foregoing, until such time as the Servicer has been notified in writing that the
Administrative Agent's appointment has been revoked or terminated, in all
circumstances requiring the direction, consent or approval of, or the delivery
of any notices or other communications to, LIFT hereunder, the Servicer shall
only be required to seek the direction, consent or approval of, or deliver any
such notices or other communications to, the Administrative Agent. The Servicer
shall not be liable to any Person within the LIFT Group or any other Person for
any act taken or omission to act in accordance with the instructions (or other
actions) of the Administrative Agent, except to the extent otherwise provided in
Section 3.03 and Article XI. LIFT agrees with the Servicer that the
Administrative Agency Agreement shall not be amended by the parties thereto in
any manner that may, directly or indirectly, affect the Servicer's rights,
obligations or liabilities (or potential liabilities) under this Agreement or
with respect to the Administrative Agency Agreement or otherwise without the
Servicer's prior written consent.
(d) Except as otherwise provided in Sections 2.04(b), 3.02(c),
3.02(d) and 10.04, LIFT agrees not to (and not to permit any other Person within
the LIFT Group to) appoint any third party service provider with respect to any
Aircraft Asset without the prior written consent of the Servicer; PROVIDED,
HOWEVER, that
6
SERVICING AGREEMENT
the Servicer's prior written consent is not required with respect to the
appointment by any Person within the LIFT Group of any legal, accounting,
insurance, valuation or other similar service providers to perform services not
included within the Services.
(e) The Servicer shall in all cases be entitled to rely on the
instructions (or other actions) of any Person that the Servicer reasonably
believes to be authorized to act on behalf of LIFT or the Administrative Agent
and shall not be liable to any Person within the LIFT Group for any act taken or
omission to act in accordance with such instructions (or other actions), except
to the extent otherwise provided in Section 3.03 and Article XI.
(f) Notwithstanding anything contained in this Agreement to
the contrary, the Servicer shall not be required to perform any Service (or any
other service) with respect to any Aircraft Asset unless and until a true and
complete copy of all Aircraft Assets Related Documents has been delivered to the
Servicer or other written notice thereof has been provided to the Servicer.
Without limiting the foregoing, the Servicer acknowledges that, in connection
with its provision of services with respect to the Original Aircraft, it is in
possession of various Aircraft Assets Related Documents that were received by
the Servicer prior to the date hereof.
(g) LIFT agrees not to (and not to permit any other Person
within the LIFT Group to) enter into any agency agreements relating to the
procurement of lessees for the Aircraft Assets (or agreements similar thereto)
without the prior written consent of the Servicer.
SECTION 2.03. NOTES OFFERINGS. (a)(i) In connection with the
public or private offering and sale (whether within the United States, outside
of the United States or both within and outside of the United States) after the
Closing Date of any newly issued or outstanding Notes, as the case may be, by
(x) LIFT or (y) any other Person, pursuant to which any Person within the LIFT
Group is required to file, or assist in the filing of, any registration
statement with the United States Securities and Exchange Commission or prepare
and distribute, or assist in the preparation and distribution of, a private
placement memorandum or other securities offering document (any such offering
and sale, including, without limitation, the Initial Exchange Offer and any
other Exchange Offer, being hereinafter referred to
7
SERVICING AGREEMENT
herein as a "NOTES OFFERING"), LIFT will provide (or cause its advisors to
provide, as the case may be) the Servicer and its advisors drafts of, and a
reasonable time to review, each registration statement (including the form of
prospectus therein) or private placement memorandum or other securities offering
document, as the case may be, and each amendment or supplement to any thereof
relating to any such Notes Offering (the "PROSPECTUS") and will use its best
efforts to incorporate the comments, if any, provided by the Servicer with
respect to the Servicer or any of its Affiliates or their respective roles in
connection with any such Notes Offering (it being understood that the Servicer
and its Affiliates have the right, but not the obligation, to comment thereon).
LIFT will not, and will not permit any Person within the LIFT Group to, file, or
assist in the filing of, any such Prospectus with any governmental agency or
otherwise publicly disclose (it being understood that disclosures to Persons
having registration rights that were granted by LIFT with respect to any Notes
shall not be considered public disclosures) the contents of such Prospectus
without the Servicer's prior consent (which consent must be written only with
respect to, in the case of any Prospectus that is filed with the United States
Securities and Exchange Commission, the last Prospectus filed prior to or
concurrently with the filing of a request for acceleration of effectiveness of
the related registration statement or post-effective amendment thereto or, in
the case of any Prospectus that is not filed with the United States Securities
and Exchange Commission, the version of the Prospectus to be delivered in
connection with the sale, or confirmation of sale, of any Notes, as the case may
be) as to those portions of any such Prospectus relating to the Servicer or any
of its Affiliates (the "SERVICER DISCLOSURE", which term shall include, without
limitation, the Servicer Information), which consent shall not be unreasonably
withheld or delayed.
(ii) LIFT understands and agrees that the Servicer has the
right to approve any information in any Prospectus relating to the Servicer or
any Affiliate thereof and that LIFT will not permit the inclusion in any such
Prospectus of (x) any financial statements or financial data relating to the
Servicer or any Affiliate thereof, (y) performance or related data with respect
to the Servicer's management of aircraft directly or indirectly owned by any
Person within the LIFT Group or any other Person's aircraft or other assets or
(z) information relating to aircraft that do not comprise
8
SERVICING AGREEMENT
Aircraft Assets owned or managed by the Servicer or any of its Affiliates
(except and to the extent that the quantities and types of aircraft currently
owned or managed by the Servicer are disclosed in a form and substance
substantially similar to that set forth under the captions "LIFT--Servicer
Operations" in the final offering circular dated June 13, 2001, relating to LIFT
and the Notes (the "FINAL PROSPECTUS"). Notwithstanding the foregoing, the
Servicer agrees (A) that, subject to its prior review and updating, any
Prospectus may include Servicer Disclosure substantially identical to that
contained in the Final Prospectus and (B) to respond with any comments it may
have on any Servicer Disclosure reasonably promptly following LIFT's delivery of
drafts of the entire Prospectus, including any Servicer Disclosure, to the
Servicer. LIFT will also provide (or cause its Affiliates or advisors to
provide, as the case may be) the Servicer with copies of, and an opportunity to
review, any marketing and marketing related materials produced in connection
with any Notes Offering. LIFT will not distribute any such marketing materials
(or disseminate, or permit the dissemination of, the information contained
therein) including information relating to the Servicer or any of its Affiliates
without the Servicer's prior written consent, which consent shall not be
unreasonably withheld, as to those portions of any such marketing materials
relating to the Servicer or any of its Affiliates. The Servicer agrees to
respond with any comments it may have on any such marketing materials reasonably
promptly following LIFT's delivery of copies thereof to the Servicer.
(iii) LIFT agrees that it will use its commercially reasonable
efforts to cause its legal, accounting and other technical advisors to include
the Servicer and such Affiliates of the Servicer as the Servicer designates as
addressees of any opinions and/or comfort letters being provided to any Person
within the LIFT Group and/or any underwriters in connection with any Notes
Offering.
(iv) LIFT agrees that each Prospectus will include disclosure,
in form and substance satisfactory to the Servicer, of all disclaimers, waivers
of liability and indemnification pertaining to the Servicer or any of its
Affiliates in connection with this Agreement and any related Notes Offering.
(b) LIFT agrees that, in connection with customary marketing
activities related to any Notes
9
SERVICING AGREEMENT
Offering, the Servicer and its Affiliates shall be present at such marketing
activities solely in the Servicer's capacity as Servicer with respect to the
Aircraft Assets pursuant to this Agreement. LIFT agrees that on any so-called
roadshow the Servicer's only obligation shall be, to the extent necessary, to
discuss the factual matters relating to its role as servicer hereunder and the
Aircraft Assets which are the subject hereof, including discussing information
contained in the Prospectus with respect to such assets relating to types of
aircraft, aircraft maintenance and aircraft leases. Notwithstanding the
foregoing, the Servicer shall not be required to make any presentations with
respect to, or to comment upon, its views of future trends in the aviation
industry, including future trends relating to types of aircraft, particular
lessees or expected aircraft lease rates or values, or to provide opinions,
forecasts, predictions or prospects relating thereto (or to the Aircraft
Assets). LIFT agrees that no more than two (2) members of the Servicer's
management, the identity of which members and the schedule of any activities in
which such members are to participate are to be mutually agreed upon by LIFT and
the Servicer from time to time, shall be required to be present at any customary
road show activities related to any Notes Offering (it being understood that if
reasonably requested by LIFT, the Servicer will provide, subject to
availability, up to an aggregate of four (4) members of its management). In no
event shall a representative of the Servicer be required to attend any roadshow
without representatives of LIFT, the Administrative Agent and the underwriters.
(c) LIFT will invite the Servicer to attend, on reasonable
prior notice, all meetings (or portions thereof) with rating agencies relating
to any Notes Offering, will provide the Servicer a reasonable period of time to
review and comment upon any written materials relating to the Servicer or any of
its Affiliates prior to submission thereof to any rating agency and will provide
the Servicer with copies of all documents received from any such rating agencies
relating to the Servicer or any of its Affiliates. LIFT agrees that, in
furtherance of the foregoing, it will not submit any materials to any rating
agency relating to the Servicer or any of its Affiliates without the Servicer's
prior consent, which consent shall be in writing and not unreasonably withheld
or delayed.
(d) LIFT understands, acknowledges and agrees that the
Servicer will not be a party to any underwriting
10
SERVICING AGREEMENT
agreement or any letter to, representation to or indemnity or other agreement
with, any underwriter, in connection with any Notes Offering, and, except as set
forth in Section 2.03(m), shall not assume responsibility for any information
set forth in any Prospectus related thereto.
(e) (i) Subject to executing confidentiality agreements
satisfactory in form and substance to LIFT, LIFT agrees to use its commercially
reasonable efforts to provide the Servicer or any of its Affiliates and/or
advisors with an opportunity, at the Servicer's election, to conduct customary
due diligence with respect to any Notes Offering, including with respect to any
matters disclosed in any Prospectus.
(ii) Subject to executing confidentiality agreements
satisfactory in form and substance to the Servicer, the Servicer agrees to
provide LIFT, underwriters, rating agencies and/or advisors with reasonable
opportunities to conduct due diligence with respect to information pertaining to
the Servicer and the provision of Services pursuant to this Agreement with
respect to the Aircraft Assets; PROVIDED, HOWEVER, that, if it is established to
the Servicer's reasonable satisfaction that any rating agency does not execute
confidentiality agreements as a matter of policy, the Servicer will waive such
requirement with respect to such rating agency so long as such rating agency
establishes to the Servicer's reasonable satisfaction that any information made
available to it will be held confidential.
(f) Except to the extent required by law, LIFT agrees not to
(and not to permit any other Person within the LIFT Group to) make any, direct
or indirect, press release or other public announcement by any means (including
by making disclosures to financial analysts or other members of the financial
community) relating to the Servicer (or any of its Affiliates) and their
respective involvement in any Notes Offering without the Servicer's prior
written consent. In the event a press release or other public announcement is
recommended by securities counsel or required by law, LIFT shall consult with
the Servicer prior to making (or permitting to be made) any such press release
or public announcement to the extent that such press release or public
announcement relates to the Servicer (or any of its Affiliates) and their
respective involvement in any Notes Offering.
11
SERVICING AGREEMENT
(g) Upon the closing of any Notes Offering (other than the
Initial Exchange Offer), LIFT shall pay, or cause another Person to pay, the
Servicer financing fees, pro rata in accordance with the Net Proceeds of any
such Notes Offering, equal to the greater of (x) 0.0005 multiplied by the Net
Proceeds of any such Notes Offering and (y) $250,000. "NET PROCEEDS" means the
cash proceeds received by any Person selling Notes (other than underwriters)
within the LIFT Group or any other Person in connection with any Notes Offering,
less Transaction Costs incurred by any Person within the LIFT Group or any such
other Person in connection with any such Notes Offering (other than the fees
payable pursuant to this Section 2.03(g)); PROVIDED, HOWEVER, that, in
calculating Net Proceeds for purposes of this Section 2.03(g), with respect to
any offering of Additional Notes the cash proceeds of which are used in part to
acquire Aircraft Assets from GE Capital and its Affiliates, the Net Proceeds
resulting from the sale of such Additional Notes only (without giving effect to
this proviso) shall be reduced by the product of (a) such Net Proceeds and (b)
the quotient obtained by dividing (i) the Appraised Value of the Aircraft Assets
being acquired by Persons within the LIFT Group from GE Capital and its
Affiliates by (ii) the Appraised Value of all Aircraft Assets being acquired by
Persons within the LIFT Group, in the case of (i) and (ii) in connection with
such offering. Without agreement between LIFT and the Servicer, which agreement
shall include an increase in the fees to be paid to the Servicer in connection
with the Servicer's involvement with respect to any Notes Offering, the Servicer
shall not be required to assist in the solicitation of, or otherwise take any
action to obtain, any lessee consents and/or novations in connection with any
Notes Offering. Such increase in the fees to be paid to the Servicer in
connection with the Servicer's involvement with respect to any such Notes
Offering will be negotiated in good faith by LIFT and the Servicer and will
reflect the increased services to be provided by the Servicer (it being
understood that an agreement as to such increased fees must be reached prior to
the Servicer's involvement with respect to any Notes Offering pursuant to this
Section 2.03 in which the Servicer assists in the solicitation of, or otherwise
takes any action to obtain, any lessee consents and/or novations).
(h) Notwithstanding the foregoing, (i) neither the Servicer
nor any of its Affiliates shall be obligated to underwrite or purchase any
securities to be issued by LIFT or any other Person within the LIFT Group or any
12
SERVICING AGREEMENT
other Person in any Notes Offering; (ii) neither the Servicer nor any of its
Affiliates shall be obligated to issue any Guarantees or otherwise to provide
any credit enhancement or support or incur any obligations or liabilities to
provide any credit enhancement or support or incur any other obligations or
liabilities in connection with any Notes Offering; (iii) neither the Servicer
nor any of its Affiliates shall be required to sign any registration statement
(or any similar document) in connection with any Notes Offering (as
"registrant", "issuer" or in any other capacity) or take any other action that
could, in the Servicer's sole determination, result in the Servicer or any of
its Affiliates being (or being deemed to be) a "control person" with respect to
the applicable issuer of any securities issued in connection with any such
financing transaction under applicable securities laws in connection with any
such financing or an "underwriter" of any such securities; and (iv) the
obligations of the Servicer under this Section 2.03 shall be subject to the
reasonable satisfaction of the Servicer with all the terms and conditions of the
applicable Notes Offering that relate to the Servicer or any of its Affiliates
(including the indemnities in favor of the Servicer and its Affiliates).
(i) In the case of any Notes Offering, the Indemnified Parties
shall have no liability for, and LIFT shall hold, and shall cause each other
Person, if any, for whom a Notes Offering was conducted to hold, each
Indemnified Party harmless from, and indemnify on an After- Tax Basis each
Indemnified Party against, any and all Losses that may be imposed on, incurred
by or asserted against (including with respect to any such claims, suits,
actions or proceedings by third parties, including the applicable underwriters
and purchasers of any securities issued in connection with any such Notes
Offering) such Indemnified Party, directly or indirectly, arising out of, in
connection with or related to the Servicer's performance of the obligations set
forth in this Section 2.03 with respect to any Notes Offering; PROVIDED,
HOWEVER, that such indemnity shall not apply to the extent that, if LIFT had
suffered such Losses, the Servicer would have been required to indemnify LIFT
pursuant to the terms of Section 2.03(m). The obligation of LIFT under this
Section 2.03(i) shall be in addition to any liability that LIFT may otherwise
have to the Indemnified Parties and shall not be limited or reduced with respect
to the Indemnified Parties by any other rights to indemnification that may be
available to such Indemnified Parties.
13
SERVICING AGREEMENT
(j) LIFT agrees to reimburse the Servicer, on a monthly basis,
for all out-of-pocket expenses incurred directly or indirectly by the Servicer
or any of its Affiliates in connection with any Notes Offering with respect to
which the Servicer shall provide services pursuant to this Section 2.03,
including any outside advisor fees and expenses (including travel and lodgings),
including legal, accounting, investment banking, consulting and other similar
advisors retained by the Servicer or any of its Affiliates in connection with
any Notes Offering.
(k) For the avoidance of doubt, but without derogating from
any of the Servicer's rights hereunder, the Servicer shall continue to act as
the primary servicer for each Aircraft Asset, following the financing or
refinancing thereof pursuant to a public or private aircraft financing
transaction, so long as any Person within the LIFT Group owns or leases-in such
Aircraft Asset (or so long as such Aircraft Asset constitutes an Original
Aircraft), on the terms provided in this Agreement. In addition, the Servicer
shall continue to act as the primary servicer for any Aircraft Assets that are
financed or refinanced pursuant to a public or private aircraft financing
transaction (including a public or private securitization financing transaction)
under circumstances in which, following such financing or refinancing, (i) LIFT,
any holder of any Beneficial Interest Certificates and/or any of their
respective Affiliates have (individually or in the aggregate) a direct or
indirect interest in such Aircraft Assets or in any securities representing the
residual or equity interest in such Aircraft Assets, and (ii) such Aircraft
Assets are to be managed pursuant to a servicing agreement or other arrangement
other than this Agreement, (x) on a basis substantially the same as the basis
upon which the Servicer provides the Services pursuant to this Agreement
(including for the fees provided for herein to be paid to the Servicer and in
accordance with the Standard of Care and the Conflicts Standard and subject to
the Standard of Liability and Article XI) and (y) otherwise on such commercially
reasonable terms as shall be agreed.
(l) Notwithstanding any provision to the contrary in this
Agreement, GE Capital or any Affiliate of GE Capital may, in its sole
discretion, at any time and from time to time enter into and effectuate public
or private financing transactions with respect to Aircraft other than the
Aircraft Assets.
14
SERVICING AGREEMENT
(m) The Servicer shall indemnify and hold harmless LIFT, any
holder of a Beneficial Interest Certificate and their respective trustees,
officers and employees from and against any and all Losses that may be imposed
on, incurred by or asserted against LIFT or such other Persons insofar as any
such Loss arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Servicer Information (as
defined below) contained in any final or preliminary Prospectus or (ii) the
omission or alleged omission to state in the Servicer Information included in
any final or preliminary Prospectus a material fact required to be stated
therein or necessary to make the statements therein not misleading; PROVIDED,
HOWEVER, that the Servicer shall not be liable to LIFT under the indemnity set
forth in this Section 2.03(m) (x) unless the Servicer shall have consented in
writing to the text of the Servicer Information in the relevant final or
preliminary Prospectus and (y) if the relevant Loss results from an untrue
statement or omission contained in a preliminary Prospectus that was delivered
to a person that was sold a security described in such preliminary Prospectus
and if the Servicer shall have provided to LIFT prior to the distribution of the
related final Prospectus information correcting such untrue statement or
omission and LIFT shall have failed to deliver or cause to be delivered such
final Prospectus to such person containing such corrected information. "SERVICER
INFORMATION" shall mean the information set forth in the sections of the Final
Prospectus captioned "LIFT--The Servicing Arrangements," "LIFT--Servicer
Operations" and "LIFT--The Lessees--Payment History" (fifth and sixth sentences
of the third paragraph thereof only and with respect to the Aircraft Assets only
during the period that the Servicer was the "Servicer" thereof) and the
comparable sections (or comparable disclosure in comparable portions thereof)
contained in any other preliminary or final Prospectus. In connection with any
Notes Offering (other than an Exchange Offer), upon the request and at the
expense of LIFT, the Servicer shall make a good faith effort to obtain from one
of its regular outside legal counsel, selected by the Servicer, a customary
securities law disclosure letter related solely to the Servicer Information
included in the relevant Prospectus and addressed to the underwriters or initial
purchasers in respect of the Notes being offered under such Prospectus (such
underwriters and initial purchasers not, however, constituting third party
beneficiaries of this Agreement).
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SERVICING AGREEMENT
SECTION 2.04. COMPLIANCE WITH APPLICABLE LAWS AND GE POLICIES.
(a) Notwithstanding anything to the contrary in this Agreement, the Servicer
shall not be obligated to take or refrain from taking any action at any time
that the Servicer believes, in its sole discretion, is reasonably likely to (i)
violate any Applicable Law with respect to the Servicer or its Affiliates or any
GE Policy or (ii) lead to an investigation by any Governmental Authority,
directly or indirectly, of or relating to the Servicer, any of its Affiliates or
the Services. "GE POLICY" means each of the established written policies of GE
applicable to GE and its controlled affiliates related to business practices
with respect to legal, ethical and social matters, which policies are currently
embodied in the pamphlet INTEGRITY: THE SPIRIT & LETTER OF OUR COMMITMENT, a
copy of which has been provided to LIFT, as the same may be amended and in
effect from time to time. The Servicer shall provide LIFT with a copy of all
amendments and updates to INTEGRITY: THE SPIRIT & LETTER OF OUR COMMITMENT.
(b) If pursuant to paragraph (a) above, the Servicer shall
have determined not to take any action with respect to any transaction or
potential transaction (whether or not any such transaction or a similar
transaction has previously been entered into) relating to any Aircraft Asset and
as a consequence thereof any Person within the LIFT Group shall be denied the
opportunity to participate in any transaction or potential transaction in which
it would otherwise be able to participate in accordance with Applicable Law,
then, notwithstanding the provisions of Section 2.01, any such Person within the
LIFT Group may enter into, or engage another Person to arrange on its behalf,
such transaction or potential transaction with respect to such Aircraft Asset;
PROVIDED, HOWEVER, that such Person within the LIFT Group may not enter into any
such transaction or potential transaction if at or about the same time a
substantially similar transaction (with at least as favorable or the same
economic terms) could be arranged by the Servicer with respect to such Aircraft
Asset in a manner that is not reasonably likely to violate GE Policy or lead to
an investigation by any Governmental Authority, directly or indirectly, of or
relating to the Servicer, any of its Affiliates or the Services; PROVIDED
FURTHER, HOWEVER, that (i) the Aircraft Asset that is the subject of such
transaction or potential transaction (a "FORMER AIRCRAFT ASSET") shall cease to
be an Aircraft Asset (including for the purposes of calculating the
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SERVICING AGREEMENT
Servicing Fees) on the date that such transaction or potential transaction is
entered into, (ii) from and after such date (unless and until such Former
Aircraft Asset becomes an Aircraft Asset pursuant to Section 6.07) no further
Services shall be provided with respect to such Former Aircraft Asset and (iii)
the Servicer shall not have any obligation or liability with respect to such
Former Aircraft Asset or such transaction or potential transaction.
(c) Notwithstanding anything to the contrary set forth in
paragraph (b) above, no Person within the LIFT Group shall be entitled to enter
into, or engage any other Person to arrange on its behalf, any transaction or
potential transaction with respect to any Aircraft Asset if the Servicer shall
have made a determination regarding that transaction or potential transaction
pursuant to paragraph (a) above because it reasonably believed that such
transaction or potential transaction was reasonably likely to violate the United
States Foreign Corrupt Practices Act (or any similar or successor statute)
applicable to corporations organized under the laws of the United States (or any
state or political subdivision thereof) or applicable to any Person within the
LIFT Group or otherwise applicable to such transaction or potential transaction.
SECTION 2.05. LIMITATIONS. (a) Neither the Servicer nor any of
its Affiliates shall assume any Indebtedness of any Person within the LIFT Group
nor shall any provision of this Agreement or any other Operative Agreement be
construed so as to imply that the parties intended any such assumption.
(b) In addition to Section 2.04, the Servicer shall not, and
shall not be obligated to, act in a manner inconsistent with the rights,
obligations or undertakings of the "Lessor" under any Lease or otherwise in any
manner that is illegal or prohibited by Applicable Law or any applicable
contract.
(c) Notwithstanding any other provision of this Agreement, the
Servicer shall not be obligated either initially or on a continuing basis to
provide any Person within the LIFT Group or any of its Representatives any
confidential or proprietary information regarding the Servicer's or any of its
Affiliates' business or the business or finances of any Person, other than any
Person within the LIFT Group, whose assets it manages from time to time.
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SERVICING AGREEMENT
(d) The Servicer shall not be liable or accountable for (i)
the failure by a Lessee to perform any of its obligations under any Lease
including the payment of amounts payable under any Lease or (ii) the accuracy or
completeness of any notices, reports or other communications (whether written or
oral) made by any Lessee or any Person other than the Servicer in or concerning
any Lease or any document in connection therewith and shall be entitled to rely
upon all such notices, reports and communications except to the extent that the
Servicer has actual notice of any matter to the contrary.
(e) The Servicer may rely on any Adviser, Broker, law firm or
other professional adviser appointed by the Servicer or LIFT and shall not be
liable for any claim by any Person within the LIFT Group to the extent that it
was acting in good faith upon the advice of such Adviser, Broker, law firm or
other professional adviser.
(f) The relationship between the Servicer and LIFT is an
agency relationship and, except in relation to any money erroneously received by
the Servicer or any of its Affiliates into any of the Servicer's or any of its
Affiliates' bank accounts on behalf of any Person within the LIFT Group, which
the Servicer will hold in trust for such Person and deposit into the Collection
Account as soon as reasonably practicable, neither the Servicer nor any of its
Representatives shall be under any fiduciary duty or other implied obligation or
duty to any Person within the LIFT Group or any holder of any equity or debt
security issued by any Person within the LIFT Group, any Lessee or any other
Person arising out of this Agreement.
(g) Without prejudice to the Standard of Care, the Servicer
shall not be imputed with the knowledge of any of its employees other than its
directors, officers and those employees involved in the performance of the
Services relevant to such knowledge responsible for the day-to-day
administration of this Agreement. The Servicer shall be deemed to have actual
notice of any matter only upon the receipt of written notice describing any such
matter in reasonable detail or to the extent that one of the foregoing Persons
has actual knowledge of any such matter or which one of such Persons ought to
have known if the Servicer had acted in accordance with the Standard of Care.
(h) The Servicer shall not be obligated to assume, or engage
in activities which could reasonably be
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SERVICING AGREEMENT
expected to subject the Servicer to, any liability as a related company, shadow
director or similar legal concept of any Person within the LIFT Group. LIFT
understands, acknowledges and agrees that the intent of the parties hereunder is
that the Servicer will not be subject to any obligations or liabilities
whatsoever other than as and to the extent that any obligations or liabilities
arise pursuant to the express terms of this Agreement.
ARTICLE III
STANDARD OF CARE; CONFLICTS OF INTEREST;
STANDARD OF LIABILITY
SECTION 3.01. STANDARD OF CARE. The Servicer shall use
reasonable care and diligence at all times in the performance of the Services
(the "STANDARD OF CARE").
SECTION 3.02. CONFLICTS OF INTEREST. (a) LIFT acknowledges and
agrees that (i) in addition to managing the Aircraft Assets under this
Agreement, the Servicer may manage, and shall be entitled to manage, from time
to time the separate assets and businesses of (v) GE Capital and its Affiliates,
(w) debis and its Affiliates (including pursuant to the Amended and Restated
Servicing Agreement), (x) Airplanes U.S. Trust and Airplanes Limited and their
respective Affiliates (y) Aircraft Finance Trust and its Affiliates and (z)
other third parties (the assets of the parties described in clauses (v), (w),
(x), (y) and (z) are collectively hereinafter referred to as the "OTHER
ASSETS"); (ii) in the course of conducting such activities, the Servicer may
from time to time have conflicts of interest in performing its duties on behalf
of the various entities to whom it provides management services and with respect
to the various assets in respect of which it provides management services; and
(iii) the Controlling Trustees of LIFT have approved the transactions
contemplated by this Agreement and the other Operative Agreements and desire
that such transactions be consummated and in giving such approval the
Controlling Trustees of LIFT have expressly recognized that such conflicts of
interest may arise and that when such conflicts of interest arise the Servicer
shall perform the Services hereunder in accordance with the Standard of Care
and, to the extent applicable, the Conflicts Standard.
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SERVICING AGREEMENT
(b) If conflicts of interest arise regarding the management of
(i) a particular Aircraft Asset, on the one hand, and another Aircraft Asset, on
the other hand, or (ii) any Aircraft Asset, on the one hand, and any Other
Asset, on the other hand, the Servicer shall perform the Services in good faith
and, without prejudice to the generality of the foregoing, to the extent (i)
such Aircraft Assets or (ii) such Aircraft Asset and such Other Asset are
substantially similar in terms of objectively identifiable characteristics
relevant for purposes of the particular Services to be performed, the Servicer
shall not discriminate among such Aircraft Assets or between such Aircraft Asset
and such Other Asset, respectively, on an unreasonable basis (the standard set
forth in this Section 3.02(b) shall be referred to collectively as the
"CONFLICTS STANDARD").
(c) Notwithstanding any provision herein to the contrary, if,
in connection with the provision of Services with respect to an Aircraft Asset
or Lease, a conflict of interest shall exist that, in the good faith opinion of
the Servicer, requires an arm's-length negotiation between the Servicer or an
Affiliate of the Servicer, on the one hand, and any Person within the LIFT
Group, on the other hand, and the Servicer believes it would not be appropriate
for the Servicer to act on behalf of such Person within the LIFT Group in
connection with such negotiation (whether or not the Servicer shall propose to
act on behalf of itself or one of its Affiliates in connection with such
negotiation), then the Servicer shall withdraw from acting as Servicer with
respect to such Aircraft Asset or Lease in connection with the negotiation of
the issue giving rise to such conflict of interest. The Servicer shall provide
written notice to LIFT not more than ten Business Days after it has made a
determination that an arm's-length negotiation is necessary with respect to such
conflict of interest and it would not be appropriate for the Servicer to act on
behalf of such Person within the LIFT Group in connection with such negotiation.
Not more than seven Business Days after receipt of such notice from the
Servicer, LIFT shall appoint an independent representative (which may be any
Person within the LIFT Group or the Administrative Agent, but otherwise not a
Competitor of the Servicer or any of its Affiliates) (the "INDEPENDENT
REPRESENTATIVE") to act on behalf of such Person within the LIFT Group to which
such Aircraft Asset or Lease and conflict of interest relates. Any such
Independent Representative so appointed shall act on behalf of the relevant
Person within the LIFT Group for
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SERVICING AGREEMENT
purposes of such negotiation relating to such Aircraft Asset or Lease and the
Servicer shall have no responsibility or liability to any Person within the LIFT
Group with respect to such negotiation relating to such Aircraft Asset or Lease.
In any event, the Servicer shall be entitled to act on behalf of itself or its
Affiliate with respect to such negotiation. During the period of such
Independent Representative's appointment, the Servicer shall continue to perform
its ordinary functions as Servicer with respect to such Aircraft Asset or Lease
to the extent that the performance of the Servicer does not directly or
indirectly affect the negotiation of the issue giving rise to such conflict of
interest. To the extent, if any, the Servicer cannot continue to perform any
Services with respect to such Aircraft Asset or Lease during such negotiation,
such Services shall be performed by the Independent Representative or any other
designee of such Person within the LIFT Group. Any such Aircraft Asset or any
Aircraft Assets subject to any such Lease shall continue to be included as an
Aircraft Asset for purposes of calculating the Servicing Fees pursuant to
Article IX during the appointment of an Independent Representative and the fees,
if any, of any such Independent Representative shall be paid by LIFT.
(d) If the Servicer reasonably determines that directions
given by any Person to the Servicer in accordance with this Agreement or
Services required to be performed under this Agreement (other than any Service
involving an arm's-length negotiation between the Servicer or an Affiliate of
the Servicer, on the one hand, and any Person within the LIFT Group, on the
other hand) would, in either case, if carried out, place the Servicer in a
conflict of interest with respect to which, in the Servicer's good faith
opinion, the Servicer cannot continue to perform its obligations hereunder
within the requirements set forth in Section 3.02 with respect to all Aircraft
Assets or any affected Aircraft Assets, as the case may be, the Servicer shall
give LIFT prompt written notice thereof and thereafter the Servicer may resign
as Servicer with respect to the affected Aircraft Assets or LIFT may elect to
remove the Servicer with regard to the affected Aircraft Assets as provided in
Article X.
SECTION 3.03. STANDARD OF LIABILITY. The Servicer shall not be
liable or accountable to any Person including, without limitation, any
Subsidiary or Affiliate of LIFT (other than LIFT to the extent set
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SERVICING AGREEMENT
forth in the next following sentence) under any circumstances for any Losses
directly or indirectly arising out of, in connection with or related to, the
management by the Servicer of Aircraft Assets or Other Assets. The Servicer
shall not be liable or accountable to LIFT under any circumstances for, and LIFT
shall indemnify the Servicer on an After-Tax Basis in accordance with the
provisions of Article XI for, any Losses, directly or indirectly, arising out
of, in connection with or related to, the management by the Servicer of Aircraft
Assets or Other Assets, unless such Losses are finally adjudicated to have
resulted directly from (x) the Servicer's gross negligence or willful misconduct
in respect of its obligation to apply the Standard of Care or the Conflicts
Standard in respect of its performance of the Services or (y) any representation
or warranty by the Servicer set forth in Sections 4.10 or 4.11 having proven to
be false on the date hereof (the liability standards set forth in this Section
3.03, the "STANDARD OF LIABILITY"). For the avoidance of doubt, but without
limiting the provisions of Section 9.07, the provisions of this Section 3.03
shall not give rise to any obligation on the part of the Servicer to indemnify
LIFT for any Taxes. Without limiting the foregoing, the Servicer shall not be
directly or indirectly liable or accountable to LIFT under any circumstances for
any Losses directly or indirectly arising out of, in connection with or related
to, (i) the direct or indirect transfer of any Aircraft Assets or Leases related
thereto or any other assets to any Person within the LIFT Group, (ii) the
adequacy of the terms of any Lease relating to any Aircraft Assets to the extent
any such Lease was newly executed, amended or modified in connection with the
solicitation of Lessee consents, novations and related documentation pursuant to
the direct or indirect transfer of the Aircraft Assets to the LIFT Group, (iii)
the reliability or creditworthiness of any Lessee with respect to its
obligations under any Lease, (iv) the adequacy of the lease payments derived
from the Leases related to any Aircraft Assets to support various obligations of
the Persons within the LIFT Group, (v) the adequacy of the maintenance reserves
or security deposits relating to the Aircraft Assets, (vi) the terms and
conditions of the Notes or Beneficial Interest Certificates being offered and
sold by LIFT as of the Closing Date or pursuant to any Notes Offering, (vii) the
ability of LIFT to comply with the terms and conditions of such Notes or
Beneficial Interest Certificates and (viii) the structuring and implementation
of any aspect
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SERVICING AGREEMENT
of the various transactions contemplated by the Final Prospectus.
SECTION 3.04. WAIVER OF IMPLIED STANDARD. Except as expressly
stated above in this Article III, all other warranties, conditions and
representations, express or implied, statutory or otherwise, arising under U.S.
Federal, Delaware, Irish or other law in relation to the skill, care, diligence
or otherwise in respect of any service to be performed hereunder or to the
quality or fitness for any particular purpose of any goods are hereby excluded
and waived by LIFT, and the Servicer shall not be liable to LIFT or any other
Person within the LIFT Group or any other Person in contract, tort or otherwise
under U.S. Federal, Delaware, Irish or other law for any loss, damage, expense
or injury of any kind whatsoever, consequential or otherwise, arising out of or
in connection with either the services to be supplied pursuant to this Agreement
or any goods to be provided or sold in conjunction with such services or any
defect in either such goods or services or from any other cause, whether or not
any such matter amounts to a fundamental breach of a fundamental term of this
Agreement. Nothing in this Article III should be taken as in any way limiting or
excluding any liability which the Servicer may have to LIFT under Section 2 of
the Irish Liability for Defective Products Act, 1991.
THE CONTRACTUAL RIGHTS, IF ANY, WHICH THE LIFT GROUP ENJOYS BY
VIRTUE OF SECTIONS 12, 13, 14 AND 15 OF THE SALE OF GOODS ACT, 1893 (AS AMENDED)
AND SECTION 39 OF THE SALE OF GOODS AND SUPPLY OF SERVICES ACT, 1980 ARE IN NO
WAY PREJUDICED BY ANYTHING CONTAINED IN THIS AGREEMENT SAVE TO THE EXTENT
PERMITTED BY LAW.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
LIFT represents and warrants to, and agrees with, the Servicer
as follows:
SECTION 4.01. AIRCRAFT ASSETS. Schedule 4.01 contains a true
and complete list of all Aircraft Assets constituting Aircraft Assets as of the
Closing Date and each Person within the LIFT Group, if any, that owns such
Aircraft Assets as of the Closing Date. Except as otherwise set forth therein,
on the Delivery of each Aircraft Asset listed in Schedule 4.01, each Person
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SERVICING AGREEMENT
within the LIFT Group listed as an owner of an Aircraft Asset on such Schedule
will have such title to such Aircraft Asset as was conveyed to such Person on
its Delivery, free and clear of all Liens created by or through such Person.
SECTION 4.02. AIRCRAFT ASSETS RELATED DOCUMENTS. (a) The
Servicer shall not be required to perform any service provided for in or in
connection with any Aircraft Assets Related Documents not in its possession (all
such Aircraft Assets Related Documents listed in Schedule 4.02 being in its
possession) or delivered to it, and, to the extent that the failure to provide
such service results in any Losses to the Servicer, LIFT shall indemnify the
Servicer for such Losses on an After-Tax Basis, in accordance with the
provisions of Article XI.
(b) Each Aircraft Assets Related Document is a legal, valid
and binding agreement of the Person within the LIFT Group that is a party
thereto (including by way of assignment or novation) and is enforceable against
such Person within the LIFT Group that is a party thereto in accordance with its
terms. No Person within the LIFT Group has modified, amended or waived any
provision of or terminated any Aircraft Assets Related Document referred to in
Schedule 4.02 except as disclosed therein.
SECTION 4.03. ACCOUNTS AND CASH FLOW. Schedule 4.03 sets forth
a true and complete list of all bank or other similar accounts and any other
accounts relating to the Aircraft Assets, with respect to which any Person
within the LIFT Group, the Security Trustee, the Administrative Agent or any
other agent of any of the foregoing has authority and sets forth in reasonable
detail a written description of all material arrangements and procedures
relating to the flow of cash related to the Aircraft Assets, including wire
transfer instructions.
SECTION 4.04. ORGANIZATION AND STANDING. (a) LIFT is a
business trust duly created under the laws of Delaware, and each other Person
within the LIFT Group is a corporation duly incorporated, a business trust duly
created or a limited liability company duly formed and validly existing and, if
relevant, in good standing under the laws of the jurisdiction in which it is
legally incorporated, created or formed, respectively, and possesses all
franchises, licenses, permits,
24
SERVICING AGREEMENT
authorizations and approvals necessary to enable it to use its corporate or
trust name and to own, lease or otherwise hold its properties and assets and to
carry on its business as presently conducted and as proposed to be conducted
except for such franchises, licenses, permits, authorizations and approvals the
failure of which to obtain could not, individually or in the aggregate, have a
Material Adverse Effect on the Persons within the LIFT Group, taken as a whole.
Each of LIFT and each other Person within the LIFT Group is in compliance in all
material respects with all terms and conditions of such franchises, licenses,
permits, authorizations and approvals. Schedule 4.04(a) sets forth a true and
complete list of each Person within the LIFT Group and the jurisdiction in which
each such Person within the LIFT Group is legally organized.
(b) Each of LIFT and each other Person within the LIFT Group
is duly qualified to do business as a foreign corporation in each jurisdiction
in which the nature of its business or the ownership, leasing or holding of its
properties or assets requires qualification except for such jurisdictions where
the failure to be so qualified could not, individually or in the aggregate, have
a Material Adverse Effect on the Persons within the LIFT Group, taken as a
whole.
SECTION 4.05. AUTHORITY. (a) Each of LIFT and each other
Person within the LIFT Group which is a party to an Operative Agreement has all
requisite power and authority to execute each Operative Agreement to which it is
or will be a party and to consummate the transactions and to perform its
obligations contemplated thereby. All corporate acts and other proceedings
required to be taken by each Person within the LIFT Group to authorize the
execution, delivery and performance of each Operative Agreement to which it is
or will be a party and the consummation of the transactions and the performance
of its obligations contemplated thereby have been or on or before the date of
entering into the relevant Operative Agreements will have been duly and properly
taken.
(b) Each of the Operative Agreements to which any Person
within the LIFT Group is or will be a party has been or will be duly and validly
executed and delivered by such Person, as applicable, and each such Operative
Agreement is or upon such execution and delivery will be a legal, valid and
binding obligation of such Person, as applicable, enforceable against it in
accordance with its terms.
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SERVICING AGREEMENT
SECTION 4.06. NO CONFLICTS. Neither the execution and delivery
of any Operative Agreement to which any Person within the LIFT Group is a party
nor the consummation of the transactions contemplated thereby nor performance by
any Person within the LIFT Group of any of its obligations thereunder will (i)
violate any provision of the constituent documents of any such Person within the
LIFT Group, (ii) violate any order, writ, injunction, judgment or decree
applicable to any Person within the LIFT Group or any of their respective
properties or assets, (iii) violate in any material respect any Applicable Law
or (iv) result in any conflict with, breach of or default (or give rise to any
right of termination, cancelation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, warrant or
other similar instrument or any license, permit, material agreement or other
material obligation to which any Person within the LIFT Group is a party or by
which any Person within the LIFT Group or any of their respective properties or
assets may be bound. No action, consent or approval by, or filing with, any
Governmental Authority or any other regulatory or self- regulatory body, or any
other Person, is required in connection with the execution, delivery or
performance by any Person within the LIFT Group of the Operative Agreements to
which it is a party or the consummation by any Person within the LIFT Group of
the transactions contemplated thereby.
SECTION 4.07. COMPLIANCE WITH APPLICABLE LAWS. Each of LIFT
and each other Person within the LIFT Group is in compliance in all material
respects with all Applicable Laws and any filing requirements relating thereto.
SECTION 4.08. LITIGATION; DECREES. (a) Other than as may exist
with respect to the Aircraft Assets, there are no claims, actions, suits,
arbitrations or other proceedings or investigations (i) pending or, to the best
knowledge of each of LIFT and each other Person within the LIFT Group,
threatened, by or against or affecting LIFT or any other Person within the LIFT
Group, which in any case involves a potential loss exceeding $1,000,000 and (ii)
pending, or to the best knowledge of each of LIFT and each other Person within
the LIFT Group, threatened, by or against or affecting LIFT or any other Person
within the LIFT Group, related to the transactions contemplated by the Operative
Agreements.
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SERVICING AGREEMENT
(b) Each of LIFT and each other Person within the LIFT Group
is in compliance in all material respects with each outstanding judgment, order
or decree (other than as may exist with respect to the Aircraft Assets) of any
Governmental Authority or arbitrator applicable to LIFT or any other Person
within the LIFT Group, as the case may be, and no such judgment, order or decree
has or could have a Material Adverse Effect on LIFT or any other Person within
the LIFT Group.
SECTION 4.09. APPOINTMENTS. (a) Each Person within the LIFT
Group has appointed LIFT, and LIFT has accepted such appointment, to act as
representative of each such Person with respect to any matter in respect of
which LIFT or any other Person within the LIFT Group is required or permitted to
take any action pursuant to the terms of this Agreement.
(b) LIFT has appointed the Administrative Agent to act on its
behalf and on behalf of each of its Subsidiaries pursuant to the terms of the
Administrative Agency Agreement and LIFT has appointed the Administrative Agent,
on a revocable basis, to act on its behalf in connection with any action
required or permitted to be taken by LIFT on its own behalf or on behalf of any
other Person within the LIFT Group pursuant to the terms of this Agreement.
The Servicer represents and warrants to LIFT as follows:
SECTION 4.10. AUTHORITY. (a) The Servicer has all requisite
power and authority to execute each Operative Agreement to which it is or will
be a party and to consummate the transactions and to perform its obligations
contemplated thereby. All corporate acts and other proceedings required to be
taken by the Servicer to authorize the execution, delivery and performance of
each Operative Agreement to which it is or will be a party and the consummation
of the transactions and the performance of its obligations contemplated thereby
have been or on or before the date of entering into the relevant Operative
Agreements will have been duly and properly taken.
(b) Each of the Operative Agreements to which the Servicer is
or will be a party has been or will be duly and validly executed and delivered
by the Servicer, as applicable, and each such Operative Agreement is or upon
such execution and delivery will be a legal, valid
27
SERVICING AGREEMENT
and binding obligation of the Servicer, enforceable against it in accordance
with its terms.
SECTION 4.11. NO CONFLICTS. Neither the execution and delivery
of any Operative Agreement to which the Servicer is a party nor the consummation
of the transactions contemplated thereby nor performance by the Servicer of any
of its obligations thereunder will (i) violate any provision of the constituent
documents of the Servicer, (ii) violate any order, writ, injunction, judgment or
decree applicable to the Servicer or any of its properties or assets, (iii)
violate in any material respect any Applicable Law or (iv) result in any
conflict with, breach of or default (or give rise to any right of termination,
cancelation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, warrant or other similar instrument or
any license, permit, material agreement or other material obligation to which
the Servicer is a party or by which the Servicer or any of its properties or
assets may be bound. No action, consent or approval by, or filing with, any
Governmental Authority or any other regulatory or self- regulatory body, or any
other Person, is required in connection with the execution, delivery or
performance by the Servicer of the Operative Agreements to which it is a party
or the consummation by the Servicer of the transactions contemplated thereby.
SECTION 4.12. COMPLIANCE WITH APPLICABLE LAWS OF IRELAND. The
Servicer is in compliance in all material respects with all Applicable Laws of
Ireland and any filing requirements in Ireland relating thereto necessary to
perform its obligations under this Agreement.
ARTICLE V
SERVICER UNDERTAKINGS
SECTION 5.01. ACCESS. The Servicer at such times as LIFT may
reasonably request shall grant, and shall cause any Servicer Delegate to grant,
to the Persons within the LIFT Group and their agents (including, without
limitation, the Administrative Agent and auditors) access to the documents and
other records related to the Aircraft Assets (copies of which LIFT shall (at its
expense) be entitled to take), to enable the Persons within the LIFT Group to
monitor the performance by the Servicer under this Agreement or to
28
SERVICING AGREEMENT
otherwise discharge their respective obligations under Applicable Law. Upon
reasonable prior written notice and at reasonable times (in any event not more
than an aggregate, with respect to the LIFT Group taken as a whole, of four (4)
times per Year), the Servicer shall make one or more (such number to be
determined by the Servicer in its sole discretion) members of its management
available to attend meetings of the Controlling Trustees of LIFT. In addition,
the Servicer will make one or more members of its management available to
participate in additional meetings of such Controlling Trustees either, in the
Servicer's sole discretion, by participating in person or by teleconference. Any
out-of-pocket expenses incurred by the Servicer in connection with any such
attendance shall be reimbursed by LIFT.
SECTION 5.02. COMPLIANCE WITH LAW. The Servicer shall, in
connection with the performance of the Services, comply in all material respects
with all laws, rules and regulations applicable to the Servicer.
SECTION 5.03. COMMINGLING. The Servicer shall not commingle,
with its own funds, any funds of any Person within the LIFT Group from time to
time in its possession.
SECTION 5.04. RESTRICTIONS ON EXERCISE OF CERTAIN RIGHTS.
Subject to the enforcement of its rights under the Security Trust Agreement, the
Servicer shall not take any steps for the purpose of procuring the appointment
of an administrative receiver or the making of any administrative order or for
instituting any bankruptcy, reorganization, arrangement, insolvency, winding up,
liquidation, composition or any similar proceeding under the laws of any
jurisdiction with respect to any Person within the LIFT Group.
SECTION 5.05. COORDINATION WITH LIFT GROUP. The Servicer shall
designate an individual who shall be an employee of the Servicer and who shall
be primarily responsible for coordinating with LIFT and any other Person within
the LIFT Group regarding the Services, and the Servicer may from time to time
change such designation by providing notice to LIFT of such change.
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SERVICING AGREEMENT
ARTICLE VI
UNDERTAKINGS OF LIFT
SECTION 6.01. COOPERATION. LIFT shall, and shall cause each
other Person within the LIFT Group and their respective agents (including the
Administrative Agent) to, at all times cooperate with the Servicer to enable the
Servicer to provide the Services, including providing the Servicer with all
powers of attorney as may be reasonably necessary or appropriate for the
Servicer to perform the Services.
SECTION 6.02. NO REPRESENTATION WITH RESPECT TO THIRD PARTIES.
LIFT agrees that as between the Servicer, on the one hand, and each of LIFT and
the other Persons within the LIFT Group, on the other hand, no representation is
made as to the financial condition and affairs of any Lessee of, or purchaser
of, any Aircraft Asset or any vendor or supplier utilized by the Servicer in
connection with its performance of the Services.
SECTION 6.03. RELATED DOCUMENT AMENDMENTS. LIFT shall not
take, and shall not permit any other Person within the LIFT Group to take, any
action that would increase in any respect the scope, nature or level of the
Services to be provided under this Agreement without the Servicer's express
prior written consent, including by entering into, amending, modifying or
supplementing any Aircraft Assets Related Document (it being understood that (i)
the Servicer shall have no liability to any Person within the LIFT Group
directly or indirectly arising out of, in connection with or related to, the
Servicer's failure to perform such increased Service prior to any such
amendment, modification or supplement being consented to in writing by the
Servicer and (ii) no Person within the LIFT Group shall be permitted to engage
another Person to perform the affected Service without the prior written consent
of the Servicer).
SECTION 6.04. OTHER AIRCRAFT. Except as otherwise expressly
provided in Sections 2.04(b), 3.02(c) and 10.04 of this Agreement, LIFT shall
not, and shall not permit any other Person within the LIFT Group or any agent of
any Person thereof (including the Administrative Agent) to, enter into, or cause
or permit any Person (other than the Servicer or any Person acting for or on its
behalf) to enter into on its behalf, (a) any transaction for the lease or sale
of any Aircraft Asset
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SERVICING AGREEMENT
in respect of which the Servicer is at such time performing Services or (b) any
agreement for the performance by any Person other than the Servicer of some or
all of the Services, in the case of (a) and (b) without the prior written
consent of the Servicer.
SECTION 6.05. COMMUNICATIONS. LIFT shall, and shall cause each
other Person within the LIFT Group and the Administrative Agent to, forward
promptly to the Servicer a copy (or, if such communication is oral, notify the
Servicer by prompt oral or written notice and, if oral notice, confirmed in
writing upon request) of any communication received from any Person (including
any Person under any Aircraft Assets Related Document) in relation to any
Aircraft Asset.
SECTION 6.06. RATIFICATION. LIFT hereby ratifies and confirms
and agrees to ratify and confirm (and shall cause each other Person within the
LIFT Group to do the same) (and shall furnish written evidence thereof upon
request of the Servicer) whatever the Servicer does in accordance with this
Agreement in the exercise of any of the powers or authorities conferred upon the
Servicer under the terms of this Agreement.
SECTION 6.07. ADDITIONAL AIRCRAFT ASSETS. If any Aircraft
Asset shall become a Former Aircraft Asset pursuant to the provisions of Section
2.04 and thereafter the condition which caused such Former Aircraft Asset to
cease to be an Aircraft Asset shall no longer exist or the transaction entered
into as contemplated by Section 2.04(b) shall terminate, then LIFT shall, and
shall require each other Person within the LIFT Group, as appropriate, to, cause
such Former Aircraft Asset to become an Aircraft Asset and the Servicer shall
accept such Aircraft Asset as an Aircraft Asset, such action to be confirmed by
an exchange of correspondence to such effect.
SECTION 6.08. EXECUTION, AMENDMENT, MODIFICATION OR
TERMINATION OF AIRCRAFT ASSETS RELATED DOCUMENTS. (a) In connection with the
acquisition of any Aircraft (other than any Former Aircraft Asset) which becomes
an Aircraft Asset after the Closing Date other than pursuant to the Asset
Purchase Agreement, no later than ten Business Days prior to such Aircraft
becoming an Aircraft Asset, LIFT shall deliver a written notice thereof to the
Servicer setting forth the model type and manufacturer's serial number of such
Aircraft and the Person within the LIFT Group which will become the owner
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SERVICING AGREEMENT
of such Aircraft upon its acquisition, together with (x) a true and complete
list all documents related to such Aircraft which will become Aircraft Assets
Related Documents upon the acquisition of such Aircraft and (y) a true and
complete copy of each document which will become an Aircraft Assets Related
Document upon the acquisition of such Aircraft or, to the extent it has yet to
be executed, the most current draft of such document (with a final executed copy
to be delivered as promptly as practicable thereafter). LIFT will be deemed to
represent and warrant to, and agree with, the Servicer on the date such Aircraft
becomes an Aircraft Asset that (i) the Person within the LIFT Group listed as
the owner of such Aircraft in the written notice provided by LIFT will have such
title to such Aircraft as was conveyed to such Person on its acquisition free
and clear of all Liens created by or through such Person, (ii) each Aircraft
Assets Related Document related to such Aircraft is a legal, valid and binding
agreement of the Person within the LIFT Group that is a party thereto (including
by way of assignment or novation) and is enforceable against such Person within
the LIFT Group that is a party thereto in accordance with its terms and (iii) no
Person within the LIFT Group has modified, amended or waived any provision of or
terminated any Aircraft Assets Related Document referred to in such written
notice provided by LIFT except as disclosed therein. The Servicer shall not be
required to perform any services provided for in or in connection with any
Aircraft Assets Related Documents not delivered to it, and, to the extent that
the failure to provide such service results in any Losses to the Servicer, LIFT
shall indemnify the Servicer for such Losses on an After-Tax Basis, in
accordance with the provisions of Article XI.
(b) No later than five Business Days after the date that (i)
any agreement, instrument or other document becomes an Aircraft Assets Related
Document (other than as contemplated in Section 6.08(a)) or (ii) any Aircraft
Assets Related Document shall have been amended, modified or terminated, LIFT
shall deliver written notice thereof to the Servicer together with (x) in the
case of any newly executed Aircraft Assets Related Document, a true and complete
copy of such Aircraft Assets Related Document, a list of all Aircraft Assets to
which it relates and a description, in reasonable detail, of the relevance of
such Aircraft Assets Related Document to such assets or (y) in the case of any
amendment, modification or termination, a true and complete copy of any related
agreement, instrument or other document;
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SERVICING AGREEMENT
PROVIDED, HOWEVER, that such notice or such document shall not be required to be
delivered, but shall be delivered if the Servicer does not have possession of
such notice or document, delivery is so requested by the Servicer and LIFT has
possession of such notice or document, if the Servicer was substantially
involved in the preparation and execution of such new, amended, modified or
terminated agreement, instrument or other document.
SECTION 6.09. ACCESS TO LIFT GROUP INFORMATION. At all such
times as the Servicer may reasonably request, LIFT shall cause each other Person
within the LIFT Group and the Administrative Agent to grant, access to the
Servicer and its agents to the books of account, documents and other records of
such Person (including "read only" and reporting access to the management
information systems used by such Persons), and to officers, directors (or
trustees, as applicable) and employees of each Person within the LIFT Group or
any such agent for the purposes of the Servicer's performance of its obligations
in respect of Aircraft Assets under this Agreement. LIFT will provide the
Servicer with copies of the minutes of the board of Controlling Trustees of LIFT
and any written materials presented to the board by any Person, including,
without limitation, the Administrative Agent.
SECTION 6.10. LIFT GROUP ACCOUNTS AND CASH ARRANGEMENTS. (a)
LIFT shall not, and shall not permit any other Person within the LIFT Group or
any agent thereof to, establish any new bank or similar account relating to the
Aircraft Assets or close any bank or similar account relating to the Aircraft
Assets other than in accordance with the terms of the Indenture, the Security
Trust Agreement or the Administrative Agency Agreement.
(b) No Person within the LIFT Group shall modify any
arrangement with respect to any bank or similar account or the flow of cash in
connection with the Aircraft Assets other than in accordance with the terms of
the Indenture, the Security Trust Agreement or the Administrative Agency
Agreement.
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SERVICING AGREEMENT
SECTION 6.11. NOTIFICATION OF BANKRUPTCY. If LIFT or any other
Person within the LIFT Group, shall consider taking any action to:
(a) file any petition or application, commence any proceeding,
pass any resolution or convene a meeting with respect to (i) itself,
any of its Affiliates or any of its assets under any United States
Federal, state or local, foreign or other law relating to the
appointment of an examiner, liquidator, receiver or similar Person with
respect to LIFT or any other Person within the LIFT Group or over the
whole or any part of any properties or assets of any of LIFT or any
other Person within the LIFT Group or (ii) any bankruptcy,
reorganization, compromise arrangements or insolvency of any of LIFT or
any other Person within the LIFT Group; or
(b) make an assignment for the benefit of its
creditors generally;
then LIFT shall notify the Servicer of such consideration a reasonable period of
time prior to taking any such action to the extent practicable, but, in any
event, prior to taking any such action (it being understood that the foregoing
notice requirement shall not be construed to prohibit or restrain the taking of
any action described in (a) or (b) above). If any of LIFT or any other Person
within the LIFT Group becomes aware of the intention of, or any action by, any
Person (whether a creditor or member of any of LIFT or any other Person within
the LIFT Group) to appoint an examiner, liquidator, receiver or similar Person,
it shall promptly notify the Servicer accordingly.
SECTION 6.12. FURTHER ASSURANCES. LIFT agrees and shall cause
each other Person within the LIFT Group and their respective agents (including
the Administrative Agent) to agree, that, at any time and from time to time,
upon the written request of the Servicer, it will execute and deliver such
further documents and do such further acts and things as the Servicer may
reasonably request in order to effect the purposes of this Agreement.
SECTION 6.13. GUARANTEES. LIFT agrees and shall cause each
other Person within the LIFT Group, to execute and deliver a LIFT Group
Guarantee in favor of the Servicer in the form attached hereto as Appendix B.
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SERVICING AGREEMENT
SECTION 6.14. TRANSFERS OF FUNDS. LIFT agrees and shall cause
each other Person within the LIFT Group and their respective agents (including
the Administrative Agent), to cooperate with the Servicer to the extent
necessary to cause funds to be transferred into or out of the various Bank
Accounts in order for the various payments from Lessees to be applied on a basis
consistent with the instructions of such Lessees, subject in each case to the
terms of the Leases and the rights and obligations of the lessors thereunder.
ARTICLE VII
LIFT GROUP RESPONSIBILITY
SECTION 7.01. LIFT GROUP RESPONSIBILITY. Notwithstanding the
appointment of the Servicer to perform the Services and the related delegation
of authority and responsibility to the Servicer pursuant to this Agreement, each
of LIFT and each other Person within the LIFT Group shall continue to have and
exercise through its Controlling Trustees or board of directors, as applicable,
real and effective central control and management of all matters related to its
ongoing business, operations, assets and liabilities, subject to matters that
are expressly the responsibility of the Servicer in accordance with the terms of
this Agreement, and each of LIFT and each other Person within the LIFT Group
shall at all times conduct its separate ongoing business in such a manner that
the same shall at all times be readily identifiable from the separate business
of the Servicer. Matters with respect to which responsibility is not being
delegated to the Servicer shall include but are not limited to the matters set
forth in Schedule 7.01.
SECTION 7.02. PERFORMANCE WITH RESPECT TO AIRCRAFT ASSETS.
LIFT has directed the Servicer to, and the Servicer will, perform the Services
in a manner that is intended to be consistent with maximizing the cash flows
derived from the leases relating to the Aircraft Assets over time, subject to
the constraints imposed by the Indenture and this Agreement and by seeking to
achieve a balanced and diversified portfolio (including with respect to lessees,
geography and lease term lengths), in all cases taking into account the
then-existing and anticipated market conditions affecting the operating lease of
used aircraft and the commercial aviation industry generally. LIFT understands
and
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SERVICING AGREEMENT
acknowledges the inherent uncertainty in determining market conditions at any
point in time as well as the inherent limitations in anticipating market
conditions from time to time. It is expressly understood that this Section 7.02
does not impose any higher or different standard of care or liability than is
set forth in Article III.
SECTION 7.03. LEASE OPERATING BUDGET; AIRCRAFT ASSET EXPENSES
BUDGET. (a) LIFT shall adopt with respect to each year during the term of this
Agreement, in accordance with Sections 7.03(b), (c) and (d), (i) a single lease
operating budget with respect to all Aircraft Assets (the "LEASE OPERATING
BUDGET") and (ii) a single budget with respect to the Aircraft Asset expenses
related to all Aircraft Assets (the "AIRCRAFT ASSET EXPENSES BUDGET"); PROVIDED,
HOWEVER, that, with respect to the Year commencing January 1, 2001, LIFT shall
have adopted the Lease Operating Budget and the Aircraft Asset Expenses Budget
for such Year that are attached to a certificate delivered by LIFT to the
Servicer on the Closing Date.
(b) In respect of each Year during the term of this Agreement,
it is understood that the Administrative Agent shall prepare on behalf of the
LIFT Group, and not later than the October 31 immediately preceding the
commencement of such Year deliver to the Servicer (other than with respect to
the fiscal year commencing January 1, 2001), a proposed Lease Operating Budget
and a proposed Aircraft Asset Expenses Budget for such Year together with
reasonably detailed information regarding the assumptions underlying such
proposed budgets.
(c) In connection with the preparation of such proposed Lease
Operating Budget and Aircraft Asset Expenses Budget, the Servicer shall provide
the Administrative Agent, not later than the September 30 immediately preceding
the commencement of such Year (other than with respect to the fiscal year
commencing January 1, 2001), information in a form to be agreed from time to
time relating to (i) Aircraft Assets lease rates, (ii) Aircraft Assets downtime,
(iii) direct technical expenditures (including any costs to be capitalized)
relating to the Aircraft Assets, (iv) indirect costs relating to insurance,
legal, consulting and other similar expenses and (v) such other Aircraft Assets
expense- related information as may be reasonably required to prepare such
budgets, in each case including the assumptions relating thereto. The Servicer
shall only be
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SERVICING AGREEMENT
obligated to provide expense-related information to the Administrative Agent
pursuant to this Section 7.03(c) to the extent that such information relates to
the Services performed by the Servicer hereunder. LIFT shall ensure that the
Administrative Agent is instructed to prepare each such proposed Lease Operating
Budget and proposed Aircraft Asset Expenses Budget on a timely basis.
(d) After the delivery of such proposed Lease Operating Budget
and Aircraft Asset Expenses Budget as described in Sections 7.03(b) and (c), the
Servicer and the Administrative Agent shall review and discuss such proposed
Lease Operating Budget and Aircraft Asset Expenses Budget and shall make such
adjustments thereto as they shall deem appropriate, and the revised proposed
Lease Operating Budget and proposed Aircraft Asset Expenses Budget in respect of
any Year shall then be submitted no later than the December 1 preceding such
Year to LIFT for its consideration and approval (other than with respect to the
fiscal year commencing January 1, 2001). The approved Lease Operating Budget and
Aircraft Asset Expenses Budget for any Year, as each may be amended or modified
from time to time, shall hereinafter be referred to as the "APPROVED BUDGET".
Each Approved Budget shall be consistent with, and not in any manner reduce,
limit or circumscribe, the delegation to the Servicer pursuant to this Agreement
(including pursuant to Section 7.04) of a practical and workable level of
autonomy, authority and responsibility with respect to the performance of the
Services.
(e) If LIFT does not adopt any Approved Budget for any Year as
contemplated by Section 7.03(d) or if, after an Approved Budget is adopted, LIFT
shall determine that any Changed Circumstances have occurred and are continuing,
then LIFT shall instruct the Servicer and the Administrative Agent, on behalf of
the LIFT Group, to review and, to the extent possible, revise the Lease
Operating Budget and Aircraft Asset Expenses Budget in such a manner as to
adequately address the concerns of LIFT and/or such Changed Circumstances (it
being understood that, subject to the last sentence of Section 7.03(d), LIFT may
instruct the Servicer to proceed with a Lease Operating Budget and an Aircraft
Asset Expenses Budget approved by LIFT if LIFT determines that any proposed
revisions do not adequately address the concerns of LIFT and/or such Changed
Circumstances).
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SERVICING AGREEMENT
(f) Notwithstanding any other provision hereof, the Servicer
shall have no liability for the failure of the Approved Budget for any Year to
be achieved.
SECTION 7.04. TRANSACTION APPROVAL REQUIREMENTS. (a) The
Servicer shall not do any of the following without the express prior written
approval of LIFT:
(i) Except as otherwise required in accordance with the terms
of any Lease or the Asset Purchase Agreement, sell (or enter into any
agreement to sell) or otherwise dispose of any Aircraft (excluding any
sale or exchange of any Engine, parts or components thereof or aircraft
or engine spare parts or ancillary equipment or devices furnished
therewith) forming part of the Aircraft Assets; provided, however, that
the Servicer may transfer title or another interest in an Aircraft (x)
to or in favor of a trust or an entity for the purpose of registering
the Aircraft under the laws of an applicable jurisdiction so long as a
Person in the LIFT Group retains the beneficial or economic ownership
of the Aircraft, (y) from such trust or entity to a Person within the
LIFT Group or (z) within or among LIFT and its Subsidiaries without
limitation, provided with respect to this clause (z), that written
notification shall have been given to each Rating Agency (as defined in
the Indenture) of such transfer.
(ii) Enter into any new Lease (or any renewal or extension of
an existing Lease, unless any such Lease being renewed or extended had
previously been approved pursuant to this Section 7.04(a) or if any
such Lease contains an extension option and such option is being
exercised in accordance with the terms of such Lease) of Aircraft
Assets if the Lease shall not comply with all the applicable provisions
of Sections 5.02 and 5.03 of the Indenture with respect to the leasing
of such Aircraft Assets or if the Lease grants a purchase option in
favor of the Lessee.
(iii) Terminate any Lease or Leases (without substitution of,
or replacement by, another substantially similar Lease or Leases with
respect to such Aircraft Assets) to any single Lessee with respect to
any Aircraft Assets then having an aggregate depreciated net book value
on the books of
38
SERVICING AGREEMENT
the applicable Person(s) within the LIFT Group in excess of
$75,000,000.
(iv) Unless provided for in the then current Approved Budget
(including the provisions of Section 7.03(e)), enter into any contract
for the modification and/or maintenance of Aircraft Assets if the costs
to be incurred thereunder by the applicable Person within the LIFT
Group (A) exceed the greater of (1) the estimated aggregate cost of a
heavy maintenance "D" check for the airframe and a total refurbishment
of the engines for Aircraft Assets of the type in question and (2) the
amount of the available maintenance reserves or other collateral under
the applicable Lease or (B) are outside the ordinary course of the LIFT
Group's business.
(v) Issue any Guarantee on behalf of, or otherwise pledge the
credit of (other than with respect to trade payables in the ordinary
course of the LIFT Group's business), any Person within the LIFT Group,
except for any lien or indebtedness created in favor of the issuer of a
surety bond, letter of credit or similar instrument to be obtained by
or for the benefit of any Person within the LIFT Group in connection
with the repossession of an Aircraft or other enforcement action under
a Lease.
(vi) Except as specifically contemplated by Schedule 2.02(a),
on behalf of any Person within the LIFT Group, enter into, amend or
grant a waiver with respect to, any transaction with GE Capital or any
of its Affiliates (including GE and its Affiliates), including for the
acquisition, sale or lease of any Aircraft Assets from or to, or the
obtaining or provision of services by, any such Person.
(vii) Incur on behalf of any Person within the LIFT Group any
liability (actual or contingent) or cause any such liability to be
incurred, except for a liability (A) contemplated in the then current
Approved Budget, (B) arising out of, in connection with or related to a
transaction of a type which is otherwise subject to approval under this
Section 7.04 and is in fact so approved or, due to the existence of an
exception, limitation or other carve out contained therein or in any
definition therein, is not subject to approval under the relevant
39
SERVICING AGREEMENT
provision of this Section 7.04, (C) incurred in the ordinary course of
the LIFT Group's business, including, but not limited to, liabilities
related to such matters specified in Schedule 7.04, or (D) incurred
pursuant to a Lease in entering into the Lease or performing any
obligations of the lessor thereunder; PROVIDED, HOWEVER, that the
exception contained in clause (C) above is not intended to override any
other restriction contained in this Agreement (other than this clause
(vii)) relating to the incurrence of any liability referred to in such
clause (C).
(viii) Enter into on behalf of LIFT or any Person within the
LIFT Group, any order or commitment to acquire, or acquire on behalf of
the LIFT Group, aircraft or, except as otherwise provided in Section
4(e) of Schedule 2.02(a), aircraft engines, except (A) in accordance
with any Lease or (B) to acquire a replacement engine for an Aircraft
so long as the same is provided for in the then current Approved
Budget;
PROVIDED, HOWEVER, that, before the Servicer shall effect (or cause to be
effected) any optional improvement or modification of any Aircraft Asset or
effect any optional conversion of any Aircraft Asset from a passenger aircraft
to a freighter or mixed-use aircraft or purchase or otherwise acquire any
Engines or Parts outside of the ordinary course of business (other than in the
ordinary course of business in connection with a new lease of such Aircraft
Asset), the Servicer shall request that LIFT deliver to the Servicer a
certificate certifying that such action will not violate Section 5.02(i) of the
Indenture, such certificate to be delivered to the Servicer within seven
Business Days after such request therefor, and the Servicer shall not undertake
such action pending receipt of such certificate.
(b) Any transaction entered into by the Servicer on behalf of
any Person within the LIFT Group (other than with other Persons within the LIFT
Group) shall be on an arm's-length basis and on fair market value terms, unless
otherwise agreed by LIFT on behalf of any such Person within the LIFT Group.
(c) The transaction approval requirements (the "TRANSACTION
APPROVAL REQUIREMENTS") set forth in this Section 7.04 may only be amended by
mutual agreement of the parties, and shall not in any event be amended to
40
SERVICING AGREEMENT
reduce, or circumscribe the delegation to the Servicer of, the level of
autonomy, authority and responsibility contemplated by the Transaction Approval
Requirements with respect to the performance of the Services. Any rejection by
LIFT of any proposed transaction submitted to it by the Servicer pursuant to the
Transaction Approval Requirements shall only be applicable to such portions of
any such proposed transaction as are specifically required to be approved as set
forth in Section 7.04(a).
(d) LIFT shall provide the Servicer with a response confirming
its approval or rejection of any proposed transaction submitted to it by the
Servicer as promptly as practicable following its receipt of a proposal from the
Servicer and in any event not more than three Business Days after receipt of
such a proposal. In the event that the Controlling Trustees of LIFT a duly
authorized committee thereof or the Administrative Agent fails to approve of any
transaction with respect to which an approval is required pursuant to the
Transaction Approval Requirements and in respect of which the Servicer has
submitted a reasonably detailed written proposal, LIFT shall provide a
reasonably detailed written explanation for any such rejection to the Servicer
simultaneously with notifying the Servicer of such rejection. The Servicer is
not required to take any action with respect to any transaction for which
approval was sought pending receipt of such explanation.
SECTION 7.05. APPROVED BUDGETS AND TRANSACTION APPROVAL
REQUIREMENTS. Except as set forth in Section 7.04(a), no transaction entered
into by the Servicer on behalf of any Person within the LIFT Group in connection
with the performance by the Servicer of the Services shall require the approval
of any Person within the LIFT Group or its Controlling Trustees or board of
directors, as applicable, or any committees thereof; PROVIDED, HOWEVER, that
nothing set forth in this Article VII shall prohibit the Servicer from seeking
any approval or direction from LIFT with respect to any matter related to the
Services or the Aircraft Assets to the extent that the Servicer believes to be
appropriate and, pending the Servicer's receipt of any such approval or
direction, the Servicer may refrain from taking any action with respect to the
matter for which the Servicer has sought approval or direction.
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SERVICING AGREEMENT
ARTICLE VIII
EFFECTIVENESS
SECTION 8.01. EFFECTIVENESS. The effectiveness of this
Agreement and all obligations of the parties hereunder shall be conditioned upon
satisfaction (or waiver by the appropriate party) of the conditions set forth in
Schedule 8.01.
ARTICLE IX
SERVICING FEES; EXPENSES; TAXES;
PRIORITY OF SERVICING FEES
SECTION 9.01. SERVICING FEES. (a) In consideration of the
Servicer's performance of the Services, LIFT agrees to pay to the Servicer
servicing fees consisting of (i) the monthly base fee set forth in Section 9.02
("MONTHLY BASE FEE"), (ii) the rent fees set forth in Section 9.03 ("RENT
FEES"), (iii) the sales fee set forth in Section 9.04 ("SALES FEE") and (iv) the
additional servicing fees set forth in Section 9.05 ("ADDITIONAL SERVICING
FEES").
(b) LIFT agrees to provide the Servicer (with a copy to the
Administrative Agent) with any information in a timely manner that the Servicer
may reasonably request to enable the Servicer to determine the timing and amount
of any payment that the Servicer is entitled to receive pursuant to this
Agreement.
SECTION 9.02. MONTHLY BASE FEE. A Monthly Base Fee equal to
$150,000 shall be payable by LIFT to the Servicer in arrears on each Payment
Date during the Term of this Agreement; PROVIDED, HOWEVER, that in the event
that any Aircraft (other than any Former Aircraft Asset) shall become an
Aircraft Asset after the Closing Date other than pursuant to the Asset Purchase
Agreement, then the Monthly Base Fee will be increased to reflect the addition
of such Aircraft, and the amount of such increase will be negotiated in good
faith by LIFT and the Servicer.
SECTION 9.03. RENT FEES. (a) Rent Fees shall consist of the
Rent Payable Fee and the Rent Collected Fee. The Rent Fees shall be calculated
by the Servicer and payable by LIFT as follows:
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SERVICING AGREEMENT
(i) A Rent Payable Fee shall be payable by LIFT to the
Servicer in arrears for each period commencing on the Closing Date (or,
thereafter, the fourth Business Day prior to the most recent Calculation Date)
and ending on the fourth Business Day prior to the next succeeding Calculation
Date during the term of this Agreement (each such period, a "FEE PERIOD"), such
payment to be made no later than the Payment Date immediately following the end
of each such Fee Period.
The "RENT PAYABLE FEE" in respect of any Fee Period shall
equal one percent (1.0%) of the aggregate amount of the Rents due from each
Lessee attributable to such Fee Period, or portion of such Fee Period in which
the relevant Aircraft constitutes an Aircraft Asset; PROVIDED, HOWEVER, that, in
the event of an early termination of a Lease relating to any Aircraft Asset for
any reason (other than by reason of the occurrence of an event of loss or
exercise of a purchase option), the Rents which would have been payable pursuant
to such Lease but for such early termination will be included in this
calculation of the Rent Payable Fee until the earlier of (a) the date on which
Rents shall become payable in respect of such Aircraft Asset pursuant to another
Lease the Rents of which shall be included in this calculation of the Rent
Payable Fee and (b) the day that numerically corresponds to the first date by
which such Aircraft Asset and related Aircraft Documents shall have been
physically repossessed by the Servicer following such early termination in (or,
if no such day exists, the last day of) the calendar month that is the third
month after the month in which such date occurs.
(ii) A Rent Collected Fee shall be payable by LIFT to the
Servicer in arrears for each Fee Period, such payment to be made no later than
the Payment Date immediately following the end of each such Fee Period.
The "RENT COLLECTED FEE" in respect of any Fee Period shall
equal one percent (1.0%) of the aggregate amount of the Rents actually paid by
each Lessee and, if any Lessee fails to pay any Rent when due, amounts applied
towards such payment during such Fee Period or portion of such Fee Period in
which the relevant Aircraft constitutes an Aircraft Asset; PROVIDED, HOWEVER,
that if any collateral security, including any security deposit, is applied to
the payment of Rent, then, for purposes of calculating the Rent Collected Fee,
the amounts so applied shall not be included as Rent at the time of such
application but shall be so included at such time as any
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SERVICING AGREEMENT
Person within the LIFT Group shall receive substitute collateral security or a
payment (whether in the form of Rent or otherwise) which restores, in whole or
in part, such collateral security.
(b) Not less than four Business Days prior to each Payment
Date immediately following the end of each Fee Period, the Servicer shall
deliver a written notice to LIFT specifying the amount of the Rent Payable Fee
and the amount of the Rent Collected Fee payable in respect of such Fee Period.
SECTION 9.04. SALES FEE. (a) A Sales Fee shall be payable with
respect to each Fee Period by LIFT to the Servicer, such payment to be made not
later than the Payment Date immediately following the end of each such Fee
Period.
(b) The "SALES FEE" in respect of any Fee Period shall equal
one percent (1.0%) of the Aggregate Gross Proceeds in respect of Dispositions of
Aircraft Assets during such Fee Period. "AGGREGATE GROSS PROCEEDS" for any Fee
Period means the sum of the Gross Proceeds for each Disposition of an Aircraft
Asset that is an Aircraft Asset during such Fee Period. "DISPOSITION" means,
with respect to any Aircraft Asset, the sale (including pursuant to the exercise
of a purchase option), total loss or other event or circumstances under which
such Aircraft Asset ceases to be an Aircraft Asset. "GROSS PROCEEDS" shall be an
amount equal to the gross proceeds (including the fair market value of any
non-cash consideration) received by any Person within the LIFT Group in respect
of any Disposition of an Aircraft Asset.
(c) Not less than four Business Days prior to each Payment
Date immediately following the end of each Fee Period, the Servicer shall
deliver a written notice to LIFT specifying the amount of the Sales Fee payable
in respect of such Fee Period.
SECTION 9.05. ADDITIONAL SERVICING FEES. (a) Additional
Servicing Fees shall consist of Additional Sales Fees, Additional Disposition
Fees and Additional Rent Collected Fees. The Additional Servicing Fees shall be
calculated by the Servicer and payable by LIFT as follows:
(i) An Additional Sales Fee shall be payable by LIFT to the
Servicer with respect to each Fee Period,
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SERVICING AGREEMENT
such payment to be made on the Payment Date that amounts are distributed to the
Servicer pursuant to Section 3.08(a)(xxxiv) of the Indenture; PROVIDED, HOWEVER,
that such payment shall be made not later than the Payment Date immediately
following the date on which all amounts outstanding to be paid under the Notes
issued on the Closing Date shall have been paid in full. The "ADDITIONAL SALES
FEE" in respect of any Fee Period shall equal one percent (1.0%) of the
Aggregate Gross Proceeds in respect of Dispositions of Aircraft Assets during
such Fee Period.
(ii) An Additional Disposition Fee shall be payable by LIFT to
the Servicer in respect of any Disposition of an Aircraft Asset, such payment to
be made on the Payment Date that amounts are distributed to the Servicer
pursuant to Section 3.08(a)(xxxiv) of the Indenture.
The "ADDITIONAL DISPOSITION FEE" in respect of any Disposition
of an Aircraft Asset shall equal five percent (5.0%) of the Adjusted Gross
Proceeds in respect of such Disposition. "ADJUSTED GROSS PROCEEDS" means, in
respect of the Disposition of an Aircraft Asset, an amount equal to (i) the
Gross Proceeds received by any Person within the LIFT Group in respect of such
Aircraft minus (ii) the sum of the Sales Fee and the Additional Sales Fee
payable in respect of such Disposition and the Outstanding Principal Balance of
Notes allocable to such Aircraft. On any date, the Outstanding Principal Balance
of Notes allocable to an Aircraft shall equal the product of (i) (A) the
Adjusted Base Value of such Aircraft divided by (B) the Adjusted Portfolio Value
and (ii) the aggregate Outstanding Principal Balance of Notes, in each case on
the most recent Payment Date.
(iii) An Additional Rent Collected Fee shall be payable by
LIFT to the Servicer for each Fee Period commencing on or after the fourth
Business Day prior to the Calculation Date immediately preceding the Payment
Date on which all amounts outstanding to be paid under the Notes shall have been
paid in full (each such Fee Period, an "ADDITIONAL FEE PERIOD"), such payment to
be made no later than the Payment Date immediately following the end of each
such Additional Fee Period.
The "ADDITIONAL RENT COLLECTED FEE" in respect of any
Additional Fee Period shall equal three percent (3.0%) of the aggregate amount
of the Rents actually paid by each Lessee and, if any Lessee fails to pay any
Rents
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SERVICING AGREEMENT
when due, amounts applied towards such payment during such Additional Fee
Period or portion of such Additional Fee Period in which the relevant Aircraft
constitutes an Aircraft Asset.
(b) Not less than four Business Days prior to each Payment
Date immediately following the end of each Fee Period, the Servicer shall
deliver a written notice to LIFT specifying the amount of any Additional
Disposition Fees and the Additional Rent Collected Fee, payable in respect of
such Fee Period.
SECTION 9.06. EXPENSES. (a) The Servicer shall be responsible
for, and shall not be entitled to reimbursement for, the Servicer's overhead
expenses set forth in Schedule 9.06(a) ("OVERHEAD EXPENSES").
(b) (i) LIFT shall be responsible for all costs and expenses
relating to or associated with the Aircraft Assets other than Overhead Expenses,
including those costs and expenses set forth in Schedule 9.06(b) ("AIRCRAFT
ASSET EXPENSES"). Nothing contained in this Section 9.06 shall be deemed to
impose on the Servicer any obligation to advance any of its own funds for any
Aircraft Asset Expenses.
(ii) If, in connection with the performance of Services, the
Servicer, on behalf of any Person within the LIFT Group, proposes to provide
goods and services, or arrange for the provision of goods or services, from any
vendor, supplier, service provider or other Person (A) for a purchase price in
excess of U.S. $1,000,000 (or the equivalent thereof in the currency in which
such obligation is payable) or (B) at any time when a default in respect of the
payment of any amount due under this Agreement shall have occurred and be
continuing, the Servicer may require LIFT to pay for such goods or services in
advance or otherwise make the funds for payment of such goods or services
available to the satisfaction of the Servicer. If such advance payment is not
made or such funds are not otherwise made available, notwithstanding any other
provision in this Agreement, the Servicer shall be relieved of its obligation to
provide or arrange for the provision of such goods or services in respect of the
Aircraft Assets for which such goods or services were to be provided but shall
otherwise continue to manage such Aircraft Assets as provided in this Agreement
and shall continue to be entitled to receive the fees specified in Sections
9.01, 9.02, 9.03, 9.04 and 9.05 in respect of such Aircraft Assets. In
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SERVICING AGREEMENT
such case, LIFT may provide or arrange for the provision of such goods or
services in respect of such Aircraft Assets.
SECTION 9.07. TAXES. (a) LIFT agrees to pay on an After-Tax
Basis and to indemnify and hold harmless the Indemnified Parties on an After-Tax
Basis from and against (i) all liability for Taxes of or imposed on the
Taxpayers that are imposed on, or asserted to be payable by, any Indemnified
Party as a result of the structuring and implementation of any aspect of the
various transactions contemplated by the Final Prospectus or otherwise (other
than any such Taxes described in Section 9.07(f)), regardless of whether such
Taxes are attributable to a taxable period ending before, on or after the
Closing Date, other than any such Taxes imposed on or payable by a Taxpayer in
its capacity as a withholding agent in respect of amounts payable pursuant to
this Agreement to an Indemnified Party and (ii) any liability for out-of-pocket
fees, costs and expenses (including reasonable attorneys' fees) arising out of
or incident to any Tax indemnified hereunder. If any Taxes for which LIFT is to
indemnify any Indemnified Party pursuant to the immediately preceding sentence
are payable after the Closing Date, LIFT shall pay or cause to be paid to such
Indemnified Party an amount calculated on an After-Tax Basis equal to the amount
of such Taxes no later than the later of (x) five Business Days after such
Indemnified Party gives notice to LIFT that such amount is due and specifying
the date such Taxes are due and payable (the "DUE DATE") and (y) one Business
Day before the Due Date. Amounts described in clause (ii) shall be reimbursed on
an After-Tax Basis not less frequently than quarterly. Any payment required to
be made hereunder and not made at the time specified in the preceding two
sentences shall bear interest at the Stipulated Interest Rate or such higher
rate actually payable by such Indemnified Party on the delayed payment of the
Taxes being indemnified, calculated from the date such payment was required to
be made hereunder to the date such payment is actually received by the
Indemnified Party.
(b) All amounts payable by or on behalf of LIFT pursuant to
this Agreement shall be payable exclusive of any applicable value added tax,
which value added tax, if payable, shall also be payable, upon production of a
valid value added tax invoice by the Servicer. All amounts payable to LIFT by an
Indemnified Party pursuant to this Agreement shall be inclusive of value added
tax
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SERVICING AGREEMENT
save to the extent such Indemnified Party is entitled to recover (by way of
repayment, credit or set off) the whole or any part of such value added tax.
Where it is so entitled, at the request of LIFT, value added tax shall be
payable in addition thereto on production of a valid value added tax invoice but
payment of the value added tax element shall not fall due until the latest
possible date before the date on which such Indemnified Party shall receive such
repayment, credit or set off (and such Indemnified Party shall be obligated to
use reasonable endeavors (taking into account its overall tax position) to
obtain such repayment, credit or set off as soon as possible); PROVIDED,
HOWEVER, that, to the extent such payment of the value added tax element shall
fall due prior to such date of receipt pursuant to Applicable Law, LIFT shall
make such Indemnified Party whole on an After-Tax Basis for any resulting loss
of the time value of funds. The Servicer shall act on LIFT's behalf in
processing any refund of value added tax and the Servicer and LIFT shall
cooperate in good faith to file an application for relief from value added taxes
on VAT form 60A as soon as practicable after the date of this Agreement.
(c) Except as provided in Section 9.07(f), LIFT on an
After-Tax Basis, pay and indemnify and hold the Indemnified Parties harmless
from all Taxes imposed, levied or assessed against or upon the Person in the
LIFT Group or any Indemnified Parties by any Governmental Authority upon or with
respect to any of the Operative Agreements or any payment pursuant thereto or
resulting from the matters or activities described therein, other than (except
to the extent required to make any payment on an After-Tax Basis) (i) payroll,
social security and employment Taxes of such Indemnified Party and any Taxes
that are based on or measured by the net income, net receipts, net profits, net
worth, franchise or conduct of business of such Indemnified Party, (ii) any
Taxes payable by such Indemnified Party pursuant to the controlled foreign
corporation provisions or the passive foreign investment company provisions of
the U.S. Internal Revenue Code of 1986, as amended (the "CODE"), or any
successor provision, (iii) any Taxes payable by an Indemnified Party (other than
stamp, documentary or other similar taxes), which Taxes are imposed by Ireland
or the United States of America or any political subdivision of either, or any
other jurisdiction, to the extent such Taxes would not have been imposed but for
any connection of the Indemnified Party or any Affiliate thereof with the
jurisdiction imposing such Taxes (other than any such
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SERVICING AGREEMENT
connection that results from activities of such Indemnified Party or any
Affiliate which activities are located in such jurisdiction by reason of the
location of (x) a specific lessee or sublessee of any Person within the LIFT
Group (or, with respect to any Original Aircraft, the owner), (y) an Aircraft or
any part thereof or (z) any other Person (other than any Indemnified Party) with
whom any Person within the LIFT Group (or, with respect to any Original
Aircraft, the owner) may be engaging, or contemplating engaging, in a commercial
relationship), (iv) Taxes attributable to events or conditions arising after the
termination or expiration of this Agreement and (v) Taxes imposed as a result of
the gross negligence or wilful misconduct of any Indemnified Party. All Taxes
with respect to which LIFT has an indemnification responsibility under this
Section 9.07 shall be paid not later than the date such Taxes shall be due
unless and to the extent, in the case of Taxes that do not burden any of the
assets or property of any Indemnified Party and are assessed solely upon a
Person or Persons within the LIFT Group, such Person or Persons within the LIFT
Group shall be contesting such Taxes in good faith by appropriate proceedings,
in which case such Taxes, or so much thereof as are being contested and are
unpaid, shall be paid promptly upon a final determination that such Taxes, are
due and payable. In the event any Taxes with respect to which LIFT has an
indemnification responsibility under this Section 9.07 are levied on any
Indemnified Party, or any Indemnified Party is required by law or otherwise to
pay any such Taxes in the first instance or as a result of a Person or Persons
within the LIFT Group's failure to comply with, or nonperformance in relation
to, any Applicable Law or regulations governing the payment thereof by such
Person or Persons within the LIFT Group, LIFT shall pay to such Indemnified
Party the full amount thereof on an After-Tax Basis within five Business Days
after receipt from such Indemnified Party of any written request for such
payment but not later than the due date for such Taxes. Any payment required to
be made hereunder and not made at the time specified under this Section 9.07
shall bear interest at the Stipulated Interest Rate or such higher rate actually
paid by such Indemnified Party on the delayed payment of the Taxes being
indemnified, calculated from the date such payment was required to be made
hereunder to the date such payment is actually received by such Indemnified
Party.
(d) If any claim or demand is asserted in writing with respect
to a Tax indemnified hereunder, such
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SERVICING AGREEMENT
Indemnified Party shall in good faith notify LIFT of such claim or demand within
10 days of receipt thereof; PROVIDED, HOWEVER, that failure to give such
notification shall not affect such Indemnified Party's entitlement to
indemnification hereunder unless such failure shall materially and adversely
prejudice the ability of LIFT to defend itself or any Indemnified Party against
any such action, claim, demand, proceeding or suit. If LIFT shall so request
within 30 days after receipt of such notice, such Indemnified Party shall in
good faith at LIFT's expense contest the imposition of such Tax; PROVIDED,
HOWEVER, that such Indemnified Party may in its sole discretion select any
applicable forum for such contest and determine whether any such contest shall
be by (i) resisting payment of such Tax, (ii) paying such Tax under protest or
(iii) paying such Tax and seeking a refund thereof; PROVIDED FURTHER, HOWEVER,
that at such Indemnified Party's option such contest shall be conducted by LIFT
in the name of such Indemnified Party (subject to the preceding proviso) (it
being understood that LIFT shall not be permitted to contest the imposition of
such Tax in the name of such Indemnified Party without the prior written consent
of such Indemnified Party). In no event shall such Indemnified Party be required
or LIFT be permitted by such Indemnified Party to contest the imposition of any
Tax for which LIFT is obligated to indemnify pursuant to this Section 9.07
unless (i) such Indemnified Party shall have received from LIFT (A) an indemnity
reasonably satisfactory to such Indemnified Party for any liability, expense or
loss arising out of or relating to such contest and (B) an opinion of tax
counsel to LIFT furnished at the expense of LIFT to the effect that a reasonable
basis exists for contesting such claim; (ii) LIFT shall have agreed to pay such
Indemnified Party on demand all reasonable costs and expenses that such
Indemnified Party may incur in connection with contesting such claim (including
all costs, expenses, losses, reasonable legal and accounting fees,
disbursements, penalties, interest and additions to tax); (iii) LIFT shall be in
compliance with all of their obligations under this Agreement; (iv) such
Indemnified Party shall have determined that the action to be taken will not
result in a material risk of sale, forfeiture or loss of, or the creation of any
Lien (except if LIFT shall have adequately bonded such Lien or otherwise made
provision to protect the interests of such Indemnified Party in a manner
reasonably satisfactory to such Indemnified Party) on any property or rights of
such Indemnified Party, or any portion thereof or any interest therein; and (v)
if
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SERVICING AGREEMENT
such contest shall be conducted in a manner requiring the payment of the claim,
shall have paid the amount required. Notwithstanding anything contained in this
Section 9.07, an Indemnified Party shall not be required nor shall LIFT be
permitted by such Indemnified Party to contest or continue to contest in the
name of an Indemnified Party the imposition of any Tax for which LIFT is
obligated to indemnify pursuant to this Section 9.07 if such an Indemnified
Party shall waive in writing its rights to indemnification under this Section
9.07 with respect to such Tax.
(e) If any Indemnified Party shall obtain a refund of all or
any part of any Tax paid by LIFT such Indemnified Party shall, provided no Event
of Default, or default by LIFT in the payment of any amount due hereunder, has
occurred and is continuing, pay LIFT an amount equal to the amount of such
refund, including interest received or credited and attributable thereto, plus
any net Tax benefit (or minus any net Tax detriment) realized by such
Indemnified Party as a result of a payment made pursuant to this sentence or as
a result of the receipt or accrual of such refund, including interest received
or credited and attributable thereto. If any Indemnified Party shall have paid
LIFT any refund of all or part of any Tax paid by LIFT and it is subsequently
determined that such Indemnified Party was not entitled to the refund, such
determination shall be treated as the imposition of a Tax for which LIFT is
obligated to indemnify such Indemnified Party pursuant to the provisions of
Section 9.07 hereof.
(f) Notwithstanding the other provisions of this Section 9.07,
LIFT will have no liability under this Section 9.07 and the Servicer will
indemnify and hold harmless LIFT and the other members of the LIFT Group in
respect of any Taxes (including any associated interest, penalties and additions
to tax) imposed by the United States of America as a result of LIFT being
obligated to make, or failing to make, a payment of such Taxes pursuant to
section 1446 of the Code, or any successor provision thereto, by reason of the
Servicer being treated as a partner of or in a member of the LIFT Group as a
result of any Indemnified Party holding any direct or indirect interest in a D
Note (as defined in the Indenture) or as a result of the Additional Servicing
Fees payable to the Servicer.
SECTION 9.08. PRIORITY OF PAYMENTS TO SERVICER. Any and all
amounts due and owing to the
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SERVICING AGREEMENT
Servicer or any of its Affiliates (including any amounts due and owing to the
Servicer or any of its Affiliates with respect to indemnification) pursuant to
this Agreement (other than the Additional Servicing Fees) shall be entitled to
the priority established therefor in the Indenture, which priority LIFT agrees
not to amend without the consent of the Servicer.
ARTICLE X
TERM; RIGHT TO TERMINATE; RESIGNATION;
CONSEQUENCES OF EXPIRATION, TERMINATION,
RESIGNATION OR REMOVAL; CERTAIN TAX MATTERS; SURVIVAL
SECTION 10.01. TERM. This Agreement shall have a
non-cancelable term commencing on the Closing Date and expiring on the later of
(a) the first date on which all amounts outstanding to be paid under the Notes
(and any similar obligations of LIFT issued pursuant to any other indenture or
similar agreement (I.E., there shall be no Notes or similar obligations
outstanding)) shall have been paid in full and no Beneficial Interest
Certificates (or any similar equity interests in LIFT) remain outstanding and
(b) the date on which there shall cease to be any Aircraft Assets; PROVIDED,
HOWEVER, that LIFT shall be entitled to terminate this Agreement following the
payment in full of all amounts outstanding to be paid under the Notes and any
similar obligations of LIFT issued pursuant to any other indenture or similar
agreement (I.E., there shall be no Notes or similar obligations outstanding).
During the term, this Agreement shall not be terminable by either party except
as expressly provided in this Article X.
SECTION 10.02. RIGHT TO TERMINATE. (a)(i) At any time during
the term of this Agreement, the Servicer shall in accordance with Section
10.02(c) be entitled to terminate this Agreement if:
(A) LIFT shall fail to pay in full when due (1) any Servicing
Fees within five days after the effectiveness of written notice from
the Servicer of such failure or (2) any other amount payable by LIFT
hereunder or any other Operative Agreement within ten days after the
effectiveness of written notice from the Servicer of such failure; or
(B) any Person within the LIFT Group shall fail to perform or
observe or shall violate in any
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SERVICING AGREEMENT
material respect any material term, covenant, condition or agreement to
be performed or observed by it in respect of this Agreement or any
other Operative Agreement (other than with respect to payment
obligations of LIFT referred to in clause (a)(i)(A) of this Section
10.02); or
(C) any material representation or warranty by any Person
within the LIFT Group made in this Agreement or any other Operative
Agreement or in any report, certificate, financial statement or other
agreement, instrument or document at any time furnished by or on behalf
of any Person within the LIFT Group in connection therewith shall prove
to have been false or misleading in any material respect when made or
furnished and such representation or warranty shall remain false and
misleading in any material respect and such misrepresentation or breach
of warranty is reasonably likely to have a Material Adverse Effect on
the Servicer or a material adverse effect on the rights and obligations
of the Servicer under this Agreement (including the Servicer's
compensation hereunder); or
(D) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking relief in respect of LIFT or any Significant
Subsidiary of LIFT or of a substantial part of the property or assets
of any of such Persons, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other U.S. Federal or
state or foreign bankruptcy, insolvency, receivership or similar law,
and such proceeding or petition shall continue undismissed for 75 days
or an order or decree approving or ordering any of the foregoing shall
be entered or any such Persons within the LIFT Group shall go into
liquidation, suffer a receiver or mortgagee to take possession of all
or substantially all of its assets or have an examiner appointed over
it or if a petition or proceeding is presented for any of the foregoing
and not discharged within 75 days; or
(E) LIFT or any Significant Subsidiary of LIFT shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other U.S. Federal or
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SERVICING AGREEMENT
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest the filing of,
any petition described in clause (D) above, (iii) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, or (iv) make a general assignment for the benefit
of its creditors; or
(F) there shall cease to be any Aircraft Assets;
or
(G) the Indenture shall cease to be in full force
and effect; or
(H) any Guarantee issued in favor of the Servicer shall cease
to be a legal, valid and binding agreement of the relevant Person
within the LIFT Group, enforceable in accordance with its terms.
(ii) Upon the occurrence of an event set forth in clause (i)
of this Section 10.02(a), in addition to the right of the Servicer to terminate
this Agreement in whole pursuant to Section 10.02(a)(i), the Servicer shall be
entitled to terminate its obligations to provide the Services with respect to
one or more specific Aircraft Assets (but less than all the Aircraft Assets)
(any termination with respect to less than all the Aircraft Assets being a
"PARTIAL TERMINATION"). If, upon any such Partial Termination, the Servicer
shall elect to continue to provide Services with respect to any Aircraft Asset,
the Servicer shall specify the Aircraft Assets in respect of which it intends to
continue to provide Services in the Termination Notice with respect to the
Partial Termination. All references to the expiration or termination of this
Agreement shall mean the expiration or termination of this Agreement in whole
and not to a Partial Termination unless expressly otherwise stated.
(b) At any time during the term of this Agreement, LIFT shall
be entitled to terminate this Agreement if:
(i) neither GE nor GE Capital shall own directly or indirectly
at least 75% of the voting equity of, and economic interest in, the
Servicer or any Servicer Delegate; or
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SERVICING AGREEMENT
(ii) the Servicer shall fail in any material respect to
perform any material Services in accordance with the Standard of Care
or the Conflicts Standard and such failure shall have a Material
Adverse Effect on the LIFT Group taken as a whole; or
(iii) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking relief in respect of GE, GE Capital or the
Servicer or any Servicer Delegate, or of a substantial part of the
property or assets of the Servicer, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other U.S.
Federal or state or foreign bankruptcy, insolvency, receivership or
similar law, and such proceeding or petition shall continue undismissed
for 75 days or an order or decree approving or ordering any of the
foregoing shall be entered or the Servicer shall go into liquidation,
suffer a receiver or mortgagee to take possession of all or
substantially all of its assets or have an examiner appointed over it
or if a petition or proceeding is presented for any of the foregoing
and not discharged within 75 days; or
(iv) GE, GE Capital or the Servicer shall (A) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other U.S. Federal or state or foreign bankruptcy, insolvency,
receivership or similar law, (B) consent to the institution of, or fail
to contest the filing of, any petition described in clause (iii) above,
(C) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, or (D) make a general
assignment for the benefit of its creditors; or
(v) there shall have occurred and be continuing an Event of
Default under Section 4.01(a) of the Indenture in respect of the
payment of interest on any Class A Note (as defined in the Indenture)
due to an insufficiency of funds in the Collection Account on the
relevant date, which Event of Default (x) shall have occurred on a date
on which no amount is available for drawing under any Credit Facility
(as defined in the Indenture) in respect thereof and (y) shall have
continued unremedied for 60 days; or
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SERVICING AGREEMENT
(vi) an Event of Default (other than one referred to in clause
(v) of this Section 10.02(b)) under the Indenture shall have occurred
and, other than in respect of an Event of Default under Sections
4.01(e) or 4.01(f) of the Indenture, a Default Notice (pursuant to
which the Outstanding Principal Balance of the Notes and all accrued
and unpaid interest thereon shall become due and payable) shall have
been issued in accordance with the terms of the Indenture, and at the
time of such Event of Default at least 10 Aircraft Assets shall not be
subject to Leases and each such Aircraft Asset shall have been
off-lease and reasonably available for re-lease (including in the
possession of the Servicer, together with the related Aircraft
Documents) during the three-month period ending on the date of such
Event of Default.
(c)(i) Either party to this Agreement (the "TERMINATING
PARTY") may, at any time during the term of this Agreement, by written notice
(the "TERMINATION NOTICE") to the other (the "NONTERMINATING PARTY"), set forth
its determination to terminate this Agreement pursuant to clause (a) of this
Section 10.02 (in the case of the Servicer) or Section 10.01 or clause (b) of
this Section 10.02 (in the case of LIFT) or to provide for a Partial Termination
of this Agreement pursuant to clause (a)(ii) of this Section 10.02 (in the case
of the Servicer); PROVIDED, HOWEVER, that this Agreement shall not terminate
until and unless a Replacement Servicer shall have been appointed and shall have
accepted such appointment in accordance with Section 10.04(c); PROVIDED FURTHER
that failure by the Terminating Party to provide such Termination Notice shall
not affect such party's rights under Section 10.02(a) or Section 10.01 or
Section 10.02(b), as the case may be. Any Termination Notice shall set forth in
reasonable detail the basis for such termination.
(ii) Unless the Termination Notice is provided by LIFT
pursuant to the proviso to Section 10.01, no later than the fifth day following
the effectiveness of the Termination Notice (the "EFFECTIVENESS DATE"), the
Nonterminating Party shall advise the Terminating Party in writing whether the
Nonterminating Party (A) intends to cure the basis for such termination and, if
so, the action it intends to take to effectuate such cure or (B) does not intend
to cure the basis for such termination; PROVIDED, HOWEVER, that the failure of
the Nonterminating Party to deliver such notice by such day
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SERVICING AGREEMENT
shall be deemed to constitute notice that it does not intend to cure the basis
for termination. In the event that the Termination Notice is provided by LIFT
pursuant to the proviso to Section 10.01 or the Nonterminating Party notifies
(or is deemed to have notified) the Terminating Party that the Nonterminating
Party does not intend to cure the basis for such termination, then this
Agreement shall terminate or the Partial Termination shall take effect, as the
case may be, immediately or on such later date as the Terminating Party shall
have indicated in the Termination Notice to the Nonterminating Party. In the
event that the Nonterminating Party notifies the Terminating Party by such fifth
day that it intends to cure the basis for such termination, then the
Nonterminating Party shall (A) have 15 days from the Effectiveness Date to
effectuate such cure to the reasonable satisfaction of the Terminating Party or
(B) if such cure cannot reasonably be expected to be effectuated within such
15-day period, (1) demonstrate to the reasonable satisfaction of the Terminating
Party that substantial progress is being made toward the effectuation of such
cure and (2) effectuate such cure to the reasonable satisfaction of the
Terminating Party no later than the thirtieth day following the Effectiveness
Date. Upon the failure of the Nonterminating Party to effectuate a cure in
accordance with the immediately preceding sentence, this Agreement shall
terminate or the Partial Termination shall take effect, as the case may be, on
the latest of (A) the day immediately following the expiration of such 15- or
30-day period, (B) such later date as shall be indicated in the Termination
Notice or (C) the date as of which a Replacement Servicer has been engaged to
perform the Services with respect to the Aircraft Assets and has accepted such
appointment in accordance with the provision of Section 10.04(c).
SECTION 10.03. RESIGNATION OR REMOVAL. (a) If the Servicer
reasonably determines that (x) directions given by any Person to the Servicer in
accordance with this Agreement are or would be if carried out or (y) Services
required to be performed under this Agreement are or would be if carried out (i)
unlawful under Applicable Law, (ii) in violation of any GE Policy, (iii) likely
to lead to an investigation by any Governmental Authority, directly or
indirectly, of or relating to the Servicer, any of its Affiliates or the
Services, (iv) directions or Services that would expose the Servicer to any
liabilities for which adequate bond or indemnity has not, in the Servicer's good
faith opinion, been provided or (v) directions or Services that
57
would place the Servicer in a conflict of interest with respect to which, in the
Servicer's good faith opinion, the Servicer cannot continue to perform its
obligations hereunder within the requirements set forth in Article III with
respect to all Aircraft Assets or any affected Aircraft Assets, as the case may
be, it may resign as the Servicer for all purposes under this Agreement in
relation to all the Aircraft Assets or, at its election, any affected Aircraft
Assets (but with respect to clause (v) above the Servicer may resign only with
respect to the affected Aircraft) for the duration of this Agreement, such
resignation to become effective upon the selection by LIFT of a Replacement
Servicer that has been engaged to perform the Services with respect to all the
Aircraft Assets or any affected Aircraft Assets, as the case may be, and that
has accepted such appointment in accordance with the provisions of Section
10.04(c) (it being understood that, notwithstanding any other provision herein
to the contrary, the Servicer shall be under no obligation to follow such
directions or perform such Services pending the selection of and acceptance by a
Replacement Servicer).
(b) If LIFT shall have received a notice from the Servicer
pursuant to Section 3.02(d) hereof to the effect that the Servicer cannot
continue to perform its obligations hereunder within the requirements set forth
in Section 3.02 with respect to all Aircraft Assets or any affected Aircraft
Assets, LIFT may remove the Servicer for all purposes under this Agreement in
relation to the affected Aircraft Assets or, in the event that the Servicer has
notified LIFT that the Servicer cannot continue to perform its obligations with
respect to all Aircraft Assets, all the Aircraft Assets for the duration of this
Agreement, such removal to become effective upon the selection by LIFT of a
Replacement Servicer that has been engaged to perform the Services with respect
to any affected Aircraft Assets or all the Aircraft Assets, as the case may be,
and that has accepted such appointment in accordance with the provisions of
Section 10.04(c) (it being understood that, notwithstanding any other provision
herein to the contrary, the Servicer shall be under no obligation to perform
Services with respect to the affected Aircraft Assets pending the selection of
and acceptance by a Replacement Servicer).
(c) If any Taxes that are based on or measured by all or a
portion of the revenues, rental income or assets of any Person within the LIFT
Group (other than
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SERVICING AGREEMENT
(i) any Taxes payable by any such Person pursuant to the controlled foreign
corporation provisions or the passive foreign investment company provisions of
the Code or (ii) Taxes imposed as a result of the gross negligence or wilful
misconduct of any such Person) shall be imposed on or with respect to the
Servicer or any Affiliate thereof, and if such Taxes are not indemnified by LIFT
then, provided that the Servicer shall have undertaken reasonable efforts (that
do not involve any material cost to the Servicer or any Affiliate thereof) to
otherwise avoid the imposition of such Taxes, the Servicer may resign as the
Servicer for all purposes under this Agreement in relation to all the Aircraft
Assets or, at its election, any Aircraft Assets the resignation with respect to
which would reduce or eliminate such Taxes for the duration of this Agreement,
such resig nation to become effective upon the selection by LIFT of a
Replacement Servicer to perform the Services with respect to all the Aircraft
Assets or such Aircraft Assets as the case may be, that has accepted such
appointment in accordance with the provisions of Section 10.04(c); PROVIDED,
HOWEVER, that pending the effectiveness of such resignation, LIFT shall be
required to post a bond, irrevocable letter of credit or other form of security
reasonably acceptable to the Servicer to be drawn upon by the Servicer in the
event that any such additional Taxes continue to be imposed on or with respect
to the Servicer or any Affiliate thereof during such pendency.
SECTION 10.04. CONSEQUENCES OF EXPIRATION, TERMINATION,
RESIGNATION OR REMOVAL. (a) NOTICES. (i) Upon the expiration or termination of
this Agreement in accordance with this Article X, or upon the resignation by or
removal of the Servicer with respect to the performance of the Services for any
or all of the Aircraft Assets, the Servicer will promptly forward to LIFT any
notices, reports and communications received by it from any relevant Lessee
during the one year immediately after expiration, termination, resignation or
removal.
(ii) LIFT will notify promptly each relevant Lessee and any
relevant third party (with a copy to each Rating Agency) of the termination,
resignation or removal of the Servicer under this Agreement in relation to any
of the Aircraft Assets and will request that all such notices, reports and
communications thereafter be made or given directly to the Replacement Servicer
and LIFT.
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SERVICING AGREEMENT
(b) ACCRUED RIGHTS. A termination, resignation or removal in
relation to any or all the Aircraft Assets shall not affect the respective
rights and liabilities of either party accrued prior to such termination in
respect of any prior breaches hereof or otherwise.
(c) REPLACEMENT SERVICER. (i) Upon the expiration or
termination of this Agreement in accordance with this Article X, or upon the
resignation by or removal of the Servicer with respect to the performance of the
Services for any or all of the Aircraft Assets, the Servicer will cooperate with
any Replacement Servicer, including providing such Replacement Servicer with all
information and documents reasonably requested.
(ii) Other than at the expiration of the term as set forth in
Section 10.01 or pursuant to a termination of the Agreement by the Servicer in
accordance with Section 10.02(a)(i)(A), the Servicer may not resign or be
removed from its obligations and duties as Servicer hereunder, nor may this
Agreement be terminated with respect to the Servicer, in either case in whole or
in part, unless a Replacement Servicer has been appointed and has accepted such
appointment and LIFT has received written confirmation from each of the Rating
Agencies that no lowering or with drawal of the then current Ratings of any
class or subclass of Notes will result from such appointment; PROVIDED, HOWEVER,
that, in the event that a Replacement Servicer shall not have been appointed
within 90 days after any termination of this Agreement with respect to the
Servicer or any resignation by or removal of the Servicer, the Servicer may
petition any court of competent jurisdiction for the appointment of a
Replacement Servicer.
(d) PAYMENT OF FEES AND EXPENSES. (i) Upon the expiration or
termination of this Agreement in accordance with this Article X, or upon the
resignation or removal of the Servicer with respect to the performance of the
Services for any Aircraft Asset, so long as the Servicer is continu ing to
perform any of the Services, LIFT shall continue to pay Servicing Fees and
reimbursable Aircraft Asset Expenses to the Servicer until a Replacement
Servicer shall have been appointed and shall have accepted such appointment in
accordance with the provisions of Section 10.04(c).
(ii) If a Replacement Servicer is appointed with respect to
any Aircraft Asset in accordance with Section 10.04(c) and such Aircraft Asset
is sold by any
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SERVICING AGREEMENT
Person within the LIFT Group to a customer to whom the Servicer had been
actively engaged in marketing such Aircraft Asset and with whom the Servicer had
been engaged in substantive discussions at any time during the three- month
period prior to the appointment and acceptance of such Replacement Servicer, the
Servicer shall be paid Sales Fees in respect of such Aircraft Asset as if the
Servicer had arranged for the sale of such Aircraft Asset. Following any such
appointment of a Replacement Servicer, the Servicer will, upon the request of
LIFT, provide LIFT with a list of customers with respect to which the Servicer
had been actively engaged in marketing such Aircraft Asset and with which the
Servicer had been engaged in substantive discussions at any time during such
three-month period. Such list shall be treated as confidential by LIFT and shall
not be disclosed to any Person other than members of the Controlling Trustees of
LIFT and the Administrative Agent or used for any purpose other than as a basis
for determining any Sales Fees payable to the Servicer pursuant to the first
sentence of this Section 10.04(d)(ii).
(e) TRANSITION. Upon the expiration or termina tion of this
Agreement in accordance with this Article X, or upon the resignation or removal
of the Servicer with respect to the performance of the Services for any Aircraft
Asset, the Servicer shall promptly return the originals (and all copies) within
its possession of all Aircraft Assets Related Documents to LIFT and shall
provide LIFT with such access to other nonconfidential, nonproprietary
documentation and information relating to the business of any Person within the
LIFT Group (and, upon the request by LIFT and to the extent practicable, copies
thereof) within its possession as is reasonably necessary to the conduct of the
business of any Person within the LIFT Group.
SECTION 10.05. SURVIVAL. Notwithstanding any termination or
the expiration of this Agreement, (a) the obligations of LIFT under Sections
2.03(g), 2.03(i), 2.03(j), 2.04, 2.05(a), 2.05(c), 2.05(d), 2.05(f), 2.05(g),
2.05(h), 3.03, 3.04, 6.06 and 7.03(f), Article IX, Sections 10.04 and 10.05,
Article XI and Sections 13.01 and 13.03 of this Agreement and Section 2.2(b) of
Schedule 2.02(a) to this Agreement and the Servicer's obligations under Section
10.04 and Article XI shall survive such termination or expiration, as the case
may be, and (b) the representations and warranties contained in Article IV and
in Section 2.02(g)
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SERVICING AGREEMENT
shall survive and remain in full force and effect until the third anniversary of
the date on which this Agreement shall have expired or terminated.
ARTICLE XI
INDEMNIFICATION
SECTION 11.01. INDEMNITY. (a) Notwithstanding anything to the
contrary set forth herein (other than Section 2.03(m)) or in any other Operative
Agreement, LIFT does hereby assume liability for, and does hereby agree to
indemnify and hold harmless on an After-Tax Basis each of the Indemnified
Parties from any and all Losses that may be imposed on, incurred by or asserted
against any Indemnified Party, directly or indirectly, arising out of, in
connection with or related to (i) the Servicer's performance under this
Agreement or from errors in judgment or omissions by the Servicer under this
Agreement; PROVIDED, HOWEVER, that such indemnity shall not apply to the extent
that such Losses are finally adjudicated to have been directly caused by (x) the
willful misconduct or gross negligence of the Servicer in respect of its
obligation to apply the Standard of Care or the Conflicts Standard in respect of
its performance of the Services or (y) any representation or warranty by the
Servicer set forth in Sections 4.10 or 4.11 having proven to be false on the
date hereof, (ii) any Indemnified Parties' involvement (or alleged involvement)
in connection with the structuring or implementation of any aspect of the
transactions contemplated by the Final Prospectus and (iii) the offering or sale
of the Notes or Beneficial Interest Certificates by LIFT or any of its
Affiliates, including any Losses to which any Indemnified Party may become
subject, under the Securities Act of 1933, the Securities Exchange Act of 1934
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as any such Loss arises out of, or is based upon (y) any
untrue statement or alleged untrue statement of a material fact contained in the
Final Prospectus or in any amendment thereof or supplement thereto or in any
preliminary offering memorandum or other preliminary prospectus related thereto
or (z) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or, in the case of the Final Prospectus, in light of the
circumstances under which they were made, not misleading.
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SERVICING AGREEMENT
(b) Each Indemnified Party agrees to give LIFT prompt notice
of any action, claim, demand, discovery of fact, proceeding or suit for which
the applicable Indemni fied Party intends to assert a right to indemnification
under this Agreement; PROVIDED, HOWEVER, that failure to give such notification
shall not affect such Indemnified Party's entitlement to indemnification under
this Section 11.01 unless and only to the extent such failure results in actual
irreparable prejudice to LIFT or any other Person within the LIFT Group.
SECTION 11.02. PROCEDURES FOR DEFENSE OF CLAIMS. (a) If a
Third Party Claim is made against any Indemnified Party, the applicable
Indemnified Party shall promptly notify LIFT in writing of such claim (which
notice shall include all relevant information reasonably necessary for LIFT to
understand such claim which is in the possession or under the control of, or
which can with reasonable commercial efforts be obtained by, such Indemnified
Party at the time of such notice, subject to Applicable Laws and confidentiality
obligations), and the Servicer or LIFT(if so directed by the applicable
Indemnified Party and if so accepted by LIFT) will undertake the defense
thereof. The failure to notify LIFT promptly shall not relieve LIFT of its
obligations under this Article XI unless and only to the extent that such
failure results in actual irreparable prejudice to LIFT or any other Person
within the LIFT Group.
(b) If so directed by the applicable Indemnified Party and if
accepted by LIFT, LIFT shall within 30 days, undertake the conduct and control,
through counsel of its own choosing (subject to the consent of the applicable
Indemnified Party, such consent not to be unreasonably withheld or delayed) and
at LIFT's risk and expense, the good faith settlement or defense of such claim,
and the applicable Indemnified Party shall cooperate fully with LIFT in
connection therewith; PROVIDED, HOWEVER, that (i) at all times the applicable
Indemnified Party shall be entitled to participate in such settlement or defense
through counsel chosen by it, and the fees and expenses of such counsel shall be
borne by the applicable Indemnified Party, and (ii) LIFT shall not be entitled
to settle such claims unless it shall have confirmed in writing its obligation
to indemnify the applicable Indemnified Party for the liability asserted in such
claim. LIFT shall obtain the written consent of the applicable Indemnified Party
prior to ceasing to defend, settling or otherwise disposing of such claim if as
a result thereof such Indemnified Party would become
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SERVICING AGREEMENT
subject to injunctive, declaratory or other equitable relief or the business of
such Indemnified Party would be materially adversely affected in any manner.
(c) So long as LIFT is reasonably contesting any such claim in
good faith, the applicable Indemnified Party shall fully cooperate with LIFT in
the defense of such claim as is reasonably required by LIFT. Such cooperation
shall include the retention and the provision of records and information which
are reasonably relevant to such Third Party Claim and making directors, officers
and employees available on a mutually convenient basis to provide additional
information. Neither the Servicer nor any Indemnified Party shall settle or
compromise any claim without the written consent of LIFT unless the Servicer or
the applicable Indemnified Party agrees in writing to forego any and all claims
for indemnification from LIFT with respect to such claims.
(d) If LIFT, within 5 days after notice of any such claim,
does not agree to defend such Third Party Claim as directed by the applicable
Indemnified Party, such Indemnified Party will have the right to undertake the
defense, compromise or settlement of such Third Party Claim.
SECTION 11.03. REIMBURSEMENT OF COSTS. The costs and expenses,
including fees and disbursements of counsel (except as provided in clause (i) of
the proviso to the first sentence of Section 11.02(b)) and expenses of
investigation, incurred by any Indemnified Party in connection with any Third
Party Claim, shall be reimbursed on a quarterly basis by LIFT upon the
submission of evidence reasonably satisfactory to LIFT that such expenses have
been incurred, without prejudice to LIFT's right to contest the Indemnified
Party's right to indemnification and subject to refund in the event that LIFT is
ultimately held not to be obligated to indemnify the Indemnified Party.
SECTION 11.04. WAIVER OF CERTAIN CLAIMS; SPECIAL INDEMNITY.
LIFT does hereby (a) assume liability for and agree to indemnify and hold
harmless on an After-Tax-Basis, in accordance with the provisions of this
Article XI, each of the Indemnified Parties from any and all Losses that may be
imposed on, incurred by or asserted against any Indemnified Party directly or
indirectly arising out of, in connection with or related to any claims of
shareholders or creditors of any Person within the LIFT Group and any claims
("SHADOW
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SERVICING AGREEMENT
DIRECTOR/RELATED COMPANY CLAIMS") that may be made by or on behalf of any Person
against any Indemnified Party which are based on any Indemnified Party being a
shadow director of, or a related company to, any Person within the LIFT Group
under applicable Irish law or any similar concept under any other Applicable
Law; (b) waive, and shall cause each other Person within the LIFT Group to
waive, any and all Shadow Director/Related Company Claims that may be made by or
on behalf of any Person within the LIFT Group against any Indemnified Party, (c)
agree not to xxx, and to cause each other Person within the LIFT Group not to
xxx, upon any such Shadow Director/Related Company Claims, and (d) agree that
any amounts awarded to or received by any Person within the LIFT Group arising
out of or related to any such Shadow Director/Related Company Claims (whether
such claims were made by or on behalf of any Person within the LIFT Group or by
a third party (including any liquidator)) shall be paid over to the applicable
Indemnified Party.
SECTION 11.05. WAIVER OF CERTAIN ACCOUNTING CLAIMS; SPECIAL
INDEMNITY. LIFT does hereby (a) assume liability for and agree to indemnify and
hold harmless on an After-Tax-Basis, in accordance with this Article XI, each of
the Indemnified Parties from any and all Losses that may be imposed on, incurred
by or asserted against any Indemnified Party directly or indirectly arising out
of, in connection with or related to any claims of shareholders or creditors of
any Person within the LIFT Group or of any other Person arising out of, in
connection with or related to, the compliance by LIFT or any other Person within
the LIFT Group of their respective obligations, including any of their
respective reporting obligations ("COMPLIANCE OBLIGATIONS") to any holders of
outstanding Notes or Beneficial Interest Certificates, any holders of any other
securities issued by any Person within the LIFT Group or any Governmental
Authorities and for all instructions, discretion, judgments and assumptions
related to such Compliance Obligations (collectively "ACCOUNTING CLAIMS");
PROVIDED, HOWEVER, that such indemnity shall not apply to the extent that such
Losses are finally adjudicated to have been directly caused by the willful
misconduct or gross negligence of the Servicer in respect of its obligation to
apply the Standard of Care in respect of its performance of such Services, (b)
waive, and shall cause each other Person within the LIFT Group to waive, any and
all Accounting Claims that may be made by or on behalf of LIFT or any other
Person within the LIFT Group against any Indemnified Party and (c) agree not to
xxx, and to
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SERVICING AGREEMENT
cause each other Person within the LIFT Group not to xxx, upon any such
Accounting Claim.
SECTION 11.06. CONTINUING LIABILITY UNDER OTHER AGREEMENTS.
The Servicer understands, acknowledges and agrees that the intent of the parties
hereunder is that any limitation on the liability of the Servicer under this
Agreement, whether under this Article XI, Article III or otherwise, is not
intended to and shall not be construed to limit the liability of any Person
selling any Aircraft Assets under the Asset Purchase Agreement or the liability
of GE Capital to the initial purchasers under the Purchase Agreement and that
any such liability under either such agreement shall not give rise to any claim
for indemnification in favor of the Servicer or any of its Affiliates under this
Agreement.
ARTICLE XII
ASSIGNMENT AND DELEGATION
SECTION 12.01. ASSIGNMENT AND DELEGATION. (a) No party to this
Agreement shall assign or delegate this Agreement or all or any part of its
rights or obligations hereunder to any Person without the prior written consent
of all other parties; PROVIDED, HOWEVER, that (i) the Servicer may delegate any
portion of but not all its obligations to GE or GE Capital or to any GE or GE
Capital 75% or more owned Subsidiary (a "SERVICER DELEGATE");(ii) the foregoing
provisions on assignment and delegation shall not limit the ability of the
Servicer to contract with any Person, including any of its Affiliates, for
services in respect of Aircraft Assets; and (iii) LIFT may assign its rights
hereunder to the Security Trustee under the Security Trust Agreement and,
without in any way releasing LIFT from any of its duties or obligations
hereunder, the Servicer consents to such assignment, it being understood that
neither LIFT's assignment nor the Servicer's consent to such assignment will
affect the Servicer's rights and obligations hereunder, subject the Servicer to
any liability to which it would not otherwise be subject to hereunder nor modify
in any respect the contract rights of the Servicer hereunder. Any assignment or
delegation pursuant to this Section 12.01(a) shall not require any approval
pursuant to Section 7.04.
(b) Without limiting the foregoing, any Person who shall
become a successor by assignment or otherwise
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SERVICING AGREEMENT
of LIFT or the Servicer (or any of their respective successors) in accordance
with this Section 12.01 shall be required as a condition to the effectiveness of
any such assignment or other arrangement to become a party to this Agreement;
PROVIDED, HOWEVER, that the Security Trustee shall not be required to become a
party to this Agreement solely by reason of the execution and delivery of the
Security Trust Agreement.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. DOCUMENTARY CONVENTIONS. The Documentary
Conventions shall govern this Agreement.
SECTION 13.02. POWER OF ATTORNEY. LIFT shall and shall cause
each other Person within the LIFT Group, to appoint the Servicer and its
successors, and its permitted designees and assigns, as their true and lawful
attorney-in- fact pursuant to the form of Power of Attorney attached as Schedule
13.02 to this Agreement (with such modifications as are necessary under the laws
of the jurisdictions in which such Persons are organized). All services to be
performed and actions to be taken by the Servicer pursuant to this Agreement
shall be performed for and on behalf of LIFT. The Servicer shall be entitled to
seek and obtain from LIFT (and/or any other Person within the LIFT Group as
appropriate) a power of attorney in respect of the execution of any specific
action as the Servicer deems appropriate.
SECTION 13.03. RELIANCE. The Servicer shall be entitled to
rely on the provisions of this Agreement, including Schedule 2.02(a), any
Approved Budget, any direction of, or certification by, LIFT or its Controlling
Trustees (or any duly appointed committee thereof) or the Administrative Agent,
to the extent set forth in Section 2.02(c), and the Transaction Approval
Requirements in carrying out its obligations hereunder, and LIFT hereby waives
any rights to challenge any action taken by the Servicer that is consistent with
the provisions of this Agreement (including the Standard of Care and the
Conflicts Standard), including Schedule 2.02(a), any Approved Budget, any such
direction or certification or the Transaction Approval Requirements or which has
been approved by the Controlling Trustees of LIFT or a duly appointed committee
thereof, or the Administrative Agent.
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SERVICING AGREEMENT
SECTION 13.04. CERTAIN INFORMATION. The parties hereto agree
(a) not to provide to each other competitively sensitive information, other than
information required to be provided by GECAS or LIFT, as the case may be, under
contractual arrangements existing on the date hereof (or successor arrangements
thereto), (b) that any party receiving such information shall take such action
as shall be necessary to maintain the confidentiality thereof and (c) to
establish appropriate procedures and protocols to ensure compliance with the
agreements in clauses (a) and (b). Similarly, LIFT's board of Controlling
Trustees shall agree (x) not to provide competitively sensitive information
which it may receive from GECAS pursuant to this Agreement to any third party
and (y) not to use any such competitively sensitive information for any purpose
other than its duties and responsibilities as a Controlling Trustee of LIFT. In
addition, to the extent that any Controlling Trustee of LIFT is involved in any
other business activities that are competitive with GECAS, such Controlling
Trustee must be screened from receipt of competitively sensitive information
that may be requested by any other Controlling Trustee of LIFT beyond that
information which is normally provided to the board of Controlling Trustees
pursuant to this Agreement. Any such Controlling Trustee must also undertake in
writing not to provide competitively sensitive information which it may receive
pursuant to this Agreement to any third party and not to use any such
competitively sensitive information for any purpose other than its duties and
responsibilities as a Controlling Trustee of LIFT. LIFT agrees that it will
cause the terms of this Section 13.04 to be included in any other servicing
agreement entered into by any Person within the LIFT Group with any other entity
pursuant to which such entity will provide services with respect to any aircraft
on behalf of any Person within the LIFT Group, and, in connection therewith, the
relevant Controlling Trustees shall provide to the servicer under such other
servicing agreement written undertakings substantially similar to those provided
to the Servicer as contemplated by the immediately preceding sentence.
SECTION 13.05. ORIGINAL AIRCRAFT. In the event that in the
Servicer's reasonable judgment the application of the terms of any provision
hereunder in respect of any Aircraft Asset would not be appropriate prior to the
title to such Aircraft Asset being transferred to a Person within the LIFT
Group, then the Servicer shall take such action in respect of such
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SERVICING AGREEMENT
Aircraft Asset as is commercially reasonable or appropriate in such context or
circumstances. The Servicer shall make a good faith effort to consult with LIFT
prior to taking any action in reliance upon this Section 13.05, taking into
account timing and other relevant considerations; PROVIDED, HOWEVER, that any
failure to so consult with LIFT will not constitute a default under or violation
of this Agreement.
SECTION 13.06. AMENDMENTS INVOLVING LEVERAGED LEASE
TRANSACTIONS. The terms and provisions of this Agreement have been substantially
drafted on the assumption that the Aircraft Assets to be serviced by the
Servicer hereunder on behalf of LIFT Group will be owned by Persons
within the LIFT Group. In the event that any Person within the LIFT Group enters
into a Leveraged Lease Transaction (as defined in the Indenture), the Servicer
shall continue to service the Aircraft Assets subject to the Leveraged Lease
Transaction in accordance with this Agreement. In connection therewith, LIFT and
the Servicer agree to negotiate in good faith appropriate amendments or
modifications to this Agreement to the extent necessary.
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SERVICING AGREEMENT
IN WITNESS WHEREOF, this Agreement has been duly executed on
the date first written above.
GE CAPITAL AVIATION SERVICES,
LIMITED,
by
----------------------------------
Name:
Title:
LEASE INVESTMENT FLIGHT TRUST,
by
----------------------------------
Name:
Title:
SCHEDULE 2.02(a) TO
SERVICING AGREEMENT
AIRCRAFT ASSETS SERVICES
The provision of the Services set forth in this Schedule
2.02(a) will be subject in all cases to such approval as may be required or such
limitations as may be imposed pursuant to Section 7.04(a) of the Servicing
Agreement and the provisions of this Schedule 2.02(a) shall be deemed to be so
qualified.
Unless otherwise defined herein, all capitalized terms used in
this Schedule 2.02(a) have the meanings assigned to such terms in Appendix A to
the Servicing Agreement or, in the case of certain defined terms used in Annex 1
or 2 to the Servicing Agreement or Schedule 2.02(a)(i) to the Servicing
Agreement, in the copy of the Indenture delivered to the Servicer pursuant to
Section 2.1. LIFT shall provide to the Servicer any instructions the Servicer
may require in the interpretation of Annexes 1 and 2 to the Servicing Agreement
on which instructions the Servicer shall be entitled to rely in all respects.
SECTION 1. LEASE SERVICES.
SECTION 1.1. COLLECTIONS AND DISBURSEMENTS. In connection with
each Lease of an Aircraft Asset (other than any Original Aircraft in the case of
clause (a) below) under which any Person within the LIFT Group is the lessor,
the Servicer will:
(a) invoice the Lessee or otherwise arrange, as the Servicer
deems reasonably appropriate, on behalf of such Person within the LIFT Group,
for all payments due from the Lessee, including Rents, Deposits, Maintenance
Reserves, late payment charges and any payments in respect of Taxes and other
payments (including technical, engineering, insurance and other recharges) due
under the relevant Lease, use reasonable commercial efforts to direct the
Lessee, subject to the terms of the Lease, to make such payments to such account
designated as the "Rental Account" in Schedule 4.03 to the Servicing Agreement
(the relevant details of such Rental Account being set forth in such Schedule)
or to such other accounts as specified in writing by the Administrative Agent
and use reasonable commercial efforts to enforce the payment thereof in the
event of a nonpayment by the relevant due date;
2
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
(b) review from time to time, as deemed necessary by the
Servicer, the level of Rents, Deposits, Maintenance Reserves and other amounts
that may be adjusted under the Lease and shall propose to the relevant Lessee
and/or make such adjustments to the Rents, Deposits, Maintenance Reserves and
other amounts as are required or that the Servicer otherwise deems reasonably
appropriate considering, among other things, the terms of the relevant Lease and
practices that the Servicer believes are prevalent in the operating lease
market;
(c) subject to the timely receipt by the Servicer of the
information related to the receipt of all payments made pursuant to any Lease
into any Bank Account, maintain appropriate records regarding payments under the
Leases;
(d) subject to the terms of any applicable Aircraft Assets
Related Document, take such commercially reasonable actions as are necessary to
apply any payments of any type received from any Lessee on a basis consistent
with the directions of such Lessee and, to the extent that any such payments are
made to an account other than the account to which such payment should have been
directed pursuant to such Lessee's direction, to take such further commercially
reasonable actions as are necessary to give effect to such directions; PROVIDED,
HOWEVER, that, in the event a Lessee is in default under a Lease or a Lessee is
subject to a voluntary or involuntary bankruptcy, liquidation, receivership or
other similar proceeding, the Servicer will consult with the Administrative
Agent prior to applying any funds received from such Lessee to the extent that
such funds could reasonably be applied to leases relating to both Aircraft
Assets and Other Assets; and
(e) provide for the safekeeping and recording of any letters
of credit, guarantees or other credit support (other than cash and cash
equivalents) held as part of Deposits or Maintenance Reserves and the timely
renewal or drawing on or disbursement thereof as provided under the applicable
Lease or other Aircraft Assets Related Document or otherwise in accordance with
Section 1.5 of this Schedule 2.02(a).
SECTION 1.2. MAINTENANCE. Subject to the availability of
adequate funding to comply with the obligations under this Schedule 2.02(a) and
the Servicing Agreement, the Servicer will perform the following
3
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
technical services relating to the maintenance of the Aircraft Assets:
(a) monitor the performance of maintenance obligations by
Lessees under all Leases relating to the Aircraft Assets by including
the Aircraft Assets in the Servicer's technical audit program (which
shall include inspection of each Aircraft Asset and maintenance of a
record of all written reports generated in connection with such
inspections) consistent with practices employed from time to time by GE
Capital and its Affiliates with respect to their own Aircraft; the
Servicer shall advise LIFT as to the content of such technical audit
program and shall advise LIFT as to any material change to such
technical audit program from time to time;
(b) determine the air authority approval status of a proposed
maintenance program and proposed maintenance performer under any new
Lease of any Aircraft Assets under which any Person within the LIFT
Group is, or following the Delivery of the related Aircraft Asset will
be, the lessor;
(c) in connection with a termination or expiration of a Lease
under which any Person within the LIFT Group is, or following the
Delivery of the related Aircraft Asset will be, the lessor:
(i) arrange for the appropriate technical inspection
of the Aircraft Asset for the purpose of determining if the
re-delivery conditions under the Lease have been satisfied;
(ii) maintain a record of all material reports and
other written materials (including any relevant reconciliation
statements) received or generated by the Servicer in
connection with such inspection and provide reasonable access
to such reports and written materials to the relevant Persons
within the LIFT Group;
(iii) on the basis of the final inspection and
available records, determine whether the Lessee has complied
with all required airworthiness directives and mandatory
modifications, and establish the status of compliance with
Airframe and Engine manufacturer service bulletins and
Lessee-originated modifications undertaken, in each case with
4
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
respect to the Aircraft Asset and as required by the Lease;
(iv) (A) determine whether the Lessee has satisfied
the re-delivery conditions applicable to the Aircraft Asset
specified in the Lease and negotiate any modifications,
repairs, refurbishments, inspections or overhauls to or
compromises of such conditions that the Servicer deems
reasonably necessary or appropriate, (B) determine the
application of any available Deposits, Maintenance Reserves or
other payments under the Lease and (C) maintain a record of
the satisfaction of such conditions and accept re-delivery of
the Aircraft Asset; and
(v) determine the need for, procure and monitor the
performance of any maintenance and refurbishment of the
Aircraft Asset upon re-delivery, including compliance with
applicable airworthiness directives, service bulletins and
other modifications which the Servicer may deem reasonably
necessary or appropriate for the marketing of the Aircraft
Asset;
(d) consider and, to the extent the Servicer deems reasonably
necessary or appropriate, approve any Lessee-originated modifications
to any Aircraft Asset submitted by any Lessee:
(i) to the extent authorized by the terms of
the relevant Lease; or
(ii) which the Servicer reasonably determines would
not result in a material diminution in value of the Aircraft
Asset or the interests of any Person within the LIFT Group; or
(iii) which are approved by LIFT;
(e) determine the amount (if any) that the relevant Person
within the LIFT Group (or, with respect to any Original Aircraft, the
owner) is obliged to contribute pursuant to the provisions of a Lease
(taking into account the amount of Maintenance Reserves available with
respect to such Lease and the receivables position of the related
Lessee) to the cost of complying with any
5
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
modification requirements, airworthiness directives and similar
requirements; and
(f) arrange and supervise appropriate storage and any required
on-going maintenance of any Aircraft Asset, at the expense of the
relevant Person within the LIFT Group, following termination of a Lease
for any reason and re-delivery of the Aircraft Asset thereunder and
prior to delivery of such Aircraft Asset to a new lessee or purchaser,
on the most economic basis reasonably available and appropriate under
the circumstances.
The Servicer shall generally provide the technical/maintenance
services set forth in this Section 1.2 through the use of its own staff where it
shall deem appropriate and shall utilize third parties to provide such
technical/maintenance services where it shall deem appropriate.
SECTION 1.3. INSURANCE.
(a) The Servicer will provide the following
insurance services:
(i) negotiate the insurance provisions of any proposed lease
or other agreement affecting any of the Aircraft Assets, with such
provisions to include such minimum coverage amounts with respect to
hull and liability insurance as are set forth on Annex 1 to the
Servicing Agreement, as the same may be amended from time to time at
the direction of LIFT; PROVIDED, HOWEVER, that, if an agreement with
respect to hull or liability insurance, if any, cannot be reached with
any particular Lessee pursuant to which such Lessee will procure and
pay the premiums for such insurance in amounts consistent with the
foregoing, the Servicer shall arrange for any shortfall in the required
amount of insurance to be covered, at the expense of LIFT, pursuant to
arrangements entered into pursuant to clauses (iii) and (v) of this
Section 1.3(a);
(ii) monitor the performance of the obligations of Lessees
relating to insurance under Leases of any Aircraft Assets and, where
practicable, ensuring that appropriate evidence of insurance exists
with respect to any Aircraft Assets maintenance providers;
6
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
(iii) source and arrange a group aviation insurance program
covering the Aircraft Assets (it being understood that any savings
resulting from a group policy covering both Aircraft Assets and Other
Assets shall be shared equitably based on the amount of insurance
obtained and premium paid thereunder with respect to the covered
Aircraft Assets, on the one hand, and the Other Assets, on the other
hand), with such minimum coverage amounts with respect to hull and
liability insurance as are set forth on Annex 1 to the Servicing
Agreement, as the same may be amended from time to time at the
direction of LIFT;
(iv) procure such repossession insurance for Aircraft Assets
registered in those countries listed on Annex 1 to the Servicing
Agreement (which list has been established by LIFT and may be modified
from time to time by LIFT) and with such minimum coverage amounts with
respect to hull insurance as are set forth on Annex 1 to the Servicing
Agreement, as the same may be amended from time to time at the
direction of LIFT; PROVIDED, HOWEVER, that, if an agreement with
respect to repossession insurance, if any, cannot be reached with any
particular Lessee pursuant to which such Lessee will pay the premiums
for such insurance in amounts consistent with the foregoing, the
Servicer shall pay any premiums to the extent unpaid by the Lessee, at
the expense of LIFT;
(v) if at any time any Aircraft Asset ceases to be insured or
any Person within the LIFT Group requires insurance coverage relating
to an Aircraft Asset for any reason, including default by the Lessee or
an Aircraft Asset not being leased upon termination of a Lease, the
Servicer will procure, at the expense of the relevant Person within the
LIFT Group, alternative insurance coverage, with such minimum coverage
amounts with respect to hull and liability insurance as are set forth
on Annex 1 to the Servicing Agreement, as the same may be amended from
time to time at the direction of LIFT; and
(vi) advise LIFT of any settlement offers received by the
Servicer with respect to any claim of damage or loss in excess of
$10,000,000 with respect to an Aircraft Asset, and, upon request by
LIFT, provide LIFT with copies of all relevant
7
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
documentation related thereto and such other additional information and
advice as LIFT may reasonably request and, upon direction from LIFT
that any such settlement offer related thereto is acceptable, prepare
the appropriate documentation, including releases and any indemnities
required in connection with such releases, to give effect to such
settlement offer and procure the execution of such documentation by
LIFT (it being understood that settlement offers with respect to any
such claims up to and including $10,000,000 may be settled by the
Servicer independently);
PROVIDED, HOWEVER, that, in each case where insurance is to be obtained by the
Servicer, such insurance is reasonably available in the relevant insurance
market and the Servicer shall have used reasonable sourcing techniques prior to
obtaining such insurance. The foregoing provisions shall apply, MUTATIS
MUTANDIS, to any arrangements in which Persons other than Lessees have
possession of, or insurance responsibility for, an Aircraft Asset (including in
the event that an Aircraft Asset has been sold pursuant to a mortgage, deferred
payment agreement or any similar arrangement).
(b) The Servicer may engage, on behalf of, and for the benefit
and at the expense of, any Person within the LIFT Group, one or more Advisers
and Brokers, each of whom:
(i) may also act in the same or similar capacities
for the Servicer and its Affiliates;
(ii) shall take directions from the Servicer (as
authorized by the Servicing Agreement) in respect of
the Aircraft Assets; and
(iii) may act on behalf of any Person within the LIFT Group in
respect of any of their other insurance requirements, if requested to
do so by any such Person within the LIFT Group.
The Servicer shall be entitled to rely reasonably on the actions taken by or
recommendations of any such Adviser and Broker, subject to the terms of the
relevant Lease. The Servicer will obtain such advice from the relevant Adviser
or Broker or both, as it deems appropriate, as to the reasonableness of any
insurance arrangements proposed by a Lessee, and as to the levels and types of
insurance to be provided by a Lessee or to be arranged by the
8
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
Servicer, for any of the Aircraft Assets. Except to the extent the Servicer can
effect more cost efficient coverage under fleet or group policies, the Servicer
will use reasonable commercial efforts to maintain separate and distinct
customer relationships with such Advisers or Brokers when acting on behalf of
any Person within the LIFT Group, on the one hand, and when acting on its own
behalf or on behalf of other Persons not within the LIFT Group whose Aircraft
Assets it manages, on the other hand. Any such insurance obtained by the
Servicer shall include as the named insured thereunder, such Persons as are
required to be designated as named insureds pursuant to paragraph 6 of Annex 1
to the Servicing Agreement.
(c) The Servicer shall provide to LIFT such periodic reports
regarding insurance matters relating to the Aircraft Assets as LIFT may
reasonably request.
SECTION 1.4. ADMINISTRATION. The Servicer shall administer
each Lease in accordance with its terms and as otherwise specifically addressed
herein.
SECTION 1.5. ENFORCEMENT. The Servicer shall take commercially
reasonable steps to enforce the obligations to the relevant Person within the
LIFT Group (or, with respect to any Original Aircraft, the owner) of the Lessee
and any other parties under each Lease and under any ancillary agreements
thereto delivered by LIFT to the Servicer (including any guarantees of the
obligations of the Lessee). Following any default by a Lessee under the
applicable Lease, the Servicer will take all such commercially reasonable steps
as it deems reasonably necessary or appropriate to preserve and enforce the
rights of the relevant Person within the LIFT Group (or, with respect to any
Original Aircraft, the owner) under the applicable Lease, including entering
into negotiations with such Lessee with respect to the restructuring of such
Lease or declaration of an event of default under the applicable Lease, drawing
on or making disbursement of any Deposits, Maintenance Reserves or any letters
of credit, guarantees or other credit support thereunder, voluntary or
involuntary termination of the Lease and repossession of the Aircraft Asset that
is the subject of the Lease, and pursuing such legal action with respect thereto
as the Servicer deems reasonably necessary or appropriate.
SECTION 1.6. LEASE MODIFICATIONS. (a) The Servicer shall be
authorized to make such amendments and modifications to any Lease as it shall
deem reasonably
9
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
necessary or appropriate; PROVIDED, HOWEVER, that such amendment or modification
shall require the approval of LIFT pursuant to Section 7.04(a) of the Servicing
Agreement if the provisions of such amendment or modification, were they to be
included in a new Lease to be entered into after the date hereof, would, on
their own, cause the entering into of such new Lease to require the approval of
LIFT pursuant to Section 7.04(a)(ii) of the Servicing Agreement. Such amendments
or modifications may be made without regard to whether there is a default by the
Lessee or other party under or with respect to any such Lease.
(b) The Servicer may waive, in its absolute discretion,
overdue interest due from any Lessee under any Lease on any default in payment
of rent, maintenance reserves or other amount thereunder if any such default is
cured within seven (7) days of the date on which such payment was due.
SECTION 1.7. OPTIONS AND OTHER RIGHTS. The Servicer shall be
authorized to take such action as it shall deem reasonably necessary or
appropriate with respect to:
(a) the exercise by any Lessee or other party of any option or
right affecting the applicable Aircraft Asset or the applicable Lease,
consistent with the terms of any such option or right; and
(b) the exercise on behalf of any Person within the LIFT Group
(or, with respect to any Original Aircraft, the owner) of any right or option
that such Person (or such owner) may have with respect to any of the Aircraft
Assets or the Leases.
SECTION 2. COMPLIANCE WITH COVENANTS; SECURITY
INTERESTS.
SECTION 2.1. COMPLIANCE GENERALLY. (a) Subject to the
availability to the Servicer of adequate funding to comply with its obligations
under this Schedule 2.02(a) and the Servicing Agreement, the Servicer shall take
such commercially reasonable actions as it shall deem reasonably necessary or
appropriate to keep LIFT in compliance with its obligations and covenants under
the Indenture solely to the extent that such obligations and covenants
specifically relate to the Services, excluding, in any case, (i) any reporting
obligations in respect of any of the foregoing and
10
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
(ii) any rental or other payment or monetary obligations under the Indenture;
PROVIDED, HOWEVER, that the foregoing shall only apply to (A) any Indenture
covenants that are set forth (or, in certain cases, appear as extracts) on
Schedule 2.02(a)(i) to the Servicing Agreement, to the extent that each
provision set forth (or extracted) on such Schedule includes the relevant
section references for each such provision from the Indenture, and which
(together with the definitions for any capitalized terms used therein) are set
forth in full in a copy of the Indenture delivered by LIFT to the Servicer,
certified by LIFT as a true and complete copy thereof (and LIFT shall promptly
provide the Servicer with all amendments, supplements and waivers thereto, so
certified), and LIFT shall provide to the Servicer any instructions the Servicer
may require in the interpretation of the Indenture, on which instructions the
Servicer shall be entitled to rely in all respects and (B) such Indenture
covenants (excluding, in any case, any such covenants relating to the
limitations on Lessee concentrations, which are treated in Section 2.2 of this
Schedule 2.02(a)) first coming into effect (including through amendments or
modifications) after the date of the Servicing Agreement, or which LIFT shall
from time to time notify the Servicer in writing, in reasonably specific detail.
(b) Nothing in this Schedule 2.02(a) or elsewhere in the
Servicing Agreement shall be deemed to constitute or be construed as (i) a
delegation or other transfer to, or an assumption by, the Servicer or any of its
Affiliates of any obligations of any Person within the LIFT Group (or, with
respect to any Original Aircraft, the owner) to make any payment to any Lessee
or other Person, or to comply with any other monetary obligation, under any
Lease or (ii) a transfer to the Servicer or any of its Affiliates of any right,
title or interest in any Lease or related agreement or any Aircraft Asset
covered thereby.
SECTION 2.2. CERTAIN MATTERS RELATING TO CONCENTRATION
THRESHOLDS.
(a) CONCENTRATION THRESHOLDS GENERALLY. The Servicer shall use
reasonable commercial efforts to comply with any covenants specifically relating
to limitations on Lessee concentration set forth in the Indenture
("CONCENTRATION LIMITS") and shall promptly inform LIFT of any proposed
transaction that it reasonably determines may result in such Concentration
11
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
Limits being exceeded, and LIFT shall promptly provide to the Servicer any
information that the Servicer may reasonably require in connection with such
Concentration Limits in order to comply with the provisions of this Section 2.2.
The Servicer shall not enter into any such transaction other than pursuant to
the terms of Section 2.2(c) below.
(b) PRESENT CONCENTRATION LIMITS. LIFT hereby represents and
warrants to the Servicer that set forth in Annex 2 to the Servicing Agreement
are the Concentration Limits (including, following each provision set forth in
such Annex, the relevant section references for each such provision from the
Indenture) presently imposed under the Indenture, which Concentration Limits
(together with the definitions for any capitalized terms used therein) are set
forth in a full copy of the Indenture delivered by LIFT to the Servicer,
certified by LIFT as a true and complete copy thereof (and LIFT shall promptly
provide the Servicer with all amendments, supplements and waivers thereto, so
certified) and LIFT shall provide to the Servicer any instructions the Servicer
may require in the interpretation of such Concentration Limits, on which
instructions the Servicer shall be entitled to rely in all respects.
(c) DIRECTIONS TO SERVICER. The Servicer shall not enter into
any transaction with respect to which it has provided notice pursuant to Section
2.2(a) until LIFT has provided a written certification to the Servicer to the
effect that such transaction will not result in any violation of the
Concentration Limits and the Servicer shall be entitled to rely upon such
certification for all purposes of the Servicing Agreement and this Schedule
2.02(a).
SECTION 2.3. SECURITY INTERESTS. In connection with the
obligation of any Person within the LIFT Group under the Security Trust
Agreement to perfect any security interest granted by it in its right, title and
interest in and to any Assigned Lease, the Servicer's sole responsibility in
respect thereof shall be to take the following actions with respect to each
Assigned Lease: (a) seek advice from local counsel in the jurisdiction where the
related Aircraft Asset is registered as to what actions would be customarily
taken in such jurisdiction to perfect the security interest created in such
Assigned Lease pursuant to the Security Trust Agreement and to use commercially
reasonable efforts to implement such advice, (b) (1) create an
12
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
original chattel paper copy of such Assigned Lease by adding the following
language to the cover of such Assigned Lease: "To the extent, if any, that this
[Lease Agreement] or any [Lease Supplement] hereunder constitutes chattel paper
(as such term is defined in the Uniform Commercial Code as in effect in any
applicable jurisdiction), no security interest in this [Lease Agreement] or such
[Lease Supplement] may be created through the transfer or possession of any
counterpart other than the original executed counterpart, which shall be
identified as the counterpart containing the receipt therefor executed by the
Security Trustee under and as defined in the Security Trust Agreement dated as
of June 26, 2001, between LIFT, LIFT Trust-Sub 1, Bankers Trust Company, as
Security Trustee, and the various other parties identified on the signature
pages thereof", and (2) no later than five days after the execution of such
Assigned Lease by all the parties thereto, deliver such original chattel paper
copy (which, by way of clarification, shall not include the signature or the
receipt therefor of the Security Trustee) to a courier service for delivery to
the Security Trustee at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust and Agency Services, Structure Finance Team, (c) notify the
Lessee in writing of the security assignment of such Assigned Lease to the
Security Trustee pursuant to the Security Trust Agreement (which notice may be
contained in such Assigned Lease), (d) obtain from the Lessee a written
acknowledgment addressed to, or for the benefit of, the Security Trustee (1)
acknowledging receipt of notification of such security assignment and (2)
containing the agreement of the Lessee to continue to make all payments required
to be made to the lessor under such Assigned Lease to the account specified in
such Assigned Lease unless and until the Security Trustee otherwise directs (it
being understood that the account specified in such Assigned Lease will be the
account specified by the Administrative Agent to the Servicer as contemplated by
Section 1.1(a) of this Schedule 2.02(a)) and (e) take such other action as LIFT
shall have reasonably requested and described in reasonable detail in a written
notice to the Servicer. Notwithstanding the foregoing, the Servicer shall have
no obligation to take any action specified in the prior sentence of this Section
2.3 with respect to any Assigned Lease or any supplement or amendment thereto
that was executed before the related Aircraft became an Aircraft Asset (it being
the expectation of the parties hereto that such action will be taken by the
seller of any Aircraft Asset related to such Assigned Lease to any Person within
the LIFT
13
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
Group). In connection with any Assigned Lease, LIFT will cooperate with
the Servicer in obtaining a letter of quiet enjoyment with respect to such
Assigned Lease referred to in the final sentence of Section 2.08(a) of the
Security Trust Agreement.
SECTION 3. LEASE MARKETING.
(a) The Servicer shall provide and perform lease marketing
services with respect to the Aircraft Assets and in connection therewith is
authorized:
(i) to negotiate and enter into any commitment for a lease of
an Aircraft Asset on behalf of and (through a power of attorney) in the
name of the relevant Person within the LIFT Group (or, with respect to
any Original Aircraft, the owner); and
(ii) to include within any commitment for a Lease of an
Aircraft Asset any intermediate Lease or Leases through any Person
within the LIFT Group that the Servicer deems reasonably necessary or
appropriate.
(b) The Servicer shall commence the negotiation of any
commitment for a Lease or Leases of Aircraft Assets in a manner consistent with
the practices employed by the Servicer with respect to its aircraft operating
leasing services business generally and shall commence the drafting of, and
negotiation with respect to, any Leases for Aircraft Assets on the following
basis:
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
(i) in the case of any proposed Lessee that is not and has not
been a lessee of an aircraft managed or serviced by the Servicer, the
Servicer shall commence the drafting of, and negotiation with respect
to, a Lease for Aircraft Assets based on the form of lease agreement or
agreements then used by the Servicer in connection with its aircraft
operating leasing services business generally (as such form of lease
shall be amended from time to time by the Servicer, the "PRO FORMA
LEASE"); and
(ii) in the case of any proposed Lessee that is or was a
lessee of an aircraft managed or serviced by the Servicer, the Servicer
may commence the drafting of, and negotiation with respect to, a Lease
for Aircraft Assets based on a form of lease substantially similar to
the lease previously used with respect to such Lessee (the "PRECEDENT
LEASE").
14
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
Provided that the Servicer commences the negotiation of a
Lease of any Aircraft Asset in accordance with clauses (b)(i) and (b)(ii) above,
the terms of any executed Lease may vary from the terms of the Pro Forma Lease
or the Precedent Lease employed by the Servicer in accordance with such clauses.
Section 3(b) shall not be applicable to the negotiation with respect to, or
execution of, any Lease for Aircraft Assets in which negotiations commenced on
or prior to the Closing Date. The Servicer is authorized to execute and deliver
binding leases and related agreements on behalf of the relevant Person within
the LIFT Group (or, with respect to any Original Aircraft, the owner) based on
the foregoing procedures.
(c) (i) Upon ten Business Days' prior written notice from LIFT
(x) requesting a copy of the then current Pro Forma Lease and (y)
specifying that such Pro Forma Lease is to be used for purposes of the
annual review required pursuant to the terms of Section 5.03(f) of the
Indenture (the "ANNUAL REVIEW"), the Servicer shall provide LIFT with a
copy of its then current Pro Forma Lease, together with a copy thereof
marked (with such marking to be accomplished only if, and to the
extent, possible with the then current word processing software
employed by the Servicer and, for the avoidance of doubt, not manually)
to reflect changes from the version of the Pro Forma Lease that was
produced by the Servicer following the immediately preceding Annual
Review to give effect to the terms of Section 3(c)(ii) below (or from
the Pro Forma Lease utilized as of the Closing Date (a copy of which
shall have been delivered to LIFT on or before the Closing Date) in the
case of the first such Annual Review).
(ii) On or prior to each anniversary of the Closing Date and
following the Annual Review, LIFT shall advise the Servicer in writing
whether any provisions in the then current Pro Forma Lease that
correspond to the Core Lease Provisions are required in accordance with
the terms of Section 5.03(f) of the Indenture to be deleted from such
Pro Forma Lease and replaced with the provision corresponding thereto
in the most recent Pro Forma Lease in which such provision was
determined to be acceptable in accordance with the terms of Section
5.03(f) of the Indenture. Following any such written advice from LIFT,
the Servicer shall amend the Pro Forma Lease
15
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
accordingly and shall commence the negotiation of any Lease thereafter
with the Pro Forma Lease as so amended in respect of any such
provision.
(d) The Servicer shall take such reasonable commercial actions
as shall be reasonably necessary or appropriate to deliver any Aircraft Asset
pursuant to the terms of the documentation of the Lease or Leases of such
Aircraft Asset, including upon an extension of such Leases.
(e) The Servicer shall generally provide the marketing
services set forth in this Section 3 through the use of its own marketing staff
where it shall deem appropriate and shall utilize third parties to provide such
marketing services where it shall deem appropriate.
SECTION 4. SALES OF AIRCRAFT AND ENGINES.
(a) The Servicer shall provide and perform sales services with
respect to the Aircraft Assets at, and on a basis consistent with, the direction
from time to time of LIFT, and, in connection therewith, is authorized:
(i) to enter into any commitment for a sale of an Aircraft
Asset on behalf and (through a power of attorney) in the name of the
relevant Person within the LIFT Group; and
(ii) to include within any sale any intermediate Lease or
Leases through any Person within the LIFT Group that the Servicer deems
reasonably necessary or appropriate; PROVIDED, HOWEVER, that, except as
otherwise required in accordance with the terms of a Lease, the
Servicer shall not enter into any sale of any Aircraft Asset or
agreement to sell any Aircraft Assets without obtaining the approval of
LIFT pursuant to Section 7.04(a) of the Servicing Agreement.
(b) The Servicer shall negotiate documentation of any sale
and, subject to Section 4(a) of this Schedule 2.02(a), is authorized to execute
and deliver binding agreements on behalf and (through a power of attorney) in
the name of the relevant Person within the LIFT Group.
(c) The Servicer shall take such reasonable commercial actions
as shall be reasonably necessary or
16
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
appropriate to deliver any Aircraft Asset pursuant to the terms of the
documentation of the sale.
(d) In the event that LIFT directs the Servicer to sell or
arrange for the sale of any Aircraft Asset, the Servicer will not be required to
take any such action until LIFT shall provide the Servicer with an Officer's
Certificate, substantially in the form attached as Schedule 2.02(a)(ii) to the
Servicing Agreement, certifying that such sale complies with the terms of the
Indenture and that the Servicer is entitled to rely upon such certification for
all purposes of the Servicing Agreement and this Schedule 2.02(a).
(e) Notwithstanding any other provision in Section 7.04 of the
Servicing Agreement to the contrary, the Servicer shall be permitted to
purchase, sell or exchange any Engine relating to an Aircraft or any part or
components thereof or spare parts or ancillary equipment or devices furnished
with an Aircraft at such times and on such terms and conditions as the Servicer
deems reasonably necessary or appropriate in connection with its performance of
the Services; PROVIDED, HOWEVER, the Servicer shall not be permitted to
purchase, or enter any order to purchase, Engines or spare parts in a quantity
in excess of that quantity then required to enable the Aircraft Assets to be
leased without obtaining the prior written consent of LIFT.
SECTION 5. AIRCRAFT ACQUISITIONS.
SECTION 5.1. LIMITATION ON ACQUISITIONS. LIFT shall not, and
shall not permit any other Person within the LIFT Group to, purchase or
otherwise acquire, directly or indirectly, (x) Aircraft Assets from any Person
other than the Servicer, Automatic or any of their respective Affiliates, or (y)
without the consent of the Servicer, any L1011, A300B4-200, B747-100, -200,
-300, any Stage II aircraft (including, without limitation, hushkitted
versions), any Fokker aircraft or any regional jets, and other than as provided
herein (including, without limitation, with respect to any Engine, in Section
4(e) of Schedule 2.02(a) and, in respect of any Aircraft Assets, pursuant to the
terms of the Asset Purchase Agreement).
SECTION 5.2. FIRM ORDERS AND OPTIONS. With respect to any
Aircraft Assets that LIFT or any other Person within the LIFT Group shall
purchase pursuant to any firm order, order subject to cancelation, option or
other arrangement, the Servicer shall, at the request of LIFT, take such
reasonable commercial actions as the Servicer shall deem reasonably necessary or
appropriate to accept delivery of any such Aircraft Assets on behalf of LIFT or
any other Person within the LIFT Group, as the case may be, in accordance with
the terms of such order, option or
17
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
other arrangement (including, without limitation, conducting such pre-delivery
inspections as the Servicer deems reasonably appropriate); PROVIDED, HOWEVER,
that the Servicer shall have no obligation to make any payments to any seller of
such Aircraft Assets.
SECTION 5.3. OTHER ACQUISITIONS. Except as otherwise provided
in Section 2.03(g) of the Servicing Agreement, the Servicer shall not be
required to assist in the solicitation of, or otherwise take any action to
obtain, any lessee consents and/or novations in connection with the acquisition
of any Aircraft Assets or the issuance of Additional Notes or Additional
Certificates (it being the expectation of the parties hereto that the obtaining
of any lessee consents and/or novations with respect to any Aircraft Asset shall
be the responsibility of the seller of such Aircraft Asset to any Person within
the LIFT Group). The parties hereto acknowledge that Section 2.03 of the
Servicing Agreement deals with, among other things, the Servicer's involvement
in the issuance of Additional Notes and Additional Certificates.
SECTION 6. MARKET RESEARCH.
SECTION 6.1. MARKET RESEARCH. The Servicer shall maintain
research capability and, subject to the requirements of Section 13.05 of the
Servicing Agreement, shall provide commercial aviation general market industry
research reports to LIFT on an annual basis, which reports shall include general
market information with respect to commercial aviation demand in terms of
traffic growth, new Aircraft requirements and other information necessary for
LIFT Group's long-term planning with respect to Leases, purchases and sales, and
the Aircraft Assets; PROVIDED, HOWEVER, that, upon the delivery of any
Termination Notice, the Servicer shall cease to provide competitively sensitive
information to the LIFT Group.
18
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
SECTION 7. AIRCRAFT ASSET CASH SERVICES.
SECTION 7.1. ACCOUNTS AND ACCOUNT INFORMATION.
19
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
(a) EXISTING ACCOUNTS. In the event that the Administrative
Agent desires to modify any of the arrangements relating to any of the bank
accounts set forth on Schedule 4.03 to the Servicing Agreement (the "EXISTING
ACCOUNTS") in accordance with Section 2.04 of the Administrative Agency
Agreement, LIFT shall cause the Administrative Agent to (i) deliver a
certificate to the Servicer specifying in reasonable detail the modifications to
be made with respect to any such Existing Accounts and certifying that any such
modifications are in accordance with the applicable provisions of the Indenture
and the Administrative Agency Agreement and (ii) transmit instructions to the
relevant banking institution to effect such modifications and shall take such
other actions as are incidental thereto in order to give effect to the
foregoing.
(b) NEW ACCOUNTS. The Servicer shall notify the Administrative
Agent in the event that any new bank accounts need to be established on behalf
of any Person within the LIFT Group in connection with the execution of a new
Lease and shall set forth in reasonable detail the (i) identity of the new
Lessee, (ii) Aircraft Assets subject to such Lease and (iii) jurisdiction of the
Lessee and in which such Aircraft Assets are to be registered. Following receipt
of such notice from the Servicer, LIFT shall cause the Administrative Agent
promptly to (i) deliver a certificate to the Servicer specifying (v) the name
and location of the bank at which such account will be established, (w) the
name(s) in which such account will be established, (x) the names of the
beneficiaries of such account, (y) the names of the Persons authorized to make
withdrawals from such account and (z) such other information (including with
respect to any security arrangements) as the Administrative Agent deems
appropriate and certifying that the establishment of such account is in
accordance with the applicable provisions of the Indenture and the
Administrative Agency Agreement and (ii) transmit instructions to the relevant
banking institution to effect the establishment of such account and shall take
such other actions as are incidental thereto in order to give effect to the
foregoing (the "NEW ACCOUNTS"; and, together with the Existing Accounts, the
"BANK ACCOUNTS").
SECTION 7.2. CASH TRANSFERS. (a) In the event that funds are
required to be transferred from any Bank Account to the account of another
Person (other than any Person within the LIFT Group) in order to give effect to
the directions of any Lessee in accordance with
20
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
Section 1.1(d) of this Schedule 2.02(a), the Servicer shall provide the
Administrative Agent with written notice setting forth the (i) name of the
transferor, (ii) name of the transferee, (iii) accounts from and to which funds
are to be transferred, (iv) amounts to be transferred, (v) amount of the initial
payment from the Lessee and (vi) anticipated date of transfer. No later than the
next following Business Day, LIFT shall cause the Administrative Agent to notify
the Servicer in writing whether the proposed transfer will be made on such
anticipated date of transfer or on another stated date. LIFT shall instruct the
Administrative Agent to cause such transfer to be made on such date in
accordance with the terms of the written notice provided by the Servicer.
(b) It is understood and agreed that (i) all decisions as to
any transfers contemplated by Section 7.2(a) shall be the decisions and
responsibility of the Administrative Agent and not the decisions and
responsibility of the Servicer (and the Servicer shall not be subject to any
other responsibilities not specified in this Section 7 or any liability
whatsoever for any such transfers or any decisions of the Administrative Agent
related thereto) and (ii) the Servicer shall have no responsibility as to the
actions taken (or omitted) by any banking institution upon receipt of any
payment instruction from the Administrative Agent in accordance with the
procedures set forth in this Section 7.
SECTION 7.3. PAYMENTS.
(a) ANTICIPATED PAYMENTS. For purposes of the calculation of
the Required Expense Amount by the Administrative Agent pursuant to Section
2.04(a)(ii) of the Administrative Agency Agreement, not less than one Business
Day prior to each Calculation Date, the Servicer shall deliver to the
Administrative Agent a written projection of payment obligations (including
projected expenditures, or return to Lessees, of security deposits and/or
maintenance reserves in accordance with the terms of any Lease) reasonably
anticipated by the Servicer to be necessary to be paid in connection with the
Servicer's performance of the Services under the Servicing Agreement during the
period extending from the Payment Date immediately following such Calculation
Date through to the next succeeding Payment Date (the "MONTHLY PAYMENT PERIOD").
Not later than two Business Days prior to the date of each cash payment, the
Servicer shall deliver to
21
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
the Administrative Agent a written notice of such payment (whether or not such
cash payment was reflected in the projection referred to in this Section
7.3(a)), and shall state the (i) anticipated date of such payment, (ii) payee,
(iii) amount of such payment and (iv) obligation in respect of which such
payment is to be made (the "STATED SERVICES OBLIGATION"), with an appropriate
notation if, and to what extent, such payment should be made from the Lessee
Funded Account. No later than the Business Day prior to such anticipated date of
payment, LIFT shall instruct the Administrative Agent to notify the Servicer in
writing whether the proposed payment will be made on such anticipated date or on
another stated date. LIFT shall instruct the Administrative Agent to pay or
cause such payment to be made on such date to the payee for the Stated Services
Obligation from the funds then available in the Expense Account and/or the
Lessee Funded Account, as the case may be.
(b) UNANTICIPATED PAYMENTS. During any Monthly Payment Period
the Servicer may request in writing the Administrative Agent's approval for the
Administrative Agent to pay or cause to be paid expenses that had not been
reasonably anticipated by the Servicer at the time the projection required to be
provided to the Administrative Agent pursuant to Section 7.3(a) with respect to
such Monthly Payment Period was delivered to the Administrative Agent. Any such
request shall specify for each such payment obligation the (i) anticipated date
of such payment, (ii) payee, (iii) amount of such payment and (iv) Stated
Services Obligation, with an appropriate notation if, and to what extent, such
payment should be made from the Lessee Funded Account. No later than the
Business Day next following such request by the Servicer, LIFT shall instruct
the Administrative Agent to notify the Servicer in writing whether such payment
will be made on such anticipated date of payment or on another stated date. LIFT
shall instruct the Administrative Agent to pay or cause such payment to be made
on such date to the payee for the Stated Services Obligation from the funds then
available in the Expense Account or the Lessee Funded Account, as the case may
be. In the event that the funds then available in the Expense Account or the
Lessee Funded Account are insufficient to make any such payment, pursuant to
Section 2.04(a)(iii)(B) of the Administrative Agency Agreement, LIFT shall cause
the Administrative Agent to take such actions as are necessary to cause funds
sufficient to make any such payments to be transferred as soon as practicable
from
22
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
the Collection Account to the Expense Account and/or the Lessee Funded Account,
as the case may be. Following the transfer of such funds from the Collection
Account, LIFT shall cause the Administrative Agent to pay or cause such payments
to made in accordance with the foregoing provisions.
(c) LIMITATION ON PAYMENTS. It is understood and agreed that
(i) all decisions as to the payment of funds from any Bank Account (including
the timing, amount and payee thereof) shall be the decisions and responsibility
of the Administrative Agent and not the decisions or responsibility of the
Servicer (and the Servicer shall not be subject to any other responsibilities
not specified in this Section 7 or any liability whatsoever for any such
payments or any decisions of the Administrative Agent related thereto) and (ii)
the Servicer shall have no responsibility as to the action taken (or omitted) by
any banking institution upon receipt of any payment instructions from the
Administrative Agent in accordance with the procedures set forth in this Section
7 or as to the application by any payee of any amounts paid to it from any Bank
Account in accordance with the procedures set forth in this Section 7, including
no responsibility as to whether such payee applies such payment toward the
Stated Services Obligation for which such payment was made.
SECTION 8. PROFESSIONAL AND OTHER SERVICES.
SECTION 8.1. LEGAL SERVICES. The Servicer shall provide or
procure legal services, in all relevant jurisdictions, on behalf of the relevant
Persons within the LIFT Group with respect to the lease, sale or financing of
the Aircraft Assets, any amendment or modification of any Lease, the enforcement
of the rights of any Person within the LIFT Group under any Lease, any disputes
that arise with respect to the Aircraft Assets or for any other purpose that the
Servicer reasonably determines is necessary in connection with the performance
of the Services. The Servicer shall provide such legal services (which services
shall not, in any case, be deemed to include (i) services or transactions
relating to taxation matters, the laws of foreign jurisdictions, capital markets
transactions or novel or unique transactions or (ii) a high level of services at
fiscal year end or other times of peak activity relative to the level of
services at other times) by using its in-house legal staff where it shall deem
appropriate and shall authorize outside counsel to provide such legal
23
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
services where it shall deem appropriate. The Servicer anticipates that it will
use outside counsel to perform some or all the Services set forth in Section 2.3
of this Schedule 2.02(a). LIFT recognizes, and shall cause each other Person
within the LIFT Group to recognize, that from time to time the Servicer will
retain legal counsel to provide legal services on behalf of Persons within the
LIFT Group and, in the event that a dispute arises between any Person within the
LIFT Group and the Servicer, LIFT agrees, and shall cause each other Person
within the LIFT Group, to waive any conflict of interest any such counsel may
have with respect to any such dispute or otherwise to enable the Servicer to
retain such counsel on its own behalf (it being understood that notwithstanding
any such waiver of a conflict of interest, any such Persons within the LIFT
Group do not waive any rights to retain any such counsel on its own behalf if
such counsel is so agreeable).
SECTION 8.2. ACCOUNTING AND TAX SERVICES. The Servicer shall
arrange for such accounting and tax services and advice (which may be provided
by the Servicer's internal staff, to the extent available) as shall be
reasonably necessary or appropriate in connection with the structuring of lease,
sale or financing transactions with respect to the Aircraft Assets or for any
other purpose that the Servicer reasonably determines is necessary in connection
with the performance of the Services; PROVIDED, HOWEVER, that the Servicer shall
not be responsible for arranging for any accounting services with respect to the
preparation of any management accounts or any financial statements of any Person
within the LIFT Group, any footnotes thereto or any audits thereof.
SECTION 9. REPORTS; CUSTODY.
SECTION 9.1. MONTHLY REPORTS. On the Business Day immediately
preceding each Calculation Date (or, to the extent impracticable, promptly
thereafter), the Servicer shall provide to LIFT:
(a) A written report, covering the period from the end of the
last such report, if any, through and including the fourth Business Day prior to
such Calculation Date (the "REPORTING PERIOD"), of (i) the leasing, sales and
purchasing activities that were completed during such Reporting Period
(including any proposals to create segregated accounts), which shall include a
summary of the principal financial terms
24
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
related to any new or amended lease transactions, (ii) any Aircraft then
off-lease, (iii) any Aircraft suffering an event of loss and of any insurance,
condemnation, requisition or other proceeds received or claims made in respect
thereof and (iv) any default notices issued, in each case with respect to the
Aircraft Assets, in such detail as LIFT and the Servicer may agree from time to
time.
(b) A detailed statement of receivables and payables covering
the Reporting Period (including details, if any, of any set-offs among Lessee
receivables, Lessee payables, Maintenance Reserves and security deposits and
past-due amounts) analyzed by Lessee for each account balance outstanding
(including with respect to restructured Leases), categorized by number of days
outstanding, in such detail as LIFT and the Servicer may agree from time to
time.
(c) A statement of material cash disbursements not previously
reported in a prior monthly statement (i) which the Servicer believes will be
due and payable during the period extending from the second Payment Date
following such Calculation Date through to the fifth succeeding Payment Date and
(ii) which were not contemplated in the then current Approved Budget or, to the
extent that any of the succeeding five months is not covered by the then current
Approved Budget, which are not usual or customary.
SECTION 9.2. QUARTERLY REPORTS. The Servicer shall provide
written reports to LIFT within thirty days after the end of each calendar
quarter which shall set forth the following information for such calendar
quarter:
(a) A list of each Aircraft in the portfolio identified by
manufacturer's serial number and specifying the following with respect thereto:
(i) Lessee, (ii) lease rate, (iii) lease commencement date and (iv) changes in
the foregoing, if any, from the prior quarterly report.
(b) A list (which may be made available in writing or
electronically) setting forth the concentration of Aircraft by country of
habitual base, region, Lessee, aircraft type and age, in summary form on the
basis of aircraft type, numbers of aircraft and appraised values as of the most
recent appraisal, in such
25
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
detail as LIFT and the Servicer may agree from time to time.
(c) A report on all pending and potential (with respect to
which a member of the Servicer's in-house legal staff has received written
notice threatening litigation, which, in the sole judgment of the Servicer, is
material) litigation involving any Aircraft Assets or Leases of which the
Servicer has written notice.
(d) A report of any claims being made with respect to any of
the Aircraft Assets of which the Servicer is aware with an actual or potential
liability in excess of $10,000,000.
(e) A report (which may be included in clause (a) above) by
Lessee identifying termination, extension, purchase and any other material
options.
(f) A report of Leases expiring during the
following two quarters.
SECTION 9.3. OTHER INFORMATION.
(a) To the extent the Servicer is in possession of the
relevant information, the Servicer shall prepare and submit to LIFT the
following information with respect to each Person within the LIFT Group or, in
the case of clause (i) below, any holder of the Beneficial Interest
Certificates:
(i) upon request by LIFT, information with respect to
transactions relating to Aircraft Assets necessary for each Person
within the LIFT Group or any holder of the Beneficial Interest
Certificates to prepare value added tax and other tax returns; and
(ii) promptly after the occurrence thereof, notify LIFT of any
accident or incident of which the Servicer has notice involving any
Aircraft Asset where (A) the potential loss in connection therewith
exceeds the higher of the damage notification threshold under the
relevant Lease, if any, and $2,000,000 or (B) the potential liability
in connection therewith exceeds $2,000,000.
(b) Upon request by LIFT, the Servicer shall provide to LIFT
copies of any financial statements received by the Servicer from any Lessee
under and in
26
SCHEDULE 2.02(a) TO SERVICING AGREEMENT
accordance with the provisions of its Lease of an Aircraft Asset.
(c) Upon request by LIFT, the Servicer shall provide to LIFT
such factual information and data about the Aircraft Assets which may reasonably
be requested by LIFT; PROVIDED, HOWEVER, that the Servicer shall not be required
to provide any valuations, interpretations, comparisons, evaluations, opinions,
forecasts, predictions or analytical analysis.
SECTION 9.4. RATINGS INFORMATION. Upon request by LIFT, the
Servicer shall provide to LIFT such information and data about the Aircraft
Assets and other commercially reasonable assistance relating to the Aircraft
Assets as LIFT shall deem reasonably necessary or appropriate in connection with
providing information to the ratings agencies for LIFT's debt ratings.
SECTION 9.5. CUSTODY OF DOCUMENTS. The Servicer agrees to hold
all original documents of any Person within the LIFT Group that relate to the
Aircraft Assets in the possession of the Servicer in safe custody and according
to the commercially reasonable instructions of LIFT.
SECTION 9.6. REPORTING OBLIGATIONS GENERALLY. Notwithstanding
anything herein to the contrary, LIFT acknowledges and agrees that it shall be
responsible for, and the Servicer shall not have any responsibility for, (a) any
Compliance Obligations to any holders of outstanding Notes, any holders of any
other securities issued by any Person within the LIFT Group or any Governmental
Authorities and (b) all instructions, discretion, judgments and assumptions
related to such Compliance Obligations, and LIFT agrees to indemnify the
Servicer and its Affiliates in respect of the foregoing as further provided in
Section 11.05 of the Servicing Agreement.
SECTION 9.7. AIRCRAFT ASSETS RELATED DOCUMENTS. The Servicer
shall provide to the Security Trustee a copy of each fully executed Aircraft
Assets Related Document received by the Servicer no later than ten Business Days
after the receipt thereof by the Servicer. For purposes of this Section 9.7, the
term "Aircraft Assets Related Documents" does not include letters of intent,
memoranda of understanding or similar documents.
SCHEDULE 2.02(a)(i)
TO THE SERVICING AGREEMENT
APPLICABLE INDENTURE COVENANTS
Attach pages containing the following sections of the Indenture:
1. 5.02(b) Limitation on Encumbrances;
2. 5.02(i) Limitation on Modification Payments and
Capital Expenditures;
3. 5.03(a) Concentration Limits;
4. 5.03(b) Compliance with Law, Maintenance of
Permits;
5. 5.03(c) Appraisal of Aircraft;
6. 5.03(d) Maintenance of Assets;
7. 5.03(f) Leases;
8. 5.03(g) Opinions;
9. 5.03(h) Insurance; and
10. 5.03(h) [sic] Indemnity.
SCHEDULE 2.02(a)(ii)
TO THE SERVICING AGREEMENT
[Form of Officer's Certificate for LIFT]
The undersigned, representing LEASE INVESTMENT FLIGHT TRUST
("LIFT"), a Delaware business trust, in accordance with Section 4(d) of Schedule
2.02(a) to the Servicing Agreement dated as of June 26, 2001, (the "Servicing
Agreement") between LIFT and GE Capital Aviation Services, Limited (the
"Servicer"), hereby certifies as follows:
(a) the sale of the [insert description of asset(s) to be sold], which
LIFT has directed the Servicer to arrange pursuant to Section 4 of Schedule
2.02(a) to the Servicing Agreement (the "Sale"), complies in all respects with
the terms of the Trust Indenture dated as of June 26, 2001, between LIFT, LIFT
Trust-Sub 1, Phoenix American Financial Services, Inc. and Bankers Trust
Company;
(b) the Sale has been approved by the Controlling Trustee of LIFT in
accordance with Section 7.04(a) of the Servicing Agreement;
(c) in connection with such Sale, the Servicer is entitled to rely upon
this certification for all purposes of the Servicing Agreement and Schedule
2.02(a) thereto; and
(d) the undersigned is a duly appointed, qualified and acting officer
of LIFT and the signature appearing below after his/her name is a genuine
signature.
IN WITNESS WHEREOF, I have hereunto set my hand on and as of
this [ ] day of [ ], [ ].
By:
--------------------------
Name:
Title:
SCHEDULE 4.01 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS
SERIAL # MODEL OWNER
-------- ----- -----
49511 MD-82 LIFT CEA China, LLC (Delaware)
49513 MD-82 LIFT CEA China, LLC (Delaware)
49515 MD-82 LIFT CEA China, LLC (Delaware)
1108 X000-000 XXXX XXX Xxxxx, LLC (Delaware)
1093 X000-000 XXXX XXX Xxxxx, LLC (Delaware)
49509 MD-82 LIFT SP Spain, LLC (Delaware)
49519 MD-82 LIFT SP Spain, LLC (Delaware)
49501 MD-82 LIFT SP Spain, LLC (Delaware)
49578 MD-83 LIFT SP Spain, LLC (Delaware)
49507 MD-82 LIFT SP Spain, LLC (Delaware)
30112 Boeing 767-375ER LIFT Canada, LLC (Delaware)
30108 Boeing 767-375ER LIFT Canada, LLC (Delaware)
49419 MD-82 MD82 Aircraft Owner F Limited (Cayman)
48523 MD11F (MD-82) Sinope Limited (Cayman)
24469 Boeing 737-400 B737 Owner Limited (Cayman)
28602 Boeing 737-36N LIFT GF UK, LLC (Delaware)
28606 Boeing 737-36N LIFT GF UK, LLC (Delaware)
28591 Xxxxxx 000-000 XXXX Xxxxxx, LLC (Delaware)
28628 Boeing 737-800(86N) LIFT Turkey, LLC (Delaware)
23376 Boeing 737-3B7 LIFT Georgia, LLC (Delaware)
28673 Boeing 737-36N LIFT France, LLC (Delaware)
28672 Boeing 737-36N LIFT France, LLC (Delaware)
28569 Boeing 737-36N LIFT France, LLC (Delaware)
28570 Boeing 737-300 LIFT Portugal, LLC (Delaware)
28592 Boeing 737-800 LIFT Morocco, LLC (Delaware)
28565 Boeing 737-500(56N) LIFT RS Brazil, LLC (Delaware)
53147 MD-82 MD82 Aircraft Owner G Limited (Cayman)
29338 Boeing 737-33V LIFt EJ UK, LLC (Delaware)
28671 Boeing 737-300(36N) LIFT VG Brazil, LLC (Delaware)
28584 Boeing 737-76N LIFT VG Brazil, LLC (Delaware)
24512 Boeing 737-400 LIFT Indonesia, LLC (Delaware)
23384 Boeing 737-3B7 LIFT Arizona, LLC (Delaware)
28427 Xxxxxx 000-0X0 XXXX Xxxxxxxx, LLC (Delaware)
26208 Boeing 767-3Y0 LIFT Missouri, LLC (Delaware)
1152 Airbus A320-200 LIFT Italy, LLC (Delaware)
879 Airbus A320-200 LIFT IB Spain, LLC (Delaware)
29618 Boeing 767-38AER LIFT A2K UK, LLC (Delaware)
28609 Boeing 737-700 Zibal Aircraft Leasing LLC (Delaware)
30110 Boeing 767-300ER LIFT Russia, LLC (Delaware)
SCHEDULE 4.02
TO SERVICING AGREEMENT
Aircraft Assets Related Documents
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 53147)
1. Aircraft Specific Lease Agreement dated November 14, 2000 by and
between GECAS Technical Services Limited and Nouvelair Tunisie
(incorporating by reference therein the Aircraft Lease Common Terms
Agreement dated November 14, 2000 between MD82 Aircraft Owner G Limited
and Nouvelair Tunisie).
2. Certificate of Acceptance dated June 11, 1999.
3. Aircraft Lease Novation and Amendment Agreement dated June 18, 2001 by
and among LIFT Ireland Leasing Limited, GECAS Technical Services
Limited and Nouvelair Tunisie.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49511)
1. Aircraft Lease Agreement dated as of April 2, 1999 among MD-82 Aircraft
Leasing I Corp. ("MD-82 I"), MD-82 Aircraft Leasing II Corp. and MD-82
Aircraft Leasing III Corp. (collectively, "Lessors"), China Eastern
Airlines Corporation Limited ("Lessee") and China Eastern Aviation
Import & Export Corporation ("Consenting Party").
2. Certificate of Acceptance dated November 23, 1999 between MD-82 I and
Lessee.
3. Aircraft Lease Amendment Agreement dated as of June 20, 2001 among
Lessors, Lessee, GECC and Consenting Party.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49513)
1. Aircraft Lease Agreement dated as of April 2, 1999 among MD-82 Aircraft
Leasing I Corp., MD-82 Aircraft Leasing II Corp. ("MD-82 II") and MD-82
Aircraft Leasing III Corp. (collectively, "Lessors"), China Eastern
Airlines Corporation Limited ("Lessee") and China Eastern Aviation
Import & Export Corporation ("Consenting Party").
2. Certificate of Acceptance dated May 26, 2000 between MD-82 II and
Lessee.
3. Aircraft Lease Amendment Agreement dated as of June 20, 2001 among
Lessors, Lessee, GECC and Consenting Party.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49515)
1. Aircraft Lease Agreement dated as of April 2, 1999 among MD-82 Aircraft
Leasing I Corp., MD-82 Aircraft Leasing II Corp. and MD-82 Aircraft
Leasing III Corp. ("MD-82 III") (collectively, "Lessors"), China
Eastern Airlines Corporation Limited ("Lessee") and China Eastern
Aviation Import & Export Corporation ("Consenting Party").
2. Certificate of Acceptance dated May 26, 2000 between MD-82 III and
Lessee.
3. Aircraft Lease Amendment Agreement dated as of June 20, 2001 among
Lessors, Lessee, GECC and Consenting Party.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 1108)
1. Aircraft Lease Agreement dated as of January 26, 1998 among A320
Aircraft Leasing X Corp. ("Lessor"), China Eastern Airlines Corporation
Limited ("Lessee") and China Eastern Aviation Import & Export
Corporation ("Consenting Party").
2. Letter Agreement dated February 24, 1998 between Lessor and Lessee.
3. Certificate of Acceptance dated November 16, 1999 between Lessor and
Lessee.
4. Aircraft Lease Amendment Agreement [1108] dated as of June 20, 2001
among Lessor, Lessee, GECC and Consenting Party.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 1093)
1. Aircraft Lease Agreement dated as of January 26, 1998 among A320
Aircraft Leasing IX Corp. ("Lessor"), China Eastern Airlines
Corporation Limited ("Lessee") and China Eastern Aviation Import &
Export Corporation ("Consenting Party").
2. Letter Agreement dated February 24, 1998 between Lessor and Lessee.
3. Certificate of Acceptance dated October 26, 1999 between Lessor and
Lessee.
4. Aircraft Lease Amendment Agreement [1093] dated as of June 20, 2001
among Lessor, Lessee, GECC and Consenting Party.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49509)
1. Aircraft Lease Agreement dated as of March 31, 1999 between Spanair,
S.A. ("Lessee") and General Electric Capital Corporation ("Prior
Lessor").
2. Side Letter, dated April 15, 1999, between Prior Lessor and Lessee.
3. Letter Agreement No. 1, dated May 19, 1999, between Lessee and Prior
Lessor.
4. Certificate of Acceptance dated October 20, 1999.
5. Aircraft Lease Novation and Amendment Agreement dated as of May 28,
2001 among Lessee, Prior Lessor and LIFT SP Spain, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49519)
1. Aircraft Lease Agreement dated as of March 31, 1999 between Spanair,
S.A. ("Lessee") and General Electric Capital Corporation ("Prior
Lessor").
2. Letter Agreement No. 1, dated April 15, 1999, between Lessee and Prior
Lessor.
3. Letter Agreement No. 2, dated May 19, 1999, between Lessee and Prior
Lessor.
4. Certificate of Acceptance dated September 23, 1999.
5. Aircraft Lease Novation and Amendment Agreement dated as of May 28,
2001 among Lessee, Prior Lessor and LIFT SP Spain, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49501)
1. Aircraft Lease Agreement dated as of March 31, 1999 between Spanair,
S.A. ("Lessee") and General Electric Capital Corporation ("Prior
Lessor").
2. Letter Agreement No. 1, dated April 15, 1999, between Lessee and Prior
Lessor.
3. Letter Agreement No. 2, dated May 19, 1999 between Lessee and Prior
Lessor.
4. Certificate of Acceptance dated October 28, 1999. Lessee, Prior Lessor
and LIFT SP Spain, LLC.
5. Aircraft Lease Novation and Amendment Agreement dated as of May 28,
2001 among Lessee, Prior Lessor and LIFT SP Spain, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49578)
1. Aircraft Lease Agreement dated May 14, 1996 between General Electric
Capital Corporation ("Prior Lessor") and Spanair, S.A. ("Lessee").
2. Letter Agreement, dated May 14, 1996, between Prior Lessor and Lessee.
3. Certificate of Acceptance dated June 25, 1996
4. Aircraft Specific Lease Agreement dated October 25, 2000 between Lessee
and Prior Lessor ("Prior Lessor"), (incorporating by reference therein
the Aircraft Lease Common Terms Agreement dated May 4, 2000 between
Prior Lessor and Lessee and extending the existing lease beyond October
31, 2000).
5. Aircraft Lease Novation and Amendment Agreement dated as of May 28,
2001 among Lessee, Prior Lessor and LIFT SP Spain, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 49507)
1. Aircraft Lease Agreement dated as of May 19, 1999 between Spanair, S.A.
("Lessee") and General Electric Capital Corporation ("Prior Lessor").
2. Letter Agreement No. 1, dated May 19, 1999, between Lessee and Prior
Lessor.
3. Certificate of Acceptance dated January 5, 2000.
4. Aircraft Lease Novation and Amendment Agreement dated as of May 28,
2001 among Lessee, Prior Lessor and LIFT SP Spain, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 30112)
1. Aircraft Lease Agreement dated as of December 31, 1998 between Canadian
Airlines International Ltd. ("Canadian") and Alcyone FSC Corporation
("Existing Lessor").
2. Certificate of Acceptance dated September 15, 1999.
3. Aircraft Lease Novation and Amendment Agreement [30112] dated as of
March 20, 2000, by and among Existing Lessor, Canadian and Lessee.
4. Aircraft Lease Novation Agreement [MSN 30112] dated June 12, 2001,
among Existing Lessor, Lessee, LIFT Canada, LLC ("New Lessor") and Air
Canada.
5. Amended and Restated Aircraft Lease Agreement [MSN 30112] dated June
12, 2001, between New Lessor and Lessee (incorporating by reference
therein an Aircraft Lease Common Terms Agreement dated as of January 1,
2001 between GECC and Air Canada).
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 30108)
1. Aircraft Lease Agreement dated as of December 31, 1998 between Canadian
Airlines International Ltd. ("Canadian") and Alcyone FSC Corporation
("Existing Lessor").
2. Certificate of Acceptance dated November 18, 1999.
3. Aircraft Lease Novation and Amendment Agreement [30108] dated as of
March 20, 2000, by and among Existing Lessor, Canadian and Lessee.
4. Aircraft Lease Novation Agreement [MSN 30108] dated June 12, 2001,
among Existing Lessor, Lessee, LIFT Canada, LLC ("New Lessor") and Air
Canada.
5. Amended and Restated Aircraft Lease Agreement [MSN 30108] dated June
12, 2001, between New Lessor and Lessee (incorporating by reference
therein an Aircraft Lease Common Terms Agreement dated as of January 1,
2001 between GECC and Air Canada).
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28602)
1. Aircraft Lease Agreement dated September 14, 1998 between Alcyone FSC
Corporation and Go Fly Limited.
2. Letter dated September 14, 1998 from Alcyone FSC Corporation to Go Fly
Limited regarding interpretation of the Lease and Delayed Delivery.
3. Certificate of Acceptance dated August 12, 1999 by Go Fly Limited to
Alcyone FSC Corporation.
4. Letter dated February 7, 2001 from Alcyone FSC Corporation to Go Fly
Limited regarding the breakdown of the Engine Refurbishment Payment
Rate.
5. Novation and Amendment Agreement dated June 13, 2001 between Alcyone
FSC Corporation, LIFT GF UK, LLC and Go Fly Limited.
6. Aircraft Lease Amendment Agreement dated June 14, 2001 between LIFT GF
UK, LLC and Go Fly Limited.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28606)
1. Aircraft Lease Agreement dated September 14, 1998 between Alcyone FSC
Corporation and Go Fly Limited.
2. Letter dated September 14, 1998 from Alcyone FSC Corporation to Go Fly
Limited regarding interpretation of the Lease and Delayed Delivery.
3. Certificate of Acceptance dated October 22, 1999 by Go Fly Limited to
Alcyone FSC Corporation.
4. Letter dated February 7, 2001 from Alcyone FSC Corporation to Go Fly
Limited regarding the breakdown of the Engine Refurbishment Payment
Rate.
5. Novation and Amendment Agreement dated June 13, 2001 between Alcyone
FSC Corporation, LIFT GF UK, LLC and Go Fly Limited.
6. Aircraft Lease and Amendment Agreement dated June 14, 2001 between LIFT
GF UK, LLC and Go Fly Limited.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28591)
1. Aircraft Lease Agreement dated June 26, 2000 between Alcyone FSC
Corporation and Pegasus Hava Tasimaciligi A.S.
2. Certificate of Acceptance dated June 30, 2000.
3. Side Letter No. 1 dated August 29, 2000 between Pegasus Hava
Tasimaciligi A.S. and Alcyone FSC Corporation.
4. Aircraft Lease Novation and Amendment Agreement dated June 4, 2001 by
and among Alcyone FSC Corporation, Pegasus Hava Tasimaciligi A.S. and
LIFT Turkey, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28628)
1. Aircraft Lease Agreement dated March 16, 1999 by and between Aviation
Financial Services, Inc. and Pegasus Hava Tasimaciligi A.S.
2. Certificate of Acceptance dated June 2, 2000.
3. Side Letter No. 1 dated _________, 2001 by and among Aviation Financial
Services, Inc., LIFT Turkey, LLC and Pegasus Hava Tasimaciligi A.S.
4. Aircraft Lease Novation and Amendment Agreement dated June 4, 2001 by
and among Aviation Financial Services, Inc., LIFT Turkey, LLC and
Pegasus Hava Tasimaciligi A.S.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 23376)
1. Aircraft Lease Agreement, dated as of June 12, 1988 between Delta Air
Lines, Inc. ("Lessee") and General Electric Capital Corporation ("Prior
Lessor").
2. Lease Supplement No. 1, dated July 21, 1998, between Lessee and Prior
Lessor.
3. Lease Amendment No. 1, dated January 16, 2001, between Lessee and Prior
Lessor.
4. Aircraft Lease Assignment and Amendment Agreement, dated as of June 28,
2001, among Lessee, Prior Lessor and LIFT Georgia, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28570)
1. Aircraft Lease Agreement dated February 4, 1998 between SATA-AIR ACORES
Sociedade Acoreano Transportes Aereos S.A. (formerly known as SATA-AIR
ACORES Servico Acoreano de Transportes Aereos E.P) and Alcyone FSC
Corporation.
2. Certificate of Acceptance dated March 30, 1998 by SATA-AIR ACORES
Sociedade Acoreano Transportes Aereos S.A. to Alcyone FSC Corporation.
3. Side Letter dated June 21, 2000 between SATA-AIR ACORES Sociedade
Acoreano Transportes Aereos S.A. and Alcyone FSC Corporation, relating
to adjustment of Supplemental Rent.
4. Side Letter dated July 19, 2000 between SATA-AIR ACORES Sociedade
Acoreano Transportes Aereos S.A. and Alcyone FSC Corporation, relating
to adjustment of Supplemental Rent.
5. Letter Agreement dated May 17, 2001 from Alcyone FSC Corporation to
SATA-AIR ACORES Sociedade Acoreano Transportes Aereos S.A., regarding
reduction in Agreed Value.
6. Aircraft Lease Novation and Amendment Agreement, dated as of June 6,
2001 between SATA-AIR ACORES Sociedade Acoreano Transportes Aereos
S.A., Alcyone FSC Corporation and LIFT Portugal, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 29618)
1. Aircraft Lease Agreement dated 24 June 1998, between Alcyone FSC
Corporation ("Existing Lessor") and Air 2000 Limited ("Lessee").
2. Side Letters dated June 24, 1998, June 8, 2000 and February 14, 2001
made between Existing Lessor and Lessee.
3. Deposit Agreement dated June 24, 1998 made between Existing Lessor and
Lessee.
4. Certificate of Acceptance dated May 9, 2000.
5. Deposit Novation and Amendment Agreement dated ________________, 2001
made between Existing Lessor, Lessee and LIFT A2K UK, LLC ("New
Lessor").
6. Aircraft Lease Novation and Amendment Agreement dated June 27, 2001 by
and among Existing Lessor, Lessee, New Lessor, First Choice Holidays
Plc and General Electric Capital Corporation.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 29338)
1. Aircraft Specific Lease Agreement dated July 7, 1999 between Alnitak
FSC Two Corporation and easyJet Airline Company Limited (incorporating
by reference therein an Aircraft Lease Common Terms Agreement dated
June 22, 1999 between General Electric Capital Corporation and easyJet
Airline Company Limited).
2. Side Letter dated July 7, 1999 from Alnitak FSC Two Corporation to
easyJet Airline Company Limited.
3. Certificate of Acceptance dated July 8, 1999 by easyJet Airline Company
Limited to Alnitak FSC Two Corporation.
4. Letter Agreement dated September 13, 1999 to easyJet Airline Company
Limited from General Electric Capital Corporation, Alnitak FSC Two
Corporation and certain other parties thereto.
5. Letter Agreement dated October 13, 2000 to easyJet Airline Company
Limited from GECC, amending certain provisions of the Common Terms
Agreement.
6. Letter dated October 27, 2000 from Alnitak FSC Two Corporation to
easyJet Airline Company Limited and easyJet Switzerland S.A.
7. Amendment Agreement dated October 30, 2000 among (1) easyJet Airline
Company Limited, (2) easyJet plc (formerly known as easyJet Limited)
and (3) Alnitak FSC One Corporation, Alnitak FSC Two Corporation,
Alnitak FSC Three Corporation and Arcturus FSC Corporation.
8. Letter Agreement dated April 30, 2000 from General Electric Capital
Corporation to easyJet Airline Company Limited (and copied to Alnitak
FSC One Corporation, Alnitak FSC Two Corporation, Alnitak FSC Three
Corporation and Arcturus FSC Corporation).
9. Letter dated March 30, 2001 from Xxxxxx Xxxx, counsel to easyJet
Airline Company Limited, to General Electric Capital Aviation Services
and countersigned by General Electric Capital Corporation on April 9,
2001.
10. Aircraft Lease Novation and Amendment Agreement dated as of June 27,
2001 between Alnitak FSC Two Corporation, LIFT EJ UK, LLC, easyJet
Airline Company Limited and easyJet PLC, as guarantor.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 23384)
1. Aircraft Lease Agreement, dated as of May 1, 1988 between America West
Airlines, Inc. ("Lessee") and General Electric Capital Corporation
("Prior Lessor").
2. Letter Agreement No. 1, dated as of May 1, 1988 between Lessee and
Prior Lessor.
3. Lease Supplement No. 1, dated May 18, 1998, between Lessee and Prior
Lessor.
4. Aircraft Lease Assignment and Amendment Agreement, dated as of June 19,
2001 among Lessee, Prior Lessor and LIFT Arizona, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 26208)
1. Amended and Restated Lease Agreement (2001 N639TW), dated as of April
9, 2001 between TWA Airlines LLC ("Lessee") and General Electric
Capital Corporation ("Prior Lessor").
2. Assumption and Lease Agreement, dated April 9, 2001, by American
Airlines, Inc.
3. FAA Instrument of Assignment and Assumption, dated April 9, 2001,
between Trans World Airlines, Inc. and Lessee.
4. Assignment, Assumption and Amendment Agreement, dated April 9, 2001,
among Trans World Airlines, Inc., Lessee and Prior Lessor.
5. Amendment to Lease Agreement, dated as of April 9, 2001 between Prior
Lessor and Trans World Airlines, Inc.
6. Side Letter, dated April 9, 2001, between Prior Lessor and Lessee re:
extension of the lease term.
7. Aircraft Lease Assignment and Amendment Agreement, dated as of June 26,
2001 among Prior Lessor, Lessee and LIFT Missouri, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 1152)
1. Aircraft Specific Lease Agreement dated as of July 14, 1999 between
GECAS Technical Services Limited ("Prior Lessor") and Volare Airlines
S.p.A. ("Lessee") (incorporating by reference therein an Aircraft Lease
Common Terms Agreement dated as of July 14, 1999 between General
Electric Capital Corporation and Lessee).
2. Side Letter dated as of July 20, 1999, between Prior Lessor and Lessee.
3. Certificate of Acceptance dated February 3, 2000.
4. Side Letter dated as of February 23, 2000 between Prior Lessor and
Lessee.
5. This Aircraft Lease Novation and Amendment Agreement dated as of June
19, 2001 among Prior Lessor, Lessee, Volare Group S.p.A. and LIFT
Ireland Leasing Limited.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 879)
1. Aircraft Lease Agreement dated as of August 7, 1998 between General
Electric Capital Corporation ("GECC") and Iberworld Airlines S.A.
("Lessee").
2. Certificate of Acceptance dated December 10, 1998.
3. Aircraft Lease Novation and Amendment Agreement dated as of March 3,
1999 between GECC, Castle Harbour Leasing Inc. ("Prior Lessor") and
Lessee.
4. Aircraft Lease Novation and Amendment Agreement dated as of June 22,
2001 among Prior Lessor, Lessee and LIFT IB Spain, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 48523)
1. Aircraft Lease Agreement, dated as of March 22, 2000, between Sinope
Limited and GECAS Technical Services Limited.
2. Certificate of Acceptance dated March 22, 2000.
3. Aircraft Lease Novation and Amendment Agreement dated as of June 12,
2001 among Lessee, Prior Lessor and LIFT Ireland Leasing Limited.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 24469)
1. Aircraft Lease Agreement dated April 25, 1989 between debis AirFinance
plc (formerly known as AerFi Group plc, formerly known as GPA Group
plc) and Asiana Airlines, Inc. ("Lessee") relating to the Aircraft.
2. Acceptance Certificate dated July 25, 1989
3. Letter Agreement dated October 18, 1989 between debis AirFinance plc
(formerly known as AerFi Group plc, formerly known as GPA Group plc)
and Lessee.
4. Lease Amendment Agreement dated June 10, 1992 between debis AirFinance
plc (formerly known as AerFi Group plc, formerly known as GPA Group
plc) and Lessee.
5. Extension Agreement dated June 16, 1992 between debis AirFinance plc
(formerly known as AerFi Group plc, formerly known as GPA Group plc)
and Lessee.
6. Lease Amendment Agreement dated September 25, 1992 between debis
AirFinance plc, (formerly known as AerFi Group plc formerly known as
GPA Group plc) and Lessee.
7. Aircraft Lease Novation and Amendment Agreement dated December 17, 1998
between AerFi Group plc (formerly known as GPA Group plc), GECAS
Technical Services Limited, Kumho Tire Co., Ltd. and Lessee and as
supplemented and amended by the Supplemental Agreement, dated December
29, 1998.
8. Aircraft Lease Extension and Amendment Agreement dated February 24,
1999 between Existing Lessor and Lessee.
9. Letter Agreement dated July 24, 1999 between GECAS Technical Services
Limited and Asiana Airlines, Inc.
10. Letter Agreement dated September 1, 1999 between GECAS Technical
Services Limited and Asiana Airlines, Inc.
11. Aircraft Lease Novation and Amendment Agreement dated June 25, 2001
between Existing Lessor, Kumho Tire Co., Ltd., LIFT Ireland Leasing
Limited and Asiana Airlines, Inc.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28565)
1. Aircraft Lease Agreement dated as of November 3, 1997 (the "Lease"),
between Rio Sul Linhas Aereas S.A. ("Lessee"), and Alcyone FSC
Corporation ("Prior Lessor").
2. Certificate of Acceptance dated November 11, 1997.
3. Amendment No. 1 to the Lease dated November 1, 1999.
4. Aircraft Lease Assignment, Assumption and Amendment Agreement dated as
of June 21, 2001 among Lessee, Prior Lessor and LIFT RS Brazil, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28671)
1. Aircraft Lease Agreement dated as of November 18, 1997 (the "Lease"),
between Varig, S.A.(Viacao Aerea Rio-Grandense) ("Lessee"), and Alcyone
FSC Corporation ("Prior Lessor").
2. Certificate of Acceptance dated November 21, 1997.
3. Amendment No. 1 to the Lease dated November 1, 1999.
4. Aircraft Lease Assignment, Assumption and Amendment Agreement dated as
of June 21, 2001 among Lessee, Prior Lessor and LIFT VG Brazil, LLC.
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
AIRCRAFT ASSETS RELATED DOCUMENTS
(MSN# 28584)
1. Aircraft Lease Agreement dated as of September 8, 1998 (the "Lease"),
between Varig, S.A.(Viacao Aerea Rio-Grandense) ("Lessee") and Alcyone
FSC Corporation ("Prior Lessor").
2. Certificate of Acceptance dated January 6, 1999.
3. Amendment No. 1 to the Lease dated November 1, 1999.
4. Aircraft Lease Assignment, Assumption and Amendment Agreement dated as
of June 21, 2001 among Lessee, Prior Lessor and LIFT VG Brazil, LLC.
SCHEDULE 4.03 TO
THE SERVICING AGREEMENT
BANK ACCOUNTS
ACCOUNT NAME ACCOUNT NUMBER
------------------------------------------------------------------------------------------------------------------------
LIFT LESSEE FUND AIR 2000 29618 32006
LIFT LESSEE FUND AMERICA WEST 23384 32007
LIFT LESSEE FUND ASIANA AIRLINES 24469 32008
LIFT LESSEE FUND CHINA EASTERN 1093 32009
LIFT LESSEE FUND CHINA EASTERN 1108 32010
LIFT LESSEE FUND CHINA EASTERN 49511 32011
LIFT LESSEE FUND CHINA EASTERN 49513 32012
LIFT LESSEE FUND CHINA EASTERN 49515 32013
LIFT LESSEE FUND EASYJET 29338 32014
LIFT LESSEE FUND GARUDA 24512 32015
LIFT LESSEE FUND KOREAN AIRLINES 28427 32022
LIFT LESSEE FUND MALAYSIAN AIRLINES 28427 32023
LIFT LESSEE FUND NOUVELAIR 53147 32024
LIFT LESSEE FUND PEGASUS 28628 32025
LIFT LESSEE FUND RIO SUL 28565 32026
LIFT LESSEE FUND ROYAL AIR MAROC 28592 32027
LIFT LESSEE FUND SPANAIR 49501 32028
LIFT LESSEE FUND SPANAIR 49507 32029
LIFT LESSEE FUND SPANAIR 49509 32030
LIFT LESSEE FUND SPANAIR 49519 32031
LIFT LESSEE FUND VARIG 28584 32032
LIFT LESSEE FUND VARIG 28671 32033
LIFT RENTAL ACCT (DDA Account) *
LIFT RENTAL ACCT - SUSPENSE 32034
LIFT COLLECTIONS ACCT 00000
XXXX XXXXXX XXXX XXXX 00000
LIFT EXPENSE ACCT 32037
LIFT NOTE ACCT CLASS A1 32038
LIFT NOTE ACCT CLASS A2 32039
LIFT NOTE ACCT CLASS A3 32040
LIFT NOTE ACCT CLASS B 32041
LIFT NOTE ACCT CLASS C 32042
LIFT NOTE ACCT CLASS D 32043
LIFT OWNER TRUSTEE ACCT 32044
2
* Bankers Trust Company NY
ABA #: 000-000-000
Account#: 00412-996
Account Name: BTCO as Security Trustee for LIFT-LIFT
Rental Account
Reference: LIFT-[lessee][serial#]
SCHEDULE 4.04(a) TO
THE SERVICING AGREEMENT
LIST OF PERSONS WITHIN THE LIFT
GROUP AND JURISDICTIONS
ENTITY JURISDICTION
------ ------------
Lease Investment Flight Trust Delaware
LIFT Trust-Sub 1 Delaware
LIFT CEA China, LLC Delaware
LIFT SP Spain, LLC* Delaware
LIFT Canada, LLC Delaware
LIFT GF UK, LLC Delaware
LIFT France, LLC* Delaware
LIFT Turkey, LLC* Delaware
LIFT Georgia, LLC* Delaware
LIFT Portugal, LLC* Delaware
LIFT Morocco, LLC* Delaware
LIFT RS Brazil, LLC* Delaware
LIFT EJ UK, LLC* Delaware
LIFT VG Brazil, LLC* Delaware
LIFT Indonesia, LLC* Delaware
LIFT Arizona, LLC Delaware
LIFT Malaysia, LLC* Delaware
LIFT Missouri, LLC Delaware
LIFT Italy, LLC* Delaware
LIFT IB Spain, LLC* Delaware
LIFT A2K UK, LLC* Delaware
LIFT Russia LLC* Delaware
ZIBAL Aircraft Leasing LLC* Delaware
A320 Aircraft Leasing IX Corp. Delaware
A320 Aircraft Leasing X Corp. Delaware
MD82 Aircraft Leasing I Corp. Delaware
MD82 Aircraft Leasing II Corp. Delaware
MD82 Aircraft Leasing III Corp. Delaware
MD82 Aircraft Owner F Limited* Cayman
MD82 Aircraft Owner G Limited* Cayman
B737 Owner Limited* Cayman
Sinope Limited* Cayman
LIFT Ireland Leasng Limited* Ireland
LIFT Indonesia Leasing, S.A.R.L.* France
LIFT Malaysian Leasing Limited* Malaysia-Lebanon
LIFT Bermuda Leasing Limited* Bermuda
----------
* These Persons will not be within the LIFT Group as of the Closing
Date. These Persons will be within the LIFT Group as of date of each such
Persons' applicable Delivery Date (as defined in the Asset Purchase Agreement).
SCHEDULE 7.01 TO
THE SERVICING AGREEMENT
RESPONSIBILITIES OF LIFT GROUP
A. With respect to Aircraft Assets, each Person within the
LIFT Group shall retain such responsibilities as are
expressly set forth in Article VII of the Servicing
Agreement.
B. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, assets which do not constitute Aircraft Assets and for any
or all LIFT Group Liabilities.
C. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all finance functions which are not expressly the
responsibility of the Servicer under the Servicing Agreement. Such
responsibilities of the LIFT Group shall include:
(i) all matters relating to the arrangement and procurement of any
financings of any type or nature for the LIFT Group;
(ii) all matters relating to the management of borrowings and
payments under such financings and the management of the
respective borrowers' or issuers', as the case may be,
compliance with the terms of such financings, including
compliance with the reporting requirements thereunder and any
computations required in connection with such reporting;
(iii) all matters relating to the arrangement and procurement of
refinancings of any type or nature of any outstanding
indebtedness of the LIFT Group;
(iv) all matters relating to the restructuring of any type or
nature of any indebtedness of the LIFT Group; and
(v) all communications with creditors (other than
trade creditors and Lessees) of any type or nature
of the LIFT Group.
It is expressly understood by the parties that while the Servicer will,
to the extent expressly provided
2
SCHEDULE 7.01 TO SERVICING AGREEMENT
in Schedule 2.02(a) to the Servicing Agreement, provide LIFT with
assistance and information required to assist in its compliance with
its obligations and covenants under the Indenture to the extent such
compliance specifically relates to the Services, the Servicer shall not
deal directly with any creditors of any Person within the LIFT Group,
except to the extent such dealings with trade creditors are incidental
to the Servicer's provision of the Services under the Servicing
Agreement.
D. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all treasury functions of the LIFT Group that are not
expressly the responsibility of the Servicer under the Servicing
Agreement, including:
(i) cash management;
(ii) currency and interest rate risk management (including the
establishment of related policies and the arrangement and
procurement of appropriate swap programs); and
(iii) reconciliation of all Bank Account-related information.
E. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all accounting functions not expressly the responsibility
of the Servicer under the Servicing Agreement, including:
(i) the monitoring of cash receipts and disbursements
and accounts payable and accounts receivable of
the LIFT Group;
(ii) the promulgation, maintenance, interpretation, amending and
supplementing of accounting policies for the LIFT Group, and
the review and approval of any potential exceptions to the
accounting policies established by the LIFT Group;
(iii) maintaining the accounting ledgers, preparing balance sheets,
statements of changes in shareholders' equity and statements
of income and cash flows and arranging for financial
3
SCHEDULE 7.01 TO SERVICING AGREEMENT
audits, as required, and for the preparation of audited
financial reports for the LIFT Group;
(iv) the provision of overhead services to the LIFT Group; and
(v) preparing annual Lease Operating Budgets and Aircraft Asset
Expenses Budgets, preparing and analyzing actual results to
budget and performing profitability analysis.
F. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all corporate secretarial activities and other matters
related to the existence of any Person within the LIFT Group.
G. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all matters relating to the holders of the share capital of
any Person within the LIFT Group.
H. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all legal and regulatory matters which are not expressly
the responsibility of the Servicer under the Servicing Agreement,
including:
(i) the preparation and filing of reports required to
be filed with the U.S. Securities and Exchange
Commission or any other Governmental Authority;
(ii) all legal services (including the negotiation of documents)
not constituting the provision of Services relating to all
matters described herein for which any Person within the LIFT
Group has responsibility; and
(iii) the preparation and filing of corporate and tax returns of
each Person within the LIFT Group with any Governmental
Authority.
I. Each of LIFT and each other Person within the LIFT
Group shall be responsible for, and the Servicer shall
have no responsibilities in respect of, any and all
litigation or other legal proceedings
4
SCHEDULE 7.01 TO SERVICING AGREEMENT
against or brought by any Person within the LIFT Group, other than
enforcement actions relating to any Aircraft Assets (including any
counterclaim arising from any such action to the extent any such
counterclaim relates to the Aircraft Assets) brought by LIFT or any
other Person within the LIFT Group commencing after the date of the
Servicing Agreement.
J. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, the arrangement and procurement of all insurance other than
insurance related to the Aircraft Assets which the Servicer is to
arrange and procure (at the expense of the LIFT Group) under the
Servicing Agreement.
K. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, employees of any Person within the LIFT Group.
L. Each of LIFT and each other Person within the LIFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, purchase orders and options to purchase Aircraft Assets,
except to the extent the same constitute the provision of Services.
M. Except to the extent provided for in Section 2.3 of Schedule 2.02(a) to
the Servicing Agreement, each of LIFT and each other Person within the
LIFT Group shall be responsible for, and the Servicer shall have no
responsibilities in respect of, keeping LIFT in compliance with their
obligations and covenants under the Security Trust Agreement.
Notwithstanding anything contained herein to the contrary,
LIFT acknowledges and agrees that it shall be responsible for, and the Servicer
shall not have any responsibility for, (a) any Compliance Obligations to any
holders of outstanding Notes or Beneficial Interest Certificates, any holders of
any other securities issued by any Person within the LIFT Group or any
Governmental Authorities and (b) all instructions, discretion, judgments and
assumptions related to such Compliance Obligations, and LIFT agrees to indemnify
the Servicer and its Affiliates in respect of the foregoing as further provided
in Section 11.05 of the Servicing Agreement.
SCHEDULE 7.04 TO
THE SERVICING AGREEMENT
LIABILITIES INCURRED IN ORDINARY COURSE OF BUSINESS
1. Acquisitions, dispositions or replacements of Aircraft, Engines or
Parts (including BFE) including, without limitation, by leasing in.
2. Modifications, maintenance, overhauls, repairs, upgrades or other
technical expenditures.
3. Dry Leases and wet Leases (including extensions, renewals, amendments
and terminations thereof).
4. Repossessions.
5. Registrations and Deregistrations.
6. Governmental approvals, certifications, permits, licenses, consents,
filings and authorizations.
7. Third party professional services including, without limitation, legal,
tax advisory and insurance.
8. Taxes.
9. Aircraft operator transition costs (including, without limitation,
flight operations, storage and maintenance, technical consultants
costs, and purchase, storage and scrapping of spare Parts).
10. Lessee Liens.
11. Insurance
SCHEDULE 8.01 TO
THE SERVICING AGREEMENT
CONDITIONS TO EXECUTION
1. Each Person within the LIFT Group (other than LIFT) shall have executed and
delivered an LIFT Group Guarantee in favor of the Servicer substantially in the
form attached to the Servicing Agreement as Appendix B.
2. Each appendix, annex, exhibit or schedule to the Servicing Agreement and each
LIFT Group Guarantee shall have been completed to the reasonable satisfaction of
the Servicer and delivered with the Servicing Agreement and the LIFT Group
Guarantees on the Closing Date.
3. The Aircraft Assets Related Documents shall have been delivered to the
Servicer, pursuant to Sections 2.02(f) and 4.02 of the Servicing Agreement, at
the Servicer's offices in Xxxxxxx, Ireland, on or prior to the Closing Date.
4. Each person within the LIFT Group shall have executed and delivered to the
Servicer the acknowledged power of attorney contemplated by Section 13.02 of the
Servicing Agreement.
5. LIFT shall have delivered to the Servicer a copy of the Indenture, certified
by LIFT as a true and complete copy thereof.
6. LIFT and each other Person within the LIFT Group shall have delivered to the
Servicer satisfactory evidence, in the reasonable judgment of the Servicer, as
to the appointment of agents for service of process as required by the
Documentary Conventions set forth in Appendix A to the Servicing Agreement.
7. LIFT and each other Person within the LIFT Group shall have delivered to the
Servicer, in form and substance reasonably satisfactory to the Servicer:
(A) a certificate dated the Closing Date of the
secretary, any assistant secretary or other appropriate
officer of each such Person certifying as to:
(1) the attached corporate charter, by-laws
and other constituent documents of such Person,
recently certified, in the case of any such document
filed with the secretary of state or similar
Governmental
2
SCHEDULE 8.01 TO SERVICING AGREEMENT
Authority of the jurisdiction in which such Person is
organized by such Governmental Authority;
(2) the absence of amendments to any
constituent document since the date of the last
amendment (a) shown on the official evidence as to
filed constituent documents furnished pursuant to (B)
below if such official evidence is available and (b)
in any event reflected in the constituent documents
furnished pursuant to (1) above;
(3) resolutions or other written evidence of
corporate action of the board of directors or
Controlling Trustees, as applicable (or appropriate
committee thereof) and, if applicable, the
shareholders of such Person duly authorizing or
ratifying the execution, delivery and performance by
such Person of the Servicing Agreement and the LIFT
Group Guarantee, as applicable, to which it is or is
to be party and the absence of any modification,
amendment or revocation thereof or any other
resolutions relating thereto;
(4) the absence of proceedings for the
dissolution, liquidation, receivership or
similar proceedings with respect to such
Person;
(5) if applicable, its corporate seal;
and
(6) the incumbency and signatures of the
individuals authorized to execute and deliver
documents on such Person's behalf; and
(B) to the extent available from appropriate
Governmental Authorities, recent official evidence from
appropriate Governmental Authorities of appropriate
jurisdictions as to constituent documents on file, good
standing, payment of franchise taxes and qualification to do
business in the jurisdiction in which such Person is
organized.
3
SCHEDULE 8.01 TO SERVICING AGREEMENT
8. LIFT and each other Person within the LIFT Group shall have delivered to the
Servicer an Officer's Certificate dated the Closing Date, in form and substance
reasonably satisfactory to the Servicer, stating that:
(A) each representation and warranty of such Person
contained in the Servicing Agreement and LIFT Group Guarantee,
as applicable, is true and correct as of the Closing Date;
(B) such Person has duly performed and complied in
all material respects with all covenants, agreements and
conditions contained in the Servicing Agreement and LIFT Group
Guarantee, as applicable, required to be performed or complied
with by it on or before the Closing Date;
(C) no event has occurred and is continuing or
condition exists or would result from the consummation of any
transaction contemplated by the Servicing Agreement or LIFT
Group Guarantee, as applicable, to which such Person is a
party that constitutes, or with the giving of notice or lapse
of time or both would constitute, a default in any material
respect under such Servicing Agreement or LIFT Group
Guarantee, as applicable, or a breach thereof or would give
any party thereto the right to terminate, or not to perform
any material obligation under, any thereof; and
(D) the Servicing Agreement and LIFT Group Guarantee,
as applicable, to which it is a party is in full force and
effect with respect to it, has not been amended, modified or
terminated and constitutes its legal, valid and binding
obligation enforceable against it in accordance with its
terms.
9. The Servicer (and such Affiliates of the Servicer that the Servicer
designates as addressees) shall have received legal opinions dated as of the
Closing Date,
4
SCHEDULE 8.01 TO SERVICING AGREEMENT
which shall cover the following matters and shall also cover such
other matters as the Servicer and its counsel may reasonably request:
(A) Each of LIFT and each other Person within the
LIFT Group has been duly organized and is validly existing as
a business trust, a corporation or a limited liability company
in good standing under the laws of its jurisdiction or
organization, incorporation or formation, respectively.
(B) Neither the execution and delivery of the
Servicing Agreement and LIFT Group Guarantee, as applicable,
nor the consummation of the transactions contemplated thereby
nor the performance by LIFT or any other Person within the
LIFT Group of any of their obligations thereunder in
accordance with the terms thereof will (i) violate any order,
writ, injunction, judgment or decree in effect as of the date
hereof of any [insert appropriate courts] to which LIFT or any
other Person within the LIFT Group, or any of their respective
Affiliates, is a party or by which any of their respective
properties or assets are bound, (ii) violate in any material
respect any applicable law of [insert applicable law] in
effect as of the date hereof or (iii) result in any conflict
with, breach of or default (or give rise to any right of
termination, cancelation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, warrant or other similar instrument or any license,
permit material agreement or other material obligation to
which any such Person is a party or by which any such Person's
properties or assets may be bound.
(C) Upon execution and delivery thereof, the
Servicing Agreement and the LIFT Group Guarantee, as
applicable, to which LIFT and each other Person within the
LIFT Group is a party shall be valid and legally binding on
and enforceable against such party in accordance with its
terms, subject to applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium or other laws
affecting creditors' rights generally from time to time in
effect and to general equity
5
SCHEDULE 8.01 TO SERVICING AGREEMENT
principles regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(D) No action, consent or approval by, or filing
with, any [insert appropriate Governmental Authorities] or
other third party is required in connection with the
execution, delivery or performance by LIFT or any other Person
within the LIFT Group of the Servicing Agreement and the LIFT
Group Guarantee, as applicable, to which it is a party or the
consummation by LIFT or any other Person within the LIFT Group
of the transactions contemplated thereby.
10. The Servicer shall have delivered to LIFT, in form and substance reasonably
satisfactory to LIFT:
(A) a certificate dated the Closing Date of the secretary, any
assistant secretary or another appropriate officer of the Servicer
certifying as to:
(1) the attached corporate charter, by-laws and other
constituent documents of the Servicer, recently certified, in
the case of any such document filed with the secretary of
state or similar Governmental Authority of the jurisdiction in
which the Servicer is organized by such Governmental
Authority;
(2) the absence of amendments to any constituent
document since the date of the last amendment (a) shown on the
official evidence as to filed constituent documents furnished
pursuant to (B) below if such official evidence is available
and (b) in any event reflected in the constituent documents
furnished pursuant to (1) above;
(3) resolutions or other written evidence of
corporate action of the board of directors (or appropriate
committee thereof) and, if applicable, the shareholders of the
Servicer duly authorizing or ratifying the execution, delivery
and performance by the Servicer of the Servicing Agreement and
the absence of any modification, amendment or revocation
thereof or any other resolutions relating thereto;
6
SCHEDULE 8.01 TO SERVICING AGREEMENT
(4) the absence of proceedings for the
dissolution, liquidation, receivership or similar
proceedings with respect to the Servicer;
(5) if applicable, its corporate seal; and
(6) the incumbency and signatures of the
individuals authorized to execute and deliver
documents on the Servicer's behalf; and
(B) to the extent available from appropriate Governmental
Authorities, recent official evidence from appropriate Governmental
Authorities of appropriate jurisdictions as to constituent documents on
file, payment of franchise taxes and qualification to do business in
the jurisdiction in which the Servicer is organized.
11. The Servicer shall have delivered to LIFT an Officer's Certificate dated the
Closing Date, in form and substance reasonably satisfactory to LIFT, stating
that:
(A) each representation and warranty of the Servicer contained
in the Servicing Agreement is true and correct as of the Closing Date;
(B) the Servicer has duly performed and complied in all
material respects with all covenants, agreements and conditions
contained in the Servicing Agreement required to be performed or
complied with by it on or before the Closing Date;
(C) no event has occurred and is continuing or condition
exists or would result from the consummation of any transaction
contemplated by the Servicing Agreement that constitutes, or with the
giving of notice or lapse of time or both would constitute, a default
in any material respect under the Servicing Agreement or a breach
thereof or would give any party thereto the right to terminate, or not
to perform any material obligation under, the Servicing Agreement; and
(D) the Servicing Agreement is in full force and effect with
respect to it, has not been amended, modified or terminated and
constitutes its legal, valid and binding obligation enforceable against
it in accordance with its terms.
7
SCHEDULE 8.01 TO SERVICING AGREEMENT
12. LIFT shall have received legal opinions dated as of the Closing Date and
issued pursuant to Sections 9(i) and 9(j) of the Purchase Agreement.
SCHEDULE 9.06(a) TO
THE SERVICING AGREEMENT
OVERHEAD EXPENSES
1. Salary, bonuses, company cars and benefits of Servicer's employees.
2. Travel and entertainment expenses of Servicer's employees.
3. Office, office equipment and rental expenses of the Servicer.
4. Telecommunications expenses of the Servicer.
5. Advertising and promotional expenses of the Servicer.
6. Taxes on the income, receipts, profits, gains, net worth or franchise
of Servicer and payroll, employment and Social Security Taxes for
employees of the Servicer.
SCHEDULE 9.06(b) TO
THE SERVICING AGREEMENT
CATEGORIES OF AIRCRAFT ASSET EXPENSES
1. Storage, maintenance, repossession (whether or not successful),
reconfiguration, refurbishment and repair expenses relating to Aircraft
Assets, including all expenses incurred by the Servicer relating to
compliance with airworthiness directives and service bulletins, which
include the fees and expenses of independent technicians and other
experts retained for any of the foregoing purposes.
2. Insurance expense related to Aircraft Assets, including all fees and
expenses of insurance advisors and brokers.
3. Expenses incurred in connection with the effectuation or acceptance of
delivery of any Aircraft Asset, whether being sold or leased by any
Person within the LIFT Group.
4. Special studies expenses related to Aircraft Assets authorized by any
Person within the LIFT Group and fees and expenses of independent
advisors retained for providing valuation and appraisal services and
general financial advice such as structuring leases and sales and
financing transactions.
5. Outside legal counsel, advisory fees and expenses and other
professional fees and expenses related to Aircraft Assets (including in
connection with the sale, lease, release, lease extension or
repossession of Aircraft Assets or any enforcement actions relating to
any lease).
6. Extraordinary fees and expenses not incurred in the ordinary course of
business which the Servicer reasonably determines appropriate in
rendering the Services.
7. Taxes reimbursable to Servicer pursuant to Section 9.07.
8. Any other expenses relating to or associated with Aircraft Assets other
than Overhead Expenses of the Servicer and such Overhead Expenses of
the LIFT Group as are expressly the responsibility of the Servicer
under Section 9.06(a) of the Servicing Agreement.
SCHEDULE 13.02 TO THE
SERVICING AGREEMENT
MANAGEMENT SERVICES
POWER OF ATTORNEY
OF
[GRANTOR]
WHEREAS [GRANTOR], having its [registered] office at [insert address]
(hereinafter called "the Grantor") desires to appoint GE CAPITAL AVIATION
SERVICES, LIMITED having its registered office at 0 Xxxxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxx 0, Xxxxxxx ("the Attorney") as the true and lawful attorney of
the Grantor for and in the name of and on behalf of the Grantor in such
Attorney's absolute discretion to execute each and every Requisite Document and
Requisite Act as defined below and do all or any of the acts or things
hereinafter mentioned.
KNOW ALL MEN BY THESE PRESENTS that in consideration for the mutual promises and
benefits set forth in the Servicing Agreement (defined below) the Grantor does
hereby make, constitute and irrevocably and unconditionally appoint for the
period (the "Term") as and from the date hereof until termination or expiry of
the Servicing Agreement between
Lease Investment Flight Trust and GE Capital
Aviation Services, Limited dated as of June 26, 2001 ("the Servicing
Agreement"), in accordance with its terms the Attorney as a true and lawful
attorney of the Grantor for and in the name of and on behalf of the Grantor with
absolute discretion to exercise, do, execute and/or deliver all or any of the
acts, documents and things hereinafter mentioned that is to say:
1. To negotiate, approve, settle the terms of, agree, make, sign, execute
(whether under hand or seal) and deliver all deeds, agreements,
documents, commitments, arrangements, instruments, applications, oaths,
affidavits, declarations, notices, confirmations, certificates,
approvals, acceptances, deliveries and to do all other acts, matters
and things whatsoever which are in each case necessary or desirable for
the Attorney to do for and on behalf of the Grantor in respect of the
provision of the Services (as defined in and contemplated by the
Servicing Agreement) (each such document a "Requisite Document" and
each such act a "Requisite Act").
2
SCHEDULE 13.02 TO SERVICING AGREEMENT
2. To make such amendments, modifications and variations
to the Requisite Documents and to enter into ancillary
documentation in respect thereof, all on such terms as any such
Attorney may, in its sole discretion, determine from time to time for
and on behalf of the Grantor; and to make, give, sign, execute and do
all things including, without limitation, any material acts which may
be necessary in order to effect the terms of such Requisite Documents
or in connection with the making, signature, executions and delivery of
the Requisite Documents or any other documents required to be executed
by the Grantor in connection therewith or the performance of any acts,
matters and things contemplated thereby or by the Requisite Acts as may
be necessary in accordance with the provision of the Services.
3. To nominate and appoint one or more substitutes as
attorney or attorneys under it for all and any of the
purposes aforesaid and the appointment of same with
liberty to revoke.
4. To acknowledge this Power of Attorney as the act and deed of the
Grantor and generally to do all other acts which may be necessary and
desirable for carrying the purpose of this Power of Attorney into
effect.
IT IS HEREBY DECLARED THAT:-
(A) The Grantor hereby ratifies and confirms and agrees to ratify
and confirm whatsoever any Attorney shall do or cause to be
done in, or by virtue of this Power of Attorney as long as
such act is not inconsistent with the terms of the Servicing
Agreement or this Power of Attorney or in violation of
Applicable Law.
(B) This Power of Attorney shall be irrevocable for
the Term and at all times both before and after
the Term shall be conclusive and binding upon the
Grantor and no person or corporation having
dealings with any Attorney under this Power of
Attorney shall be under any obligation to make any
inquiries as to whether or not this Power of
Attorney has been revoked and all acts hereunder
shall be valid and binding on the Grantor unless
3
SCHEDULE 13.02 TO SERVICING AGREEMENT
express notice of its revocation shall have been
received by such person or corporation.
(C) Subject to the provisions of the Servicing
Agreement the Grantor unconditionally undertakes
to indemnify and keep indemnified each Attorney
and his agents, and their respective successors
and estates, against all actions, proceedings,
claims, costs, expenses and liabilities of
whatsoever nature arising from the exercise or
purported exercise in good faith of any of the
powers conferred on each Attorney by this Power of
Attorney.
(D) Subject to the provisions of the Servicing
Agreement any Attorney or other person, making or
doing any payment or act, in good faith, in
pursuance of this Power of Attorney shall not be
liable in respect of the payment or act by reason
that before the payment or act the Grantor was
insolvent or had revoked this power if the fact of
such insolvency or revocation was not at the time
of payment or act known to the Attorney or other
person making or doing same.
(E) The particular powers enumerated above shall be given the
widest interpretation.
(F) THIS POWER OF ATTORNEY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF the Grantor has caused this Power of Attorney duly executed
by the Grantor this day of [ ], [ ].
SIGNED BY:
---------------------------------
For and on behalf of
[GRANTOR]
in the presence of:
ANNEX 1 TO THE
SERVICING AGREEMENT
INSURANCE GUIDELINES
1. HULL AND REPOSSESSION INSURANCE: With respect to any Aircraft Asset,
hull and repossession insurance, when applicable, shall be maintained
in an amount equal to the greatest of (a) the Note Target Price for
such Aircraft (as such Note Target Price is set forth on Schedule 1(a)
attached hereto, as the same shall be amended in writing from time to
time by LIFT), (b) the appraised value for such Aircraft (as such
appraised value is set forth on Schedule 1(b) attached hereto, as the
same shall be amended in writing from time to time by LIFT), (c) 110%
of the net book value of such Aircraft (as such net book value is set
forth on Schedule 1(c) attached hereto, as the same shall be amended in
writing from time to time by LIFT), and (d) such other amounts as may
be directed in writing by LIFT from time to time. Spare engines and
parts, if any, shall be insured on the basis of their "replacement
cost".
2. LIABILITY INSURANCE: Liability insurance shall be maintained for each
Aircraft Asset and occurrence in an amount not less than the amount set
forth on Schedule 2 attached hereto, as the same shall be amended in
writing from time to time by LIFT. Liability insurance shall be
maintained for each non-passenger Aircraft Asset and occurrence in an
amount not less than 75% of the amounts set forth on Schedule 2. With
respect to each Aircraft Asset acquired pursuant to the Asset Purchase
Agreement, liability insurance shall include, without limitation,
cover, to the extent generally available in the leading insurance
markets, for the indemnity of each Purchaser (as defined in the Asset
Purchase Agreement) contained in Section 10.1 of the Asset Purchase
Agreement, with the relevant Seller Indemnitees (as defined in the
Asset Purchase Agreement) as additional insureds, during the period
commencing on the date of Delivery of the relevant Aircraft Asset and
ending on the earlier of (i) the third anniversary of the date of such
Delivery and (ii) the date of completion of the next major check in
respect of the relevant Aircraft Asset.
3. INSURANCE DEDUCTIBLES:
(a) Deductibles and self-insurance for Aircraft Assets subject to
a Lease may be maintained in an amount (i) not to exceed $10.0
million in aggregate in respect of any one occurrence in
2
ANNEX 1 TO SERVICING AGREEMENT
respect of such Aircraft Assets provided that the Lessee
related thereto has a rating of not less than A or its
equivalent on its long-term, unsecured debt obligations by at
least one Rating Agency or (ii) pursuant to commercially
reasonable deductible and self-insurance arrangements (taking
into account, INTER ALIA, the creditworthiness and experience
of the Lessee, the type of aircraft and market practices in
the aircraft insurance industry generally).
(b) Deductibles for Aircraft Assets off-lease shall be maintained
in respect of any one occurrence in respect of such Aircraft
Assets in an amount equal to $200,000 or such other amount as
LIFT may direct in writing from time to time.
4. REPOSSESSION INSURANCE: Subject to prior confirmation from LIFT on a
case by case basis, repossession insurance shall be maintained for
Aircraft Assets subject to a Lease that are or will be registered in
any jurisdiction listed on Schedule 4 attached hereto, as the same may
be amended in writing from time to time by LIFT.
5. OTHER INSURANCE MATTERS: Apart from the matters set forth above, the
coverage and terms of any insurance with respect to any Aircraft Assets
(a) subject to a Lease, shall be negotiated on a basis consistent with
Sections 3(b) and (c) of Schedule 2.02(a) to the Servicing Agreement
and (b) not subject to a Lease, shall be substantially consistent with
the commercial practices of leading international aircraft operating
lessors regarding similar equipment.
6. NAMED INSUREDS: Any insurance arrangements entered into with respect to
any Aircraft Assets shall include as named insureds such Persons as are
set forth on Schedule 6 attached hereto, as the same shall be amended
in writing from time to time by LIFT. With respect to clauses 2(f) and
2(g) of Schedule 6, the Servicer shall use commercially reasonable
efforts to cause Lessees to include the Persons set forth in such
clauses as named insureds in connection with liability insurance;
PROVIDED, HOWEVER, that to the extent that a Lessee is not willing to
include such Persons, the Servicer will, subject to the provisions of
the Servicing Agreement
3
ANNEX 1 TO SERVICING AGREEMENT
and at the expense of LIFT, arrange for alternative liability insurance
coverage with respect to such Persons. GECAS and such of its Affiliates
as it determines appropriate may, in GECAS' sole discretion, be named
as additional insureds in connection with any such liability insurance
arrangements.
7. CURRENCIES: Any insurance requirement stated in U.S. dollar terms shall
be interpreted to include the foreign currency equivalent thereto from
time to time if any such insurance related thereto is denominated in a
currency other than U.S. dollars.
8. AVAILABILITY: The insurance guidelines set forth herein are subject in
all cases to such insurance being generally available in the relevant
insurance market from time to time.
9. REVISIONS TO REQUIRED AMOUNTS OF INSURANCE: LIFT shall use commercially
reasonable efforts to provide to the Servicer amendments to Schedules
1(a) and 1(c) attached hereto, on a quarterly basis, and Schedule 1(b)
attached hereto, on an annual basis, promptly (and in any event within
seven Business Days) following receipt or calculation by LIFT of the
relevant information that would form the basis of any such amendment.
With respect to each proposed amendment to any schedule to this Annex
1, LIFT shall provide the Servicer with (x) a signed hard copy thereof
and (y) an e-mailed Excel version thereof. The Servicer shall not be
required to implement any change in the amount of insurance required to
be maintained with respect to any Aircraft Asset pursuant to Section
1.3 of Schedule 2.02(a) to the Servicing Agreement and this Annex 1 as
a result of the receipt by the Servicer from LIFT of any written
notice, direction, amendment or similar communication pursuant to this
Annex 1 until the seventh Business Day following receipt thereof
(including, with respect to the immediately preceding sentence, receipt
of the items listed in both clauses (x) and (y) thereof.
SCHEDULE 1(a) TO ANNEX 1
TO THE SERVICING AGREEMENT
NOTE TARGET PRICE
OUTSTANDING
PRINCIPAL
BALANCE
SERIES ALLOCABLE TO
TYPE NUMBER AIRCRAFT NOTE TARGET PRICE
---- ------ -------- -----------------
1 29618 B767-300ER 81,879,747.02 84,336,139.44
2 30108 B767-300ER 79,443,571.64 81,826,878.79
3 30112 B767-300ER 78,586,995.79 80,944,605.67
4 28672 B737-300 29,194,192.83 30,070,018.61
5 28673 B737-300 28,871,825.57 29,737,980.34
6 28569 B737-300 29,103,315.65 29,976,415.12
7 23384 B737-300 15,495,119.02 15,959,972.59
8 24469 B737-400 20,818,783.95 21,443,347.47
9 49513 MD82 17,536,778.60 18,062,881.95
10 49515 MD82 17,755,988.33 18,288,667.98
11 49511 MD82 17,656,515.00 18,186,210.45
12 1093 A320-200 39,212,138.29 40,388,502.54
13 1108 A320-200 39,341,085.29 40,521,317.85
14 23376 B737-300 15,516,610.78 15,982,109.10
15 29338 B737-300 31,183,659.31 32,119,169.08
16 24512 B737-400 20,345,978.95 20,956,358.32
17 28602 B737-300 31,444,622.97 32,387,961.65
18 28606 B737-300 31,588,921.00 32,536,588.63
19 879 A320-200 37,289,295.09 38,407,973.94
20 49419 MD82 14,954,770.71 15,403,413.83
21 48523 MD11F 69,078,697.20 71,151,058.12
22 28609 B737-700 33,538,474.72 34,544,628.97
23 28427 B747-400 130,666,193.75 134,586,179.58
24 53147 MD82 20,975,362.33 21,604,623.20
25 28591 B737-800 39,077,051.77 40,249,363.32
26 28628 B737-800 41,508,314.28 42,753,563.71
27 28565 B737-500 24,386,315.50 25,117,904.97
28 28592 B737-800 39,092,401.98 40,265,174.04
29 28570 B737-300 29,083,666.91 29,956,176.92
30 49501 MD82 16,112,222.04 16,595,588.71
31 49509 MD82 17,552,129.72 18,078,693.62
32 49519 MD82 18,712,651.84 19,274,031.39
33 49578 MD83 17,294,235.92 17,813,063.00
34 49507 MD82 15,780,644.30 16,254,063.63
35 26208 B767-300ER 60,298,027.55 62,106,968.38
36 28671 B737-300 27,800,337.61 28,634,347.74
37 28584 B737-700 31,613,481.70 32,561,886.15
38 1152 A320-200 40,825,510.04 42,050,275.35
39 30110 B767-300ER 78,384,364.95 80,735,895.89
----------------
Total 1,429,000,000.00 1,471,870,000.04
================
SCHEDULE 1(b) TO ANNEX 1
TO THE SERVICING AGREEMENT
APPRAISED VALUES
SERIAL
TYPE NUMBER APPRAISED VALUE
---- ------ ---------------
1 B767-300ER 29618 88,898,333.00
2 B767-300ER 30108 86,253,333.00
3 B767-300ER 30112 85,323,333.00
4 B737-300 28672 31,696,667.00
5 B737-300 28673 31,346,667.00
6 B737-300 28569 31,598,000.00
7 B737-300 23384 16,823,333.00
8 B737-400 24469 22,603,333.00
9 MD82 49513 19,040,000.00
10 MD82 49515 19,278,000.00
11 MD82 49511 19,170,000.00
12 A320-200 1093 42,573,333.00
13 A320-200 1108 42,713,333.00
14 B737-300 23376 16,846,667.00
15 B737-300 29338 33,856,667.00
16 B737-400 24512 22,090,000.00
17 B737-300 28602 34,140,000.00
18 B737-300 28606 34,296,667.00
19 A320-200 879 40,485,667.00
20 MD82 49419 16,236,667.00
21 MD11F 48523 75,000,000.00
22 B737-700 28609 36,413,333.00
23 B747-400 28427 141,866,667.00
24 MD82 53147 22,773,333.00
25 B737-800 28591 42,426,667.00
26 B737-800 28628 45,066,333.00
27 B737-500 28565 26,476,667.00
28 B737-800 28592 42,443,333.00
29 B737-300 28570 31,576,667.00
30 MD82 49501 17,493,333.00
31 MD82 49509 19,056,667.00
32 MD82 49519 20,316,667.00
33 MD83 49578 18,776,667.00
34 MD82 49507 17,133,333.00
35 B767-300ER 26208 65,466,667.00
36 B737-300 28671 30,183,333.00
37 B737-700 28584 34,323,333.00
38 A320-200 1152 44,325,000.00
39 B767-300ER 30110 85,103,333.00
-------------
Total 1,551,491,333.00
================
SCHEDULE 1(C) TO ANNEX 1
TO THE SERVICING AGREEMENT
NET BOOK VALUE
SERIAL NET BOOK 110% OF NET
TYPE NUMBER VALUE BOOK VALUE
---- ------ ----- ----------
1 B767-300ER 29618 75,118,705.53 82,630,576.08
2 B767-300ER 30108 72,883,692.01 80,172,061.21
3 B767-300ER 30112 72,097,846.05 79,307,630.66
4 B737-300 28672 26,783,546.04 29,461,900.64
5 B737-300 28673 26,487,797.56 29,136,577.32
6 B737-300 28569 26,700,172.85 29,370,190.14
7 B737-300 23384 14,215,643.37 15,637,207.71
8 B737-400 24469 19,099,718.28 21,009,690.11
9 MD82 49513 16,088,717.36 17,697,589.10
10 MD82 49515 16,289,826.33 17,918,808.96
11 MD82 49511 16,198,566.79 17,818,423.47
12 A320-200 1093 35,974,281.60 39,571,709.76
13 A320-200 1108 36,092,580.99 39,701,839.09
14 B737-300 23376 14,235,360.49 15,658,896.54
15 B737-300 29338 28,608,736.66 31,469,610.33
16 B737-400 24512 18,665,954.12 20,532,549.53
17 B737-300 28602 28,848,151.82 31,732,967.00
18 B737-300 28606 28,980,534.75 31,878,588.23
19 A320-200 879 34,210,212.89 37,631,234.18
20 MD82 49419 13,719,913.14 15,091,904.45
21 MD11F 48523 63,374,674.47 69,712,141.92
22 B737-700 28609 30,769,108.34 33,846,019.17
23 B747-400 28427 119,876,717.86 131,864,389.65
24 MD82 53147 19,243,367.54 21,167,704.29
25 B737-800 28591 35,850,349.47 39,435,384.42
26 B737-800 28628 38,080,855.78 41,888,941.36
27 B737-500 28565 22,372,668.70 24,609,935.57
28 B737-800 28592 35,864,432.16 39,450,875.38
29 B737-300 28570 26,682,146.56 29,350,361.22
30 MD82 49501 14,781,790.46 16,259,969.51
31 MD82 49509 16,102,800.90 17,713,080.99
32 MD82 49519 17,167,495.43 18,884,244.97
33 MD83 49578 15,866,202.12 17,452,822.33
34 MD82 49507 14,477,592.02 15,925,351.22
35 B767-300ER 26208 55,319,049.46 60,850,954.41
36 B737-300 28671 25,504,785.38 28,055,263.92
37 B737-700 28584 29,003,067.41 31,903,374.15
38 A320-200 1152 37,454,432.61 41,199,875.87
39 B767-300ER 30110 71,911,947.00 79,103,141.70
------------- -------------
Total 1,311,003,442.30 1,442,103,786.56
================ ================
SCHEDULE 2 TO
ANNEX 1 TO THE
SERVICING AGREEMENT
LIABILITY INSURANCE
Model Minimum Limit
----- -------------
ATP/ATR/Dash-8/RJ/F50/F70 US $250 million
HS146/AVRO/F28/F100 US $300 million
B727/B737/A320/MD80/DC9 US $500 million
DC8/A310 US $650 million
B757/B767/A300 US $800 million
L1011/DC10/A330/A340/MD11/B777 US $600 million
B747 US $750 million
Notwithstanding the foregoing, with respect to any liability insurance
maintained by any Person within the LIFT Group for the benefit of the Persons
listed in clause 2(h) of Schedule 6 to Annex 1, such amount of insurance shall
be not less than US$750 million for wide-body Aircraft and US$600 million for
any other type of Aircraft.
SCHEDULE 4 TO ANNEX 1
TO THE SERVICING AGREEMENT
REPOSSESSION INSURANCE
COUNTRY
Angola
Armenia
Azerbaijan
Belarus
Benin
Bhutan
Cameroon
Cape Verde Islands
Chad
Comoros
Congo
Equatorial Guinea
Eritrea
Ethiopia
Grenada
Kazakhstan
Kirbati
Kyrgistan
Liberia
Moldova
Mongolia
Niger
Sao Tome & Principe
Somalia
Turkmenistan
Uzbekistan
SCHEDULE 6 TO ANNEX 1
TO THE SERVICING AGREEMENT
NAMED INSUREDS
1. HULL AND REPOSSESSION INSURANCE
with respect to each Aircraft Asset, owner (and head lessor,
if applicable) and intermediate lessor(s), if any, of Aircraft
2. LIABILITY INSURANCE
(a) with respect to each Aircraft Asset other than an Original
Aircraft, owner (and head lessor, if applicable) of Aircraft (Person
within LIFT Group)
(b) with respect to each Aircraft Asset other than an Original
Aircraft, intermediate lessor(s), if any, of Aircraft (Person(s) within
LIFT Group)
(c) GECAS, the Servicer
(d) the Administrative Agent
(e) the Trustee
(f) with respect to each Original Aircraft, the LIFT Group
(g) following the later of (i) the Effective Time (as defined
in the Indenture) and (ii) with respect to each Aircraft Asset,
Delivery of such Aircraft Asset, any holder of the Beneficial Interest
Certificates in LIFT from time to time(1)
(h) with respect to each Aircraft Asset acquired pursuant to
the Asset Purchase Agreement, the relevant Seller Indemnitees (as
defined in the Asset Purchase Agreement) during the period commencing
on the date of Delivery of such Aircraft Asset and ending on the
earlier of (i) the second anniversary of such date of Delivery and (ii)
the date of completion of the next major check in respect of such
Aircraft Asset.
--------
1 This requirement shall be deemed to be satisfied in the event that "Named
Insured" for liability insurance includes Parent Parties (in each case, as
substantially defined in Annex A, in pertinent part).
ANNEX 2 TO THE
SERVICING AGREEMENT
CONCENTRATION LIMITS
PERCENTAGE OF MOST RECENT
APPRAISED VALUE OF
LESSEE CONCENTRATION LIMITS PORTFOLIO(1)
--------------------------- -------------------------
Single lessee rated the equivalent of BBB/Baa2 or better........... 15
Other single lessees............................................... 12
Five largest lessees............................................... 40(2)
PERCENTAGE OF MOST RECENT
APPRAISED VALUE OF
COUNTRY CONCENTRATION LIMITS PORTFOLIO(1)
----------------------------- --------------------------
Countries rated the equivalent of AAA/Aaa(3)....................... 30
Countries rated the equivalent of BBB/Baa2 or better(3)............ 20
Other.............................................................. 15
---------------------
(1) This percentage is obtained by dividing the most recent appraised
value of all aircraft leased or to be leased to lessee habitually based in
the applicable country by the most recent appraised value of all aircraft
then owned by LIFT and its subsidiaries.
(2) On and after June 26, 2006, the initial Lessee Concentration Limit
of 40% of the aggregate appraised value of the aircraft applicable to the
five largest lessees will reduce to 35%, unless the rating agencies rating
the notes cofirm to LIFT that they will not lower, qualify or withdraw
their ratings as a result of retaining the 40% limit.
(3) The applicable rating is the sovereign foreign currency debt rating
assigned by the rating agencies rating the notes to the country in which a
lessee is habitually based at the time the relevant lease is executed.
2
ANNEX 1 TO SERVICING AGREEMENT
PERCENTAGE OF MOST
RECENT APPRAISED VALUE OF
REGION CONCENTRATION LIMITS PORTFOLIO(1)
--------------------------- -------------------------
Developed Market region(4)............................................ 60
Emerging Market region(4)............................................. 30
Asia and Pacific regions together(4).................................. 45
Undesginated(4)....................................................... 20(5)
Region Countries
------ ---------
Developed Markets:
Europe...................................... European Union (Excluding
Greece and Luxembourg. If Greece is admitted to
the Euro zone then Greece will be included as a
member of the Europe Developed Market Region),
Norway and Switzerland
North America............................... Canada and the United States
Pacific..................................... Australia, Hong Kong, Japan, New Zealand and
Singapore
--------------------
4 The designation of regions is set out below.
5 In addition, no more than 10% of the most recent appraised value
of the aircraft may be leased to lessees habitually based in
"Undesignated" countries rated below the equivalent of BBB/Baa2 and no
more than 5% of the most recent appraised value of the aircraft may be
leased to lessees habitually based in "Undesignated" countries in
Africa.
3
ANNEX 1 TO SERVICING AGREEMENT
Emerging Markets:
Asia........................................ China, India, Indonesia, Korea, Malaysia, Pakistan,
Philippines, Sri Lanka, Taiwan and Thailand
Europe and Middle
East........................................ Czech Republic, Greece (If Greece is admitted to
the Euro zone then Greece will be included as a
member of the Europe Developed Market Region),
Hungary, Israel, Jordan, Poland, Russia and Turkey
Latin America............................... Xxxxxxxxx, Xxxxxx, Xxxxx, Xxxxxxxx, Xxxxxx, Xxxx
and Venezuela
Undesignated................................ All other countries
APPENDIX A TO THE
SERVICING AGREEMENT
CONSTRUCTION AND USAGE; DEFINITIONS
CONSTRUCTION AND USAGE
The terms defined below have the meanings set forth below for
all purposes. "Include", "includes" and "including" shall be deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import. "Writing", "written" and comparable terms
refer to printing, typing, lithography or other means of reproducing words in a
visible form. Any agreement or instrument or any law, rule or regulation of any
Governmental Authority defined or referred to below means such agreement or
instrument or such law, rule or regulation as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of such law, rule or regulation) by
succession of any comparable successor law, rule or regulation and includes (in
the case of agreements or instruments) references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns. Any term defined below by reference to any
agreement or instrument or any law, rule or regulation of any Governmental
Authority has such meaning whether or not such agreement, instrument or law,
rule or regulation is in effect. "Agreement", "hereof", "herein", "hereunder"
and comparable terms refer to the agreement in which such term appears
(including all exhibits and schedules hereto) and not to any particular article,
section, clause or other subdivision thereof or attachment thereto. References
to any gender include, unless the context otherwise requires, references to all
genders, and references to the singular include, unless the context otherwise
requires, references to the plural and vice versa. "Shall" and "will" have equal
force and effect. References to "Article", "Section", "Clause" or another
subdivision or to an attachment are, unless the context otherwise requires, to
an article, section, clause or subdivision of or attachment to such agreement.
2
APPENDIX A TO THE SERVICING AGREEMENT
DEFINITIONS
"ACCELERATION DEFAULT" means any Event of Default of the type
described in Section 4.01(e) or 4.01(f) of the Indenture.
"ACCOUNTING CLAIMS" has the meaning assigned to such term in
Section 11.05 of the Servicing Agreement.
"ACQUISITION" has the meaning assigned to such term in the
Final Prospectus.
"ADDITIONAL CERTIFICATES" means any Beneficial Interest
Certificates issued pursuant to the Trust Agreement (or pursuant to supplements
thereto) at any time after the Closing Date, the proceeds of which are used, in
substantial part, to acquire Aircraft.
"ADDITIONAL DISPOSITION FEE" has the meaning assigned to such
term in Section 9.05(a)(ii) of the Servicing Agreement.
"ADDITIONAL FEE PERIOD" has the meaning assigned to such term
in Section 9.05(a)(iii) of the Servicing Agreement.
"ADDITIONAL NOTES" means any class or subclass of Notes issued
pursuant to the Indenture (or pursuant to supplements thereto) at any time after
the Closing Date, the proceeds of which are used, in substantial part, to
acquire Aircraft.
"ADDITIONAL RENT COLLECTED FEE" has the meaning assigned to
such term in Section 9.05(a)(iii) of the Servicing Agreement.
"ADDITIONAL SALES FEE" has the meaning assigned to such term
in Section 9.05(a)(i) of the Servicing Agreement.
"ADDITIONAL SERVICING FEES" has the meaning assigned to such
term in Section 9.01(a) of the Servicing Agreement.
"ADJUSTED BASE VALUE" has the meaning assigned to such term in
Section 1.01 of the Indenture.
"ADJUSTED GROSS PROCEEDS" has the meaning assigned to such
term in Section 9.05(a)(ii) of the Servicing Agreement.
3
APPENDIX A TO THE SERVICING AGREEMENT
"ADJUSTED PORTFOLIO VALUE" has the meaning assigned to such
term in Section 1.01 of the Indenture.
"ADMINISTRATIVE AGENCY AGREEMENT" means the Administrative
Agency Agreement dated as of June 26, 2001, between Phoenix American Financial
Services, Inc., as Administrative Agent, LIFT, the issuer subsidiaries defined
therein and Bankers Trust Company, as Trustee and the Security Trustee.
"ADMINISTRATIVE AGENCY FEES" means the fees paid to the
Administrative Agent in consideration of the services rendered by the
Administrative Agent pursuant to Section 6.01(a) of the Administrative Agency
Agreement.
"ADMINISTRATIVE AGENT" means Phoenix American Financial
Services, Inc., as administrative agent under the
Administrative Agency Agreement.
"ADVISER" means an insurance adviser engaged by the Servicer
in accordance with Section 1.3(b) of Schedule 2.02(a) to the Servicing
Agreement.
"AFFILIATE" means a Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the Person specified; PROVIDED, HOWEVER, that (i) LIFT and
its respective Subsidiaries, on the one part, and GE and its Subsidiaries, on
the other part, shall not be considered to be Affiliates of each other and (ii)
no holder of any Beneficial Interest Certificates shall be considered to be an
Affiliate of LIFT and its Subsidiaries.
"AFTER-TAX BASIS" means on a basis such that any payment
received, deemed to have been received or receivable by any Person shall, if
necessary, be supplemented by a further payment to that Person so that the sum
of the two payments shall, after deduction of all Federal, state, local and
Irish or other foreign Taxes, penalties, fines, interest, additions to Tax and
other charges resulting from the receipt (actual or constructive) or accrual of
such payments imposed by or under any Federal, state, local or Irish or other
foreign law or Governmental Authority (after taking into account any current
deduction to which such Person shall be entitled with respect to the amount that
gave rise to the underlying payment), be equal to the payment received, deemed
to have been received or receivable.
4
APPENDIX A TO THE SERVICING AGREEMENT
"AGGREGATE GROSS PROCEEDS" has the meaning assigned to such
term in Section 9.04(b) of the Servicing Agreement.
"AIRCRAFT" means any airframe together with (i) any Engine
installed on such airframe (or any Engine substituted therefor), (ii) parts or
components thereof, (iii) spare parts or ancillary equipment or devices
furnished therewith and (iv) the Aircraft Documents with respect thereto.
"AIRCRAFT ASSET EXPENSES" has the meaning assigned to such
term in Section 9.06(b)(i) of the Servicing Agreement.
"AIRCRAFT ASSET EXPENSES BUDGET" has the meaning assigned to
such term in Section 7.03(a) of the Servicing Agreement.
"AIRCRAFT ASSETS" means (a) all Aircraft owned or leased-in by
any Person within the LIFT Group as of the Closing Date or at any time or from
time to time thereafter (taking into account any acquisitions or dispositions
made in accordance with this Agreement); PROVIDED, HOWEVER, that Aircraft Assets
shall not include (x) any Aircraft Asset that shall have ceased to be an
Aircraft Asset in accordance with the provisions of Sections 2.04(b) or 3.02(d)
of the Servicing Agreement, but shall include any Former Aircraft Asset that
shall have become an Aircraft Asset pursuant to Section 6.07 of the Servicing
Agreement or (y) any Aircraft Asset in respect of which the obligation of the
Servicer to provide Services shall have been terminated in accordance with
Article X of the Servicing Agreement and (b) all Original Aircraft.
"AIRCRAFT ASSETS RELATED DOCUMENTS" means all Leases and other
contracts and agreements of Persons within the LIFT Group the terms of which
relate to or affect any of the Aircraft Assets.
"AIRCRAFT DOCUMENTS" means, in relation to an Aircraft, all
records, logs, technical data, manuals and other documents relating to the
maintenance and operation of such Aircraft.
"AMENDED AND RESTATED SERVICING AGREEMENT" means the Amended
and Restated Servicing Agreement dated as of March 28, 1996, between GECAS and
debis.
5
APPENDIX A TO THE SERVICING AGREEMENT
"ANNEX 1" means Annex 1 to the Servicing Agreement, which
annex sets forth the Insurance Guidelines.
"ANNEX 2" means Annex 2 to the Servicing Agreement, which
annex sets forth the Concentration Limits contained in Section 5.03(a) of the
Indenture.
"ANNUAL REVIEW" has the meaning assigned to such term in
Section 3(c)(i) of Schedule 2.02(a) to the Servicing Agreement.
"APPLICABLE LAW" with respect to any Person means any law,
statute, ordinance, rule or regulation or code of conduct or practice of any
U.S. Federal, state or local Governmental Authority, the EU or any Irish or
other foreign or international Governmental Authority that applies to such
Person or any of its properties or assets.
"APPRAISED VALUE" means with respect to any Aircraft, the
average of the most recent appraisals by each of the Appraisers of the Base
Value of such Aircraft.
"APPRAISER" means at least three independent appraisers that
are members of the International Society of Transport Aircraft Trading or any
similar organization.
"APPROVED BUDGET" has the meaning assigned to such term in
Section 7.03(d) of the Servicing Agreement.
"ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement
dated as of June 26, 2001, among GE Capital, LIFT Trust-Sub 1 and the other
parties thereto.
"ASSIGNED LEASES" has the meaning assigned to such term in
Section 1.01 of the Security Trust Agreement.
"AUTOMATIC" means Automatic LLC.
"BANK ACCOUNTS" has the meaning assigned to such term in
Section 7.1(b) of Schedule 2.02(a) to the Servicing Agreement.
"BASE VALUE" has the meaning assigned to such term in Section
1.01 of the Indenture.
6
APPENDIX A TO THE SERVICING AGREEMENT
"BENEFICIAL INTEREST CERTIFICATES" means any Beneficial
Interest Certificates issued pursuant to the Trust Agreement (or pursuant to any
supplements thereto).
"BEST EFFORTS" has the meaning assigned to such term in
Section 2.03(a)(i) of the Servicing Agreement.
"BROKER" means an insurance broker engaged by Servicer in
accordance with Section 1.3(b) of Schedule 2.02(a) to the Servicing Agreement.
"BUSINESS DAY" means a day on which U.S. dollar deposits may
be traded on the London inter-bank market and commercial banks and foreign
exchange markets are open in New York, New York and London, England.
"CALCULATION DATE" means the fourth Business Day immediately
preceding each Payment Date.
"CHANGED CIRCUMSTANCE" means the occurrence of any material
event, circumstance or condition shall have occurred or arisen and be continuing
that is reasonably likely to result in the current cash flow projections in any
Year being materially less favorable than the forecast which is the most current
at the time that the Approved Budget is finalized for that Year in accordance
with Section 7.03 of the Servicing Agreement.
"CLOSING" means the closing of the offering and sale of the
Notes by LIFT and the consummation of the Acquisition and the other transactions
described in the Final Prospectus.
"CLOSING DATE" means June 26, 2001.
"CODE" has the meaning assigned to such term in Section
9.07(c) of the Servicing Agreement.
"COLLECTION ACCOUNT" has the meaning assigned to such term in
Section 3.01(a) of the Indenture.
"COMPETITOR" means any of the following Persons:
(i) any Person (other than GE Capital and its Affiliates)
engaged in, or which has an Affiliate engaged in, the business of
manufacturing aircraft or aircraft engines, which business had
consolidated revenues attributable to such business for such Person's
and/or its Affiliates', as the case may be,
7
APPENDIX A TO THE SERVICING AGREEMENT
most recently completed fiscal year in excess of $200 million; or
(ii) any of the following Persons (or any of their respective
Affiliates) and their respective successors and assigns:
(a) International Lease Finance Corporation;
(b) Ansett Worldwide Aviation Services;
(c) GATX Corporation;
(d) ORIX;
(e) Pembroke Capital Limited;
(f) Xxxxxxx & Xxxxx Limited;
(g) debis; and
(h) IAMG; or
(iii) any other Person (or any Affiliate thereof) (other than
GE and its Affiliates) which engages in a business as an operating
lessor of Aircraft Assets in competition with any Person within the
LIFT Group either (x) in succession to any of the Persons specified in
clause (ii) above or (y) which has consolidated aircraft
leasing-related revenues (excluding revenues from sales of aircraft)
attributable to such business for its most recently completed fiscal
year in excess of $200 million.
"COMPLIANCE OBLIGATIONS" has the meaning assigned to such term
in Section 11.05 of the Servicing Agreement.
"CONCENTRATION LIMITS" has the meaning assigned to such term
in Section 2.2(a) of Schedule 2.02(a) to the Servicing Agreement.
"CONFLICTS STANDARD" has the meaning assigned to such term in
Section 3.02(b) of the Servicing Agreement.
"CONTROL" (including, with its correlative meanings,
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).
"CONTROLLING TRUSTEES" means the controlling trustees of LIFT.
8
APPENDIX A TO THE SERVICING AGREEMENT
"CORE LEASE PROVISIONS" means the core lease provisions
included as Exhibit K to the Indenture, as the same may be amended from time to
time.
"DEBIS" means debis AirFinance Ireland plc, a company
incorporated under the laws of Ireland (formerly known as AerFi Group plc).
"DEFAULT NOTICE" has the meaning assigned to such term in
Section 1.01 of the Indenture.
"DELIVERY" has the meaning assigned to such term in Section
1.1 of the Asset Purchase Agreement.
"DEPOSITS" means the deposits required under a Lease.
"DISPOSITION" has the meaning assigned to such term in Section
9.04(b) of the Servicing Agreement.
"DOCUMENTARY CONVENTIONS" with respect to any agreement,
instrument or other document that states it is governed thereby, means that,
except as otherwise expressly provided therein:
(a) NO PARTNERSHIP. The parties thereto expressly recognize
and acknowledge that such agreement, instrument or other document is
not intended to create a partnership, joint venture or other similar
arrangement between or among any of the parties thereto or their
respective Affiliates.
(b) NOTICES. Subject to paragraph (d) below, all notices,
consents, directions, approvals, instructions, requests and other
communications required or permitted by such agreement, instrument or
other document to be given to any Person shall be in writing, and any
such notice shall become effective five Business Days after being
deposited in the mails, certified or registered, return receipt
requested, with appropriate postage prepaid for first class mail or, if
delivered by hand or courier service or in the form of a facsimile,
when received (and, in the case of a facsimile, receipt of such
facsimile is confirmed to the sender), and shall be directed to the
address or facsimile number of such Person set forth in Appendix C to
the Servicing Agreement. From time to time any party to such agreement,
instrument or other document may designate a new address or number for
purposes of
9
APPENDIX A TO THE SERVICING AGREEMENT
notice thereunder by notice to each of the other parties
thereto.
(c) GOVERNING LAW. SUCH AGREEMENT, INSTRUMENT OR OTHER
DOCUMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(d) JURISDICTION; COURT PROCEEDINGS; WAIVER OF JURY TRIAL. Any
suit, action or proceeding against any party to such agreement,
instrument or other document arising out of or relating to such
agreement, instrument or other document, any transaction contemplated
thereby or any judgment entered by any court in respect of any thereof
may be brought in any New York State court located in the County of New
York or Federal court sitting in the Second Circuit, and each such
party hereby submits to the nonexclusive jurisdiction of such courts
for the purpose of any such suit, action or proceeding. To the extent
that service of process by mail is permitted by applicable law, each
party thereto irrevocably consents to the service of process in any
such suit, action or proceeding in such courts by the mailing of such
process by registered or certified mail, postage prepaid, at its
address for notices provided for above. Each party to such agreement,
instrument or other document irrevocably agrees not to assert any
objection which it may ever have to the laying of venue of any such
suit, action or proceeding in any New York State court located in the
County of New York or Federal court sitting in the Second Circuit, and
any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. To the fullest extent
permitted by Applicable Law, each party to such agreement, instrument
or other document waives any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under
or in connection with such agreement, instrument or other document.
LIFT agrees, and it shall cause each other Person within the LIFT Group
not to bring any action, suit or proceeding against GE Capital, the
Servicer or any of their respective Affiliates or any of GE Capital's,
the Servicer's or their respective Affiliates' Representatives arising
out of, in connection with or related to any such agreement, instrument
or other document or any transaction contemplated thereby except in a
New
10
APPENDIX A TO THE SERVICING AGREEMENT
York State court located in the County of New York or Federal court
sitting in the Second Circuit.
(e) AGENT. LIFT and each other Person within the LIFT Group
hereby appoints CT Corporation System (the "AGENT"), 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, X.X.X. 00000, as its nonexclusive agent for service
of process in connection with each Operative Agreement. The parties may
use any other legally available means of service of process. LIFT will
promptly notify the Servicer and GE Capital of any change in the
address of the Agent; PROVIDED, HOWEVER, that LIFT will at all times
maintain an agent located within New York State for service of process
in connection with each Operative Agreement, the identity of any
successor Agent to be reasonably satisfactory to the Servicer and GE
Capital.
The Servicer hereby appoints GE Capital (the "SERVICER'S
AGENT"), 000 Xxxxxxx Xxx., 00xx Xxxxx, Xxx Xxxx, X.X. 00000, X.X.X., as
its nonexclusive agent for service of process in connection with each
Operative Agreement. The parties may use any other legally available
means of service of process. The Servicer will promptly notify LIFT of
any change in the address of the Servicer's Agent; PROVIDED, HOWEVER,
that the Servicer will at all times maintain an agent located within
New York State for service of process in connection with each Operative
Agreement, the identity of any successor Servicer's Agent to be
reasonably satisfactory to LIFT.
(f) CONSEQUENTIAL DAMAGES. In no event will any party to such
agreement, instrument or other document be liable to any other for lost
profits, income tax consequences, lost savings or any other
consequential damages, even if such party has been advised of the
possibility of such damages, or for punitive damages, resulting from
the breach of any obligation under such agreement, instrument or other
document.
(g) COUNTERPARTS. Each such agreement, instrument or other
document may be executed by the parties thereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and
the same agreement, instrument or other document. All signatures need
not be on the same counterpart.
11
APPENDIX A TO THE SERVICING AGREEMENT
(h) ENTIRE AGREEMENT; AMENDMENT AND WAIVER. Such agreement,
instrument or other document, together with the other Operative
Agreements, shall constitute the entire agreement of the parties
thereto with respect to the subject matter thereof and supersedes all
prior written and oral agreements and understandings with respect to
such subject matter. Neither any such agreement, instrument or other
document nor any of the terms thereof may be terminated, amended,
supplemented, waived or modified, except by an instrument in writing
signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification shall be sought. No
failure or delay of any party to any such agreement, instrument or
other document, in exercising any power or right thereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power.
(i) TABLE OF CONTENTS; HEADINGS. The table of contents and
headings of the various articles, sections and other subdivisions of
such agreement, instrument or other document are for convenience of
reference only and shall not modify, define or limit any of the terms
or provisions of such agreement, instrument or other document.
(j) PARTIES IN INTEREST; LIMITATION ON RIGHTS OF OTHERS. The
terms of such agreement, instrument or other document shall be binding
upon, and inure to the benefit of, the parties thereto and their
permitted successors and assigns and, to the extent applicable, their
respective Affiliates and Representatives. Except as expressly set
forth in any such agreement, instrument or other document with respect
to Affiliates and Representatives of the parties thereto, nothing in
such agreement, instrument or other document, whether express or
implied, shall be construed to give any Person (including any past,
present or future employee of any Person within the LIFT Group) (other
than the parties thereto and their permitted successors and assigns
and, with respect to Sections 2.01(a) and 2.03(m) of the Servicing
Agreement and Section 9.3 of Schedule 2.02 to the Servicing Agreement,
any holders of the Beneficial Interest Certificates) any
12
APPENDIX A TO THE SERVICING AGREEMENT
legal or equitable right, remedy or claim under or in respect of such
agreement, instrument or other document or any covenants, conditions
or provisions contained therein.
(k) METHOD OF PAYMENT. Except as otherwise agreed, all amounts
required to be paid by any party to such agreement, instrument or other
document to any other party thereunder (including in respect of any
judgment or settlement entered in respect of such agreement, instrument
or other document) shall be paid in dollars, by wire transfer, or other
acceptable method of payment, of same day funds to a dollar account
located in the United States as such party may specify by notice to the
other party.
(l) PAYMENT ON BUSINESS DAYS. If any payment under such
agreement, instrument or other document is required to be made on a day
other than a Business Day, the date of payment shall be extended to the
next Business Day.
(m) PAST DUE PAYMENTS. Any amount payable to any party or any
of its Representatives under any such agreement, instrument or other
document shall be paid on the date therein specified for payment of
such amounts. To the extent that all or a portion of such amount is not
paid on such date, such amount (or the unpaid portion thereof) shall
bear interest at the Stipulated Interest Rate from such date until and
through the date that such amount has been paid in full.
(n) SEVERABILITY. Any provision of such agreement, instrument
or other document that shall be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions thereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by Applicable Law, each of LIFT and the Servicer waives any
provision of law that renders any provision of any agreement,
instrument or other document prohibited or unenforceable in any
respect.
"DOLLAR" or "$" means the lawful money of the United States of
America.
13
APPENDIX A TO THE SERVICING AGREEMENT
"DUE DATE" has the meaning assigned to such term in Section
9.07(a) of the Servicing Agreement.
"EFFECTIVENESS DATE" has the meaning assigned to such term in
Section 10.02(c)(ii) of the Servicing Agreement.
"ENGINE" means owned or leased-in aircraft engines or, with
respect to any Original Aircraft, any aircraft engine required to be delivered
together with such Original Aircraft pursuant to the terms of the Asset Purchase
Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EU" means the European Union.
"EVENT OF DEFAULT" has the meaning assigned to such term in
Section 1.01 of the Indenture.
"EXCHANGE NOTES" means any notes of LIFT containing terms
identical to the Notes issued on the Closing Date, any Additional Notes or any
Refinancing Notes (except that such Exchange Note shall be registered under the
Securities Act of 1933) that are issued and exchanged for the Notes issued on
the Closing Date, such Additional Notes or such Refinancing Notes, as the case
may be, pursuant to a Registration Rights Agreement and the Indenture.
"EXCHANGE OFFER" means any exchange offer pursuant to which
any of the Notes will be exchanged for Exchange Notes issued pursuant to an
effective registration statement under the Securities Act of 1933.
"EXISTING ACCOUNTS" has the meaning assigned to such term in
Section 7.1(a) of Schedule 2.02(a) to the Servicing Agreement.
"EXPENSE ACCOUNT" has the meaning assigned to such term in
Section 3.01(a) of the Indenture.
"FEE PERIOD" has the meaning assigned to such term in Section
9.03(a)(i) of the Servicing Agreement.
"FINAL PROSPECTUS" has the meaning assigned to such term in
Section 2.03(a)(ii) of the Servicing Agreement.
14
APPENDIX A TO THE SERVICING AGREEMENT
"FORMER AIRCRAFT ASSET" has the meaning assigned to such term
in Section 2.04(b) of the Servicing Agreement.
"GE" means General Electric Company, a New York corporation.
"GE CAPITAL" means General Electric Capital Corporation, a New
York corporation.
"GECAS" means GE Capital Aviation Services, Limited, a company
incorporated under the laws of Ireland.
"GE POLICY" has the meaning assigned to such term in Section
2.04(a) of the Servicing Agreement.
"GOVERNMENTAL AUTHORITY" means any court, administrative
agency or commission or other governmental agency or instrumentality (or any
officer or representative thereof) domestic, foreign or international, of
competent jurisdiction including the EU.
"GROSS PROCEEDS" has the meaning assigned to such term in
Section 9.04(b) of the Servicing Agreement.
"GUARANTEE" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); PROVIDED,
HOWEVER, that the term Guarantee shall not include (x) endorsements for
collection or deposit, in either case in the ordinary course of business, (y)
any guarantee by any Person within the LIFT Group of the obligations of another
Person within the LIFT Group in respect of such Person's obligations in
connection with any Aircraft Assets, whether as lessor, seller or otherwise, or
(z) the delivery of a bond or similar instrument by or on behalf of any Person
within the LIFT Group in connection with the detention or repossession of any
Aircraft Assets.
15
APPENDIX A TO THE SERVICING AGREEMENT
"INDEBTEDNESS" means, with respect to any Person at any date
of determination (without duplication), (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (d) all the obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six months after the date of purchasing
such property or service or taking delivery and title thereto or the completion
of such services, and payment deferrals arranged primarily as a method of
raising finance or financing the acquisition of such property or service, (e)
all obligations of such Person under a lease of (or other agreement conveying
the right to use) any property (whether real, personal or mixed) that is
required to be classified and accounted for as a capital lease obligation under
U.S. GAAP, (f) all Indebtedness of other Persons secured by a lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person, and
(g) all Indebtedness of other Persons Guaranteed by such Person.
"INDEMNIFIED PARTIES" means GE Capital, the Servicer and their
respective Affiliates and each of GE Capital's, the Servicer's and their
respective Affiliates' Representatives.
"INDENTURE" means the Trust Indenture dated as of June 26,
2001, among LIFT, LIFT Trust-Sub 1, the Administrative Agent and Bankers Trust
Company, as trustee.
"INDEPENDENT REPRESENTATIVE" has the meaning assigned to such
term in Section 3.02(c) of the Servicing Agreement.
"INDEPENDENT TRUSTEES" means the independent trustees of LIFT.
"INITIAL EXCHANGE OFFER" means the Exchange Offer with respect
to the Notes issued on the Closing Date.
"LEASE" means any lease or other agreement or arrangement
pursuant to which any Person (other than a Person within the LIFT Group) has the
right to possession and use of any Aircraft Asset.
16
APPENDIX A TO THE SERVICING AGREEMENT
"LEASE OPERATING BUDGET" has the meaning assigned to such term
in Section 7.03(a) of the Servicing Agreement.
"LESSEE" means the lessee (or equivalent Person) in respect of
a Lease.
"LESSEE CONTACT" has the meaning assigned to such term in
Section 2.01(a) of the Servicing Agreement.
"LESSEE FUNDED ACCOUNT" has the meaning assigned to such term
in Section 3.01(a) of the Indenture.
"LIEN" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LIFT" means Lease Investment Flight Trust, a Delaware
statutory business trust.
"LIFT GROUP" has the meaning assigned to such term in Section
2.01(a) of the Servicing Agreement.
"LIFT GROUP GUARANTEES" means each Guarantee, in the form set
forth as Appendix B to the Servicing Agreement, issued by each Person within the
LIFT Group (other than LIFT) pursuant to Section 6.13 of the Servicing
Agreement.
"LIFT GROUP LIABILITIES" means any obligations or liabilities
of any Person within the LIFT Group (whether accrued, absolute, contingent,
unasserted, known or unknown or otherwise).
"LOSSES" means any and all liabilities (including liabilities
arising out of the doctrine of strict liability), obligations, losses, damages,
penalties, Taxes, actions, suits, judgments, costs, fees, expenses (including
reasonable legal fees, expenses and related charges and costs of investigation)
and disbursements, of whatsoever kind and nature; PROVIDED, HOWEVER, the term
"Losses" shall not include any Indemnified Party's management time or overhead
expenses.
17
APPENDIX A TO THE SERVICING AGREEMENT
"MAINTENANCE RESERVES" means the maintenance reserves under
each of the Leases.
"MATERIAL ADVERSE EFFECT" with respect to any Person means an
event, condition, matter, change or effect that impacts or, insofar as
reasonably can be foreseen, in the future is likely to impact, in a material
adverse manner, the condition (financial or otherwise), properties, assets,
liabilities, earnings, capitalization, shareholders' equity, licenses or
franchises, businesses, operation or prospects of such Person or the ability of
such Person to perform fully any of its obligations under any of the Operative
Agreements.
"MONTHLY BASE FEE" has the meaning assigned to such term in
Section 9.01(a) of the Servicing Agreement.
"MONTHLY PAYMENT PERIOD" has the meaning assigned to such term
in Section 7.3(a) of Schedule 2.02(a) to the Servicing Agreement.
"NET PROCEEDS" has the meaning assigned to such term in
Section 2.03(g) of the Servicing Agreement.
"NEW ACCOUNTS" has the meaning assigned to such term in
Section 7.1(b) of Schedule 2.02(a) to the Servicing Agreement.
"NONTERMINATING PARTY" has the meaning assigned to such term
in Section 10.02(c)(i) the Servicing Agreement.
"NOTES" means any class or subclass of Notes issued pursuant
to the Indenture on the Closing Date, any Exchange Notes, any Additional Notes
and any Refinancing Notes, in each case issued pursuant to the Indenture (or
pursuant to any supplements thereto).
"NOTE TARGET PRICE" has the meaning assigned to such term in
Section 5.02(g) of the Indenture.
"NOTES OFFERING" has the meaning assigned to such term in
Section 2.03(a)(i) of the Servicing Agreement.
"NOTICE OF TERMINATION" means a Termination Notice.
18
APPENDIX A TO THE SERVICING AGREEMENT
"OFFICER'S CERTIFICATE" means, as to any Person, a certificate
of the President, any Vice President or Assistant Vice President, the Treasurer
or any Assistant Treasurer, the Secretary or any Assistant Secretary, or any
Director.
"OPERATIVE AGREEMENTS" means the Servicing Agreement, the LIFT
Group Guarantees and all other agreements, instruments or other documents which
are required by the terms of any thereof to be delivered in connection with any
of the foregoing documents.
"ORIGINAL AIRCRAFT" means any "Aircraft" (as defined in the
Asset Purchase Agreement); PROVIDED, HOWEVER, that Original Aircraft shall not
include any "Aircraft" (x) which shall have suffered an "Event of Loss" (as
defined in the Asset Purchase Agreement) and in respect of which the loss
proceeds shall have become payable to the appropriate Person within the LIFT
Group, (y) with respect to which a payment has been made pursuant to Section 4.2
of the Asset Purchase Agreement or (z) with respect to which a Delivery has been
effected.
"OTHER ASSETS" has the meaning assigned to such term in
Section 3.02(a) of the Servicing Agreement.
"OUTSTANDING PRINCIPAL BALANCE" has the meaning assigned to
such term in Section 1.01 of the Indenture.
"OVERHEAD EXPENSES" has the meaning assigned to such term in
Section 9.06(a) of the Servicing Agreement.
"PARENT PARTIES" means, initially, General
Electric Capital Corporation, or upon Delivery of the relevant Aircraft Asset,
LIFT Trust-Sub 1, Lease Investment Flight Trust, Automatic LIFT I, LP, and/or
each other Person which from time to time is the legal or beneficial owner,
directly or indirectly, of more than 50% of the capital stock, membership
interests, beneficial interest, partnership interests or other interests of or
in Lessor or Owner, and their successors and assigns.
"PARTIAL TERMINATION" has the meaning assigned to such term in
Section 10.02(a)(ii) of the Servicing Agreement.
"PAYMENT DATE" means the 15th day of each month, commencing on
June 26, 2001; PROVIDED, HOWEVER, that, if
19
APPENDIX A TO THE SERVICING AGREEMENT
any Payment Date would otherwise fall on a day that is not a Business Day, the
relevant Payment Date shall be the first following day which is a Business Day.
"PERMITTED ACCOUNT INVESTMENTS" has the meaning assigned to
such term in Section 1.01 of the Indenture.
"PERSON" means any individual, firm, corporation, limited
liability company, partnership, trust, body of persons, joint venture,
governmental authority or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"PRECEDENT LEASE" has the meaning assigned to such term in
Section 3(b) of Schedule 2.02(a) to the Servicing Agreement.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by Bankers Trust Company as its prime rate in effect
at its principal office in New York City; each change in the "Prime Rate" shall
be effective on the date such change is announced.
"PRO FORMA LEASE" has the meaning assigned to such term in
Section 3(b) of Schedule 2.02(a) to the Servicing Agreement.
"PROSPECTUS" has the meaning assigned to such term in Section
2.03(a)(i) of the Servicing Agreement.
"PURCHASE AGREEMENT" means the Purchase Agreement dated as of
June 13, 2001, among LIFT, Automatic Aircraft, LP and Credit Suisse First Boston
Corporation.
"QUARTER" means each fiscal quarter.
"RATING AGENCIES" means each of Standard & Poor's Ratings
Group, a division of the XxXxxx-Xxxx Companies, Inc. and Xxxxx'x
Investors Service, Inc. and any successors to either of the foregoing.
"RATINGS" means the then current rating assigned by a Rating
Agency in respect of the Notes.
"REFINANCING NOTES" means any class or subclass of Notes
issued pursuant to the Indenture (or pursuant to supplements thereto) at any
time after the Closing Date,
20
APPENDIX A TO THE SERVICING AGREEMENT
the proceeds of which are used to repay all or any part of the then outstanding
Notes.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Closing Date, between LIFT and Credit Suisse First
Boston Corporation, Xxxxxx Brothers Inc. and Xxxxxxx Xxxxx Barney Inc., and any
other agreement entered into between LIFT and a purchaser of Notes providing for
the registration of such Notes under the Securities Act of 1933.
"RENT COLLECTED FEE" has the meaning assigned to such term in
Section 9.03(a)(ii) of the Servicing Agreement.
"RENT FEES" has the meaning assigned to such term in Section
9.01 of the Servicing Agreement.
"RENT PAYABLE FEE" has the meaning assigned to such term in
Section 9.03(a)(i) of the Servicing Agreement.
"RENTS" means the basic rent payable pursuant to a Lease and
in the event that the agreement or arrangement pursuant to which possession of
any Aircraft Asset is given is other than as a lease, amounts equivalent to any
basic rent.
"REPLACEMENT SERVICER" means a replacement servicer to perform
some or all of the Services under the Servicing Agreement formerly performed by
the Servicer, appointed in accordance with Section 10.04(c) of the Servicing
Agreement.
"REPORTING PERIOD" has the meaning assigned to such term in
Section 9.1(a) of Schedule 2.02(a) to the Servicing Agreement.
"REPRESENTATIVES" with respect to any Person means the
officers, directors, employees, advisors and agents of such Person.
"REQUIRED EXPENSES AMOUNT" has the meaning assigned to such
term in Section 1.01 of the Indenture.
"RESTRICTED LESSEE CONTACT" has the meaning assigned to such
term in Section 2.01 of the Servicing Agreement.
21
APPENDIX A TO THE SERVICING AGREEMENT
"SALES FEE" has the meaning assigned to such term in Section
9.01 of the Servicing Agreement.
"SECURITY TRUST AGREEMENT" means the Security Trust Agreement
dated as of the Closing Date among LIFT, LIFT Trust-Sub 1, Bankers Trust
Company, as Security Trustee and the operating bank, and the other parties
thereto.
"SECURITY TRUSTEE" means Bankers Trust Company, a New York
banking corporation, in its capacity as security trustee pursuant to the
Security Trust Agreement.
"SERVICER" means GECAS.
"SERVICER DELEGATE" has the meaning assigned to such term in
Section 12.01 of the Servicing Agreement.
"SERVICER DISCLOSURE" has the meaning assigned to such term in
Section 2.03(a)(i) of the Servicing Agreement.
"SERVICER INFORMATION" has the meaning assigned to such term
in Section 2.03(m) of the Servicing Agreement.
"SERVICES" has the meaning assigned to such term in Section
2.02(a) of the Servicing Agreement.
"SERVICING AGREEMENT" or "AGREEMENT" means the Servicing
Agreement dated as of June 26, 2001, between LIFT and the Servicer.
"SERVICING FEES" means the Monthly Base Fee, the Sales Fee,
the Rent Fees and the Additional Servicing Fees.
"SHADOW DIRECTOR/RELATED COMPANY CLAIMS" has the meaning
assigned to such term in Section 11.04 of the Servicing Agreement.
"SIGNIFICANT SUBSIDIARY" means any Person within the LIFT
Group that has title to, or any other indicia of ownership in, any Aircraft
Assets.
"STANDARD OF CARE" has the meaning assigned to such term in
Section 3.01 of the Servicing Agreement.
22
APPENDIX A TO THE SERVICING AGREEMENT
"STANDARD OF LIABILITY" has the meaning assigned to such term
in Section 3.03 of the Servicing Agreement.
"STATED SERVICES OBLIGATION" has the meaning assigned to such
term in Section 7.3(a) of Schedule 2.02(a) to the Servicing Agreement.
"STIPULATED INTEREST RATE" means, for any period, a rate per
annum equal to the Prime Rate in effect during such period plus 2 percent per
annum.
"SUBSIDIARY" of any Person means a corporation, company or
other entity (i) more than 50% of whose outstanding shares or securities
(representing the right to vote for the election of directors or other managing
authority) are, or (ii) which does not have outstanding shares or securities (as
may be the case in a partnership, joint venture or unincorporated association),
but more than 50% of whose ownership interest representing the right to make
decisions for such other entity is, now or hereafter owned or controlled,
directly or indirectly, by such Person, but such corporation, company or other
entity shall be deemed to be a Subsidiary only so long as such ownership or
control exists.
"SWAP PROVIDER" has the meaning assigned to such term in
Section 1.01 of the Indenture.
"TAX" or "TAXES" means all fees (including documentation,
license and registration fees), taxes, assessments, levies, impositions, duties,
withholdings and other governmental charges of any nature whatsoever (including
taxes based upon or measured by gross receipts, income, profits, sales, use or
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, social security, employment, excise, documentary, stamp, corporation,
corporation profits, advance corporation, capital duty, capital gains, capital
acquisitions, wealth, vehicle registration, social insurance, and property
taxes), together with all interest, fines, penalties and additions imposed with
respect to such amounts.
"TAXPAYER" means any Person within the LIFT Group or any
predecessor of any Person within the LIFT Group, or any successor to any Person
within the LIFT Group (but not including GE Capital, the Servicer or any of
their Affiliates).
23
APPENDIX A TO THE SERVICING AGREEMENT
"TERMINATING PARTY" has the meaning assigned to such term in
Section 10.02(c)(i) of the Servicing Agreement.
"TERMINATION NOTICE" has the meaning assigned to such term in
Section 10.02(c)(i) of the Servicing Agreement.
"THIRD PARTY CLAIM" means a claim by a third party arising out
of a matter for which an Indemnified Party is entitled to be indemnified
pursuant to the indemnity provisions of the Servicing Agreement.
"TRANSACTION APPROVAL REQUIREMENTS" has the meaning assigned
to such term in Section 7.04(c) of the Servicing Agreement.
"TRANSACTION COSTS" means all out-of-pocket expenses incident
to any Notes Offering (specifically excluding, except to the extent otherwise
expressly included herein, any direct or indirect commissions, discounts, fees
or other remuneration allowed or paid to any underwriters in connection with any
such Notes Offering), including the cost of printing any offering documents
(including the Prospectus) and any expenses (including fees and disbursements of
counsel) incurred by any underwriters in connection with qualification of the
Notes for sale under the laws of such jurisdictions as the underwriters
designate and the printing of memoranda relating thereto, for any fees charged
by investment rating agencies for the rating of the Notes, for any filing fees
of the National Association of Securities Dealers, Inc. relating to the Notes
and for expenses incurred in distributing any Prospectuses.
"TRUST AGREEMENT" means the Trust Agreement dated as of June
12, 2001, between Automatic LIFT I LP, as depositor and Wilmington Trust
Company, as Owner Trustee.
"TRUSTEE" has the meaning assigned to such term in the
Indenture.
"TRUSTEE FEES" means the fees paid to the Trustee in
consideration of the services rendered by the Trustee pursuant to Article VI of
the Indenture.
"U.S. GAAP" means generally accepted accounting principles in
the United States.
24
APPENDIX A TO THE SERVICING AGREEMENT
"U.S. TAX CODE" means the United States Internal Revenue Code
of 1986, as amended.
"YEAR" means each fiscal year ended December 31.
APPENDIX B TO THE
SERVICING AGREEMENT
GUARANTEE dated as of [insert date], made by
[insert name] ("Guarantor") in favor of GE CAPITAL
AVIATION SERVICES, LIMITED (the "Servicer") and its
Affiliates relating to the Servicing Agreement dated as
of June 26, 2001 (the "Agreement"), between the Servicer
and LEASE INVESTMENT FLIGHT TRUST ("LIFT").
WHEREAS pursuant to the Agreement, the Servicer has agreed to
provide Services to each Person within the LIFT Group in accordance with and to
the extent set forth in the Agreement;
WHEREAS the Obligor is a party to the Agreement and is liable
for any and all amounts due and owing to the Servicer and any of its Affiliates
under the Agreement; and
WHEREAS each Person within the LIFT Group is a direct or
indirect beneficiary of the Services performed by the Servicer pursuant to the
Agreement.
NOW, THEREFORE, in consideration of the premises and to induce
the Servicer to enter in the Agreement and to perform the Services thereunder,
Guarantor hereby agrees, for the benefit of the Servicer and its Affiliates, as
follows:
1. Guarantor unconditionally and irrevocably guarantees to the
Servicer and its Affiliates (a) the due and punctual payment of all amounts due
to the Servicer and its Affiliates from the Obligor under the Agreement, whether
now existing or hereafter incurred, and (b) the due and punctual performance of
all other obligations of the Obligor to the Servicer and its Affiliates under
the Agreement (all the foregoing being hereinafter collectively called the
"Obligations") and any and all fees and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by the Servicer and its
Affiliates in enforcing any rights under this Guarantee, all without regard to
any counterclaim, set-off, deduction or defense of any kind which the Obligor or
Guarantor may have or assert, and without abatement, suspension, deferment or
diminution on account of any event or condition whatsoever. In case of failure
of the Obligor punctually to pay any of the amounts referred to in clause (a)
above, Guarantor hereby agrees to cause such amounts to be paid punctually when
and as
0
XXXXXXXX X TO THE SERVICING AGREEMENT
the same shall become due and payable as if such payment were made by the
Obligor. Guarantor further agrees that this Guarantee constitutes a guarantee of
payment when due and not of collection.
2. The liability of the undersigned under this Guarantee
shall, to the fullest extent permitted by Applicable Law, be unconditional
irrespective of (i) any lack of enforceability against the Obligor of any
Obligation, (ii) any change of the time, manner or place of payment, or any
other term, of any Obligation, (iii) any exchange, release or nonperfection of
any collateral securing payment of any Obligation or any other guarantee in
respect thereof, (iv) any law, regulation or order of any jurisdiction affecting
any term of any Obligation or the Servicer's or any of its Affiliates' rights
with respect thereto and (v) any other circumstance which might vary the risk of
or otherwise constitute a defense available to, or a discharge of, the Obligor,
Guarantor or any surety. The Guarantor waives, to the fullest extent permitted
by Applicable Law, promptness, diligence and notices with respect to any
Obligation and this Guarantee and any requirement that the Servicer or any of
its Affiliates exhaust any right or take any action against the Obligor, any
collateral security or any other guarantor.
3. In the event that the Guarantor is required by any
applicable law to make any deduction or withholding for or on account of Taxes
from any payment to be made by it hereunder, then it shall (i) pay over to the
government or taxing authority imposing such Tax the full amount required to be
deducted or withheld (including the full amount required to be deducted or
withheld from the additional amounts required to be paid pursuant to clause (ii)
below), (ii) pay to the Servicer or its Affiliates, as the case may be, together
with such payment such additional amounts as may be necessary in order that the
net amount received by the Servicer or its Affiliates, as the case may be, will
be not less than the full amount of such payment which would otherwise have been
receivable had no such deduction or withholding been required and (iii) forward
to the Servicer as soon as possible such tax receipts or other official
documentation with respect to the payment of the Taxes so deducted or withheld
as may be issued from time to time by such government or taxing authority.
4. Guarantor further agrees that this Guarantee shall continue
to be effective or be reinstated, as the
0
XXXXXXXX X TO THE SERVICING AGREEMENT
case may be, if at any time payment, or any part thereof, of any Obligation or
interest thereon is rescinded or must otherwise be restored by the Servicer
upon the bankruptcy or reorganization of the Obligor, Guarantor or otherwise.
5. Upon payment by Guarantor of any sums to the Servicer or
its Affiliates under this Guarantee, all rights of Guarantor against the Obligor
arising as a result thereof by way of right of subrogation or otherwise shall in
all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full of all the obligations of the Obligor under the
Agreement.
6. The Guarantor represents and warrants as of the date hereof
to the Servicer and its Affiliates that:
(a) the Guarantor is a corporation or business trust duly
organized and validly existing and, if relevant, in good standing under
the laws of the jurisdiction in which it is legally organized, and has
full power, authority and legal right to execute and deliver, and to
perform its obligations under, this Guarantee;
(b) the Guarantor has taken all necessary corporate and legal
action to authorize the guarantee hereunder on the terms and conditions
of this Guarantee and to authorize its execution, delivery and
performance;
(c) this Guarantee has been duly executed and delivered by a
duly authorized officer or Representative of the Guarantor, and
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms;
(d) the execution, delivery and performance of this Guarantee
will not constitute a default under or violate any provision of any law
or regulation, or any judgment or order of any court, arbitrator or
governmental authority, in each case applicable to the Guarantor,
constituent documents of the Guarantor, or any agreement to which the
Guarantor is a party; and
(e) no consent of any other Person, and no consent, license,
permit, approval or authorization
4
APPENDIX B TO THE SERVICING AGREEMENT
of, exemption by, notice or report to, or registration, filing or
declaration with, any Governmental Authority, is required in
connection with the execution delivery, performance, validity or
enforceability with respect to the Guarantor of this Guarantee.
7. This Guarantee shall remain in full force and effect and be
binding in accordance with its terms upon the Guarantor and shall inure to the
benefit of the Servicer and its Affiliates until all the Obligations and the
obligations of the Guarantor under this Guarantee shall have been satisfied by
indefeasible payment in full.
8. The obligations of Guarantor under this Guarantee may not
be assigned or delegated without the prior written consent of the Servicer.
9. The liability of the Guarantor under this Guarantee is
limited to the maximum amount that will result in the obligations of the
Guarantor not constituting a fraudulent conveyance or fraudulent transfer under
Applicable Law.
10. This Guarantee shall be governed by the Documentary
Conventions, and all capitalized terms used but not defined herein have the
meanings assigned to such terms in Appendix A to the Agreement. The construction
and usage set forth in such Appendix A are incorporated herein by reference.
IN WITNESS WHEREOF, Guarantor has executed this Guarantee as
of the date first above written.
[Insert Name of Guarantor]
by
----------------------
Name:
Title:
APPENDIX C TO THE
SERVICING AGREEMENT
NOTICES
GE CAPITAL AVIATION SERVICES, LIMITED
Aviation House
Shannon, County Clare
Ireland
Attention: Company Secretary
Fax: (000) 00-000000
Telephone: (000) 00-000000
with a copy to:
GE Capital Aviation Services, Inc.
000 Xxxx Xxxxx Xxxx (Xxxxxx Xxxxx)
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
Telephone: (000) 000-0000
Lease Investment Flight Trust
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Phoenix American Financial Services, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Financial Services Division
Fax: (000) 000-0000
Telephone: (000) 000-0000
EXHIBIT G
FORM OF
ADMINISTRATIVE AGENCY AGREEMENT
between
LEASE INVESTMENT FLIGHT TRUST,
as the Issuer
THE ISSUER SUBSIDIARIES IDENTIFIED HEREIN,
BANKERS TRUST COMPANY
in its capacity as the Trustee and the Security Trustee
and
PHOENIX AMERICAN FINANCIAL SERVICES, INC.
as the Administrative Agent
Dated as of June 26, 2001
Table of Contents
Page
----
ARTICLE I DEFINITIONS...........................................................................1
Section 1.01 Definitions..........................................................1
ARTICLE II APPOINTMENT; ADMINISTRATIVE SERVICES.................................................4
Section 2.01 Appointment..........................................................4
Section 2.02 Limitations..........................................................5
Section 2.03 Administrative Services..............................................6
Section 2.04 Bank Account Management and Calculation Services....................11
Section 2.05 Accounting Services.................................................14
Section 2.06 Additional Administrative Services..................................16
Section 2.07 Additional Aircraft.................................................17
Section 2.08 New Subsidiaries....................................................17
Section 2.09 The Issuer Group Responsibility.....................................17
ARTICLE III STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY...................................17
Section 3.01 Standard of Performance.............................................17
Section 3.02 Liability and Indemnity.............................................18
ARTICLE IV ADMINISTRATIVE AGENT UNDERTAKINGS...................................................20
Section 4.01 Administrative Agent Undertakings...................................20
ARTICLE V UNDERTAKINGS OF THE ISSUER GROUP.....................................................22
Section 5.01 Cooperation.........................................................22
Section 5.02 Information.........................................................22
Section 5.03 Scope of Services...................................................22
Section 5.04 Ratification........................................................23
Section 5.05 Covenants...........................................................23
i
Section 5.06 Ratification by Subsidiaries........................................24
ARTICLE VI ADMINISTRATION FEES AND EXPENSES....................................................24
Section 6.01 Administration Fees.................................................24
Section 6.02 Expenses............................................................25
Section 6.03 Payment of Expenses.................................................25
ARTICLE VII TERM; REPLACEMENT OF OR RESIGNATION BY THE ADMINISTRATIVE AGENT....................26
Section 7.01 Term................................................................26
Section 7.02 Replacement or Resignation..........................................26
Section 7.03 Consequences of Replacement or Resignation..........................27
Section 7.04 Survival............................................................28
ARTICLE VIII ASSIGNMENT AND DELEGATION.........................................................28
Section 8.01 Assignment and Delegation...........................................28
ARTICLE IX MISCELLANEOUS.......................................................................28
Section 9.01 Notices.............................................................28
Section 9.02 Governing Law.......................................................30
Section 9.03 Jurisdiction........................................................30
Section 9.04 WAIVER OF JURY TRIAL................................................30
Section 9.05 Counterparts; Third Party Beneficiaries.............................30
Section 9.06 Entire Agreement....................................................31
Section 9.07 Table of Contents; Headings.........................................31
Section 9.08 Amendments..........................................................31
Section 9.09 No Partnership......................................................31
Section 9.10 Concerning the Security Trustee and the Trustee.....................31
Section 9.11 Restrictions on Disclosure..........................................32
ii
SCHEDULES
SCHEDULE 1 - Accounts
SCHEDULE 2 - Issuer Group Services Power of Attorney
iii
THIS ADMINISTRATIVE AGENCY AGREEMENT (this "Agreement") dated as of June
26, 2001, is made between LEASE INVESTMENT FLIGHT Trust (the "Issuer"), a
Delaware business trust, each ISSUER SUBSIDIARY signatory to this Agreement or
that becomes a party under Section 5.06 hereof (collectively with the Issuer,
the "Issuer Group"), Bankers Trust Company, a New York banking corporation, not
in its individual capacity but solely as the trustee under the Indenture and as
the security trustee under the Security Trust Agreement, and PHOENIX AMERICAN
FINANCIAL SERVICES, INC., a California corporation.
For the consideration set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Administrative
Agent, the Trustee, the Security Trustee, the Issuer and the other Issuer Group
Members agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. For purposes of this Agreement, the following
terms have the following meanings. Unless otherwise defined herein, all
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Indenture.
"Administrative Agent" means the Person, at the time of determination,
appointed as the Administrative Agent under this Agreement. The initial
Administrative Agent for both the Issuer Group Services and the Bank Account
Management Services is Phoenix American Financial Services, Inc. If at any time
a different person is appointed as the Administrative Agent for the Issuer Group
Services and as the Administrative Agent for the Bank Account Management
Services, the term "Administrative Agent" shall apply to both or one such Person
as applicable.
"Administrative Fee" has the meaning assigned to such term in Section 6.01
hereof.
"Administrative Services" has the meaning assigned to such terms in
Section 2.01 hereof.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the Person specified; provided, however, that the Issuer, the other Issuer
Group Members, the Trustee, the Security Trustee and the Administrative Agent
shall not be considered to be Affiliates of each other.
"After-Tax Basis" means on a basis such that any payment received, deemed
to have been received or receivable by any Person shall, if necessary, be
supplemented by a further payment to that Person so that the sum of the two
payments shall, after deduction of all U.S. federal, state, local and foreign
Taxes, penalties, fines, interest, additions to Tax and other charges resulting
from the receipt (actual or constructive) or accrual of such payments imposed by
or under any U.S. federal, state, local or foreign law or Governmental Authority
(after taking into account any current deduction to which such Person shall be
entitled with respect to the
2
amount that gave rise to the underlying payment) be equal to the payment
received, deemed to have been received or receivable.
"Aircraft Asset Expenses Budget" has the meaning assigned to such term in
Section 7.03(a)(i) of the Servicing Agreement.
"Aircraft Assets" has the meaning assigned to such term in the Servicing
Agreement.
"Annual Appraised Value" means initially the average Base Value of an
Aircraft at the time acquired by an Issuer Group Member and thereafter as
determined annually by the Appraisers.
"Approved Budget" has the meaning assigned to such term in Section 7.03(d)
of the Servicing Agreement.
"Bank Account Management Services" has the meaning assigned to such term
in Section 2.01 hereof.
"Capital Markets Advisor" means Credit Suisse First Boston Corporation.
"Concentration Thresholds" has the meaning assigned to such term in
Section 2.2(a) of Schedule 2.02(a) of the Servicing Agreement.
"Conflicts Standard" has the meaning assigned to such term in Section
3.02(b) of the Servicing Agreement.
"Consolidated Quarterly Draft Accounts" has the meaning assigned to such
term in Section 2.04(b)(ii) hereof.
"Consolidating Quarterly Draft Accounts" has the meaning assigned to such
term in Section 2.04(b)(iii) hereof.
"Dollars" or "$" means the lawful currency of the United States of
America.
"Draft Accounts" has the meaning assigned to such term in
Section 2.05(b)(iii) hereof.
"EU" means the European Union.
"Fee Period" has the meaning assigned to such term in Section 6.01 hereof.
"Governmental Authority" means any court, administrative agency or
commission or other governmental agency or instrumentality (or any Responsible
Officer thereof), domestic, foreign or international, of competent jurisdiction
including, without limitation, the EU.
3
"Indenture" means the Trust Indenture dated as of June 26, 2001, between
the Issuer, the Bridge Note Issuer, the Administrative Agent and the Trustee.
"Issuer Group Services" has the meaning assigned to such term in Section
2.01 hereof.
"Lease" means any lease or other agreement or arrangement pursuant to
which any Person (other than an Issuer Group Member) has the right to possession
and use of any Aircraft.
"Lease Operating Budget" has the meaning assigned to such term in Section
7.03(a)(i) of the Servicing Agreement.
"Ledgers" has the meaning assigned to such term in Section 2.04(b)(i)
hereof.
"Maintenance Reserves" has the meaning assigned to such term in the Asset
Purchase Agreement.
"Owner Trustee" means the Wilmington Trust Company, as owner trustee of
the Issuer.
"Quarter" means the fiscal quarter of each Issuer Group Member, as
applicable.
"Ratings" means the ratings assigned to the Securities by the Rating
Agencies.
"Reimbursable Expenses" has the meaning assigned to such term in Section
6.02(b) hereof.
"Schedule 2.02(a)" has the meaning assigned to such term in Section
2.03(k)(viii) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Service Providers" means the Persons providing services to the Issuer
Group, including, without limitation, where the context admits, the Servicer,
the Financial Advisor, the Capital Markets Advisor and other Persons performing
similar services or advising the Issuer Group.
"Standard of Care" has the meaning assigned to such term in Section 3.01
of the Servicing Agreement.
"Standard of Performance" has the meaning assigned to such term in Section
3.01 hereof.
"Subsidiary" means, with respect to any Person, a corporation, company or
other entity (i) more than 50% of whose outstanding shares or securities
(representing the right to vote for the election of directors or other managing
authority) are, or (ii) which does not have
4
outstanding shares or securities (as may be the case in a partnership, joint
venture or unincorporated association), but more than 50% of whose ownership
interest representing the right to make decisions for such other entity is, now
or hereafter owned or controlled, directly or indirectly, by such Person, but
such corporation, company or other entity shall be deemed to be a Subsidiary
only so long as such ownership or control exists.
"U.S. Bankruptcy Code" has the meaning assigned to such term in Section
7.02(b)(iii) hereof.
"Year" has the meaning assigned to such term in the Servicing Agreement.
ARTICLE II
APPOINTMENT; ADMINISTRATIVE SERVICES
Section 2.01 APPOINTMENT. Each Issuer Group Member hereby appoints the
Administrative Agent as the provider of the administrative and related services
set forth in Section 2.03 hereof, the accounting services set forth in Section
2.05 hereof and the additional administrative services set forth in Sections
2.06, 2.07 and 2.08 hereof (collectively, the "Issuer Group Services") to each
Issuer Group Member on the terms and subject to the conditions set forth in this
Agreement. Each Issuer Group Member acknowledges that it has assigned its
rights, among other things, to administer the Non-Trustee Accounts and it rights
and draw upon any Credit Facility to the Security Trustee pursuant to the
Security Trust Agreement and that pursuant to this Agreement the Security
Trustee has appointed the Administrative Agent its agent to administer the
Non-Trustee Accounts and to administer and draw upon any Credit Facility. In the
event the Trustee or the Security Trustee receives any notice or instruction
from the Administrative Agent with regard to any Issuer Group Services, the
Trustee or the Security Trustee, as applicable, may regard such notice or
instruction as given by the Issuer or any other Issuer Group Member unless
previously notified otherwise in writing by the Issuer.
(b) The Trustee and the Security Trustee hereby appoint the Administrative
Agent as their agent for the purposes of providing the bank account management,
calculation and other services set forth in Section 2.04 hereof and in the
Indenture and performing the other activities (excluding those under Section
2.03(j) hereof and the provisions of the Indenture referenced in Section
2.03(k)(ii) hereof, the performance of which constitute Issuer Group Services)
to be performed by the Administrative Agent under the Indenture (collectively,
the "Bank Account Management Services" and, together with the Issuer Group
Services, the "Administrative Services") and delegate to the Administrative
Agent (except as otherwise specified in the Indenture or the Security Trust
Agreement) their respective authority to administer the Accounts and to
otherwise perform the Bank Account Management Services on the terms and subject
to the conditions set forth in this Agreement. Each of the Trustee and the
Security Trustee hereby directs the Administrative Agent, in its capacity as
such, to enter into and to perform the Administrative Agent's obligations under
the Indenture.
(c) The Administrative Agent hereby accepts such appointments and agrees
to perform the Issuer Group Services on behalf of the Issuer Group Members and
the Bank Account Management Services on behalf of the Trustee and the Security
Trustee, in each case on the
5
terms and subject to the conditions set forth in this Agreement. Each party
agrees that the Administrative Agent, in performing the Bank Account Management
Services, is acting exclusively as the agent of the Trustee and the Security
Trustee and not in any agency or other capacity on behalf of any Issuer Group
Member and that no Issuer Group Member has any right to direct the
Administrative Agent with respect to all or any aspect of the Bank Account
Management Services.
(d) The Issuer Group Services do not include any service or matter that is
the responsibility of the Servicer under the Servicing Agreement, the Financial
Advisor under the Financial Advisory Agreement, the Capital Markets Advisor
under the Capital Markets Advisory Letter, the Reference Agent under the
Reference Agency Agreement or the company secretaries of any Issuer Group
Member.
(e) The Issuer Group Services do not include any service or matter that
falls under the categories of "investment business services" or "investment
advice" under the Investment Intermediaries Act, 1995 or any other applicable
provision of Irish law that would require such services to be performed by an
entity that has obtained prior authorization from the Central Bank of Ireland.
Section 2.02 LIMITATIONS. (a) The Administrative Agent agrees (with
respect to the Issuer Group Services) to comply with the terms of the articles
of incorporation, by-laws, trust agreements or similar constituting documents of
each Issuer Group Member and all agreements to which any Issuer Group Member is
a party (including all Related Documents), provided that copies of such
documents and agreements have been delivered to the Administrative Agent and,
without prejudice to the foregoing, not to enter into, on behalf of any Issuer
Group Member, any commitments, loans or obligations or charge, mortgage, pledge,
encumber or otherwise restrict or dispose of the property or assets or expend
any funds of any Issuer Group Member save (i) as expressly permitted by the
terms of this Agreement or (ii) upon a Controlling Trustees' Resolution. The
Administrative Agent (in performing the Bank Account Management Services) agrees
to comply with the terms of the Indenture, the Security Trust Agreement and the
terms of each relevant Credit Facility).
(b) In connection with the performance of (i) the Issuer Group Services,
the Administrative Agent shall (A) have no responsibility for the failure of any
other Person (other than any Person acting as a delegate of the Administrative
Agent under this Agreement pursuant to Section 8.01 hereof) providing services
directly to the Issuer Group to perform its obligations to the Issuer Group and
(B) in all cases be entitled to rely upon the instructions of the Issuer Group
with respect to any Issuer Group Services and upon notices, reports or other
communications made by any Person providing services to the Issuer Group (other
than any Affiliate of the Administrative Agent) and shall not be responsible for
the accuracy or completeness of any such notices, reports or other
communications except to the extent that the Administrative Agent has actual
notice of any matter to the contrary, (ii) the Bank Account Management Services,
the Administrative Agent shall not be responsible for acting upon the
instructions of the Trustee or the Security Trustee (as applicable) and (iii)
the Administrative Services, the Administrative Agent shall not be obligated to
act in any manner that is reasonably likely to (A) violate any Applicable Law,
(B) lead to an investigation by any Governmental
6
Authority or (C) expose the Administrative Agent to any liabilities for which,
in the Administrative Agent's good faith opinion, adequate bond or indemnity has
not been provided.
(c) Subject to the limitations set forth in Section 2.02(a), in connection
with the performance of the Issuer Group Services, the Administrative Agent is
expressly authorized by the Issuer and each other Issuer Group Member, (i) to
engage in and conclude commercial negotiations with the Persons providing
services to the Issuer Group, including, without limitation, where the context
admits, the Servicer, the Capital Markets Advisor, the Financial Advisor, the
Reference Agent and other Persons performing similar services or advising the
Issuer Group (the "Service Providers") and with their Responsible Officers, and
(ii) after such consultation, if any, as the Administrative Agent deems
necessary under the circumstances, to act on such Issuer Group Member's behalf
with regard to any and all matters requiring any action on the part of the
Administrative Agent under the Servicing Agreement. The Issuer agrees that it
will give the Administrative Agent and the Servicer 60 days prior Written Notice
of any limitation or modification of the authority set forth in this Section
2.02(c).
(d) The Administrative Agent may rely on the advice of any law firm,
accounting firm, risk management adviser, tax adviser, insurance adviser,
technical adviser, aircraft appraiser or other professional adviser appointed by
the Issuer and any Person appointed in good faith by the Administrative Agent
and shall not be liable for any claim by any Issuer Group Member to the extent
that it was acting in good faith upon the advice of any such persons.
(e) Notwithstanding the appointment of, and the delegation of authority
and responsibility to, the Administrative Agent with respect to the Issuer Group
Services, the Issuer and each other Issuer Group Member shall continue to have
and exercise through its respective controlling trustees or board real and
effective central control and management of all matters related to its ongoing
business, operations, assets and liabilities, subject to matters that are
expressly the responsibility of the Administrative Agent in accordance with the
terms of this Agreement, and each Issuer Group Member shall at all times conduct
its separate ongoing business in such a manner as the same shall at all times be
readily identifiable from the separate business of the Administrative Agent, and
none of the Issuer Group Members is merely lending its name to decisions taken
by others.
Section 2.03 ADMINISTRATIVE SERVICES. The Administrative Agent hereby
agrees to perform and provide the following services for each Issuer Group
Member and its respective governing bodies:
(a) administrative services:
(i) except in such instances in which such preparation and
distribution is required to be done by another party by Applicable Law,
preparation and distribution, at such time as shall be agreed with the
Administrative Agent, of draft trustees or board meeting agendas and any other
papers required in connection with such meetings;
7
(ii) maintaining, or monitoring the maintenance of, the books,
records, registers and associated filings of each Issuer Group Member, other
than those required to be maintained by the Owner Trustee;
(iii) providing any administrative assistance reasonably
necessary to assist any Issuer Group Member in carrying out its obligations,
including providing timely notice of decisions to be made, or actions to be
taken, under any of the Related Documents; provided, that if the obligations of
any Issuer Group Member under any of the Related Documents are only required
upon receipt of notice to such Issuer Group Member or the Administrative Agent,
then the Administrative Agent shall provide such administrative assistance only
to the extent it has received such notice or is otherwise aware of such
obligations;
(iv) assisting the Issuer in arranging for directors and officers
liability insurance for and on behalf of the Issuer and each other Issuer Group
Member;
(v) procuring, at the direction of the Controlling Trustees, and
coordinating the advice of, legal counsel, accounting, tax and other
professional advisers at the expense of the relevant Issuer Group Member, to
assist such Issuer Group Member in carrying out its obligations, supervising, in
accordance with instructions from such Issuer Group Member, such legal counsel,
accounting, tax and other advisers and providing each Certificateholder with
annual tax reports on form K-1 on or prior to the date required by Applicable
Law;
(vi) as frequently as is necessary for each Issuer Group Member to
comply with its obligations under the Related Documents, arranging for the
Appraisals to be made and providing the Appraisals to the relevant Service
Providers; and
(vii) providing assistance to the Servicer with respect to matters
for which such assistance is contemplated by the Servicing Agreement or is
reasonably necessary in order for the Servicer to perform its duties in
accordance with the Servicing Agreement;
(b) to monitor the performance of the Service Providers and to report on
such performance to the Controlling Trustees on a quarterly basis, including:
(i) with respect to the Servicer:
(A) monitoring and reviewing the information and other reports
provided by the Servicer pursuant to the Servicing Agreement, including with
respect to the status of Lease payments, Lessee receivables, Maintenance
Reserves, security deposits, adjustments of rentals and claims against
Maintenance Reserves in accordance with Lease terms (to the extent provided to
the Administrative Agent);
(B) assisting the Issuer in evaluating the Servicer's performance
relative to the Standard of Care and the Conflicts Standard; and
(C) monitoring the compliance of the Servicer with its obligations
under the Servicing Agreement;
8
(ii) with respect to the other Service Providers, assisting in
evaluating the performance and compliance of each Service Provider against its
obligations under the relevant agreement;
(c) to the extent that (i) the following services are not provided by the
other Service Providers, and (ii) the relevant information is provided to the
Administrative Agent by the Issuer Group or the Service Providers, to act as
liaison with the Rating Agencies with respect to the rating impact of any
decisions on behalf of the Issuer Group, including, without limitation:
(i) informing the Rating Agencies from time to time of any material
changes in the Portfolio, coordinating with the Issuer Group and the Service
Providers and providing the Rating Agencies with such statistical and other
information as they may from time to time request (such information to be
provided at the Issuer Group's expense to the extent that providing such
information requires services that are materially greater in scope than those
being provided pursuant to the express terms of this Agreement);
(ii) providing the Rating Agencies with the Outstanding Principal
Balances of each class or subclass of Notes and loan-to-value ratios (i.e.,
ratio of debt to Annual Appraised Value of the Issuer Group's assets) or any
other financial information the Rating Agencies shall request; and
(iii) coordinating among the Issuer Group, the Servicer and the
Appraisers to ensure that the Appraisals are received as required;
(d) to provide assistance to the Issuer Group in procuring Lessee
consents, novations and other documentation and in taking all other actions
necessary in connection with the reissue or amendment of letters of credit;
(e) to provide assistance to the Issuer Group in the execution of (1) the
acquisition of Pledged Stock and/or Aircraft under the Asset Purchase Agreement,
(2) the re-lease and/or sale of the Aircraft, (3) the acquisition of Additional
Aircraft and (4) financing transactions relating to the Issuer Group after the
Initial Closing Date, including:
(i) coordinating with the Service Providers, legal and other
professional advisers to monitor the protection of the Issuer Group's interests
and rights and coordinating the execution of documentation required at closings;
(ii) providing qualified personnel to attend and provide
administrative support (including the preparation of any certificates required
pursuant to the Servicing Agreement and the Indenture) at the closings in
connection with the acquisition of Pledged Stock and/or Aircraft under the Asset
Purchase Agreement, sales or re-leases of the Aircraft and the acquisition of
any Additional Aircraft, if required (it being understood that the
Administrative Agent will not be obligated to provide legal counsel or legal or
technical services to the Issuer Group);
(iii) coordinating with the Issuer Group and the Service Providers
and assisting in the management of the closing process so that closings will
occur on a timely basis;
9
(iv) providing all necessary administrative support to complete any
documentation and other related matters; and
(v) appointing counsel and other appropriate professional advisers
to represent the Issuer Group in connection with any such closings;
(f) to coordinate with the Capital Markets Advisor, including reviewing
the effect on the cash flows required for payment of the Notes of investments
and reinvestments of cash pursuant to this Agreement;
(g) based on information produced or provided to it, to prepare, file
and/or distribute, with the assistance of outside counsel and auditors, if
appropriate, all reports to be prepared, filed and/or distributed by any Issuer
Group Member or its governing bodies, subject to the approval of the Controlling
Trustees in the case of any exchange offer documents filed by the Issuer under
the Securities Act and the Exchange Act, and any reports filed by the Issuer on
Form 10-K and 10-Q and, if such form is being filed with any information other
than the Monthly Report to Holders, any Form 8-K under the Exchange Act,
including:
(i) filings (including, without limitation, Uniform Commercial Code
filings) any Issuer Group Member is required to make in various jurisdictions
and preparing such filings or monitoring counsel and advisers in connection with
the preparation and filing of such materials;
(ii) filings the Issuer is required to make under the Securities Act
and the Exchange Act in connection with the preparation and filing of any
exchange offer documents;
(iii) compliance by the Issuer with applicable periodic reporting
requirements of the Exchange Act, in particular, working with necessary
professional advisers to the Issuer and the Service Providers, as appropriate,
to prepare on behalf of the Issuer and to arrange for the filing and
distribution of an annual report on Form 10-K in respect of the Issuer and, as
periodic reporting requirements of the Exchange Act, quarterly reports on Form
10-Q and any required reports on Form 8-K in respect of the Issuer;
(iv) reports required or recommended to be distributed to investors
(including press releases), and managing investor relations on behalf of the
Issuer Group, and preparing or arranging for the preparation and distribution of
such reports at the Issuer Group's expense; and
(v) reports required to be filed with any Governmental Authorities,
and preparing on behalf of any Issuer Group Member or arranging for the
preparation of and arranging for the filing of any reports required to be filed
with any other entity in order for such Issuer Group Member not to be in
violation of Applicable Law or any applicable covenants;
(h) with respect to amendments:
(i) to report on the substance of any proposed amendments to any
Related Documents; and
10
(ii) to the extent requested by the Issuer Group or by the parties
to Related Documents and subject to approval by the appropriate controlling
trustees or board, to coordinate with the Issuer Group's legal counsel, the
other parties thereto and their counsel the preparation and execution of any
amendments to the Related Documents (other than amendments relating to the
Aircraft or the Leases), and to provide assistance in the implementation of such
amendments;
(i) to the extent reasonably requested by the Servicer, to coordinate and
provide assistance on behalf of the Issuer Group with the Servicer in the
performance of the Servicer's obligations under the Servicing Agreement;
(j) to authorize payment of certain bills and expenses (i) payable to
legal and professional advisers authorized to be engaged or consulted pursuant
to this Agreement, (ii) to the extent required by the terms of the Servicing
Agreement or the Indenture or (iii) approved by the Controlling Trustees and to
determine the Required Expense Amount and the amount of Permitted Accruals
determined in accordance with the Indenture;
(k) providing assistance to the Issuer with respect to matters for which
action by the Issuer is required under the Servicing Agreement or the Indenture,
including such assistance that may be necessary for the Issuer to:
(i) comply with Sections 6.08, 7.03(a)(i) and 7.04 of the Servicing
Agreement;
(ii) comply with Sections 5.02, 5.03, 6.12 and 6.13 of the
Indenture;
(iii) provide such instructions to the Servicer as the Servicer may
require in interpreting the Indenture, the Concentration Thresholds and Annex 2
to the Servicing Agreement;
(iv) direct the Servicer to amend the minimum hull and liability
insurance coverage amounts set forth in Annex 1 to the Servicing Agreement;
(v) direct the Servicer as to whether settlement offers received by
the Servicer with respect to claims for damage or loss in excess of $10,000,000
with respect to an Aircraft Asset are acceptable;
(vi) review and request such periodic and other reports as the
Servicer is obligated to provide under the Servicing Agreement;
(vii) provide the Servicer with such information as the Servicer
may reasonably request in connection with the Concentration Thresholds and
certify to the Servicer whenever the proposed Aircraft-related transactions will
result in the violation of such Concentration Thresholds;
(viii) advise the Servicer as required by Section 3(c) of Schedule
2.02(a) of the Servicing Agreement ("Schedule 2.02(a)"); and
11
(ix) request market research industry information from the Servicer
in regard to valuations of Aircraft Assets in accordance with Section 6.1 of
Schedule 2.02(a);
(l) to inform the Controlling Trustees as soon as is reasonably
practicable if the Administrative Agent believes that (i) net revenues generated
by the Leases will be insufficient to satisfy the payment obligations of the
Issuer Group and (ii) an Event of Default will result from such insufficiency,
and to advise the Controlling Trustees as to any appropriate action to be taken
(subject to the provisions of the Related Documents) with respect to such
insufficiency and to cause the actions directed by the Controlling Trustees to
be implemented so as to avoid an Event of Default, if it is possible to do so;
(m) to advise the Controlling Trustees as to the appropriate levels of
Reserved Cash;
(n) to oversee the general operation of any credit or liquidity
enhancement facility provided for the benefit of the Issuer, including without
limitation each Credit Facility (including without limitation monitoring the
amounts committed and available for drawing, and outstanding and required to be
repaid, under each such facility);
(o) to determine whether it is necessary or appropriate at any time that
the Issuer make a drawing under any back-up letter of credit of which the Issuer
is the beneficiary and, if so, to administer such drawing on the Issuer's
behalf;
(p) to provide such assistance and financial information to the Capital
Markets Advisor as the Capital Markets Advisor may so reasonably request to
enable the Capital Markets Advisor to perform its obligations under its Capital
Markets Advisory Letter with the Issuer and, consistent with the interest rate
hedging policy adopted by the Issuer on the Initial Closing Date (as the same
may be amended or otherwise modified from time to time;
(q) to assure compliance by each Issuer Group Member with its obligations
under Section 2.07 of the Security Trust Agreement with respect to the
Non-Trustee Accounts, including notifying and instructing each Obligor (as
defined in the Security Trust Agreement) to make payments directly to a
Non-Trustee Account; and
(r) to provide all necessary assistance and information to legal and other
professional advisers to the Issuer Group in connection with any claim, action,
proceeding or petition brought against any Issuer Group Member.
Section 2.04 BANK ACCOUNT MANAGEMENT AND CALCULATION SERVICES. The
Administrative Agent hereby agrees for the benefit of the Trustee and the
Security Trustee to perform and provide the following bank account management
calculation and other services:
(a) INDENTURE OBLIGATIONS. The Administrative Agent shall, in its
capacity as such hereunder, execute and deliver, and perform the obligations
of the Administrative Agent under the Indenture in accordance with the terms
thereof. In particular and without limiting the foregoing:
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(i) THE ACCOUNTS
(A) ESTABLISHMENT AND OPERATIONS OF ACCOUNTS. The Administrative
Agent shall cause the Operating Bank to establish and maintain (in accordance
with Section 3.01(a) of the Indenture and as provided in the Security Trust
Agreement) (1) on the Initial Closing Date (t) the Collections Account, (u) the
Lessee Funded Accounts consisting of the separate accounts so designated on
Schedule 1 hereto, (v) the Rental Accounts designated on Schedule 1 hereto, (w)
the Expense Account, (x) a Note Account for each subclass of Initial Notes and
(y) the Owner Trustee Account and (2) thereafter, as and when required by the
Indenture or as specified in a Controlling Trustees' Resolution delivered to the
Administrative Agent, the Trustee and the Security Trustee or, in the case of
any Rental Account or any Lessee Funded Account, as requested by the Servicer
under the Servicing Agreement, any Account referred to in Section 3.01(a)(ii) of
the Indenture. Each such Account shall, when established, be operated in
accordance with the applicable provisions of Section 3.01 of the Indenture and
Section 2.06 of the Security Trust Agreement.
(B) REPLACEMENT ACCOUNT. If at any time the Security Trustee
Accounts are no longer to be maintained by the then Operating Bank under the
Security Trust Agreement, the Administrative Agent shall cause the successor
Operating Bank to establish and maintain the Accounts previously maintained by
its predecessor (in each case with the same name and purposes as it had so been
maintained) and those to be established and maintained thereafter. In addition,
if, at any time, any Account ceases to be an Eligible Account, the
Administrative Agent shall, within 10 Business Days after notice thereof, cause
the Operating Bank to establish and maintain as an Eligible Account a new
Account having the same name and purpose in accordance with the requirements of
the Indenture.
(C) RENTAL ACCOUNT. With respect to any Rental Account, the
Administrative Agent shall determine, as provided in Section 3.01(f) of the
Indenture, whether or not such Account is required to be established and
maintained as a Non-Trustee Account.
(D) LESSEE PAYMENT INSTRUCTIONS. The Administrative Agent shall take
all necessary steps to ensure that all funds on deposit in each Rental Account
(including any Non-Trustee Account) are, to the extent required by the
Indenture, transferred from such Rental Account to the Collections Account
within one Business Day of receipt thereof (other than certain limited amounts,
if any, required to be left on deposit for local, legal or regulatory reasons).
(E) BANK ACCOUNT STATEMENTS. The Administrative Agent shall take all
necessary steps to ensure that the Operating Bank and each other bank at which a
Non-Trustee Account is located shall furnish as of the close of business on each
Calculation Date a statement providing the then current balance of each
applicable Account to it as well as the Security Trustee, the Issuer, the
Trustee, and the Servicer.
(F) MAINTAINING THE NON-TRUSTEE ACCOUNTS. The Administrative Agent
shall exercise all rights of the Issuer Group Members to instruct or otherwise
communicate with
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the Eligible Institutions at which the Non-Trustee Accounts are maintained and
otherwise to administer the Non-Trustee Accounts.
(ii) CALCULATIONS. Pursuant to Section 3.06 of the Indenture, the
Administrative Agent shall, at the times and in the manner set forth therein,
determine or calculate each of the amounts and provide the reports required to
be determined, calculated or prepared by it pursuant to Sections 3.06(a) through
(e) of the Indenture.
(iii) WITHDRAWALS AND TRANSFERS. The Administrative Agent shall
direct the Operating Bank to make the following withdrawals and transfers in
accordance with the terms of the Indenture:
(A) CLOSING DATE DEPOSITS, WITHDRAWALS AND TRANSFERS. On each
Closing Date, the Administrative Agent shall direct each of the transfers
described in Section 3.03 of the Indenture in accordance with such Section.
(B) INTERIM DEPOSITS AND WITHDRAWALS. From time to time, the
Administrative Agent shall direct the Operating Bank to make the withdrawals and
transfers, and the Administrative Agent shall give the notices, provided for in
Section 3.04 of the Indenture in accordance with such Section.
(C) INTERIM DEPOSITS AND WITHDRAWALS FOR MODIFICATION PAYMENTS OR
DISPOSITIONS OF AIRCRAFT. From time to time, the Administrative Agent shall
direct the Operating Bank to make the withdrawals and transfers provided for in
Section 3.05 of the Indenture in accordance with such Section.
(D) PAYMENT DATE FIRST STEP WITHDRAWALS AND TRANSFERS. On each
Payment Date, the Administrative Agent shall direct the Operating Bank to make
the withdrawals and transfers provided for in Section 3.07 of the Indenture in
accordance with such Section.
(E) PAYMENT DATE SECOND STEP WITHDRAWALS. On each Payment Date,
after the withdrawals and transfers provided for in Section 3.07 of the
Indenture have been made at the direction of the Administrative Agent (except as
permitted in clause (F) below) the Administrative Agent shall direct the
Operating Bank to distribute funds on deposit in the Collections Account as
provided in Section 3.08(a) of the Indenture and shall make such certifications
to the Trustee as may be required hereunder in connection therewith.
(F) EVENT OF DEFAULT AND DEFAULT NOTICE WITHDRAWALS AND TRANSFERS.
Notwithstanding anything to the contrary contained in Section 3.07 or 3.08(a) of
the Indenture, following the delivery of a Default Notice to the Administrative
Agent or the Issuer pursuant to the Indenture or during the continuance of an
Acceleration Default, after the withdrawals and transfers provided for in
Section 3.07 of the Indenture have been made, the Administrative Agent shall
direct the Operating Bank to distribute funds on deposit in the Collections
Account and the Expense Account in the amounts and in the order of priority
provided for in Section 3.08(b) of the Indenture.
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(G) DEFEASANCE/REDEMPTION AND REFINANCING TRANSFERS. The
Administrative Agent shall direct the Operating Bank to transfer from time to
time amounts on deposit in the Defeasance/Redemption Account or, in the case of
a Refinancing, the Refinancing Account to the applicable Note Account in
connection with either the redemption of any class or subclass of Notes in
accordance with Section 3.10 of the Indenture or the exercise of the defeasance
provisions set forth in Article XI of the Indenture and shall give the notices
provided for in Section 3.10 of the Indenture.
(H) CURRENCY CONVERSIONS. If and to the extent that the Issuer
incurs any payment obligation or other cost in a currency other than U.S.
dollars, the Administrative Agent shall, to the extent practicable, convert U.S.
dollars into such other currency at the then prevailing market rate as necessary
to discharge such payment obligations or costs, at the expense of the Issuer in
accordance with Section 12.07 of the Indenture.
(I) INVESTMENTS OF CASH. The Administrative Agent shall at the
direction of the Controlling Trustees (or, following the giving of a Default
Notice or during the continuance of an Acceleration Default at the direction of
the Security Trustee) invest and reinvest the funds on deposit in the Accounts
as permitted by and in accordance with Section 3.02 of the Indenture.
(b) REPORTS. The Administrative Agent shall timely prepare the reports
required by Section 2.15 of the Indenture and provide such reports to the
Trustee and the other Persons indicated in that section.
(c) RECORDS. The Administrative Agent shall provide such information
relating to the Accounts to the Security Trustee, the Trustee, the Capital
Markets Advisor or the Rating Agencies as any of them may reasonably request
from time to time and as required under the Indenture.
Section 2.05 ACCOUNTING SERVICES. The Administrative Agent hereby agrees
to perform and provide the following accounting services:
(a) BUDGETING PROCESS. The Administrative Agent shall, in accordance with
the procedures, policies and guidelines described below and on the basis of
information generated by the Administrative Agent and information provided by
the Service Providers and the Issuer Group:
(i) in respect of each Year during the term of the Servicing
Agreement (other than with respect to the fiscal year commencing on the Initial
Closing Date), and on behalf of the Issuer Group, prepare and deliver to the
Servicer, no later than the September 30 immediately preceding the commencement
of such Year a proposed Lease Operating Budget and a proposed Aircraft Asset
Expenses Budget for such Year together with reasonably detailed supporting
information and the assumptions underlying such proposed Lease Operating Budget
and Aircraft Asset Expenses Budget, such proposed Lease Operating Budget and
Aircraft Asset Expenses Budget to be based, in part, on the information provided
by the Servicer pursuant to Section 7.03(c) of the Servicing Agreement;
15
(ii) on behalf of the Issuer Group, review, discuss and negotiate
with the Servicer such proposed Lease Operating Budgets and Aircraft Asset
Expenses Budgets, and make such adjustments proposed by the Servicer as the
Administrative Agent, in consultation with the Controlling Trustees and with due
regard for current market conditions, may deem appropriate; and
(iii) submit to the Servicer no later than the November 10
immediately preceding the commencement of such Year the Approved Budgets
together with reasonably detailed information regarding the Issuer's underlying
assumptions.
(b) MANAGEMENT ACCOUNTS AND FINANCIAL STATEMENTS. The Administrative Agent
shall, in accordance with the procedures, policies and guidelines described
below and on the basis of information generated by the Administrative Agent and
information provided by the Service Providers and the Issuer Group:
(i) establish an accounting system and maintain the accounting
ledgers of and for each Issuer Group Member in accordance with U.S. GAAP unless
otherwise required by Applicable Law and specified by the Controlling Trustees
(collectively, the "Ledgers");
(ii) prepare and deliver (within 40 days after the end of the
relevant Quarter or, if the end of such Quarter coincides with the end of a
Year, within 75 days after the end of such Year), with respect to the Issuer
Group, on a consolidated basis, a draft balance sheet and draft statement of
changes in shareholders' equity or residual trust interest as of the end of each
Quarter and Year, as applicable, and draft statements of income and cash flows
for each Quarter and Year, as applicable (the "Consolidated Quarterly Draft
Accounts");
(iii) to the extent required by Applicable Law, prepare and deliver
(within 40 days after the end of the relevant Quarter or, if the end of such
Quarter coincides with the end of a Year, within 90 days after the end of such
Year), with respect to the Issuer Group on a combined basis and such of the
Issuer and the other Issuer Group Members as specified by the Controlling
Trustees in a written schedule provided to the Administrative Agent (which
schedule may be updated by the Controlling Trustees to the Administrative Agent
delivered at least 30 days prior to the commencement of the relevant Quarter),
on a consolidating company-by-company basis, a draft balance sheet and statement
of changes in shareholders' equity or residual trust interest as of the end of
each Quarter and Year, as applicable, with respect to such Issuer Group Member
and draft statements of income and cash flows for such Quarter and Year, as
applicable (the "Consolidating Quarterly Draft Accounts" and, together with the
Consolidated Quarterly Draft Accounts the "Draft Accounts"). The Controlling
Trustees shall specify the applicable legal requirements mandating the
preparation of such Consolidating Quarterly Draft Accounts in the written
schedule provided to the Administrative Agent pursuant to this section;
(iv) as required by the Controlling Trustees, arrange and manage the
quarterly review of the Draft Accounts by the Issuer Group's auditors;
(v) arrange for, coordinate with and assist the Issuer Group's
auditors in preparing annual audits;
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(vi) prepare or arrange for the preparation of and arrange for the
filing of the Issuer Group's tax returns in conjunction with the Issuer Group's
tax advisers after submission to the Controlling Trustees to the extent required
by the Controlling Trustees or Applicable Law;
(vii) liaise with the Servicer for the purpose of preparing the
monthly and quarterly reports in accordance with Section 9 of Schedule 2.02(a);
and
(viii) compare the expected cash flows of the Issuer Group and the
budgets to actual results.
(c) OTHER REPORTS. The Administrative Agent shall prepare the Draft
Accounts in accordance with U.S. GAAP unless otherwise required by Applicable
Law and specified by the Controlling Trustees. In connection with the
preparation of the Consolidated Quarterly Draft Accounts, the Administrative
Agent will, provide to the Controlling Trustees, at such times as the
Controlling Trustees may require, a review report (as defined by the Statements
on Standards for Accounting and Review Services issued by the American Institute
of Certified Public Accountants) of the Issuer Group's independent public
accountants with respect to the financial statements of such Issuer Group
Members for, or as of the end of, such Quarter, including in such report such
accountants' statement that, based on its review of such financial statements,
it is not aware of any material modifications that should be made to such
financial statements in order for them to be in conformity with U.S. GAAP or
other applicable accounting principles; provided, however, that, with respect to
such financial statements for, or as of the end of, any Quarter (other than the
last Quarter of any Year), in the event that the Issuer Group does not include
(or cause to be included) any material disclosure required by U.S. GAAP or other
applicable accounting principles to be included within footnotes to such
financial statements, such review report may be qualified solely by stating that
the only modification that should be made to such financial statements in order
for them to be in conformity with U.S. GAAP or other applicable accounting
principles is the inclusion of such disclosure; provided further, however, that
such qualification may not relate to any footnote to such financial statements.
(d) INSTRUCTIONS. The Administrative Agent shall be entitled to request
instructions from the Controlling Trustees as to general guidelines or
principles to be followed in preparing Draft Accounts and as to amending or
supplementing any such guidelines or principles.
Section 2.06 ADDITIONAL ADMINISTRATIVE SERVICES. The Administrative Agent
will provide additional Administrative Services, including (a) providing
assistance to the Capital Markets Advisor in (i) arranging one or more
Refinancings of all or a portion of the Notes, and (ii) arranging for the
payment of any purchase price adjustment necessary to be paid pursuant to the
Asset Purchase Agreement and (b) undertaking efforts to avoid any adverse change
in the tax status of any Issuer Group Member. In addition, upon a request by any
Issuer Group Member, the Administrative Agent will take such other actions as
may be appropriate to facilitate such Issuer Group Member's business operations
and assist the Controlling Trustees in carrying out their obligations; provided,
however, that the Administrative Agent will not be obligated or permitted to
take any action that might reasonably be expected to result in the business of
such
17
Issuer Group Member ceasing to be separate and readily identifiable from, and
independent of, the Administrative Agent, and any of its Affiliates.
Section 2.07 ADDITIONAL AIRCRAFT. In the event that the Issuer Group shall
acquire any Additional Aircraft, the Administrative Agent hereby agrees to
provide the same Administrative Services with respect to all such Additional
Aircraft.
Section 2.08 NEW SUBSIDIARIES. The Administrative Agent shall be
responsible for coordinating with outside legal counsel, auditors, tax advisers
and other professional advisers with respect to all corporate and administrative
matters relating to the formation, operation, corporate affairs and related
matters with respect to all Subsidiaries which are or may become members of the
Issuer Group, including identifying such outside advisers, a potential company
secretary and candidates for trustee to the extent necessary, and shall be
permitted to incur expenses in respect of such Subsidiaries without the Issuer
Group's consent up to such aggregate amount as shall be authorized from time to
time. To the extent that the Administrative Agent shall deem it necessary or
desirable in order for the Issuer Group to carry on its business, the
Administrative Agent shall have the authority to assist in the formation of new
Subsidiaries of the Issuer and to appoint any director to any such Subsidiary
without the consent of the Issuer Group; provided, that such directors are the
same directors of the Issuer then in office unless otherwise required by
applicable local law mandating a particular citizenship for directors. The
Administrative Agent and its personnel may act as company secretary for any
Subsidiary.
Section 2.09 THE ISSUER GROUP RESPONSIBILITY. (a) The obligations of the
Administrative Agent hereunder are limited to those matters that are expressly
the responsibility of the Administrative Agent in accordance with the terms of
this Agreement. Notwithstanding the appointment of the Administrative Agent to
perform the Administrative Services, each Issuer Group Member shall remain
responsible for all matters and decisions related to its business, operations,
assets and liabilities.
(b) Without derogating from the authority and responsibility of the
Administrative Agent with respect to the performance of certain of the
Administrative Services as set forth in this Agreement, it is hereby expressly
agreed and acknowledged that the Administrative Agent is not authorized or
empowered to make or enter into any agreement, contract or other legally binding
arrangement, in respect of or relating to the business or affairs of any Issuer
Group Member, or pledge the credit of, incur any indebtedness on behalf of or
expend any funds of any Issuer Group Member other than as expressly permitted in
accordance with the terms of this Agreement, all such authority and power being
reserved to the appropriate Issuer Group Member or the Security Trustee, as the
case may be.
ARTICLE III
STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY
Section 3.01 STANDARD OF PERFORMANCE. The Administrative Agent will devote
the same amount of time and attention to and will be required to exercise the
same level of skill, care and diligence in the performance of its services as it
would if it were administering such services on its own behalf (the "Standard of
Performance").
Section 3.02 LIABILITY AND INDEMNITY. (a) The Administrative Agent shall
not be liable for any Losses or Taxes to or of, or payable by any Issuer Group
Member at any time from any cause whatsoever or any Losses or Taxes directly or
indirectly arising out of or in connection with or related to the performance by
the Administrative Agent of this Agreement unless such Losses or Taxes are the
result of the Administrative Agent's own gross negligence, willful misconduct,
deceit or fraud or that of any of its directors, officers, agents or employees,
as the case may be.
(b) Notwithstanding anything to the contrary set forth in any other
agreement to which any Issuer Group Member is a party, the Issuer and the other
Issuer Group Members, do hereby assume liability for and do hereby jointly and
severally agree to indemnify, reimburse and hold harmless on an After-Tax Basis
the Administrative Agent, its directors, officers, employees and agents and each
of them from any and all Losses or Taxes that may be imposed on, incurred by or
asserted against any of them arising out of, in connection with or related to
the Administrative Agent's performance under this Agreement (including any
Losses or Taxes incurred by the Administrative Agent as a result of indemnifying
any Person to whom it shall have delegated its obligations hereunder in
accordance with Section 8.01 hereof, but only to the extent the Administrative
Agent would have been indemnified had it performed such obligations), except as
a result of the gross negligence, willful misconduct, deceit or fraud of the
Administrative Agent or any of its directors, officers, employees or agents.
This indemnity shall not apply to:
(i) Taxes imposed on net income by the revenue authorities of the
State of California or the United States of America in respect of any payment by
any Issuer Group Member to the Administrative Agent due to the performance of
the Administrative Services; and
(ii) Taxes imposed on net income of the Administrative Agent by any
Government Authority other than the revenue authorities of the State of
California or the United States of America to the extent such Taxes would not
have been imposed in the absence of any connection of the Administrative Agent
with such jurisdiction imposing such Taxes other than any connection that
results from the performance by the Administrative Agent of its obligations
under this Agreement. This indemnity shall expressly inure to the benefit of any
director, officer, agent or employee of the Administrative Agent now existing or
in the future and to the benefit of any successor of the Administrative Agent
and shall survive the expiration of this Agreement.
(c) The Administrative Agent agrees to indemnify, reimburse and hold
harmless on an After-Tax Basis each Issuer Group Member and its respective
trustees, directors and agents for any Losses whatsoever which they or any of
them may incur or be subject to in consequence of the performance of the
Administrative Services or any breach of the terms of this Agreement by the
Administrative Agent, but only to the extent such Losses arise due to the
willful misconduct, gross negligence, deceit or fraud of the Administrative
Agent or any of its
19
directors, officers or employees, as the case may be; provided, however, that
this indemnity shall not apply and the Administrative Agent shall have no
liability in respect of Losses to the extent that they arise from (i) the
willful misconduct, deceit or fraud of any Issuer Group Members or their
respective directors, trustees or agents, (ii) any breach by the Administrative
Agent of its obligations under this Agreement to the extent such breach is a
result of a Service Provider's failure to perform its obligations to the Issuer
Group or a failure by the Issuer Group to comply with its obligations under this
Agreement, (iii) any action that the Issuer Group requires the Administrative
Agent to take pursuant to a direction but only to the extent that the
Administrative Agent takes such action in accordance with such direction and in
accordance with the provisions hereof or (iv) a refusal by the Issuer Group to
take action upon a recommendation made in good faith by the Administrative Agent
in accordance with the terms hereof.
(d) The Administrative Agent agrees to indemnify, reimburse and hold
harmless on an After-Tax Basis each of the Trustee, the Security Trustee and the
Operating Bank and their respective trustees, directors and agents for any
Losses whatsoever which they or any of them may incur or be subject to in
consequence of the performance of the Bank Account Management Services or any
breach of the terms of this Agreement by the Administrative Agent, but only to
the extent such Losses arise due to the willful misconduct, gross negligence,
deceit or fraud of the Administrative Agent or any of its directors, officers or
employees, as the case may be; provided, however, that this indemnity shall not
apply and the Administrative Agent shall have no liability in respect of Losses
to the extent that they arise from (i) the willful misconduct, deceit or fraud
of the Trustee or Security Trustee, or their respective directors, trustees or
agents, (ii) any breach by the Administrative Agent of its obligations under
this Agreement to the extent such breach is solely a result of a Service
Provider's failure to perform its obligations to the Issuer Group or a failure
solely by the Issuer Group to comply with its obligations under this Agreement,
(iii) any action that the Trustee or the Security Trustee requires the
Administrative Agent to take pursuant to a direction but only to the extent that
the Administrative Agent takes such action in accordance with such direction and
in accordance with the provisions hereof or (iv) a refusal by the Trustee or the
Security Trustee to take action upon a recommendation made in good faith and
consistent with the provisions relating to the Trustee or the Security Trustee
under the Related Documents by the Administrative Agent in accordance with the
terms hereof.
(e) The Administrative Agent, the Issuer and the other Issuer Group
Members, the Trustee and the Security Trustee acknowledge and agree that the
terms of this Agreement contemplate that the Administrative Agent shall receive
the Relevant Information in order for the Administrative Agent to make required
credit and debit entries and to make the calculations and supply the information
and reports required herein, and that the Administrative Agent will do the
foregoing to the extent such information is so provided by such relevant parties
and on the basis of such information, without undertaking any independent
verification or recalculation of such information.
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ARTICLE IV
ADMINISTRATIVE AGENT UNDERTAKINGS
Section 4.01 ADMINISTRATIVE AGENT UNDERTAKINGS. The Administrative Agent
hereby covenants with the Issuer Group that it will conduct its business such
that it is a separate and readily identifiable business from, and independent
of, each Issuer Group Member and further covenants as follows:
(a) if the Administrative Agent receives any money whatsoever, which
money belongs to any Issuer Group Member, the Trustee or the Security Trustee or
is to be paid to any Issuer Group Member, the Trustee or the Security Trustee or
into any account pursuant to any Related Document or otherwise, it will hold
such money in trust for such Issuer Group Member, the Trustee or the Security
Trustee, as the case may be, and shall keep such money separate from all other
money belonging to the Administrative Agent and shall as promptly as practicable
thereafter pay the same into the relevant account in accordance with the terms
thereof without exercising any right of setoff it may have;
(b) it will comply with any proper directions, orders and
instructions which any Issuer Group Member (with respect to the Issuer Group
Services) or the Security Trustee or the Trustee (with respect to the Bank
Account Management Services) may from time to time give to it in accordance with
the provisions of this Agreement and the Indenture; provided, that during the
continuance of any Event of Default, the Administrative Agent shall comply only
with the instructions of the Security Trustee as to all Administrative Services;
(c) it will not knowingly fail to comply with any legal requirements
in the performance of the Administrative Services;
(d) it will make all payments required to be made by it at any time
and from time to time pursuant to this Agreement on the required date for
payment thereof and shall turn over any amounts owed to the Security Trustee,
the Issuer, any other Issuer Group Member or the Trustee without set-off or
counterclaim;
(e) it will not take any steps for the purpose of procuring the
appointment of any administrative receiver or the making of an administrative
order or for instituting any bankruptcy, reorganization, arrangement,
insolvency, winding up, liquidation, composition or any like proceedings under
the laws of any jurisdiction in respect of any Issuer Group Member or in respect
of any of their respective liabilities, including, without limitation, as a
result of any claim or interest of the Administrative Agent or any of its
Affiliates;
(f) it will cooperate with each Issuer Group Member and its
respective trustees, directors and agents (with respect to the Issuer Group
Services when no Event of Default has occurred and is continuing) and the
Security Trustee and the Trustee (with respect to the Bank Account Management
Services, or, following the giving of a Default Notice or during the continuance
of an Acceleration, all Administrative Services), including by providing such
21
information as may reasonably be requested, to permit such Persons to monitor
the Administrative Agent's compliance with its obligations under this Agreement;
(g) during the term of this Agreement, it will observe all corporate
formalities necessary to remain a legal entity separate and distinct from, and
independent of, each Issuer Group Member;
(h) during the term of this Agreement, it will maintain its assets
and liabilities separate and distinct from each Issuer Group Member;
(i) during the term of this Agreement, it will maintain records,
books, accounts and minutes separate from those of each Issuer Group Member;
(j) during the term of this Agreement, it will pay its obligations
in the ordinary course of its business as a legal entity separate from each
Issuer Group Member;
(k) during the term of this Agreement, it will keep its funds
separate and distinct from the funds of each Issuer Group Member, and it will
receive, deposit, withdraw and disburse such funds separately from the funds of
each Issuer Group Member;
(l) during the term of this Agreement, it will conduct its business
in its own name, and not in the name of any Issuer Group Member;
(m) during the term of this Agreement, it will not pay or become
liable for any debt of any Issuer Group Member, other than to make payments in
the form of indemnity as required by the express terms of this Agreement;
(n) during the term of this Agreement, it will not hold out that it
is a division of any Issuer Group Member or that any Issuer Group Member is a
division of it;
(o) during the term of this Agreement, it will not induce any third
party to rely on the creditworthiness of any Issuer Group Member in order that
such third party will be induced to contract with it;
(p) during the term of this Agreement, it will not enter into any
agreements between it and any Issuer Group Member that are more favorable to
either party than agreements that the parties would have been able to enter into
at such time on an arm's-length basis with a non-affiliated third party, other
than any Related Documents in effect on the date hereof (it being understood
that the parties hereto do not intend by this covenant to ratify any
self-dealing transactions); and
(q) during the term of this Agreement, it will (i) forward promptly
to the Servicer a copy of any material communication received from any Person in
relation to any Lease or Aircraft; (ii) grant such access to the Servicer to its
books of account, documents and other records and to its employees as may be
reasonably necessary for the Servicer or the Additional Servicer to perform its
obligations in respect of any Lease or Aircraft under the Servicing Agreement;
provided, however, that the Servicer shall not have access to the minutes of the
22
Administrative Agent's board meetings and other confidential business
information; and (iii) execute and deliver such documents and do such acts and
things as the Servicer may reasonably request in order to effect the purposes of
the Servicing Agreement.
ARTICLE V
UNDERTAKINGS OF THE ISSUER GROUP
Section 5.01 COOPERATION. The Issuer and the other Issuer Group Members
shall use commercially reasonable efforts to cause any Service Provider to at
all times cooperate with the Administrative Agent to enable the Administrative
Agent to provide the Issuer Group Services, including providing the
Administrative Agent with all powers of attorney as may be reasonably necessary
or appropriate for the Administrative Agent to perform the Issuer Group Services
in accordance with this Agreement. In addition, as and to the extent requested
by the Administrative Agent, the Trustee and the Security Trustee, the Issuer
and the other Issuer Group Members shall use commercially reasonable efforts to
cause any Service Provider to at all times cooperate with the Administrative
Agent to enable the Administrative Agent to provide the Bank Account Management
Services. The Trustee and the Security Trustee shall provide the Administrative
Agent with such powers of attorney as may be reasonably necessary or appropriate
for the Administrative Agent to perform the Bank Account Management Services in
accordance with this Agreement.
Section 5.02 INFORMATION. The Issuer will provide the Administrative Agent
with the following information in respect of itself and each other Issuer Group
Member:
(a) copies of all Related Documents, including the articles of
incorporation, by-laws, trust agreements (or equivalent documents) of each
Issuer Group Member, and copies of all books and records maintained on behalf of
each such Issuer Group Member;
(b) details of all bank accounts and bank mandates maintained by any
Issuer Group Member;
(c) names of and contact information with respect to the Controlling
Trustees or board for each Issuer Group Member;
(d) such other information as is necessary to the Administrative
Agent's performance of the Administrative Services; and
(e) a copy of any information provided to the Issuer Group
pursuant to the Servicing Agreement; provided, that such information as is
referred to in this Section 5.02 (with the exception of paragraphs (d) and (e))
shall be provided to the Administrative Agent after the execution of this
Agreement and, in respect of any amendment or changes to the information
provided to the Administrative Agent after the execution of this Agreement,
promptly following the effectiveness of such amendments or changes.
Section 5.03 SCOPE OF SERVICES. (a) In the event that any Issuer Group
Member shall enter into any agreement, amendment or other modification of any
Lease or shall take any other
23
action that has the effect of increasing in any material respect the scope,
nature or level of the Issuer Group Services to be provided under this Agreement
without the Administrative Agent's express prior written consent, the Issuer
Group shall so notify the Administrative Agent and the Administrative Agent
shall not be obligated to perform the affected Administrative Service to the
extent of such increase unless and until the Administrative Agent and the Issuer
Group shall agree on the terms of such increased Administrative Service (it
being understood that (i) the Administrative Agent shall have no liability to
any Issuer Group Member directly or indirectly arising out of, in connection
with or related to the Administrative Agent's failure to perform such increased
Administrative Service prior to any such agreement and (ii) the Issuer Group
shall not be permitted to engage another Person to perform the affected
Administrative Service without the prior written consent of the Administrative
Agent unless the Administrative Agent has indicated it is unable or unwilling to
act in respect of the affected Administrative Service or the Administrative
Agent requires payment of more than reasonable additional compensation for such
additional Administrative Service).
(b) In the event that the Issuer Group shall acquire Additional
Aircraft, the Issuer Group shall so notify the Administrative Agent and the
Administrative Agent shall be obligated to provide the Issuer Group Services
with respect to such Additional Aircraft in accordance with Section 2.07 hereof.
Section 5.04 RATIFICATION. The Issuer and the other Issuer Group Members
hereby ratify and confirm and agree to ratify and confirm (and shall furnish
written evidence thereof upon request of the Administrative Agent) any act or
omission by the Administrative Agent with respect to any Issuer Group Services
in accordance with this Agreement in the exercise of any of the powers or
authorities conferred upon the Administrative Agent under the terms of this
Agreement, it being expressly understood and agreed that none of the foregoing
shall have any obligation to ratify and confirm, and expressly does not ratify
and confirm, any act or omission of the Administrative Agent in violation of
this Agreement, the Standard of Performance or for which the Administrative
Agent is obligated to indemnify any Issuer Group Member under Article III
hereof.
Section 5.05 COVENANTS. Each of the Issuer and the other Issuer Group
Members covenants with the Administrative Agent that it will conduct its
business such that it is a separate and readily identifiable business from, and
independent of, the Administrative Agent and any of its Affiliates and further
covenants as follows:
(a) during the term of this Agreement, it will observe all corporate
formalities necessary to remain legal entities separate and distinct from, and
independent of, the Administrative Agent, and any of its Affiliates;
(b) during the term of this Agreement, it will maintain its assets
and liabilities separate and distinct from those of the Administrative Agent;
(c) during the term of this Agreement, it will maintain records,
books, accounts, and minutes separate from those of the Administrative Agent;
24
(d) during the term of this Agreement, it will pay its obligations
in the ordinary course of business as a legal entity separate from the
Administrative Agent;
(e) during the term of this Agreement, it will keep its funds
separate and distinct from any funds of the Administrative Agent, and will
receive, deposit, withdraw and disburse such funds separately from any funds of
the Administrative Agent;
(f) during the term of this Agreement, it will conduct its business
in its own name, and not in the name of the Administrative Agent;
(g) during the term of this Agreement, it will not agree to pay or
become liable for any debt of the Administrative Agent, other than to make
payments in the form of indemnity as required by the express terms of this
Agreement;
(h) during the term of this Agreement, it will not hold out that it
is a division of the Administrative Agent, or that the Administrative Agent is a
division of it;
(i) during the term of this Agreement, it will not induce any third
party to rely on the creditworthiness of the Administrative Agent in order that
such third party will be induced to contract with it;
(j) during the term of this Agreement, it will not enter into any
transaction between it and the Administrative Agent that are more favorable to
either party than transactions that the parties would have been able to enter
into at such time on an arm's-length basis with a non-affiliated third party,
other than any agreements in effect on the date hereof (it being understood that
the parties hereto do not intend by this covenant to ratify any self-dealing
transactions); and
(k) during the term of this Agreement, it will observe all material
corporate or other procedures required under Applicable Law and under its
constitutive documents.
Section 5.06 RATIFICATION BY SUBSIDIARIES. The Issuer hereby undertakes to
procure that, if so requested by the Administrative Agent, any subsidiary of the
Issuer formed or acquired after the date hereof, shall execute an agreement with
the Administrative Agent adopting and confirming, as regards such subsidiary,
the terms of this Agreement, and agreeing to ratify anything done by the
Administrative Agent in connection herewith on the terms of Section 5.04.
ARTICLE VI
ADMINISTRATION FEES AND EXPENSES
Section 6.01 ADMINISTRATION FEES. In consideration of the Administrative
Agent's performance of the Administrative Services, the Issuer agrees to pay to
the Administrative Agent a per annum amount equal to $624,000 for the first five
years commencing after the Initial Closing Date and a per annum amount equal to
$660,000 (subject to an annual cost of living adjustments (not to exceed 5% in
any given year) based on the consumer price index for the San Francisco region)
thereafter for the remainder of the term plus $1,000 for each Aircraft in excess
25
of 39 owned by the Issuer Group (the "Administrative Fee") payable in arrears in
equal monthly installments (each monthly payment, an "Administrative Fee") on
each Payment Date (until the resignation or removal of the Administrative Agent)
for each period commencing on and including the Initial Closing Date (or,
thereafter, the last of day of the immediately preceding period) and ending on
but excluding the Calculation Date immediately preceding such Payment Date (each
such period, a "Fee Period").
Section 6.02 EXPENSES. (a) The Administrative Agent shall be responsible
for (i) all telephone, facsimile and communications costs and expenses directly
relating to or associated with the Administrative Agent's performance of its
duties as set forth in this Agreement up to an annual amount of $20,000 and (ii)
all fees and expenses owed to aviation consultants hired to assist the
Administrative Agent with the Administrative Services up to an annual amount of
$25,000.
(b) Subject to the provisions of Section 6.02(a), the Issuer Group
shall be responsible for the following expenses incurred by the Administrative
Agent in the performance of its obligations ("Reimbursable Expenses"):
(i) reasonable out of pocket expenses, including travel,
accommodation and subsistence and approved expenditures in respect of insurance
coverage for the Administrative Agent;
(ii) annual telephone, fax and communication costs and expenses
necessarily and directly incurred in connection with the performance of the
Administrative Services in excess of $20,000 and annual fees and expenses to
aviation consultants hired to assist the Administrative Agent with the
Administrative Services in excess of $25,000;
(iii) expenses expressly authorized by (i) the Controlling Trustees
or (ii) any Person to whom such authority has been delegated, other than the
Administrative Agent or its Affiliates; and
(iv) expenses expressly authorized pursuant to other provisions of
this Agreement.
Section 6.03 PAYMENT OF EXPENSES. No later than each Calculation Date, the
Administrative Agent shall deliver a notice to the Issuer Group, setting forth
the amounts of Reimbursable Expenses owed to the Administrative Agent pursuant
to Section 6.02 of this Agreement through and including such Calculation Date
(it being understood that if there are no such expenses the Administrative Agent
will be under no obligation to provide such notice). The Issuer Group agrees to
pay to the Administrative Agent an amount equal to all such Reimbursable
Expenses on the next Payment Date following such Calculation Date.
26
ARTICLE VII
TERM; REPLACEMENT OF OR RESIGNATION BY THE ADMINISTRATIVE AGENT
Section 7.01 TERM. This Agreement shall have a term commencing on the
Initial Closing Date and expiring on the date of payment in full of all amounts
outstanding to be paid on the Securities.
Section 7.02 REPLACEMENT OR RESIGNATION. (a) At any time during the term
of this Agreement (i) the Issuer Group by a Controlling Trustees' Resolution,
shall be entitled to replace the then existing Administrative Agent performing
the Issuer Group Services with a new Administrative Agent appointed by it (with
the prior written consent of the Servicer, such consent not to be unreasonably
withheld or delayed (it being understood that the Servicer may consider, among
other factors, whether the proposed Administrative Agent is a "Competitor" as
defined in the Servicing Agreement)) on 120 days' Written Notice to the
Administrative Agent, the Trustee and the Security Trustee, except following the
delivery of a Default Notice or during the continuance of an Acceleration
Default (in which case all such powers shall be vested in the Security Trustee
as provided in clause (ii) below) and (ii) the Security Trustee shall be
entitled to replace the then existing Administrative Agent performing the Bank
Account Management Services and, following the delivery of a Default Notice or
during the continuance of an Acceleration Default, all of the Administrative
Services with a new Administrative Agent appointed by it on 120 days' written
notice.
(b) At any time during the term of this Agreement, the Administrative
Agent shall be entitled to resign as the Administrative Agent performing the
Issuer Group Services, the Bank Account Management Services or both such
Administrative Services on 120 days' Written Notice to the Issuer, the Security
Trustee and the Trustee if:
(i) any Issuer Group Member shall fail to pay in full when due (A)
any Administrative Fee or any Reimbursable Expenses in an aggregate amount in
excess of $50,000 and such failure continues for a period of 30 days, in either
case, after the effectiveness of Written Notice from the Administrative Agent of
such failure or (B) any other amount payable to the Administrative Agent
hereunder, and such failure continues for a period of 60 days after Written
Notice from the Administrative Agent of such failure;
(ii) any Issuer Group Member shall fail to perform or observe or
shall violate in any material respect any material term, covenant, condition or
agreement to be performed or observed by it in respect of this Agreement and
such failure continues for a period of 30 days after the Issuer Group shall have
received notice of such failure (other than with respect to payment obligations
referred to in clause (b)(i) of this Section 7.02);
(iii) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking relief in
respect of the Issuer or any Issuer Group Member, or of a substantial part of
the property or assets of the Issuer or any other Issuer Group Member, under
Title 11 of the United States Code, as now constituted or hereafter
27
amended (the "U.S. Bankruptcy Code"), or any other U.S. federal or state or
foreign bankruptcy, insolvency, receivership or similar law, and such proceeding
or petition shall continue undismissed for 120 days or an order or decree
approving or ordering any of the foregoing shall be entered or the Issuer or any
other Issuer Group Member shall go into liquidation, suffer a receiver or
mortgagee to take possession of all or substantially all of its assets or have
an examiner appointed over it or if a petition or proceeding is presented for
any of the foregoing and not discharged within 120 days; or
(iv) the Issuer or any other Issuer Group Member shall (A)
voluntarily commence any proceeding or file any petition seeking relief under
the U.S. Bankruptcy Code, or any other U.S. federal or state or foreign
bankruptcy, insolvency, receivership or similar law, (B) consent to the
institution of, or fail to contest the filing of, any petition described in
clause (b)(iii) of this Section 7.02, (C) file an answer admitting the material
allegations of a petition filed against it in any such proceeding or (D) make a
general assignment for the benefit of its creditors.
(c) No replacement of the Administrative Agent pursuant to Section 7.02(a)
and no resignation by the Administrative Agent pursuant to Section 7.02(b) shall
become effective prior to the date on which a successor Administrative Agent
shall have become a party to this Agreement and accepted appointment as such
successor Administrative Agent; provided, however, that in the event that a
successor Administrative Agent shall not have been appointed within 90 days
after such resignation, the Administrative Agent may petition any court of
competent jurisdiction for the appointment of a successor Administrative Agent.
Upon any such replacement or resignation, the Administrative Agent shall be
entitled to the payment of any compensation owed to it hereunder and to the
reimbursement of all Reimbursable Expenses incurred in connection with all
services rendered by it hereunder, as provided in Section 6 hereof, and for so
long as the Administrative Agent is continuing to perform any of the
Administrative Services, the Administrative Agent shall be entitled to continue
to be paid all amounts due to it hereunder, net of any amounts that shall have
been finally adjudicated by a court of competent jurisdiction to be owed by the
Administrative Agent to the Issuer Group or not to be due to the Administrative
Agent, until a successor Administrative Agent shall have been appointed and
shall have accepted such appointment.
Section 7.03 CONSEQUENCES OF REPLACEMENT OR RESIGNATION. (a) NOTICES. (i)
Following the replacement or resignation of the Administrative Agent pursuant to
Section 7.01 or 7.02, the Administrative Agent will promptly forward to the
Issuer Group any notices in respect of the Issuer Group Services and to the
Trustee and the Security Trustee any notices in respect of the Bank Account
Management Services received by it during the year immediately following the
replacement and resignation of the Administrative Agent pursuant to this
Agreement.
(ii) The Issuer Group will notify promptly any relevant third party,
including each Rating Agency, the Security Trustee, the Trustee, and the
Servicer, of the replacement and resignation of the Administrative Agent
pursuant to the Agreement and will request that any such notices and accounting
reports and communications thereafter be made or given directly to the entity
engaged to serve as Administrative Agent, and to the other parties hereto.
28
(b) ACCRUED RIGHTS. The replacement and resignation of the
Administrative Agent pursuant to this Agreement shall not affect the respective
rights and liabilities of any party accrued prior to such termination in respect
of any prior breaches hereof or otherwise.
(c) REPLACEMENT. If the Administrative Agent is replaced or resigns,
the Administrative Agent will cooperate with any person appointed to perform the
relevant Administrative Services, including providing such person with all
information and documents reasonably requested.
Section 7.04 SURVIVAL. Notwithstanding any replacement or resignation of
the Administrative Agent or the expiration of this Agreement, the obligations of
the Issuer Group and the Administrative Agent under Section 3.02 shall survive
such replacement or resignation of the Administrative Agent or expiration, as
the case may be.
ARTICLE VIII
ASSIGNMENT AND DELEGATION
Section 8.01 ASSIGNMENT AND DELEGATION. (a) Except as provided in
subsection (b) below, no party to this Agreement shall assign or delegate or
otherwise subcontract this Agreement or all or any part of its rights or
obligations hereunder to any Person without the prior written consent of the
other parties (such consent not to be unreasonably withheld) and, except with
respect to the Bank Account Management Services, assign or delegate or otherwise
subcontract to a "Competitor" of the Servicer (as defined in the Servicing
Agreement), without the prior written consent of the Servicer; provided that the
Issuer Group Members may assign their rights hereunder to the Security Trustee
for the benefit of the Secured Parties under the terms of the Security Trust
Agreement.
(b) The Administrative Agent may assign its right to receive
compensation for the performance of all or any part of the services set forth in
Article II, including without limitation, the establishment and maintenance of
the Ledgers and the preparation of the Draft Accounts.
(c) Without limiting the foregoing, any Person who shall become a
successor by assignment or otherwise of any party hereto shall be required as a
condition to the effectiveness of any such assignment or other arrangement to
become a party to this Agreement.
29
ARTICLE IX
MISCELLANEOUS
Section 9.01 NOTICES. All notices, consents, directions, approvals,
instructions, requests and other communications required or permitted by this
Agreement to be given to any Person shall be in writing, and any such notice
shall become effective ten (10) days after being deposited in the mails,
certified or registered, return receipt requested, with appropriate postage
prepaid for first class mail, or if delivered by hand or courier service or in
the form of a facsimile, when received (and, in the case of a facsimile, receipt
of such facsimile is confirmed to the sender), and shall be directed to the
address or facsimile number of such Person set forth below:
If to the Issuer and the other Issuer Group Members, to:
Lease Investment Flight Trust
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administrator
Fax: (000) 000-0000
with copies to:
Phoenix American Financial Services, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Financial Services Division
and
Xxxxxx X. Xxxxxxx, Xx.
00 Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000)000-0000
and
Xxxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Fax: (000)000-0000
and
Xxxxx X. Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000)000-0000
30
if to the Administrative Agent, to:
Phoenix American Financial Services, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Financial Services Division
if to the Trustee or the Security Trustee, to:
Bankers Trust Company
Four Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust and Agency Services-Structured Finance
Fax: (000) 000-0000
From time to time any party to such agreement may designate a new address
or number for purposes of notice thereunder by notice to each of the other
parties thereto.
Section 9.02 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 9.03 JURISDICTION. Except as otherwise expressly provided in this
Agreement, the parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 9.01 shall be deemed
effective service of process on such party.
Section 9.04 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 9.05 COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the
31
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto. No provision of this Agreement is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
Section 9.06 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 9.07 TABLE OF CONTENTS; HEADINGS. The table of contents and
headings of the various articles, sections and other subdivisions of such
agreement are for convenience of reference only and shall not modify, define or
limit any of the terms or provisions of such agreement.
Section 9.08 AMENDMENTS. This Agreement may not be amended, supplemented
of otherwise modified except in a writing executed by all parties hereto,
provided that the Administrative Agent, the Security Trustee and the Trustee may
amend, supplement of otherwise modify this Agreement to alter the Bank Account
Management Services without the consent of, or the execution of any writing by,
the Issuer or any other Issuer Group Member. To the extent that so doing would,
directly or indirectly, affect the Servicer's rights, obligations or liabilities
(or potential liabilities) under the Servicing Agreement, this Agreement may not
be amended to alter the scope of Issuer Group Services in any material respect
without the consent of the Servicer (such consent not to be unreasonably
withheld or delayed). Prior to the execution of any such amendment, supplement
or modification, the Security Trustee and the Trustee shall be entitled to
receive an Officer's Certificate to the effect that all conditions precedent to
such amendment, modification or supplement, if any, have been satisfied.
Section 9.09 NO PARTNERSHIP. (a) It is expressly recognized and
acknowledged that this Agreement is not intended to create a partnership, joint
venture or other similar arrangement between any Issuer Group Member or Members
on the one part and the Administrative Agent on the other part. It is also
expressly understood that any actions taken on behalf of any Issuer Group Member
by the Administrative Agent shall be taken as agent for such Issuer Group
Member, either naming the relevant Issuer Group Member, or naming the
Administrative Agent as agent for an undisclosed principal. No Issuer Group
Member shall hold itself out as a partner of the Administrative Agent, and the
Administrative Agent will not hold itself out as a partner of any Issuer Group
Member.
(b) The Administrative Agent shall not have any fiduciary duty or
other implied obligations or duties to any Issuer Group Member, any Lessee or
any other Person arising out of this Agreement.
Section 9.10 CONCERNING THE SECURITY TRUSTEE AND THE TRUSTEE. In respect
of the Security Trustee's and Trustee's performance of appointing the
Administrative Agent to provide the Bank Account Management Services, the
Security Trustee and the Trustee shall be afforded all of the rights,
protections, immunities and indemnities contained in the Security Trust
32
Agreement and the Indenture, respectively, as if such rights, protections,
immunities and indemnities were specifically set forth herein. It is expressly
understood and agreed that neither the Security Trustee nor the Trustee shall
have any liability in respect of the appointment, performance or nonperformance
of the Administrative Agent, all such liability, if any, being expressly waived
by the parties hereto and by any Person claiming by, through or under such
parties.
Section 9.11 RESTRICTIONS ON DISCLOSURE. The Administrative Agent agrees
that it shall not, prior to the termination or expiration of this Agreement or
within the three (3) years after such termination or expiration, disclose to any
Person any information stated in writing by an Issuer Group Member or the
Servicer to be confidential or proprietary, whether of a technical, financial,
commercial or other nature, received directly or indirectly from the Issuer
Group or the Servicer regarding the Issuer Group or the Servicer or their
respective businesses or the Aircraft.
Notwithstanding anything herein to the contrary, the foregoing shall not
be construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Administrative Agent from
sources other than an Issuer Group Member or the Servicer, (ii) disclosure of
any and all information (A) if required to do so by any Applicable Law, (B) to
any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Administrative Agent's business or that
of its affiliates, (C) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Administrative Agent or an affiliate or an officer,
director, employer or shareholder thereof is a party, (D) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by this Agreement approved in
advance by any Issuer Group Member or (E) to any affiliate, independent or
internal auditor, agent, employee or attorney of the Administrative Agent having
a need to know the same, provided that the Administrative Agent advises such
recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by any Issuer Group Member or the
Servicer.
Section 9.12 POWER OF ATTORNEY. The Issuer shall, and shall cause each
other Issuer Group Member, to appoint the Administrative Agent and its
successors, and its permitted designees and assigns, as their true and lawful
attorney-in-fact pursuant to the form of Power of Attorney attached as Schedule
2 to this Agreement (with such modifications as are necessary under the laws of
the jurisdictions in which such Persons are organized). The Administrative Agent
shall be entitled to seek and obtain from the Issuer (and/or any other Issuer
Group Member as appropriate) a power of attorney in respect of the execution of
any specific action as the Administrative Agent requests which is required in
connection with the Administrative Services.
IN WITNESS WHEREOF, this Agreement has been duly executed on
the date first written above.
LEASE INVESTMENT FLIGHT TRUST,
By Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
By: /s/
-----------------------------------------
Name:
Title:
LIFT TRUST - SUB 1,
By Wilmington Trust Company,
not in its individual capacity but
solely as the owner trustee
By:
-----------------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as the Operaing Bank and thet
Security Trustee
By:
-----------------------------------------
Name:
Title:
PHOENIX AMERICAN FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Name:
Title:
SCHEDULE 1
ACCOUNTS
ACCOUNT NAME ACCOUNT NUMBER
--------------------------------------------------------------------------------
LIFT LESSEE FUND AIR 2000 29618 32006
------------------------------------
LIFT LESSEE FUND AMERICA WEST 23384 32007
------------------------------------
LIFT LESSEE FUND ASIANA AIRLINES 24469 32008
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 1093 32009
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 1108 32010
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 49511 32011
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 49513 32012
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 49515 32013
------------------------------------
LIFT LESSEE FUND EASYJET 29338 32014
------------------------------------
LIFT LESSEE FUND GARUDA 24512 32015
------------------------------------
LIFT LESSEE FUND KOREAN AIRLINES 48523 32022
------------------------------------
LIFT LESSEE FUND MALAYSIAN AIRLINES 28427 32023
------------------------------------
LIFT LESSEE FUND NOUVELAIR 53147 32024
------------------------------------
LIFT LESSEE FUND PEGASUS 28628 32025
------------------------------------
LIFT LESSEE FUND RIO SUL 28565 32026
------------------------------------
LIFT LESSEE FUND ROYAL AIR MAROC 28592 32027
------------------------------------
LIFT LESSEE FUND SPANAIR 49501 32028
------------------------------------
LIFT LESSEE FUND SPANAIR 49507 32029
------------------------------------
LIFT LESSEE FUND SPANAIR 49509 32030
------------------------------------
46
LIFT LESSEE FUND SPANAIR 49519 32031
------------------------------------
LIFT LESSEE FUND VARIG 28584 32032
------------------------------------
LIFT LESSEE FUND VARIG 28671 32033
------------------------------------
Bankers Trust Company NY
ABA #: 000-000-000
Account #: 00412-996
Account Name: BTCO as Security Trustee
for LIFT-LIFT Rental Account
LIFT RENTAL ACCT (DDA Account) Reference: LIFT-[lessee][serial#]
------------------------------------
LIFT RENTAL ACCT - SUSPENSE 32034
------------------------------------
LIFT COLLECTIONS ACCT 32035
------------------------------------
LIFT BRIDGE NOTE ACCT 32036
------------------------------------
LIFT EXPENSE ACCT 32037
------------------------------------
LIFT NOTE ACCT CLASS A1 32038
------------------------------------
LIFT NOTE ACCT CLASS A2 32039
------------------------------------
LIFT NOTE ACCT CLASS A3 32040
------------------------------------
LIFT NOTE ACCT CLASS B-1 32041
------------------------------------
LIFT NOTE ACCT CLASS C-1 32042
------------------------------------
LIFT NOTE ACCT CLASS D-1 32043
------------------------------------
LIFT OWNER TRUSTEE ACCT 32044
------------------------------------
2
SCHEDULE 2
ISSUER GROUP SERVICES
POWER OF ATTORNEY
OF
[GRANTOR]
WHEREAS [GRANTOR], having its [registered] office at [insert
address] (hereinafter called the "Grantor") desires to appoint
PHOENIX AMERICAN FINANCIAL SERVICES, INC. having its office at
________________ (the "Attorney") as the true and lawful
attorney of the Grantor for and in the name of and on behalf
of the Grantor in such Attorney's absolute discretion to
execute each and every Requisite Document and Requisite Act as
defined below and do all or any of the acts or things
hereinafter mentioned.
KNOW ALL MEN BY THESE PRESENTS that in consideration for the
mutual promises and benefits set forth in the Administrative
Agency Agreement (defined below) the Grantor does hereby make,
constitute and irrevocably and unconditionally appoint for the
period (the "Term") as and from the date hereof until
termination or expiry of the Administrative Agency Agreement
between the Grantor, other Issuer Group Members, Bankers Trust
Company and the Attorney, dated as of June 26, 2001 (the
"Administrative Agency Agreement") in accordance with its
terms the Attorney as a true and lawful attorney of the
Grantor for and in the name of and on behalf of the Grantor
with absolute discretion to exercise, do, execute and/or
deliver all or any of the acts, documents and things
hereinafter mentioned that in to say:
1. To negotiate, approve, settle the terms of, agree, make,
sign, execute (whether under hand or seal) and deliver
all deeds, agreements, documents, commitments,
arrangements, instruments, applications, oaths,
affidavits, declarations, notices, confirmations,
certificates, approvals, acceptances, deliveries and to
do all other acts, matters and things whatsoever which
are in each case necessary or desirable for the Attorney
to do for and on behalf of the Grantor in respect of the
provision of the Issuer Group Services (as defined in
and contemplated by the Administrative Agency Agreement)
(each such document a "Requisite Document" and each such
act a "Requisite Act").
2. To make such amendments, modifications and variations to
the Requisite Documents and to enter into ancillary
documentation in respect thereof, all on such terms as
any such Attorney may, in its sole discretion, determine
from time to time for and on behalf of the Grantor; and
to make, give, sign, execute and do all things
including, without limitation, any material acts which
may be necessary in order to effect the terms of such
Requisite Documents or in connection with the making,
signature, executions and delivery of the Requisite
Documents or any other documents required to
3
be executed by the Grantor in connection therewith or
the performance of any acts, matters and things
contemplated thereby or by the Requisite Acts as may be
necessary in accordance with the provision of the Issuer
Group Services.
3. To nominate and appoint one or more substitutes as
attorney or attorneys under it for all and any of the
purposes aforesaid and the appointment of same with
liberty to revoke.
4. To acknowledge this Power of Attorney as the act and
deed of the Grantor and generally to do all other acts
which may be necessary and desirable for carrying the
purpose of this Power of Attorney into effect.
IT IS HEREBY DECLARED THAT: -
(A) The Grantor hereby ratifies and confirms and
agrees to ratify and confirm whatsoever any
Attorney shall do or cause to be done in, or by
virtue of this Power of Attorney as long an such
act is not inconsistent with the terms of the
Administrative Agency Agreement or this Power of
Attorney or in violation of Applicable Law.
(B) This Power of Attorney shall be irrevocable for
the Term and at all times both before and after
the Term shall be conclusive and binding upon the
Grantor and no person or corporation having
dealings with any Attorney under this Power of
Attorney shall be under any obligation to make any
inquiries as to whether or not this Power of
Attorney has been revoked and all acts hereunder
shall be valid and binding on the Grantor unless
express notice of its revocation shall have been
received by such person or corporation.
(C) Subject to the provisions of the Administrative
Agency Agreement the Grantor unconditionally
undertakes to indemnify and keep indemnified each
Attorney and his agents, and their respective
successors and estates, against all actions,
proceedings, claims, costs, expenses and
liabilities of whatsoever nature arising from the
exercise or purported exercise in good faith of
any of the powers conferred on each Attorney by
this Power of Attorney.
(D) The particular powers enumerated above shall be
given the widest interpretation.
(E) THIS POWER OF ATTORNEY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
4
IN WITNESS WHEREOF the Grantor has caused this Power of
Attorney duly executed by the Grantor this ____ day of [ ],
2001.
SIGNED BY: ________________
For and on behalf of
[GRANTOR]
in the presence of:
SCHEDULE 1
------------------------------------ ------------------------------------------ ----------------------- -----------------------
SELLER ASSET - BENEFICIAL INTEREST AIRCRAFT MSN LESSEE
------------------------------------ ------------------------------------------ ----------------------- -----------------------
General Electric Capital LIFT CEA China, LLC (Delaware) 00000 Xxxxx Eastern
Corporation ("GECC") MD82 Aircraft Leasing I Corporation
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT CEA China, LLC (Delaware) 00000 Xxxxx Eastern
MD82 Aircraft Leasing II Corporation
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT CEA China, LLC (Delaware) 00000 Xxxxx Eastern
MD82 Aircraft Leasing III Corporation
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT CEA China, LLC (Delaware) 1108 China Eastern
A320 Aircraft Leasing X Corp. (Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT CEA China, LLC (Delaware) 1093 China Eastern
A320 Aircraft Leasing IX Corp. (Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT SP Spain, LLC 49509 Spanair
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT SP Spain, LLC 49519 Spanair
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT SP Spain, LLC 49501 Spanair
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT SP Spain, LLC 49578 Spanair
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT SP Spain, LLC 49507 Spanair
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Canada, LLC 30112 Air Canada Capital
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Canada, LLC 30108 Air Canada Capital
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Castle Harbour Leasing Inc. MD82 Aircraft Owner F Limited (Cayman) 49419 None
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Aviation Financial Services, Inc. Sinope Limited (Cayman) 48523 Korean Airlines
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC B737 Owner Limited (Cayman) 24469 Asiana Airlines
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT GF UK, LLC 28602 Go Fly Limited
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT GF UK, LLC 28606 Go Fly Limited
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. XXXX Xxxxxx, XXX 00000 Xxx Xxxxxx
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. XXXX Xxxxxx, XXX 00000 Xxx Xxxxxx
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. XXXX Xxxxxx, XXX 00000 Xxx Xxxxxx
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Turkey, LLC 28591 Pegasus
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Turkey, LLC 28628 Pegasus
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Georgia, LLC 23376 Delta
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Portugal, LLC 28570 SATA - Air Acores
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Morocco, LLC 28592 Royal Air Maroc
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT RS Brazil, LLC 28565 Rio Sul
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alnitak FSC Two Corp. LIFT EJ UK, LLC 29338 EasyJet Airline Co.
(Delaware) Ltd. (subleased to
easyJet Switzerland)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Castle Harbour Leasing Inc. MD82 Aircraft Owner G Limited (Cayman) 53147 Nouvelair Tunisie
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT VG Brazil, LLC 28671 Varig
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT VG Brazil, LLC 28584 Varig
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Indonesia, LLC 00000 Xxxxxx
(Xxxxxxxx)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. Zibal Aircraft Leasing LLC 28609 Jet Airways
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Arizona, LLC 23384 America West
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Malaysia, LLC 00000 Xxxxxxxxx Airline
(Delaware) System
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Missouri, LLC 26208 TWA Airline LLC
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Italy, LLC 1152 Volare
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Castle Harbour Leasing Inc. LIFT IB Spain, LLC 879 Iberworld
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT A2K UK, LLC 29618 Air 2000
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Russia, LLC 30110 Aeroflot
(Delaware)
------------------------------------ ------------------------------------------ ----------------------- -----------------------
Alcyone FSC Corp. LIFT Bermuda Leasing Limited Intermediate
(Bermuda) * lessor/lessee to
Aeroflot
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Ireland Leasing Limited Asiana Airlines
(Ireland) Korean Airlines
Nouvelaire Tunisie
Volare
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Indonesia Leasing, S.A.R.L. Garuda
(France) *
------------------------------------ ------------------------------------------ ----------------------- -----------------------
-----------------
* May be subsidiary of applicable LLC
------------------------------------ ------------------------------------------ ----------------------- -----------------------
GECC LIFT Malaysian Leasing Limited Malaysian Airline
(Malaysia - Labuan) * System
------------------------------------ ------------------------------------------ ----------------------- -----------------------
SCHEDULE 2
AIRCRAFT INFORMATION
Aircraft No. 1
--------------------------------------------- ------------------------------------------------------------------------
Aircraft:
--------------------------------------------- ------------------------------------------------------------------------
Engines:
--------------------------------------------- ------------------------------------------------------------------------
Initial Appraised Value:
--------------------------------------------- ------------------------------------------------------------------------
Lessee:
--------------------------------------------- ------------------------------------------------------------------------
Aircraft Lease Agreement:
--------------------------------------------- ------------------------------------------------------------------------
State of Registration:
--------------------------------------------- ------------------------------------------------------------------------
Security Deposit (specify whether cash,
letter of credit, guaranty or other
instrument):
--------------------------------------------- ------------------------------------------------------------------------
Delivery Date (under Lease):
--------------------------------------------- ------------------------------------------------------------------------
Maintenance Reserve Amount:
--------------------------------------------- ------------------------------------------------------------------------
Expiry Date (of Lease):
--------------------------------------------- ------------------------------------------------------------------------
Aircraft Purchase Price:
--------------------------------------------- ------------------------------------------------------------------------
Maintenance Performer:
--------------------------------------------- ------------------------------------------------------------------------
Lease Documents:
--------------------------------------------- ------------------------------------------------------------------------
Purchaser:
--------------------------------------------- ------------------------------------------------------------------------
SCHEDULE 3
DOCUMENTS AND CONDITIONS - DELIVERY
1. AIRCRAFT NO. 1; MSN [______]
All documents and conditions listed in Section __ of the Lease
Novation for aircraft msn [______], except as listed in Schedule 4.
SCHEDULE 4
DOCUMENTS AND CONDITIONS - POST-DELIVERY
The information set out in this Schedule 4 may be amended from time to time by a
Disclosure Letter acceptable to the Purchaser.
SCHEDULE 5
PRINCIPAL PLACE OF INCORPORATION OR ORGANIZATION
JURISDICTION OF
NAME OF SELLER INCORPORATION OR ORGANIZATION
General Electric Capital Corporation New York
(may be reincorporated in
Delaware at any time)
Castle Harbour Leasing Inc. Delaware
Aviation Financial Services, Inc. Delaware
Alcyone FSC Corporation Barbados (foreign sales corporation)
Alnitak FSC Two Corporation Barbados (foreign sales corporation)
SCHEDULE 6
LIFT ENTITIES - LIFT NON-CORPORATE ENTITIES *
LIFT CEA China, LLC
LIFT SP Spain, LLC
LIFT Canada, LLC
LIFT GF UK, LLC
LIFT France, LLC
LIFT Turkey, LLC
LIFT Georgia, LLC
LIFT Portugal, LLC
LIFT Morocco, LLC
LIFT RS Brazil, LLC
LIFT EJ UK, LLC
LIFT VG Brazil, LLC
LIFT Indonesia, LLC
LIFT Arizona, LLC
LIFT Malaysia, LLC
LIFT Missouri, LLC
LIFT Italy, LLC
LIFT IB Spain, LLC
LIFT A2K UK, LLC
LIFT Russia, LLC
ZIBAL Aircraft Leasing LLC
---------
* All are Delaware Limited Liability Companies
LIFT ENTITIES - LIFT CORPORATE AND CHINESE CORPORATE ENTITIES
A320 Aircraft Leasing IX Corp. (Delaware) **
A320 Aircraft Leasing X Corp. (Delaware) **
MD82 Aircraft Leasing I Corporation (Delaware) **
MD82 Aircraft Leasing II Corporation (Delaware) **
MD82 Aircraft Leasing III Corporation (Delaware) **
MD82 Aircraft Owner F Limited (Cayman)***
MD82 Aircraft Owner G Limited (Cayman) ***
B737 Owner Limited (Cayman) ***
Sinope Limited (Cayman) ***
LIFT Ireland Leasing Limited (Ireland)
LIFT Indonesia Leasing, S.A.R.L. (France)
LIFT Malaysian Leasing Limited (Malaysia - Labuan)
LIFT Bermuda Leasing Limited (Bermuda)
--------
** Indicates LIFT Corporate Chinese Entity.
*** Has elected or will elect before the Purchase Date to be an entity taxable
as a disregarded entity for federal income tax purposes.
