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Exhibit 10.3
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SERVICING AGREEMENT
between
GE CAPITAL AVIATION SERVICES, LIMITED,
and
AIRCRAFT FINANCE TRUST
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TABLE OF CONTENTS
(Not part of Agreement)
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions....................................................1
SECTION 1.02. Construction and Usage.........................................1
ARTICLE II
APPOINTMENT; SERVICES
SECTION 2.01. Appointment....................................................1
SECTION 2.02. Aircraft Asset Services........................................4
SECTION 2.03. Notes Offerings................................................6
SECTION 2.04. Compliance with Applicable Laws and GE Policies................14
SECTION 2.05. Limitations....................................................16
ARTICLE III
STANDARD OF CARE; CONFLICTS OF INTEREST; STANDARD OF LIABILITY
SECTION 3.01. Standard of Care...............................................18
SECTION 3.02. Conflicts of Interest..........................................18
SECTION 3.03. Standard of Liability..........................................20
SECTION 3.04. Waiver of Implied Standard.....................................21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Aircraft Assets................................................22
SECTION 4.02. Aircraft Assets Related Documents..............................22
SECTION 4.03. Accounts and Cash Flow.........................................23
SECTION 4.04. Organization and Standing......................................23
SECTION 4.05. Authority......................................................23
SECTION 4.06. No Conflicts...................................................24
SECTION 4.07. Compliance with Applicable Laws................................25
SECTION 4.08. Litigation; Decrees............................................25
SECTION 4.09. Appointments...................................................25
SECTION 4.11. No Conflicts...................................................26
SECTION 4.12. Compliance with Applicable Laws of Ireland.....................27
ARTICLE V
SERVICER UNDERTAKINGS
SECTION 5.01. Access.........................................................27
SECTION 5.02. Compliance with Law............................................27
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SECTION 5.03. Commingling....................................................27
SECTION 5.04. Restrictions on Exercise of Certain Rights.....................27
SECTION 5.05. Coordination with AFT..........................................28
ARTICLE VI
UNDERTAKINGS OF AFT
SECTION 6.01. Cooperation....................................................28
SECTION 6.02. No Representation with Respect to Third Parties................28
SECTION 6.03. Related Document Amendments....................................28
SECTION 6.04. Other Aircraft.................................................29
SECTION 6.05. Communications.................................................29
SECTION 6.06. Ratification...................................................29
SECTION 6.07. Additional Aircraft Assets.....................................29
SECTION 6.08. Execution, Amendment, Modification or Termination of
Aircraft Assets Related Documents........................30
SECTION 6.09. Access to AFT Group Information................................31
SECTION 6.10. AFT Group Accounts and Cash Arrangements.......................31
SECTION 6.11. Notification of Bankruptcy.....................................32
SECTION 6.12. Further Assurances.............................................32
SECTION 6.13. Guarantees.....................................................32
SECTION 6.14. Transfers of Funds.............................................33
ARTICLE VII
AFT GROUP RESPONSIBILITY
SECTION 7.01. AFT Group Responsibility.......................................33
SECTION 7.02. Performance with Respect to Aircraft Assets....................33
SECTION 7.03. Lease Operating Budget; Aircraft Asset Expenses Budget.........34
SECTION 7.04. Transaction Approval Requirements..............................36
SECTION 7.05. Approved Budgets and Transaction Approval Requirements.........39
ARTICLE VIII
EFFECTIVENESS
SECTION 8.01. Effectiveness..................................................39
ARTICLE IX
SERVICING FEES; EXPENSES; TAXES; PRIORITY OF SERVICING FEES
SECTION 9.01. Servicing Fees; UniCapital Serviced Aircraft...................39
SECTION 9.02. Monthly Base Fee...............................................41
SECTION 9.03. Rent Fees......................................................41
SECTION 9.04. Sales Fee......................................................43
SECTION 9.05. Additional Servicing Fees......................................43
SECTION 9.06. Expenses.......................................................45
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SECTION 9.07. Taxes .........................................................46
SECTION 9.08. Priority of Payments to Servicer...............................50
ARTICLE X
TERM; RIGHT TO TERMINATE; RESIGNATION; CONSEQUENCES OF EXPIRATION,
TERMINATION, RESIGNATION OR REMOVAL; CERTAIN TAX MATTERS; SURVIVAL
SECTION 10.01. Term .........................................................51
SECTION 10.02. Right to Terminate............................................51
SECTION 10.03. Resignation or Removal........................................56
SECTION 10.04. Consequences of Expiration, Termination, Resignation or
Removal..................................................58
SECTION 10.05. Survival......................................................60
ARTICLE XI
INDEMNIFICATION
SECTION 11.01. Indemnity.....................................................61
SECTION 11.02. Procedures for Defense of Claims..............................62
SECTION 11.03. Reimbursement of Costs........................................63
SECTION 11.04. Waiver of Certain Claims; Special Indemnity...................63
SECTION 11.05. Waiver of Certain Accounting Claims; Special Indemnity........64
SECTION 11.06. Waiver of Year 2000 Claims; Special Indemnity.................64
SECTION 11.07. Continuing Liability under Other Agreements...................65
ARTICLE XII
ASSIGNMENT AND DELEGATION
SECTION 12.01. Assignment and Delegation.....................................66
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Documentary Conventions.......................................66
SECTION 13.02. Power of Attorney.............................................67
SECTION 13.03. Reliance......................................................67
SECTION 13.04. Year 2000 Readiness Disclosure................................67
SECTION 13.05. Certain Information...........................................67
SECTION 13.06. Original Aircraft.............................................68
SECTION 13.07. UniCapital Aircraft...........................................69
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Schedules
Schedule 2.02(a) Aircraft Assets Services
Schedule 2.02(a)(i) Applicable Indenture Covenants
Schedule 2.02(a)(ii) Form of Officer's Certificate
Schedule 4.01 Aircraft Assets
Schedule 4.02 Aircraft Assets Related Documents
Schedule 4.03 Bank Accounts
Schedule 4.04(a) List of Persons within the AFT Group and
Jurisdictions
Schedule 7.01 Responsibilities of AFT Group
Schedule 7.04 Liabilities Incurred in Ordinary
Course of Business
Schedule 8.01 Conditions to Execution
Schedule 9.06(a) Overhead Expenses
Schedule 9.06(b) Aircraft Asset Expenses
Schedule 13.02 Power of Attorney
Annexes
Annex 1 Insurance Guidelines
Annex 2 Concentration Limits
Appendices
Appendix A Construction and Usage; Definitions
Appendix B Form of Guarantee
Appendix C Notices
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SERVICING AGREEMENT dated as of May 5, 1999, between GE CAPITAL
AVIATION SERVICES, LIMITED, a company incorporated under the laws of Ireland
(the "Servicer") and AIRCRAFT FINANCE TRUST, a Delaware business trust ("AFT").
For the consideration set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Servicer and AFT
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise defined herein, all
capitalized terms used but not defined herein have the meanings assigned to such
terms in Appendix A.
SECTION 1.02. Construction and Usage. The conventions of
construction and usage set forth in Appendix A are incorporated by reference
herein.
ARTICLE II
APPOINTMENT; SERVICES
SECTION 2.01. Appointment. (a) AFT appoints the Servicer as the
exclusive provider of the Services (as defined in Section 2.02(a)) to AFT and
its Subsidiaries and Affiliates (collectively, the "AFT Group") in respect of
the Aircraft Assets on the terms and subject to the conditions set forth in this
Agreement. In furtherance of the foregoing, the parties hereto acknowledge and
agree that notwithstanding any other provision of this Agreement, without the
consent of the Servicer, AFT shall not, and shall not permit any Person within
the AFT Group and any agent of any thereof, including the Administrative Agent,
to, contact directly or otherwise have any direct dealings with any Lessee or
any relevant third party with respect to any Aircraft Asset (which, as provided
in the definition of "Aircraft Assets", the parties understand shall not include
any Aircraft Asset (x) that shall have ceased to be an Aircraft Asset in
accordance with the provisions of Sections 2.04(b) or 3.02(d), but shall include
any Former Aircraft Asset that shall have become an Aircraft Asset pursuant
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to Section 6.07 of the Servicing Agreement or (y) in respect of which the
obligation of the Servicer to provide Services shall have been terminated in
accordance with Article X) (such contact or other direct dealing, a "Lessee
Contact") to the extent that such Lessee Contact constitutes, or involves taking
any action that constitutes, the provision or performance of any Service (to
such extent, a "Restricted Lessee Contact"). Notwithstanding the foregoing, in
the event that AFT or, in the case of clauses (iv) or (v) below only, any holder
of any Beneficial Interest Certificates reasonably believes that it shall be
necessary for there to be a Restricted Lessee Contact under circumstances in
which one of the following clauses is applicable:
(i) during the period (x) commencing upon the occurrence of an Event
of Default under Section 4.01 of the Indenture in respect of the payment
of interest on any Class A Note (as defined in the Indenture) due to an
insufficiency of funds in the Collection Account on the relevant date,
which Event of Default (1) shall have occurred on a date on which no
amount is available for drawing under any Credit Facility (as defined in
the Indenture) in respect thereof and (2) shall have continued unremedied
for 60 days and (y) ending upon the remedying of such Event of Default;
(ii) following the occurrence of an Event of Default (other than one
referred to in clause (i) of this Section 2.01(a)) under the Indenture
and, other than in respect of an Event of Default under Sections 4.01(e)
or 4.01(f) of the Indenture, the issuance of a Default Notice (pursuant to
which the Outstanding Principal Balance of the Notes and all accrued and
unpaid interest thereon shall become due and payable) in accordance with
the terms of the Indenture, and provided that at the time of such Event of
Default at least 10 Aircraft Assets shall not be subject to Leases and
each such Aircraft Asset shall have been off-lease and reasonably
available for re-lease (including in the possession of the Servicer,
together with the related Aircraft Documents) during the three-month
period ending on the date of such Event of Default;
(iii) in respect of any claim for indemnification made by the
Servicer under this Agreement in respect of a Loss incurred by the
Servicer related to a Lessee;
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(iv) to discharge AFT's or such holder's, as the case may be,
obligations under Applicable Law including any requirement to file any
report with any governmental authority or to respond to any court order or
to prosecute or defend any suit;
(v) to respond to requests from AFT's or such holder's, as the case
may be, auditors;
(vi) to enable AFT to discharge its obligations under Article VII;
(vii) to enable the Administrative Agent to monitor the Servicer's
performance under this Agreement in accordance with the express terms of
the Administrative Agency Agreement;
(viii) to enable AFT to perform its express obligations under the
Indenture and Security Trust Agreement including, without limitation,
AFT's obligations under Sections 5.02 and 5.03 of the Indenture and
Sections 2.06 and 3.01 of the Security Trust Agreement; or
(ix) the Servicer's material failure to perform a Service which
involves a Lessee and necessitates a Lessee Contact, which material
failure continues unremedied for 30 days after the Servicer's receipt of
written notice of such material failure from AFT and which if left
unremedied would have a Material Adverse Effect on the AFT Group taken as
a whole;
then AFT shall deliver a written notice to the Servicer setting forth in
reasonable detail the reasons for such Restricted Lessee Contact (including
which of the foregoing clauses (i) through (ix) is applicable thereto) and the
specifics of such Restricted Lessee Contact. In the case of clauses (i) and (ii)
and (iv) through (viii) above, after receipt of such notice, the Servicer shall
promptly notify AFT whether the Servicer will itself make such Restricted Lessee
Contact, or whether a Person within the AFT Group or agent of any thereof,
including the Administrative Agent, should make such Restricted Lessee Contact.
In the case of clauses (iii) and (ix) above, after delivering such notice to the
Servicer, any Person within the AFT Group shall be permitted to make such
Restricted Lessee Contact directly itself or through any agent, including the
Administrative Agent. In making any Restricted Lessee Contact AFT shall not, and
shall not permit any Person within the AFT
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Group or any agent of any thereof, including the Administrative Agent, to
interfere with the Servicer's performance of any Service.
(b) The Servicer hereby accepts its appointment pursuant to the
first sentence of Section 2.01(a) and agrees to perform the Services on the
terms and subject to the conditions set forth in this Agreement.
SECTION 2.02. Aircraft Asset Services. (a) The Services to be
provided by the Servicer in respect of the Aircraft Assets are as set forth in
Schedule 2.02(a) (the "Services"), the provisions of which Schedule 2.02(a) are
hereby incorporated herein by reference.
(b) AFT has advised the Servicer that each Person within the AFT
Group has appointed AFT to act as its representative with respect to any matter
in respect of which AFT has or any other Person within the AFT Group is required
or permitted to take any action pursuant to the terms of this Agreement.
Accordingly, in connection with the performance of the Services, the Servicer
shall in all cases be entitled to rely on the instructions (or other actions) of
AFT as representative of each Person within the AFT Group. The Servicer shall
not be liable to any Person within the AFT Group or any other Person for any act
taken or omission to act in accordance with such instructions (or other
actions), except to the extent otherwise provided in Section 3.03 and Article
XI. The Servicer shall in all cases be entitled to rely upon the instructions
(or other actions) of AFT and upon notices, reports or other communications
(whether written or oral) made by any Lessee or any other Person (other than any
Affiliate of the Servicer) in or concerning any Aircraft Assets, Aircraft Assets
Related Document or any document in connection therewith and shall not be
responsible for the accuracy or completeness of any such notices, reports or
other communications.
(c) AFT has advised the Servicer that it has appointed the
Administrative Agent, on a revocable basis, to, among other things, act on its
behalf in connection with any actions required or permitted to be taken by AFT
on its own behalf or on behalf of any other Person within the AFT Group
(including as provided in Section 2.02(b)) pursuant to the terms of this
Agreement. Accordingly, in connection with the performance of the Services,
unless earlier notified in writing by AFT that the Administrative Agent's
appointment to act on behalf of AFT has been revoked or terminated, the Servicer
shall
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in all cases be entitled to rely on the instructions (or other actions) of the
Administrative Agent; provided, however, that the Servicer shall not be obliged
to act upon the instructions of, or with respect to, the Administrative Agent
unless the Servicer consented to the appointment of such Administrative Agent in
writing, which consent shall not be unreasonably withheld (it being understood
that the Servicer may consider, among other factors, whether the proposed
Administrative Agent is a Competitor). The Servicer hereby consents to the
appointment of ReSource/Phoenix, Inc. as the initial Administrative Agent. The
appointment of the Administrative Agent to act on behalf of AFT shall in no way
limit or otherwise derogate from the Servicer's right to rely on the
instructions (or other actions) of AFT as set forth in Section 2.02(b). Without
limiting the foregoing, until such time as the Servicer has been notified in
writing that the Administrative Agent's appointment has been revoked or
terminated, in all circumstances requiring the direction, consent or approval
of, or the delivery of any notices or other communications to, AFT hereunder,
the Servicer shall only be required to seek the direction, consent or approval
of, or deliver any such notices or other communications to, the Administrative
Agent. The Servicer shall not be liable to any Person within the AFT Group or
any other Person for any act taken or omission to act in accordance with the
instructions (or other actions) of the Administrative Agent, except to the
extent otherwise provided in Section 3.03 and Article XI. AFT agrees with the
Servicer that the Administrative Agency Agreement shall not be amended by the
parties thereto in any manner that may, directly or indirectly, affect the
Servicer's rights, obligations or liabilities (or potential liabilities) under
this Agreement or with respect to the Administrative Agency Agreement or
otherwise without the Servicer's prior written consent.
(d) Except as otherwise provided in Sections 2.04(b), 3.02(c),
3.02(d) and 10.04, AFT agrees not to (and not to permit any other Person within
the AFT Group to) appoint any third party service provider with respect to any
Aircraft Asset without the prior written consent of the Servicer; provided,
however, that the Servicer's prior written consent is not required with respect
to the appointment by any Person within the AFT Group of any legal, accounting,
insurance, valuation or other similar service providers to perform services not
included within the Services.
(e) The Servicer shall in all cases be entitled to rely on the
instructions (or other actions) of any Person that
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the Servicer reasonably believes to be authorized to act on behalf of AFT or the
Administrative Agent and shall not be liable to any Person within the AFT Group
for any act taken or omission to act in accordance with such instructions (or
other actions), except to the extent otherwise provided in Section 3.03 and
Article XI.
(f) Notwithstanding anything contained in this Agreement to the
contrary, the Servicer shall not be required to perform any Service (or any
other service) with respect to any Original Aircraft unless and until a true and
complete copy of all Aircraft Assets Related Documents has been delivered to the
Servicer or other written notice thereof has been provided to the Servicer.
Without limiting the foregoing, the Servicer acknowledges that, in connection
with its provision of services with respect to the Original Aircraft, it is in
possession of various Aircraft Assets Related Documents that were received by
the Servicer prior to the date hereof.
(g) AFT agrees not to (and not to permit any other Person within the
AFT Group to) enter into any agency agreements relating to the procurement of
lessees for the Aircraft Assets (or agreements similar thereto) without the
prior written consent of the Servicer.
SECTION 2.03. Notes Offerings. (a)(i) In connection with the public
or private offering and sale (whether within the United States, outside of the
United States or both within and outside of the United States) after the Closing
Date of any newly issued or outstanding Notes, as the case may be, by (x) AFT or
(y) any other Person, pursuant to which any Person within the AFT Group is
required to file, or assist in the filing of, any registration statement with
the United States Securities and Exchange Commission or prepare and distribute,
or assist in the preparation and distribution of, a private placement memorandum
or other securities offering document (any such offering and sale, including,
without limitation, the Initial Exchange Offer and any other Exchange Offer,
being hereinafter referred to herein as a "Notes Offering"), AFT will provide
(or cause its advisors to provide, as the case may be) the Servicer and its
advisors drafts of, and a reasonable time to review, each registration statement
(including the form of prospectus therein) or private placement memorandum or
other securities offering document, as the case may be, and each amendment or
supplement to any thereof relating to any such Notes Offering (the "Prospectus")
and will use its best efforts to incorporate the comments, if any, provided by
the Servicer
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with respect to the Servicer or any of its Affiliates or their respective roles
in connection with any such Notes Offering (it being understood that the
Servicer and its Affiliates have the right, but not the obligation, to comment
thereon). AFT will not, and will not permit any Person within the AFT Group to,
file, or assist in the filing of, any such Prospectus with any governmental
agency or otherwise publicly disclose (it being understood that disclosures to
Persons having registration rights that were granted by AFT with respect to any
Notes shall not be considered public disclosures) the contents of such
Prospectus without the Servicer's prior consent (which consent must be written
only with respect to, in the case of any Prospectus that is filed with the
United States Securities and Exchange Commission, the last Prospectus filed
prior to or concurrently with the filing of a request for acceleration of
effectiveness of the related registration statement or post-effective amendment
thereto or, in the case of any Prospectus that is not filed with the United
States Securities and Exchange Commission, the version of the Prospectus to be
delivered in connection with the sale, or confirmation of sale, of any Notes, as
the case may be) as to those portions of any such Prospectus relating to the
Servicer or any of its Affiliates (the "Servicer Disclosure", which term shall
include, without limitation, the Servicer Information), which consent shall not
be unreasonably withheld or delayed.
(ii) AFT understands and agrees that the Servicer has the right to
approve any information in any Prospectus relating to the Servicer or any
Affiliate thereof and that AFT will not permit the inclusion in any such
Prospectus of (x) any financial statements or financial data relating to the
Servicer or any Affiliate thereof, (y) performance or related data with respect
to the Servicer's management of aircraft directly or indirectly owned by any
Person within the AFT Group or any other Person's aircraft or other assets or
(z) information relating to aircraft that do not comprise Aircraft Assets owned
or managed by the Servicer or any of its Affiliates (except and to the extent
that the quantities and types of aircraft currently owned or managed by the
Servicer are disclosed in a form and substance substantially similar to that set
forth under the captions "The Parties--GECAS" and "Risk Factors-Risks Relating
to AFT and Certain Third Parties--Conflicts of Interest of GECAS" (second and
fourth paragraphs thereof only) in the final offering memorandum dated April 21,
1999, relating to AFT and the Notes (the "Final Prospectus"). Notwithstanding
the foregoing, the Servicer agrees (A) that, subject to its prior review and
updating, any Prospectus may include Servicer Disclosure
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substantially identical to that contained in the Final Prospectus and (B) to
respond with any comments it may have on any Servicer Disclosure reasonably
promptly following AFT's delivery of drafts of the entire Prospectus, including
any Servicer Disclosure, to the Servicer. AFT will also provide (or cause its
Affiliates or advisors to provide, as the case may be) the Servicer with copies
of, and an opportunity to review, any marketing and marketing related materials
produced in connection with any Notes Offering. AFT will not distribute any such
marketing materials (or disseminate, or permit the dissemination of, the
information contained therein) including information relating to the Servicer or
any of its Affiliates without the Servicer's prior written consent, which
consent shall not be unreasonably withheld, as to those portions of any such
marketing materials relating to the Servicer or any of its Affiliates. The
Servicer agrees to respond with any comments it may have on any such marketing
materials reasonably promptly following AFT's delivery of copies thereof to the
Servicer.
(iii) AFT agrees that it will use its commercially reasonable
efforts to cause its legal, accounting and other technical advisors to include
the Servicer and such Affiliates of the Servicer as the Servicer designates as
addressees of any opinions and/or comfort letters being provided to any Person
within the AFT Group and/or any underwriters in connection with any Notes
Offering.
(iv) AFT agrees that each Prospectus will include disclosure, in
form and substance satisfactory to the Servicer, of all disclaimers, waivers of
liability and indemnification pertaining to the Servicer or any of its
Affiliates in connection with this Agreement and any related Notes Offering.
(b) AFT agrees that, in connection with customary marketing
activities related to any Notes Offering, the Servicer and its Affiliates shall
be present at such marketing activities solely in the Servicer's capacity as
Servicer with respect to the Aircraft Assets pursuant to this Agreement. AFT
agrees that on any so-called roadshow the Servicer's only obligation shall be,
to the extent necessary, to discuss the factual matters relating to its role as
servicer hereunder and the Aircraft Assets which are the subject hereof,
including discussing information contained in the Prospectus with respect to
such assets relating to types of aircraft, aircraft maintenance and aircraft
leases. Notwithstanding the foregoing, the Servicer shall not be required to
make any presentations with respect to, or to comment upon, its views of future
trends in the aviation
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industry, including future trends relating to types of aircraft, particular
lessees or expected aircraft lease rates or values, or to provide opinions,
forecasts, predictions or prospects relating thereto (or to the Aircraft
Assets). AFT agrees that no more than two (2) members of the Servicer's
management, the identity of which members and the schedule of any activities in
which such members are to participate are to be mutually agreed upon by AFT and
the Servicer from time to time, shall be required to be present at any customary
road show activities related to any Notes Offering (it being understood that if
reasonably requested by AFT, the Servicer will provide, subject to availability,
up to an aggregate of four (4) members of its management). In no event shall a
representative of the Servicer be required to attend any roadshow without
representatives of AFT, the Administrative Agent and the underwriters.
(c) AFT will invite the Servicer to attend, on reasonable prior
notice, all meetings (or portions thereof) with rating agencies relating to any
Notes Offering, will provide the Servicer a reasonable period of time to review
and comment upon any written materials relating to the Servicer or any of its
Affiliates prior to submission thereof to any rating agency and will provide the
Servicer with copies of all documents received from any such rating agencies
relating to the Servicer or any of its Affiliates. AFT agrees that, in
furtherance of the foregoing, it will not submit any materials to any rating
agency relating to the Servicer or any of its Affiliates without the Servicer's
prior consent, which consent shall be in writing and not unreasonably withheld
or delayed.
(d) AFT understands, acknowledges and agrees that the Servicer will
not be a party to any underwriting agreement or any letter to, representation to
or indemnity or other agreement with, any underwriter, in connection with any
Notes Offering, and, except as set forth in Section 2.03(m), shall not assume
responsibility for any information set forth in any Prospectus related thereto.
(e) (i) Subject to executing confidentiality agreements satisfactory
in form and substance to AFT, AFT agrees to use its commercially reasonable
efforts to provide the Servicer or any of its Affiliates and/or advisors with an
opportunity, at the Servicer's election, to conduct customary due diligence with
respect to any Notes Offering, including with respect to any matters disclosed
in any Prospectus.
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(ii) Subject to executing confidentiality agreements satisfactory in
form and substance to the Servicer, the Servicer agrees to provide AFT,
underwriters, rating agencies and/or advisors with reasonable opportunities to
conduct due diligence with respect to information pertaining to the Servicer and
the provision of Services pursuant to this Agreement with respect to the
Aircraft Assets; provided, however, that, if it is established to the Servicer's
reasonable satisfaction that any rating agency does not execute confidentiality
agreements as a matter of policy, the Servicer will waive such requirement with
respect to such rating agency so long as such rating agency establishes to the
Servicer's reasonable satisfaction that any information made available to it
will be held confidential.
(f) Except to the extent required by law, AFT agrees not to (and not
to permit any other Person within the AFT Group to) make any, direct or
indirect, press release or other public announcement by any means (including by
making disclosures to financial analysts or other members of the financial
community) relating to the Servicer (or any of its Affiliates) and their
respective involvement in any Notes Offering without the Servicer's prior
written consent. In the event a press release or other public announcement is
recommended by securities counsel or required by law, AFT shall consult with the
Servicer prior to making (or permitting to be made) any such press release or
public announcement to the extent that such press release or public announcement
relates to the Servicer (or any of its Affiliates) and their respective
involvement in any Notes Offering.
(g) Upon the closing of any Notes Offering (other than the Initial
Exchange Offer), AFT shall pay, or cause another Person to pay, the Servicer
financing fees, pro rata in accordance with the Net Proceeds of any such Notes
Offering, equal to the greater of (x) 0.0005 multiplied by the Net Proceeds of
any such Notes Offering and (y) $250,000. "Net Proceeds" means the cash proceeds
received by any Person selling Notes (other than underwriters) within the AFT
Group or any other Person in connection with any Notes Offering, less
Transaction Costs incurred by any Person within the AFT Group or any such other
Person in connection with any such Notes Offering (other than the fees payable
pursuant to this Section 2.03); provided, however, that, in calculating Net
Proceeds for purposes of this Section 2.03(g), with respect to any offering of
Additional Notes the cash proceeds of which are used in part to acquire Aircraft
Assets from GE Capital and its Affiliates, the Net Proceeds resulting from the
sale of such Additional
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Notes only (without giving effect to this proviso) shall be reduced by the
product of (a) such Net Proceeds and (b) the quotient obtained by dividing (i)
the Appraised Value of the Aircraft Assets being acquired by Persons within the
AFT Group from GE Capital and its Affiliates by (ii) the Appraised Value of all
Aircraft Assets being acquired by Persons within the AFT Group, in the case of
(i) and (ii) in connection with such offering. Without agreement between AFT and
the Servicer, which agreement shall include an increase in the fees to be paid
to the Servicer in connection with the Servicer's involvement with respect to
any Notes Offering, the Servicer shall not be required to assist in the
solicitation of, or otherwise take any action to obtain, any lessee consents
and/or novations in connection with any Notes Offering. Such increase in the
fees to be paid to the Servicer in connection with the Servicer's involvement
with respect to any such Notes Offering will be negotiated in good faith by AFT
and the Servicer and will reflect the increased services to be provided by the
Servicer (it being understood that an agreement as to such increased fees must
be reached prior to the Servicer's involvement with respect to any Notes
Offering pursuant to this Section 2.03 in which the Servicer assists in the
solicitation of, or otherwise takes any action to obtain, any lessee consents
and/or novations).
(h) Notwithstanding the foregoing, (i) neither the Servicer nor any
of its Affiliates shall be obligated to underwrite or purchase any securities to
be issued by AFT or any other Person within the AFT Group or any other Person in
any Notes Offering; (ii) neither the Servicer nor any of its Affiliates shall be
obligated to issue any Guarantees or otherwise to provide any credit enhancement
or support or incur any obligations or liabilities to provide any credit
enhancement or support or incur any other obligations or liabilities in
connection with any Notes Offering; (iii) neither the Servicer nor any of its
Affiliates shall be required to sign any registration statement (or any similar
document) in connection with any Notes Offering (as "registrant", "issuer" or in
any other capacity) or take any other action that could, in the Servicer's sole
determination, result in the Servicer or any of its Affiliates being (or being
deemed to be) a "control person" with respect to the applicable issuer of any
securities issued in connection with any such financing transaction under
applicable securities laws in connection with any such financing or an
"underwriter" of any such securities; and (iv) the obligations of the Servicer
under this Section 2.03 shall be subject to the reasonable satisfaction of the
Servicer with all the terms and conditions of the applicable Notes Offering that
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relate to the Servicer or any of its Affiliates (including the indemnities in
favor of the Servicer and its Affiliates).
(i) In the case of any Notes Offering, the Indemnified Parties shall
have no liability for, and AFT shall hold, and shall cause each other Person, if
any, for whom a Notes Offering was conducted to hold, each Indemnified Party
harmless from, and indemnify on an After Tax Basis each Indemnified Party
against, any and all Losses that may be imposed on, incurred by or asserted
against (including with respect to any such claims, suits, actions or
proceedings by third parties, including the applicable underwriters and
purchasers of any securities issued in connection with any such Notes Offering)
such Indemnified Party, directly or indirectly, arising out of, in connection
with or related to the Servicer's performance of the obligations set forth in
this Section 2.03 with respect to any Notes Offering; provided, however, that
such indemnity shall not apply to the extent that, if AFT had suffered such
Losses, the Servicer would have been required to indemnify AFT pursuant to the
terms of Section 2.03(m). The obligation of AFT under this Section 2.03(i) shall
be in addition to any liability that AFT may otherwise have to the Indemnified
Parties and shall not be limited or reduced with respect to the Indemnified
Parties by any other rights to indemnification that may be available to such
Indemnified Parties.
(j) AFT agrees to reimburse the Servicer, on a monthly basis, for
all out-of-pocket expenses incurred directly or indirectly by the Servicer or
any of its Affiliates in connection with any Notes Offering with respect to
which the Servicer shall provide services pursuant to this Section 2.03,
including any outside advisor fees and expenses (including travel and lodgings),
including legal, accounting, investment banking, consulting and other similar
advisors retained by the Servicer or any of its Affiliates in connection with
any Notes Offering.
(k) For the avoidance of doubt, but without derogating from any of
the Servicer's rights hereunder, the Servicer shall continue to act as the
primary servicer for each Aircraft Asset, following the financing or refinancing
thereof pursuant to a public or private aircraft financing transaction, so long
as any Person within the AFT Group owns or leases-in such Aircraft Asset (or so
long as such Aircraft Asset constitutes an Original Aircraft), on the terms
provided in this Agreement. In addition, the Servicer shall continue to act as
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the primary servicer for any Aircraft Assets that are financed or refinanced
pursuant to a public or private aircraft financing transaction (including a
public or private securitization financing transaction) under circumstances in
which, following such financing or refinancing, (i) AFT, any holder of any
Beneficial Interest Certificates (including, without limitation, UniCapital)
and/or any of their respective Affiliates have (individually or in the
aggregate) a direct or indirect interest in such Aircraft Assets or in any
securities representing the residual or equity interest in such Aircraft Assets,
and (ii) such Aircraft Assets are to be managed pursuant to a servicing
agreement or other arrangement other than this Agreement, (x) on a basis
substantially the same as the basis upon which the Servicer provides the
Services pursuant to this Agreement (including for the fees provided for herein
to be paid to the Servicer and in accordance with the Standard of Care and the
Conflicts Standard and subject to the Standard of Liability and Article XI) and
(y) otherwise on such commercially reasonable terms as shall be agreed.
(l) Notwithstanding any provision to the contrary in this Agreement,
GE Capital or any Affiliate of GE Capital may, in its sole discretion, at any
time and from time to time enter into and effectuate public or private financing
transactions with respect to Aircraft other than the Aircraft Assets.
(m) The Servicer shall indemnify and hold harmless AFT, UniCapital,
any holder of a Beneficial Interest Certificate and their respective trustees,
officers and employees from and against any and all Losses that may be imposed
on, incurred by or asserted against AFT or such other Persons insofar as any
such Loss arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Servicer Information (as
defined below) contained in any final or preliminary Prospectus or (ii) the
omission or alleged omission to state in the Servicer Information included in
any final or preliminary Prospectus a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Servicer shall not be liable to AFT under the indemnity set
forth in this Section 2.03(m) (x) unless the Servicer shall have consented in
writing the text of the Servicer Information in the relevant final or
preliminary Prospectus and (y) if the relevant Loss results from an untrue
statement or omission contained in a preliminary Prospectus that was delivered
to a person that was sold a security described in such preliminary Prospectus
and if the Servicer shall have provided to AFT prior to the
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distribution of the related final Prospectus information correcting such untrue
statement or omission and AFT shall have failed to deliver or cause to be
delivered such final Prospectus to such person containing such corrected
information. "Servicer Information" shall mean the information set forth in the
sections of the Final Prospectus captioned "Risk Factors--Risks Relating to AFT
and Certain Third Parties--Conflicts of Interest of GECAS" (excluding any
description therein of the Servicing Agreement or any other document or the
terms of any thereof), "The Parties--GECAS" and "The Original Aircraft and
Initial Leases--The Lessees--Payment History" (second paragraph thereof only and
with respect to the Aircraft Assets only during the period that the Servicer was
the "Servicer" thereof) and the comparable sections (or comparable disclosure in
comparable portions thereof) contained in any other preliminary or final
Prospectus. In connection with any Notes Offering (other than an Exchange
Offer), upon the request and at the expense of AFT, the Servicer shall make a
good faith effort to obtain from one of its regular outside legal counsel,
selected by the Servicer, a customary securities law disclosure letter related
solely to the Servicer Information included in the relevant Prospectus and
addressed to the underwriters or initial purchasers in respect of the Notes
being offered under such Prospectus (such underwriters and initial purchasers
not, however, constituting third party beneficiaries of this Agreement).
SECTION 2.04. Compliance with Applicable Laws and GE Policies. (a)
Notwithstanding anything to the contrary in this Agreement, the Servicer shall
not be obligated to take or refrain from taking any action at any time that the
Servicer believes, in its sole discretion, is reasonably likely to (i) violate
any Applicable Law with respect to the Servicer or its Affiliates or any GE
Policy or (ii) lead to an investigation by any Governmental Authority, directly
or indirectly, of or relating to the Servicer, any of its Affiliates or the
Services. "GE Policy" means each of the established written policies of GE
applicable to GE and its controlled affiliates related to business practices
with respect to legal, ethical and social matters, which policies are currently
embodied in the pamphlet Integrity: The Spirit & Letter of Our Commitment, a
copy of which has been provided to AFT, as the same may be amended and in effect
from time to time. The Servicer shall provide AFT with a copy of all amendments
and updates to Integrity: The Spirit & Letter of Our Commitment.
(b) If pursuant to paragraph (a) above, the Servicer shall have
determined not to take any action with respect to any
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transaction or potential transaction (whether or not any such transaction or a
similar transaction has previously been entered into) relating to any Aircraft
Asset and as a consequence thereof any Person within the AFT Group shall be
denied the opportunity to participate in any transaction or potential
transaction in which it would otherwise be able to participate in accordance
with Applicable Law, then, notwithstanding the provisions of Section 2.01, any
such Person within the AFT Group may enter into, or engage another Person to
arrange on its behalf, such transaction or potential transaction with respect to
such Aircraft Asset; provided, however, that such Person within the AFT Group
may not enter into any such transaction or potential transaction if at or about
the same time a substantially similar transaction (with at least as favorable or
the same economic terms) could be arranged by the Servicer with respect to such
Aircraft Asset in a manner that is not reasonably likely to violate GE Policy or
lead to an investigation by any Governmental Authority, directly or indirectly,
of or relating to the Servicer, any of its Affiliates or the Services; provided
further, however, that (i) the Aircraft Asset that is the subject of such
transaction or potential transaction (a "Former Aircraft Asset") shall cease to
be an Aircraft Asset (including for the purposes of calculating the Servicing
Fees) on the date that such transaction or potential transaction is entered
into, (ii) from and after such date (unless and until such Former Aircraft Asset
becomes an Aircraft Asset pursuant to Section 6.07) no further Services shall be
provided with respect to such Former Aircraft Asset and (iii) the Servicer shall
not have any obligation or liability with respect to such Former Aircraft Asset
or such transaction or potential transaction.
(c) Notwithstanding anything to the contrary set forth in paragraph
(b) above, no Person within the AFT Group shall be entitled to enter into, or
engage any other Person to arrange on its behalf, any transaction or potential
transaction with respect to any Aircraft Asset if the Servicer shall have made a
determination regarding that transaction or potential transaction pursuant to
paragraph (a) above because it reasonably believed that such transaction or
potential transaction was reasonably likely to violate the United States Foreign
Corrupt Practices Act (or any similar or successor statute) applicable to
corporations organized under the laws of the United States (or any state or
political subdivision thereof) or applicable to any Person within the AFT Group
or otherwise applicable to such transaction or potential transaction.
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SECTION 2.05. Limitations. (a) Neither the Servicer nor any of its
Affiliates shall assume any Indebtedness of any Person within the AFT Group nor
shall any provision of this Agreement or any other Operative Agreement be
construed so as to imply that the parties intended any such assumption.
(b) In addition to Section 2.04, the Servicer shall not, and shall
not be obligated to, act in a manner inconsistent with the rights, obligations
or undertakings of the "Lessor" under any Lease or otherwise in any manner that
is illegal or prohibited by Applicable Law or any applicable contract.
(c) Notwithstanding any other provision of this Agreement, the
Servicer shall not be obligated either initially or on a continuing basis to
provide any Person within the AFT Group or any of its Representatives any
confidential or proprietary information regarding the Servicer's or any of its
Affiliate's business or the business or finances of any Person, other than any
Person within the AFT Group, whose assets it manages from time to time.
(d) The Servicer shall not be liable or accountable for (i) the
failure by a Lessee to perform any of its obligations under any Lease including
the payment of amounts payable under any Lease or (ii) the accuracy or
completeness of any notices, reports or other communications (whether written or
oral) made by any Lessee or any Person other than the Servicer in or concerning
any Lease or any document in connection therewith and shall be entitled to rely
upon all such notices, reports and communications except to the extent that the
Servicer has actual notice of any matter to the contrary.
(e) The Servicer may rely on any Adviser, Broker, law firm or other
professional adviser appointed by the Servicer or AFT and shall not be liable
for any claim by any Person within the AFT Group to the extent that it was
acting in good faith upon the advice of such Adviser, Broker, law firm or other
professional adviser.
(f) The relationship between the Servicer and AFT is an agency
relationship and, except in relation to any money erroneously received by the
Servicer or any of its Affiliates into any of the Servicer's or any of its
Affiliate's bank accounts on behalf of any Person within the AFT Group, which
the Servicer will hold in trust for such Person and deposit into the Collection
Account as soon as reasonably practicable, neither
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the Servicer nor any of its Representatives shall be under any fiduciary duty or
other implied obligation or duty to any Person within the AFT Group or any
holder of any equity or debt security issued by any Person within the AFT Group,
any Lessee or any other Person arising out of this Agreement.
(g) Without prejudice to the Standard of Care, the Servicer shall
not be imputed with the knowledge of any of its employees other than its
directors, officers and those employees involved in the performance of the
Services relevant to such knowledge responsible for the day to day
administration of this Agreement. The Servicer shall be deemed to have actual
notice of any matter only upon the receipt of written notice describing any such
matter in reasonable detail or to the extent that one of the foregoing Persons
has actual knowledge of any such matter or which one of such Persons ought to
have known if the Servicer had acted in accordance with the Standard of Care.
(h) The Servicer shall not be obligated to assume, or engage in
activities which could reasonably be expected to subject the Servicer to, any
liability as a related company, shadow director or similar legal concept of any
Person within the AFT Group. AFT understands, acknowledges and agrees that the
intent of the parties hereunder is that the Servicer will not be subject to any
obligations or liabilities whatsoever other than as and to the extent that any
obligations or liabilities arise pursuant to the express terms of this
Agreement.
(i) Notwithstanding anything to the contrary set forth herein or
otherwise, neither the Servicer nor any of its Affiliates shall be liable or
accountable hereunder for, and shall have no obligations with respect to, any
adverse consequences (including any Losses) in connection with any Year 2000
Compatibility problems, or any Year 2000 Problem relating to the Services, or
the operation or functionality of the Aircraft Assets or of the AFT Group as
either may relate to the processing of any dates.
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ARTICLE III
STANDARD OF CARE; CONFLICTS OF INTEREST;
STANDARD OF LIABILITY
SECTION 3.01. Standard of Care. The Servicer shall use reasonable
care and diligence at all times in the performance of the Services (the
"Standard of Care").
SECTION 3.02. Conflicts of Interest. (a) AFT acknowledges and agrees
that (i) in addition to managing the Aircraft Assets under this Agreement, the
Servicer may manage, and shall be entitled to manage, from time to time the
separate assets and businesses of (w) GE Capital and its Affiliates, (x) AerFi
and its Affiliates (including pursuant to the Amended and Restated Servicing
Agreement), (y) Airplanes U.S. Trust and Airplanes Limited and their respective
Affiliates and (z) other third parties (the assets of the parties described in
clauses (w), (x), (y) and (z) are collectively hereinafter referred to as the
"Other Assets"); (ii) in the course of conducting such activities, the Servicer
may from time to time have conflicts of interest in performing its duties on
behalf of the various entities to whom it provides management services and with
respect to the various assets in respect of which it provides management
services; and (iii) the Controlling Trustees of AFT have approved the
transactions contemplated by this Agreement and the other Operative Agreements
and desire that such transactions be consummated and in giving such approval the
Controlling Trustees of AFT have expressly recognized that such conflicts of
interest may arise and that when such conflicts of interest arise the Servicer
shall perform the Services hereunder in accordance with the Standard of Care
and, to the extent applicable, the Conflicts Standard.
(b) If conflicts of interest arise regarding the management of (i) a
particular Aircraft Asset, on the one hand, and another Aircraft Asset, on the
other hand, or (ii) any Aircraft Asset, on the one hand, and any Other Asset, on
the other hand, the Servicer shall perform the Services in good faith and,
without prejudice to the generality of the foregoing, to the extent (i) such
Aircraft Assets or (ii) such Aircraft Asset and such Other Asset are
substantially similar in terms of objectively identifiable characteristics
relevant for purposes of the particular Services to be performed, the Servicer
shall not discriminate among such Aircraft Assets or between such Aircraft Asset
and such Other Asset, respectively, on an unreasonable basis and, in the case of
the VARIG Aircraft (as
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defined in the Final Prospectus), on the basis of GE Capital's interests in the
VARIG Deposit Amounts (as defined in the Final Prospectus) (the standard set
forth in this Section 3.02(b) shall be referred to collectively as the
"Conflicts Standard").
(c) Notwithstanding any provision herein to the contrary, if, in
connection with the provision of Services with respect to an Aircraft Asset or
Lease, a conflict of interest shall exist that, in the good faith opinion of the
Servicer, requires an arm's-length negotiation between the Servicer or an
Affiliate of the Servicer, on the one hand, and any Person within the AFT Group,
on the other hand, and the Servicer believes it would not be appropriate for the
Servicer to act on behalf of such Person within the AFT Group in connection with
such negotiation (whether or not the Servicer shall propose to act on behalf of
itself or one of its Affiliates in connection with such negotiation), then the
Servicer shall withdraw from acting as Servicer with respect to such Aircraft
Asset or Lease in connection with the negotiation of the issue giving rise to
such conflict of interest. The Servicer shall provide written notice to AFT not
more than ten Business Days after it has made a determination that an
arm's-length negotiation is necessary with respect to such conflict of interest
and it would not be appropriate for the Servicer to act on behalf of such Person
within the AFT Group in connection with such negotiation. Not more than seven
Business Days after receipt of such notice from the Servicer, AFT shall appoint
an independent representative (which may be any Person within the AFT Group or
the Administrative Agent, but otherwise not a Competitor of the Servicer or any
of its Affiliates) (the "Independent Representative") to act on behalf of such
Person within the AFT Group to which such Aircraft Asset or Lease and conflict
of interest relates. Any such Independent Representative so appointed shall act
on behalf of the relevant Person within the AFT Group for purposes of such
negotiation relating to such Aircraft Asset or Lease and the Servicer shall have
no responsibility or liability to any Person within the AFT Group with respect
to such negotiation relating to such Aircraft Asset or Lease. In any event, the
Servicer shall be entitled to act on behalf of itself or its Affiliate with
respect to such negotiation. During the period of such Independent
Representative's appointment, the Servicer shall continue to perform its
ordinary functions as Servicer with respect to such Aircraft Asset or Lease to
the extent that the performance of the Servicer does not directly or indirectly
affect the negotiation of the issue giving rise to such conflict of interest. To
the extent, if any, the Servicer cannot continue
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to perform any Services with respect to such Aircraft Asset or Lease during such
negotiation, such Services shall be performed by the Independent Representative
or any other designee of such Person within the AFT Group. Any such Aircraft
Asset or any Aircraft Assets subject to any such Lease shall continue to be
included as an Aircraft Asset for purposes of calculating the Servicing Fees
pursuant to Article IX during the appointment of an Independent Representative
and the fees, if any, of any such Independent Representative shall be paid by
AFT.
(d) If the Servicer reasonably determines that directions given by
any Person to the Servicer in accordance with this Agreement or Services
required to be performed under this Agreement (other than any Service involving
an arm's-length negotiation between the Servicer or an Affiliate of the
Servicer, on the one hand, and any Person within the AFT Group, on the other
hand) would, in either case, if carried out, place the Servicer in a conflict of
interest with respect to which, in the Servicer's good faith opinion, the
Servicer cannot continue to perform its obligations hereunder within the
requirements set forth in Section 3.02 with respect to all Aircraft Assets or
any affected Aircraft Assets, as the case may be, the Servicer shall give AFT
prompt written notice thereof and thereafter the Servicer may resign as Servicer
with respect to the affected Aircraft Assets or AFT may elect to remove the
Servicer with regard to the affected Aircraft Assets as provided in Article X.
SECTION 3.03. Standard of Liability. The Servicer shall not be
liable or accountable to any Person including, without limitation, any
Subsidiary or Affiliate of AFT (other than AFT to the extent set forth in the
next following sentence) under any circumstances for any Losses directly or
indirectly arising out of, in connection with or related to, the management by
the Servicer of Aircraft Assets or Other Assets. The Servicer shall not be
liable or accountable to AFT under any circumstances for, and AFT shall
indemnify the Servicer on an After-Tax Basis in accordance with the provisions
of Article XI for, any Losses, directly or indirectly, arising out of, in
connection with or related to, the management by the Servicer of Aircraft Assets
or Other Assets, unless such Losses are finally adjudicated to have resulted
directly from (x) the Servicer's gross negligence or willful misconduct in
respect of its obligation to apply the Standard of Care or the Conflicts
Standard in respect of its performance of the Services or (y) any representation
or warranty by the Servicer set forth in Sections 4.10 or 4.11 having proven to
be false on the date hereof (the liability standards set forth in this Section
3.03,
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the "Standard of Liability"). For the avoidance of doubt, but without limiting
the provisions of Section 9.07, the provisions of this Section 3.03 shall not
give rise to any obligation on the part of the Servicer to indemnify AFT for any
Taxes. Without limiting the foregoing, the Servicer shall not be directly or
indirectly liable or accountable to AFT under any circumstances for any Losses
directly or indirectly arising out of, in connection with or related to, (i) the
direct or indirect transfer of any Aircraft Assets or Leases related thereto or
any other assets to any Person within the AFT Group, (ii) the adequacy of the
terms of any Lease relating to any Aircraft Assets to the extent any such Lease
was newly executed, amended or modified in connection with the solicitation of
Lessee consents, novations and related documentation pursuant to the direct or
indirect transfer of the Aircraft Assets to the AFT Group, (iii) the reliability
or creditworthiness of any Lessee with respect to its obligations under any
Lease, (iv) the adequacy of the lease payments derived from the Leases related
to any Aircraft Assets to support various obligations of the Persons within the
AFT Group, (v) the adequacy of the maintenance reserves or security deposits
relating to the Aircraft Assets, (vi) the terms and conditions of the Notes or
Beneficial Interest Certificates being offered and sold by AFT as of the Closing
Date or pursuant to any Notes Offering, (vii) the ability of AFT to comply with
the terms and conditions of such Notes or Beneficial Interest Certificates and
(viii) the structuring and implementation of any aspect of the various
transactions contemplated by the Final Prospectus.
SECTION 3.04. Waiver of Implied Standard. Except as expressly stated
above in this Article III, all other warranties, conditions and representations,
express or implied, statutory or otherwise, arising under U.S. Federal,
Delaware, Irish or other law in relation to the skill, care, diligence or
otherwise in respect of any service to be performed hereunder or to the quality
or fitness for any particular purpose of any goods are hereby excluded and
waived by AFT, and the Servicer shall not be liable to AFT or any other Person
within the AFT Group or any other Person in contract, tort or otherwise under
U.S. Federal, Delaware, Irish or other law for any loss, damage, expense or
injury of any kind whatsoever, consequential or otherwise, arising out of or in
connection with either the services to be supplied pursuant to this Agreement or
any goods to be provided or sold in conjunction with such services or any defect
in either such goods or services or from any other cause, whether or not any
such matter amounts to a fundamental breach of a fundamental term of this
Agreement. Nothing in this
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Article III should be taken as in any way limiting or excluding any liability
which the Servicer may have to AFT under Section 2 of the Irish Liability for
Defective Products Act, 1991.
THE CONTRACTUAL RIGHTS, IF ANY, WHICH THE AFT GROUP ENJOYS BY VIRTUE
OF SECTIONS 12, 13, 14 AND 15 OF THE SALE OF GOODS ACT, 1893 (AS AMENDED) AND
SECTION 39 OF THE SALE OF GOODS AND SUPPLY OF SERVICES ACT, 1980 ARE IN NO WAY
PREJUDICED BY ANYTHING CONTAINED IN THIS AGREEMENT SAVE TO THE EXTENT PERMITTED
BY LAW.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
AFT represents and warrants to, and agrees with, the Servicer as
follows:
SECTION 4.01. Aircraft Assets. Schedule 4.01 contains a true and
complete list of all Aircraft Assets constituting Aircraft Assets as of the
Closing Date and each Person within the AFT Group, if any, that owns such
Aircraft Assets as of the Closing Date. Except as otherwise set forth therein,
on the Delivery of each Aircraft Asset listed in Schedule 4.01, each Person
within the AFT Group listed as an owner of an Aircraft Asset on such Schedule
will have such title to such Aircraft Asset as was conveyed to such Person on
its Delivery, free and clear of all Liens created by or through such Person.
SECTION 4.02. Aircraft Assets Related Documents. (a) The Servicer
shall not be required to perform any service provided for in or in connection
with any Aircraft Assets Related Documents not in its possession (all such
Aircraft Assets Related Documents listed in Schedule 4.02 being in its
possession) or delivered to it, and, to the extent that the failure to provide
such service results in any Losses to the Servicer, AFT shall indemnify the
Servicer for such Losses on an After-Tax Basis, in accordance with the
provisions of Article XI.
(b) Each Aircraft Assets Related Document is a legal, valid and
binding agreement of the Person within the AFT Group that is a party thereto
(including by way of assignment or novation) and is enforceable against such
Person within the AFT
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Group that is a party thereto in accordance with its terms. No Person within the
AFT Group has modified, amended or waived any provision of or terminated any
Aircraft Assets Related Document referred to in Schedule 4.02 except as
disclosed therein.
SECTION 4.03. Accounts and Cash Flow. Schedule 4.03 sets forth a
true and complete list of all bank or other similar accounts and any other
accounts relating to the Aircraft Assets, with respect to which any Person
within the AFT Group, the Security Trustee, the Administrative Agent or any
other agent of any of the foregoing has authority and sets forth in reasonable
detail a written description of all material arrangements and procedures
relating to the flow of cash related to the Aircraft Assets, including wire
transfer instructions.
SECTION 4.04. Organization and Standing. (a) Each of AFT and each
other Person within the AFT Group is a corporation or business trust duly
organized and validly existing and, if relevant, in good standing under the laws
of the jurisdiction in which it is legally organized and possesses all
franchises, licenses, permits, authorizations and approvals necessary to enable
it to use its corporate or trust name and to own, lease or otherwise hold its
properties and assets and to carry on its business as presently conducted and as
proposed to be conducted except for such franchises, licenses, permits,
authorizations and approvals the failure of which to obtain could not,
individually or in the aggregate, have a Material Adverse Effect on the Persons
within the AFT Group, taken as a whole. Each of AFT and each other Person within
the AFT Group are in compliance in all material respects with all terms and
conditions of such franchises, licenses, permits, authorizations and approvals.
Schedule 4.04(a) sets forth a true and complete list of each Person within the
AFT Group and the jurisdiction in which each such Person within the AFT Group is
legally organized.
(b) Each of AFT and each other Person within the AFT Group is duly
qualified to do business as a foreign corporation in each jurisdiction in which
the nature of its business or the ownership, leasing or holding of its
properties or assets requires qualification except for such jurisdictions where
the failure to be so qualified could not, individually or in the aggregate, have
a Material Adverse Effect on the Persons within the AFT Group, taken as a whole.
SECTION 4.05. Authority. Each of AFT and each other Person within
the AFT Group which is a party to an Operative
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Agreement has all requisite power and authority to execute each Operative
Agreement to which it is or will be a party and to consummate the transactions
and to perform its obligations contemplated thereby. All corporate acts and
other proceedings required to be taken by each Person within the AFT Group to
authorize the execution, delivery and performance of each Operative Agreement to
which it is or will be a party and the consummation of the transactions and the
performance of its obligations contemplated thereby have been or on or before
the date of entering into the relevant Operative Agreements will have been duly
and properly taken.
(b) Each of the Operative Agreements to which any Person within the
AFT Group is or will be a party has been or will be duly and validly executed
and delivered by such Person, as applicable, and each such Operative Agreement
is or upon such execution and delivery will be a legal, valid and binding
obligation of such Person, as applicable, enforceable against it in accordance
with its terms.
SECTION 4.06. No Conflicts. Neither the execution and delivery of
any Operative Agreement to which any Person within the AFT Group is a party nor
the consummation of the transactions contemplated thereby nor performance by any
Person within the AFT Group of any of its obligations thereunder will (i)
violate any provision of the constituent documents of any such Person within the
AFT Group, (ii) violate any order, writ, injunction, judgment or decree
applicable to any Person within the AFT Group or any of their respective
properties or assets, (iii) violate in any material respect any Applicable Law
or (iv) result in any conflict with, breach of or default (or give rise to any
right of termination, cancelation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, warrant or
other similar instrument or any license, permit, material agreement or other
material obligation to which any Person within the AFT Group is a party or by
which any Person within the AFT Group or any of their respective properties or
assets may be bound. Other than with respect to any filings made pursuant to the
HSR Act, no action, consent or approval by, or filing with, any Governmental
Authority or any other regulatory or self-regulatory body, or any other Person,
is required in connection with the execution, delivery or performance by any
Person within the AFT Group of the Operative Agreements to which it is a party
or the consummation by any Person within the AFT Group of the transactions
contemplated thereby.
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SECTION 4.07. Compliance with Applicable Laws. Each of AFT and each
other Person within the AFT Group is in compliance in all material respects with
all Applicable Laws and any filing requirements relating thereto.
SECTION 4.08. Litigation; Decrees. (a) Other than as may exist with
respect to the Aircraft Assets, there are no claims, actions, suits,
arbitrations or other proceedings or investigations (i) pending or, to the best
knowledge of each of AFT and each other Person within the AFT Group, threatened,
by or against or affecting AFT or any other Person within the AFT Group, which
in any case involves a potential loss exceeding $1,000,000 and (ii) pending, or
to the best knowledge of each of AFT and each other Person within the AFT Group,
threatened, by or against or affecting AFT or any other Person within the AFT
Group, related to the transactions contemplated by the Operative Agreements.
(b) Each of AFT and each other Person within the AFT Group is in
compliance in all material respects with each outstanding judgment, order or
decree (other than as may exist with respect to the Aircraft Assets) of any
Governmental Authority or arbitrator applicable to AFT or any other Person
within the AFT Group, as the case may be, and no such judgment, order or decree
has or could have a Material Adverse Effect on AFT or any other Person within
the AFT Group.
SECTION 4.09. Appointments. (a) Each Person within the AFT Group has
appointed AFT, and AFT has accepted such appointment, to act as representative
of each such Person with respect to any matter in respect of which AFT or any
other Person within the AFT Group is required or permitted to take any action
pursuant to the terms of this Agreement.
(b) AFT has appointed the Administrative Agent to act on its behalf
and on behalf of each of its Subsidiaries pursuant to the terms of the
Administrative Agency Agreement and AFT has appointed the Administrative Agent,
on a revocable basis, to act on its behalf in connection with any action
required or permitted to be taken by AFT on its own behalf or on behalf of any
other Person within the AFT Group pursuant to the terms of this Agreement.
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The Servicer represents and warrants to AFT as follows:
SECTION 4.10. Authority. (a) The Servicer has all requisite power
and authority to execute each Operative Agreement to which it is or will be a
party and to consummate the transactions and to perform its obligations
contemplated thereby. All corporate acts and other proceedings required to be
taken by the Servicer to authorize the execution, delivery and performance of
each Operative Agreement to which it is or will be a party and the consummation
of the transactions and the performance of its obligations contemplated thereby
have been or on or before the date of entering into the relevant Operative
Agreements will have been duly and properly taken.
(b) Each of the Operative Agreements to which the Servicer is or
will be a party has been or will be duly and validly executed and delivered by
the Servicer, as applicable, and each such Operative Agreement is or upon such
execution and delivery will be a legal, valid and binding obligation of the
Servicer, enforceable against it in accordance with its terms.
SECTION 4.11. No Conflicts. (a) Neither the execution and delivery
of any Operative Agreement to which the Servicer is a party nor the consummation
of the transactions contemplated thereby nor performance by the Servicer of any
of its obligations thereunder will (i) violate any provision of the constituent
documents of the Servicer, (ii) violate any order, writ, injunction, judgment or
decree applicable to the Servicer or any of its properties or assets, (iii)
violate in any material respect any Applicable Law or (iv) result in any
conflict with, breach of or default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, warrant or other similar instrument or
any licence, permit, material agreement or other material obligation to which
the Servicer is a party or by which the Servicer or any of its properties or
assets may be bound. Other than with respect to any filings made pursuant to the
HSR Act, no action, consent or approval by, or filing with, any Governmental
Authority or any other regulatory or self-regulatory body, or any other Person,
is required in connection with the execution, delivery or performance by the
Servicer of the Operative Agreements to which it is a party or the consummation
by the Servicer of the transactions contemplated thereby.
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SECTION 4.12. Compliance with Applicable Laws of Ireland. The
Servicer is in compliance in all material respects with all Applicable Laws of
Ireland and any filing requirements in Ireland relating thereto necessary to
perform its obligations under this Agreement.
ARTICLE V
SERVICER UNDERTAKINGS
SECTION 5.01. Access. The Servicer at such times as AFT may
reasonably request shall grant, and shall cause any Servicer Delegate to grant,
to the Persons within the AFT Group and their agents (including, without
limitation, the Administrative Agent and auditors) access to the documents and
other records related to the Aircraft Assets (copies of which AFT shall (at its
expense) be entitled to take), to enable the Persons within the AFT Group to
monitor the performance by the Servicer under this Agreement or to otherwise
discharge their respective obligations under Applicable Law. Upon reasonable
prior written notice and at reasonable times (in any event not more than an
aggregate, with respect to the AFT Group taken as a whole, of four (4) times per
Year), the Servicer shall make one or more (such number to be determined by the
Servicer in its sole discretion) members of its management available to attend
meetings of the Controlling Trustees of AFT. In addition, the Servicer will make
one or more members of its management available to participate in additional
meetings of such Controlling Trustees either, in the Servicer's sole discretion,
by participating in person or by teleconference. Any out-of-pocket expenses
incurred by the Servicer in connection with any such attendance shall be
reimbursed by AFT.
SECTION 5.02. Compliance with Law. The Servicer shall, in connection
with the performance of the Services, comply in all material respects with all
laws, rules and regulations applicable to the Servicer.
SECTION 5.03. Commingling. The Servicer shall not commingle with its
own funds, any funds of any Person within the AFT Group from time to time in its
possession.
SECTION 5.04. Restrictions on Exercise of Certain Rights. Subject to
the enforcement of its rights under the Security Trust Agreement, the Servicer
shall not take any steps
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for the purpose of procuring the appointment of an administrative receiver or
the making of any administrative order or for instituting any bankruptcy,
reorganization, arrangement, insolvency, winding up, liquidation, composition or
any similar proceeding under the laws of any jurisdiction with respect to any
Person within the AFT Group.
SECTION 5.05. Coordination with AFT. The Servicer shall designate an
individual who shall be an employee of the Servicer and who shall be primarily
responsible for coordinating with AFT and any other Person within the AFT Group
regarding the Services, and the Servicer may from time to time change such
designation by providing notice to AFT of such change.
ARTICLE VI
UNDERTAKINGS OF AFT
SECTION 6.01. Cooperation. AFT shall, and shall cause each other
Person within the AFT Group and their respective agents (including the
Administrative Agent) to, at all times cooperate with the Servicer to enable the
Servicer to provide the Services, including providing the Servicer with all
powers of attorney as may be reasonably necessary or appropriate for the
Servicer to perform the Services.
SECTION 6.02. No Representation with Respect to Third Parties. AFT
agrees that as between the Servicer, on the one hand, and each of AFT and the
other Persons within the AFT Group, on the other hand, no representation is made
as to the financial condition and affairs of any Lessee of, or purchaser of, any
Aircraft Asset or any vendor or supplier utilized by the Servicer in connection
with its performance of the Services.
SECTION 6.03. Related Document Amendments. AFT shall not take, and
shall not permit any other Person within the AFT Group to take, any action that
would increase in any respect the scope, nature or level of the Services to be
provided under this Agreement without the Servicer's express prior written
consent, including by entering into, amending, modifying or supplementing any
Aircraft Assets Related Document (it being understood that (i) the Servicer
shall have no liability to any Person within the AFT Group directly or
indirectly arising out of, in connection with or related to, the Servicer's
failure to perform such increased Service prior to any such amendment,
modification
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or supplement being consented to in writing by the Servicer and (ii) no Person
within the AFT Group shall be permitted to engage another Person to perform the
affected Service without the prior written consent of the Servicer).
SECTION 6.04. Other Aircraft. Except as otherwise expressly provided
in Section 2.04(b), 3.02(c) and Section 10.04 of this Agreement, AFT shall not,
and shall not permit any other Person within the AFT Group or any agent of any
Person thereof (including the Administrative Agent) to, enter into, or cause or
permit any Person (other than the Servicer or any Person acting for or on its
behalf) to enter into on its behalf, (a) any transaction for the lease or sale
of any Aircraft Asset in respect of which the Servicer is at such time
performing Services or (b) any agreement for the performance by any Person other
than the Servicer of some or all of the Services, in the case of (a) and (b)
without the prior written consent of the Servicer.
SECTION 6.05. Communications. AFT shall, and shall cause each other
Person within the AFT Group and the Administrative Agent to, forward promptly to
the Servicer a copy (or, if such communication is oral, notify the Servicer by
prompt oral or written notice and, if oral notice, confirmed in writing upon
request) of any communication received from any Person (including any Person
under any Aircraft Assets Related Document) in relation to any Aircraft Asset.
SECTION 6.06. Ratification. AFT hereby ratifies and confirms and
agrees to ratify and confirm (and shall cause each other Person within the AFT
Group to do the same) (and shall furnish written evidence thereof upon request
of the Servicer) whatever the Servicer does in accordance with this Agreement in
the exercise of any of the powers or authorities conferred upon the Servicer
under the terms of this Agreement.
SECTION 6.07. Additional Aircraft Assets. If any Aircraft Asset
shall become a Former Aircraft Asset pursuant to the provisions of Section 2.04
and thereafter the condition which caused such Former Aircraft Asset to cease to
be an Aircraft Asset shall no longer exist or the transaction entered into as
contemplated by Section 2.04(b) shall terminate, then AFT shall, and shall
require each other Person within the AFT Group, as appropriate, to, cause such
Former Aircraft Asset to become an Aircraft Asset and the Servicer shall accept
such Aircraft Asset as an Aircraft Asset, such action to be confirmed by an
exchange of correspondence to such effect.
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SECTION 6.08. Execution, Amendment, Modification or Termination of
Aircraft Assets Related Documents. (a) In connection with the acquisition of any
Aircraft (other than any Former Aircraft Asset) which becomes an Aircraft Asset
after the Closing Date other than pursuant to the Asset Purchase Agreement, no
later than ten Business Days prior to such Aircraft becoming an Aircraft Asset,
AFT shall deliver a written notice thereof to the Servicer setting forth the
model type and manufacturer's serial number of such Aircraft and the Person
within the AFT Group which will become the owner of such Aircraft upon its
acquisition, together with (x) a true and complete list all documents related to
such Aircraft which will become Aircraft Assets Related Documents upon the
acquisition of such Aircraft and (y) a true and complete copy of each document
which will become an Aircraft Assets Related Document upon the acquisition of
such Aircraft or, to the extent it has yet to be executed, the most current
draft of such document (with a final executed copy to be delivered as promptly
as practicable thereafter). AFT will be deemed to represent and warrant to, and
agree with, the Servicer on the date such Aircraft becomes an Aircraft Asset
that (i) the Person within the AFT Group listed as the owner of such Aircraft in
the written notice provided by AFT will have such title to such Aircraft as was
conveyed to such Person on its acquisition free and clear of all Liens created
by or through such Person, (ii) each Aircraft Assets Related Document related to
such Aircraft is a legal, valid and binding agreement of the Person within the
AFT Group that is a party thereto (including by way of assignment or novation)
and is enforceable against such Person within the AFT Group that is a party
thereto in accordance with its terms and (iii) no Person within the AFT Group
has modified, amended or waived any provision of or terminated any Aircraft
Assets Related Document referred to in such written notice provided by AFT
except as disclosed therein. The Servicer shall not be required to perform any
services provided for in or in connection with any Aircraft Assets Related
Documents not delivered to it, and, to the extent that the failure to provide
such service results in any Losses to the Servicer, AFT shall indemnify the
Servicer for such Losses on an After-Tax Basis, in accordance with the
provisions of Article XI.
(b) No later than five Business Days after the date that (i) any
agreement, instrument or other document becomes an Aircraft Assets Related
Document (other than as contemplated in Section 6.08(a)) or (ii) any Aircraft
Assets Related Document shall have been amended, modified or terminated, AFT
shall
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deliver written notice thereof to the Servicer together with (x) in the case of
any newly executed Aircraft Assets Related Document, a true and complete copy of
such Aircraft Assets Related Document, a list of all Aircraft Assets to which it
relates and a description, in reasonable detail, of the relevance of such
Aircraft Assets Related Document to such assets or (y) in the case of any
amendment, modification or termination, a true and complete copy of any related
agreement, instrument or other document; provided, however, that such notice or
such document shall not be required to be delivered, but shall be delivered if
the Servicer does not have possession of such notice or document, delivery is so
requested by the Servicer and AFT has possession of such notice or document, if
the Servicer was substantially involved in the preparation and execution of such
new, amended, modified or terminated agreement, instrument or other document.
SECTION 6.09. Access to AFT Group Information. At all such times as
the Servicer may reasonably request, AFT shall grant, and shall cause each other
Person within the AFT Group and the Administrative Agent to grant, access to the
Servicer and its agents to the books of account, documents and other records of
such Person (including "read only" and reporting access to the management
information systems used by such Persons), and to officers, directors (or
trustees, as applicable) and employees of each Person within the AFT Group or
any such agent for the purposes of the Servicer's performance of its obligations
in respect of Aircraft Assets under this Agreement. AFT will provide the
Servicer with copies of the minutes of the board of Controlling Trustees of AFT
and any written materials presented to the board by any Person, including,
without limitation, the Administrative Agent.
SECTION 6.10. AFT Group Accounts and Cash Arrangements. (a) AFT
shall not, and shall not permit any other Person within the AFT Group or any
agent thereof to, establish any new bank or similar account relating to the
Aircraft Assets or close any bank or similar account relating to the Aircraft
Assets other than in accordance with the terms of the Indenture, the Security
Trust Agreement or the Administrative Agency Agreement.
(b) No Person within the AFT Group shall modify any arrangement with
respect to any bank or similar account or the flow of cash in connection with
the Aircraft Assets other than in accordance with the terms of the Indenture,
the Security Trust Agreement or the Administrative Agency Agreement.
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SECTION 6.11. Notification of Bankruptcy. If AFT, or any other
Person within the AFT Group, shall consider taking any action to:
(a) file any petition or application, commence any proceeding, pass
any resolution or convene a meeting with respect to (i) itself, any of its
Affiliates or any of its assets under any United States Federal, state or
local, foreign or other law relating to the appointment of an examiner,
liquidator, receiver or similar Person with respect to AFT or any other
Person within the AFT Group or over the whole or any part of any
properties or assets of any of AFT or any other Person within the AFT
Group or (ii) any bankruptcy, reorganization, compromise arrangements or
insolvency of any of AFT or any other Person within the AFT Group; or
(b) make an assignment for the benefit of its creditors generally;
then AFT shall notify the Servicer of such consideration a reasonable period of
time prior to taking any such action to the extent practicable, but, in any
event, prior to taking any such action (it being understood that the foregoing
notice requirement shall not be construed to prohibit or restrain the taking of
any action described in (a) or (b) above). If any of AFT or any other Person
within the AFT Group becomes aware of the intention of, or any action by, any
Person (whether a creditor or member of any of AFT or any other Person within
the AFT Group) to appoint an examiner, liquidator, receiver or similar Person,
it shall promptly notify the Servicer accordingly.
SECTION 6.12. Further Assurances. AFT agrees, and shall cause each
other Person within the AFT Group and their respective agents (including the
Administrative Agent) to agree, that, at any time and from time to time, upon
the written request of the Servicer, it will execute and deliver such further
documents and do such further acts and things as the Servicer may reasonably
request in order to effect the purposes of this Agreement.
SECTION 6.13. Guarantees. AFT agrees, and shall cause each other
Person within the AFT Group, to execute and deliver an AFT Group Guarantee in
favor of the Servicer in the form attached hereto as Appendix B.
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SECTION 6.14. Transfers of Funds. AFT agrees, and shall cause each
other Person within the AFT Group and their respective agents (including the
Administrative Agent), to cooperate with the Servicer to the extent necessary to
cause funds to be transferred into or out of the various Bank Accounts in order
for the various payments from Lessees to be applied on a basis consistent with
the instructions of such Lessees, subject in each case to the terms of the
Leases and the rights and obligations of the lessors thereunder.
ARTICLE VII
AFT GROUP RESPONSIBILITY
SECTION 7.01. AFT Group Responsibility. Notwithstanding the
appointment of the Servicer to perform the Services and the related delegation
of authority and responsibility to the Servicer pursuant to this Agreement, each
of AFT and each other Person within the AFT Group shall continue to have and
exercise through its Controlling Trustees or board of directors, as applicable,
real and effective central control and management of all matters related to its
ongoing business, operations, assets and liabilities, subject to matters that
are expressly the responsibility of the Servicer in accordance with the terms of
this Agreement, and each of AFT and each other Person within the AFT Group shall
at all times conduct its separate ongoing business in such a manner that the
same shall at all times be readily identifiable from the separate business of
the Servicer. Matters with respect to which responsibility is not being
delegated to the Servicer shall include but are not limited to the matters set
forth in Schedule 7.01.
SECTION 7.02. Performance with Respect to Aircraft Assets. AFT has
directed the Servicer to, and the Servicer will, perform the Services in a
manner that is intended to be consistent with maximizing the cash flows derived
from the leases relating to the Aircraft Assets over time, subject to the
constraints imposed by the Indenture and this Agreement and by seeking to
achieve a balanced and diversified portfolio (including with respect to lessees,
geography and lease term lengths), in all cases taking into account the
then-existing and anticipated market conditions affecting the operating lease of
used aircraft and the commercial aviation industry generally.
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AFT understands and acknowledges the inherent uncertainty in determining market
conditions at any point in time as well as the inherent limitations in
anticipating market conditions from time to time. It is expressly understood
that this Section 7.02 does not impose any higher or different standard of care
or liability than is set forth in Article III.
SECTION 7.03. Lease Operating Budget; Aircraft Asset Expenses
Budget. (a) AFT shall adopt with respect to each year during the term of this
Agreement, in accordance with Sections 7.03(b), (c) and (d), (i) a single lease
operating budget with respect to all Aircraft Assets (the "Lease Operating
Budget") and (ii) a single budget with respect to the Aircraft Asset expenses
related to all Aircraft Assets (the "Aircraft Asset Expenses Budget"); provided,
however, that, with respect to the Year commencing January 1, 1999, AFT shall
have adopted the Lease Operating Budget and the Aircraft Asset Expenses Budget
for such Year that are attached to a certificate delivered by AFT to the
Servicer on the Closing Date.
(b) In respect of each Year during the term of this Agreement, it is
understood that the Administrative Agent shall prepare on behalf of the AFT
Group, and not later than the October 31 immediately preceding the commencement
of such Year deliver to the Servicer (other than with respect to the fiscal year
commencing January 1, 1999), a proposed Lease Operating Budget and a proposed
Aircraft Asset Expenses Budget for such Year together with reasonably detailed
information regarding the assumptions underlying such proposed budgets.
(c) In connection with the preparation of such proposed Lease
Operating Budget and Aircraft Asset Expenses Budget, the Servicer shall provide
the Administrative Agent, not later than the September 30 immediately preceding
the commencement of such Year (other than with respect to the fiscal year
commencing January 1, 1999), information in a form to be agreed from time to
time relating to (i) Aircraft Assets lease rates, (ii) Aircraft Assets downtime,
(iii) direct technical expenditures (including any costs to be capitalized)
relating to the Aircraft Assets, (iv) indirect costs relating to insurance,
legal, consulting and other similar expenses and (v) such other Aircraft Assets
expense-related information as may be reasonably required to prepare such
budgets, in each case including the assumptions relating thereto. The Servicer
shall only be obligated to provide expense-related information to the
Administrative Agent pursuant to this Section 7.03(c) to the extent that such
information relates to the Services performed
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by the Servicer hereunder. AFT shall ensure that the Administrative Agent is
instructed to prepare each such proposed Lease Operating Budget and proposed
Aircraft Assets Expenses Budget on a timely basis.
(d) After the delivery of such proposed Lease Operating Budget and
Aircraft Asset Expenses Budget as described in Sections 7.03(b) and (c), the
Servicer and the Administrative Agent shall review and discuss such proposed
Lease Operating Budget and Aircraft Asset Expenses Budget and shall make such
adjustments thereto as they shall deem appropriate, and the revised proposed
Lease Operating Budget and proposed Aircraft Asset Expenses Budget in respect of
any Year shall then be submitted no later than the December 1 preceding such
Year to AFT for its consideration and approval (other than with respect to the
fiscal year commencing January 1, 1999). The approved Lease Operating Budget and
Aircraft Asset Expenses Budget for any Year, as each may be amended or modified
from time to time, shall hereinafter be referred to as the "Approved Budget".
Each Approved Budget shall be consistent with, and not in any manner reduce,
limit or circumscribe, the delegation to the Servicer pursuant to this Agreement
(including pursuant to Section 7.04) of a practical and workable level of
autonomy, authority and responsibility with respect to the performance of the
Services.
(e) If AFT does not adopt any Approved Budget for any Year as
contemplated by Section 7.03(d) or if, after an Approved Budget is adopted, AFT
shall determine that any Changed Circumstances have occurred and are continuing,
then AFT shall instruct the Servicer and the Administrative Agent, on behalf of
the AFT Group, to review and, to the extent possible, revise the Lease Operating
Budget and Aircraft Asset Expenses Budget in such a manner as to adequately
address the concerns of AFT and/or such Changed Circumstances (it being
understood that, subject to the last sentence of Section 7.03(d), AFT may
instruct the Servicer to proceed with a Lease Operating Budget and an Aircraft
Asset Expenses Budget approved by AFT if AFT determines that any proposed
revisions do not adequately address the concerns of AFT and/or such Changed
Circumstances).
(f) Notwithstanding any other provision hereof, the Servicer shall
have no liability for the failure of the Approved Budget for any Year to be
achieved.
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SECTION 7.04. Transaction Approval Requirements. (a) The Servicer
shall not do any of the following without the express prior written approval of
AFT:
(i) Except as otherwise required in accordance with the terms of any
Lease or the Asset Purchase Agreement, sell (or enter into any agreement
to sell) or otherwise dispose of any Aircraft (excluding any sale or
exchange of any Engine, parts or components thereof or aircraft or engine
spare parts or ancillary equipment or devices furnished therewith) forming
part of the Aircraft Assets.
(ii) Enter into any new Lease (or any renewal or extension of an
existing Lease, unless any such Lease being renewed or extended had
previously been approved pursuant to this Section 7.04(a) or if any such
Lease contains an extension option and such option is being exercised in
accordance with the terms of such Lease) of Aircraft Assets if the Lease
shall not comply with all the applicable provisions of Sections 5.02 and
5.03 of the Indenture with respect to the leasing of such Aircraft Assets
or if the Lease grants a purchase option in favor of the lessee.
(iii) Terminate any Lease or Leases (without substitution of, or
replacement by, another substantially similar Lease or Leases with respect
to such Aircraft Assets) to any single Lessee with respect to any Aircraft
Assets then having an aggregate depreciated net book value on the books of
the applicable Person(s) within the AFT Group in excess of $75,000,000.
(iv) Unless provided for in the then current Approved Budget
(including the provisions of Section 7.03(e)), enter into any contract for
the modification and/or maintenance of Aircraft Assets if the costs to be
incurred thereunder by the applicable Person within the AFT Group (A)
exceed the greater of (1) the estimated aggregate cost of a heavy
maintenance "D" check for the airframe and a total refurbishment of the
engines for Aircraft Assets of the type in question and (2) the amount of
the available maintenance reserves or other collateral under the
applicable Lease or (B) are outside the ordinary course of the AFT Group's
business.
(v) Issue any Guarantee on behalf of, or otherwise pledge the credit
of (other than with respect to trade
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payables in the ordinary course of the AFT Group's business), any Person
within the AFT Group.
(vi) Except as specifically contemplated by Schedule 2.02(a), on
behalf of any Person within the AFT Group, enter into, amend or grant a
waiver with respect to, any transaction with GE Capital or any of its
Affiliates (including GE and its Affiliates), including for the
acquisition, sale or lease of any Aircraft Assets from or to, or the
obtaining or provision of services by, any such Person.
(vii) Incur on behalf of any Person within the AFT Group any
liability (actual or contingent) or cause any such liability to be
incurred, except for a liability (A) contemplated in the then current
Approved Budget, (B) arising out of, in connection with or related to a
transaction of a type which is otherwise subject to approval under this
Section 7.04 and is in fact so approved or, due to the existence of an
exception, limitation or other carve out contained therein or in any
definition therein, is not subject to approval under the relevant
provision of this Section 7.04, (C) incurred in the ordinary course of the
AFT Group's business, including, but not limited to, liabilities related
to such matters specified in Schedule 7.04, or (D) incurred pursuant to a
Lease in entering into the Lease or performing any obligations of the
lessor thereunder; provided, however, that the exception contained in
clause (C) above is not intended to override any other restriction
contained in this Agreement (other than this clause (vii)) relating to the
incurrence of any liability referred to in such clause (C).
(viii) Enter into on behalf of AFT or any Person within the AFT
Group, any order or commitment to acquire, or acquire on behalf of the AFT
Group, aircraft or, except as otherwise provided in Section 4(e) of
Schedule 2.02(a), aircraft engines, except (A) in accordance with any
Lease or (B) to acquire a replacement engine for an Aircraft so long as
the same is provided for in the then current Approved Budget;
provided, however, that, before the Servicer shall effect (or cause to be
effected) any optional improvement or modification of any Aircraft Asset or
effect any optional conversion of any Aircraft Asset from a passenger aircraft
to a freighter or
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mixed-use aircraft or purchase or otherwise acquire any Engines or Parts outside
of the ordinary course of business (other than in the ordinary course of
business in connection with a new lease of such Aircraft Asset), the Servicer
shall request that AFT deliver to the Servicer a certificate certifying that
such action will not violate Section 5.02(i) of the Indenture, such certificate
to be delivered to the Servicer within seven Business Days after such request
therefor, and the Servicer shall not undertake such action pending receipt of
such certificate.
(b) Any transaction entered into by the Servicer on behalf of any
Person within the AFT Group (other than with other Persons within the AFT Group)
shall be on an arm's-length basis and on fair market value terms, unless
otherwise agreed by AFT on behalf of any such Person within the AFT Group.
(c) The transaction approval requirements (the "Transaction Approval
Requirements") set forth in this Section 7.04 may only be amended by mutual
agreement of the parties, and shall not in any event be amended to reduce, or
circumscribe the delegation to the Servicer of, the level of autonomy, authority
and responsibility contemplated by the Transaction Approval Requirements with
respect to the performance of the Services. Any rejection by AFT of any proposed
transaction submitted to it by the Servicer pursuant to the Transaction Approval
Requirements shall only be applicable to such portions of any such proposed
transaction as are specifically required to be approved as set forth in Section
7.04(a).
(d) AFT shall provide the Servicer with a response confirming its
approval or rejection of any proposed transaction submitted to it by the
Servicer as promptly as practicable following its receipt of a proposal from the
Servicer and in any event not more than three Business Days after receipt of
such a proposal. In the event that the Controlling Trustees of AFT, a duly
authorized committee thereof or the Administrative Agent fails to approve of any
transaction with respect to which an approval is required pursuant to the
Transaction Approval Requirements and in respect of which the Servicer has
submitted a reasonably detailed written proposal, AFT shall provide a reasonably
detailed written explanation for any such rejection to the Servicer
simultaneously with notifying the Servicer of such rejection. The Servicer is
not required to take any action with respect to any transaction for which
approval was sought pending receipt of such explanation.
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SECTION 7.05. Approved Budgets and Transaction Approval
Requirements. Except as set forth in Section 7.04(a), no transaction entered
into by the Servicer on behalf of any Person within the AFT Group in connection
with the performance by the Servicer of the Services shall require the approval
of any Person within the AFT Group or its Controlling Trustees or board of
directors, as applicable, or any committees thereof; provided, however, that
nothing set forth in this Article VII shall prohibit the Servicer from seeking
any approval or direction from AFT with respect to any matter related to the
Services or the Aircraft Assets to the extent that the Servicer believes to be
appropriate and pending the Servicer's receipt of any such approval or
direction, the Servicer may refrain from taking any action with respect to the
matter for which the Servicer has sought approval or direction.
ARTICLE VIII
EFFECTIVENESS
SECTION 8.01. Effectiveness. The effectiveness of this Agreement and
all obligations of the parties hereunder shall be conditioned upon satisfaction
(or waiver by the appropriate party) of the conditions set forth in Schedule
8.01.
ARTICLE IX
SERVICING FEES; EXPENSES; TAXES;
PRIORITY OF SERVICING FEES
SECTION 9.01. Servicing Fees; UniCapital Serviced Aircraft. (a) In
consideration of the Servicer's performance of the Services, AFT agrees to pay
to the Servicer servicing fees consisting of (i) the monthly base fee set forth
in Section 9.02 ("Monthly Base Fee"), (ii) the rent fees set forth in Section
9.03 ("Rent Fees"), (iii) the sales fee set forth in Section 9.04 ("Sales Fee")
and (iv) the additional servicing fees set forth in Section 9.05 ("Additional
Servicing Fees").
(b) For purposes of Sections 9.03, 9.04 and 9.05, the term "Aircraft
Assets" shall be deemed to include all UniCapital Serviced Aircraft and the
UniCapital Serviced Aircraft shall be
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included in the calculation of the Servicing Fees set forth in such Sections on
the terms and to the extent provided for in the following two sentences. With
respect to any UniCapital Serviced Aircraft which is also an Initial UniCapital
Aircraft, 50% of the gross proceeds received by any Person within the AFT Group
in respect of a Disposition of such UniCapital Serviced Aircraft shall be
included as Gross Proceeds for purposes of calculating the Sales Fee, the
Additional Sales Fee and the Additional Disposition Fee. In respect of any
UniCapital Serviced Aircraft with respect to which the Servicer arranged or
negotiated the related Lease or the extension or renewal of such Lease (it being
understood that in the event that the Lease to TransMeridian Airlines
contemplated by the Letter of Intent referred to in clause (y) of the proviso to
this sentence is implemented, the Servicer shall not be deemed to have arranged
or negotiated such Lease), (i) 50% (in the case of any Initial UniCapital
Aircraft) and 75% (in the case of any Additional UniCapital Aircraft) of the
Rents due or actually paid, as applicable, in respect of such UniCapital
Serviced Aircraft shall be included in the calculation of the Rent Payable Fee,
the Rent Collected Fee and the Additional Rent Collected Fee, and (ii) 50% (in
the case of any Initial UniCapital Aircraft, without duplication of amounts
included pursuant to the prior sentence) and 75% (in the case of any Additional
UniCapital Aircraft) of the gross proceeds received by any Person within the AFT
Group in respect of a Disposition of such UniCapital Serviced Aircraft shall be
included as Gross Proceeds for purposes of calculating the Sales Fee, the
Additional Sales Fee and the Additional Disposition Fee; provided, however, that
if the Lease is with a Lessee that was both (x) the Lessee of such UniCapital
Aircraft immediately prior to the effectiveness of such Lease or the extension
or renewal of such Lease and (y) the initial Lessee of such UniCapital Aircraft
at the time that such UniCapital Aircraft had first become an Aircraft Asset
under this Agreement (for purposes of this clause (y) if the Airbus A320-200
Aircraft (with manufacturer's serial number 373) shall be both an Initial
UniCapital Aircraft and leased to TransMeridian Airlines as contemplated by the
Letter of Intent dated October 28, 1998, TransMeridian Airlines shall be deemed
to be the relevant initial Lessee), then (A) 0% (in the case of any Initial
UniCapital Aircraft) and 50% (in the case of any Additional UniCapital Aircraft)
of the Rents due or actually paid, as applicable, in respect of such UniCapital
Serviced Aircraft shall be included in the calculation of the Rent Payable Fee,
the Rent Collected Fee and the Additional Rent Collected Fee, and (B) 50% (in
the case of any Initial UniCapital Aircraft, without duplication of amounts
included
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pursuant to the prior sentence) and 50% (in the case of any Additional
UniCapital Aircraft) of the gross proceeds received by any Person within the AFT
Group in respect of a Disposition of such UniCapital Serviced Aircraft shall be
included as Gross Proceeds for purposes of calculating the Sales Fee, the
Additional Sales Fee and the Additional Disposition Fee; provided further,
however, that the gross proceeds received by any Person within the AFT Group in
respect of a Disposition of a UniCapital Serviced Aircraft which is also an
Additional UniCapital Aircraft shall be included as Gross Proceeds as provided
for in this sentence only if the Disposition occurs while such UniCapital
Serviced Aircraft is subject to the Lease or the Lease extension or renewal
which was arranged or negotiated by the Servicer.
(c) AFT agrees to provide the Servicer (with a copy to the
Administrative Agent) with any information in a timely manner that the Servicer
may reasonably request to enable the Servicer to determine the timing and amount
of any payment that the Servicer is entitled to receive pursuant to this
Agreement.
SECTION 9.02. Monthly Base Fee. A Monthly Base Fee equal to $150,000
shall be payable by AFT to the Servicer in arrears on each Payment Date during
the Term of this Agreement; provided, however, that in the event that any
Aircraft (other than any Former Aircraft Asset) shall become an Aircraft Asset
after the Closing Date other than pursuant to the Asset Purchase Agreement, then
the Monthly Base Fee will be increased to reflect the addition of such Aircraft,
and the amount of such increase will be negotiated in good faith by AFT and the
Servicer.
SECTION 9.03. Rent Fees. (a) Rent Fees shall consist of the Rent
Payable Fee and the Rent Collected Fee. The Rent Fees shall be calculated by the
Servicer, with the assistance of AFT to the extent such Rent Fees relate to any
UniCapital Serviced Aircraft, and payable by AFT as follows:
(i) A Rent Payable Fee shall be payable by AFT to the Servicer in
arrears for each period commencing on the Closing Date (or, thereafter, the
fourth Business Day prior to the most recent Calculation Date) and ending on the
fourth Business Day prior to the next succeeding Calculation Date during the
term of this Agreement (each such period, a "Fee Period"), such payment to be
made no later than the Payment Date immediately following the end of each such
Fee Period.
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The "Rent Payable Fee" in respect of any Fee Period shall equal one
percent of the aggregate amount of the Rents due from each Lessee attributable
to such Fee Period, or portion of such Fee Period in which the relevant Aircraft
constitutes an Aircraft Asset or a UniCapital Serviced Aircraft; provided,
however, that, in the event of an early termination of a Lease relating to any
Aircraft Asset for any reason (other than by reason of the occurrence of an
event of loss or exercise of a purchase option), the Rents which would have been
payable pursuant to such Lease but for such early termination will be included
in this calculation of the Rent Payable Fee until the earlier of (a) the date on
which Rents shall become payable in respect of such Aircraft Asset pursuant to
another Lease the Rents of which shall be included in this calculation of the
Rent Payable Fee and (b) the day that numerically corresponds to the first date
by which such Aircraft Asset and related Aircraft Documents shall have been
physically repossessed by the Servicer (or, in the case of any UniCapital
Serviced Aircraft, the servicer under the UniCapital Servicing Agreement)
following such early termination in (or, if no such day exists, the last day of)
the calendar month that is the third month after the month in which such date
occurs; provided further, however, that Rents due in respect of any UniCapital
Serviced Aircraft shall be included in this calculation of the Rent Payable Fee
on the terms and to the extent provided for in Section 9.01(b).
(ii) A Rent Collected Fee shall be payable by AFT to the Servicer in
arrears for each Fee Period, such payment to be made no later than the Payment
Date immediately following the end of each such Fee Period.
The "Rent Collected Fee" in respect of any Fee Period shall equal
one percent of the aggregate amount of the Rents actually paid by each Lessee
and, if any Lessee fails to pay any Rent when due, amounts applied towards such
payment during such Fee Period or portion of such Fee Period in which the
relevant Aircraft constitutes an Aircraft Asset or a UniCapital Serviced
Aircraft; provided, however, that if any collateral security, including any
security deposit, is applied to the payment of Rent, then, for purposes of
calculating the Rent Collected Fee, the amounts so applied shall not be included
as Rent at the time of such application but shall be so included at such time as
any Person within the AFT Group shall receive substitute collateral security or
a payment (whether in the form of Rent or otherwise) which restores, in whole or
in part, such collateral security; provided further, however, that Rents
actually paid in respect of any UniCapital Serviced Aircraft shall be included
in this
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calculation of the Rent Collected Fee on the terms and to the extent provided
for in Section 9.01(b).
(b) Not less than four Business Days prior to each Payment Date
immediately following the end of each Fee Period, the Servicer shall deliver a
written notice to AFT specifying the amount of the Rent Payable Fee and the
amount of the Rent Collected Fee payable in respect of such Fee Period.
SECTION 9.04. Sales Fee. (a) A Sales Fee shall be payable with
respect to each Fee Period by AFT to the Servicer, such payment to be made not
later than the Payment Date immediately following the end of each such Fee
Period.
(b) The "Sales Fee" in respect of any Fee Period shall equal one
percent multiplied by the Aggregate Gross Proceeds in respect of Dispositions of
Aircraft Assets during such Fee Period. "Aggregate Gross Proceeds" for any Fee
Period means the sum of the Gross Proceeds for each Disposition of an Aircraft
Asset that is an Aircraft Asset during such Fee Period. "Disposition" means,
with respect to any Aircraft Asset, the sale (including pursuant to the exercise
of a purchase option), total loss or other event or circumstances under which
such Aircraft Asset ceases to be an Aircraft Asset or, in the case of any
Aircraft Asset which is a UniCapital Serviced Aircraft, ceases to be a
UniCapital Serviced Aircraft. "Gross Proceeds" shall be an amount equal to the
gross proceeds (including the fair market value of any non-cash consideration)
received by any Person within the AFT Group in respect of any Disposition of an
Aircraft Asset; provided however, that the gross proceeds in respect of a
Disposition of a UniCapital Serviced Aircraft shall be included as Gross
Proceeds on the terms and to the extent provided for in Section 9.01(b).
(c) Not less than four Business Days prior to each Payment Date
immediately following the end of each Fee Period, the Servicer shall deliver a
written notice to AFT specifying the amount of the Sales Fee payable in respect
of such Fee Period.
SECTION 9.05. Additional Servicing Fees. (a) Additional Servicing
Fees shall consist of Additional Sales Fees, Additional Disposition Fees and
Additional Rent Collected Fees. The Additional Servicing Fees shall be
calculated by the Servicer, with the assistance of AFT to the extent such
Additional Servicing Fees relate to any UniCapital Serviced Aircraft, and
payable by AFT as follows:
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(i) An Additional Sales Fee shall be payable by AFT to the Servicer
with respect to each Fee Period, such payment to be made on the Payment Date
that amounts are distributed to the Servicer pursuant to Section 3.08(a)(xxxiv)
of the Indenture; provided, however, that such payment shall be made not later
than the Payment Date immediately following the date on which all amounts
outstanding to be paid under the Notes issued on the Closing Date shall have
been paid in full. The "Additional Sales Fee" in respect of any Fee Period shall
equal one percent multiplied by the Aggregate Gross Proceeds in respect of
Dispositions of Aircraft Assets during such Fee Period.
(ii) An Additional Disposition Fee shall be payable by AFT to the
Servicer in respect of any Disposition of an Aircraft Asset, such payment to be
made on the Payment Date that amounts are distributed to the Servicer pursuant
to Section 3.08(a)(xxxiv) of the Indenture.
The "Additional Disposition Fee" in respect of any Disposition of an
Aircraft Asset shall equal five percent multiplied by the Adjusted Gross
Proceeds in respect of such Disposition. "Adjusted Gross Proceeds" means, in
respect of the Disposition of an Aircraft Asset, an amount equal to (i) the
Gross Proceeds received by any Person within the AFT Group in respect of such
Aircraft minus (ii) the sum of the Sales Fee and the Additional Sales Fee
payable in respect of such Disposition and the Outstanding Principal Balance of
Notes allocable to such Aircraft. On any date, the Outstanding Principal Balance
of Notes allocable to an Aircraft shall equal the product of (i) (A) the
Adjusted Base Value of such Aircraft divided by (B) the Adjusted Portfolio Value
and (ii) the aggregate Outstanding Principal Balance of Notes, in each case on
the most recent Payment Date.
(iii) An Additional Rent Collected Fee shall be payable by AFT to
the Servicer for each Fee Period commencing on or after the fourth Business Day
prior to the Calculation Date immediately preceding the Payment Date on which
all amounts outstanding to be paid under the Notes shall have been paid in full
(each such Fee Period, an "Additional Fee Period"), such payment to be made no
later than the Payment Date immediately following the end of each such
Additional Fee Period.
The "Additional Rent Collected Fee" in respect of any Additional Fee
Period shall equal three percent of the aggregate amount of the Rents actually
paid by each Lessee and, if any
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Lessees fails to pay any Rents when due, amounts applied towards such payment
during such Additional Fee Period or portion of such Additional Fee Period in
which the relevant Aircraft constitutes an Aircraft Asset or a UniCapital
Serviced Aircraft; provided, however, that Rents actually paid in respect of any
UniCapital Serviced Aircraft shall be included in this calculation of the
Additional Rent Collected Fee on the terms and to the extent provided for in
Section 9.01(b).
(b) Not less than four Business Days prior to each Payment Date
immediately following the end of each Fee Period, the Servicer shall deliver a
written notice to AFT specifying the amount of any Additional Disposition Fees
and the Additional Rent Collected Fee, payable in respect of such Fee Period.
SECTION 9.06. Expenses. (a) The Servicer shall be responsible for,
and shall not be entitled to reimbursement for, the Servicer's overhead expenses
set forth in Schedule 9.06(a) ("Overhead Expenses").
(b) (i) AFT shall be responsible for all costs and expenses relating
to or associated with the Aircraft Assets other than Overhead Expenses,
including those costs and expenses set forth in Schedule 9.06(b) ("Aircraft
Asset Expenses"). Nothing contained in this Section 9.06 shall be deemed to
impose on the Servicer any obligation to advance any of its own funds for any
Aircraft Asset Expenses.
(ii) If, in connection with the performance of Services, the
Servicer, on behalf of any Person within the AFT Group, proposes to provide
goods and services, or arrange for the provision of goods or services, from any
vendor, supplier, service provider or other Person (A) for a purchase price in
excess of U.S. $1,000,000 (or the equivalent thereof in the currency in which
such obligation is payable) or (B) at any time when a default in respect of the
payment of any amount due under this Agreement shall have occurred and be
continuing, the Servicer may require AFT to pay for such goods or services in
advance or otherwise make the funds for payment of such goods or services
available to the satisfaction of the Servicer. If such advance payment is not
made or such funds are not otherwise made available, notwithstanding any other
provision in this Agreement, the Servicer shall be relieved of its obligation to
provide or arrange for the provision of such goods or services in respect of the
Aircraft Assets for which such goods or services were to be provided but shall
otherwise continue to manage such Aircraft Assets as provided in this Agreement
and
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shall continue to be entitled to receive Asset Based Servicing Fees in respect
of such Aircraft Assets. In such case, AFT may provide or arrange for the
provision of such goods or services in respect of such Aircraft Assets.
SECTION 9.07. Taxes. (a) AFT agrees to pay on an After-Tax Basis and
to indemnify and hold harmless the Indemnified Parties on an After-Tax Basis
from and against (i) all liability for Taxes of or imposed on the Taxpayers that
are imposed on, or asserted to be payable by, any Indemnified Party as a result
of the structuring and implementation of any aspect of the various transactions
contemplated by the Final Prospectus or otherwise (other than any such Taxes
described in Section 9.07(f)), regardless of whether such Taxes are attributable
to a taxable period ending before, on or after the Closing Date, other than any
such Taxes imposed on or payable by a Taxpayer in its capacity as a withholding
agent in respect of amounts payable pursuant to this Agreement to an Indemnified
Party and (ii) any liability for out-of-pocket fees, costs and expenses
(including reasonable attorneys' fees) arising out of or incident to any Tax
indemnified hereunder. If any Taxes for which AFT is to indemnify any
Indemnified Party pursuant to the immediately preceding sentence are payable
after the Closing Date, AFT shall pay or cause to be paid to such Indemnified
Party an amount calculated on an After-Tax Basis equal to the amount of such
Taxes no later than the later of (x) five Business Days after such Indemnified
Party gives notice to AFT that such amount is due and specifying the date such
Taxes are due and payable (the "Due Date") and (y) one Business Day before the
Due Date. Amounts described in clause (ii) shall be reimbursed on an After-Tax
Basis not less frequently than quarterly. Any payment required to be made
hereunder and not made at the time specified in the preceding two sentences
shall bear interest at the Stipulated Interest Rate or such higher rate actually
payable by such Indemnified Party on the delayed payment of the Taxes being
indemnified, calculated from the date such payment was required to be made
hereunder to the date such payment is actually received by the Indemnified
Party.
(b) All amounts payable by or on behalf of AFT pursuant to this
Agreement shall be payable exclusive of any applicable value added tax, which
value added tax, if payable, shall also be payable by AFT, upon production of a
valid value added tax invoice by the Servicer. All amounts payable to AFT by an
Indemnified Party pursuant to this Agreement shall be inclusive of value added
tax save to the extent such Indemnified Party is entitled to recover (by way of
repayment, credit or set
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off) the whole or any part of such value added tax. Where it is so entitled, at
the request of AFT, value added tax shall be payable in addition thereto on
production of a valid value added tax invoice but payment of the value added tax
element shall not fall due until the latest possible date before the date on
which such Indemnified Party shall receive such repayment, credit or set off
(and such Indemnified Party shall be obligated to use reasonable endeavors
(taking into account its overall tax position) to obtain such repayment, credit
or set off as soon as possible); provided, however, that, to the extent such
payment of the value added tax element shall fall due prior to such date of
receipt pursuant to Applicable Law, AFT shall make such Indemnified Party whole
on an After-Tax Basis for any resulting loss of the time value of funds. The
Servicer shall act on AFT's behalf in processing any refund of value added tax
and the Servicer and AFT shall cooperate in good faith to file an application
for relief from value added taxes on VAT form 60A as soon as practicable after
the date of this Agreement.
(c) Except as provided in Section 9.07(f), AFT shall, on an
After-Tax Basis, pay and indemnify and hold the Indemnified Parties harmless
from all Taxes imposed, levied or assessed against or upon the Person in the AFT
Group or any Indemnified Parties by any Governmental Authority upon or with
respect to any of the Operative Agreements or any payment pursuant thereto or
resulting from the matters or activities described therein, other than (except
to the extent required to make any payment on an After-Tax Basis) (i) payroll,
social security and employment Taxes of such Indemnified Party and any Taxes
that are based on or measured by the net income, net receipts, net profits, net
worth, franchise or conduct of business of such Indemnified Party, (ii) any
Taxes payable by such Indemnified Party pursuant to the controlled foreign
corporation provisions or the passive foreign investment company provisions of
the U.S. Internal Revenue Code of 1986, as amended (the "Code"), or any
successor provision, (iii) any Taxes payable by an Indemnified Party (other than
stamp, documentary or other similar taxes), which Taxes are imposed by Ireland
or the United States of America or any political subdivision of either, or any
other jurisdiction, to the extent such Taxes would not have been imposed but for
any connection of the Indemnified Party or any Affiliate thereof with the
jurisdiction imposing such Taxes (other than any such connection that results
from activities of such Indemnified Party or any Affiliate which activities are
located in such jurisdiction by reason of the location of (x) a specific lessee
or sublessee of any Person within the AFT Group (or, with respect to any
Original Aircraft,
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the owner), (y) an Aircraft or any part thereof or (z) any other Person (other
than any Indemnified Party) with whom any Person within the AFT Group (or, with
respect to any Original Aircraft, the owner) may be engaging, or contemplating
engaging, in a commercial relationship), (iv) Taxes attributable to events or
conditions arising after the termination or expiration of this Agreement and (v)
Taxes imposed as a result of the gross negligence or wilful misconduct of any
Indemnified Party. All Taxes with respect to which AFT has an indemnification
responsibility under this Section 9.07 shall be paid not later than the date
such Taxes shall be due unless and to the extent, in the case of Taxes that do
not burden any of the assets or property of any Indemnified Party and are
assessed solely upon a Person or Persons within the AFT Group, such Person or
Persons within the AFT Group shall be contesting such Taxes in good faith by
appropriate proceedings, in which case such Taxes, or so much thereof as are
being contested and are unpaid, shall be paid promptly upon a final
determination that such Taxes, are due and payable. In the event any Taxes with
respect to which AFT has an indemnification responsibility under this Section
9.07 are levied on any Indemnified Party, or any Indemnified Party is required
by law or otherwise to pay any such Taxes in the first instance or as a result
of a Person or Persons within the AFT Group's failure to comply with, or
nonperformance in relation to, any Applicable Law or regulations governing the
payment thereof by such Person or Persons within the AFT Group, AFT shall pay to
such Indemnified Party the full amount thereof on an After-Tax Basis within five
Business Days after receipt from such Indemnified Party of any written request
for such payment but not later than the due date for such Taxes. Any payment
required to be made hereunder and not made at the time specified under this
Section 9.07 shall bear interest at the Stipulated Interest Rate or such higher
rate actually paid by such Indemnified Party on the delayed payment of the Taxes
being indemnified, calculated from the date such payment was required to be made
hereunder to the date such payment is actually received by such Indemnified
Party.
(d) If any claim or demand is asserted in writing with respect to a
Tax indemnified hereunder, such Indemnified Party shall in good faith notify AFT
of such claim or demand within 10 days of receipt thereof; provided, however,
that failure to give such notification shall not affect such Indemnified Party's
entitlement to indemnification hereunder unless such failure shall materially
and adversely prejudice the ability of AFT to defend itself or any Indemnified
Party against any such action, claim, demand, proceeding or suit. If AFT
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shall so request within 30 days after receipt of such notice, such Indemnified
Party shall in good faith at AFT's expense contest the imposition of such Tax;
provided, however, that such Indemnified Party may in its sole discretion select
any applicable forum for such contest and determine whether any such contest
shall be by (i) resisting payment of such Tax, (ii) paying such Tax under
protest or (iii) paying such Tax and seeking a refund thereof; provided further,
however, that at such Indemnified Party's option such contest shall be conducted
by AFT in the name of such Indemnified Party (subject to the preceding proviso)
(it being understood that AFT shall not be permitted to contest the imposition
of such Tax in the name of such Indemnified Party without the prior written
consent of such Indemnified Party). In no event shall such Indemnified Party be
required or AFT be permitted by such Indemnified Party to contest the imposition
of any Tax for which AFT is obligated to indemnify pursuant to this Section 9.07
unless (i) such Indemnified Party shall have received from AFT (A) an indemnity
reasonably satisfactory to such Indemnified Party for any liability, expense or
loss arising out of or relating to such contest and (B) an opinion of tax
counsel to AFT, furnished at the expense of AFT, to the effect that a reasonable
basis exists for contesting such claim; (ii) AFT shall have agreed to pay such
Indemnified Party on demand all reasonable costs and expenses that such
Indemnified Party may incur in connection with contesting such claim (including
all costs, expenses, losses, reasonable legal and accounting fees,
disbursements, penalties, interest and additions to tax); (iii) AFT shall be in
compliance with all of their obligations under this Agreement; (iv) such
Indemnified Party shall have determined that the action to be taken will not
result in a material risk of sale, forfeiture or loss of, or the creation of any
Lien (except if AFT shall have adequately bonded such Lien or otherwise made
provision to protect the interests of such Indemnified Party in a manner
reasonably satisfactory to such Indemnified Party) on any property or rights of
such Indemnified Party, or any portion thereof or any interest therein; and (v)
if such contest shall be conducted in a manner requiring the payment of the
claim, shall have paid the amount required. Notwithstanding anything contained
in this Section 9.07, an Indemnified Party shall not be required nor shall AFT
be permitted by such Indemnified Party to contest or continue to contest in the
name of an Indemnified Party the imposition of any Tax for which AFT is
obligated to indemnify pursuant to this Section 9.07 if such an Indemnified
Party shall waive in writing its rights to indemnification under this Section
9.07 with respect to such Tax.
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(e) If any Indemnified Party shall obtain a refund of all or any
part of any Tax paid by AFT, such Indemnified Party shall, provided no Event of
Default, or default by AFT in the payment of any amount due hereunder, has
occurred and is continuing, pay AFT an amount equal to the amount of such
refund, including interest received or credited and attributable thereto, plus
any net Tax benefit (or minus any net Tax detriment) realized by such
Indemnified Party as a result of a payment made pursuant to this sentence or as
a result of the receipt or accrual of such refund, including interest received
or credited and attributable thereto. If any Indemnified Party shall have paid
AFT any refund of all or part of any Tax paid by AFT and it is subsequently
determined that such Indemnified Party was not entitled to the refund, such
determination shall be treated as the imposition of a Tax for which AFT is
obligated to indemnify such Indemnified Party pursuant to the provisions of
Section 9.07 hereof.
(f) Notwithstanding the other provisions of this Section 9.07, AFT
will have no liability under this Section 9.07 and the Servicer will indemnify
and hold harmless AFT and the other members of the AFT Group in respect of any
Taxes (including any associated interest, penalties and additions to tax)
imposed by the United States of America as a result of AFT being obligated to
make, or failing to make, a payment of such Taxes pursuant to section 1446 of
the Code, or any successor provision thereto, by reason of the Servicer being
treated as a partner of or in a member of the AFT Group as a result of any
Indemnified Party holding any direct or indirect interest in a D Note (as
defined in the Indenture) or as a result of the Additional Servicing Fees
payable to the Servicer.
SECTION 9.08. Priority of Payments to Servicer. Any and all amounts
due and owing to the Servicer or any of its Affiliates (including any amounts
due and owing to the Servicer or any of its Affiliates with respect to
indemnification) pursuant to this Agreement (other than the Additional Servicing
Fees) shall be entitled to the priority established therefor in the Indenture,
which priority AFT agrees not to amend without the consent of the Servicer.
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ARTICLE X
TERM; RIGHT TO TERMINATE; RESIGNATION;
CONSEQUENCES OF EXPIRATION, TERMINATION,
RESIGNATION OR REMOVAL; CERTAIN TAX MATTERS; SURVIVAL
SECTION 10.01. Term. This Agreement shall have a non-cancelable term
commencing on the Closing Date and expiring on the later of (a) the first date
on which all amounts outstanding to be paid under the Notes (and any similar
obligations of AFT issued pursuant to any other indenture or similar agreement
(i.e., there shall be no Notes or similar obligations outstanding)) shall have
been paid in full and no Beneficial Interest Certificates (or any similar equity
interests in AFT) remain outstanding and (b) the date on which there shall cease
to be any Aircraft Assets; provided, however, that AFT shall be entitled to
terminate this Agreement following the payment in full of all amounts
outstanding to be paid under the Notes and any similar obligations of AFT issued
pursuant to any other indenture or similar agreement (i.e., there shall be no
Notes or similar obligations outstanding). During the term, this Agreement shall
not be terminable by either party except as expressly provided in this Article
X.
SECTION 10.02. Right to Terminate. (a)(i) At any time during the
term of this Agreement, the Servicer shall in accordance with Section 10.02(c)
be entitled to terminate this Agreement if:
(A) AFT shall fail to pay in full when due (1) any Servicing Fees
within five days after the effectiveness of written notice from the
Servicer of such failure or (2) any other amount payable by AFT hereunder
or any other Operative Agreement within ten days after the effectiveness
of written notice from the Servicer of such failure; or
(B) any Person within the AFT Group shall fail to perform or observe
or shall violate in any material respect any material term, covenant,
condition or agreement to be performed or observed by it in respect of
this Agreement or any other Operative Agreement (other than with respect
to payment obligations of AFT referred to in clause (a)(i)(A) of this
Section 10.02); or
(C) any material representation or warranty by any Person within the
AFT Group made in this Agreement or any
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other Operative Agreement or in any report, certificate, financial
statement or other agreement, instrument or document at any time furnished
by or on behalf of any Person within the AFT Group in connection therewith
shall prove to have been false or misleading in any material respect when
made or furnished and such representation or warranty shall remain false
and misleading in any material respect and such misrepresentation or
breach of warranty is reasonably likely to have a Material Adverse Effect
on the Servicer or a material adverse effect on the rights and obligations
of the Servicer under this Agreement (including the Servicer's
compensation hereunder); or
(D) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
relief in respect of AFT or any Significant Subsidiary of AFT or of a
substantial part of the property or assets of any of such Persons, under
Title 11 of the United States Code, as now constituted or hereafter
amended, or any other U.S. Federal or state or foreign bankruptcy,
insolvency, receivership or similar law, and such proceeding or petition
shall continue undismissed for 75 days or an order or decree approving or
ordering any of the foregoing shall be entered or any such Persons within
the AFT Group shall go into liquidation, suffer a receiver or mortgagee to
take possession of all or substantially all of its assets or have an
examiner appointed over it or if a petition or proceeding is presented for
any of the foregoing and not discharged within 75 days; or
(E) AFT or any Significant Subsidiary of AFT shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other U.S. Federal or state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail
to contest the filing of, any petition described in clause (D) above,
(iii) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, or (iv) make a general assignment
for the benefit of its creditors; or
(F) there shall cease to be any Aircraft Assets; or
(G) the Indenture shall cease to be in full force and effect; or
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(H) any Guarantee issued in favor of the Servicer shall cease to be
a legal, valid and binding agreement of the relevant Person within the AFT
Group, enforceable in accordance with its terms.
(ii) Upon the occurrence of an event set forth in clause (i) of this
Section 10.02(a), in addition to the right of the Servicer to terminate this
Agreement in whole pursuant to Section 10.02(a)(i), the Servicer shall be
entitled to terminate its obligations to provide the Services with respect to
one or more specific Aircraft Assets (but less than all the Aircraft Assets)
(any termination with respect to less than all the Aircraft Assets being a
"Partial Termination"). If, upon any such Partial Termination, the Servicer
shall elect to continue to provide Services with respect to any Aircraft Asset,
the Servicer shall specify the Aircraft Assets in respect of which it intends to
continue to provide Services in the Termination Notice with respect to the
Partial Termination. All references to the expiration or termination of this
Agreement shall mean the expiration or termination of this Agreement in whole
and not to a Partial Termination unless expressly otherwise stated.
(b) At any time during the term of this Agreement, AFT shall be
entitled to terminate this Agreement if:
(i) neither GE nor GE Capital shall own directly or indirectly at
least 75% of the voting equity of, and economic interest in, the Servicer
or any Servicer Delegate; or
(ii) the Servicer shall fail in any material respect to perform any
material Services in accordance with the Standard of Care or the Conflicts
Standard and such failure shall have a Material Adverse Effect on the AFT
Group taken as a whole; or
(iii) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
relief in respect of GE, GE Capital or the Servicer or any Servicer
Delegate, or of a substantial part of the property or assets of the
Servicer, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other U.S. Federal or state or foreign
bankruptcy, insolvency, receivership or similar law, and such proceeding
or petition shall continue undismissed for 75 days or an order or decree
approving or
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ordering any of the foregoing shall be entered or the Servicer shall go
into liquidation, suffer a receiver or mortgagee to take possession of all
or substantially all of its assets or have an examiner appointed over it
or if a petition or proceeding is presented for any of the foregoing and
not discharged within 75 days; or
(iv) GE, GE Capital or the Servicer shall (A) voluntarily commence
any proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
U.S. Federal or state or foreign bankruptcy, insolvency, receivership or
similar law, (B) consent to the institution of, or fail to contest the
filing of, any petition described in clause (iii) above, (C) file an
answer admitting the material allegations of a petition filed against it
in any such proceeding, or (D) make a general assignment for the benefit
of its creditors; or
(v) there shall have occurred and be continuing an Event of Default
under Section 4.01(a) of the Indenture in respect of the payment of
interest on any Class A Note (as defined in the Indenture) due to an
insufficiency of funds in the Collection Account on the relevant date,
which Event of Default (x) shall have occurred on a date on which no
amount is available for drawing under any Credit Facility (as defined in
the Indenture) in respect thereof and (y) shall have continued unremedied
for 60 days; or
(vi) an Event of Default (other than one referred to in clause (v)
of this Section 10.02(b)) under the Indenture shall have occurred and,
other than in respect of an Event of Default under Sections 4.01(e) or
4.01(f) of the Indenture, a Default Notice (pursuant to which the
Outstanding Principal Balance of the Notes and all accrued and unpaid
interest thereon shall become due and payable) shall have been issued in
accordance with the terms of the Indenture, and at the time of such Event
of Default at least 10 Aircraft Assets shall not be subject to Leases and
each such Aircraft Asset shall have been off-lease and reasonably
available for re-lease (including in the possession of the Servicer,
together with the related Aircraft Documents) during the three-month
period ending on the date of such Event of Default.
(c)(i) Either party to this Agreement (the "Terminating Party") may,
at any time during the term of this
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Agreement, by written notice (the "Termination Notice") to the other (the
"Nonterminating Party"), set forth its determination to terminate this Agreement
pursuant to clause (a) of this Section 10.02 (in the case of the Servicer) or
Section 10.01 or clause (b) of this Section 10.02 (in the case of AFT) or to
provide for a Partial Termination of this Agreement pursuant to clause (a)(ii)
of this Section 10.02 (in the case of the Servicer); provided, however, that
this Agreement shall not terminate until and unless a Replacement Servicer shall
have been appointed and shall have accepted such appointment in accordance with
Section 10.04(c); provided further that failure by the Terminating Party to
provide such Termination Notice shall not affect such party's rights under
Section 10.02(a) or Section 10.01 or Section 10.02(b), as the case may be. Any
Termination Notice shall set forth in reasonable detail the basis for such
termination.
(ii) Unless the Termination Notice is provided by AFT pursuant to
the proviso to Section 10.01, no later than the fifth day following the
effectiveness of the Termination Notice (the "Effectiveness Date"), the
Nonterminating Party shall advise the Terminating Party in writing whether the
Nonterminating Party (A) intends to cure the basis for such termination and, if
so, the action it intends to take to effectuate such cure or (B) does not intend
to cure the basis for such termination; provided, however, that the failure of
the Nonterminating Party to deliver such notice by such day shall be deemed to
constitute notice that it does not intend to cure the basis for termination. In
the event that the Termination Notice is provided by AFT pursuant to the proviso
to Section 10.01 or the Nonterminating Party notifies (or is deemed to have
notified) the Terminating Party that the Nonterminating Party does not intend to
cure the basis for such termination, then this Agreement shall terminate or the
Partial Termination shall take effect, as the case may be, immediately or on
such later date as the Terminating Party shall have indicated in the Termination
Notice to the Nonterminating Party. In the event that the Nonterminating Party
notifies the Terminating Party by such fifth day that it intends to cure the
basis for such termination, then the Nonterminating Party shall (A) have 15 days
from the Effectiveness Date to effectuate such cure to the reasonable
satisfaction of the Terminating Party or (B) if such cure cannot reasonably be
expected to be effectuated within such 15-day period, (1) demonstrate to the
reasonable satisfaction of the Terminating Party that substantial progress is
being made toward the effectuation of such cure and (2) effectuate such cure to
the reasonable satisfaction of the
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Terminating Party no later than the thirtieth day following the Effectiveness
Date. Upon the failure of the Nonterminating Party to effectuate a cure in
accordance with the immediately preceding sentence, this Agreement shall
terminate or the Partial Termination shall take effect, as the case may be, on
the latest of (A) the day immediately following the expiration of such 15- or
30-day period, (B) such later date as shall be indicated in the Termination
Notice or (C) the date as of which a Replacement Servicer has been engaged to
perform the Services with respect to the Aircraft Assets and has accepted such
appointment in accordance with the provision of Section 10.04(c).
SECTION 10.03. Resignation or Removal. (a) If the Servicer
reasonably determines that (x) directions given by any Person to the Servicer in
accordance with this Agreement are or would be if carried out or (y) Services
required to be performed under this Agreement are or would be if carried out (i)
unlawful under Applicable Law, (ii) in violation of any GE Policy, (iii) likely
to lead to an investigation by any Governmental Authority, directly or
indirectly, of or relating to the Servicer, any of its Affiliates or the
Services, (iv) directions or Services that would expose the Servicer to any
liabilities for which adequate bond or indemnity has not, in the Servicer's good
faith opinion, been provided or (v) directions or Services that would place the
Servicer in a conflict of interest with respect to which, in the Servicer's good
faith opinion, the Servicer cannot continue to perform its obligations hereunder
within the requirements set forth in Article III with respect to all Aircraft
Assets or any affected Aircraft Assets, as the case may be, it may resign as the
Servicer for all purposes under this Agreement in relation to all the Aircraft
Assets or, at its election, any affected Aircraft Assets (but with respect to
clause (v) above the Servicer may resign only with respect to the affected
Aircraft) for the duration of this Agreement, such resignation to become
effective upon the selection by AFT of a Replacement Servicer that has been
engaged to perform the Services with respect to all the Aircraft Assets or any
affected Aircraft Assets, as the case may be, and that has accepted such
appointment in accordance with the provisions of Section 10.04(c) (it being
understood that, notwithstanding any other provision herein to the contrary, the
Servicer shall be under no obligation to follow such directions or perform such
Services pending the selection of and acceptance by a Replacement Servicer).
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(b) If AFT shall have received a notice from the Servicer pursuant
to Section 3.02(d) hereof to the effect that the Servicer cannot continue to
perform its obligations hereunder within the requirements set forth in Section
3.02 with respect to all Aircraft Assets or any affected Aircraft Assets, AFT
may remove the Servicer for all purposes under this Agreement in relation to the
affected Aircraft Assets or, in the event that the Servicer has notified AFT
that the Servicer cannot continue to perform its obligations with respect to all
Aircraft Assets, all the Aircraft Assets for the duration of this Agreement,
such removal to become effective upon the selection by AFT of a Replacement
Servicer that has been engaged to perform the Services with respect to any
affected Aircraft Assets or all the Aircraft Assets, as the case may be, and
that has accepted such appointment in accordance with the provisions of Section
10.04(c) (it being understood that, notwithstanding any other provision herein
to the contrary, the Servicer shall be under no obligation to perform Services
with respect to the affected Aircraft Assets pending the selection of and
acceptance by a Replacement Servicer).
(c) If any Taxes that are based on or measured by all or a portion
of the revenues, rental income or assets of any Person within the AFT Group
(other than (i) any Taxes payable by any such Person pursuant to the controlled
foreign corporation provisions or the passive foreign investment company
provisions of the Code or (ii) Taxes imposed as a result of the gross negligence
or wilful misconduct of any such Person) shall be imposed on or with respect to
the Servicer or any Affiliate thereof, and if such Taxes are not indemnified by
AFT then, provided that the Servicer shall have undertaken reasonable efforts
(that do not involve any material cost to the Servicer or any Affiliate thereof)
to otherwise avoid the imposition of such Taxes, the Servicer may resign as the
Servicer for all purposes under this Agreement in relation to all the Aircraft
Assets or, at its election, any Aircraft Assets the resignation with respect to
which would reduce or eliminate such Taxes for the duration of this Agreement,
such resignation to become effective upon the selection by AFT of a Replacement
Servicer to perform the Services with respect to all the Aircraft Assets or such
Aircraft Assets as the case may be, that has accepted such appointment in
accordance with the provisions of Section 10.04(c); provided, however, that
pending the effectiveness of such resignation, AFT shall be required to post a
bond, irrevocable letter of credit or other form of security reasonably
acceptable to the Servicer to be drawn upon by the Servicer in the event that
any such additional Taxes continue to
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be imposed on or with respect to the Servicer or any Affiliate thereof during
such pendency.
SECTION 10.04. Consequences of Expiration, Termination, Resignation
or Removal. (a) Notices. (i) Upon the expiration or termination of this
Agreement in accordance with this Article X, or upon the resignation by or
removal of the Servicer with respect to the performance of the Services for any
or all of the Aircraft Assets, the Servicer will promptly forward to AFT any
notices, reports and communications received by it from any relevant Lessee
during the one year immediately after expiration, termination, resignation or
removal.
(ii) AFT will notify promptly each relevant Lessee and any relevant
third party (with a copy to each Rating Agency) of the termination, resignation
or removal of the Servicer under this Agreement in relation to any of the
Aircraft Assets and will request that all such notices, reports and
communications thereafter be made or given directly to the Replacement Servicer
and AFT.
(b) Accrued Rights. A termination, resignation or removal in
relation to any or all the Aircraft Assets shall not affect the respective
rights and liabilities of either party accrued prior to such termination in
respect of any prior breaches hereof or otherwise.
(c) Replacement Servicer. (i) Upon the expiration or termination of
this Agreement in accordance with this Article X, or upon the resignation by or
removal of the Servicer with respect to the performance of the Services for any
or all of the Aircraft Assets, the Servicer will cooperate with any Replacement
Servicer, including providing such Replacement Servicer with all information and
documents reasonably requested.
(ii) Other than at the expiration of the term as set forth in
Section 10.01 or pursuant to a termination of the Agreement by the Servicer in
accordance with Section 10.02(a)(i)(A), the Servicer may not resign or be
removed from its obligations and duties as Servicer hereunder, nor may this
Agreement be terminated with respect to the Servicer, in either case in whole or
in part, unless a Replacement Servicer has been appointed and has accepted such
appointment and AFT has received written confirmation from each of the Rating
Agencies that no lowering or withdrawal of the then current Ratings of any class
or subclass of Notes will
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result from such appointment; provided, however, that, in the event that a
Replacement Servicer shall not have been appointed within 90 days after any
termination of this Agreement with respect to the Servicer or any resignation by
or removal of the Servicer, the Servicer may petition any court of competent
jurisdiction for the appointment of a Replacement Servicer.
(iii) In the event of the resignation or removal of the Servicer
with respect to the performance of the Services for any or all of the Aircraft
Assets, AFT has informed the Servicer that UniCapital or one of its Affiliates
may be appointed as the Replacement Servicer in respect thereof, and, to the
extent that the consent or approval of the Servicer to any such appointment is
required, the Servicer hereby consents in advance to such appointment.
(d) Payment of Fees and Expenses. (i) Upon the expiration or
termination of this Agreement in accordance with this Article X, or upon the
resignation or removal of the Servicer with respect to the performance of the
Services for any Aircraft Asset, so long as the Servicer is continuing to
perform any of the Services, AFT shall continue to pay Servicing Fees and
Reimbursable Expenses to the Servicer until a Replacement Servicer shall have
been appointed and shall have accepted such appointment in accordance with the
provisions of Section 10.04(c).
(ii) If a Replacement Servicer is appointed with respect to any
Aircraft Asset in accordance with Section 10.04(c) and such Aircraft Asset is
sold by any Person within the AFT Group to a customer to whom the Servicer had
been actively engaged in marketing such Aircraft Asset and with whom the
Servicer had been engaged in substantive discussions at any time during the
three-month period prior to the appointment and acceptance of such Replacement
Servicer, the Servicer shall be paid Sales Incentive Fees in respect of such
Aircraft Asset as if the Servicer had arranged for the sale of such Aircraft
Asset. Following any such appointment of a Replacement Servicer, the Servicer
will, upon the request of AFT, provide AFT with a list of customers with respect
to which the Servicer had been actively engaged in marketing such Aircraft Asset
and with which the Servicer had been engaged in substantive discussions at any
time during such three-month period. Such list shall be treated as confidential
by AFT and shall not be disclosed to any Person other than members of the
Controlling Trustees of AFT and the Administrative Agent or used for any purpose
other than as a basis for determining any Sales
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Incentive Fees payable to the Servicer pursuant to the first sentence of this
Section 10.04(d)(ii).
(e) Transition. Upon the expiration or termination of this Agreement
in accordance with this Article X, or upon the resignation or removal of the
Servicer with respect to the performance of the Services for any Aircraft Asset,
the Servicer shall promptly return the originals (and all copies) within its
possession of all Aircraft Assets Related Documents to AFT and shall provide AFT
with such access to other nonconfidential, nonproprietary documentation and
information relating to the business of any Person within the AFT Group (and,
upon the request by AFT and to the extent practicable, copies thereof) within
its possession as is reasonably necessary to the conduct of the business of any
Person within the AFT Group.
SECTION 10.05. Survival. Notwithstanding any termination or the
expiration of this Agreement, (a) the obligations of AFT under Sections 2.03(g),
2.03(i), 2.03(j), 2.04, 2.05(a), 2.05(c), 2.05(d), 2.05(f), 2.05(g), 2.05(h),
2.05(i), 3.03, 3.04, 6.06, 7.03(f), Article IX, 10.04, 10.05, Article XI, 13.01
and 13.03 of this Agreement and Section 2.2(b) of Schedule 2.02(a) to this
Agreement and the Servicer's obligations under Section 10.04 and Article XI
shall survive such termination or expiration, as the case may be, and (b) the
representations and warranties contained in Article IV and in Section 2.02(g)
shall survive and remain in full force and effect until the third anniversary of
the date on which this Agreement shall have expired or terminated.
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ARTICLE XI
INDEMNIFICATION
SECTION 11.01. Indemnity. (a) Notwithstanding anything to the
contrary set forth herein (other than Section 2.03(m)) or in any other Operative
Agreement, AFT does hereby assume liability for, and does hereby agree to
indemnify and hold harmless on an After-Tax Basis each of the Indemnified
Parties from any and all Losses that may be imposed on, incurred by or asserted
against any Indemnified Party, directly or indirectly, arising out of, in
connection with or related to (i) the Servicer's performance under this
Agreement or from errors in judgment or omissions by the Servicer under this
Agreement; provided, however, that such indemnity shall not apply to the extent
that such Losses are finally adjudicated to have been directly caused by (x) the
willful misconduct or gross negligence of the Servicer in respect of its
obligation to apply the Standard of Care or the Conflicts Standard in respect of
its performance of the Services or (y) any representation or warranty by the
Servicer set forth in Sections 4.10 or 4.11 having proven to be false on the
date hereof, (ii) any Indemnified Parties' involvement (or alleged involvement)
in connection with the structuring or implementation of any aspect of the
transactions contemplated by the Final Prospectus and (iii) the offering or sale
of the Notes or Beneficial Interest Certificates by AFT or any of its
Affiliates, including any Losses to which any Indemnified Party may become
subject, under the Securities Act of 1933, the Securities Exchange Act of 1934
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as any such Loss arises out of, or is based upon (y) any
untrue statement or alleged untrue statement of a material fact contained in the
Final Prospectus or in any amendment thereof or supplement thereto or in any
preliminary offering memorandum or other preliminary prospectus related thereto
or (z) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or, in the case of the Final Prospectus, in light of the
circumstances under which they were made, not misleading.
(b) Each Indemnified Party agrees to give AFT prompt notice of any
action, claim, demand, discovery of fact, proceeding or suit for which the
applicable Indemnified Party intends to assert a right to indemnification under
this Agreement; provided, however, that failure to give such notification shall
not affect such Indemnified Party's
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entitlement to indemnification under this Section 11.01 unless and only to the
extent such failure results in actual irreparable prejudice to AFT or any other
Person within the AFT Group.
SECTION 11.02. Procedures for Defense of Claims. (a) If a Third
Party Claim is made against any Indemnified Party, the applicable Indemnified
Party shall promptly notify AFT in writing of such claim (which notice shall
include all relevant information reasonably necessary for AFT to understand such
claim which is in the possession or under the control of, or which can with
reasonable commercial efforts be obtained by, such Indemnified Party at the time
of such notice, subject to Applicable Laws and confidentiality obligations), and
the Servicer or AFT (if so directed by the applicable Indemnified Party and if
so accepted by AFT) will undertake the defense thereof. The failure to notify
AFT promptly shall not relieve AFT of its obligations under this Article XI
unless and only to the extent that such failure results in actual irreparable
prejudice to AFT or any other Person within the AFT Group.
(b) If so directed by the applicable Indemnified Party and if
accepted by AFT, AFT shall within 30 days, undertake the conduct and control,
through counsel of its own choosing (subject to the consent of the applicable
Indemnified Party, such consent not to be unreasonably withheld or delayed) and
at AFT's risk and expense, the good faith settlement or defense of such claim,
and the applicable Indemnified Party shall cooperate fully with AFT in
connection therewith; provided, however, that (i) at all times the applicable
Indemnified Party shall be entitled to participate in such settlement or defense
through counsel chosen by it, and the fees and expenses of such counsel shall be
borne by the applicable Indemnified Party, and (ii) AFT shall not be entitled to
settle such claims unless it shall have confirmed in writing its obligation to
indemnify the applicable Indemnified Party for the liability asserted in such
claim. AFT shall obtain the written consent of the applicable Indemnified Party
prior to ceasing to defend, settling or otherwise disposing of such claim if as
a result thereof such Indemnified Party would become subject to injunctive,
declaratory or other equitable relief or the business of such Indemnified Party
would be materially adversely affected in any manner.
(c) So long as AFT is reasonably contesting any such claim in good
faith, the applicable Indemnified Party shall fully cooperate with AFT in the
defense of such claim as is
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reasonably required by AFT. Such cooperation shall include the retention and the
provision of records and information which are reasonably relevant to such Third
Party Claim and making directors, officers and employees available on a mutually
convenient basis to provide additional information. Neither the Servicer nor any
Indemnified Party shall settle or compromise any claim without the written
consent of AFT unless the Servicer or the applicable Indemnified Party agrees in
writing to forego any and all claims for indemnification from AFT with respect
to such claims.
(d) If AFT, within 5 days after notice of any such claim, does not
agree to defend such Third Party Claim as directed by the applicable Indemnified
Party, such Indemnified Party will have the right to undertake the defense,
compromise or settlement of such Third Party Claim.
SECTION 11.03. Reimbursement of Costs. The costs and expenses,
including fees and disbursements of counsel (except as provided in clause (i) of
the proviso to the first sentence of Section 11.02(b)) and expenses of
investigation, incurred by any Indemnified Party in connection with any Third
Party Claim, shall be reimbursed on a quarterly basis by AFT upon the submission
of evidence reasonably satisfactory to AFT that such expenses have been
incurred, without prejudice to AFT's right to contest the Indemnified Party's
right to indemnification and subject to refund in the event that AFT is
ultimately held not to be obligated to indemnify the Indemnified Party.
SECTION 11.04. Waiver of Certain Claims; Special Indemnity. AFT does
hereby (a) assume liability for and agree to indemnify and hold harmless on an
After-Tax-Basis, in accordance with the provisions of this Article XI, each of
the Indemnified Parties from any and all Losses that may be imposed on, incurred
by or asserted against any Indemnified Party directly or indirectly arising out
of, in connection with or related to any claims of shareholders or creditors of
any Person within the AFT Group and any claims ("Shadow Director/Related Company
Claims") that may be made by or on behalf of any Person against any Indemnified
Party which are based on any Indemnified Party being a shadow director of, or a
related company to, any Person within the AFT Group under applicable Irish law
or any similar concept under any other Applicable Law; (b) waive, and shall
cause each other Person within the AFT Group to waive, any and all Shadow
Director/Related Company Claims that may be made by or on behalf of any Person
within the AFT Group against any Indemnified Party, (c) agree not to xxx, and to
cause each other
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Person within the AFT Group not to xxx, upon any such Shadow Director/Related
Company Claims, and (d) agree that any amounts awarded to or received by any
Person within the AFT Group arising out of or related to any such Shadow
Director/Related Company Claims (whether such claims were made by or on behalf
of any Person within the AFT Group or by a third party (including any
liquidator)) shall be paid over to the applicable Indemnified Party.
SECTION 11.05. Waiver of Certain Accounting Claims; Special
Indemnity. AFT does hereby (a) assume liability for and agree to indemnify and
hold harmless on an After-Tax-Basis, in accordance with this Article XI, each of
the Indemnified Parties from any and all Losses that may be imposed on, incurred
by or asserted against any Indemnified Party directly or indirectly arising out
of, in connection with or related to any claims of shareholders or creditors of
any Person within the AFT Group or of any other Person arising out of, in
connection with or related to, the compliance by AFT or any other Person within
the AFT Group of their respective obligations, including any of their respective
reporting obligations ("Compliance Obligations") to any holders of outstanding
Notes or Beneficial Interest Certificates, any holders of any other securities
issued by any Person within the AFT Group or any Governmental Authorities and
for all instructions, discretion, judgments and assumptions related to such
Compliance Obligations (collectively "Accounting Claims"); provided, however,
that such indemnity shall not apply to the extent that such Losses are finally
adjudicated to have been directly caused by the willful misconduct or gross
negligence of the Servicer in respect of its obligation to apply the Standard of
Care in respect of its performance of such Services, (b) waive, and shall cause
each other Person within the AFT Group to waive, any and all Accounting Claims
that may be made by or on behalf of AFT or any other Person within the AFT Group
against any Indemnified Party and (c) agree not to xxx, and to cause each other
Person within the AFT Group not to xxx, upon any such Accounting Claim.
SECTION 11.06. Waiver of Year 2000 Claims; Special Indemnity. AFT
does hereby (a) assume liability for and agree to indemnify and hold harmless on
an After-Tax-Basis, in accordance with the provisions of this Article XI
(excluding, for purposes of this Section 11.06, the proviso set forth in Section
11.01(a)(i)), each of the Indemnified Parties from any and all Losses that may
be imposed on, incurred by or asserted against any Indemnified Party directly or
indirectly arising out of, in connection with or related to any claims of
shareholders
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or creditors of any Person within the AFT Group and any claims that may be made
by or on behalf of any other Person against any Indemnified Party arising out
of, in connection with or related to (i) any Year 2000 Compatibility matters in
connection with this Agreement, (ii) a failure by any Person within the AFT
Group to achieve full Year 2000 Compatibility, (iii) any Person within the AFT
Group experiencing any Year 2000 Compatibility problems in its business or with
respect to the Aircraft Assets, (iv) the Servicer experiencing any Year 2000
Compatibility problems in connection with the provision of the Services with
respect to the Aircraft Assets or (v) any third party provider of goods or
services related to the Aircraft Assets experiencing any Year 2000 Compatibility
problems (claims as described in (i)-(v) are collectively referred to as "Year
2000 Claims"); (b) waive, and shall cause each other Person within the AFT Group
to waive, any and all Year 2000 Claims that may be made by or on behalf of any
Person within the AFT Group against any Indemnified Party, (c) agree not to xxx,
and to cause each other Person within the AFT Group not to xxx, upon any such
Year 2000 Claims, and (d) agree that any amounts awarded to or received by any
Person within the AFT Group arising out of or related to any such Year 2000
Claims (whether such claims were made by or on behalf of any Person within the
AFT Group or by a third party (including any liquidator)) shall be paid over to
the applicable Indemnified Party.
SECTION 11.07. Continuing Liability under Other Agreements. The
Servicer understands, acknowledges and agrees that the intent of the parties
hereunder is that any limitation on the liability of the Servicer under this
Agreement, whether under this Article XI, Article III or otherwise, is not
intended to and shall not be construed to limit the liability of any Person
selling any Aircraft Assets under the Asset Purchase Agreement or the liability
of GE Capital to the initial purchasers under the Purchase Agreement and that
any such liability under either such agreement shall not give rise to any claim
for indemnification in favor of the Servicer or any of its Affiliates under this
Agreement.
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ARTICLE XII
ASSIGNMENT AND DELEGATION
SECTION 12.01. Assignment and Delegation. (a) No party to this
Agreement shall assign or delegate this Agreement or all or any part of its
rights or obligations hereunder to any Person without the prior written consent
of all other parties; provided, however, that (i) the Servicer may delegate any
portion of but not all its obligations to GE or GE Capital or to any GE or GE
Capital 75% or more owned Subsidiary (a "Servicer Delegate");(ii) the foregoing
provisions on assignment and delegation shall not limit the ability of the
Servicer to contract with any Person, including any of its Affiliates, for
services in respect of Aircraft Assets; and (iii) AFT may assign its rights
hereunder to the Security Trustee under the Security Trust Agreement and,
without in any way releasing AFT from any of its duties or obligations
hereunder, the Servicer consents to such assignment, it being understood that
neither AFT's assignment nor the Servicer's consent to such assignment will
affect the Servicer's rights and obligations hereunder, subject the Servicer to
any liability to which it would not otherwise be subject to hereunder nor modify
in any respect the contract rights of the Servicer hereunder. Any assignment or
delegation pursuant to this Section 12.01(a) shall not require any approval
pursuant to Section 7.04.
(b) Without limiting the foregoing, any Person who shall become a
successor by assignment or otherwise of AFT or the Servicer (or any of their
respective successors) in accordance with this Section 12.01 shall be required
as a condition to the effectiveness of any such assignment or other arrangement
to become a party to this Agreement; provided, however, that the Security
Trustee shall not be required to become a party to this Agreement solely by
reason of the execution and delivery of the Security Trust Agreement.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. Documentary Conventions. The Documentary Conventions
shall govern this Agreement.
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SECTION 13.02. Power of Attorney. AFT shall, and shall cause each
other Person within the AFT Group to appoint the Servicer and its successors,
and its permitted designees and assigns, as their true and lawful
attorney-in-fact pursuant to the form of Power of Attorney attached as Schedule
13.02 to this Agreement (with such modifications as are necessary under the laws
of the jurisdictions in which such Persons are organized). All services to be
performed and actions to be taken by the Servicer pursuant to this Agreement
shall be performed for and on behalf of AFT. The Servicer shall be entitled to
seek and obtain from AFT (and/or any other Person within the AFT Group as
appropriate) a power of attorney in respect of the execution of any specific
action as the Servicer deems appropriate.
SECTION 13.03. Reliance. The Servicer shall be entitled to rely on
the provisions of this Agreement, including Schedule 2.02(a), any Approved
Budget, any direction of, or certification by, AFT or its Controlling Trustees
(or any duly appointed committee thereof) or the Administrative Agent, to the
extent set forth in Section 2.02(c), and the Transaction Approval Requirements
in carrying out its obligations hereunder, and AFT hereby waives any rights to
challenge any action taken by the Servicer that is consistent with the
provisions of this Agreement (including the Standard of Care and the Conflicts
Standard), including Schedule 2.02(a), any Approved Budget, any such direction
or certification or the Transaction Approval Requirements or which has been
approved by the Controlling Trustees of AFT or a duly appointed committee
thereof, or the Administrative Agent.
SECTION 13.04. Year 2000 Readiness Disclosure. Statements made to
you in the course of this sale are subject to the Year 2000 Information and
Readiness Disclosure Act (15 U.S.C. `1). In the case of a dispute, this Act may
reduce your legal rights regarding the use of any such statements, unless
otherwise specified by your contract or tariff.
"You" and "your", as used in this Section 13.04, means AFT and any
other Person within the AFT Group and any agent of any thereof, including the
Administrative Agent.
SECTION 13.05. Certain Information. The parties hereto agree (a) not
to provide to each other competitively sensitive information, other than
information required to be provided by GECAS or AFT, as the case may be, under
contractual arrangements existing on the date hereof (or successor arrangements
thereto), (b) that any party receiving such
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information shall take such action as shall be necessary to maintain the
confidentiality thereof and (c) to establish appropriate procedures and
protocols to ensure compliance with the agreements in clauses (a) and (b).
Similarly, AFT's board of Controlling Trustees shall agree (x) not to provide
competitively sensitive information which it may receive from GECAS pursuant to
this Agreement to any third party and (y) not to use any such competitively
sensitive information for any purpose other than its duties and responsibilities
as a Controlling Trustee of AFT. In addition, to the extent that any Controlling
Trustee of AFT is involved in any other business activities that are competitive
with GECAS, such Controlling Trustee must be screened from receipt of
competitively sensitive information that may be requested by any other
Controlling Trustee of AFT beyond that information which is normally provided to
the board of Controlling Trustees pursuant to this Agreement. Any such
Controlling Trustee must also undertake in writing not to provide competitively
sensitive information which it may receive pursuant to this Agreement to any
third party and not to use any such competitively sensitive information for any
purpose other than its duties and responsibilities as a Controlling Trustee of
AFT. AFT agrees that it will cause the terms of this Section 13.05 to be
included in any other servicing agreement entered into by any Person within the
AFT Group with any other entity pursuant to which such entity will provide
services with respect to any aircraft on behalf of any Person within the AFT
Group, including the UniCapital Servicing Agreement, and, in connection
therewith, the relevant Controlling Trustees shall provide to the servicer under
such other servicing agreement written undertakings substantially similar to
those provided to the Servicer as contemplated by the immediately preceding
sentence.
SECTION 13.06. Original Aircraft. The parties acknowledge that this
Agreement was originally drafted in connection with Aircraft Assets owned or
leased-in by any Person within the AFT Group and not Original Aircraft. In the
event that in the Servicer's reasonable judgment the application of the terms of
any provision hereunder in respect of any Aircraft Asset would not be
appropriate prior to the title to such Aircraft Asset being transferred to a
Person within the AFT Group, then the Servicer shall take such action in respect
of such Aircraft Asset as is commercially reasonable or appropriate in such
context or circumstances. The Servicer shall make a good faith effort to consult
with AFT prior to taking any action in reliance upon this Section 13.06, taking
into account timing and other relevant considerations; provided, however, that
any
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failure to so consult with AFT will not constitute a default under or violation
of this Agreement.
SECTION 13.07. UniCapital Aircraft. It is understood that the
Aircraft Assets may include from time to time UniCapital Aircraft. In the event
that AFT has received written confirmation from each of the Rating Agencies that
no lowering or withdrawal of the then current Ratings of any class or subclass
of Notes will result from UniCapital or one of its Affiliates acting as primary
Servicer with respect to any UniCapital Aircraft pursuant to a servicing
agreement between UniCapital or one of its Affiliates and AFT (the "UniCapital
Servicing Agreement") and subject to compliance with the terms of the Indenture,
AFT may enter into the UniCapital Servicing Agreement pursuant to which
UniCapital or one of its Affiliates will perform services with respect to such
UniCapital Aircraft which are substantially similar to the Services provided by
the Servicer under this Agreement. It is understood that the UniCapital
Servicing Agreement shall cover, at AFT's and UniCapital's option, either (A)
all UniCapital Aircraft or (B) all Additional UniCapital Aircraft that, in the
case of clause (B), were both (1) acquired by any Person within the AFT Group
from UniCapital or any of its Affiliates following the effectiveness of the
UniCapital Servicing Agreement and (2) not previously Aircraft Assets under this
Agreement. In the event that AFT proposes to enter into the UniCapital Servicing
Agreement, then, as far in advance as is reasonably necessary to allow for a
smooth transition but in no event later than 30 Business Days prior to the
effective date of the UniCapital Servicing Agreement, it will deliver to the
Servicer a written notice setting forth (i) the date on which the UniCapital
Servicing Agreement will become effective and (ii) whether all UniCapital
Aircraft or only those Additional UniCapital Aircraft described in clause (B) of
the preceding sentence will become subject to the UniCapital Servicing
Agreement. Upon the effectiveness of the UniCapital Servicing Agreement and
subject to compliance with any relevant provisions of the Indenture, those
UniCapital Aircraft which become subject to such UniCapital Servicing Agreement
shall cease to be Aircraft Assets under this Agreement, except (as provided for
in Section 9.01(b)) for purposes of Sections 9.03, 9.04 and 9.05. AFT shall not,
and shall not permit any other Person within the AFT Group to, (x) permit any
Person (other than the Servicer, UniCapital and their respective Affiliates) to
act as servicer (i.e., to perform any services which are substantially similar
to the Services provided by the Servicer under this Agreement) of any Aircraft
owned or leased-in by any Person within the AFT
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Group, (y) enter into any servicing agreement with any Person (other than the
Servicer, UniCapital and their respective Affiliates) or (z) permit UniCapital
to assign or delegate any of its rights or obligations under the UniCapital
Servicing Agreement (or similar servicing agreement) to a Competitor referred to
in clause (ii) of the definition of "Competitor", except in the case of (x) and
(y) with respect to any Aircraft that shall have been an Aircraft Asset, but
shall have ceased to be an Aircraft Asset pursuant to the terms of this
Agreement (other than by reason of clause (z) of the proviso to the definition
of "Aircraft Assets"), in which case, unless such cessation shall have resulted
in the Servicer's no longer servicing any Aircraft Assets hereunder, if at the
time of such cessation UniCapital or any of its Affiliates is able to obtain
written confirmation from each of the Rating Agencies that no lowering or
withdrawal of the then current Ratings of any class or subclass of Notes will
result from such Person's acting as Replacement Servicer with respect to such
Aircraft, then UniCapital or such Affiliate shall act as such Replacement
Servicer with respect to such Aircraft.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the
date first written above.
GE CAPITAL AVIATION SERVICES,
LIMITED,
by
/s/ XXXXX XXXXXX
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Director
AIRCRAFT FINANCE TRUST,
by
Wilmington Trust Company, as
Owner Trustee
/s/ XXXXX XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
77
SCHEDULE 2.02(a) TO
THE SERVICING AGREEMENT
Aircraft Assets Services
The provision of the Services set forth in this Schedule 2.02(a)
will be subject in all cases to such approval as may be required or such
limitations as may be imposed pursuant to Section 7.04(a) of the Servicing
Agreement and the provisions of this Schedule 2.02(a) shall be deemed to be so
qualified.
Unless otherwise defined herein, all capitalized terms used in this
Schedule 2.02(a) have the meanings assigned to such terms in Appendix A to the
Servicing Agreement or, in the case of certain defined terms used in Annex 1 or
2 to the Servicing Agreement or Schedule 2.02(a)(i) to the Servicing Agreement,
in copies of the Indenture delivered to the Servicer pursuant to Section 2.1.
AFT shall provide to the Servicer any instructions the Servicer may require in
the interpretation of Annexes 1 and 2 to the Servicing Agreement on which
instructions the Servicer shall be entitled to rely in all respects.
SECTION 1. Lease Services.
SECTION 1.1. Collections and Disbursements. In connection with each
Lease of an Aircraft Asset (other than any Original Aircraft in the case of
clause (a) below) under which any Person within the AFT Group is the lessor, the
Servicer will:
(a) invoice the Lessee or otherwise arrange, as the Servicer deems
reasonably appropriate, on behalf of such Person within the AFT Group, for all
payments due from the Lessee, including Rents, Deposits, Maintenance Reserves,
late payment charges and any payments in respect of Taxes and other payments
(including technical, engineering, insurance and other recharges) due under the
relevant Lease, use reasonable commercial efforts to direct the Lessee, subject
to the terms of the Lease, to make such payments to such account designated as
the "Rental Account" in Schedule 4.03 to the Servicing Agreement (the relevant
details of such Rental Account being set forth in such Schedule) or to such
other accounts as specified in writing
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78
by the Administrative Agent and use reasonable commercial efforts to enforce the
payment thereof in the event of a nonpayment by the relevant due date;
(b) review from time to time, as deemed necessary by the Servicer,
the level of Rents, Deposits, Maintenance Reserves and other amounts that may be
adjusted under the Lease and shall propose to the relevant Lessee and/or make
such adjustments to the Rents, Deposits, Maintenance Reserves and other amounts
as are required or that the Servicer otherwise deems reasonably appropriate
considering, among other things, the terms of the relevant Lease and practices
that the Servicer believes are prevalent in the operating lease market;
(c) subject to the timely receipt by the Servicer of the information
related to the receipt of all payments made pursuant to any Lease into any Bank
Account, maintain appropriate records regarding payments under the Leases;
(d) subject to the terms of any applicable Aircraft Assets Related
Document, take such commercially reasonable actions as are necessary to apply
any payments of any type received from any Lessee on a basis consistent with the
directions of such Lessee and, to the extent that any such payments are made to
an account other than the account to which such payment should have been
directed pursuant to such Lessee's direction, to take such further commercially
reasonable actions as are necessary to give effect to such directions; provided,
however, that, in the event a Lessee is in default under a Lease or a Lessee is
subject to a voluntary or involuntary bankruptcy, liquidation, receivership or
other similar proceeding, the Servicer will consult with the Administrative
Agent prior to applying any funds received from such Lessee to the extent that
such funds could reasonably be applied to leases relating to both Aircraft
Assets and Other Assets; and
(e) provide for the safekeeping and recording of any letters of
credit, guarantees or other credit support (other than cash and cash
equivalents) held as part of Deposits or Maintenance Reserves and the timely
renewal or drawing on or disbursement thereof as provided under the applicable
Lease or other Aircraft Assets Related Document or otherwise in accordance with
Section 1.5 of this Schedule 2.02(a).
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79
SECTION 1.2. Maintenance. Subject to the availability of adequate
funding to comply with the obligations under this Schedule 2.02(a) and the
Servicing Agreement, the Servicer will perform the following technical services
relating to the maintenance of the Aircraft Assets:
(a) monitor the performance of maintenance obligations by Lessees
under all Leases relating to the Aircraft Assets by including the Aircraft
Assets in the Servicer's technical audit program (which shall include
inspection of each Aircraft Asset and maintenance of a record of all
written reports generated in connection with such inspections) consistent
with practices employed from time to time by GE Capital and its Affiliates
with respect to their own Aircraft; the Servicer shall advise AFT as to
the content of such technical audit program and shall advise AFT as to any
material change to such technical audit program from time to time;
(b) determine the air authority approval status of a proposed
maintenance program and proposed maintenance performer under any new Lease
of any Aircraft Assets under which any Person within the AFT Group is, or
following the Delivery of the related Aircraft Asset will be, the lessor;
(c) in connection with a termination or expiration of a Lease under
which any Person within the AFT Group is, or following the Delivery of the
related Aircraft Asset will be, the lessor:
(i) arrange for the appropriate technical inspection of the
Aircraft Asset for the purpose of determining if the re-delivery
conditions under the Lease have been satisfied;
(ii) maintain a record of all material reports and other
written materials (including any relevant reconciliation statements)
received or generated by the Servicer in connection with such
inspection and provide reasonable access to such reports and written
materials to the relevant Persons within the AFT Group;
(iii) on the basis of the final inspection and available
records, determine whether the Lessee has complied with all required
airworthiness directives and mandatory modifications, and establish
the status
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80
of compliance with Airframe and Engine manufacturer service
bulletins and Lessee-originated modifications undertaken, in each
case with respect to the Aircraft Asset and as required by the
Lease;
(iv) (A) determine whether the Lessee has satisfied the
re-delivery conditions applicable to the Aircraft Asset specified in
the Lease and negotiate any modifications, repairs, refurbishments,
inspections or overhauls to or compromises of such conditions that
the Servicer deems reasonably necessary or appropriate, (B)
determine the application of any available Deposits, Maintenance
Reserves or other payments under the Lease and (C) maintain a record
of the satisfaction of such conditions and accept re-delivery of the
Aircraft Asset; and
(v) determine the need for, procure and monitor the
performance of any maintenance and refurbishment of the Aircraft
Asset upon re-delivery, including compliance with applicable
airworthiness directives, service bulletins and other modifications
which the Servicer may deem reasonably necessary or appropriate for
the marketing of the Aircraft Asset;
(d) consider and, to the extent the Servicer deems reasonably
necessary or appropriate, approve any Lessee-originated modifications to
any Aircraft Asset submitted by any Lessee:
(i) to the extent authorized by the terms of the relevant
Lease; or
(ii) which the Servicer reasonably determines would not result
in a material diminution in value of the Aircraft Asset or the
interests of any Person within the AFT Group; or
(iii) which are approved by AFT;
(e) determine the amount (if any) that the relevant Person within
the AFT Group (or, with respect to any Original Aircraft, the owner) is
obliged to contribute pursuant to the provisions of a Lease (taking into
account the amount of Maintenance Reserves available with respect to such
Lease and the receivables position of the related
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81
Lessee) to the cost of complying with any modification requirements,
airworthiness directives and similar requirements; and
(f) arrange and supervise appropriate storage and any required
on-going maintenance of any Aircraft Asset, at the expense of the relevant
Person within the AFT Group, following termination of a Lease for any
reason and re-delivery of the Aircraft Asset thereunder and prior to
delivery of such Aircraft Asset to a new lessee or purchaser, on the most
economic basis reasonably available and appropriate under the
circumstances.
The Servicer shall generally provide the technical/maintenance
services set forth in this Section 1.2 through the use of its own staff where it
shall deem appropriate and shall utilize third parties to provide such
technical/maintenance services where it shall deem appropriate.
SECTION 1.3. Insurance.
(a) The Servicer will provide the following insurance services:
(i) negotiate the insurance provisions of any proposed lease or
other agreement affecting any of the Aircraft Assets, with such provisions
to include such minimum coverage amounts with respect to hull and
liability insurance as are set forth on Annex 1 to the Servicing
Agreement, as the same may be amended from time to time at the direction
of AFT; provided, however, that, if an agreement with respect to hull or
liability insurance, if any, cannot be reached with any particular Lessee
pursuant to which such Lessee will procure and pay the premiums for such
insurance in amounts consistent with the foregoing, the Servicer shall
arrange for any shortfall in the required amount of insurance to be
covered, at the expense of AFT, pursuant to arrangements entered into
pursuant to clauses (iii) and (v) of this Section 1.3(a);
(ii) monitor the performance of the obligations of Lessees relating
to insurance under Leases of any Aircraft Assets and, where practicable,
ensuring that appropriate evidence of insurance exists with respect to any
Aircraft Assets maintenance providers;
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82
(iii) source and arrange a group aviation insurance program covering
the Aircraft Assets (it being understood that any savings resulting from a
group policy covering both Aircraft Assets and Other Assets shall be
shared equitably based on the amount of insurance obtained and premium
paid thereunder with respect to the covered Aircraft Assets, on the one
hand, and the Other Assets, on the other hand), with such minimum coverage
amounts with respect to hull and liability insurance as are set forth on
Annex 1 to the Servicing Agreement, as the same may be amended from time
to time at the direction of AFT;
(iv) procure such repossession insurance for Aircraft Assets
registered in those countries listed on Annex 1 to the Servicing Agreement
(which list has been established by AFT and may be modified from time to
time by AFT) and with such minimum coverage amounts with respect to hull
insurance as are set forth on Annex 1 to the Servicing Agreement, as the
same may be amended from time to time at the direction of AFT; provided,
however, that, if an agreement with respect to repossession insurance, if
any, cannot be reached with any particular Lessee pursuant to which such
Lessee will pay the premiums for such insurance in amounts consistent with
the foregoing, the Servicer shall pay any premiums to the extent unpaid by
the Lessee, at the expense of AFT;
(v) if at any time any Aircraft Asset ceases to be insured or any
Person within the AFT Group requires insurance coverage relating to an
Aircraft Asset for any reason, including default by the Lessee or an
Aircraft Asset not being leased upon termination of a Lease, the Servicer
will procure, at the expense of the relevant Person within the AFT Group,
alternative insurance coverage, with such minimum coverage amounts with
respect to hull and liability insurance as are set forth on Annex 1 to the
Servicing Agreement, as the same may be amended from time to time at the
direction of AFT; and
(vi) advise AFT of any settlement offers received by the Servicer
with respect to any claim of damage or loss in excess of $10,000,000 with
respect to an Aircraft Asset, and, upon request by AFT, provide AFT with
copies of all relevant documentation related thereto and such other
additional information and advice as AFT may reasonably request and, upon
direction from AFT that any such settlement offer related thereto is
acceptable, prepare the
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83
appropriate documentation, including releases and any indemnities required
in connection with such releases, to give effect to such settlement offer
and procure the execution of such documentation by AFT (it being
understood that settlement offers with respect to any such claims up to
and including $10,000,000 may be settled by the Servicer independently);
provided, however, that, in each case where insurance is to be obtained by the
Servicer, such insurance is reasonably available in the relevant insurance
market and the Servicer shall have used reasonable sourcing techniques prior to
obtaining such insurance. The foregoing provisions shall apply, mutatis
mutandis, to any arrangements in which Persons other than Lessees have
possession of, or insurance responsibility for, an Aircraft Asset (including in
the event that an Aircraft Asset has been sold pursuant to a mortgage, deferred
payment agreement or any similar arrangement).
(b) The Servicer may engage, on behalf of, and for the benefit and
at the expense of, any Person within the AFT Group, one or more Advisers and
Brokers, each of whom:
(i) may also act in the same or similar capacities for the Servicer
and its Affiliates;
(ii) shall take directions from the Servicer (as authorized by the
Servicing Agreement) in respect of the Aircraft Assets; and
(iii) may act on behalf of any Person within the AFT Group in
respect of any of their other insurance requirements, if requested to do
so by any such Person within the AFT Group.
The Servicer shall be entitled to rely reasonably on the actions taken by or
recommendations of any such Adviser and Broker, subject to the terms of the
relevant Lease. The Servicer will obtain such advice from the relevant Adviser
or Broker or both, as it deems appropriate, as to the reasonableness of any
insurance arrangements proposed by a Lessee, and as to the levels and types of
insurance to be provided by a Lessee or to be arranged by the Servicer, for any
of the Aircraft Assets. Except to the extent the Servicer can effect more cost
efficient coverage under fleet or group policies, the Servicer will use
reasonable commercial efforts to maintain separate and distinct customer
relationships with such Advisers or Brokers when acting
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84
on behalf of any Person within the AFT Group, on the one hand, and when acting
on its own behalf or on behalf of other Persons not within the AFT Group whose
Aircraft Assets it manages, on the other hand. Any such insurance obtained by
the Servicer shall include as the named insured thereunder, such Persons as are
required to be designated as named insureds pursuant to paragraph 6 of Annex 1
to the Servicing Agreement.
(c) The Servicer shall provide to AFT such periodic reports
regarding insurance matters relating to the Aircraft Assets as AFT may
reasonably request.
SECTION 1.4. Administration. The Servicer shall administer each
Lease in accordance with its terms and as otherwise specifically addressed
herein.
SECTION 1.5. Enforcement. The Servicer shall take commercially
reasonable steps to enforce the obligations to the relevant Person within the
AFT Group (or, with respect to any Original Aircraft, the owner) of the Lessee
and any other parties under each Lease and under any ancillary agreements
thereto delivered by AFT to the Servicer (including any guarantees of the
obligations of the Lessee). Following any default by a Lessee under the
applicable Lease, the Servicer will take all such commercially reasonable steps
as it deems reasonably necessary or appropriate to preserve and enforce the
rights of the relevant Person within the AFT Group (or, with respect to any
Original Aircraft, the owner) under the applicable Lease, including entering
into negotiations with such Lessee with respect to the restructuring of such
Lease or declaration of an event of default under the applicable Lease, drawing
on or making disbursement of any Deposits, Maintenance Reserves or any letters
of credit, guarantees or other credit support thereunder, voluntary or
involuntary termination of the Lease and repossession of the Aircraft Asset that
is the subject of the Lease, and pursuing such legal action with respect thereto
as the Servicer deems reasonably necessary or appropriate.
SECTION 1.6. Lease Modifications. (a) The Servicer shall be
authorized to make such amendments and modifications to any Lease as it shall
deem reasonably necessary or appropriate; provided, however, that such amendment
or modification shall require the approval of AFT pursuant to Section 7.04(a) of
the Servicing Agreement if the provisions of such amendment or modification,
were they to be included in a new Lease to be entered into after the date
hereof, would, on their own, cause
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85
the entering into of such new Lease to require the approval of AFT pursuant to
Section 7.04(a)(ii) of the Servicing Agreement. Such amendments or modifications
may be made without regard to whether there is a default by the Lessee or other
party under or with respect to any such Lease.
(b) The Servicer may waive, in its absolute discretion, overdue
interest due from any Lessee under any Lease on any default in payment of rent,
maintenance reserves or other amount thereunder if any such default is cured
within seven (7) days of the date on which such payment was due.
SECTION 1.7. Options and Other Rights. The Servicer shall be
authorized to take such action as it shall deem reasonably necessary or
appropriate with respect to:
(a) the exercise by any Lessee or other party of any option or right
affecting the applicable Aircraft Asset or the applicable Lease, consistent with
the terms of any such option or right; and
(b) the exercise on behalf of any Person within the AFT Group (or,
with respect to any Original Aircraft, the owner) of any right or option that
such Person (or such owner) may have with respect to any of the Aircraft Assets
or the Leases.
SECTION 2. Compliance with Covenants; Security Interests.
SECTION 2.1. Compliance Generally. (a) Subject to the availability
to the Servicer of adequate funding to comply with its obligations under this
Schedule 2.02(a) and the Servicing Agreement, the Servicer shall take such
commercially reasonable actions as it shall deem reasonably necessary or
appropriate to keep AFT in compliance with its obligations and covenants under
the Indenture solely to the extent that such obligations and covenants
specifically relate to the Services, excluding, in any case, (i) any reporting
obligations in respect of any of the foregoing and (ii) any rental or other
payment or monetary obligations under the Indenture; provided, however, that the
foregoing shall only apply to (A) any Indenture covenants that are set forth
(or, in certain cases, appear as extracts) on Schedule 2.02(a)(i) to the
Servicing Agreement, to the extent that each provision set forth (or extracted)
on such Schedule includes the relevant section references for each such
provision from the Indenture, and which (together with the definitions for any
capitalized terms used therein) are set
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86
forth in full in a copy of the Indenture delivered by AFT to the Servicer,
certified by AFT as a true and complete copy thereof (and AFT shall promptly
provide the Servicer with all amendments, supplements and waivers thereto, so
certified), and AFT shall provide to the Servicer any instructions the Servicer
may require in the interpretation of the Indenture, on which instructions the
Servicer shall be entitled to rely in all respects and (B) such Indenture
covenants (excluding, in any case, any such covenants relating to the
limitations on Lessee concentrations, which are treated in Section 2.2 of this
Schedule 2.02(a)) first coming into effect (including through amendments or
modifications) after the date of the Servicing Agreement, or which AFT shall
from time to time notify the Servicer in writing, in reasonably specific detail.
(b) Nothing in this Schedule 2.02(a) or elsewhere in the Servicing
Agreement shall be deemed to constitute or be construed as (i) a delegation or
other transfer to, or an assumption by, the Servicer or any of its Affiliates of
any obligations of any Person within the AFT Group (or, with respect to any
Original Aircraft, the owner) to make any payment to any Lessee or other Person,
or to comply with any other monetary obligation, under any Lease or (ii) a
transfer to the Servicer or any of its Affiliates of any right, title or
interest in any Lease or related agreement or any Aircraft Asset covered
thereby.
SECTION 2.2. Certain Matters Relating to Concentration Thresholds.
(a) Concentration Thresholds Generally. The Servicer shall use
reasonable commercial efforts to comply with any covenants specifically relating
to limitations on Lessee concentration set forth in the Indenture
("Concentration Thresholds") and shall promptly inform AFT of any proposed
transaction that it reasonably determines may result in such Concentration
Thresholds being exceeded, and AFT shall promptly provide to the Servicer any
information that the Servicer may reasonably require in connection with such
Concentration Thresholds in order to comply with the provisions of this Section
2.2. The Servicer shall not enter into any such transaction other than pursuant
to the terms of Section 2.2(c) below.
(b) Present Concentration Limits. AFT hereby represents and warrants
to the Servicer that set forth in Annex 2 to the Servicing Agreement are the
Concentration
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Thresholds (including, following each provision set forth in such Annex, the
relevant section references for each such provision from the Indenture)
presently imposed under the Indenture, which Concentration Thresholds (together
with the definitions for any capitalized terms used therein) are set forth in a
full copy of the Indenture delivered by AFT to the Servicer, certified by AFT as
a true and complete copy thereof (and AFT shall promptly provide the Servicer
with all amendments, supplements and waivers thereto, so certified) and AFT
shall provide to the Servicer any instructions the Servicer may require in the
interpretation of such Concentration Thresholds, on which instructions the
Servicer shall be entitled to rely in all respects.
(c) Directions to Servicer. The Servicer shall not enter into any
transaction with respect to which it has provided notice pursuant to Section
2.2(a) until AFT has provided a written certification to the Servicer to the
effect that such transaction will not result in any violation of the
Concentration Thresholds and the Servicer shall be entitled to rely upon such
certification for all purposes of the Servicing Agreement and this Schedule
2.02(a).
SECTION 2.3. Security Interests. In connection with the obligation
of any Person within the AFT Group under the Security Trust Agreement to perfect
any security interest granted by it in its right, title and interest in and to
any Assigned Lease, the Servicer's sole responsibility in respect thereof shall
be to take the following actions with respect to each Assigned Lease: (a) seek
advice from local counsel in the jurisdiction where the related Aircraft Asset
is registered as to what actions would be customarily taken in such jurisdiction
to perfect the security interest created in such Assigned Lease pursuant to the
Security Trust Agreement and to use commercially reasonable efforts to implement
such advice, (b) (1) create an original chattel paper copy of such Assigned
Lease by adding the following language to the cover of such Assigned Lease: "To
the extent, if any, that this [Lease Agreement] or any [Lease Supplement]
hereunder constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no security
interest in this [Lease Agreement] or such [Lease Supplement] may be created
through the transfer or possession of any counterpart other than the original
executed counterpart, which shall be identified as the counterpart containing
the receipt therefor executed by the Security Trustee under and as defined in
the Security Trust Agreement dated as of May 5, 1999, between Aircraft Finance
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Trust, Bankers Trust Company as the Security Trustee and the Operating Bank and
the various other parties identified on the signature pages thereof", and (2) no
later than five days after the execution of such Assigned Lease by all the
parties thereto, deliver such original chattel paper copy (which, by way of
clarification, shall not include the signature or the receipt therefor of the
Security Trustee) to a courier service for delivery to the Security Trustee at
Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and
Agency Services, Structure Finance Team, (c) notify the Lessee in writing of the
security assignment of such Assigned Lease to the Security Trustee pursuant to
the Security Trust Agreement (which notice may be contained in such Assigned
Lease), (d) obtain from the Lessee a written acknowledgement addressed to, or
for the benefit of, the Security Trustee (1) acknowledging receipt of
notification of such security assignment and (2) containing the agreement of the
Lessee to continue to make all payments required to be made to the lessor under
such Assigned Lease to the account specified in such Assigned Lease unless and
until the Security Trustee otherwise directs (it being understood that the
account specified in such Assigned Lease will be the account specified by the
Administrative Agent to the Servicer as contemplated by Section 1.1(a) of this
Schedule 2.02(a)) and (e) take such other action as AFT shall have reasonably
requested and described in reasonable detail in a written notice to the
Servicer. Notwithstanding the foregoing, the Servicer shall have no obligation
to take any action specified in the prior sentence of this Section 2.3 with
respect to any Assigned Lease or any supplement or amendment thereto that was
executed before the related Aircraft became an Aircraft Asset (it being the
expectation of the parties hereto that such action will be taken by the seller
of any Aircraft Asset related to such Assigned Lease to any Person within the
AFT Group). In connection with any Assigned Lease, AFT will cooperate with the
Servicer in obtaining a letter of quiet enjoyment with respect to such Assigned
Lease referred to in the final sentence of Section 2.08(a) of the Security Trust
Agreement.
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SECTION 3. Lease Marketing.
(a) The Servicer shall provide and perform lease marketing services
with respect to the Aircraft Assets and in connection therewith is authorized:
(i) to negotiate and enter into any commitment for a lease of an
Aircraft Asset on behalf of and (through a power of attorney) in the name
of the relevant Person within the AFT Group (or, with respect to any
Original Aircraft, the owner); and
(ii) to include within any commitment for a Lease of an Aircraft
Asset any intermediate Lease or Leases through any Person within the AFT
Group that the Servicer deems reasonably necessary or appropriate.
(b) The Servicer shall commence the negotiation of any commitment
for a Lease or Leases of Aircraft Assets in a manner consistent with the
practices employed by the Servicer with respect to its aircraft operating
leasing services business generally and shall commence the drafting of, and
negotiation with respect to, any Leases for Aircraft Assets on the following
basis:
(i) in the case of any proposed Lessee that is not and has not been
a lessee of an aircraft managed or serviced by the Servicer, the Servicer
shall commence the drafting of, and negotiation with respect to, a Lease
for Aircraft Assets based on the form of lease agreement or agreements
then used by the Servicer in connection with its aircraft operating
leasing services business generally or, in the case of the Lease of the
Airbus A320-200 Aircraft (with manufacturer's serial number 373) to
TransMeridian Airlines, the Servicer shall commence the drafting of, and
negotiation with respect to, such Lease based on the form provided by
UniCapital to AFT pursuant to Section 5.03(f) of the Indenture (as either
such form of lease shall be amended from time to time by the Servicer, the
"Pro Forma Lease"); and
(ii) in the case of any proposed Lessee that is or was a lessee of
an aircraft managed or serviced by the Servicer, the Servicer may commence
the drafting of, and negotiation with respect to, a Lease for Aircraft
Assets based on a form of lease substantially similar to the lease
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previously used with respect to such Lessee (the "Precedent Lease").
Provided that the Servicer commences the negotiation of a Lease of
any Aircraft Asset in accordance with clauses (b)(i) and (b)(ii) above, the
terms of any executed Lease may vary from the terms of the Pro Forma Lease or
the Precedent Lease employed by the Servicer in accordance with such clauses.
Section 3(b) shall not be applicable to the negotiation with respect to, or
execution of, any Lease for Aircraft Assets in which negotiations commenced on
or prior to the Closing Date. The Servicer is authorized to execute and deliver
binding leases and related agreements on behalf of the relevant Person within
the AFT Group (or, with respect to any Original Aircraft, the owner) based on
the foregoing procedures.
(c) (i) Upon ten Business Days' prior written notice from AFT (x)
requesting a copy of the then current Pro Forma Lease and (y) specifying
that such Pro Forma Lease is to be used for purposes of the annual review
required pursuant to the terms of Section 5.03(f) of the Indenture (the
"Annual Review"), the Servicer shall provide AFT with a copy of its then
current Pro Forma Lease, together with a copy thereof marked (with such
marking to be accomplished to the extent possible with the then current
word processing software employed by the Servicer and, for the avoidance
of doubt, not manually) to reflect changes from the version of the Pro
Forma Lease that was produced by the Servicer following the immediately
preceding Annual Review to give effect to the terms of Section 3(c)(ii)
below (or from the Pro Forma Lease utilized as of the Closing Date (a copy
of which shall have been delivered to AFT on or before the Closing Date)
in the case of the first such Annual Review).
(ii) On or prior to each anniversary of the Closing Date and
following the Annual Review, AFT shall advise the Servicer in writing
whether any provisions in the then current Pro Forma Lease that correspond
to the Core Lease Provisions are required in accordance with the terms of
Section 5.03(f) of the Indenture to be deleted from such Pro Forma Lease
and replaced with the provision corresponding thereto in the most recent
Pro Forma Lease in which such provision was determined to be acceptable in
accordance with the terms of Section 5.03(f) of the Indenture. Following
any such written advice from AFT, the Servicer shall amend the Pro Forma
Lease accordingly and
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shall commence the negotiation of any Lease thereafter with the Pro Forma
Lease as so amended in respect of any such provision.
(d) The Servicer shall take such reasonable commercial actions as
shall be reasonably necessary or appropriate to deliver any Aircraft Asset
pursuant to the terms of the documentation of the Lease or Leases of such
Aircraft Asset, including upon an extension of such Leases.
(e) The Servicer shall generally provide the marketing services set
forth in this Section 3 through the use of its own marketing staff where it
shall deem appropriate and shall utilize third parties to provide such marketing
services where it shall deem appropriate.
SECTION 4. Sales of Aircraft and Engines.
(a) The Servicer shall provide and perform sales services with
respect to the Aircraft Assets at, and on a basis consistent with, the direction
from time to time of AFT, and, in connection therewith, is authorized:
(i) to enter into any commitment for a sale of an Aircraft Asset on
behalf and (through a power of attorney) in the name of the relevant
Person within the AFT Group; and
(ii) to include within any sale any intermediate Lease or Leases
through any Person within the AFT Group that the Servicer deems reasonably
necessary or appropriate; provided, however, that, except as otherwise
required in accordance with the terms of a Lease, the Servicer shall not
enter into any sale of any Aircraft Asset or agreement to sell any
Aircraft Assets without obtaining the approval of AFT pursuant to Section
7.04(a) of the Servicing Agreement.
(b) The Servicer shall negotiate documentation of any sale and,
subject to Section 4(a) of this Schedule 2.02(a), is authorized to execute and
deliver binding agreements on behalf and (through a power of attorney) in the
name of the relevant Person within the AFT Group.
(c) The Servicer shall take such reasonable commercial actions as
shall be reasonably necessary or
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appropriate to deliver any Aircraft Asset pursuant to the terms of the
documentation of the sale.
(d) In the event that AFT directs the Servicer to sell or arrange
for the sale of any Aircraft Asset, the Servicer will not be required to take
any such action until AFT shall provide the Servicer with an Officer's
Certificate, substantially in the form attached as Schedule 2.02(a)(ii) to the
Servicing Agreement, certifying that such sale complies with the terms of the
Indenture and that the Servicer is entitled to rely upon such certification for
all purposes of the Servicing Agreement and this Schedule 2.02(a).
(e) Notwithstanding any other provision in Section 7.04 of the
Servicing Agreement to the contrary, the Servicer shall be permitted to
purchase, sell or exchange any Engine relating to an Aircraft or any part or
components thereof or spare parts or ancillary equipment or devices furnished
with an Aircraft at such times and on such terms and conditions as the Servicer
deems reasonably necessary or appropriate in connection with its performance of
the Services; provided, however, the Servicer shall not be permitted to
purchase, or enter any order to purchase, Engines or spare parts in a quantity
in excess of that quantity then required to enable the Aircraft Assets to be
leased without obtaining the prior written consent of AFT.
SECTION 5. Aircraft Acquisitions.
SECTION 5.1. Limitation on Acquisitions. AFT shall not, and shall
not permit any other Person within the AFT Group to, purchase or otherwise
acquire, directly or indirectly, (x) Aircraft Assets from any Person other than
the Servicer or UniCapital or any of their respective Affiliates or (y) from
UniCapital or any of its Affiliates, without the consent of the Servicer, any
L1011, A300B4-200, B747-100, -200, -300, any Stage II aircraft (including,
without limitation, hushkitted versions), any Fokker aircraft or any regional
jets, and other than as provided herein (including, without limitation, with
respect to any Engine, in Section 4(e) of Schedule 2.02(a) and, in respect of
any Aircraft Assets, pursuant to the terms of the Asset Purchase Agreement).
SECTION 5.2. Firm Orders and Options. With respect to any Aircraft
Assets that AFT or any other Person within the AFT Group shall purchase pursuant
to any firm order, order subject to cancelation, option or other arrangement,
the
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Servicer shall, at the request of AFT, take such reasonable commercial actions
as the Servicer shall deem reasonably necessary or appropriate to accept
delivery of any such Aircraft Assets on behalf of AFT or any other Person within
the AFT Group, as the case may be, in accordance with the terms of such order,
option or other arrangement (including, without limitation, conducting such
pre-delivery inspections as the Servicer deems reasonably appropriate);
provided, however, that the Servicer shall have no obligation to make any
payments to any seller of such Aircraft Assets.
SECTION 5.3. Other Acquisitions. Except as otherwise provided in
Section 2.03(g) of the Servicing Agreement, the Servicer shall not be required
to assist in the solicitation of, or otherwise take any action to obtain, any
lessee consents and/or novations in connection with the acquisition of any
Aircraft Assets or the issuance of Additional Notes or Additional Certificates
(it being the expectation of the parties hereto that the obtaining of any lessee
consents and/or novations with respect to any Aircraft Asset shall be the
responsibility of the seller of such Aircraft Asset to any Person within the AFT
Group). The parties hereto acknowledge that Section 2.03 of the Servicing
Agreement deals with, among other things, the Servicer's involvement in the
issuance of Additional Notes and Additional Certificates.
SECTION 6. Market Research.
SECTION 6.1. Market Research. The Servicer shall maintain research
capability and, subject to the requirements of Section 13.05 of the Servicing
Agreement, shall provide commercial aviation general market industry research
reports to AFT on an annual basis, which reports shall include general market
information with respect to commercial aviation demand in terms of traffic
growth, new Aircraft requirements and other information necessary for AFT
Group's long-term planning with respect to Leases, purchases and sales, and the
Aircraft Assets; provided, however, that, upon the delivery of any Termination
Notice, the Servicer shall cease to provide competitively sensitive information
to the AFT Group.
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SECTION 7. Aircraft Asset Cash Services.
SECTION 7.1. Accounts and Account Information.
(a) Existing Accounts. In the event that the Administrative Agent
desires to modify any of the arrangements relating to any of the bank accounts
set forth on Schedule 4.03 to the Servicing Agreement (the "Existing Accounts")
in accordance with Section 2.04 of the Administrative Agency Agreement, AFT
shall cause the Administrative Agent to (i) deliver a certificate to the
Servicer specifying in reasonable detail the modifications to be made with
respect to any such Existing Accounts and certifying that any such modifications
are in accordance with the applicable provisions of the Indenture and the
Administrative Agency Agreement and (ii) transmit instructions to the relevant
banking institution to effect such modifications and shall take such other
actions as are incidental thereto in order to give effect to the foregoing.
(b) New Accounts. The Servicer shall notify the Administrative Agent
in the event that any new bank accounts need to be established on behalf of any
Person within the AFT Group in connection with the execution of a new Lease and
shall set forth in reasonable detail the (i) identity of the new Lessee, (ii)
Aircraft Assets subject to such Lease and (iii) jurisdiction of the Lessee and
in which such Aircraft Assets are to be registered. Following receipt of such
notice from the Servicer, AFT shall cause the Administrative Agent promptly to
(i) deliver a certificate to the Servicer specifying (v) the name and location
of the bank at which such account will be established, (w) the name(s) in which
such account will be established, (x) the names of the beneficiaries of such
account, (y) the names of the Persons authorized to make withdrawals from such
account and (z) such other information (including with respect to any security
arrangements) as the Administrative Agent deems appropriate and certifying that
the establishment of such account is in accordance with the applicable
provisions of the Indenture and the Administrative Agency Agreement and (ii)
transmit instructions to the relevant banking institution to effect the
establishment of such account and shall take such other actions as are
incidental thereto in order to give effect to the foregoing (the "New Accounts";
and, together with the Existing Accounts, the "Bank Accounts").
SECTION 7.2. Cash Transfers. (a) In the event that funds are
required to be transferred from any Bank Account to
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the account of another Person (other than any Person within the AFT Group) in
order to give effect to the directions of any Lessee in accordance with Section
1.1(d) of this Schedule 2.02(a), the Servicer shall provide the Administrative
Agent with written notice setting forth the (i) name of the transferor, (ii)
name of the transferee, (iii) accounts from and to which funds are to be
transferred, (iv) amounts to be transferred, (v) amount of the initial payment
from the Lessee and (vi) anticipated date of transfer. No later than the next
following Business Day, AFT shall cause the Administrative Agent to notify the
Servicer in writing whether the proposed transfer will be made on such
anticipated date of transfer or on another stated date. AFT shall instruct the
Administrative Agent to cause such transfer to be made on such date in
accordance with the terms of the written notice provided by the Servicer.
(b) It is understood and agreed that (i) all decisions as to any
transfers contemplated by Section 7.2(a) shall be the decisions and
responsibility of the Administrative Agent and not the decisions and
responsibility of the Servicer (and the Servicer shall not be subject to any
other responsibilities not specified in this Section 7 or any liability
whatsoever for any such transfers or any decisions of the Administrative Agent
related thereto) and (ii) the Servicer shall have no responsibility as to the
actions taken (or omitted) by any banking institution upon receipt of any
payment instruction from the Administrative Agent in accordance with the
procedures set forth in this Section 7.
SECTION 7.3. Payments.
(a) Anticipated Payments. For purposes of the calculation of the
Required Expense Amount by the Administrative Agent pursuant to Section 2.04(b)
of the Administrative Agency Agreement, not less than one Business Day prior to
each Calculation Date, the Servicer shall deliver to the Administrative Agent a
written projection of payment obligations (including projected expenditures, or
return to Lessees, of security deposits and/or maintenance reserves in
accordance with the terms of any Lease) reasonably anticipated by the Servicer
to be necessary to be paid in connection with the Servicer's performance of the
Services under the Servicing Agreement during the period extending from the
Payment Date immediately following such Calculation Date through to the next
succeeding Payment Date (the "Monthly Payment Period"). Not later than two
Business Days prior to the date of each cash payment, the Servicer shall deliver
to the Administrative Agent a written
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notice of such payment (whether or not such cash payment was reflected in the
projection referred to in this Section 7.3(a)), and shall state the (i)
anticipated date of such payment, (ii) payee, (iii) amount of such payment and
(iv) obligation in respect of which such payment is to be made (the "Stated
Services Obligation"), with an appropriate notation if, and to what extent, such
payment should be made from the Lessee Funded Account. No later than the
Business Day prior to such anticipated date of payment, AFT shall instruct the
Administrative Agent to notify the Servicer in writing whether the proposed
payment will be made on such anticipated date or on another stated date. AFT
shall instruct the Administrative Agent to pay or cause such payment to be made
on such date to the payee for the Stated Services Obligation from the funds then
available in the Expense Account and/or the Lessee Funded Account, as the case
may be.
(b) Unanticipated Payments. During any Monthly Payment Period the
Servicer may request in writing the Administrative Agent's approval for the
Administrative Agent to pay or cause to be paid expenses that had not been
reasonably anticipated by the Servicer at the time the projection required to be
provided to the Administrative Agent pursuant to Section 7.3(a) with respect to
such Monthly Payment Period was delivered to the Administrative Agent. Any such
request shall specify for each such payment obligation the (i) anticipated date
of such payment, (ii) payee, (iii) amount of such payment and (iv) Stated
Services Obligation, with an appropriate notation if, and to what extent, such
payment should be made from the Lessee Funded Account. No later than the
Business Day next following such request by the Servicer, AFT shall instruct the
Administrative Agent to notify the Servicer in writing whether such payment will
be made on such anticipated date of payment or on another stated date. AFT shall
instruct the Administrative Agent to pay or cause such payment to be made on
such date to the payee for the Stated Services Obligation from the funds then
available in the Expense Account or the Lessee Funded Account, as the case may
be. In the event that the funds then available in the Expense Account or the
Lessee Funded Account are insufficient to make any such payment, pursuant to
Section 3.04 of the Administrative Agency Agreement, AFT shall cause the
Administrative Agent to take such actions as are necessary to cause funds
sufficient to make any such payments to be transferred as soon as practicable
from the Collection Account to the Expense Account and/or the Lessee Funded
Account, as the case may be. Following the transfer of such funds from the
Collection Account, AFT shall cause the Administrative Agent
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to pay or cause such payments to made in accordance with the foregoing
provisions.
(c) Limitation on Payments. It is understood and agreed that (i) all
decisions as to the payment of funds from any Bank Account (including the
timing, amount and payee thereof) shall be the decisions and responsibility of
the Administrative Agent and not the decisions or responsibility of the Servicer
(and the Servicer shall not be subject to any other responsibilities not
specified in this Section 7 or any liability whatsoever for any such payments or
any decisions of the Administrative Agent related thereto) and (ii) the Servicer
shall have no responsibility as to the action taken (or omitted) by any banking
institution upon receipt of any payment instructions from the Administrative
Agent in accordance with the procedures set forth in this Section 7 or as to the
application by any payee of any amounts paid to it from any Bank Account in
accordance with the procedures set forth in this Section 7, including no
responsibility as to whether such payee applies such payment toward the Stated
Services Obligation for which such payment was made.
SECTION 8. Professional and Other Services.
SECTION 8.1. Legal Services. The Servicer shall provide or procure
legal services, in all relevant jurisdictions, on behalf of the relevant Persons
within the AFT Group with respect to the lease, sale or financing of the
Aircraft Assets, any amendment or modification of any Lease, the enforcement of
the rights of any Person within the AFT Group under any Lease, any disputes that
arise with respect to the Aircraft Assets or for any other purpose that the
Servicer reasonably determines is necessary in connection with the performance
of the Services. The Servicer shall provide such legal services (which services
shall not, in any case, be deemed to include (i) services or transactions
relating to taxation matters, the laws of foreign jurisdictions, capital markets
transactions or novel or unique transactions or (ii) a high level of services at
fiscal year end or other times of peak activity relative to the level of
services at other times) by using its in-house legal staff where it shall deem
appropriate and shall authorize outside counsel to provide such legal services
where it shall deem appropriate. The Servicer anticipates that it will use
outside counsel to perform some or all the Services set forth in Section 2.3 of
this Schedule 2.02(a). AFT recognizes, and shall cause each other Person within
the AFT Group to recognize, that from time to time
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the Servicer will retain legal counsel to provide legal services on behalf of
Persons within the AFT Group and, in the event that a dispute arises between any
Person within the AFT Group and the Servicer, AFT agrees, and shall cause each
other Person within the AFT Group, to waive any conflict of interest any such
counsel may have with respect to any such dispute or otherwise to enable the
Servicer to retain such counsel on its own behalf (it being understood that
notwithstanding any such waiver of a conflict of interest, any such Persons
within the AFT Group do not waive any rights to retain any such counsel on its
own behalf if such counsel is so agreeable).
SECTION 8.2. Accounting and Tax Services. The Servicer shall arrange
for such accounting and tax services and advice (which may be provided by the
Servicer's internal staff, to the extent available) as shall be reasonably
necessary or appropriate in connection with the structuring of lease, sale or
financing transactions with respect to the Aircraft Assets or for any other
purpose that the Servicer reasonably determines is necessary in connection with
the performance of the Services; provided, however, that the Servicer shall not
be responsible for arranging for any accounting services with respect to the
preparation of any management accounts or any financial statements of any Person
within the AFT Group, any footnotes thereto or any audits thereof.
SECTION 9. Reports; Custody.
SECTION 9.1. Monthly Reports. On the Business Day immediately
preceding each Calculation Date (or, to the extent impracticable, promptly
thereafter), the Servicer shall provide to AFT:
(a) A written report, covering the period from the end of the last
such report, if any, through and including the fourth Business Day prior to such
Calculation Date (the "Reporting Period"), of (i) the leasing, sales and
purchasing activities that were completed during such Reporting Period
(including any proposals to create segregated accounts), which shall include a
summary of the principal financial terms related to any new or amended lease
transactions, (ii) any Aircraft then off-lease, (iii) any Aircraft suffering an
event of loss and of any insurance, condemnation, requisition or other proceeds
received or claims made in respect thereof and (iv) any default notices issued,
in each case with respect to the Aircraft Assets, in such detail as AFT and the
Servicer may agree from time to time.
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(b) A detailed statement of receivables and payables covering the
Reporting Period (including details, if any, of any set-offs among Lessee
receivables, Lessee payables, Maintenance Reserves and security deposits and
past-due amounts) analyzed by Lessee for each account balance outstanding
(including with respect to restructured Leases), categorized by number of days
outstanding, in such detail as AFT and the Servicer may agree from time to time.
(c) A statement of material cash disbursements not previously
reported in a prior monthly statement (i) which the Servicer believes will be
due and payable during the period extending from the second Payment Date
following such Calculation Date through to the fifth succeeding Payment Date and
(ii) which were not contemplated in the then current Approved Budget or, to the
extent that any of the succeeding five months is not covered by the then current
Approved Budget, which are not usual or customary.
SECTION 9.2. Quarterly Reports. The Servicer shall provide written
reports to AFT within thirty days after the end of each calendar quarter which
shall set forth the following information for such calendar quarter:
(a) A list of each Aircraft in the portfolio identified by
manufacturer's serial number and specifying the following with respect thereto:
(i) Lessee, (ii) lease rate, (iii) lease commencement date and (iv) changes in
the foregoing, if any, from the prior quarterly report.
(b) A list (which may be made available in writing or
electronically) setting forth the concentration of Aircraft by country of
habitual base, region, Lessee, aircraft type and age, in summary form on the
basis of aircraft type, numbers of aircraft and appraised values as of the most
recent appraisal, in such detail as AFT and the Servicer may agree from time to
time.
(c) A report on all pending and potential (with respect to which a
member of the Servicer's in-house legal staff has received written notice
threatening litigation, which, in the sole judgment of the Servicer, is
material) litigation involving any Aircraft Assets or Leases of which the
Servicer has written notice.
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(d) A report of any claims being made with respect to any of the
Aircraft Assets of which the Servicer is aware with an actual or potential
liability in excess of $10,000,000.
(e) A report (which may be included in clause (a) above) by Lessee
identifying termination, extension, purchase and any other material options.
(f) A report of Leases expiring during the following two quarters.
SECTION 9.3. Other Information.
(a) To the extent the Servicer is in possession of the relevant
information, the Servicer shall prepare and submit to AFT the following
information with respect to each Person within the AFT Group or, in the case of
clause (i) below, any holder of the Beneficial Interest Certificates:
(i) upon request by AFT, information with respect to transactions
relating to Aircraft Assets necessary for each Person within the AFT Group
or any holder of the Beneficial Interest Certificates to prepare value
added tax and other tax returns; and
(ii) promptly after the occurrence thereof, notify AFT of any
accident or incident of which the Servicer has notice involving any
Aircraft Asset where (A) the potential loss in connection therewith
exceeds the higher of the damage notification threshold under the relevant
Lease, if any, and $2,000,000 or (B) the potential liability in connection
therewith exceeds $2,000,000.
(b) Upon request by AFT, the Servicer shall provide to AFT copies of
any financial statements received by the Servicer from any Lessee under and in
accordance with the provisions of its Lease of an Aircraft Asset.
(c) Upon request by AFT, the Servicer shall provide to AFT such
factual information and data about the Aircraft Assets which may reasonably be
requested by AFT; provided, however, that the Servicer shall not be required to
provide any valuations, interpretations, comparisons, evaluations, opinions,
forecasts, predictions or analytical analysis.
SECTION 9.4. Ratings Information. Upon request by AFT, the Servicer
shall provide to AFT such information and data
2.02(a)-24
101
about the Aircraft Assets and other commercially reasonable assistance relating
to the Aircraft Assets as AFT shall deem reasonably necessary or appropriate in
connection with providing information to the ratings agencies for AFT's debt
ratings.
SECTION 9.5. Custody of Documents. The Servicer agrees to hold all
original documents of any Person within the AFT Group that relate to the
Aircraft Assets in the possession of the Servicer in safe custody and according
to the commercially reasonable instructions of AFT.
SECTION 9.6. Reporting Obligations Generally. Notwithstanding
anything herein to the contrary, AFT acknowledges and agrees that it shall be
responsible for, and the Servicer shall not have any responsibility for, (a) any
Compliance Obligations to any holders of outstanding Notes, any holders of any
other securities issued by any Person within the AFT Group or any Governmental
Authorities and (b) all instructions, discretion, judgments and assumptions
related to such Compliance Obligations, and AFT agrees to indemnify the Servicer
and its Affiliates in respect of the foregoing as further provided in Section
11.05 of the Servicing Agreement.
SECTION 9.7. Aircraft Assets Related Documents. The Servicer shall
provide to the Security Trustee a copy of each fully executed Aircraft Assets
Related Document received by the Servicer no later than ten Business Days after
the receipt thereof by the Servicer. For purposes of this Section 9.7, the term
"Aircraft Assets Related Documents" does not include letters of intent,
memoranda of understanding or similar documents.
2.02(a)-25
102
SCHEDULE 2.02(a)(i)
TO THE SERVICING AGREEMENT
(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 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
("Ownership Interest") 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
103
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 the Issuer and any other Issuer 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 Ownership
Interest, 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 under the Initial
Lease of any Initial Aircraft existing on the date of acquisition of such
Aircraft or otherwise 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 an Eligible Credit Facility 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, individually,
$250,000 per Aircraft or, in the aggregate, 1% of the Initial Appraised Value of
the Portfolio for all Aircraft.
104
(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, including without limitation 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, excluding any capital
expenditure made in the ordinary course of business in connection with a new
lease of such Aircraft (each such non-excluded 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
Servicing Agreement) on such Aircraft, including the airframe and the related
Engines thereof; (ii) (A) such Modification Payment is included in the annual
operating budget of the Issuer Group and approved by the Controlling Trustees or
(B) 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)(xxviii) 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 Issuer Group Members,
taken as a whole, pursuant to this Section 5.02(i) after the Initial Closing
Date, including such Modification Payment, shall not exceed 5% of the aggregate
Initial Appraised Value of all Aircraft acquired by the Issuer Group.
105
Section 5.03 Operating Covenants. The Issuer covenants with the Trustee as
follows:
(a) Concentration Limits. Without a 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 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 a Rating Agency
Confirmation, the "Concentration Limits"); provided that the Issuer 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 to any Lessee located in, or as a result of which such
Aircraft would be or would be permitted to be habitually operated, in a
jurisdiction set forth in clause (a) of the Repossession Guidelines as set forth
on Exhibit E hereto and as amended from time to time upon the approval of the
Rating Agencies (the "Repossession 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
106
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, certificates,
licenses, permits and authorizations required for such Lessee's use and
operation or 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
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 May 31 of each year, commencing
in 2000, deliver to the Trustee (with no obligation of review or inquiry on the
part of the Trustee) appraisals of the Base Value of each of the 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
Aircraft 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.
107
(f) Leases. The Issuer shall (i) adopt and shall cause the Servicer
and any Additional Servicer to utilize the pro forma lease in the form provided
to the Issuer on the Initial Closing Date (in the case of the Servicer) or the
Closing Date for the acquisition of the first Additional Aircraft to be serviced
by the Additional Servicer (in the case of any Additional Servicer) as such pro
forma lease agreement or agreements may be revised for purposes of the Issuer
Group specifically or generally from time to time by the Servicer or such
Additional Servicer, as applicable (or, with respect to the Lease with respect
of the Initial Aircraft model number A320-200 bearing manufacturer's serial
number 373, the form provided by the Seller thereof to the Issuer on the Initial
Closing Date) (the "Servicer's Pro Forma Lease"), for use by the Servicer or
such Additional Servicer on behalf of the Issuer or any Issuer Subsidiary as a
starting point in the negotiation of Future Leases with Persons who are not
Issuer 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 such Additional Servicer, as applicable (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 applicable, 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
Issuer 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 K
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 Holders, 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 Holders, 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 a Rating
Agency Confirmation.
108
(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 Issuer 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 the Additional
Servicer, as applicable, 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 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
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 F hereto for each model of aircraft and as amended from
time to time with the approval of the Rating Agencies and (iii) airline
repossession insurance ("Repossession Insurance") for each Aircraft subject to a
Lease and habitually based in a jurisdiction determined in accordance with
clause (b) of the Repossession 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 such 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
Repossession Insurance 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 Repossession Insurance, any
governmental authority or agency of any jurisdiction for which Repossession
Insurance must be obtained), the sovereign foreign currency debt of which is
rated at least 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
109
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 hereunder to the
extent that such insurance is not generally available in the relevant insurance
market at commercially reasonable rates from time to time.
(h) 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 Issuer 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.
110
SCHEDULE 2.02(a)(ii)
TO THE SERVICING AGREEMENT
[Form of Officer's Certificate for AFT]
The undersigned, representing Aircraft Finance Trust ("AFT"), a
Delaware business trust, in accordance with Section 4(d) of Schedule 2.02(a) to
the Servicing Agreement dated as of May 5, 1999, (the "Servicing Agreement")
between AFT and GE Capital Aviation Services, Limited (the "Servicer"), hereby
certifies as follows:
(a) the sale of the [insert description of asset(s) to be sold], which AFT
has directed the Servicer to arrange pursuant to Section 4 of Schedule 2.02(a)
to the Servicing Agreement (the "Sale"), complies in all respects with the terms
of the Trust Indenture dated as of May 5, 1999, between AFT, ReSource/Phoenix,
Inc. and Bankers Trust Company;
(b) the Sale has been approved by the Controlling Trustee of AFT in
accordance with Section 7.04(a) of the Servicing Agreement;
(c) in connection with such Sale, the Servicer is entitled to rely upon
this certification for all purposes of the Servicing Agreement and Schedule
2.02(a) thereto; and
(d) the undersigned is a duly appointed, qualified and acting officer of
AFT and the signature appearing below after his/her name is a genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand on and as of this
[ ] day of [ ], [ ].
By:_____________________________
Name:
Title:
2.02(a)(ii)-1
111
SCHEDULE 4.01 TO
THE SERVICING AGREEMENT
Aircraft Assets
--------------------------------------------------------------------------------
TYPE S/N Owner/Head Lessee
--------------------------------------------------------------------------------
A310-300 448 AFT Trust - Sub I
--------------------------------------------------------------------------------
A320-200 210 AFT Trust - Sub I
--------------------------------------------------------------------------------
A320-200 221 AFT Trust - Sub I
--------------------------------------------------------------------------------
A320-200 222 AFT Trust - Sub I
--------------------------------------------------------------------------------
A320-200 231 AFT Trust - Sub I
--------------------------------------------------------------------------------
A320-200 373 AFT Trust - Sub I
--------------------------------------------------------------------------------
A320-200 737 AFT Trust - Sub I
--------------------------------------------------------------------------------
A320-200 749 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28333 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28548 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28554 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28557 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28558 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28559 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28561 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28562 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28563 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28564 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-300 28740 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-400 25663 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-400 25664 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-400 28489 AFT Trust - Sub I
--------------------------------------------------------------------------------
4.01-1
112
--------------------------------------------------------------------------------
TYPE S/N Owner/Head Lessee
--------------------------------------------------------------------------------
B737-400 28490 AFT Trust - Sub I
--------------------------------------------------------------------------------
B737-400 28491 AFT Trust - Sub I
--------------------------------------------------------------------------------
B767-200ER 23805 AFT Trust - Sub I
--------------------------------------------------------------------------------
B767-200ER 23806 AFT Trust - Sub I
--------------------------------------------------------------------------------
B767-300ER 25221 AFT Trust - Sub I
--------------------------------------------------------------------------------
B767-300ER 25403 AFT Trust - Sub I
--------------------------------------------------------------------------------
B767-300ER 29617 AFT Trust - Sub I
--------------------------------------------------------------------------------
B767-300ER 30008 AFT Trust - Sub I
--------------------------------------------------------------------------------
DC-10-30 46584 AFT Trust - Sub I
--------------------------------------------------------------------------------
DC-10-30 48292 AFT Trust - Sub I
--------------------------------------------------------------------------------
XX00 00000 AFT Trust - Sub I
--------------------------------------------------------------------------------
XX00 00000 AFT Trust - Sub I
--------------------------------------------------------------------------------
XX00 00000 AFT Trust - Sub I
--------------------------------------------------------------------------------
XX00 00000 AFT Trust - Sub I
--------------------------------------------------------------------------------
4.01-2
113
SCHEDULE 4.02 TO
THE SERVICING AGREEMENT
Aircraft Assets Related Documents
PROJECT POOL
INDEX
AIRCRAFT PAGE
XXX 00000 - Xxxxxxx Xxxxxxx Airways Limited ............................... 0
XXX 00000 - Xxxxxxx Xxxxxxx Airways Limited ............................... 0
XXX 00000 - Xxxxxxx Xxxxxxx Airways Limited ............................... 3
MSN 221 - Airtours International Airways Limited .......................... 4
MSN 222 - Airtours International Airways Limited .......................... 0
XXX 00000 - Xxxxxxx Xxxxxxx plc ........................................... 6
MSN 29617 - Air 2000 Limited .............................................. 7
MSN 53199 - Eurofly ....................................................... 0
XXX 00000 - Xxx Xxxxxxx ................................................... 9
MSN 737 - Star Europe ..................................................... 10
MSN 749 - Societe de Transport Aerien Regional, Trading as Star Europe .... 11
MSN 53198 - Spanair/GECC .................................................. 12
MSN 49398- Spanair S.A .................................................... 13
MSN 49791 - Spanair S.A ................................................... 14
MSN 28333 - Virgin Express ................................................ 15
MSN 28489 - Virgin Express (Ireland) Limited .............................. 00
XXX 00000 - Xxx Xxxxxxx ................................................... 17
MSN 25664 - Jet Airways ................................................... 00
XXX 00000 - Xxxxx General Aviation Corporation ............................ 00
XXX 00000 - Xxxxx General Aviation Corporation ............................ 20
MSN 23805 - Varig ......................................................... 21
MSN 23806 - Varig ......................................................... 22
MSN 28564 - Transbrasil ................................................... 23
MSN 28563 - Frontier Airlines ............................................. 00
XXX 000 - Xxxxxxxx ........................................................ 00
XXX 000 - Xxxxxxxx ........................................................ 26
MSN 448 - Royal Aviation .................................................. 27
MSN 46584 - Continental ................................................... 28
MSN 48292 - Continental ................................................... 00
XXX 00000 - Xxxxxxx Xxxx .................................................. 00
XXX 00000 - Xxxxxxxx ...................................................... 00
XXX 00000 - Xxxxxxxx Xxxx Yollari A.S. .................................... 32
MSN 28490 - Istanbul Hava Yollari A.S. .................................... 33
MSN 25221 - Britannia Airways Limited ..................................... 00
XXX 000 - Xxxxxx .......................................................... 35
MSN 25403 - Air Madagascar ................................................ 36
114
MSN 28554 (BRITISH MIDLAND AIRWAYS LIMITED)
1 Aircraft Lease Agreement dated 8 November 1996 made between Alnitak FSC
One Corporation and British Midland Airways Limited.
2 Aircraft Lease Amendment Agreement dated 6 December 1996 made between
Alnitak FSC One Corporation and British Midland Airways Limited.
3 Aircraft Lease Amendment Agreement dated 30 September 1998 made between
Alnitak FSC One Corporation and British Midland Airways Limited.
4 Aircraft Warranty Agreement dated 16 December 1996 made between Alnitak
FSC One Corporation and British Midland Airways Limited.
1
115
MSN 28557 (BRITISH MIDLAND AIRWAYS LIMITED)
1 Aircraft Lease Agreement dated 8 November 1996 made between Alnitak FSC
Two Corporation and British Midland Airways Limited.
2 Aircraft Lease Amendment Agreement dated 6 December 1996 made between
Alnitak FSC Two Corporation and British Midland Airways Limited.
3 Aircraft Lease Amendment Agreement dated 30 September 1998 made between
Alnitak FSC Two Corporation and British Midland Airways Limited.
4 Aircraft Warranty Agreement dated 15 March 1997 made between Alnitak FSC
Two Corporation and British Midland Airways Limited.
2
116
MSN 28558 (BRITISH MIDLAND AIRWAYS LIMITED)
1 Aircraft Lease Agreement dated 8 November 1996 made between Alnitak FSC
Three Corporation and British Midland Airways Limited.
2 Aircraft Lease Amendment Agreement dated 6 December 1996 made between
Alnitak FSC Three Corporation and British Midland Airways Limited.
3 Aircraft Lease Amendment Agreement dated 30 September 1998 made between
Alnitak FSC Three Corporation and British Midland Airways Limited.
4 Aircraft Warranty Agreement dated 26 April 1997 made between British
Midland Airways Limited and Alnitak FSC Three Corporation.
3
117
MSN 221 (AIRTOURS INTERNATIONAL AIRWAYS LIMITED)
1 Aircraft Lease Agreement dated 26 January 1996 made between Jodrell
Aviation Limited and Airtours International Airways Limited.
2 Side Letter dated 26 January 1996 made between Avion Aviation Limited,
Castle Aviation, Airtours International Airways Limited and Jodrell
Aviation Limited.
3 Side Letter dated 26 January 1996 made between Airtours International
Airways Limited and GE Capital Aviation Services Limited.
4 Side Letter dated 26 January 1996 made between GPAA Funding Limited, GPAA
Limited, Jodrell Aviation Limited and Airtours International Airways
Limited.
5 Aircraft Lease Novation and Amendment Agreement dated 11 March 1996 made
between General Electric Capital Corporation, Airtours International
Airways Limited and Jodrell Aviation Limited.
6 Aircraft Sub-Lease Agreement dated 28 February 1997 made between Airtours
International Airways Limited and Premiair A/S.
7 Amendment Agreement dated 21 March 1997 made between Airtours
International Airways Limited and Premiair A/S.
8 Second Amendment Agreement dated 22 May 1997 made between Airtours
International Airways Limited and Premiair A/S.
9 Third Amendment Agreement dated 18 July 1997 made between Airtours
International Airways Limited and Premiair A/S.
10 Fourth Amendment Agreement.
11 Fifth Amendment Agreement.
12 Sixth Amendment Agreement dated 25 February 1998 made between Airtours
International Airways Limited and Premiair A/S.
13 Seventh Amendment Agreement dated 24 March 1998 made between Airtours
International Airways Limited and Premiair A/S.
14 Certificate of Acceptance dated 15 May 1996 by Airtours International
Airways Limited to General Electric Capital Corporation.
4
118
MSN 222 (AIRTOURS INTERNATIONAL AIRWAYS LIMITED)
1 Aircraft Lease Agreement dated 26 January 1996 made between Jodrell
Aviation Limited and Airtours International Airways Limited.
2 Side Letter dated 26 January 1996 made between Avion Aviation Limited,
Castle Aviation Limited, Jodrell Aviation Limited and Airtours
International Airways Limited.
3 Side Letter dated 26 January 1996 made between Airtours International
Airways Limited and GE Capital Aviation Services Limited.
4 Side Letter dated 26 January 1996 made between GPAA Limited, GPAA Funding
Limited, Jodrell Aviation Limited and Airtours International Airways
Limited.
5 Aircraft Lease Novation and Amendment Agreement dated 11 March 1996 made
between Jodrell Aviation Limited, General Electrical Capital Corporation
and Airtours International Airways Limited.
6 Aircraft Sub-Lease Agreement dated 28 February 1997 made between Airtours
International Airways Limited and Premiair A/S.
7 Amendment Agreement dated 21 March 1997 made between Airtours
International Airways Limited and Premiair A/S.
8 Second Amendment Agreement dated 22 May 1997 made between Airtours
International Airways Limited and Premiair A/S.
9 Third Amendment Agreement dated 18 July 1997 made between Airtours
International Airways Limited and Premiair A/S.
10 Fourth Amendment Agreement.
11 Fifth Amendment Agreement.
12 Sixth Amendment Agreement dated 25 February 1998 made between Airtours
International Airways Limited and Premiair A/S.
13 Seventh Amendment Agreement dated 24 March 1998 made between Airtours
International Airways Limited and Premiair A/S.
14 Certificate of Acceptance dated 15 May 1996 by Airtours International
Airways Limited to General Electric Capital Corporation.
5
119
MSN 28548 (BRITISH AIRWAYS PLC)
1 Aircraft Lease Agreement dated 9 December 1997 made between Bowtie Leasing
(Bermuda) Limited and British Airways plc.
2 Letter to British Airways plc from Bowtie Leasing (Bermuda) Limited
stating the scheduled delivery date.
3 Aircraft Lease Novation and Amendment Agreement dated 27 November 1998
made between Bowtie Leasing (Bowtie) Limited, British Airways plc, General
Electric Capital Corporation and AerFi Group plc (formerly known as GPA
Group plc).
4 Assignment of Warranties dated 27 November 1998 made between General
Electric Capital Corporation and AerFi Group plc (formerly known as GPA
Group plc).
6
120
MSN 29617 (AIR 2000 LIMITED)
1 Aircraft Lease Agreement dated 24 June 1998 made between Alcyone FSC
Corporation and Air 2000 Limited.
2 Side Letter dated 24 June 1998 made between Alcyone FSC Corporation and
Air 2000 Limited.
3 Deposit Agreement dated 24 June 1998 made between Alcyone FSC Corporation
and Air 2000 Limited.
4 Certificate of Acceptance dated 30 March 1999 by Air 2000 Limited to
Alcyone FSC Corporation.
5 Guaranty dated 26 February 1999 by General Electric Capital Corporation in
favour of Air 2000 Limited.
7
121
MSN 53199 (EUROFLY)
1 Aircraft Lease Agreement dated 25 March 1997 made between Dormacken
Limited and Eurofly.
2 Lease Agreement dated 25 March 1997 made between GECC as Head Lessor and
Dormacken Limited.
3 Certificate of Acceptance dated 12 April 1997 be Eurofly S.p.A. to
Dormacken Limited.
8
122
MSN 28559 (AIR HOLLAND)
1 Aircraft Lease Agreement dated 21 November 1996 made between Arcturus FSC
Corporation and Air Holland Charter BV.
2 Aircraft Lease Amendment Agreement dated 20 March 1998 made between
Arcturus FSC Corporation and Air Holland Charter BV.
3 Aircraft Warranty Agreement dated 12 May 1997 made between Arcturus FSC
Corporation and Air Holland Charter BV.
4 Aircraft Lease Amendment Agreement dated 25 April 1999 made between
Arcturus FSC Corporation and Air Holland Charter BV.
9
123
MSN 737 (STAR EUROPE)
1 Aircraft Lease Agreement dated 9 October 1997 made between GECC and
Societe De Transport Aerien Regional ("STAR").
2 Side letter dated 31 October 1997 made between GECC and STAR.
3 Letter Agreement dated 28 November 1997 made between GECC and STAR.
10
124
MSN 749 (SOCIETE DE TRANSPORT AERIEN REGIONAL,
TRADING AS STAR EUROPE)
1 Aircraft Lease Agreement dated 16 October 1997 made between GECC and
Societe De Transport Aerien Regional.
2 Aircraft Lease Amendment Agreement dated 10 December 1997 made between
GECC and Societe De Transport Aerien Regional.
3 Side Letter undated from GECC to Societe De Transport Aerien Regional.
4 Certificate of Acceptance dated 10 December 1997 by Societe de Transport
Aerien Regional to General Electric Capital Corporation.
11
125
MSN 53198 (SPANAIR/GECC)
1 Aircraft Lease Agreement dated 13 May 1997 made between GECC and Spanair
S.A.
2 Side Letter dated 5 June 1997 made between GECC and Spanair S.A.
3 Side Letter dated 5 June 1997 re Demonstration Flight made between GECC
and Spanair.
12
126
MSN 49398 (SPANAIR S.A.)
1 Aircraft Lease Agreement dated 5 October 1995 made between General
Electric Capital Corporation and Spanair S.A.
2 Security Letter of Credit dated 6 November 1995 issued by Banco Central
Hispanoamericano S.A.
3 Letter of Intent dated 10 August 1995 from GE Capital Aviation Services,
Ltd. to Spanair.
4 Aircraft Lease Extension and Amendment Agreement dated 5 October 1998 made
between GECC and Spanair S.A.
5 Certificate of Acceptance dated 2 April 1996 by Spanair S.A. to General
Electric Capital Corporation.
13
127
MSN 49791 (SPANAIR S.A.)
1 Aircraft Lease Agreement dated 5 October 1995 made between GECC and
Spanair S.A.
2 Aircraft Lease Extension and Amendment Agreement dated 5 October 1995 made
between Aviation Financial Services Inc. and Spanair S.A.
3 Side Letter No. 1 re "C" Check dated 5 October 1995 made between GECC and
Spanair S.A.
4 Side Letter No. 2 re Purchase of Aircraft dated 5 October 1995 made
between GECC and Spanair S.A.
5 Aircraft Transfer Agreement dated 11 September 1997 made between Aviation
Financial Services Inc. and GECC.
6 Assignment, Assumption and Novation Agreement dated 11 September 1997 made
between GECC and Spanair S.A. and Aviation Financial Services Inc.
14
128
MSN 28333 (VIRGIN EXPRESS)
1 Aircraft Lease Agreement dated 14 August 1996 made between Dormacken
Limited and Virgin Express.
2 Maintenance Escalation Letter dated 23 September 1997 from GE Capital
Aviation Services to Virgin Express.
3 Head Lease Agreement dated 14 August 1996 made between GECAS Brussels FSC,
Inc. and Dormacken Limited.
4 Certificate of Acceptance dated 22 August 1996 by Eurobelgian Airlines
S.A.N.V. to Dormacken Limited.
15
129
MSN 28489 (VIRGIN EXPRESS (IRELAND) LIMITED)
1 Aircraft Lease Agreement dated 21 November 1996 made between Aldebaran FSC
One Corporation and Virgin Express (Ireland) Ltd.
2 Side Letter dated 11 September 1997 made between GECC and China Airlines
Ltd.
3 Certificate of Acceptance dated 23 October 1998 by Virgin Express
(Ireland) Limited to Aldebaran FSC One Corporation.
16
130
MSN 25663 (JET AIRWAYS)
1 Aircraft Lease Agreement dated 5 October 1997 made between Mercurbank
Aktiengesellschaft and Jet Airways.
2 Side Letter No. 1 dated 5 October 1997 made between Mercurbank
Aktiengesellschaft and Jet Airways.
3 Side Letter No. 2 dated 5 October 1997 made between Mercurbank
Aktiengesellschaft and Jet Airways.
4 Side Letter No. 2 dated 13 April 1998 made between Mercurbank
Aktiengesellschaft and Jet Airways.
5 Head Lease Agreement dated 5 October 1997 made between Birds of Paradise I
and II and Mercurbank Aktiengesellschaft.
6 Letter dated 10 November 1998 between GE Capital Bank GmbH, Jet Airways
(India) Limited, Birds of Paradise I and Birds of Paradise II.
17
131
MSN 25664 (JET AIRWAYS)
1 Aircraft Lease Agreement dated 5 October 1997 made between Mercurbank
Aktiengesellschaft and Jet Airways.
2 Side Letter No. 1 dated 5 October 1997 made between Mercurbank
Aktiengesellschaft and Jet Airways.
3 Side Letter No. 2 dated 5 October 1997 made between Mercurbank
Aktiengesellschaft and Jet Airways.
4 Side Letter No. 2 dated 13 April 1998 made between Mercurbank
Aktiengesellschaft and Jet Airways.
5 Head Lease Agreement dated 5 October 1997 made between Birds of Paradise I
and II and Mercurbank Aktiengesellschaft.
6 Letter dated 10 November 1998 between GE Capital Bank GmbH, Jet Airways
(India) Limited, Birds of Paradise I and Birds of Paradise II.
18
132
XXX 00000 (XXXXX GENERAL AVIATION CORPORATION)
1 Aircraft Lease Agreement dated 25 November 1996 made between Antares FSC
Two Corporation and China General Aviation Corporation and China Aviation
Supplies Import & Export Corporation.
2 Side Letter dated 25 November 1996 made between Antares FSC Two
Corporation and China General Aviation Corporation and China Aviation
Supplies Import & Export Corporation.
19
133
XXX 00000 (XXXXX GENERAL AVIATION CORPORATION)
1 Aircraft Lease Agreement dated 25 November 1996 made between Antares FSC
Three Corporation and China General Aviation Corporation and China
Aviation Supplies Import & Export Corporation.
2 Side Letter dated 25 November 1996 made between Antares FSC Three
Corporation and China General Aviation Corporation and China Aviation
Supplies Import & Export Corporation.
20
134
MSN 23805 (VARIG)
1 Aircraft Lease Agreement dated 15 August 1994 made between Varig, S.A. and
First Security Bank of Utah, N.A.
2 Amendment No. 1 dated 4 November 1994 made between First Security Bank of
Utah, N.A. and Varig, S.A.
3 Letter Agreement dated 4 November 1994 made between First Security Bank of
Utah, N.A. and Varig, S.A.
4 Amendment No. 2 dated 21 March 1995 made between First Security Bank of
Utah, N.A. and Varig, S.A.
5 Aircraft Lease Agreement Supplement No. 1 and Certificate of Acceptance
dated 21 March 1995 made between First Security Bank of Utah, N.A. and
Varig, S.A.
21
135
MSN 23806 (VARIG)
1 Aircraft Lease Agreement dated 15 August 1994 made between Varig, S.A. and
First Security Bank of Utah, N.A.
2 Amendment No. 1 dated 4 November 1994 made between First Security Bank of
Utah, N.A. and Varig, S.A.
3 Letter Agreement dated 4 November 1994 made between First Security Bank of
Utah, N.A. and Varig, S.A.
4 Amendment No. 2 dated 21 March 1995 made between First Security Bank of
Utah, N.A. and Varig, S.A.
5 Aircraft Lease Agreement Supplement No. 1 and Certificate of Acceptance
dated 21 March 1995 made between First Security Bank of Utah, N.A. and
Varig, S.A.
22
136
MSN 28564 (TRANSBRASIL)
1 Aircraft Lease Agreement dated 5 November 1997 made between Transbrasil
S/A Linhas Aereas and Alcyone FSC Corporation.
2 Letter Agreement dated 14 November 1997 made between Transbrasil S/A
Linhas Aereas and Alcyone FSC Corporation.
3 Certificate of Acceptance dated 14 November 1997 by Transbrasil S/A to
Alcyone FSC Corporation.
23
137
MSN 28563 (FRONTIER AIRLINES)
1 Aircraft Lease Agreement dated 25 March 1997 made between Frontier
Airlines, Inc. and GECC.
2 Letter Agreement No. 1 dated 25 March 1997 made between GECC and Frontier
Airlines, Inc.
3 Tax Indemnity Agreement dated 25 March 1997 made between GECC and Frontier
Airlines, Inc.
4 Lease Supplemental No. 1 dated 26 August 1997 made between GECC and
Frontier Airlines, Inc.
5 Letter Agreement No. 2 dated 26 August 1997 made between GECC and Frontier
Airlines, Inc.
6 Certificate of Technical Acceptance dated 25 March 1997 by Frontier
Airlines, Inc. to GECC.
7 Aircraft Lease Amendment Agreement dated as of 30 April 1999 between GECC
and Frontier Airlines, Inc.
24
138
MSN 210 (CANADIAN)
1 Aircraft Lease Agreement [210] dated 8 February 1996 made between GECC and
Canadian Airlines International Ltd.
2 Aircraft Sub-lease Agreement [210] dated 8 February 1996 made between GPAG
and Canadian Airlines International Ltd.
3 Aircraft Lease Amendment Agreement dated 16 June 1997 made between GECC
and Canadian Airlines International Ltd.
4 Aircraft Lease Novation and Amendment Agreement dated 8 May 1998 made
between GECC, Canadian Airlines International Ltd. and Aviation Financial
Services Inc.
5 Short Form Lease Novation Agreement dated 8 May 1998 made between GECC,
Aviation Financial Services Inc. and Canadian Airlines International Ltd.
6 Letter of Intent dated 23 June 1998 from GE Capital Aviation Services Inc.
to Canadian Airlines International Ltd.
7 Amending Agreement dated 5 July 1998 made between Aviation Financial
Services Inc. and Canadian Airlines International Ltd.
8 Certificate of Acceptance dated 5 July 1991 by Canadian Airlines
International Ltd. to Asset Management A/A.
9 Certificate of Acceptance dated 8 February 1996 by Canadian Airlines
International Ltd. to GECC.
25
139
MSN 231 (CANADIAN)
1 Aircraft Lease Agreement [231] dated 8 February 1996 made between GECC and
Canadian Airlines International Ltd.
2 Aircraft Sub-lease Agreement dated 8 February 1996 made between GPAG and
GECC.
3 Option Agreement dated 8 February 1996 made between GECC and Canadian
Airlines International Ltd.
4 Aircraft Lease Amendment dated 16 June 1997 made between GECC and Canadian
Airlines International Ltd.
5 Aircraft Lease Novation and Amendment Agreement dated 8 May 1998 made
between GECC, Canadian Airlines International Ltd. and Aviation Financial
Services Inc.
6 Short Form Lease Novation Agreement dated 8 May 1998 made between GECC,
Aviation Financial Services Inc. and Canadian Airlines International Ltd.
7 Option Novation and Amendment Agreement dated 8 May 1998 made between
GECC, Aviation Financial Services Inc. and Canadian Airlines International
Ltd.
8 Letter of Intent dated 23 June 1998 from GE Capital Aviation Services Inc.
to Canadian Airlines International Ltd.
9 Amending Agreement dated 19 July 1998 made between Aviation Financial
Services Inc. and Canadian Airlines International Ltd.
10 Certificate of Acceptance dated 19 September 1991 by Canadian Airlines
International Ltd. to Asset Management A/S.
11 Certificate of Acceptance dated 8 February 1996 by Canadian Airlines
International Ltd. to GECC.
26
140
MSN 448 (ROYAL AVIATION)
1 Aircraft Lease Agreement dated 12 May 1998 made between GECC and Royal
Aviation, Inc.
2 Letter Agreement No. 1 dated 12 May 1998 made between GECC and Royal
Aviation, Inc.
3 Certificate of Technical Acceptance dated 16 May 1998 by Royal Aviation,
Inc. to GECC.
4 Lease Supplement No. 1 dated 16 May 1998 made between GECC and Royal
Aviation, Inc.
5 Aircraft Lease Agreement (Short Form) dated 16 May 1998 made between GECC
and Royal Aviation, Inc.
27
141
MSN 46584 (CONTINENTAL)
1 Aircraft Lease Agreement dated 15 May 1992 made between Continental
Airlines, Inc. and Polaris Holding Company.
2 Letter Agreement No. 1 dated 15 May 1992 made between Polaris Holding
Company and Continental Airlines, Inc.
3 Tax Indemnification Agreement dated 15 May 1992 made between Polaris
Holding Company and Continental Airlines, Inc.
4 Lease Supplement No. 1 dated 18 August 1992 made between Polaris Holding
Company and Continental Airlines, Inc.
5 Certificate as to Status of Aircraft dated 18 August 1995 by Continental
Airlines, Inc. to Polaris Holding Company.
6 Aircraft Lease Agreement Amendment dated 30 March 1995 made between
Polaris Holding Company and Continental Airlines, Inc.
7 Aircraft Lease Agreement Amendment No. 2 dated 31 July 1997 made between
Polaris Holding Company and Continental Airlines, Inc.
8 Letter Agreement No. 2 dated 31 July 1997 made between Polaris Holding
Company and Continental Airlines, Inc.
28
142
MSN 48292 (CONTINENTAL)
1 Aircraft Lease Agreement dated 15 May 1992 made between Continental
Airlines, Inc. and Polaris Holding Company.
2 Letter Agreement No. 1 to Aircraft Lease Agreement dated 15 May 1992 made
between Polaris Holding Company and Continental Airlines, Inc.
3 Tax Indemnification Agreement dated 15 May 1992 made between Polaris
Holding Company and Continental Airlines, Inc.
4 Certificate as to Status of Aircraft dated 1 June, 1992 by Continental
Airlines, Inc. to Polaris Holding Company.
5 Lease Supplement No. 1 dated 2 June 1992 made between Polaris Holding
Company and Continental Airlines, Inc.
6 Aircraft Lease Agreement Amendment dated 30 March 1995 made between
Polaris Holding Company and Continental Airlines, Inc.
7 Aircraft Lease Agreement Amendment No. 2 dated 31 July 1997 made between
Polaris Holding Company and Continental Airlines, Inc.
29
143
MSN 28740 (AMERICA WEST)
1 Aircraft Lease Agreement dated 30 June 1998 made between America West
Airlines, Inc. and GECC.
2 Letter Agreement No. 1 dated 30 June 1998 made between GECC and America
West Airlines, Inc.
3 Tax Indemnity Agreement dated 30 June 1998 made between GECC and America
West Airlines, Inc.
4 Lease Supplement No. 1 dated 8 July 1998 made between GECC and America
West Airlines, Inc.
5 Certificate of Technical Acceptance dated 8 July 1998 by America West
Airlines, Inc. to GECC.
30
144
MSN 30008 (ALITALIA)
1 Aircraft Lease Agreement dated 2 April 1998 made between GECAS Technical
Services Limited and Alitalia (Linee Aeree Italiane S.p.A.).
2 Modifications side letter dated 2 April 1998 from GECAS Technical Services
Limited to Alitalia (Linee Aeree Italiane S.p.A.).
3 Certificate of Acceptance dated 22 March 1999 by Alitalia (Linee Aeree
Italiana S.p.A.) to GECAS Technical Services Limited.
31
145
MSN 28491 (ISTANBUL HAVA YOLLARI A.S.)
1 Aircraft Lease Agreement dated 16 October 1998 between Aldebaran FSC -
Three Corporation and Istanbul Hava Yollari A.S.
2 Side letter dated 7 December 1998 from Aldebaran FSC - Three Corporation
to Istanbul Hava Yollari A.S.
3 Side letter dated 10 December 1998 from Aldebaran FSC - Three Corporation
to Istanbul Hava Yollari A.S.
4 Certificate of Acceptance dated 15 December 1998.
32
000
XXX 00000 (XXXXXXXX HAVA YOLLARI A.S.)
1 Aircraft Lease Agreement dated 16 October 1998 between Aldebaran FSC - Two
Corporation and Istanbul Hava Yollari A.S.
2 Side letter (undated) between Aldebaran FSC - Two Corporation to Istanbul
Hava Yollari A.S.
3 Certificate of Acceptance dated 29 November 1998 by Istanbul Hava Yollari
A.S. to Aldebaran FSC - Two Corporation.
33
147
MSN 25221 (BRITANNIA AIRWAYS LIMITED)
1 Aircraft Lease Agreement dated 4 December 1997 made between First Security
Bank, National Association and Britannia Airways Limited.
2 Sub-Lease Agreement dated 2 September 1998 made between Britannia Airways
Limited and Britannia Airways AB.
3 Assignment (of Aircraft Lease Agreement dated 2 September 1998) dated 23
October 1998 made between Britannia Airways Limited and First Security
Bank, National Association.
4 Notice and Acknowledgement of Lease Assignment dated 26 November 1998.
5 Beneficial Interest Purchase Agreement dated 7 December 1998 made between
Pacific Asia Leasing Limited, Aircraft 25221, Inc., Amerilease Capital
Corporation Limited and UniCapital Corporation.
6 Assignment of Beneficial Interest dated 31 December 1998 made between
Pacific Asia Leasing Limited and Aircraft 25221, Inc.
7 Schedule of Parties to whom notice is to be given.
34
000
XXX 000 (XXXXXX)
(XX: This aircraft will be leased to Transmeridian Airlines, Inc.
from June 1999)
1 Aircraft Lease Agreement dated 24 May 1995 made between Wilmington Trust
Company and Midway Airlines Corporation.
2 Trust Agreement dated 24 May 1995 made between Kawasaki Leasing
International Inc. and Wilmington Trust Company.
3 Purchase Agreement Assignment dated 1 March 1996 made between Kawasaki
Leasing International Inc., KE Aircraft Leasing Inc., Kawasaki Steel Trade
Funding (USA) Inc. and Midway Airlines Corporation.
4 Assignment Agreement of Certain Warranty and Product Support Rights dated
1 March 1996 made between KE Aircraft Leasing Inc., Midway Airlines
Corporation and IAE International Aero Engines AG and Consents to
Assignment dated 28 August 1998.
5 Lease Assignment, Assumption and Amendment Agreement dated 28 August 1998
made between Wilmington Trust Company, Aircraft 373, Inc. and Midway
Airlines Corporation.
6 Certificate of Insurance dated 19 October 1998.
35
149
MSN 25403 (AIR MADAGASCAR)
(NB: This aircraft will be leased to TWA before the lease is novated)
1 Aircraft Lease Agreements dated 10 February 1998 made between Polaris
Aircraft (Pacific Coast), Inc. and Air Madagascar.
2 Configuration Side Letter Agreement dated 21 March 1998 made between
Polaris Aircraft (Pacific Coast), Inc. and Air Madagascar.
3 Aircraft Lease Agreement dated 31 March 1999 made between Polaris Aircraft
(Pacific Coast), Inc. and Trans World Airlines, Inc.
36
150
SCHEDULE 4.03 TO
SERVICING AGREEMENT
Bank Accounts
--------------------------------------------------------------------------------
ACCOUNT NAME Account Number
--------------------------------------------------------------------------------
AFT RENTAL ACCOUNT 00-000-000
--------------------------------------------------------------------------------
AFT RENTAL ACCT - SUSPENSE 27629
--------------------------------------------------------------------------------
AFT COLLECTIONS ACCT 27631
--------------------------------------------------------------------------------
AFT EXPENSE ACCT 27630
--------------------------------------------------------------------------------
AFT VARIG RESERVE ACCT 23805 27638
--------------------------------------------------------------------------------
AFT VARIG RESERVE ACCT 23806 27630
--------------------------------------------------------------------------------
AFT LESSEE FUND BRITISH MIDLAND 28557 27640
--------------------------------------------------------------------------------
AFT LESSEE FUND AIR HOLLAND 28559 27641
--------------------------------------------------------------------------------
AFT LESSEE FUND BRITISH MIDLAND 28558 27642
--------------------------------------------------------------------------------
AFT LESSEE FUND CHINA GENERAL 28561 27643
--------------------------------------------------------------------------------
AFT LESSEE FUND CHINA GENERAL 28562 27644
--------------------------------------------------------------------------------
AFT LESSEE FUND FRONTIER 28563 27645
--------------------------------------------------------------------------------
AFT LESSEE FUND TRANSBRASIL 28564 27647
--------------------------------------------------------------------------------
AFT LESSEE FUND BRITISH MIDLAND 28554 27646
--------------------------------------------------------------------------------
AFT LESSEE FUND STAR 737 27648
--------------------------------------------------------------------------------
AFT LESSEE FUND CANADIAN 210 27649
--------------------------------------------------------------------------------
AFT LESSEE FUND CANADIAN 231 27650
--------------------------------------------------------------------------------
AFT LESSEE FUND SPANAIR 49791 27651
--------------------------------------------------------------------------------
AFT LESSEE FUND AIRTOURS 221 27652
--------------------------------------------------------------------------------
AFT LESSEE FUND AIRTOURS 222 27653
--------------------------------------------------------------------------------
AFT LESSEE FUND VIRGIN 28489 27654
--------------------------------------------------------------------------------
AFT LESSEE FUND ISTANBUL 28491 27655
--------------------------------------------------------------------------------
AFT LESSEE FUND JET AIRWAYS 25663 27656
--------------------------------------------------------------------------------
AFT LESSEE FUND JET AIRWAYS 25664 27657
--------------------------------------------------------------------------------
AFT LESSEE FUND AMERICA WEST 28740 27658
--------------------------------------------------------------------------------
AFT LESSEE FUND STAR 749 27659
--------------------------------------------------------------------------------
AFT LESSEE FUND ALITALIA 30008 27660
--------------------------------------------------------------------------------
151
--------------------------------------------------------------------------------
AFT LESSEE FUND TWA 25403 27661
--------------------------------------------------------------------------------
AFT LESSEE FUND ISTANBUL 28490 27662
--------------------------------------------------------------------------------
AFT LESSEE FUND VARIG 23805 27663
--------------------------------------------------------------------------------
AFT LESSEE FUND VARIG 23806 27664
--------------------------------------------------------------------------------
AFT LESSEE FUND ROYAL AVIATION 448 27665
--------------------------------------------------------------------------------
AFT LESSEE FUND BRITANNIA 25221 27683
--------------------------------------------------------------------------------
152
WIRE INSTRUCTIONS
RENTAL ACCOUNT Only;
Bankers Trust Co.
ABA 000000000
for the account of
BTCO Sect. TTEE AFT Rental
Account number 00-000-000
Other Accounts:
Bankers Trust Company
ABA# 000-000-000
New York, NY
Account Number 01-41-9647
Attn: Structured Finance Team / Xxxx Xxxxxxxx ext 2-4305
Reference: AFT (Account Name) (Account Number)
153
SCHEDULE 4.04(a) TO
THE SERVICING AGREEMENT
List of Persons within the AFT
Group and Jurisdictions
Entity Jurisdiction
------ ------------
Aircraft Finance Trust Delaware
AFT Trust-Sub I Delaware
Aircraft Finance Trust
Ireland Limited Ireland
4.04(a)-1
154
SCHEDULE 7.01 TO
THE SERVICING AGREEMENT
Responsibilities of AFT Group
A. With respect to Aircraft Assets, each Person within the AFT Group shall
retain such responsibilities as are expressly set forth in Article VII of
the Servicing Agreement.
B. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, assets which do not constitute Aircraft Assets and for any or
all AFT Group Liabilities.
C. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all finance functions which are not expressly the
responsibility of the Servicer under the Servicing Agreement. Such
responsibilities of the AFT Group shall include:
(i) all matters relating to the arrangement and procurement of any
financings of any type or nature for the AFT Group;
(ii) all matters relating to the management of borrowings and payments
under such financings and the management of the respective
borrowers' or issuers', as the case may be, compliance with the
terms of such financings, including compliance with the reporting
requirements thereunder and any computations required in connection
with such reporting;
(iii) all matters relating to the arrangement and procurement of
refinancings of any type or nature of any outstanding indebtedness
of the AFT Group;
(iv) all matters relating to the restructuring of any type or nature of
any indebtedness of the AFT Group; and
(v) all communications with creditors (other than trade creditors and
Lessees) of any type or nature of the AFT Group.
7.01-1
155
It is expressly understood by the parties that while the Servicer will, to
the extent expressly provided in Schedule 2.02(a) to the Servicing
Agreement, provide AFT with assistance and information required to assist
in its compliance with its obligations and covenants under the Indenture
to the extent such compliance specifically relates to the Services, the
Servicer shall not deal directly with any of AFT Group's creditors, except
to the extent such dealings with trade creditors are incidental to the
Servicer's provision of the Services under the Servicing Agreement.
D. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all treasury functions of the AFT Group that are not expressly
the responsibility of the Servicer under the Servicing Agreement,
including:
(i) cash management;
(ii) currency and interest rate risk management (including the
establishment of related policies and the arrangement and
procurement of appropriate swap programs); and
(iii) reconciliation of all Bank Account-related information.
E. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all accounting functions not expressly the responsibility of
the Servicer under the Servicing Agreement, including:
(i) the monitoring of cash receipts and disbursements and accounts
payable and accounts receivable of the AFT Group;
(ii) the promulgation, maintenance, interpretation, amending and
supplementing of accounting policies for the AFT Group, and the
review and approval of any potential exceptions to the accounting
policies established by the AFT Group;
(iii) maintaining the accounting ledgers, preparing balance sheets,
statements of changes in shareholders' equity and statements of
income and cash flows and arranging
7.01-2
156
for financial audits, as required, and for the preparation of
audited financial reports for the AFT Group;
(iv) the provision of overhead services to the AFT Group; and
(v) preparing annual Lease Operating Budgets and Aircraft Asset Expenses
Budgets, preparing and analyzing actual results to budget and
performing profitability analysis.
F. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all corporate secretarial activities and other matters related
to the existence of any Person within the AFT Group.
G. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all matters relating to the holders of the share capital of
any Person within the AFT Group.
H. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, all legal and regulatory matters which are not expressly the
responsibility of the Servicer under the Servicing Agreement, including:
(i) the preparation and filing of reports required to be filed with
the U.S. Securities and Exchange Commission or any other
Governmental Authority;
(ii) all legal services (including the negotiation of documents) not
constituting the provision of Services relating to all matters
described herein for which any Person within the AFT Group has
responsibility; and
(iii) the preparation and filing of corporate and tax returns of each
Person within the AFT Group with any Governmental Authority.
I. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, any and all litigation or other legal proceedings against or
brought by any Person
7.01-3
157
within the AFT Group, other than enforcement actions relating to any
Aircraft Assets (including any counterclaim arising from any such action
to the extent any such counterclaim relates to the Aircraft Assets)
brought by AFT or any other Person within the AFT Group commencing after
the date of the Servicing Agreement.
J. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, the arrangement and procurement of all insurance other than
insurance related to the Aircraft Assets which the Servicer is to arrange
and procure (at the expense of the AFT Group) under the Servicing
Agreement.
K. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, employees of any Person within the AFT Group.
L. Each of AFT and each other Person within the AFT Group shall be
responsible for, and the Servicer shall have no responsibilities in
respect of, purchase orders and options to purchase Aircraft Assets,
except to the extent the same constitute the provision of Services.
M. Except to the extent provided for in Section 2.3 of Schedule 2.02(a) to
the Servicing Agreement, each of AFT and each other Person within the AFT
Group shall be responsible for, and the Servicer shall have no
responsibilities in respect of, keeping AFT in compliance with its
obligations and covenants under the Security Trust Agreement.
Notwithstanding anything contained herein to the contrary, AFT
acknowledges and agrees that it shall be responsible for, and the Servicer shall
not have any responsibility for, (a) any Compliance Obligations to any holders
of outstanding Notes or Beneficial Interest Certificates, any holders of any
other securities issued by any Person within the AFT Group or any Governmental
Authorities, (b) all instructions, discretion, judgments and assumptions related
to such Compliance Obligations and (c) any adverse consequences (including any
Losses) in connection with any Year 2000 Compatibility problems, or any Year
2000 Problem relating to the Services, or the operation or functionality of the
Aircraft Assets or of the AFT Group as either may relate to the
7.01-4
158
processing of any dates, and AFT agrees to indemnify the Servicer and its
Affiliates in respect of the foregoing as further provided in Sections 11.05 and
11.06 of the Servicing Agreement.
7.01-5
159
SCHEDULE 7.04 TO
THE SERVICING AGREEMENT
Liabilities Incurred in Ordinary Course of Business
1. Acquisitions, dispositions or replacements of Aircraft, Engines or Parts
(including BFE) including, without limitation, by leasing in.
2. Modifications, maintenance, overhauls, repairs, upgrades or other
technical expenditures.
3. Dry Leases and wet Leases (including extensions, renewals, amendments and
terminations thereof).
4 Repossessions.
5. Registrations and Deregistrations.
6. Governmental approvals, certifications, permits, licenses, consents,
filings and authorizations.
7. Third party professional services including, without limitation, legal,
tax advisory and insurance.
8. Taxes.
9. Aircraft operator transition costs (including, without limitation, flight
operations, storage and maintenance, technical consultants costs, and
purchase, storage and scrapping of spare Parts).
10. Lessee Liens.
11. Insurance
7.04-1
160
SCHEDULE 8.01 TO
THE SERVICING AGREEMENT
Conditions to Execution
1. Each Person within the AFT Group (other than AFT) shall have executed and
delivered an AFT Group Guarantee in favor of the Servicer substantially in the
form attached to the Servicing Agreement as Appendix B.
2. Each appendix, annex, exhibit or schedule to the Servicing Agreement and each
AFT Group Guarantee shall have been completed to the reasonable satisfaction of
the Servicer and delivered with the Servicing Agreement and the AFT Group
Guarantees at the Closing.
3. The Aircraft Assets Related Documents shall have been delivered to the
Servicer, pursuant to Section 4.02 of the Servicing Agreement, at the Servicer's
offices in Xxxxxxx, Ireland, on or prior to the Closing Date.
4. AFT shall have executed and delivered to the Servicer the acknowledged power
of attorney contemplated by Section 13.02 of the Servicing Agreement.
5. AFT shall have delivered to the Servicer a copy of the Indenture, certified
by AFT as a true and complete copy thereof.
6. AFT and each other Person within the AFT Group shall have delivered to the
Servicer satisfactory evidence, in the reasonable judgment of the Servicer, as
to the appointment of agents for service of process as required by the
Documentary Conventions set forth in Appendix A to the Servicing Agreement.
8.01-1
161
7. AFT and each other Person within the AFT Group shall have delivered to the
Servicer, in form and substance reasonably satisfactory to the Servicer:
(A) a certificate dated the Closing Date of the secretary, any
assistant secretary or another appropriate officer of each such
Person certifying as to:
(1) the attached corporate charter, by-laws and other
constituent documents of such Person, recently certified, in
the case of any such document filed with the secretary of
state or similar Governmental Authority of the jurisdiction in
which such Person is organized by such Governmental Authority;
(2) the absence of amendments to any constituent
document since the date of the last amendment (a) shown on the
official evidence as to filed constituent documents furnished
pursuant to (B) below if such official evidence is available
and (b) in any event reflected in the constituent documents
furnished pursuant to (1) above;
(3) resolutions or other written evidence of corporate
action of the board of directors or Controlling Trustees, as
applicable (or appropriate committee thereof) and, if
applicable, the shareholders of such Person duly authorizing
or ratifying the execution, delivery and performance by such
Person of the Servicing Agreement and AFT Group Guarantee, as
applicable, to which it is or is to be party and the absence
of any modification, amendment or revocation thereof or any
other resolutions relating thereto;
(4) the absence of proceedings for the dissolution,
liquidation, receivership or similar proceedings with respect
to such Person;
(5) if applicable, its corporate seal; and
8.01-2
162
(6) the incumbency and signatures of the individuals
authorized to execute and deliver documents on such Person's
behalf; and
(B) to the extent available from appropriate Governmental
Authorities, recent official evidence from appropriate Governmental
Authorities of appropriate jurisdictions as to constituent documents
on file, good standing, payment of franchise taxes and qualification
to do business in the jurisdiction in which such Person is
organized.
8. AFT and each other Person within the AFT Group shall have delivered to the
Servicer an Officer's Certificate dated the Closing Date, in form and substance
reasonably satisfactory to the Servicer, stating that:
(A) each representation and warranty of such Person contained
in the Servicing Agreement and AFT Group Guarantee, as applicable,
is true and correct as of the Closing Date;
(B) such Person has duly performed and complied in all
material respects with all covenants, agreements and conditions
contained in the Servicing Agreement and AFT Group Guarantee, as
applicable, required to be performed or complied with by it on or
before the Closing Date;
(C) no event has occurred and is continuing or condition
exists or would result from the consummation of any transaction
contemplated by the Servicing Agreement or AFT Group Guarantee, as
applicable, to which such Person is a party that constitutes, or
with the giving of notice or lapse of time or both would constitute,
a default in any material respect under such Servicing Agreement or
AFT Group Guarantee, as applicable, or a breach thereof or would
give any party thereto the right to terminate, or not to perform any
material obligation under, any thereof; and
(D) the Servicing Agreement and AFT Group Guarantee, as
applicable, to which it is a party is in full force and effect with
respect to it, has not been amended, modified or terminated and
constitutes its
8.01-3
163
legal, valid and binding obligation enforceable against it in
accordance with its terms.
9. The Servicer (and such Affiliates of the Servicer that the Servicer
designates as addressees) shall have received legal opinions dated as of the
Closing Date, which shall cover the following matters and shall also cover such
other matters as the Servicer and its counsel may reasonably request:
(A) Each of AFT and each other Person within the AFT Group has
been duly organized and is validly existing as a [business
trust/corporation] in good standing under the laws of its
jurisdiction of incorporation.
(B) Neither the execution and delivery of the Servicing
Agreement and AFT Group Guarantee, as applicable, nor the
consummation of the transactions contemplated thereby nor the
performance by AFT or any other Person within the AFT Group of any
of their obligations thereunder in accordance with the terms thereof
will (i) violate any order, writ, injunction, judgment or decree in
effect as of the date hereof of any [insert appropriate courts] to
which AFT or any other Person within the AFT Group, or any of their
respective Affiliates, is a party or by which any of their
respective properties or assets are bound, (ii) violate in any
material respect any applicable law of [insert applicable law] in
effect as of the date hereof or (iii) result in any conflict with,
breach of or default (or give rise to any right of termination,
cancelation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, warrant or other
similar instrument or any license, permit material agreement or
other material obligation to which any such Person is a party or by
which any such Person's properties or assets may be bound.
(C) Upon execution and delivery thereof, the Servicing
Agreement and AFT Group Guarantee, as applicable, to which AFT and
each other Person within the AFT Group is a party shall be valid and
legally binding on and enforceable against such party in accordance
with its terms, subject to applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium or other laws affecting
8.01-4
164
creditors' rights generally from time to time in effect and to
general equity principles regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(D) No action, consent or approval by, or filing with, any
[insert appropriate Governmental Authorities] or other third party
is required in connection with the execution, delivery or
performance by AFT or any other Person within the AFT Group of the
Servicing Agreement and AFT Group Guarantee, as applicable, to which
it is a party or the consummation by AFT or any other Person within
the AFT Group of the transactions contemplated thereby.
10. The Servicer shall have delivered to AFT, in form and substance reasonably
satisfactory to AFT:
(A) a certificate dated the Closing Date of the secretary, any
assistant secretary or another appropriate officer of the Servicer
certifying as to:
(1) the attached corporate charter, by-laws and other
constituent documents of the Servicer, recently certified, in the
case of any such document filed with the secretary of state or
similar Governmental Authority of the jurisdiction in which the
Servicer is organized by such Governmental Authority;
(2) the absence of amendments to any constituent document
since the date of the last amendment (a) shown on the official
evidence as to filed constituent documents furnished pursuant to (B)
below if such official evidence is available and (b) in any event
reflected in the constituent documents furnished pursuant to (1)
above;
(3) resolutions or other written evidence of corporate action
of the board of directors (or appropriate committee thereof) and, if
applicable, the shareholders of the Servicer duly authorizing or
ratifying the execution, delivery and performance by the Servicer of
the Servicing Agreement and the absence of any modification,
amendment or revocation thereof or any other resolutions relating
thereto;
8.01-5
165
(4) the absence of proceedings for the dissolution,
liquidation, receivership or similar proceedings with respect to the
Servicer;
(5) if applicable, its corporate seal; and
(6) the incumbency and signatures of the individuals
authorized to execute and deliver documents on the Servicer's
behalf; and
(B) to the extent available from appropriate Governmental
Authorities, recent official evidence from appropriate Governmental
Authorities of appropriate jurisdictions as to constituent documents on
file, payment of franchise taxes and qualification to do business in the
jurisdiction in which the Servicer is organized.
11. The Servicer shall have delivered to AFT an Officer's Certificate dated the
Closing Date, in form and substance reasonably satisfactory to AFT, stating
that:
(A) each representation and warranty of the Servicer contained in
the Servicing Agreement is true and correct as of the Closing Date;
(B) the Servicer has duly performed and complied in all material
respects with all covenants, agreements and conditions contained in the
Servicing Agreement required to be performed or complied with by it on or
before the Closing Date;
(C) no event has occurred and is continuing or condition exists or
would result from the consummation of any transaction contemplated by the
Servicing Agreement that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default in any material respect
under the Servicing Agreement or a breach thereof or would give any party
thereto the right to terminate, or not to perform any material obligation
under, the Servicing Agreement; and
(D) the Servicing Agreement is in full force and effect with respect
to it, has not been amended, modified or terminated and constitutes its
legal, valid and binding obligation enforceable against it in accordance
with its terms.
8.01-6
166
12. AFT shall have received legal opinions dated as of the Closing Date,
substantially in the form of the opinions set forth in Appendix D and Appendix E
to the Purchase Agreement.
8.01-7
167
SCHEDULE 9.06(a) TO
THE SERVICING AGREEMENT
Overhead Expenses
1. Salary, bonuses, company cars and benefits of Servicer's employees.
2. Travel and entertainment expenses of Servicer's employees.
3. Office, office equipment and rental expenses of the Servicer.
4. Telecommunications expenses of the Servicer.
5. Advertising and promotional expenses of the Servicer.
6. Taxes on the income, receipts, profits, gains, net worth or franchise of
Servicer and payroll, employment and Social Security Taxes for employees
of the Servicer.
9.06(a)-1
168
SCHEDULE 9.06(b) TO
THE SERVICING AGREEMENT
Categories of Aircraft Asset Expenses
1. Storage, maintenance, repossession (whether or not successful),
reconfiguration, refurbishment and repair expenses relating to Aircraft
Assets, including all expenses incurred by the Servicer relating to
compliance with airworthiness directives and service bulletins, which
includes the fees and expenses of independent technicians and other
experts retained for any of the foregoing purposes.
2. Insurance expense related to Aircraft Assets, including all fees and
expenses of insurance advisors and brokers.
3. Expenses incurred in connection with the effectuation or acceptance of
delivery of any Aircraft Asset, whether being sold or leased by any Person
within the AFT Group.
4. Special studies expenses related to Aircraft Assets authorized by any
Person within the AFT Group and fees and expenses of independent advisors
retained for providing valuation and appraisal services and general
financial advice such as structuring leases and sales and financing
transactions.
5. Outside legal counsel, advisory fees and expenses and other professional
fees and expenses related to Aircraft Assets (including in connection with
the sale, lease, release, lease extension or repossession of Aircraft
Assets or any enforcement actions relating to any lease).
6. Extraordinary fees and expenses not incurred in the ordinary course of
business which the Servicer reasonably determines appropriate in rendering
the Services.
7. Taxes reimbursable to Servicer pursuant to Section 9.07.
8. Any other expenses relating to or associated with Aircraft Assets other
than Overhead Expenses of the Servicer and such Overhead Expenses of the
AFT Group as are expressly the responsibility of the Servicer under
Section 9.06(a) of the Servicing Agreement.
9.06(b)-1
169
SCHEDULE 13.02 TO THE
SERVICING AGREEMENT
MANAGEMENT SERVICES
POWER OF ATTORNEY
OF
[GRANTOR]
WHEREAS [GRANTOR], having its [registered] office at [insert address]
(hereinafter called "the Grantor") desires to appoint GE CAPITAL AVIATION
SERVICES, LIMITED having its registered office at 0 Xxxxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxx 0, Xxxxxxx ("the Attorney") as the true and lawful attorney of
the Grantor for and in the name of and on behalf of the Grantor in such
Attorney's absolute discretion to execute each and every Requisite Document and
Requisite Act as defined below and do all or any of the acts or things
hereinafter mentioned.
KNOW ALL MEN BY THESE PRESENTS that in consideration for the mutual promises and
benefits set forth in the Servicing Agreement (defined below) the Grantor does
hereby make, constitute and irrevocably and unconditionally appoint for the
period (the "Term") as and from the date hereof until termination or expiry of
the Servicing Agreement between AFT and GE Capital Aviation Services, Limited
dated as of May 5, 1999 ("the Servicing Agreement") in accordance with its terms
the Attorney as a true and lawful attorney of the Grantor for and in the name of
and on behalf of the Grantor with absolute discretion to exercise, do, execute
and/or deliver all or any of the acts, documents and things hereinafter
mentioned that is to say:
1. To negotiate, approve, settle the terms of, agree, make, sign, execute
(whether under hand or seal) and deliver all deeds, agreements, documents,
commitments, arrangements, instruments, applications, oaths, affidavits,
declarations, notices, confirmations, certificates, approvals,
acceptances, deliveries and to do all other acts, matters and things
whatsoever which are in each case necessary or desirable for the Attorney
to do for and on behalf of the Grantor in respect of the provision of the
Services (as
13.02(b)-1
170
defined in and contemplated by the Servicing Agreement) (each such
document a "Requisite Document" and each such act a "Requisite Act").
2. To make such amendments, modifications and variations to the Requisite
Documents and to enter into ancillary documentation in respect thereof,
all on such terms as any such Attorney may, in its sole discretion,
determine from time to time for and on behalf of the Grantor; and to make,
give, sign, execute and do all things including without limitation any
material acts which may be necessary in order to effect the terms of such
Requisite Documents or in connection with the making, signature,
executions and delivery of the Requisite Documents or any other documents
required to be executed by the Grantor in connection therewith or the
performance of any acts, matters and things contemplated thereby or by the
Requisite Acts as may be necessary in accordance with the provision of the
Services.
3. To nominate and appoint one or more substitutes as attorney or attorneys
under it for all and any of the purposes aforesaid and the appointment of
same with liberty to revoke.
4. To acknowledge this Power of Attorney as the act and deed of the Grantor
and generally to do all other acts which may be necessary and desirable
for carrying the purpose of this Power of Attorney into effect.
IT IS HEREBY DECLARED THAT:-
(A) The Grantor hereby ratifies and confirms and agrees to ratify and
confirm whatsoever any Attorney shall do or cause to be done in, or
by virtue of this Power of Attorney as long as such act is not
inconsistent with the terms of the Servicing Agreement or this Power
of Attorney or in violation of Applicable Law.
(B) This Power of Attorney shall be irrevocable for the Term and at all
times both before and after the Term shall be conclusive and binding
upon the Grantor and no person or corporation having dealings with
any Attorney under this Power of Attorney shall be under any
obligation to make any inquiries as to whether or
13.02(b)-2
171
not this Power of Attorney has been revoked and all acts hereunder
shall be valid and binding on the Grantor unless express notice of
its revocation shall have been received by such person or
corporation.
(C) Subject to the provisions of the Servicing Agreement the Grantor
unconditionally undertakes to indemnify and keep indemnified each
Attorney and his agents, and their respective successors and
estates, against all actions, proceedings, claims, costs, expenses
and liabilities of whatsoever nature arising from the exercise or
purported exercise in good faith of any of the powers conferred on
each Attorney by this Power of Attorney.
(D) Subject to the provisions of the Servicing Agreement any Attorney or
other person, making or doing any payment or act, in good faith, in
pursuance of this Power of Attorney shall not be liable in respect
of the payment or act by reason that before the payment or act the
Grantor was insolvent or had revoked this power if the fact of such
insolvency or revocation was not at the time of payment or act known
to the Attorney or other person making or doing same.
(E) The particular powers enumerated above shall be given the widest
interpretation.
(F) This Power of Attorney shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF the Grantor has caused this Power of Attorney duly executed
by the Grantor this day of [ ], 1999.
SIGNED BY:____________________
For and on behalf of
[GRANTOR]
in the presence of:
13.02(b)-3
172
ANNEX 1
INSURANCE GUIDELINES
1. Hull and Repossession Insurance: With respect to any Aircraft Asset, hull
and repossession insurance, when applicable, shall be maintained in an
amount equal to the greatest of (a) the Note Target Price for such
Aircraft (as such Note Target Price is set forth on Schedule 1(a) attached
hereto, as the same shall be amended in writing from time to time by AFT),
(b) the appraised value for such Aircraft (as such appraised value is set
forth on Schedule 1(b) attached hereto, as the same shall be amended in
writing from time to time by AFT), (c) 110% of the net book value of such
Aircraft (as such net book value is set forth on Schedule 1(c) attached
hereto, as the same shall be amended in writing from time to time by AFT),
and (d) such other amounts as may be directed in writing by AFT from time
to time. Spare engines and parts, if any, shall be insured on the basis of
their "replacement cost".
2. Liability Insurance: Liability insurance shall be maintained for each
Aircraft Asset and occurrence in an amount not less than the amount set
forth on Schedule 2 attached hereto, as the same shall be amended in
writing from time to time by AFT. Liability Insurance shall be maintained
for each non-passenger Aircraft Asset and occurrence in an amount not less
than 75% of the amounts set forth on Schedule 2. With respect to each
Aircraft Asset acquired pursuant to the Asset Purchase Agreement,
liability insurance shall include, without limitation, cover, to the
extent generally available in the leading insurance markets, for the
indemnity of each Purchaser (as defined in the Asset Purchase Agreement)
contained in Section 10.1 of the Asset Purchase Agreement, with the
relevant Seller Indemnitees (as defined in the Asset Purchase Agreement)
as additional insureds, during the period commencing on the date of
Delivery of the relevant Aircraft Asset and ending on the earlier of (i)
the third anniversary of the date of such Delivery and (ii) the date of
completion of the next major check in respect of the relevant Aircraft
Asset.
3. Insurance Deductibles:
(a) Deductibles and self-insurance for Aircraft Assets subject to a
Lease may be maintained in an amount
Annex 1-1
173
(i) not to exceed $10.0 million in aggregate in respect of any one
occurrence in respect of such Aircraft Assets provided that the
Lessee related thereto has a rating of not less than A or its
equivalent on its long-term, unsecured debt obligations by at least
one Rating Agency or (ii) pursuant to commercially reasonable
deductible and self-insurance arrangements (taking into account,
inter alia, the creditworthiness and experience of the Lessee, the
type of aircraft and market practices in the aircraft insurance
industry generally).
(b) Deductibles for Aircraft Assets off-lease shall be maintained in
respect of any one occurrence in respect of such Aircraft Assets in
an amount equal to $200,000 or such other amount as AFT may direct
in writing from time to time.
4. Repossession Insurance: Subject to prior confirmation from AFT on a case
by case basis, repossession insurance shall be maintained for Aircraft
Assets subject to a Lease that are or will be registered in any
jurisdiction listed on Schedule 4 attached hereto, as the same may be
amended in writing from time to time by AFT.
5. Other Insurance Matters: Apart from the matters set forth above, the
coverage and terms of any insurance with respect to any Aircraft Assets
(a) subject to a Lease, shall be negotiated on a basis consistent with
Sections 3(b) and (c) of Schedule 2.02(a) to the Servicing Agreement and
(b) not subject to a Lease, shall be substantially consistent with the
commercial practices of leading international aircraft operating lessors
regarding similar equipment.
6. Named Insureds: Any insurance arrangements entered into with respect to
any Aircraft Assets shall include as named insureds such Persons as are
set forth on Schedule 6 attached hereto, as the same shall be amended in
writing from time to time by AFT. With respect to clauses 2(f) and 2(g) of
Schedule 6, the Servicer shall use commercially reasonable efforts to
cause Lessees to include the Persons set forth in such clauses as named
insureds in connection with liability insurance; provided, however, that
to the extent that a Lessee is not willing to include such Persons, the
Servicer will, subject to the provisions of the Servicing Agreement and at
the expense of AFT, arrange for alternative liability insurance coverage
with respect
Annex 1-2
174
to such Persons. GECAS and such of its Affiliates as it determines
appropriate may, in GECAS' sole discretion, be named as additional
insureds in connection with any such liability insurance arrangements.
7. Currencies: Any insurance requirement stated in U.S. dollar terms shall be
interpreted to include the foreign currency equivalent thereto from time
to time if any such insurance related thereto is denominated in a currency
other than U.S. dollars.
8. Availability: The insurance guidelines set forth herein are subject in all
cases to such insurance being generally available in the relevant
insurance market from time to time.
9. Revisions to Required Amounts of Insurance: AFT shall use commercially
reasonable efforts to provide to the Servicer amendments to Schedules 1(a)
and 1(c) attached hereto, on a quarterly basis, and Schedule 1(b) attached
hereto, on an annual basis, promptly (and in any event within seven
Business Days) following receipt or calculation by AFT of the relevant
information that would form the basis of any such amendment. With respect
to each proposed amendment to any schedule to this Annex 1, AFT shall
provide the Servicer with (x) a signed hard copy thereof and (y) an
e-mailed Excel version thereof. The Servicer shall not be required to
implement any change in the amount of insurance required to be maintained
with respect to any Aircraft Asset pursuant to Section 1.3 of Schedule
2.02(a) to the Servicing Agreement and this Annex 1 as a result of the
receipt by the Servicer from AFT of any written notice, direction,
amendment or similar communication pursuant to this Annex 1 until the
seventh Business Day following receipt thereof (including, with respect to
the immediately preceding sentence, receipt of the items listed in both
clauses (x) and (y) thereof.
Annex 1-3
175
SCHEDULE 1(a) TO ANNEX 1
Note Target Price
Outstanding Principal
Serial Balance Allocable to
Type Number Aircraft Note Target Price
----------- -------- ----------------------- --------------------
A310-300 448 $31,785,561 $32,739,128
A320-200 210 26,167,024 26,952,035
A320-200 221 27,452,828 28,276,413
A320-200 222 27,471,110 28,295,243
A320-200 231 26,310,230 27,099,537
A320-200 373 28,692,928 29,553,716
A320-200 737 37,379,722 38,501,114
A320-200 749 37,227,375 38,344,197
B737-300 28333 30,780,074 31,703,476
B737-300 28548 32,245,647 33,213,016
B737-300 28554 30,441,865 31,355,121
B737-300 28557 31,895,250 32,852,108
B737-300 28558 31,910,485 32,867,799
B737-300 28559 31,950,095 32,908,598
B737-300 28561 31,895,250 32,852,108
B737-300 28562 32,001,893 32,961,949
B737-300 28563 32,209,084 33,175,356
B737-300 28564 32,434,557 33,407,593
B737-300 28740 33,330,354 34,330,264
B737-400 25663 24,957,393 25,706,115
B737-400 25664 24,798,953 25,542,922
B737-400 28489 32,075,019 33,037,270
B737-400 28490 31,992,752 32,952,534
B737-400 28491 32,017,127 32,977,641
B767-200ER 23805 32,748,390 33,730,842
B767-200ER 23806 32,745,343 33,727,704
B767-300ER 25221 58,101,884 59,844,941
B767-300ER 25403 61,069,593 62,901,681
B767-300ER 29617 82,017,228 84,477,745
B767-300ER 30008 82,126,918 84,590,725
DC-10-30 46584 17,702,656 18,233,736
DC-10-30 48292 19,993,946 20,593,765
MD-83 49398 18,040,865 18,582,091
MD-83 49791 20,188,950 20,794,618
MD-83 53198 22,105,468 22,768,632
MD-83 53199 22,736,182 23,418,268
Total $1,209,000,000 $1,245,270,000
Schedule 1(a) to Annex 1-1
176
SCHEDULE 1(b) TO ANNEX 1
Appraised Values
Type Serial Number Appraised Value
---- ------------- ---------------
A310-300 448 $34,773,333
A320-200 210 28,626,667
A320-200 221 30,033,333
A320-200 222 30,053,333
A320-200 231 28,783,333
A320-200 373 31,390,000
A320-200 737 40,893,333
A320-200 749 40,726,667
B737-300 28333 33,673,333
B737-300 28548 35,276,667
B737-300 28554 33,303,333
B737-300 28557 34,893,333
B737-300 28558 34,910,000
B737-300 28559 34,953,333
B737-300 28561 34,893,333
B737-300 28562 35,010,000
B737-300 28563 35,236,667
B737-300 28564 35,483,333
B737-300 28740 36,463,333
B737-400 25663 27,303,333
B737-400 25664 27,130,000
B737-400 28489 35,090,000
B737-400 28490 35,000,000
B737-400 28491 35,026,667
B767-200ER 23805 35,826,667
B767-200ER 23806 35,823,333
B767-300ER 25221 63,563,333
B767-300ER 25403 66,810,000
B767-300ER 29617 89,726,667
B767-300ER 30008 89,846,667
DC-10-30 46584 19,366,667
DC-10-30 48292 21,873,333
MD-83 49398 19,736,667
MD-83 49791 22,086,667
MD-83 53198 24,183,333
MD-83 53199 24,873,333
Total $1,322,643,333
Schedule 1(b) to Annex 1-1
177
SCHEDULE 1(c) TO ANNEX 1
Net Book Value
Serial 110% of Net Book
Type Number Net Book Value Value
------------- ----------- -------------------- ------------------
A310-300 448 $31,446,068 $34,590,675
A320-200 210 25,887,541 28,476,295
A320-200 221 27,159,612 29,875,573
A320-200 222 27,177,698 29,895,468
A320-200 231 26,029,217 28,632,139
A320-200 373 28,386,467 31,225,113
A320-200 737 36,980,479 40,678,527
A320-200 749 36,829,760 40,512,736
B737-300 28333 30,451,321 33,496,453
B737-300 28548 31,901,240 35,091,364
B737-300 28554 30,116,724 33,128,396
B737-300 28557 31,554,586 34,710,044
B737-300 28558 31,569,658 34,726,623
B737-300 28559 31,608,845 34,769,729
B737-300 28561 31,554,586 34,710,044
B737-300 28562 31,660,089 34,826,098
B737-300 28563 31,865,067 35,051,574
B737-300 28564 32,088,132 35,296,945
B737-300 28740 32,974,361 36,271,797
B737-400 25663 24,690,830 27,159,913
B737-400 25664 24,534,082 26,987,490
B737-400 28489 31,732,434 34,905,678
B737-400 28490 31,651,046 34,816,151
B737-400 28491 31,675,161 34,842,677
B767-200ER 23805 32,398,614 35,638,475
B767-200ER 23806 32,395,599 35,635,159
B767-300ER 25221 57,481,314 63,229,445
B767-300ER 25403 60,417,325 66,459,058
B767-300ER 29617 81,141,224 89,255,347
B767-300ER 30008 81,249,742 89,374,717
DC-10-30 46584 17,513,579 19,264,937
DC-10-30 48292 19,780,397 21,758,436
MD-83 49398 17,848,176 19,632,993
MD-83 49791 19,973,317 21,970,649
MD-83 53198 21,869,366 24,056,302
MD-83 53199 22,493,343 24,742,678
Schedule 1(c) to Annex 1-1
178
$1,196,087,000 $1,315,695,700
Schedule 1(c) to Annex 1-2
179
SCHEDULE 2 TO ANNEX 1
Liability Insurance
Model Minimum Limit
----- -------------
ATP/ATR/Dash-8/RJ/F50/F70 US $250 million
HS146/AVRO/F28/F100 US $300 million
B727/B737/A320/MD80/DC9 US $500 million
DC8/A310 US $600 million
B747/B757/B767/A300 US $750 million
L1011/DC10/A330/A340/MD11/B777 US $750 million
Notwithstanding the foregoing, with respect to any liability insurance
maintained by any Person within the AFT Group for the benefit of the Persons
listed in clause 2(h) of Schedule 6 to Annex 1, such amount of insurance shall
be not less than US$750 million for wide-body Aircraft and US$600 million for
any other type of Aircraft.
Schedule 2 to Annex 1-1
180
SCHEDULE 4 TO ANNEX 1
Repossession Insurance
Country
-------
Angola
Armenia
Azerbaijan
Belarus
Benin
Bhutan
Cameroon
Cape Verde Islands
Chad
Comoros
Congo
Cuba
Equatorial Guinea
Eritrea
Ethiopia
Grenada
Iran
Iraq
Kazakhstan
Kirbati
Kyrgistan
Liberia
Libya
Moldova
Mongolia
Myanmar
Niger
North Korea
Sao Tome & Principe
Somalia
Sudan
Syria
Turkmenistan
Uzbekistan
Schedule 4 to Annex 1-1
181
SCHEDULE 6 TO ANNEX 1
Named Insureds
1. Hull and Repossession Insurance
(a) with respect to each Aircraft Asset other than an Original
Aircraft, owner (and head lessor, if applicable) of Aircraft (Person
within AFT Group)
(b) with respect to each Aircraft Asset other than an Original
Aircraft, intermediate lessor(s), if any, of Aircraft (Person(s) within
AFT Group)
(c) with respect to each Original Aircraft other than an Original
UniCapital Aircraft, GE Capital and/or one or more of its Affiliates
(d) with respect to each Original UniCapital Aircraft, UniCapital
and/or one or more of its Affiliates
2. Liability Insurance
(a) with respect to each Aircraft Asset other than an Original
Aircraft, owner (and head lessor, if applicable) of Aircraft (Person
within AFT Group)
(b) with respect to each Aircraft Asset other than an Original
Aircraft, intermediate lessor(s), if any, of Aircraft (Person(s) within
AFT Group)
(c) GECAS, the Servicer
(d) the Administrative Agent
(e) the Trustee
(f) with respect to each Original Aircraft, the AFT Group
(g) any holder of the Beneficial Interest Certificates in AFT from
time to time
(h) with respect to each Aircraft Asset acquired pursuant to the
Asset Purchase Agreement, the relevant Seller Indemnitees (as defined in
the Asset Purchase
Schedule 6 to Annex 1-1
182
Agreement) during the period commencing on the date of Delivery of such
Aircraft Asset and ending on the earlier of (i) the third anniversary of
such date of Delivery and (ii) the date of completion of the next major
check in respect of such Aircraft Asset
Schedule 6 to Annex 1-2
183
ANNEX 2
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 (1)
---------------------------- ---------------------
Countries rated AAA/Aa2
(or the equivalent) or better (2) .................... 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)
--------------------------- ----------------------
Any Single Developed Market Region (3) ............... 50%
Any Single Emerging Market Region (3) ................ 25%
Asia/Pacific (3) ..................................... 45%
Undesignated (4) ..................................... 20%(4)
----------
(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 the Issuer Group.
(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:
184
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
Asia .................... China, India, Indonesia, South 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
UNDESIGNATED
All other countries (generally those that have small or under-developed
capital markets, including Iceland, Fiji and Guyana)
(4) In addition, within the "Undesignated" country catagory, no more than 10%
of the most recent Appraised Value of the Portfolio shall be leased to
Lessees habitually based in "Undesignated" 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
"Undesignated" countries in Africa.
Repossession Guidelines
(a) Prohibited Countries:
Cuba Myanmar
North Korea Iran
Sudan Iraq
Syria Libya
(b) Countries with respect to which Repossession Insurance must be procured:
Angola Equatorial Guinea Mongolia
Armenia Eritrea Myanmar
Azerbaijan Ethiopia Niger
Belarus Grenada North Korea
Benin Iran Sao Tome & Principe
Bhutan Iraq Somalia
Cameroon Kazakhstan Sudan
Cape Verde Islands Kirbati Syria
Chad Kyrgistan Turkmenistan
Comoros Liberia Uzbekistan
Congo Libya
Cuba Xxxxxxx
0
185
APPENDIX A TO THE
SERVICING AGREEMENT
CONSTRUCTION AND USAGE; DEFINITIONS
Construction and Usage
The terms defined below have the meanings set forth below for all
purposes. "Include", "includes" and "including" shall be deemed to be followed
by "without limitation" whether or not they are in fact followed by such words
or words of like import. "Writing", "written" and comparable terms refer to
printing, typing, lithography or other means of reproducing words in a visible
form. Any agreement or instrument or any law, rule or regulation of any
Governmental Authority defined or referred to below means such agreement or
instrument or such law, rule or regulation as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of such law, rule or regulation) by
succession of any comparable successor law, rule or regulation and includes (in
the case of agreements or instruments) references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns. Any term defined below by reference to any
agreement or instrument or any law, rule or regulation of any Governmental
Authority has such meaning whether or not such agreement, instrument or law,
rule or regulation is in effect. "Agreement", "hereof", "herein", "hereunder"
and comparable terms refer to the agreement in which such term appears
(including all exhibits and schedules hereto) and not to any particular article,
section, clause or other subdivision thereof or attachment thereto. References
to any gender include, unless the context otherwise requires, references to all
genders, and references to the singular include, unless the context otherwise
requires, references to the plural and vice versa. "Shall" and "will" have equal
force and effect. References to "Article", "Section", "Clause" or another
subdivision or to an attachment are, unless the context otherwise requires, to
an article, section, clause or subdivision of or attachment to such agreement.
Appendix A-1
186
Definitions
"Acceleration Default" means any Event of Default of the type
described in Section 4.01(e) or 4.01(f) of the Indenture.
"Accounting Claims" has the meaning assigned to such term in Section
11.05 of the Servicing Agreement.
"Acquisition" has the meaning assigned to such term in the Final
Prospectus.
"Additional Certificates" means any Beneficial Interest Certificates
issued pursuant to the Trust Agreement (or pursuant to supplements thereto) at
any time after the Closing Date, the proceeds of which are used, in substantial
part, to acquire Aircraft.
"Additional Disposition Fee" has the meaning assigned to such term
in Section 9.05(a)(ii) of the Servicing Agreement.
"Additional Fee Period" has the meaning assigned to such term in
Section 9.05(a)(iii) of the Servicing Agreement.
"Additional Notes" means any class or subclass of Notes issued
pursuant to the Indenture (or pursuant to supplements thereto) at any time after
the Closing Date, the proceeds of which are used, in substantial part, to
acquire Aircraft.
"Additional Rent Collected Fee" has the meaning assigned to such
term in Section 9.05(a)(iii) of the Servicing Agreement.
"Additional Sales Fee" has the meaning assigned to such term in
Section 9.05(a)(i) of the Servicing Agreement.
"Additional Servicing Fees" has the meaning assigned to such term in
Section 9.01 of the Servicing Agreement.
"Additional UniCapital Aircraft" means any Aircraft (other than any
Initial UniCapital Aircraft) acquired by any Person within the AFT Group from
UniCapital or any of its Affiliates.
"Adjusted Base Value" has the meaning assigned to such term in
Section 1.01 of the Indenture.
Appendix A-2
187
"Adjusted Gross Proceeds" has the meaning assigned to such term in
Section 9.05(a)(ii) of the Servicing Agreement.
"Adjusted Portfolio Value" has the meaning assigned to such term in
Section 1.01 of the Indenture.
"Administrative Agency Agreement" means the Administrative Agency
Agreement dated as of May 5, 1999, among ReSource/Phoenix, Inc., as
Administrative Agent, AFT, Bankers Trust Company, as Security Trustee, and the
entities listed on Appendix A thereto.
"Administrative Agency Fees" means the fees paid to the
Administrative Agent in consideration of the services rendered by the
Administrative Agent pursuant to Section 6.01(a) of the Administrative Agency
Agreement.
"Administrative Agent" means ReSource/Phoenix, Inc., as
administrative agent under the Administrative Agency Agreement.
"Adviser" means an insurance adviser engaged by the Servicer in
accordance with Section 1.3(b) of Schedule 2.02 to the Servicing Agreement.
"AerFi" means AerFi Group plc, a company incorporated under the laws
of Ireland.
"Affiliate" means a Person that directly, or indirectly through one
or more intermediaries, controls or is controlled by, or is under common control
with, the Person specified; provided, however, that (i) AFT and its
Subsidiaries, on the one part, and GE and its Subsidiaries, on the other part,
shall not be considered to be Affiliates of each other and (ii) no holder of any
Beneficial Interest Certificates shall be considered to be an Affiliate of AFT
and its Subsidiaries.
"AFT" means Aircraft Finance Trust, a Delaware business trust.
"AFT Group" has the meaning assigned to such term in Section 2.01(a)
of the Servicing Agreement.
"AFT Group Guarantees" means each Guarantee, in the form set forth
as Appendix B to the Servicing Agreement, issued
Appendix A-3
188
by each Person within the AFT Group pursuant to Section 6.13 of the Servicing
Agreement.
"AFT Group Liabilities" means any obligations or liabilities of any
Person within the AFT Group (whether accrued, absolute, contingent, unasserted,
known or unknown or otherwise).
"After-Tax Basis" means on a basis such that any payment received,
deemed to have been received or receivable by any Person shall, if necessary, be
supplemented by a further payment to that Person so that the sum of the two
payments shall, after deduction of all Federal, state, local and Irish or other
foreign Taxes, penalties, fines, interest, additions to Tax and other charges
resulting from the receipt (actual or constructive) or accrual of such payments
imposed by or under any Federal, state, local or Irish or other foreign law or
Governmental Authority (after taking into account any current deduction to which
such Person shall be entitled with respect to the amount that gave rise to the
underlying payment), be equal to the payment received, deemed to have been
received or receivable.
"Aggregate Gross Proceeds" has the meaning assigned to such term in
Section 9.04(b) of the Servicing Agreement.
"Aircraft" means any airframe together with (i) any Engine installed
on such airframe (or any Engine substituted therefor), (ii) parts or components
thereof, (iii) spare parts or ancillary equipment or devices furnished therewith
and (iv) the Aircraft Documents with respect thereto.
"Aircraft Asset Expenses Budget" has the meaning assigned to such
term in Section 7.03(a) of the Servicing Agreement.
"Aircraft Assets" means (a) all Aircraft owned or leased-in by any
Person within the AFT Group as of the Closing Date or at any time or from time
to time thereafter (taking into account any acquisitions or dispositions made in
accordance with this Agreement); provided, however, that Aircraft Assets shall
not include (x) any Aircraft Asset that shall have ceased to be an Aircraft
Asset in accordance with the provisions of Sections 2.04(b) or 3.02(d) of the
Servicing Agreement, but shall include any Former Aircraft Asset that shall have
become an Aircraft Asset pursuant to Section 6.07 of the Servicing Agreement,
(y) any Aircraft Asset in respect of which the
Appendix A-4
189
obligation of the Servicer to provide Services shall have been terminated in
accordance with Article X of the Servicing Agreement or (z) any UniCapital
Serviced Aircraft except (to the extent provided for in Section 9.01(b) of the
Servicing Agreement) for purposes of Sections 9.03, 9.04 and 9.05 of the
Servicing Agreement and (b) all Original Aircraft.
"Aircraft Assets Expenses" has the meaning assigned to such term in
Section 9.06(b)(i) of the Servicing Agreement.
"Aircraft Assets Related Documents" means all Leases and other
contracts and agreements of Persons within the AFT Group the terms of which
relate to or affect any of the Aircraft Assets.
"Aircraft Documents" means, in relation to an Aircraft, all records,
logs, technical data, manuals and other documents relating to the maintenance
and operation of such Aircraft.
"Amended and Restated Servicing Agreement" means the Amended and
Restated Servicing Agreement dated as of March 28, 1996, between GECAS and
AerFi.
"Annex 1" means Annex 1 to the Servicing Agreement, which annex sets
forth the Insurance Guidelines.
"Annex 2" means Annex 2 to the Servicing Agreement, which annex sets
forth the Concentration Thresholds contained in Section 5.03(a) of the
Indenture.
"Annual Review" has the meaning assigned to such term in Section
3(c)(i) of Schedule 2.02(a) to the Servicing Agreement.
"Applicable Law" with respect to any Person means any law, statute,
ordinance, rule or regulation or code of conduct or practice of any U.S.
Federal, state or local Governmental Authority, the EU or any Irish or other
foreign or international Governmental Authority that applies to such Person or
any of its properties or assets.
"Appraised Value" means with respect to any Aircraft, the average of
the most recent appraisals by each of the Appraisers of the Base Value of such
Aircraft.
Appendix A-5
190
"Appraiser" means at least three independent appraisers that are
members of the International Society of Transport Aircraft Trading or any
similar organization.
"Approved Budget" has the meaning assigned to such term in Section
7.03(d) of the Servicing Agreement.
"Asset Purchase Agreement" means the Master Aircraft Purchase
Agreement dated as of May 5, 1999, among GE Capital, AFT and the other parties
thereto.
"Assigned Lease" has the meaning assigned to such term in Section
1.01 of the Security Trust Agreement.
"Bank Accounts" has the meaning assigned to such term in Section
7.1(b) of Schedule 2.02(a) to the Servicing Agreement.
"Base Value" has the meaning assigned to such term in Section 1.01
of the Indenture.
"Beneficial Interest Certificates" means any Beneficial Interest
Certificates issued pursuant to the Trust Agreement (or pursuant to any
supplements thereto).
"best efforts" has the meaning assigned to such term in Section
2.03(a)(i) of the Servicing Agreement.
"Broker" means an insurance broker engaged by Servicer in accordance
with Section 1.3(b) of Schedule 2.02(a) to the Servicing Agreement.
"Business Day" means a day on which U.S. dollar deposits may be
traded on the London inter-bank market and commercial banks and foreign exchange
markets are open in New York, New York and London, England.
"Calculation Date" means the fourth Business Day immediately
preceding each Payment Date.
"Changed Circumstance" means the occurrence of any material event,
circumstance or condition shall have occurred or arisen and be continuing that
is reasonably likely to result in the current cash flow projections in any Year
being materially less favorable than the forecast which is the most current at
the time that the Approved Budget is finalized for that Year in accordance with
Section 7.03 of the Servicing Agreement.
Appendix A-6
191
"Closing" means the closing of the offering and sale of the Notes by
AFT and the consummation of the Acquisition and the other transactions described
in the Final Prospectus.
"Closing Date" means May 5, 1999.
"Code" has the meaning assigned to such term in Section 9.07(c) of
the Servicing Agreement.
"Collection Account" has the meaning assigned to such term in
Section 3.01(a) of the Indenture.
"Competitor" means any of the following Persons:
(i) any Person (other than GE Capital and its Affiliates) engaged
in, or which has an Affiliate engaged in, the business of manufacturing
aircraft or aircraft engines, which business had consolidated revenues
attributable to such business for such Person's and/or its Affiliate's, as
the case may be, most recently completed fiscal year in excess of $200
million; or
(ii) any of the following Persons (or any of their respective
Affiliates) and their respective successors and assigns:
(a) International Lease Finance Corporation;
(b) Ansett Worldwide Aviation Services;
(c) GATX Corporation;
(d) ORIX;
(e) Pembroke Capital Limited;
(f) Xxxxxxx & Xxxxx Limited;
(g) AerFi; and
(h) IAMG; or
(iii) any other Person (or any Affiliate thereof) (other than GE and
its Affiliates) which engages in a business as an operating lessor of
Aircraft Assets in competition with any Person within the AFT Group either
(x) in succession to any of the Persons specified in clause (ii) above or
(y) which has consolidated aircraft leasing-related revenues (excluding
revenues from sales of aircraft) attributable to such business for its
most recently completed fiscal year in excess of $200 million.
"Compliance Obligations" has the meaning assigned to such term in
Section 11.05 of the Servicing Agreement.
Appendix A-7
192
"Concentration Thresholds" has the meaning assigned to such term in
Section 2.2(a) of Schedule 2.02(a) to the Servicing Agreement.
"Conflicts Standard" has the meaning assigned to such term in
Section 3.02(b) of the Servicing Agreement.
"control" (including, with its correlative meanings, "controlled by"
and "under common control with") means possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise);
"Controlling Trustees" means the controlling trustees of AFT.
"Core Lease Provisions" means the core lease provisions included as
Exhibit L to the Indenture, as the same may be amended from time to time.
"Default Notice" has the meaning assigned to such term in Section
1.01 of the Indenture.
"Delivery" has the meaning assigned to such term in Section 1.1 of
the Asset Purchase Agreement.
"Deposits" means the deposits required under a Lease.
"Disposition" has the meaning assigned to such term in Section
9.04(b) of the Servicing Agreement.
"Documentary Conventions" with respect any agreement, instrument or
other document that states it is governed thereby, means that, except as
otherwise expressly provided therein:
(a) No Partnership. The parties thereto expressly recognize and
acknowledge that such agreement, instrument or other document is not
intended to create a partnership, joint venture or other similar
arrangement between or among any of the parties thereto or their
respective Affiliates.
(b) Notices. Subject to paragraph (d) below, all notices, consents,
directions, approvals, instructions, requests and other communications
required or permitted by such agreement, instrument or other document to
be given to
Appendix A-8
193
any Person shall be in writing, and any such notice shall become effective
five Business Days after being deposited in the mails, certified or
registered, return receipt requested, with appropriate postage prepaid for
first class mail or, if delivered by hand or courier service or in the
form of a facsimile, when received (and, in the case of a facsimile,
receipt of such facsimile is confirmed to the sender), and shall be
directed to the address or facsimile number of such Person set forth in
Appendix C to the Servicing Agreement. From time to time any party to such
agreement, instrument or other document may designate a new address or
number for purposes of notice thereunder by notice to each of the other
parties thereto.
(c) Governing Law. SUCH AGREEMENT, INSTRUMENT OR OTHER DOCUMENT
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
(d) Jurisdiction; Court Proceedings; Waiver of Jury Trial. Any suit,
action or proceeding against any party to such agreement, instrument or
other document arising out of or relating to such agreement, instrument or
other document, any transaction contemplated thereby or any judgment
entered by any court in respect of any thereof may be brought in any New
York State court located in the County of New York or Federal court
sitting in the Second Circuit, and each such party hereby submits to the
nonexclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding. To the extent that service of process by mail is
permitted by applicable law, each party thereto irrevocably consents to
the service of process in any such suit, action or proceeding in such
courts by the mailing of such process by registered or certified mail,
postage prepaid, at its address for notices provided for above. Each party
to such agreement, instrument or other document irrevocably agrees not to
assert any objection which it may ever have to the laying of venue of any
such suit, action or proceeding in any New York State court located in the
County of New York or Federal court sitting in the Second Circuit, and any
claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. To the fullest extent permitted
by Applicable Law, each party to such agreement, instrument or other
document waives any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or
Appendix A-9
194
in connection with such agreement, instrument or other document. AFT
agrees, and it shall cause each other Person within the AFT Group not to
bring any action, suit or proceeding against GE Capital, the Servicer or
any of their respective Affiliates or any of GE Capital's, the Servicer's
or their respective Affiliates' Representatives arising out of, in
connection with or related to any such agreement, instrument or other
document or any transaction contemplated thereby except in a New York
State court located in the County of New York or Federal court sitting in
the Second Circuit.
(e) Agent. AFT and each other Person within the AFT Group hereby
appoints CT Corporation System (the "Agent"), 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx, X.X.X. 00000, as its nonexclusive agent for service of process in
connection with each Operative Agreement. The parties may use any other
legally available means of service of process. AFT will promptly notify
the Servicer and GE Capital of any change in the address of the Agent;
provided, however, that AFT will at all times maintain an agent located
within New York State for service of process in connection with each
Operative Agreement, the identity of any successor Agent to be reasonably
satisfactory to the Servicer and GE Capital.
The Servicer hereby appoints GE Capital (the "Servicer's Agent"),
000 Xxxxxxx Xxx., 00xx Xxxxx, Xxx Xxxx, X.X. 00000, X.X.X., as its
nonexclusive agent for service of process in connection with each
Operative Agreement. The parties may use any other legally available means
of service of process. The Servicer will promptly notify AFT of any change
in the address of the Servicer's Agent; provided, however, that the
Servicer will at all times maintain an agent located within New York State
for service of process in connection with each Operative Agreement, the
identity of any successor Servicer's Agent to be reasonably satisfactory
to AFT.
(f) Consequential Damages. In no event will any party to such
agreement, instrument or other document be liable to any other for lost
profits, income tax consequences, lost savings or any other consequential
damages, even if such party has been advised of the possibility of such
damages, or for punitive damages, resulting from the breach of any
obligation under such agreement, instrument or other document.
Appendix A-10
195
(g) Counterparts. Each such agreement, instrument or other document
may be executed by the parties thereto in separate counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same agreement,
instrument or other document. All signatures need not be on the same
counterpart.
(h) Entire Agreement; Amendment and Waiver. Such agreement,
instrument or other document, together with the other Operative
Agreements, shall constitute the entire agreement of the parties thereto
with respect to the subject matter thereof and supersedes all prior
written and oral agreements and understandings with respect to such
subject matter. Neither any such agreement, instrument or other document
nor any of the terms thereof may be terminated, amended, supplemented,
waived or modified, except by an instrument in writing signed by the party
against which the enforcement of the termination, amendment, supplement,
waiver or modification shall be sought. No failure or delay of any party
to any such agreement, instrument or other document, in exercising any
power or right thereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or
power.
(i) Table of Contents; Headings. The table of contents and headings
of the various articles, sections and other subdivisions of such
agreement, instrument or other document are for convenience of reference
only and shall not modify, define or limit any of the terms or provisions
of such agreement, instrument or other document.
(j) Parties in Interest; Limitation on Rights of Others. The terms
of such agreement, instrument or other document shall be binding upon, and
inure to the benefit of, the parties thereto and their permitted
successors and assigns and, to the extent applicable, their respective
Affiliates and Representatives. Except as expressly set forth in any such
agreement, instrument or other document with respect to Affiliates and
Representatives of the parties thereto, nothing in such agreement,
instrument or other document, whether express or implied, shall be
construed to give any Person (including any past, present
Appendix A-11
196
or future employee of any Person within the AFT Group) (other than the
parties thereto and their permitted successors and assigns and, with
respect to Sections 2.01(a) and 2.03(m) of the Servicing Agreement and
Section 9.3 of Schedule 2.02 to the Servicing Agreement, any holders of
the Beneficial Interest Certificates and, with respect to Section 2.03(m)
of the Servicing Agreement, UniCapital) any legal or equitable right,
remedy or claim under or in respect of such agreement, instrument or other
document or any covenants, conditions or provisions contained therein.
(k) Method of Payment. Except as otherwise agreed, all amounts
required to be paid by any party to such agreement, instrument or other
document to any other party thereunder (including in respect of any
judgment or settlement entered in respect of such agreement, instrument or
other document) shall be paid in dollars, by wire transfer, or other
acceptable method of payment, of same day funds to a dollar account
located in the United States as such party may specify by notice to the
other party.
(l) Payment on Business Days. If any payment under such agreement,
instrument or other document is required to be made on a day other than a
Business Day, the date of payment shall be extended to the next Business
Day.
(m) Past Due Payments. Any amount payable to any party or any of its
Representatives under any such agreement, instrument or other document
shall be paid on the date therein specified for payment of such amounts.
To the extent that all or a portion of such amount is not paid on such
date, such amount (or the unpaid portion thereof) shall bear interest at
the Stipulated Interest Rate from such date until and through the date
that such amount has been paid in full.
(n) Severability. Any provision of such agreement, instrument or
other document that shall be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions thereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. To the extent permitted by Applicable Law, each
of AFT and the Servicer waives any provision of law
Appendix A-12
197
that renders any provision of any agreement, instrument or other document
prohibited or unenforceable in any respect.
"Dollar" or "$" means the lawful money of the United States of
America.
"Due Date" has the meaning assigned to such term in Section 9.07(a)
of the Servicing Agreement.
"Effectiveness Date" has the meaning assigned to such term in
Section 10.02(c)(ii) of the Servicing Agreement.
"Engine" means owned or leased-in aircraft engines or, with respect
to any Original Aircraft, any aircraft engine required to be delivered together
with such Original Aircraft pursuant to the terms of the Asset Purchase
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"EU" means the European Union.
"Event of Default" has the meaning assigned to such term in Section
1.01 of the Indenture.
"Exchange Notes" means any notes of AFT containing terms identical
to the Notes issued on the Closing Date, any Additional Notes or any Refinancing
Notes (except that such Exchange Note shall be registered under the Securities
Act of 1933) that are issued and exchanged for the Notes issued on the Closing
Date, such Additional Notes or such Refinancing Notes, as the case may be,
pursuant to a Registration Rights Agreement and the Indenture.
"Exchange Offer" means any exchange offer pursuant to which any of
the Notes will be exchanged for Exchange Notes issued pursuant to an effective
registration statement under the Securities Act of 1933.
"Existing Accounts" has the meaning assigned to such term in Section
7.1(a) of Schedule 2.02(a) to the Servicing Agreement.
"Expense Account" has the meaning assigned to such term in Section
3.01(a) of the Indenture.
Appendix A-13
198
"Fee Period" has the meaning assigned to such term in Section
9.03(a)(i) of the Servicing Agreement.
"Final Prospectus" has the meaning assigned to such term in Section
2.03(a)(ii) of the Servicing Agreement.
"Former Aircraft Asset" has the meaning assigned to such term in
Section 2.04(b) of the Servicing Agreement.
"GE" means General Electric Company, a New York corporation.
"GE Capital" means General Electric Capital Corporation, a New York
corporation.
"GECAS" means GE Capital Aviation Services, Limited, a company
incorporated under the laws of Ireland.
"GE Policy" has the meaning assigned to such term in Section 2.04(a)
of the Servicing Agreement.
"Governmental Authority" means any court, administrative agency or
commission or other governmental agency or instrumentality (or any officer or
representative thereof) domestic, foreign or international, of competent
jurisdiction including the EU.
"Gross Proceeds" has the meaning assigned to such term in Section
9.04(b) of the Servicing Agreement.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person or (ii) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
Guarantee shall not include (x) endorsements for collection or deposit, in
either case in the ordinary course of business, (y) any guarantee by any Person
within the AFT Group of the obligations of another Person within the AFT Group
in respect of such Person's obligations in connection with any Aircraft Assets,
Appendix A-14
199
whether as lessor, seller or otherwise, or (z) the delivery of a bond or similar
instrument by or on behalf of any Person within the AFT Group in connection with
the detention or repossession of any Aircraft Assets.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (d) all the obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six months after the date of purchasing
such property or service or taking delivery and title thereto or the completion
of such services, and payment deferrals arranged primarily as a method of
raising finance or financing the acquisition of such property or service, (e)
all obligations of such Person under a lease of (or other agreement conveying
the right to use) any property (whether real, personal or mixed) that is
required to be classified and accounted for as a capital lease obligation under
U.S. GAAP, (f) all Indebtedness of other Persons secured by a lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person, and
(g) all Indebtedness of other Persons Guaranteed by such Person.
"Indemnified Parties" means GE Capital, the Servicer and their
respective Affiliates and each of GE Capital's, the Servicer's and their
respective Affiliates' Representatives.
"Indenture" means the Trust Indenture dated as of May 5, 1999, among
AFT, the Administrative Agent and Bankers Trust Company, as trustee.
"Independent Representative" has the meaning assigned to such term
in Section 3.02(c) of the Servicing Agreement.
"Independent Trustees" means the independent trustees of AFT.
"Initial Exchange Offer" means the Exchange Offer with respect to
the Notes issued on the Closing Date.
Appendix A-15
200
"Initial UniCapital Aircraft" means any Aircraft acquired by any
Person within the AFT Group pursuant to the Asset Purchase Agreement with the
proceeds of the Notes issued on the Closing Date following the acquisition of
such Aircraft by GE Capital or any of its Affiliates from UniCapital or any of
its Affiliates.
"Lease" means any lease or other agreement or arrangement pursuant
to which any Person (other than a Person within the AFT Group) has the right to
possession and use of any Aircraft Asset.
"Lease Operating Budget" has the meaning assigned to such term in
Section 7.03(a) of the Servicing Agreement.
"Lessee" means the lessee (or equivalent Person) in respect of a
Lease.
"Lessee Funded Account" has the meaning assigned to such term in
Section 3.01(a) of the Indenture.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Losses" means any and all liabilities (including liabilities
arising out of the doctrine of strict liability), obligations, losses, damages,
penalties, Taxes, actions, suits, judgments, costs, fees, expenses (including
reasonable legal fees, expenses and related charges and costs of investigation)
and disbursements, of whatsoever kind and nature; provided, however, the term
"Losses" shall not include any Indemnified Party's management time or overhead
expenses.
"Maintenance Reserves" means the maintenance reserves under each of
the Leases.
"Material Adverse Effect" with respect to any Person means an event,
condition, matter, change or effect that impacts or, insofar as reasonably can
be foreseen, in the future is likely to impact, in a material adverse manner,
the condition (financial or otherwise), properties, assets, liabilities,
earnings, capitalization, shareholders' equity, licenses or
Appendix A-16
201
franchises, businesses, operation or prospects of such Person or the ability of
such Person to perform fully any of its obligations under any of the Operative
Agreements.
"Monthly Base Fee" has the meaning assigned to such term in Section
9.01 of the Servicing Agreement.
"Monthly Payment Period" has the meaning assigned to such term in
Section 7.3(a) of Schedule 2.02(a) to the Servicing Agreement.
"Net Proceeds" has the meaning assigned to such term in Section
2.03(g) of the Servicing Agreement.
"New Accounts" has the meaning assigned to such term in Section
7.1(b) of Schedule 2.02(a) to the Servicing Agreement.
"Nonterminating Party" has the meaning assigned to such term in
Section 10.02(c)(i) the Servicing Agreement.
"Notes" means any class or subclass of Notes issued pursuant to the
Indenture on the Closing Date, and any Exchange Notes, any Additional Notes and
any Refinancing Notes, in each case issued pursuant to the Indenture (or
pursuant to any supplements thereto).
"Note Target Price" has the meaning assigned to such term in Section
5.02(g) of the Indenture.
"Notes Offering" has the meaning assigned to such term in Section
2.03(a)(i) of the Servicing Agreement.
"Notice of Termination" means a Termination Notice.
"Officer's Certificate" means, as to any Person, a certificate of
the President, any Vice President or Assistant Vice President, the Treasurer or
any Assistant Treasurer, the Secretary or any Assistant Secretary, or any
Director.
"Operative Agreements" means the Servicing Agreement, the AFT Group
Guarantees and all other agreements, instruments or other documents which are
required by the terms of any thereof to be delivered in connection with any of
the foregoing documents.
Appendix A-17
202
"Original Aircraft" means any "Aircraft" (as defined in the Asset
Purchase Agreement); provided, however, that Original Aircraft shall not include
any "Aircraft" (x) which shall have suffered an "Event of Loss" (as defined in
the Asset Purchase Agreement) and in respect of which the loss proceeds shall
have become payable to the appropriate Person within the AFT Group, (y) with
respect to which a payment has been made pursuant to Section 4.2 of the Asset
Purchase Agreement or (z) with respect to which a Delivery has been effected.
"Original UniCapital Aircraft" means any Original Aircraft which
will become an Initial UniCapital Aircraft upon its Delivery.
"Other Assets" has the meaning assigned to such term in Section
3.02(a) of the Servicing Agreement.
"Outstanding Principal Balance" has the meaning assigned to such
term in Section 1.01 of the Indenture.
"Overhead Expenses" has the meaning assigned to such term in Section
9.06(a) of the Servicing Agreement.
"Partial Termination" has the meaning assigned to such term in
Section 10.02(a)(ii) of the Servicing Agreement.
"Payment Date" means the 15th day of each month, commencing on June
15, 1999; provided, however, that, if any Payment Date would otherwise fall on a
day that is not a Business Day, the relevant Payment Date shall be the first
following day which is a Business Day.
"Permitted Account Investments" has the meaning assigned to such
term in Section 1.01 of the Indenture.
"Person" means any individual, firm, corporation, partnership,
trust, body of persons, joint venture, governmental authority or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Precedent Lease" has the meaning assigned to such term in Section
3(b) of Schedule 2.02(a) to the Servicing Agreement.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Bankers Trust Company as its prime rate in effect at its
principal office in New York
Appendix A-18
203
City; each change in the "Prime Rate" shall be effective on the date such change
is announced.
"Pro Forma Lease" has the meaning assigned to such term in Section
3(b) of Schedule 2.02(a) to the Servicing Agreement.
"Prospectus" has the meaning assigned to such term in Section
2.03(a)(i) of the Servicing Agreement.
"Purchase Agreement" means the Purchase Agreement dated as of April
21, 1999, among AFT, GE Capital and Xxxxxx Brothers Incorporated.
"Quarter" means each fiscal quarter.
"Rating Agencies" means each of Standard & Poor's Ratings Group, a
division of the XxXxxx-Xxxx Companies, Inc. and Xxxxx'x Investors Service, Inc.
and any successors to either of the foregoing.
"Ratings" means the then current rating assigned by a Rating Agency
in respect of the Notes.
"Refinancing Notes" means any class or subclass of Notes issued
pursuant to the Indenture (or pursuant to supplements thereto) at any time after
the Closing Date, the proceeds of which are used to repay all or any part of the
then outstanding Notes.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Closing Date, between AFT and Xxxxxx Brothers
Incorporated and any other agreement entered into between AFT and a purchaser of
Notes providing for the registration of such Notes under the Securities Act of
1933.
"Rent Collected Fee" has the meaning assigned to such term in
Section 9.03(a)(ii) of the Servicing Agreement.
"Rent Fees" has the meaning assigned to such term in Section 9.01 of
the Servicing Agreement.
"Rent Payable Fee" has the meaning assigned to such term in Section
9.03(a)(i) of the Servicing Agreement.
"Rents" means the basic rent payable pursuant to a Lease and in the
event that the agreement or arrangement
Appendix A-19
204
pursuant to which possession of any Aircraft Asset is given is other than as a
lease, amounts equivalent to any basic rent.
"Replacement Servicer" means a replacement servicer to perform some
or all of the Services under the Servicing Agreement formerly performed by the
Servicer, appointed in accordance with Section 10.04(c) of the Servicing
Agreement.
"Representatives" with respect to any Person means the officers,
directors, employees, advisors and agents of such Person.
"Required Expense Amount" has the meaning assigned to such term in
Section 1.01 of the Indenture.
"Sales Fee" has the meaning assigned to such term in Section 9.01 of
the Servicing Agreement.
"Security Trust Agreement" means the Security Trust Agreement dated
as of the Closing Date among AFT, the Administrative Agent, the Servicer,
Bankers Trust Company, as Trustee, Security Trustee and reference agent, and the
other parties thereto.
"Security Trustee" means Bankers Trust Company, a New York banking
corporation, in its capacity as security trustee pursuant to the Security Trust
Agreement dated as of the Closing Date among AFT and Bankers Trust Company, as
Security Trustee, and the other parties thereto.
"Servicer" means GECAS.
"Servicer Delegate" has the meaning assigned to such term in Section
12.01 of the Servicing Agreement.
"Servicer Disclosure" has the meaning assigned to such term in
Section 2.03(a)(i) of the Servicing Agreement.
"Servicer Information" has the meaning assigned to such term in
Section 2.03(m) of the Servicing Agreement.
"Services" has the meaning assigned to such term in Section 2.02(a)
of the Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement dated as of May
5, 1999, between AFT and the Servicer.
Appendix A-20
205
"Servicing Fees" means the Monthly Base Fee, the Sales Fee, the Rent
Fees and the Additional Servicing Fees.
"Shadow Director/Related Company Claims" has the meaning assigned to
such term in Section 11.04 of the Servicing Agreement.
"Significant Subsidiary" means any Person within the AFT Group that
has title to, or any other indicia of ownership in, any Aircraft Assets.
"Standard of Care" has the meaning assigned to such term in Section
3.01 of the Servicing Agreement.
"Standard of Liability" has the meaning assigned to such term in
Section 3.03 of the Servicing Agreement.
"Stated Services Obligation" has the meaning assigned to such term
in Section 7.3(a) of Schedule 2.02(a) to the Servicing Agreement.
"Stipulated Interest Rate" means, for any period, a rate per annum
equal to the Prime Rate in effect during such period plus 2 percent per annum.
"Subsidiary" of any Person means a corporation, company or other
entity (i) more than 50% of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing authority)
are, or (ii) which does not have outstanding shares or securities (as may be the
case in a partnership, joint venture or unincorporated association), but more
than 50% of whose ownership interest representing the right to make decisions
for such other entity is, now or hereafter owned or controlled, directly or
indirectly, by such Person, but such corporation, company or other entity shall
be deemed to be a Subsidiary only so long as such ownership or control exists.
"Swap Provider" has the meaning assigned to such term in the
Indenture.
"Tax" or "Taxes" means all fees (including documentation, license
and registration fees), taxes, assessments, levies, impositions, duties,
withholdings and other governmental charges of any nature whatsoever (including
taxes based upon or measured by gross receipts, income, profits, sales, use or
occupation, and value added, ad valorem, transfer,
Appendix A-21
206
franchise, withholding, payroll, social security, employment, excise,
documentary, stamp, corporation, corporation profits, advance corporation,
capital duty, capital gains, capital acquisitions, wealth, vehicle registration,
social insurance, and property taxes), together with all interest, fines,
penalties and additions imposed with respect to such amounts.
"Taxpayer" means any Person within the AFT Group or any predecessor
of any Person within the AFT Group, or any successor to any Person within the
AFT Group (but not including GE Capital, the Servicer or any of their
Affiliates).
"Terminating Party" has the meaning assigned to such term in Section
10.02(c)(i) of the Servicing Agreement.
"Termination Notice" has the meaning assigned to such term in
Section 10.02(c)(i) of the Servicing Agreement.
"Third Party Claim" means a claim by a third party arising out of a
matter for which an Indemnified Party is entitled to be indemnified pursuant to
the indemnity provisions of the Servicing Agreement.
"Transaction Approval Requirements" has the meaning assigned to such
term in Section 7.04(c) of the Servicing Agreement.
"Transaction Costs" means all out-of-pocket expenses incident to any
Notes Offering (specifically excluding, except to the extent otherwise expressly
included herein, any direct or indirect commissions, discounts, fees or other
remuneration allowed or paid to any underwriters in connection with any such
Notes Offering), including the cost of printing any offering documents
(including the Prospectus) and any expenses (including fees and disbursements of
counsel) incurred by any underwriters in connection with qualification of the
Notes for sale under the laws of such jurisdictions as the underwriters
designate and the printing of memoranda relating thereto, for any fees charged
by investment rating agencies for the rating of the Notes, for any filing fees
of the National Association of Securities Dealers, Inc. relating to the Notes
and for expenses incurred in distributing any Prospectuses.
"Trust Agreement" means the Trust Agreement dated as of April 13,
1999, among UniCapital AFT-I, Inc. and UniCapital AFT-II, Inc., as depositors,
Wilmington Trust Company, as Owner Trustee, the Controlling Trustees and the
Independent Trustees.
Appendix A-22
207
"Trustee" has the meaning assigned to such term in the Indenture.
"Trustee Fees" means the fees paid to the Trustee in consideration
of the services rendered by the Trustee pursuant to Article VI of the Indenture.
"UniCapital" means UniCapital Corporation, a Delaware corporation.
"UniCapital Aircraft" means all Initial UniCapital Aircraft and all
Additional UniCapital Aircraft.
"UniCapital Serviced Aircraft" means any UniCapital Aircraft that
shall have become subject to the UniCapital Servicing Agreement.
"UniCapital Servicing Agreement" has the meaning assigned to such
term in Section 13.07 of the Servicing Agreement.
"U.S. GAAP" means generally accepted accounting principles in the
United States.
"U.S. Tax Code" means the United States Internal Revenue Code of
1986, as amended.
"Year" means each fiscal year ended December 31.
"Year 2000 Claims" has the meaning assigned to such term in Section
11.06 of the Servicing Agreement.
"Year 2000 Compatibility" refers to the ability of computer systems
and non-computing equipment containing embedded microchips to perform properly
date sensitive functions and to avoid any Year 2000 Problem.
"Year 2000 Problem" means the vulnerability of systems to errors and
failures in connection with the use, exchange, or other processing of dates (for
example, the use of two digits to represent the year rather than four digits,
resulting in a system being unable to distinguish between the year 1900 and the
year 2000).
Appendix A-23
000
XXXXXXXX X TO THE
SERVICING AGREEMENT
GUARANTEE dated as of [insert date], made
by [insert name] ("Guarantor") in favor of GE CAPITAL AVIATION
SERVICES, LIMITED (the "Servicer") and its Affiliates relating
to the Servicing Agreement dated as of [insert date] (the
"Agreement"), between the Servicer and Aircraft Finance Trust
(the "Obligor").
WHEREAS pursuant to the Agreement, the Servicer has agreed to
provide Services to each Person within the AFT Group in accordance with and to
the extent set forth in the Agreement;
WHEREAS the Obligor is a party to the Agreement and is liable for
any and all amounts due and owing to the Servicer and any of its Affiliates
under the Agreement; and
WHEREAS each Person within the AFT Group is a direct or indirect
beneficiary of the Services performed by the Servicer pursuant to the Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the
Servicer to enter in the Agreement and to perform the Services thereunder,
Guarantor hereby agrees, for the benefit of the Servicer and its Affiliates, as
follows:
1. Guarantor unconditionally and irrevocably guarantees to the
Servicer and its Affiliates (a) the due and punctual payment of all amounts due
to the Servicer and its Affiliates from the Obligor under the Agreement, whether
now existing or hereafter incurred, and (b) the due and punctual performance of
all other obligations of the Obligor to the Servicer and its Affiliates under
the Agreement (all the foregoing being hereinafter collectively called the
"Obligations") and any and all fees and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by the Servicer and its
Affiliates in enforcing any rights under this Guarantee, all without regard to
any counterclaim, set-off, deduction or defense of any kind which the Obligor or
Guarantor may have or assert, and without abatement, suspension, deferment or
diminution on account of any event or condition whatsoever. In case of failure
of the Obligor punctually to pay any of the amounts referred to in
Appendix B-1
209
clause (a) above, Guarantor hereby agrees to cause such amounts to be paid
punctually when and as the same shall become due and payable as if such payment
were made by the Obligor. Guarantor further agrees that this Guarantee
constitutes a guarantee of payment when due and not of collection.
2. The liability of the undersigned under this Guarantee shall, to
the fullest extent permitted by Applicable Law, be unconditional irrespective of
(i) any lack of enforceability against the Obligor of any Obligation, (ii) any
change of the time, manner or place of payment, or any other term, of any
Obligation, (iii) any exchange, release or nonperfection of any collateral
securing payment of any Obligation or any other guarantee in respect thereof,
(iv) any law, regulation or order of any jurisdiction affecting any term of any
Obligation or the Servicer's or any of its Affiliates' rights with respect
thereto and (v) any other circumstance which might vary the risk of or otherwise
constitute a defense available to, or a discharge of, the Obligor, Guarantor or
any surety. The Guarantor waives, to the fullest extent permitted by Applicable
Law, promptness, diligence and notices with respect to any Obligation and this
Guarantee and any requirement that the Servicer or any of its Affiliates exhaust
any right or take any action against the Obligor, any collateral security or any
other guarantor.
3. In the event that the Guarantor is required by any applicable law
to make any deduction or withholding for or on account of Taxes from any payment
to be made by it hereunder, then it shall (i) pay over to the government or
taxing authority imposing such Tax the full amount required to be deducted or
withheld (including the full amount required to be deducted or withheld from the
additional amounts required to be paid pursuant to clause (ii) below), (ii) pay
to the Servicer or its Affiliates, as the case may be, together with such
payment such additional amounts as may be necessary in order that the net amount
received by the Servicer or its Affiliates, as the case may be, will be not less
than the full amount of such payment which would otherwise have been receivable
had no such deduction or withholding been required and (iii) forward to the
Servicer as soon as possible such tax receipts or other official documentation
with respect to the payment of the Taxes so deducted or withheld as may be
issued from time to time by such government or taxing authority.
4. Guarantor further agrees that this Guarantee shall continue to be
effective or be reinstated, as the case may be,
Appendix B-2
210
if at any time payment, or any part thereof, of any Obligation or interest
thereon is rescinded or must otherwise be restored by the Servicer upon the
bankruptcy or reorganization of the Obligor, Guarantor or otherwise.
5. Upon payment by Guarantor of any sums to the Servicer or its
Affiliates under this Guarantee, all rights of Guarantor against the Obligor
arising as a result thereof by way of right of subrogation or otherwise shall in
all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full of all the obligations of the Obligor under the
Agreement.
6. The Guarantor represents and warrants as of the date hereof to
the Servicer and its Affiliates that:
(a) the Guarantor is a corporation or business trust duly organized
and validly existing and, if relevant, in good standing under the laws of
the jurisdiction in which it is legally organized, and has full power,
authority and legal right to execute and deliver, and to perform its
obligations under, this Guarantee;
(b) the Guarantor has taken all necessary corporate and legal action
to authorize the guarantee hereunder on the terms and conditions of this
Guarantee and to authorize its execution, delivery and performance;
(c) this Guarantee has been duly executed and delivered by a duly
authorized officer or Representative of the Guarantor, and constitutes the
legal, valid and binding obligation of the Guarantor, enforceable against
the Guarantor in accordance with its terms;
(d) the execution, delivery and performance of this Guarantee will
not constitute a default under or violate any provision of any law or
regulation, or any judgment or order of any court, arbitrator or
governmental authority, in each case applicable to the Guarantor,
constituent documents of the Guarantor, or any agreement to which the
Guarantor is a party; and
(e) no consent of any other Person, and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any Governmental Authority, is
required in connection with the execution delivery, performance,
Appendix B-3
211
validity or enforceability with respect to the Guarantor of this
Guarantee.
7. This Guarantee shall remain in full force and effect and be
binding in accordance with its terms upon the Guarantor and shall inure to the
benefit of the Servicer and its Affiliates until all the Obligations and the
obligations of the Guarantor under this Guarantee shall have been satisfied by
indefeasible payment in full.
8. The obligations of Guarantor under this Guarantee may not be
assigned or delegated without the prior written consent of the Servicer.
9. The liability of the Guarantor under this Guarantee is limited to
the maximum amount that will result in the obligations of the Guarantor not
constituting a fraudulent conveyance or fraudulent transfer under Applicable
Law.
10. This Guarantee shall be governed by the Documentary Conventions,
and all capitalized terms used but not defined herein have the meanings assigned
to such terms in Appendix A to the Agreement. The construction and usage set
forth in such Appendix A are incorporated herein by reference.
IN WITNESS WHEREOF, Guarantor has executed this Guarantee as of the
date first above written.
[Insert Name of Guarantor]
by
________________________________
Name:
Title:
Appendix B-4
212
APPENDIX C TO THE
SERVICING AGREEMENT
Notices
GE Capital Aviation Services, Limited
Aviation House
Shannon
Ireland
Attention: Company Secretary
Fax: (000) 00-000000
Telephone: (000) 00-000000
with a copy to:
GE Capital Aviation Services, Inc.
000 Xxxx Xxxxx Xxxx (Xxxxxx Xxxxx)
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
Telephone: (000) 000-0000
Aircraft Finance Trust
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administrator
Fax: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
ReSource/Phoenix, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
Telephone: (000) 000-0000
Appendix C-1
