EXECUTION COPY
CREDIT AGREEMENT (2006-A)
by and among
XXXXXXXXX XXXXXXXXXX XXXXXXXX 0 XXXXXXX,
XXXXXXXXX XXXXXXX NO. 3 LIMITED,
and
THE BORROWERS PARTY HERETO FROM TIME TO TIME,
as Borrowers,
JPMORGAN CHASE BANK, N.A.,
BEAR XXXXXXX CORPORATE LENDING INC. and
CITIBANK, N.A.,
as Lenders
and
JPMORGAN CHASE BANK, N.A.,
as Agent
and
THE OTHER LENDERS PARTY HERETO FROM TIME TO TIME
Dated as of February 28, 2006
TABLE OF CONTENTS
PAGE
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ARTICLE I
Definitions and Terms
1.1. Definitions........................................................... 1
1.2. Rules of Interpretation............................................... 26
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans....................................................... 27
2.2. Payment of Interest................................................... 29
2.3. Payment of Principal.................................................. 29
2.4. Manner of Payment..................................................... 30
2.5. Notes................................................................. 31
2.6. Pro Rata Payments..................................................... 31
2.7. Reductions............................................................ 31
2.8. Conversions and Elections of Subsequent Interest Periods.............. 32
2.9. Increase and Decrease in Amounts...................................... 32
2.10. Fees.................................................................. 32
2.11. Deficiency Advances................................................... 32
2.12. Use of Proceeds....................................................... 33
2.13. Designation of Borrowing Affiliate; Releases.......................... 33
2.14. Joint and Several Liability........................................... 34
2.15. Eligible Lease Involving Eligible Intermediary........................ 35
ARTICLE III
Security
3.1. Security.............................................................. 36
3.2. Further Assurances.................................................... 36
3.3. Information Regarding Collateral...................................... 36
3.4. Quiet Enjoyment....................................................... 36
ARTICLE IV
Change in Circumstances
4.1. Requirements of Law................................................... 37
4.2. Limitation on Types of Loans.......................................... 38
4.3. Illegality............................................................ 38
4.4. Treatment of Affected Loans........................................... 39
4.5. Compensation.......................................................... 39
4.6. Taxes................................................................. 40
ARTICLE V
Conditions to Making Loans
5.1. Conditions of Closing................................................. 42
5.2. Conditions of Revolving Loans......................................... 44
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5.3. Conditions of Subsequent Advances Under Revolving Loans............... 47
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority............................................ 48
6.2. Loan Documents........................................................ 49
6.3. Solvency.............................................................. 49
6.4. Subsidiaries and Stockholders......................................... 49
6.5. Ownership Interests................................................... 50
6.6. Liens................................................................. 50
6.7. Title to Properties................................................... 50
6.8. Taxes................................................................. 50
6.9. Other Agreements...................................................... 51
6.10. Litigation............................................................ 51
6.11. Federal Regulations................................................... 51
6.12. Investment Company.................................................... 51
6.13. Patents, Etc.......................................................... 52
6.14. No Untrue Statement................................................... 52
6.15. No Consents, Etc...................................................... 52
6.16. Employee Benefit Plans................................................ 53
6.17. No Default............................................................ 53
6.18. Environmental Laws.................................................... 53
6.19. Employment Matters.................................................... 54
6.20. Taxes................................................................. 54
6.21. Parent Guarantor Representations and Warranties....................... 54
ARTICLE VII
Affirmative Covenants
7.1. Financial Reports, Etc................................................ 54
7.2. Maintain Properties................................................... 54
7.3. Existence, Qualification, Etc......................................... 55
7.4. Regulations and Taxes................................................. 55
7.5. Insurance............................................................. 55
7.6. True Books............................................................ 55
7.7. Right of Inspection................................................... 55
7.8. Observe all Laws...................................................... 56
7.9. Governmental Licenses................................................. 56
7.10. Covenants Extending to Other Persons.................................. 56
7.11. Officer's Knowledge of Default........................................ 56
7.12. Suits or Other Proceedings............................................ 56
7.13. Notice of Environmental Complaint or Condition........................ 56
7.14. Environmental Compliance.............................................. 56
7.15. Indemnification....................................................... 57
7.16. Further Assurances.................................................... 57
7.17. Hedging Agreements.................................................... 57
7.18. Continued Operations.................................................. 57
7.19. Maintenance of Eligible Assets; Other Covenants and Restrictions; Non-
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Discrimination..................................................... 58
7.20. Re-registration of Eligible Assets.................................... 58
7.21. Employee Benefit Plans................................................ 58
7.22. Accounts.............................................................. 58
7.23. Eligible Lease; Lessee Notice......................................... 58
ARTICLE VIII
Negative Covenants
8.1. Acquisitions.......................................................... 58
8.2. Capital Expenditures.................................................. 59
8.3. Liens................................................................. 59
8.4. Indebtedness.......................................................... 60
8.5. Transfer of Assets.................................................... 61
8.6. Subsidiaries; Investments............................................. 61
8.7. Merger or Consolidation............................................... 61
8.8. Transactions with Affiliates.......................................... 61
8.9. Employee Benefit Plans; ERISA Affiliates; Employees................... 61
8.10. Fiscal Year........................................................... 62
8.11. Dissolution, etc...................................................... 62
8.12. Change in Control..................................................... 62
8.13. Negative Pledge Clauses............................................... 62
8.14. Partnerships.......................................................... 62
8.15. Business and Operations............................................... 62
8.16. Ownership, Operation and Leasing of Financed Eligible Assets.......... 62
8.17. Bank Accounts......................................................... 63
8.18. Representations Regarding Agent and Lenders........................... 63
8.19. Bermuda Holding 2 Ltd.; AI 3 Ltd...................................... 63
8.20. Organizational Documents.............................................. 63
8.21. Permanent Capital Markets Financing................................... 63
8.22. Borrowing Base Covenant............................................... 64
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default..................................................... 64
9.2. Agent to Act.......................................................... 68
9.3. Cumulative Rights..................................................... 68
9.4. No Waiver............................................................. 68
9.5. Allocation of Proceeds................................................ 68
9.6. Activities of Eligible Carriers....................................... 69
ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities................................... 69
10.2. Reliance by Agent..................................................... 71
10.3. Defaults.............................................................. 71
10.4. Rights as Lender...................................................... 71
10.5. Indemnification....................................................... 71
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10.6. Non-Reliance on Agent and Other Lenders............................... 71
10.7. Resignation of Agent.................................................. 71
10.8. Fees.................................................................. 72
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations........................................ 72
11.2. Notices............................................................... 74
11.3. Right of Set-off; Adjustments......................................... 76
11.4. Survival.............................................................. 77
11.5. Expenses.............................................................. 77
11.6. Amendments and Waivers................................................ 77
11.7. Counterparts.......................................................... 78
11.8. Return of Funds....................................................... 78
11.9. Indemnification; Limitation of Liability.............................. 78
11.10. Severability.......................................................... 80
11.11. Entire Agreement...................................................... 80
11.12. Payments.............................................................. 80
11.13. Confidentiality....................................................... 80
11.14. Governing Law; Waiver of Jury Trial................................... 81
11.15. Judgment Currency..................................................... 82
11.16. USA PATRIOT Act....................................................... 82
11.17. Post-Closing Matters.................................................. 82
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EXHIBITS
EXHIBIT A Applicable Commitment Percentages
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Notice of Appointment (or Revocation) of Authorized
Representative
EXHIBIT D Form of Borrowing Notice
EXHIBIT E Form of Interest Rate Selection Notice
EXHIBIT F Form of Note
EXHIBIT G-1 Form of Domestic Counsel Opinion
EXHIBIT G-2 Form of FAA Counsel Opinion at Funding
EXHIBIT G-3 Form of Foreign Counsel Opinion as to Borrower
EXHIBIT G-4 Form of Foreign Counsel Opinion as to Lease and Lessee
EXHIBIT H Compliance Certificate
EXHIBIT I-1 Form of Facility Guaranty
EXHIBIT I-2 Form of Parent Guarantor Guaranty
EXHIBIT J Form of Security Agreement
EXHIBIT K List of Approved Aircraft Models
EXHIBIT L Required Insurance on Each Aircraft
EXHIBIT M Form of Lessee Notice
EXHIBIT N Form of Account Control Agreement
EXHIBIT O Form of Lockbox Agreement
EXHIBIT P Monthly Servicer and Covenant Compliance Report
EXHIBIT Q Form of Assumption Letter
EXHIBIT R Borrowing Base Certificate
EXHIBIT S-1 Form of Pledge and Security Agreement (for pledged beneficial
interest in Holdings Subsidiary Trust)
EXHIBIT S-2 Form of Pledge and Security Agreement (for pledged interest
in Holdings SPC, Beneficial Owner, Applicable Intermediary
or other Subsidiary)
EXHIBIT S-3 Form of Xxxxxxx Xxxxxx
XXXXXXX X-0 Form of Irish Pledge
SCHEDULES
Schedule 1.1 Certain Persons who are not Eligible Assignees
Schedule 3.3 Information Regarding Collateral
Schedule 6.7 Existing Liens
Schedule 6.8 Tax Matters
Schedule 6.10 Litigation
Schedule 6.21 Accounts
Schedule 7.19(a) Maintenance, Return, Alteration, Replacement, Pooling and
Lease
Schedule 8.4 Indebtedness
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (2006-A), dated as of February 28, 2006 (as may
be amended, supplemented or otherwise modified from time to time, the
"Agreement"), is made by and among, AIRCASTLE INVESTMENT HOLDINGS 2 LIMITED, an
exempted company organized and existing under the laws of Xxxxxxx ("Xxxxxxx
Xxxxxxx 0 Xxx."), XXXXXXXXX XXXXXXX NO. 3 LIMITED, a limited liability company
incorporated in Ireland ("AI 3 Ltd."), and certain Holdings Subsidiary Trusts
and Holdings SPCs (as defined below) designated as Borrowing Affiliates
hereunder (such Holdings Subsidiary Trusts and Holdings SPCs being referred to
individually as a "Borrower" or collectively as the "Borrowers"), JPMORGAN CHASE
BANK, N.A., a national banking association, in its capacity as a Lender
("JPMCB"), BEAR XXXXXXX CORPORATE LENDING INC., a national banking corporation,
CITIBANK, N.A., a national banking association, and each other financial
institution executing and delivering a signature page hereto and each other
financial institution which may hereafter execute and deliver an instrument of
assignment with respect to this Agreement pursuant to Section 11.1 (such
financial institutions hereinafter being referred to individually as a "Lender"
or collectively as the "Lenders"), and JPMORGAN CHASE BANK, N.A., in its
capacity as agent for the Lenders (in such capacity, and together with any
successor agent appointed in accordance with the terms of Section 10.7, the
"Agent");
WITNESSETH:
WHEREAS, the Borrowers have requested that the Lenders make available
to the Borrowers a revolving credit facility of up to $500,000,000, the proceeds
of which are to be used solely to provide interim financing for the purchase or
refinancing by the Borrowers of Eligible Assets; and
WHEREAS, the Lenders are willing to make such revolving credit
facility available to the Borrowers upon the terms and conditions set forth
herein;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree
as follows:
ARTICLE I
DEFINITIONS AND TERMS
1.1. Definitions. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:
"$100,000,000 Capital Call" has the meaning given to such term in
section 5.1(c).
"AA LLC" means Aircastle Advisor LLC, a Delaware limited liability
company and a direct wholly-owned subsidiary of the Parent.
"AA Ireland Ltd." means Aircastle Advisor (Ireland) Limited, a limited
company organized in Ireland and a direct wholly-owned subsidiary of the
Parent.
"ABS Ltd." means Aircastle Bermuda Securities Limited, an exempted
company organized and existing under the laws of Bermuda.
"Account" has the meaning given in the Lockbox Agreement.
"Account Control Agreement" means an account control agreement in
substantially the form of Exhibit N.
"Acquisition" means the acquisition of any beneficial interest, equity
interest or other ownership interest in another Person (including the
purchase of an option, warrant or convertible or similar type security to
acquire such interest at the time it becomes exercisable by the holder
thereof), whether by purchase of such interest or upon exercise of an
option or warrant for, or conversion of securities into, such interest.
"Advance Rate" means at any time, the aggregate principal amount of
the Loans outstanding hereunder, divided by the Borrowing Base.
"Affiliate" means any Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under
common control with any Guarantor or any Borrower; or (ii) which
beneficially owns or holds 10% or more of any class of the outstanding
voting stock (or in the case of a Person which is not a corporation, 10% or
more of the equity interest or beneficial interest) of any Guarantor or any
Borrower; or 10% or more of any class of the outstanding voting stock (or
in the case of a Person which is not a corporation, 10% or more of the
equity interest or beneficial interest) of which is beneficially owned or
held by any Guarantor or any Borrower; provided, however, at the time any
Guarantor registers any security issued by it pursuant to the Securities
Act of 1933, as amended, the figure "10%" used in this definition shall
automatically change to "5%" without further action; provided, further,
that the term Affiliate, unless otherwise specified herein, shall only be
deemed to refer to an "Affiliate" of any Parent Guarantor, as applicable,
where such term is used in the Parent Guarantor Guaranty executed by the
relevant Parent Guarantor, as applicable. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
ownership of voting stock, by contract or otherwise
"AHC Ltd." means Aircastle Holding Corporation Limited, an exempted
company organized and existing under the laws of Bermuda.
"AI 2 Credit Agreement" means the 364-Day Senior Secured Credit
Agreement, dated as of October 25, 2005 by and among: XXXXX FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, as trustee under each of trust agreement
(MSN 333), trust Agreement (MSN 337) and trust Agreement (MSN 342) each
dated as of October 19, 2005 with AI 2 Ltd. as trustor; AI 2 Ltd.,
CITIBANK, N.A., a national banking
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association, as a lender, the other lenders from time to time party thereto
and CITIBANK, N.A., in its capacity as agent for the lenders thereunder.
"AI 1 Ltd" means Aircastle Ireland No. 1 Limited, a limited liability
company incorporated in Ireland and a wholly-owned subsidiary of Ireland
Holding Ltd.
"AI 2 Ltd" means Aircastle Ireland No. 2 Limited, a limited liability
company incorporated in Ireland and a wholly-owned subsidiary of Ireland
Holding Ltd.
"AI 3 Ltd." has the meaning given such term in the preamble to this
Agreement.
"Aircraft" means any Stage III fixed wing airframe together with the
jet Engines therefor (whether or not) affixed thereto.
"Aircraft Portfolio" means the collective reference to all of the
Eligible Assets owned by any Subsidiary of Bermuda Holding 2 Ltd. or AI 3
Ltd. at any one time.
"Applicable Borrower" means, with respect to any Financed Eligible
Asset, the Borrower that has requested or received a Loan to enable such
Borrower to purchase or refinance such Financed Eligible Asset.
"Applicable Carrier" means, with respect to any Financed Eligible
Asset, the Eligible Carrier that has leased such Financed Eligible Asset
from the Applicable Borrower, or from the Applicable Intermediary in
accordance with Section 2.15.
"Applicable Commitment Percentage" means, with respect to each Lender
at any time, a fraction, the numerator of which shall be such Lender's
Revolving Credit Commitment and the denominator of which shall be the Total
Revolving Credit Commitment, which Applicable Commitment Percentage for
each Lender as of the Closing Date is as set forth in Exhibit A; provided
that the Applicable Commitment Percentage of each Lender shall be increased
or decreased to reflect any assignments to or by such Lender effected in
accordance with Section 11.1.
"Applicable Foreign Aviation Law" means, with respect to any Eligible
Asset, any applicable law (other than the FAA Act) of any country or
subdivision thereof, governing the registration, ownership, operation, or
leasing of all or any part of such Eligible Asset, or the creation,
recordation, maintenance, perfection or priority or Liens on all or any
part of such Eligible Asset.
"Applicable Foreign Jurisdiction" means, with respect to any Eligible
Asset, any jurisdiction that administers an Applicable Foreign Aviation
Law.
"Applicable Intermediary" means, with respect to any Financed Eligible
Asset, the Eligible Intermediary that has leased such Eligible Asset from
the Applicable Borrower, and has leased such Eligible Asset to the
Applicable Carrier, in each case in accordance with Section 2.15.
"Applicable Lease Cure Period" has the meaning assigned thereto in
Section 9.6.
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"Applicable Lending Office" means, for each Lender and for each Type
of Loan, the "Lending Office" for such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or an affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Borrowers by
written notice in accordance with the terms hereof as the office by which
its Loans are to be made and maintained.
"Applicable Margin" means:
(a) with respect to the Eurodollar Rate, 1.25%; and
(b) with respect to the Base Rate, 0.25%.
"Approved Improvements" means improvements made or added to an
Eligible Asset acceptable to the Agent in its reasonable judgment.
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a Lender's
interest under this Agreement pursuant to Section 11.1.
"Assumption Letter" means an Assumption Letter in substantially the
form of Exhibit Q.
"Authorized Representative" means any of the President, Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer or Vice
President of the Parent, Bermuda Holding 2 Ltd. or AI 3 Ltd., as
applicable, or any Beneficial Owner, in each case as authorized
representative for each of the Borrowers, or any other Person expressly
designated by the Board of Directors of each of the Borrowers (or the
appropriate committee thereof) as an Authorized Representative of each of
the Borrowers as set forth from time to time in a certificate in the form
of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to the sum of
(a) the higher of (i) the Federal Funds Rate for such day plus one-half of
one percent (0.5%) and (ii) the Prime Rate for such day, plus (b) the
Applicable Margin. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Rate shall be effective on the effective date of
such change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate.
"Beneficial Owner" means, with respect to any Holdings Subsidiary
Trust, either Aircastle Bermuda Holding 2 Ltd. or AI3 Ltd. or any Person
who is a direct or indirect wholly-owned subsidiary of Bermuda Holding 2
Ltd. or AI 3 Ltd., in any case holding a beneficial interest in such
Holdings Subsidiary Trust.
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"Bermuda Holding 1 Ltd." means Aircastle Investment Holdings Limited,
an exempted company organized and existing under the laws of Bermuda and a
direct wholly-owned subsidiary of AHC Ltd.
"Bermuda Holding 1/AI 1 Credit Agreement" means that certain
$600,000,000 third amended and restated credit agreement, dated as of
October 24, 2005 (as may be further amended), made by and among Bermuda
Holding 1 Ltd., AI 1 Ltd., ABH 12 Limited and certain other entities
designated as borrowing affiliates thereunder, certain lenders and JPMorgan
Chase Bank, N.A., as administrative agent.
"Bermuda Holding 2 Ltd." has the meaning given to such term in the
preamble to this Agreement.
"Board" means the Board of Governors of the Federal Reserve System (or
any successor body).
"Borrower" has the meaning given to such term in the preamble to this
Agreement.
"Borrowing Affiliate" means any direct or indirect wholly-owned
Subsidiary of Bermuda Holding 2 Ltd. or AI 3 Ltd. and any Holdings
Subsidiary Trust or Holdings SPC that in either case is designated as a
Borrowing Affiliate hereunder pursuant to Section 2.13 hereof.
"Borrowing Base" means, as of any date of determination, the
depreciated book value of all Eligible Assets owned by the Borrowers and
their respective subsidiaries minus the sum of (i) the depreciated book
value of any Unleasable Financed Eligible Asset and (ii) if a Borrowing
Base Event occurs with respect to any Borrower or a Subsidiary thereof, the
depreciated book value of each Financed Eligible Asset owned by such
Borrower that suffered a Borrowing Base Event; provided, that on the date
of the initial financing of the purchase of an Eligible Asset, the
depreciated book value shall be deemed to equal the Purchase Price. Each
calculation of the Borrowing Base shall apply the depreciated book value of
the Eligible Asset as of the completed month end immediately prior to the
date of determination.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit R.
"Borrowing Base Covenant" has the meaning set forth with respect to
such term in Section 8.22.
"Borrowing Base Event" means, with respect to any Borrower, if (a) one
or more judgments or orders where the amount not covered by insurance (or
the amount as to which the insurer denies liability) is in excess of
$250,000 is rendered against such Borrower or any Subsidiary thereof, or
(b) there is any attachment, injunction or execution against any of such
Borrower's or Subsidiaries' properties for any amount in excess of $250,000
in the aggregate; and such judgment, attachment, injunction or
5
execution remains unpaid, unstayed, undischarged, unbonded or undismissed
for a period of thirty (30) days.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with a Loan under the Revolving Credit
Facility, in the form of Exhibit D.
"Business Day" means, (i) with respect to any Base Rate Loan, any day
which is not a Saturday, Sunday or a day on which banks in the State of New
York are authorized or obligated by law, executive order or governmental
decree to be closed and, (ii) with respect to any Eurodollar Rate Loan, any
day which is a Business Day, as described above, and on which the relevant
international financial markets are open for the transaction of business
contemplated by this Agreement in London, England and New York, New York.
"Calculation Date" mean the date three Business Days prior to each
Payment Date.
"Capital Expenditures" means, with respect to the Borrowers and their
respective Subsidiaries, for any period the sum of (without duplication)
(i) all expenditures (whether paid in cash or accrued as liabilities) by
any Borrower or any Subsidiary during such period for items that would be
classified as "property, plant or equipment" or comparable items on the
consolidated balance sheet of such Borrower and its Subsidiaries, including
without limitation all transactional costs incurred in connection with such
expenditures provided the same have been capitalized, excluding, however,
the amount of any Capital Expenditures paid for with proceeds of casualty
insurance, as evidenced in writing and submitted to the Agent together with
any compliance certificate delivered pursuant to Section 7.1(a) or (b), and
(ii) with respect to any Capital Lease entered into by any Borrower or its
Subsidiaries during such period, the present value of the lease payments
due under such Capital Lease over the term of such Capital Lease applying a
discount rate equal to the interest rate provided in such lease (or in the
absence of a stated interest rate, that rate used in the preparation of the
financial statements described in Section 7.1(a)), all the foregoing in
accordance with GAAP.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board and
any successor thereof.
"Capital Stock" means, with respect to any Person, all of the shares,
interests, rights, participations or other equivalents (however designated)
of capital stock of (or other ownership or profit interests or units in)
such Person and all of the warrants, options or other rights for the
purchase, acquisition or exchange from such Person of any of the foregoing
(including through convertible securities).
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government, or any agency or
instrumentality thereof, having maturities of not more than one year from
the date of acquisition; (ii) marketable general obligations issued by any
state of the United States of America or any political
6
subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the
time of acquisition thereof, having a credit rating of "A" or better from
either Standard & Poor's Ratings Group or Xxxxx'x Investors Service, Inc.;
(iii) certificates of deposit, time deposits, eurodollar time deposits,
overnight bank deposits or bankers' acceptances having maturities of not
more than one year from the date of acquisition thereof issued by any
commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard &
Poor's Rating Group, or "A" or the equivalent thereof by Xxxxx'x Investors
Service, Inc., and having capital and surplus in excess of $500 million;
(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (i), (ii) and (iii)
entered into with any bank meeting the qualifications specified in clause
(iii) above; (v) commercial paper rated at the time of acquisition thereof
at least "A-2" or the equivalent thereof by Standard & Poor's Rating Group
or "P-2" or the equivalent thereof by Xxxxx'x Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating agency, if
both of the two named rating agencies cease publishing ratings of
investments, and in either case maturing within one year after the date of
acquisition thereof; and (vi) interests in any investment company which
invests solely in instruments of the type specified in clauses (i) through
(v) above.
"Change of Control" means, at any time, 100% of the beneficial
ownership of (a) any Borrower or any Eligible Intermediary is not directly
or indirectly owned by Bermuda Holding 2 Ltd. or AI 3 Ltd. or (b) Bermuda
Holding 2 Ltd. or AI 3 Ltd. is not directly or indirectly owned by Parent.
"Closing Date" means the date as of which this Agreement is executed
by the Borrowers, the Lenders and the Agent and on which the conditions set
forth in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"Collateral" means, collectively, (i) all property of any Borrower,
any Subsidiary, any Eligible Intermediary, Bermuda Holding 2 Ltd., AI 3
Ltd. or any other Person in which the Agent or any Lender is granted a Lien
as security for all or any portion of the Obligations under any Security
Instrument including, without limitation, the Leases, the Pledged
Interests, the Securitization Interests and the other collateral described
in such Security Agreement, Pledge Agreement, Lockbox Agreement and other
Security Instrument and (ii) the Parent Guarantor Collateral. For the
avoidance of doubt, none of the Security Instruments shall provide for the
grant of a perfected security interest in the Financed Eligible Assets.
"Consolidated Net Income" means for any period, the consolidated net
income (or loss) of the Parent and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any
7
Person accrued prior to the date it becomes a Subsidiary of the Parent or
is merged into or consolidated with the Parent or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of the
Parent) in which the Parent or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by
the Parent or such Subsidiary in the form of dividends or similar
distributions, (c) the undistributed earnings of any Subsidiary of the
Parent to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by
the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary and (d) any
gain realized upon the sale or other disposition of any property, plant or
equipment of the Parent or its consolidated Subsidiaries involving aircraft
financed pursuant to this Agreement or the Bermuda Holding 1/AI 1 Credit
Agreement in a transaction in which the seller retains any residual or
beneficial interest in the disposed asset.
"Consolidated Net Worth" means at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Parent and its Subsidiaries under stockholders' equity at such date plus
the uncalled portion of the $100,000,000 Capital Call.
"Contingent Obligation" of any Person means all contingent liabilities
required (or which, upon the creation or incurring thereof, would be
required) to be included in the financial statements (including footnotes)
of such Person in accordance with GAAP, including Statement No. 5 of the
Financial Accounting Standards Board, all Rate Hedging Obligations and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including
obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation or any
property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for the purchase
or payment of such Indebtedness or other obligation, or (ii) to
maintain a minimum working capital, net worth or other balance sheet
condition or any income statement condition of the primary obligor;
(3) to grant or convey any lien, security interest, pledge,
charge or other encumbrance on any property or assets of such Person
to secure payment of such Indebtedness or other obligation;
(4) to lease property or to purchase securities or other property
or services primarily for the purpose of assuring the owner or holder
of such Indebtedness or obligation of the ability of the primary
obligor to make payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the Indebtedness or such
obligation of the primary obligor against loss in respect thereof.
8
"Continue", "Continuation", and "Continued" refers to the continuation
pursuant to Section 2.8 hereof of a Eurodollar Rate Loan of one Type as a
Eurodollar Rate Loan of the same Type from one Interest Period to the next
Interest Period.
"Convention" means the Convention on the International Recognition of
Rights in Aircraft signed initially at Geneva in 1948, as the same may be
amended, modified or supplemented from time to time.
"Convert", "Conversion", and "Converted" refers to a conversion
pursuant to Section 2.8 or Article IV of one Type of Loan into another Type
of Loan.
"Credit Agreement" has the meaning given to such term in the first
recital to this Agreement.
"Credit Party" means, collectively, each Borrower, each Eligible
Intermediary, each Guarantor, and each other Person providing Collateral
pursuant to any Security Instrument (other than the Parent Guarantors, none
of which shall be deemed a Credit Party).
"Default" means any event or condition which, with the giving or
receipt of notice or lapse of time or both, would constitute an Event of
Default hereunder, provided that if, pursuant to Section 9.6, such event or
condition is not deemed to be a breach of the Credit Parties' obligations
under this Agreement and the other Loan Documents, such event or condition
shall not be deemed to be a "Default" except for the purposes of Section
7.11, the first two sentences of Section 10.3, the Compliance Certificate
in the form of Exhibit H, and Section 4 of the Borrowing Base Certificate
in the form of Exhibit R.
"Default Rate" means (i) with respect to each Eurodollar Rate Loan,
until the end of the Interest Period applicable thereto, a rate of two
percent (2%) above the Eurodollar Rate applicable to such Loan, and
thereafter at a rate of interest per annum which shall be two percent (2%)
above the Base Rate, (ii) with respect to Base Rate Loans, at a rate of
interest per annum which shall be two percent (2%) above the Base Rate and
(iii) in any case, the maximum rate permitted by applicable law, if lower.
"Depositary Bank" means a bank, trust company or other Person,
satisfactory to the Agent, that executes the Lockbox Agreement in the
capacity of "Depositary Bank" thereunder.
"Dollars" and the symbol "$" means dollars constituting legal tender
for the payment of public and private debts in the United States of
America.
"Eligible Aircraft" means any Aircraft which satisfies each of the
following requirements:
(a) such Aircraft is a Stage III aircraft and is one of the
models listed on Exhibit K attached hereto;
9
(b) such Aircraft is owned by the Applicable Borrower;
(c) such Aircraft is covered by all of the insurance described on
Exhibit L attached hereto and the Agent (for itself and on behalf of
the Lenders) is named as loss payee or contract party on the hull
insurance and is named as an additional insured or contract party on
the liability insurance;
(d) neither the Applicable Carrier (if any) nor the Applicable
Intermediary (if any) is organized under the laws of, or domiciled in,
any Prohibited Country; and
(e) the age of such Aircraft is (i) in the case of a passenger
aircraft, 19 years or less and (ii) in the case of a freighter
aircraft, 25 years or less, in each case measured from the date of
original manufacture as a passenger aircraft or a freighter aircraft,
as the case may be, to the date of the original Loan made or to be
made in respect of such Eligible Aircraft.
"Eligible Asset" means an Eligible Aircraft or an Eligible Engine.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a Lender
that is a "resident" (as that term is used in the Treaty) of the U.S. or a
"qualified person" (as that term is used in the Treaty) and (iii) any other
Person approved by the Agent (such consent not to be unreasonably withheld
or delayed) that is either (A) a resident of the U.S., (B) a qualified
person under the Treaty or (C) a "bank" (as that term is used in Article 23
of the Treaty) that is a resident of Ireland or, if not such a resident, in
whose hands the income from the Loans is attributable to a permanent
establishment of such Persons in the U.S. or Ireland; provided, however,
that (x) neither any Borrower nor an affiliate of any Borrower shall
qualify as an Eligible Assignee and (y) unless a Default or Event of
Default has occurred and is continuing, none of the Persons listed on
Schedule 1.1 shall qualify as an Eligible Assignee unless the Parent shall
have consented to such qualification, such consent not to be unreasonably
withheld or delayed.
"Eligible Carrier" means any air carrier duly licensed to carry
passengers or cargo under applicable law, foreign or domestic.
"Eligible Engine" means any Engine suitable for use on an Eligible
Aircraft.
"Eligible Intermediary" means, with respect to any Financed Eligible
Asset, Bermuda Holding 2 Ltd. or AI 3 Ltd. or a Person that is a direct or
indirect wholly-owned subsidiary of Bermuda Holding 2 Ltd. or AI 3 Ltd.
"Eligible Lease" or "Eligible Leases" means a fully-executed Lease by
a Borrower or Eligible Intermediary (as lessor) to an Eligible Carrier (as
lessee) of an Eligible Asset, which Lease satisfies each of the following
requirements:
(a) such Lease is a "triple net lease" (subject to any
arrangement whereby the Borrower and the Eligible Carrier agree to
share certain expenses relating to aircraft or engine maintenance,
directives, service bulletins or similar
10
items) and requires the lessee to maintain the insurance described in
Exhibit L attached hereto with respect to such Eligible Asset, and to
bear all risk of loss, damage or liability with respect to such
Eligible Asset;
(b) if the Eligible Carrier is domiciled in the United States,
the lessor is entitled to the benefits of Section 1110 of the U.S.
bankruptcy code with respect to the lessor's rights against such
lessee, including without limitation the rights to require performance
of such lessee's obligations under the Lease or return such Eligible
Asset during such lessee's bankruptcy or insolvency;
(c) such Lease requires the lessee to comply with covenants and
restrictions regarding the maintenance, return, alteration,
replacement, pooling and sublease of such Eligible Asset, which
covenants and restrictions satisfy the requirements of Section 7.19(a)
and Schedule 7.19(a) hereto;
(d) if such Lease contains a purchase option, the expected
exercise price is equal to or greater than the expected outstanding
principal and accrued interest on all Loans relating to such Eligible
Asset as of the date of exercise of such option;
(e) such Lease prohibits the lessee from flying or locating such
Eligible Asset in any country in violation of the applicable laws of
any jurisdiction;
(f) such Lease provides rent payments in US dollars and contains
customary covenants and restrictions relating to re-registration of
such Eligible Asset; which covenants and restrictions satisfy the
requirements of the Security Agreement;
(g) at the time of any Loan hereunder relating to such Eligible
Asset or, if later, at the time of the entering into such Lease, no
prepayment shall have been made under such Lease, and no Lease payment
obligation shall have been accelerated, provided that it is understood
that a scheduled rental payment to be paid in advance for a rental
period in accordance with the Lease terms is not deemed to be a
prepayment;
(h) at the time of any Loan relating to such Eligible Asset or,
if later, at the time of the delivery of such Eligible Asset under
such Lease, the applicable lessor shall have delivered a Lessee Notice
to the applicable lessee; and
(i) either (i) such Lease is a "true lease" lease (and not a
lease intended as security) under applicable commercial law and other
applicable law relating to creditors' rights and bankruptcy; or (ii)
such Lease grants to such Borrower, and such Borrower has at all times
under the FAA Act (in the case of Eligible Assets registered in the
United States), a perfected first priority mortgage Lien on such
Eligible Asset (subject only to Permitted Liens), which Lien has been
assigned to the Agent;
11
provided, however, that in the circumstances described in Section 2.15,
"Eligible Lease" means, individually and collectively, (X) a fully-executed
Lease by a Borrower (as lessor) to the Applicable Intermediary (as lessee) of an
Eligible Asset, which Lease satisfies each of the requirements for an "Eligible
Lease" set forth in clauses (a) through (h) above except that the lessee is not
an Eligible Carrier, and (Y) a fully-executed sublease by such Applicable
Intermediary (as sublessor) to an Eligible Carrier (as sublessee) of such
Financed Eligible Asset, which Eligible Carrier is not a U.S. Carrier, and which
Lease is identical in all material respects (other than the Persons that are
lessor and lessee) to the Lease described in clause (X) above, and which Lease
satisfies all the requirements for an "Eligible Lease" set forth in clauses (a)
through (i) above, except that the lessor is not a Borrower.
"Employee Benefit Plan" means, at a particular time, any employee
benefit plan that is covered by ERISA and in respect of which any Guarantor
or any Borrower or any of their respective ERISA Affiliates is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Engine" means any aircraft jet engine.
"Environmental Laws" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order, decree, permit or license
regulating, relating to, or imposing liability or standards of conduct
concerning, any environmental matters or conditions, environmental
protection or conservation, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended; the Superfund Amendments and Reauthorization Act of 1986,
as amended; the Resource Conservation and Recovery Act, as amended; the
Toxic Substances Control Act, as amended; the Clean Air Act, as amended;
the Clean Water Act, as amended; together with all regulations promulgated
thereunder, and any other "Superfund" or "Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means an entity, whether or not incorporated, that
is under common control with any Guarantor or any Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes any
Guarantor or any Borrower and that is treated as a single employer within
the meaning of Section 414 of the Code.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar Interbank Offered Rate Applicable
------------------------------------
Rate = 1- Reserve Requirement + Margin
"Eurodollar Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as such in
Section 9.1.
12
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"FAA" means the United States Federal Aviation Administration.
"FAA Act" means 49 U.S.C. Subtitle VII, Sections 40101 et seq., as
amended from time to time, any regulations promulgated thereunder and any
successor provision.
"FAA Counsel" means DeBee & Gilchrist, Daugherty, Xxxxxx and Xxxxxxxx,
Xxxxxx and Xxxxxx, Xxxxx & Xxxxxxx, or any other law firm having nationally
recognized expertise in FAA matters acceptable to the Agent.
"FAA Recording Office" means the office of the FAA in Oklahoma City,
Oklahoma, maintained as the office for the recordation of Liens on Eligible
Assets and pursuant to the FAA Act, and any successor or additional office
performing the same or a comparable function.
"Facility Guaranty" means each Guaranty Agreement between one or more
Guarantors and the Agent for the benefit of the Lenders (substantially in
the form of Exhibit I-1 attached hereto), delivered as of the Closing Date
and otherwise pursuant to Section 2.13, 5.1 or 5.2, as the same may be
amended, modified or supplemented from time to time.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual capacity)
on such day on such transactions as determined by the Agent.
"Fee Letter" means the Fee Letter dated February 28, 2006, by JPMorgan
Chase Bank, N.A., X.X. Xxxxxx Securities Inc., Bear Xxxxxxx & Co. Inc.,
Bear Xxxxxxx Corporate Lending Inc., Citigroup Global Markets, Inc. and
accepted and agreed to by the Parent.
"Fee Payment Date" means, for any month in which a commitment fee is
due, the twentieth (20th ) calendar day of each calendar month (or, if such
day is not a Business Day, on the next succeeding Business Day).
"Financed Aircraft" with respect to any Loan means, collectively, each
Eligible Aircraft, the acquisition of which was or is to be financed or
refinanced in whole or in part by such Loan.
13
"Financed Eligible Asset" with respect to any Loan means,
collectively, each Eligible Aircraft or Eligible Engine, or part thereof,
the acquisition of which was or is to be financed or refinanced in whole or
in part by such Loan.
"Fiscal Year" means the twelve-month fiscal period of the Parent and
its Subsidiaries commencing on January 1 of each calendar year and ending
on December 31 of each calendar year.
"Foreign Benefit Law" means any applicable statute, law, ordinance,
code, rule, regulation, order or decree of any foreign nation or any
province, state, territory, protectorate or other political subdivision
thereof regulating, relating to, or imposing liability or standards of
conduct concerning, any Employee Benefit Plan.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set
forth in pronouncements of the Financial Accounting Standards Board, the
American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances
as of the date of a report.
"Governmental Authority" means any Federal, state, municipal, national
or other government (whether foreign or domestic and including the European
Union) or governmental department, commission, board, bureau, court, agency
or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court,
in each case whether associated with a state or local government of the
United States, the United States, or a foreign entity or foreign
government.
"Guarantors" means, at any date, the collective reference to Bermuda
Holding 2 Ltd., AI 3 Ltd. and the Beneficial Owners, Eligible
Intermediaries and Subsidiaries who are required to be parties to a
Facility Guaranty at such date. For the avoidance of doubt, Guarantor shall
not refer to any Person that is a Parent Guarantor.
"Hazardous Material" means and includes any pollutant, contaminant, or
hazardous, toxic or dangerous waste, substance or material (including
without limitation petroleum products, asbestos-containing materials and
lead), the generation, handling, storage, transportation, disposal,
treatment, release, discharge or emission of which is subject to any
Environmental Law.
"Hedging Agreement" means one or more agreements between any Borrower
or any Guarantor and any Lender or any Affiliate thereof, on terms mutually
acceptable to such Borrower or any Guarantor and such Lender (or
Affiliate), which agreements create Rate Hedging Obligations.
"Holdings SPC" means a Subsidiary, 100% of the voting and equity
interests in which are owned directly or indirectly by Bermuda Holding 2
Ltd. or AI 3 Ltd..
"Holdings Subsidiary Trust" means any trust (a) that is organized
under the laws of a state of the United States, (b) whose trustee is a
Qualified Trustee and (c) in which
14
100% of all beneficial interests are owned directly by Bermuda Holding 2
Ltd. or AI 3 Ltd. or a direct or indirect wholly-owned Subsidiary of
Bermuda Holding 2 Ltd. or AI 3 Ltd..
"Indebtedness" means with respect to any Person, without duplication,
all Indebtedness for Money Borrowed, all indebtedness of such Person for
the acquisition of property or arising under Rate Hedging Obligations, all
indebtedness secured by any Lien on the property of such Person whether or
not such indebtedness is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary course
of business), all Contingent Obligations, and other items which in
accordance with GAAP is required to be classified as a liability on a
balance sheet; but excluding all accounts payable in the ordinary course of
business so long as payment therefor is due within one year; provided that
in no event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other deferred
credits or reserves or deferred compensation obligations.
"Indebtedness for Money Borrowed" means with respect to any Person,
without duplication, all indebtedness in respect of money borrowed, as
reflected on the balance sheet of such Person in accordance with GAAP,
including without limitation all Capital Leases and the deferred purchase
price of any property or asset, evidenced by a promissory note, bond,
debenture or similar written obligation for the payment of money (including
conditional sales or similar title retention agreements), other than trade
payables incurred in the ordinary course of business.
"Individual Eligible Asset Borrowing Base" with respect to any
Eligible Asset as of any date means the depreciated book value or Purchase
Price, as applicable, of such Eligible Asset as of such date.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent" means to pertain to a condition of Insolvency.
"Interbank Offered Rate" means, with respect to any Eurodollar Rate
Loan for the Interest Period applicable thereto, the rate per annum
(rounded upwards, if necessary), to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period (or, if no such comparable term is
quoted, an interpolated rate as reasonably determined by the Agent). If for
any reason such rate is not available, the term "Interbank Offered Rate"
shall mean, with respect to any Eurodollar Rate Loan for the Interest
Period applicable thereto, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than
15
one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
"Interest Period" means, for each Eurodollar Rate Loan, a period
commencing on the date such Eurodollar Rate Loan is made or Converted or on
the last day of the preceding Interest Period, as the case may be, and
ending on (x) the next occurring day that is the fifteenth day of a
calendar month or (y) in the case of an Interest Period of one week, the
last day of such week (provided, that Interest Periods of one week in
duration may not be selected by a Borrower other than in anticipation of a
prepayment of a Loan); provided, that,
(a) if an Interest Period for a Eurodollar Rate Loan would end on
a day which is not a Business Day, such Interest Period shall be
extended to the next Business Day (unless such extension would cause
the applicable Interest Period to end in the succeeding calendar
month, in which case such Interest Period shall end on the next
preceding Business Day); and
(b) except in the case of a one-week Interest Period, any
Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month.
"Interest Rate Selection Notice" means the written notice delivered by
an Authorized Representative in connection with the election of a
subsequent Interest Period for any Eurodollar Rate Loan or the Conversion
of any Base Rate Loan into a Eurodollar Rate Loan, in the form of Exhibit
E.
"Investment" means with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of any direct or
indirect advance, loan (other than advances to customers in the ordinary
course of business) or other extension of credit (including by way of
Guarantee or similar arrangement, but excluding any debt or extension of
credit represented by a bank deposit other than a time deposit) or capital
contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by, such Person and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided that none of the following will be deemed to
be an Investment: (a) Rate Hedging Obligations entered into in the ordinary
course of business and in compliance with this Agreement; (b) endorsements
of negotiable instruments and documents in the ordinary course of business;
and (c) an acquisition of assets, Capital Stock or other securities by a
Credit Party or a Subsidiary for consideration to the extent such
consideration consists of common equity securities of a Credit Party.
"Ireland Holding Ltd." means Aircastle Ireland Holding Limited, a
limited company incorporated in Ireland.
16
"Joint Lead Arrangers" means X.X. Xxxxxx Securities Inc., Bear Xxxxxxx
& Co. Inc. and Citigroup Global Markets, Inc.
"Lease Event of Default" means any event characterized as an "event of
default" (or the equivalent) under any Lease of any Eligible Asset (or that
would be so characterized assuming the sending of any required notice by
the lessor in a timely manner).
"Lender" has the meaning given to such term in the preamble to this
Agreement.
"Lessee Notice" means a certificate in form and substance reasonably
acceptable to the Agent, duly completed and executed by an Applicable
Borrower with respect to an Eligible Asset; and the Agent agrees that the
form of Lessee Notice attached hereto as Exhibit M is acceptable.
"Lien" means any interest in property securing any obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes. For the purposes
of this Agreement, any Borrower and any Subsidiary shall be deemed to be
the owner of any property which it has acquired or holds subject to a
conditional sale agreement, financing lease, or other arrangement pursuant
to which title to the property has been retained by or vested in some other
Person for security purposes.
"Loan" or "Loans" means any of the Revolving Loans.
"Loan Documents" means this Agreement, the Notes (if any), the
Security Instruments, the Parent Guarantor Guaranties, the Facility
Guaranties, the Assumption Letters, the Fee Letters and all other
instruments and documents heretofore or hereafter executed or delivered to
or in favor of any Lender or the Agent in connection with the Loans made
and transactions contemplated under this Agreement, as the same may be
amended, supplemented or replaced from the time to time.
"Lockbox Agreement" means a lockbox agreement between any Beneficial
Owner (if applicable), any Borrower, the Depositary Bank and the Agent
substantially the form of Exhibit O hereto, as supplemented from time to
time in accordance with the terms thereof.
"Manufacturer" means any manufacturer of any Financed Eligible Asset.
"Manufacturer's Warranty" means any warranty made or offered by any
Manufacturer with respect to any Financed Eligible Asset.
"Material Adverse Effect" means a material adverse effect on (i) the
ability of the Credit Parties and the Parent Guarantors, taken as a whole,
to pay or perform their respective obligations, liabilities and
indebtedness under the Loan Documents as such payment or performance
becomes due in accordance with the terms thereof, or (ii) the
17
rights, powers and remedies of the Agent or any Lender under any Loan
Document or the validity, legality or enforceability thereof.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Monthly Servicer and Covenant Compliance Report" means the report
substantially in the form of Exhibit P to be attached hereto and made part
of this Agreement pursuant to Section 11.17.
"Multiemployer Plan" means an Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA to which any
Borrower or any ERISA Affiliate is making, or is accruing an obligation to
make, contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"Non Recourse Indebtedness" Indebtedness (i) as to which no Parent
Guarantor (a) provides any guarantee or credit support of any kind
(including any undertaking, guarantee, indemnity, agreement or instrument
that would constitute Indebtedness) or (b) is directly or indirectly liable
as a guarantor or otherwise, other than, in the case of clauses (a) and (b)
above, (1) any pledge of any ownership interest in a Subsidiary, not
included in the Parent Guarantor Collateral, (2) any guarantee or other
support in respect of obligations in connection with the purchase of any
aircraft related assets or (3) in connection with the lease of any aircraft
related asset pursuant to which a Subsidiary is the Lessor, and (ii) the
terms of which provide that there is no recourse against any of the assets
of (x) the Parent Guarantors (other than (1) ownership interests in
Subsidiaries of any Parent Guarantor not included in the Parent Guarantor
Collateral, (2) to the extent attributable to any guarantee or other
support in respect of obligations in connection with the purchase of any
aircraft related assets or (3) in connection with the lease of any aircraft
related asset pursuant to which a Subsidiary is the Lessor), or (y) Bermuda
Holding 1 Ltd., AI 1 Ltd., AI 2 Ltd. or AI 3 Ltd. or, in the case of the
entities in this clause (y) only, any of their respective Subsidiaries.
"Notes" means, collectively, the promissory notes (if any) of the
Borrowers evidencing Revolving Loans executed and delivered to the Lenders
as provided in Section 2.5 substantially in the form of Exhibit F, with
appropriate insertions as to amounts, dates and names of Lenders.
"Obligations" means the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to Bermuda Holding 2 Ltd., AI 3 Ltd., or any Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of Bermuda
Holding 2 Ltd., AI 3 Ltd. or any Borrower to the Agent (acting in any
capacity) or to any Lender (or, in the case of Rate Hedging Obligations,
any affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, any
other Loan Document, any Rate Hedging Obligation entered into with any
Lender or any
18
affiliate of any Lender or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of
counsel to the Agent (acting in any capacity) or to any Lender that are
required to be paid by Bermuda Holding 2 Ltd., AI 3 Ltd. or any Borrower
pursuant thereto) or otherwise.
"Operating Circular" means an operating circular issued by the Federal
Reserve Bank.
"Organizational Action" means with respect to any corporation, limited
liability company, partnership, limited partnership, limited liability
partnership, trust or other legally authorized incorporated or
unincorporated entity, any corporate, organizational or partnership action
(including any required shareholder, trustee, member or partner action), or
other similar official action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership, trust or other legally authorized incorporated or
unincorporated entity, (i) the articles of incorporation, certificate of
incorporation, articles of organization, certificate of limited
partnership, trust agreement or other applicable organizational or charter
documents relating to the creation of such entity which will, in each case,
contain provisions reasonably satisfactory to the Lenders to ensure such
entity's bankruptcy remoteness, including provisions relating to the
appointment of a special member or independent director, the consent of
which will be required to approve any decisions related to bankruptcy
matters and (ii) the bylaws, operating agreement, partnership agreement,
limited partnership agreement or other applicable documents relating to the
operation, governance or management of such entity.
"Parent" means Aircastle Investment Limited, an exempted company
organized and existing under the laws of Bermuda.
"Parent Guarantor Collateral" means, collectively, all property of the
Parent or any other Parent Guarantor in which the Agent or any Lender is
granted a Lien as security for all or any portion of the Obligations under
any Security Instrument including, without limitation, the Pledged
Interests described in the Parent and Parent Guarantor Pledge Agreements.
"Parent Guarantor Guaranty" means each Guaranty Agreement between each
Parent Guarantor and the Agent for the benefit of the Lenders
(substantially in the form of Exhibit I-2 attached hereto), delivered as of
the Closing Date, and otherwise pursuant to Section 7.16, as the same may
be amended, modified or supplemented from time to time as the same may be
amended, modified or supplemented from time to time.
"Parent Guarantors" means the collective reference to the Parent, AA
LLC, ABS Ltd., AHC Ltd., AA Ireland Ltd. and Ireland Holding Ltd.
19
"Parent IPO" means the issuance by the Parent or any direct or
indirect parent of Parent of its Capital Stock in an underwritten primary
public offering (other than a public offering pursuant to a registration
statement on Form S-8) pursuant to an effective registration statement
filed with the SEC in accordance with the Securities Act (whether alone or
in connection with a secondary public offering).
"Partnership Interests" has the meaning therefor provided in the
Pledge Agreement.
"Payment Date" means any date provided for herein on which the
principal of, interest on or other amounts in respect of the Loans is due
and payable.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Permanent Capital Markets Financing" means a securitization of any
interests in or leases of Eligible Assets, enhanced equipment trust
certificate or other permanent aircraft or engine-secured public or private
capital markets transaction (which, in each case, does not constitute
bridge or interim financing) for the benefit of any Parent Guarantor,
Bermuda Holding 2 Ltd. or AI 3 Ltd. or a subsidiary of Bermuda Holding 2
Ltd. or AI 3 Ltd., occurring after the date hereof.
"Permitted Lien" means any Lien permitted by Section 8.3.
"Person" means an individual, partnership, corporation, limited
liability company, limited liability partnership, business trust, joint
stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Pledge Agreement" means, collectively (or individually as the context
may indicate), (i) those certain Pledge and Security Agreements or Share
Charges dated as of the date hereof entered into by either AHC Ltd., AA
Ireland Ltd., Ireland Holding Ltd. in favor of the Agent (for the benefit
of the Agent and the Lenders), and (ii) any additional Pledge and Security
Agreement or Share Charge (substantially in the form of Exhibit X-0, X-0,
X-0 or S-4 attached hereto, as applicable), delivered to the Agent pursuant
to Section 5.1, 5.2 or 2.13, as hereafter amended, supplemented or replaced
from time to time.
"Pledged Interests" means the interests so defined in the Pledge
Agreement including, without limitation, all Capital Stock of AA LLC, ABS
Ltd., AA Ireland Ltd., AHC Ltd., Ireland Holding Ltd., Bermuda Holding 2
Ltd. and AI 3 Ltd. and all Securitization Interests.
"Prime Rate" means the per annum rate of interest established from
time to time by the Reference Bank as its prime or reference rate, which
rate may not be the lowest rate of interest charged by the Reference Bank
to its customers.
"Principal Office" means the principal office of the Agent presently
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office
and address as the Agent may from time to time designate. Payments shall be
made to the account specified in the
20
Lockbox Agreement or to such other account as the Agent may from time to
time specify in writing.
"Prohibited Countries" means any country in which an Aircraft or
Engine would not be covered by the insurance requirements of Section 3.7 of
the Security Agreement (including, if required, political risk insurance),
any country with which the United States does not maintain normal
diplomatic relations and any country where or with nationals of which it is
unlawful for Persons subject to the jurisdiction of the United States to
conduct business without material restrictions or limitations.
"Purchase Price" with respect to any Eligible Assets means the actual
purchase price paid for such Eligible Assets by the Applicable Borrower,
together with all other reasonable out of pocket expenses (including
reasonable attorneys fees of each of the Borrower and the Agent) incurred
or which is estimated by the Borrower to be incurred in respect of such
Eligible Assets, in each case reasonably acceptable to the Agent.
"Qualified Conversion" means the conversion of a Financed Aircraft
from passenger configuration to a freighter configuration that meets the
following conditions: (a) such conversion is performed by a conversion
company that is well established with a program that has an FAA granted
Supplemental Type Certificate to perform the intended work; (b) the
conversion work is performed pursuant to a contract, assigned to the
Lenders as collateral security, on terms and conditions that are reasonably
acceptable to the Lenders; and (c)(i) the senior unsecured long-term debt
rating of the conversion company is not less than BBB/Baa2 or (ii) the
conversion company has caused a performance bond, letter of credit or other
security naming the Agent as beneficiary, in an amount equal to 125% of the
Loan of such Financed Aircraft, in each case in form and substance
satisfactory to the Lenders to be issued by a surety or other Person
customarily engaged in the performance bonding and surety business or
issuing letters of credit reasonably acceptable to the Lenders.
"Qualified Trustee" means (i) Wilmington Trust Company, Xxxxx Fargo
Bank Northwest, N.A., JPMorgan Chase Bank, N.A., or another bank or trust
company having a combined capital and surplus of at least One Hundred
Million Dollars ($100,000,000) or (ii) any other Person acceptable to the
Agent.
"Qualifying Lender" means a Lender, beneficially entitled to the
interest payable to that Lender in respect of any Loan under this
Agreement; (a) which is a bank carrying on a bona fide banking business in
Ireland; (b) which is a person resident in a country with which Ireland has
a double taxation treaty or resident in a member state of the European
Communities (other than Ireland) provided the loan is not connected with an
Irish branch or agency of such Lender; or (c) which is a corporation
established under the laws of the USA which is subject to tax in the USA on
its worldwide income and the Loan is not connected with an Irish branch or
agency of such Lender.
"Quarterly Period" means a fiscal quarter of the Borrowers and their
Subsidiaries.
21
"Rate Hedging Obligations" means any and all obligations of Bermuda
Holding 2 Ltd., AI 3 Ltd., any Borrower or any Subsidiary, whether absolute
or contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from
the fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange transactions,
including, but not limited to, Dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or
interest rate options, puts, warrants and those commonly known as interest
rate "swap" agreements; and (ii) any and all cancellations, buybacks,
reversals, terminations or assignments of any of the foregoing.
"Reference Bank" means JPMorgan Chase Bank, N.A.
"Regulation A" means a Regulation A circular issued by such Federal
Reserve Bank.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Regulatory Change" means any change effective after the Closing Date
in United States federal or state laws or regulations (including Regulation
D and capital adequacy regulations) or foreign laws or regulations or the
adoption or making after such date of any interpretations, directives or
requests applying to a class of banks, which includes any of the Lenders,
under any United States federal or state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration
thereof or compliance by any Lender with any request or directive regarding
capital adequacy, including those relating to "highly leveraged
transactions," whether or not having the force of law, and whether or not
failure to comply therewith would be unlawful and whether or not published
or proposed prior to the date hereof.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the third day notice
period is waived by the PBGC.
"Required Lenders" means, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating more than 50% of the
aggregate Credit Exposures of all the Lenders on such date. For purposes of
the preceding sentence, the amount of the "Credit Exposure" of each Lender
shall be equal at all times (a) other than following the occurrence and
during the continuance of an Event of Default, to the amount of its
Revolving Credit Commitment; and (b) following the occurrence and during
the continuance of an Event of Default, to the aggregate principal amount
of such
22
Lender's Applicable Commitment Percentage of Revolving Credit Outstandings;
provided that, for the purpose of this definition only, if any Lender shall
have failed to fund its Applicable Commitment Percentage of any Loan, the
Revolving Credit Commitment of such Lender shall be deemed reduced by the
amount it so failed to fund for so long as such failure shall continue and
such Lender's Credit Exposure attributable to such failure shall be deemed
held by any Lender making more than its Applicable Commitment Percentage of
such Loan to the extent it covers such failure.
"Requirement of Law" means as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by
such member banks with respect to (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to be
determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Rate Loans. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.
"Revolving Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to make Revolving Loans to the Borrowers up to an
aggregate principal amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total Revolving Credit
Commitment.
"Revolving Credit Facility" means the facility described in Article II
hereof providing for Loans to the Borrowers by the Lenders in the aggregate
principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans then
outstanding.
"Revolving Credit Termination Date" means the earliest of (i) the
Stated Termination Date, (ii) the date of termination of Lenders'
obligations pursuant to Section 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrowers may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full of
all Revolving Credit Outstandings, together with all accrued and unpaid
interest thereon and reduce the Total Revolving Credit Commitment to zero
pursuant to Section 2.7.
"Revolving Loan" or "Revolving Loans" means any borrowing pursuant to
a Loan under the Revolving Credit Facility in accordance with Article II.
23
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Secured Party" has the meaning given in the Security Agreement.
"Securitization Interest" means the equity or subordinated interests
received by the Parent or any of its Subsidiaries pursuant to the sale,
transfer, conveyance or other disposition of any Financed Eligible Asset or
one or more aircraft financed under the Bermuda Holding I/AI 1 Credit
Agreement or direct or indirect interest therein in connection with the
securitization by the Parent, an Affiliate thereof, or any of its
Subsidiaries, of such aircraft or interest therein.
"Security Agreement" means, collectively (or individually as the
context may indicate), any Security Agreement (substantially in the form of
Exhibit J attached hereto) delivered to the Agent pursuant to Section 2.13,
5.1, or 5.2, as hereafter modified, amended or supplemented from time to
time.
"Security Instruments" means, collectively, the Pledge Agreement,
Security Agreement, the Lockbox Agreement, the Account Control Agreement
and all other agreements, instruments and other documents, whether now
existing or hereafter in effect, pursuant to which the any Parent
Guarantor, any Guarantor, Borrower, any Beneficial Owner, any Subsidiary,
any Intermediary or any other Person shall grant or convey to the Agent or
the Lenders a Lien in property as security for all or any portion of the
Obligations, as any of them may be amended, modified or supplemented from
time to time.
"Single Employer Plan" means any Employee Benefit Plan covered by
Title IV of ERISA which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at the
time of determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value on an orderly basis) is in excess of the
total amount of its liabilities, including Contingent Obligations; and
(ii) it is then able and expects to be able to pay its debts as
they mature;
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted; and
(iv) with respect to any Person incorporated in Ireland, such
Person is "unable to pay its debts" as that phrase is defined under
Irish law in Section 214 of the Companies Xxx 0000 and Section 2(3) of
the Companies (Amendment) Xxx 0000.
"Stated Termination Date" means August 28, 2007.
24
"Subsidiary" means any corporation or other entity in which more than
50% of its outstanding voting stock or more than 50% of all equity
interests is owned directly or indirectly by one or more Guarantors,
Borrowers and/or by one or more of any Guarantor's Subsidiaries or any
Borrower's Subsidiaries. With respect to any specified Guarantor or
Borrower, the "Subsidiaries" of such Guarantor or Borrower shall mean (y)
any Subsidiary owned directly or indirectly by such Guarantor or Borrower
or by any of its Subsidiaries, or (z) any trust with respect to which such
Guarantor or such Borrower or any of its Subsidiaries has a beneficial
interest.
"Taxes" means all present or future taxes, levies, imposts, duties,
charges, fees, deductions or withholdings imposed, levied, collected,
withheld or assessed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.
"Termination Event" means: (i) a "Reportable Event"; or (ii) the
termination of a Single Employer Plan or the filing of a notice of intent
to terminate a Single Employer Plan; or (iii) the institution of
proceedings to terminate a Single Employer Plan by the PBGC; or (iv) the
partial or complete withdrawal of any Borrower or any ERISA Affiliate from
a Multiemployer Plan; or (v) the imposition of a Lien pursuant to Section
412 of the Code or Section 302 of ERISA in favor of the PBGC or a Employee
Benefit Plan; or (vi) any event or condition which results in the
Reorganization or Insolvency of a Multiemployer Plan; or (vii) any event or
condition which results in the termination of a Multiemployer Plan under
Section 4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Revolving Credit Commitment" means a principal amount equal to
$500,000,000, as may be reduced from time to time in accordance with
Section 2.7.
"Treaty" means the "Convention Between the Government of the United
States of America and the Government of Ireland for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on
Income and Capital Gains" as amended and in effect on the date hereof.
"Trust Agreement" means a trust agreement between a Beneficial Owner
and a Qualified Trustee.
"Trust Estate" means all estate, right, title and interest of each
Trustee in and to each Eligible Asset, each lease and all related documents
and all other property of the Trustee, including, without limitation, all
amounts of rent, insurance proceeds (other than liability insurance
proceeds payable to or for the benefit of any Borrower, any Beneficial
Owner, any Lender or the Agent) and requisition, indemnity or other
payments or any kind for or with respect to each Eligible Asset.
"Trustee" means a Qualified Trustee, solely in its capacity as trustee
under a Trust Agreement.
"Type" means any type of Loan (i.e., a Base Rate Loan or a Eurodollar
Rate Loan).
25
"Unleaseable" with respect to a Financed Eligible Asset means (a) such
Financed Eligible Asset shall not be subject to an Eligible Lease for 120
consecutive days (excluding the number of days such Eligible Asset shall be
undergoing (i) maintenance or repairs in accordance with the provisions of
the Loan Documents, (ii) Approved Improvements or (iii) a Qualified
Conversion) and (b) after such 120 day period the Agent shall have
reasonably determined that Bermuda Holding 2 Ltd. or AI 3 Ltd., as
applicable, will be unable to lease such Financed Eligible Asset within 120
days after the date of determination.
"Voting Stock" means shares of capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall have
the meanings assigned to such terms and shall be interpreted in accordance
with GAAP applied on a Consistent Basis.
(b) The headings, subheadings and table of contents used herein or in
any other Loan Document are solely for convenience of reference and shall
not constitute a part of any such document or affect the meaning,
construction or effect of any provision thereof.
(c) Except as otherwise expressly provided, references herein to
articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules are references to articles, sections, paragraphs, clauses,
annexes, appendices, exhibits and schedules in or to this Agreement.
(d) All definitions set forth herein or in any other Loan Document
shall apply to the singular as well as the plural form of such defined
term, and all references to the masculine gender shall include reference to
the feminine or neuter gender, and vice versa, as the context may require.
(e) When used herein or in any other Loan Document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words of like import
shall, unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
(f) References to "including" means including without limiting the
generality of any description preceding such term, and for purposes hereof
the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters,
to matters similar to those specifically mentioned.
(g) All dates and times of day specified herein shall refer to such
dates and times in New York, New York.
26
(h) Each of the parties to the Loan Documents and their counsel have
reviewed and revised, or requested (or had the opportunity to request)
revisions to, the Loan Documents, and any rule of construction that
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Loan Documents and
all exhibits, schedules and appendices thereto.
(i) Any reference to an officer of any Borrower or any other Person by
reference to the title of such officer shall be deemed to refer to each
other officer of such Person, however titled, exercising the same or
substantially similar functions.
(j) All references to any agreement or document as amended, modified
or supplemented, or words of similar effect, shall mean such document or
agreement, as the case may be, as amended, modified or supplemented from
time to time only as and to the extent permitted therein and in the Loan
Documents.
ARTICLE II
THE REVOLVING CREDIT FACILITY
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Loans to any of the Borrowers under
the Revolving Credit Facility from time to time from the Closing Date until
the Revolving Credit Termination Date on a pro rata basis as to the total
borrowing requested by the applicable Borrower on any day determined by
such Lender's Applicable Commitment Percentage up to but not exceeding the
Revolving Credit Commitment of such Lender, provided, however, that (A) the
proceeds of such Loan shall be used by such Borrower to (i) finance or
reimburse a Borrower for up to 85% of (x) the Purchase Price of an Eligible
Asset and (y), without duplication of amounts included in clause (x), the
costs incurred in connection with any Approved Improvements or any
Qualified Conversion related to such Eligible Asset and (ii) subsequent to
the initial purchase of such Eligible Asset, to finance up to 85% of the
Individual Eligible Asset Borrowing Base for such Eligible Asset and (B)
the amount of such Loan (together with any other Loans relating to such
Eligible Asset) shall not exceed 85% of the Individual Eligible Asset
Borrowing Base of such Eligible Asset; and provided, further, that the
Lenders will not be required and shall have no obligation to make any such
Loan (i) so long as a Default or an Event of Default has occurred and is
continuing or (ii) if the Agent has accelerated the maturity of any of the
Loans as a result of an Event of Default; and provided, further, that
immediately after giving effect to each such Loan, (A) the Borrowers shall
be in compliance with the Borrowing Base Covenant; and (B) the amount of
Revolving Credit Outstandings shall not exceed the Total Revolving Credit
Commitment. Within such limits, the Borrowers may borrow, repay and
reborrow under the Revolving Credit Facility on a Business Day from the
Closing Date until, but (as to borrowings and reborrowings) not including,
the Revolving Credit Termination Date; provided, however, that (1) no
Revolving Loan that is a Eurodollar Rate Loan shall be made which has an
Interest Period that extends beyond the Stated Termination Date and (2)
each Revolving Loan that is a Eurodollar Rate Loan
27
may, subject to the provisions of Section 2.7, be repaid only on the last
day of the Interest Period with respect thereto unless such payment is
accompanied by the additional payment, if any, required by Section 4.5.
(b) Amounts. Each Revolving Loan hereunder and each Conversion under
Section 2.8, shall be in an amount of at least $500,000 (other than
Revolving Loans made in connection with an Approved Improvement or a
Qualified Conversion).
(c) Procedures. An Authorized Representative shall give the Agent (i)
at least three (3) Business Days' irrevocable written notice of an Interest
Rate Selection Notice with appropriate insertions, effective upon receipt,
of each Revolving Loan that is to be Converted into a Eurodollar Rate Loan
prior to 10:30 A.M. and (ii) at least one (1) Business Day's written
notice, revocable only on or before noon the following Business Day of a
Borrowing Notice with appropriate insertions, effective upon receipt, of
each Revolving Loan (which shall be borrowed as a Base Rate Loan) prior to
10:30 A.M. and (iii) at least one (1) Business Day's irrevocable written
notice of an Interest Rate Selection Notice with appropriate insertions,
effective upon receipt, of each Revolving Loan that is to be Converted into
a Base Rate Loan prior to 10:30 A.M. Each such notice shall (A) specify the
name of the respective Borrower, the amount of the borrowing, the date of
borrowing or Conversion (as applicable), type of Revolving Loan (Base Rate
or Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate Loan,
the Interest Period to be used in the computation of interest and (B)
identify the Financed Eligible Asset the acquisition of which is to be
financed with the proceeds of the borrowing. Notice of receipt of such
Borrowing Notice or Interest Rate Selection Notice, as the case may be,
together with the amount of each Lender's portion of a Loan requested
thereunder, shall be provided by the Agent to each Lender by facsimile
transmission with reasonable promptness, but (provided the Agent shall have
received such notice by 10:30 A.M.) not later than 1:00 P.M. on the same
day as the Agent's receipt of such notice.
(i) Promptly (and, to the extent feasible, not later than 2:00
P.M.) on the date specified for each borrowing under this Section 2.1,
each Lender shall, pursuant to the terms and subject to the conditions
of this Agreement, make the amount of the Loan or Loans to be made by
it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's
Applicable Commitment Percentage of the Revolving Loan or Revolving
Loans to be made on such day. Such wire transfer shall be directed to
the Agent at the Principal Office and shall be in the form of Dollars
constituting immediately available funds. The amount so received by
the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Applicable Borrower by delivery of
the proceeds thereof to the Borrowers' Account or otherwise as shall
be directed in the applicable Borrowing Notice by an Authorized
Representative and reasonably acceptable to the Agent.
(ii) Each Loan will be made initially as a Base Rate Loan. The
Borrowers shall have the option to elect the duration of the initial
and any subsequent Interest Periods and to Convert the Revolving Loans
in accordance with Section 2.8. Eurodollar Rate Loans and Base Rate
Loans may be
28
outstanding at the same time, provided, however, there shall not be
outstanding at any one time Eurodollar Rate Loans for any or any
Borrower having more than two (2) different Interest Periods. If the
Agent does not receive an Interest Rate Selection Notice giving notice
of election of the duration of an Interest Period by the time
prescribed by Section 2.8, the applicable Borrower shall be deemed to
have elected for any Eurodollar Loan an Interest Period of the
duration provided in clause (x) of the definition of Interest Period.
2.2. Payment of Interest.
(a) The Borrowers, jointly and severally, shall pay interest to the
Agent for the account of each Lender on the outstanding and unpaid
principal amount of each Loan made by such Lender for the period commencing
on the date of such Loan until such Loan shall be due at the then
applicable Base Rate for Base Rate Loans or applicable Eurodollar Rate for
Eurodollar Rate Loans, as designated by the Authorized Representative
pursuant to Section 2.1; provided, however, that if any Event of Default
shall occur and be continuing, all amounts outstanding hereunder shall bear
interest during such period at the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a year of
360 days and calculated in each case for the actual number of days elapsed.
Interest on each Loan shall be paid (x) monthly in arrears on the twentieth
(20th) calendar day of each calendar month (or, if such day is not a
Business Day, on the next succeeding Business Day), (y) upon payment or
prepayment of the principal amount of any Loan or any portion thereof, on
the amount so paid or prepaid and (z) at the Revolving Credit Termination
Date.
2.3. Payment of Principal.
(a) Scheduled Repayment; Voluntary Prepayments. The principal amount
of each Revolving Loan shall be due and payable to the Agent for the
benefit of each Lender in full on the Stated Termination Date, or earlier
as specifically provided herein. The Borrower may prepay the outstanding
principal amount of any Eurodollar Loan, in whole or in part, upon two
Business Days' notice to the Lenders and, in the case of Base Rate Loans,
upon same day notice to the. All such prepayments must be accompanied by
accrued interest up to, and including, the date of such prepayment and any
compensation due under Section 4.5 hereof.
(b) Mandatory Prepayments.
(i) Upon the sale of any Financed Eligible Asset or other asset
by any Borrower (including the sale or disposition of the equity
interests in any such Borrower that holds a Financed Eligible Asset
but excluding any transfer of an Eligible Asset to a direct or
indirect Subsidiary of Bermuda Holding 2 Ltd. or AI 3 Ltd. who, in
connection with such transfer will assume all of the transferor's
obligations and shall satisfy all requirements under Section 5.2 to
become a Borrower hereunder), or upon the refinancing of any
Indebtedness of any Borrower arising from any Loan hereunder, the
Borrowers, jointly and severally,
29
shall immediately pay to the Agent an amount equal to the greater of
(A) the outstanding principal of and accrued interest on any Loans
made to, or for the benefit of, such Borrower in connection with such
Financed Eligible Asset and (B) an amount sufficient to bring the
Borrowers into compliance with the Borrowing Base Covenant after
giving effect to such sale, disposition or refinancing. If any net
proceeds of such sale or refinancing remain after the repayments in
full of all outstanding principal and accrued interest on the Loans
attributable to the Financed Eligible Asset sold, such excess proceeds
shall be applied first, to reduce the outstanding principal and
accrued interest on Loans as directed by Bermuda Holding 2 Ltd. or AI
3 Ltd. until the Borrowers are in compliance with the Borrowing Base
Covenant and second, if no Default or Event of Default exists at the
time, to the Applicable Borrower to be used or distributed by the
Applicable Borrower in its sole discretion.
(ii) If, as of any Calculation Date, the aggregate principal
amount of the Loans shall be greater than 85% of the Borrowing Base on
such day, the Borrowers shall, on the Payment Date immediately
following such Calculation Date, prepay the Loans in an amount equal
to the amount necessary to cause the aggregate outstanding principal
amount of the Loans to be not greater than 85% of the Borrowing Base
on such Payment Day.
(iii) If the estimated amount of out of pocket costs incurred by
an Applicable Borrower in connection with the acquisition of a
Financed Eligible Asset exceeds the actual amount of such out of
pocket costs included in the Purchase Price of such Financed Eligible
Asset, the Borrowers shall prepay the Loan relating to such Financed
Eligible Asset in an amount equal to 85% of such excess out of pocket
costs within five Business Days after a Responsible Officer learns of
such excess.
(iv) The Borrowers, jointly and severally, shall prepay the Loans
in respect of a Financed Eligible Asset upon the occurrence of an
Event of Loss in respect of such Finance Eligible Asset and on the
date required by Section 3.8(b) of the Security Agreement. If any net
proceeds received in respect of such Event of Loss remain after the
repayment in full of all outstanding principal and accrued interest on
such Loans, if no Default or Event of Default exists at the time, such
excess proceeds shall be paid to the Applicable Borrower and may be
used by such Borrower in accordance with the terms of this Agreement
and the other Loan Documents.
(v) Upon any Permanent Capital Markets Financing, the Borrowers,
jointly and severally, shall be required to prepay the Loans from the
cash proceeds received with respect to any Financed Eligible Asset
included in such Permanent Capital Markets Financing.
2.4. Manner of Payment. Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid to the Lenders with respect to the Loans, shall be made to the Agent at
the Principal Office, for the
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account of each Lender, in Dollars and in immediately available funds without
setoff, deduction or counterclaim before 12:30 P.M. on the date such payment is
due.
(a) The Agent shall deem any payment made by or on behalf of any
Borrower hereunder that is not made both in Dollars and in immediately
available funds and prior to 12:30 P.M. to be a non-conforming payment. Any
such payment shall not be deemed to be received by the Agent until the time
such funds become available funds. Any non-conforming payment may
constitute or become a Default or Event of Default. Interest shall continue
to accrue on any principal as to which a non-conforming payment is made
until the later of (x) the date such funds become available funds or (y)
the next Business Day at the Default Rate from the date such amount was due
and payable.
(b) In the event that any payment hereunder becomes due and payable on
a day other than a Business Day, then such due date shall be extended to
the next succeeding Business Day unless provided otherwise under clause
(ii) of the definition of "Interest Period"; provided that interest shall
continue to accrue during the period of any such extension and provided,
further, that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date.
(c) Any payment or prepayment of any principal or interest on any Loan
hereunder shall be accompanied by a certificate signed by an Authorized
Representative and delivered to the Agent, which certificate shall identify
such Loan, the amount of principal and interest paid thereon, and the
Borrower to whom, or for whose benefit, such Loan was originally advanced.
2.5. Notes. At the request of any Lender, Revolving Loans made by such
Lender shall be evidenced by a Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Revolving
Credit Commitment and shall be duly completed, executed and delivered by the
Borrowers.
2.6. Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Loans and the fees
described in Section 2.10 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by any Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from any Borrower.
2.7. Reductions. The Borrowers shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Agent, effective upon receipt, to reduce the Total Revolving
Credit Commitment. The Agent shall give each Lender, within one (1) Business Day
of receipt of such notice, facsimile notice, or telephonic notice (confirmed in
writing), of such reduction. Each such reduction shall be in the aggregate
amount of $5,000,000 or such greater amount which is in an integral multiple of
$1,000,000, or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total
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Revolving Credit Commitment. Each reduction of the Total Revolving Credit
Commitment shall be accompanied by payment of the Revolving Loans to the extent
that the principal amount of Revolving Credit Outstandings exceeds the Total
Revolving Credit Commitment after giving effect to such reduction, together with
accrued and unpaid interest on the amounts prepaid. No such reduction shall
result in the payment of any Eurodollar Rate Loan other than on the last day of
the Interest Period of such Eurodollar Rate Loan unless such prepayment is
accompanied by amounts due, if any, under Section 4.5.
2.8. Conversions and Elections of Subsequent Interest Periods. Subject
to the limitations set forth below and in Article IV, the Borrowers may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on any
Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate
Loans on the last day of the Interest Period for such Eurodollar Rate
Loans; and
(b) provided that no Default or Event of Default shall have occurred
and be continuing and upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30
A.M. three (3) Business Days' prior to the date of such election or
Conversion:
(i) elect a subsequent Interest Period for all or a portion of
Eurodollar Rate Loans to begin on the last day of the then current
Interest Period for such Eurodollar Rate Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and Conversion pursuant to this Section 2.8 shall be subject to
the limitations on Eurodollar Rate Loans set forth in the definition of
"Interest Period" herein and in Sections 2.1, 2.3 and Article IV. The Agent
shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.9. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment that shall be available to the Borrowers as Loans
shall be reduced by the aggregate amount of Revolving Credit Outstandings.
2.10. Fees. Borrower shall pay (i) the fees specified in the Fee
Letters on the dates specified therein and (ii) a commitment fee for the period
from and including the date hereof to the Revolving Credit Termination Date,
computed at a rate of 0.25% per annum on the average daily amount of the
available unused Revolving Credit Commitment of such Lender during the period
for which payment is made, payable monthly in arrears on each Fee Payment Date,
commencing on the first such date to occur after the date hereof.
2.11. Deficiency Advances. No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to make
any Loan hereunder nor
32
shall the Revolving Credit Commitment of any Lender hereunder be increased as a
result of such default of any other Lender. Without limiting the generality of
the foregoing, in the event any Lender shall fail to advance funds to any
Borrower as herein provided, the Agent may in its discretion and in its capacity
as a Lender, but shall not be obligated to, advance all or any portion of such
amount or amounts (each, a "deficiency advance") and shall thereafter be
entitled to payments of principal of and interest on such deficiency advance in
the same manner and at the same interest rate or rates as if it had originally
made such Loan; provided that, (i) such defaulting Lender shall not be entitled
to receive payments of principal, interest or fees with respect to such
deficiency advance until such deficiency advance shall be paid by such Lender
and (ii) upon payment to the Agent from such other Lender of the entire
outstanding amount of each such deficiency advance, together with accrued and
unpaid interest thereon, from the most recent date or dates interest was paid to
the Agent by a Borrower on each Loan comprising the deficiency advance at the
interest rate per annum for overnight borrowing by the Agent from the Federal
Reserve Bank, then such payment shall be to the Agent as a Lender in full
payment of such deficiency advance and such Borrower shall be deemed to have
borrowed the amount of such deficiency advance from such other Lender as of the
most recent date or dates, as the case may be, upon which any payments of
interest were made by such Borrower thereon.
2.12. Use of Proceeds. The proceeds of each Loan made pursuant to the
Revolving Credit Facility hereunder shall be used by the Applicable Borrower to
(a) finance or reimburse a Borrower for up to 85% of the Purchase Price of an
Eligible Asset and 85% of the costs incurred in connection with any Approved
Improvements or any Qualified Conversion or (b) subsequent to the initial
purchase of an Eligible Asset, finance up to 85% of the Individual Eligible
Asset Borrowing Base of such Eligible Asset.
2.13. Designation of Borrowing Affiliate; Releases.
(a) An Authorized Representative may from time to time designate any
Holdings Subsidiary Trust or Holdings SPC which has not joined in the
execution of this Agreement as a "Borrowing Affiliate" hereunder by causing
such Holdings Subsidiary Trust or Holdings SPC to execute and deliver a
duly completed Assumption Letter (in the form attached hereto as Exhibit Q)
to the Agent with the written acknowledgment of the Borrowers and the Agent
at the foot thereof, together with (a) Facility Guaranties executed by each
Beneficial Owner of any such Holdings Subsidiary Trust, by each Subsidiary
of any such Beneficial Owner (other than such Holdings Subsidiary Trust),
by each Subsidiary of such Holdings Subsidiary Trust or of such Holdings
SPC and by the Applicable Intermediary (if any), (b) Security Agreements
signed by such Holdings Subsidiary Trust or Holdings SPC, by each
Beneficial Owner of any such Holdings Subsidiary Trust, by each Subsidiary
of any such Beneficial Owner, by each Subsidiary of such Holdings
Subsidiary Trust or Holdings SPC and by the Applicable Intermediary (if
any), (c) Pledge Agreements signed by the respective Beneficial Owners and
other owners, granting a security interest in the Pledged Interests in such
Holdings Subsidiary Trust or Holdings SPC in any Subsidiary thereof, in any
Beneficial Owner and in any Subsidiary thereof, and in the Applicable
Intermediary (if any), and (d) all additional documents required under such
Assumption Letter. Upon such execution, delivery and consent, such Holdings
Subsidiary Trust or Holdings SPC (as the case may be) shall for
33
all purposes be a party hereto as a Borrower as fully as if it had executed
and delivered this Agreement.
(b) So long as (w) all Loans made to or on behalf of any Borrower,
together with all accrued interest on such Loans, have been paid in full,
(x) all other outstanding Obligations of such Borrower (except Obligations
to pay principal and interest on Loans other than those Loans described in
clause (w)) have been paid in full, (y) no Default or Event of Default has
occurred and will be continuing after giving effect to such termination,
and (z) any prepayment required under Section 2.3(b) has been made, then
such Borrower may, by not less than three (3) days prior notice to the
Agent (which shall promptly notify the Lenders thereof), (i) terminate its
status as a "Borrowing Affiliate" and "Borrower" hereunder and under the
other Loan Documents, and (ii) (with respect to any Beneficial Owner of
such Borrower) unless such Person also holds a beneficial interest in any
other Borrower, terminate the status of such Person and any other
Subsidiary of such Person as a "Guarantor" hereunder and under the other
Loan Documents, and (iii) terminate the status of the Applicable
Intermediary (if any) and any other Subsidiary of such Borrower as a
"Guarantor" hereunder and under the other Loan Documents. Upon such
terminations (provided the conditions to such terminations are satisfied),
the Agent shall take all actions reasonably requested by such Borrower (A)
to release the Liens of the Agent on all Collateral owned by such Borrower
and its Subsidiaries (including the Applicable Intermediary, if any) and to
release such Borrower and such Subsidiaries from all of their respective
obligations under the Loan Documents (including without limitation a
written release to such effect), (B) unless such Beneficial Owner also
holds a beneficial interest in any other Borrower, to release the Liens of
the Agent on all Collateral owned by such Beneficial Owner and its other
Subsidiaries and to release such Beneficial Owner and such other
Subsidiaries from all of their respective obligations under the Loan
Documents (including without limitation a written release to such effect),
(C) to release the Lien of the Agent with respect to any Pledged Interests
in such Borrower, its Subsidiaries and the Applicable Intermediary, and (D)
(unless such Beneficial Owner also holds a beneficial interest in any other
Borrower) to release the Lien of the Agent with respect to any Pledged
Interests in such Beneficial Owner. Any provision of this Section 2.13 or
any other provision of any Loan Document notwithstanding, in no event shall
Bermuda Holding 2 Ltd., or AI 3 Ltd. be released from its obligations to
pay indemnification to, or reimburse any costs or expenses of, the Agent or
any Lender (including without limitation the obligations under Article IV
and Sections 4.6, 7.15, 11.5 and 11.9), which agreements and obligations
shall survive any release or termination of any Credit Party (other than
Bermuda Holding 2 Ltd., or AI 3 Ltd.) pursuant to this Section 2.12.
2.14. Joint and Several Liability. Each Borrower (including without
limitation each Borrowing Affiliate) agrees and acknowledges that the
Obligations (subject to the proviso in the last sentence in the definition of
"Obligations" as such term is defined in Section 1.1 herein) constitute and will
constitute joint and several obligations and liabilities of the Borrowers;
provided, however, that anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Borrower with respect to
the joint and several liability under this Section 2.14 shall in no event exceed
the amount which can be guaranteed by such Borrower under applicable federal,
state and applicable foreign laws relating
34
to the insolvency of debtors. Each Borrower further agrees and acknowledges that
all actions taken, elections made and notices and certificates furnished or
received by it under or pursuant to the Loan Documents shall constitute the
action, election, notice or certification of all of the Borrowers under the Loan
Documents, and that each Authorized Representative shall have full authority to
act for and on behalf of all of the Borrowers for all purposes of the Loan
Documents. Each Borrower agrees that the joint and several liability of the
Borrowers shall not be impaired or affected by any modification, supplement,
extension or amendment of any contract or agreement to which the parties thereto
may hereafter agree, nor by any modification, release or other alteration of any
of the rights of the Agent or any Lender with respect to the Collateral other
than as provided in Section 2.13(b) hereof, nor by any delay, extension of time,
renewal, compromise or other indulgence granted by the Agent, any Lender or any
other Person with respect to any of the Obligations, nor by any other agreements
or arrangements whatever with any other Borrower or with anyone else, each
Borrower hereby waiving all notice of any such delay, extension, release,
substitution, renewal, compromise or any such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consenting to
be bound thereby as fully and effectually as if it had expressly agreed thereto
in advance. The liability of each Borrower hereunder is direct and unconditional
as to all of the Obligations hereunder, and may be enforced without requiring
the Agent, any Lender or any other Person first to resort to any other right,
remedy or security; no Borrower shall have any right of subrogation,
reimbursement or indemnity whatsoever, nor any right of recourse to security for
indemnity whatsoever, nor any right of recourse to security for any of the
Obligations hereunder, unless and until all of said Obligations have been paid
in full; except as provided in Section 2.13(b) hereof and subject to the proviso
to the first sentence of this Section 2.14, nothing shall discharge or satisfy
the liability of any Borrower hereunder except the full payment and performance
of all of the Obligations; any and all present and future debts and obligations
of each Borrower to the other Borrowers are hereby waived and postponed in favor
of and subordinated to the full payment and performance of all present and
future Obligations of the Borrowers to the Agent, the Lenders and any other
Person.
2.15. Eligible Lease Involving Eligible Intermediary. In lieu of
leasing a Financed Eligible Asset directly to an Eligible Carrier, a Borrower
may lease such Financed Eligible Asset directly to an Eligible Intermediary
pursuant to an Eligible Lease described in clause (X) of the proviso to the
definition of "Eligible Lease"; provided that
(a) such Eligible Intermediary simultaneously subleases such Eligible
Asset to an Eligible Carrier pursuant to an Eligible Lease described in
clause (Y) of the proviso to the definition of "Eligible Lease" and such
sublease is pledged as collateral security for the obligations of the
Eligible Intermediary under the head lease;
(b) in the case of any Loan with respect to such Eligible Asset, all
Loan conditions that pertain to any Eligible Lease or other Lease by a
Borrower of such Eligible Asset (including without limitation requirements
concerning the perfection of Liens on Collateral, and delivery of copies of
the Leases and Lessee Notices) shall be satisfied with respect to each such
Lease to or by the Applicable Intermediary;
35
(c) all provisions of any Loan Document that pertain to any Eligible
Lease or other Lease by a Borrower of such Eligible Asset shall apply to
each such Lease to or by the Applicable Intermediary; and
(d) the lease/sublease structure shall not result in adverse tax or
other consequences to the Agent or any Lender which have not been
indemnified or otherwise addressed to the reasonable satisfaction of the
Agent.
ARTICLE III
SECURITY
3.1. Security. As security for the full and timely payment and
performance of all Obligations, each Borrower will, or will cause the Credit
Parties and the Parent Guarantors to, on or before the date of the initial Loan
do or cause to be done all things necessary in the reasonable opinion of the
Agent and its counsel to grant to the Agent for the benefit of the Lenders a
duly perfected first priority security interest under all applicable laws in all
Collateral subject to no prior Lien or other encumbrance (that, in each case,
has not previously been satisfied in full) or restriction on transfer (other
than Permitted Liens).
3.2. Further Assurances. At the request of the Agent, each Borrower
will, or will cause the Parent Guarantors and other Credit Parties (as the case
may be), to, execute, by its duly authorized officers, alone or with the Agent,
any certificate, instrument, statement or document, or to procure any such
certificate, instrument, statement or document, or to take such other action
(and pay all connected costs) which the Agent reasonably deems necessary from
time to time to create, continue or preserve the liens and security interests in
Collateral (and the perfection and priority thereof) of the Agent contemplated
hereby and by the other Loan Documents and specifically including all Collateral
acquired by the Parent Guarantor, any Borrower, or any Guarantor or any other
Credit Party after the Closing Date.
3.3. Information Regarding Collateral. Bermuda Holding 2, AI 3 Ltd.,
and each Borrower represents, warrants and covenants that (i) the chief
executive office of the each Parent Guarantor and each Credit Party providing
Collateral pursuant to a Security Instrument (each, a "Grantor") at the Closing
Date is located at the address or addresses specified on Schedule 3.3, and (ii)
Schedule 3.3 contains a true and complete list of (a) the name and address of
each Grantor, (b) each location of the chief executive office and principal
place of business of each Grantor and (c) the country of registration (if
applicable) of each Eligible Asset. No Borrower shall change, or permit any
other Grantor to change, the location of its chief executive office or principal
place of business, or use or permit any other Grantor to use, any additional
trade style, except upon giving not less than thirty (30) days' prior written
notice to the Agent and taking or causing to be taken all such action at the
Borrowers' or such other Grantor's expense as may be reasonably requested by the
Agent to perfect or maintain the perfection of the Lien of the Agent in
Collateral.
3.4. Quiet Enjoyment. The Agent and each Lender hereby agree that, so
long as no Lease Event of Default shall have occurred and be continuing under an
Eligible Lease, it will not interfere with the quiet enjoyment of the possession
and use of the Eligible Asset by the
36
Applicable Carrier during the term of such Eligible Lease and it will (subject
to any requirements or restrictions imposed by applicable law) dispose of its
interest in the Eligible Asset leased under such Eligible Lease expressly
subject to such Eligible Lease and on terms such that the purchaser provides a
similar right of quiet enjoyment to such Applicable Carrier. Upon the request of
any Borrower, the Agent (on behalf of itself and the Lenders) will confirm the
immediately preceding sentence in writing to any Applicable Carrier.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1. Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date
hereof:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender that is not otherwise included in
the determination of the Eurodollar Rate; or
(ii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost (other than a
Tax) to such Lender, by an amount that such Lender deems to be material, of
making, converting into, continuing or maintaining Eurodollar Rate Loans or to
reduce any amount receivable hereunder in respect thereof (other than by reason
of any Tax), then, in any such case, the Borrowers shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender (on an after-tax basis) for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Borrowers (with a copy
to the Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time,
after submission by such Lender to the Borrowers (with a copy to the Agent)
of a written
37
request therefor, the Borrowers shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such corporation (on an
after-tax basis) for such reduction.
(c) Each Lender shall promptly notify Bermuda Holding 2 Ltd., AI 3
Ltd., the Parent and the Agent of any event of which it has knowledge
occurring after the date hereof, which will entitle a Lender to
compensation pursuant to this Section 4.1, and such Lender shall, upon
written request by Bermuda Holding 2 Ltd., AI 3 Ltd., the Parent or any
Borrower, designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrowers (with a
copy to the Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section, the Borrowers
shall not be required to compensate a Lender pursuant to this Section for
any amounts incurred more than three months prior to the date that such
Lender notifies the Borrowers of such Lender's intention to claim
compensation therefor; provided that, if the circumstances giving rise to
such claim have a retroactive effect, then such three-month period shall be
extended to include the period of such retroactive effect. The obligations
of the Borrowers pursuant to this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
4.2. Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Rate Loans for such Interest Period;
then the Agent shall give the Borrowers prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type or to Convert Loans
of any other Type into Loans of such Type, and the Borrowers shall, jointly and
severally, on the last day(s) of the then current Interest Period(s) for the
outstanding Loans of the affected Type, either prepay such Loans or Convert such
Loans into Base Rate Loans in accordance with the terms of this Agreement.
4.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrowers thereof and such
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be suspended until such
time
38
as such Lender may again make, maintain, and fund Eurodollar Rate Loans (in
which case the provisions of Section 4.4 shall be applicable).
4.4. Treatment of Affected Loans. If the obligation of any Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to Section 4.1
or 4.3 hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 4.3 hereof, on such earlier date as such Lender
may specify to the Borrowers with a copy to the Agent) and, unless and until
such Lender gives notice as provided below that the circumstances specified in
Section 4.1 or 4.3 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender
as Loans of the Affected Type shall be made or Continued instead as Base
Rate Loans, and all Loans of such Lender that would otherwise be Converted
into Loans of the Affected Type shall be Converted instead into (or shall
remain as) Base Rate Loans.
If such Lender gives notice to the Borrowers (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
4.5. Compensation. Upon the request of any Lender, Bermuda Holding 2
Ltd., AI 3 Ltd. and the Borrowers, jointly and severally, shall pay to such
Lender such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost, or expense incurred by it
as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Rate Loan
for any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 9.1) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by any Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article V
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Rate
Loan on the date for such borrowing,
39
Conversion, Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this Agreement.
4.6. Taxes.
(a) Any and all payments by any Borrower to or for the account of any
Lender or the Agent hereunder or under any other Loan Document shall be
made free and clear of and without deduction or withholding for any and all
Taxes, and all liabilities with respect thereto, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding, in the case of each Lender and the Agent, Taxes imposed on its
income, receipts, capital, net worth or items of tax preference and
franchise, doing business and similar Taxes (imposed on it in lieu of net
income taxes), imposed on such Lender or Agent as a result of a present or
former connection between the Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political subdivision
or taxing authority thereof or therein (other than any such connection
arising solely from the Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded Taxes ("
Indemnified Taxes") or Other Taxes (as defined below) are required to be
withheld after the date hereof from or in respect of any sum payable under
this Agreement or any other Loan Document to any Lender or the Agent, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.6) such Lender or the Agent receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions, (iii) such Borrower shall
timely pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law, and (iv) such Borrower
shall furnish to the Agent, at its address referred to in Section 11.2, the
original or a certified copy of a receipt evidencing payment thereof or
other evidence of payment reasonably acceptable to such Lender or the
Agent; provided however, that the Borrowers shall not be required to
increase such amounts payable to any Lender with respect to any Taxes (i)
that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are
United States or Irish withholding taxes imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time
of assignment, to receive additional amounts from the Borrowers with
respect to such Taxes pursuant to this paragraph.
(b) In addition, Bermuda Holding 2 Ltd., AI 3 Ltd. and the Borrowers
agree, jointly and severally, to timely pay any and all present or future
stamp or documentary taxes which arise from the execution or delivery of
this Agreement or any other Loan Document or the provision of the security
interest in any Collateral required hereunder (hereinafter referred to as
"Other Taxes").
(c) Bermuda Holding 2 Ltd., AI 3 Ltd. and the Borrowers agree, jointly
and severally, to indemnify each Lender and the Agent for the full amount
of Indemnified Taxes and Other Taxes (including, without limitation, any
Indemnified Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 4.6)
40
paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or with
respect thereto.
(d) Each Lender, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender in the case
of each other Lender, and from time to time thereafter if requested in
writing by any Borrower or the Agent (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to the date on
which a form originally was required to be provided), shall provide the
Borrowers and the Agent with (i) a complete and properly executed Internal
Revenue Service Form X-0XXX, X-0XXX or W-8IMY (including all required
accompanying information), as appropriate, or any successor form prescribed
by the Internal Revenue Service (including a United States taxpayer
identification number), certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest, certifying
that the Lender is eligible for the "portfolio interest exemption" or
certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States or (ii) Internal Revenue Service Form W-9 or any successor form
prescribed by the Internal Revenue Service. In addition, each Lender and
the Agent agrees that it will (i) take all actions reasonably requested by
Bermuda Holding 2 Ltd., AI 3 Ltd. or a Borrower in writing that are
consistent with applicable legal and regulatory restrictions to claim any
available reductions or exemptions from Indemnified Taxes or Other Taxes
and (ii) otherwise cooperate with Bermuda Holding 2 Ltd., AI 3 Ltd. and the
Borrowers to minimize any amounts payable by Bermuda Holding 2 Ltd., AI 3
Ltd. or the Borrowers under this Section 4.6; provided, however, that in
each case, any out-of-pocket cost relating to such action or cooperation
requested by Bermuda Holding 2 Ltd., AI 3 Ltd. or a Borrower shall be borne
by Bermuda Holding 2 Ltd., AI 3 Ltd. or such Borrower and no Lender shall
be required to take any action that it determines in its sole good faith
discretion, may be adverse in any non de minimis respect to it and not
indemnified to its satisfaction. Each Lender listed on the signature page
hereto represents that it is a Qualifying Lender as of the Closing Date and
each assignee represents that it is a Qualifying Lender as of the date such
party becomes an assignee.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to such
Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law or reasonably requested by such Borrower, such properly
completed and executed documentation prescribed by applicable law as will
permit such payments to be made without withholding or at a reduced rate,
provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender's judgment such completion,
execution or submission would not materially prejudice the legal position
of such Lender.
(f) If Bermuda Holding 2 Ltd., AI 3 Ltd. or any Borrower is required
to pay additional amounts to or for the account of any Lender pursuant to
this Section 4.6, then such Lender will agree to use reasonable efforts to
change the jurisdiction of its
41
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the sole judgment of
such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
Bermuda Holding 2 Ltd., AI 3 Ltd. or the applicable Borrower shall furnish
to the Agent the original or a certified copy of a receipt evidencing such
payment or otherwise evidence of such payment as is reasonably acceptable
to the Agent.
(h) If the Agent or any Lender receives a refund of any Taxes or Other
Taxes as to which it has been indemnified by Bermuda Holding 2 Ltd., AI3
Ltd. or a Borrower or with respect to which Bermuda Holding 2 Ltd., AI3
Ltd. or a Borrower has paid additional amounts pursuant to this Section
4.6, it shall pay over such refund to Bermuda Holding 2 Ltd., AI3 Ltd. or
such Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by Bermuda Holding 2 Ltd., AI3 Ltd. or a Borrower
under this Section 4.6 with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses (including any net
increase in Taxes imposed on such Person by reason of such refund and the
payment by such Person pursuant to this sentence) of the Agent or such
Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that Bermuda
Holding 2 Ltd., AI3 Ltd. or the Borrower, upon the request of the Agent or
such Lender, agrees to repay the amount paid over to Bermuda Holding 2
Ltd., AI3 Ltd. or such Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Agent or
such Lender in the event the Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be
construed to require the Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to Bermuda Holding 2 Ltd., AI3 Ltd. or any Borrower or any
other Person.
(i) Without prejudice to the survival of any other agreement of
Bermuda Holding 2 Ltd., AI 3 Ltd. or any Borrower hereunder, the agreements
and obligations of Bermuda Holding 2 Ltd., AI 3 Ltd. and each Borrower
contained in this Section 4.6 shall survive the termination of the
Revolving Credit Commitments and the payment in full of the Loans.
ARTICLE V
CONDITIONS TO MAKING LOANS
5.1. Conditions of Closing. The effectiveness of this Agreement is
subject to the conditions precedent that:
(a) the Agent shall have received, in form and substance satisfactory
to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the Notes (if
applicable), the initial Facility Guaranties, the initial Parent
Guarantor Guaranties,
42
the initial Security Agreements and the other initial Loan Documents,
together with all schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with respect to
the Loan Documents and the transactions contemplated thereby of
special counsel to the Credit Parties dated the Closing Date
(including opinions of New York, Bermuda and Irish counsel), addressed
to the Agent (on behalf of itself and the Lenders), substantially in
the form of Exhibit G-1 and Exhibit G-3 or otherwise reasonably
satisfactory to special counsel to the Agent;
(iii) resolutions of the boards of directors or other appropriate
governing body (or of the appropriate committee thereof) of each
Parent Guarantor and Credit Party (except in the case of a Credit
Party that is a trust), certified by its secretary or assistant
secretary as of the Closing Date, approving and adopting the Loan
Documents to be executed by such Person, and authorizing the execution
and delivery thereof;
(iv) specimen signatures of officers of each Parent Guarantor and
the Credit Parties executing the Loan Documents on behalf of such
party, certified by the secretary or assistant secretary of such
party;
(v) the Organizational Documents of each Parent Guarantor, each
Credit Party and each of the trustees for each Holdings Subsidiary
Trust certified as of a recent date by the Secretary of State or
comparable official of its jurisdiction of organization (provided that
the Trust Agreement of a Holdings Subsidiary Trust may be certified by
the secretary or assistant secretary of its Beneficial Owner);
(vi) certificates issued as of a recent date by the Secretaries
of State or comparable officials of the respective jurisdictions of
formation of each of the Credit Parties (excluding Holdings Subsidiary
Trusts) as to the due existence and good standing of such Person;
(vii) notice of appointment of the initial Authorized
Representative(s);
(viii) Uniform Commercial Code financing statements appropriate
for filing in all places required by applicable law to perfect the
Liens of the Agent under the Security Instruments as a first priority
Lien as to items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such other
documents and/or evidence of other actions as may be necessary under
applicable law to perfect the Liens of the Agent under the Security
Instruments as a first priority Lien in and to such other Collateral
as the Agent may require;
(ix) the delivery by the Parent, AA Ireland Ltd., AHC Ltd.,
Bermuda Holding 2 Ltd., AI 3 Ltd. and the Borrowers of all stock
certificates and other certificates, if any, evidencing ownership of
any Pledged Interests, accompanied
43
in each case by duly executed stock or transfer powers (or other
appropriate transfer documents) in blank affixed thereto; and
(x) the delivery by the Parent of an Account Control Agreement
with respect to each Account listed on Schedule 6.21 and the delivery
by Bermuda Holding 2 Ltd., AI 3 Ltd., and the Borrowers of "control
agreements" that have been executed by the respective issuers (and
consented to by the respective Credit Parties) with respect to any
uncertificated Pledged Interests; and
(xi) evidence that any fees payable by any Parent Guarantor or
any Credit Party on the Closing Date to the Agent and the Lenders have
been paid in full; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) no litigation, action, suit, investigation or other arbitral,
administrative or judicial proceeding shall be pending or threatened
which could reasonably be likely to result in a Material Adverse
Effect; and
(ii) the Parent Guarantors and the Credit Parties shall have
received all approvals, consents and waivers, and shall have made or
given all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the occurrence
of any default under, conflict with or violation of (A) any applicable
law, rule, regulation, order or decree of any Governmental Authority
or arbitral authority or (B) any agreement, document or instrument to
which any of the Credit Parties is a party or by which any of them or
their properties is bound.
(c) Evidence that the Parent has received not less than $400,000,000
of cash capital contributions from its investors and has the right, without
restriction, limitation or the requirement to satisfy any condition that
has not yet been met or waived, to require its shareholders to purchase
additional shares of the Parent for an aggregate purchase price of
$100,000,000 (the "$100,000,000 Capital Call").
5.2. Conditions of Revolving Loans. The obligation of the Lenders to
make Revolving Loans hereunder on or subsequent to the Closing Date (other than
additional loans to a Borrower in connection with Approved Improvements, or a
Qualified Conversion) is subject to the conditions precedent that:
(a) each of the conditions to making the Revolving Credit Facility
available to the Borrowers, as set forth in Section 5.1, shall have been
satisfied on or prior to the date of the initial Loan after the Closing
Date;
(b) the representations and warranties of the Credit Parties set forth
in Article VI and in each of the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Loan, with
the same effect as though such representations and warranties had been made
on and as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date;
44
(c) the Borrowing Affiliate with respect to such Loan shall have
executed and delivered to the Agent an Assumption Letter, and each Borrower
and the Agent shall have executed such Assumption Letter and the Borrowing
Affiliate shall have delivered to the Agent all other agreements,
instruments and documents required by such Assumption Letter;
(d) the Borrowing Affiliate with respect to such Loan shall have
delivered to the Agent (i) Facility Guaranties fully executed by any
Beneficial Owner of such Borrowing Affiliate, by each Subsidiary of any
such Beneficial Owner (other than such Borrowing Affiliate), by each
Subsidiary of such Borrowing Affiliate and by the Applicable Intermediary
(if any); (ii) Pledge Agreements fully executed by the appropriate
pledgors, granting a security interest in all Pledged Interests with
respect to each such Beneficial Owner, such Borrowing Affiliate, each
Subsidiary of any Beneficial Owner, each Subsidiary of such Borrowing
Affiliate, and the Applicable Intermediary (if any); (iii) Security
Agreements fully executed by such Borrowing Affiliate, any Beneficial Owner
of such Borrowing Affiliate, each Subsidiary of any Beneficial Owner, each
Subsidiary of such Borrowing Affiliate, and the Applicable Intermediary (if
any); and ((iv) Lockbox Agreements executed by each Borrower;
(e) the Agent shall have received the latest drafts of the following
within 5 Business Days prior to the date of the Loan, an organized
pre-closing of the required documentation shall have occurred at least one
Business Day prior to the date of the Loan, and the Agent shall have
received final versions of the following, in form and substance
satisfactory to the Agent and the Lenders, on or prior to the date of the
Loan:
(i) each of the documents and instruments (including without
limitation the opinions of counsel, the resolutions of boards of
directors or other appropriate governing bodies or committees, the
specimen signatures, officer's certificates, Organizational Documents
and governmental certificates (if any) of existence, qualification,
good standing and assumed name) required by Section 5.1 as if such
Borrowing Affiliate had been a Borrowing Affiliate (and its Beneficial
Owner, their respective Subsidiaries and the Applicable Intermediary
(if any) had been in such positions) on the Closing Date;
(ii) with respect to each Financed Eligible Asset registered in
the United States, the favorable written opinion with respect to the
Loan Documents and the transactions contemplated thereby of FAA
Counsel dated the date of such Loan, addressed to the Agent (on behalf
of itself and the Lenders), substantially in the form of Exhibit G-2
or otherwise reasonably satisfactory to special counsel to the Agent;
(iii) with respect to every other Financed Eligible Asset, the
favorable written opinion with respect to the Loan Documents and the
transactions contemplated thereby of local counsel in each Applicable
Foreign Jurisdiction dated the date of such Loan, addressed to the
Agent (on behalf of itself and the Lenders), substantially in the
forms of Exhibit G-3 and Exhibit G-4 or otherwise reasonably
satisfactory to special counsel to the Agent;
45
(iv) certificates of insurance from qualified brokers of aircraft
insurance or other evidence satisfactory to the Agent, evidencing all
insurance required by the Loan Documents (including without limitation
all insurance required by Exhibit L with respect to each Eligible
Asset that is to be a Financed Eligible Asset);
(v) a Borrowing Notice;
(vi) a certificate of an Authorized Representative substantially
in the form of Exhibit R containing computations of the Borrowing Base
and providing information about the Financed Eligible Asset, in each
case after giving effect to such Loan and any related Financed
Eligible Asset;
(vii) Uniform Commercial Code financing statements appropriate
for filing in all places required by applicable law to perfect the
Liens of the Agent under the Security Instruments as a first priority
Lien as to items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such other
documents and/or evidence of other actions as may be necessary under
applicable law to perfect the Liens of the Agent under the Security
Instruments as a first priority Lien in and to such other Collateral
as the Agent may require, including without limitation:
(1) the delivery by the Borrowers of all stock
certificates and other certificates, if any, evidencing
ownership of any Pledged Interests, accompanied in each case
by duly executed stock or transfer powers (or other
appropriate transfer documents) in blank affixed thereto;
and
(2) the delivery by the Borrowers of "control
agreements" that have been executed by the respective
issuers (and consented to by the respective Credit Parties)
with respect to any uncertificated Pledged Interests;
(3) with respect to each Financed Eligible Asset
registered in the United States, evidence of the filing with
the FAA Recording Office all documents required by the FAA
in order to protect the Applicable Borrower's right, title
and interest in such Financed Eligible Asset;
(4) with respect to each Financed Eligible Asset not
registered in the United States, evidence of the filing with
each applicable recording office in each Applicable Foreign
Jurisdiction of all documents required by such office or any
Applicable Foreign Aviation Law in order to protect the
Applicable Borrower's right, title and interest in such
Financed Eligible Asset in such Applicable Foreign
Jurisdiction;
46
(5) a copy of the executed purchase agreement and
executed xxxx of sale evidencing the purchase by the
Applicable Borrower of each Financed Eligible Asset;
(6) copies of the certificates of aircraft registration
issued by the FAA and certificates of airworthiness issued
by the FAA, in each case with respect to each Aircraft
registered in the United States; and
(7) evidence of registration and other applicable
qualification issued by any Applicable Foreign Jurisdiction
to the extent such registration or qualification is required
by an Applicable Foreign Aviation Law, in each case with
respect to each Eligible Asset not registered in the United
States;
(viii) results of a search of Liens filed with the FAA or any
Applicable Foreign Jurisdiction with respect to any Eligible Asset
that is or is to be a Financed Eligible Asset;
(ix) for each Financed Eligible Asset that will be subject to an
Eligible Lease on the date of the initial Loan, copies of each such
Eligible Lease; and
(x) for each Financed Eligible Asset that will be subject to an
Eligible Lease on the date of the initial Loan for such Financed
Eligible Asset, a Lessee Notice and evidence (which may be in the form
of a legal opinion) that the Agent shall have the right, under the
laws of the Applicable Foreign Jurisdiction, to enforce directly the
Eligible Lease against the Lessee, including without limitation, the
obligation of the Lessee to make payments under the Eligible Lease to
the applicable Account.
(f) at the time of (and after giving effect to) the initial Loan, no
Default or Event of Default specified in Article IX shall have occurred and
be continuing;
(g) immediately after giving effect to the initial Loan;
(i) the aggregate principal balance of all outstanding Revolving
Loans for each Lender shall not exceed such Lender's Revolving Credit
Commitment; and
(ii) the Revolving Credit Outstandings shall not exceed the
lesser of the Borrowing Base or the Total Revolving Credit Commitment.
5.3. Conditions of Subsequent Advances Under Revolving Loans. The
obligation of the Lenders to make an additional loan to a Borrower in connection
with Approved Improvements or a Qualified Conversion is subject to the
conditions precedent that:
47
(a) the representations and warranties of the Credit Parties set forth
in Article VI and in each of the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Loan, with
the same effect as though such representations and warranties had been made
on and as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date;
(b) the Agent shall have received final versions of the following at
least one Business Day prior to the date of the Loan:
(i) a Borrowing Notice; and
(ii) a certificate of an Authorized Representative substantially
in the form of Exhibit R containing computations of the Borrowing Base
and providing information about the Financed Eligible Asset, in each
case after giving effect to such Loan and any related Financed
Eligible Asset;
(c) at the time of (and after giving effect to) the initial Loan, no
Default or Event of Default specified in Article IX shall have occurred and
be continuing; and
(d) immediately after giving effect to the initial Loan;
(i) the aggregate principal balance of all outstanding Revolving
Loans for each Lender shall not exceed such Lender's Revolving Credit
Commitment;
(ii) the Revolving Credit Outstandings shall not exceed the
lesser of the Borrowing Base or the Total Revolving Credit Commitment.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Bermuda Holding 2 Ltd., AI 3 Ltd., each other Guarantor and each
Borrower represents and warrants with respect to itself, its Subsidiaries (if
any) and each other Credit Party (which representations and warranties shall
survive the delivery of the documents mentioned herein and the making of Loans),
that:
6.1. Organization and Authority.
(a) Each Borrower, each Subsidiary and each other Credit Party is a
trust, corporation, partnership or limited liability company duly organized
and validly existing under the laws of the jurisdiction of its formation;
(b) Each Borrower, each Subsidiary and each other Credit Party (x) has
the requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in the
Loan Documents, and (y) is qualified to do business in every jurisdiction
in which failure so to qualify would have a Material Adverse Effect;
48
(c) Each Borrower has the power and authority to execute, deliver and
perform this Agreement and the Notes (if applicable), and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Credit Party (other than the Borrowers) has the power and
authority to execute, deliver and perform each of the Loan Documents to
which it is a party; and
(e) When executed and delivered, each of the Loan Documents to which
any Credit Party is a party will be the legal, valid and binding obligation
or agreement, as the case may be, of such Credit Party (as the case may
be), enforceable against such Credit Party (as the case may be) in
accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors' rights generally and to the
effect of general principles of equity (whether considered in a proceeding
at law or in equity);
6.2. Loan Documents. The execution, delivery and performance by each
Credit Party of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite Organizational Action
of such Credit Party (as the case may be) required for the lawful
execution, delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule or
regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority binding
on such Credit Party or their respective properties, or (iii) the
Organizational Documents of such Credit Party;
(c) does not and will not be in conflict with, result in a breach of
or constitute an event of default, or an event which, with notice or lapse
of time or both, would constitute an event of default, under any contract,
indenture, agreement or other instrument or document to which such Credit
Party is a party, or by which the properties or assets of such Credit Party
are bound; and
(d) does not and will not result in the creation or imposition of any
Lien upon any of the properties or assets of such Credit Party or any
Subsidiary except any Liens in favor of the Agent and the Lenders created
by the Security Instruments;
6.3. Solvency. At the time of each Loan to a Borrower, such Borrower
and each Beneficial Owner of such Borrower and each Eligible Intermediary, if
any, is Solvent after giving effect to the transactions contemplated by the Loan
Documents;
6.4. Subsidiaries and Stockholders. No Borrower or Guarantor (other
than Bermuda Holding 2 Ltd., and AI 3 Ltd.) has any Subsidiaries, except that a
Guarantor may have a beneficial interest in a Borrower, a Borrower may own an
Eligible Intermediary and a Borrower may be a Subsidiary of a Guarantor;
49
6.5. Ownership Interests.
(a) No Borrower or Guarantor owns any interest in any Person, except
that a Guarantor may have a beneficial interest in a Borrower, and a
Borrower may own an Eligible Intermediary; and
(b) Bermuda Holding 2 Ltd. or AI 3 Ltd. owns, directly or indirectly,
all of the Capital Stock of each Borrower, except for directors' qualifying
shares, if any.
6.6. Liens. The Agent (for itself and on behalf of the Lenders) has a
first priority perfected Lien (subject to Permitted Liens) on all Collateral
under the Security Instruments;
6.7. Title to Properties. Each Borrower and each of its Subsidiaries,
each Guarantor and each other Credit Party has good and marketable title to all
its real and personal properties, subject to no transfer restrictions or Liens
of any kind except as provided in the Security Instruments and the Leases; and
6.8. Taxes. Except as set forth in Schedule 6.8, each Borrower, each
of its Subsidiaries, each Guarantor and each other Credit Party has filed or
caused to be filed all federal, state, local and foreign Tax returns in each
case that are required to be filed by it and that, the failure to file, would
have a Material Adverse Effect (individually or in the aggregate) and, except
for Taxes and assessments being contested in good faith by appropriate
proceedings diligently conducted and against which reserves in accordance with
GAAP reflected in the financial statements most recently delivered pursuant to
Section 7.1(a) and satisfactory to the Borrowers' independent certified public
accountants have been established, have paid or caused to be paid all Taxes as
shown on said returns or on any assessment received by it, to the extent that
such Taxes have become due;
6.9. Other Agreements. No Guarantor, other Credit Party nor any
Subsidiary of Bermuda Holding 1 Ltd or of AI 3 Ltd:
(i) is a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions,
which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect;
(ii) is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which such Guarantor, other Credit Party or
such Subsidiary is a party, which default has, or if not remedied
within any applicable grace period could reasonably be likely to have,
a Material Adverse Effect; or
(iii) shall have, prior to its execution of the Assumption
Letter, conducted business other than related to the acquisition,
leasing, maintenances, financing (solely under the Loan Documents),
ownership and disposition of Eligible Assets or have incurred any
liabilities except to the extent related to such business, including,
without limitation, under the Eligible Lease to which it is a party,
an aircraft acquisition, sale, maintenance or overhaul agreement and
the
50
Loan Documents, none of which liabilities (except (a) the purchase
price in respect of an Eligible Asset, (b) liabilities in respect of
Approved Improvements and (c) those arising under the Loan Documents
and the Eligible Leases) are material to the Borrowers taken as a
whole.
6.10. Litigation. Except as set forth in Schedule 6.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of any Borrower, threatened by or against any Guarantor, any Borrower
or any Subsidiary of Bermuda Holding 1 Ltd or of AI 3 Ltd or any other Credit
Party or affecting any such Person or any properties or rights of any such
Person, which could reasonably be likely to have a Material Adverse Effect;
6.11. Federal Regulations. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used (a) for "buying" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in effect
for any purpose that violates the provisions of the Regulations of the Board or
(b) for any purpose that violates the provisions of the Regulations of the
Board. If requested by any Lender or the Agent, the Borrowers will furnish to
the Agent and each Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
6.12. Investment Company. No Credit Party is an "investment company,"
or "promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
Section 80a-1, et seq.). The application of the proceeds of the Loans and
repayment thereof by each Borrower and the performance by each Borrower and the
other Credit Parties of the transactions contemplated by the Loan Documents will
not violate any provision of said Act, or any rule, regulation or order issued
by the Securities and Exchange Commission thereunder, in each case as in effect
on the date hereof;
6.13. Patents, Etc. Each Borrower, each Guarantor and each other
Credit Party owns or has the right to use, under valid license agreements or
otherwise, all material patents, licenses, franchises, trademarks, trademark
rights, trade names, trade name rights, trade secrets and copyrights necessary
to or used in the conduct of its businesses as now conducted and as contemplated
by the Loan Documents, without known conflict with any patent, license,
franchise, trademark, trade secret, trade name, copyright, other proprietary
right of any other Person;
6.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of any Parent Guarantor, any Borrower or any other Credit Party in accordance
with or pursuant to any Loan Document nor (b) any written statement,
representation, or warranty provided to the Agent in connection with the
negotiation or preparation of the Loan Documents contains any misrepresentation
or untrue statement of material fact or omits to state a material fact
necessary, in light of the circumstance under which it was made, in order to
make any such warranty, representation or statement contained therein not
misleading;
51
6.15. No Consents, Etc. Neither the respective businesses or
properties of the Credit Parties or any Subsidiary, nor any relationship among
the Credit Parties or any Subsidiary and any other Person, nor any circumstance
in connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Credit Party as a
condition to the execution, delivery and performance of, or consummation of the
transactions contemplated by the Loan Documents, which, if not obtained or
effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or qualification
has been duly obtained or effected, as the case may be;
6.16. Employee Benefit Plans.
(a) Neither any Guarantor nor any Borrower or any of their respective
Subsidiaries has or has ever sponsored any Employee Benefit Plan, any
Single Employer Plan or any Multiemployer Plan, or had any obligation to
fund any such plan;
(b) Neither any Borrower nor any ERISA Affiliate has incurred any
"accumulated funding deficiency" within the meaning of Section 412 of the
Code or Section 302 of ERISA with respect to any Single Employer Plan,
whether or not waived, during the six-year period prior to the date on
which this representation is made or deemed made or any other liability to
the PBGC which remains outstanding, in each case, in an amount that would
be reasonably likely to have a Material Adverse Effect;
(c) No Termination Event has occurred during the six-year period prior
to the date on which this representation is made or deemed made or is
reasonably expected to occur with respect to any Single Employer Plan or
Multiemployer Plan, neither any Borrower nor any ERISA Affiliate has
incurred any unpaid withdrawal liability with respect to any Multiemployer
Plan that, in each case, could be reasonably expected to have a Material
Adverse Effect; and
(d) The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Single Employer
Plan) did not, as of the last annual valuation date prior to the date on
which this representation is made or deemed made for each such plan, exceed
the then current value of the assets of such Single Employer Plan allocable
to such benefits by a material amount;
6.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder;
6.18. Environmental Laws. Except as listed on Schedule 6.18, each
Borrower, each Guarantor and each Subsidiary of Bermuda Holding 1 Ltd or of AI 3
Ltd is in compliance with all applicable Environmental Laws and has been issued
and currently maintains all required federal, state and local permits, licenses,
certificates and approvals. Except as listed on Schedule 6.18, neither any
Borrower, any Guarantor nor any Subsidiary of Bermuda Holding 1 Ltd or of AI 3
Ltd has been notified of any pending or threatened action, suit, proceeding or
investigation, and neither any Borrower, any Guarantor nor any Subsidiary of
Bermuda Holding 1 Ltd or of AI
52
3 Ltd is aware of any facts, which (a) calls into question, or could reasonably
be expected to call into question, compliance by any Borrower, any Guarantor or
any Subsidiary of Bermuda Holding 1 Ltd or of AI 3 Ltd with any Environmental
Laws, (b) seeks, or could reasonably be expected to form the basis of a
meritorious proceeding, to suspend, revoke or terminate any license, permit or
approval necessary for the operation of any Borrower's, any Guarantor's or any
of Bermuda Holding 1 Ltd's or of AI 3 Ltd's Subsidiary's business or facilities
or for the generation, handling, storage, treatment or disposal of any Hazardous
Materials, or (c) seeks to cause, or could reasonably be expected to form the
basis of a meritorious proceeding to cause, any property of any Borrower, any
Guarantor or any Subsidiary of Bermuda Holding 1 Ltd or of AI 3 Ltd or other
Credit Party to be subject to any restrictions on ownership, use, occupancy or
transferability under any Environmental Law;
6.19. Employment Matters. No Borrower, Guarantor or Credit Party has
or has ever had any employee other than officers thereof;
6.20. Taxes. AI3 Ltd. is eligible for the benefits of the Income Tax
Treaty between the United States of America and Ireland. No Borrower, to its
knowledge, as of the date of this Agreement, is required to withhold or deduct
any Taxes imposed by any non-U.S. Governmental Authority, in an amount or to an
extent that would be reasonably expected to have a Material Adverse Effect; and
6.21. Parent Guarantor Representations and Warranties. On the Closing
Date the Representations and Warranties of each Parent Guarantor contained in
their respective Parent Guarantor Guaranty are true, correct and complete in all
material respects when made or deemed made.
ARTICLE VII
AFFIRMATIVE COVENANTS
Unless the Required Lenders shall otherwise consent in writing,
Bermuda Holding 2 Ltd., AI 3 Ltd. and each Borrower will, and where applicable
will cause each Parent Guarantor, each other Guarantor and each Subsidiary (if
any) to:
7.1. Financial Reports, Etc.
(a) As soon as practical and in any event within 90 days after the end
of each Fiscal Year, deliver or cause to be delivered to the Agent and each
Lender audited consolidated balance sheets of Parent and its Subsidiaries
as at the end of such Fiscal Year, and the notes thereto (if any), and the
relating audited consolidated statements of income, changes in
stockholders' (or members') equity and cash flows, and the respective notes
thereto (if any), for such Fiscal Year, setting forth comparative financial
statements for the preceding year (if applicable), reported on by Ernst &
Young LLP or other independent certified public accountants of nationally
recognized standing all prepared in accordance with GAAP and accompanied by
a certificate of an Authorized Representative, which certificate shall be
in the form of Exhibit H;
53
(b) as soon as practical and in any event within 60 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender consolidated income statements of
Parent and its Subsidiaries prepared in accordance with GAAP and
accompanied by a certificate of an Authorized Representative to the effect
that such financial statements present fairly, in all material respects,
the financial position of Parent and its Subsidiaries and of each of the
Borrowers and their respective Subsidiaries as of the end of such fiscal
period and the results of their operations for such fiscal period;
(c) at any time after March 31, 2006, as soon as practical and in any
event within 10 days after the end of each calendar month with respect to a
draft (for the Agent) and within 30 days after the end of each calendar
month with respect to a final report (for the Agent and each Lender),
deliver or cause to be delivered as set forth above a Monthly Servicer and
Covenant Compliance Report, providing information about the Financed
Eligible Asset, and stating that each Borrower is in compliance with the
covenants and terms hereof and that no Default or Event of Default has
occurred and is continuing, in each case as of the end of such month, which
certificate shall be in the form of Exhibit P;
(d) promptly upon their becoming available to Bermuda Holding 2 Ltd.,
AI 3 Ltd. or any Borrower, such Person shall deliver to the Agent and each
Lender a copy of (i) all regular or special reports or effective
registration statements which Bermuda Holding 2 Ltd., AI 3 Ltd., any
Borrower, any Guarantor or any Subsidiary shall file with the Securities
and Exchange Commission (or any successor thereto) or any securities
exchange, (ii) any proxy statement distributed by Bermuda Holding 2 Ltd.,
AI 3 Ltd., any Borrower, any Guarantor or any Subsidiary to its
shareholders, bondholders or the financial community in general, and (iii)
any management letter or other report submitted to any Borrower, any
Guarantor or any Subsidiary by independent accountants in connection with
any annual, interim or special audit of any Borrower or any Subsidiary; and
(e) promptly, from time to time, deliver or cause to be delivered to
the Agent and each Lender such other information regarding Bermuda Holding
2 Ltd.'s, AI 3 Ltd.'s, any Borrower's, any Guarantor's and any Subsidiary's
operations, business affairs and financial condition as the Agent or such
Lender may reasonably request.
Subject to Section 11.15, the Agent and the Lenders are hereby authorized to
deliver a copy of any such financial or other information delivered hereunder to
the Lenders (or any affiliate of any Lender) or to the Agent, to any
Governmental Authority having jurisdiction over the Agent or any of the Lenders
pursuant to any written request therefor or in the ordinary course of
examination of loan files, or to any other Person who shall acquire or consider
the assignment of, or acquisition of any participation interest in, any
Obligation permitted by this Agreement;
7.2. Maintain Properties. If a Financed Eligible Asset is not subject
to an Eligible Lease, maintain and make repairs to such Financed Eligible Asset
in compliance with the requirements set forth in Section 3.4 of the Security
Agreement; and each Borrower, Guarantor and Subsidiary shall maintain all other
properties necessary to its operations in good working order and condition, make
all needed repairs, replacements and renewals to such other
54
properties, and maintain free from Liens all trademarks, trade names, patents,
copyrights, trade secrets, know-how, and other intellectual property and
proprietary information (or adequate licenses thereto), in each case as are
reasonably necessary to conduct its business as currently conducted or as
contemplated hereby, all in accordance with customary and prudent business
practices;
7.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 8.7, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary;
7.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and timely pay
all Taxes, assessments, governmental charges, claims for labor, supplies, rent
and any other obligation which, if unpaid, would become a Lien other than a
Permitted Lien against any of its properties;
7.5. Insurance. Maintain or cause to be maintained with respect to
each Financed Eligible Asset and all other Collateral the insurance described on
Exhibit L and cause the Agent for itself and on behalf of the Lenders to be
named additional insureds (in the case of any liability insurance) and loss
payee or contract party (in the case of any hull insurance) on such insurance
and on any and all other insurance maintained by any Credit Party with respect
to such Financed Aircraft or provided by or on behalf of a lessee or other
Person pursuant to the terms of any Lease;
7.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements;
7.7. Right of Inspection. Permit any Person designated by any Lender
or the Agent to visit and inspect any Financed Eligible Asset, or any other
property, corporate book or financial report of any Borrower or any Subsidiary
and to discuss its affairs, finances and accounts with its principal officers
and independent certified public accountants; and cause each Eligible Carrier to
permit any Person designated by any Lender or any Agent to inspect any Financed
Eligible Asset, all at reasonable times, at reasonable intervals and with
reasonable prior notice, subject to any restriction on inspection contained in
an Eligible Lease with respect to such Financed Eligible Asset, provided that
notwithstanding any such Lease, (a) any Person designated by a Lender or the
Agent may inspect such Financed Eligible Asset at any reasonable time upon an
event of default under such Lease, and (b) upon any Event of Default, the
Applicable Borrower will use its best efforts to cause the Applicable Carrier
(and any other Person) to permit any Person designated by a Lender or the Agent
to inspect such Financed Eligible Asset at any time;
55
7.8. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business;
7.9. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents;
7.10. Covenants Extending to Other Persons. Cause each Guarantor and
each of their respective Subsidiaries (if any) to do with respect to itself, its
business and its assets, each of the things required of any Borrower in Sections
7.2 through 7.9, and 7.18 inclusive;
7.11. Officer's Knowledge of Default. Upon any officer of any
Guarantor or any Borrower obtaining knowledge of any Default or Event of Default
hereunder or under any other obligation of any Borrower or any Subsidiary or
other Credit Party to any Lender, or any event, development or occurrence which
could reasonably be expected to have a Material Adverse Effect, cause such
officer or an Authorized Representative to promptly notify the Agent of the
nature thereof, the period of existence thereof, and what action such Borrower
or such Subsidiary or other Credit Party proposes to take with respect thereto;
7.12. Suits or Other Proceedings. Upon any officer of any Guarantor or
any Borrower obtaining knowledge of any action, suit, litigation, investigation,
or other proceeding being instituted or threatened against any Borrower or any
Subsidiary or other Credit Party, in any court or before any Governmental
Authority, or any attachment, levy, execution or other process being instituted
against any assets of any Borrower or any Subsidiary or other Credit Party,
making a claim or claims in an aggregate amount greater than $250,000, exclusive
of punitive damages, not otherwise covered by insurance or that would otherwise
be reasonably expected to have a Material Adverse Effect, promptly deliver to
the Agent written notice thereof stating the nature and status of such action,
suit, litigation, investigation, dispute, proceeding, levy, execution or other
process;
7.13. Notice of Environmental Complaint or Condition. Promptly provide
to the Agent true, accurate and complete copies of any and all notices,
complaints, orders, directives, claims or citations received by any Borrower,
any Guarantor or any Subsidiary relating to any (a) violation or alleged
violation by any Borrower, any Guarantor or any Subsidiary of any applicable
Environmental Law; (b) release or threatened release by any Borrower, any
Guarantor or any Subsidiary, or by any Person handling, transporting or
disposing of any Hazardous Material on behalf of any Borrower, any Guarantor or
any Subsidiary, or at any facility or property owned or leased or operated by
any Borrower, any Guarantor or any Subsidiary, of any Hazardous Material, except
where occurring legally pursuant to a permit or license; or (c) liability or
alleged liability of any Borrower, any Guarantor or any Subsidiary for the costs
of cleaning up, removing, remediating or responding to a release of Hazardous
Materials;
7.14. Environmental Compliance. If any Borrower, any Guarantor or any
Subsidiary shall receive any letter, notice, complaint, order, directive, claim
or citation alleging that any Borrower, any Guarantor or any Subsidiary has
violated any Environmental Law, has
56
released any Hazardous Material, or is liable for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials, any
Borrower, any Guarantor and any Subsidiary shall, within the time period
permitted and to the extent required by the applicable Environmental Law or the
Governmental Authority responsible for enforcing such Environmental Law, remove
or remedy, or cause the applicable Subsidiary to remove or remedy, such
violation or release or satisfy such liability;
7.15. Indemnification. Without limiting the generality of Xxxxxxx
00.0, Xxxxxxx Xxxxxxx 0 Xxx., XX 0 Ltd. and each Borrower hereby agrees jointly
and severally to indemnify and hold the Agent and the Lenders, and their
respective officers, directors, employees and agents, harmless from and against
any and all claims, losses, penalties, liabilities, damages and expenses
(including assessment and cleanup costs and reasonable attorneys', consultants'
or other expert fees, expenses and disbursements) arising directly or indirectly
from, out of or by reason of (a) the violation of any Environmental Law by any
Borrower or any Subsidiary or with respect to any property owned, operated or
leased by any Borrower or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of any Borrower or any Subsidiary, or on or
with respect to property owned or leased or operated by any Borrower or any
Subsidiary. The provisions of this Section 7.15 shall survive repayment of the
Obligations and expiration or termination of this Agreement;
7.16. Further Assurances. At the Borrowers' cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents (including any
additional Facility Guaranties or Parent Guarantor Guaranties in connection with
new Guarantors and Parent Guarantors), certificates, financing and continuation
statements, and do and cause to be done such further acts that may be reasonably
necessary or advisable in the reasonable opinion of the Agent to carry out more
effectively the provisions and purposes of this Agreement, the Security
Instruments and the other Loan Documents;
7.17. Hedging Agreements. Subject to Section 8.4, each Borrower or any
Guarantor may, in its sole discretion, maintain Hedging Agreements with a Lender
or a Lender Affiliate in an aggregate notional amount for the Borrowers and
Guarantors not greater than the Total Revolving Credit Agreement;
7.18. Continued Operations. Subject to Section 8.15, continue at all
times to conduct its business and engage principally in the same line or lines
of business substantially as heretofore conducted;
7.19. Maintenance of Eligible Assets; Other Covenants and
Restrictions; Non-Discrimination.
(a) Ensure that any Lease with respect to any Financed Eligible Asset
contains covenants and restrictions regarding the maintenance, alteration,
replacement, pooling, sublease and (in the case of a Lease) return of such
Eligible Asset by the Applicable Carrier, which covenants and restrictions
satisfy the requirements of Schedule 7.19(a) hereto;
57
(b) Promptly and diligently take or cause to be taken all steps which
a prudent international aircraft lessor or financier would reasonably take
in light of all of the relevant circumstances to compel the relevant
Eligible Carrier to comply with the terms of any Lease, or, if applicable
and the Applicable Borrower is entitled to do so, to repossess the
applicable Financed Eligible Asset (and, if a prudent international
aircraft lessor or financier would determine it necessary or desirable, to
de-register and export the same to a safe location) if any failure to
comply with such Lease is not promptly remedied;
7.20. Re-registration of Eligible Assets. Ensure that any Lease with
respect to any Eligible Asset contain covenants and restrictions regarding
re-registration of such Eligible Asset, which covenants and restrictions satisfy
the requirements of the Security Agreement;
7.21. Employee Benefit Plans. Without limiting the generality of
Section 8.9, with reasonable promptness, and in any event within thirty (30)
days after any Borrower knows or has reason to know thereof, give notice to the
Agent of (a) the establishment of any Single Employer Plan (which notice shall
include a copy of such plan), (b) the failure of any Borrower or any ERISA
Affiliate to make a required installment or payment under Section 302 of ERISA
or Section 412 of the Code by the due date; (c) the occurrence of a Termination
Event with respect to any Single Employer Plan or Multiemployer Plan; and (d)
the institution of proceedings or the taking of any other action by the PBGC or
any Borrower or any ERISA Affiliate or any Multiemployer Plan with respect to
the withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan;
7.22. Accounts. Bermuda Holding 2 Ltd., AI 3 Ltd., the Guarantors and
the Borrowers shall establish the Accounts as provided in the Lockbox Agreement
and shall deposit all proceeds (including without limitation rent) from any
Lease of any Financed Eligible Asset to the Accounts designated under the
Lockbox Agreement;
7.23. Eligible Lease; Lessee Notice. Deliver to the Agent promptly
upon execution, any Lease entered into by any Borrower, together with a Lessee
Notice in connection with such Lease, the opinion referred to in Section
5.2(e)(iii) and the evidence referred to in Section 5.2(e)(x); and
ARTICLE VIII
NEGATIVE COVENANTS
Unless the Required Lenders shall otherwise consent in writing,
Bermuda Holding 2 Ltd., AI 3 Ltd. and each Borrower will not, and will cause
each Guarantor and each Subsidiary thereof (if any) not to:
8.1. Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, except for the Acquisition of a Subsidiary as
permitted by Section 8.6;
58
8.2. Capital Expenditures. Make or become committed to make any
Capital Expenditures, except for Capital Expenditures to maintain or purchase
Eligible Assets or in connection with Approved Improvements and Qualified
Conversions;
8.3. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to (a) any property or assets
now owned or hereafter acquired by any Borrower, any Guarantor or any Subsidiary
or (b) any Financed Eligible Asset, except the following (the "Permitted
Liens"):
(i) Liens created under the Security Instruments in favor of the
Agent and the Lenders; and Liens arising under the Eligible Leases in
favor of the Applicable Intermediary (as lessor) or the Applicable
Borrower which Liens in each case have been assigned to the Agent;
(ii) Liens set forth in Schedule 6.7;
(iii) Liens imposed by law for Taxes (A) not yet due or (B) which
are being contested in good faith by appropriate proceedings
diligently conducted, each of which Liens in clause (B) above shall be
fully bonded over, to the reasonable satisfaction of the Agent;
(iv) statutory Liens of landlords and Liens of mechanics,
materialmen and other Liens imposed by law or created in the ordinary
course of business and (i) in existence less than 90 days from the
date of creation thereof for amounts not yet due or (ii) which are
being contested in good faith by appropriate proceedings diligently
conducted, which are inferior in respect of the Collateral to the
Liens conferred under the Security Instruments or have been fully
bonded over to the reasonable satisfaction of the Agent, and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(v) Liens arising out of any judgment or award with respect to
which an appeal or proceeding for review is being prosecuted in good
faith by appropriate proceedings diligently conducted, and with
respect to which a stay of execution is in effect;
(vi) Liens created by the Applicable Carrier under an Eligible
Lease that are not subject to clause (vii) below, which Liens are
created without the knowledge of the Applicable Borrower and are
released or fully bonded over to the reasonable satisfaction of the
Agent within 30 days after the Applicable Borrower has notice or
knowledge of any such Lien;
(vii) with respect to any Lease and the related Eligible Asset,
(i) any "Permitted Liens" (as defined in or the equivalent term in
such Lease Agreement and as agreed to by the Agent) (except a
Permitted Lien that is a Lessor Lien (as defined in or the equivalent
term in such Lease Agreement)), and (ii) any other Lien created by a
Lessee, a sublessee of a Lessee or any Person claiming by or through a
Lessee or sublessee, in each case in this clause (ii) as agreed to by
the Agent; provided, that with respect to Liens of the type listed in
clause (ii), such
59
Lien is being contested in good faith by appropriate proceedings or,
upon the Applicable Borrower receiving notice or knowledge of such
Lien, such Applicable Borrower is diligently and promptly enforcing
the lessor's rights against the Lessee;
(viii) any head lease in respect of any Eligible Asset;
(ix) any Lien from air navigation authority, airport tending,
gate or handling (or similar) charges or levies (A) not yet overdue or
(B) which are being contested in good faith by appropriate
proceedings, each of which Liens in clause (B) above shall be fully
bonded over, to the reasonable satisfaction of the Agent;
(x) Liens securing Indebtedness described in Section 8.4(b);
(xi) Liens securing Indebtedness described in Section 8.4(f);
(xii) Liens granted by a Borrower, Guarantor or any Subsidiary
thereof in favor of a Lender or an Affiliate of a Lender in an
aggregate amount not to exceed $10,000,000 in connection with
Indebtedness permitted under Section 8.4(c).
8.4. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness of Bermuda Holdings 2 Ltd., AI 3 Ltd., any Guarantor or any
Subsidiary thereof, howsoever evidenced, except:
(a) Indebtedness owing to (including guaranties in favor of) the Agent
or any Lender in connection with this Agreement, any Note or other Loan
Document;
(b) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(c) Indebtedness arising from Hedging Agreements permitted under
Section 7.17; provided that the aggregate notional amount of Hedging
Agreements shall not exceed the Total Revolving Credit Commitment;
(d) unsecured intercompany Indebtedness for loans and advances made by
Bermuda Holding 2 Ltd., AI 3 Ltd. or any Beneficial Owner to a Borrower or
a Guarantor, provided that such intercompany Indebtedness is evidenced by a
promissory note or similar written instrument acceptable to the Agent which
provides that such Indebtedness is subordinated to obligations, liabilities
and undertakings of the holder or owner thereof under the Loan Documents on
terms acceptable to the Agent;
(e) Contingent Obligations of Bermuda Holding 2 Ltd., AI 3 Ltd. or any
other Credit Party in support of the obligations of any Credit Party.
(f) Contingent Obligations of any Credit Party in support of any
Subsidiary in connection with the purchase of an Eligible Asset or with an
Eligible Lease pursuant to which such Subsidiary is the lessor; and
60
(g) Indebtedness existing on the date hereof and listed on Schedule
8.4 hereof.
8.5. Transfer of Assets. Sell, lease, transfer or otherwise dispose of
any assets other than (a) leases by Borrowers and Applicable Intermediaries of
Eligible Assets under Eligible Leases, (b) sales by Borrowers and Applicable
Intermediaries of Eligible Assets or all of the beneficial interest or ownership
of a Beneficial Owner or a Borrower, provided that (i) the purchaser of such
Eligible Asset or beneficial interest from a Borrower or Applicable Intermediary
shall have acknowledged receipt of the Applicable Borrower's irrevocable
instruction to pay the sales price for such Eligible Asset or beneficial
interest directly to the Collection Account identified in the Lockbox Agreement
to which the Applicable Borrower is a party, (ii) the net proceeds of such sales
are promptly applied in accordance with Section 2.3(b), and (iii) at the time of
any such sale the requirements of Section 2.13 for release of the respective
Borrower or Guarantor have been satisfied, or (c) Engine swaps, interchange or
pooling arrangements to the extent permitted under any Eligible Lease;
8.6. Subsidiaries; Investments. Own, create or permit to exist any
Subsidiary of Bermuda Holdings 2 Ltd., AI 3 Ltd., any Borrower or any Guarantor
(except that a Guarantor may own beneficial interests in, or (subject to Section
8.4(d)) make advances to, a Borrower or another Guarantor and any Credit Party
may own an Applicable Intermediary), or otherwise purchase, own, invest in or
otherwise acquire, directly or indirectly, any stock or other securities, or
make or permit to exist any interest whatsoever in any other Person or permit to
exist any loans or advances to any Person, other than loans referred to in
Section 8.4(d);
8.7. Merger or Consolidation.
. (a) Consolidate with or merge into any other Person, or (b) permit
any other Person to merge into it, or (c) liquidate, wind-up or dissolve or
sell, transfer or lease or otherwise dispose of all or a substantial part of its
assets without the consent of the Agent, except as permitted by Section 8.5 and
except in the case of a Borrower or Guarantor that simultaneously terminates its
status as a Borrower or Guarantor hereunder in accordance with Section 2.13;
8.8. Transactions with Affiliates. Other than transactions permitted
under Section 8.7, enter into any transaction after the Closing Date, including,
without limitation, the purchase, sale, lease or exchange of property, real or
personal, or the rendering of any service, with any Affiliate of such Person,
except (a) that such Persons may render services to any Parent Guarantor or any
Subsidiary of any Parent Guarantor for compensation at the same rates generally
paid by Persons engaged in the same or similar businesses for the same or
similar services, (b) that any Parent Guarantor or any Subsidiary thereof may
render services to such Persons for compensation at the same rates generally
charged by the Parent Guarantor or such Subsidiary, and (c) in either case in
the ordinary course of business and pursuant to the reasonable requirements of
such Person's business consistent with past practice of such Person and upon
fair and reasonable terms no less favorable to such Person than would be
obtained in a comparable arm's-length transaction with a Person not an
Affiliate;
8.9. Employee Benefit Plans; ERISA Affiliates; Employees. Sponsor any
Employee Benefit Plan or any Multiemployer Plan or agree to have any obligation
to fund any such plan, or hire or retain any employee other than officers
thereof;
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8.10. Fiscal Year. Change its Fiscal Year, or have any fiscal year
other than the Fiscal Year;
8.11. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a transaction
permitted pursuant to Section 8.7;
8.12. Change in Control. Cause, suffer or permit to exist or occur any
Change of Control;
8.13. Negative Pledge Clauses. Bermuda Holdings 2 Ltd, AI 3 Ltd, each
Borrower, and each Eligible Intermediary shall not enter into or cause, suffer
or permit to exist any agreement with any Person other than the Agent and the
Lenders pursuant to this Agreement or any other Loan Documents which prohibits
or limits the ability of such Credit Party to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired; provided that any Eligible Lease may contain such a
prohibition or limitation so long as the prohibition or limitation does not
apply to any Lien granted in favor of the Agent or any Lender pursuant to the
Loan Documents;
8.14. Partnerships. Become a general partner in any general or limited
partnership;
8.15. Business and Operations. Engage in any (i) business or
operations other than the ownership, financing, leasing and sale of Eligible
Aircraft and Eligible Engines or the ownership of a Borrower, a Guarantor or
Eligible Intermediary engaged in such business or operations, or matters
reasonably incidental thereto, or the performance of the Loan Documents,
provided, however, that, except as otherwise provided in Section 2.1(a), no
Borrower that owns or is the Applicable Borrower with respect to any Aircraft or
Engine may own or be the Applicable Borrower with respect to any other Aircraft
or Engine and (ii) business in Bermuda or Ireland other than the performance of
its obligations under the Loan Documents; and
8.16. Ownership, Operation and Leasing of Financed Eligible Assets.
(a) Permit any Person other than a Borrower (or a Beneficial Owner
solely by virtue of its beneficial interest in the respective Borrower) to
own beneficially or of record any Financed Eligible Asset;
(b) Permit any Financed Eligible Asset to be leased, subleased or
chartered to any Person other than the Applicable Carrier or the Applicable
Intermediary, or to be operated by any Person other than the Applicable
Borrower or the Applicable Carrier, except as permitted in the Security
Agreement or any Lease;
(c) Permit any Financed Eligible Asset to be leased to an Eligible
Carrier except under the terms of an Eligible Lease;
(d) Permit any Financed Eligible Asset to be flown into or located in
any country (or part thereof) if as a result thereof such Financed Eligible
Asset would not be covered by insurance;
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8.17. Bank Accounts. Permit any Parent Guarantor, Borrower or other
Credit Party to open or allow to exist any bank accounts for which the aggregate
average daily balance, together with any bank accounts of the other Parent
Guarantors, Borrowers and other Credit Parties, will be in excess of $500,000
unless the Agent is granted a Security Interest in such account by subjecting
such account to a Lockbox Agreement or an Account Control Agreement; provided
that this provision shall not apply to any bank account maintained by any
Subsidiary of the Guarantor on which a Lien is granted to secure Non Recourse
Indebtedness pursuant to the terms of Section 10(b)5 of the Parent Guarantor
Guarantees, so long as such Subsidiary is the obligor of such Indebtedness.
8.18. Representations Regarding Agent and Lenders. Represent or hold
out, or permit any Parent Guarantor, Credit Party or Applicable Carrier to
represent or hold out, the Agent or any Lender as (a) the owner of any Financed
Eligible Asset, (b) carrying goods or passengers on any Financed Aircraft, or
(c) being in any way responsible for any operation of carriage (whether for hire
or reward or gratuitously) which may be undertaken by any Borrower, Guarantor,
Parent Guarantor, Subsidiary or Applicable Carrier; or
8.19. Bermuda Holding 2 Ltd.; AI 3 Ltd. In the case of Bermuda Holding
2 Ltd. and AI 3 Ltd., conduct, transact or otherwise engage in any business or
operations other than those incidental to its voting, equity, beneficial or any
other ownership interests of each Borrower and the performance of the Loan
Documents; or
8.20. Organizational Documents. Amend its Organizational Documents
without the consent of the Lenders and the Collateral Agent (as defined in the
Security Agreement for such Credit Party); or
8.21. Permanent Capital Markets Financing. Enter into a Permanent
Capital Markets Financing that results in the issuance of or transfer to a
Parent Guarantor of Securitization Interests arising out of aircraft financed
pursuant to this Agreement or the Bermuda Holding 1/AI 1 Credit Agreement, nor
permit any Parent Guarantor to enter into such Permanent Capital Markets
Financing unless, with respect to such Securitization Interests, the following
is true:
(a) the Parent or any of its Subsidiaries is permitted to and shall
pledge the Securitization Interests as Collateral hereunder;
(b) the Securitization Interests impose no funding obligations on the
holder thereof;
(c) the Securitization Interests are to be held by a Parent Guarantor
free and clear of all liens, encumbrances, rights or claims of any other
Person; and
(d) the Securitization Interests are not subject to any agreement
(other than the underlying documentation governing the Securitization
Interests) in favor of any Person limiting or restricting the payment of
dividends and other distributions to the holder; or
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8.22. Borrowing Base Covenant. Permit the aggregate principal amount
of Loans outstanding hereunder to exceed 85% of the Borrowing Base (the
"Borrowing Base Covenant").
ARTICLE IX
EVENTS OF DEFAULT AND ACCELERATION
9.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment of the
principal of any Loan or other Obligation, when and as the same shall be
due and payable whether pursuant to any provision of Article II, at
maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment of any
amount of interest on any Loan or other Obligation or of any fees or other
amounts payable to any of the Lenders or the Agent within three (3)
Business Days after the date on which the same shall be due and payable; or
(c) if default shall be made in the performance or observance of any
covenant set forth in Section 7.5, 7.11, 7.12, 7.23 or Article VIII
hereunder or set forth in Sections 9(h) or (i) or Section 10 of any Parent
Guarantor Guaranty; or
(d) if a default shall be made in the performance or observance of, or
shall occur under, any covenant, agreement or provision contained in this
Agreement (other than as described in clauses (a), (b) or (c) above), or if
a default shall be made in the performance or observance of, or shall occur
under, any covenant, agreement or provision contained in any of the other
Loan Documents (beyond any applicable grace period, if any, contained
therein) or in any instrument or document evidencing or creating any
obligation, guaranty, or Lien in favor of the Agent (acting in any
capacity) or any of the Lenders or delivered to the Agent (acting in any
capacity) or any of the Lenders in connection with or pursuant to this
Agreement or any of the Obligations, and such default shall continue for 30
or more days after the earlier of receipt of notice of such default to an
Authorized Representative from the Agent (acting in any capacity) or an
officer of any Borrower becomes aware of such default, or if any Loan
Document ceases to be in full force and effect (other than by reason of any
action by the Agent (acting in any capacity)), or if without the written
consent of the Lenders, this Agreement or any other Loan Document shall be
disaffirmed or shall terminate, be terminable or be terminated or become
void or unenforceable for any reason whatsoever (other than in accordance
with its terms in the absence of default or by reason of any action by the
Lenders or the Agent (acting in any capacity)); or
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(e) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with respect to
any Indebtedness or Rate Hedging Obligation (other than the Loans and other
Obligations) of Bermuda Holding 2 Ltd., AI 3 Ltd., any Borrower or any of
its Subsidiaries, or (ii) a default, which is not waived, in the
performance, observance or fulfillment of any term or covenant contained in
any agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by Bermuda Holding 2 Ltd., AI 3 Ltd., any
Borrower or any of its Subsidiaries, or (iii) any other event of default as
specified in any agreement or instrument under or pursuant to which any
such Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by Bermuda Holding 2 Ltd., AI 3 Ltd., any
Borrower or any of its Subsidiaries, and such default or event of default
under clause (i), (ii) or (iii) above shall continue for more than the
period of grace, if any, therein specified, or such default or event of
default under clause (i), (ii) or (iii) above shall permit the holder of
any such Indebtedness (or any agent or trustee acting on behalf of one or
more holders) to accelerate the maturity thereof; or
(f) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with respect to
any Indebtedness or Rate Hedging Obligation of the Parent or any Parent
Guarantor, or (ii) a default, which is not waived, in the performance,
observance or fulfillment of any term or covenant contained in any
agreement or instrument under or pursuant to which any such Indebtedness or
Rate Hedging Obligation may have been issued, created, assumed, guaranteed
or secured by the Parent or any Parent Guarantor, or (iii) any other event
of default as specified in any agreement or instrument under or pursuant to
which any such Indebtedness or Rate Hedging Obligation may have been
issued, created, assumed, guaranteed or secured by the Parent or any Parent
Guarantor, and such default or event of default under clause (i), (ii) or
(iii) above shall continue for more than the period of grace, if any,
therein specified, or such default or event of default under clause (i),
(ii) or (iii) above shall permit the holder of any such Indebtedness (or
any agent or trustee acting on behalf of one or more holders) to accelerate
the maturity thereof, in each case with respect to (A) Indebtedness the
outstanding principal, interest, premium or other amount of which exceeds
in the aggregate $2,500,000 or (B) Rate Hedging Obligations, termination or
liquidation payments aggregating $2,500,000 are due; or
(g) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report or
statement at any time furnished to the Agent (acting in any capacity) or
any Lender by or on behalf of any Borrower, any Parent Guarantor or any
other Credit Party pursuant to or in connection with any Loan Document, or
otherwise, shall be false or misleading in any material respect when given;
or
(h) if any of the Parent Guarantors, Bermuda Holding 2 Ltd., AI 3
Ltd., the Borrowers, the Subsidiaries and the other Credit Parties shall be
unable to pay its debts generally as they become due; or any of the Parent
Guarantors, Bermuda Holding 2 Ltd., AI 3 Ltd., the Borrowers, the
Subsidiaries and the other Credit Parties shall file a petition to take
advantage of any insolvency statute; make an assignment for the benefit of
its
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creditors; commence a proceeding for the appointment of a receiver,
trustee, examiner, liquidator or conservator of itself or of the whole or
any substantial part of its property; file a petition or answer seeking
liquidation, reorganization, examination or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or statute;
or
(i) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, examiner,
liquidator or conservator of any of the Parent Guarantors, Bermuda Holding
2 Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and the other Credit
Parties or of the whole or any substantial part of any such Person's
properties and such order, judgment or decree continues unstayed and in
effect for a period of sixty (60) days, or approve a petition filed against
any of the Parent Guarantors, Bermuda Holding 2 Ltd., AI 3 Ltd., the
Borrowers, the Subsidiaries and the other Credit Parties seeking
liquidation, reorganization, examination or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state, which petition is not dismissed
within sixty (60) days; or if, under the provisions of any other law for
the relief or aid of debtors, a court of competent jurisdiction shall
assume custody or control of any of the Parent Guarantors, Bermuda Holding
2 Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and the other Credit
Parties or of the whole or any substantial part of any such Person's
properties, which control is not relinquished within sixty (60) days; or if
there is commenced against the any of the Parent Guarantors, Bermuda
Holding 2 Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and the other
Credit Parties any proceeding or petition seeking reorganization,
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state which proceeding or petition remains undismissed for a period of
sixty (60) days; or if the any of the Parent Guarantors, Bermuda Holding 2
Ltd., AI 3 Ltd., the Borrowers, the Subsidiaries and the other Credit
Parties takes any action to indicate its consent to or approval of any such
proceeding or petition; or
(j) if any Borrower, any of its Subsidiaries or any Parent Guarantor
shall, other than in the ordinary course of business, suspend all or any
part of its operations material to the conduct of its business of the
Parent and its Subsidiaries taken as a whole for a period of more than 60
day; or
(k) if this Agreement or any other Loan Document shall for any reason
not be, or be asserted by any Parent Guarantor, any Borrower or any other
Credit Party or Subsidiary not to be, a legal, valid and binding obligation
of any Parent Guarantor, any Borrower or any Credit Party (as the case may
be) enforceable in accordance with its terms; or
(l) if any Lien of the Agent pursuant to any Loan Document shall for
any reason not be, or be asserted by any Parent Guarantor, any Borrower or
any other Credit Party or Subsidiary not to be a valid, first priority
perfected Lien on the Collateral identified therein (except to the extent
that such Lien is not required hereunder or under the Security Agreement to
be a valid, first priority perfected Lien on such Collateral), subject to
no other Liens except Permitted Liens; or
66
(m) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Employee Benefit Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Single Employer Plan or any Lien in favor of the PBGC or a
Single Employer Plan shall arise on the assets of any Borrower or any ERISA
Affiliate, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is likely to result in the termination of such Single Employer Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) any Borrower or any ERISA
Affiliate shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Employee Benefit
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall continue to exist and not have been cured or
waived,
(A) either or both of the following actions may be taken: (i) the
Agent, with the consent of the Required Lenders, may, and at the
direction of the Required Lenders shall, declare any obligation of the
Lenders to make further Loans terminated, whereupon the obligation of
each Lender to make further Loans hereunder shall terminate
immediately, and (ii) the Agent shall at the direction of the Required
Lenders, at their option, declare by notice to the Borrowers any or
all of the Obligations to be immediately due and payable, and the
same, including all interest accrued thereon and all other obligations
of any Borrower to the Agent and the Lenders, shall forthwith become
immediately due and payable without presentment, demand, protest,
notice or other formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any instrument
evidencing the Obligations to the contrary notwithstanding; provided,
however, that notwithstanding the above, if there shall occur an Event
of Default under clause (g) or (h) above, then the obligation of the
Lenders to make Loans hereunder shall automatically terminate and any
and all of the Obligations shall be immediately due and payable
without the necessity of any action by the Agent or the Required
Lenders or notice to the Agent or the Lenders;
(B) each Borrower shall, upon demand of the Agent or the Required
Lenders, promptly cause to be performed at Borrowers' expense by
independent certified public accountants acceptable to the Agent an
audit of all Financed Eligible Asset; and
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(C) the Agent and each of the Lenders shall have all of the
rights and remedies available under the Loan Documents or under any
applicable law, including without limitation all of the rights and
remedies of a secured party under any applicable Uniform Commercial
Code, the FAA Act, the Convention or any other applicable law.
9.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
9.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
9.4. No Waiver. No course of dealing between any Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
9.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Loans has been accelerated pursuant to
Article IX hereof, all payments received by the Agent hereunder, in respect of
any principal of or interest on the Obligations or any other amounts payable by
any Borrower hereunder, shall be applied by the Agent in the following order (or
in such manner as the Required Lenders may determine):
(a) amounts due to the Lenders pursuant to Sections 2.10 and 11.5;
(b) amounts due to the Agent pursuant to Section 10.8;
(c) payments of interest on Loans, to be applied for the ratable
benefit of the Lenders and amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Hedging Agreement with any
of the Lenders on a pro rata basis according to the amounts owed;
(d) payments of principal of Loans, to be applied for the ratable
benefit of the Lenders;
(e) amounts due to the Lenders pursuant to Sections 7.15 and 11.9;
(f) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders;
and
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(g) any surplus remaining after application as provided for herein,
to any Borrower or otherwise as may be required by applicable law.
9.6. Activities of Eligible Carriers. Notwithstanding anything
contained in this Agreement or any other Loan Document, the Credit Parties shall
not be deemed to be in breach of their respective obligations hereunder or
thereunder with respect to the care, maintenance, alteration, possession,
return, replacement, pooling, subleasing, use or operation of any Financed
Eligible Asset or any part thereof subject to an Eligible Lease by virtue of a
default by the Applicable Carrier under such Eligible Lease so long as each of
the following conditions is satisfied:
(a) such default by the Applicable Carrier is not within the control
of any Credit Party;
(b) the Credit Parties are in compliance with Section 7.19; and
(c) such default does not relate to any use or location of an
Eligible Asset in any jurisdiction that constitutes an Event of Default
hereunder, any failure to make any payment required by this Agreement or
any other Loan Document when due hereunder or thereunder, or any failure to
maintain any insurance required under this Agreement or any other Loan
Document, any failure to maintain perfection of the Agent's Lien on any
Collateral.
ARTICLE X
THE AGENT
10.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents, as "Mortgagee" under each Security
Agreement and as "Security Agent" under each Lockbox Agreement (references in
this Article X to the term "Agent" being deemed to include as well such other
capacities), with such powers and discretion as are specifically delegated to
the Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 10.5 and the first sentence of
Section 10.6 hereof shall include its affiliates and its own and its affiliates'
officers, directors, employees, and agents):
(a) shall not have any duties or responsibilities except those
expressly set forth in the Loan Documents and shall not be a trustee or
fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made in or
in connection with any Loan Document or any certificate or other document
referred to or provided for in, or received by any of them under, any Loan
Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Loan Document, or any other document
referred to or provided for therein or for any failure by any Credit Party
or any other Person to perform any of its obligations thereunder;
69
(c) shall not be responsible for or have any duty to ascertain,
inquire into, or verify the performance or observance of any covenants or
agreements by any Credit Party or the satisfaction of any condition or to
inspect the property (including the books and records) of any Credit Party
or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted to be
taken by it under or in connection with any Loan Document, except for its
own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
10.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or facsimile) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Credit Party), independent accountants, and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 11.1 hereof. As to any matters not expressly provided for by the Loan
Documents, the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that the Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to any
Loan Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
10.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or a Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
10.4. Rights as Lender. With respect to its Revolving Credit
Commitment and the Loans made by it, JPMCB (and any successor acting as Agent)
in its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may
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exercise the same as though it were not acting as the Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. The Agent and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Credit Party or any of its
Subsidiaries or affiliates as if it were not acting as Agent, and JPMCB (and any
successor acting as Agent) and its affiliates may accept fees and other
consideration from any Credit Party or any of its Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.5. Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed under Section 11.9 hereof, but without limiting the
obligations of any Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable attorneys' fees), or disbursements of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against
the Agent (including by any Lender) in any way relating to or arising out of any
Loan Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Loan Document; provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs or expenses payable by any
Borrower under Section 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by any Borrower. The agreements contained
in this Section 10.5 shall survive payment in full of the Loans and all other
amounts payable under this Agreement.
10.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Credit Parties and their Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Credit Party or any of its Subsidiaries or affiliates that may come into the
possession of the Agent or any of its affiliates.
10.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent, subject (so
long as no Default or Event of Default has occurred and is continuing) to the
written consent of an Authorized Representative, which consent shall not be
unreasonably withheld. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent which
shall be a commercial bank organized
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under the laws of the United States of America having combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article X shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
10.8. Fees. The Borrowers agree, jointly and severally, to pay to the
Agent, for its individual account, an Agent's fee as from time to time agreed to
by any Borrower and the Agent in writing.
ARTICLE XI
MISCELLANEOUS
11.1. Assignments and Participations. (a) Each Lender may assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Loans, its Note, and its Revolving Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least
equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement; and
(iv) the parties to such assignment shall execute and deliver to
the Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit B hereto, together with any Note subject to such assignment
and a processing fee of $3,500 (which amount shall not be payable by
any Borrower);
(v) except in the case of an assignment to another Lender, any
assignment of all or any portion of the Revolving Credit Commitment
shall require the consent of the Agent and, unless a Default or Event
of Default has occurred and is continuing, an Authorized
Representative, such consent in each case not to be unreasonably
withheld;
(vi) neither any Borrower nor Bermuda Holding 2 Ltd. nor AI 3
Ltd. shall incur any greater expense or liabilities (including,
without limitation, indemnities and increased costs (other than with
respect to taxes, which shall be governed by the provisions of Section
4.6 hereof)) than it would have incurred had such assignment not taken
place; and
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(vii) none of the Joint Lead Arrangers shall assign any portion
of its Loans or Revolving Credit Commitment or sell any participation
therein unless, if after giving effect to such assignment or sale of a
participation and until the earlier of (A) a Default or Event of
Default shall have occurred and be continuing and (B) April 28. 2006,
the Loans held by, and the percentage of Revolving Credit Commitments
of, such Joint Lead Arrangers, shall be less than $85,000,000, such
Joint Lead Arranger (the "Initiating JLA") (x) shall have delivered
five Business Days' prior written notice of such assignment or
participation to the other Joint Lead Arrangers (the "Participating
JLAs") and (y) if, and to the extent, requested by either of the
Participating JLAs after receipt of such notice, shall have made
arrangements with the proposed transferee to permit such Participating
JLA to participate in such assignment or participation on the same
terms as the Initiating JLA up to an amount equal to:
(A) if immediately prior to such assignment or
participation, the Loans held by and the Total Revolving
Commitment of the Initiating JLA is equal to or less than
$85,000,000, the amount of the Loans held by, and the Total
Revolving Commitment of, the Initiating JLA that the Initiating
JLA then intends to assign or participate to the transferee
divided by three; or
(B) if immediately prior to such assignment or participation
the Loans held by, and the Total Revolving Commitment of, the
Initiating JLA is greater than $85,000,000, the amount of the
Loans held by, and the Total Revolving Commitment of, the
Initiating JLA that the Initiating JLA then intends to assign or
participate to the transferee (less the portion thereof equal to
the amount by which the Loans held by and the Total Revolving
Commitment of the Initiating JLA exceeds $85,000,000) divided by
three.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrowers shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is a Non-U.S.
Lender, it shall deliver to the Borrowers and the Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section 4.6.
(b) The Agent shall maintain at its address referred to in Section
11.2 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitment of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
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purposes of this Agreement. The Register shall be available for inspection
by any Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit B
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under
this Agreement (including all or a portion of its Revolving Credit
Commitment or its Loans); provided, however, that (i) such Lender s
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Article IV and
the right of set-off contained in Section 11.3, (iv) neither any Borrower
nor Bermuda Holding 2 Ltd. nor AI 3 Ltd. shall have any greater obligation
to a participant than it would have had to such Lender in the absence of
the existence of such participant and (v) each Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain
the sole right to enforce the obligations of any Borrower relating to its
Loans and to approve any amendment, modification, or waiver of any
provision of this Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at which interest
or fees are payable on such Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on such Loans,
releasing all or substantially all of the Collateral (except for a release
of Collateral in accordance with Section 2.13), releasing any Guarantor
(except for a release of a Guarantor in accordance with Section 2.13), or
extending or increasing its Revolving Credit Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its
Loans to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(f) Any Lender may furnish any information concerning any Borrower or
any of its Subsidiaries in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.15.
11.2. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid by certified or registered
74
mail, return receipt requested, or, in the case of telecopy notice, when
received, addressed as follows in the case of Bermuda Holding 2 Ltd., AI 3 Ltd.,
the Borrowers and the Agent, and as set forth in an administrative questionnaire
delivered to the Agent in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto
(a) if to Bermuda Holding 2 Ltd. or any Borrower (or, in connection
with notice of service of process with respect to any Credit Party):
to Holdings or such Borrower (or such Credit Party, as
applicable)
c/o Aircastle Advisor LLC 000
Xxxxx Xxxxxxxx Xxxxx - Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Lease Management
E-Mail: xxxxxxxxxxxxxxx@xxxxxxxxxxxx.xxx
Facsimile Number: (000) 000-0000
Confirmation Number: (000) 000-0000
(b) if to AI 3 Ltd. or any Borrower organized under the laws of
Ireland:
c/o Aircastle Advisor (Ireland) Limited
Xxxxxxxxx Xxxxxxxx Xxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxx
Telephone: 000-000-0-000-0000
Facsimile: 011-353-1-877-2750
with a copy to:
Aircastle Advisor LLC
000 Xxxxx Xxxxxxxx Xxxxx - Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Lease Management
E-Mail: xxxxxxxxxxxxxxx@xxxxxxxxxxxx.xxx
Facsimile Number: (000) 000-0000
Confirmation Number: (000) 000-0000
(c) if to the Agent:
JPMorgan Chase Bank, N.A.
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: Xxxxxxx.x.xxxx@xxxxxxxx.xxx
with a copy to:
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JPMorgan Chase Bank, N.A
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: Xxxxx.xxxxxxx@xxxxxxxx.xxx
(d) if to any other Credit Party, at the address set forth on the
signature page of the Facility Guaranty or Security Instrument executed by
such Credit Party, as the case may be.
11.3. Right of Set-off; Adjustments.
(a) Upon the occurrence and during the continuance of any Event of
Default, each Lender (and each of its affiliates) is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Lender (or any of its affiliates) to or for the credit or the
account of any Borrower against any and all of the obligations of any
Borrower now or hereafter existing under this Agreement and the Note held
by such Lender, irrespective of whether such Lender shall have made any
demand under this Agreement or such Note and although such obligations may
be unmatured. Each Lender agrees promptly to notify the applicable Borrower
after any such set-off and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity
of such set-off and application. The rights of each Lender under this
Section 11.3 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time receive
any payment of all or part of the Loans owing to it, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans owing to it, or interest thereon, such
benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans
owing to it, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefitted Lender, such purchase shall be rescinded,
and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 11.3 may,
to the fullest extent permitted by law, exercise all of its rights of
payment (including the right of set-off) with respect to such participation
as fully as if such Person were the direct creditor of the Borrowers in the
amount of such participation.
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11.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the execution and delivery to the Lenders of this Agreement and any Notes and
shall continue in full force and effect so long as any of Obligations remain
outstanding or any Lender has any Loan hereunder or any Borrower has continuing
obligations hereunder unless otherwise provided herein. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party and all
covenants, provisions and agreements by or on behalf of any Borrower which are
contained in the Loan Documents shall inure to the benefit of the successors and
permitted assigns of the Lenders or any of them.
11.5. Expenses. Bermuda Holding 2 Ltd., AI 3 Ltd. and each Borrower
agree, jointly and severally, to pay on demand (subject, in the case of
preparation, execution, delivery and administration costs, to the Fee Letter),
all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification, and amendment of
this Agreement, the other Loan Documents, subject to any cap that may have
otherwise been agreed, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Agent (excluding the cost of internal counsel) with respect thereto and with
respect to advising the Agent as to its rights and responsibilities under the
Loan Documents. Bermuda Holding 2 Ltd., AI 3 Ltd. and each Borrower further
agree, jointly and severally, to pay on demand all costs and expenses of the
Agent and the Lenders, if any (including, without limitation, reasonable
external attorneys' fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.
11.6. Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.6. The
Required Lenders and each Credit Party or Parent Guarantor party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the
Agent and each Credit Party or Parent Guarantor party to the relevant Loan
Document may, from time to time, (a) enter into written amendments, supplements
or modifications hereto and to the other Loan Documents for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Loan Parties or Parent
Guarantors hereunder or thereunder or (b) waive, on such terms and conditions as
the Required Lenders or the Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) forgive the principal amount or extend the final scheduled date of
maturity of any Loan, reduce the stated rate of any interest or fee payable
hereunder (except that any amendment or modification of defined terms used in
the financial covenants in this Agreement shall not constitute a reduction in
the rate of interest or fees for purposes of this clause (i)) or extend the
scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender's Revolving Credit Commitment, in each case
without the written consent of each Lender directly affected thereby; (ii)
eliminate or reduce the voting rights of any Lender under this Section 11.6
without the written consent of such Lender; (iii) reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by Bermuda Holding 2 Ltd., AI 3 Ltd. or
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any Borrower of any of their respective rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release all or substantially all of the Parent Guarantors or
Guarantors from their obligations under the Parent Guarantor Guarantee or
various Facility Guarantees, in the case of clauses (i) through (iii) without
the written consent of all Lenders; or (iv) amend, modify or waive any provision
of Article X without the written consent of the Agent. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Credit Parties, the Parent Guarantors, the
Lenders, the Agent and all future holders of the Loans. In the case of any
waiver, the Credit Parties, the Parent Guarantors, the Lenders and the Agent
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon;
No notice to or demand on any Borrower in any case shall entitle such
Borrower or any other Borrower to any other or further notice or demand in
similar or other circumstances, except as otherwise expressly provided herein.
No delay or omission on any Lender's or the Agent's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any Default or Event of Default.
11.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
11.8. Return of Funds. If after receipt of any payment of all or any
part of the Obligations, any Lender is for any reason compelled to surrender
such payment to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of trust funds or
for any other reason, this Agreement shall continue in full force and each
Borrower, jointly and severally, shall be liable to, and shall indemnify and
hold the Agent or such Lender harmless for, the amount of such payment
surrendered until the Agent or such Lender shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Agent or the Lenders in reliance upon such payment, and any such contrary
action so taken shall be without prejudice to the Agent or the Lenders' rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable.
11.9. Indemnification; Limitation of Liability.
(a) Bermuda Holding 2 Ltd., AI 3 Ltd. and each Borrower, jointly and
severally, agree to indemnify and hold harmless the Agent (which term for
purposes of this Section 11.9 includes the "Mortgagee" under each Security
Agreement and the "Security Agent" under each Lockbox Agreement) and each
Lender and each of their affiliates and their respective officers,
directors, employees, agents, and advisors (each, an "Indemnified Party")
from and against any and all claims, damages, losses, liabilities, costs,
and expenses (including, without limitation, reasonable external attorneys'
fees, but
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excluding principal and accrued interest on any Loan) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding
or preparation of defense in connection therewith) the Loan Documents, any
of the transactions contemplated herein, any Aircraft, Engine or other
Collateral, any possession, performance, transportation, management, sale,
ownership, registration, mortgage, charging, control, maintenance, service,
repair, design, testing, defect, overhaul, purchase, bearing, use or
operation of any Aircraft, Engine or other Collateral, or the actual or
proposed use of the proceeds of the Loans, except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 11.9 applies, such indemnity shall
be effective whether or not such investigation, litigation or proceeding is
brought by Bermuda Holding 2 Ltd., AI 3 Ltd., any Borrower, its directors,
shareholders or creditors or an Indemnified Party or any other Person or
any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. Bermuda Holding 2 Ltd.,
AI 3 Ltd. and each Borrower agree that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to
it, any of its Subsidiaries, any Guarantor or any security holders or
creditors thereof arising out of, related to or in connection with the
transactions contemplated in any Loan Document, except to the extent that
such liability directly results from such Indemnified Party's gross
negligence or willful misconduct. Bermuda Holding 2 Ltd., AI 3 Ltd. and
each Borrower agree not to assert any claim against the Agent, any Lender,
any of their affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of or
otherwise relating to the Loan Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Loans.
(b) Without prejudice to the survival of any other agreement of
Bermuda Holding 2 Ltd., AI 3 Ltd. or any Borrower hereunder, the agreements
and obligations of Bermuda Holding 2 Ltd., AI 3 Ltd. and each Borrower
contained in this Section 11.9 shall survive the payment in full of the
Loans and all other amounts payable under this Agreement.
(c) Except as expressly provided herein, each Lender, each Borrower
and the Agent agree that this Agreement and each other Loan Document
entered into by a Holdings Subsidiary Trust is executed by a Qualified
Trustee, not individually but solely as Trustee under a Trust Agreement in
the exercise of the power and authority conferred and vested in it as such
Trustee, that each and all of the representations, undertakings and
agreements by a Qualified Trustee, or for the purpose or with the intention
of binding a Qualified Trustee, are made and intended for the purpose of
binding only the Trust Estates (and, to the extent any Lender, Borrower or
Agent has an interest therein, any liability insurance proceeds), and that
in no case whatsoever shall any Qualified Trustee be personally liable for
any loss in respect of such representations, undertakings and agreements,
that nothing herein contained shall be construed as creating any liability
on any Qualified Trustee individually or personally, to perform any
covenant, either express
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or implied, herein, all such liability, if any, being expressly waived by
each Lender, each Borrower and the Agent and by each and every Person now
or hereafter claiming by, through or under such Persons except with respect
to the gross negligence or willful misconduct of such Qualified Trustee or
for any Liens on the Collateral arising from, through or under such
Qualified Trustee in its individual capacity, and that so far as any
Qualified Trustee, individually or personally is concerned, each Lender,
each Borrower and the Agent and any Person claiming by, through or under
such Persons shall look solely, except as provided above, to the Trust
Estates (and, to the extent any Lender, Borrower or Agent has an interest
therein, any liability insurance proceeds), for the performance of any
obligation under this Credit Agreement and the other Loan Documents. The
term "Trustee" as used in this Section 11.9(c) shall include any Qualified
Trustee succeeding a Qualified Trustee, as trustee under a Trust Agreement.
Any obligation of any Holdings Subsidiary Trust hereunder or under the
other Loan Documents may be performed by a Beneficial Owner, and any such
performance shall not be construed as revocation of the trust created by
any Trust Agreement.
11.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
11.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, and other communications between or among the parties, both
oral and written, with respect thereto.
11.12. Payments. All principal, interest, and other amounts to be paid
by any Borrower under this Agreement and the other Loan Documents shall be paid
to the Agent at the Principal Office in Dollars and in immediately available
funds, without setoff, deduction or counterclaim. Subject to the definition of
"Interest Period" herein, whenever any payment under this Agreement or any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time in such case shall be included in the computation of interest and fees,
as applicable, and as the case may be.
11.13. Confidentiality. The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by the Parent Guarantors, Bermuda Holding 2 Ltd., AI 3 Ltd. any other
Credit Party or any Affiliate thereof, pursuant to or in connection with this
Agreement or the other Loan Documents; provided that nothing herein shall
prevent any Lending Party from disclosing such information (a) to any other
Lending Party or any affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or affiliate or any Lending
Party, (b) to any other Person if reasonably incidental to the administration of
the credit facility provided herein, (c) as required by any law, rule, or
regulation, (d) upon the order of any court or administrative agency, (e) upon
the request or demand of any regulatory agency or authority, (f) that is or
becomes available to the public or that is or becomes available to any Lending
Party other than as a result of a
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disclosure by any Lending Party prohibited by this Agreement, (g) in connection
with any litigation to which such Lending Party or any of its affiliates may be
a party, (h) to the extent necessary in connection with the exercise of any
remedy under this Agreement or any other Loan Document, and (i) subject to
provisions substantially similar to those contained in this Section, to any
actual or proposed participant or assignee.
11.14. Governing Law; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) BERMUDA HOLDING 2 LTD., AI 3 LTD. AND EACH BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS THAT ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN
THE XXXXXX XX XXX XXXX, XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, BERMUDA HOLDING 2 LTD. AND EACH
BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY
BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND BERMUDA HOLDING 2
LTD. AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY
TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) BERMUDA HOLDING 2 LTD., AI 3 LTD. AND EACH BORROWER AGREES THAT
SERVICE OF PROCESS MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS PROVIDED IN
SECTION 11.2(A), OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF SHALL PRECLUDE
THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENT IN THE COURTS OF ANY OTHER JURISDICTION. TO
THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, BERMUDA
HOLDING 2 LTD., AI 3 LTD. AND EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH
SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT
AND ITS PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE
AVAILABLE UNDER APPLICABLE LAW.
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(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION THEREWITH, BERMUDA HOLDING 2 LTD., AI 3 LTD., THE BORROWERS, THE
AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR
PROCEEDING.
11.15. Judgment Currency.
(a) To the extent permitted by applicable law, if for the
purposes of obtaining judgment in any court it is necessary to convert
a sum due hereunder in United States Dollars into another currency,
the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be determined
in accordance with Section 1.3 of this Agreement on the Business Day
preceding that on which final judgment is given.
To the extent permitted by applicable law, the obligation of each
Credit Party in respect of any sum due in United States Dollars from it to any
Lender or the Agent hereunder shall, notwithstanding any judgment in a currency
other than United States Dollars, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Agent (as the case may be)
of any sum adjudged to be so due in such other currency, such Lender or the
Agent (as the case may be) may in accordance with normal banking procedures
purchase United States Dollars with such other currency; if the United States
Dollars so purchased are less than such sum due to such Lender or the Agent (as
the case may be) in United States Dollars, each Credit Party agrees, to the
extent permitted by applicable law, as a separate obligation and notwithstanding
any such judgment, to indemnify such Lender or the Agent (as the case may be)
against such loss, and if the United States Dollars so purchased exceed such sum
due to any Lender or the Agent (as the case may be) in United States Dollars,
such Lender or the Agent (as the case may be) agrees to remit to each such
Credit Party such excess.
11.16. USA PATRIOT Act. Each Lender hereby notifies Bermuda Holding 2
Ltd., AI 3 Ltd. and each Borrower that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "Act"), it is required to obtain, verify and record information that
identifies each Borrower, which information includes the name and address of
such Borrower and other information that will allow such Lender to identify each
Borrower in accordance with the Act.
11.17. Post-Closing Matters. Notwithstanding the provisions of
Sections 5.1 and 7.16, the Credit Parties need not complete the actions or
deliver the documents described in Sections 5.1(a)(x) with respect to accounts
held at Bank of America or finalize Exhibit P until no later than March 31,
2006, and the Effective Date will occur upon satisfaction of the other
conditions in Section 5.1.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
AIRCASTLE INVESTMENT HOLDINGS 2 LIMITED
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxx
-----------------------------
Title: CFO
----------------------------
AIRCASTLE IRELAND NO. 3 LIMITED
By: /s/ Xxx Xxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxx
-----------------------------
Title: Director
----------------------------
Signature Page to the Aircastle 2 Credit Agreement
JPMORGAN CHASE BANK, N.A., as Agent and
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------
Title: Managing Director
----------------------------
Signature Page to the Aircastle 2 Credit Agreement
BEAR XXXXXXX CORPORATE LENDING INC.,
as a Lender
By: /s/ Xxxxxx Xxxxxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxxxxx
-----------------------------
Title: Vice President
----------------------------
Signature Page to the Aircastle 2 Credit Agreement
CITIBANK, N.A.,
as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------
Title: Director
----------------------------
Signature Page to the Aircastle 2 Credit Agreement
