*
_________________________________________________
GUARANTEE AGREEMENT
DATED AS OF
SEPTEMBER 11, 1996
BETWEEN
ABN AMRO BANK N.V., CHICAGO BRANCH
AS FACILITY AGENT
-AND-
EXPORT-IMPORT BANK OF THE UNITED STATES
EXIMBANK GUARANTEE NO. AP070425 - PEOPLE'S REPUBLIC OF CHINA
(CHINA YUNNAN AIRLINES)
RELATING TO
TWO (2) BOEING MODEL 767-300 AIRCRAFT EACH WITH
TWO (2) INSTALLED ROLLS-ROYCE MODEL RB211-524H-36 ENGINES
ONE (1) ROLLS-ROYCE QECU SPARE ENGINE
__________________________________________________
TABLE OF CONTENTS
-----------------
(This Table of Contents is not part of this Agreement
and is for convenience of reference only)
PAGE
----
SECTION 1. Definitions............................................................... 3
SECTION 2. The Guarantee............................................................. 7
SECTION 3. Scope and Binding Nature of the Guarantee, and Termination Thereof........ 7
SECTION 4. Endorsement of the Guarantee Legend....................................... 9
(a) Endorsement of Floating Rate Note(s)...................................... 9
(b) Endorsement of the Fixed Rate Notes....................................... 10
SECTION 5. Payment Method............................................................ 11
SECTION 6. Procedures for Making Demand on Eximbank following First Default.......... 11
SECTION 7. Payment of the Guaranteed Amount.......................................... 12
(i) Accelerated Payment Method.......................................... 13
(ii) Installment Payment Method.......................................... 13
(b) Payment Certificates Issued in Exchange for Fixed Rate Notes Upon a
Total Loss of an Aircraft or Upon a Termination Due to Obsolescence
of an Aircraft............................................................ 13
(c) Payment Certificates Issued In Exchange for Fixed Rate Notes Upon an
Event of Default.......................................................... 14
(d) Payments under a Payment Certificate...................................... 15
(e) Failure to Make Claim Payment............................................. 15
SECTION 8. Application of Partial Payments and Eximbank Payments..................... 15
SECTION 9. Collections; Subsequent Payments by Eximbank.............................. 16
SECTION 10.Undertakings of the Facility Agent........................................ 16
(a) Note Register............................................................. 16
(b) Notice of Default......................................................... 16
(c) Amendments to the Loan Agreement, Lease Agreements or Notes............... 16
(d) Notice of Interest Rates.................................................. 17
(e) Disbursements............................................................. 17
(f) Payments on a Note after Payment by Eximbank.............................. 17
(g) Transfer of Rights, Duties, Obligations and Responsibilities under this
Guarantee Agreement....................................................... 17
(h) Indemnification........................................................... 18
SECTION 11.Eximbank Payments; Discharge of Liability................................. 18
SECTION 12.Governing Law............................................................. 19
SECTION 13.Notification.............................................................. 19
SECTION 14.Parties Bound............................................................. 19
ANNEXES
Annex A - Form of Guarantee Legend
Annex B-1 - Request for Guarantee Legend (Floating Rate Note)
Annex B-2 - Request for Guarantee Legend (Fixed Rate Note)
Annex C - Assignment
Annex D - Payment Certificate
ii
GUARANTEE AGREEMENT
-------------------
THIS GUARANTEE AGREEMENT, entered into as of the 11th day of
September, 1996, ("GUARANTEE AGREEMENT") between ABN AMRO Bank N.V., Chicago
Branch, acting in its capacity as facility agent under the Loan Agreement (as
hereinafter defined) (together with its successors and permitted assigns, the
"FACILITY AGENT") and Export-Import Bank of the United States, an agency of the
United States of America ("EXIMBANK").
W I T N E S S E T H:
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WHEREAS, China Aviation Supplies Corporation, a state-owned legal
entity organized under the applicable laws of the People's Republic of China
("CASC") and The Boeing Company (the "SELLER") have entered into that certain
Purchase Agreement No. 1844 dated December 3, 1994 (the "PURCHASE AGREEMENT")
for the purchase of, inter alia, two (2) Boeing Model 767-300 airframes
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(individually, an "AIRFRAME" and collectively as the context may require, the
"AIRFRAMES") each with two (2) installed Rolls-Royce RB211-524H-36 engines (the
Airframes together with the engines are referred to herein individually as an
"AIRCRAFT" and collectively, as the context may require, as the "AIRCRAFT");
WHEREAS, pursuant to those certain Purchase Agreement Assignments each
to be dated the date of execution and delivery thereof between CASC, China
Yunnan Airlines, a legal entity organized under the applicable laws of the
People's Republic of China (the "COMPANY"), YA96A Limited, a company organized
under the laws of the Cayman Islands (the "BORROWER"), CASC and, by way of
execution of the consent and agreement referred to therein, the Seller, CASC
assigned, or will assign, its right to take title to the Aircraft to the
Borrower;
WHEREAS, pursuant to that certain Spare Engine Sale Agreement dated
the date of execution and delivery thereof between the Company and the Borrower,
the Borrower has agreed to purchase one (1) Rolls-Royce QECU spare engine (the
"SPARE") from the Company;
WHEREAS, pursuant to separate Aircraft Lease Agreements each to be
dated the date of execution and delivery thereof between the Company, as lessee,
and the Borrower, as lessor (as each thereof may be amended, supplemented or
otherwise modified from time to time, a "LEASE AGREEMENT" and collectively, the
"LEASE AGREEMENTS"), the Borrower has agreed, or will agree, to lease the
Aircraft and the Spare to the Company;
WHEREAS, the Lenders (as hereinafter defined) have established a
credit in favor of the Borrower in the amount of U.S. $103,000,000 (the
"CREDIT") pursuant to the terms of that certain Guaranteed Loan Agreement dated
August 27, 1996 (the "LOAN
[GUARANTEE AGREEMENT]
AGREEMENT") by and among the Borrower, the Financial Institutions listed on the
signature page thereto as Lenders (the "LENDERS"), the Facility Agent,
Wilmington Trust Company, not in its individual capacity, except as expressly
stated therein, but solely as security trustee (the "SECURITY TRUSTEE") and
Eximbank in order to enable the Borrower to finance the sum of up to (i) 85
percent (85%) of the total Eximbank-approved cost incurred by the Borrower for
the purchase of the Airframes (the "FINANCED PORTION"), (ii) 100 percent (100%)
of the amount of Eximbank's exposure fee ("EXPOSURE FEE") payable pursuant to
paragraph C of Article III of the Reimbursement and Indemnity Agreement (as
hereinafter defined), and (iii) 85 percent (85%) of the total Eximbank-approved
cost of certain legal and other services (the "APPROVED SERVICES");
WHEREAS, the Lenders have agreed to make one or more advances under
the Loan Agreement in such amounts as shall not in the aggregate exceed the
Credit and on such dates as requested by the Borrower in order to enable the
Borrower to finance the sums described above when and as necessary upon delivery
of the Aircraft (or as shall otherwise be agreed by the Lenders, the Facility
Agent, Eximbank and the Borrower);
WHEREAS, the Company, the Borrower and Eximbank have entered into a
Reimbursement and Indemnity Agreement dated as of September 11, 1996 (the
"REIMBURSEMENT AND INDEMNITY AGREEMENT") setting forth, among other things, the
terms and conditions on which this Guarantee Agreement is to be issued;
WHEREAS, as of each Utilization Date (as hereinafter defined), the
Borrower will evidence its obligation to repay that portion of the Credit used
to finance the Airframes to be settled for on such Utilization Date and the
amount of the Exposure Fee and Approved Services, if any, related thereto,
together with the accrued interest thereon, by issuing and delivering to the
Facility Agent on behalf of the Lenders on such Utilization Date one (1)
floating rate note for each Airframe so financed on such Utilization Date;
WHEREAS, upon compliance with certain terms and conditions specified
in the Loan Agreement and this Guarantee Agreement, the Borrower will exchange
the Floating Rate Notes (as hereinafter defined) for one or more Fixed Rate
Notes (as hereinafter defined), which Fixed Rate Notes will collectively
evidence the then outstanding principal amount of the Loan (as hereinafter
defined) at the time of such exchange;
WHEREAS, as provided in the Loan Agreement, it is the intention of the
Lenders, the Company and the Borrower that the Fixed Rate Notes, if and when
issued, be sold, assigned and transferred to a special purpose securities trust
(the "TRUST") which will succeed to all of the rights, duties and obligations of
the Facility Agent and the Lenders under the Loan Agreement, the Floating Rate
Notes and the Operative Documents (as hereinafter defined);
WHEREAS, the Trust, subject to compliance with applicable securities
laws,
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[GUARANTEE AGREEMENT]
will issue certificates representing beneficial interests in the assets of such
Trust (which are comprised of the Fixed Rate Notes);
WHEREAS, it is a condition precedent to the making of the Credit and
the issuance of each Floating Rate Note that Eximbank provide a guarantee of the
principal of, and interest on, each such Floating Rate Note in an amount equal
to the Guaranteed Amount (as hereinafter defined) relating to such Floating Rate
Note (the "EXIMBANK FLOATING RATE GUARANTEE");
WHEREAS, it is a condition precedent to the exchange of the Floating
Rate Notes for the Fixed Rate Notes that the Eximbank Floating Rate Guarantee
with respect to each Floating Rate Note be cancelled and Eximbank provide a
guarantee of the principal of, and interest on, each Fixed Rate Note in an
amount equal to the Guaranteed Amount relating to such Fixed Rate Note (THE
"EXIMBANK FIXED RATE GUARANTEE");
WHEREAS, it is a condition precedent to the sale, assignment and
transfer of the Assigned Property (as hereinafter defined) by the Facility Agent
and the Lenders to the Trust that the Trustee (as hereinafter defined) accept
all of the duties and obligations of the Facility Agent and the Lenders in
respect of the Assigned Property under the Loan Agreement, this Guarantee
Agreement and the other Operative Documents;
WHEREAS, ABN AMRO Bank N.V. ("ABN AMRO") will enter into that certain
Irrevocable Revolving Credit Agreement with U.S. Trade Funding Corporation, in
form and substance satisfactory to Eximbank (as such Irrevocable Revolving
Credit Agreement may be amended, supplemented or modified from time to time with
the consent of Eximbank, the "LIQUIDITY AGREEMENT"); and
WHEREAS, an advance (a "LIQUIDITY ADVANCE") may be drawn by, or for
the benefit of, the Trustee under the Liquidity Agreement, so that the Trust
will have sufficient funds to make payment on outstanding certificates
(representing the respective beneficial interests in the Trust) notwithstanding
failure by the Company to make timely payment of principal of, and interest on,
the Fixed Rate Notes pending satisfaction of the conditions set forth in Section
7 hereof for payment of such amounts by Eximbank pursuant to this Guarantee
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
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For the purposes of this Agreement, the following terms shall have the
following meanings and all terms defined in this Section 1, or in the Recitals
or other provisions of this Agreement in the singular to have the same meaning
when used in the
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[GUARANTEE AGREEMENT]
plural and vice versa:
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"ACCELERATED PAYMENT METHOD" means the method by which Eximbank shall
pay a claim under this Agreement with respect to the Floating Rate Notes as set
forth in Section 7(a)(i) hereof;
"APPLICABLE RATE" shall have the meaning ascribed thereto in the Loan
Agreement;
"ASSIGNED PROPERTY" means all of the Facility Agent's and the Lenders'
rights, benefits and obligations under the Loan Agreement, the Floating Rate
Notes and this Guarantee Agreement in respect thereof as assigned to the Trust
pursuant to the Transfer Agreement;
"ASSIGNMENT" shall have the meaning ascribed thereto in the third
paragraph of Section 6 hereof;
"AVAILABILITY DATE" means June 30, 1997;
"BUSINESS DAY" means any day except one on which the Federal Reserve
Bank of New York is closed;
"CONVERSION" shall have the meaning ascribed thereto in the Loan
Agreement;
"CONVERSION DATE" shall have the meaning ascribed thereto in the Loan
Agreement;
"DECLARATION OF TRUST" shall have the meaning ascribed to the term
"Trust Agreement" in the Loan Agreement;
"DETERMINATION DATE" shall have the meaning ascribed thereto in the
Loan Agreement;
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such a day is not a Business Day, for the next preceding Business
Day) by the Board of Governors of the Federal Reserve System in Statistical
Release H.15 (519) or any successor publication thereto, or, if such rate is not
published for any day which is a Business Day, the rate specified as the
"offered" Federal funds rate on such day in The Wall Street Journal (Eastern
-----------------------
Edition, U.S.) under the table entitled "Money Rates;"
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[GUARANTEE AGREEMENT]
"FIXED RATE NOTE" or "FIXED RATE NOTES" means the note or notes, as
the context may require, delivered in exchange for the Floating Rate Notes and
issued to the Trustee upon Conversion pursuant to the Loan Agreement, which note
or notes bear interest at the fixed rate per annum notified by the Underwriter
in the Notice of Conversion and which are in substantially the form of Part 2 to
Appendix 3 to the Loan Agreement;
"FLOATING RATE NOTE" or "FLOATING RATE NOTES" means, as the context
may require, the note or notes issued on each Utilization Date to the Facility
Agent on behalf of the Lenders pursuant to the Loan Agreement bearing interest
at a floating rate per annum and which are in substantially the form of Part 1
to Appendix 3 to the Loan Agreement;
"GUARANTEE" means Eximbank's guarantee of payment of the Guaranteed
Amount pursuant to this Guarantee Agreement;
"GUARANTEED AMOUNT" means all amounts specified in Section 2(a), (b)
and (c) of this Guarantee Agreement;
"GUARANTEED INTEREST RATE" means (i) in the case of each Floating Rate
Note, the per annum rate of interest applicable thereto as calculated from time
to time in accordance with the Loan Agreement (without regard to any default
interest) except that the Applicable Rate shall be the same for the purpose of
ascertaining the Guaranteed Interest Rate under both Sections 2(b) and 2(c)
hereof, and (ii) in the case of the Fixed Rate Notes, the per annum fixed rate
of interest notified by the Underwriter in the Notice of Conversion calculated
in accordance with the Loan Agreement (without regard to any default interest)
except that the Applicable Rate shall be the same for the purpose of
ascertaining the Guaranteed Interest Rate under both Sections 2(b) and 2(c)
hereof, and (iii) in the case of a Liquidity Advance, the per annum rate of
interest that is determined from time to time in accordance with the definition
of "Interest Rate" (without regard to any default interest) set forth in the
Liquidity Agreement;
"ICBC" means The Industrial and Commercial Bank of China acting
through its Head Office, Beijing, People's Republic of China;
"INSTALLMENT PAYMENT METHOD" means the method by which Eximbank shall
pay a claim under this Guarantee Agreement with respect to the Fixed Rate Notes
as set forth in Section 7(a)(ii) hereof;
"LOAN" means the aggregate principal amount of the Credit (as reduced
by repayment or prepayment) from time to time outstanding under the Loan
Agreement as evidenced by (i) the Floating Rate Notes, and (ii) on and after the
Conversion Date, the Fixed Rate Notes;
"NOTE" or "NOTES" means, as the context may require, one or more of
the
5
[GUARANTEE AGREEMENT]
Floating Rate Notes issued by the Borrower to the Facility Agent on behalf of
the Lenders in accordance with the terms of the Loan Agreement and, if issued in
exchange for cancelled Floating Rate Notes, as the context may require, one or
more of the Fixed Rate Notes issued by the Borrower to the Trustee in accordance
with the terms of the Loan Agreement, including any replacement note issued
pursuant to Clause 2.08(C) thereof;
"NOTEHOLDER" or "HOLDER" means each person or entity listed as the
holder of an interest in a Note on the register maintained by the Facility Agent
or Trustee, as applicable, pursuant to Section 10 hereof;
"NOTICE OF CONVERSION" shall have the meaning ascribed thereto in the
Loan Agreement;
"OPERATIVE DOCUMENTS" shall have the meaning ascribed thereto in the
Loan Agreement;
"PAYMENT CERTIFICATE" shall have the meaning ascribed thereto in
Section 7(a)(ii) hereof;
"PAYMENT METHOD" shall mean either the Accelerated Payment Method or
the Installment Payment Method, as the case may be;
"RELEVANT PARTY" shall mean (i) prior to the date of Conversion, the
Facility Agent, and (ii) on and after the date of Conversion, the Trustee
(acting as Trustee pursuant to the Securitization Documents);
"SECURITIZATION DOCUMENTS" shall have the meaning ascribed thereto in
the Loan Agreement;
"TERMINATION DATE" with respect to an Aircraft shall have the meaning
ascribed thereto in the Lease Agreement related to such Aircraft;
"TOTAL LOSS" with respect to an Aircraft shall have the meaning
ascribed thereto in the Lease Agreement related to such Aircraft;
"TRANSFER AGREEMENT" shall have the meaning ascribed thereto in the
Loan Agreement;
"TRUSTEE" shall have the meaning ascribed thereto in the Loan
Agreement;
"UNDERWRITER" shall have the meaning ascribed thereto in the Loan
Agreement; and
6
[GUARANTEE AGREEMENT]
"UTILIZATION DATE" shall have the meaning ascribed thereto in the
Reimbursement and Indemnity Agreement.
SECTION 2. THE GUARANTEE.
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Subject to the terms and conditions hereinafter set forth, Eximbank
hereby guarantees to the Relevant Party payment of:
(a) the disbursed and outstanding principal amount of the Loan
as evidenced (i) by the Floating Rate Notes, or (ii) on and after the date
of Conversion, by the Fixed Rate Notes (or Liquidity Advance, if any, made
as a result of a payment default under any Fixed Rate Note);
(b) the interest accrued from time to time at the Guaranteed
Interest Rate on the disbursed and outstanding principal amount of the Loan
as evidenced (i) by the Floating Rate Notes, or (ii) on and after the date
of Conversion, by the Fixed Rate Notes (or if an advance is made under the
Liquidity Agreement as a result of a payment default under any Fixed Rate
Note, the Liquidity Advance); and
(c) the interest accrued at the Guaranteed Interest Rate on any
due and unpaid amount described in sub-sections (a) and/or (b) above from
and including the due date for the payment thereof to the actual date of
payment thereof by Eximbank.
If and to the extent ABN AMRO shall have made a Liquidity Advance under the
Liquidity Agreement, Eximbank shall thereafter (subject only to Section 3(c)
hereof) have no further obligation hereunder (either as to principal or
interest) in respect of that portion of the Loan which was due and payable and
resulted in such Liquidity Advance being made; provided that the foregoing shall
not affect the obligations of the Facility Agent and/or the Trustee pursuant to
Section 6 hereof; provided, further, nothing in this sentence shall be construed
so as to affect Eximbank's guarantee of any Liquidity Advance and accrued
interest thereon in accordance with the terms hereof. ABN AMRO, as liquidity
provider, shall have no rights hereunder except to the extent amounts paid by
Eximbank hereunder are distributed to ABN AMRO in accordance with the
Declaration of Trust. In no event shall the liability of Eximbank under this
Guarantee Agreement exceed the aggregate principal amount of U.S.
$101,672,199.28 plus the accrued interest and the accrued post-maturity interest
thereon specified in sub-sections (b) and (c) above, respectively, at the
Guaranteed Interest Rate.
7
[GUARANTEE AGREEMENT]
SECTION 3. SCOPE AND BINDING NATURE OF THE GUARANTEE, AND TERMINATION
----------------------------------------------------------
THEREOF.
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(a) The Guarantee shall only be effective (without duplication) with
respect to the Guaranteed Amount represented by any Note (and Liquidity Advance,
if any, made as a result of a payment default under such Note) so long as such
Note bears Eximbank's guarantee legend in the form of Annex A to this Guarantee
Agreement, said legend having been manually executed by an authorized officer of
Eximbank pursuant to the procedures set forth in Section 4 hereof (the
"GUARANTEE LEGEND").
(b) After Eximbank has placed its Guarantee Legend on a Note, the
Guarantee with respect to such Note (and Liquidity Advance, if any, made as a
result of a payment default under such Note) shall be binding on Eximbank (and
shall constitute the direct, general and unconditional obligation of Eximbank
(but only upon the Facility Agent's, each Lender's, the Trustee's, and each
Noteholder's observance of, and in strict accordance with, the terms of this
Guarantee Agreement) and a continuing guarantee of payment), notwithstanding
that the payment under the Loan Agreement and/or any Note is unenforceable,
except to the extent that the Guarantee has been terminated pursuant to sub-
sections (d)(i) or (d)(ii) below.
(c) The Guarantee shall be deemed to continue to be binding on
Eximbank with respect to any payment, or any part thereof, of the Guaranteed
Amount received by the Facility Agent, any Lender, the Trustee, any Noteholder
or ABN AMRO which is rescinded or must otherwise be returned by the Facility
Agent, any Lender, the Trustee, any Noteholder or ABN AMRO, as the case may be;
provided such rescission or return of payment has been compelled by law as the
result of the bankruptcy or insolvency of the Borrower and/or the Company, or as
a result of any law, regulation or decree applicable to the Borrower and/or the
Company, now or hereinafter in effect. A demand on Eximbank for payment
pursuant to the Guarantee of any such returned amount must be made promptly but
in no event later than thirty (30) days after the Facility Agent, such Lender,
the Trustee, such Noteholder or ABN AMRO has actually returned such amount. At
least fifteen (15) days prior to making such demand on Eximbank, the Relevant
Party shall have made demand for payment on the Borrower, the Company or ICBC,
whichever is the party(ies) unaffected by the recision action.
(d) (i) In the event that the Relevant Party fails to make a
demand on Eximbank within the time period and in accordance with the
procedures set forth in Section 6 hereof, the Guarantee with respect to the
unpaid installment of principal or the unpaid accrued interest (or any
Liquidity Advance related to either thereof) as to which such timely demand
was not made shall automatically terminate. Such termination shall be
without prejudice to the right of the Relevant Party to make demand on
Eximbank, or diminish or otherwise affect Eximbank's obligations, under
this Guarantee Agreement with respect to any other unpaid installments of
principal of
8
[GUARANTEE AGREEMENT]
or unpaid accrued interest on the Loan that is not paid when due (or any
Liquidity Advance related to either thereof); and
(ii) In the event that the Facility Agent, any Lender, the
Trustee or any Noteholder without Eximbank's prior written consent, agrees
to an amendment or deviation prohibited by sub-section 10(c) below, the
Guarantee shall automatically terminate unless the amendment or deviation,
as the case may be, is rescinded or otherwise remedied to the satisfaction
of Eximbank within thirty (30) calendar days after written notice to the
Relevant Party from Eximbank (the "GUARANTEE TERMINATION DATE"). Such
termination will be effective as of the Guarantee Termination Date without
further notice to the Facility Agent, the Lenders, the Trustee, ABN AMRO or
the Noteholders unless the amendment or deviation giving rise to such
termination shall have been remedied to the satisfaction of Eximbank as
aforesaid.
(E) NO DISCHARGE. Eximbank's liability under this Guarantee
------------
Agreement shall be irrevocable, absolute and unconditional (but only upon the
Facility Agent's, each Lender's, the Trustee's, and each Noteholder's observance
of, and in strict accordance with, the terms hereof) irrespective of any lack of
validity or enforceability of the Loan Agreement, any Note, any other Operative
Document, the ICBC A Guarantee and the ICBC/EXIM Guarantee (each as defined in
the Lease Agreements) (including, without limitation, incapacity (for any
purpose) or the lack of any governmental approval or failure of consideration or
any bankruptcy, insolvency, dissolution, liquidation, reorganization,
adjustment, composition or similar circumstance of or relating to the Borrower
and/or the Company or any other person or entity or for any other reason
whatsoever).
(F) CONDITIONS OF GUARANTEE. Eximbank hereby waives diligence,
-----------------------
presentment, protest and any requirement that the Facility Agent, any Lender,
ABN AMRO, the Trustee or any Noteholder exhaust any right or take any action
against or give notice to the Borrower, the Company, ICBC or Eximbank, except
for the written demands for payment and notices by the Facility Agent, the
Lenders, the Trustee or the Noteholders on the Borrower, the Company, ICBC and
Eximbank required under this Guarantee Agreement.
SECTION 4. ENDORSEMENT OF THE GUARANTEE LEGEND.
-----------------------------------
(A) ENDORSEMENT OF FLOATING RATE NOTE(S). Upon compliance with the
------------------------------------
conditions set forth in Clause 3 of the Loan Agreement regarding advances
thereunder used or to be used in connection with the financing of each of the
Airframes and the Exposure Fee and Approved Services related thereto and at any
time after any portion of the Credit related thereto has been advanced under the
Loan Agreement and upon issuance of a Floating Rate Note related to such
Airframe, the Facility Agent may request Eximbank to evidence the Guarantee with
respect to that portion of the Credit as evidenced by each such Floating Rate
Note by placing its Guarantee Legend in the form of Annex A to this Guarantee
Agreement
9
on such Floating Rate Note. The Facility Agent's request ("REQUEST FOR FLOATING
RATE GUARANTEE LEGEND") shall be in the form of Annex B-1 to this Guarantee
Agreement and be accompanied by the Floating Rate Note related to the Airframe
financed with that portion of the Credit to which such Request for Floating Rate
Guarantee Legend relates. Eximbank shall not be obligated to so endorse any
Floating Rate Note unless a complete and duly executed Request for Floating Rate
Guarantee Legend in the form of Annex B-1 is received by it no later than the
Availability Date (or such later date as may be agreed by Eximbank and the
Facility Agent) and the conditions set forth in Article V of the Reimbursement
and Indemnity Agreement have been satisfied or waived by Eximbank in its sole
discretion.
(B) ENDORSEMENT OF THE FIXED RATE NOTES.
(i) Subject to the receipt by Eximbank of the documents set forth
in Section 4(b)(ii) below, upon issuance by the Borrower of the Fixed Rate
Notes, the Facility Agent may request Eximbank to evidence the Guarantee
with respect to the Loan as evidenced by the Fixed Rate Notes (and any
Liquidity Advance related thereto) by placing its Guarantee Legend in the
Form of Annex A to this Guarantee Agreement on each of the Fixed Rate
Notes. The Facility Agent's request ("REQUEST FOR FIXED RATE GUARANTEE
LEGEND") regarding the Guarantee of the Fixed Rate Notes shall be in the
form of Annex B-2 to this Guarantee Agreement and be accompanied by the
Fixed Rate Notes. Eximbank shall not be obligated to so endorse any of the
Fixed Rate Notes unless a complete and duly executed Request for Fixed Rate
Guarantee Legend is received by it no later than the close of business on
the Conversion Date (or such later date as may be agreed by Eximbank, the
Facility Agent and the Trustee).
(ii) The obligation of Eximbank to place its Guarantee Legend on
each of the Fixed Rate Notes is subject to the receipt by Eximbank of the
following documents, each of which shall be satisfactory to Eximbank in
form and substance:
(A) a duly executed Request for Fixed Rate Guarantee Legend
substantially in the form of Annex B-2 hereto;
(B) the originally executed Eximbank Guarantee Legend to
the Floating Rate Notes and evidence that all of the Floating Rate
Notes have been cancelled;
(C) a duly executed original of each of the Securitization
Documents and the Transfer Agreement;
(D) a duly executed certificate of a senior officer of the
Borrower, dated the Conversion Date, stating that no Potential Event
of Default or Event of Default under the Loan Agreement shall have
occurred
10
[GUARANTEE AGREEMENT]
and be continuing as of such date;
(E) a duly executed certificate of an authorized officer of
the Facility Agent, dated the Conversion Date, stating that the
Borrower is not in default as to the payment of principal of, or
interest on, any of the Floating Rate Notes as of such date;
(F) a duly executed certificate of a senior officer of the
Company, dated the Conversion Date, stating that no Termination Event
under any Lease Agreement has occurred and is continuing as of such
date;
(G) the executed Fixed Rate Notes and evidence indicating
that each such Fixed Rate Note has been duly executed and delivered by
the Borrower; and
(H) such other documents, certificates and opinions of
counsel relating to the Conversion and/or the sale, assignment and
transfer of the Assigned Property to the Trust as Eximbank may
reasonably request.
SECTION 5. PAYMENT METHOD.
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(a) All payments made by Eximbank under this Guarantee Agreement in
respect of the Floating Rate Notes shall be made in accordance with the
Accelerated Payment Method.
(b) All payments made by Eximbank under this Guarantee Agreement in
respect of any Fixed Rate Note shall be made in accordance with the Installment
Payment Method.
(c) The Payment Methods set forth in this Section 5 shall not be
subject to change.
SECTION 6. PROCEDURES FOR MAKING DEMAND ON EXIMBANK FOLLOWING FIRST
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DEFAULT. In the event that (i) the Borrower fails for any reason (including,
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without limitation, a failure to pay resulting from debt relief accorded by the
United States of America to the People's Republic of China; or the Company's
failure to satisfy its obligations to pay rent under any Lease Agreement; or the
imposition of withholding taxes) for more than thirty (30) calendar days to pay
any part of the Guaranteed Amount as required by the Loan Agreement, and (ii) a
period of at least fifteen (15) calendar days has elapsed since written demand
for payment was made on the Borrower, the Company and ICBC by the Relevant Party
(which demand may be omitted only if and to the extent that the making thereof
would be prohibited by any applicable law governing the bankruptcy or insolvency
of the Borrower, the Company or ICBC, as applicable), the Relevant Party may
11
[GUARANTEE AGREEMENT]
make a demand on Eximbank for payment under the Guarantee.
Each written demand on Eximbank pursuant to this Section 6 shall (i)
be made only by the Relevant Party, (ii) identify the Note or Notes with respect
to which the payment default has occurred and specify the due and unpaid
installment of principal of, and the accrued interest on, the Note or Notes (or
Liquidity Advance, if any, made as a result of a payment default under such Note
or Notes) as of the date of such demand (calculated at the applicable Guaranteed
Interest Rate), and the accrued post-maturity interest on the due and unpaid
principal of and interest on the Note or Notes (or Liquidity Advance, if any,
made as a result of a payment default under such Note or Notes) as of the date
of such demand (calculated at the applicable Guaranteed Interest Rate), (iii)
identify the holders of the Note or Notes, (iv) state the Payment Method which
is applicable to the Note or Notes for which such demand on Eximbank is being
made, (v) be accompanied by a copy of the written demand for payment on the
Borrower, the Company and ICBC (or, in the event such demand was omitted with
respect to the Company, the Borrower or ICBC pursuant to the preceding
paragraph, evidence of (x) such party's bankruptcy or insolvency, (y) the
applicable prohibition and (z) the Relevant Party's demand for payment on those
parties not subject to such prohibition), and (vi) be made not later than 150
calendar days from the date as of which the due and unpaid installment of
principal and/or accrued interest was originally scheduled to be paid.
In connection with any demand on Eximbank pursuant to this Section 6,
the Relevant Party and the Noteholders shall be obligated to (A) assign to
Eximbank, in substantially the form of Annex C hereto (an "ASSIGNMENT") all of
their respective right, title and interest in and to the Note or Notes to which
such demand relates (including all rights, title and interests to any post-
default interest) and in, to and under the Loan Agreement and, to the extent
that such right, title and interest relates to the Guaranteed Amount or any
security therefor, the other Operative Documents, (B) deliver such Assignment
and the Note or Notes (and security, if any) to Eximbank, and (C) endorse the
Notes (and security, if any) to the order of Eximbank, without recourse.
Notwithstanding the foregoing, none of the Facility Agent, the Trustee, ABN
AMRO, any Lender nor any Noteholder shall be required to assign to Eximbank (i)
any of its right, title and interest in and to the letter from the Borrower to
the Facility Agent accepted by the Company dated as of September 11, 1996 (a
copy of which has been provided to Eximbank) or (ii) any security (the "EXCLUDED
SECURITY") given by any Person (other than the Borrower and/or the Company) to
secure any obligations of the Borrower and/or the Company under the Operative
Documents (other than the Loan Agreement and Note(s)) to the extent related to
amounts which are not guaranteed by Eximbank under this Guarantee Agreement.
Excluded Security may consist of, but is not limited to, one or more standby
letters of credit or other third party guarantees or indemnities, in each case,
approved in writing by Eximbank.
SECTION 7. PAYMENT OF THE GUARANTEED AMOUNT.
--------------------------------
12
[GUARANTEE AGREEMENT]
(A) PAYMENT METHODS. Upon receipt of the Relevant Party's demand for
---------------
payment with respect to a Note (or a Liquidity Advance) in accordance with the
provisions of Section 6 hereof, Eximbank, within five (5) Business Days
thereafter (unless Eximbank determines that additional time is required due to
the large number of claims then pending at Eximbank, in which case within
fifteen (15) Business Days thereafter), shall pay to the Relevant Party, the
Guaranteed Amount (the date as of which Eximbank initially makes such payment
shall hereinafter be referred to as the "INITIAL EXIMBANK PAYMENT DATE") as
follows:
(I) ACCELERATED PAYMENT METHOD. With respect to each Floating
--------------------------
Rate Note, on the Initial Eximbank Payment Date, an amount equal to the sum
of (A) the unpaid principal amount of such Floating Rate Note, (B) the due
and unpaid accrued interest on the principal amount of such Floating Rate
Note at the Guaranteed Interest Rate to the due date for payment thereof as
provided in the Loan Agreement, and (C) the accrued post-maturity interest
at the Guaranteed Interest Rate on any due and unpaid amount described in
(A) and/or (B) above from and including the initial due date for such
amounts to (but excluding) the earlier of the date such amounts were paid
and the Initial Eximbank Payment Date (the "ACCELERATED PAYMENT METHOD").
(II) INSTALLMENT PAYMENT METHOD. With respect to each Fixed Rate
--------------------------
Note (or Liquidity Advance, if any, made as a result of a payment default
under any such Fixed Rate Note), on the Initial Eximbank Payment Date (A)
an amount equal to the sum of (X) the scheduled installment (without regard
to any acceleration) then due and unpaid of principal on such Fixed Rate
Note (or the amount of the Liquidity Advance, if any, made as a result of a
payment default under such Fixed Rate Note), (Y) the due and unpaid accrued
interest on such installment of such Fixed Rate Note (provided that if a
Liquidity Advance is made as a result of a payment default under such Fixed
Rate Note, the amounts set forth in this clause (B) shall be limited to
that portion of the due and unpaid accrued interest not included in the
determination of the amount of such Liquidity Advance) at the Guaranteed
Interest Rate to the due date for payment thereof as provided in the Loan
Agreement or Liquidity Agreement, as applicable, and (Z) the accrued post-
maturity interest at the Guaranteed Interest Rate on any due and unpaid
amount described in (A)(X) and/or (A)(Y) above from and including the
initial due date for such amounts to (but excluding) the earlier of the
date such amounts were paid and the Initial Eximbank Payment Date, and (B)
the issuance and delivery to the Trustee, in exchange for such Fixed Rate
Note, of a payment certificate (the "PAYMENT CERTIFICATE") in the form of
Annex D to this Guarantee Agreement, which Payment Certificate shall (X) be
in a face amount equal to the then outstanding (but not yet due) principal
amount of such Fixed Rate Note (after giving effect to any payment made by
Eximbank on the Initial Eximbank Payment Date), (Y) be payable on the same
payment dates and in the same principal installments as such Fixed Rate
Note, and (Z) accrue interest at the Guaranteed Interest Rate that was
applicable to such Fixed Rate Note, (the "INSTALLMENT PAYMENT
13
[GUARANTEE AGREEMENT]
METHOD").
(B) PAYMENT CERTIFICATES ISSUED IN EXCHANGE FOR FIXED RATE NOTES UPON
-----------------------------------------------------------------
A TOTAL LOSS OF AN AIRCRAFT OR UPON A TERMINATION DUE TO OBSOLESCENCE OF AN
---------------------------------------------------------------------------
AIRCRAFT. If (i) a Total Loss occurs in relation to an Aircraft or if any Lease
--------
Agreement is terminated with respect to an Aircraft due to obsolescence pursuant
to Clause 3.03 thereof (the affected Aircraft in either case being hereinafter
referred to as the "AFFECTED AIRCRAFT") at a time when one or more Fixed Rate
Notes have been issued and are outstanding, (ii) such Affected Aircraft is not,
in the case of a Total Loss, replaced in accordance with the terms of Clause
16.08 of the related Lease Agreement, (iii) no Liquidity Advance shall be
outstanding under the Liquidity Agreement, and (iv) Eximbank (or a paying agent
designated by Eximbank) (the "PAYING AGENT") has received all amounts due under
Clause 6.03 of the Loan Agreement, in the case of a Total Loss, and Clause 6.04
of the Loan Agreement in the case of obsolescence (which amounts, at all times,
shall at least equal the aggregate of (A) the outstanding principal amount of
the Fixed Rate Note attributable (by designation on the face of said Fixed Rate
Note) to such Affected Aircraft (an "AFFECTED AIRCRAFT NOTE"), plus (B) all
accrued and unpaid interest thereon, plus (C) all other amounts then due and
payable under such Affected Aircraft Note or under the Loan Agreement or the
other Operative Documents in connection with such Affected Aircraft or such
Affected Aircraft Note, plus (D) in the case of an obsolescence termination, the
Make-Whole Amount payable pursuant to Clause 6.04 of the Loan Agreement) then
the Trustee shall, upon notice from Eximbank, (I) assign to Eximbank, in
substantially the form of the Assignment, all of the Trustee's rights, title and
interests in and to any such Affected Aircraft Note and in, to and under any
related rights the Trustee may have under the Loan Agreement with respect to any
such Affected Aircraft Note and, to the extent that such right, title and
interest relates to the Guaranteed Amount or any security therefor, the other
Operative Documents related to such Affected Aircraft, (II) deliver such
Assignment and Affected Aircraft Note to Eximbank, and (III) endorse any such
Affected Aircraft Note to the order of Eximbank, without recourse.
Upon compliance with the requirements set forth in the immediately
preceding paragraph, Eximbank, within five (5) Business Days thereafter (unless
Eximbank determines that additional time is required due to the large number of
claims then pending at Eximbank, in which case within fifteen (15) Business Days
thereafter), shall issue and deliver to the Trustee one or more Payment
Certificates, which shall (i) be in an aggregate face amount equal to the then
outstanding (but not yet due) principal amount of such Affected Aircraft Note
(after giving effect to any payments made by the Borrower and/or the Company
since the Total Loss of such Affected Aircraft occurred or receipt of notice of
such obsolescence termination, as the case may be), (ii) be payable on the same
payment dates and in the same principal installments as such Affected Aircraft
Note, and (iii) accrue interest at the Guaranteed Interest Rate.
(C) PAYMENT CERTIFICATES ISSUED IN EXCHANGE FOR FIXED RATE NOTES UPON
-----------------------------------------------------------------
AN EVENT OF DEFAULT. If (i) any Fixed Rate Note is outstanding, (ii) an Event
-------------------
of Default
14
[GUARANTEE AGREEMENT]
(other than an Event of Default based upon the failure by the Borrower to pay
when due any of the Guaranteed Amounts) shall have occurred and be continuing,
(iii) no Liquidity Advance shall be outstanding under the Liquidity Agreement,
(iv) Eximbank shall have accelerated the Loan under the Loan Agreement pursuant
to Clause 13.02 of the Loan Agreement, and (v) the Borrower and/or the Company
shall have paid, and Eximbank (or a paying agent designated by Eximbank) shall
have received all such amounts then due and payable under the Loan Agreement and
the other Operative Documents, then the Trustee shall, upon notice from Eximbank
(A) assign to Eximbank, in substantially the form of the Assignment, all of the
Trustee's rights, title and interests in and to the Fixed Rate Notes and the
Loan Agreement and, to the extent that such right, title and interest relates to
the Guaranteed Amount or any security therefor, the other Operative Documents,
(B) deliver such Assignment and the Fixed Rate Notes to Eximbank, and (C)
endorse the Fixed Rate Notes to the order of Eximbank, without recourse.
Upon compliance with the requirements set forth in the immediately
preceding paragraph, Eximbank, within five (5) Business Days thereafter (unless
Eximbank determines that additional time is required due to the large number of
claims then pending at Eximbank, in which case within fifteen (15) Business Days
after the date of demand), shall issue and deliver to the Trustee, one or more
Payment Certificates, which shall (i) be in an aggregate face amount equal to
the then outstanding (but not yet due) principal amount of the Fixed Rate Notes
(other than those principal payments originally scheduled to be due prior to the
acceleration of the Loan), (ii) be payable on the same payment dates and in the
same principal installments as such Fixed Rate Notes, and (iii) accrue interest
at the Guaranteed Interest Rate.
(D) PAYMENTS UNDER A PAYMENT CERTIFICATE. In accordance with the
------------------------------------
terms of a Payment Certificate, Eximbank shall pay the principal amount of such
Payment Certificate in installments on the payment dates and in the amounts set
forth therein, together with the accrued interest thereon at the Guaranteed
Interest Rate. Each payment under a Payment Certificate shall be made to the
Trustee.
(E) FAILURE TO MAKE CLAIM PAYMENT. In the event Eximbank fails to
-----------------------------
make claim payment within fifteen (15) Business Days after demand in accordance
with Section 7(a), for each additional day after the fifteenth Business Day up
to the day on which Eximbank makes claim payment, Eximbank shall pay the
Relevant Party an additional amount equal to the difference between (i) interest
accrued on the defaulted installment(s) of principal and/or interest at the
Guaranteed Interest Rate as provided in Section 7(a) and (ii) interest on such
installment(s) calculated at a rate per annum equal to the sum of (x) one
percent (1%) and (y) the higher of the Guaranteed Interest Rate or the Federal
Funds Rate.
SECTION 8. APPLICATION OF PARTIAL PAYMENTS AND EXIMBANK PAYMENTS. In
-----------------------------------------------------
calculating the amount of Eximbank's first payment to be made under this
Guarantee Agreement, any partial payments received by the Facility Agent, any
Lender, the Trustee or
15
[Guarantee Agreement]
ABN AMRO from the Borrower and/or the Company with respect to the applicable
Note (or Liquidity Advance, as applicable) prior to the Initial Eximbank Payment
Date shall be applied in accordance with Clause 10.03 of the Loan Agreement.
Further, if the Guarantee terminates pursuant to Section 3(d) hereof
with respect to one or more installments of principal of or interest on a Note
(or a Liquidity Advance, as applicable) all such installments of principal of or
interest on such Note (and such Liquidity Advance, as applicable) as to which
the Guarantee has terminated shall be deemed to have been paid in full when and
as due for the purposes of determining the amounts payable under Section 6
hereof and making the calculations required under Section 7 hereof.
SECTION 9. COLLECTIONS; SUBSEQUENT PAYMENTS BY EXIMBANK. On the
--------------------------------------------
Initial Eximbank Payment Date with respect to a Note or the issuance of a
Payment Certificate by Eximbank, as applicable, (i) Eximbank, by virtue of any
Assignment contemplated hereby, shall be entitled, in its sole discretion, to
pursue for its own account collection of all amounts due or to become due on
such Note and, to the extent applicable, the Notes or under the Loan Agreement,
and (ii) if payment by Eximbank was made in accordance with the Installment
Payment Method, after the Initial Eximbank Payment Date the Trustee shall be
entitled only to payments from Eximbank in accordance with the Payment
Certificate issued to the Trustee in exchange for such Note.
SECTION 10. UNDERTAKINGS OF THE FACILITY AGENT. The Facility Agent
----------------------------------
agrees that so long as Eximbank remains liable under this Guarantee Agreement:
(A) NOTE REGISTER. The Facility Agent shall establish and maintain a
-------------
register with respect to the Noteholders and the Notes for the purpose of
recording (i) the name and address of each current and past Noteholder, (ii) the
date of issuance and transfer of each Note and the face amount of each such
Note, and (iii) the date and amount of each payment (indicating the amount of
principal and interest included in each payment) made by or on behalf of the
Borrower on each Note. The Facility Agent shall maintain such register with
respect to the Note until such time as Eximbank has issued a Payment Certificate
or Payment Certificates with respect thereto and shall make such register
available to Eximbank for inspection and copying, on Eximbank's written request.
After such time, the Facility Agent need not maintain the register, provided the
Facility Agent shall have first delivered to Eximbank's Claims and Recoveries
Division a copy of the register, certified by the Facility Agent as a true,
complete and correct copy, which copy Eximbank shall have found to be
satisfactory in form and substance.
(B) NOTICE OF DEFAULT. Upon receipt of knowledge of the occurrence of
-----------------
any Event of Default under the Loan Agreement (including any event whereby ABN
AMRO shall become obligated to make a Liquidity Advance) or Termination Event
under any Lease Agreement, or the receipt of knowledge that any payment
previously made by, or on behalf
16
[Guarantee Agreement]
of, the Borrower and/or the Company to any Lender or Noteholder is required to
be returned under the circumstances referred to in Section 3(c) hereof, the
Facility Agent will promptly notify Eximbank thereof.
(C) AMENDMENTS TO THE LOAN AGREEMENT, LEASE AGREEMENTS OR NOTES. The
-----------------------------------------------------------
Facility Agent, without Eximbank's prior written consent, shall not agree (nor
permit any Lender or any Noteholder to agree) to any material amendment,
supplement or modification of the terms of the Loan Agreement, the Liquidity
Agreement, any Lease Agreement or the terms of the Notes, or waive any material
provision thereof or otherwise consent to any material deviation from the
provisions thereof, including, without limitation, any change in the amount of
payment, the dates of payment, the place of payment or any other payment terms
of the Loan Agreement, the Liquidity Agreement, any Lease Agreement or the
Notes. The Facility Agent shall promptly inform Eximbank of each amendment,
supplement or modification to the terms of the Loan Agreement, the Liquidity
Agreement, any Lease Agreement or any Note that is proposed in writing to, or
by, the Facility Agent or executed by the Facility Agent, and of each waiver or
consent to any deviation from the terms thereof that is proposed in writing to,
or by, the Facility Agent or executed by the Facility Agent, and shall provide
copies thereof to Eximbank as soon as practicable after such copies are
available.
(D) NOTICE OF INTEREST RATES. Upon Eximbank's request, the Facility
------------------------
Agent shall promptly notify Eximbank of the per annum rate of interest
applicable to each day or period with respect to which Eximbank is required to
make a payment of a Guaranteed Amount hereunder.
(E) DISBURSEMENTS. The Facility Agent shall (i) ensure that the
-------------
Lenders make the Credit available in accordance with the terms of the Loan
Agreement and as approved by Eximbank, (ii) retain the documents required for
making each advance under the Credit, (iii) make such documents available to
Eximbank at Eximbank's request, and (iv) not dispose of such documents without
Eximbank's prior written consent.
(F) PAYMENTS ON A NOTE AFTER PAYMENT BY EXIMBANK. After the Initial
--------------------------------------------
Eximbank Payment Date with respect to a Note or the issuance of a Payment
Certificate with respect to a Note, as applicable, and until all principal of
and interest on such Note has been paid in full and received by Eximbank, the
Facility Agent shall forward (and shall cause each Lender and Noteholder to
forward) promptly to Eximbank any payments on such Note or any related payment
under the Loan Agreement (other than payments related to Excluded Security or to
the letter described in clause (i) of the last paragraph of Section 6 hereof)
that such Lender or Noteholder receives from any Person other than Eximbank
after the Initial Eximbank Payment Date or such date of issuance, as applicable.
(G) TRANSFER OF RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES UNDER
------------------------------------------------------------------
THIS GUARANTEE AGREEMENT. The Facility Agent, without Eximbank's prior written
------------------------
consent,
17
[Guarantee Agreement]
will not assign, delegate or otherwise transfer (i) its right and obligation to
make demand on Eximbank for payment, and to receive payment from Eximbank in
accordance with the provisions of Sections 6 and 7 hereof, or (ii) any of its
other rights, duties, obligations or responsibilities under this Guarantee
Agreement and the other Operative Documents.
Notwithstanding the foregoing, the Facility Agent and Eximbank hereby
agree in connection with the Conversion that (i) the Facility Agent shall
transfer to the Trustee all of its rights, duties, obligations and
responsibilities under this Agreement (and for all purposes of this Section 10,
the term "FACILITY AGENT" shall be deemed to mean the Trustee from and after the
Conversion Date), and (ii) the Facility Agent shall, and shall cause each Lender
and Noteholder to, transfer to the Trustee all of the respective rights, duties,
obligations and responsibilities of the Facility Agent, the Lenders and the
Noteholders under the Loan Agreement and the other Operative Documents. The
Facility Agent and Eximbank hereby agree that such transfer shall be an
assignment, delegation and transfer of all of the respective rights, duties,
obligations and responsibilities of the Lenders and the Facility Agent under
this Guarantee Agreement, the Loan Agreement and each of the other Operative
Documents to which either thereof is a party and shall be pursuant to the
Transfer Agreement which shall be in form and substance satisfactory to
Eximbank, duly executed by the Lenders, the Facility Agent and the Trustee and
consented to by Eximbank. From and after the Conversion, the Trustee, without
Eximbank's prior written consent, will not assign, delegate or otherwise
transfer any of the rights, duties, obligations or responsibilities specified in
clauses (i) or (ii) of the first sentence of this Section 10(g).
Nothing in this Section 10(g) is intended to restrict or otherwise
limit the right of the Lenders after the Determination Date, as set forth in the
Loan Agreement, to assign or otherwise transfer all or any portion of the
Floating Rate Notes held by it as a Noteholder, and any such transfer may be
effected at any time without Eximbank's prior written consent.
(H) INDEMNIFICATION. If the Facility Agent (or Trustee, as the case
---------------
may be) fails to comply with any undertaking set forth in this Section 10 or
with any other obligation under the Operative Documents, the Facility Agent (or
the Trustee, as the case may be) shall be liable to Eximbank for all of the
actual damages suffered, or costs reasonably incurred, by Eximbank as a result
thereof (including all legal costs and expenses related thereto or arising
therefrom), and shall indemnify Eximbank for such damages, costs and expenses.
Neither the Facility Agent nor the Trustee shall in any event be liable for
incidental or consequential damages. The coverage of this Guarantee Agreement
with respect to any interest in the Note held by the Facility Agent in its
capacity as a Lender shall not be affected by such failure by the Facility Agent
in its capacity as Facility Agent, and such failure shall not impair the rights
of any other Lender under this Guarantee Agreement. Eximbank may enforce its
rights under this Section 10(h), and pursue all remedies available with respect
thereto, in any court of competent jurisdiction. Notwithstanding anything to
the contrary stated herein, the agreements set forth in this Section 10(h) shall
survive the termination of this Agreement and the payment of all or any portion
of the Guaranteed
18
[Guarantee Agreement]
Amount.
SECTION 11. EXIMBANK PAYMENTS; DISCHARGE OF LIABILITY. All amounts
-----------------------------------------
payable by Eximbank under this Guarantee Agreement or under any Payment
Certificate shall be made (i) prior to the date of Conversion, to the Facility
Agent, and (ii) on and after the date of Conversion, to the Trustee, as the case
may be, as provided for in this Guarantee Agreement. Payment of any such amount
by Eximbank shall discharge fully and completely Eximbank's liability to the
Facility Agent, the Lenders, the Trustee or ABN AMRO, as the case may be, under
this Guarantee Agreement or the Payment Certificate(s), as the case may be, with
respect to such amounts.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 13. NOTIFICATION. All notices, requests, consents and
------------
demands hereunder shall be in writing and telexed, telecopied, cabled or
delivered to the intended recipient at the address specified beneath its name on
the signature pages hereto or at such other address as shall be designated by
such party in a notice to the other parties hereto. All such communications
shall be deemed to have been given when received by the party to which such
communication was addressed. All communications from Eximbank shall be
addressed and sent (i) prior to the date of Conversion, to the Facility Agent,
and (ii) on and after the date of Conversion, to the Trustee at such address as
shall be specified in the writing to Eximbank and shall be deemed to have been
given upon receipt of such communication.
SECTION 14. PARTIES BOUND. This Guarantee Agreement is binding upon,
-------------
and inures to the benefit of each party hereto and their respective successors
and permitted assigns.
* * *
19
[Guarantee Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed, in duplicate, as of the date first above written.
ABN AMRO BANK N.V.,CHICAGO BRANCH, EXPORT-IMPORT BANK OF THE
as Facility Agent UNITED STATES
By: ABN AMRO NORTH AMERICA, INC.,
its Agent By: /s/ Xxxxx Xxxxxx
--------------------------------
(Signature)
Name: /s/ Xxxxx X. Xxxxxx
------------------------------
By: /s/ Xxxx X. Xxxxx (Print)
-----------------------------
(Signature) Title: VICE PRESIDENT
-----------------------------
Name: Xxxx X. Xxxxx
---------------------------
(Print) 000 Xxxxxxx Xxxxxx, X.X.
Title: VICE PRESIDENT Xxxxxxxxxx, X.X. 00000
-------------------------- Attn: Vice President - Aircraft
Finance Division
By: /s/ Xxxxx X. Xxxxxx Re: Eximbank Guarantee No.
-----------------------------
AP070425 - People's Republic of
Name: Xxxxx X. Xxxxxx China (China Yunnan Airlines)
---------------------------
(Print)
Title: ASSISTANT VICE PRESIDENT Telephone: (000) 000-0000
--------------------------
Telefax: (000) 000-0000
000 Xxxxx XxXxxxx Xxxxxx Telex Number: 197681
Xxxxxxx, Xxxxxxxx 00000 Answerback: EXIM UT
Attn: Structured Trade Finance
copy to:
Telephone: (000) 000-0000
Telefax: (000) 000-0000 Vedder, Price, Xxxxxxx & Kammholz
Telex Number: 6732700 000 Xxxxx XxXxxxx Xxxxxx
Answerback: ABN AMRO CGO Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxx
Telefax: (000) 000-0000
Annexes:
A - Guarantee Legend
B-1 - Request for Guarantee Legend (Floating Rate Notes)
B-2 - Request for Guarantee Legend (Fixed Rate Notes)
C - Assignment
D - Payment Certificate
20
[Guarantee Agreement]
Annex A
[Form of Guarantee Legend]
GUARANTEE
This note is guaranteed by the Export-Import Bank of the United States
("EXIMBANK") as provided in the Guarantee Agreement dated as of September 11,
1996, between ABN AMRO Bank N.V., Chicago Branch, as Facility Agent, and
Eximbank, and said guarantee is expressly made subject to all of said provisions
therein as if all of said provisions were expressly set forth herein.
EXPORT-IMPORT BANK OF
THE UNITED STATES
By:__________________________________________
(Signature)
Name:________________________________________
(Print)
Title:_______________________________________
Eximbank Xxxxxxxxx Xx. XX000000 - Xxxxxx'x Xxxxxxxx of China (China Yunnan
Airlines)
21
[Guarantee Agreement]
Annex B-1
REQUEST FOR GUARANTEE LEGEND
(Floating Rate Notes)
Date: _______ __, 000__
Xxxxxx-Xxxxxx Xxxx
Xx xxx Xxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Vice President - Contract Administration
Subject: Eximbank Xxxxxxxxx Xx. XX000000 - Xxxxxx'x Xxxxxxxx of China
(China Yunnan Airlines)
Ladies and Gentlemen:
In accordance with the terms of the guarantee agreement ("GUARANTEE
AGREEMENT") dated as of September 11, 1996, between ABN AMRO Bank N.V., Chicago
Branch, as Facility Agent, and Export-Import Bank of the United States, we
hereby request that you issue your guarantee by endorsing the Guarantee Legend
which appears on the promissory note(s) ("NOTE(S)") described below and which
accompanies this Request for Guarantee Legend. We certify that the Note(s)
fully evidence disbursements related to the Airframe and made pursuant to the
terms and conditions of the Loan Agreement.
Airframe Note Note Principal
MSN No. Date Amount
--- --- ---- ------
* * *
22
[Guarantee Agreement]
Unless otherwise provided herein, the defined terms used in this
Request for Guarantee Legend shall have the respective meanings specified in the
Guarantee Agreement.
ABN AMRO Bank N.V., CHICAGO BRANCH,
as Facility Agent
By: ABN AMRO NORTH AMERICA, INC.,
its agent
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
23
[Guarantee Agreement]
Annex B-2
REQUEST FOR GUARANTEE LEGEND
(Fixed Rate Notes)
Date: _________ __, 000__
Xxxxxx-Xxxxxx Xxxx
Xx xxx Xxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Vice President - Contract Administration
Subject: Eximbank Xxxxxxxxx Xx. XX000000 - Xxxxxx'x Xxxxxxxx of China
(China Yunnan Airlines)
Ladies and Gentlemen:
In accordance with the terms of the guarantee agreement ("GUARANTEE
AGREEMENT") dated as of September 11, 1996, between ABN AMRO Bank N.V., Chicago
Branch, as Facility Agent, and Export-Import Bank of the United States, we
hereby request that you issue your guarantee by endorsing the Guarantee Legend
which appears on the promissory notes ("NOTES") described below and which
accompany this Request. We certify that the Notes are issued in exchange for
the outstanding aggregate principal amount of the Floating Rate Notes issued
pursuant to the Loan Agreement and guaranteed pursuant to the Guarantee
Agreement and that the Notes listed below fully evidence the entire amount of
Floating Rate Notes converted to a fixed interest rate pursuant to and in
accordance with the terms and conditions of the Loan Agreement:
Airframe Note Note Principal
MSN No. Date Amount
--- --- ---- ------
The Facility Agent hereby further certifies that on the Conversion
Date the Borrower was not in default as to the payment of either principal of or
interest on the Floating Rate Notes.
* * *
24
[Guarantee Agreement]
Unless otherwise provided herein, the defined terms used in this
Request for Guarantee Legend shall have the respective meanings specified in the
Guarantee Agreement.
ABN AMRO Bank N.V., CHICAGO BRANCH,
as Facility Agent
By: ABN AMRO NORTH AMERICA, INC.,
its agent
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
25
[Guarantee Agreement]
ASSIGNMENT Annex C
For value received, ___________________________________ (the
"NOTEHOLDER") hereby assigns to the Export-Import Bank of the United States
("EXIMBANK"), without recourse, all of its right, title and interest in, and all
sums of money now due or to become due to the Noteholder under, the promissory
note (the "NOTE") of YA96A Limited (the "BORROWER"), dated __________, 199_, in
the principal amount of U.S. $___________________, the [related rights of the
Noteholder under the]/1/ Loan Agreement pursuant to which the Note was issued,
and any other Operative Documents [related to such Affected Aircraft]/1/ and any
and all security related thereto. Notwithstanding the foregoing, the Noteholder
shall not be required to assign to Eximbank (i) any of its right, title and
interest in and to the letter from the Borrower to the Facility Agent accepted
by the Company dated as of September 11, 1996 or (ii) any security (the
"EXCLUDED SECURITY") given by any Person (other than the Borrower and/or the
Company) to secure any obligations of the Borrower and/or the Company under the
Operative Documents (other than the Loan Agreement [(to the extent assigned
above)]/1/ and Note) to the extent related to amounts which are not guaranteed
by Eximbank under the Guarantee Agreement described below. Excluded Security may
consist of, but is not limited to, one or more standby letters of credit or
other third party guarantees or indemnities, in each case, approved in writing
by Eximbank.
This Assignment is made pursuant to the terms of a guarantee agreement
(the "GUARANTEE AGREEMENT") dated as of September 11, 1996 between ABN AMRO Bank
N.V., Chicago Branch, as Facility Agent, and Eximbank and identified as Eximbank
Guarantee No. AP070425. The Noteholder acknowledges and agrees that this
Assignment is subject to the terms of the Guarantee Agreement, including,
without limitation, the provisions of Section 6 thereof.
In the event that the Noteholder receives any payment on the Loan as
evidenced by the Notes after Eximbank's payment with respect to the Loan under
the Guarantee Agreement, the Noteholder agrees to promptly forward such payment
to Eximbank.
Unless otherwise provided herein, the defined terms used in this
Assignment shall have the respective meanings specified in the Guarantee
Agreement.
* * *
________________________
/1/ To be included only in connection with an Assignment pursuant to
Section 7(b) of the Guarantee Agreement defined herein.
26
[Guarantee Agreement]
IN WITNESS WHEREOF, the Noteholder has caused this instrument to be
sealed this _____ day of ________________, ____.
(Name of Noteholder)
By:__________________________________________
(Signature)
Name:________________________________________
(Print)
Title:_______________________________________
27
[Guarantee Agreement]
ANNEX D
PAYMENT CERTIFICATE
No. ____________
____________________, ____
TO: [Trustee]
The Export-Import Bank of the United States ("EXIMBANK") hereby
acknowledges the assignment, without recourse, to Eximbank of all of
________________'s right, title and interest in and to the fixed rate promissory
note of YA96A Limited dated _____________, 199_ in the face amount of
US$___________________, the payment of which is guaranteed by Eximbank pursuant
to the terms of a guarantee agreement (the "GUARANTEE AGREEMENT") dated as of
September 11, 1996 between Eximbank and ABN AMRO Bank N.V., Chicago Branch, as
Facility Agent and identified as Eximbank Guarantee No. AP070425.
Eximbank hereby agrees to pay to ____________________, or
_________________________'s registered assigns, the principal amounts set forth
in item 3 below on the dates (each a "PAYMENT DATE") so set forth and interest
at the Guaranteed Interest Rate (as defined in the Guarantee Agreement) and
calculated in the manner set forth in the Guarantee Agreement.
1. Face Amount of the Note: $____________
2. Total Principal Amount
Outstanding under the Note
at [Date of Certificate]: $____________
3. Schedule of Payments:
Payment Principal
Date Amount
____________________ $___________________
____________________ ___________________
____________________ ___________________
____________________ ___________________
____________________ ___________________
28
[Guarantee Agreement]
The transfer of this Payment Certificate must be registered by the
registered holder hereof (or by such holder's attorney-in-fact duly authorized
in writing) on the books of Eximbank maintained for such purpose at its offices
at 000 Xxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000. All payments of principal
and interest on this Payment Certificate shall be made to the person in whose
name this Payment Certificate is so registered at the close of business on the
day which is 15 calendar days next preceding a Payment Date (each a "RECORD
DATE") and by wire transfer in immediately available funds to such person's
account at a commercial bank in the United States as such account shall appear
on the registry books of Eximbank.
Eximbank shall not be required to register the transfer of this
Payment Certificate during the period from and including the Record Date for any
Payment Date to and including such Payment Date, and, prior to due presentment
for registration of transfer of this Payment Certificate, Eximbank may deem and
treat the person in whose name this Payment Certificate is registered upon the
registry books of Eximbank as the absolute owner of this Payment Certificate
(notwithstanding any notation of ownership or other writing hereon) for the
purpose of receiving payment of or on account of the unpaid principal and
interest due hereon and for all other purposes, and Eximbank shall not be
affected by any notice to the contrary.
This Payment Certificate is issued pursuant to the terms and
conditions of the Guarantee Agreement and is subject to those terms and
conditions and is entitled to the benefits thereof.
EXPORT-IMPORT BANK OF THE UNITED STATES
By___________________________________________
(Signature)
Name_________________________________________
(Print)
Title________________________________________
29
