1
Exhibit 4.1
Conformed Copy
INDENTURE
dated as of March 3, 1998
by and between
XXXXXX XXXXXXX AIRCRAFT FINANCE, a Delaware business trust,
as issuer of the Notes,
and
BANKERS TRUST COMPANY, as initial
trustee of the Notes
2
Reconciliation and tie between the Indenture, dated as of March 3, 1998, and
the Trust Indenture Act of 1939, as amended. This reconciliation does not
constitute part of the Indenture.
Trust Indenture Act
of 1939 Section Indenture Section
------------------- -----------------
310(a)(1) 6.09
(a)(2) 6.09
(b) 6.08
311 6.08
312(a) 2.12
313(a) 6.10
313(c) 6.10/6.11(c)
314(a) 6.11(a) - (c)
(a)(4) 6.11(d)
(c)(1) 1.03
(c)(2) 1.03
(e) 1.03
315(b) 6.07
315(d) 6.01
316(a)(last sentence) 1.04(c)
(a)(1)(A) 4.12
(a)(1)(B) 4.05
(b) 4.09
(c) 1.04(d)
317(a)(1) 4.03; 13.04
(a)(2) 4.10
(b) 2.04
318(a) 13.13
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions 1
Section 1.02. Rules of Construction 32
Section 1.03. Compliance Certificates and Opinions 34
Section 1.04. Acts of Noteholders 34
Section 1.05. Incorporation by Reference of Trust Indenture Act 36
ARTICLE II
THE NOTES
Section 2.01. Amount Not to Exceed the Initial Outstanding
Principal Balance; Terms; Form; Execution and
Delivery 36
Section 2.02. Restrictive Legends 39
Section 2.03. Registrar and Paying Agent 41
Section 2.04. Paying Agent to Hold Money in Trust 42
Section 2.05. Method of Payment 42
Section 2.06. Minimum Denomination 43
Section 2.07. Transfer and Exchange; Cancellation 43
Section 2.08. Mutilated, Destroyed, Lost or Stolen Notes 44
Section 2.09. Payments of Transfer Taxes 44
Section 2.10. Refinancing of Notes 45
Section 2.11. Issuer Additional Notes 46
Section 2.12. Book-Entry Provisions 48
Section 2.13. Special Transfer Provisions 50
Section 2.14. Temporary Definitive Notes 53
Section 2.15. Statements to Noteholders 54
Section 2.16. CUSIP, CINS AND ISIN Numbers 56
ARTICLE III
ACCOUNTS; PRIORITY OF PAYMENTS
Section 3.01. Establishment of Accounts 56
Section 3.02. Investments of Cash 61
Section 3.03. Closing Date Deposits, Withdrawals and Transfers 61
Section 3.04. Interim Deposits and Withdrawals 62
Section 3.05. Interim Deposits and Withdrawals for Modification
Payments or Dispositions of Aircraft 63
Section 3.06. Calculation Date Calculations 63
Section 3.07. Payment Date First Step Withdrawals and Transfers 66
Section 3.08. Payment Date Second Step Withdrawals 66
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Page
Section 3.09. Allocations of Principal Payments Among Subclasses
of the Notes 71
Section 3.10. Certain Redemptions; Certain Premiums 71
Section 3.11. Adjustment of Class Percentages and Target
Principal Balances 73
ARTICLE IV
DEFAULT AND REMEDIES
Section 4.01. Events of Default 74
Section 4.02. Acceleration, Rescission and Annulment 75
Section 4.03. Other Remedies 76
Section 4.04. Limitation on Suits 76
Section 4.05. Waiver of Existing Defaults 77
Section 4.06. Restoration of Rights and Remedies 77
Section 4.07. Remedies Cumulative 78
Section 4.08. Authority of Courts Not Required 78
Section 4.09. Rights of Noteholders to Receive Payment 78
Section 4.10. Trustee May File Proofs of Claim 78
Section 4.11. Undertaking for Costs 78
Section 4.12. Control by Noteholders 79
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.01. Representations and Warranties 79
Section 5.02. General Covenants 81
Section 5.03. Operating Covenants 93
ARTICLE VI
THE TRUSTEE
Section 6.01. Acceptance of Trusts and Duties 98
Section 6.02. Absence of Duties 98
Section 6.03. Representations or Warranties 99
Section 6.04. Reliance; Agents; Advice of Counsel 99
Section 6.05. Not Acting in Individual Capacity 101
Section 6.06. No Compensation from Noteholders 101
Section 6.07. Notice of Defaults 101
Section 6.08. May Hold Notes 101
Section 6.09. Corporate Trustee Required; Eligibility 101
Section 6.10. Reports by Trustee 102
Section 6.11. Reports by the Issuer 102
ARTICLE VII
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SUCCESSOR TRUSTEES
Page
Section 7.01. Resignation and Removal of Trustee 103
Section 7.02. Appointment of Successor 103
ARTICLE VIII
INDEMNITY
Section 8.01. Indemnity 104
Section 8.02. Noteholders' Indemnity 105
ARTICLE IX
MODIFICATION
Section 9.01. Modification with Consent of Holders 105
Section 9.02. Modification Without Consent of Holders 106
Section 9.03. Subordination and Priority of Payments 106
Section 9.04. Execution of Amendments by Trustee 106
Section 9.05. Swap Providers 106
Section 9.06. Conformity with Trust Indenture Act 107
ARTICLE X
SUBORDINATION
Section 10.01. Subordination of the Notes 107
ARTICLE XI
DISCHARGE OF INDENTURE; DEFEASANCE
Section 11.01. Discharge of Liability on the Notes; Defeasance 109
Section 11.02. Conditions to Defeasance 110
Section 11.03. Application of Trust Money 111
Section 11.04. Repayment to Issuer 111
Section 11.05. Indemnity for Government Obligations and
Corporate Obligations 111
Section 11.06. Reinstatement 112
ARTICLE XII
GUARANTEE
Section 12.01. Guarantee 112
Section 12.02. Conditions to Effectiveness of Guarantee 114
Section 12.03. Ranking and Subordination of the Guarantees 114
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Page
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Right of Trustee to Perform 115
Section 13.02. Waiver 115
Section 13.03. Severability 115
Section 13.04. Restrictions on Exercise of Certain Rights 116
Section 13.05. Notices 116
Section 13.06. Assignments 118
Section 13.07. Currency Conversion 118
Section 13.08. Application to Court 119
Section 13.09. Governing Law 120
Section 13.10. Jurisdiction 120
Section 13.11. Counterparts 120
Section 13.12. Table of Contents, Headings, Etc. 120
Section 13.13. Trust Indenture Act 120
Schedules
Schedule A - Initial Appraised Value of the Initial Aircraft
Schedule B - Issuer Subsidiaries
Exhibits
Exhibit A-1 - Form of Subclass A-1 Floating Rate Note
Exhibit A-2 - Form of Subclass A-2 Floating Rate Note
Exhibit B - Form of Subclass B-1 Floating Rate Note
Exhibit C - Form of Subclass C-1 Fixed Rate Note
Exhibit D - Form of Subclass D-1 Fixed Rate Note
Exhibit E - Concentration Limits
Exhibit F - Agents for Service of Process
Exhibit G - Insurance Provisions
Exhibit H - Form of Monthly Report to the Issuer and Each Rating
Agency
Exhibit I - Form of Certificate
Exhibit J - Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S
Exhibit K - Form of Certificate to be Delivered in Connection with
Transfers to Non-QIB Accredited Investors
Exhibit L - Core Lease Provisions
Appendices
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Appendix A - Class Percentages
Appendix B - Target Principal Balances
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TRUST INDENTURE, dated as of March 3, 1998 (this "Indenture"), by
and among XXXXXX XXXXXXX AIRCRAFT FINANCE, a Delaware business
trust ("MSAF") created under the Third Amended and Restated Trust
Agreement dated as of March 3, 1998 (the "Trust Agreement"), among
MS Financing Inc., as depositor (the "Depositor"), Wilmington
Trust Company, as Delaware Trustee (the "Delaware Trustee"), the
Controlling Trustees, the Alternate Controlling Trustee and the
Independent Trustees, as issuer of the Notes (the "Issuer"), and
BANKERS TRUST COMPANY, as trustee of each subclass of Notes (the
"Trustee").
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For purposes of this Indenture, the following
terms shall have the meanings indicated below:
"Acceleration Default" means any Event of Default of the type described in
Section 4.01(f) or 4.01(g) hereof.
"Accounts" means the Rental Accounts, the Collection Account, the
Defeasance/Redemption Account, the Expense Account, the Lessee Funded Account,
the Aircraft Purchase Account and the Refinancing Account and any ledger and
subledger accounts maintained therein in accordance with this Indenture.
"Acquisition Agreements" means the Asset Purchase Agreement and any
agreements pursuant to which Issuer Additional Aircraft are acquired.
"Act", with respect to any Noteholder, has the meaning given to such term
in Section 1.04 hereof.
"Additional Aircraft" means the Issuer Additional Aircraft and the
Guarantor Additional Aircraft.
"Additional Issuance" has the meaning given to such term in Section 2.11
hereof.
"Additional Lease" means, with respect to each Additional Aircraft, each
aircraft lease agreement, conditional sale agreement, hire purchase agreement
or other similar arrangement with respect to such Additional Aircraft on the
relevant Closing Date.
"Additional Servicer" means a servicer of any Issuer Additional Aircraft
pursuant to an Additional Servicing Agreement.
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"Additional Servicing Agreement" means any servicing agreement entered
into to service any Issuer Additional Aircraft.
"Adjusted Base Value" means, with respect to any Aircraft on any
Calculation Date, the average of the Base Values of such Aircraft as determined
by the Appraisals of such Aircraft delivered in connection with the Relevant
Appraisal with respect to such Calculation Date.
"Adjusted Portfolio Value" means, in respect of any Payment Date, the sum
of the products of (i) the Adjusted Base Value of each Aircraft in the
Portfolio on the Calculation Date preceding such Payment Date and (ii) the
quotient obtained by dividing the applicable Depreciation Factor for such
Aircraft on such Calculation Date by the applicable Depreciation Factor for
such Aircraft as of the Relevant Appraisal with respect to such Calculation
Date.
"Administrative Agency Agreement" means the Administrative Agency
Agreement dated as of the Initial Closing Date among the Administrative Agent,
the Security Trustee, the Issuer, the Aircraft Owning Companies, Greenfly
(Ireland) Limited and Redfly (UK) Limited.
"Administrative Agent" means Cabot Aircraft Services Limited, a company
incorporated under the laws of Ireland, in its capacity as administrative agent
under the Administrative Agency Agreement, including its successors in interest
and permitted assigns, until a successor Person shall have become the
administrative agent under such agreement, and thereafter "Administrative
Agent" shall mean such successor Person.
"affiliate" has the meaning given to such term in Section 5.02(b) hereof.
"Agent Members" has the meaning given to such term in Section 2.12 hereof.
"Agreed Currency" has the meaning given to such term in Section 13.07(a)
hereof.
"Agreed Value Payment" means a payment to be made by or on behalf of a
Lessee under a Lease upon or following a Total Loss of an Aircraft with respect
to such Total Loss.
"Aircraft" means the Initial Aircraft and the Additional Aircraft.
"Aircraft Agreement" has the meaning given to such term in Section 5.02(g)
hereof.
"Aircraft Owning Companies" means initially, MSA I and Aircraft SPC-5,
Inc., a California corporation, any successor corporations and any other Issuer
Subsidiaries holding title to an Aircraft.
"Aircraft Purchase Account" has the meaning given to such term in Section
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3.01(h) hereof.
"Aircraft Sale" means any sale or other disposition of any Aircraft,
including by reason of such Aircraft suffering a Total Loss.
"Allowed Restructuring" has the meaning given to such term in Section
5.02(e) hereof.
"Annual Report" has the meaning given to such term in Section 2.15(a)
hereof.
"Applicable Aviation Authority" means, in relation to any Aircraft, each
governmental or regulatory authority that has responsibility for the
supervision of civil aviation and/or the registration and operations of civil
aircraft in the State of Registration of such Aircraft.
"Applicable Law" means, with respect to any Person, all laws, rules,
regulations and orders of governmental regulatory authorities applicable to
such Person, including, without limitation, the regulations of each Applicable
Aviation Authority applicable to such Person.
"Appraisal" means a desktop appraisal of the Base Value of an Aircraft
made pursuant to Section 5.03(c) hereof.
"Appraisers" has the meaning set forth in Section 5.03(c) hereof.
"Asset Purchase Agreement" means the Asset Purchase Agreement dated as of
November 10, 1997 between ILFC and the Issuer.
"Assumed Portfolio Value" means, in respect of any Payment Date, the sum
of the products of (i) the Initial Appraised Value of each Aircraft in the
Portfolio on the Calculation Date preceding such Payment Date and (ii) the
quotient obtained by dividing the Depreciation Factor applicable to such
Aircraft on such Calculation Date by the Depreciation Factor applicable to such
Aircraft on the relevant Closing Date.
"Authorized Agent" means, with respect to the Notes of any subclass, any
authorized Paying Agent or Registrar for the Notes of such subclass.
"Available Collections Amount" means, as of any Calculation Date, amounts
on deposit in the Collection Account less the Required Expense Amount
determined as of such date.
"Bankers Trust" means Bankers Trust Company, a New York banking
corporation currently located at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Base Value" means the value of an Aircraft in an open, unrestricted,
stable market environment with a reasonable balance of supply and demand, and
with full consideration of the Aircraft's "highest and best use", presuming an
arm's-length, cash
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transaction between willing, able and knowledgeable parties, acting prudently,
with an absence of duress and with a reasonable period of time available for
marketing, adjusted to account for the maintenance status of such Aircraft (with
certain assumptions as to use since the last reported status).
"Basic Terms Modification" has the meaning given to such term in Section
9.01 hereof.
"Beneficial Interest" means the undivided beneficial interest in the
property of the Issuer arising out of the Trust Agreement.
"Beneficial Interest Distribution Amount" means on any Payment Date after
March 15, 2003, an amount, as determined and declared by the Controlling
Trustees, not to exceed the lesser of (i) 3% of the difference, if positive,
between the Adjusted Portfolio Value in respect of such Payment Date and the
Outstanding Principal Balance of the MSAF Group Notes (determined prior to
application of the Available Collections Amount on such Payment Date) and (ii)
15% of the Available Collections Amount on such Payment Date after application
of payments and retentions set forth in (i) to (xvii) of Section 3.08(a)
hereof.
"Business Day" means a day on which U.S. dollar deposits may be dealt in
on the London inter-bank market and commercial banks and foreign exchange
markets are open in New York, New York and London, England and, with respect to
payments to or withdrawals from the Non-Trustee Accounts, a day on which the
financial institution at which such account is located is open for business.
"Calculation Date" means the fourth Business Day immediately preceding
each Payment Date.
"Cash Management Agreement" means the Cash Management Agreement dated as
of the Initial Closing Date among the Issuer, the Trustee, the Security Trustee
and the Cash Manager.
"Cash Manager" means Bankers Trust, in its capacity as cash manager under
the Cash Management Agreement, including its successors in interest, until a
successor Person shall have become the cash manager under that agreement, and
thereafter, "Cash Manager" shall mean such successor Person.
"Cedel" means Cedel Bank, societe anonyme.
"Class A Notes" means, collectively, the Subclass A-1 Notes and the
Subclass A-2 Notes, each substantially in the form attached as Exhibits A-1 and
A-2 hereto, any Refinancing Notes issued to refinance any subclass of the Class
A Notes and any Issuer Additional Notes of such class.
"Class B Notes" means the Subclass B-1 Notes, substantially in the form
attached as Exhibit B-1 hereto, any Refinancing Notes issued to refinance any
subclass of the Class B Notes and any Issuer Additional Notes of such class.
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"Class C Notes" means the Subclass C-1 Notes, each substantially in the
form attached as Exhibit C-1 hereto, any Refinancing Notes issued to refinance
any subclass of the Class C Notes and any Issuer Additional Notes of such
class.
"Class D Notes" means the Subclass D-1 Notes, substantially in the form
attached as Exhibit D-1 hereto, any Refinancing Notes issued to refinance any
subclass of the Class D Notes and any Issuer Additional Notes of such class.
"Class Percentage" means each of the Minimum Class Percentage, Scheduled
Class Percentage and Supplemental Class Percentage.
"Closing Date" means in the case of (i) the Initial Notes and the Initial
Aircraft, the Initial Closing Date, (ii) any Refinancing Notes or MSAF Group
Additional Notes, the relevant date of issuance of such Notes and (iii) any
Additional Aircraft, the date of issuance of the MSAF Group Additional Notes
issued to finance the acquisition of such Additional Aircraft.
"Collateral" has the meaning given to such term in the Security Trust
Agreement.
"Collection Account" has the meaning given to such term in Section 3.01(b)
hereof.
"Collections" means, without duplication, (i) Rental Payments (other than
Segregated Funds) and all other amounts received by any MSAF Group Member
pursuant to any Lease or MSAF Group Related Collateral Document, (ii) the
amount on deposit in the Collection Account in respect of the Liquidity Reserve
Amount, (iii) amounts received in respect of claims for damages or in respect
of any breach of contract for nonpayment of any of the foregoing (including any
amounts received from any MSAF Group Member, whether by way of distribution,
dividend, repayment of a loan or otherwise, and any proceeds received in
connection with any Allowed Restructuring), (iv) the amount received by any
MSAF Group Member in connection with any Aircraft Sale or otherwise received
under any Aircraft Agreement, including sale proceeds, Total Loss Proceeds,
Agreed Value Payments, proceeds of PRI, Requisition Compensation and all
Partial Loss Proceeds, less, in each case, any expenses payable by such MSAF
Group Member to any Person that is not a MSAF Group Member in connection
therewith, (v) other amounts received by any MSAF Group Member from insurance
with respect to any Aircraft, (vi) any amounts transferred from the Lessee
Funded Account into the Collection Account in accordance with Section 3.07
hereof, (vii) any Swap Receipts, (viii) the proceeds of any investments of the
funds in the Accounts (except to the extent that any such proceeds are required
to be paid over to any Lessee under a Lease), (ix) any amounts transferred from
the Aircraft Purchase Account into the Collection Account in accordance with
Section 3.04 hereof and (x) any other amounts received by any MSAF Group Member
other than (A) Segregated Funds, (B) funds to be applied in connection with a
redemption under Section 3.10(a) or (b) under this Indenture or under any
Guarantor Indenture, which shall be deposited in the Defeasance/Redemption
Account, (C) funds received in connection with a Refinancing and (D) other
amounts required to be
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paid over to any third party pursuant to any Related Document, in each case
subject to the restrictions set forth in this Indenture and any Guarantor
Indenture.
"Commission" means the U.S. Securities and Exchange Commission, as from
time to time constituted or created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Concentration Default" has the meaning given to such term in Section
5.02(g) hereof.
"Concentration Limits" has the meaning given to such term in Section
5.03(a) hereof.
"control" has the meaning given to such term in Section 5.02(b) hereof,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Controlling Trustees" has the meaning given to such term in the Trust
Agreement.
"Controlling Trustees' Resolution" means a copy of a resolution certified
by a Signatory Trustee as having been duly adopted by the Controlling Trustees
and being in full force and effect on the date of such certification.
"Core Lease Provisions" has the meaning given to such term in Section
5.03(f) hereof.
"Corporate Obligations" has the meaning given to such term in Section
11.02 hereof.
"Corporate Trust Office" means, with respect to the Trustee, the office of
such trustee in the city at which at any particular time its corporate trust
business shall be principally administered and, with respect to the Trustee on
the date hereof, shall be Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust and Agency Group--Structured Finance, Facsimile No:
x000-000-0000.
"covenant defeasance" has the meaning given to such term in Section 11.01
hereof.
"Credit Facility" means any letter of credit, guarantee or other credit or
liquidity enhancement facility in favor of the Issuer.
"Custody and Loan Agreement" means the custody and loan agreement dated as
of the Initial Closing Date among the Issuer, the other MSAF Lessors (as
defined therein) and ILFC.
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"DCR" means Duff and Xxxxxx Credit Rating Co., and any successor thereto,
or, if such corporation or its successor shall for any reason no longer perform
the functions of a securities rating agency, "DCR" shall be deemed to refer to
any other nationally recognized rating agency designated by the Issuer.
"Default" means a condition, event or act which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"Default Notice" means a notice given to the Issuer by Holders
representing 25% of the aggregate Outstanding Principal Balance of the Senior
Class of Notes, with a copy to the Trustee of each subclass of Notes, the Cash
Manager and the Administrative Agent, declaring all Outstanding principal of
and accrued and unpaid interest on the Notes to be immediately due and payable.
"Defeasance/Redemption Account" has the meaning given to such term in
Section 3.01(g) hereof.
"Definitive Notes" has the meaning given to such term in Section 2.01(b)
hereof.
"Depositor" has the meaning set forth in the preambles hereof.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Depreciation Factor" means, (i) with respect to each Initial Aircraft on
any date of determination, if positive, the product of (1-kn) and 1.02n ,
where "n" equals the age of such Aircraft in years from the date of its
manufacture and "k" equals a fraction, the numerator of which is 1 and the
denominator of which is the Expected Useful Life of such Initial Aircraft;
provided that in the event such Aircraft is converted to freighter service, the
Depreciation Factor for such Aircraft shall be the factor determined by the
Controlling Trustees and (ii) with respect to each Additional Aircraft, the
Depreciation Factor determined by the Controlling Trustees in connection with
the issuance of the MSAF Group Additional Notes funding the acquisition of such
Additional Aircraft.
"Direction" has the meaning given to such term in Section 1.04(c) hereof.
"Eligibility Requirements" has the meaning given to such term in Section
2.03(b) hereof.
"Eligible Account" means a segregated trust account with an Eligible
Institution.
"Eligible Credit Facility" means any Credit Facility provided by, or
supported with a further Credit Facility provided by, an Eligible Provider.
"Eligible Institution" means (a) Bankers Trust, so long as it has (A) a
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long-term unsecured debt rating of A (or the equivalent) or better by each
Rating Agency or (B) a certificate of deposit rating of A-1 by Standard &
Poor's, P-1 by Moody's and otherwise acceptable to DCR; and (b) any bank
organized under the laws of the United States of America or any state thereof,
or the District of Columbia (or any domestic branch of a foreign bank), which
at all times has either (A) a long-term unsecured debt rating of AA (or the
equivalent) or better by each Rating Agency or (B) a certificate of deposit
rating of A-l+ by Standard & Poor's, P-1 by Moody's and D-1 by DCR.
"Eligible Provider" means a Person whose short-term unsecured debt is
rated A-1+ by Standard & Poor's, P-1 by Moody's or D-1+ by DCR or is otherwise
designated as an Eligible Provider by the Controlling Trustees.
"Encumbrance" has the meaning given to such term in Section 5.02(b)
hereof.
"Engine" means each engine installed on any aircraft, or, where any such
engine has been replaced under the terms of the relevant Lease, the engine
replacing such engine, and includes any and all Parts incorporated in,
installed on or attached to such engine.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Event of Default", with respect to a class of Notes, has the meaning
given to such term in Section 4.01 hereof.
"Excess Amortization Date" means, with respect to (i) the Subclass X-0
Xxxxx, Xxxxx 00, 0000, (xx) the Subclass A-2 Notes and the Subclass X-0 Xxxxx,
Xxxxx 00, 0000, (xxx) the Subclass C-1 Notes, March 15, 2013, (iv) the Subclass
D-1 Notes, March 15, 2010 and (v) any Refinancing Notes or Issuer Additional
Notes, the Excess Amortization Date established by or pursuant to a Controlling
Trustees' Resolution or in any indenture supplemental hereto providing for the
issuance of such Notes or specified in the form of such Notes.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any securities of the Issuer containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to a Registration Rights Agreement and this Indenture.
"Expected Final Payment Date" means with respect to (i) the Subclass X-0
Xxxxx, Xxxxx 00, 0000, (xx) the Subclass A-2 Notes, September 15, 2005, (iii)
the Subclass X-0 Xxxxx, Xxxxx 00, 0000, (xx) the Subclass C-1 Notes, March 15,
2013, (v) the Subclass D-1 Notes, March 15, 2014 and (vi) any Refinancing Notes
or Issuer Additional Notes, the Expected Final Payment Date established by or
pursuant to a Controlling Trustees' Resolution or in any indenture supplemental
hereto providing for the issuance of such Notes or specified in the form of
such Notes.
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"Expected Useful Life" means, with respect to each Initial Aircraft, 25
years and, with respect to any Issuer Additional Aircraft, the "Useful Life"
established by or pursuant to a Controlling Trustees' Resolution or in any
indenture supplemental hereto providing for the issuance of Issuer Additional
Notes funding the acquisition of such Additional Aircraft.
"Expense Account" has the meaning given to such term in Section 3.01(d) of
this Indenture.
"Expenses" means, with respect to MSAF Group, collectively, any fees,
costs or expenses incurred by any MSAF Group Member in the course of the
business activities permitted under Section 5.02(e) of this Indenture or under
any Guarantor Indenture, including, without limitation, any fees and expenses
of any Service Provider; provided, however, that, except as expressly provided
herein, Expenses shall not include any amount payable on the MSAF Group Notes,
under any Swap Agreement or under any Credit Facilities or any other amounts
ranking pari passu with or junior to interest payable on the MSAF Group Class A
Notes in the priority of payments set forth under Section 3.08 of this
Indenture.
"Extended Pool Factor" means, with respect to each subclass of MSAF Group
Notes, the "Extended Pool Factor" set forth in the appendix to such Notes.
"Extension Amount" has the meaning given to such term in Section 3.09
hereof.
"Final Maturity Date" means with respect to (i) the Subclass A-1 Notes,
the Subclass A-2 Notes, the Subclass B-1 Notes, the Subclass C-1 Notes and the
Subclass D-1 Notes, March 15, 2023 and (ii) any Refinancing Notes or Issuer
Additional Notes, the date specified in the form of such Notes.
"Financial Advisor" means Xxxxxx Xxxxxxx & Co. Incorporated in its
capacity as financial advisor under the Financial Advisory Agreement, including
its successors in interest and permitted assigns, until a successor Person
shall become the financial advisor under such agreement; and thereafter
"Financial Advisor" shall mean such successor Person.
"Financial Advisory Agreement" means the Financial Advisory Agreement
dated as of the Initial Closing Date among the Financial Advisor and the
Issuer.
"Fixed Rate Notes" means the Subclass C-1 Notes, the Subclass D-1 Notes
and any Refinancing Notes or Issuer Additional Notes issued with a fixed rate
of interest.
"Floating Rate Notes" means the Subclass A-1 Notes, the Subclass A-2
Notes, the Subclass B-1 Notes and any Refinancing Notes or Issuer Additional
Notes issued with a floating or variable rate of interest.
"Future Lease" means, with respect to each Aircraft, any aircraft lease
17
agreement, conditional sale agreement, hire purchase agreement or other similar
arrangement as may be in effect at any time after the relevant Closing Date
between the related MSAF Group Member (as lessor or vendor) and a Person not an
MSAF Group Member (as lessee or purchaser), as such agreement or arrangement may
be amended, modified, extended, supplemented, assigned or novated from time to
time, in each case other than any Initial Lease; provided that if, under any
sub-leasing arrangement with respect to an Aircraft, the lessor thereof agrees
to receive payments or collateral directly from, or is to make payments directly
to, the sub-lessee, in any such case to the exclusion of the related Lessee,
then the relevant sub-lease shall constitute the "Lease", and the sub-lessee
shall constitute the related "Lessee" with respect to such Aircraft, but only to
the extent of the provisions of such sub-lease agreement relevant to such
payments and collateral and to the extent agreed by the relevant lessor.
"Global Notes" means any Rule 144A Global Notes and Regulation S Global
Notes.
"Guarantee" has the meaning given to such term in Section 5.02(f) hereof.
"guarantee" has the meaning given to such term in Section 5.02(f) hereof.
"Guarantor" means a special purpose vehicle, other than an Issuer
Subsidiary, organized to (i) issue Guarantor Additional Notes pursuant to an
indenture the terms of which are substantially identical to those of this
Indenture, the proceeds of which shall be used to acquire Guarantor Additional
Aircraft and (ii) guarantee the Notes.
"Guarantor Additional Aircraft" means any aircraft or Engine acquired by a
Guarantor or any Guarantor Subsidiary after the Initial Closing Date, excluding
any such aircraft or Engine sold or disposed of by way of a completed Aircraft
Sale.
"Guarantor Additional Notes" has the meaning given to such term in Section
12.02 hereof.
"Guarantor Class A Additional Note Guarantee" has the meaning given to
such term in Section 12.03 hereof.
"Guarantor Class A Additional Notes" means the Guarantor Additional Notes
issued by a Guarantor ranking pari passu with the Class A Notes.
"Guarantor Class B Additional Note Guarantee" has the meaning given to
such term in Section 12.03 hereof.
"Guarantor Class B Additional Notes" means the Guarantor Additional Notes
issued by a Guarantor ranking pari passu with the Class B Notes.
"Guarantor Class C Additional Note Guarantee" has the meaning given to
such term in Section 12.03 hereof.
18
"Guarantor Class C Additional Notes" means the Guarantor Additional Notes
issued by a Guarantor ranking pari passu with the Class C Notes.
"Guarantor Class D Additional Note Guarantee" has the meaning given to
such term in Section 12.03 hereof.
"Guarantor Class D Additional Notes" means the Guarantor Additional Notes
issued by a Guarantor ranking pari passu with the Class D Notes.
"Guarantor Indenture" has the meaning given to such term in Section 12.02
hereof.
"Guarantor Subsidiary" means each subsidiary of a Guarantor.
"Guarantor Trustee" means a trustee or any successor trustee appointed in
accordance with a Guarantor Indenture.
"ILFC" means International Lease Finance Corporation, a corporation
incorporated under the laws of California.
"incur" has the meaning given to such term in Section 5.02(f) hereof.
"Indebtedness" has the meaning given to such term in Section 5.02(f)
hereof.
"Indenture" has the meaning set forth in the preamble hereof.
"Independent Trustees" has the meaning given to such term in the Trust
Agreement.
"Initial Aircraft" means each of the aircraft (including any related
Engines) and the spare Engine identified in Schedule A hereto, any Remaining
Aircraft and Substitute Aircraft, excluding any such aircraft sold or disposed
of by way of a completed Aircraft Sale.
"Initial Appraised Value", in the case of each Initial Aircraft, means the
average of the appraisals by each of the Initial Appraisers of the Base Value
of such Aircraft as of September 30, 1997 and, in the case of any Additional
Aircraft, the average of the appraisals by each of the Appraisers of the Base
Value of such Aircraft as of a date not more than six months prior to the
Closing Date for the issuance of the relevant MSAF Group Additional Notes.
"Initial Appraisers" means Aircraft Information Services, Inc., BK
Associates, Inc. and Airclaims Limited.
"Initial Closing Date" means March 3, 1998.
19
"Initial Lease" means, with respect to each Initial Aircraft, each
aircraft lease agreement, conditional sale agreement, hire purchase agreement
or other similar arrangement with respect to such Initial Aircraft which is
listed in Section 3.09 of the Disclosure Schedule to the Asset Purchase
Agreement, as such agreement or arrangement may be amended, modified, extended,
supplemented, assigned or novated from time to time.
"Initial Notes" means the Subclass A-1 Notes, the Subclass A-2 Notes, the
Subclass B-1 Notes, the Subclass C-1 Notes and the Subclass D-1 Notes.
"Initial Outstanding Balance" means, with respect to any MSAF Group Notes,
the initial total principal amount on the date of issuance therefor of such
Notes unpaid and outstanding at any time.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Intercompany Loan" has the meaning given to such term in Section 5.02(f)
hereof.
"Interest Accrual Period" means, as to each subclass of MSAF Group Notes,
the period beginning on (and including) the relevant Closing Date and ending on
(but excluding) the first Payment Date thereafter and each successive period
beginning on (and including) a Payment Date and ending on (but excluding) the
next succeeding Payment Date; provided that the final Interest Accrual Period
with respect to any subclass of MSAF Group Notes shall end on but exclude the
Final Maturity Date with respect to such subclass of MSAF Group Notes (or, if
earlier, with respect to any subclass of MSAF Group Notes repaid in full, the
date such subclass of MSAF Group Notes is repaid in full). Account balances
with respect to each Interest Accrual Period shall be determined by reference
to the balances of funds on deposit in the Accounts on the Calculation Date
immediately preceding each Payment Date.
"Interest Amount" means, with respect to each subclass of MSAF Group
Notes, on any Payment Date, the amount of accrued and unpaid interest at the
Stated Rate of Interest with respect to such subclass of MSAF Group Notes on
such Payment Date (including, to the fullest extent permitted by applicable
law, interest on accrued and unpaid interest (excluding any unpaid Step-Up
Interest) from any prior Interest Accrual Period at the Stated Rate of Interest
for such subclass), determined in accordance with the terms of such subclass of
MSAF Group Notes. Any amount of Premium or interest on any subclass of MSAF
Group Notes not paid when due shall, to the fullest extent permitted by
applicable law, bear interest at an interest rate per annum equal to the Stated
Rate of Interest for such MSAF Group Notes from the date when due until such
amount is paid or duly provided for, payable on the next succeeding Payment
Date, subject to the availability of the Available Collections Amount therefor
after making payments entitled to priority under Section 3.08 hereof.
"investment" has the meaning given to such term in Section 5.02(c) hereof.
20
"Issuer" has the meaning set forth in the preamble hereof.
"Issuer Additional Aircraft" means any aircraft or Engine acquired by the
Issuer or any Issuer Subsidiary after the Initial Closing Date (other than any
Remaining Aircraft or Substitute Aircraft), excluding any such aircraft or
Engine sold or disposed of by way of a completed Aircraft Sale.
"Issuer Additional Notes" means any notes issued pursuant to this
Indenture the proceeds of which are used to acquire Issuer Additional Aircraft.
"Issuer Subsidiary" means each subsidiary of the Issuer existing on the
Initial Closing Date and listed on Schedule B to this Indenture and any other
subsidiary of the Issuer.
"Leases" means the Initial Leases, the Future Leases and the Additional
Leases.
"legal defeasance" has the meaning given to such term in Section 11.01
hereof.
"Lessee" means each Person who is the lessee of an Aircraft from time to
time leased from any MSAF Group Member.
"Lessee Funded Account" has the meaning given to such term in Section
3.01(c) hereof.
"LIBOR" means, unless otherwise specified, the London interbank offered
rate for one month U.S. dollar deposits, determined pursuant to the Reference
Agency Agreement.
"Liquidity Reserve Amount" means an amount, initially approximately $65.5
million, which may be increased or decreased from time to time by the
Controlling Trustees for any reason; provided that any such reduction shall be
subject to Rating Agency Confirmation.
"Listing Agent" means Banque Internationale a Luxembourg S.A.
"Losses" means any loss, cost, charge, expense, interest, fee, payment,
demand, liability, claim, action, proceeding, penalty, fine, damages, judgment,
order or other sanction other than Taxes.
"Minimum Class Percentage" means, with respect to the MSAF Group Class A
Notes and the MSAF Group Class B Notes on any Payment Date, the "Minimum Class
Percentage" set forth in Appendix A to this Indenture for such Payment Date, as
such percentage shall be adjusted from time to time in accordance with Section
3.11 hereof.
"Minimum Liquidity Reserve Amount" means an amount, initially equal to $15
million, which may be increased or decreased from time to time by the
Controlling
21
Trustees for any reason; provided that any such reduction shall be subject to
Rating Agency Confirmation.
"Minimum Principal Payment Amount" means, with respect to each class of
MSAF Group Notes on any Payment Date, the difference, if positive, between the
aggregate Outstanding Principal Balance of such class of MSAF Group Notes and
the Minimum Target Principal Balance of such class of MSAF Group Notes on such
Payment Date.
"Minimum Target Principal Balance" means, with respect to (i) the MSAF
Group Class A Notes and the MSAF Group Class B Notes on any Payment Date, the
product of (x) the Minimum Class Percentage for such class of MSAF Group Notes
on such Payment Date and (y) the Assumed Portfolio Value in respect of such
Payment Date; provided that, if on any Payment Date the Outstanding Principal
Balance of MSAF Group Class A Notes is greater than the Adjusted Portfolio
Value in respect of such Payment Date, then the "Minimum Target Principal
Balance" of MSAF Group Class A Notes shall be equal to the Scheduled Target
Principal Balance of MSAF Group Class A Notes and (ii) the MSAF Group Class C
Notes and the MSAF Group Class D Notes on any Payment Date, the "Minimum Target
Principal Balance" set forth in Appendix A to this Indenture for such Payment
Date, as such amount shall be adjusted from time to time in accordance with
Section 3.11 hereof.
"Modification Payment" has the meaning given to such term in Section
5.02(i) hereof.
"Monthly Report" has the meaning given to such term in Section 2.15(a)
hereof.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor thereto.
"Xxxxxx Xxxxxxx" means Xxxxxx Xxxxxxx, Xxxx Xxxxxx, Discover & Co., a
corporation incorporated under the laws of the State of Delaware.
"Xxxxxx Xxxxxxx Loan Agreement" means the loan agreement dated as of the
Initial Closing Date between the Issuer and Xxxxxx Xxxxxxx.
"MSAF Group" means the Issuer, any Issuer Subsidiary, any Guarantor and
any Guarantor Subsidiary.
"MSAF Group Additional Notes" means the Issuer Additional Notes and the
Guarantor Additional Notes.
"MSAF Group Class A Notes" means the Class A Notes and the Guarantor Class
A Additional Notes.
"MSAF Group Class B Notes" means the Class B Notes and the Guarantor Class
B Additional Notes.
22
"MSAF Group Class C Notes" means the Class C Notes and the Guarantor Class
C Additional Notes.
"MSAF Group Class D Notes" means the Class D Notes and the Guarantor Class
D Additional Notes.
"MSAF Group Fixed Rate Notes" means the MSAF Group Notes issued with a
fixed rate of interest.
"MSAF Group Floating Rate Notes" means the MSAF Group Notes issued with a
floating or variable rate of interest.
"MSAF Group Member" means the Issuer, any Guarantor, any Issuer Subsidiary
or any Guarantor Subsidiary.
"MSAF Group Notes" means the Notes and the Guarantor Additional Notes.
"MSAF Group Related Collateral Document" means any Related Collateral
Document or any "Related Collateral Document" referred to in a Guarantor
Indenture.
"MSA I" means MSA I, a Delaware business trust.
"Net Sale Proceeds" has the meaning given to such term in Section 5.02(g)
hereof.
"Non-Trustee Accounts" has the meaning given to such term in Section
3.01(e) hereof.
"Non-U.S. Person" means a person who is not a U.S. person, as defined in
Regulation S.
"Note Account" has the meaning given to such term in Section 3.01(i)
hereof.
"Noteholder" or "Holder" means any Person in whose name a MSAF Group Class
A Note, MSAF Group Class B Note, MSAF Group Class C Note or MSAF Group Class D
Note is registered from time to time in the Register for such MSAF Group Notes.
"Notes" means the Initial Notes and the Issuer Additional Notes and any
Exchange Notes.
"Note Target Price" has the meaning given to such term in Section 5.02(g)
hereof.
"Notices" has the meaning given to such term in Section 13.05 hereof.
"Officer's Certificate" means a certificate signed by, with respect to the
Issuer,
23
any Signatory Trustee and, with respect to a Guarantor or any other
Person, any officer, director, trustee or equivalent representative.
"Operating Bank" means Bankers Trust or any other Eligible Institution at
which the Accounts are held; provided that (i) upon the resignation or removal
and the replacement of the Senior Trustee pursuant to the terms of this
Indenture, the successor trustee appointed thereunder shall be the Operating
Bank; and (ii) if at any time the Operating Bank ceases to be an Eligible
Institution, a successor operating bank shall be appointed by the
Administrative Agent on behalf of the Security Trustee and all Accounts (other
than the Non-Trustee Accounts) shall thereafter be transferred to and be
maintained at such successor operating bank in the name of the Security Trustee
and such successor operating bank shall thereafter be the "Operating Bank".
"Opinion of Counsel" means a written opinion signed by legal counsel, who
may be an employee of or counsel to the Issuer, that meets the requirements of
Section 1.03 hereof.
"Outstanding" means (a) with respect to the Notes of any class or subclass
at any time, all Notes of such class or subclass theretofore authenticated and
delivered by the Trustee except (i) any such Notes cancelled by, or delivered
for cancellation to, the Trustee; (ii) any such Notes, or portions thereof, for
the payment of principal of and accrued and unpaid interest on which moneys
have been deposited in the applicable Note Account or distributed to
Noteholders by the Trustee and any such Notes, or portions thereof, for the
payment or redemption of which moneys in the necessary amount have been
deposited in the Defeasance/Redemption Account; provided that if such Notes are
to be redeemed prior to the maturity thereof in accordance with the
requirements of Section 3.10(a) or 3.10(b) hereof, notice of such redemption
shall have been given as provided in Section 3.10(c) hereof, or provision
satisfactory to the Trustee shall have been made for giving such notice; and
(iii) any such Notes in exchange or substitution for which other Notes, as the
case may be, have been authenticated and delivered, or which have been paid
pursuant to the terms of this Indenture (unless proof satisfactory to the
Trustee is presented that any of such Notes is held by a Person in whose hands
such Note is a legal, valid and binding obligation of the Issuer); and (b) when
used with respect to any other evidence of indebtedness shall mean, at any
time, any principal amount thereof then unpaid and outstanding (whether or not
due or payable).
"Outstanding Principal Balance" means, with respect to any MSAF Group Note
or other evidence of indebtedness Outstanding, the total principal amount of
such evidence of indebtedness unpaid and outstanding at any time as determined
in the report to be delivered pursuant to Section 3.06 hereof.
"Partial Loss" means, with respect to any Aircraft or related asset, any
event or occurrence of loss, damage, destruction or the like which is not a
Total Loss.
"Partial Loss Proceeds" means, with respect to any Aircraft or related
asset, the total proceeds of the insurance or reinsurance (other than in
respect of liability insurance) paid in respect of any Partial Loss to any MSAF
Group Member.
24
"Parts" means any part, component, appliance, accessory, instrument or
other item of equipment (other than any Engine) installed in or attached to any
Aircraft (or part thereof).
"Paying Agent" has the meaning given to such term in Section 2.03 hereof.
The term "Paying Agent" includes any additional Paying Agent.
"Payment Date" means the 15th day of each month, commencing on April 15,
1998; provided that if any Payment Date would otherwise fall on a day which is
not a Business Day, such Payment Date shall be the first following day which is
a Business Day.
"Permanent Regulation S Global Note" has the meaning given to such term in
Section 2.01 hereof.
"Permitted Account Investments" means, in each case, book-entry
securities, negotiable instruments or securities represented by instruments in
bearer or registered form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America (having original
maturities of no more than 365 days, or such lesser time as is required
for the distribution of funds);
(b) demand deposits, time deposits or certificates of deposit of the
Operating Bank or of depository institutions or trust companies organized
under the laws of the United States of America or any state thereof, or
the District of Columbia (or any domestic branch of a foreign bank) (i)
having original maturities of no more than 365 days, or such lesser time
as is required for the distribution of funds; provided that at the time
of investment or contractual commitment to invest therein, the short-term
debt rating of such depository institution or trust company shall be at
least "A-1+" by Standard & Poor's and "P-1" by Moody's and which is
acceptable to DCR or (ii) having maturities of more than 365 days and, at
the time of the investment or contractual commitment to invest therein, a
rating of "AA" from Standard & Poor's and "Aa2" from Moody's and which is
acceptable to DCR;
(c) corporate or municipal debt obligations (i) having remaining
maturities of no more than 365 days, or such lesser time as is required
for the distribution of funds, having, at the time of the investment or
contractual commitment to invest therein, a rating of at least "A-1+" or
"AA" by Standard & Poor's and "P-1" or "Aa2" by Moody's and which is
acceptable to DCR or (ii) having maturities of more than 365 days and, at
the time of the investment or contractual commitment to invest therein, a
rating of "AA" from Standard & Poor's and "Aa2" from Moody's and which is
acceptable to DCR;
(d) investments in money market funds (including funds in respect of
which the Trustee or any of its affiliates is investment manager or
advisor) having a rating of at least "AA" by Standard & Poor's and "Aa2"
by Moody's and which is
25
acceptable to DCR;
(e) notes or bankers' acceptances (having original maturities of no
more than 365 days, or such lesser time as is required for the
distribution of funds) issued by any depository institution or trust
company referred to in (b) above; or
(f) any other investments approved pursuant to a Rating Agency
Confirmation;
provided, however, that no investment shall be made in any obligations of any
depository institution or trust company which has a contractual right to set
off and apply any deposits held, and other indebtedness owing, by any MSAF
Group Member to or for the credit or the account of such bank.
"Permitted Accruals" has the meaning given to such term in Section 3.01(d)
hereof.
"Permitted Additional Aircraft Acquisition" has the meaning given to such
term in Section 5.02(h) hereof.
"Permitted Encumbrance" has the meaning given to such term in Section
5.02(b) hereof.
"Person" means any natural person, firm, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any political subdivision thereof or any other legal entity,
including public bodies.
"Pledged Beneficial Interest" has the meaning given to such term in the
Security Trust Agreement.
"Pledged Debt" has the meaning given to such term in the Security Trust
Agreement.
"Pledged Stock" has the meaning given to such term in the Security Trust
Agreement.
"Pool Factor" means, with respect to each subclass of MSAF Group Notes on
any Payment Date, the "Pool Factor" for such Payment Date set forth in the
appendix to such Notes.
"Portfolio" means, at any time, all Aircraft owned by MSAF Group.
"Precedent Lease" has the meaning given to such term in Section 5.03(f)
hereof.
"Premium" means, with respect to any Note on the Redemption Date thereof,
26
the excess of the Redemption Price over the Outstanding Principal Balance
thereof.
"PRI" has the meaning given to such term in Section 5.03(h) hereof.
"PRI Guidelines" has the meaning given to such term in Section 5.03(a)
hereof.
"Primary Eligible Credit Facility" means any Eligible Credit Facility,
other than a Secondary Eligible Credit Facility, which provides by its terms
that it is entitled only to the priority of repayment accorded to Primary
Eligible Credit Facilities under Section 3.08 hereof.
"Prior Ranking Amounts" has the meaning assigned to such term in Section
3.08 hereof.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02 hereof.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Quarterly Report" has the meaning given to such term in Section 2.15(a)
hereof.
"Rating Agency" means each of DCR, Moody's and Standard & Poor's and any
other nationally recognized rating agency designated by the Issuer and the
Guarantor, if any; provided that such organizations shall only be deemed to be
a Rating Agency for purposes of the Indenture with respect to MSAF Group Notes
they are then rating.
"Rating Agency Confirmation" means a prior written confirmation from each
Rating Agency that a specified action or event shall not result in the
downgrade or withdrawal of such Rating Agency's then current credit rating, if
any, of any subclass of MSAF Group Notes.
"Received Currency" has the meaning given to such term in Section 13.07(a)
hereof.
"Receiver" means any Person or Persons appointed as (and any additional
Person or Persons appointed or substituted as) administrative receiver,
receiver, manager or receiver and manager.
"Record Date" means with respect to each Payment Date, the close of
business on the day that is 15 days prior to such Payment Date, whether or not
such day is a Business Day.
"Redemption" has the meaning given to such term in Section 3.10(c) hereof.
"Redemption Date" means the date, which shall in each case be a Payment
27
Date, on which Notes of any subclass are redeemed.
"Redemption Premium" means (i) in respect of any Initial Note on any date,
the Redemption Premium indicated in the table below:
28
REDEMPTION DATE REDEMPTION PREMIUM
---------------------------- ------------------------------------------
SUBCLASS SUBCLASS SUBCLASS SUBCLASS
A-1 NOTES A-2 NOTES B-1 NOTES D-1 NOTES
--------- --------- --------- ---------
On or after the Closing Date 101.00% 102.00% 103.00% --
On or after March 15, 1999 100.50% 101.50% 102.50% --
On or after March 15, 2000 100.00% 101.00% 102.00% --
On or after March 15, 2001 -- 100.50% 101.50% --
On or after March 15, 2002 -- 100.00% 101.00% --
On or after March 15, 2003 -- 100.00% 100.50% 105.25%
On or after March 15, 2004 -- 100.00% 100.00% 104.50%
On or after March 15, 2005 -- 100.00% 100.00% 103.75%
On or after March 15, 2006 -- -- 100.00% 103.00%
On or after March 15, 2007 -- -- 100.00% 102.25%
On or after March 15, 2008 -- -- 100.00% 101.50%
On or after March 15, 2009 -- -- 100.00% 100.75%
On or after March 15, 2010 -- -- 100.00% 100.00%
On or after March 15, 2011 -- -- 100.00% 100.00%
On or after March 15, 2012 -- -- 100.00% 100.00%
On or after March 15, 2013 -- -- 100.00% 100.00%
On or after March 15, 2014 -- -- -- 100.00%
and (ii) in respect of any subclass of Refinancing Notes or Issuer Additional
Notes, the Redemption Premium established by or pursuant to a Controlling
Trustees' Resolution or in any indenture supplemental hereto providing for the
issuance of such Notes or designated as such in the form of such Notes.
"Redemption Price" means with respect to (i) the Subclass A-1 Notes, the
Subclass A-2 Notes and the Subclass B-1 Notes, (A) to the extent that the
redemption is funded other than out of the Available Collections Amount
(including proceeds from Refinancing Notes and proceeds from third parties),
the product of the applicable Redemption Premium and the Outstanding Principal
Balance of the portion of such subclass of Notes being redeemed and (B) to the
extent that the redemption is funded out of the Available Collections Amount,
the Outstanding Principal Balance of the portion of such subclass of Notes
being redeemed, without premium, (ii) any portion of the Subclass C-1 Notes
being redeemed, the higher of (X) the discounted present value of the Scheduled
Principal Payment Amounts allocable in accordance with Section 3.09 hereof in
respect of, and interest on, such portion from the Redemption Date to and
including the applicable Expected Final Payment Date discounted at a rate equal
to the Treasury Yield plus 0.5% and (Y) the Outstanding Principal Balance of
such portion, (iii) any portion of the Subclass D-1 Notes being redeemed,
(a) if such redemption occurs prior to March 15, 2003, the higher of (1) the
discounted present value of the Scheduled Principal Payment Amounts allocable
in accordance with Section 3.09 hereof in respect of, and interest on, such
portion from the Redemption Date to, but not including, March 15, 2003, plus
the product of the applicable Redemption Premium and the assumed Outstanding
Principal Balance for March 15, 2003 of
29
such portion, discounted at a rate equal to the Treasury Yield plus 1% and (2)
the Outstanding Principal Balance of such portion and (b) if such redemption
occurs on or after March 15, 2003, the product of the applicable Redemption
Premium and the Outstanding Principal Balance of such portion and (iv) any
Refinancing Notes or Issuer Additional Notes, the Redemption Price established
by or pursuant to a Controlling Trustees' Resolution or in any indenture
supplemental hereto providing for the issuance of such Notes or designated as
such in the form of such Notes.
"Reference Agency Agreement" means the Reference Agency Agreement dated as
of the Initial Closing Date, among the Issuer, the Trustee, the Reference Agent
and the Administrative Agent pursuant to which LIBOR is established from time
to time.
"Reference Agent" means Bankers Trust in its capacity as reference agent
under the Reference Agency Agreement, including its successors in interest,
until another Person shall have become the reference agent under that
agreement, and thereafter "Reference Agent" shall mean such successor Person.
"Reference Date" means, with respect to each Interest Accrual Period, the
day that is two Business Days prior to the Payment Date on which such Interest
Accrual Period commences; provided, however, that the Reference Date with
respect to the initial Interest Accrual Period means the date that is two
Business Days before the Initial Closing Date.
"Refinancing" has the meaning given to such term in Section 2.10 hereof.
"Refinancing Account" has the meaning given to such term in Section
3.01(f) hereof.
"Refinancing Expenses" means all out-of-pocket costs and expenses incurred
in connection with an offering and issuance of Refinancing Notes.
"Refinancing Notes" means any subclass of Notes issued by the Issuer under
this Indenture at any time and from time to time after the date hereof, the
proceeds of which are used to repay all or any part of the Outstanding
Principal Balance of a subclass of Notes and ranking pari passu with such
Notes.
"Register" has the meaning given to such term in Section 2.03 hereof.
"Registrar" has the meaning given to such term in Section 2.03 hereof and
includes any additional Registrar.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the Initial Closing Date, between the Issuer and Xxxxxx Xxxxxxx &
Co. Incorporated and any other agreement entered into between the Issuer and a
purchaser of Notes providing for the registration of the transfer of such Notes
under the Securities Act.
"Registration Statement" means the Registration Statement as defined and
described in a Registration Rights Agreement.
30
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" has the meaning given to such term in Section
2.01 hereof.
"Regulation S Global Note Exchange Date" means the date of exchange of any
Temporary Regulation S Global Note for any Permanent Regulation S Global Note,
which date shall be forty days after the Initial Closing Date, in the case of
the Initial Notes, and, in the case of any Additional Issuance, the date
established by or pursuant to a Controlling Trustees' Resolution or in any
indenture supplemental hereto providing for such Additional Issuance.
"Related Collateral Document" means any letter of credit, third-party or
bank guarantee or cash collateral provided by or on behalf of a Lessee to
secure such Lessee's obligations under a Lease.
"Related Documents" means the Administrative Agency Agreement, the Cash
Management Agreement, each Credit Facility, this Indenture, the Notes, the
Reference Agency Agreement, the Security Documents, the Servicing Agreement,
the Financial Advisory Agreement, the Asset Purchase Agreement, the
Registration Rights Agreement, the Tax Indemnification Agreement, any
Additional Servicing Agreements, any other Acquisition Agreements, any Swap
Agreements and any Swap Guarantees.
"Relevant Appraisal" means, with respect to any date of determination, the
most recent Appraisal preceding such date of determination.
"Relevant Information" means any information provided to the
Administrative Agent by any Service Provider or any other service provider
retained from time to time by MSAF Group pursuant to the Related Documents.
"Remaining Aircraft" means those Initial Aircraft title to which has not
been transferred to an Aircraft Owning Company by the Initial Closing Date.
"Renewal Lease" has the meaning given to such term in Section 5.03(f)
hereof.
"Rental Account" has the meaning given to such term in Section 3.01(e)
hereof.
"Rental Payments" means all rental payments and other amounts payable by
or on behalf of a Lessee under a Lease.
"Required Expense Amount" means, with respect to MSAF Group on each
Payment Date, (i) the amount of Expenses of MSAF Group due and payable on the
Calculation Date relating to such Payment Date or reasonably anticipated to
become due and payable before the end of the six-month period beginning on such
date, (ii) at the discretion of the Administrative Agent, an amount necessary
to provide for Permitted Accruals (other than
31
accruals in respect of Modification Payments) and (iii) an amount determined by
the Administrative Agent to be necessary to maintain the Permitted Balance in
the Expense Account after payment of the Expenses (on such Payment Date and
during the next succeeding Interest Accrual Period) and provision for the
Permitted Accruals.
"Requisition Compensation" means all monies or other compensation
receivable by any MSAF Group Member from any government, whether civil,
military or de facto, or public or local authority in relation to an Aircraft
in the event of its requisition for title, confiscation, restraint, detention,
forfeiture or compulsory acquisition or seizure or requisition for hire by or
under the order of any government or public or local authority.
"Responsible Officer" means, (i) with respect to the Trustee, any officer
within the Corporate Trust Office, including any Vice President, Managing
Director, Assistant Vice President, Secretary, Assistant Secretary or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge and familiarity with the particular subject and
(ii) with respect to the Issuer, any Controlling Trustee.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Note" has the meaning given to such term in Section 2.01
hereof.
"Scheduled Class Percentage" means, with respect to the MSAF Group Class A
Notes and the MSAF Group Class B Notes on any Payment Date, the "Scheduled
Class Percentage" set forth in Appendix A to this Indenture for such Payment
Date, as such percentage shall be adjusted from time to time in accordance with
Section 3.11 hereof.
"Scheduled Expiration Date" with respect to any Lease, means the date upon
which such lease is scheduled to expire under the terms thereof.
"Scheduled Principal Payment Amount" means, with respect to each class of
MSAF Group Notes on any Payment Date, the difference, if positive, between the
aggregate Outstanding Principal Balance of such class of MSAF Group Notes
(after giving effect to any payment of the Minimum Principal Payment Amount for
such class of MSAF Group Notes) and the Scheduled Target Principal Balance of
such class of MSAF Group Notes on such Payment Date.
"Scheduled Target Principal Balance" means with respect to (i) the MSAF
Group Class A Notes on any Payment Date, the product of (A) of the Scheduled
Class Percentage for the MSAF Group Class A Notes on such Payment Date and (B)
the lesser of (x) the Assumed Portfolio Value in respect of such Payment Date
and (y) 105% of the Adjusted Portfolio Value in respect of such Payment Date,
(ii) the MSAF Group Class B Notes on any Payment Date, the product of the
Scheduled Class Percentage for the MSAF Group Class B Notes on such Payment
Date and the Assumed Portfolio Value in respect of such Payment Date and (iii)
the MSAF Group Class C Notes and the MSAF Group Class D
32
Notes on any Payment Date, the "Scheduled Target Principal Balance" for such
Payment Date set forth in Appendix B to this Indenture, in each case as such
amount shall be adjusted from time to time in accordance with Section 3.11
hereof.
"Secondary Eligible Credit Facility" means the Custody and Loan Agreement,
the Xxxxxx Xxxxxxx Loan Agreement and any other Eligible Credit Facility
designated as a "Secondary Eligible Credit Facility" by the Controlling
Trustees and which provides by its terms that it is entitled only to the
priority of repayment accorded to Secondary Eligible Credit Facilities under
Section 3.08 hereof.
"Secured Parties" has the meaning given to such term in the Security Trust
Agreement.
"Securities Act" means the Securities Act of 1933.
"Security Interests" means the security interests granted or expressed to
be granted in the Collateral pursuant to the Security Trust Agreement.
"Security Trust Agreement" means the Security Trust Agreement dated as of
the Initial Closing Date, among the Issuer, each other party thereto and the
Security Trustee, for the benefit of the Secured Parties.
"Security Trustee" means the trustee appointed pursuant to Section 6.01 of
the Security Trust Agreement, initially Bankers Trust.
"Segregated Funds" means all of the funds, including any maintenance
reserves and security deposits, received from Lessees and not permitted to be
commingled with the funds of the MSAF Group pursuant to the terms of the
related Leases.
"Sellers" means ILFC and any sellers of Issuer Additional Aircraft.
"Senior Claim" has the meaning given to such term in Section 10.01 hereof.
"Senior Class" means, (i) so long as any Class A Notes are Outstanding,
the Class A Notes, (ii) after the Class A Notes have been repaid in full and so
long as any Class B Notes are Outstanding, the Class B Notes, (iii) after the
Class A Notes and Class B Notes have been repaid in full and so long as any
Class C Notes are Outstanding, the Class C Notes and (iv) after the Class A
Notes, Class B Notes and Class C Notes have been paid in full and so long as
any Class D Notes are Outstanding, the Class D Notes.
"Senior Trustee" means the Trustee of the Senior Class of the Notes;
provided that if more than one Person shall otherwise be the Trustee of various
subclasses of the Senior Class of Notes, then the Senior Trustee shall be the
Trustee of the subclass of such Notes with the lowest numerical designation
then Outstanding.
"Service Provider" means each of the Cash Manager, the Delaware Trustee,
the Servicer, the Trustee, the Security Trustee, the Administrative Agent, the
Reference Agent,
33
the Financial Advisor and any Additional Servicer.
"Servicer" means ILFC in its capacity as servicer under the Servicing
Agreement, including its successors in interest, until a successor Person shall
have become the servicer pursuant to such agreement or any replacement
servicing agreement, and thereafter "Servicer" shall mean such successor
Person.
"Servicer's Pro Forma Lease" has the meaning given to such term in Section
5.03(f) hereof.
"Servicing Agreement" means the Servicing Agreement, dated as of November
10, 1997, among the Servicer, the Issuer, the Administrative Agent and the
entities listed in Appendix A thereto.
"Shelf Registration Statement" has the meaning given to such term in the
applicable Registration Rights Agreement.
"Signatory Trustee" has the meaning given to such term in the Trust
Agreement.
"Significant Subsidiary" means at any time and from time to time any
subsidiary of the Issuer or any Guarantor other than any subsidiary which owns
or leases Aircraft having an aggregate Base Value of less than 10% of the
Adjusted Portfolio Value at such time.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Stated Rate of Interest" means, with respect to each subclass of MSAF
Group Notes, the interest rate set forth in such MSAF Group Notes; provided,
however, if an exchange offer registered under the Securities Act is not
consummated or a Shelf Registration Statement under the Securities Act with
respect to resales of (i) the Initial Notes is not declared effective by the
Commission on or prior to the date that is 270 days after the Initial Closing
Date provided that if such day is not a Business Day, then the next succeeding
Business Day, the Stated Rate of Interest for such MSAF Group Notes shall
increase by 0.5% per annum until (A) such exchange offer is consummated or (B)
the Shelf Registration Statement is declared effective or (ii) any MSAF Group
Additional Notes is not declared effective by the Commission on or prior to the
date specified in the Registration Rights Agreement relating to such MSAF Group
Notes, the Stated Rate of Interest shall increase by the rate specified in such
Registration Rights Agreement until such time as is specified therein.
"State of Registration" means, in relation to an Aircraft at any time, the
country or state on whose national register such Aircraft is registered at that
time under the laws of such country or state in accordance with the applicable
provisions of any Lease relating to such Aircraft.
34
"Step-Up Interest" means with respect to (i) any Subclass A-1 Notes not
repaid on or before the Expected Final Payment Date thereof, interest, at a
rate of 0.5% per annum, and (ii) any Refinancing Notes or MSAF Group Additional
Notes that by their terms provide that they are entitled to Step-Up Interest at
any time, interest, at a rate established by or pursuant to a Controlling
Trustees' Resolution or in any indenture supplemental hereto providing for the
issuance of such Notes or specified in the form of such Notes, which shall
accrue in addition to the Stated Rate of Interest on the Outstanding Principal
Balance of such MSAF Group Notes.
"Stock" has the meaning given to such term in Section 5.02(b) hereof.
"Subclass A-1 Notes" means the Subclass A-1 Notes, due March 15, 2023, of
the Issuer in the initial aggregate principal amount of $400,000,000,
substantially in the form of Exhibit A-1 hereto, including any note issued in
replacement or substitution therefor, any Exchange Note issued in exchange for
such Note pursuant to a Registration Rights Agreement and this Indenture and
any Refinancing Notes designated in the form of such Refinancing Notes as being
entitled to the rights and benefits of the Subclass A-1 Notes under this
Indenture, in each case ranking pari passu in order of payment priority to the
Subclass A-1 Notes.
"Subclass A-2 Notes" means the Subclass A-2 Notes, due March 15, 2023, of
the Issuer in the initial aggregate principal amount of $340,000,000,
substantially in the form of Exhibit A-2 hereto, including any note issued in
replacement or substitution therefor, any Exchange Note issued in exchange for
such Note pursuant to a Registration Rights Agreement and this Indenture and
any Refinancing Notes designated in the form of such Refinancing Notes as being
entitled to the rights and benefits of the Subclass A-2 Notes under this
Indenture, in each case ranking pari passu in order of payment priority to the
Subclass A-2 Notes.
"Subclass B-1 Notes" means the Subclass B-1 Notes, due March 15, 2023, of
the Issuer in the initial aggregate principal amount of $100,000,000,
substantially in the form of Exhibit B-1 hereto, including any notes issued in
replacement or substitution therefor, any Exchange Note issued in exchange for
such Note pursuant to a Registration Rights Agreement and this Indenture and
any Refinancing Notes designated in the form of such Refinancing Notes as being
entitled to the rights and benefits of the Subclass B-1 Notes under this
Indenture, in each case ranking pari passu in order of payment priority to the
Subclass B-1 Notes.
"Subclass C-1 Notes" means the Subclass C-1 Notes, due March 15, 2023, of
the Issuer in the initial aggregate principal amount of $100,000,000,
substantially in the form of Exhibit C-1 hereto, including any notes issued in
replacement or substitution therefor, any Exchange Note issued in exchange for
such Note pursuant to a Registration Rights Agreement and this Indenture and
any Refinancing Notes designated in the form of such Refinancing Notes as being
entitled to the rights and benefits of the Subclass C-1 Notes under this
Indenture, in each case ranking pari passu in order of payment priority to the
Subclass C-1 Notes.
35
"Subclass D-1 Notes" means the Subclass D-1 Notes, due March 15, 2023, of
the Issuer in the initial aggregate principal amount of $110,000,000,
substantially in the form of Exhibit D-1 hereto, including any notes issued in
replacement or substitution therefor, any Exchange Note issued in exchange for
such Note pursuant to a Registration Rights Agreement and this Indenture and
any Refinancing Notes designated in the form of such Refinancing Notes as being
entitled to the rights and benefits of the Subclass D-1 Notes under this
Indenture, in each case ranking pari passu in order of payment priority to the
Subclass D-1 Notes.
"Subordinated Claim" has the meaning given to such term in Section 10.01
hereof.
"Subordinated Swap Payments" has the meaning given to such term in Section
3.08 hereof.
"Substitute Aircraft" means an aircraft identified to replace a Remaining
Aircraft that has failed to be delivered to the MSAF Group; provided, that such
aircraft (i) is no more than seven years old as of February 28, 1998, (ii) is
subject to an operating lease contract, or letter of intent therefor, that will
become effective within 90 days following February 28, 1998, (iii) is of the
same type as such undelivered Remaining Aircraft and (iv) does not result in a
Concentration Default.
"Supplemental Class Percentage" means, with respect to the MSAF Group
Class A Notes and the MSAF Group Class B Notes on each Payment Date, the
"Supplemental Class Percentage" on such Payment Date set forth in Appendix A to
this Indenture, as such percentage shall be adjusted from time to time in
accordance with Section 3.11 hereof.
"Supplemental Principal Payment Amount" means, with respect to the MSAF
Group Class A Notes and the MSAF Group Class B Notes on any Payment Date, the
difference, if positive, between the Outstanding Principal Balance of such
class of MSAF Group Notes (after giving effect to any payment of the Minimum
Principal Payment Amount and Scheduled Principal Payment Amount for such class
of MSAF Group Notes) and the Supplemental Target Principal Balance of such
class of MSAF Group Notes on such Payment Date.
"Supplemental Target Principal Balance" means, with respect to the MSAF
Group Class A Notes and the MSAF Group Class B Notes on any Payment Date, the
product of (i) the Supplemental Class Percentage for such class of MSAF Group
Notes on such Payment Date and (ii) the Assumed Portfolio Value in respect of
such Payment Date.
"Swap Agreement" means any interest rate swap, cap, floor, Swaption, or
other interest rate hedging agreement among the Issuer and any Swap Provider
existing on the Initial Closing Date or entered into in accordance with
Sections 5.02(e)(iv) and 9.05 of this Indenture.
"Swap Breakage Costs" means any amounts payable by any MSAF Group
36
Member to a Swap Provider as a result of any early termination (however
described or defined therein) of any Swap Agreement.
"Swap Guarantee" has the meaning given to such term in Section 9.05
hereof.
"Swap Payment" means, on any Payment Date, a net payment to a Swap
Provider by any MSAF Group Member, other than any Subordinated Swap Payment.
"Swap Provider" means the counterparty of any MSAF Group Member under any
Swap Agreement.
"Swap Receipt" means a net payment to be made by a Swap Provider into the
Collection Account under a Swap Agreement and includes any such payment made by
a guarantor under any related Swap Guarantee or any termination payment
received from any counterparty to a Swap Agreement.
"Swaption" means any option agreement with respect to a Swap Agreement.
"Target Principal Balance" means, with respect to the MSAF Group Class C
Notes and the MSAF Group Class D Notes on any Payment Date, each of the Minimum
Target Principal Balance and the Scheduled Target Principal Balance on such
Payment Date.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, loss, damage, liability, expense, additions to tax and additional
amounts or costs incurred or imposed with respect thereto) imposed or otherwise
assessed by the United States or by any state, local or foreign government (or
any subdivision or agency thereof) or other taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth and similar charges; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value added, taxes on goods and services, gains taxes, license, registration
and documentation fees, customs duties, tariffs, and similar charges.
"Tax Indemnification Agreement" means the Tax Indemnification Agreement
dated as of the Initial Closing Date entered into by the Issuer and Xxxxxx
Xxxxxxx.
"Temporary Regulation S Global Note" has the meaning given to such term in
Section 2.01 hereof.
"Third Party Event" has the meaning given to such term in Section 5.03(b)
hereof.
"Total Loss" means, with respect to any Aircraft (a) if the same is
subject to a Lease, a Casualty Occurrence or Event of Loss (each as defined in
such Lease) or the like (however so defined); or (b) if the same is not subject
to a Lease, (i) its actual, constructive, compromised, arranged or agreed total
loss, (ii) its destruction, damage beyond repair or
37
being rendered permanently unfit for normal use for any reason whatsoever, (iii)
its requisition for title, confiscation, restraint, detention, forfeiture or any
compulsory acquisition or seizure or requisition for hire (other than a
requisition for hire for a temporary period not exceeding 180 days) by or under
the order of any government (whether civil, military or de facto) or public or
local authority or (iv) its hijacking, theft or disappearance, resulting in loss
of possession by the owner or operator thereof for a period of 30 consecutive
days or longer. A Total Loss with respect to any Aircraft shall be deemed to
occur on the date on which such Total Loss is deemed pursuant to the relevant
Lease to have occurred or, if such Lease does not so deem or the relevant
Aircraft is not subject to a Lease, (A) in the case of an actual total loss or
destruction, damage beyond repair or being rendered permanently unfit, the date
on which such loss, destruction, damage or rendering occurs (or, if the date of
loss or destruction is not known, the date on which the relevant Aircraft was
last heard of); (B) in the case of a constructive, compromised, arranged or
agreed total loss, the earlier of (1) the date 30 days after the date on which
notice claiming such total loss is issued to the insurers or brokers and (2) the
date on which such loss is agreed or compromised by the insurers; (C) in the
case of requisition for title, confiscation, restraint, detention, forfeiture,
compulsory acquisition or seizure, the date on which the same takes effect; (D)
in the case of a requisition for hire, the expiration of a period of 180 days
from the date on which such requisition commenced (or, if earlier, the date upon
which insurers make payment on the basis of a Total Loss); or (E) in the case of
clause (iv) above, the final day of the period of 30 consecutive days referred
to therein.
"Total Loss Proceeds" means, in relation to an Aircraft, the total net
proceeds of the insurance and reinsurance paid in respect of a Total Loss
thereof and includes, in the case of a Total Loss of an airframe which does not
involve the Total Loss of all Engines or parts installed thereon at the time
when such Total Loss occurred, the net sale proceeds of any such surviving
Engines or parts.
"Treasury Yield" means, with respect to (i) any Redemption of the Subclass
C-1 Notes on any Payment Date, the interest rate (expressed as a semiannual
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined on the fourth Business Day prior to such Payment
Date to be the per annum rate equal to the semiannual yield to maturity for
United States Treasury securities maturing on the Average Life Date of such
subclass and trading in the public securities markets either (x) as determined
by interpolation between the most recent weekly average yield to maturity for
two series of United States Treasury securities trading in the public
securities markets, (A) one maturing as close as possible to, but earlier than,
the Average Life Date of such subclass and (B) the other maturing as close as
possible to, but later than, the Average Life Date of such subclass in each
case as published in the most recent H.15 (519) or (y) if a weekly average
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such subclass is reported in the most recent H.15 (519), such
weekly average yield to maturity as published in such H.15 (519), (ii) any
Redemption of the Subclass D-1 Notes on any Payment Date, a per annum rate
(expressed as a monthly equivalent yield) determined to be the per annum rate
equal to the semiannual yield to maturity of the 6 1/4% United States Treasury
Notes maturing on February 15, 2003 and (iii) any Redemption of any Refinancing
Notes or Issuer Additional Notes on any Payment Date, the Treasury Yield for
such Payment
38
Date, if any, established by or pursuant to a Controlling Trustees' Resolution
or in any indenture supplemental hereto providing for the issuance of such Notes
or designated as such in the form of such Notes.
For the purposes of this definition,
"H.15 (519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors
of the Federal Reserve System, and the most recent H.15 (519) is the H.15
(519) published prior to the close of business on the fourth Business Day
prior to the applicable Payment Date.
"Average Life Date" of any subclass of Notes shall be the date which
follows the applicable Payment Date by a period equal to the Remaining
Weighted Average Life of such subclass.
"Remaining Weighted Average Life" means, with respect to any
subclass of Notes on any Payment Date, (i) the sum of the products of (A)
the portion of the Scheduled Principal Payment Amount allocable to such
subclass in accordance with Section 3.09 hereof on each subsequent
Payment Date (each, a "Subsequent Date") and (B) the number of days
remaining until such Subsequent Date divided by (ii) the Outstanding
Principal Balance of such subclass on such Payment Date.
"Trust Agreement" has the meaning given to such term in the preamble
hereof.
"Trustee" has the meaning given to such term in the preamble hereof and
any successor Trustee appointed in accordance with the terms hereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, (15
U.S. Code Section Section 77aaa-77bbbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06 hereof.
"U.S. GAAP" means generally accepted accounting principles in the United
States.
"U.S. Government Obligations" has the meaning given to such term in
Section 11.02 hereof.
Section 1.02. Rules of Construction Unless the context otherwise requires:
(a) A term has the meaning assigned to it and an accounting term not
otherwise defined has the meaning assigned to it in accordance with U.S.
GAAP.
(b) The terms "herein", "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
(c) Unless otherwise indicated in context, all references to
Articles, Sections, Appendices, Exhibits or Annexes refer to an Article
or Section of, or an
39
Appendix, Exhibit or Annex to, this Indenture.
(d) Words of the masculine, feminine or neuter gender shall mean and
include the correlative words of other genders, and words in the singular
shall include the plural, and vice versa.
(e) The terms "include", "including" and similar terms shall be
construed as if followed by the phrase "without limitation".
(f) Unless otherwise indicated, references to a subclass of Notes
shall be to the Subclass A-1 Notes, the Subclass A-2 Notes, the Subclass
B-1 Notes, the Subclass C-1 Notes and the Subclass D-1 Notes or to a
subclass of Refinancing Notes or Issuer Additional Notes, as applicable;
and references to a class of Notes shall be to the Class A Notes, Class B
Notes, Class C Notes and Class D Notes or to a class of Refinancing Notes
or Issuer Additional Notes, as applicable.
(g) References in this Indenture to an agreement or other document
(including this Indenture) include references to such agreement or
document as amended, replaced or otherwise modified in accordance with
the provisions of this Indenture, and the provisions of this Indenture
apply to successive events and transactions.
(h) References in this Indenture to any statute or other legislative
provision shall include any statutory or legislative modification or
re-enactment thereof, or any substitution therefor.
(i) References in this Indenture to the Notes of any class or
subclass include the conditions applicable to the Notes of such class or
subclass; and any reference to any amount of money due or payable by
reference to the Notes of any class or subclass shall include any sum
covenanted to be paid by the Issuer under this Indenture in respect of
the Notes of such class or subclass.
(j) References in this Indenture to any action, remedy or method of
judicial proceeding for the enforcement of the rights of creditors or of
security shall be deemed to include, in respect of any jurisdiction other
than the State of New York, references to such action, remedy or method
of judicial proceeding for the enforcement of the rights of creditors or
of security available or appropriate in such jurisdiction as shall most
nearly approximate such action, remedy or method of judicial proceeding
described or referred to in this Indenture.
(k) Where any payment is to be made, funds applied or any
calculation is to be made hereunder on a day which is not a Business Day,
unless any Related Document otherwise provides, such payment shall be
made, funds applied and calculation made on the next succeeding Business
Day, and payments shall be adjusted accordingly.
(l) Where both the Servicer and any Additional Servicer or any
40
replacement servicer are performing or may perform lease management
and/or remarketing services pursuant to a Related Document in relation to
one or more Aircraft at the same time, a reference in this Indenture to
the "Servicer" shall be construed as a reference to each of the Servicer
and such Additional Servicer or such replacement servicer and the rights
and obligations of the parties hereto shall be construed accordingly.
(m) Any provision in this Indenture providing for a transfer to or
among, or a withdrawal from, an Account or any other bank account by the
Administrative Agent shall be construed to be a transfer to or among, or
a withdrawal from, as the case may be, such Account or other bank account
by the Operating Bank or other Eligible Institution at which the
applicable account or accounts are located at the written, electronic or
other automated funds transfer direction of the Administrative Agent.
Such direction may be made by the Administrative Agent unless and until a
Default Notice shall have been delivered to MSAF or the Administrative
Agent, or the Administrative Agent shall have defaulted under the
Administrative Agency Agreement, and any such direction shall be in
writing and (i) give full details of the amount to be transferred or
withdrawn, the Account or other bank account to be debited, the Account
or other bank account to be credited and the date of the relevant payment
and (ii) certify that such request is made pursuant to and in accordance
with the terms of this Indenture. The Operating Bank and the Trustee
shall be entitled to act in accordance with such a request, without
further question or inquiry, and shall have no obligation to give any
direction to any other Eligible Institution at which an account or
accounts are located unless and until it receives such a request from the
Administrative Agent; provided that the Administrative Agent shall at all
times comply with the relevant provisions of the Administrative Agency
Agreement with respect to any such direction.
Section 1.03. Compliance Certificates and Opinions. Upon any application
or request by the Issuer to the Trustee to take any action under any provision
of this Indenture, the Issuer shall furnish to the Trustee an Officer's
Certificate stating that, in the opinion of the signers thereof, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to Section 6.11 hereof) or any indenture supplemental hereto shall
include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions in this
Indenture relating thereto;
(2) a brief statement as to the nature and scope of the examination
or
41
investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.04. Acts of Noteholders. (a) Any direction, consent, waiver or
other action provided by this Indenture in respect of the Notes of any subclass
to be given or taken by Noteholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Noteholders in
person or by an agent or proxy duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee, to each Rating Agency
where it is hereby expressly required pursuant to this Indenture or to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose under this Indenture and conclusive in favor of the Trustee or
the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds
or administer oaths that the Person executing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or such other officer and where such execution
is by an officer of a corporation or association, trustee of a trust or member
of a partnership, on behalf of such corporation, association, trust or
partnership, such certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other reasonable manner which the Trustee deems
sufficient.
(c) In determining whether the Holders of Notes have given any direction,
consent, request, demand, authorization, notice, waiver or other Act (a
"Direction"), under this Indenture, Notes owned by the Issuer or any affiliate
of any such Person shall be disregarded and deemed not to be Outstanding for
purposes of any such determination. In determining whether the Trustee shall
be protected in relying upon any such Direction, only Notes which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Notwithstanding the foregoing, (i) if any such Person owns 100% of the Notes of
any subclass Outstanding, such Notes shall not be so disregarded as aforesaid,
and (ii) if any amount of Notes of such subclass so owned by any such Person
have been pledged in good faith, such Notes shall not be disregarded as
aforesaid if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the
42
pledgee is not the Issuer, the Depositor or any affiliate of any such
Person.
(d) The Issuer may at its option, by delivery of Officers' Certificates to
the Trustee, set a record date other than the Record Date to determine the
Noteholders in respect of the Notes of any subclass entitled to give any
Direction in respect of such Notes. Notwithstanding Section 316(c) of the
Trust Indenture Act, such record date shall be the record date specified in
such Officer's Certificate which shall be a date not more than 30 days prior to
the first solicitation of Noteholders in connection therewith. If such a
record date is fixed, such Direction may be given before or after such record
date, but only the Noteholders of record of the applicable subclass at the
close of business on such record date shall be deemed to be Noteholders for the
purposes of determining whether Noteholders of the requisite proportion of
Outstanding Notes of such subclass have authorized or agreed or consented to
such Direction, and for that purpose the Outstanding Notes of such subclass
shall be computed as of such record date; provided that no such Direction by
the Noteholders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
one year after the record date.
(e) Any Direction or other action by the Holder of any Note shall bind the
Holder of every Note issued upon the transfer thereof or in exchange therefor
or in lieu thereof, whether or not notation of such action is made upon such
Note.
Section 1.05. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
ARTICLE II
THE NOTES
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Section 2.01. Amount Not to Exceed the Initial Outstanding Principal
Balance; Terms; Form; Execution and Delivery. (a) The Outstanding Principal
Balance of any subclass of Notes which may be authenticated and delivered from
time to time under this Indenture shall not exceed the initial Outstanding
Principal Balance set forth for such subclass of Notes in the definition
thereof or, with respect to any subclass of Refinancing Notes or Issuer
Additional Notes, authorized in a Controlling Trustees' Resolution; provided
that at no time may the Outstanding Principal Balance of any such subclass of
Refinancing Notes exceed the Outstanding Principal Balance of the subclass of
Notes being refinanced thereby immediately prior to such Refinancing plus any
Premium and transaction expenses relating thereto; and provided, further, that
any Issuer Additional Notes shall be issued in accordance with Section 2.11
hereof.
(b) There shall be issued and delivered and authenticated on the relevant
Closing Date to each of the Noteholders Notes in the principal amounts and
maturities and bearing the interest rates, in each case in registered form and
substantially in the form set forth in the applicable exhibit to this Indenture
or in any indenture supplemental hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements printed, lithographed or
engraved thereon, as may be required to comply with the rules of any securities
exchange on which such Notes may be listed or to conform to any usage in
respect thereof, or as may, consistently herewith, be prescribed by the Trustee
or by the Signatory Trustee executing such Notes, such determination by said
Signatory Trustee to be evidenced by his execution of the Notes.
Definitive Notes of each subclass shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Notes may be listed, all as determined by the Signatory Trustee executing such
Notes, as evidenced by his execution of such Notes.
Each subclass of Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Notes in
registered form, substantially in the form set forth in the applicable exhibit
to this Indenture or in any indenture supplemental hereto (each, a "Rule 144A
Global Note"), registered in the name of the nominee of the Depository,
deposited with the Trustee, as custodian for the Depository, duly executed by
the Issuer and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of each Rule 144A Global Note may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository or its nominee, in accordance with the
instructions given by the Holder thereof, as hereinafter provided.
Each subclass of Notes offered and sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
temporary global Notes in registered form substantially in the form set forth
in the applicable exhibit to this Indenture or in any indenture supplemental
hereto (each, a "Temporary Regulation S Global Note"), registered in the name
of the nominee of the Depository, deposited with the Trustee, as custodian for
the Depository, duly executed by the Issuer and authenticated by the Trustee as
44
hereinafter provided. At any time following the applicable Regulation S Global
Note Exchange Date, upon receipt by the Trustee and the Issuer of a certificate
substantially in the form of Exhibit I hereto, one or more permanent global
Notes for each subclass of Notes in registered form substantially in the form
set forth in the applicable exhibit to this Indenture or in any indenture
supplemental hereto (each, a "Permanent Regulation S Global Note"; and together
with each Temporary Regulation S Global Note, the "Regulation S Global Notes")
duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided shall be deposited with the Trustee, as custodian for the Depository,
and the Registrar shall reflect on its books and records the date and a decrease
in the principal amount of the Temporary Regulation S Global Note of such
subclass in an amount equal to the principal amount of the beneficial interest
in such Temporary Regulation S Global Note transferred.
Notes offered and sold in reliance on Section 4(2) of the Securities Act
shall be issued in the form of permanent certificated Notes in registered form
in substantially the form set forth in the applicable exhibit to this Indenture
(collectively with the definitive, fully registered Notes issued pursuant to
Section 2.12(b) hereof, the "Definitive Notes").
The Initial Notes issuable hereunder on the Initial Closing Date shall be
issued in five subclasses. The Initial Notes shall be designated the Subclass
A-1 Notes, the Subclass A-2 Notes, the Subclass B-1 Notes, the Subclass C-1
Notes and the Subclass D-1 Notes.
Interest shall accrue on any subclass of the Floating Rate Notes from the
relevant Closing Date and shall be computed for each Interest Accrual Period on
the basis of a 360-day year and the actual number of days elapsed in such
Interest Accrual Period on the Outstanding Principal Balance of such Note.
Interest shall accrue on any subclass of the Fixed Rate Notes from the relevant
Closing Date and shall be computed for each Interest Accrual Period on the
basis of a 360-day year and one-twelfth of an annual interest payment on the
Outstanding Principal Balance and, in the case of an incomplete Interest
Accrual Period, on the basis of a 360-day year consisting of twelve 30-day
months and the actual number of days elapsed in such Interest Accrual Period.
(c) On the date of any Refinancing, the Issuer shall issue and deliver as
provided in Section 2.10 hereof an aggregate principal amount of Refinancing
Notes having the maturities and bearing the interest rates and such other terms
authorized by one or more Controlling Trustees' Resolutions or in any indenture
supplemental hereto providing for the issuance of such Notes or specified in
the form of such Notes, in each case in accordance with such Section 2.10.
(d) On the date of the issuance, if any, of any Issuer Additional Notes,
the Issuer shall issue and deliver, as provided in Sections 2.11 and 5.02(f)
hereof, an aggregate principal amount of Issuer Additional Notes having the
maturities and bearing the interest rates and such other terms authorized by
one or more Controlling Trustees' Resolutions or in any indenture supplemental
hereto providing for the issuance of such Notes or specified in the form of
such Notes, in each case in accordance with such Section 2.11.
(e) The Notes shall be executed on behalf of the Issuer by the manual or
facsimile signature of a Signatory Trustee of the Issuer.
45
(f) Each Note bearing the manual or facsimile signatures of any individual
who was at the time such Note was executed a Signatory Trustee of the Issuer
shall bind the Issuer, notwithstanding that any such individual has ceased to
hold such office prior to the authentication and delivery of such Notes or any
payment thereon.
(g) At any time and from time to time after the execution of any Notes,
the Issuer may deliver such Notes to the Trustee for authentication and,
subject to the provisions of clause (h) below, the Trustee shall authenticate
such Notes by manual or facsimile signature upon receipt by it of written
orders of the Issuer. The Notes shall be authenticated on behalf of the
Trustee by any Responsible Officer of the Trustee.
(h) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless it shall have been executed on
behalf of the Issuer as provided in clause (e) above and authenticated by or on
behalf of the Trustee as provided in clause (g) above. Such signatures shall
be conclusive evidence that such Note has been duly executed and authenticated
under this Indenture. Each Note shall be dated the date of its authentication.
Section 2.02. Restrictive Legends. Unless and until a Note is exchanged
for an Exchange Note in connection with an effective registration under the
Securities Act pursuant to the Registration Rights Agreement, each Rule 144A
Global Note, each Regulation S Global Note and each Definitive Note issued in
reliance on Section 4(2) of the Securities Act shall bear the following legend
on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY
AUTHORITY IN ANY JURISDICTION AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT(A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) (TAKING INTO ACCOUNT
THE PROVISIONS OF RULE 144(d) IF APPLICABLE) UNDER THE SECURITIES ACT AS
IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO XXXXXX XXXXXXX AIRCRAFT FINANCE OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN
46
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM
REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND, IN EACH CASE (A) THROUGH (F) ABOVE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE
WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE TRANSFER NOTICE ATTACHED HERETO AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
47
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.13 OF THE INDENTURE.
Section 2.03. Registrar and Paying Agent. (a) With respect to each
subclass of Notes, there shall at all times be maintained an office or agency
in the location set forth in Section 13.05 hereof where Notes of such subclass
may be presented or surrendered for registration of transfer or for exchange
(each, a "Registrar"), and for payment thereof (each, a "Paying Agent") and
where notices and demands to or upon the Issuer in respect of such Notes may be
served. For so long as any Notes are listed on the Luxembourg Stock Exchange,
the Issuer shall appoint and maintain a Paying Agent and a Registrar in
Luxembourg. The Issuer shall cause each Registrar to keep a register of such
subclass of Notes for which it is acting as Registrar and of their transfer and
exchange (the "Register"). Written notice of the location of each such other
office or agency and of any change of location thereof shall be given by the
Trustee to the Issuer and the Holders of such subclass. In the event that no
such office or agency shall be maintained or no such notice of location or of
change of location shall be given, presentations and demands may be made and
notices may be served at the Corporate Trust Office of the Trustee.
(b) Each Authorized Agent shall be a bank or trust company, shall be a
corporation organized and doing business under the laws of the United States or
any state or territory thereof or of the District of Columbia, with a combined
capital and surplus of at least $75,000,000 (or having a combined capital and
surplus in excess of $5,000,000 and the obligations of which, whether now in
existence or hereafter incurred, are fully and unconditionally guaranteed by a
corporation organized and doing business under the laws of the United States,
any state or territory thereof or of the District of Columbia and having a
combined capital and surplus of at least $75,000,000) and shall be authorized
under the laws of the United States or any state or territory thereof to
exercise corporate trust powers, subject to supervision by Federal or state
authorities (such requirements, the "Eligibility Requirements"). The Trustee
shall initially be a Paying Agent and Registrar hereunder with respect to the
Notes of each subclass. Each Registrar other than the Trustee shall furnish to
the Trustee, at stated intervals of not more than six months, and at such other
times as the Trustee may request in writing, a copy of the Register maintained
by such Registrar.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authorized Agent, shall be the
48
successor of such Authorized Agent hereunder, if such successor corporation is
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the parties hereto or such Authorized
Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written notice
of resignation to the Trustee and the Issuer. The Issuer may, and at the
request of the Trustee shall, at any time terminate the agency of any
Authorized Agent by giving written notice of termination to such Authorized
Agent and to the Trustee. Upon the resignation or termination of an Authorized
Agent or if at any time any such Authorized Agent shall cease to be eligible
under this Section (when, in either case, no other Authorized Agent performing
the functions of such Authorized Agent shall have been appointed by the
Trustee), the Issuer shall promptly appoint one or more qualified successor
Authorized Agents, reasonably satisfactory to the Trustee, to perform the
functions of the Authorized Agent which has resigned or whose agency has been
terminated or who shall have ceased to be eligible under this Section. The
Issuer shall give written notice of any such appointment made by it to the
Trustee; and in each case the Trustee shall mail notice of such appointment to
all Holders of the related subclass as their names and addresses appear on the
Register for such subclass.
(e) The Issuer agrees to pay, or cause to be paid, from time to time to
each Authorized Agent reasonable compensation for its services and to reimburse
it for its reasonable expenses to be agreed to pursuant to separate agreements
with each such Authorized Agent.
Section 2.04. Paying Agent to Hold Money in Trust. The Trustee shall
require each Paying Agent other than the Trustee to agree in writing that all
moneys deposited with any Paying Agent for the purpose of any payment on the
Notes shall be deposited and held in trust for the benefit of the Holders
entitled to such payment, subject to the provisions of this Section. Moneys so
deposited and held in trust shall constitute a separate trust fund for the
benefit of the Holders with respect to which such money was deposited.
The Trustee may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, direct any Paying
Agent to pay to the Trustee all sums held in trust by such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall
be released from all further liability with respect to such money.
Section 2.05. Method of Payment. (a) On each Payment Date, the Trustee
shall, or shall instruct a Paying Agent to, pay, to the extent of the Available
Collections Amount therefor, to the Noteholders all interest, principal and
premium, if any, on the Notes of each subclass (other than payments received
following an Event of Default in respect of any subclass of Notes); provided,
that in the event and to the extent receipt of any payment is not confirmed by
the Trustee or Paying Agent by 1:00 p.m. (New York time) on such Payment Date
or any Business Day thereafter, distribution thereof shall be made on the
Business Day following the Business Day such payment is received. Each payment
on any Payment Date other than the Final Payment Date with respect to any
subclass of Notes shall be made by the Trustee or Paying Agent to the
Noteholders as of the Record Date for such Payment Date. The final payment with
respect to any Note, however, shall be made only upon presentation and
surrender of such Note by the Noteholder or its agent at the Corporate
49
Trust Office or agency of the Trustee or Paying Agent specified in the
notice given by the Trustee or Paying Agent with respect to such final payment.
(b) At such time, if any, as the Notes of any subclass are issued in the
form of Definitive Notes, payments on a Payment Date shall be made by check
mailed to each Noteholder of a Definitive Note on the applicable Record Date at
its address appearing on the Register maintained with respect to such subclass.
Alternatively, upon application in writing to the Trustee, not later than the
applicable Record Date, by a Noteholder of one or more Definitive Notes of such
subclass having an aggregate principal amount of not less than $1,000,000, any
such payments shall be made by wire transfer to an account designated by such
Noteholder at a financial institution in New York, New York; provided that the
final payment for each subclass of Notes shall be made only upon presentation
and surrender of the Definitive Notes of such subclass by the Noteholder or its
agent at the Corporate Trust Office or agency of the Trustee or Paying Agent
specified in the notice of such final payment given by the Trustee or Paying
Agent. The Trustee or Paying Agent shall mail such notice of the final payment
of such subclass to each of the Noteholders of such subclass, specifying the
date and amount of such final payment.
Section 2.06. Minimum Denomination. Each subclass of Notes shall be
issued in minimum denominations of $100,000 and integral multiples of $1,000 in
excess thereof.
Section 2.07. Transfer and Exchange; Cancellation. The Notes are
issuable only in registered form. A Holder may transfer a Note only by written
application to the Registrar stating the name of the proposed transferee and
otherwise complying with the terms of this Indenture. No such transfer shall
be effected until, and such transferee shall succeed to the rights of a Holder
only upon, final acceptance and registration of the transfer by the Registrar
in the Register.
Prior to the due presentment for registration of transfer of a Note, the
Issuer and the Trustee may deem and treat the applicable registered Noteholder
as the absolute owner and Holder of such Note for the purpose of receiving
payment of all amounts payable with respect to such Note and for all other
purposes and shall not be affected by any notice to the contrary. The
Registrar (if different from the Trustee) shall promptly notify the Trustee and
the Trustee shall promptly notify the Issuer of each request for a registration
of transfer of a Note.
Furthermore, any Holder of a Global Note shall, by acceptance of such
Global Note, agree that, subject to Section 2.12(b) hereof, transfers of
beneficial interests in such Global Note may be effected only through a
book-entry system maintained by the Holder of such Global Note (or its agent)
and that ownership of a beneficial interest in such Note shall be required to
be reflected in a book-entry. When Notes are presented to the Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations (including an exchange of
Notes for Exchange Notes), the Registrar shall register the transfer or make
the exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such Notes are duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized
50
in writing to act on behalf of the Holder); provided that no exchanges of
Notes for Exchange Notes shall occur until a Registration Statement shall have
been declared effective by the Commission and any Notes that are exchanged for
Exchange Notes shall be cancelled by the Trustee. To permit registrations of
transfers and exchanges, the Issuer shall execute and the Trustee shall
authenticate Notes at the Registrar's request. Except as set forth in Sections
2.08 and 2.09 hereof, no service charge shall be made for any registration of
transfer or exchange or redemption of the Notes.
The Issuer shall not be required to exchange or register the transfer of
any Notes as above provided during the 15-day period preceding the Final
Maturity Date of any such Notes or during a 15-day period preceding the first
mailing of any notice of Redemption or Refinancing of Notes to be redeemed or
refinanced. The Issuer shall not be required to exchange or register the
transfer of any Notes that have been selected, called or are being called for
Redemption or Refinancing except, in the case of any Notes where notice has
been given that such Notes are to be redeemed in part, the portion thereof not
so to be redeemed.
The Issuer at any time may deliver Notes to the Trustee for cancellation.
The Trustee and no one else shall cancel and destroy in accordance with its
customary practices in effect from time to time (subject to the record
retention requirements of the Exchange Act) any such Notes, together with any
other Notes surrendered to it for registration of transfer, exchange or
payment. The Issuer may not issue new Notes (other than Refinancing Notes
issued in connection with any Refinancing) to replace Notes it has redeemed,
paid or delivered to the Trustee for cancellation.
Section 2.08. Mutilated, Destroyed, Lost or Stolen Notes. If any Note
shall become mutilated, destroyed, lost or stolen, the Issuer shall, upon the
written request of the Holder thereof and presentation of the Note or
satisfactory evidence of destruction, loss or theft thereof to the Trustee or
Registrar, issue, and the Trustee shall authenticate and the Trustee or
Registrar shall deliver in exchange therefor or in replacement thereof, a new
Note of the same subclass, payable to such Holder in the same principal amount,
of the same maturity, with the same payment schedule, bearing the same interest
rate and dated the date of its authentication. If the Note being replaced has
become mutilated, such Note shall be surrendered to the Trustee or a Registrar
and forwarded to the Issuer by the Trustee or such Registrar. If the Note
being replaced has been destroyed, lost or stolen, the Holder thereof shall
furnish to the Issuer, the Trustee or a Registrar (i) such security or
indemnity as may be required by them to save the Issuer, the Trustee and such
Registrar harmless and (ii) evidence satisfactory to the Issuer, the Trustee
and such Registrar of the destruction, loss or theft of such Note and of the
ownership thereof. The Noteholders will be required to pay any tax or other
governmental charge imposed in connection with such exchange or replacement and
any other expenses (including the fees and expenses of the Trustee and any
Registrar) connected therewith.
Section 2.09. Payments of Transfer Taxes. Upon the transfer of any Note
or Notes pursuant to Section 2.07 hereof, the Issuer or the Trustee may require
from the party requesting such new Note or Notes payment of a sum to reimburse
the Issuer or the Trustee for, or to provide funds for the payment of, any
transfer tax or similar governmental charge payable in connection therewith.
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Section 2.10. Refinancing of Notes. (a) Subject to paragraphs (b) and
(c) below and Section 5.02(f)(ii) hereof, the Issuer may issue Refinancing
Notes pursuant to this Indenture for the purpose of refinancing the Outstanding
Principal Balance of any subclass of Notes (including refinancings of
Refinancing Notes). Each refinancing of any subclass of Notes with the
proceeds of an offering of Refinancing Notes (a "Refinancing") shall be
authorized pursuant to one or more Controlling Trustees' Resolutions. Each
Refinancing Note shall be designated generally as a "Note" for all purposes
under this Indenture, with such further designations added or incorporated in
such title as specified in the related Controlling Trustees' Resolutions or in
any indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes, as the case may be.
(b) A Refinancing of any subclass of Notes in whole or in part may occur
on any Payment Date after the Initial Closing Date; provided that notice of
such Refinancing shall be given to the Trustee and, for so long as any Notes
are listed on the Luxembourg Stock Exchange, to the Listing Agent and the
Luxembourg Stock Exchange, not less than five days and not more than thirty
days prior to the date of such Refinancing; provided, further that an amount
equal to the Redemption Price plus accrued and unpaid interest will be payable
with respect to any subclass of Notes so refinanced. Each notice in respect of
a Refinancing shall state (i) the date of such Refinancing, (ii) the Redemption
Price of the Notes to be refinanced and the amount of accrued but unpaid
interest thereon, (iii) that the Notes of the subclass to be refinanced must be
surrendered and (iv) that, unless the Issuer defaults in the payment of the
Redemption Price and any accrued and unpaid interest, interest on such subclass
of Notes to be refinanced will cease to accrue on and after the date of such
Refinancing. On the date of any Refinancing, the Issuer shall issue and sell
an aggregate principal amount of Refinancing Notes not to exceed the
Outstanding Principal Balance of the subclass of Notes being refinanced thereby
plus any Premium and transaction expenses relating thereto. The proceeds of
each sale of Refinancing Notes shall be used to repay the Outstanding Principal
Balance of the subclass of Notes being refinanced thereby. Once a Notice of
Refinancing in respect of any Refinancing is published, each subclass of Notes
to which such Notice of Refinancing applies shall become due and payable on the
Refinancing Date stated in such Notice of Refinancing at their Redemption
Price, together with accrued and unpaid interest.
(c) Each Refinancing Note shall contain such terms as may be established
in or pursuant to the related Controlling Trustees' Resolutions (subject to
Section 2.01 hereof) or in any indenture supplemental hereto providing for the
issuance of such Notes or specified in the form of such Notes to the extent
permitted below, and shall have the same ranking pursuant to Section 3.08 with
respect to all other Outstanding Notes as the Notes being refinanced thereby.
Prior to any Refinancing, any or all of the following, as applicable, with
respect to the related issue of Refinancing Notes shall have been determined by
the Issuer and set forth in such Controlling Trustees' Resolutions or in any
indenture supplemental hereto providing for the issuance of such Notes or
specified in the form of such Notes, as the case may be:
(1) the subclass of Notes to be refinanced by such Refinancing
Notes;
(2) the aggregate principal amount of each subclass of such
Refinancing
52
Notes which may be issued in respect of such Refinancing;
(3) the proposed date of such Refinancing;
(4) the Expected Final Payment Date and the Final Maturity Date of
each subclass of such Refinancing Notes;
(5) the rate at which such Refinancing Notes shall bear interest or
the method by which such rate shall be determined;
(6) if other than denominations of $100,000 and any integral
multiple of $1,000 in excess thereof, the denomination or denominations
in which any subclass of such Refinancing Notes shall be issuable;
(7) whether any such Refinancing Notes are to be issuable initially
in temporary or permanent global form and, if so, whether beneficial
owners of interests in any such permanent global Refinancing Note may
exchange such interests for Refinancing Notes of such subclass and of
like tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 2.07 hereof, and the circumstances under which and
the place or places where any such exchanges may be made and the identity
of any initial depository therefor; and
(8) any other terms, conditions, rights and preferences (or
limitations on such rights and preferences) relating to the subclass of
Refinancing Notes (which terms shall comply with Applicable Law and not
be inconsistent with the requirements or restrictions of this Indenture,
including Section 5.02(f)(ii) hereof).
If any of the terms of any issue of Refinancing Notes are established by
action taken pursuant to one or more Controlling Trustees' Resolutions, such
Controlling Trustees' Resolutions shall be delivered to the Trustee setting
forth the terms of such Refinancing Notes.
Section 2.11. Issuer Additional Notes. (a) Subject to paragraph (b)
below and Section 5.02(f)(iv) hereof, the Issuer may issue Issuer Additional
Notes pursuant to this Indenture the proceeds of which shall be used to acquire
Issuer Additional Aircraft (each, an "Additional Issuance"). Each issuance of
any subclass of Issuer Additional Notes shall be authorized pursuant to one or
more Controlling Trustees' Resolutions. Each Issuer Additional Note shall be
designated generally as a "Note" for all purposes under this Indenture, with
such further designations added or incorporated in such title as specified in
the related Controlling Trustees' Resolutions or in any indenture supplemental
hereto providing for the issuance of such Notes or specified in the form of
such Notes, as the case may be.
(b) Each Issuer Additional Note shall contain such terms as may be
established in or pursuant to the related Controlling Trustees' Resolutions
(subject to Section 2.01 hereof) or in any indenture supplemental hereto
providing for the issuance of such Notes or specified in the form of such Notes
to the extent permitted below, and shall
53
have the same ranking pursuant to Section 3.08 with respect to all other
Outstanding MSAF Group Notes of the same class. Prior to any issuance, any or
all of the following, as applicable, with respect to the related Additional
Issuance shall have been determined by the Issuer and set forth in such
Controlling Trustees' Resolutions or in any indenture supplemental hereto or
specified in the form of such Notes, as the case may be:
(1) the subclass of Notes to be issued;
(2) the aggregate principal amount of each subclass of such Issuer
Additional Notes which may be issued;
(3) the proposed date of such Additional Issuance;
(4) the Expected Final Payment Date and the Final Maturity Date of
each subclass of such Issuer Additional Notes;
(5) the rate at which such Issuer Additional Notes shall bear
interest or the method by which such rate shall be determined;
(6) if other than denominations of $100,000 and any integral
multiple of $1,000 in excess thereof, the denomination or denominations
in which each subclass of any such Issuer Additional Notes shall be
issuable;
(7) whether any such Issuer Additional Notes are to be issuable
initially in temporary or permanent global form and, if so, whether
beneficial owners of interests in any such permanent global Issuer
Additional Note may exchange such interests for Issuer Additional Notes
of the same subclass and of like tenor and of any authorized form and
denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided in Section 2.07 hereof, and
the circumstances under which and the place or places where any such
exchanges may be made and the identity of any initial depository
therefor; and
(8) any other terms, conditions, rights and preferences (or
limitations on such rights and preferences) relating to each subclass of
Issuer Additional Notes (which terms shall comply with Applicable Law and
not be inconsistent with the requirements or restrictions of this
Indenture, including Sections 5.02(f) and 13.13 hereof).
If any of the terms of any issue of Issuer Additional Notes are
established by action taken pursuant to one or more Controlling Trustees'
Resolutions, such Controlling Trustees' Resolutions shall be delivered to the
Trustee setting forth the terms of such Issuer Additional Notes.
Section 2.12. Book-Entry Provisions. (a) Global Notes of each subclass
initially shall (i) be registered in the name of the Depository for such Notes
or in the name of the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for the Depository and (iii) if not registered under the
Securities Act, bear the Private Placement Legend as set forth in Section 2.02
hereof.
54
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under such
Global Note, and the Depository may be treated by the Issuer, the Trustee and
any agent of the Issuer or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever.
Whenever notice or other communication to the Noteholders of any subclass
of Global Notes is required under this Indenture, unless and until Definitive
Notes shall have been issued pursuant to Section 2.12(b) below, the Trustee
shall give all such notices and communications specified herein to be given to
Noteholders of such subclass of Global Notes to the Depository and/or the Agent
Members, and shall make available additional copies as requested by such Agent
Members.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer,
the Trustee or any agent of the Issuer or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Global Note. Neither the Issuer nor the Trustee shall be liable for any delay
by the Depository in identifying the beneficial owners of the Global Notes, and
the Issuer and the Trustee may conclusively rely on, and shall be fully
protected in relying on, instructions from the Depository for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of any Global Notes to be issued).
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depository, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depository
and the provisions of Section 2.13 hereof. Definitive Notes shall be issued to
the individual beneficial owners or their nominees in exchange for their
beneficial interests in the Rule 144A Global Note or the Regulation S Global
Note, respectively, only if (i) the Issuer advises the Trustee in writing that
the Depository is no longer willing or able to properly discharge its
responsibilities as depositary with respect to the Notes and the Trustee or the
Issuer is unable to appoint a qualified successor within 90 days of such
notice, (ii) the Issuer, at its option, elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of an Event of
Default with respect to any class of Notes, Noteholders of a subclass within
such class representing an aggregate of not less than 51% of the aggregate
Outstanding Principal Balance of Notes of such subclass advise the Issuer, the
Trustee and the Depository through the Agent Members in writing that the
continuation of a book-entry system through the Depository (or a successor
thereto) is no longer in the best interests of the Noteholders of such
subclass. Upon the occurrence of any event described in the immediately
preceding sentence, the Trustee shall notify all Noteholders of each affected
subclass, through the Depository, of the occurrence of such event and of the
availability of Definitive Notes of such subclass. Upon surrender to the
Trustee of the Global Notes of such subclass held by the Depository,
accompanied by registration instructions from the Depository for registration
of Definitive Notes in the names of Noteholders of such subclass, the Issuer
shall issue and the Trustee shall authenticate and deliver the Definitive Notes
of such subclass to the beneficial owners of such subclass or their
55
nominees in accordance with the instructions of the Depository.
None of the Issuer, the Registrar, the Paying Agent or the Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be fully protected in relying on, such registration
instructions. Upon the issuance of Definitive Notes of such subclass, the
Trustee shall recognize the Persons in whose name the Definitive Notes are
registered in the Register as Noteholders hereunder. Neither the Issuer nor
the Trustee shall be liable if the Trustee or the Issuer is unable to locate a
qualified successor Depository.
Definitive Notes of any subclass will be freely transferable and
exchangeable for Definitive Notes of the same subclass at the office of the
Trustee or the office of a Registrar upon compliance with the requirements set
forth herein.
(c) Any beneficial interest in one of the Global Notes as to any subclass
that is transferred to a Person who takes delivery in the form of an interest
in another Global Note will, upon transfer, cease to be an interest in such
Global Note and become an interest in such other Global Note and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Note for as
long as it remains such an interest.
(d) Any Definitive Note delivered in exchange for an interest in a Rule
144A Global Note pursuant to paragraph (b) of this Section shall, except as
otherwise provided by paragraph (f) of Section 2.13, bear the Private Placement
Legend applicable to a Rule 144A Global Note set forth in Section 2.02 hereof.
(e) Any Definitive Note delivered in exchange for an interest in a
Regulation S Global Note pursuant to paragraph (b) of this Section shall,
except as otherwise provided by paragraph (f) of Section 2.13, bear the Private
Placement Legend applicable to a Regulation S Global Note set forth in Section
2.02 hereof.
Section 2.13. Special Transfer Provisions. Unless and until a Note is
exchanged for an Exchange Note under an effective registration statement under
the Securities Act pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether
or not such Note bears the Private Placement Legend, if the proposed
transferee has delivered to the Registrar (A) a certificate substantially
in the form of Exhibit K hereto and (B) if the aggregate principal amount
of the Notes being transferred is less than $250,000, an Opinion of
Counsel acceptable to the Issuer that such transfer is in compliance with
the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial
56
interest in the Rule 144A Global Note, upon receipt by the Registrar of
(x) the documents, if any, required by paragraph (i) and (y) instructions
given in accordance with the Depositary's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the Rule 144A Global Note in an amount
equal to the principal amount of the beneficial interest in the Rule 144A
Global Note to be transferred, and the Issuer shall execute, and the
Trustee shall authenticate and deliver, one or more Definitive Notes of
like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of an interest in a Rule 144A
Global Note or a Definitive Note issued in exchange for an interest in such Rule
144A Global Note in accordance with Section 2.12(b) hereof to a QIB (excluding
Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) Definitive Notes,
the Registrar shall register the transfer if such transfer is being made
by a proposed transferor who has checked the box provided for on the form
of Note stating, or has otherwise advised the Issuer and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for
on the form of Note stating, or has otherwise advised the Issuer and the
Registrar in writing, that it is purchasing the Note for its own account
or an account with respect to which it exercises sole investment
discretion and that it and any such account are QIBs within the meaning
of Rule 144A, are aware that the sale to it is being made in reliance on
Rule 144A and acknowledge that they have received such information
regarding the Issuer as they have requested pursuant to Rule 144A or have
determined not to request such information and that they are aware that
the transferor is relying upon their foregoing representations in order
to claim the exemption from registration provided by Rule 144A or (y) an
interest in a Rule 144A Global Note, the transfer of such interest may be
effected only through the book-entry system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the Note to
be transferred is a Definitive Note, upon receipt by the Registrar of the
documents referred to in Clause (i) and instructions given in accordance
with the Depository's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount at maturity of the Rule 144A Global Note in an amount
equal to the principal amount at maturity of the Definitive Note to be
transferred, and the Trustee shall cancel the Definitive Note so
transferred.
(c) Transfers of Interests in a Temporary Regulation S Global Note. The
following provisions shall apply with respect to registration of any proposed
transfer of interests in a Temporary Regulation S Global Note:
(i) The Registrar shall register the transfer of any interest in a
Temporary Regulation S Global Note (x) if the proposed transferee is a
Non-U.S. Person and the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit J hereto or
(y) if the proposed transferee is a QIB and the proposed transferor has
checked the box provided for on the form of Note stating, or has
57
otherwise advised the Issuer and the Registrar in writing, that the sale
has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Note stating, or has otherwise advised the Issuer and the Registrar in
writing, that it is purchasing the Note for its own account or an account
with respect to which it exercises sole investment discretion and that it
and any such account are QIBs within the meaning of Rule 144A, are aware
that the sale to them is being made in reliance on Rule 144A and
acknowledge that they have received such information regarding the Issuer
as they have requested pursuant to Rule 144A or have determined not to
request such information and that they are aware that the transferor is
relying upon their foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member that provides the
documents referred to in clause (i)(y) above, upon receipt by the
Registrar of such documents and instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect
on its books and records the date and an increase in the principal amount
of the Rule 144A Global Note of the relevant subclass, in an amount equal
to the principal amount of the Temporary Regulation S Global Note of such
subclass to be transferred, and the Trustee shall decrease the amount of
the Temporary Regulation S Global Note of such subclass.
(d) Transfers of Interests in a Permanent Regulation S Global Note or
Definitive Notes Issued in Exchange for an Interest in a Permanent Regulation S
Global Note to U.S. Persons. The Registrar shall register any transfer of
interests in a Permanent Regulation S Global Note or Definitive Notes issued in
exchange for an interest in a Permanent Regulation S Global Note in accordance
with Section 2.12(b) hereof to U.S. Persons without requiring any additional
certification.
(e) Transfers to Non-U.S. Persons at any Time. The following provisions
shall apply with respect to any transfer of a Note to a Non-U.S. Person:
(i) Prior to the applicable Regulation S Global Notes Exchange Date,
the Registrar shall register any proposed transfer of a Note to a
Non-U.S. Person upon receipt of a certificate substantially in the form
of Exhibit J hereto from the proposed transferor.
(ii) On and after the applicable Regulation S Global Notes Exchange
Date, the Registrar shall register any proposed transfer of a Note to any
Non-U.S. Person if the Note to be transferred is a Definitive Note or an
interest in a Rule 144A Global Note, upon receipt of a certificate
substantially in the form of Exhibit J from the proposed transferor.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in a Rule 144A Global Note, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and
(y) instructions in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of a Rule 144A Global Note in an
amount equal to the principal amount of the beneficial interest in such
Rule
58
144A Global Note to be transferred, and (b) if the proposed transferee is
an Agent Member, upon receipt by the Registrar of instructions given in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Regulation S Global Note of the relevant
subclass in an amount equal to the principal amount of the beneficial
interest in such Rule 144A Global Note or any Definitive Notes issued in
exchange for such interest in such Rule 144A Global Note to be
transferred, and the Trustee shall cancel the Definitive Note, if any, so
transferred or decrease the amount of the Rule 144A Global Note.
(f) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Notes bearing the Private Placement Legend, the
Registrar shall deliver only Notes that bear the Private Placement Legend
unless either (i) the Private Placement Legend is no longer required under
Section 2.02 hereof or, in respect of a Definitive Note, the condition set
forth in paragraph (e)(ii) of this Section 2.13 exists or (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the
Issuer and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(g) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture. The
Registrar shall not register a transfer of any Note unless such transfer
complies with the restrictions on transfer of such Note set forth in this
Indenture. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Trustee the certifications and legal
opinions described herein to confirm that such transfer is being made pursuant
to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Trustee shall not be
required to determine (but may rely on a determination made by the Issuer with
respect to) the sufficiency of any such legal opinions.
The Trustee shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.12 hereof or this Section 2.13.
The Issuer shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Trustee.
Section 2.14. Temporary Definitive Notes. Pending the preparation of
Definitive Notes of any subclass, the Issuer may execute and the Trustee may
authenticate and deliver temporary Definitive Notes of such subclass which are
printed, lithographed, typewritten or otherwise produced, in any denomination,
containing substantially the same terms and provisions as are set forth in the
applicable exhibit hereto or in any indenture supplemental hereto, except for
such appropriate insertions, omissions, substitutions and other variations
relating to their temporary nature as the Signatory Trustee of the Issuer
executing such temporary Definitive Notes may determine, as evidenced by his
execution of
59
such temporary Definitive Notes.
If temporary Definitive Notes of any subclass are issued, the Issuer will
cause Definitive Notes of such subclass to be prepared without unreasonable
delay. After the preparation of Definitive Notes of such subclass, the
temporary Definitive Notes shall be exchangeable for Definitive Notes upon
surrender of such temporary Definitive Notes at the Corporate Trust Office of
the Trustee, without charge to the Holder thereof. Upon surrender for
cancellation of any one or more temporary Definitive Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor
Definitive Notes of like subclass, in authorized denominations and in the same
aggregate principal amounts. Until so exchanged, such temporary Definitive
Notes shall in all respects be entitled to the same benefits under this
Indenture as Definitive Notes.
Section 2.15. Statements to Noteholders. (a) On the second Business Day
before each Payment Date and any other date for distribution of any payments
with respect to any subclass of Notes then Outstanding, the Trustee will,
provided that such information is delivered to the Trustee in a timely manner,
distribute to each Noteholder with each Payment to Noteholders of such subclass
a report, substantially in the form attached as Exhibit H hereto and setting
forth the information described therein after giving effect to such Payment
(each, a "Monthly Report"). Each Monthly Report for each April 15, July 15 and
October 15 shall be accompanied by (i) a statement setting forth an analysis of
the Collection Account activity for the preceding fiscal quarter ended February
28, May 31 and August 31, respectively, (ii) a discussion and analysis of such
activity and of any significant developments affecting MSAF Group in such
quarter and (iii) an updated description of the Aircraft then in the Portfolio
and the related Lessees (each, a "Quarterly Report"). Each Monthly Report for
each February 15 shall be accompanied by (i) a statement setting forth an
analysis of the Collection Account activity for the preceding fiscal year ended
November 30, (ii) a discussion and analysis of such activity and of any
significant developments affecting MSAF Group in such year and (iii) updated
information with respect to the Aircraft then in the Portfolio (each, a "Annual
Report").
(b) After the end of each calendar year but not later than the latest date
permitted by law, the Trustee in its capacity as Paying Agent shall or, if the
Paying Agent is another Person other than the Trustee, the Trustee shall
instruct such Paying Agent to, furnish to each Person who at any time during
such calendar year was a Noteholder of record of any subclass a statement
containing the sum of the amounts determined pursuant to clause (D) of Exhibit
H hereto with respect to the subclass for such calendar year or, in the event
such Person was a Noteholder of record of any subclass during only a portion of
such calendar year, for the applicable portion of such calendar year, and such
other items as are readily available to the Trustee and which a Noteholder
shall reasonably request as necessary for the purpose of such Noteholder's
preparation of its U.S. federal income or other tax returns. So long as any of
the Notes are registered in the name of the initial Depository or its nominee,
such report and such other items will be prepared on the basis of such
information supplied to the Trustee by the initial Depository and the Agent
Members, and will be delivered by the Trustee to such Agent Members to be
available for forwarding by such Agent Members to the applicable beneficial
owners in the manner described above. In the event that any such information
has been provided by any Paying Agent directly to such Person through other
60
tax-related reports or otherwise, the Trustee in its capacity as Paying Agent
shall not be obligated to comply with such request for information.
(c) On each Payment Date and any other date specified herein for
distribution of any Payments with respect to the Notes of any subclass, the
Trustee shall provide to the Listing Agent, on behalf of the Luxembourg Stock
Exchange, a copy of the report to Noteholders of such subclass described in
this Section 2.15(a).
(d) At such time, if any, as the Notes of any subclass are issued in the
form of Definitive Notes, the Trustee shall prepare and deliver the information
described in this Section 2.15(b) to each Holder of record of a Definitive Note
of such subclass for the relevant period of beneficial ownership of such
Definitive Note as appears on the records of the Trustee.
(e) Following each Payment Date and any other date specified herein for
distribution of any Payments with respect to the Notes and prior to a
Refinancing or Redemption, the Trustee shall cause notice thereof to be given
(i) by publication in the Luxemburger Wort or, if such newspaper shall cease to
be published or timely publication therein shall not be practicable, in such
English language newspaper or newspapers as the Trustee shall approve having a
general circulation in Europe, (ii) by either of (a) the information contained
in such notice appearing on the relevant page of the Reuters Screen or such
other medium for the electronic display of data as may be approved by the
Trustee and notified to Noteholders or (b) publication in the Financial Times
and The Wall Street Journal (National Edition) or, if either newspaper shall
cease to be published or timely publication therein shall not be practicable,
in such English language newspaper or newspapers as the Trustee shall approve
having a general circulation in Europe and the United States and (iii) until
such time as any Definitive Notes are issued and, so long as the Notes of any
subclass are registered with the Depository, Euroclear and/or Cedel, delivery
of the relevant notice to the Depository, Euroclear and/or Cedel for
communication by them to Noteholders of such subclass. Notwithstanding the
above, any notice to the Noteholders of any subclass specifying a floating
interest rate for the Notes, any Payment Date, any principal payment or any
payment of Premium, if any, shall be validly given by delivery of the relevant
notice to the Depository, Euroclear and/or Cedel for communication by them to
such Noteholders, without the need for publication in the Luxemburger Wort.
(f) The Trustee shall be at liberty to sanction some other method of
giving notice to the Noteholders of any subclass if, in its opinion, such other
method is reasonable, having regard to the number and identity of the
Noteholders of such subclass and/or to market practice then prevailing, is in
the best interests of the Noteholders of such subclass and will comply with the
rules of the Luxembourg Stock Exchange as confirmed by the Listing Agent or
such other stock exchange (if any) on which the Notes of such subclass are then
listed, and any such notice shall be deemed to have been given on such date as
the Trustee may approve; provided that notice of such method is given to the
Noteholders of such subclass in such manner as the Trustee shall require.
Notwithstanding the above, any notice specifying the rate, amount or
Payment Date in respect of the Notes of any subclass bearing interest at a
floating rate or in respect of any repayment of principal on any Notes shall,
for so long as such Notes are listed on the
61
Luxembourg Stock Exchange and so long as the rules of the Luxembourg Stock
Exchange so require, be given to the Listing Agent; provided that such
requirement shall be satisfied until such time as any Definitive Notes of such
subclass are issued to all Noteholders and so long as the Notes of such subclass
are held on behalf of DTC, Cedel and Euroclear by (i) delivery of the relevant
notice to DTC, Cedel and Euroclear for communication by them to the Noteholders
of such subclass without need for publication in the Luxemburger Wort and (ii)
delivery of the notice to the Luxembourg Stock Exchange and the Paying Agent in
Luxembourg; provided further, that any notice specifying (a) an increase in the
rate of interest of any subclass of Notes due to Step-Up Interest or failure by
the Issuer to comply with the registration requirements for the Notes or (b)
redemption of principal of any Notes must be published in the Luxemburger Wort
or another daily newspaper of general circulation in Luxembourg. Any such
notice shall be deemed to have been given on the first day on which any of such
conditions shall have been met.
Section 2.16. CUSIP, CINS AND ISIN Numbers. The Issuer in issuing the
Notes may use "CUSIP", "CINS", "ISIN" or other identification numbers (if then
generally in use), and if so, the Trustee shall use CUSIP numbers, CINS
numbers, ISIN numbers or other identification numbers, as the case may be, in
notices of redemption or exchange as a convenience to Holders; provided that
any such notice shall state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of redemption or exchange and that reliance may be placed only on
the other identification numbers printed on the Notes; provided further, that
failure to use "CUSIP", "CINS", "ISIN" or other identification numbers in any
notice of redemption or exchange shall not affect the validity or sufficiency
of such notice.
ARTICLE III
ACCOUNTS; PRIORITY OF PAYMENTS
Section 3.01. Establishment of Accounts. (a) The Administrative Agent,
acting on behalf of the Security Trustee, shall establish and maintain the
Accounts set forth on Schedule I to the Administrative Agency Agreement and any
additional accounts established from time to time in the manner described in
this Section 3.01. To the greatest extent possible, the Security Trustee shall
be granted a security interest in the Issuer's and the Issuer Subsidiaries'
interests in the cash balances from time to time deposited in all of the
Accounts pursuant to the terms of Section 2.01 of the Security Trust Agreement.
The Security Trustee shall have sole dominion and control over the Accounts
(including, inter alia, the sole power to direct withdrawals or transfers from
the Accounts), which dominion and control is delegated to the Administrative
Agent pursuant to Section 2.01(b) of the Administrative Agency Agreement.
(i) The Administrative Agent shall make withdrawals and transfers
from the Accounts in accordance with the terms of the Administrative
Agency Agreement and this Indenture based on the Relevant Information and
as calculated by it pursuant to this Indenture and the Administrative
Agency Agreement.
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(ii) If the Operating Bank should change at any time, then the
Administrative Agent, acting on behalf of the Security Trustee, shall
thereupon promptly establish replacement accounts as necessary at the
successor Operating Bank and transfer the balance of funds in each
Account then maintained at the former Operating Bank pursuant to the
terms of the Administrative Agency Agreement to such successor Operating
Bank.
(b) Collection Account. The Administrative Agent, acting on behalf of the
Security Trustee, shall establish and maintain at the Operating Bank in the
name of the Security Trustee (or in the name of an Eligible Institution
designated in writing by the Security Trustee to the Operating Bank), a trust
account (the "Collection Account"). The Collection Account shall bear a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Secured Parties. All Collections received by the Issuer
and the Issuer Subsidiaries shall be deposited in the Collection Account and
transferred therefrom in accordance with the terms of this Indenture.
If the balance of funds on deposit in the Collection Account, together
with the amount available for drawing under any Eligible Credit Facilities,
falls below the Liquidity Reserve Amount at any time (including as a result of
any increase in the Liquidity Reserve Amount), the Issuer may continue to make
all payments, including required payments on the MSAF Group Notes and any
Guarantees, which rank prior to, or pari passu with, payments of Minimum
Principal Payment Amounts on the MSAF Group Class D Notes pursuant to Section
3.08(a) hereof and any Permitted Accruals other than in respect of Modification
Payments; provided that the balance of funds in the Collection Account,
together with the amount available for drawing under any Eligible Credit
Facilities does not fall below the Minimum Liquidity Reserve Amount at its then
current level; provided further, however, that the balance of funds in the
Collection Account, together with the amount available for drawing under any
Eligible Credit Facilities may fall below the Minimum Liquidity Reserve Amount
at its then current level, and the Issuer may continue to make all payments,
including required payments on MSAF Group Notes and any Guarantees, in order to
pay accrued and unpaid interest on, and, on the applicable Final Maturity Date
thereof, principal of, the Senior Class then Outstanding to avoid an Event of
Default, in each case subject to the order of priorities under Section 3.08
hereof.
The Security Trustee shall have sole dominion and control over the
Collection Account and all investments made through and/or maintained in the
Collection Account, including authority to direct withdrawals from or transfers
among the Collection Account and each other Account. Amounts may be withdrawn
or transferred from the Collection Account only in accordance with the
provisions of this Indenture, any Guarantor Indenture and the Administrative
Agency Agreement by authorized officers or employees of the Security Trustee or
agents authorized by the Security Trustee in writing (including the
Administrative Agent and any authorized agent thereof pursuant to the
Administrative Agency Agreement). If, at any time, the Collection Account
ceases to be an Eligible Account, the Administrative Agent or an agent thereof
shall, within 10 Business Days, establish a new collection account meeting the
conditions set forth in this Section 3.01(b) and transfer any cash or
investments in
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the existing Collection Account to such new collection account; and from the
date such new collection account is established, it shall be the "Collection
Account".
(c) Lessee Funded Account. The Administrative Agent, acting on behalf of
the Security Trustee, shall establish and maintain at the Operating Bank in the
name of the Security Trustee (or in the name of an Eligible Institution
designated in writing by the Security Trustee to the Operating Bank) one or
more trust accounts (collectively, the "Lessee Funded Account"). The Lessee
Funded Account shall bear a designation indicating that the Segregated Funds
deposited therein are held for the benefit of the relevant Lessee pursuant to
the terms of any Lease which requires that such funds be segregated from the
other funds of the MSAF Group, and that such Segregated Funds are to be held in
accordance with such Lease. Any Segregated Funds received from time to time
from such Lessees (other than any cash security deposits which shall be
transferred by the Administrative Agent to ILFC to be held in custody in
accordance with the Custody and Loan Agreement) shall be transferred by the
Administrative Agent directly into the Lessee Funded Account. All funds on
deposit in the Lessee Funded Accounts shall be accounted for and, if required
by any Lease, segregated on a per lease basis as set forth below and may not be
used to make payments, other than as permitted under Section 3.07 hereof, in
respect of the Notes or the Notes at any time, including after the delivery of
a Default Notice. Any Segregated Funds relating to an expired Lease that
remain in the Lessee Funded Account after expiration of such lease and that are
not due and owing to the relevant Lessee under such expired lease shall be
credited in the Lessee Funded Account to the next Lessee of the relevant
Aircraft to the extent, if any, required under the terms of the next Lease
relating to such aircraft.
The Security Trustee shall have sole dominion and control over the Lessee
Funded Account and all investments made through and/or maintained in the Lessee
Funded Accounts, including sole authority to direct withdrawals or transfers
therefrom. Amounts may be withdrawn from the Lessee Funded Account only in
accordance with the provisions of this Indenture, any Guarantor Indenture and
the Administrative Agency Agreement and only by officers, employees or agents
authorized by the Security Trustee in writing (including the Administrative
Agent and any authorized agent thereof pursuant to the Administrative Agency
Agreement). If, at any time, any Lessee Funded Account ceases to be an
Eligible Account, the Administrative Agent or an agent thereof shall establish,
within 10 Business Days, a new lessee funded account to replace such Lessee
Funded Account meeting the conditions set forth in this Section 3.01(c) and
transfer any cash or investments in the existing Lessee Funded Account to such
new lessee funded account; and from the date any such new lessee funded account
is established, it shall be the "Lessee Funded Account" with respect to the
relevant Lease.
(d) Expense Account. The Administrative Agent, acting on behalf of the
Security Trustee, shall establish and maintain at the Operating Bank, in the
name of the Security Trustee (or in the name of an Eligible Institution
designated in writing by the Security Trustee to the Operating Bank), a trust
account (the "Expense Account") bearing a designation indicating that the funds
deposited therein are held for the benefit of the Secured Parties. On each
Payment Date, the Required Expense Amount (other than the part of the Required
Expense Amount paid directly to certain Expense payees on such Payment Date
pursuant to Section 3.08(a)(i)) shall be deposited into the Expense Account
from the
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Collection Account. The Administrative Agent may, but shall not be required
to, maintain in the Expense Account a balance containing accruals in respect of
Expenses that are not regular, monthly recurring Expenses, including
Modification Payments and Refinancing Expenses, if any, of MSAF Group
anticipated to become due and payable in any future Interest Accrual Period
(the "Permitted Accruals").
The Security Trustee shall have sole dominion and control over the Expense
Account, including sole authority to direct withdrawals from or transfers among
the Accounts. Amounts may be withdrawn or transferred from the Expense Account
only in accordance with the provisions of this Indenture, any Guarantor
Indenture and the Administrative Agency Agreement by authorized officers or
employees of the Security Trustee or by agents authorized by the Security
Trustee in writing (including the Administrative Agent and any authorized
agents thereof pursuant to the Administrative Agency Agreement). If, at any
time, the Expense Account ceases to be an Eligible Account, the Administrative
Agent or an agent thereof shall establish, within 10 Business Days, a new
expense account meeting the conditions set forth in this Section 3.01(d) and
transfer any cash or investments in the existing Expense Account to such new
expense account; and from the date such new expense account is established, it
shall be the "Expense Account".
(e) Rental Accounts. The Administrative Agent, acting on behalf of the
Security Trustee, shall establish and maintain, on or prior to the applicable
Closing Date and from time to time thereafter, one or more rental accounts
(each, a "Rental Account") for the deposit of Rental Payments and any amounts
received pursuant to any Related Collateral Documents; provided that all funds
on deposit in each Rental Account (other than certain limited amounts, if any,
required to be left on deposit for local tax or other regulatory or legal
reasons) shall be transferred by the Administrative Agent or its agent from
such Rental Account into the Collection Account within one Business Day of
receipt thereof. Each Rental Account (other than the Non-Trustee Accounts)
shall be established and maintained at the Operating Bank (in which case such
Rental Account shall be a trust account), another Eligible Institution or a
responsible and reputable bank in accordance with Section 2.04 of the
Administrative Agency Agreement in the name of the Security Trustee on behalf
of the Secured Parties.
In each case in which, for tax or other regulatory or legal reasons, any
Rental Account cannot be established in the name of the Security Trustee, then,
upon written notice from the Administrative Agent to the Security Trustee and
each Rating Agency, the Issuer and any related Issuer Subsidiary shall open
such Rental Account (each, a "Non-Trustee Account") in the name of the relevant
Issuer or Lessor or such other Person as may be specified by the terms of the
relevant Lease, at an Eligible Institution or other reputable and responsible
bank; provided that no Non-Trustee Account may be opened unless the relevant
Lessor is or becomes a party to a Security Document.
(f) Refinancing Account. The Administrative Agent, acting on behalf of
the Trustee, shall establish and maintain at the Operating Bank in the name of
the Trustee, a trust account (the "Refinancing Account") for the benefit of the
Holders of MSAF Group Notes of any subclass being refinanced for the purpose of
receiving the cash proceeds of any such Refinancing and holding such proceeds
on behalf of the Holders of such MSAF Group
65
Notes until such time as the Outstanding Principal Balance and all accrued and
unpaid interest and Premium, if any, on such MSAF Group Notes are repaid in
full using such proceeds and such MSAF Group Notes are cancelled by the
Trustee.
(g) Defeasance/Redemption Account. The Administrative Agent, acting on
behalf of the Trustee, shall establish and maintain at the Operating Bank in
the name of the Trustee, a trust account (the "Defeasance/Redemption Account")
for the benefit of the Holders of MSAF Group Notes of any subclass being
redeemed or defeased at the Operating Bank or such other Eligible Institution
as may be required for the purpose of receiving funds or securities to be used
to redeem or defease MSAF Group Notes pursuant to Section 3.10 or Article XI
hereof or pursuant to any Guarantor Indenture and holding such funds on behalf
of the Holders of the subclass of MSAF Group Notes to be redeemed or defeased,
as the case may be, until such time as the Outstanding Principal Balance and
all accrued and unpaid interest and Premium, if any, on such MSAF Group Notes
are repaid in full using such funds and such MSAF Group Notes are cancelled by
the Trustee.
(h) Aircraft Purchase Account. The Administrative Agent, acting on behalf
of the Security Trustee, shall establish and maintain at the Operating Bank in
the name of the Security Trustee, a trust account (the "Aircraft Purchase
Account") for the purpose of (i) holding proceeds of the issuance of the
Initial Notes on behalf of the Holders until such time as the Remaining
Aircraft or Substitute Aircraft are delivered or such other time as the funds
held therein are transferred to the Collection Account in accordance with
Section 3.04 hereof and (ii) holding proceeds of any Additional Issuance
pending application of such proceeds for the acquisition of Additional
Aircraft.
The Security Trustee shall have sole dominion and control over the
Aircraft Purchase Account and all investments made through and/or maintained in
the Aircraft Purchase Account, including authority to direct withdrawals from
or transfers among the Aircraft Purchase Account and each other Account. Any
amounts may be withdrawn or transferred from the Aircraft Purchase Account only
in accordance with the provisions of this Indenture and the Administrative
Agency Agreement by authorized officers or employees of the Security Trustee or
agents authorized by the Security Trustee in writing (including the
Administrative Agent and any authorized agent thereof pursuant to the
Administrative Agency Agreement). If, at any time such account is required to
be maintained by the Issuer, the Aircraft Purchase Account ceases to be an
Eligible Account, the Administrative Agent or an agent thereof shall, within 10
Business Days, establish a new deposit account meeting the conditions set forth
in this Section 3.01(h) and transfer any cash or investments in the existing
Aircraft Purchase Account to such new deposit account; and from the date such
new deposit account is established, it shall be the "Aircraft Purchase
Account".
(i) Note Account. The Administrative Agent, acting on behalf of the
Trustee, shall establish and maintain at the Operating Bank in the name of the
Trustee a trust account for the benefit of the Noteholders of each subclass
(each, a "Note Account") as a non-interest-bearing account. The Trustee shall
hold each Note Account in trust for the benefit of the Noteholders of the
relevant subclass, and shall make or permit withdrawals therefrom only as
provided in this Indenture. On each day when a payment is required to be made
under this Indenture in respect of a subclass, such amount shall be transferred
from the
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Collection Account to the applicable Note Account for application to the
payment of such Notes in accordance with the terms of this Indenture.
Section 3.02. Investments of Cash. For so long as any MSAF Group Notes
remain Outstanding, the Cash Manager, on behalf of the Security Trustee, shall,
at the written direction of MSAF, invest and reinvest the funds on deposit in
the Accounts in Permitted Account Investments ; provided, however, that
following the giving of a Default Notice or during the continuance of an
Acceleration Default, the Cash Manager shall invest such amount at the written
direction of the Security Trustee in Permitted Account Investments described in
clause (d) of the definition thereof (but in each case only to the extent such
investment, as advised by the Administrative Agent to the Cash Manager, is
permitted by the Leases pursuant to which such funds were received) from the
time of receipt thereof until such time as such amounts are required to be
distributed pursuant to the terms of this Indenture. Pursuant to the Cash
Management Agreement, the Cash Manager shall make such investments and
reinvestments in accordance with the terms of the following provisions:
(i) the Permitted Account Investments shall have maturities and
other terms such that sufficient funds shall be available to make
required payments pursuant to this Indenture and any Guarantor Indenture
(A) on or before the first Payment Date after which such investment is
made, in the case of investments of funds on deposit in the Collection
Account and the Expense Account, or (B) in accordance with the
requirements of the relevant Leases or Aircraft Agreements, in the case
of investments of funds on deposit in the Lessee Funded Accounts;
provided that an investment maturing within one year of the date of
investment shall nevertheless be a Permitted Account Investment if it has
been acquired with funds which are not reasonably anticipated, at the
discretion of the Administrative Agent, to be required to be paid to any
other Person or otherwise transferred from the applicable Account prior
to such maturity;
(ii) if any funds to be invested are not received in the Accounts by
1:00 p.m., New York City time, on any Business Day, such funds shall, if
possible, be invested in overnight Permitted Account Investments; and
(iii) if required by the terms of a Lease, any investments of funds
on deposit in a Lessee Funded Account or the Collection Account shall be
made on behalf of the relevant Lessee in such investments as may be
required thereunder.
Section 3.03. Closing Date Deposits, Withdrawals and Transfers. On each
Closing Date, the Administrative Agent shall make the following transfers to
the Accounts:
(i) deposit into the relevant Lessee Funded Account the amount of
the initial Segregated Funds, if any, received or deemed to have been
received from the Sellers pursuant to the terms of the relevant
Acquisition Agreements;
(ii) deposit into the Collection Account, in the case of the Initial
Closing Date, an amount equal to the cash portion of the initial
Liquidity Reserve Amount and, in the case of any other Closing Dates, any
amount necessary to reflect the required Liquidity Reserve Amount at such
date;
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(iii) transfer from the Collection Account to the Expense Account an
amount equal to the Required Expense Amount for the relevant initial
Interest Accrual Period; and
(iv) deposit into the Aircraft Purchase Account, (A) in the case of
the Initial Closing Date, an amount equal to the Initial Outstanding
Balance of the Initial Notes raised with respect to the Remaining
Aircraft and (B) in the case of any other Closing Dates, if applicable,
an amount equal to the proceeds of any MSAF Group Additional Notes issued
to acquire the Additional Aircraft.
Section 3.04. Interim Deposits and Withdrawals. (a) Interim Withdrawals
and Transfers for Expenses, Certain Lease Obligations and Other Obligations.
On any Business Day, the Administrative Agent, on behalf of the Security
Trustee, may make, without duplication, the following withdrawals for the
following purposes, in each case after written notice from the Servicer or the
Administrative Agent to the Trustee, which notice shall identify the basis for
such withdrawal or transfer in reasonable detail:
(i) withdraw from the Expense Account or the Lessee Funded Account
or draw under the applicable Related Collateral to the extent that funds
on deposit therein or available thereunder may be withdrawn or drawn
pursuant to the terms of the related Lease or Related Collateral
Document, to discharge any Expense or Permitted Accruals then due and
payable;
(ii) transfer from the Collection Account from time to time (but in
no event on less than one Business Day's prior written notice to the
Trustee, such notice to be given by the delivery of a notice in the form
of Exhibit B to the Administrative Agency Agreement, from the
Administrative Agent (unless such one Business Day's notice requirement
is waived by the Trustee)), other amounts, including amounts constituting
the Liquidity Reserve Amount, from the Collection Account into the
Expense Account, in each case only to the extent that such funds are to
be applied to unanticipated Expenses which become due and payable during
such Interest Accrual Period; provided that no such transfer from the
Collection Account in respect of Expenses shall be made prior to the next
succeeding Payment Date if, in the reasonable judgment of the
Administrative Agent such transfer would have a material adverse effect
on the ability of MSAF Group to make payments of accrued and unpaid
interest on the Senior Class of MSAF Group Notes then Outstanding on the
next Payment Date therefor in accordance with Section 3.08 hereof;
(iii) withdraw Segregated Funds from the Lessee Funded Account or
draw under any applicable Related Collateral, in any case to the extent
required by or necessary in connection with a Lease, any documents
related thereto and the Related Collateral Documents, for deposit in the
Collection Account to satisfy any default in Rental Payments under any
related Lease;
(iv) transfer any Segregated Funds from the Collection Account to
the Lessee Funded Account in accordance with the terms of any Lease;
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(v) withdraw from the Aircraft Purchase Account an amount equal to
the purchase price of any Remaining Aircraft, Substitute Aircraft or
Additional Aircraft, to the extent necessary to effect payment therefor;
and
(vi) (A) in the case of the Initial Notes, on June 1, 1998, and (B)
in the case of any MSAF Group Additional Notes, on such date as shall be
set forth in a Controlling Trustees' Resolution, transfer any balance in
the Aircraft Purchase Account to the Collection Account for application
in accordance with Section 3.08(a) hereof.
Section 3.05. Interim Deposits and Withdrawals for Modification Payments
or Dispositions of Aircraft. On any Business Day, the Administrative Agent, on
behalf of the Security Trustee, shall withdraw from time to time from the
Permitted Accruals on deposit in the Expense Account and, to the extent
permitted under Section 3.08(a) hereof, such other amounts as may be necessary
from the Collection Account to pay amounts due and owing in respect of a
Modification Payment and shall transfer such amounts to the appropriate payees.
Upon the sale or other disposition of any Aircraft, Engine or other asset, the
Administrative Agent shall deposit any and all proceeds received in respect
thereof by any MSAF Group Member in the Collection Account (other than in
connection with any sale of all or substantially all of the assets of MSAF
Group, in which case the Administrative Agent shall deposit any and all
proceeds thereof into the Defeasance/Redemption Account in connection with the
redemption of each subclass of the MSAF Group Notes). Any funds then on
deposit in the Lessee Funded Account related to the Aircraft subject to such
sale or other disposition shall be applied on a basis consistent with the terms
of the Lease related to such Aircraft, if any, or as otherwise provided by the
relevant agreements related to such sale or other disposition.
Section 3.06. Calculation Date Calculations. (a) Calculation of
Required Amounts. As soon as practicable after each Calculation Date, but in
no event later than two Business Days preceding the immediately succeeding
Payment Date, the Administrative Agent shall, based on information known to it
or Relevant Information provided to it, determine the Collections received
during the period commencing on the day next following the preceding
Calculation Date and ending on such Calculation Date and calculate the
following amounts:
(A) the balance of funds on deposit in the Accounts on the
Calculation Date and the required Liquidity Reserve Amount on such
Calculation Date;
(B) the Required Expense Amount as of such Calculation Date;
(C) the Available Collections Amount on such Calculation Date
(separately listing any Swap Payments and Swap Breakage Costs and amounts
to be retained in the Collection Account pursuant to Section 3.08(a)(iii)
and (xi));
(D) the net Segregated Funds available to be transferred into the
Collection Account on such Calculation Date; and
69
(E) any other information, determinations and calculations
reasonably required in order to give effect to the terms of this
Indenture and the Related Documents.
(b) Calculation of Interest Amounts. Not later than five Business Days
prior to each Payment Date, the following calculations or determinations with
respect to Interest Amounts due on such Payment Date shall be performed or made
and, if calculated or determined by a Person other than the Administrative
Agent, provided to the Administrative Agent:
(i) the Reference Agent shall calculate the applicable interest rate
on each subclass of MSAF Group Floating Rate Notes based on LIBOR
determined on the Reference Date for the relevant Interest Accrual
Period;
(ii) the Administrative Agent shall calculate the Interest Amount in
respect of each subclass of MSAF Group Floating Rate Notes on such
Payment Date;
(iii) the Administrative Agent shall calculate the amount of Step-Up
Interest (including Step-Up Interest on any accrued and unpaid Step-Up
Interest), if any, in respect of each subclass of MSAF Group Notes
entitled to such Step-Up Interest on such Payment Date; and
(iv) the Administrative Agent shall calculate the Interest Amount in
respect of each subclass of MSAF Group Fixed Rate Notes on such Payment
Date.
(c) Calculation of Principal Payment Amounts. Not later than five
Business Days prior to each Payment Date, the Administrative Agent shall
calculate or determine the following with respect to principal payments due on
such Payment Date:
(i) the Outstanding Principal Balance of each class and subclass of
the MSAF Group Notes on such Payment Date immediately prior to any
principal payment on such date;
(ii) the Adjusted Portfolio Value and the Assumed Portfolio Value on
such Payment Date;
(iii) the Minimum Target Principal Balance for each applicable class
of MSAF Group Notes Outstanding and Minimum Principal Payment Amount on
such Payment Date with respect to each class of MSAF Group Notes;
(iv) the Scheduled Target Principal Balance for each applicable
class of MSAF Group Notes Outstanding and Scheduled Principal Payment
Amount on such Payment Date with respect to each class of MSAF Group
Notes; and
(v) the Supplemental Principal Balance for each applicable class of
MSAF Group Notes Outstanding and Supplemental Principal Payment Amount on
such Payment Date with respect to each class of MSAF Group Notes.
(d) Calculation of Refinancing Amounts. Not later than two Business
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Days prior to the date on which a Refinancing of any subclass of MSAF Group
Notes is scheduled to occur, the Administrative Agent shall perform the
calculations necessary to determine, with respect to each such subclass of MSAF
Group Note to be repaid on such date, the Redemption Price of such subclass and
the accrued and unpaid interest on such subclass.
(e) Application of the Available Collections Amount. Not later than 1:00
p.m., New York City time, on the Business Day prior to each Payment Date, the
Administrative Agent shall determine the amounts to be applied on such Payment
Date to make each of the payments contemplated by Section 3.08(a) or 3.08(b),
as applicable, setting forth separately, in the case of payments in respect of
MSAF Group Notes, the amount to be applied on such Payment Date to pay
interest, principal and Premium, if any, on each subclass of MSAF Group Notes
in accordance with Sections 3.08 and 3.09.
(f) Reports. (i) The Administrative Agent shall provide all of the
information required to be provided in the report set forth as Exhibit H hereto
setting forth the information described in Sections 3.06(a), (b), (c) and (d)
and such other information as is required to be set forth therein, together
with as many copies of such reports as the Trustee may reasonably request, to
the Issuer, each Rating Agency, the Cash Manager, the Financial Advisor, the
Servicer, any Additional Servicer, the Listing Agent and the Trustee, no later
than 1:00 p.m., New York City time, two Business Days immediately preceding
each Payment Date:
(ii) The Administrative Agent will provide to the Trustee, on the first
Payment Date following the filing by MSAF Group of any Report on Form 10-Q
under the Exchange Act with the Commission, a copy of Schedule A hereto,
updated and revised to reflect the then current composition of the Portfolio.
(iii) The Administrative Agent will provide to the Trustee, not later than
90 days after the end of each calendar year, a statement containing (A) the
cumulative amount of each type of payment reported in clauses (B), (D), (E) and
(F) of Section 3.06(a) during the preceding calendar year (or any portion
thereof) for each subclass of Notes Outstanding at any time during such year
and (B) such other items as are readily ascertainable and that the Trustee or
any Noteholder shall reasonably request as necessary for the purpose of such
Noteholder's preparation of its U.S. federal income tax returns.
Section 3.07. Payment Date First Step Withdrawals and Transfers. On each
Payment Date, the Administrative Agent, on behalf of the Security Trustee,
shall make the following withdrawals from and transfers among the Accounts:
(a) transfer the proceeds of any Refinancing of any subclass of
Notes from the Refinancing Account to the applicable Note Account in each
case in accordance with Section 2.10(b) and Section 5.02(f) hereof and
Section 2.04(d) of the Administrative Agency Agreement;
(b) subject to the applicable Leases, transfer from the Lessee
Funded Account to the Collection Account any available Segregated Funds;
71
(c) transfer from the Collection Account to the Lessee Funded
Account the amount of any Segregated Funds then on deposit in the
Collection Account;
(d) transfer from any Account (other than the Collection Account) to
the Collection Account the amount of earnings (net of losses and
investment expenses), if any, on investments of funds on deposit therein
during the preceding Interest Accrual Period, except that earnings on any
portion of the funds on deposit in any Account required under the terms
of the related Lease to be repaid to the related Lessee shall be retained
therein; and
(e) after the giving of a Default Notice or following the Interest
Accrual Period in which an Aircraft Sale occurs with respect to the last
remaining Aircraft, transfer any amounts remaining in the Lessee Funded
Account (other than amounts required to be maintained in such account
pursuant to the terms of the related Lease or Aircraft Agreement) into
the Collection Account.
Section 3.08. Payment Date Second Step Withdrawals. (a) On each Payment
Date, after the withdrawals and transfers provided for in Section 3.07 have
been made, the Administrative Agent, on behalf of the Security Trustee, shall
distribute the amounts set forth below in the order of priority set forth below
but, in each case, only to the extent that all amounts then required to be paid
ranking prior thereto "Prior Ranking Amounts" have been paid in full. All
payments of Available Collections Amount to be made to Holders of any subclass
of Notes pursuant to this Section 3.08 shall be made through a direct transfer
of funds to the applicable Note Account with respect to such subclass of Notes.
To the extent that any amounts are retained in the Collection Account on any
Payment Date pursuant to this Section 3.08(a), such amounts shall not be
distributed thereafter on such Payment Date out of the Collection Account as
Available Collections Amount pursuant to any succeeding payment required to be
made under this Section 3.08(a) provided that there are funds available
therefor.
(i) First, to the Expense Account or directly to the relevant
Expense payees in accordance with the Administrative Agency Agreement, an
amount equal to the Required Expense Amount and then to the relevant
Expense payees;
(ii) Second, in no order of priority inter se, but pro rata (A)
among the Note Accounts for each subclass of MSAF Group Class A Notes,
the Interest Amount on such subclass of MSAF Group Class A Notes in no
order of priority inter se, but pro rata according to the amount of
accrued and unpaid interest on such subclass of MSAF Group Class A Notes
and (B) pro rata, to any Swap Provider, an amount equal to any Swap
Payment due pursuant to any Swap Agreement (other than any Subordinated
Swap Payments);
(iii) Third, first, to any Persons providing any Primary Eligible
Credit Facilities, any amounts payable to such Persons under the terms of
their respective Primary Eligible Credit Facilities and then, after
giving effect to the transfers made in respect of all Prior Ranking
Amounts, retain in the Collection Account an amount, if positive, equal
to the Minimum Liquidity Reserve Amount less the amounts available for
drawing under any Primary Eligible Credit Facilities;
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(iv) Fourth, to the Note Accounts for each subclass of MSAF Group
Class A Notes, in the order of priority by subclass set forth in Section
3.09 hereof, an amount equal to the Minimum Principal Payment Amount of
the MSAF Group Class A Notes;
(v) Fifth, among the Note Accounts for each subclass of MSAF Group
Class B Notes, the Interest Amount on such subclass of MSAF Group Class B
Notes in no order of priority inter se, but pro rata according to the
amount of accrued and unpaid interest on such subclass of MSAF Group
Class B Notes;
(vi) Sixth, to the Note Accounts for each subclass of MSAF Group
Class B Notes, in the order of priority by subclass set forth in Section
3.09 hereof, an amount equal to the Minimum Principal Payment Amount of
the MSAF Group Class B Notes;
(vii) Seventh, among the Note Accounts for each subclass of MSAF
Group Class C Notes, the Interest Amount on such subclass of MSAF Group
Class C Notes in no order of priority inter se, but pro rata according to
the amount of accrued and unpaid interest on such subclass of MSAF Group
Class C Notes;
(viii) Eighth, to the Note Accounts for each subclass of MSAF Group
Class C Notes, in the order of priority by subclass set forth in Section
3.09 hereof, an amount equal to the Minimum Principal Payment Amount of
the MSAF Group Class C Notes;
(ix) Ninth, among the Note Accounts for each subclass of MSAF Group
Class D Notes, the Interest Amount on such subclass of MSAF Group Class D
Notes in no order of priority inter se, but pro rata according to the
amount of accrued and unpaid interest on such subclass of MSAF Group
Class D Notes;
(x) Tenth, to the Note Accounts for each subclass of MSAF Group
Class D Notes in the order of priority by subclass set forth in Section
3.09 hereof, an amount equal to the Minimum Principal Payment Amount of
the MSAF Group Class D Notes;
(xi) Eleventh, first, to any Persons providing any Credit Facilities
that are not Primary Eligible Credit Facilities, any amounts payable to
such Persons under the terms of their respective Credit Facilities and
then, after giving effect to the transfers made in respect of all Prior
Ranking Amounts, retain in the Collection Account an amount equal to the
difference, if positive, between the Liquidity Reserve Amount and the sum
of (x) the amount of cash reserved under (iii) above and (y) the amount
available for drawing under any Eligible Credit Facilities;
(xii) Twelfth, to the Note Accounts for each subclass of MSAF Group
Class A Notes, in the order of priority by subclass set forth in Section
3.09 hereof, an amount equal to the Scheduled Principal Payment Amount of
the MSAF Group Class A Notes;
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(xiii) Thirteenth, to the Note Accounts for each subclass of MSAF
Group Class B Notes, in the order of priority by subclass set forth in
Section 3.09 hereof, an amount equal to the Scheduled Principal Payment
Amount of the MSAF Group Class B Notes;
(xiv) Fourteenth, to the Note Accounts for each subclass of MSAF
Group Class C Notes, in the order of priority by subclass set forth in
Section 3.09 hereof, an amount equal to the Scheduled Principal Payment
Amount of the MSAF Group Class C Notes;
(xv) Fifteenth, to the Note Accounts for each subclass of MSAF Group
Class D Notes, in the order of priority by subclass set forth in Section
3.09 hereof, an amount equal to the Scheduled Principal Payment Amount of
the MSAF Group Class D Notes;
(xvi) Sixteenth, to the Expense Account, an amount equal to
Permitted Accruals in respect of Modification Payments (or any part
thereof);
(xvii) Seventeenth, among the Note Accounts for each subclass of
MSAF Group Notes entitled thereto, an amount equal to all accrued and
unpaid Step-Up Interest, if any, in no order of priority inter se, but
pro rata according to the amount of such accrued and unpaid Step-Up
Interest;
(xviii) Eighteenth, to the holders of the Beneficial Interest, the
Beneficial Interest Distribution Amount;
(xix) Nineteenth, to the Note Accounts for each subclass of MSAF
Group Class A Notes, in the order of priority by subclass set forth in
Section 3.09 hereof, an amount equal to the Supplemental Principal
Payment Amount of the MSAF Group Class A Notes;
(xx) Twentieth, to the Note Accounts for each subclass of MSAF Group
Class B Notes, in the order of priority by subclass set forth in Section
3.09 hereof, an amount equal to the Supplemental Principal Payment Amount
of the MSAF Group Class B Notes;
(xxi) Twenty-first, to the Note Accounts for each subclass of MSAF
Group Class D Notes, in the order of priority by subclass set forth in
Section 3.09 hereof, an amount equal to the Redemption Price of the
Outstanding Principal Balance of each such subclass;
(xxii) Twenty-second, to the Note Accounts for each subclass of MSAF
Group Class C Notes, in the order of priority by subclass set forth in
Section 3.09 hereof, an
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amount equal to the Redemption Price of the Outstanding Principal Balance
of each such subclass;
(xxiii) Twenty-third, to the Note Accounts for each subclass of MSAF
Group Class B Notes, in the order of priority by subclass set forth in
Section 3.09 hereof, an amount equal to the Redemption Price of the
Outstanding Principal Balance of each such subclass;
(xxiv) Twenty-fourth, to the Note Accounts for each subclass of MSAF
Group Class A Notes, in the order of priority by subclass set forth in
Section 3.09 hereof, an amount equal to the Redemption Price of the
Outstanding Principal Balance of each such subclass;
(xxv) Twenty-fifth, payments to the Swap Providers which are
subordinated in accordance with the relevant Swap Agreements
("Subordinated Swap Payments"); and
(xxvi) Twenty-sixth, to the holders of the Beneficial Interest, all
remaining amounts.
(b) Anything to the contrary contained in Section 3.08(a) hereof
notwithstanding, following delivery to the Issuer, any Guarantor or the
Administrative Agent of a Default Notice or during the continuance of an
Acceleration Default, the allocation of payments described in such Section
3.08(a) shall not apply and all amounts on deposit in the Collection Account
and the Expense Account shall be applied by the Administrative Agent in the
following order of priority:
(i) First, to the Expense Account for distribution by the
Administrative Agent or, in accordance with the Administrative Agency
Agreement, directly to the relevant Expense payees, an amount equal to
the Required Expense Amount and then to the relevant Expense payees;
(ii) Second, in no order of priority inter se, but pro rata to the
providers of any Primary Eligible Credit Facilities, such amounts as are
required to make any payments due to such providers pursuant to the terms
of their respective Primary Eligible Credit Facilities;
(iii) Third, in no order of priority inter se, but pro rata in
respect of amounts outstanding or payable on such date, (A) pro rata
among the Note Accounts for each subclass of MSAF Group Class A Notes,
all accrued and unpaid interest (including any Step-Up Interest) on, and
the Outstanding Principal Balance of such subclass of MSAF Group Class A
Notes and (B) pro rata to any Swap Provider, such amounts as are required
to pay any Swap Payments (other than Subordinated Swap Payments) due
pursuant to any Swap Agreement;
(iv) Fourth, in no order of priority inter se, but pro rata in
respect of amounts outstanding or payable on such date, pro rata among
the Note Accounts for each subclass of MSAF Group Class B Notes, all
accrued and unpaid interest (including any Step-Up Interest) on, and the
Outstanding Principal Balance of such subclass of MSAF Group Class B
Notes;
(v) Fifth, in no order of priority inter se, but pro rata in respect
of amounts outstanding or payable on such date, pro rata among the Note
Accounts for
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each subclass of MSAF Group Class C Notes, all accrued and unpaid
interest (including any Step-Up Interest) on, and the Outstanding
Principal Balance of such subclass of MSAF Group Class C Notes;
(vi) Sixth, in no order of priority inter se, but pro rata in
respect of amounts outstanding or payable on such date, pro rata among
the Note Accounts for each subclass of MSAF Group Class D Notes, all
accrued and unpaid interest (including any Step-Up Interest) on, and the
Outstanding Principal Balance of such subclass of MSAF Group Class D
Notes;
(vii) Seventh, in no order of priority inter se, but pro rata to the
providers of Credit Facilities other than Primary Eligible Credit
Facilities, such amounts as are required to make payments due to such
providers pursuant to the terms of their respective Credit Facilities;
(viii) Eighth, in no order of priority inter se, but pro rata, to any Swap
Provider, such amounts as are required to make any Subordinated Swap Payments
due pursuant to any Swap Agreement; and
(ix) Ninth, to the holders of the Beneficial Interest, any amount
remaining.
Section 3.09. Allocations of Principal Payments Among Subclasses of the
Notes. To the extent that any payment of principal pursuant to Section 3.08(a)
hereof is allocable to any class of MSAF Group Notes on any Payment Date, the
Available Collections Amount will be applied to repay all MSAF Group Notes in
such class in the following order of priority: (i) First, to each subclass, in
order of the earliest issued subclass, the difference, if positive, between the
Outstanding Principal Balance of each such subclass and the product of the
applicable Extended Pool Factor on such Payment Date and the Initial Principal
Balance of each such subclass (any such difference, the "Extension Amount");
provided that in the case of two or more subclasses issued on the same date,
the Available Collections Amount will be applied to each such subclass pro rata
according to the amount of, but not to exceed, the Extension Amount of such
subclass; (ii) Second, to each subclass, in no order of priority inter se, but
pro rata according to the amount of, but not to exceed, the difference, if
positive, between the Outstanding Principal Balance of each such subclass
(after giving effect to any payment under clause (i) above) and the product of
the applicable Pool Factor on such Payment Date and the Initial Principal
Balance of each such subclass; (iii) Third, to each subclass with an Expected
Final Payment Date on or before such Payment Date, in order of the earliest
issued subclass; provided that in the case of two or more subclasses issued on
the same date, the Available Collections Amount will be applied to such
subclasses in order of the subclass with the earliest Expected Final Payment
Date and, with respect to any two or more subclasses having the same Expected
Final Payment Date, the Available Collections Amount will be applied to such
subclasses pro rata according to the Outstanding Principal Balance of each such
subclass (after giving effect to any payment under clauses (i) and (ii) above)
on such Payment Date; (iv) Fourth, to each subclass with an Excess Amortization
Date on or before such Payment Date, in no order of priority inter se, but pro
rata according to the Outstanding Principal Balance of each such subclass
(after giving effect to any payment under clauses (i), (ii) and (iii) above) on
such Payment Date; and (v) Fifth, to each subclass in order of the earliest
Expected Final Payment Date, provided, in the case of two or
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more subclasses having the same Expected Final Payment Date, in no order of
priority inter se, but pro rata, according to the Outstanding Principal Balance
of each such subclass (after giving effect to any payment under clauses (i),
(ii), (iii) and (iv) above on such Payment Date.
. Section 3.10. Certain Redemptions; Certain Premiums. (a) Optional
Redemption. Subject to the provisions of Section 3.10(c) hereof, on any
Payment Date the Issuer may elect to redeem any subclass of the Notes in whole
or in part, out of amounts available for such purpose, if any, other than
Collections, at the Redemption Price plus any accrued and unpaid interest
thereon to the Redemption Date; provided that notice of any such redemption
shall be given to the Trustee not less than 30 days prior to such Redemption
Date; and provided further, the provisions of this Section 3.10(a) shall not
apply to any Refinancing pursuant to Section 3.10 hereof.
(b) Redemption for Taxation Reasons. Subject to the provisions of Section
3.10(c) hereof, if, at any time,
(i) the Issuer is, or on the next succeeding Payment Date will be,
required to make any withholding or deduction under the laws or
regulations of any applicable tax authority with respect to any payment
on any subclass of MSAF Group Notes; or
(ii) the Issuer is or will be subject to any circumstance (whether
by reason of any law, regulation, regulatory requirement or
double-taxation convention, or the interpretation or application thereof,
or otherwise) leading to the imposition of a tax (whether by direct
assessment or by withholding at source) or other similar imposition by
any jurisdiction which would (A) materially increase the cost to the
Issuer of making payments in respect of any subclass of MSAF Group Notes
or of complying with its obligations under or in connection with the MSAF
Group Notes; (B) materially increase the operating or administrative
expenses of the Issuer; or (C) otherwise obligate the Issuer or any of
its subsidiaries to make any material payment on, or calculated by
reference to, the amount of any sum received or receivable by the Issuer,
or by the Administrative Agent on behalf of MSAF Group as contemplated by
the Administrative Agency Agreement;
then the Issuer shall inform the Trustee in writing at such time of any such
requirement or imposition and shall use its best efforts to avoid the effect of
the same; provided that no actions shall be taken by the Issuer to avoid such
effects without Rating Agency Confirmation. If, after using its reasonable
best efforts to avoid the adverse effects described above, the Issuer or any of
its subsidiaries has not avoided such effects, the Issuer may, at its election,
redeem the MSAF Group Notes in whole, without Premium, on any Payment Date;
provided, however, that any such redemptions may not occur more than 30 days
prior to such time as the requirement or imposition described in (i) or (ii)
above is to become effective; and provided further that notice of any such
redemption shall be given to the Trustee not less than 30 days prior to such
Redemption Date.
(c) Method of Redemption. The Trustee (or the Administrative Agent acting
as its agent (or any authorized agent of the Administrative Agent)) shall give
written notice in respect of any redemption of any subclass of MSAF Group Notes
under Section
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3.10(a) or 3.10(b) hereof (a "Redemption") to each Holder of MSAF Group Notes
and, for so long as the Notes are listed on the Luxembourg Stock Exchange, the
Luxembourg Stock Exchange, at least 20 days but not more than 60 days before
such Redemption Date. The Trustee shall not be permitted to deliver any notice
under this Section 3.10(c) unless and until it shall have received evidence
satisfactory to it that amounts sufficient to (A) redeem such subclass of MSAF
Group Notes and (B) pay all accrued and unpaid interest, including interest on
interest, in respect of each subclass of MSAF Group Notes ranking pari passu
therewith or prior thereto are, or will on or before the Redemption Date be,
deposited in the Defeasance/Redemption Account. Each notice in respect of a
Redemption given pursuant to this Section 3.10(c) shall state (i) the
applicable Redemption Date, (ii) the Trustee's arrangements for making payments
in respect of such Redemption, (iii) the Redemption Price of the MSAF Group
Notes to be redeemed, (iv) in the case of Redemption in whole, that MSAF Group
Notes of the subclass to be redeemed must be surrendered to the Trustee to
collect the Redemption Price plus accrued and unpaid interest on such MSAF
Group Notes and (v) in the case of Redemption in whole, that, unless the MSAF
Group defaults in the payment of the Redemption Price and any accrued and
unpaid interest thereon, interest on the subclass of MSAF Group Notes called
for Redemption shall cease to accrue on and after the Redemption Date.
(d) Deposit of Redemption Amount. On or before any Redemption Date in
respect of a Redemption under Section 3.10(a), the Issuer shall, to the extent
an amount equal to the Redemption Price of MSAF Group Notes to be redeemed and
all accrued and unpaid interest as of the Redemption Date is not then held by
the Issuer, deposit or cause to be deposited in the Defeasance/Redemption
Account an amount in immediately available funds equal to such amount to be
redeemed. On or before any Redemption Date in respect of a Redemption under
Section 3.10(b), the Issuer shall, to the extent an amount equal to the
Outstanding Principal Balance of MSAF Group Notes to be redeemed and all
accrued and unpaid interest as of the Redemption Date is not then held by the
Issuer, deposit or cause to be deposited in the Defeasance/Redemption Account
an amount in immediately available funds equal to such amount to be redeemed.
(e) MSAF Group Notes Payable on Redemption Date. After notice has been
given under Section 3.10(c) hereof, the Outstanding Principal Balance of the
MSAF Group Notes to be redeemed on such Redemption Date shall become due and
payable at the Corporate Trust Office of the Trustee, and from and after such
Redemption Date (unless there shall be a default in the payment of the
applicable amount to be redeemed) such principal amount shall cease to bear
interest. Upon surrender of any MSAF Group Note for redemption in accordance
with such notice, the Redemption Price of such MSAF Group Note, together with
accrued and unpaid interest thereon shall be paid as provided for in this
Article III. If any MSAF Group Note to be redeemed shall not be so paid upon
surrender thereof for redemption, the Outstanding Principal Balance thereof
shall continue to bear interest until paid from the Redemption Date at the
interest rate applicable to such MSAF Group Note.
Section 3.11. Adjustment of Class Percentages and Target Principal
Balances. Upon each acquisition of any Additional Aircraft, subject to
Sections 5.02(f)(iv) and 5.02(h) hereof, each of the Class Percentages for the
MSAF Group Class A Notes and the MSAF Group Class B Notes and each of the
Target Principal Balances for the MSAF Group Class C
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Notes and the MSAF Group Class D Notes shall be adjusted to take into account
such Permitted Additional Aircraft Acquisition in the manner determined by the
Controlling Trustees; provided, that no Pool Factor or Extended Pool Factor for
any subclass of MSAF Group Notes may be adjusted. The Administrative Agent
shall include such adjusted Class Percentages and Target Principal Balances in
each Quarterly Report and Annual Report.
ARTICLE IV
DEFAULT AND REMEDIES
Section 4.01. Events of Default. Each of the following events shall
constitute an "Event of Default" hereunder with respect to any class of Notes,
and each such Event of Default shall be deemed to exist and continue so long
as, but only so long as, it shall not have been remedied:
(a) failure to pay when due interest (other than any Step-Up
Interest) on any Note of such class or subclass thereof, and the
continuance of such default unremedied for a period of five Business Days
or more after the same shall have become due and payable;
(b) failure to pay when due principal of or Premium, if any, on any
Note of such class or subclass thereof on or prior to the applicable
Final Maturity Date;
(c) failure to pay any amount (other than interest) when due and
payable in connection with any Note of such class or subclass thereof, to
the extent that there are, at such time, funds available for such payment
in the Collection Account, and the continuance of such default for a
period of five Business Days or more;
(d) failure by the Issuer to comply with any of the covenants,
obligations, conditions or provisions binding on it under this Indenture
or any of the Notes (other than a payment default for which provision is
made in clause (a), (b) or (c) of this Section 4.01), if such failure or
such breach materially adversely affects the Holders of such class of
Notes and continues for a period of 30 days or more after written notice
thereof has been given to the Issuer by the Senior Trustee or by the
Holders of at least 25% of the aggregate Outstanding Principal Balance of
the Notes of the Senior Class;
(e) an "Event of Default" under and as defined in any Guarantor
Indenture;
(f) a court having jurisdiction in the premises enters a decree or
order for (i) relief in respect of the Issuer or any Significant
Subsidiary of the Issuer under any Applicable Law relating to bankruptcy,
insolvency, receivership, winding-up, liquidation, reorganization,
examination, relief of debtors or other similar law now or hereafter in
effect; (ii) appointment of a receiver, liquidator, examiner, assignee,
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custodian, trustee, sequestrator or similar official of the Issuer or any
Significant Subsidiary of the Issuer; or (iii) the winding up or
liquidation of the affairs of the Issuer or any Significant Subsidiary of
the Issuer and, in each case, such decree or order shall remain unstayed
or such writ or other process shall not have been stayed or dismissed
within 90 days from entry thereof;
(g) the Issuer or any Significant Subsidiary of the Issuer (i)
commences a voluntary case under any Applicable Law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization, examination, relief of debtors or other similar law now
or hereafter in effect, or consents to the entry of an order for relief
in any involuntary case under any such law; (ii) consents to the
appointment of or taking possession by a receiver, liquidator, examiner,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or any Significant Subsidiary of the Issuer or for all or
substantially all of the property and assets of the Issuer or any
Significant Subsidiary of the Issuer; or (iii) effects any general
assignment for the benefit of creditors;
(h) any judgment or order for the payment of money in excess of 5%
of the aggregate Adjusted Portfolio Value shall be rendered against the
Issuer or any Issuer Subsidiary or any other member of the MSAF Group and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
10 consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect; provided, however, that any such judgment or order shall not be
an Event of Default under this Section 4.01(h) if and for so long as (i)
the amount of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer, which shall be rated at least "A"
by A.M. Best Company or any similar successor entity, has been notified
of, and has not disputed the claim made for payment of, the amount of
such judgment or order; or
(i) the constitutional documents creating the Issuer cease to be in
full force and effect without replacement documents having the same terms
being in full force and effect.
Section 4.02. Acceleration, Rescission and Annulment. (a) If an Event
of Default with respect to the Senior Class of Notes (other than an Event of
Default under clause (f) or (g) of Section 4.01) occurs and is continuing, the
Senior Trustee may, and, upon the direction of Holders of at least 25% of the
aggregate Outstanding Principal Balance of the Senior Class of Notes, shall,
give a Default Notice to the Issuer, the Cash Manager, the Administrative Agent
and the Trustee declaring the Outstanding Principal Balance of the Notes and
all accrued and unpaid interest thereon to be due and payable. Upon delivery
of a Default Notice, such Outstanding Principal Balance and all accrued and
unpaid interest thereon shall be due and payable. At any time after the Senior
Trustee has declared the Outstanding Principal Balance of the Notes to be due
and payable and prior to the exercise of any other remedies pursuant to this
Article IV, Holders of a majority of the aggregate Outstanding Principal
Balance of the Senior Class of Notes, by written notice to the Issuer, the
Senior Trustee and the Administrative Agent, may, subject to Section 4.05(a),
rescind and
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annul such declaration and thereby annul its consequences if: (i) there has
been paid to or deposited with the Senior Trustee an amount sufficient to pay
all overdue installments of interest on the MSAF Group Notes, and the principal
of and Premium, if any, on the MSAF Group Notes that would have become due
otherwise than by such declaration of acceleration, (ii) the rescission would
not conflict with any judgment or decree and (iii) all other Defaults and
Events of Default, other than nonpayment of interest and principal on the MSAF
Group Notes that have become due solely because of such acceleration, have been
cured or waived. If an Event of Default under clause (f) or (g) of Section
4.01 occurs, the Outstanding Principal Balance of the Notes and all accrued and
unpaid interest thereon shall automatically become due and payable without any
further action by any party.
(b) Notwithstanding Sections 4.02 and 4.03 hereof, after the occurrence
and during the continuation of an Event of Default, (i) the Class B Noteholders
shall not be permitted to give or direct the giving of a Default Notice or to
exercise any remedy in respect of such Event of Default until all interest and
principal on the Class A Notes have been paid in full, (ii) the Class C
Noteholders shall not be permitted to give a Default Notice or to exercise any
remedy in respect of such Event of Default until all interest and principal on
the Class A Notes and the Class B Notes have been paid in full and (iii) the
Class D Noteholders shall not be permitted to give a Default Notice or to
exercise any remedy in respect of such Event of Default until all interest and
principal on the Class A Notes, the Class B Notes and the Class C Notes have
been paid in full.
(c) The Trustee shall provide each Rating Agency with a copy of any
Default Notice it receives pursuant to this Indenture.
Section 4.03. Other Remedies. If an Event of Default occurs and is
continuing, the Senior Trustee may pursue any available remedy by proceeding at
law or in equity to collect the payment of principal of, Premium, if any, or
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Senior Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding.
Section 4.04. Limitation on Suits. Without limiting the provisions of
Section 4.09 and the final sentence of Section 13.04, no Holder shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, the Security Trust Agreement or the Notes, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder holds Notes of the Senior Class and has previously
given written notice to the Senior Trustee of a continuing Event of
Default;
(b) the Holders of at least 25% of the aggregate Outstanding
Principal Balance of the Senior Class of Notes make a written request to
the Senior Trustee to pursue a remedy hereunder;
(c) such Holder or Holders offer to the Senior Trustee an indemnity
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reasonably satisfactory to the Senior Trustee against any costs, expenses
and liabilities to be incurred in complying with such request;
(d) the Senior Trustee does not comply with such request within 60
days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period, Holders of a majority of the
Outstanding Principal Balance of the Senior Class of Notes do not give
the Senior Trustee a direction inconsistent with such request.
No one or more Noteholders may use this Indenture to affect, disturb or
prejudice the rights of another Holder or to obtain or seek to obtain any
preference or priority not otherwise created by this Indenture and the terms of
the Notes over any other Holder or to enforce any right under this Indenture,
except in the manner herein provided.
Section 4.05. Waiver of Existing Defaults. (a) The Senior Trustee or a
majority of the Outstanding Principal Balance of the Senior Class of Notes by
notice to the Senior Trustee may waive any existing Default hereunder and its
consequences, except a Default: (i) in the deposit or distribution of any
payment required to be made on any Notes, (ii) in the payment of the interest
on, principal of or Premium, if any, on any Note or (iii) in respect of a
covenant or provision hereof which under Article IX hereof cannot be modified
or amended without the consent of the Holder of each Note affected thereby.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon. Each such notice of waiver
shall also be notified to each Rating Agency.
(b) Any written waiver of a Default or an Event of Default given by
Holders of the Notes to the Trustee and the Issuer in accordance with the terms
of this Indenture shall be binding upon the Trustee and the other parties
hereto. Unless such writing expressly provides to the contrary, any waiver so
granted shall extend only to the specific event or occurrence which gave rise
to the Default or Event of Default so waived and not to any other similar event
or occurrence which occurs subsequent to the date of such waiver.
Section 4.06. Restoration of Rights and Remedies. If the Trustee or any
Holder of Notes of the Senior Class has instituted any proceeding to enforce
any right or remedy under this Indenture, and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or such Holder, then in every such case the Issuer, the Trustee and
the Noteholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Noteholders shall
continue as though no such proceeding has been instituted.
Section 4.07. Remedies Cumulative. Each and every right, power and
remedy herein given to the Trustee specifically or otherwise in this Indenture
shall be cumulative and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in equity
or by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to
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time and as often and in such order as may be deemed expedient by the Trustee,
and the exercise or the beginning of the exercise of any power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Trustee in the exercise of any right, remedy or power or in the pursuance of
any remedy shall impair any such right, power or remedy or be construed to be a
waiver of any Default on the part of the Issuer or to be an acquiescence
therein.
Section 4.08. Authority of Courts Not Required. The parties hereto agree
that, to the greatest extent permitted by law, the Trustee shall not be obliged
or required to seek or obtain the authority of, or any judgment or order of,
the courts of any jurisdiction in order to exercise any of its rights, powers
and remedies under this Indenture, and the parties hereby waive any such
requirement to the greatest extent permitted by law.
Section 4.09. Rights of Noteholders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Noteholder to receive
payment of interest on, principal of and Premium, if any, on its Note on or
after the respective due dates therefor expressed in such Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Noteholder.
Section 4.10. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of any Noteholder
allowed in any judicial proceedings relating to any obligor on the Notes, its
creditors or its property.
Section 4.11. Undertaking for Costs. All parties to this Indenture
agree, and each Noteholder by its acceptance thereof shall be deemed to have
agreed, that in any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defense made by the party litigant.
This Section 4.11 does not apply to a suit instituted by the Trustee, a suit
instituted by any Noteholder for the enforcement of the payment of interest,
principal or Premium, if any, on his Note on or after the respective due dates
expressed in such Note, or a suit by a Noteholder or Noteholders of more than
10% of the Outstanding Principal Balance of any class or subclass of the Notes.
Section 4.12. Control by Noteholders. Subject to Section 4.04 hereof,
the Noteholders holding Notes of any class or subclass of not less than 25% of
the Outstanding Principal Balance of Notes of such class or subclass shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee under this Indenture; provided that
(1) such direction shall not be in conflict with any rule of law or
with this Agreement and would not involve the Trustee in personal
liability or expense;
(2) the Trustee shall not determine that the action so directed
would be
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unjustly prejudicial to the Noteholders of such class or subclass not
taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.01. Representations and Warranties. The Issuer represents and
warrants to the Trustee as follows:
(i) Due Organization. Each of the Issuer and MSA I is a business
trust created under the laws of Delaware, and each Issuer Subsidiary
other than MSA I is a corporation duly incorporated in its respective
jurisdiction of incorporation, in each case with full power and authority
to conduct its business; and none of the Issuer or any Issuer Subsidiary
is in liquidation, bankruptcy or suspension of payments.
(ii) Special Purpose Status. The Issuer has not engaged in any
activities since its organization (other than those incidental to its
organization and other appropriate trust steps and arrangements for the
payment of fees to, and director's and officer's insurance for, the
Controlling Trustees, the Alternate Controlling Trustee and the
Independent Trustees, the purchase of the Initial Aircraft and interests
in the Initial Leases, the authorization and the issuance of the Initial
Notes, the execution of the Related Documents and the activities referred
to in or contemplated by such agreements), and the Issuer has not paid
any dividends or other distributions since its organization.
(iii) Non-Contravention. The purchase of the Initial Aircraft and
interests in the Initial Leases pursuant to the Asset Purchase Agreement,
the creation of the Initial Notes and the issuance, execution and
delivery of, and the compliance by the Issuer and each Issuer Subsidiary
with the terms of each of the Related Documents and the Initial Notes:
(A) do not and will not at the Initial Closing Date or any
Payment Date conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, the
constitutional documents of the Issuer or the constituent documents
of any Issuer Subsidiary or with any existing law, rule or
regulation applying to or affecting the Issuer or any Issuer
Subsidiary or any judgment, order or decree of any government,
governmental body or court having jurisdiction over the Issuer or
any Issuer Subsidiary; and
(B) do not and will not at the Initial Closing Date or any
Payment Date infringe the terms of, or constitute a default under,
any deed, indenture, agreement or other instrument or obligation to
which the Issuer or any Issuer Subsidiary is a party or by which
any of them or any part of their undertaking,
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assets, property or revenues are bound.
(iv) Due Authorization. The purchase of the Initial Aircraft and
interests in the Initial Leases, the creation, execution and issuance of
the Initial Notes, the execution and issue or delivery by the Issuer and
each Issuer Subsidiary of the Related Documents executed by it and the
performance by each of them of their obligations to be assumed hereunder
and thereunder and the arrangements contemplated hereby and thereby to be
performed by each of them have been duly authorized by each of them.
(v) Validity and Enforceability. This Indenture constitutes, and
the Related Documents, when executed and delivered and, in the case of
the Initial Notes, when issued and authenticated, will constitute valid,
legally binding and (subject to general equitable principles, insolvency,
liquidation, reorganization and other laws of general application
relating to creditors' rights or claims or to laws of prescription or the
concepts of materiality, reasonableness, good faith and fair dealing)
enforceable obligations of the Issuer and each Issuer Subsidiary
executing the same.
(vi) No Defaults. There exists no Event of Default nor any event
which, had the Initial Notes already been issued, would constitute a
Default or an Event of Default.
(vii) No Encumbrances. Subject to the Security Interests created in
favor of the Security Trustee and except for Permitted Encumbrances,
there exists no Encumbrance over the assets or undertaking of the Issuer
or any Issuer Subsidiary which ranks prior to or pari passu with the
obligation to make payments on the Initial Notes.
(viii) No Consents. All consents, approvals, authorizations or
other orders of all regulatory authorities required (excluding any
required by the other parties to the Related Documents) for or in
connection with the execution and performance of the Related Documents by
the Issuer and each Issuer Subsidiary and the issue and performance of
the Initial Notes and the offering of the Initial Notes by the Issuer has
been obtained and are in full force and effect and not contingent upon
fulfillment of any condition.
(ix) No Litigation. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of the Issuer, threatened
against or affecting, the Issuer or any Issuer Subsidiary before any
court or arbitrator or any governmental body, agency or official which in
any manner challenges or seeks to prevent, enjoin, alter or materially
delay the transactions contemplated by this Indenture (including the
Exhibits and Schedules attached hereto) and the Related Documents.
(x) Employees, Subsidiaries. The Issuer and each Issuer Subsidiary
have no employees. Set forth in Schedule B hereto is a true and complete
list, as of the date hereof, of all Issuer Subsidiaries, together with
their jurisdictions of organization.
(xi) Ownership. The Issuer or an Issuer Subsidiary is the
beneficial owner
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of the Pledged Stock, the Pledged Debt, the Pledged Beneficial Interest
and the Non-Trustee Accounts, free from all Encumbrances and claims
whatsoever other than Permitted Encumbrances.
(xii) No Filings. Under the laws of Delaware and New York
(including U.S. federal law) in force at the date hereof, it is not
necessary or desirable that this Indenture or any Related Document to
which an Issuer Subsidiary is a party (other than evidences of the
Security Interests) be filed, recorded or enrolled (other than the filing
of the Trust Agreement in Delaware) with any court or other authority in
any such jurisdictions or that any stamp, registration or similar tax be
paid on or in relation to this Indenture or any of the other Related
Documents.
(xiii) Other Representations. The representations and warranties
made by the Issuer and each Issuer Subsidiary in any of the other Related
Documents are true and accurate.
Section 5.02. General Covenants. The Issuer covenants with the Trustee
as follows:
(a) No Release of Obligations. The Issuer shall not take, or
knowingly permit any Issuer Subsidiary to take, any action which would
amend, terminate (other than any termination in connection with the
replacement of such agreement with an agreement on terms substantially no
less favorable to MSAF Group than the agreement being terminated) or
discharge or prejudice the validity or effectiveness of this Indenture
(other than as permitted herein), the Security Trust Agreement, the Cash
Management Agreement, the Administrative Agency Agreement, the Financial
Advisory Agreement, the Servicing Agreement or any Additional Servicing
Agreement or permit any party to any such document to be released from
such obligations, except, in each case, as permitted or contemplated by
the terms of such document, and provided that such actions may be taken
or permitted, and such releases may be permitted, if the Issuer shall
have first obtained an authorizing resolution of the Controlling Trustees
determining that such action, permitted action or release does not
materially adversely affect the interests of the Noteholders and having
given notice thereof to the Rating Agencies; and provided further that,
in any case (i) the Issuer shall not take any action which would result
in any amendment or modification to the conflicts standard or duty of
care in such agreements and (ii) there must be at all times an
administrative agent, a cash manager, a financial advisor and a servicer
(provided that, if the Servicer or any Additional Servicer terminates the
Servicing Agreement or any Additional Servicing Agreement pursuant to
Section 10.02(a) thereof, this Section 5.02(a) shall not be violated if
the Issuer uses its best efforts to obtain a successor servicer).
(b) Limitation on Encumbrances. The Issuer shall not, and shall not
permit any Issuer Subsidiary to, create, incur, assume or suffer to exist
any mortgage, pledge, lien, encumbrance, charge or security interest (in
each case, an "Encumbrance"), including, without limitation, any
conditional sale, any sale with recourse against the seller or any
affiliate of the seller, or any agreement to give any security interest
over or with respect to any of the Issuer's or any Issuer Subsidiary's
86
assets (other than the segregation of the Segregated Funds) including,
without limitation, all shares of capital stock, all beneficial interests
in trusts, all ordinary shares and preferred shares and any options,
warrants and other rights to acquire such shares or interests ("Stock")
and any Indebtedness of any Issuer Subsidiary held by the Issuer or any
Issuer Subsidiary.
Notwithstanding the foregoing, the Issuer may create, incur, assume
or suffer to exist (i) any Permitted Encumbrance, (ii) any security
interest created or required to be created under the Security Trust
Agreement, (iii) Encumbrances over rights in or derived from Leases, upon
Rating Agency Confirmation (provided that any transaction or series of
transactions resulting in such Encumbrance, taken as a whole, does not
materially adversely affect the amount of Collections that would have
been received by any MSAF Group Member from such Lease had such
Encumbrance not been created) or (iv) any other Encumbrance the validity
or applicability of which is being contested in good faith in appropriate
proceedings by the Issuer or any Issuer Subsidiary.
For the purposes of this Indenture, "affiliate" means, with respect
to any Person, any other Person that, directly or indirectly, controls,
is controlled by or is under common control with, such Person or is a
director or officer of such Person; "control" of a Person means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting Stock, by contract or otherwise. For the
purposes of this Indenture, "Permitted Encumbrance" means (i) any lien
for taxes, assessments and governmental charges or levies not yet due and
payable or which are being contested in good faith by appropriate
proceedings; (ii) in respect of any Aircraft, any lien of a repairer,
carrier or hangar keeper arising in the ordinary course of business by
operation of law or any engine or parts-pooling arrangements or other
similar lien; (iii) any permitted lien or encumbrances on any Aircraft,
Engines or Parts as defined under any Lease thereof (other than liens or
encumbrances created by the relevant lessor); (iv) any lien created by or
through or arising from debt or liabilities or any act or omission of any
Lessee in each case either in contravention of the relevant Lease
(whether or not such Lease has been terminated) or without the consent of
the relevant lessor (provided that if such lessor becomes aware of any
such lien, it shall use commercially reasonable efforts to have any such
lien lifted); (v) any head lease, lease, Conditional Sale Agreement or
Purchase Option existing on the relevant Closing Date or Aircraft
Agreement meeting the requirements of clause (iii) or (v) of the second
paragraph of Section 5.02(g) hereof; (vi) any lien for air navigation
authority, airport tending, gate or handling (or similar) charges or
levies; (vii) any lien created in favor of the Issuer, any Issuer
Subsidiary or the Security Trustee; (viii) any Encumbrance arising under
the Custody and Loan Agreement or under any other agreement the terms of
which contemplate that security deposits held for Lessees with respect to
Additional Aircraft are held by a third party and (ix) any other lien not
referred to in clauses (i) through (viii) of this paragraph which would
not adversely affect the owner's rights and does not exceed the greater
of 0.2% of the aggregate Initial Appraised Value of the Portfolio from
time to time and $250,000 per Aircraft.
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(c) Limitation on Restricted Payments. The Issuer shall not, and
shall not permit any Issuer Subsidiary to (i) declare or pay any dividend
or make any distribution on its Stock held by Persons other than the
Issuer or any Issuer Subsidiary; provided that so long as no Event of
Default shall have occurred and be continuing and to the extent there are
available funds therefor in the Collection Account on such Payment Date,
the Issuer may, subject to the provisions set forth in Section 3.08
hereof, pay the Beneficial Interest Distribution Amount and the amount
referred to in Section 3.08(a)(xxvi) hereof; (ii) purchase, redeem,
retire or otherwise acquire for value any shares of Stock of the Issuer
or any Issuer Subsidiary held by or on behalf of Persons other than the
Issuer, any Issuer Subsidiary and other Persons permitted under Section
5.02(l)(ii)(B) hereof; (iii) make any payment of principal, interest or
Premium, if any, on the Notes or make any voluntary or optional
repurchase, defeasance or other acquisition or retirement for value of
Indebtedness of the Issuer or such Issuer Subsidiary that is not owed to
the Issuer or such Issuer Subsidiary other than in accordance with
Section 3.10 hereof; provided that the Issuer or any of its affiliates
may repurchase, defease or otherwise acquire or retire any of the Notes
other than from the Available Collections Amount so long as any new notes
of the Issuer issued in connection with such transaction rank pari passu
with the Notes being repurchased, defeased, acquired or retired and the
Controlling Trustees shall determine that such action does not materially
adversely affect the Noteholders and shall have obtained Rating Agency
Confirmation or (iv) make any investments (other than Permitted Account
Investments, Allowed Restructurings, investments permitted under Section
5.02(e) hereof and investments in any Aircraft Owning Companies pursuant
to a Permitted Aircraft Acquisition; provided that written notification
of the organization or acquisition of each such Aircraft Owning Company
shall have been given to each Rating Agency).
The term "investment" for purposes of the above restriction shall
mean any loan or advance to a Person, any purchase or other acquisition
of any beneficial interest, capital stock, warrants, rights, options,
obligations or other securities of such Person, any capital contribution
to such Person or any other investment in such Person. For the avoidance
of doubt, "investment" shall not include any obligation of a purchaser of
an Aircraft to make deferred or installment payments pursuant to any
Aircraft Agreement specified in (iii) or (iv) of the second paragraph of
Section 5.02(g) hereof so long as MSAF Group retains a security interest
in the relevant Aircraft until all such obligations are discharged.
(d) Limitation on Dividends and Other Payment Restrictions. The
Issuer shall not, and shall not permit any Issuer Subsidiary to, create
or otherwise suffer to exist any consensual encumbrance or restriction of
any kind on the ability of any Issuer Subsidiary to (i) declare or pay
dividends or make any other distributions permitted by applicable law, or
purchase, redeem or otherwise acquire for value, the Stock of the Issuer
or such Issuer Subsidiary, as the case may be; (ii) pay any Indebtedness
owed to the Issuer or such Issuer Subsidiary; (iii) make loans or
advances to the Issuer or such Issuer Subsidiary; or (iv) transfer any of
its property or assets to the Issuer or any other Issuer Subsidiary.
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The foregoing provisions shall not restrict any consensual
encumbrances or other restrictions: (i) existing on the Initial Closing
Date or, in the case of any Issuer Additional Aircraft, the date of
acquisition of such Aircraft, under any Related Document, and any
amendments, extensions, refinancings, renewals or replacements of such
documents; provided that such consensual encumbrances and restrictions in
any such amendments, extensions, refinancings, renewals or replacements
are no less favorable in any material respect to the Holders of the MSAF
Group Notes than those previously in effect and being amended, extended,
refinanced, renewed or replaced; or (ii) in the case of clause (iv) of
the preceding paragraph, (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a
lease, license, conveyance or contract or similar property or asset or
(B) existing by virtue of any transfer of, agreement to transfer, option
or right with respect to, or consensual encumbrance on, any property or
assets of the Issuer or any Issuer Subsidiary not otherwise prohibited by
this Indenture. Nothing contained in this covenant shall prevent the
Issuer or any Issuer Subsidiary from creating, incurring, assuming or
suffering to exist any Encumbrances not otherwise prohibited under this
Indenture.
(e) Limitation on Engaging in Business Activities. The Issuer shall
not, and shall not permit any Issuer Subsidiary to, engage in any
business or activity other than:
(i) purchasing or otherwise acquiring (subject to Section
5.02(h) hereof), owning, holding, converting, maintaining,
modifying, managing, operating, leasing, re-leasing and, subject to
the limitations set forth in Section 5.02(g) hereof, selling or
otherwise disposing of the Aircraft and entering into all contracts
and engaging in all related activities incidental thereto,
including from time to time accepting, exchanging, holding or
permitting any Issuer Subsidiary to accept, exchange or hold (an
"Allowed Restructuring") promissory notes, contingent payment
obligations or equity interests, of Lessees or their affiliates
issued in connection with the bankruptcy, reorganization or other
similar process, or in settlement of delinquent obligations or
obligations anticipated to be delinquent, of such Lessees or their
respective affiliates in the ordinary course of business;
(ii) providing loans to, guaranteeing or otherwise supporting
the obligations and liabilities of any MSAF Group Member, in each
case on such terms and in such manner as the Controlling Trustees
see fit and (whether or not the Issuer or any Issuer Subsidiary
derives a benefit therefrom) so long as such loans, guarantees or
other supports are provided in connection with the purposes set
forth in clause (i) of this Section 5.02(e); provided that written
notification shall have been given to each Rating Agency of such
loan, guarantee or other support;
(iii) financing or refinancing the business activities
described in clause (i) of this covenant through the offer, sale
and issuance of any securities
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of the Issuer or any Guarantor, upon such terms and conditions as
the Controlling Trustees see fit, for cash or in payment or in
partial payment for any property purchased or otherwise acquired by
any MSAF Group Member;
(iv) engaging in currency and interest rate exchange
transactions for the purposes of avoiding, reducing, minimizing,
hedging against or otherwise managing the risk of any loss, cost,
expense or liability arising, or which may arise, directly or
indirectly, from any change or changes in any interest rate or
currency exchange rate or in the price or value of any of the
Issuer's or any Issuer Subsidiary's property or assets, within
limits determined by the Controlling Trustees from time to time and
submitted to the Rating Agencies, including but not limited to
dealings, whether involving purchases, sales or otherwise, in
foreign currency, spot and forward interest rate exchange
contracts, forward interest rate agreements, caps, floors and
collars, futures, options, swaps and any other currency, interest
rate and other similar hedging arrangements and such other
instruments as are similar to, or derivatives of, any of the
foregoing;
(v) (A) establishing, promoting and aiding in promoting,
constituting, forming or organizing companies, trusts, syndicates,
partnerships or other entities of all kinds in any part of the
world for the purposes set forth in clause (i) above; provided that
written notification shall have been given to each Rating Agency
that such company, trust, syndicate or partnership is set up in
compliance with this Indenture, (B) acquiring, holding and
disposing of shares, securities and other interests in any such
trust, company, syndicate, partnership or other entity and (C)
disposing of shares, securities and other interests in, or causing
the dissolution of, any existing subsidiary; provided that any such
disposition which results in the disposition of an Aircraft meets
the requirements set forth in Section 5.02(g) hereof; and
(vi) taking out, acquiring, surrendering and assigning
policies of insurance and assurances with any insurance company or
companies which the Issuer or any Issuer Subsidiary may think fit
and to pay the premiums thereon.
(f) Limitation on Indebtedness. The Issuer shall not, and shall
not permit any Issuer Subsidiary to, incur, create, issue, assume,
guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, whether
present or future (in any such case, to "incur"), Indebtedness.
For the purposes of this Indenture, "Indebtedness" means, with
respect to any Person at any date of determination (without duplication),
(i) all indebtedness of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all the obligations of such
Person to pay the deferred and unpaid purchase price of property or
services, which purchase price is
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due more than six months after the date of purchasing such property or
service or taking delivery and title thereto or the completion of such
services, and payment deferrals arranged primarily as a method of raising
finance or financing the acquisition of such property or service, (v) all
obligations of such Person under a lease of (or other agreement conveying
the right to use) any property (whether real, personal or mixed) that is
required to be classified and accounted for as a capital lease obligation
under U.S. GAAP, (vi) all Indebtedness (as defined in clauses (i) through
(v) of this paragraph) of other Persons secured by a lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person,
and (vii) all Indebtedness (as defined in clauses (i) through (v) of this
paragraph) of other Persons guaranteed by such Person.
Notwithstanding the foregoing, the Issuer and any Issuer Subsidiary
may incur each and all of the following:
(i) Indebtedness in respect of any Initial Notes issued on the
Initial Closing Date;
(ii) Indebtedness in respect of any Refinancing Notes or other
Indebtedness described in the proviso to Section 5.02(c)(iii);
provided that (A) such Refinancing Notes or other Indebtedness
receive ratings from the Rating Agencies at the close of such
Refinancing or repurchase equal to or higher than those of the
subclass being refinanced or repurchased (determined at the date of
incurrence), (B) taking into account such Refinancing or
repurchase, the Issuer receives Rating Agency Confirmation prior to
such Refinancing or repurchase with respect to each subclass of
MSAF Group Notes Outstanding at such time and (C) the net proceeds
of any such Refinancing or other Indebtedness shall be used only to
repay the Outstanding Principal Balance of the subclass of Notes
being so refinanced or repurchased plus any Redemption Premium and
transaction expenses relating thereto;
(iii) Indebtedness in respect of guarantees by MSAF or any
MSAF Subsidiary of any other MSAF Group Member (other than the
Guarantee described in (v) below), provided that no such
Indebtedness shall be incurred if it would materially adversely
affect the Noteholders;
(iv) Indebtedness in respect of any Issuer Additional Notes
the proceeds of which are applied to finance a Permitted Additional
Aircraft Acquisition; provided that (A) the Issuer receives Rating
Agency Confirmation prior to the incurrence of such Indebtedness
with respect to all of the MSAF Group Notes Outstanding at such
time and (B) the net proceeds of such Indebtedness shall be used
only to finance such Permitted Additional Aircraft Acquisition and
(c) such Issuer Additional Notes will be cross-collateralized with
all Outstanding Notes by the Collateral under the Security Trust
Agreement;
(v) Indebtedness in respect of the Guarantee set forth in
Article XII
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of this Indenture (the "Guarantee"); provided that (A) the
Indebtedness guaranteed thereby is incurred by a Guarantor that has
guaranteed the Notes, (B) the Indebtedness being guaranteed would
be permitted pursuant to clause (ii) or (iv) if such Indebtedness
were incurred directly by the Issuer and (C) the Indebtedness being
guaranteed was issued by the Guarantor under an indenture the terms
of which (including the covenants and other obligations of the
Guarantor thereunder) are substantially identical to those of this
Indenture;
(vi) obligations to each Seller under each Acquisition
Agreement and any related lease assignment and assumption
agreements and the documents related thereto;
(vii) Indebtedness under any agreements between the Issuer or
any Issuer Subsidiary and any other MSAF Group Members (each, an
"Intercompany Loan"); provided that such Indebtedness shall be
evidenced by promissory notes and written notification shall have
been given to each Rating Agency of the incurrence of such
Indebtedness; and
(viii) Indebtedness of MSAF Group under any Credit Facility.
For the purposes of this Indenture, "guarantee" means any
obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness or other obligation of any
other Person and, without limiting the generality of the foregoing,
any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation
of such other Person or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided
that the term "guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"guarantee" when used as a verb has a corresponding meaning.
(g) Limitation on Aircraft Sales. The Issuer shall not, and shall
not permit any Issuer Subsidiary to, sell, transfer or otherwise dispose
of any Aircraft or any interest therein.
Notwithstanding the foregoing, the Issuer and any Issuer Subsidiary
shall be permitted to sell, transfer or otherwise dispose of, directly or
indirectly, (a) any Engine or Part owned on the Initial Closing Date or,
with respect to any Issuer Additional Aircraft, on the date such Aircraft
is acquired or (b) one or more Aircraft or an interest therein (i)
pursuant to a Purchase Option or other agreements of a similar character
existing on the Initial Closing Date or, with respect to any Additional
Aircraft, on the Closing Date therefor, (ii) within or among the Issuer
and the Issuer Subsidiaries without limitation, and among the Issuer
and/or any Issuer Subsidiary and any other MSAF Group Member; provided
that no such sale, transfer or disposition shall be made other than to
the Issuer or any Issuer Subsidiary if such sale,
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transfer or other disposition would materially adversely affect the
Noteholders; provided, further, that written notification shall have been
given to each Rating Agency of such sale, transfer or disposition, (iii)
pursuant to any Aircraft Agreement; provided that such sale does not
result in a Concentration Default and the net present value of the cash
Net Sale Proceeds is not less than the Note Target Price, (iv) pursuant
to receipt of insurance proceeds in connection with an event of loss or
(v) pursuant to an Aircraft Agreement and, in any one calendar year, not
exceeding 10% of the Adjusted Portfolio Value as determined by the most
recent Appraisal obtained for such calendar year; provided that the
Controlling Trustees unanimously confirm that each such sale would not
materially adversely affect the Noteholders and such sale does not result
in a Concentration Default.
For the purpose of this Section 5.02(g), the net present value of
the cash Net Sale Proceeds of any sale, transfer or other disposition of
any Aircraft shall mean the present value of all payments received or to
be received by the Issuer or any Issuer Subsidiary from the date of
execution or option granting date, as the case may be, of the relevant
Aircraft Agreement through and including the date of transfer of title to
such Aircraft, discounted back to the date of execution or option
granting date, as the case may be, of such Aircraft Agreement at the
weighted average cost of funds of the MSAF Group (based on the cost of
funds represented by the MSAF Group Notes and taking into account any
Swap Agreements).
The "Note Target Price" means, in respect of any Aircraft, an amount
equal to 103% of the aggregate Outstanding Principal Balance of the MSAF
Group Notes, together with any accrued but unpaid interest thereon and
any related Swap Breakage Costs, allocable to such Aircraft on the date
of the sale agreement or purchase option granting date, as the case may
be. On any date, the Outstanding Principal Balance of MSAF Group Notes
allocable to an Aircraft shall equal the product of (i) (A) the Adjusted
Base Value of such Aircraft divided by (B) the Adjusted Portfolio Value
and (ii) the aggregate Outstanding Principal Balance of MSAF Group Notes,
in each case on the most recent Payment Date.
"Aircraft Agreement" means any lease, sublease, conditional sale
agreement, finance leases, hire purchase agreement or other agreement
(other than an agreement relating to maintenance, modification or
repairs) or any purchase option granted to a Person other than any MSAF
Group Member to purchase an Aircraft pursuant to a purchase option
agreement, in each case pursuant to which any Person acquires or is
entitled to acquire legal title, or the economic benefits of ownership
of, such Aircraft.
"Net Sale Proceeds" means, with respect to any sale or other
disposition of any assets, the aggregate amount of cash received or to be
received from time to time (whether as initial or deferred consideration)
by or on behalf of the seller in connection with such transaction after
deducting therefrom (without duplication) (a) reasonable and customary
brokerage commissions and other similar fees and commissions (including
fees received by the Servicer under the Servicing Agreement) and (b) the
amount of taxes payable in connection with or as a result of such
transaction, in each case to the extent, but only to the extent, that the
amounts so
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deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an affiliate of the seller and are properly
attributable to such transaction or to the asset that is the subject
thereof.
"Concentration Default" means an Event of Default under Section
5.03(a) which would arise if effect were given to any sale, transfer or
other disposition or any purchase or other acquisition pursuant to an
Aircraft Agreement as of the date of such Aircraft Agreement regardless
of whether such sale, transfer or other disposition or purchase or other
acquisition is scheduled or expected to occur after the date of such
Aircraft Agreement.
(h) Limitation on Aircraft Acquisitions. The Issuer shall not, and
shall not permit any Issuer Subsidiary to, purchase or otherwise acquire
any Aircraft other than the Initial Aircraft or any interest therein.
Notwithstanding the foregoing, the Issuer may, and may permit any
Issuer Subsidiary to, (A) purchase or otherwise acquire, directly or
indirectly, Additional Aircraft from time to time (a "Permitted
Additional Aircraft Acquisition"); provided that (i) no Event of Default
shall have occurred and be continuing, (ii) all Scheduled Principal
Payment Amounts have been paid, (iii) the acquisition does not result in
a Concentration Default and (iv) after giving effect to such acquisition,
no more than 90% by appraised Base Value of the Portfolio consists of
Stage 3 narrowbody aircraft and regional jets, no more than 50% by
appraised Base Value of the Portfolio consists of Stage 3 widebody
aircraft and no more than 15% by appraised Base Value of the Portfolio
consists of Stage 2 aircraft and turboprop aircraft without the
Controlling Trustees having obtained Rating Agency Confirmation, (B) act
as sponsor of a future MSAF Group entity other than an Issuer Subsidiary
that would fund an acquisition of aircraft assets with Indebtedness
guaranteed by the Issuer pursuant to Section 12.01; provided that, if
such acquisition of aircraft assets had been consummated indirectly by
the Issuer, such acquisition would have been permitted pursuant to the
preceding clause (A) and (C) purchase or otherwise acquire, directly or
indirectly, (x) Remaining Aircraft pursuant to the Asset Purchase
Agreement or (y) Substitute Aircraft.
(i) Limitation on Modification Payments and Capital Expenditures.
The Issuer shall not, and shall not permit any Issuer Subsidiary to, make
any capital expenditures for the purpose of effecting any optional
improvement or modification of any Aircraft, for the optional conversion
of any Aircraft from a passenger aircraft to a freighter or mixed-use
aircraft, or for the purpose of purchasing or otherwise acquiring any
Engines or Parts outside of the ordinary course of business (each such
expenditure, a "Modification Payment").
Notwithstanding the foregoing, the Issuer may, and may permit any
Issuer Subsidiary to, make Modification Payments; provided that (i) each
Modification Payment, together with all other Modification Payments made
after the Initial Closing Date pursuant to this Section 5.02(i) with
respect to any single Aircraft, do not exceed the aggregate amount of
funds that would be necessary to perform one incidence of heavy
maintenance (as described in the applicable Servicing Agreement or
Additional
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Servicing Agreement) on such Aircraft, including the airframe and the
related Engines thereof; (ii) such Modification Payment is included in
the annual operating budget of the MSAF Group and approved by the
Controlling Trustees; (iii) the amount of funds necessary to make such
Modification Payment shall have been accrued in advance as a Permitted
Accrual in the Expense Account through transfers into the Expense Account
pursuant to Section 3.08(a)(xvi) hereof or otherwise allowed to be paid
under Section 5.02(f) hereof; and (iv) the aggregate amount of all
Modification Payments made by all MSAF Group Members, taken as a whole,
pursuant to this Section 5.02(i) and pursuant to any Guarantor Indenture
after the Initial Closing Date, including such Modification Payment,
shall not exceed 5% of the aggregate Initial Appraised Value of all
Aircraft acquired by MSAF Group.
(j) Limitation on Consolidation, Merger and Transfer of Assets. The
Issuer shall not, and shall not permit any Issuer Subsidiary to,
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of its property and assets (as an entirety or
substantially an entirety in one transaction or in a series of related
transactions) to, any other Person, or permit any other Person to merge
with or into the Issuer or any Issuer Subsidiary, unless (i) the
resulting entity is a special purpose corporation, the charter of which
is substantially similar to the Trust Agreement or the equivalent charter
document of such Issuer Subsidiary, as the case may be, and, after such
consolidation, merger, sale, conveyance, transfer, lease or other
disposition, payments from such resulting entity to the Noteholders do
not give rise to any withholding tax payments less favorable to the
Noteholders than the amount of any withholding tax payments which would
have been required had such event not occurred, (ii) in the case of any
consolidation, merger or transfer by the Issuer, the surviving successor
or transferee entity shall expressly assume all of the obligations of the
Issuer under this Indenture, the Notes and each other Related Document to
which the Issuer is then a party, (iii) the Controlling Trustees shall
have obtained a Rating Agency Confirmation with respect to such merger,
sale, conveyance, transfer, lease or disposition, (iv) immediately after
giving effect to such transaction, no Event of Default shall have
occurred and be continuing and (v) the Issuer delivers to the Trustee an
Officer's Certificate and an opinion of counsel, in each case stating
that such consolidation, merger or transfer and such supplemental
indenture comply with the above criteria and, if applicable, Section
5.02(g) hereof and that all conditions precedent provided for herein
relating to such transaction have been complied with; provided that this
covenant shall not apply to any such consolidation, merger, sale,
conveyance, transfer, lease or disposition (a) within and among the
Issuer and any Issuer Subsidiary and any other MSAF Group Member if such
consolidation, merger, sale, conveyance, transfer, lease or disposition,
as the case may be, would not materially adversely affect the Noteholders
and written notification is given to such Rating Agency, (b) complying
with the terms of Section 5.02(g) hereof or (c) effected as part of a
single transaction providing for the redemption or defeasance of MSAF
Group Notes in accordance with Section 3.10 or Article XI, respectively,
hereof.
(k) Limitation on Transactions with Affiliates. The Issuer shall
not, and shall not permit any Issuer Subsidiary, directly or indirectly,
to enter into, renew or extend any transaction (including, without
limitation, the purchase, sale, lease or
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exchange of property or assets, or the rendering of any service) with any
affiliate of the Issuer or any Issuer Subsidiary, except upon fair and
reasonable terms no less favorable to the Issuer or such Issuer
Subsidiary than could be obtained, at the time of such transaction or at
the time of the execution of the agreement providing therefor, in a
comparable arm's-length transaction with a Person that is not such an
affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) any transaction in connection with the establishment of MSAF Group,
its acquisition of the Initial Aircraft or pursuant to the terms of the
Related Documents; (ii) any transaction within and among the Issuer or
any Issuer Subsidiary and any other MSAF Group Member; provided that no
such transaction, other than among the Issuer and any Issuer Subsidiary,
shall be consummated if such transaction would materially adversely
affect any Noteholders; (iii) the payment of reasonable and customary
regular fees to, and the provision of reasonable and customary liability
insurance in respect of, the Controlling Trustees; (iv) any payments on
the Beneficial Interest in accordance with Section 3.08 hereof; (v) any
Permitted Additional Aircraft Acquisition or any transaction complying
with Section 5.02(g) hereof; (vi) any payments of the types referred to
in clause (i) or (ii) of Section 5.02(c) hereof and not prohibited
thereunder; (vii) sale of Aircraft or any Issuer Subsidiaries as part of
a single transaction providing for the redemption or defeasance of MSAF
Group Notes in accordance with Section 3.10 or Article XI, respectively,
hereof, (viii) any Swap Agreement or Swaption or other instrument used
for the management of interest rate risk with Xxxxxx Xxxxxxx or any of
its affiliates or (ix) the Tax Indemnification Agreement.
(l) Limitation on the Issuance, Delivery and Sale of Capital Stock.
The Issuer shall not (i) issue, deliver or sell any shares, interests,
participations or other equivalents (however designated, whether voting
or non-voting, other than beneficial interests, shares, participations or
other equivalents existing on the Initial Closing Date) in equity, or
(ii) sell, or permit any Issuer Subsidiary, directly or indirectly, to
issue, deliver or sell, any shares, interests, participations or other
equivalents in equity (however designated, whether voting or non-voting,
other than beneficial interests, shares, participations or other
equivalents existing on the Initial Closing Date), except (A) issuances
or sales of further beneficial interest in the Issuer having economic
terms no less favorable to the Noteholders than the terms of the
Beneficial Interest on the Initial Closing Date, (B) issuances or sales
of shares of Stock of foreign Issuer Subsidiaries to nationals in the
jurisdiction of incorporation or organization of such Issuer Subsidiary,
as the case may be, to the extent required by applicable law or necessary
in the determination of the Controlling Trustees to avoid adverse tax
consequences in any such jurisdiction, (C) the pledge of the Pledged
Stock and Pledged Beneficial Interest pursuant to the Security Trust
Agreement, (D) the sale, delivery or transfer of any Stock of any MSAF
Group Member as part of a single transaction providing for the redemption
or defeasance of the MSAF Group Notes in accordance with Section 3.10 or
Article XI, respectively, hereof and pursuant to a Guarantor Indenture,
(E) the sale of any Stock of an Issuer Subsidiary in order to effect the
sale of all Aircraft owned by such Issuer Subsidiary in compliance with
Section 5.02(g) hereof and (F) the sale, delivery, transfer or pledge of
stock or beneficial interests of any MSAF Group Member to or for the
benefit of any other
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MSAF Group Member.
(m) Bankruptcy and Insolvency; Corporate Governance. The Issuer (i)
shall promptly provide the Trustee and the Rating Agencies with written
notice of the institution of any proceeding by or against the Issuer or
any Issuer Subsidiary, as the case may be, seeking to adjudicate any of
them a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of their debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee or other
similar official for either or for any substantial part of their
property; (ii) shall not take any action to waive, repeal, amend, vary,
supplement or otherwise modify its charter documents that would adversely
affect the rights, privileges or preferences of any holder of the MSAF
Notes, as determined by the Controlling Trustees; and (iii) shall not,
without an affirmative unanimous written resolution of the Independent
Trustees and the Controlling Trustees, take any action to waive, repeal,
amend, vary, supplement or otherwise modify the provisions of the Trust
Agreement which requires a unanimous resolution of the Independent
Trustees and the Controlling Trustees, or limits the actions of
beneficial interest holders, with respect to voluntary insolvency
proceedings or consents to involuntary insolvency proceedings.
(n) Payment of Principal, Premium, if any, and Interest. The Issuer
shall duly and punctually pay the principal, Premium, if any, and
interest on the Notes in accordance with the terms of this Indenture and
the Notes.
(o) Limitation on Employees. The Issuer shall not, and shall not
permit any Issuer Subsidiary to, employ or maintain any employees other
than as required by any provisions of local law; provided that trustees
and directors shall not be deemed to be employees for purposes of this
Section 5.03(o).
Section 5.03. Operating Covenants. The Issuer covenants with the Trustee
as follows:
(a) Concentration Limits. Unless the Controlling Trustees obtain
Rating Agency Confirmation, the Issuer shall not permit any Issuer
Subsidiary to lease or re-lease any Aircraft if entering into such
proposed Lease would cause the Portfolio (excluding any Aircraft then
subject to an Aircraft Agreement and expected to be disposed of within
one year pursuant to Section 5.02(g)(iii) and (v) but as to which the
Issuer or any Issuer Subsidiary retains an interest including a right to
lease rentals or other payments, finance lease payments, instalment
purchase agreements or any other payments with respect to such Aircraft,
but including any Aircraft with respect to which MSAF Group has entered
into a binding agreement to acquire and which the Controlling Trustees
reasonably expect to acquire within 180 days from the date of such
agreement) to exceed any of the Concentration Limits set forth in Exhibit
E hereto (as such limits may be adjusted by the Issuer from time to time,
subject to Rating Agency Confirmation, the "Concentration Limits");
provided that the Issuer
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and any Issuer Subsidiary shall be entitled to renew or extend any Lease
to the existing Lessee thereunder irrespective of the effect of such
renewal or extension on the Concentration Limits. The Issuer shall not
permit any Issuer Subsidiary to lease or re-lease any Aircraft operated
or to be operated by a Lessee domiciled in a jurisdiction set forth in
clause (a) of the PRI Guidelines as set forth on Exhibit E hereto and as
amended from time to time upon the approval of the Rating Agencies (the
"PRI Guidelines") as "Prohibited Countries".
(b) Compliance with Law, Maintenance of Permits. The Issuer shall
(i) comply, and cause each Issuer Subsidiary to comply, in all material
respects with all Applicable Laws, (ii) obtain, and cause each Issuer
Subsidiary to obtain, all material governmental (including regulatory)
registrations, certificates, licenses, permits and authorizations
required for the use and operation of the Aircraft owned by it,
including, without limitation, a current certificate of airworthiness for
each such Aircraft (issued by the Applicable Aviation Authority and in
the appropriate category for the nature of the operations of such
Aircraft), except that (A) no certificate of airworthiness shall be
required for any Aircraft (x) during any period when such Aircraft is
undergoing maintenance, modification or repair, (y) following the
withdrawal or suspension by such Applicable Aviation Authority of
certificates of airworthiness in respect of all aircraft of the same
model or period of manufacture as such Aircraft (in which case the Issuer
shall comply, and cause each Issuer Subsidiary to comply, with all
directions of such Applicable Aviation Authority in connection with such
withdrawal or suspension), (B) no registrations, certificates, licenses,
permits or authorizations required for the use or operation of any
Aircraft need be obtained with respect to any period when such Aircraft
is not being operated and (C) no such registrations, certificates,
licenses, permits or authorizations shall be required to be maintained
for any Aircraft that is not the subject of a Lease, except to the extent
required under Applicable Laws, (iii) not cause or knowingly permit,
directly or indirectly, through any Issuer Subsidiary, any Lessee to
operate any Aircraft under any Lease in any material respect contrary to
any Applicable Law and (iv) not knowingly permit, directly or indirectly,
through any Issuer Subsidiary, any Lessee not to obtain all material
governmental (including regulatory) registrations, Notes, licenses,
permits and authorizations required for such Lessee's use and operation
of any Aircraft under any operating Lease except as provided, mutatis
mutandis, in clauses (ii)(A) and (ii)(B) above.
Notwithstanding the foregoing, no breach of this Section 5.03(b)
shall be deemed to have occurred by virtue of any act or omission of a
Lessee or sub-lessee, or of any Person which has possession of the
Aircraft or any Engine for the purpose of repairs, maintenance,
modification or storage, or by virtue of any requisition, seizure, or
confiscation of the Aircraft (other than seizure or confiscation arising
from a breach by the Issuer or an Issuer Subsidiary of this Section
5.03(b)) (each, a "Third Party Event"); provided that (i) neither the
Issuer nor any Issuer Subsidiary consents or has consented to such Third
Party Event; and (ii) the Issuer or Issuer Subsidiary which is the lessor
or owner of such Aircraft promptly and diligently takes such commercially
reasonable actions as a leading international aircraft operating lessor
would reasonably take in respect of such Third Party Event, including, as
deemed
98
appropriate (taking into account, inter alia, the laws of the
jurisdictions in which the Aircraft are located), seeking to compel such
Lessee or other relevant Person to remedy such Third Party Event or
seeking to repossess the relevant Aircraft or Engine.
(c) Appraisal of Aircraft. The Issuer shall, at least once each
year and in any case no later than 30 days prior to October 31 of each
year, commencing in 1998, deliver to the Trustee appraisals of the Base
Value of each of the Initial Aircraft and Issuer Additional Aircraft from
at least three independent appraisers that are members of the
International Society of Transport Aircraft Trading or any similar
organization (each, an "Appraiser"), each such appraisal to be dated
within 30 days prior to its delivery to the Trustee.
(d) Maintenance of Assets. The Issuer shall (i) with respect to
each Initial Aircraft or Issuer Additional Aircraft, as the case may be,
and Engine that is subject to a Lease, cause, directly or indirectly,
through any Issuer Subsidiary, such Aircraft and Engine to be maintained
in a state of repair and condition consistent with the reasonable
commercial practice of leading international aircraft operating lessors
with respect to similar aircraft under lease, taking into consideration,
among other things, the identity of the relevant Lessee (including the
credit standing and operating experience thereof), the age and condition
of the Aircraft and the jurisdiction in which such Aircraft will be
operated or registered under such Lease and (ii) with respect to each
Aircraft that is not subject to a Lease, maintain, and cause each Issuer
Subsidiary to maintain, such Aircraft in a state of repair and condition
consistent with the reasonable commercial practice of leading
international aircraft operating lessors with respect to aircraft not
under lease. Notwithstanding the foregoing, no breach of this Section
5.03(d) shall be deemed to have occurred by virtue of any Third Party
Event; provided that (i) neither the Issuer nor any Issuer Subsidiary
consents or has consented to such Third Party Event; and (ii) the Issuer
or such Issuer Subsidiary which is the lessor or owner of such Aircraft
promptly and diligently takes such commercially reasonable actions as a
leading international aircraft operating lessor would reasonably take in
respect of such Third Party Event, including as deemed appropriate,
seeking to compel such Lessee or other relevant Person to remedy such
Third Party Event or seeking to repossess the relevant Aircraft or
Engine.
(e) Notification of Trustee and Administrative Agent. The Issuer
shall notify the Trustee and Administrative Agent in writing as soon as
the Issuer or any Issuer Subsidiary becomes aware of any loss, theft,
damage or destruction to any Initial Aircraft, Issuer Additional Aircraft
or Engine if the potential cost of repair or replacement of such asset
(without regard to any insurance claim related thereto) may exceed
$2,000,000.
(f) Leases. The Issuer shall (i) adopt and shall cause the Servicer
to utilize the pro forma lease set forth in Exhibit B to Schedule 2.02(a)
of the Asset Purchase Agreement, and will adopt and will agree to cause
any Additional Servicer to utilize the pro forma lease agreement or
agreements then used by such Additional Servicer in connection with its
aircraft operating leasing services business generally, as such pro forma
lease agreement or agreements may be revised for purposes of
99
MSAF Group specifically or generally from time to time by the Servicer or
the Additional Servicer, as the case may be (the "Servicer's Pro Forma
Lease"), for use by the Servicer or such Additional Servicer, as the case
may be, on behalf of the Issuer or any Issuer Subsidiary as a starting
point in the negotiation of Future Leases with Persons who are not MSAF
Group Members; provided, however, that with respect to any Future Lease
entered into in connection with (x) the renewal or extension of an
Initial Lease, (y) the leasing of an Aircraft to a Person that is or was
a Lessee under an Initial Lease or (z) the leasing of an Aircraft to a
Person that is or was the lessee under an operating lease of an aircraft
that is being managed or serviced by the Servicer or the Additional
Servicer, as the case may be (such Future Lease, a "Renewal Lease"), a
form of lease substantially similar to such Initial Lease or operating
lease (a "Precedent Lease"), as the case may be, may be used by the
Servicer or the Additional Servicer, as the case may be, in lieu of the
Servicer's Pro Forma Lease on behalf of the Issuer or any Issuer
Subsidiary as a starting point in the negotiation of such Future Lease
with Persons who are not MSAF Group Members and provided further,
however, that if the Controlling Trustees determine, in an annual review
of the Servicer's Pro Forma Lease on or before each anniversary of the
relevant Closing Date, that any revision to the Servicer's Pro Forma
Lease made from time to time since the preceding review by the
Controlling Trustees (or, with respect to the first anniversary of the
Initial Closing Date, since the Initial Closing Date) is substantially
inconsistent with the core lease provisions of the Issuer set forth in
Exhibit L to this Indenture (as such provisions may be amended from time
to time, the "Core Lease Provisions") in a manner and to such a degree as
to have a material adverse effect on the Noteholders, taking into
consideration, inter alia, such revision and any risk that the Aircraft
might not be able to be leased on terms inconsistent with the provisions
of the Servicer's Pro Forma Lease, then the Controlling Trustees shall
direct the Servicer not to include such revision in the Servicer's Pro
Forma Lease to be used thereafter as the starting point in the
negotiation of any Future Lease with respect to the Aircraft. If the
Controlling Trustees determine that any such revision to the Servicer's
Pro Forma Lease will not have a material adverse effect on the
Noteholders, then the Controlling Trustees shall amend the applicable
Core Lease Provisions and (ii) notify the Rating Agencies of any Future
Lease entered into the terms of which are materially less favorable from
the point of view of the lessor than any of the Leases then in effect,
including without limitation, such changes to the Core Lease Provisions.
The Issuer shall not enter into, and shall not permit any Issuer
Subsidiary to enter into, any Future Lease the rental payments under
which are denominated in a currency other than U.S. dollars without
Rating Agency Confirmation.
(g) Opinions. The Issuer shall not enter into, and shall not permit
any Issuer Subsidiary to enter into, any Future Lease with any Person
that is not an MSAF Group Member or change the jurisdiction of
registration of any Aircraft that is subject to a Lease, unless, upon
entering into such Future Lease or changing the jurisdiction or
registration of such Aircraft (or within a commercially reasonable period
thereafter), the Servicer or Additional Servicer, as the case may be,
obtains such legal opinions, if any, with regard to compliance with the
registration requirements of the relevant jurisdiction, enforceability of
the Future Lease and such other matters
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customary for such transactions to the extent that receiving such legal
opinions is consistent with the reasonable commercial practice of leading
international aircraft operating lessors.
(h) Insurance. The Issuer shall maintain or cause, directly or
indirectly through the Issuer Subsidiaries, to be maintained with
reputable and responsible insurers or with insurers that maintain
relevant reinsurance with reputable and responsible reinsurers (i)
airline hull insurance for each Initial Aircraft and Issuer Additional
Aircraft in an amount at least equal to the Note Target Price for such
Aircraft (or the equivalent thereof from time to time if such insurance
is denominated in a currency other than U.S. dollars) and (ii) airline
liability insurance for each Aircraft and occurrence in an amount at
least equal to the relevant amount set forth on Exhibit G hereto for each
model of aircraft and as amended from time to time with the approval of
the Rating Agencies and (iii) airline political risk insurance ("PRI")
for each Aircraft subject to a Lease and habitually based in a
jurisdiction determined in accordance with clause (b) of the PRI
Guidelines, which may be amended from time to time only with the approval
of the Rating Agencies, in an amount at least equal to the Note Target
Price (or the equivalent thereof from time to time if such insurance is
denominated in a currency other than U.S. dollars) for such Aircraft;
provided further that for a period commencing sixty days after the
Initial Closing Date to one year from the Initial Closing Date(any period
may be extended for up to one year if so requested in writing by any
Rating Agency), the Issuer shall, upon request from any Rating Agency,
obtain PRI with respect to Aircraft leased to Lessees habitually based in
certain countries other than Developed Markets specified by each such
Rating Agency; provided, however, that with respect to any such insurance
for any Aircraft subject to a Lease, such insurance may be subject to
commercially reasonable deductible and self-insurance arrangements
(taking into account, inter alia, the creditworthiness and experience of
the Lessee, if any, the type of aircraft and market practices in the
aircraft insurance industry generally). The coverage and terms
(including endorsements, deductibles and self-insurance arrangements) of
any insurance maintained with respect to any Aircraft not subject to a
Lease shall be substantially consistent with the commercial practices of
leading international aircraft operating lessors regarding similar
aircraft.
In determining the amount of insurance required to be maintained by
this Section 5.03(h), the Issuer may take into account any
indemnification from, or insurance provided by, any governmental,
supranational or inter-governmental authority or agency (other than, with
respect to PRI, any governmental authority or agency of any jurisdiction
for which PRI must be obtained, the sovereign foreign currency debt of
which is rated AA, or the equivalent, by at least one of the Rating
Agencies, against any risk with respect to an Aircraft at least in an
amount which, when added to the amount of insurance against such risk
maintained by the Issuer (or which the Issuer has caused to be
maintained), shall be at least equal to the amount of insurance against
such risk otherwise required by this Section 5.03(h) (taking into account
self-insurance permitted by this Section 5.03(h)). Any such
indemnification or insurance provided by such government shall provide
substantially similar protection as the insurance required by this
Section 5.03(h). The Issuer shall not be required to maintain (or to
cause to be maintained) any insurance otherwise required
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hereunder to the extent that such insurance is not generally available in
the relevant insurance market at commercially reasonable rates from time
to time.
(i) Indemnity. The Issuer shall, and shall cause each Issuer
Subsidiary to, include in each Lease between the Issuer or such Issuer
Subsidiary and a Person who is not an MSAF Group Member an indemnity from
such Person in respect of any losses or liabilities arising from the use
or operation of the Aircraft during the term of such Lease, subject to
such exceptions, limitations and qualifications as are consistent with
the reasonable commercial practice of leading international aircraft
operating lessors.
(j) Swaptions. The Issuer shall, unless otherwise approved by each
Rating Agency, purchase Swaptions commencing one year after the Initial
Closing Date.
ARTICLE VI
THE TRUSTEE
Section 6.01. Acceptance of Trusts and Duties. The duties and
responsibilities of the Trustee shall be as provided by the TIA and as set
forth herein. The Trustee accepts the trusts hereby created and applicable to
it and agrees to perform the same but only upon the terms of this Indenture and
the TIA and agrees to receive and disburse all moneys received by it in
accordance with the terms hereof. The Trustee in its individual capacity shall
not be answerable or accountable under any circumstances, except for its own
willful misconduct or negligence or breach of any of its representations or
warranties set forth herein and the Trustee shall not be liable for any action
or inaction of the Issuer or any other parties to any of the Related Documents.
Any amounts received by the Trustee under this Indenture, including, without
limitation, the fees and out-of-pocket expenses of the Trustee shall be
Expenses of the Issuer.
Section 6.02. Absence of Duties. Except in accordance with written
instructions or requests furnished pursuant to Sections 5.02 and 5.03 hereof,
the Trustee shall have no duty to ascertain or inquire as to the performance or
observance of any covenants, conditions or agreements on the part of any
Lessee. Notwithstanding the foregoing, the Trustee, upon written request,
shall furnish to any Noteholder, promptly upon receipt thereof, duplicates or
copies of all reports, Notices, requests, demands, certificates, financial
statements and other instruments furnished to the Trustee under this Indenture.
Section 6.03. Representations or Warranties. The Trustee does not make
and shall not be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Indenture, the Notes or any other
document or instrument or as to the correctness of any statement contained in
any thereof, except that the Trustee in its individual capacity hereby
represents and warrants (i) that each such specified document to which it is a
party has been or will be duly executed and delivered by one of its officers
who is and will be duly authorized to execute and deliver such document on its
behalf, and (ii) the Indenture is
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the legal, valid and binding obligation of Bankers Trust, enforceable against
Bankers Trust in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally.
Section 6.04. Reliance; Agents; Advice of Counsel. The Trustee shall
incur no liability to anyone acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Trustee may accept a copy of a
resolution of, in the case of the Issuer, the Controlling Trustees and, in the
case of any other party to any Related Document, the governing body of such
Person, certified in an accompanying Officer's Certificate as duly adopted and
in full force and effect, as conclusive evidence that such resolution has been
duly adopted and that the same is in full force and effect. As to any fact or
matter the manner of ascertainment of which is not specifically described
herein, the Trustee shall be entitled to receive and may for all purposes
hereof conclusively rely on a certificate, signed by an officer of any duly
authorized Person, as to such fact or matter, and such certificate shall
constitute full protection to the Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon. The Trustee shall furnish to
the Cash Manager or the Administrative Agent upon written request such
information and copies of such documents as the Trustee may have and as are
necessary for the Cash Manager or the Administrative Agent to perform its
duties under Article II hereof. The Trustee shall assume, and shall be fully
protected in assuming, that the Issuer is authorized by its constitutional
documents to enter into this Indenture and to take all action permitted to be
taken by it pursuant to the provisions hereof, and shall not inquire into the
authorization of the Issuer with respect thereto.
The Trustee shall not be liable for any action it takes or omits to take
in good faith that it believes to be authorized or within its rights or powers
or for any action it takes or omits to take in accordance with the direction of
the Holders in accordance with Section 4.12 hereof relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys or a
custodian or nominee, and the Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the supervision of, any such
agent, attorney, custodian or nominee appointed with due care by it hereunder.
The Trustee may consult with counsel as to any matter relating to this
Indenture and any Opinion of Counsel or any advice of such counsel shall be
full and complete authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel.
The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture, or to institute, conduct or defend any
litigation hereunder or in relation hereto, at the request, order or direction
of any of the Holders, pursuant to the provisions of this Indenture, unless
such Holders shall have offered to the
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Trustee security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which may be incurred therein or thereby.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Indenture shall in any event require
the Trustee to perform, or be responsible or liable for the manner of
performance of, any obligations of the Issuer or the Administrative Agent under
this Indenture or any of the Related Documents.
The Trustee shall not be liable for any Losses or Taxes (except for Taxes
relating to any compensation, fees or commissions of any entity acting in its
capacity as Trustee hereunder) or in connection with the selection of Permitted
Account Investments or for any investment losses resulting from Permitted
Account Investments.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 4.01(f) or 4.01(g) hereof, such expenses
(including the fees and expenses of its counsel) and the compensation for such
services are intended to constitute expenses of administration under any
bankruptcy law or law relating to creditors' rights generally.
The Trustee shall not be charged with knowledge of an Event of Default
unless a Responsible Officer of the Trustee obtains actual knowledge of such
event or the Trustee receives written notice of such event from the Issuer, the
Administrative Agent or Noteholders owning Notes aggregating not less than 10%
of the outstanding principal amount of the Notes.
The Trustee shall have no duty to monitor the performance of the Issuer,
the Cash Manager or any other party to the Related Documents, nor shall it have
any liability in connection with the malfeasance or nonfeasance by such
parties. The Trustee shall have no liability in connection with compliance by
the Issuer, the Administrative Agent or any lessee under a Lease with statutory
or regulatory requirements related to any Aircraft or any Lease. The Trustee
shall not make or be deemed to have made any representations or warranties with
respect to any Aircraft or any Lease or the validity or sufficiency of any
assignment or other disposition of any Aircraft or any Lease.
Section 6.05. Not Acting in Individual Capacity. The Trustee acts
hereunder solely as trustee unless otherwise expressly provided; and all
Persons, other than the Noteholders to the extent expressly provided in this
Indenture, having any claim against the Trustee by reason of the transactions
contemplated hereby shall look, subject to the lien and priorities of payment
as herein provided, only to the property of the Issuer for payment or
satisfaction thereof.
Section 6.06. No Compensation from Noteholders. The Trustee agrees that
it shall have no right against the Noteholders or, except as provided in
Article III hereof, the property of the Issuer, for any fee as compensation for
its services hereunder.
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Section 6.07. Notice of Defaults. As promptly as practicable after, and
in any event within 30 days after, the occurrence of any Default hereunder, the
Trustee shall transmit by mail to the Issuer and the Noteholders holding Notes
of the related subclass in accordance with Section 313(c) of the TIA, notice of
such Default hereunder actually known to a Responsible Officer of the Trustee,
unless such Default shall have been cured or waived; provided, however, that,
except in the case of a Default on the payment of the interest, principal, or
Premium, if any, on any Note, the Trustee shall be fully protected in
withholding such notice if and so long as a trust committee of Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Noteholders of the related class.
Section 6.08. May Hold Notes. The Trustee, any Paying Agent, the
Registrar or any of their affiliates or any other agent in their respective
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise
deal with the Issuer with the same rights it would have if it were not Trustee,
Paying Agent, Registrar or such other agent.
Section 6.09. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee which shall be eligible to act as a trustee under
Section 310(a) of the Trust Indenture Act and shall meet the Eligibility
Requirements. If such corporation publishes reports of conditions at least
annually, pursuant to law or to the requirements of federal, state, territorial
or District of Columbia supervising or examining authority, then for the
purposes of this Section 6.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.09 to act as Trustee, the Trustee shall
resign immediately as Trustee in the manner and with the effect specified in
Section 7.01 hereof.
Section 6.10. Reports by Trustee. Within 60 days after February 28 of
each year commencing with the first full year following the issuance of any
subclass of Notes, the Trustee shall transmit to the Noteholders of each
subclass, as provided in Section 313(c) of the TIA, a brief report describing,
among other things, any changes in eligibility and qualifications of the
Trustee and any issuance of Additional Notes, if required by Section 313(a) of
the TIA.
Section 6.11. Reports by the Issuer. The Issuer shall:
(a) file with the Trustee, within 30 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer is required to file with
the Commission pursuant to section 13 or section 15(d) of the Exchange Act;
or, if the Issuer is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Trustee all
Monthly Reports, Quarterly Reports and Annual Reports;
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(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed by the Commission, such additional
information, documents and reports with respect to compliance by the
Issuer with the conditions and covenants provided for in this Indenture,
as may be required by such rules and regulations, including, in the case
of annual reports, if required by such rules and regulations,
certificates or opinions of independent public accountants;
(c) transmit to all Noteholders, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act such summaries of
any information, documents and reports required to be filed by the Issuer
pursuant to subsections (a) and (b) of this Section 6.11 as may be
required by rules and regulations prescribed by the Commission; and
(d) furnish to the Trustee, within 120 days after the end of each
fiscal year, a brief certificate from the principal executive officer,
principal accounting officer or principal financial officer of the
Administrative Agent, as applicable, as to his or her knowledge of the
Issuer's compliance with all conditions and covenants under this
Indenture (it being understood that for purposes of this paragraph (d),
such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture).
ARTICLE VII
SUCCESSOR TRUSTEES
Section 7.01. Resignation and Removal of Trustee. The Trustee may resign
as to all or any of the subclasses of the Notes at any time without cause by
giving at least 90 days' prior written notice to the Issuer, the Cash Manager,
the Administrative Agent and the Holders. Holders of a majority of the
Outstanding Principal Balance of any subclass of the Notes may at any time
remove the Trustee as to such subclass without cause by an instrument in
writing delivered to the Issuer, the Cash Manager, the Administrative Agent,
the Security Trustee, the Senior Trustee and the Trustee being removed. In
addition, the Issuer may remove the Trustee as to any of the subclasses of the
Notes if: (i) such Trustee fails to comply with Section 310 of the TIA after
written request therefor by the Issuer or the Noteholder of the related
subclass who has been a bona fide Noteholder for at least six months, (ii) such
Trustee fails to comply with Section 7.02(c) hereof, (iii) such Trustee is
adjudged a bankrupt or an insolvent, (iv) a receiver or public officer takes
charge of such Trustee or its property or (v) such Trustee becomes incapable of
acting. References to the Trustee in this Indenture include any successor
Trustee as to all or any of the subclasses of the Notes appointed in accordance
with this Article VII.
Section 7.02. Appointment of Successor. (a) In the case of the
resignation or removal of the Trustee as to any subclass of the Notes under
Section 7.01 hereof, the Issuer shall promptly appoint a successor Trustee as
to such subclass; provided that a majority of the Outstanding Principal Balance
of such subclass of the Notes may appoint, within one year
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after such resignation or removal, a successor Trustee as to such subclass
which may be other than the successor Trustee appointed by the Issuer, and such
successor Trustee appointed by the Issuer shall be superseded by the successor
Trustee so appointed by the Noteholders. If a successor Trustee as to any
subclass of the Notes shall not have been appointed and accepted its
appointment hereunder within 60 days after the Trustee gives notice of
resignation as to such subclass, the retiring Trustee, the Issuer, the
Administrative Agent, the Cash Manager or a majority of the Outstanding
Principal Balance of such subclass of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee as to such
subclass. Any successor Trustee so appointed by such court shall immediately
and without further act be superseded by any successor Trustee appointed as
provided in the first sentence of this paragraph within one year from the date
of the appointment by such court.
(b) Any successor Trustee as to any subclass of the Notes, however
appointed, shall execute and deliver to the Issuer, the Cash Manager, the
Administrative Agent and the predecessor Trustee as to such subclass an
instrument accepting such appointment, and thereupon such successor Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers, duties and trusts of such predecessor Trustee hereunder in the
trusts hereunder applicable to it with like effect as if originally named the
Trustee as to such subclass herein; provided that, upon the written request of
such successor Trustee, such predecessor Trustee shall, upon payment of all
amounts due and owing to it, execute and deliver an instrument transferring to
such successor Trustee, upon the trusts herein expressed applicable to it, all
the estates, properties, rights, powers and trusts of such predecessor Trustee,
and such predecessor Trustee shall duly assign, transfer, deliver and pay over
to such successor Trustee all moneys or other property then held by such
predecessor Trustee hereunder solely for the benefit of such subclass of the
Notes.
(c) If a successor Trustee is appointed with respect to one or more (but
not all) subclasses of the Notes, the Issuer, the predecessor Trustee and each
successor Trustee with respect to each subclass of Notes shall execute and
deliver an indenture supplemental hereto which shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the predecessor Trustee with respect to the subclasses of
Notes as to which the predecessor Trustee is not retiring shall continue to be
vested in the predecessor Trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the Notes hereunder by more than one Trustee.
(d) Each Trustee shall be an Eligible Institution and shall meet the
Eligibility Requirements, if there be such an institution willing, able and
legally qualified to perform the duties of a Trustee hereunder; provided that
the Rating Agencies shall receive notice of any replacement Trustee.
(e) Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation to which substantially all the business of the Trustee may be
transferred, shall, subject to the terms of paragraph (c) of this Section, be
the Trustee under this Indenture without further act.
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ARTICLE VIII
INDEMNITY
Section 8.01. Indemnity. The Issuer shall indemnify the Trustee (and its
officers, directors, employees and agents) for, and hold it harmless against,
any loss, liability or expense incurred by it without negligence or bad faith
on its part in connection with the acceptance or administration of this
Indenture and its duties under this Indenture and the Notes, including the
costs and expenses of defending itself against any claim or liability and of
complying with any process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties and hold it
harmless against, any loss, liability or reasonable expense incurred without
negligence or bad faith on its part, arising out of or in connection with
actions taken or omitted to be taken in reliance on any Officer's Certificate
furnished hereunder, or the failure to furnish any such Officers' Certificate
required to be furnished hereunder. The Trustee shall notify the Issuer and
the Rating Agencies promptly of any claim asserted against the Trustee for
which it may seek indemnity; provided, however, that failure to provide such
notice shall not invalidate any right to indemnity hereunder. The Issuer shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee
may have separate counsel and the Issuer shall pay reasonable fees and expenses
of such counsel. The Issuer need not pay for any settlements made without its
consent; provided that such consent shall not be unreasonably withheld. The
Issuer need not reimburse any expense or indemnity against any loss or
liability incurred by the Trustee through negligence or bad faith.
Section 8.02. Noteholders' Indemnity. The Trustee shall be entitled,
subject to such Trustee's duty during a default to act with the required
standard of care, to be indemnified by the Holders of any subclass of the Notes
before proceeding to exercise any right or power under this Indenture or the
Cash Management Agreement at the request or direction of such Holders.
The provisions of Sections 8.01 and 8.02 hereof shall survive the
termination of this Indenture or the earlier resignation or removal of the
Trustee.
ARTICLE IX
MODIFICATION
Section 9.01. Modification with Consent of Holders. With the consent of
Holders of a majority of the Outstanding Principal Balance of the Notes on the
date of any vote of such Holders (voting as a single class), the Issuer, when
authorized by resolution of the Board, may amend or modify this Indenture or
the Notes; provided that, without the consent of each Swap Provider and each
Holder of any Notes affected thereby, no such amendment may modify the
provisions of this Indenture or the Notes setting forth the frequency or the
currency of payment of, the maturity of, or the method of calculation of the
amount of, any interest, principal and Premium, if any, payable in respect of
any subclass of
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Notes, or reduce the percentage of the aggregate Outstanding Principal Balance
of any subclass of Notes required to approve any amendment or waiver of this
Section 9.01 or alter the manner or priority of payment of such subclass of
Notes (each, a "Basic Terms Modification").
It shall not be necessary for the consent of the Holders under this
Section 9.01 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof. Any such modification approved by the required Holders of any class
or subclass of Notes will be binding on the Holders of the relevant class or
subclass of Notes and each party to the Indenture.
The Issuer shall give each Rating Agency prior notice of any amendment
under this Section 9.01 and any amendments of the constitutive documents by the
Issuer or any Issuer Subsidiaries, and, after an amendment under this Section
9.01 becomes effective, the Issuer shall mail to the Holders and the Rating
Agencies a notice briefly describing such amendment. Any failure of the Issuer
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amendment.
After an amendment under this Section 9.01 becomes effective, it shall
bind every Holder, whether or not notation thereof is made on any Note held by
such Holder.
Section 9.02. Modification Without Consent of Holders. Subject to
Section 9.01 hereof, the Trustee may agree, without the consent of any
Noteholder, (a) to any modification (other than a Basic Terms Modification) of,
or the waiver or authorization of any breach or prospective breach of, any
provision of any Related Document or of the relevant Notes to correct a
manifest error or an error which is of a formal, minor or technical nature, (b)
to modify the provisions of this Indenture or the Administrative Agency
Agreement relating to the timing of movement of Rental Payments or other monies
received or Expenses incurred among the Accounts by the Administrative Agent or
(c) to comply with the requirements of the Commission in connection with the
qualification of this Indenture under the TIA. Any such modification shall be
notified to the Holders as soon as practicable thereafter and shall be binding
on all the Holders.
Section 9.03. Subordination and Priority of Payments. The subordination
provisions contained in Section 3.08, Section 3.09 and Article X hereof may not
be amended or modified without the consent of each Swap Provider, each provider
of a Credit Facility, each Noteholder of the subclass affected thereby and each
Noteholder of any subclass of Notes ranking senior thereto. In no event shall
the provisions set forth in Section 3.08 relating to the priority of the
Expenses, Swap Payments and payments under all Credit Facilities be amended or
modified.
Section 9.04. Execution of Amendments by Trustee. In executing, or
accepting the additional trusts created by, any amendment or modification to
this Indenture permitted by this Article or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amendment
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is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Section 9.05. Swap Providers. (a) The Issuer may enter into one or more
Swap Agreements from time to time; provided, that counterparties to all Swap
Agreements shall be subject to the prior approval of the Controlling Trustees
and shall have credit ratings or provide collateralization arrangements
consistent with maintaining the ratings of the Notes.
(b) Notification to Trustee. The Issuer shall promptly notify the Trustee
in writing of the execution of any Swap Agreement or Swap Guarantee.
(c) Third Party Beneficiary. Each Swap Provider and each provider of a
Credit Facility shall be a third party beneficiary of Sections 3.08 and 9.03
hereof.
Section 9.06. Conformity with Trust Indenture Act. Every indenture
supplemental hereto pursuant to this Article IX shall conform to the
requirements of the TIA as then in effect.
ARTICLE X
SUBORDINATION
Section 10.01. Subordination of the Notes. (a) Each of the Issuer and
the Trustee (on behalf of the Holders of each class of Notes) covenants and
agrees, and each Holder, by its acceptance of a Note, covenants and agrees,
that the Notes of each class will be issued subject to the provisions of this
Article X; and each Holder, by its acceptance of a Note, agrees that all
amounts payable on any Note will, to the extent and in the manner set forth in
this Article X, Section 3.08 and , if applicable, Section 3.09 hereof, be
subordinated in right of payment to the prior payment in full of all Expenses
payable to the Service Providers pursuant to this Indenture and the Related
Documents. In addition, each Holder, by its acceptance of a Note, agrees that
(i) all amounts payable on any Class A Note will, to the extent and in the
manner set forth in this Article X and Section 3.08 hereof, be subordinated in
right of payment to all payments under any Primary Eligible Credit Facilities;
(ii) all amounts payable on any Class B Note will, to the extent and in the
manner set forth in this Article X and Section 3.08 hereof, be subordinated in
right of payment to all payments under any Primary Eligible Credit Facilities,
the payment in full of the Class A Notes and all Swap Payments (other than
Subordinated Swap Payments) payable to any Swap Provider pursuant to any Swap
Agreement; (iii) all amounts payable on any Class C Note will, to the extent
and in the manner set forth in this Article X and Section 3.08 hereof, be
subordinated in right of payment to all payments under any Primary Eligible
Credit Facilities, the payment in full of the Class A Notes, all Swap Payments
(other than Subordinated Swap Payments) payable to any Swap Provider pursuant
to any Swap Agreement and the Class B Notes and (iv) all amounts payable on any
Class D Note will, to the extent and in the manner set forth in this Article X
and Section 3.08, be subordinated in right of payment to the payment in full to
all payments under any Primary Eligible Credit Facilities, the payment in full
of the Class A
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Notes, all Swap Payments (other than Subordinated Swap Payments) payable to any
Swap Provider pursuant to any Swap Agreement, the Class B Notes and the Class C
Notes. Any claim to payment so stated to be subordinated is referred to as a
"Subordinated Claim"; each claim to payment to which another claim to payment
is a Subordinated Claim is referred to as a "Senior Claim" with respect to such
Subordinated Claim.
(b) If prior to the payment in full of all Senior Claims then due and
payable, the Trustee or any Holder of a Subordinated Claim shall have received
any payment or distribution in respect of such Subordinated Claim in excess of
the amount to which such Holder was then entitled under Section 3.08 hereof,
then such payment or distribution shall be received and held in trust by such
Person and paid over or delivered to the Trustee for application as provided in
such Section 3.08.
(c) If any Service Provider, the Trustee or Holder of any Senior Claim
receives any payment in respect of any Senior Claim which is subsequently
invalidated, declared preferential, set aside and/or required to be repaid to a
trustee, receiver or other party, then, to the extent such payment is so
invalidated, declared preferential, set aside and/or required to be repaid,
such Senior Claim shall be revived and continue in full force and effect, and
shall be entitled to the benefits of this Article X, all as if such payment had
not been received.
(d) Subject to Section 10.01(i) below, the Trustee (on its own behalf and
on behalf of the Holders) and the Issuer each confirm that the payment
priorities specified in Section 3.08 hereof shall apply in all circumstances.
(e) Each Holder, by its acceptance of a Note, authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article X, and
appoints the Trustee its attorney-in-fact for such purposes, including, in the
event of any dissolution, winding up, liquidation or reorganization of the
Issuer (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or
otherwise) any actions tending towards liquidation of the property and assets
of the Issuer or the filing of a claim for the unpaid balance of its Notes in
the form required in those proceedings.
(f) If payment on the MSAF Group Notes is accelerated as a result of an
Event of Default, the Issuer shall promptly notify the holders of the Senior
Claims of such acceleration.
(g) After all Senior Claims are paid in full and until the Subordinated
Claims are paid in full, the holders of Subordinated Claims shall be subrogated
to the rights of holders of Senior Claims to receive payments applicable to
Senior Claims. A payment made under this Article X to holders of Senior Claims
which otherwise would have been made to the holders of Subordinated Claims is
not, as between the Issuer and the holders of Subordinated Claims, a payment by
the Issuer.
(h) No right of any holder of any Senior Claim to enforce the
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subordination of any Subordinated Claim shall be impaired by an act or failure
to act by the Issuer or the Trustee or by any failure by either the Issuer or
the Trustee to comply with this Indenture.
(i) Notwithstanding anything contained herein to the contrary, payments
from property (or proceeds thereof) deposited in the Defeasance/Redemption
Account pursuant to Article XI, which property shall be for the benefit of the
applicable Holders, shall not be subordinated to the prior payment of any
Senior Claims or subject to the restrictions set forth in this Article X,
Section 3.08 and Section 3.09 hereof, and none of the Holders shall be
obligated to pay over any payments from any such property to the Trustee or any
holder of Senior Claims or any other creditor of the Issuer or any Issuer
Subsidiary.
(j) Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Claim, whether such Senior
Claim was created or acquired before or after the issuance of such Holder's
claim, to acquire and continue to hold such Senior Claim and such holder of any
Senior Claim shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold such Senior Claim.
ARTICLE XI
DISCHARGE OF INDENTURE; DEFEASANCE
Section 11.01. Discharge of Liability on the Notes; Defeasance. (a)
When (i) the Issuer delivers to the Trustee all Outstanding Notes (other than
Notes replaced pursuant to Section 2.08 hereof) for cancellation or (ii) all
Outstanding Notes have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Section 3.10(c)
hereof and the Issuer irrevocably deposits in the Defeasance/Redemption Account
funds sufficient to pay at maturity or upon redemption all Outstanding Notes,
including interest thereon to maturity or the Redemption Date (other than Notes
replaced pursuant to Section 2.08), and if in either case the Issuer pays all
other sums payable hereunder by the Issuer, then this Indenture shall, subject
to Section 11.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Issuer accompanied by an Officers' Certificate and an opinion of counsel, at
the cost and expense of the Issuer, to the effect that any conditions precedent
to a discharge of this Indenture have been met.
(b) Subject to Sections 11.01(c) and 11.02, the Issuer at any time may
terminate (i) all its obligations under the Notes or any class or subclass of
Notes and this Indenture ("legal defeasance" option) or (ii) its obligations
under Sections 5.02, 5.03 and 4.01 (other than with respect to a failure to
comply with Sections 4.01(a)), 4.01(b), 4.01(c), 4.01(f) (only with respect to
the Issuer) and 4.01(g) (only with respect to the Issuer) ("covenant
defeasance" option); provided that no "legal defeasance" option or "covenant
defeasance" option may be exercised unless such option is exercised
contemporaneously by a Guarantor with respect to all Outstanding Guarantor
Additional Notes. The Issuer may exercise its legal
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defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
If the Issuer exercises its legal defeasance option, payment of any Notes
subject to such legal defeasance may not be accelerated because of an Event of
Default. If the Issuer exercises its covenant defeasance option, payment of
the Notes may not be accelerated because of an Event of Default (other than
with respect to a failure to comply with Section 5.02(n)), 4.01(a), 4.01(b),
4.01(c), 4.01(f) (other than with respect to the Issuer) and 4.01(g) (other
than with respect to the Issuer).
Upon satisfaction of the conditions set forth herein and upon request of
the Issuer, the Trustee shall acknowledge in writing the discharge of those
obligations that the Issuer terminates.
(c) Notwithstanding clauses (a) and (b) above, the Issuer's obligations in
Sections 2.01, 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 5.02(n), Article
VI, Sections 8.01, 11.04, 11.05 and 11.06 shall survive until all the Notes
have been paid in full. Thereafter, the Issuer's obligations in Sections 8.01,
11.04 and 11.05 shall survive.
Section 11.02. Conditions to Defeasance. The Issuer may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Issuer irrevocably deposits in trust in the
Defeasance/Redemption Account any one or any combination of (A) money,
(B) obligations of, and supported by the full faith and credit of, the
U.S. Government ("U.S. Government Obligations") or (C) obligations of
corporate issuers ("Corporate Obligations") (provided that any such
Corporate Obligations are rated AA+, or the equivalent, or higher, by the
Rating Agencies at such time and shall not have a maturity of longer than
three years from the date of defeasance) for the payment of all
principal, Premium, if any, and interest (i) on the Notes or any class or
subclass of Notes being defeased, in the case of legal defeasance, or
(ii) on all of the Notes in the case of covenant defeasance, in either
case, to maturity or redemption, as the case may be;
(2) the Issuer delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations or the
Corporate Obligations plus any deposited money without investment will
provide cash at such times and in such amounts as will be sufficient to
pay principal and interest when due (i) on the Notes or any class or
subclass of Notes being defeased, in the case of legal defeasance, or
(ii) on all of the Notes in the case of covenant defeasance, in either
case, to maturity or redemption, as the case may be;
(3) 91 days pass after the deposit described in clause (1) above is
made and during the 91-day period no Event of Default specified in
Section 4.01(f) or (g) with respect to the Issuer occurs which is
continuing at the end of the period;
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(4) the deposit described in clause (1) above does not constitute a
default under any other agreement binding on the Issuer;
(5) the Issuer delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit described in clause (1)
does not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940, as amended;
(6) in the case of the legal defeasance option, the Issuer shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Issuer has received from, or there has been published by, the U.S.
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Noteholders will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of such
legal defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such legal defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Issuer shall
have delivered to the Trustee an Opinion of Counsel to the effect that
the Noteholders will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred;
(8) if the related Notes are then listed on any securities exchange,
the Issuer delivers to the Trustee an Opinion of Counsel to the effect
that such deposit, defeasance and discharge will not cause such Notes to
be delisted;
(9) the Issuer has obtained a Rating Agency Confirmation relating to
the defeasance contemplated by this Section 11.02; and
(10) the Issuer delivers to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes as contemplated by this Article XI
have been complied with.
Section 11.03. Application of Trust Money. The Trustee shall hold in
trust in the Defeasance/Redemption Account money, U.S. Government Obligations
or Corporate Obligations deposited with it pursuant to this Article XI. It
shall apply the deposited money and the money from U.S. Government Obligations
or Corporate Obligations in accordance with this Indenture to the payment of
principal, Premium, if any, and interest on the class or subclass of Notes.
Money and securities so held in trust are not subject to Article X hereof.
Section 11.04. Repayment to Issuer. The Trustee shall promptly turn over
to the Issuer upon request any excess money or securities held by it at any
time.
Subject to any applicable abandoned property law, the Trustee shall pay to
the Issuer upon request any money held by it for the payment of principal or
interest that remains
114
unclaimed for two years and, thereafter, Noteholders entitled to the money must
look to the Issuer for payment as general creditors.
Section 11.05. Indemnity for Government Obligations and Corporate
Obligations. The Issuer shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or Corporate Obligations, or the principal and interest
received on such U.S. Government Obligations or Corporate Obligations.
Section 11.06. Reinstatement. If the Trustee is unable to apply any
money or U.S. Government Obligations or Corporate Obligations in accordance
with this Article XI by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Issuer's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to this Article XI until such time as the Trustee is
permitted to apply all such money, U.S. Government Obligations or Corporate
Obligations in accordance with this Article XI; provided, however, that, if the
Issuer has made any payment of interest on or principal of any Notes because of
the reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money,
U.S. Government Obligations or Corporate Obligations held by the Trustee.
ARTICLE XII
GUARANTEE
Section 12.01. Guarantee. Subject to Section 12.02 hereof,
(a) the Issuer hereby fully and unconditionally guarantees to each holder
of any Guarantor Notes and to each Guarantor Trustee on behalf of any such
holder, in each case: (A) the due and punctual payment of principal, accrued
and unpaid interest and Premium (as defined in the Guarantor Indenture pursuant
to which such Guarantor Notes have been issued), if any, on such Guarantor
Notes, when and as the same shall become due and payable, whether at the
applicable Final Maturity Date (as defined in such Guarantor Indenture) of such
Guarantor Notes, by acceleration or otherwise, the due and punctual payment of
interest on any overdue principal, to the extent lawful, and the due and
punctual performance of all other obligations of the Guarantor to the holders
of such Guarantor Notes or under such Guarantor Indenture, and (B) in the case
of any extension of time of payment or renewal of such Guarantor Notes or any
of such other obligations, that the same shall be promptly paid in full when
due or otherwise. The liability of the Issuer under this Guarantee is limited
to the maximum amount that will result in the obligations of the Issuer not
constituting a fraudulent conveyance or fraudulent transfer under applicable
law;
(b) the Issuer hereby waives diligence, presentment, filing of claims with
a court in the event of merger or bankruptcy of the Guarantor, any right to
acquire a proceeding first against the Guarantor, the benefit of discussion,
protest or notice with respect to any Guarantor Note of any subclass or the
debt evidenced thereby and all demands
115
whatsoever (except as specified above), and covenants that this Guarantee shall
not be discharged as to any such Guarantor Note except by payment in full of
the principal, accrued and unpaid interest and Premium, if any, thereon. The
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article IV of the Guarantor Indenture for the purposes of this Guarantee. In
the event of any declaration of acceleration of such obligations as provided in
Article IV of such Guarantor Indenture, such obligations (whether or not due
and payable) shall forthwith become due and payable by the Issuer for the
purpose of this Guarantee. In addition, without limiting the foregoing
provisions, upon the effectiveness of an acceleration under Article IV of such
Guarantor Indenture, the Guarantor Trustee shall be entitled to make a demand
for payment on such Guarantor Notes under this Guarantee;
(c) the Issuer hereby waives any claim or other rights which it may now or
hereafter acquire against the Guarantor that arise from the existence, payment,
performance or enforcement of the Issuer's obligations under such Guarantor
Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the holder of any Guarantor Note against
the Guarantor, whether or not such claim, remedy or right arises in equity, or
under contract, statute or common law, including, without limitation, the right
to take or receive from the Guarantor, directly or indirectly, in cash or other
property or in any other manner, payment or security on account of such claim
or other rights, until all of the Issuer's obligations under the Guarantor
Indenture have been satisfied. If any payment shall be paid to the Issuer in
violation of the preceding sentence and the principal, accrued interest and
Premium, if any, on any Guarantor Notes shall not have been paid in full, such
amount shall be deemed to have been paid to the Issuer for the benefit of, and
held in trust for the benefit of, the holders of such Guarantor Notes, and
shall forthwith be paid to the Guarantor Trustee for the benefit of such
holders to be credited and applied upon the principal, accrued interest and
Premium, if any, on such Guarantor Notes;
(d) the Issuer hereby agrees that this Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time, payment, or any
part thereof, of any obligations guaranteed or interest thereon is rescinded or
must otherwise be restored by a holder to the Guarantor upon the bankruptcy or
insolvency of the Guarantor or the Issuer or otherwise; and
(e) the Issuer hereby agrees that its obligations under this Guarantee
shall be irrevocable and unconditional, irrespective of the validity,
regularity or enforceability of the Guarantor Notes against the Guarantor, the
absence of any action to enforce the Guarantor's obligations under the
Guarantor Notes, any waiver or consent by a holder with respect to any
provisions thereof, any amendment to the terms under which the Guarantor Notes
are issued, any release of collateral related to the Guarantor Notes, the
bankruptcy of the Guarantor or any circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor; provided,
however, that the Issuer shall be entitled to exercise any right that the
Guarantor could have exercised under the Guarantor Indenture to cure any
default in respect of its obligations under the Guarantor Indenture or the
Guarantor Notes, if any, but only to the extent such right, if any, is provided
to the Guarantor under such Guarantor Indenture or the Guarantor Notes.
116
Section 12.02. Conditions to Effectiveness of Guarantee. The Guarantee
set forth in Section 12.01 shall become valid and effective only upon the
fulfillment of each of the following conditions:
(i) the Guarantor shall have entered into an indenture, the terms of
which (including the covenants and other obligations of such Guarantor
thereunder) are substantially identical to those of this Indenture (the
"Guarantor Indenture" and the notes issued thereunder, the "Guarantor
Additional Notes");
(ii) the Guarantor shall have entered into all related documents,
the terms of which are substantially similar to those of the
corresponding Related Documents (including cross-collateralizing the
Notes by naming the Noteholders as secured parties to any security
agreements);
(iii) all amounts received by such Guarantor or any Guarantor
Subsidiary pursuant to any Lease or MSAF Group Related Collateral
Document shall have been deposited into the Collections Account;
(iv) the certificate of authentication on the Guarantor Additional
Notes shall have been signed by or on behalf of the Guarantor Trustee;
and
(v) the Issuer shall have received Rating Agency Confirmation prior
to the issuance of the Guarantor Additional Notes.
Section 12.03. Ranking and Subordination of the Guarantees. The
Guarantee of the Guarantor Class A Additional Notes (the "Guarantor Class A
Additional Note Guarantee") shall rank pari passu with the Issuer's obligation
to make payments on or otherwise perform in accordance with the terms of the
Class A Notes and shall rank senior to its obligation to make payments on or
otherwise perform in accordance with the terms of the Class B Notes, its
Guarantee of the Guarantor Class B Additional Notes (the "Guarantor Class B
Additional Note Guarantee"), the Class C Notes, its Guarantee of the Guarantor
Class C Additional Notes (the "Guarantor Class C Additional Note Guarantee"),
the Class D Notes and its Guarantee of the Guarantor Class D Additional Notes
(the "Guarantor Class D Additional Note Guarantee"). The Guarantor Class B
Additional Note Guarantee shall rank junior to the Issuer's obligation to make
payments on or otherwise perform in accordance with the terms of the Class A
Notes and the Guarantor Class A Additional Note Guarantee, shall rank pari
passu with its obligation to make payments on or otherwise perform in
accordance with the terms of the Class B Notes and shall rank senior to its
obligation to make payments on or otherwise perform in accordance with the
terms of the Class C Notes, the Guarantor Class C Additional Note Guarantee,
the Class D Notes and the Guarantor Class D Additional Note Guarantee. The
Guarantor Class C Additional Note Guarantee shall rank junior to the Issuer's
obligation to make payments on or otherwise perform in accordance with the
terms of the Class A Notes, the Guarantor Class A Additional Note Guarantee,
the Class B Notes and the Guarantor Class B Additional Note Guarantee, shall
rank pari passu with its obligation to make payments on or otherwise perform in
accordance with the terms of the Class C Notes and shall rank senior to its
obligation to make payments on or otherwise
117
perform in accordance with the terms of the Class D Notes and the Guarantor
Class D Additional Note Guarantee. The Guarantor Class D Additional Note
Guarantee shall rank junior to the Issuer's obligation to make payments on or
otherwise perform in accordance with the terms of the Class A Notes, the
Guarantor Class A Additional Note Guarantee, the Class B Notes, the Guarantor
Class B Additional Note Guarantee, the Class C Notes and the Guarantor Class C
Additional Note Guarantee, shall rank pari passu with its obligation to make
payments on or otherwise perform in accordance with the terms of the Class D
Notes.
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Right of Trustee to Perform. If the Issuer for any reason
fails to observe or punctually to perform any of its obligations to the
Trustee, whether under this Indenture or any of the other Related Documents or
otherwise, the Trustee shall have power (but shall have no obligation), on
behalf of or in the name of the Issuer or otherwise, to perform such
obligations and to take any steps which the Trustee may, in its absolute
discretion, consider appropriate with a view to remedying, or mitigating the
consequences of, such failure by the Issuer; provided that no exercise or
failure to exercise this power by the Trustee shall in any way prejudice the
Trustee's other rights under this Indenture or any of the other Related
Documents.
Section 13.02. Waiver. Any waiver by any party of any provision of this
Indenture or any right, remedy or option hereunder shall only prevent and estop
such party from thereafter enforcing such provision, right, remedy or option if
such waiver is given in writing and only as to the specific instance and for
the specific purpose for which such waiver was given. The failure or refusal
of any party hereto to insist in any one or more instances, or in a course of
dealing, upon the strict performance of any of the terms or provisions of this
Indenture by any party hereto or the partial exercise of any right, remedy or
option hereunder shall not be construed as a waiver or relinquishment of any
such term or provision, but the same shall continue in full force and effect.
No failure on the part of the Trustee to exercise, and no delay on its part in
exercising, any right or remedy under this Indenture will operate as a waiver
thereof, nor will any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy. The rights and remedies provided in this Indenture are
cumulative and not exclusive of any rights or remedies provided by law.
Section 13.03. Severability. In the event that any provision of this
Indenture or the application thereof to any party hereto or to any circumstance
or in any jurisdiction governing this Indenture shall, to any extent, be
invalid or unenforceable under any applicable statute, regulation or rule of
law, then such provision shall be deemed inoperative to the extent that it is
invalid or unenforceable and the remainder of this Indenture, and the
application of any such invalid or unenforceable provision to the parties,
jurisdictions or circumstances other than to whom or to which it is held
invalid or unenforceable, shall not be affected thereby nor shall the same
affect the validity or enforceability of this Indenture. The parties hereto
further agree that the holding by any court of competent jurisdiction that any
118
remedy pursued by the Trustee hereunder is unavailable or unenforceable shall
not affect in any way the ability of the Trustee to pursue any other remedy
available to it.
Section 13.04. Restrictions on Exercise of Certain Rights. The Trustee
and, during the continuance of a payment Default with respect to the Senior
Class of Notes, the Senior Trustee, in its capacity as trustee of such class
and except as otherwise provided in Section 4.04, may xxx for recovery or take
any other steps for the purpose of recovering any of the obligations hereunder
or any other debts or liabilities whatsoever owing to it by the Issuer. Each
of the Noteholders shall at all times be deemed to have agreed by virtue of the
acceptance of the Notes that only the Trustee and, during the continuance of a
payment Default with respect to the Senior Class of Notes, the Senior Trustee,
in its capacity as trustee of such class and except as provided in Section
4.04, may take any steps for the purpose of procuring the appointment of an
administrative receiver, examiner, receiver or similar officer or the making of
an administration order or for instituting any bankruptcy, reorganization,
arrangement, insolvency, winding up, liquidation, composition, examination or
any like proceedings under the laws of Delaware.
Section 13.05. Notices. All notices, demands, certificates, requests,
directions, instructions and communications hereunder ("Notices") shall be in
writing and shall be effective (a) upon receipt when sent through the mails,
registered or certified mail, return receipt requested, postage prepaid, with
such receipt to be effective the date of delivery indicated on the return
receipt, or (b) one Business Day after delivery to an overnight courier, or (c)
on the date personally delivered to an authorized officer of the party to which
sent, or (d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:
if to the Issuer, to:
Xxxxxx Xxxxxxx Aircraft Finance
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administrator
Facsimile: (x000) 000-0000
and
Xxxxxx Xxxxxxx Aircraft Finance
c/o Cabot Aircraft Services Limited
0xx Xxxxx
Xxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx 0
Xxxxxxx
Attention: Xx. Xxxxxx X'Xxxxx
Facsimile: (x000-0) 000-0000
119
with copies to:
Xxxxx Xxxx & Xxxxxxxx
0 Xxxxxxxxx'x Xxxxx
Xxxxxx
XX0X 0XX
Attention: Mr. Xxx Xxxx
Facsimile: (x00-000) 000-0000
and
Xxxxxx Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx
X00 0XX
Attention: Mr. Xxxxx Xxxxxxxx
Facsimile: (x00-000) 000-0000
if to the Administrative Agent, to:
Cabot Aircraft Services Limited
0xx Xxxxx
Xxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx 0
Xxxxxxx
Attention: Xx. Xxxxxx X'Xxxxx
Facsimile: (x000-0) 000-0000
if to the Trustee, the Registrar or the Paying Agent, to:
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency Group,
Structured Finance Team
Facsimile: (x000) 000-0000
Telephone: (x000) 000-0000
if to the Cash Manager, to:
Bankers Trust Company
Four Albany Street
9th Floor
Mailstop 5091
000
Xxx Xxxx, Xxx Xxxx 00000
Attention: F. Xxx Xxxxx Xxxx
Facsimile: (x000) 000-0000
for so long as the Notes are listed on the Luxembourg Stock
Exchange, if to the Listing Agent, Luxembourg Paying Agent and Registrar,
to:
Banque Internationale a Luxembourg S.A.
00, xxxxx x'Xxxx
X-0000 Xxxxxxxxxx
Xxxxxxxxx: Xxxxxxx Deisges
Facsimile: (x000) 0000-0000
A copy of each notice given hereunder to any party hereto shall also be given
to each of the other parties hereto. Each party hereto may, by notice given in
accordance herewith to each of the other parties hereto, designate any further
or different address to which subsequent Notices shall be sent.
Section 13.06. Assignments. This Indenture shall be a continuing
obligation of the Issuer and shall (i) be binding upon the Issuer and its
successors and assigns and (ii) inure to the benefit of and be enforceable by
the Trustee, and by its successors, transferees and assigns. The Issuer may
not assign any of its obligations under the Indenture, or delegate any of its
duties hereunder.
Section 13.07. Currency Conversion. (a) If any amount is received or
recovered by the Administrative Agent or the Trustee in respect of this
Indenture or any part thereof (whether as a result of the enforcement of the
security created under the Security Trust Agreement or pursuant to this
Indenture or any judgment or order of any court or in the liquidation or
dissolution of the Issuer or by way of damages for any breach of any obligation
to make any payment under or in respect of the Issuer's obligations hereunder
or any part thereof or otherwise) in a currency (the "Received Currency") other
than the currency in which such amount was expressed to be payable (the "Agreed
Currency"), then the amount in the Received Currency actually received or
recovered by the Trustee shall, to the fullest extent permitted by Applicable
Law, only constitute a discharge to the Issuer to the extent of the amount of
the Agreed Currency which the Administrative Agent or the Trustee was or would
have been able in accordance with its normal procedures to purchase on the date
of actual receipt or recovery (or, if that is not practicable, on the next date
on which it is so practicable), and, if the amount of the Agreed Currency which
the Administrative Agent or Trustee is or would have been so able to purchase
is less than the amount of the Agreed Currency which was originally payable by
the Issuer, the Issuer shall pay to the Administrative Agent such amount as the
Administrative Agent shall determine to be necessary to indemnify the Trustee
against any Loss sustained by it as a result (including the cost of making any
such purchase and any premiums, commissions or other charges paid or incurred
in connection therewith) and so that such indemnity, to the fullest extent
permitted by Applicable Law, (i) shall constitute a separate and independent
obligation of the Issuer distinct from its obligation to discharge the amount
which was originally payable by the
121
Issuer and (ii) shall give rise to a separate and independent cause of action
and apply irrespective of any indulgence granted by the Administrative Agent or
the Trustee and continue in full force and effect notwithstanding any judgment,
order, claim or proof for a liquidated amount in respect of the amount
originally payable by the Issuer or any judgment or order and no proof or
evidence of any actual loss shall be required.
(b) For the purpose of or pending the discharge of any of the moneys and
liabilities hereby secured the Administrative Agent may convert any moneys
received, recovered or realized by the Administrative Agent under this
Indenture (including the proceeds of any previous conversion under this Section
13.07) from their existing currency of denomination into the currency of
denomination (if different) of such moneys and liabilities and any conversion
from one currency to another for the purposes of any of the foregoing shall be
made at the Trustee's then prevailing spot selling rate at its office by which
such conversion is made. If not otherwise required to be applied in the
Received Currency, the Administrative Agent, acting on behalf of the Security
Trustee, shall promptly convert any moneys in such Received Currency other than
U.S. dollars into U.S. dollars. Each previous reference in this section to a
currency extends to funds of that currency and funds of one currency may be
converted into different funds of the same currency.
Section 13.08. Application to Court. The Security Trustee may at any
time after the service of a Default Notice apply to any court of competent
jurisdiction for an order that the terms of this Indenture be carried into
execution under the direction of such court and for the appointment of a
Receiver of the Collateral or any part thereof and for any other order in
relation to the administration of this Indenture as the Senior Trustee shall
deem fit and it may assent to or approve any application to any court of
competent jurisdiction made at the instigation of any of the Noteholders and
shall be indemnified by the Issuer against all costs, charges and expenses
incurred by it in relation to any such application or proceedings.
Section 13.09. Governing Law. THIS INDENTURE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 13.10. Jurisdiction. (a) Each of the parties hereto agrees that
the United States federal and New York State courts located in The City of New
York shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Indenture and, for such purposes, submits to the jurisdiction of such
courts. Each of the parties hereto waives any objection which it might now or
hereafter have to the United States federal or New York State courts located in
The City of New York being nominated as the forum to hear and determine any
suit, action or proceeding, and to settle any disputes, which may arise out of
or in connection with this Indenture and agrees not to claim that any such
court is not a convenient or appropriate forum. Each of the parties hereto
agrees that the process by which any suit, action or proceeding is begun may be
served on it by being delivered in connection with any suit, action or
proceeding in The City of New York to the Person named as the process agent of
such party in Exhibit F at the address set out therein or at the principal New
York City office of such process agent, if not the same.
122
(b) The submission to the jurisdiction of the courts referred to in
Section 13.10(a) shall not (and shall not be construed so as to) limit the
right of the Trustee to take proceedings against the Issuer in any other court
of competent jurisdiction nor shall the taking of proceedings in any one or
more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
(c) Each of the parties hereto hereby consents generally in respect of any
legal action or proceeding arising out of or in connection with this Indenture
to the giving of any relief or the issue of any process in connection with such
action or proceeding, including the making, enforcement or execution against
any property whatsoever (irrespective of its use or intended use) of any order
or judgment which may be made or given in such action or proceeding.
123
Section 13.11. Counterparts. This Indenture may be executed in two or
more counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 13.12. Table of Contents, Headings, Etc. The Table of Contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms and provisions hereof.
Section 13.13. Trust Indenture Act. Prior to the effectiveness of the
Registration Statement, this Indenture shall be incorporated and be governed by
the provisions of the Trust Indenture Act that are required to be part of and
to govern indentures qualified under the Trust Indenture Act. After the
effectiveness of the Registration Statement, this Indenture shall be subject to
the provisions of the Trust Indenture Act that are required to be a part of
this Indenture and shall, to the extent applicable, be governed by such
provisions.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
XXXXXX XXXXXXX AIRCRAFT FINANCE, as
Issuer
By /s/ C. Xxxxx Xxxxxxxx
________________________________
Name: C. Xxxxx Xxxxxxxx
Title: Alternate Signatory Trustee
BANKERS TRUST COMPANY, not in its
individual capacity
124
but solely as Trustee
By /s/ Xxxxxxxx X.X. Xxxxx
________________________________
Name: Xxxxxxxx X.X. Xxxxx
Title: Vice President
125
SCHEDULE A
INITIAL APPRAISED VALUE OF THE INITIAL AIRCRAFT
INITIAL APPRAISAL VALUE AT
SEPTEMBER 30, 1997
SERIAL NUMBER ($000'S)
------------- --------------------------
23788 $21,973
49822 20,097
25165 21,973
25161 26,310
410 26,273
409 26,310
27635 32,053
704279 6,037
23807 39,067
279 32,260
26256 69,780
49825 19,010
25104 29,713
24234 23,527
25371 28,263
49824 21,627
414 32,520
393 32,310
11569 18,533
11565 18,423
11564 17,530
24367 37,090
597 47,030
25372 28,820
26295 28,073
24798 57,627
555 54,377
24106 67,953
437 32,543
26272 44,993
26260 71,727
23811 22,697
24260 36,017
24299 22,973
126
SCHEDULE B
ISSUER SUBSIDIARIES
Jurisdiction of Organization
MSA I Delaware
Aircraft SPC-5, Inc. California
Greenfly (Ireland) Limited Ireland
Redfly (UK) Limited U.K.
127
EXHIBIT A-1
FORM OF SUBCLASS A-1 FLOATING RATE NOTE
XXXXXX XXXXXXX AIRCRAFT FINANCE
SUBCLASS A-1 NOTE, Due March 15, 2023
No. ____ [CUSIP][ISIN][CCN]
$_________
XXXXXX XXXXXXX AIRCRAFT FINANCE, a business trust organized under the laws
of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of ___________________________________________________ DOLLARS
($_________) on March 15, 2023 (the "Final Maturity Date") and to pay interest
monthly in arrears on the Outstanding Principal Balance hereof at a fluctuating
interest rate per annum equal to the sum of LIBOR plus 0.21% per annum (the
"Stated Interest Rate") from the date hereof until the Outstanding Principal
Balance hereof is paid or duly provided for, payable on each Payment Date.
Interest on this Subclass A-1 Note in each Interest Accrual Period shall be
calculated on the basis of a 360-day year and the actual number of days elapsed
in such Interest Accrual Period.
This Subclass A-1 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its "Subclass A-1 Notes, due March 15, 2023", issued
under the Trust Indenture dated as of March 3, 1998 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as trustee (the "Trustee"). The Indenture also provides for the
issuance of Subclass A-2 Notes, Subclass B-1 Notes, Subclass C-1 Notes and
Subclass D-1 Notes (collectively, the "Initial Notes"). All capitalized terms
used in this Subclass A-1 Note and not defined herein shall have the respective
meanings assigned to such terms in the Indenture. Reference is made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Subclass A-1 Noteholders. This Subclass A-1 Note is subject to all terms of
the Indenture.
The Issuer will redeem the Outstanding Principal Balance of this Subclass
A-1 Note prior to the Final Maturity Date on the Payment Dates and in the
amounts specified in the Indenture, subject to the availability of the
Available Collections Amount therefor after making payments entitled to
priority under Sections 3.08 and 3.09 of the Indenture.
The Issuer may redeem all or part of the Outstanding Principal Balance of
this Subclass A-1 Note prior to the Final Maturity Date on the Payment Dates,
in the
128
A-1-2
amounts and under the circumstances specified in the Indenture.
Other than in the case of a redemption for taxation reasons specified in
the Indenture, upon any redemption of any amount of the Outstanding Principal
Balance of this Subclass A-1 Note (i) with the application of funds other than
the Available Collections Amount (including proceeds from Refinancing Notes and
proceeds from third parties), such amount shall be redeemed at a Redemption
Price equal to the product of the applicable Redemption Premium applicable
thereto and the Outstanding Principal Balance thereof and (ii) with the
application of the Available Collections Amount, such amount shall be redeemed
at a Redemption Price equal to the Outstanding Principal Balance thereof.
Following the Expected Final Payment Date of this Subclass A-1 Note and
until the Outstanding Principal Balance hereof is paid or duly provided for,
the Outstanding Principal Balance hereof shall bear additional interest
("Step-Up Interest") at the rate of 0.5% per annum, payable on each Payment
Date, subject to the availability of the Available Collections Amount therefor
after making payments entitled to priority under Sections 3.08 and 3.09 of the
Indenture.
Any amount of Premium or interest (including Step-Up Interest) on this
Subclass A-1 Note that is not paid when due shall, to the fullest extent
permitted by applicable law, bear interest at a fluctuating interest rate per
annum equal to the Stated Interest Rate plus, following the Expected Final
Payment Date of this Subclass A-1 Note, 0.5% per annum from the date when due
until such amount is paid or duly provided for, payable on the next succeeding
Payment Date, subject, in the case of Step-Up Interest, to the availability of
the Available Collections Amount therefor after making payments entitled to
priority under Sections 3.08 and 3.09 of the Indenture.
If an exchange offer (the "Exchange Offer") registered under the
Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to
resales of the Notes is not declared effective by the Commission, on or before
November 30, 1998 in accordance with the terms of the Registration Rights
Agreement dated as of March 3, 1998 between the Issuer and Xxxxxx Xxxxxxx & Co.
International Limited, thereafter an additional incremental interest amount
will accrue on each subclass of Notes, at an annual rate of 0.50%. Such
additional incremental interest amounts on the Notes will be payable in cash on
each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
The indebtedness evidenced by the Subclass A-1 Notes is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Claims (as defined in the
Indenture), and this Subclass A-1 Note is issued subject to such provisions.
Each Holder of this Subclass A-1 Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints the Trustee his
129
A-1-3
attorney-in-fact for such purpose.
The maturity of this Subclass A-1 Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Subclass A-1 Note is and will be secured, on a subordinated basis, by
the collateral pledged as security therefor as provided in the Security Trust
Agreement.
Subject to and in accordance with the terms of the Indenture, there will
be distributed monthly on each Payment Date commencing on April 15, 1998, to
the Person in whose name this Subclass A-1 Note is registered at the close of
business on the Record Date with respect to such Payment Date, in the manner
specified in Section 3.08 of the Indenture, such Person's pro rata share (based
on the aggregate percentage of the Outstanding Principal Balance of the
Subclass A-1 Notes held by such Person) of the aggregate amount distributable
to all Holders of Subclass A-1 Notes on such Payment Date.
All amounts payable in respect of this Subclass A-1 Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment.
The final payment with respect to this Subclass A-1 Note, however, shall be
made only upon presentation and surrender of this Note by the Noteholder or its
agent at the Corporate Trust Office or agency of the Trustee or Paying Agent
specified in the notice given by the Trustee or Paying Agent with respect to
such final payment. At such time, if any, as this Subclass A-1 Note is issued
in the form of one or more Definitive Notes, payments on a Payment Date shall
be made by check mailed to each Noteholder of such a Definitive Note on the
applicable Record Date at its address appearing on the Register maintained with
respect to Subclass A-1 Notes. Alternatively, upon application in writing to
the Trustee, not later than the applicable Record Date, by a Noteholder of one
or more Definitive Notes of Subclass A-1 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer
to an account designated by such Noteholder at a financial institution in New
York, New York. The final payment with respect to any such Definitive Note,
however, shall be made only upon presentation and surrender of such Definitive
Note by the Noteholder or its agent at the Corporate Trust Office or agency of
the Trustee or Paying Agent specified in the notice of such final payment given
by the Trustee or Paying Agent. Any reduction in the principal amount of this
Subclass A-1 Note (or any one or more predecessor Subclass A-1 Notes) effected
by any payments made on any Payment Date shall be binding upon all future
Holders of this Subclass A-1 Note and of any Subclass A-1 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass A-1 Note, whether or not noted hereon.
The Holder of this Subclass A-1 Note agrees, by acceptance hereof, to pay
over to the Administrative Agent any money (including principal, Premium and
interest) paid to it in respect of this Subclass A-1 Note in the event that the
Administrative Agent, acting in good faith, determines subsequently that such
monies were not paid in accordance with the priority of payment provisions of
the Indenture or as a result of any other mistake
130
A-1-4
of fact or law on the part of the Administrative Agent in making such payment.
This Subclass A-1 Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. When this Subclass A-1 Note
is presented to the Registrar with a request to register the transfer or to
exchange it for an equal principal amount of Subclass A-1 Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder). No service charge
shall be made for any registration of transfer or exchange of this Subclass A-1
Note, but the party requesting such new Note or Notes may be required to pay a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
Prior to the registration of transfer of this Subclass A-1 Note, the
Issuer and the Trustee may deem and treat the Person in whose name this
Subclass A-1 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the absolute owner and
Holder hereof for the purpose of receiving payment of all amounts payable with
respect to this Subclass A-1 Note and for all other purposes, and neither the
Issuer nor the Trustee shall be affected by notice to the contrary.
The Indenture permits the amendment or modification of the Indenture and
the Subclass A-1 Notes by the Issuer with the consent of the Holders of a
majority of the Outstanding Principal Balance of all Notes on the date of any
vote of such Holders (voting as a single class); provided that, without the
consent of each Swap Provider and each Holder of any Notes affected thereby, no
such amendment may (i) modify the provisions of the Indenture or the Notes
setting forth the frequency or the currency of payment of, the maturity of, or
the method of calculation of the amount of, any interest, principal and
Premium, if any, payable in respect of any subclass of Notes, (ii) reduce the
percentage of the aggregate Outstanding Principal Balance of such subclass of
Notes required to approve any amendment or waiver of Section 9.01 of the
Indenture or (iii) alter the manner or priority of payment of such subclass of
Notes (each, a "Basic Terms Modification"). Any such amendment or modification
shall be binding on every Holder hereof, whether or not notation thereof is
made upon this Subclass A-1 Note. The Indenture also permits the Trustee to
agree, without the consent of any Noteholder, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of
the relevant Notes to correct a manifest error or an error which is of a
formal, minor or technical nature or (b) to modify the provisions of the
Indenture or the Administrative Agency Agreement relating to the timing of
movement of Rental Payments or other monies received or Expenses incurred among
the Accounts by the Administrative Agent.
131
A-1-5
The subordination provisions contained in Section 3.08, Section 3.09 and
Article X of the Indenture may not be amended or modified without the consent
of each Swap Provider, each provider of a Credit Facility, each Noteholder of
the subclass affected thereby and each Noteholder of any subclass of Notes
ranking senior thereto. In no event shall the provisions set forth in Section
3.08 of the Indenture relating to the priority of the Expenses, Swap Payments
and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders of Notes
representing a majority of the Outstanding Principal Balance of the Senior
Class of Notes, on behalf of the Holders of all of the Subclass A-1 Notes, to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver shall be conclusive and binding upon all present and future
Holders of this Subclass A-1 Note and of any Subclass A-1 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass A-1 Note, whether or not notation of such consent or waiver is
made upon this Subclass A-1 Note.
The term "Issuer" as used in this Subclass A-1 Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Holders of
Subclass A-1 Notes under the Indenture.
The Subclass A-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Subclass A-1 Note shall in all respects be governed by, and construed
in accordance with, the laws of the State of New York, including all matters of
construction, validity and performance.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual or facsimile signature, this
Subclass A-1
132
A-1-6
Note shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Subclass A-1 Note to be
signed manually or by facsimile by its Signatory Trustee.
Date:______________ XXXXXX XXXXXXX AIRCRAFT FINANCE
By:__________________________
Name:
Title: Signatory Trustee
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subclass A-1 Notes due March 15, 2023 designated above
and referred to in the within-mentioned indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely
as Trustee
By: __________________________
Authorized Signatory
133
A-1-7
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
_______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: [Signature of Transferor]
NOTE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
[THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN
EXCHANGE NOTES AND PERMANENT
REGULATION S GLOBAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(K)
under the Securities Act, the undersigned confirms
134
that without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date:
NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
NOTICE: to be executed by an executive
officer
135
X-0-0
XXXXXXX X-0
FORM OF SUBCLASS A-2 FLOATING RATE NOTE
XXXXXX XXXXXXX AIRCRAFT FINANCE
SUBCLASS A-2 NOTE, Due March 15, 2023
No. ____ [CUSIP][ISIN][CCN]
$_________
XXXXXX XXXXXXX AIRCRAFT FINANCE, a business trust organized under the laws
of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of _______________________________ DOLLARS ($_________) on March
15, 2023 (the "Final Maturity Date") and to pay interest monthly in arrears on
the Outstanding Principal Balance hereof at a fluctuating interest rate per
annum equal to the sum of LIBOR plus 0.35% per annum (the "Stated Interest
Rate") from the date hereof until the Outstanding Principal Balance hereof is
paid or duly provided for, payable on each Payment Date. Interest on this
Subclass A-2 Note in each Interest Accrual Period shall be calculated on the
basis of a 360-day year and the actual number of days elapsed in such Interest
Accrual Period.
This Subclass A-2 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its "Subclass A-2 Notes, due March 15, 2023", issued under
the Trust Indenture dated as of March 3, 1998 (as amended or supplemented from
time to time, the "Indenture"), between the Issuer and Bankers Trust Company, as
indenture trustee (the "Trustee"). The Indenture also provides for the issuance
of Subclass A-1 Notes, Subclass B-1 Notes, Subclass C-1 Notes and Subclass D-1
Notes (collectively, the "Initial Notes"). All capitalized terms used in this
Subclass A-2 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture and
all indentures supplemental thereto for a statement of the respective rights and
obligations thereunder of the Issuer, the Trustee and the Subclass A-2
Noteholders. This Subclass A-2 Note is subject to all terms of the Indenture.
The Issuer will redeem the Outstanding Principal Balance of this Subclass
A-2 Note prior to the Final Maturity Date on the Payment Dates and in the
amounts specified in the Indenture, subject to the availability of the Available
Collections Amount therefor after making payments entitled to priority under
Sections 3.08 and 3.09 of the Indenture.
The Issuer may redeem all or part of the Outstanding Principal Balance of
136
A-2-10
this Subclass A-2 Note prior to the Final Maturity Date on the Payment Dates,
in the amounts and under the circumstances specified in the indenture.
Other than in the case of a redemption for taxation reasons specified in
the Indenture, upon any redemption of any amount of the Outstanding Principal
Balance of this Subclass A-2 Note (i) with the application of funds other than
the Available Collections Amount (including proceeds from Refinancing Notes and
proceeds from third parties), such amount shall be redeemed at a Redemption
Price equal to the product of the applicable Redemption Premium applicable
thereto, and the Outstanding Principal Balance thereof and (ii) with the
application of the Available Collections Amount, such amount shall be redeemed
at a Redemption Price equal to the Outstanding Principal Balance thereof.
Any amount of Premium or interest on this Subclass A-2 Note that is not
paid when due shall, to the fullest extent permitted by applicable law, bear
interest at a fluctuating interest rate per annum equal to the Stated Interest
Rate from the date when due until such amount is paid or duly provided for,
payable on the next succeeding Payment Date, subject to the availability of the
Available Collections Amount therefor after making payments entitled to
priority under Section 3.08 of the Indenture.
If an exchange offer (the "Exchange Offer") registered under the
Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to
resales of the Notes is not declared effective by the Commission, on or before
November 30, 1998 in accordance with the terms of the Registration Rights
Agreement dated as of March 3, 1998 between the Issuer and Xxxxxx Xxxxxxx & Co.
International Limited, thereafter an additional incremental interest amount
will accrue on each subclass of Notes, at an annual rate of 0.50%. Such
additional incremental interest amounts on the Notes will be payable in cash on
each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
The indebtedness evidenced by the Subclass A-2 Notes is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Claims (as defined in the
Indenture), and this Subclass A-2 Note is issued subject to such provisions.
Each Holder of this Subclass A-2 Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
The maturity of this Subclass A-2 Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture.
This Subclass A-2 Note is and will be secured, on a subordinated basis, by
the collateral pledged as security therefor as provided in the Security Trust
Agreement.
Subject to and in accordance with the terms of the Indenture, there will
be
137
A-2-11
distributed monthly on each Payment Date commencing on April 15, 1998, to
the Person in whose name this Subclass A-2 Note is registered at the close of
business on the Record Date with respect to such Payment Date, in the manner
specified in Section 3.08 of the Indenture, such Person's pro rata share (based
on the aggregate percentage of the Outstanding Principal Balance of the
Subclass A-2 Notes held by such Person) of the aggregate amount distributable
to all Holders of Subclass A-2 Notes on such Payment Date.
All amounts payable in respect of this Subclass A-2 Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Subclass A-2 Note, however, shall be made
only upon presentation and surrender of this Note by the Noteholder or its
agent at the Corporate Trust Office or agency of the Trustee or Paying Agent
specified in the notice given by the Trustee or Paying Agent with respect to
such final payment. At such time, if any, as this Subclass A-2 Note is issued
in the form of one or more Definitive Notes, payments on a Payment Date shall
be made by check mailed to each Noteholder of such a Definitive Note on the
applicable Record Date at its address appearing on the Register maintained with
respect to Subclass A-2 Notes. Alternatively, upon application in writing to
the Trustee, not later than the applicable Record Date, by a Noteholder of one
or more Definitive Notes of Subclass A-2 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer
to an account designated by such Noteholder at a financial institution in New
York, New York. The final payment with respect to any such Definitive Note,
however, shall be made only upon presentation and surrender of such Definitive
Note by the Noteholder or its agent at the Corporate Trust Office or agency of
the Trustee or Paying Agent specified in the notice of such final payment given
by the Trustee or Paying Agent. Any reduction in the principal amount of this
Subclass A-2 Note (or any one or more predecessor Subclass A-2 Notes) effected
by any payments made on any Payment Date shall be binding upon all future
Holders of this Subclass A-2 Note and of any Subclass A-2 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass A-2 Note, whether or not noted hereon.
The Holder of this Subclass A-2 Note agrees, by acceptance hereof, to pay
over to the Administrative Agent any money (including principal, Premium and
interest) paid to it in respect of this Subclass A-2 Note in the event that the
Administrative Agent, acting in good faith, determines subsequently that such
monies were not paid in accordance with the priority of payment provisions of
the Indenture or as a result of any other mistake of fact or law on the part of
the Administrative Agent in making such payment.
This Subclass A-2 Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the
name of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. When this Subclass A-2 Note
is presented to the Registrar with a request to register the transfer or to
exchange it for an equal principal amount of Subclass A-2 Notes of other
authorized
138
A-2-12
denominations, the Registrar shall register the transfer or make the exchange
as requested if its requirements for such transactions are met (including, in
the case of a transfer, that such Note is duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Trustee and
Registrar duly executed by the Holder thereof or by an attorney who is
authorized in writing to act on behalf of the Holder). No service charge shall
be made for any registration of transfer or exchange of this Subclass A-2 Note,
but the party requesting such new Note or Notes may be required to pay a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith.
Prior to the registration of transfer of this Subclass A-2 Note, the
Issuer and the Trustee may deem and treat the Person in whose name this
Subclass A-2 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the absolute owner and
Holder hereof for the purpose of receiving payment of all amounts payable with
respect to this Subclass A-2 Note and for all other purposes, and neither the
Issuer nor the Trustee shall be affected by notice to the contrary.
The Indenture permits the amendment or modification of the Indenture and
the Subclass A-2 Notes by the issuer with the consent of the Holders of a
majority of the Outstanding Principal Balance of all Notes on the date of any
vote of such Holders (voting as a single class); provided that, without the
consent of each Swap Provider and each Holder of any Notes affected thereby, no
such amendment may (i) modify the provisions of the Indenture or the Notes
setting forth the frequency or the currency of payment of, the maturity of, or
the method of calculation of the amount of, any interest, principal and
Premium, if any, payable in respect of any subclass of Notes, (ii) reduce the
percentage of the aggregate Outstanding Principal Balance of such subclass of
Notes required to approve any amendment or waiver of Section 9.01 of the
Indenture or (iii) alter the manner or priority of payment of such subclass of
Notes (each, a "Basic Terms Modification"). Any such amendment or modification
shall be binding on every Holder hereof, whether or not notation thereof is
made upon this Subclass A-2 Note. The Indenture also permits the Trustee to
agree, without the consent of any Noteholder, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of
the relevant Notes to correct a manifest error or an error which is of a
formal, minor or technical nature or (b) to modify the provisions of the
Indenture or the Administrative Agency Agreement relating to the timing of
movement of Rental Payments or other monies received or Expenses incurred among
the Accounts by the Administrative Agent.
The subordination provisions contained in Section 3.08, Section 3.09 and
Article X of the Indenture may not be amended or modified without the consent
of each Swap Provider, each provider of a Credit Facility, each Noteholder of
the subclass affected thereby and each Noteholder of any subclass of Notes
ranking senior thereto. In no event shall the provisions set forth in Section
3.08 of the Indenture relating to the priority of the Expenses, Swap Payments
and payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders of Notes
139
A-2-13
representing a majority of the Outstanding Principal Balance of the Senior Class
of Notes, on behalf of the Holders of all of the Subclass A-2 Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Subclass A-2 Note and of any Subclass A-2 Note issued upon the registration
of transfer of, in exchange or in lieu of or upon the refinancing of this
Subclass A-2 Note, whether or not notation of such consent or waiver is made
upon this Subclass A-2 Note.
The term "Issuer" as used in this Subclass A-2 Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Holders of
Subclass A-2 Notes under the Indenture.
The Subclass A-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Subclass A-2 Note shall in all respects be governed by, and construed
in accordance with, the laws of the State of New York, including all matters of
construction, validity and performance.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual or facsimile signature, this Subclass
A-2
140
A-2-14
Note shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Subclass A-2 Note to be
signed manually or by facsimile by its Signatory Trustee.
Date: _________________ XXXXXX XXXXXXX AIRCRAFT FINANCE
By: __________________________
Name:
Title: Signatory Trustee
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subclass A-2 Notes due March 15, 2023 designated above
and referred to in the within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely
as Trustee
By: __________________________
Authorized Signatory
141
A-2-15
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
_______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: [Signature of Transferor]
NOTE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
[THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN
EXCHANGE NOTES AND PERMANENT
REGULATION S GLOBAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms
142
A-2-16
that without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date:
NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (A) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive officer
143
EXHIBIT B
FORM OF SUBCLASS B-1 FLOATING RATE NOTE
XXXXXX XXXXXXX AIRCRAFT FINANCE
SUBCLASS B-1 NOTE, Due March 15, 2023
No. ____ [CUSIP][ISIN][CCN]
$__________
XXXXXX XXXXXXX AIRCRAFT FINANCE, a business trust organized under the laws
of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of ______________________________ DOLLARS ($_________) on March
15, 2023 (the "Final Maturity Date") and to pay interest monthly in arrears on
the Outstanding Principal Balance hereof at a fluctuating interest rate per
annum equal to the sum of LIBOR plus 0.65% per annum (the "Stated Interest
Rate") from the date hereof until the Outstanding Principal Balance hereof is
paid or duly provided for, payable on each Payment Date. Interest on this
Subclass B-1 Note in each Interest Accrual Period shall be calculated on the
basis of a 360-day year and the actual number of days elapsed in such Interest
Accrual Period.
This Subclass B-1 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its "Subclass B-1 Notes, due March 15, 2023", issued
under the Trust Indenture dated as of March 3, 1998 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as indenture trustee (the "Trustee"). The Indenture also provides for
the issuance of Subclass A-1 and A-2 Notes, Subclass C-1 Notes and Subclass D-1
Notes (collectively, the "Initial Notes"). All capitalized terms used in this
Subclass B-1 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture
and all indentures supplemental thereto for a statement of the respective
rights and obligations thereunder of the Issuer, the Guarantor, the Trustee and
the Subclass B-1 Noteholders. This Subclass B-1 Note is subject to all terms
of the Indenture.
The Issuer will redeem the Outstanding Principal Balance of this Subclass
B-1 Note prior to the Final Maturity Date on the dates and in the amounts
specified in the Indenture, subject to the availability of the Available
Collections Amount therefor after making payments entitled to priority under
Section 3.08 of the Indenture.
The Issuer may redeem all or part of the Outstanding Principal Balance of
this Subclass B-1 Note prior to the Final Maturity Date on the Payment Dates,
in the amounts and under the circumstances specified in the Indenture.
144
B-1-18
Other than in the case of a redemption for taxation reasons specified in
the Indenture, upon any redemption of any amount of the Outstanding Principal
Balance of this Subclass B-1 Note (i) with the application of funds other than
the Available Collections Amount (including proceeds from Refinancing Notes and
proceeds from third parties), such amount shall be redeemed at a Redemption
Price equal to the product of the Applicable Redemption Premium and the
Outstanding Principal Balance thereof and (ii) with the application of the
Available Collections Amount, such amount shall be redeemed at a Redemption
Price equal to the Outstanding Principal Balance thereof.
Any amount of Premium or interest on this Subclass B-1 Note that is not
paid when due shall, to the fullest extent permitted by applicable law, bear
interest at a fluctuating interest rate per annum equal to the Stated Interest
Rate from the date when due until such amount is paid or duly provided for,
payable on the next succeeding Payment Date, subject to the availability of the
Available Collections Amount therefor after making payments entitled to priority
under Section 3.08 of the Indenture.
If an exchange offer (the "Exchange Offer") registered under the Securities
Act is not consummated and a shelf registration statement (the "Shelf
Registration Statement") under the Securities Act with respect to resales of the
Notes is not declared effective by the Commission, on or before November 30,
1998 in accordance with the terms of the Registration Rights Agreement dated as
of March 3, 1998 between the Issuer and Xxxxxx Xxxxxxx & Co. International
Limited, thereafter an additional incremental interest amount will accrue on
each subclass of Notes, at an annual rate of 0.50%. Such additional incremental
interest amounts on the Notes will be payable in cash on each Payment Date until
the Exchange Offer is consummated or the Shelf Registration Statement is
declared effective. The Holder of this Note is entitled to the benefits of such
Registration Rights Agreement.
The indebtedness evidenced by the Subclass B-1 Notes is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Claims (as defined in the
Indenture), and this Subclass B-1 Note is issued subject to such provisions.
Each Holder of this Subclass B-1 Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
The maturity of this Subclass B-1 Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture. The Subclass B-1 Noteholders shall not be permitted to deliver a
Default Notice or to exercise any remedy in respect of any such Event of Default
until all interest and principal on the Class A Notes have been paid in full.
This Subclass B-1 Note is and will be secured, on a subordinated basis, by
the collateral pledged as security therefor as provided in the Security Trust
Agreement.
145
B-1-19
Subject to and in accordance with the terms of the Indenture, there will be
distributed monthly on each Payment Date commencing on April 15, 1998, to the
Person in whose name this Subclass B-1 Note is registered at the close of
business on the Record Date with respect to such Payment Date, in the manner
specified in Section 3.08 of the Indenture, such Person's pro rata share (based
on the aggregate percentage of the Outstanding Principal Balance of the Subclass
B-1 Notes held by such Person) of the aggregate amount distributable to all
Holders of Subclass B-1 Notes on such Payment Date.
All amounts payable in respect of this Subclass B-1 Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Subclass B-1 Note, however, shall be made
only upon presentation and surrender of this Note by the Noteholder or its agent
at the Corporate Trust Office or agency of the Trustee or Paying Agent specified
in the notice given by the Trustee or Paying Agent with respect to such final
payment. At such time, if any, as this Subclass B-1 Note is issued in the form
of one or more Definitive Notes, payments on a Payment Date shall be made by
check mailed to each Noteholder of such a Definitive Note on the applicable
Record Date at its address appearing on the Register maintained with respect to
Subclass B-1 Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Noteholder of one or more
Definitive Notes of Subclass B-1 having an aggregate principal amount of not
less than $1,000,000, any such payments shall be made by wire transfer to an
account designated by such Noteholder at a financial institution in New York,
New York. The final payment with respect to any such Definitive Note, however,
shall be made only upon presentation and surrender of such Definitive Note by
the Noteholder or its agent at the Corporate Trust Office or agency of the
Trustee or Paying Agent specified in the notice of such final payment given by
the Trustee or Paying Agent. Any reduction in the principal amount of this
Subclass B-1 Note (or any one or more predecessor Subclass B-1 Notes) effected
by any payments made on any Payment Date shall be binding upon all future
Holders of this Subclass B-1 Note and of any Subclass B-1 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass B-1 Note, whether or not noted hereon.
The Holder of this Subclass B-1 Note agrees, by acceptance hereof, to pay
over to the Administrative Agent any money (including principal, Premium and
interest) paid to it in respect of this Subclass B-1 Note in the event that the
Cash Manager, acting in good faith, determines subsequently that such monies
were not paid in accordance with the priority of payment provisions of the
Indenture or as a result of any other mistake of fact or law on the part of the
Administrative Agent in making such payment.
This Subclass B-1 Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. When this Subclass A-1 Note
is presented to the Registrar with a request to register the transfer or to
146
B-1-20
exchange it for an equal principal amount of Subclass B-1 Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder). No service charge
shall be made for any registration of transfer or exchange of this Subclass B-1
Note, but the party requesting such new Note or Notes may be required to pay a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
Prior to the registration of transfer of this Subclass B-1 Note, the
Issuer and the Trustee may deem and treat the Person in whose name this
Subclass B-1 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the absolute owner and
Holder hereof for the purpose of receiving payment of all amounts payable with
respect to this Subclass B-1 Note and for all other purposes, and neither the
Issuer nor the Trustee shall be affected by notice to the contrary.
The Indenture permits the amendment or modification of the Indenture and
the Subclass B-1 Notes by the Issuer with the consent of the Holders of a
majority of the Outstanding Principal Balance of all Notes on the date of any
vote of such Holders (voting as a single class); provided that, without the
consent of each Swap Provider and each Holder of any Notes affected thereby, no
such amendment may (i) modify the provisions of the Indenture or the Notes
setting forth the frequency or the currency of payment of, the maturity of, or
the method of calculation of the amount of, any interest, principal and
Premium, if any, payable in respect of such subclass of Notes, (ii) reduce the
percentage of the aggregate Outstanding Principal Balance of such subclass of
Notes required to approve any amendment or waiver of Section 9.01 of the
Indenture or (iii) alter the manner or priority of payment of any subclass of
Notes (each, a "Basic Terms Modification"). Any such amendment or modification
shall be binding on every Holder hereof, whether or not notation thereof is
made upon this Subclass B-1 Note. The Indenture also permits the Trustee to
agree, without the consent of any Noteholder, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of
the relevant Notes to correct a manifest error or an error which is of a
formal, minor or technical nature or (b) to modify the provisions of the
Indenture or the Administrative Agency Agreement relating to the timing of
movement of Rental Payments or other monies received or Expenses incurred among
the Accounts by the Administrative Agent.
The subordination provisions contained in Section 3.08, Section 3.09 and
Article X of the Indenture may not be amended or modified without the consent
of each Swap Provider, each provider of a Credit Facility, each Noteholder of
the subclass affected thereby and each Noteholder of any subclass of Notes
ranking senior thereto. In no event shall the provisions set forth in Section
3.08 of the Indenture relating to the priority of the Expenses, Swap Payments
and payments under all Credit Facilities be amended or modified.
147
B-1-21
The Indenture also contains provisions permitting the Holders of Notes
representing a majority of the Outstanding Principal Balance of the Senior
Class of Notes, on behalf of the Holders of all of the Subclass B-1 Notes, to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver shall be conclusive and binding upon all present and future
Holders of this Subclass B-1 Note and of any Subclass B-1 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass B-1 Note, whether or not notation of such consent or waiver is
made upon this Subclass B-1 Note.
The term "Issuer" as used in this Subclass B-1 Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Holders of
Subclass B-1 Notes under the Indenture.
The Subclass B-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Subclass B-1 Note shall in all respects be governed by, and construed
in accordance with, the laws of the State of New York, including all matters of
construction, validity and performance.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual or facsimile signature, this
Subclass B-1
148
B-1-22
Note shall not be entitled to any benefit under the indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Subclass B-1 Note to be
signed manually or by facsimile by its Signatory Trustee.
Date: ________________ XXXXXX XXXXXXX AIRCRAFT FINANCE
By:
Name:
Title: Signatory Trustee
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subclass B-1 Notes due March 15, 2023 designated above
and referred to in the within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely as Trustee
By:
Authorized Signatory
149
B-1-23
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
_______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: [Signature of Transferor]
NOTE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
[THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN
EXCHANGE NOTES AND PERMANENT
REGULATION S GLOBAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms
150
B-1-24
that without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date:
NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive
officer
151
EXHIBIT C
FORM OF SUBCLASS C-1 FIXED RATE NOTE
XXXXXX XXXXXXX AIRCRAFT FINANCE
6.90% SUBCLASS C-1 NOTE, Due March 15, 2023
No. ____ [CUSIP][ISIN][CCN]
$_________
XXXXXX XXXXXXX AIRCRAFT FINANCE, a business trust organized under the laws
of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of ________________________________ DOLLARS ($________) on March
15, 2023 (the "Final Maturity Date") and to pay interest monthly in arrears on
the Outstanding Principal Balance hereof at the rate of 6.90% per annum (the
"Stated Interest Rate") from the date hereof until the Outstanding Principal
Balance hereof is paid or duly provided for, payable on each Payment Date.
Interest on this Subclass C-1 Note for each Interest Accrual Period shall be
calculated on the basis of a 360-day year and one-twelfth of an annual interest
payment and, in the case of a payment other than on an Interest Payment Date,
on the basis of a 360-day year consisting of twelve 30-day months.
This Subclass C-1 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its "Subclass C-1 Notes, due March 15, 2023", issued
under the Trust Indenture dated as of March 3, 1998 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as indenture trustee (the "Trustee"). The Indenture also provides for
the issuance of Subclass A-1 and A-2 Notes, Subclass B-1 Notes and Subclass D-1
Notes (collectively, the "Initial Notes"). All capitalized terms used in this
Subclass C-1 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture
and all indentures supplemental thereto for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Subclass C-1 Noteholders. This Subclass C-1 Note is subject to all terms of
the Indenture.
The Issuer will redeem the Outstanding Principal Balance of this Subclass
C-1 Note prior to the Final Maturity Date on the Payment Dates and in the
amounts specified in the Indenture, subject to the availability of the
Available Collections Amount therefor after making payments entitled to
priority under Section 3.08 of the Indenture.
The Issuer may redeem all or part of the Outstanding Principal Balance of
this Subclass C-1 Note prior to the Final Maturity Date on the Payment Dates,
in the amounts and under the circumstances specified in the Indenture.
152
C-1-26
Other than in the case of a redemption for taxation reasons specified in
the Indenture, upon any redemption of any amount of the Outstanding Principal
Balance of this Subclass C-1 Note equal to the higher of (i) the discounted
value of the Scheduled Principal Payment Amounts and interest of this Subclass
C-1 Note from the Redemption Date to and including the Expected Final Payment
Date discounted at a rate equal to the Treasury Yield plus 0.5% and (ii) the
Outstanding Principal Balance thereof.
Any amount of Premium or interest on this Subclass C-1 Note that is not
paid when due shall, to the fullest extent permitted by applicable law, bear
interest at an interest rate per annum equal to the Stated Interest Rate from
the date when due until such amount is paid or duly provided for, payable on
the next succeeding Payment Date, subject to the availability of the Available
Collections Amount therefor after making payments entitled to priority under
Section 3.08 of the Indenture.
If an exchange offer (the "Exchange Offer") registered under the
Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to
resales of the Notes is not declared effective by the Commission, on or before
November 30, 1998 in accordance with the terms of the Registration Rights
Agreement dated as of March 3, 1998 between the Issuer and Xxxxxx Xxxxxxx & Co.
International Limited, thereafter an additional incremental interest amount
will accrue on each subclass of Notes, at an annual rate of 0.50%. Such
additional incremental interest amounts on the Notes will be payable in cash on
each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
The indebtedness evidenced by the Subclass C-1 Notes is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Claims (as defined in the
Indenture), and this Subclass C-1 Note is issued subject to such provisions.
Each Holder of this Subclass C-1 Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
The maturity of this Subclass C-1 Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture. The Subclass C-1 Noteholders shall not be permitted to deliver a
Default Notice or to exercise any remedy in respect of any such Event of
Default until all interest and principal on the Class A Notes and the Class B
Notes have been paid in full.
This Subclass C-1 Note is and will be secured, on a subordinated basis, by
the collateral pledged as security therefor as provided in the Security Trust
Agreement.
153
C-1-27
Subject to and in accordance with the terms of the Indenture, there will be
distributed monthly on each Payment Date commencing on April 15, 1998, to the
Person in whose name this Subclass C-1 Note is registered at the close of
business on the Record Date with respect to such Payment Date, in the manner
specified in Section 3.08 of the Indenture, such Person's pro rata share (based
on the aggregate percentage of the Outstanding Principal Balance of the Subclass
C-1 Notes held by such Person) of the aggregate amount distributable to all
Holders of Subclass C-1 Notes on such Payment Date.
All amounts payable in respect of this Subclass C-1 Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment. The
final payment with respect to this Subclass C-1 Note, however, shall be made
only upon presentation and surrender of this Note by the Noteholder or its agent
at the Corporate Trust Office or agency of the Trustee or Paying Agent specified
in the notice given by the Trustee or Paying Agent with respect to such final
payment. At such time, if any, as this Subclass C-1 Note is issued in the form
of one or more Definitive Notes, payments on a Payment Date shall be made by
check mailed to each Noteholder of such a Definitive Note on the applicable
Record Date at its address appearing on the Register maintained with respect to
Subclass C-1 Notes. Alternatively, upon application in writing to the Trustee,
not later than the applicable Record Date, by a Noteholder of one or more
Definitive Notes of Subclass C-1 having an aggregate principal amount of not
less than $1,000,000, any such payments shall be made by wire transfer to an
account designated by such Noteholder at a financial institution in New York,
New York. The final payment with respect to any such Definitive Note, however,
shall be made only upon presentation and surrender of such Definitive Note by
the Noteholder or its agent at the Corporate Trust Office or agency of the
Trustee or Paying Agent specified in the notice of such final payment given by
the Trustee or Paying Agent. Any reduction in the principal amount of this
Subclass C-1 Note (or any one or more predecessor Subclass C-1 Notes) effected
by any payments made on any Payment Date shall be binding upon all future
Holders of this Subclass C-1 Note and of any Subclass C-1 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass C-1 Note, whether or not noted hereon.
The Holder of this Subclass C-1 Note agrees, by acceptance hereof, to pay
over to the Administrative Agent any money (including principal, Premium and
interest) paid to it in respect of this Subclass C-1 Note in the event that the
Administrative Agent, acting in good faith, determines subsequently that such
monies were not paid in accordance with the priority of payment provisions of
the Indenture or as a result of any other mistake of fact or law on the part of
the Administrative Agent in making such payment.
This Subclass C-1 Note is issuable only in registered form. A Holder may
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. When this Subclass C-1 Note
is presented to the Registrar with a request to register the transfer or to
154
C-1-28
exchange it for an equal principal amount of Subclass C-1 Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder). No service charge
shall be made for any registration of transfer or exchange of this Subclass C-1
Note, but the party requesting such new Note or Notes may be required to pay a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
Prior to the registration of transfer of this Subclass C-1 Note, the
Issuer and the Trustee may deem and treat the Person in whose name this
Subclass C-1 Note (as of the day of determination or as of such other date as
may be specified in the Indenture) is registered as the absolute owner and
Holder hereof for the purpose of receiving payment of all amounts payable with
respect to this Subclass C-1 Note and for all other purposes, and neither the
Issuer nor the Trustee shall be affected by notice to the contrary.
The Indenture permits the amendment or modification of the Indenture and
the Subclass C-1 Notes by the Issuer with the consent of the Holders of a
majority of the Outstanding Principal Balance of all Notes on the date of any
vote of such Holders (voting as a single class); provided that, without the
consent of each Swap Provider and each Holder of any Notes affected thereby, no
such amendment may (i) modify the provisions of the Indenture and the Notes
setting forth the frequency or the currency of payment of, the maturity of, or
the method of calculation of the amount of, any interest, principal and
Premium, if any, payable in respect of such subclass of Notes, (ii) reduce the
percentage of the aggregate Outstanding Principal Balance of any subclass of
Notes required to approve any amendment or waiver of Section 9.01 of the
Indenture or (iii) alter the manner or priority of payment of any subclass of
Notes (each, a "Basic Terms Modification"). Any such amendment or modification
shall be binding on every Holder hereof, whether or not notation thereof is
made upon this Subclass C-1 Note. The Indenture also permits the Trustee to
agree, without the consent of any Noteholder, (a) to any modification (other
than a Basic Terms Modification) of, or the waiver or authorization of any
breach or prospective breach of, any provision of any Related Document or of
the relevant Notes to correct a manifest error or an error which is of a
formal, minor or technical nature or (b) to modify the provisions of the
Indenture or the Administrative Agency Agreement relating to the timing of
movement of Rental Payments or other monies received or Expenses incurred among
the Accounts by the Administrative Agent.
The subordination provisions contained in Section 3.08, Section 3.09 and
Article X of the Indenture may not be amended or modified without the consent
of each Swap Provider, each provider of a Credit Facility, each Noteholder of
the subclass affected thereby and each Noteholder of any subclass of Notes
ranking senior thereto. In no event shall the provisions set forth in Section
3.08 of the Indenture relating to the priority of the Expenses, Swap Payments
and payments under all Credit Facilities be amended or modified.
155
C-1-29
The Indenture also contains provisions permitting the Holders of Notes
representing a majority of the Outstanding Principal Balance of the Senior
Class of Notes, on behalf of the Holders of all of the Subclass C-1 Notes, to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver shall be conclusive and binding upon all present and future
Holders of this Subclass C-1 Note and of any Subclass C-1 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass C-1 Note, whether or not notation of such consent or waiver is
made upon this Subclass C-1 Note.
The term "Issuer" as used in this Subclass C-1 Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Holders of
Subclass C-1 Notes under the Indenture.
The Subclass C-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Subclass C-1 Note shall in all respects be governed by, and construed
in accordance with, the laws of the State of New York, including all matters of
construction, validity and performance.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual or facsimile signature, this
Subclass C-1
156
C-1-30
Note shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Subclass C-1 Note to be
signed manually or by facsimile by its Signatory Trustee.
Date: ______________ XXXXXX XXXXXXX AIRCRAFT FINANCE
By: __________________________
Name:
Title: Signatory Trustee
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subclass C-1 Notes due March 15, 2023 designated above
and referred to in the within-mentioned Indenture.
Date: ____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely
as trustee
By: __________________________
Authorized Signatory
157
C-1-31
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
_______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: [Signature of Transferor]
NOTE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
[THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN
EXCHANGE NOTES AND PERMANENT
REGULATION S GLOBAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms
158
C-1-32
that without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the Indenture shall have
been satisfied.
Date:
NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive officer
159
EXHIBIT D
FORM OF SUBCLASS D-1 FIXED RATE NOTE
XXXXXX XXXXXXX AIRCRAFT FINANCE
8.70% SUBCLASS D-1 NOTE, Due March 15, 2023
NO. ____ [CUSIP][ISIN][CCN]
$________
XXXXXX XXXXXXX AIRCRAFT FINANCE, a business trust organized under the laws
of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of ______________________________________ DOLLARS ($_________) on
March 15, 2023 (the "Final Maturity Date") and to pay interest monthly in
arrears on the Outstanding Principal Balance hereof at the rate of 8.70% per
annum (the "Stated Interest Rate") from the date hereof until the Outstanding
Principal Balance hereof is paid or duly provided for, payable on each Payment
Date. Interest on this Subclass D-1 Note for each Interest Accrual Period
shall be calculated on the basis of a 360-day year and one-twelfth of an annual
interest payment and, in the case of a payment other than on an Interest
Payment Date, on the basis of a 360-day year consisting of twelve 30-day
months.
This Subclass D-1 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its "Subclass D-1 Notes, due March 15, 2023", issued
under the Trust Indenture dated as of March 3, 1998 (as amended or supplemented
from time to time, the "Indenture"), between the Issuer and Bankers Trust
Company, as indenture trustee (the "Trustee"). The Indenture also provides for
the issuance of Subclass A-1 and A-2 Notes, Subclass B-1 Notes and Subclass C-1
Notes (collectively, the "Initial Notes"). All capitalized terms used in this
Subclass D-1 Note and not defined herein shall have the respective meanings
assigned to such terms in the Indenture. Reference is made to the Indenture
and all indentures supplemental thereto for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Subclass D-1 Noteholders. This Subclass D-1 Note is subject to all terms of
the Indenture.
The Issuer will redeem the Outstanding Principal Balance of this Subclass
D-1 Note prior to the Final Maturity Date on the Payment Dates and in the
amounts specified in the Indenture, subject to the availability of the
Available Collections Amount therefor after making payments entitled to
priority under Section 3.08 of the Indenture.
The Issuer may redeem all or part of the Outstanding Principal Balance of
this Subclass D-1 Note prior to the Final Maturity Date on the Payment Dates,
in the
160
D-1-34
amounts and under the circumstances specified in the Indenture.
Other than in the case of a redemption for taxation reasons specified in
the Indenture, upon any redemption of any amount of the Outstanding Principal
Balance of this Subclass D-1 Note (i) prior to March 15, 2003, such amount
shall be redeemed at a Redemption Price equal to the higher of (A) the
discounted present value of the Scheduled Principal Payment Amounts and
interest from the Redemption Date to, but not including, March 15, 2003, plus
the product of the Redemption Premium applicable thereto and the scheduled
Outstanding Principal Balance thereof on March 15, 2003, discounted at a rate
equal to the Treasury Yield plus 1% and (B) the Outstanding Principal Balance
thereof and (ii) on or after March 15, 2003, such amount shall be redeemed at a
Redemption Price equal to the product of the Redemption Premium applicable
thereto and the Outstanding Principal Balance thereof.
Any amount of Premium or interest on this Subclass D-1 Note that is not
paid when due shall, to the fullest extent permitted by applicable law, bear
interest at an interest rate per annum equal to the Stated Interest Rate from
the date when due until such amount is paid or duly provided for, payable on
the next succeeding Payment Date, subject to the availability of the Available
Collections Amount therefor after making payments entitled to priority under
Section 3.08 of the Indenture.
If an exchange offer (the "Exchange Offer") registered under the
Securities Act is not consummated and a shelf registration statement (the
"Shelf Registration Statement") under the Securities Act with respect to
resales of the Notes is not declared effective by the Commission, on or before
November 30, 1998 in accordance with the terms of the Registration Rights
Agreement dated as of March 3, 1998 between the Issuer and Xxxxxx Xxxxxxx & Co.
International Limited, thereafter an additional incremental interest amount
will accrue on each subclass of Notes, at an annual rate of 0.50%. Such
additional incremental interest amounts on the Notes will be payable in cash on
each Payment Date until the Exchange Offer is consummated or the Shelf
Registration Statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
The indebtedness evidenced by the Subclass D-1 Notes is, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Claims (as defined in the
Indenture), and this Subclass D-1 Note is issued subject to such provisions.
Each Holder of this Subclass D-1 Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
The maturity of this Subclass D-1 Note is subject to acceleration upon the
occurrence and during the continuance of the Events of Default specified in the
Indenture. The Subclass D-1 Noteholders shall not be permitted to deliver a
Default Notice or to
161
D-1-35
exercise any remedy in respect of any such Event of Default until all interest
and principal on the Class A Notes, the Subclass B Notes and the Class C Notes
have been paid in full.
This Subclass D-1 Note is and will be secured, on a subordinated basis, by
the collateral pledged as security therefor as provided in the Security Trust
Agreement.
Subject to and in accordance with the terms of the Indenture, there will
be distributed monthly on each Payment Date commencing on April 15, 1998, to
the Person in whose name this Subclass D-1 Note is registered at the close of
business on the Record Date with respect to such Payment Date, in the manner
specified in Section 3.08 of the Indenture, such Person's pro rata share (based
on the aggregate percentage of the Outstanding Principal Balance of the
Subclass D-1 Notes held by such Person) of the aggregate amount distributable
to all Holders of Subclass D-1 Notes on such Payment Date.
All amounts payable in respect of this Subclass D-1 Note shall be payable
in U.S. dollars in immediately available funds in the manner provided in the
Indenture to the Holder hereof on the Record Date relating to such payment.
The final payment with respect to this Subclass D-1 Note, however, shall be
made only upon presentation and surrender of this Note by the Noteholder or its
agent at the Corporate Trust Office or agency of the Trustee or Paying Agent
specified in the notice given by the Trustee or Paying Agent with respect to
such final payment. At such time, if any, as this Subclass D-1 Note is issued
in the form of one or more Definitive Notes, payments on a Payment Date shall
be made by check mailed to each Noteholder of such a Definitive Note on the
applicable Record Date at its address appearing on the Register maintained with
respect to Subclass D-1 Notes. Alternatively, upon application in writing to
the Trustee, not later than the applicable Record Date, by a Noteholder of one
or more Definitive Notes of Subclass D-1 having an aggregate principal amount
of not less than $1,000,000, any such payments shall be made by wire transfer
to an account designated by such Noteholder at a financial institution in New
York, New York. The final payment with respect to any such Definitive Note,
however, shall be made only upon presentation and surrender of such Definitive
Note by the Noteholder or its agent at the Corporate Trust Office or agency of
the Trustee or Paying Agent specified in the notice of such final payment given
by the Trustee or Paying Agent. Any reduction in the principal amount of this
Subclass D-1 Note (or any one or more predecessor Subclass D-1 Notes) effected
by any payments made on any Payment Date shall be binding upon all future
Holders of this Subclass D-1 Note and of any Subclass D-1 Note issued upon the
registration of transfer of, in exchange or in lieu of or upon the refinancing
of this Subclass D-1 Note, whether or not noted hereon.
The Holder of this Subclass D-1 Note agrees, by acceptance hereof, to pay
over to the Administrative Agent any money (including principal, Premium and
interest) paid to it in respect of this Subclass D-1 Note in the event that the
Administrative Agent, acting in good faith, determines subsequently that such
monies were not paid in accordance with the priority of payment provisions of
the Indenture or as a result of any other mistake of fact or law on the part of
the Administrative Agent in making such payment.
This Subclass D-1 Note is issuable only in registered form. A Holder may
162
D-1-36
transfer this Note only by written application to the Registrar stating the name
of the proposed transferee and otherwise complying with the terms of the
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. When this Subclass D-1 Note
is presented to the Registrar with a request to register the transfer or to
exchange it for an equal principal amount of Subclass D-1 Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including, in the case of a transfer, that such Note is duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney who
is authorized in writing to act on behalf of the Holder). No service charge
shall be made for any registration of transfer or exchange of this Subclass D-1
Note, but the party requesting such new Note or Notes may be required to pay a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith.
Prior to the registration of transfer of this Subclass D-1 Note, the Issuer
and the Trustee may deem and treat the Person in whose name this Subclass D-1
Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the absolute owner and Holder
hereof for the purpose of receiving payment of all amounts payable with respect
to this Subclass D-1 Note and for all other purposes, and neither the Issuer nor
the Trustee shall be affected by notice to the contrary.
The Indenture permits the amendment or modification of the Indenture and
the Subclass D-1 Notes by the Issuer with the consent of the Holders of a
majority of the Outstanding Principal Balance of all Notes on the date of any
vote of such Holders (voting as a single class); provided that, without the
consent of each Swap Provider and Holder of any Notes affected thereby, no such
amendment may (i) modify the provisions of the Indenture and the Notes setting
forth the frequency or the currency of payment of, the maturity of, or the
method of calculation of the amount of, any interest, principal and Premium, if
any, payable in respect of such subclass of Notes, (ii) reduce the percentage of
the aggregate Outstanding Principal Balance of any subclass of Notes required to
approve any amendment or waiver of Section 9.01 of the Indenture or (iii) alter
the manner or priority of payment of any subclass of Notes (each, a "Basic Terms
Modification"). Any such amendment or modification shall be binding on every
Holder hereof, whether or not notation thereof is made upon this Subclass D-1
Note. The Indenture also permits the Trustee to agree, without the consent of
any Noteholder, (a) to any modification (other than a Basic Terms Modification)
of, or the waiver or authorization of any breach or prospective breach of, any
provision of any Related Document or of the relevant Notes to correct a manifest
error or an error which is of a formal, minor or technical nature or (b) to
modify the provisions of the Indenture or the Administrative Agency Agreement
relating to the timing of movement of Rental Payments or other monies received
or Expenses incurred among the Accounts by the Administrative Agent.
The subordination provisions contained in Section 3.08, Section 3.09 and
Article X of the Indenture may not be amended or modified without the consent of
each
163
D-1-37
Swap Provider, each provider of a Credit Facility, each Noteholder of the
subclass affected thereby and each Noteholder of any subclass of Notes ranking
senior thereto. In no event shall the provisions set forth in Section 3.08 of
the Indenture relating to the priority of the Expenses, Swap Payments and
payments under all Credit Facilities be amended or modified.
The Indenture also contains provisions permitting the Holders of Notes
representing a majority of the Outstanding Principal Balance of the Senior Class
of Notes, on behalf of the Holders of all of the Subclass D-1 Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon all present and future Holders of
this Subclass D-1 Note and of any Subclass D-1 Note issued upon the registration
of transfer of, in exchange or in lieu of or upon the refinancing of this
Subclass D-1 Note, whether or not notation of such consent or waiver is made
upon this Subclass D-1 Note.
The term "Issuer" as used in this Subclass D-1 Note includes any successor
to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Trustee and the Holders of
Subclass D-1 Notes under the Indenture.
The Subclass D-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Subclass D-1 Note shall in all respects be governed by, and construed
in accordance with, the laws of the State of New York, including all matters of
construction, validity and performance.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual or facsimile signature, this Subclass
X-0
000
X-0-00
Note shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Subclass D-1 Note to be
signed manually or by facsimile by its Signatory Trustee.
Date: _____________ XXXXXX XXXXXXX AIRCRAFT FINANCE
By: __________________________
Name:
Title: Signatory Trustee
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subclass D-1 Notes due March 15, 2023 designated above
and referred to in the within-mentioned Indenture.
Date: _____________ BANKERS TRUST COMPANY, not in its
individual capacity but solely
as Trustee
By: __________________________
Authorized Signatory
165
D-1-39
[FORM OF] TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. __________________
_______________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ______________________________ attorney to transfer said Note on the
books of the Issuer with full power of substitution in the premises.
Date: [Signature of Transferor]
NOTE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
[THE FOLLOWING PROVISIONS TO BE
INCLUDED ON ALL NOTES OTHER THAN
EXCHANGE NOTES AND PERMANENT
REGULATION S GLOBAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(K)
under the Securities Act, the undersigned confirms
166
D-1-40
that without utilizing any general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.13 of the indenture shall have
been satisfied.
Date:
NOTICE: The signature to this assignment must
correspond with the name as written upon the face of
the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
NOTICE: To be executed by an executive
officer
167
EXHIBIT E
CONCENTRATION LIMITS
Percentage of Most
Recent Appraised
Lessee Concentration Limits Value of Portfolio (1)
--------------------------- ----------------------
Single Lessee rated BBB/Baa2 (or the equivalent) or better 15%
Other single Lessees...................................... 10%
Five largest Lessees...................................... 35%
Percentage of Most
Recent Appraised
Country Concentration Limits Value of Portfolio
---------------------------- --------------------
United States............................................. 25%
Countries rated BBB/Baa2 (or the equivalent) or better (2) 20%
Other..................................................... 15%
Percentage of Most
Recent Appraised
Region Concentration Limits Value of Portfolio (1)
--------------------------- ----------------------
Developed Market Region (3)............................... 50%
Emerging Market Region (3)................................ 25%
Other (3)................................................. 20% (4)
Asia/Pacific (3).......................................... 55%
---------------
(1) Percentage to be obtained by dividing the aggregate most recent Appraised
Values of all Aircraft leased or to be leased to Lessees habitually based
in the applicable country by the aggregate most recent Appraised Values of
all Aircraft then owned by MSAF Group and any future MSAF Group member.
(2) Based on the sovereign foreign currency debt rating assigned by the
Rating Agencies to the country in which a Lessee is habitually based at
the time the relevant Lease is executed.
(3) The designations of Emerging Markets and Developed Markets are as
determined and published by Capital International Perspective S.A. from
time to time based on, among other things, gross domestic product levels,
regulation of foreign ownership of assets, the regulatory environment,
exchange controls and perceived investment risk. Asia/Pacific represents
the aggregate of the Aircraft leased to Lessees habitually based in the
Asia area of the Emerging Market Region and the Pacific area of the
Developed Market Region. The current designations are as set out below:
Region Country
------ -------
DEVELOPED MARKETS
Europe.......... European Union (except Greece and Luxembourg), Norway
and Switzerland
North America... Canada and United States
Pacific......... Australia, Hong Kong, Japan, New Zealand and Singapore
EMERGING MARKETS
168
Asia................... China, India, Indonesia, Korea, Malaysia, Pakistan,
Philippines, Sri Lanka, Taiwan and Thailand
Europe and Middle East. Czech Republic, Greece, Hungary, Israel, Jordan,
Poland, Russia and Turkey
Latin America.......... Xxxxxxxxx, Xxxxxx, Xxxxx, Xxxxxxxx, Xxxxxx, Xxxx and
Venezuela
OTHER
All other countries (generally those that have small or under-developed capital
markets, including Iceland, Fiji and Guyana)
(4) In addition, within the Other designation, no more than 10% of the most
recent Appraised Value of the Portfolio shall be leased to Lessees
habitually based in "Other" countries rated below BBB/Baa2 (or the
equivalent) and no more than 5% of the most recent Appraised Value of the
Portfolio shall be leased to Lessees habitually based in "Other" countries
in Africa.
PRI Guidelines
(a) Prohibited Countries:
Burma
Cuba
Iran
Iraq
Libya
North Korea
Sudan
Syria
(b) Countries with respect to which PRI must be procured:
Angola Congo Mongolia
Armenia Equatorial Guinea Niger
Azerbaijan Eritrea Sao Tome & Principe
Belarus Ethiopia Somalia
Benin Grenada Sudan
Bhutan Kazakhstan Syria
Cameroon Kirbati Turkmenistan
Cape Verde Islands Kyrgistan Uzbekistan
Chad Liberia
Comoros Moldova
169
EXHIBIT F
AGENTS FOR SERVICE OF PROCESS
Party Jurisdiction Appointed Agent
----- ------------ ---------------
Xxxxxx Xxxxxxx Delaware Wilmington Trust Company
Aircraft Finance 0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx
00000-0000
U.S.A.
Bankers Trust Company New York Bankers Trust Company
0 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
U.S.A.
170
EXHIBIT G
INSURANCE PROVISIONS
Model Minimum Limits
------ --------------
ATP/ATR/Dash-8/RI/F50/F70 US$200 million
HS146/AVRO/F28/F100 US$300 million
B727/B737/A320/MD80/DC9 US$350 million
DC8/A310 US$450 million
B757/B767/A300 US$500 million
L1011/DC10/A330/A340/MD11/B777 US$600 million
B747 US$750 million
171
EXHIBIT H
FORM OF MONTHLY REPORT TO THE ISSUER
AND EACH RATING AGENCY
(i) With respect to each Payment Date,
A. The balances on deposit on the
Calculation Date immediately preceding the prior
Payment Date;
B. The aggregate amounts of deposits
and withdrawals between such Calculation Date and the
Calculation Date immediately preceding such Payment
Date; and
C. The balances on deposit in the
Expense Account, Collection Account and Lessee Funded
Account on the Calculation Date immediately preceding
such Payment Date.
(ii) Analysis of Expense Account Activity
Balance on the preceding Calculation Date
Net Transfer to the Expense Account from the Collection
Account during the period between prior Calculation Date and
the relevant Calculation Date
Payments during the period between the prior Calculation
Date and the relevant Calculation Date:
(1) Payments on prior Payment Date;
(2) Other payments;
Balance on the relevant Calculation Date
(iii) Analysis of Collection Account Activity
Balance on the preceding Calculation Date;
- Required Expense Amount (including
on preceding Payment Date);
- Net Transfer to Lessee Funded Account during period;
- Collections during period;
- Transfer from the Aircraft Purchase Account;
- Drawings under Credit Facilities;
- Aggregate Note Payments;
- Swap Payments;
- Repayments of drawings under credit or liquidity
172
enhancement facilities;
Balance on relevant Calculation Date
(separately stating components of the Liquidity
Reserve Amount)
Analysis of current Payment Date distributions
(iv) Payments on the Notes
(a) Floating Rate Notes (by class and, if applicable,
subclass)
- Applicable LIBOR for the current Interest Accrual Period;
- Applicable Margin for the current Interest Accrual Period;
- Applicable Interest Rate for current Interest Accrual
Period;
- Interest Amount Payable;
- Step-Up Interest;
- Opening Outstanding Principal Balance;
- Minimum Principal Payment Amount;
- Scheduled Principal Payment Amount;
- Supplemental Principal Payment Amount;
- Redemption Amount;
- amount allocable to principal;
- amount allocable to Premium;
- Closing Outstanding Principal Balance;
(b) Fixed Rate Notes (by class and, if applicable, subclass)
- Applicable Interest Rate;
- Interest Amount Payable;
- Opening Outstanding Principal Balance;
- Minimum Principal Payment Amount;
- Scheduled Principal Payment Amount;
- Redemption Amount
- amount allocable to principal;
- amount allocable to Premium;
- Closing Outstanding Principal Balance;
(v) Floating Rate Note information for next Interest
Accrual Period (by subclass):
Applicable LIBOR;
Applicable Margin;
Applicable Interest Rate
(vi) Payments per $100,000 Initial Outstanding
Principal Balance of Notes (by subclass):
Opening Outstanding Principal Balance;
Total Principal Payments;
173
Closing Outstanding Principal Balance;
Total Interest;
Total Premium
174
EXHIBIT I
FORM OF CERTIFICATE
__________________ , _____
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency Group
Xxxxxx Xxxxxxx Aircraft Finance
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Re: Xxxxxx Xxxxxxx Aircraft Finance (the "Issuer")
Subclass o Notes
Dear Sirs:
This letter relates to U.S. $ principal amount of Subclass
o Notes of the Issuer represented by a Subclass o Note which bears a legend
(the "Legended Note") outlining restrictions upon transfer of such Legended
Note. Pursuant to Section 2.01 of the Indenture dated as of March 3, 1998 (the
"Indenture") relating to the Subclass o Notes and certain other subclasses of
notes, we hereby certify that we are (or we will hold such securities on behalf
of) a person outside the United States to whom the Subclass o Notes may be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended ("Regulation S"). Accordingly, you are
hereby requested to exchange the legended certificate for an unlegended
certificate representing an identical principal amount of Subclass o Notes, all
in the manner provided for in the Indenture.
Each of you is entitled to rely upon this letter and is irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Holder]
By: ________________________
Authorized Signature
175
EXHIBIT J
FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S
Bankers Trust Company ---------,-----
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency Group
Xxxxxx Xxxxxxx Aircraft Finance
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Re: Xxxxxx Xxxxxxx Aircraft Finance (the "Issuer")
Subclass o Notes
Dear Sirs:
In connection with our proposed sale of U.S.$ aggregate
principal amount of the Subclass o Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended ("Regulation S") and, accordingly, we represent that:
(1) the offer of the Subclass o Notes was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
Each of you is entitled to rely upon this letter and is irrevocably
authorized
176
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_________________
Authorized Signature
177
EXHIBIT K
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
, 1998
Xxxxxx Xxxxxxx Aircraft Finance
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
ABN AMRO Bank N.V.
Chase Manhattan International Limited
Credit Suisse First Boston (Europe) Limited
Credit Commerciale de France
Barclays de Zoete Wedd Limited
Dresdner Bank AG London Branch
Nikko Europe Plc
Tokyo -- Mitsubishi International plc
As Initial Purchasers in connection with the
Offering Memorandum referred to below
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Ladies and Gentlemen:
In connection with our proposed purchase of Notes due 2023 (the "Notes")
of Xxxxxx Xxxxxxx Aircraft Finance (the "Issuer"), we confirm that:
1. We have received a copy of the Offering Memorandum dated February 20,
1998 (the "Offering Memorandum") relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled "Purchasers' Representations and Transfer Restrictions" of such
Offering Memorandum and the restrictions on duplication and circulation of such
Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Offering Memorandum under
"Purchasers'
178
Representations and Transfer Restrictions" and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, that the Notes will only be in the form of
definitive physical certificates and that the Notes may not be offered or sold
except as permitted in the following sentence. We agree, on our own behalf and
on behalf of any accounts for which we are acting as hereinafter stated, that
if we should sell any Notes in the future, we will do so only (1) (A) to the
Issuer or any subsidiary thereof, (B) in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined therein), (C)
to an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes to the Trustee (as defined in the Indenture) a signed
letter containing certain representations and agreements relating to the
restrictions on transfer of the Notes (the form of which letter can be obtained
from the Trustee) and, if such transfer is in respect of an aggregate principal
amount of Notes of less than $250,000, an opinion of counsel acceptable to the
Issuer that such transfer is in compliance with the Securities Act, (D) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available) or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing any of the Notes from us a notice advising
such purchaser that resales of the Notes are restricted as stated herein and
(2) in each case, in accordance with any applicable securities laws of any
state in the United States or any other applicable jurisdiction and in
accordance with the legend to be set forth in the Notes, which will reflect the
substance of this paragraph.
4. We understand that, on any proposed resale of any Notes, we will be
required to furnish to the Issuer and the Trustee such certifications, legal
opinions and other information as the Issuer and the Trustee may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risks of our or their investment.
6. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
7. We are not acquiring the Notes with a view to distribution thereof or
with any present intention of offering or selling the Notes, except as
permitted above, provided that the disposition of our property and property of
any accounts for which we are acting as fiduciary shall remain at all times
within our control.
179
You, the Issuer and the Trustee are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
By:_________________
Name:
Title:
180
EXHIBIT L
CORE LEASE PROVISIONS
1. Representations and Warranties, etc.
representations and warranties or a legal opinion or such other comfort
acceptable to the lessor as to, without limitation, the due execution of
such lease by the related lessee and the validity of such lessee's
obligations thereunder, due authorization of such lease and procurement
of relevant licenses and permits in connection therewith;
2. Subleasing
permission to sublease only if the primary lessee thereunder remains
obligated to make payments on such primary lease, except with respect to
the specific classes of sublessees and under the specific conditions
provided in such lease;
3. Permitted Encumbrances
provisions requiring the lessee not to create any Encumbrances in
respect of the aircraft or the related engines, except for exceptions
thereto consistent with the reasonable commercial practices of leading
international aircraft operating lessors, including Encumbrances not
affecting the use or operation of the aircraft arising in the ordinary
course of the lessee's business;
4. No Right to Sell
the lease shall not permit a lessee to sell any aircraft except, with
respect to an aircraft the subject of a purchase option, pursuant to an
agreement entered into by such lessee prior to the exercise of such
purchase option to sell or otherwise transfer ownership of such aircraft
upon the exercise of such purchase option;
5. Events of Loss
provisions stipulating that the lease will terminate in the event of a
Total Loss of the relevant aircraft;
6. Return of Aircraft
provisions for redelivery of the relevant aircraft, including, if
applicable, replacement engines and parts, on expiry or termination of
the lease (other than any expiration or termination coincident with the
purchase of the
181
relevant aircraft pursuant to exercise of a purchase option by the
relevant lessee or in cases in which such lease provides for retention
of the relevant Aircraft by the lessee or for delivery to a third
party), specifying the required return condition and any obligation
upon the lessee to remedy or compensate the lessor, directly or
indirectly, for any material deviations from such return condition, in
each case considering the other terms of the relevant lease and to the
extent consistent with the reasonable commercial practices of leading
international aircraft operating lessors;
7. Termination Events
provisions setting forth the conditions under which the lessor may
terminate a lease and repossess the relevant aircraft, at any time after
the expiration of any agreed grace period or remedy period, in each case
consistent with the reasonable commercial practices of leading
international aircraft operating lessors;
8. Assignment
provisions prohibiting the assignment of any benefits or obligations
under the lease to any Person, subject to exceptions consistent with the
reasonable commercial practices of leading international aircraft
operating lessors;
9. Disclaimer of Conditions or Warranty
provisions acknowledging that when the Lessee gives formal notice of
acceptance of the relevant aircraft, it takes delivery of such aircraft
with no condition, warranty or representation of any kind having been
given by or on behalf of the lessor in respect of such aircraft, except
as to matters expressly set forth in the lease;
10. Net Lease
provisions stating the Lessee's obligation to make rental payments is
absolute and unconditional under any and all circumstances and
regardless of other events or similar provisions.
